The White Paper’s discussion points include:

• The current state of the housing markets;
• The growth of innovative mortgage products, and
• The impact of developments in the housing and mortgage markets on households, financial institutions, the financial markets and the economy more broadly.

The purpose of the white paper, according to MBA Chief Economist Doug Duncan, is to “put the flood of commentaries and analyses regarding housing markets and new mortgage products into proper perspective by assessing a broad array of market data, reviewing the risks and reaching some conclusions.”

MBA NewsLink will release the White Paper in Wednesday’s editions, and provide coverage of the conference call. The White Paper will be available later today at MBA’s Web site, www.mortgagebankers.org.
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Credit Plus Inc., Salisbury, Md., is offering instruction to mortgage professionals on how to better educate Spanish-speaking clients about the mortgage process. Its representatives from throughout the U.S. are stressing that understanding the culture is key in closing transactions.
 
“With more than 44 million Hispanics living in the United States and the boom expected to continue, there is a great opportunity for mortgage brokers to work with this segment of the population,” said Steve Grant, President of Credit Plus. “Education is crucial as some may not be aware of the U.S. mortgage system or are from countries that don’t have credit programs.”

Credit Plus offers mortgage professionals credit reports in Spanish. They include credit history information accompanied by descriptions of each score and suggestions on what the customer can do to increase his or her rating. Bi-lingual representatives are available to assist customers.

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Credit Plus also announced its relocation to a larger facility at 31550 Winterplace Parkway in Salisbury, Md. It is a 50,000 square-foot office that includes more space, expanded customer service capabilities and tightened security. 

The call center in the new facility can accommodate up to 470 customer support personnel.
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According to the report, the Los Angeles Basin has the largest industrial base in the nation, comprising 1.2 billion square feet in buildings 10,000 square feet and greater, is a relatively decentralized market, with 20 percent of the space located in Central Los Angeles, and 80 percent dispersed throughout the region. Significant new construction, however, is taking place, particularly in the Inland Empire, which includes Western San Bernardino and Riverside Counties.

The total vacancy rate for industrial property in the Los Angeles basin region, including sublet space, was three percent at the end of the second quarter this year. The direct vacancy rate was at 2.8 percent. The total vacancy for the Los Angeles Basin was down 0.8 percentage points from the first quarter and it continues to be the lowest vacancy rate of any major market nationwide, the report said. Total vacancy rates were low in all markets near Los Angeles, particularly in the San Gabriel Valley with a 1.3 percent vacancy rate and in the South Bay at 1.7 percent.

Analysts project market conditions to remain very tight in all markets.

Average asking rental rates for buildings in the 70,000 to 99,999 square foot range were highest in Orange County at $0.67 per square foot (PSF) and lowest in the Inland Empire at $0.42 PSF.The weighted average asking rental rate in the second quarter, for buildings in the 70,000 to 99,999 square foot range, was $0.54 PSF per month, industrial Triple Net (NNN), up from $0.53 PSF last quarter, and up from $0.48 PSF one year ago.

"Given the very low vacancy rates and the strong economy, rental rates should continue to climb in most markets over the next 12 months," the report said. "Average sale prices, climbed once more during the quarter."

For example, the report noted that average sale prices rose $77 PSF for buildings in the 70,000 to 99,999 square foot segment, up from $73 PSF last quarter and $67 PSF one year ago. In markets that included South Orange County, average sales prices reached the high $100 PSF range for smaller buildings.

"These still appear to be opportune times for tenants to negotiate new leases, before rental rates climb any further, as a result of projected continued hyper-tight market conditions," the report said. "The outlook for building sales, specifically with sale prices, is less clear."

Factors that will support high sales prices include tight market conditions and a strong economy. Indications of a downward correction include prices that have risen very sharply in the past three years, above replacement costs in some areas, and projected increases in interest rates.
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HomeStreet Capital

The apartment complex was originally developed in 1973. The Santa Clara condominium market has been very strong in recent years with available inventory lagging behind demand. As of April 2005, the median condominium price was $465,000, an increase of 20.8 percent over the previous year, said Tom Meunier, vice president, income loan manager, who arranged financing through HomeStreet Bank portfolio funds. The borrower is Imagination Properties Santa Clara Park L.P., a Washington limited partnership and long standing client of HomeStreet.

"It was out of state for us," Meunier said. "The reason we did it was that the ownership group has a strong relationship with HomeStreet. It was our first venture out of the Northwest."

Upon completion, the project will house 56 two-bedroom and 29 three-bedroom units, priced in the range of $500,000 to $600,000. All windows and roofs will be replaced, and building exteriors will be updated.

As part of the condominium conversion, interiors of all units will be stripped down to the studs and rebuilt. The new units will include electrical upgrades and plumbing for gas, granite countertops, stainless appliances, washers and dryers, and tankless water heaters.
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"Most home owners are only in a home an average of five to seven years," said Jeanette Schneider, vice president and co-regional director of RE/MAX of Southeastern Michigan. "It makes sense, then, to begin analyzing resale values from the very first day you set out to buy a home."

According to the National Association of Realtors (NAR), the median U.S. home price jumped to $206,000 in April 2005—up by 15 percent over the past year and by 55 percent over the past five years.

"Even if you're not contemplating buying or selling anytime soon, today's home values are changing the way we think about the roof over our head," Schneider said. "Real estate is becoming less about longevity and more about value."

"Past generations thought of their house as an investment, but a passive one," Schneider continued. "Burning the mortgage after 30 years promised a debt-free retirement and a little legacy for the next generation. But now, people track their home values almost daily. And thanks to home-equity loans and refinancing, the home is an easily tapped source of cash."

NAR reported the national median existing-home price increased 9.3 percent in 2004 and is projected to rise 5.6 percent this year. Since record keeping began in 1968, the national median home price has risen every year, even during recessions and periods of sales decline. Typically, home values rise at the general rate of inflation, plus one-to-two percentage points.

Over the last few years, Americans have shown a readiness to pull their money out of stocks and put it into real estate, often as a second home, NAR said. Thirty-six percent of home sales in 2004 were second homes, including 23 percent for investment purposes.

Other characteristics buyers assessed include property taxes, square footage, roof age, school district, storage space, furnace age, home warranty, location/placement of home within a subdivision and garage size.

Several factors also affect neighborhood choice. According to the 2004 National Association of Realtors Profile of Home Buyers and Sellers, 64 percent of urban respondents said neighborhood quality as a main characteristic. Forty-five percent said close to job/school was a factor, while 34 percent said close to family/friends followed by area shopping.
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