Housing Bubble and Real Estate Market Tracker

Judy Weil submits: Here's our summary of articles and data points on the housing market. It's part of Seeking Alpha's coverage of the real estate market and homebuilder stocks. Like all other topics and stock coverage from Seeking Alpha, you can have this sent to your Blackberry or desktop email by signing up for our no-spam free email subscription service.

Quote of the Day- "From the House's Mouth"

"These people have so little equity on their houses, that they find it really easy to just walk out. They're not going to lose a lot of equity, so they're tempted to say, 'Well, I'm just going to stop paying and let them come and repossess the house.' They already have bad credit anyway."- Guillermo Covarrubias, assistant professor of economics at The University of Texas at Tyler. (Tyler Morning Telegraph, Sept. 3rd)

Real Estate Sales and House Prices

• Valley Residents Get Smart About Homes (Arizona Republic, Sept. 2nd): "Metropolitan Pheonix: The median price of Valley homes sold last month was about $250,000. The median price of a home listed in July was almost $275,000… The shakeup of the mortgage industry, particularly with Tucson-based First Magnus' demise, has left hundreds and possibly thousands of Arizonans out of work. To help the industry, Stewart Title, with the Arizona Mortgage Lenders Association and the Arizona Mortgage Bankers Association, is holding a job fair Sept. 7... Employers will be interviewing for the following positions: loan officers, processors and coordinators."

• Its Mill Days Gone (and Not Coming Back), a Small Town Tries Plans B and C (NY Times, Sept. 2nd): "Berlin, New Hampshire: Nearly all the paper mills have closed, taking thousands of jobs… Berlin is… betting [on] a new 1,280-bed federal prison and New England’s first all-terrain vehicle park… The loss of the mill industry has left the city with a glut of housing. Vacant buildings abound, and the city is starting to crack down on absentee landlords. A string of fires occurred, leaving homeowners and renters on edge, and Berlin has also been attracting people… who are looking for cheap housing but not necessarily employment."

• Despite Instability, Del. Home Market OK (Delaware Online, Sept. 2nd): "New Castle County: [Inventory of] homes priced at $150,000 or below… have dropped 10% from a year ago. [But there are 54% more] homes priced from $250,000-$400,000… on the market than at the same time last year… From August 2002-August 2003, the average price of a home sold in New Castle County was $192,817, and it sat for an average of 32 days on the market… In the 12 months ending in August, the average home price in New Castle County stood at $262,095… taking an average of 47 days to sell… During H1'07, 1,476 properties… sold in Kent County, vs. 1,840 during H1'06 [-20%]. The average price… increased [5%], from $240,300 in 2006 to $252,200 in 2007."

• Real Estate Market Conditions (Westchester.com, Bill Smith's blog, Sept. 2nd) Westchester, New York: "I have heard from a couple of realtors that the market for over $600k homes has really slowed since the credit crunch hit. My neighbor just lost his buyer when the guy's mortgage company would not fund a jumbo mortgage at the closing. I have looked at www.westchesterny.blogspot.com for a good exchange on what is happening to the Westchester real estate market."

• Survey Sees Sizzling Home Values (Daily News, Sept. 1st) Longview, Washington: "Office of Federal Housing Enterprise Oversight: The Longview area's 13.6% y/y increase in home values ranks sixth in the country… Washington state ranked third [nationwide], with appreciation at 9.12%, behind Utah at 15.28% and Wyoming at 12.84%… "Matt Broughton, Realtor/owner of Realty World in Longview: "I'm kind of surprised at that ranking… We're seeing a lot of pricing reductions. There's a lot inventory…" Despite the glut of homes… the median price for a home in the county rose to $199,250 in June… Longview's ranking likely also is bolstered by current owners refinancing their homes for extra cash, since part of the OFHEO measures refinancing."

• Hamptons Summer Rental Hit $1M (The Real Deal, Aug. 31st): "A Hamptons waterfront luxury rental for Memorial Day to Labor Day hit $1 million this season, a record. The Southampton house was rented through... Sotheby's International Realty in Southampton. [They] declined to say where the house was or who rented it... The $1m summer rental shattered the previous record high of $550,000 for a summer rental. Russian aluminum heiress Anna Anisimova shelled out that sum in 2004 for the Southampton mansion of socialite/songwriter Denise Rich."

