December 30, 2005

Morning Feed

COOLING, NOT MELTING: The "housing market is slowing" story is getting out ahead of itself. Reading all the real estate market slowdown stories makes it sound like prices are dropping and fast. Maybe prices are off thier highs of late summer, but they are nonetheless above year-ago levels. OK inventory is building -- look at all those lockboxes on condos around DC -- but so far prices are stable.

This assessment is underscored by the November Existing Sales report from the National Assn. of Realtors, which has the following headline: "Existing-home sales declined in November while home prices sustained double-digit annual gains."

According to the realtors, total existing-home sales in the South eased by 0.7 percent in Nov. 2005 to a level of 2.74 million, but were 3.8 percent higher than November 2004. The median price in the South was $184,000, up 8.2 percent from November 2004. Sounds pretty good to me. OK maybe not as good as things were a few months ago, but still pretty good.

MORTGAGE RATES DROP: NAR economist David Lereah pointed at higher mortgage interest rates as the culpriut responsible for moderating sales. Oh well, we guess he cant spot all those lockboxes and oversupply, at least here in DC. Thats not a factor, David? Is it! (Calm down.)

But dropping mortgage rates, which are now at a two-month low, should help. The 30-year fixed-rate mortgage averaged 6.22 percent, with an average 0.5 point, for the week ending December 29, 2005, down from last week's average of 6.26 percent, said Fredie Mac. Last year at this time, the 30-year averaged 5.81 percent.

The average for the 15-year this week is 5.76 percent, with an average 0.6 point, down from last week's average of 5.79 percent. A year ago, the 15-year FRM averaged 5.23 percent, said Freddie Mac.

One Liners

A 95 percent interest in the Warner Building at 1299 Pennsylvania Avenue NW has been acquired by Vornado Realty Trust for $170M in cash and the assumption of $149M in debt. Vornado says the 560,000 SF Warner Building is 93 percent leased but will not disclose the seller's name.

Manhole cover explodes and leaves apartment on Ga. Ave without power.

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