Integrity Bank of Alpharetta, Ga., on Friday became the 10th United States bank to fail so far this year, hurt by the very business it was built on — real estate lending.
Regions Bank of Birmingham, Ala., is assuming all of Integrity Bank’s $974 million in insured and uninsured deposits in 23,000 accounts, and about $34.4 million of the bank’s $1.1 billion in assets.
The remainder of Integrity’s assets are being retained by the Federal Deposit Insurance Corporation. The agency said it estimated that Integrity’s failure would cost its deposit insurance fund $250 million to $350 million.
Integrity Bank, which opened for business in November 2000, specialized in real estate lending in the Atlanta area with a self-described “faith-based culture.” Throughout the early part of the decade when the housing market was booming, Integrity Bank grew into a billion-dollar publicly traded company — but when the real estate market started faltering, the bank struggled.
A F.D.I.C. spokesman, Rickey McCullough, said late Friday that the bank had failed because of its aggressive pursuit of construction loans, coupled with falling real estate values and “inadequate risk management.”
Construction loans were 76 percent of the bank’s total loan portfolio. During the quarter ended June 30, the bank posted a net loss of $33.6 million.
Integrity’s five branches in Atlanta, which were closed Friday, will open Tuesday as Regions Bank branches. Regions has about $144 billion in total assets.
Integrity Bank is the first Georgia bank to fail since late September of last year, when NetBank — also based in Alpharetta — was closed.
“Despite today’s announcement, it is important to emphasize that the overwhelming majority of banks operating in Georgia, 96 percent, are well capitalized and have adequate reserves,” the chief executive of the Georgia Bankers Association, Joe Brannen, said.
The number of bank failures has shot up this year amid continuing mortgage defaults.
Friday, August 29, 2008
Thursday, August 28, 2008
Interest in Myrtle Beach real estate surged over 24%
Consumer interest in real estate surged in July with significant month-over-month increases in both traffic (29%) and time spent on site (26%) on Realtor.com (1), the #1 homes-for-sale-site. In fact, year-over-year page views on Realtor.com and the Move Network increased by 22% and 11% respectively (1), as consumers spent more time searching properties in popular and unexpected metro areas than this time last year.
Local markets in July experiencing the largest year-over-year percentage increases in consumer searches on Realtor.com included Stockton-Lodi, CA (140.9%), Las Vegas, NV (93.9%), Fort Myers-Cape Coral, FL (69.5%), Detroit, MI (51.8%) and Washington, DC-MD-VA-WV, VA (49.1%) Myrtle Beach, SC (24.6%)
As interest in local real estate markets picks up, consumers actively engaged in real estate search continue to invest their time on Realtor.com and on the Move Network
"As interest in local real estate markets picks up, consumers actively engaged in real estate search continue to invest their time on Realtor.com and on the Move Network," said Lorna Borenstein, president of Move, Inc. "The fact that consumers are spending significantly more time on Realtor.com than with many of the next closest competitors confirms they're looking to us to provide reliable and comprehensive content, access to the largest and most accurate listing database on Realtor.com, and valuable home buying resources. While finding interesting and entertaining information on real estate Web sites is fun, Move is committed to delivering the most current, reliable and useful real estate data that consumers need and expect from the trusted leader."
Borenstein continues by pointing out year-over-year traffic on Realtor.com increased by 9.5%, despite the fact that traffic within the real estate category declined by 1%, and consumers spent 24.7% more time in July on Realtor.com than on the next closest competitor (1).
During the company's second quarter 2008 earnings call, Move announced registrations on Realtor.com Beta increased by 60%, while three times the number of consumers received email alerts with updated information about their saved searches as compared to registrations on the "classic" site. The company also reported personalized alerts have shown a better than 50% click-through rate, driving consumers back to view Realtor.com content and advertising.
