Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz of the day will be.
Tuesday, the Dow Jones industrial average rose 22.40 points, or 0.1%, to 17,251.53. The Standard & Poor’s 500 index fell 3.71 points, or 0.2%, to 2,015.93. The NASDAQ composite index gave up 21.61 points, or 0.5%, to 4,728.67.
Benchmark U.S. crude shed 84 cents, or 2.3%, to $36.34 a barrel in New York. Brent crude, the benchmark used to price international oils, lost 79 cents, or 2%, to $38.74 per barrel in London. In other energy trading, wholesale gasoline slipped 1 cent to $1.41 a gallon. Heating oil fell 2 cents to $1.18 a gallon. Natural gas rose 3 cents, or 1.8%, to $1.85 per 1,000 cubic feet.
Lenders are Getting Choosier When it Comes to Risky Real Estate Deals “Lenders are getting stingier when it comes to funding risky U.S. real estate developments, putting pressure on landlords in need of fresh funding to keep their projects afloat. Banks are proceeding with caution as the specter of slowing economic growth rattles financial markets and shakes investor confidence in a six-year recovery that’s helped lift property values to records. Lenders are going to be more selective and discriminating as the year progresses, said Mark Myers, the head of the commercial real estate business at Wells Fargo.” (Bloomberg)
U.S. Multifamily Mortgages Grew at Fastest Pace Since 1993 “The amount of outstanding U.S. mortgages for multifamily homes rose to $1.06 trillion in 2015, up 10.4 percent from a year earlier, which was its fastest annual pace since 1993, a U.S. industry group said on Monday. The rise in multifamily loans helped propel the growth in commercial real estate mortgages by the largest amount since 2007, the Mortgage Bankers Association said. Last year's pickup in commercial lending coincided with the resilience in the single-family housing market in a steady U.S. economy.” (Reuters)
Morgan Stanley Sees 30% Risk of World Recession “Morgan Stanley has hiked the probability of a recession hitting the global economy within the next year to 30 percent from 20 percent. The U.S. bank also cut its baseline forecast for world economic growth to 3.0 percent in 2016. ‘While we don't believe that a global recession is likely this year, the declining impact of lower oil prices and easier monetary policy on growth starts to worry us,’ said Morgan Stanley economists led by Elga Bartsch in a report sent on Monday.” (CNBC)
The 20 Richest Real Estate Barons in the World “Despite the uncertainty roiling global financial markets, the real estate barons of the world are doing relatively well in 2016. Twenty-two people made the FORBES Billionaires List for the first time this year thanks to their real estate holdings, bringing the total number of the property-rich on the Forbes list to a whopping 184. The United States, with 44 billionaires, boasts the most property tycoons of any nation in the world.” (Forbes)
Here are the 3 Biggest Real Estate Ideas: MIPIM Director “Fancy some sun, sea and parties…alongside deep debate of property yields and cap rates? You're not alone as around 23,500 real estate professionals descend on the French resort of Cannes for the 27th annual real estate trade fair, MIPIM, which starts Tuesday. We caught up with the conference's director, Filippo Rean, to hear about the three hottest themes at this year's conference.” (CNBC)
How to Calculate the Future Value of Real Estate Investments “There are a couple of major financial considerations when making a real estate investment. First, you want to estimate the property's potential to generate rental income, which can usually be done by evaluating the rental histories of similar properties nearby. It can also be useful to estimate what the property might be worth in the future. For instance, if a rental property barely breaks even on rental income, but you project that you'll be able to sell it at a nice profit later; it still may be worth considering.” (Motley Fool)
What Does the Latest Job Number Mean for the U.S. Office Market? “According to the Bureau of Labor Statistics' preliminary numbers, the primary office-using sub-sectors added an average of 40,000 jobs in January and February 2016, a slowdown from the robust 73,000 monthly average in Q4 2015. However, this was similar to 2014 and 2015 when office-using employment growth got off to a sluggish start in the first quarter, before subsequently picking up later in the year. Seasonal factors, including atypical weather patterns, may have impacted the data during these periods.” (World Property Journal)
Are Unions Losing Their Grip in NYC? “Union contractors’ hold on the industry has been slipping for several years, but their role in NYC development has never been in as much jeopardy as is it now. This is, indeed, a crucial time for the city’s construction industry: Costs are on the rise, skilled workers are in short supply and one of developers’ most beloved tax benefits, the 421a program, is dead — at least temporarily. And the fight over 421a is a key indication of how developers are digging their heels in on what they’re willing to pay for labor. In blunt terms, it’s seemingly a perfect storm for a non-union takeover.” (The Real Deal)
Google reveals 77 per cent of its online traffic is encrypted — Google has disclosed how much of the traffic to its search engine and other services is being protected from hackers as part of its push to encrypt all online activity. Encryption shields 77% of the requests sent globally to Google’s data centres, up from 52% at the end of 2013, according to company statistics released Tuesday. The numbers cover all Google services expect its YouTube video site. Google plans to add YouTube to its encryption breakdown by the end of this year. Encryption is a security measure that scrambles transmitted information so it’s unintelligible if it’s intercepted by a third party.
US homebuilder sentiment holds steady in March -- U.S. homebuilders remain optimistic that the housing market will improve, but their expectations for sales over the next six months have dimmed just as the spring home-selling season gets under way. The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday held steady at 58 this month. Readings above 50 indicate more builders view sales conditions as good rather than poor. The index had been in the low 60s for eight months until February.