Financial Dispatch: Home prices slide 14%

Andrew Torgan
CNN Financial News Producer

The steep slide in home price accelerated at a record pace during the first three months of 2009.
The national median home price of single family homes sold during the first quarter fell 13.8% to $169,000 year over year, and 6.2% compared with the last quarter 2008, according to the National Association of Realtors. That was the largest year-over-year decline in the 30-year history of the report.
The NAR attributed much of the loss to two factors: First-time homebuyers, who are often entry-level buyers, accounted for about half of all purchases during the quarter. And many buyers took advantage of the deeply-discounted prices of foreclosed properties and short sales. These “distressed properties” typically sell for 20% less than traditional homes, according to NAR. These homes also accounted for about half of all transactions.
Trade Deficit widens
The U.S. trade deficit rose in March for the first time since last July as the global recession cut sharply into sales of American exports.
The Commerce Department says the deficit widened to $27.6 billion in March, slightly lower than the $29 billion gap that economists had forecast. The politically-sensitive trade deficit with China also increased.
Ford seeks to raise cash
Ford Motor says it will offer 300 million common shares in a public offering to help meet funding requirements for retirees’ health benefits
Based on Monday’s closing stock price, the offering could raise nearly $2 billion dollars. The automaker says it will use part of the profits to pay into a health care trust for its retired workers under its agreement with the United Auto Workers union.
GM stock falls to 76-year low
General Motors stock plunged 23% to a 76-year low this morning, a day after a group of GM executives disclosed they had sold shares in the struggling automaker.
Six GM executives, led by former GM Vice Chairman and product chief Bob Lutz, disclosed Monday that they sold almost $315,000 in stock and liquidated their remaining direct holdings in the automaker.
The sale underscores the pressure on GM with less than three weeks remaining for the automaker to win deals to slash debt and operating costs with its major union and bondholders to avoid bankruptcy.
750,000 jobs by August?
The Obama Administration estimates that the economic stimulus plan will create or save 750,000 jobs by early August, a senior administration official said Monday.
The comments came as the administration’s Council on Economic Advisers released a report that explained the methodology behind its estimates for how many jobs will be created by the $787 billion stimulus package.
The report touts — as stated previously by the White House — that the plan will save or create 3.5 million jobs by the end of 2010. It also points to even bigger job creation and savings of 6.8 million jobs by the end of 2012.
Crude touches $60/barrel
Crude oil prices topped $60 a barrel level in electronic trading this morning as investors focused on signs of economic stabilization and a weaker U.S. dollar.
Oil last settled above $60 a barrel on Nov. 12, when it ended at $62.41.
Gas prices surge 10%
Gas prices have surged nearly 10% over the past two weeks.
That’s a gain of 20 cents during the past 14 days, and the national average hit $2.248 a gallon on Tuesday, according to AAA.
There is a silver lining, however: Analysts say a return to $4 a gallon gas is not on the horizon. Even though prices have been on a tear, they’re still some 46% lower from the all-time high of $4.114 a gallon hit last July.
Memorial Day travel to rebound
Despite that recent run-up, Memorial Day travel is expected to rebound this year, thanks to the overall decline from 2008’s record-high gas prices and discounts on hotels.
According to AAA, a total of 32.4 million Americans will travel at least 50 miles from home to mark the holiday weekend. That’s an increase of 1.5% from last year, when soaring gas prices cut the number to 31.9 million.
Baggage fees top $1 billion
U.S. airlines took in a record $1.1 billion in bag fees in 2008 after staring to charge for all checked luggage in an effort to cover rising energy prices, according to data from the U.S. Transportation Department.
Traditionally, airlines would only charge a fee for passengers who exceeded the baggage weight limits or who would want to check more than 2 pieces of luggage. United Airlines was the first U.S. carrier to break with the practice by charging $25 for a second checked bag starting in February 2008. US Airways announced it would start charging $15 fee for the first bag starting July 2008.
Most carriers now follow this practice of charging $15 (each way) for the first checked bag and $25 (each way) for a second checked bag.