Local markets in July experiencing the largest year-over-year percentage increases in consumer searches on Realtor.com included Stockton-Lodi, CA (140.9%), Las Vegas, NV (93.9%), Fort Myers-Cape Coral, FL (69.5%), Detroit, MI (51.8%) and Washington, DC-MD-VA-WV, VA (49.1%) Myrtle Beach, SC (24.6%)
As interest in local real estate markets picks up, consumers actively engaged in real estate search continue to invest their time on Realtor.com and on the Move Network
"As interest in local real estate markets picks up, consumers actively engaged in real estate search continue to invest their time on Realtor.com and on the Move Network," said Lorna Borenstein, president of Move, Inc. "The fact that consumers are spending significantly more time on Realtor.com than with many of the next closest competitors confirms they're looking to us to provide reliable and comprehensive content, access to the largest and most accurate listing database on Realtor.com, and valuable home buying resources. While finding interesting and entertaining information on real estate Web sites is fun, Move is committed to delivering the most current, reliable and useful real estate data that consumers need and expect from the trusted leader."
Borenstein continues by pointing out year-over-year traffic on Realtor.com increased by 9.5%, despite the fact that traffic within the real estate category declined by 1%, and consumers spent 24.7% more time in July on Realtor.com than on the next closest competitor (1).
During the company's second quarter 2008 earnings call, Move announced registrations on Realtor.com Beta increased by 60%, while three times the number of consumers received email alerts with updated information about their saved searches as compared to registrations on the "classic" site. The company also reported personalized alerts have shown a better than 50% click-through rate, driving consumers back to view Realtor.com content and advertising.
opportunities for investors with cash
There has been much talk about the effect of the subprime mortgage crisis in the US on its real estate market. The collapse or near collapse of many financial institutions which dealt in subprime mortgages, as well as, the vast amount of foreclosures have all affected the real estate market. As a result, mortgage banks are now much more selective and much more cautious and the large numbers of foreclosures have created a glut in the market which force prices down.
Prices are falling dramatically and in some places namely in Florida and Las Vegas prices for residential real estate have fallen by more than 50 percent while on a national average prices have fallen by over 30%.
And the crisis is not yet over.
Each foreclosure brings further falls in prices, and each time a financial institution announces losses it means that there is less money available fort mortgages. This is bad news for those US residents who want to buy a dwelling and need finance and it is also bad news for those who for diverse reasons need to re-finance their mortgages.
But a falling market also presents many opportunities for investors especially those with ready cash.
"The current real estate downturn in the US has created many investment opportunities. This holds true for US investors with ready cash but it is even more true for overseas investors," said Ami Segal. "The dollar has weakened in the money markets of the world which means that the buying power of the pound sterling the euro the yen and yes the shekel has increased substantially and real estate in the US are considered very good bargains".
Prices are falling dramatically and in some places namely in Florida and Las Vegas prices for residential real estate have fallen by more than 50 percent while on a national average prices have fallen by over 30%.
And the crisis is not yet over.
Each foreclosure brings further falls in prices, and each time a financial institution announces losses it means that there is less money available fort mortgages. This is bad news for those US residents who want to buy a dwelling and need finance and it is also bad news for those who for diverse reasons need to re-finance their mortgages.
But a falling market also presents many opportunities for investors especially those with ready cash.
"The current real estate downturn in the US has created many investment opportunities. This holds true for US investors with ready cash but it is even more true for overseas investors," said Ami Segal. "The dollar has weakened in the money markets of the world which means that the buying power of the pound sterling the euro the yen and yes the shekel has increased substantially and real estate in the US are considered very good bargains".
mortgage activity increased
Applications for the week ending August 22, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 421.6, an increase of 0.5 percent on a seasonally adjusted basis from 419.3 one week earlier. On an unadjusted basis, the Index decreased 0.9 percent compared with the previous week and was down 31.2 percent compared with the same week one year earlier.
The Refinance Index increased 0.3 percent to 1038.0 from the previous week and the seasonally adjusted Purchase Index increased 0.6 percent to 315.9 from one week earlier. The Conventional Purchase Index decreased 0.6 percent while the Government Purchase Index (largely FHA) increased 3.3 percent.
The four week moving average for the seasonally adjusted Market Index is up 0.05 percent. The four week moving average for the seasonally adjusted Purchase index is up 0.51 percent, while this average is down 0.85 percent for the Refinance Index.
The refinance share of mortgage activity increased to 35.2 percent of total applications from 34.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.9 percent from 8.0 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.44 percent from 6.47 percent, with points decreasing to 1.03 from 1.10 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.94 percent from 5.99 percent, with points decreasing to 1.13 from 1.18 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs increased to 7.15 percent from 7.07 percent, with points decreasing to 0.36 from 0.42 (including the origination fee) for 80 percent LTV loans.
