From: hamachi@adobe.com (Gordon Hamachi)
Subject: Real Estate News Summary, Part 110
Organization: Adobe Systems Incorporated
Distribution: usa
Date: Sat, 25 Jul 1992 01:33:35 GMT

Real Estate News Summary, Part 110, June-July 1992

854. A disturbing and perhaps increasing 11.3% of home mortgage borrowers make
     material misrepresentations on their applications.  The lies range from
     minor fibs about income or debts to elaborate plots to steal a lender's
     money.  Borrower fraud is especially common in soft markets with high
     housing costs.  Builders or agents hungry for a sale provide the buyer
     with undisclosed down payment cash.  This puts unqualified people with no
     equity at all into a house.  These become the most likely to default.
     [San Francisco Examiner]

855. Tumbling mortgage rates and much talk of an economic recovery couldn't
     keep May home sales from falling 18.8% year-over-year in the South Bay,
     15.5% in the rest of the Bay Area, and 10.4% in California.  Home prices
     dropped almost 1% in the South Bay, 4.5% elsewhere in the Bay Area, and
     4.1% statewide.  The worst market in the state was Sacramento, where sales
     dropped 26.5% and prices 4.7%.  [San Francisco Examiner]

856. If a couple earning $50K bought a $150K house, the mortgage would be
     $1,200 including property taxes and insurance.  If a similar home could be
     rented for $800, they would pay $4,800 more each year to buy vs. rent.
     They can recover $3K through tax breaks, but would still be $1,800 richer
     renting.  If the home appreciated 5% per year for 5 years, the would make
     a $30K before-tax profit.  But if the house didn't appreciate over the 5
     years, they would lose more than $18K on the deal, plus the use of their
     money.  [San Francisco Chronicle]

857. Money-raising proposals are at the heart of the current California budget
     battle.  Among them: capping yearly mortgage interest deductions at $50K,
     which at current rates is the interest on a $500K mortgage.  That is a cut
     of 50% from current law.  Proponents argue that the only people who can
     qualify for a $500K mortgage are those with incomes of $200K and above who
     do not need the deduction anyway.  Opponents say the measure would depress
     real estate sales and the construction industry. [San Francisco Chronicle]

858. New home sales dropped 5.6% in May, the fourth decline in a row.  The
     steady march downward troubled economists.  April sales, which previously
     were estimated to have risen 1.3%, were revised downward to show a 2.7% 
     decline.  The biggest drop in May occurred in the West, where sales
     plunged 34.4%.  The median sales price was $106,000, down from $119,900 a
     month earlier. [Wall Street Journal]

859. A 0.6% rise in the index of leading economic indicators failed to relieve
     concerns about the fragility of the economic recovery.  The gain was less
     than half the 2% average growth after the 1981-82 recession.  In a
     separate report, the Conference Board reported June's 71.7 consumer
     confidence index was down slightly from May's 71.9. [Associated Press]

860. Interest rates are not the largest drag on housing, jobs are.  Until we
     see six-figure job creation numbers each month, we're not going to have
     much more of a housing recovery.  Since March, rates have been falling and
     activity has been lackluster.  Seasonally adjusted annual new home sales
     have fallen 5 months in a row, and existing home sales also fell in May.
     The rates are the lowest in 20 years, and it's not attracting the
     consumer. [Wall Street Journal]

861. Kennedy-Wilson will auction 35 Euro-style condominiums in Walnut Creek,
     California.  Minimum selling prices now $75K to $100K; previous asking
     prices $116K to $166K.  [San Francisco Examiner]
Newsgroups: misc.invest.real-estate