• Parks Attract Pricey Developments (The Real Deal, Aug. 31st): "New York's parks keep attracting more upscale developments. Between Central Park West and Broadway and 61st and 62nd streets, the sold-out 15 CPW is reportedly the city's most successful apartment complex ever. At least 15 apartments sold for more than $20 million. The converted Plaza Hotel re-opens as apartments on October 1, and has reportedly sold units for $50 million. At 220 Central Park South, a 41-story condo tower is planned, with units expected to sell for at least $2,500/sf At 111 Central Park North, a 48-unit condo tower is expected to open this fall, after breaking Harlem records with sales of up to $1,700/sf."

Real Estate Investing and Sentiment

• Watch The Path Ahead, Not Your Own Feet (Richard Shaw in Seeking Alpha, Aug. 31st): "CNN August 28, 2007: "Standard and Poor’s said its nationwide S&P/Case-Shiller Home Price Index fell 3.2% from Q2'06 to Q2'07… WSJ August 30, 2007 - “U.S. house prices appreciated 3.2% in Q2'07 from Q2'06, the Office of Federal Housing Enterprise Oversight reported Thursday. … OFHEO said prices rose only 0.1% in Q2 from Q1… The two releases report exactly opposite direction and magnitude of housing price changes. They are probably measuring different segments of the housing world, but they report the numbers as national aggregates and the investment news services report them as headlines… Short-term news and data [is] more noise than useful information."

• Housing Help Slated For Artists (AM NY, Aug. 30th): "Gov. Eliot Spitzer signed a new bill Thursday that… gives grants of up $12,000 to a single artist over a two-year-period and up to $20,000 to a group of artists for live-work space in neighborhoods artists have been priced out of. Assemblywoman Joan Millman (D-Brooklyn), who sponsored the legislation: "Artists come into communities that are rundown and sleazy and bring a life and vibrancy to that community -- they are an economic engine and they shouldn't be overlooked." Backers also say that the creative industries are a key piece of New York City's economic engine, generating more than 300,000 jobs according to a 2002 study."

Subprime Fallout

• Treasury Market Volatility Rises to Most in 3 Years (Bloomberg, Sept. 4th): "Morgan Stanley's head of U.S. government bond trading, Sanjay Verma: [Traders] have stopped computer-driven buying and selling of Treasuries… The retreat by so-called black-box traders and hedge funds caused orders for Treasuries to drop [some] 80%... Mark MacQueen, a partner at Sage Advisory Services Ltd.: Securities firms increased commissions as much as nine-fold to avoid losses should offers to buy or sell bonds suddenly disappear… Volatility in Treasuries has increased… in the [current credit crisis]. Federal Reserve: The U.S. market for commercial paper, corporate debt maturing in 270 days or less, shrank for a third week, extending the biggest slump in at least seven years."

• Did the Bush-Bernanke Offense Do Anything for the Economy? (Jim Kingsland in Seeking Alpha, Sept. 2nd): "The FHA part of the Bush plan will help an entire 80,000 people qualify for FHA insured mortgage refinancings... While I'm not for bailing out nitwit speculators who knew just enough to be dangerous, 80,000 compares to 2-million adjustables that will reset over the next two years. Oddly enough, on Thursday night, the administration pre-warned the press that this Bush program would cater to certain subprime borrowers who were facing foreclosure. Yet, on Friday, the President told us the 80,000 FHA insured mortgages… would be for people with "good credit."

• Brokerage Earnings to Drop -- Lehman (Steven Towns in Seeking Alpha, Aug, 31st): "A warning from Lehman Brothers' analysts about Q3 earnings amid ongoing market turmoil. The firm cut its H2'07 and 2008 estimates for brokerage firms Goldman Sachs, Morgan Stanley, Merrill Lynch and Bear Stearns. Lehman: "We believe that third-quarter earnings will be significantly impacted by the dislocation in the credit and asset-backed/mortgage markets…" The note also said Lehman has "limited conviction about 2008 ... sitting here at the end of August with a wall of worry to climb between now and October."

• Accredited Climbs on Lowered Bid (Roy Mehta in Seeking Alpha, Aug, 31st): "Private equity company Lone Star Funds has cut its offer for mortgage lender Accredited Home Lenders by 44%. Lone Star… is now offering to pay $214 million ($8.50/share). The lender had originally agreed to be bought by Lone Star for $400m ($15.10/share) on June 4th. However the private equity company has been trying to back out of the deal, pointing out the "drastic deterioration" of Accredited's financial situation. Last week, Accredited stopped accepting new home loan applications and cut 62% of its workforce… Lone Star's new $8.50 offer represents a 32% premium over the $6.31 closing price of Accredited on Thursday."

