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 Thu, Jul 30 1992 Date: Thu, 30 Jul 92 04:32:02 EDT Message-ID: 07-30 0000 DECISIONLINE: Real Estate USA TODAY Update July 30, 1992 Source: USA TODAY:Gannett National Information Network IRS DROPS DEFERMENT CHALLENGE: Pacific Gateway Properties Inc. Wednesday announced that an IRS challenge has been dropped. The challenge concerned tax-deferred reporting of property exchanges conducted by its Golden Gateway Building Company partnership in 1988. The company said it has been advised that the IRS won't propose any adjustments. The property in question is the Alcoa Building in downtown San Francisco. STOCK MARKET GOES WILD: In the last two days, the bond and stock markets have blasted off, taking individual investors and professional money managers for a wild ride. The interest rate on bellwether 30-year Treasury bonds has plummeted to 7.45%. That's slightly above January's low of 7.39%. The Dow Jones industrial average has jumped 97 points, and the Standard & Poor's 500 index set a record high Wednesday. (For more, see special Market package below.) TRUST ANNOUNCES PURCHASES: New Plan Realty Trust, the nation's largest real estate investment trust, has announced that it has contracted to purchase a Kingsport, Tenn., shopping center. The trust also has taken title of an apartment complex in Louisville, Ky. from the Resolution Trust Corp. That purchase went directly to closing. The trust paid $8.3 million in cash for the properties. COST-RATE GAP TO NARROW: The gap between the cost of funds for banks and the rates they charge depositors on loans likely will narrow as loan demand increases, Federal Reserve Chairman Alan Greenspan told the House Banking Committee Wednesday. Greenspan said that balancing the federal budget would bring down long-term interest rates and stimulate economic growth. TRUST INCOME DROPS: The Chicago Dock and Canal Trust, a publicly held real estate investment trust, Wednesday announced its income before gain from disposition of real estate of $1.3 million, or $.24 per share, for the fiscal year ended April 30. In the previous fiscal year, income before reserve for asset impairment was $4.9 million, or $.85 per share. LONE STAR EARNINGS DROP: Lone Star Industries Wednesday said second-quarter earnings fell to 12 cents a share from 25 cents a year ago. The producer of construction materials said net income fell to $2 million from $4.1 million in the second quarter of 1991. Revenue fell to $64.6 million from $73.4 million. SPECIAL PACKAGE ON MARKET: SUPPLY AND DEMAND TRIGGERS DROP: Long-term interest rates are now on the verge of doing what short-term rates have been doing all year - falling to levels not seen in 30 years. Reason: Supply and demand. Investors, fearing that today's long-term bond yields are heading for extinction, are lunging to grab them before they're gone. Wall Street is happy because consumers are miserable. CONFIDENCE PLUNGE SHOCKS STREET: The Conference Board, a business research group, said Tuesday that its Consumer Confidence index plunged to 61 in July from 72.6 -the biggest drop since October. The report shocked Wall Street because the Federal Reserve Board had lowered its key discount rate from 3.5% to 3% July 2 - the lowest since 1963. NEWS SENDS YIELDS DOWN: Bond yields, which had drifted lower last week, plunged on the news. Falling consumer confidence is wonderful for the bond market. When the economy grows slowly or recedes, there's little chance inflation will heat up. Inflation eats up the value of bonds' interest payments. Traders worried about inflation demand higher bond yields. If they think yields will fall, they bid yields down. (End of package.) FIXED-RATE MORTGAGES DECLINE: The rates for 30-year fixed-rate mortgages from the Federal Home Loan Mortgage Corp. were listed at 8.08% Wednesday, unchanged from Tuesday and down from 8.09% the week before. They were at 9.50% a year ago. For 30-year adjustable-rate mortgages, the rates were 5.45%, unchanged from Tuesday and down from 5.50% the week before. A year ago they were at 7.21%. ARM INDEXES UNCHANGED: The one-year Treasury ARM index rates were listed at 3.53% Wednesday, unchanged from Tuesday and unchanged from the week before. A year ago they were at 6.29%. For the 11th District ARM index, rates were at 5.290%, unchanged from Tuesday and unchanged also from the week before. A year ago they were at 7.155%. T-BONDS INCREASE: Treasury security rates for the 30-year bonds showed an increase Wednesday, listing at 7.45%. That's up 0.02 from rates of 7.43% Tuesday and down 0.21 from 7.66% the week before. A year ago T-bonds were at 8.33%. Real Estate Editor: Beth Mann. (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