From: hamachi@adobe.com (Gordon Hamachi)
Subject: Real Estate News Summary, Part 129
Organization: Adobe Systems Incorporated
Distribution: usa
Date: Fri, 20 Nov 1992 21:23:24 GMT

Real Estate News Summary, Part 129, October, 1992

1015.Fortunately, not everyone bought homes at the peak in 1988-89.  Even with
     a 10-15% decline in Bay Area property values, most longtime homeowners
     still have huge residual equity in their homes. [San Francisco Examiner]

1016.Pacific Greystone recently purchased lots at discounts as much as 35% from
     prices in the late '80s.  The transaction should make Southern California
     homeowners uneasy.  Some builders expect California land prices to fall as
     much as 50% from their 1989 peak. [Wall Street Journal]

1017.Some people think that because home prices have come down a bit it's time
     to go up again, but they will not really go up until incomes meet prices.
     Housing prices in weak markets must either fall or stagnate to reach
     equilibrium with local earnings and mortgage costs.  Under this theory
     median prices are still 20% to 30% higher than equilibrium in such
     distressed markets as Los Angeles and New York.  The National Association
     of Realtors disagrees, saying many sellers will pull their homes off the
     market until pricing firms. [Wall Street Journal]

1018.The FHA raised it's loan ceiling by 20% in high-cost regions such as the
     Bay Area.  A buyer could purchase a $159,700 home with 5% down.  This will
     open the door for many people who couldn't have qualified for a home any
     other way.  The San Jose Real Estate Board reports the median sale price
     of townhouses and condos was $162,000. [San Jose Mercury News]

1019.In Q1 1992, 43% of homeowners refinancing 30-year mortgages chose 15-year
     mortgages.  It's a reflection of attitudes among consumers that they want
     to get out of debt. [Wall Street Journal]

1020.Silicon Valley Bank announced a Q3 loss of $9.4 million, reflecting a
     record $23.7 million provision for loan losses, mostly to cover bad loans
     to home builders.  Outstanding loans to developers grew from $41 million
     in Q4 1987 to $869 million in Q4 1991.  A lot of houses were rising in
     value at that time.  Not many people in 1988 were saying that the
     residential real estate market would crash in 1992.[San Jose Mercury News]

1021.The Great California Home Rush.  Kennedy-Wilson will auction 215
     residential properties.  Minimum selling prices from $10,000 to $740,000.
     No unpublished reserve prices!  These homes will be sold to the highest
     bidder at or above the published minimum selling price.  San Francisco,
     San Mateo, Santa Clara, Alameda, Contra Costa, Sacramento, Solano, Marin,
     Sonoma.  [San Francisco Examiner[

1022.Prices reduced up to $43,900 on $311,900 homes at the Breakers at Marina
     Bay, a gated community of 3 and 4 bedroom single family detached homes on
     the bay.  5% down available.  [San Francisco Examiner]

1023.The average U.S. worker now has to work 6.43 years to buy a median priced
     new home, nearly twice what it took 20 years ago. [Wall Street Journal]

1024.During a recent 3-month period, 18% of Los Angeles area homes sold for
     below purchase price compared with 3% 2 years earlier.  Builders have cut
     prices up to 30%.  Existing homes have dropped 10-15% and as much as 25%
     in affluent areas.  Spreading job losses foretell a surge in foreclosures.
     Plunging land prices will soon further depress new-home prices.  Realtor
     statistics showing an average 4% median price drop lag behind reality:
     Sharper declines are widespread. A UCLA economist predicts prices will
     plunge a further 20% after adjustment for inflation. [Wall Street Journal]