• McGraw-Hill Rearranges Its Deck Chairs (George Gutowski in Seeking Alpha, Aug. 31st): "NY Times: Kathleen Corbet, president of the credit rating company Standard & Poor’s, resigned after lawmakers and investors criticized the company for failing to judge the risks of securities backed by subprime mortgages… S&P laid out a lot of credit ratings which did not hold… The credit rating system is broken and just replacing one top officer is not enough… The credit rating system is inadvertently entrenched by regulatory requirements that requires investments to be within certain-investment rating grades. The business is then automatically driven into a few rating agencies… Billions have been lost on so called investment grade or better credit."

• Speculator Defaults Aggravating Housing Crisis (Seeking Alpha, Aug. 31st): "As risk grows, lenders have tightened lending standards, discouraging applications from potential homebuyers: The Mortgage Bankers Association mortgage application index fell 4% last week, its second consecutive decline. Adjustable rate mortgage applications fell 23% and rates rose to 6.51% from 5.84% last week, while fixed interest loan rates fell. Economists predict 7-10% home price declines by 2008. Nervous homebuilders will meet with Fed chief Ben Bernanke this week, possibly to press for a Fed Funds rate cut to buffer the struggling industry. But an MBA survey found that in former price and building boom states that are now suffering, many of the loans defaulting were to made investors and speculators… The Fed appears disinclined to help out speculators with an interest rate cut."

• Banks Not Eager to Borrow at Discount Window (Judith Levy in Seeking Alpha, Aug. 31st): "Federal Reserve: U.S. banks are making but slight use of the recently lowered rate at the discount window… Primary credit borrowing at the window averaged $1.3 billion per day this week, up from an average of $1.2b last week. On Wednesday, though, primary credits totaled $1.1b, down from $2b a week earlier. Last week, Citigroup, JPMorgan, Bank of America and Wachovia each borrowed $500 million at the window in a show of support for the Fed's move… Little to no new borrowing has occurred since. Christopher Low, chief economist at FTN Financial in New York: "It is too expensive. If a bank has decent credit, they can get a much lower rate in the market."

• Commercial Paper Slump Deepens, T-Bill Yields Fall (Judith Levy in Seeking Alpha, Aug. 31st): "The U.S. commercial paper market contracted for the third week in a row -- its worst slump in at least seven years -- and has shed 11% of its value in a month as investors continue to flee to safe investments. Outstanding commercial paper fell a seasonally adjusted $62.8 billion last week. That fall is smaller than the week before last, when paper dropped by $90.2b, but is still significant. Total outstanding commercial paper now stands at $1.979 trillion, the first time in five months it has ticked below $2t. Asset-backed commercial paper fell $59.4b to $998b last week, its lowest since December."

• Bailout With Taxpayer Dollars (Seeing the Forest, Aug. 31st): "Bush announced "home loan relief" today… This means a huge taxpayer transfer to the rich. Partly by moving more mortgages to federal insurance - meaning the government pays the investors when the mortgage fails. Also getting the housing agencies to raise the limits on "conforming" loans, in other words, a higher threshold before a loan becomes a "jumbo." Which means taxpayer involvement in the higher-priced housing, too."

• But Is Subprime Really the Issue? (Average Joe Investor, Aug. 30th): "[The risk on subprime lending] is studied and in order to take on the incremental risk, lenders charge higher interest rates… Lenders had not adequately cushioned themselves for the default risk that they were going to face [and risk profiles changed…] But there is most certainly a market for these loans, and as long as risk is adequately measured, there is no reason that there shouldn't be someone out there serving this part of the market… Right now the market has tightened like a vise [but] there is demand just building up -- demand that somebody can and should be serving."

Foreclosure Impact

• Most Of Foreclosure Frenzy Avoids ET (Tyler Morning Telegraph, Sept. 2nd) Texas: "The rise in delinquencies is an estimated 325,000 foreclosure proceedings, up from a quarterly rate of 230,000 the previous two years," said Guillermo Covarrubias, assistant professor of economics at The University of Texas at Tyler. Lauren Glass, senior VP for Southside Bank: "We rarely see nonprime loans or subprime loans or ARMs (adjustable rate mortgages) in the East Texas area… Our delinquencies have not increased, and our foreclosures have not increased." But in East Texas, [when] comparing H1'07 with H1'06, she has seen the monthly lists grow longer."

