Mortgage applications to purchase a home are rising for two reasons: Buyer demand is increasing, and those buyers are afraid rates will go up dramatically, so they want to lock in fast.

(Read More: Depression Begone! Home Prices Set Record in April)

Alicia and Ryan Diederichs say they are in a race against time. A job transfer recently sent them and their three young children to Oceanside, Calif. Now crammed into a small rental apartment, they are hoping to buy a house quickly.

“I’m afraid we’re going to miss the boat,” said Alicia Diederichs. “I feel like we might get priced out of the market in a few months, and just depending on the mortgage payment whether we could afford it if the interest rates go up more.”

The Diederichs need a large house to fit their family, but home prices are rising fast on the California coast, and they have not yet locked in a mortgage rate.

“Ideally we would do a 30-year fixed, but it’s all going to be dependent on the end mortgage payment, what we can afford, so we would have to look at an ARM potentially if rates continue to rise,” she said.

(Read More: Mortgage Cop: Four Top Banks Fail Consumers)

The combination of sharply higher home prices and rising rates is squeezing buyers who are already facing tighter underwriting standards. In order to qualify for loans, they must fit into strict debt-to-income calculations, and those calculations change with every increase in mortgage rates.

Article source: http://www.cnbc.com/id/100845777

Share

Reprints

Disable this ad

Join the thousands of real estate professionals that subscribe to the California AM Alert. Each and every morning, we deliver the important stories, data, analysis?as well as the opinions and insights of industry thought leaders to provide you with market intelligence and a daily business advantage.

Become a registered member today and don?t miss another important story in the California market. Let GlobeSt.com be your source for everything real estate.

At GlobeSt.com, we are passionate about bringing you the best possible user experience. We listened to your feedback and now offer the ability to access information on GlobeSt.com without interruptions! Supercharge your viewing experience by disabling these ads.

Sign Up Today

Potrero Launch is slated to be completed
in the third quarter of 2012.

(Mark Your Calendars: RealShare REAL ESTATE 2012, March 22^nd in Los Angeles).

SAN FRANCISCO-Los Angeles-based CityView, a real estate advisory firm founded by former HUD Secretary Henry Cisneros, has just closed on its first asset from the Bay Area Fund. The new $300-million fund will be used to invest in multifamily housing communities in the Bay Area region.

The class A mixed-use asset, called Potrero Launch, is located in the Mission Bay area of San Francisco’s waterfront and is slated to be completed in the third quarter of 2012 with 196 rental apartment units and 28,000 square feet of office and retail space.  

According to Cisneros, executive chairman of CityView, “There is a critical shortage of quality rental properties in the Bay Area. For those who cannot afford the high cost of owning a home in the region, it is imperative that they have access to high quality multifamily housing.”

Tony Cardoza, formerly of Real Estate Capital Partners, has been named as managing director of the Bay Area Fund and David Martin, formerly the founder, chairman and CEO of the Martin Group, and vice chairman of CityView is chairman of the fund’s investment committee. Cardoza and Martin have extensive experience in the Bay Area and collectively have worked on a number of notable projects, such as One Market, 1000 Van Ness, Hamilton Field, EmeryBay, and Downtown Pleasant Hill.

Martin says that “Patrick McNerney, principal of Martin Building Co. and the developer of Potrero Launch, has a long history of building high quality projects in the City.”

McNerney says in a prepared statement that the transaction was “complex” and “took place over a condensed timeframe.”

Cardoza points out that “We’ve raised a significant amount of capital for an area we think is very promising for new construction in the multi-family sector and we intend to continue to seek similar urban, infill development opportunities with strong partners.”

Cisneros adds that “This region is a focus for our equity dollars because of several factors—it’s one of the focal points of the nation’s business and professional services, its artistic and cultural opportunities, its transportation, its educational and scientific talents, and its foreign trade activities. The area is a big draw for people, jobs, and the capital necessary to justify large-scale investments in housing. We certainly hope that more housing options will help ease the high cost of rental housing for Bay Area residents.”

Cardoza tells GlobeSt.com that the amount for Potrero Launch is $437,000 per residential unit. In addition, he says, the project has 20% affordable units reserved for those earning 30% and 50% AMI.

Categories:

West,
Multifamily,
Acquisitions/Dispositions,
San Francisco

Natalie Dolce Natalie Dolce, editor of the West Coast region for GlobeSt.com and Real Estate Forum, is responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, Natalie was Northeast bureau chief, covering New York City for GlobeSt.com. Dolce?s background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats Arthur Frommer?s Budget Travel magazine, FashionLedge.com, Co-Ed magazine, and has also freelanced for a number of publications including MSNBC.com and Museums New York magazine. Contact Natalie Dolce.