The Refinance Index increased 0.3 percent to 1038.0 from the previous week and the seasonally adjusted Purchase Index increased 0.6 percent to 315.9 from one week earlier. The Conventional Purchase Index decreased 0.6 percent while the Government Purchase Index (largely FHA) increased 3.3 percent.
The four week moving average for the seasonally adjusted Market Index is up 0.05 percent. The four week moving average for the seasonally adjusted Purchase index is up 0.51 percent, while this average is down 0.85 percent for the Refinance Index.
The refinance share of mortgage activity increased to 35.2 percent of total applications from 34.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.9 percent from 8.0 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.44 percent from 6.47 percent, with points decreasing to 1.03 from 1.10 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.94 percent from 5.99 percent, with points decreasing to 1.13 from 1.18 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs increased to 7.15 percent from 7.07 percent, with points decreasing to 0.36 from 0.42 (including the origination fee) for 80 percent LTV loans.
Tuesday, August 26, 2008
It continues to be a buyers market with sales up 3.1%
There was a glimmer of good news yesterday for North America's biggest economic problem, the U.S. housing meltdown. Unfortunately, it was only a glimmer, with any genuine sign of improvement likely to show up many months in the future.
Still, analysts found it mildly encouraging that U.S. sales of existing homes perked up by 3.1 per cent in July, more than expected.
The hope is that this could mark the end of a disastrous contraction in the real-estate market, one that has shrunk the volume of existing-home sales by a stunning 31 per cent since the U.S. real-estate bubble peaked in September of 2005.
It's a small step because the true problem isn't with the volume of home sales, but the average price at which these sales take place. And the median sale price of a U.S. home in July kept falling - down 7.1 per cent from a year earlier - despite the uptick in sales volume.
It continues to be a buyers market with high inventory and low interest rates. Many investors and fund managers are keeping a close watch on the housing market as rates are expected to increase of the next few months.
Still, analysts found it mildly encouraging that U.S. sales of existing homes perked up by 3.1 per cent in July, more than expected.
The hope is that this could mark the end of a disastrous contraction in the real-estate market, one that has shrunk the volume of existing-home sales by a stunning 31 per cent since the U.S. real-estate bubble peaked in September of 2005.
It's a small step because the true problem isn't with the volume of home sales, but the average price at which these sales take place. And the median sale price of a U.S. home in July kept falling - down 7.1 per cent from a year earlier - despite the uptick in sales volume.
It continues to be a buyers market with high inventory and low interest rates. Many investors and fund managers are keeping a close watch on the housing market as rates are expected to increase of the next few months.
Horry-Georgetown Technical College 6,000 students
Horry-Georgetown Technical College has reached a record. Fall enrollment reached 6,000 students for the first time in the school's history.
As of Tuesday afternoon, more than 6,100 students had paid to take fall semester classes. That number was just over 5,900 on Monday.
Some feel the demand for good jobs, healthcare jobs in particular, is driving enrollment.
By the end of the week the enrollment could jump as high as 6,300 students.
As of Tuesday afternoon, more than 6,100 students had paid to take fall semester classes. That number was just over 5,900 on Monday.
Some feel the demand for good jobs, healthcare jobs in particular, is driving enrollment.
By the end of the week the enrollment could jump as high as 6,300 students.
Monday, August 25, 2008
Existing-home sales rose in July
Existing-home sales rose in July to the highest level in five months, although sales have hovered in a relatively narrow range over the past 11 months, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.1 percent to a seasonally adjusted annual rate of 5.00 million units in July from a downwardly revised level of 4.85 million in June, but are 13.2 percent lower than the 5.76 million-unit pace in July 2007.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the up-and-down pattern may break soon. “We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead,” he said. “Buyers who’ve been on the sidelines should take a closer look at what’s available to them now in terms of financing and incentives. Given some of the inventory on the market, we also strongly encourage buyers to get a professional home inspection.”
The national median existing-home price for all housing types was $212,400 in July, down 7.1 percent from a year ago when the median was $228,600.
Lawrence Yun, NAR chief economist, said home prices in some regions could soon increase. “Sales have picked up significantly in several Florida and California markets. Home prices generally follow sales trends after a few months of lag time,” he said. “Still, inventory remains high in many parts of the country and will require time to fully absorb. We expect more balanced conditions in 2009 and will eventually return to normal long-term appreciation patterns.”