• Foreclosures On The Rise In Somerset County (Daily American, Sept. 1st): "In 1996, just 26 mortgage foreclosures were filed in Somerset County, according to figures compiled by the county prothonotary office. But the number of foreclosures has multiplied repeatedly since then. In 2006, lenders and banks filed 156 foreclosures in the county… In Somerset County, most of the growing number of foreclosures have not been filed by local banks, said Missy Truscott, clerk at the Somerset County Sheriff's Office. The sheriff serves foreclosure papers and supervises tax sales. Rather, the foreclosures have been filed by national lenders, some with names like The Money Store."

• More In Colorado Forfeit Houses (Denver Post, Aug. 31st): "Colorado Division of Housing report: For every 10 homes entering foreclosure in Colorado in H1'07, six ended up in a forced foreclosure sale [vs.] five out of 10 in H1'06… During H1'07, there were 19,460 foreclosures started in the state versus 28,435 in all of last year. Public trustees in the state reported selling 11,908 homes during H1'07 versus 13,643… last year. Adams County [had] one new foreclosure in H1 for every 45 households... In Denver, one out of every 60… one out of 62 in Weld County and one out of 68 homes in Arapahoe County… Statewide, new foreclosures rose a comparatively modest 6% between the two quarters."

• Foreclosures Remain High Here (Public Opinion, Aug. 31st) Pennsylvania: "The Franklin County Sheriff's Department, which is responsible for selling foreclosed properties, has seen a steady flow of foreclosures, said Sheriff Robert Wollyung… Sixteen years ago, the sheriff's department had 10 or 12 foreclosed properties on the list for each sheriff's sale, Wollyung said. This year, there are about 50 properties on the list for sale every two months… The Better Business Bureau said an estimated 1.7 million homeowners could lose their homes to foreclosure over the next few years."

Global Impact and Alternatives To The Housing Slump

• Yen Gains as European Bank Losses Cause Paring of ECB Rate Bets (Bloomberg, Sept. 4th): "The yen gained versus 14 out of 16 most-active currencies after Germany's IKB Deutsche Industriebank AG yesterday said it will post a loss of as much as €700 million ($953 million). A global credit-market slump has caused traders to trim bets for the European Central Bank to raise interest rates on Sept. 6. "The report suggests German banks may have a lot of exposure to subprime loans,'' said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo."

• U.S. and China Renew Cooperation on Affordable Housing (RIS Media, Sept. 3rd): "U.S. Housing and Urban Development [HUD] Secretary Alphonso Jackson and the People’s Republic of China Construction Minister Wang Guangtao signed a Memorandum of Cooperation that renews the two nations commitment to work together to improve and expand affordable housing opportunities… Under this new bilateral cooperative framework, the U.S. and China will explore a variety of solutions to housing challenges of mutual concern through collaborative efforts, and share and exchange information on research, policies, and programs. Areas of cooperation will include: providing affordable low-income housing, promoting energy efficiency, enhancing secondary mortgage market operations and creative housing finance systems."

• Subprime Crisis To Hit World Economy -D.Bank CEO (Reuters, Sept. 2nd): "Global economic growth will take a hit as a result of the U.S. subprime mortgage crisis, says Josef Ackermann, CEO of Deutsche Bank, Germany's biggest bank. "Growth, especially of private consumption in the United States, will suffer because of the housing crisis and that can naturally not go without negatively affecting the world economy overall," Josef Ackermann [wrote] in the German business daily Handelsblatt on Monday."

Macro Impact, And Will The Housing Slump Cause A Recession?

• Real Crises Aren't Fixed Overnight (LA Times, Sept. 3rd): "The really big crises in history unfolded over months and years, not mere days… The 1997-98 Asian financial crisis started July 2, 1997 with the speculative assault on the Thai baht, but was not really over until after the bailout of Long Term Capital Management (Sept. 23, 1998)… The [current] consensus is that aggregate losses from the U.S. sub-prime mortgage market could amount to $100b-$200 billion… In the coming weeks, we are likely to see a dash for the exits as investors try to redeem money from suspect hedge funds. That in turn could add to the pressure on the banks that act as the hedge funds' prime brokers."

• Few Expect a Panacea in a Rate Cut by the Fed (NY Times, Sept. 3rd): "Edward E. Leamer, professor of management at the University of California, LA: “The reason there isn’t a market for these [mortgage] credits is that people don’t know what price they should be trading at. That’s not going to be affected by a small change in the federal funds rate.” The overnight fed funds rate [appears to have] a weak [historical] relationship to housing. Long-term interest rates, which determine mortgage rates, rose slightly before the central bank began raising the overnight rate in June 2004. But long-term rates and mortgage rates soon declined and stayed low throughout the time that the Fed quintupled its overnight rate to 5.25%."

