Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Fri, Jul 17 1992 Date: Fri, 17 Jul 92 05:16:17 EDT Message-ID: 07-17 0000 DECISIONLINE: Real Estate USA TODAY Update July 17-19, 1992 Source: USA TODAY:Gannett National Information Network JUNE HOUSING STARTS DROP: The economy got a jolt of bad news Thursday, as the Commerce Department reported a sharp 3.2% drop in housing starts last month. That followed an 11% rise in May and 19% plunge in April. Ground-breakings for homes and apartment buildings fell in all regions except the west, the Commerce Department said. JULY IMPROVEMENT EXPECTED: Low mortgage rates should provide a slight rise in housing starts in July, analysts say. In June, seasonally adjusted starts totaled 1.17 million, down from 1.21 million in May, the Commerce Department reported Thursday. But most analysts expect July's improvements to be only modest, below the 1.7 million level of starts in 1983 and 1984. N.Y.C. SEES GLIMMER OF HOPE: The nation's largest commercial real-estate market may have hit bottom. During the last two years, New York City developers and lenders have been hit especially hard by the mix of oversupply and sagging demand seen across the USA. "But we see evidence that the market is finally stabilizing," says Steven Swerdlow, executive vice president, New York office of CB Commercial Real Estate Group. (For more, see special New York package below.) MORE APPLY FOR HOME LOANS: With the lowest mortgage interest rates in 20 years, home loan applications soared 71.5% last week over the week ended July 3, according to the latest weekly survey by the Mortgage Bankers Association. Refinancings accounted for most of the gain, jumping to 59.4% of the total from 40% two weeks ago. The average rate on 30-year fixed mortgages fell to 8.13%. JAPANESE EYE FRANCE: Japanese investors, it seems, have displaced the British as the largest foreign owners of French real estate. They now account for 31% of all foreign property holdings in the country, says Healey & Baker, a London-based real-estate firm. The big draw: Paris. More than 40% of all Japanese holdings in France are there. WASH. TRIBE PLANS CASINO: Washington's Puyallup Tribe wants to build a $300 million, 300-acre resort offering high-stakes casino gambling, provided it can get the idea by the state Gaming Commission. Current gambling pacts between the state and the tribes allow only limited gaming tables. FIXED-RATE MORTGAGES HOLD: The rates for 30-year fixed-rate mortgages from the Federal Home Loan Mortgage Corp. were listed at 8.13% Thursday, unchanged from Wednesday but down from 8.29% the week before. They were at 9.64% a year ago. For 30-year adjustable-rate mortgages, the rates were 5.56%, unchanged from Wednesday but down from 5.69% the week before. A year ago they were at 7.22%. ARM INDEXES STABLE: The one-year Treasury ARM index rates were listed at 3.64% Thursday, unchanged from Wednesday but down from 3.96% a week before. A year ago they were at 6.30%. For the 11th District ARM index, rates were at 5.290%, unchanged from Wednesday and unchanged from the week before. A year ago they were at 7.329%. T-BONDS DROP: Treasury security rates for the 30-year bonds showed a decline Thursday, listing at 7.61%. That's down 0.08 from Wednesday but up 0.02 from 7.59% the week before. A year ago T-bonds were at 8.47%. SPECIAL PACKAGE ON NEW YORK: CITY SUFFERED MORE THAN MOST: Rents in some choice midtown Manhattan districts have fallen more than 30% since their 1989 peak, says Swerdlow. Caught in the downdraft: High-profile developers such as Donald Trump, Peter Kalikow and the Reichmann brothers, owners of Olympia & York. "We're not saying we're going to climb out of the hole any time soon," says Swerdlow. But there are signs of hope. NEW YORK VACANCIES STABILIZE: One sign of hope for New York City real estate develpers: Vacancy rates have leveled. In downtown Manhattan, the vacancy rate has held at a high, but stable 20% since the beginning of the year, Swerdlow says. The key reason: A virtual shutdown in construction. Demand, meanwhile, is still flat, but at least it has stopped falling. SLOW IMPROVEMENT EXPECTED: "Simple supply and demand seems to dictate that the market will improve," says Howard Grufferman, a managing director of Julian Studley Inc., a major commercial broker. But it will be years before property values revive - perhaps too long for many developers. "The fact that the market has bottomed probably isn't much help, given their debt problems," says Swerdlow. (End of package.) Real Estate Editor: Christopher Goldthwaite. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM