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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (232411)	12/9/2009 10:28:07 AM
From: Les H	Read Replies (2) \| Respond to of 306849

New lending rules for condominium buyers already are forcing some developers to change or scrap plans for new projects for fear too many buyers will be shut out. On Monday, the Federal Housing Administration started limiting the number of buyers in condo buildings that can get loans insured by the agency. The rules also put restrictions on buildings with poor finances, too many delinquent owners and a high number of rentals. The tighter lending standards are designed to protect the financial health of the FHA. About 18 percent of loans insured by the FHA are either delinquent or in foreclosure, and the agency's financial cushion has dipped below the federal minimum. But the move is a blow to condo buyers because the FHA has become a key source of mortgage financing. The agency insures about one in four new loans today because buyers need only have a 3.5 percent down payment. "It is a huge debacle for us," said Rene Oehlerking, marketing director for Salt Lake City developer Garbett Homes. The company has canceled a 300-unit condo project, spending $300,000 to redesign it into homes. Most of the builders' homes and condos this year went to buyers with FHA loans. Garbett's condo project didn't pencil out with the new FHA rule that allows only half of a condo building's units to have FHA-backed loans, with some exceptions. That number falls to 30 percent in 2011. Another new rule requires at least 30 percent of units in new buildings be pre-sold before the agency insures any loans. That number will rise to 50 percent in 2011. rgj.com

To: Les H who wrote (232411)	12/9/2009 11:01:53 AM
From: Les H	Respond to of 306849

Boomer stat rekindles "meltdown" debate for 2010 LONDON (Reuters) - As soothsayers and strategists gaze into 2010, one statistic on the retiring baby-boom generation makes anxious reading for stock market bulls. The share of the U.S. population aged between 40 and 65, when people typically prepare for retirement by building their biggest pile of financial assets, peaks in 2010 and this ratio has shown an uncanny link with real equity prices for 40 years. In snapshot, 78 million Americans were born between 1946 and 1964 and by the mid-1980s earned half of U.S. personal income. This outsize population cohort, swollen by global baby booms as World War Two ended in 1945, is typical. The proportion of the global population over 60 is set to double by 2050 to 21.8 percent. As birth rates fall and people live longer, ratios of retirees per worker is likely to soar. Yet the U.S. ratio of those in prime savings years to the sum of under-40s plus those 65 and over is marked by a glaring market correlation and an obvious 2010 milestone. Goldman Sachs, for example, points out the stock price funk of the 1970s coincided with a three point fall in this key ratio. And its sharp 15 point rebound from 1982 to next year straddled an 18-year bull market on Wall St .SPX. After 2010, it is set to decline once more and is forecast to sink six points over the next two decades. Comparison with Japan, whose aging profile is more advanced than those of western economies, packs a more ominous warning. When the prime savings age group topped out there in the early 1990s, Japan's Nikkei 225 .N225 entered a 20-year bear market that has more than halved stock prices since then. reuters.com