News

Washington, D.C.–New home construction in 2007 dropped by the largest amount in 27 years due to the housing decline, The Commerce Department said Thursday.Last year, construction began on 1.353 million new homes and apartments, a 24.8 percent decline from 2006–the second biggest annual drop on record, according to The New York Times.Construction declined in December by a larger-than-predicted 14.2 percent. Housing starts totaled 1.006 million units at an annual rate. New construction approvals didn’t offer much hope for the coming months: Building permits dropped in December by 8.1 percent to an annual rate of 1.068 million units, the seventh monthly…

California–Many economists feel that California–whose economy is so substantial it could be considered the world’s eighth-largest–and Florida may already be in recession, The Financial Times reported Thursday.Along with Nevada and Arizona, California and Florida make up approximately a fifth of the U.S. economy. Recent data suggests economic activity in Florida is contracting and may be waning in California, the Times said.Existing home sales in California dropped 36 percent in the year to November 2007; in Florida, sales fell 30 percent. Median sale prices declined 12 percent in California and 10 percent in Florida.In addition to a large unsold home supply,…

New York–Merrill Lynch & Co. posted a much higher quarterly operating loss than had been forecast and announced a hefty subprime-related writedown on Thursday, CNNMoney.com reports.In addition to a $3.1 billion writedown on hedges with financial guarantors, Merrill said it would take an $11.5 billion writedown on its collateralized debt obligations and subprime home mortgages. Merrill also reported a loss from continuing operations of $10.3 billion, or $12.57 a share, for the quarter. The company had a loss of $9.91 billion, or $12.01 a share, on a net basis.Last year, Merrill posted a net profit of $2.3 billion.Analysts polled by…

Washington, D.C.–A report issued Wednesday by the Federal Reserve shows the U.S economy is regionally mixed, with some areas slowing significantly and others hardly at all. The Fed’s “beige book,” which compiles business status reports from around the U.S., reveals the nation is working to challenge the housing and credit slumps’ effects, according to The Washington Post.The report suggests economic declines are present only in some industries. Several big banks announced multibillion-dollar write-downs recently; yet regional banks remain steady. Unemployment is up in the construction industry but not in the engineering or consulting sectors. Consumer debt has increased in highly…

By Anuradha Kher, Online News EditorDetroit — The Northern Group has announced that it will acquire Lafayette Towers, the two 22-story-building complex in Lafayette Park, just east of downtown Detroit.Designed by Mies van der Rohe, the Lafayette Towers are part of the larger 78-acre Lafayette Park, which includes the largest collection of Mies van der Rohe buildings in the world.Lafayette Towers joins New York-based Northern Group’s already-substantial Detroit portfolio with Alden Park Towers apartments on the Detroit river, east of downtown, and “The Downtown Collection” of office buildings.“We have invested in Detroit for the last five years and continue to…

By Anuradha Kher, Online News EditorWashington D.C — The National Multi Housing Council (NMHC) and National Apartment Association (NAA) filed a lawsuit against the Federal Communications Commission (FCC) this Wednesday asking the court to repeal the FCC’s regulations banning “exclusive access” agreements between cable providers and apartment owners announced in October last year.Before the regulation was announced, apartment building owners could utilize exclusive access contracts as a bargaining tool to negotiate lower rates, better product availability and enhanced service standards for their residents, according to the NMHC and NAA.Exclusive access agreements, they argue, also enable smaller video firms to gather…

By Anuradha Kher, Online News EditorOakland, Calif. — The Ellington sales center will officially open with a ceremony today at 130 Webster St. in Oakland.The Ellington, now under construction, is a 6-story residential community featuring 134 condominiums located at 2nd and Broadway in Jack London Square. It has one- and two-bedroom condominiums and two-story penthouse suites. The building is slated to open in the summer this year. The one-bedroom condominiums are tentatively priced between $500,000 to $700,000 and the two-bedroom condominiums between $700,000 to $900,000.The Ellington’s building amenities include 24-hour attended lobby, electronically controlled access to lobby, concierge services, 50-ft….

By Anuradha Kher, Online News EditorWashington D.C. — The US Department of Housing and Urban Development (HUD) has decided to rescind a notice published in October last year that would have increased the mortgage insurance premium (MIP) on a number of multifamily programs. The current mortgage rate is 45 basis points while the proposal was to increase it to 61 basis points, a 35.6 percent increase.“HUD did not reveal the exact reason for its decision to rescind the notice, but the bottom line was that there was a lot of pressure from the Congress as well as the industry,” David…

Kent, Wash.–Phoenix-based Hendricks & Partners recently facilitated the sale of a 382-unit apartment community in Kent, Wash., for $38,281,300, or $100,213 per unit.Bascom Centrestone Kent, LLC of San Francisco sold The Avante complex to the Longwell Company of Bellevue, Wash. Kenny Dudunakis of the Seattle Hendricks & Partners office negotiated the transaction on behalf of the seller and buyer. The Avante sale is the second property transfer in the past two months from Bascom Northwest to Longwell Company.Constructed in 1978, The Avante consists of 34 two-story residential buildings situated on more than 17 acres. Bascom recently directed a comprehensive upgrade…

By Keat Foong, Executive Editor Boca Raton, Fla.–Economists speaking at the National Multi Housing Council’s (NMHC) Apartment Strategies Conference, being held here in Boca Raton, Fla., today warned that the U.S. economy is likely to tip into recession this year.  “As to the question of whether there will be a recession, frankly, I don’t see how that can be avoided,” said Mark Obrinsky, vice president of research and chief economist at NMHC. Obrinsky cited the housing downturn and the turmoil in the financial markets as major causes of any recession that will occur in 2008. He said the financial markets are “in…