Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Mon, Apr 13 1992 Date: Mon, 13 Apr 92 05:42:38 EDT Message-ID: 04-13 0000 DECISIONLINE: Real Estate USA TODAY Update April 13, 1992 Source: USA TODAY:Gannett National Information Network BANKS COUNTING ON CUSHIONS: The meltdown in Japan's stocks is hitting the financial cushions of big Japanese banks and that could soon hurt the U.S. economy. Japanese banks have long been investors in stocks. Big city banks are like U.S. money center banks such as Citibank. But Japan lacks well-developed money markets to give businesses other loan sources. And banks were counting on stock gains to cover real estate losses. (For more, see special Japan package below.) SILVERDOME MAY BE SOLD: The City Council of Pontiac, Mich., says things are so bad that in order to survive the city must sell the Silverdome, home of the Detroit Lions football team. City Council president John Bueno envisions a private group or a syndicate of investors buying the arena and developing the land around it, something the city doesn't have the cash or desire to do. PONTIAC HAS ASSETS: "Urban problems are spreading," says Boston Mayor Ray Flynn, president of the U.S. Conference of Mayors. But Pontiac has assets it can sell. In addition to the Silverdome, and a golf course, the city council has looked at selling the hospital, two cemeteries, a mental institution and the dump. Civic leaders want to cut property taxes 25% to match those in Auburn Hills. FDIC UPS MORTGAGE THRESHOLD: The Federal Deposit Insurance Corp. has increased the minimum mortgage threshold that decides if a licensed appraiser has to be used in federally-related real estate transactions financed by the banks the FDIC regulates. The minimum amount is now $100,000, up from $50,000. The primary short-term impact will be on areas with median home prices under $100,000. WESTINGHOUSE INCOME DROPS: Westinghouse, which has been hard hit by poor real estate loans, Friday reported a 6% decline in first-quarter net income. Net income was $92 million, or 27 cents per share, compared to $98 million, or 34 cents per share, for the first quarter of 1991. "Most of our businesses are late (economic) cycle and have yet to experience increased order activity," said Chairman Paul Lego. MAUI CONDO LISTINGS JUMP: In Hawaii, the number of condominium listings between December 1990 and December 1991 barely edged up on Oahu, staying right about 4,500. But Maui saw a significant jump, from nearly 1,250 to just over 1,500, according to a recent Hawaii Investor. Listings for the Big Island increased from just over 250 to just under 500, where Kauai listings edged up from about 300 to about 400. PROPOSAL WRITING SEMINAR SET: The New Jersey Department of Community Affairs Division of Housing and Development's housing advocacy office is offering a seminar on proposal writing May 14 in Trenton. It's offering the seminar in conjunction with the New Jersey Institute of Technology's continuing education division. For registration information call the NJIT at 800-624-9850. HUD GRANTS ADDITIONAL AUTHORITY: The Department of Housing and Urban Development has given the regional director of the Boston Regional HUD Office and the field office managers in Region I additional authority. They have the authority of the Assistant Secretary for Housing-Federal Housing Commission to approve plans of action from owners implementing the Emergency Low Income Housing Preservation Act and other acts. MORTGAGE RATES PLUNGE: Mortgage rates dropped sharply last week and economists say they expect more declines. Thirty-year fixed rates averaged 8.84% vs. 8.96% a week earlier, the Federal Home Loan Mortgage Corp. says. Mortgage rates peaked this year at 9.03% four weeks ago and have fallen ever since. One-year adjustable rates averaged 6.15% last week vs. 6.22%. SPECIAL PACKAGE ON JAPAN: ASSETS ARE DEFLATING: Twelve of the world's 20 largest banks are Japanese, based on 1990 assets. But those assets are quickly deflating. The Nikkei stock average is 54% below its 1989 peak of 38,916. The big banks have gone from nearly $200 billion in unrealized stock gains to less than 80 billion. And many Japanese banks have suffered huge losses on loans to real estate speculators. BAD LOANS COULD TOP $200B: The big Japanese banks may be holding more than $200 billion in bad property loans, by one estimate. Losses on those could wipe out most or all of their capital cushion. Even if the banks' real-estate losses aren't that bad, "I suspect we'll see the failure of one or more of the major banks," says David Beim, a professor at Columbia University School of Business. PRESSURE IS ON U.S. BANKS: That threat has rattled investors. Japanese bank stocks have fallen much faster than the overall market. It has also put pressure on big U.S. banks, who do billions of dollars in complex trades with Japanese banks. A default could be devastating. "Japan is the world's banker," says George Salem, Prudential Securities. "If they pull back, a lot of borrowers are going to starve." (End of package.) Real Estate Editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 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