• Bernanke Will Have A Lot To Answer For When He Makes His Next Calls (Milwaukee Journal Sentinel, Sept. 2nd): "While it is virtually certain that there will be further blowups in the credit markets… not even the world's central bankers know how bad the collateral damage will be… According to BCA, an independent research firm, losses from subprime and related loans will eventually surpass those suffered during the S&L debacle in the late 1980s. BCA also notes that more than $500 billion in subprime mortgages will "reset" at higher interest rates between now and early 2009. Combined with chronically high energy costs and falling house prices, those mortgage resets represent a sizable headwind for [the] economy."

• Wall Street Bonus Picture: Rich Instead of Very Rich (Wall St. Journal, Sept. 1st): "Consulting firm Options Group: Wall Street bonuses are expected to drop about 5% for 2007. NY State comptroller's office: The average Wall Street bonus in 2006 was $137,580… up 15.2% from $119,390 in 2005. That… might be a drag on New York's hot real-estate market [where] young Wall Street employees dol[e] out millions of dollars for condos and luxury homes, thanks to their hefty bonuses. Combined net income -- the key figure for determining bonuses -- of Goldman Sachs Group, Bear Stearns, Lehman Brothers Holdings, Merrill Lynch and Morgan Stanley was more than $30 billion at the end of fiscal 2006... At the end of their FH1'07, the firms' combined net income was more than $18b."

• Historic Fall In Home Prices (Christian Science Monitor, Aug. 31st): "American homeowners and consumers can take comfort on several fronts: Most owners are still above water, with a cushion of equity that outweighs the current price drop. Many owners have fully paid off their mortgage. California, Michigan, and parts of Florida are among the biggest decliners. Prices are still rising in Charlotte, N.C., and Seattle. In more than 40 states, prices… have tracked the growth of personal incomes, says Karl Case, a housing expert at Wellesley College in Massachusetts. Most economists are not predicting an [imminent] recession… For potential buyers, the housing shakeout promises to make homes more affordable in some overheated markets."

• Steep Home-Price Drop Stirs Fears (Wall St. Journal, Aug. 29th): "The [April-June] S&P/Case-Shiller survey found that prices in the New York City metropolitan area declined, even though most local real-estate agents say prices for expensive condominiums in Manhattan continue to surge. There are two explanations for the difference. First, the S&P/Case-Shiller survey covers only single-family homes, not condominiums and cooperatives, which dominate the Manhattan market. Also, while prices are still rising in parts of the city, they are starting to decline in the suburbs. "There's a divergence between what's going on with suburban homes and the apartment/condo market in the city center," said Standard & Poor's Vice President and index committee member Maureen Maitland."

Homebuilders And Housing Stocks

• 'Savior' Pulls Out Of Pittsboro Deal (News & Observer, Sept. 4th): "In 2005, Pittsboro's mayor, Nancy May, declared Toll Brothers (TOL) builders the town's "savior" because the luxury home developer agreed to help build a new, bigger wastewater treatment plant in return for the town's approving its 1,500-home subdivision. [Now] Toll has pulled out of the deal. Pittsboro Town Planner David Monroe says Toll will not buy the 773 acres it had optioned at U.S. 64 Business and Bypass… Toll Brothers confirmed it is dropping its plans, but would not say why the company decided against building River Oaks, a 1,546-home subdivision… The developer had [also] agreed to donate 30 acres for a school or civic center… Pittsboro Town Planner David Monroe: To date, Toll Brothers has paid the town $250,000."

• Elwood Development Project Stalled For The Moment (Herald News, Sept. 2nd): "[Chicago developers] said they were stepping back [from a planned Elwood] development in order to determine whether existing costs and conditions… will permit this project to move forward… [Their] attorney said it is well known that the real estate market throughout the US has changed dramatically [recently]… The plans included the building of 1,387 housing units on 562 acres… The proposed development is on some of the same properties that Centex Homes (CTX) wanted to develop two years ago. The Garden Glen plan called for no condominiums, which was one of the things residents and officials did not like about the mothballed Centex plan."

• Don't Blindly Follow Carl Icahn (Or Anyone Else For That Matter) (Chad Brand in Seeking Alpha, Sept. 2nd): "Shareholders of WCI Communities Inc. (WCI) elected billionaire Carl Icahn to the board of the struggling homebuilder last week, more than four months after management rejected his $22-per-share takeover bid… The stock currently trades at $9. That boneheaded bid lands him a board seat because of his 15% stake in the company… Many investors blindly buy stocks that billionaires like Icahn and Buffett get involved with. Although they make a lot of money, they are human too, so they make mistakes just like the rest of us… Do your homework even if you want to follow a great investor into an investment."