Analysis of NAR price data since 1968 shows home prices normally rise 1 to 2 percentage points above the overall rate of inflation, building wealth over the typical period of homeownership.
Total housing inventory at the end of July rose 3.9 percent to 4.67 million existing homes available for sale, which represents an 11.2.-month supply at the current sales pace, up from a 11.1-month supply in June. The rise in supply results from a sharp increase in condo inventory; the single family supply declined.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.43 percent in July from 6.32 percent in June; the rate was 6.70 percent in July 2007.
Single-family home sales rose 3.1 percent to a seasonally adjusted annual rate of 4.39 million in July from 4.26 million in June, but are 12.4 percent below the 5.01 million-unit level a year ago. The median existing single-family home price was $210,900 in July, down 7.7 percent from July 2007.
Existing condominium and co-op sales increased 3.4 percent to a seasonally adjusted annual rate of 610,000 units in July from 590,000 in June, but are 18.6 percent below the 749,000-unit pace in July 2007. The median existing condo price was $223,400 in July, which is 2.7 percent below a year ago.
Regionally, existing-home sales in the West jumped 9.7 percent in July to a level of 1.13 million and are 0.9 percent higher than July 2007. The median price in the West was $273,200, down 22.2 percent from a year ago.
In the Northeast, existing-home sales rose 5.9 percent to an annual pace of 900,000 in July, but are 11.8 percent below a year ago. The median price in the Northeast was $278,700, which is 4.9 percent lower than July 2007.
Existing-home sales in the Midwest increased 0.9 percent to an annual rate of 1.12 million in July, but are 17.0 percent lower than July 2007. The median price in the Midwest was $175,400, up 1.0 percent from a year ago.
In the South, existing-home sales slipped 0.5 percent to an annual pace of 1.85 million in July, and are 18.1 percent below a year ago. The median price in the South was $179,300, down 3.5 percent from July 2007.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.1 percent to a seasonally adjusted annual rate of 5.00 million units in July from a downwardly revised level of 4.85 million in June, but are 13.2 percent lower than the 5.76 million-unit pace in July 2007.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the up-and-down pattern may break soon. “We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead,” he said. “Buyers who’ve been on the sidelines should take a closer look at what’s available to them now in terms of financing and incentives. Given some of the inventory on the market, we also strongly encourage buyers to get a professional home inspection.”
The national median existing-home price for all housing types was $212,400 in July, down 7.1 percent from a year ago when the median was $228,600.
Lawrence Yun, NAR chief economist, said home prices in some regions could soon increase. “Sales have picked up significantly in several Florida and California markets. Home prices generally follow sales trends after a few months of lag time,” he said. “Still, inventory remains high in many parts of the country and will require time to fully absorb. We expect more balanced conditions in 2009 and will eventually return to normal long-term appreciation patterns.”
Analysis of NAR price data since 1968 shows home prices normally rise 1 to 2 percentage points above the overall rate of inflation, building wealth over the typical period of homeownership.
Total housing inventory at the end of July rose 3.9 percent to 4.67 million existing homes available for sale, which represents an 11.2.-month supply at the current sales pace, up from a 11.1-month supply in June. The rise in supply results from a sharp increase in condo inventory; the single family supply declined.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.43 percent in July from 6.32 percent in June; the rate was 6.70 percent in July 2007.
Single-family home sales rose 3.1 percent to a seasonally adjusted annual rate of 4.39 million in July from 4.26 million in June, but are 12.4 percent below the 5.01 million-unit level a year ago. The median existing single-family home price was $210,900 in July, down 7.7 percent from July 2007.
Existing condominium and co-op sales increased 3.4 percent to a seasonally adjusted annual rate of 610,000 units in July from 590,000 in June, but are 18.6 percent below the 749,000-unit pace in July 2007. The median existing condo price was $223,400 in July, which is 2.7 percent below a year ago.
Regionally, existing-home sales in the West jumped 9.7 percent in July to a level of 1.13 million and are 0.9 percent higher than July 2007. The median price in the West was $273,200, down 22.2 percent from a year ago.
