Commercial & Residential Property Blog

For thousands of low-income renters nationwide — but especially in rural towns and small cities — the recession is hitting home in an unexpected way.

Nationwide, funding to build low-cost apartments has dropped by more than half in two years to $4 billion. Hundreds of projects can’t get off the ground because the federal tax credits that help offset development costs are currently worthless to traditional investors.

Sinking property values, high unemployment and prices, and poor environments add to the pressure felt by residents in these metros.

Few enjoy their commute. Just ask Stephen Dinwiddie, M.D., a psychiatrist at the University of Chicago.

The Mortgage Bankers Association (MBA) today released its mid-year ranking of commercial and multifamily mortgage servicers as of June 30, 2009. On top of the list of firms is Wells Fargo/Wachovia Bank with $476.2 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $308.5 billion, Capmark Finance Inc. with $248.7 billion, KeyBank Real Estate Capital with $133.1 billion, Bank of America with $132.2 billion, and GEMSA Loan Services LP with $104.8 billion.

The U.S. Department of Commerce offered yet another clue that, with any luck, the panic and the recession will someday merely be bad memories. According to Commerce, the U.S. GDP contracted at a 1 percent annualized rate during 2Q09, less than expected. The rate was also considerably less than the annualized rate of contraction seen in the first quarter, 6.4 percent, and the rate of contraction during the fourth quarter of 2008, 5.4 percent.

Long-term mortgage rates remain near record lows, despite rising slightly this week. Freddie Mac reported that average interest on a 30-year fixed loan was 5.14 percent, up from 5.12 percent a week ago.

Rates for 30-year home loans edged up this week, but remain close to record lows reached over the spring.

The average rate for a 30-year fixed mortgage was 5.14 percent, up from 5.12 percent a week earlier, mortgage company Freddie Mac said Thursday. Rates, while above the record low of 4.78 percent hit in the spring, are still at attractive levels for people looking to buy a home or refinance.

DANVILLE, Va–Richmond Federal Reserve President Jeffrey Lacker was quoted on Thursday as saying the U.S. economy was stabilising after a painful recession and the shattered housing market will no longer be a drag on economic activity.

“I think the economy is levelling out,” Lacker said in an interview with the Danville Register & Bee newspaper. “I think there is reason for hope.”

Since the credit crunch hit a couple of years ago, investors have been shying away from tax-exempt bonds. That’s one aspect of the financial crisis that never received that much attention in the media, but the impact of that was severe on state and local housing finance agencies (HFAs), which make low-cost mortgage money available to working households that have trouble qualifying for conventional financing.

The recession is over and the economy is no longer in freefall, says Richard W. Fisher, president and chief executive of the Federal Reserve Bank of Dallas.

Fisher says the worst is certainly over for the residential housing market. “The way the math works, I call it the Johnny Mercer effect,” he says, referring to the singer- songwriter who wrote the lyric: “Accentuate the positive, eliminate the negative. …”

BusinessWeek’s real estate guru Marc Roth points out these opportunities, which he says make sense if investors are willing to look over the property carefully and ask tough questions.