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 Tue, May 26 1992 Date: Tue, 26 May 92 05:20:39 EDT Message-ID: 05-26 0000 DECISIONLINE: Real Estate USA TODAY Update May 26, 1992 Source: USA TODAY:Gannett National Information Network AVERAGE RATES TAKE A DROP: Rates on 30-year, fixed-rate mortgages averaged 8.53% last week, down from 8.64% the week before, reports the Federal Home Loan Mortgage Corp. The rate is the fourth weekly drop and the lowest average rate since the week of January 24, when rates were 8.56%. One-year adjustable mortgages averaged 5.93%, down from 5.97%, and 15-year fixed mortgages averaged 8.16%, down from 8.26%. ANALYSIS REVEALS CALIF. WOES: A USA TODAY analysis of 12,296 U.S. commercial banks and savings banks as of Dec. 31, 1991 shows California banks' problem assets soared 56% to $15 billion from a year earlier. That compares to a 2% increase nationally, according to data from the Federal Deposit Insurance Corp. "California banks are up to their eyeballs" in bad loans, says Michael Murphy of The Overpriced Stock Service. (For more, see special Banks package below.) MAY SALES EXPECTED TO BE BETTER: A survey of economists by consultants MMS International Inc. finds that economists expect the National Association of Realtors to announce Tuesday a 1% drop in sales of previously owned homes for April. Economists look for better sales this month because of recent declines in mortgage rates. TIME SHARES GROWING IN CALIF.: Of the two million households in the world owning a time share, nearly 10% are California residents, reports "The Resort Timeshare Industry in California," a study commissioned by the Washington-based American Resort Development Association. The study found that in 1991, California accounted for nearly $215 million of time-share inventory, or 7% of the world's total. TIME SHARES ADDING TO ECONOMY: California is home to 71 time-share resorts, with 3,739 units and 190,000 intervals, says a study commissioned by the Washington-based American Resort Development Association. With an average price of $8,875, sales totaled over $1.5 billion through 1991. Time-share resorts have added $230 million consumer spending, $37 million of travel expenses and $12 million in property taxes. TOP RENTAL CITIES REPORTED: The average Honolulu renter pays more than $12,000 annually for a basic one-bedroom apartment, reports Runzheimer International, a Rochester, Wis.-based management consulting firm. San Francisco followed with an an annual cost of $9,260. The top ten was rounded out by New York, Boston, San Jose, Calif., Washington, D.C., Los Angeles, Chicago, Hartford, Conn., and San Diego. RETIREE COMMUNITIES PLANNED: The Marriott Corporation plans to develop housing complexes for retirees, the company reports in the May:June issue of the Journal of Housing. Marriott, which will retain management responsibilities while selling the communities to outside investors, plans to build 100 of the communities by 2000. ONLINE SERVICE SUCCEEDS: Grempler Realty, Inc. a Baltimore real estate company, receives 500 calls weekly from buyers and sellers dialing into an online computer service, reports the June issue of Real Estate Today. Among CompuHome offerings: The companies' listings, interest rate updates and open house schedules. Callers don't need to leave information, which Grempler says has led to its success. RTC TO PROVIDE L.A. HOMES: The Resolution Trust Corporation says will provide 49 apartments and single-family homes in the Los Angeles area to families displaced by the recent riots. The RTC, the federal agency charged with administering the savings-and-loan cleanup, inherited the units from failed S&Ls. SPECIAL PACKAGE ON BANKS: 1980S SAW OVERBUILDING: By the end of the 1980s, commercial real-estate developers, backed by banks and insurance companies, had built more than California could absorb. In Southern California nearly 20% of office space is now empty, and sales of previously owned homes have fallen three straight years. California banks' holdings of repossessed property rose 48% to $3.2 billionin 1991. SOME HAVE POSITIVE OUTLOOK: Some analysts say California's stronger and more diverse economy will prevent another New England or Texas, where real-estate meltdowns ruined hundreds of banks. Also, the state's growing population may yet fill empty space. And unlike Texas and New England, short-term interest rates have helped California banks. Bank merges will also improve efficiency and profits, analysts say. CALIF. CONCERNS SOME: The situation in California may be as bad or worse than Texas and New England combined, says George Salem, Prudential Securities' banking analyst. A commercial real estate recovery may be several years away, and interest rates won't help the banks forever. Either way, mounting loan problems can be expected, even as the economy recovers, says Lynn Reaser, chief economist at First Interstate. (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