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.
U.S. stock indexes closed mostly higher Wednesday after a sharp increase in crude oil prices helped drive market-leading gains for energy companies. Banks and other financial stocks declined the most as bond yields headed lower, which translates into lower interest rates on loans and lower profits for banks.
The Dow Jones industrial average ended in the red, while the Standard & Poor's 500 index and Nasdaq composite eked out modest gains. Two stocks rose for every one that fell on the New York Stock Exchange. The S&P 500 index added 2.56 points, or 0.1 percent, to 2,361.13. The Dow fell 42.18 points, or 0.2 percent, to 20,659.32. The Nasdaq composite index gained 22.41 points, or 0.4 percent, to 5,897.55.
Bond prices rose. The 10-year Treasury yield fell to 2.39 percent from 2.42 percent.
A day after Wall Street rallied on news that U.S. consumer confidence reached its highest level since 2000, the market got another dose of encouraging economic data Wednesday.
More people signed contracts to buy U.S. homes last month as warm weather and rising confidence appeared to encourage consumers to look for houses. The National Association of Realtors said Wednesday that its pending home sales index climbed 5.5 percent in February to 112.3, its highest point since April and its second-highest point since 2006. In addition, rising prices may have nudged some people into making offers for homes now out of fear of having to pay more if they wait. The NAR's index of pending home sales rose 11.4 percent in the Midwest, 4.3 percent in the South, 3.4 percent in the Northeast and 3.1 percent in the West. The U.S. housing market is looking strong despite a sharp rise in mortgage rates since the presidential election. The average on a benchmark 30-year fixed rate loan was 4.23 percent last week, up from 3.54 percent the week before the Nov. 8 vote. The NAR's pending home sales index climbed 5.5 percent in February to 112.3, its highest point since April and its second-highest point since 2006.
Governor Doug Ducey today signed an executive order aimed at reducing Arizona's regulatory system by seeking information from state boards and commissions about overly burdensome licensing requirements. By requiring new information from these boards and commissions, the Governor's Office seeks to eliminate unnecessary barriers to entering the job market and to expand opportunities for Arizonans who want to work. The governor’s executive order requires a number of state boards and commissions to review all requirements for each type of license that they issue—and then report these requirements accordingly. If the licensing requirements are found to be excessive (compared to the national average for that license), the board will have to justify the regulation in question, specifically citing potential harm to individuals in our state. The goal is to identify unnecessary and burdensome licensing requirements that are making it harder for Arizonans to find, keep, and create jobs. You can see the executive order here: [Executive Order 2017-03]
How-To Report Road Repair Concerns - Is there a pothole you'd like to see fixed? Is a street sign missing? Is a tree limb hanging too close over a roadway or sidewalk? You can report these issues to the Tucson Department of Transportation (TDOT), (520) 791-3154, or email the exact location to TDOTConcerns@tucsonaz.gov.
Tucson Department of Transportation:
Fed's Fischer says he sees two more rate hikes in 2017 “Federal Reserve Vice Chairman Stanley Fischer told CNBC that he sees the central bank raising rates two more times this year. Two rate hikes, seems to be 'about right,' Fischer said in an exclusive interview on 'Power Lunch' on Tuesday. He said the Fed's current outlook hasn't changed very much. In its March meeting, the Fed said it still expects its federal funds rate to be about 1.4 percent at end of 2017. Traders tracked by the CME Group also seem to be pricing in two more rate hikes for the current year.” (CNBC)
Retailers Could Get Slammed by Slowing International Tourism “The last thing beleaguered high-end U.S. retailers need right now is for another big chunk of their customer base to go AWOL. U.S. shoppers pulled back from luxury purchases in the wake of the Great Recession, leading stores to become more dependent on Chinese, Brazilian, and European tourists to pick up the slack. Now they’re caught in a geopolitical pickle. More international visitors are cutting back on trips to the U.S. because of the perception that the country is becoming inhospitable to foreigners, the travel ban on citizens from six countries, and global headlines about hassles at customs. Plus, the strengthening U.S. dollar against the euro and the yuan has made shopping here less appealing.” (Fortune)
U.S. House committee approves bill to increase scrutiny of Fed “A Republican-controlled committee of lawmakers approved a bill on Tuesday to allow a congressional audit of Federal Reserve monetary policy, a proposal Fed policymakers have opposed and which faces an uncertain path to final approval. Democrats uniformly spoke against the proposal during a meeting of the House of Representatives Committee on Oversight and Government Reform, suggesting the bill would face stronger resistance than in the past. ‘We should not in any way hinder their independence,’ said Representative Carolyn Maloney, a New York Democrat, echoing the sentiment of Fed policymakers who say they could come under political pressure to avoid making unpopular decisions such as raising interest rates to slow growth and control inflation. The next step for the bill would be a floor vote by the entire House, where Republicans hold a solid majority.” (Reuters)
