October home prices rise at slowest pace since ‘97Prices of single-family homes across the nation rose in October at the slowest rate in almost a decade, a housing index released Tuesday by Standard & Poor’s showed, giving more evidence of the housing market’s deceleration, which has affected many parts of the broader economy.

The S&P/Case-Shiller composite index showed a 2.4 percent year-over-year increase in the price of a single-family home based on prices of existing homes tracked in 10 major metropolitan markets.

The growth rate of the 10-city composite index is sharply below the 3.7 percent rise posted in September and the slowest since a 2 percent growth rate in February 1997, according to S&P. Read more
 

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The national and local real estate markets are made up primarily of five sectors, Residential, Retail, Industrial, Commercial and Investment, which all overlap on their fringes. While it should be noted that national trends can differ drastically from local trends, and that there are economic influences such as interest rates that affect all markets, overall, all sectors are currently healthy and will be getting healthier through 2007.The news you’ve been reading over the past year is either grossly overstated or just plain wrong. There has been no crash in real estate pricing and only in certain select markets has there been a bubble that has now mostly deflated.

The strength of a residential market is dependent on financing rates, overall unemployment and household formation. Market downturns are caused by excess supply or the fairly rapid increase of the first two factors mentioned. Specific markets, such as luxury condominiums in Miami, Tucson and Los Angeles, experienced supply and prices which overshot their targeted market. Those are the headlines we are being bombarded with.

Interest rates remain in a very affordable sweet spot of between five to six and one half percent, the unemployment rate is at a historic low of below 5 percent and normal household formation is being added to by an ever-increasing flood of immigrants as well as the growing trend of empty nesters purchasing second homes.

While there are bargains in the overbuilt condo markets in some cities, there has only been a leveling out of pricing for prime residential properties in most markets (except in areas like Michigan that are dependent on the shrinking auto industry). So don’t wait to make that bid thinking that prices will go much lower. Read more

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Many Americans looking at the values of their homes are asking not whether it will fall, but how much. But in fact, more than half of the 100 top markets in the U.S. are slated to rise next year. Forecasts for 100 real estate marketsFortune asked Moody’s Economy.com and real estate valuation company Fiserv Lending Solutions to give us their take on what lies ahead for housing in the country’s 100 largest metropolitan areas.

The picture in many parts of the country isn’t pretty. In 2007, 36 of the 100 biggest markets are expected to see price declines. For 2008, that number rises a notch to 37. 6 strategies to survive the real estate bust

But the housing market looks healthy in the Southeast, where the top market, McAllen Texas, is predicted to rise 8.5 percent in 2007, and another 9.8 percent in 2008. In fact, four of the hottest U.S. home markets forecast for next year are in Texas. Also on the list are two markets in upstate New York — Syracuse and Rochester. Read more

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While investors and homeowners fretted over the housing slump in 2006, one of the year’s most noteworthy real estate stories went largely unnoticed: Hundreds of billions of dollars poured into office towers, industrial buildings, and retail centers, setting the stage for what is certain to be a record-shattering year for commercial property deals.

To put it in perspective: Half of the biggest U.S. single-asset real estate deals in history were announced or closed in the past 12 months. Commercial real estate represents 90% of the most expensive deals of the year, the top eight of which are each more than $1 billion. Last year’s biggest deal, the sale of 200 Park Ave. in New York for $1.7 billion, was the only billion-dollar property sale in 2005.

Paradoxically, the largest deal of the year—and of all time—was the sale of MetLife’s (MET) Stuyvesant Town residential complex to Tishman Speyer for $5.4 billion. Other colossal transactions include the pending $1.8 billion sale of the Mall of America in Minnesota, San Francisco’s $1.05 billion Bank of America (BAC) Center, and the $880 million State Street (STT) Financial Center in Boston. Read more

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West Roxbury resident Jay Russo had a choice: Hang on to his adjustable-rate mortgage, which has a very low rate that could rise dramatically next year, or refinance into a sure thing, a fixed-rate mortgage that will cost more now but will remain stable over the life of the loan.

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In October, Gary Pipes purchased a decommissioned missile base that the federal government once owned. The property spans more than 15 acres and includes three enormous underground bunkers where Nike defense missiles were poised for launching at a moment’s notice.

“I thought it was a good investment,” Pipes said. He’s not alone.

Facilities such as this are sprinkled throughout the country, and they’re being used in ways the U.S. military never envisioned - for homes, for scuba diving, and for schools.

“There are a lot of dreamers out there,” said Ed Peden, who lives underground in a converted Atlas missile silo near Topeka, Kan. “And these are very unique opportunities.”

So enamored with the missile bases is Peden that he walked away from his 19-year career as a secondary-school teacher and went to work for himself. He now identifies missile bases and similar structures throughout the country, then tries to market and sell them. Read more

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