In the Northeast, existing-home sales rose 5.9 percent to an annual pace of 900,000 in July, but are 11.8 percent below a year ago. The median price in the Northeast was $278,700, which is 4.9 percent lower than July 2007.
Existing-home sales in the Midwest increased 0.9 percent to an annual rate of 1.12 million in July, but are 17.0 percent lower than July 2007. The median price in the Midwest was $175,400, up 1.0 percent from a year ago.
In the South, existing-home sales slipped 0.5 percent to an annual pace of 1.85 million in July, and are 18.1 percent below a year ago. The median price in the South was $179,300, down 3.5 percent from July 2007.
lower rates this week?
Last week, as predicted rates improved early in the week, then gave back almost all of the gains as rumors ran amuck that Korea Development Bank may be interested in acquiring Lehman Brothers. This caused many investors to pull money out of bonds in favor of stocks thereby surrendering most of the lower rates initially gained during the beginning of the week.
The week ahead features the key report for the housing industry, namely Existing Home Sales, which is due out on Monday. In addition, the FOMC will be releasing the meeting minutes on Tuesday. Investors are sure to read between the lines of this key report for any clues of when and if the Fed will adjust rates.
Last but not least, the Personal Consumption Expenditures (PCE) report will be released on Friday and will give a read of inflation before the market closes early in observance of Labor Day. Remember, the PCE report is the Fed's favorite gauge of inflation and thus carries tremendous weight in most investors eyes. Add this that most of the senior investors and traders traditionally start their holiday festivities early, the low volume and junior traders left in charge can push the market drastically with just a few trades, it is possible that Friday's movements may be over stated.
The bottom line: It is likely that the market will continue to be volatile.
The week ahead features the key report for the housing industry, namely Existing Home Sales, which is due out on Monday. In addition, the FOMC will be releasing the meeting minutes on Tuesday. Investors are sure to read between the lines of this key report for any clues of when and if the Fed will adjust rates.
Last but not least, the Personal Consumption Expenditures (PCE) report will be released on Friday and will give a read of inflation before the market closes early in observance of Labor Day. Remember, the PCE report is the Fed's favorite gauge of inflation and thus carries tremendous weight in most investors eyes. Add this that most of the senior investors and traders traditionally start their holiday festivities early, the low volume and junior traders left in charge can push the market drastically with just a few trades, it is possible that Friday's movements may be over stated.
The bottom line: It is likely that the market will continue to be volatile.
Real estate investment trusts (REITs)
Q: Do you think it's illogical to own REITs in a taxable account?
A: Real estate investment trusts (REITs) have several traits that make them ideal for many investors' retirement accounts. But that doesn't mean you must own them that way.
REITs are investment vehicles that typically own collections of commercial property such as office buildings or retail space. For investors, REITs are interesting from several perspectives. First, academic studies have shown that shares of REITs have solid expected returns, but they don't move in lockstep with U.S. stocks. That means by adding REITs to your U.S. stock portfolio, you can reduce your overall risk while maintaining your expected return.
Why are REITs well suited for retirement accounts? REITs are required by tax law to return nearly all their earnings to investors. Much of that money returned to shareholders is usually, but not always, taxed at the shareholder's ordinary income tax rate. REIT income often, but not always, fails to qualify for the lower dividend tax rates.
So, here's the thinking: If you want to own REITs anyway, why not put your shares in a retirement account? You win financially by deferring (or in a Roth IRA, eliminating) the tax into the future when you retire.
A: Real estate investment trusts (REITs) have several traits that make them ideal for many investors' retirement accounts. But that doesn't mean you must own them that way.
REITs are investment vehicles that typically own collections of commercial property such as office buildings or retail space. For investors, REITs are interesting from several perspectives. First, academic studies have shown that shares of REITs have solid expected returns, but they don't move in lockstep with U.S. stocks. That means by adding REITs to your U.S. stock portfolio, you can reduce your overall risk while maintaining your expected return.
Why are REITs well suited for retirement accounts? REITs are required by tax law to return nearly all their earnings to investors. Much of that money returned to shareholders is usually, but not always, taxed at the shareholder's ordinary income tax rate. REIT income often, but not always, fails to qualify for the lower dividend tax rates.
So, here's the thinking: If you want to own REITs anyway, why not put your shares in a retirement account? You win financially by deferring (or in a Roth IRA, eliminating) the tax into the future when you retire.
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