Real estate markets differ though economies similar for Calgary and Houston

Real estate markets in Calgary and Houston are different on several fronts, even though energy indsutry drives both economies.

By Mario Toneguzzi, Calgary HeraldMay 5, 2009


Major Canadian and American cities with similar economies and geographies are experiencing variable price trends this spring, according to a survey released today by Century 21 Canada.
In a comparison between Calgary and Houston, the house price survey said price levels are significantly higher and selling times are shorter in Calgary than in Houston but Calgary also has greater price declines than Houston.
The report said average prices in March were $380,737 in Calgary compared with $200,233 in Houston. Median prices in March were $340,500 in Calgary compared with $130,000 in Houston. Calgary's average and median prices declined 11 per cent and 12 per cent respectively, while Houston's average and median prices declined four per cent and six per cent respectively from a year ago.
mtoneguzzi@theherald.canwest.com
© Copyright (c) The Calgary Herald

Spring rally won't last, realtors say

VIRGINIA GALT
May 6, 2009
Canadian homeowners will likely have to wait until next year to see a solid rebound in real estate prices, the heads of two of Canada's largest real estate firms said yesterday.
The brief spring rally in the Canadian housing market - although encouraging - cannot be regarded as the beginning of a full-fledged recovery just yet, and sales activity is expected to cool again this summer, Don Lawby, president of Century 21 Canada Ltd., and Phil Soper, chief executive officer of Royal LePage Real Estate Services Ltd., said in interviews.
"The spring market is usually the biggest and the best of the year for the housing industry... and there probably will be a lull during the summer," Mr. Lawby said.
What happens in the fall will depend on the economy and consumer sentiment, he added.

"If there are lots of worries about layoffs and the deteriorating economy, then we are not going to have much activity. On the other hand, we have not seen dramatic declines in house prices and I don't think we are going to," Mr. Lawby said.
Mr. Soper agreed that the spectre of rising unemployment is a concern. However, prospective home buyers tend to be more greatly influenced by low interest rates and improved affordability when it comes to making purchasing decisions, he said. Low interest rates and softer prices spurred an increase in the volume of Canadian home sales in February, March and April and - after a typical summer slowdown - will likely result in increased sales activity again in the fall, Mr. Soper predicted.
The real estate executives' views supported those of two Canadian bank economists who issued reports on Canadian real estate trends yesterday.
"We still feel there is more downside than upside risk to home sales and prices," said Bank of Nova Scotia economist Adrienne Warren.
"The significant deterioration in domestic labour markets in recent months suggests little prospect for a major resurgence in demand in the near term. Meantime, a still-high level of active listings relative to underlying demand will continue to pressure prices," Ms. Warren said.
Pascal Gauthier of Toronto-Dominion Bank said the competing forces of rising unemployment and greater affordability will cause markets to "remain quite choppy between now and the end of the recession" in most parts of the country.
Mr. Lawby and Mr. Soper said entry-level, first-time buyers have been the most active players in the Canadian real estate market this spring, while higher-end home sales activity continues to be subdued. Nonetheless, they said, the Canadian real estate market is far healthier than the U.S. market in the wake of the subprime mortgage crisis that caused the U.S. housing collapse.
"We don't have the same problems," said Mr. Lawby, who issued a report yesterday comparing housing prices in major Canadian and U.S. cities with similar economies and geographies.
While prices in both countries are down year over year in most regions, prices have not fallen as steeply in the Canadian market as in the U.S., according to the Century 21 report.
"When you compare ... so-called 'twin cities,' you see some dramatic differences," Mr. Lawby said.
For instance, the market is much stronger in Toronto than in Chicago.
"In Toronto, the average price declined 4 per cent to $394,099 and the median price dipped 2 per cent to $325,000 [between March, 2008, and March, 2009]. In Chicago, the average price fell 34 per cent to $249,901 and the median price dropped 39 per cent to $180,000. (U.S. average prices are in U.S. dollars.)
"It took an average of 37 days to sell a house in Toronto, compared to 168 days in Chicago," Century 21 said in its report.