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.
Thursday, the Dow Jones industrial average rose 134.29 points, or 0.7 per cent, to 18,506.41. The S&P 500 gained 11.32 points, or 0.5 per cent, to 2,163.75. The Nasdaq composite increased 28.33 points, or 0.6 per cent, to 5,034.06.
Benchmark U.S. crude rose 93 cents to close at $45.68 a barrel in New York. Brent crude, a standard for international oil prices, rose $1.11 to close at $47.37 a barrel in London. In other energy trading in New York, wholesale gasoline rose 4 cents to $1.41 a gallon, heating oil rose 3 cents to $1.41 a gallon and natural gas slipped a penny to $2.73 per 1,000 cubic feet.
States require insurance companies to locate beneficiaries -- Beneficiaries of unclaimed life insurance policies already have received billions of dollars — and others could be in store for some unexpected cash — the result of state actions forcing companies to locate heirs and pay them the money they are owed. Nearly two dozen states have passed laws requiring companies to search for beneficiaries. Illinois is the latest to consider a version of the legislation. The laws follow yearslong audits and multi-state investigations of the top 40 insurance companies that revealed many of them held on to benefits, even when they knew the person insured had died.
Average US mortgage rates move little; near historic lows --Long-term U.S. mortgage rates moved little this week, remaining near historically low levels in the wake of financial disarray in Europe. Mortgage giant Freddie Mac says the average for the benchmark 30-year fixed-rate mortgage ticked up to 3.42 per cent from 3.41 per cent last week, staying close to its all-time low of 3.31 per cent in November 2012. The average rate is down sharply from 4.09 per cent a year ago. The 15-year mortgage rate slipped to 2.72 per cent from 2.74 per cent last week.
US producer prices rose in June at fastest pace in 13 months --Prices charged by U.S. producers rose in June at the fastest pace in 13 months, reflecting a big jump in the price of gasoline and other energy products. The Labor Department says that its producer price index, which measures cost pressures before they reach the consumer, increased 0.5 per cent in June. That was the largest one-month jump since a similar rise in May 2015. Energy prices were up 4.1 per cent last month while food costs rose 0.9 per cent.
US weekly claims for jobless benefits hold steady --The number of Americans seeking unemployment benefits was unchanged last week, remaining at the lowest point since mid-April. The Labor Department said Thursday that weekly benefit applications held steady at 254,000, following a decline of 16,000 in the previous week. It was the lowest point since the number fell to 248,000 for the week of April 16. Weekly claims, which are a proxy for layoffs, have been below 300,000 for 71 consecutive weeks, the longest stretch since 1973.
Cheap Real Estate Still for Sale in Closed-End Funds “Yesterday I talked about using real estate as a way of finding income in these yield-starved times. While it is true that most people are underexposed to real estate and that real estate investment trusts have handily outperformed the broader market over the past 43 years, many REIT prices have been driven to extremely high levels. It is harder now to find REITs that trade at bargain levels. So to put money to work in real estate securities at a good price you must dig a little deeper.” (The Street)
More Renters Sour on Homeownership, Some Blame Student Debt “As home prices and rents continue to rise, confidence in the housing market is starting to wane. It is showing up in weaker traffic at open houses and less interest in taking on a mortgage as some worry about their student debt loads. The numbers are dropping, and a new survey from the National Association of Realtors only adds fodder to the current market's failings. While three-quarters of Americans surveyed in the second quarter of this year still think now is a good time to buy a home, the numbers are slipping, especially among renters.” (CNBC)
Ahold, Delhaize Agree to Sell 86 U.S. Stores Ahead of Merger “Royal Ahold NV and Delhaize Group agreed to sell 86 stores in the U.S. as the Dutch and Belgian grocers seek to win antitrust clearance for their merger this month. The European retailers are selling 4.1 percent of their combined U.S. stores, and the sites represent 3.2 percent of their revenue in that market, they said in a statement Thursday. Buyers include Weis Markets Inc., Publix Super Markets Inc., and Supervalu Inc. The divestments are subject to approval from the Federal Trade Commission, which has yet to rule on the merger.” (Bloomberg)
This Is the Future: Workplaces That Make You Healthier “When McKesson decided to revamp its headquarters in Richmond, Va., it knew it was time for a radical change. The drug distribution giant also knew it needed a workplace that was not only inspiring but reflected its primary mission: making people healthier. That’s what led the company to one of the latest workplace trends: WELL Building Certification. McKesson’s former 20-plus-year-old building was overcrowded, inflexible, technologically outdated, and lacked daylight. Addressing those issues was simply the first step. Executives wanted to create a space that benefited its workers.” (Fortune)
Cabela’s Near Sale to Goldman Sachs and Bass Pro Shops “Call this a shotgun marriage. Goldman Sachs and Bass Pro Shops are close to buying retail hunting giant Cabela’s, The Post has learned. ‘Bass is the only buyer around it,’ a source said. Private equity suitors including Apax Partners and TPG Capital have dropped out of the process. The auction to buy Cabela’s is expected to wrap up within days, sources close to the process said.” (New York Post)
Senators Ask FTC to Investigate Airbnb Impact on Rent “A group of senators is urging the Federal Trade Commission to investigate commercial use of short-term rentals through companies such as Airbnb, HomeAway and FlipKey. Three Democrats — California’s Dianne Feinstein, Hawaii’s Brian Schatz and Elizabeth Warren of Massachusetts — signed a letter out of concern that listings from commercial individuals or companies were ‘taking housing inventory off the market and driving up the cost of rent.’ These commercial users refer to people who rent out entire homes or multiple listings.” (MarketWatch)
Apartment Absorptions and Completions Grew in 2015 “Data from the US Census Bureau shows that multifamily for-rent starts grew 13% to 372,000 units in 2015. Completions rose 23%, according to the Survey of Market Absorption (SOMA), hitting 259,500 in 2015, writes the NAHB's Carmel Ford for Eye on Housing. The good news? People were moving into those new apartments. Likewise, apartment absorption rates increased in 2015, indicating solid demand growth.” (Multifamily Executive)
Why Commercial Real Estate Loans Are Not Like Wine “When fruit matures, it is ready for harvest. When certain wines and cheeses mature, they taste better. And when teenagers mature, they are able to think more logically and make more considered decisions. But what about when commercial mortgages mature? There may be benefits to waiting around for fruit, wine and teens, but waiting for a loan to reach its maturity date without examining whether it might be open to early refinancing doesn’t make the loan better – it makes the lending opportunity more likely to pass by those lenders who wait too long.” (Forbes)
U.S. Office Vacancy Rates Decline in Q2 “According to CBRE Group, vacancy rates in the U.S. office market saw a modest decline of 10 basis points (bps) during the second quarter of 2016 (Q2 2016), dipping to 13.0%. The national office vacancy rate remains at the lowest level since 2008, with a 40-bps decline over the past year. The suburban vacancy rate decreased by 20 bps, to 14.4%, while downtown vacancy increased by 10 bps, to 10.5%.” (World Property Journal)
Is Pokemon Go the Future of Real Estate? (Spoiler: No) “It’s barely been two weeks since Pokemon Go debuted, but the augmented reality game has already spawned the inevitable explainers, guides on where to play (hey), hot takes, parodies, backlash, and backlash to the backlash. And we’re now at the point in its life cycle where the inevitable has occurred: Businesses are looking to make bank on the game, thanks to the fact that players have to actually leave their homes and interact with their cities to play it. This is happening in ways that are totally natural—bars and restaurants, for example, are offering specials and welcoming players who are on Pokemon bar crawls—and ways that are ridiculous.” (Curbed New York)