How middle-class and even wealthy American families are sliding inexorably into the red “Not even a high six-figure salary is enough to keep New York City families out of the red. But spare a thought for the average American family, whose costs easily outpace the average income. A recent analysis from Sam Dogen at his personal finance website Financial Samurai showed how difficult it is for high earners to escape the rat race in New York City, one of the priciest places to live in the world. He analyzed a mock budget for an imaginary family of four in which the two 35-year-old breadwinners each make $250,000 a year. After factoring in taxes, 401(k)contributions, home and child care costs, the family was left with just $7,300 for the year — as if they were living ‘paycheck to paycheck.’” (MarketWatch)
To Address Affordable Housing Shortage, Restoring 19th-Century Homes “The tiny city of Apalachicola, Fla., is well known in preservationist circles for its abundance of restored 19th-century buildings, but when it comes to affordable housing, the Gulf Coast community comes up short. ‘Twenty-eight percent of the population in Franklin County pays 40 percent of its income for housing,’ said Jeffrey Sharkey, a political consultant from Tallahassee, Fla. Mr. Sharkey is one of the investors in Denton Cove, a proposed multifamily housing development that has divided the community and prompted a discussion about whether the city’s housing problem should be solved with new homes or the historic ones that are its legacy. Denton Cove would be a 52-unit cluster of town homes built on the site of a decommissioned high school and paid for through the sale of Housing and Urban Development low-income tax credits.” (New York Times)
SummerHill to Develop 994-Unit Mixed-Use Property in CA “SummerHill Housing Group will develop Nuevo, 988-residential units and six live-work units in the 65+/-Lawrence Station area plan in Santa Clara, Calif. Nuevo will consist of 451 for-sale residential units, six for-sale live/work units, 537 apartments and approximately 40,000 square feet of neighborhood retail and restaurants. The company has started the demolition of the aging light industrial facilities located on site and expects to commence grading for the apartments this summer. ‘It is a true masterplan, which is rare in this day and age in the Bay Area,’ Robert Freed, SummerHill Housing Group’s president & CEO, told MHN. ‘Its proximity to both jobs and transportation is another key element.’ SummerHill’s Nuevo community will include 41 E-Homes, 176 TownFlats, 114 E-Towns, 120 condos, six live/work units and 98 affordable apartment homes. Amenities for residents of the apartment homes will include pools, club rooms, fitness centers, business centers, pet grooming facilities, bike storage and outdoor BBQ areas.” (MultiHousing News)
Study: Restaurants deliver halo effect for retail centers “For the first time ever in 2016, U.S. restaurant sales eclipsed grocery store sales — and that’s good news for retail centers. The amount of space dedicated to food in retail centers has grown from 5% in 2007 to 15% today. And the trend is expected to increase to 20% by 2025, according to a study, ‘The Successful Integration of Food & Beverage within Retail Real Estate,’ from the International Council of Shopping Centers (ICSC). ‘The increasing popularity of dining out is revitalizing retail real estate around the globe by creating a true sense of community where people can go out to dinner, take in a movie and shop, all in one place,’ said Tom McGee, president and CEO of ICSC. ‘Centers that are strategic and innovative when incorporating foodservices are sure to reap benefits such as increases in foot traffic, dwell time and number of visitors.’ The two main factors driving the growth are technology advancements and the rise of an experience economy, which was fueled by millennials and adopted by all generations.” (Chain Store Age)
Best U.S. Markets for Buying Single Family Rental Homes in 2017 Revealed “ATTOM Data Solutions has just released its Q1 2017 Single Family Rental Market Report, which ranks the best U.S. markets for buying single-family rental properties in 2017. According to their study, the average annual gross rental yield (annualized gross rent income divided by median purchase price of single family homes) among the 375 counties was 9.0 percent for 2017, down from an average of 9.1 percent in 2016.” (World Property Journal)
After a big bonus, General Growth CEO pay declines “General Growth Properties CEO Sandeep Mathrani earned $12.7 million in 2016, less than a third of the $39.2 million he was awarded the previous year. A one-time $25 million stock award in 2015 accounted for most of the decline. Without the huge payout, which won't vest before February 2020, Mathrani's total compensation would have slipped $1.5 million, according to a proxy the Chicago-based mall operator filed with the Securities & Exchange Commission. His base pay ($1.2 million) and non-equity incentive comp ($3 million) have been flat for three years. After a "say on pay" shareholder vote last year, General Growth's compensation committee opted to prohibit guaranteed minimum benefits and excise tax gross-ups and other pay practices. Since 2014, base pay has been flat and long-term equity incentives have declined 20 percent for directors, the proxy said. Mathrani, 54, took over as CEO of the nation's second-largest shopping mall owner in 2011, a couple of months after the real estate investment trust emerged from Chapter 11 bankruptcy protection.” (Crain’s Chicago Business)
Developers are moving ahead with $300 million Plano mixed-use project “Developers have gotten the go ahead to move forward on a $300 million Plano mixed-use project on U.S. Highway 75 Los Angeles-based Regent Properties is redeveloping the 84-acre former Texas Instruments campus near the southeast corner of U.S. Highway 75 and Legacy Drive. Work is already underway to convert four old TI buildings into new generation office space. And now Plano officials have okayed zoning for Regent to build almost 700 apartments, retail space and a hotel in the project on the west side of U.S. 75. ‘We were full speed ahead with our Legacy Central project before, and this just reinforces our ability to deliver a great mixed-use project with this residential component approval,’ said Regent CEO Eric Fleiss. ‘Two of our office buildings are almost completed as is our fitness center.’” (Dallas News)