From: hamachi@adobe.com (Gordon Hamachi)
Subject: Real Estate News Summary, Part 119
Organization: Adobe Systems Incorporated
Distribution: usa
Date: Tue, 8 Sep 1992 19:09:45 GMT

Real Estate News Summary, Part 119, August 1992

930. The average fixed 30-year mortgage has slipped below 8% for the first time
     in 20 years, but low consumer confidence will prevent a strong pickup in
     housing markets until the economy gets back into full stride. Strengthened
     sales activity is reported in the Southeast, Midwest and much of the West.
     California remains very weak, and in the Northeast many buyers are still
     wary.  [Wall Street Journal]

931. Thirty-year fixed mortgages dropped to 7.96%, the lowest since 1973. Along
     with low rates, Bay Area homes are $10,000 cheaper than they were a year
     ago, which means 19% of California households can afford to buy homes,
     compared to only 15% a year ago.  But rates could go as low as 2% and it
     wouldn't make any difference.  With unemployment still extremely high,
     many simply don't want to chance taking the home buying plunge.
     [San Jose Mercury News]

932. The median price of a Santa Clara County home was $220K in July, down $31K
     from a year earlier.  The average was $225K, down from $253,382.  The
     information is from deeds after the close of escrow.  Average housing
     figures include single-family homes, condos, townhouses and mobile homes.
     [San Jose Mercury News]

933. Despite more affordable prices and low interest rates, buyers remain leery
     of the home market.  In response, a growing number of brokers and builders
     are offering layoff insurance.  Prudential Realty of California offers 12
     months of loan payments of up to $5K/month if buyers are laid off during
     the first year.  Shannon & Luchs, a D.C. broker, recently finished a 90
     day program offering buyers a maximum 6 months of mortgage coverage, for
     up to $1,500 a month.  In November 1990, Carlton Homes offering layoff
     coverage of $1,500 a month for up to 6 months.  [San Jose Mercury News]

934. The times are changing.  Consumer prices rose 0.1% for July.  But good
     deals on cars, housing, and other items are offset by wages that are
     growing at a slower rate than inflation.  During the year ending in June,
     wages and salaries rose 2.9%, compared with a 3.1% increase in the cost of
     living.  Low wage growth contributes to pessimism on the economy.  The
     University of Michigan's consumer sentiment index fell in its early August
     reading to 75.3 from 76.6 last month.  [Washington Post]

935. With interest rates at a 25-year low and Peninsula housing prices cheaper
     than they've been in years, move-up homes are unexpectedly in reach of
     many buyers.  One big problem these buyers face is selling their current
     homes.  But selling a house in any market is simply a function of price.
     [Peninsula Times Tribune]

936. Even with mortgage rates at their lowest level in nearly 20 years, the
     housing market remains hamstrung by general economic malaise.  During the
     Great Depression interest rates fell to almost zero and the housing sector
     did nothing.  There was a 1/3 loss in incomes.  Incomes have to be boosted
     for interest rates to have an impact.  [Wall Street Journal]

937. University of Michigan economists predict unemployment will inch down to
     6.7% by the end of 1994.  It stood at 7.7 in July.  This slow but steady
     decline leaves unemployment 1.5% above the level during the 1.5 years
     preceding the 1990-91 recession.  The economists predict that mortgage
     rates will drop another 0.5% by the end of 1993. [San Francisco Chronicle]
Newsgroups: misc.invest.real-estate