RSS Feed by Calculated Risk on 9/21/2014 08:38:00 PM
Sunday, September 21, 2014
Monday: Existing Home Sales
Another excellent article from Nick Timiraos at the WSJ: Should Mortgage Lending Standards Ease?
Easy credit fueled the home-price bubble of the past decade, which spurred overbuilding of homes and boosted consumer spending on everything from cars to college educations. Mortgage investors suffered huge losses after prices collapsed, and private lending markets have struggled to revive. Banks now are sharply limiting their mortgage offerings.Monday:
Subprime auto lending, by comparison, contracted sharply during the recession but has roared back—at a pace nearly four times that of prime lending over the past four years.
Auto lending has rebounded in part because investors didn't take the drubbing that mortgage investors did. Loans are smaller, cars can be repossessed faster than homes when borrowers default, and the collateral is easier to value. Car sales have also been fueled by an aging fleet that has resulted in pent-up demand.
• At 8:30 AM ET, the Chicago Fed National Activity Index for August. This is a composite index of other data.
• At 10:00 AM, Existing Home Sales for August from the National Association of Realtors (NAR). The consensus is for sales of 5.18 million on seasonally adjusted annual rate (SAAR) basis. Sales in July were at a 5.15 million SAAR. Economist Tom Lawler estimates the NAR will report sales of 5.12 million SAAR.
Weekend:
• Schedule for Week of September 21st
From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are down slightly and DOW futures are up slightly (fair value).
Oil prices were up over the last week with WTI futures at $92.41 per barrel and Brent at $98.08 per barrel. A year ago, WTI was at $104, and Brent was at $110 - so prices are down 10%+ year-over-year.
Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are around $3.35 per gallon (down almost 15 cents from a year ago). If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.
| Orange County Historical Gas Price Charts Provided by GasBuddy.com |
Hotels: Occupancy up 4.5%, RevPAR up 11.8% Year-over-Year
by Calculated Risk on 9/21/2014 12:13:00 PM
From HotelNewsNow.com: STR: US results for week ending 13 September
The U.S. hotel industry recorded positive results in the three key performance measurements during the week of 7-13 September 2014, according to data from STR.Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.
In year-over-year measurements, the industry’s occupancy rate rose 4.5 percent to 68.0 percent. Average daily rate increased 6.9 percent to finish the week at US$117.73. Revenue per available room for the week was up 11.8 percent to finish at US$80.04.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.
There is always a dip in occupancy after the summer (less leisure travel), and business travel should pick up soon.
Click on graph for larger image.The red line is for 2014, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels. Purple is for 2000.
The 4-week average of the occupancy rate is solidly above the median for 2000-2007, and is at about the level as for the same week in 2000 (the previous high).
Right now it looks like 2014 will be the best year since 2000 for hotels. Since it takes some time to plan and build hotels, I expect 2015 will be a record year for hotel occupancy. Note: Smith Travel analysts say that supply growth will pickup next year, but remain relatively slow, "hotel supply growth in the United States is forecast to be 1% this year and 1.3% in 2015".
Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com
Saturday, September 20, 2014
Schedule for Week of September 21st
by Calculated Risk on 9/20/2014 01:11:00 PM
The key reports this week are August New home sales on Wednesday, Existing home sales on Monday, and the third estimate of Q2 GDP on Friday.
For manufacturing, the September Richmond and Kansas City Fed surveys will be released this week.
8:30 AM ET: Chicago Fed National Activity Index for August. This is a composite index of other data.
10:00 AM: Existing Home Sales for August from the National Association of Realtors (NAR). The consensus is for sales of 5.18 million on seasonally adjusted annual rate (SAAR) basis. Sales in July were at a 5.15 million SAAR. Economist Tom Lawler estimates the NAR will report sales of 5.12 million SAAR.
A key will be the reported year-over-year increase in inventory of homes for sale.
9:00 AM: FHFA House Price Index for July. This was original a GSE only repeat sales, however there is also an expanded index. The consensus is for a 0.4% increase.