• US CREDIT-Lennar, Centex Spreads Risk Junk Ratings (Reuters, Aug. 30th): "Debt of home builders Lennar Corp. (LEN) and Centex Corp. (CTX) is at risk of weakening further as Moody's Investors Service reviews the builders for a ratings downgrade that may potentially send them into junk territory… which in the case of "Ba2"-rated Lennar and Centex would be a two-notch cut… The cost to insure Lennar and Centex's debt with credit default swaps has risen around 10 basis points in the past week to around the 260 basis point-area, or $260,000/year for five years to insure $10 million in debt… Gimme Credit analyst Kathleen Shanley: A cut to junk could post problems for Centex's ability to fund mortgages through its financial arm."

Commercial Real Estate and REITs

• Westinghouse Landlord-To-Be A Big Player In Real Estate (Pittsburgh Post Gazette, Sept. 2nd): "Privately-held Wells REIT purchased an 82-acre [Pittsburgh] site for $14 million last month and is now providing the $175m needed to build the 800,000-sf Cranberry complex before leasing it back to Westinghouse Electric for $330m over 15 years…Wells controls more than 1.1 million-sf, or 2.5%, of the total office space in the Pittsburgh metropolitan area. Wells, which oversees more than 35 million-sf of space around the country, is a key participant nationally in the rise of privately held REIT, representing a new breed of investors that is not highly leveraged and thus better able to withstand the [current] credit crunch."

• Despite Bumps, Commercial Real Estate Market Remains Strong (Dallas Morning News, Aug. 31st): "The number of [Dallas] office, apartment, industrial and retail buildings and the like in foreclosure this year is staggeringly small. About 147 commercial properties are currently threatened with foreclosure, and only about 20 of those have loans of $1 million or more. Almost all the larger commercial loans in default are for aging apartment houses [and] a few old strip shopping centers… [Though] more than 3,000 residential homes a month are posted for foreclosure, the commercial property market is in great shape. Of course, if the percentage increase in commercial property loan defaults continues to rise month after month, eventually there will be a problem."

• Commercial Real Estate Hangs Tight (Memphis Daily News, Aug. 31st): "CB Richard Ellis (CBRE) "2Q 2007 Memphis Office MarketView Report": Overall [Memphis office sector] vacancy remained the same as Q1, at 14.6%, lease rates climbed to a record $17.01/sf and absorption increased to a positive 76,053-sf, all pointing toward stability… [With] 2.9% vacancy in East Memphis Class A properties - newer sites with better amenities, cleaner physical aesthetics and more efficient space [and] which encompass 2.9 million-sf of rentable space. [This] led all submarkets in average $24.88/sf lease. The next highest was Class A space along the Tennessee 385 corridor at $21.92… record prices coupled with high occupancy in East Memphis - the heart of the city's office sector - means vitality citywide."

• More Commercial Real Estate Deals Feeling The Pinch (Minnesota Star Tribune, Aug. 30th): "The Minnesota Vikings' cancellation of a $45 million deal to buy Star Tribune property near the Metrodome from the Star Tribune's owners, Avista Capital Partners, could be the first visible sign of a transaction called off because of tighter credit markets... Area lenders, lawyers and developers involved in commercial real estate… said the credit crunch has raised borrowing costs and tightened standards significantly in the last month or so, prompting some buyers -- both here and elsewhere -- to abandon, postpone or restructure deals… Ed Padilla, CEO of real estate investment banking firm NorthMarq Capital [said] some retradings are shaving 5-15% off the initial price."

• Commercial Real Estate Delinquencies Still Falling (CoStar Group, Aug. 30th): "The U.S. Commercial Mortgage-Backed Securities delinquency index fell for the sixth straight month to 0.28% in July 2007, one basis point lower than at the end of June 2007. The continued downward trend was due to a large drop in office and multifamily delinquencies, according to Fitch Ratings' latest U.S. CMBS loan delinquency index… Retail delinquencies increased by only $1.3 million (0.5%)… Michelle Bayard, director, Fitch CMBS group: "The decrease in multifamily delinquencies during July reversed the trend of steady increases since April 2007…" In July, industrial delinquencies increased by $7.7m (17.3%)… Self-storage delinquencies increased by $2.8 million (30.6%)."

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