Homeowners
are pulling cash out again; this time it’s the millennials - (www.cnbc.com) Fast-rising
home prices gave homeowners more equity than many expected, and they are now
tapping that equity at the fastest rate in eight years. Homeowners gained a
collective $570 billion throughout 2016, bringing the number of homeowners with
"tappable" equity up to 39.5 million, according to Black Knight
Financial Services. Those borrowers have at least 20 percent equity in their
homes. But the fact that mortgage rates were lower last year makes it less
likely today's borrowers would want to refinance this year. About 68 percent of
tappable equity belongs to borrowers with mortgage rates below today's levels.
The vast majority of these borrowers, more than three-quarters, also have FICO
credit scores well above average, which gives them more options for cashing out
on their homes. Enter the HELOC. Home equity lines of credit are second loans
taken outside the primary mortgage, and millennials are leading the pack to
cash in.
Manhattan
Apartment Prices Tumble In Q1 As Sellers Fret Over Rising Rates - (www.zerohedge.com) At
the end of 4Q 2016, we noted that NYC real estate sales volumes were collapsing
as sellers seemed to be having a difficult time accepting the fact that
clearing prices had dropped below their exorbitant asking prices...here was our
conclusion then (see "More Bad News For NYC Real Estate As Luxury Co-Op Contracts
Collapse 25%"):
"The lesson seems to be that the marginal New York City buyer has been
priced out of the market while sellers have not yet accepted that the bubble
has burst deciding instead to maintain listing prices while letting their
apartments sit on the market longer amid growing inventory levels...that should
work out well..." Now, it seems that growing fears over the flood of new
inventory slated to hit the New York market combined with the Fed's promise to
keep hiking interest rates has sellers slightly more willing to
compromise. Per the following quarterly Manhattan market update from Douglas Elliman,
the median sales price for apartments in the Big Apple dropped 3.3% YoY in
1Q 2017 prompting a 'surge' in deal volumes which were up 0.5%.
Miami
Condo Bust Much Worse than Industry Numbers Show - (www.wolfstreet.com) Condo
sales in Miami-Dade County have plunged. Condos on the market have surged.
Supply has hit 14 months. Developers are sitting on completed units they can’t
sell, and months’ supply in their projects has reached several years. With this kind of supply-and-demand imbalance
– sales down 25% from February 2014, inventory up 90% since early 2013 – you’d
expect prices to head south. But the median price of condos in February,
according to the Miami Association of Realtors, increased 6.3%
year-over-year. This is the mystery we’ll shed some light on (chart by StatFunding):
StatFunding conducted an analysis of sales price per
square foot in four condo projects with 2,634 units in Brickell, an area of
Miami that is part of the “condo corridor.”
Latest
rift in Greek bailout talks dashes hopes for deal in Malta - (www.reuters.com) A
new rift between Athens and the International Monetary Fund over pensions and
labor reforms has dealt a blow to an initial accord, dashing hopes for a
bailout review deal before a meeting of euro zone finance ministers this week. Talks
between Athens, the European Union and the Washington-based IMF have dragged on
for months due to differences over Greece's fiscal progress, labor and energy
market reforms. The delays have revived fears of a new crisis in Europe, which
is already reeling from Britain's decision to exit the union. Sources close to
the talks said Greece and its creditors had reached an initial agreement on the
main issues of the bailout review in Brussels last week but they hit a
last-minute snag.
Italian
bond yields rise as traders focus on political worries - (www.ft.com) Italian
government bond prices were lower on Monday, as investors focused on signs of
political sclerosis rather than economic data pointing to strength in
manufacturing and a drop in the ranks of the unemployed. The difference between
Italian 10-year sovereign bonds and the benchmark German Bund — a key measure
of investor confidence as it shows the premium traders are demanding to buy
Italian debt — hit a more than three-year high on Monday of 2.03 per cent.
Higher Italian bond yields on Monday came after IHS Markit’s purchasing
managers’ index, which measures everything from output to employment levels in
the factory sector, accelerated from 55.4 to hit 56.2 in March, in numbers
released Monday. A number above 50 indicates expansion, and March was the
strongest reading for the index since the eurozone debt crisis in 2011. The
Italian unemployment rate also dropped to 11.5 per cent in February, from 11.8
per cent in January, in figures released on Monday.
South Africa Cut to Junk for the First Time Since 2000 - (www.bloomberg.com)
Trump Is Ready for Tax Cuts, but His Treasury Department Isn’t - (www.nytimes.com)
This Volatility Warning Has a Different Ring to It Today - (www.wsj.com)
China’s ‘bad banks’ thrive as alternative lenders - (www.ft.com)
Donald Trump’s North Korea warning sparks concern in Asia - (www.ft.com)
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