10:00 AM: Richmond Fed Survey of Manufacturing Activity for September.
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
10:00 AM: New Home Sales for August from the Census Bureau. This graph shows New Home Sales since 1963. The dashed line is the July sales rate.
The consensus is for an increase in sales to 430 thousand Seasonally Adjusted Annual Rate (SAAR) in August from 412 thousand in July.
During the day: The AIA's Architecture Billings Index for August (a leading indicator for commercial real estate).
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 300 thousand from 280 thousand.
8:30 AM: Durable Goods Orders for August from the Census Bureau. The consensus is for a 17.1% decrease in durable goods orders (last month durable goods orders were up 22.6% due to aircraft orders).
11:00 AM: the Kansas City Fed manufacturing survey for September.
8:30 AM: Gross Domestic Product, 2nd quarter 2014 (third estimate). The consensus is that real GDP increased 4.6% annualized in Q2, up from 4.2% in the second estimate.
9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for September). The consensus is for a reading of 84.6, unchanged from the preliminary reading of 84.6, and up from the August reading of 82.5.
Unofficial Problem Bank list unchanged at 435 Institutions
by Calculated Risk on 9/20/2014 08:05:00 AM
This is an unofficial list of Problem Banks compiled only from public sources.
Here is the unofficial problem bank list for Sept 19, 2014.
Changes and comments from surferdude808:
Only one addition and deletion to report this week to the Unofficial Problem Bank List. So the list count stays steady at 435 institutions but assets move down slightly to $137.4 billion. A year ago, the list held 692 institutions with assets of $242.9 billion. This is the fourth time since November 2012 the weekly list count has gone unchanged otherwise the week-to-week list count has been declining since August 10, 2012.CR Note: The first unofficial problem bank list was published in August 2009 with 389 institutions. The list peaked at 1,002 institutions on June 10, 2011, and is now down to 435.
This week the OCC terminated its actions against The First National Bank and Trust, Atmore, AL ($130 million). Added this week was Fayette County Bank, St. Elmo, IL ($53 million). Notice of this action came from the Illinois Department of Financial & Professional Regulation, which is one of the few state banking departments in the nation to provide transparency around its enforcement actions against commercial banks. So we give them major props and wish that all of their state brethren be as transparent.
Next week, we anticipate the FDIC will provide an update on its enforcement action activities.
Friday, September 19, 2014
CoStar: Commercial Real Estate prices increased 11.9% year-over-year in July
by Calculated Risk on 9/19/2014 04:56:00 PM
Here is a price index for commercial real estate that I follow.
From CoStar: Commercial Real Estate Prices Advance in July amid Rising Transaction Volume and Improving Liquidity Measures
CoStar’s equal-weighted U.S. Composite Index increased by a strong 1.5% in July 2014 and 11.9% for the 12 months ending in July 2014. It has now advanced to within 20% of its prerecession peak reached in 2007, supported by increased investor interest beyond core properties in primary markets. The value-weighted U.S. Composite Index, which is more heavily influenced by higher-value trades, began to recover earlier and is nearly back to its peak levels reached in 2007. As a result, annual pricing gains have moderated slightly over the last several months. The value-weighted Composite Index advanced 0.8% in July 2014, and 8.0% for the 12 months ending in July 2014.
...
Trailing 12-month repeat sale deal volume increased 24% as of July 2014 over the prior 12-month period ending in July 2013, as healthy market fundamentals, low interest rates and increasing allocations to commercial real estate by major investors provide a healthy environment for real estate transactions.
...
Distress sales as a percentage of total sales continued to decline from a peak of over 35% in 2011 to 11% through the first seven months of 2014.
emphasis added
Click on graph for larger image.This graph from CoStar shows the the value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index indexes.
The value weighted index is almost back to the pre-recession peak, but the equal weighted is still well below the pre-recession peak.
The second graph shows the percent of distressed "pairs".The distressed share is down from over 35% at the peak.
Note: These are repeat sales indexes - like Case-Shiller for residential - but this is based on far fewer pairs.