Article source: http://www.globest.com/news/12_278/sanfrancisco/multifamily/CityView-Closes-on-First-Asset-from-300M-Fund-318340.html

What does the consumer price index (CPI) have to tell us about the future of the housing market?

Apparently a lot.

Let me first explain a few things for those of you housing types who don’t follow this monthly number. The CPI is the most common way to measure inflation. There’s the big number and then what’s called the “core” number, which is the big number minus food and energy costs (gas prices obviously skewing things a lot these days). The big number was pushed down thanks to a drop in gasoline prices, but the core number was higher than expected, thanks to housing.

One component of the CPI is the “Owners Equivalent Rent,” (OER) measures the amount of money it costs to live somewhere, anywhere, be it a rental apartment or your own home.

“The key factor in the higher than expected core rate was a .2 percent rise in Owners Equivalent Rent, the biggest gain since March ’09,” writes Peter Boockvar of Miller Tabak. “This figure is important because it makes up 25 percent of CPI and 40 percent of the core. Apartment landlords are gaining pricing power as vacancies fall as the homeownership continues its decline. This is a secular trend and will result in a further lift in core inflation going forward.”

Page 1 of 3 | Next Page
Show Entire Article

Obama, Republicans Trade Demands for Debt Plan

CEO of WSJ Parent Resigns Amid News Corp Scandal

Recession’s Legacy: Twice as Many Americans Saving

One Democrat’s Advice: Raising Taxes Doesn’t Add Revenue

SP Threatens Broad Downgrade of Finance Companies

More Top Stories

Article source: http://www.cnbc.com/id/43769306?__source=RSS*blog*&par=RSS

For 18 years, Mr. MacFarlane’s real estate development and asset-management firm in San Francisco invested huge sums for the California Public Employees’ Retirement System, the nation’s largest pension fund, and other institutional investors.

His early dedication to urban real estate produced healthy returns and management fees. With his long friendship with the power broker Willie L. Brown Jr. and onetime partnership with the former basketball star Magic Johnson, Mr. MacFarlane became the most-prominent black financier in San Francisco.

Mr. MacFarlane rode the real-estate boom with flair, buying two private planes, a soccer team, and two penthouses at San Francisco’s St. Regis (also the residence of Mr. Brown).

Then came the crash.

Mr. MacFarlane lost more than $1 billion of CalPERS’s money on exurban housing developments in Southern California and Arizona. Unable to sell his St. Regis aerie for $70 million, he recently turned the penthouses over to his lender. CalPERS is no longer a client of his firm, MacFarlane Partners. Half of his employees are gone. Ownership of the soccer team, D.C. United, didn’t work out, either.

Many investors, of course, lost big in the financial crisis. But few lost more publicly than Mr. MacFarlane. A recent Bloomberg headline reminded everyone that, thanks to him, “Arizona Land Sells for 8% of Price CalPERS Group Paid at Peak.” Mr. MacFarlane said he resigned his CalPERS account, and The Wall Street Journal heralded the news with “CalPERS Cleans House, Finally.” That $1 billion Mr. MacFarlane lost will haunt the state for years, since taxpayers are responsible for CalPERS’s liabilities.

But now Mr. MacFarlane is mounting a comeback, announcing two developments in recent weeks. The rental-apartment and small retail projects — one at what is now a pit at the corner of Market and Octavia, the other involving an old foam-cup factory in Corte Madera — are quite a comedown from glamorous projects of yore like the Time Warner Center in New York.

Some might take Mr. MacFarlane’s ability to get even small deals done as a sad indicator of a financial industry culture in which failure brings few consequences. But if this 60-year-old liver-transplant survivor can pick himself up and get back in the game, then perhaps it’s a sign of something more hopeful — that if you have the smarts and the moxie, you can pick yourself up and start afresh.

Sitting in his office in SoMa, framed by celebrity-friend photos and a commanding view of the Bay Bridge, Mr. MacFarlane doesn’t seem to have put the past entirely behind him. The once-formidable investor has a haunted look about him, his broad, reflexive salesman’s smile never quite making it to his eyes.

Spinning gamely, Mr. MacFarlane said he was simply returning to the strategies that brought him initial success decades ago.

“The market is moving back to what we do,” he said, adding that while his firm was “always well-known for our biggest investments, we have always done this range of deals.”

Mr. MacFarlane raised his current $211 million investment fund in 2009, from three unidentified European institutions, and Goldman Sachs now owns 20 percent of the firm. The two new projects will cost about $123 million.

Nori Gerardo Lietz, chief strategist for private real estate at the Partners Group, an investment-management firm, gives Mr. MacFarlane considerable credit for forging on. A self-made man, Mr. MacFarlane grew up poor in Middletown, Ohio, made it to a Presbyterian boarding school in Arizona and later earned an M.B.A. from the University of Pittsburgh and a law degree from U.C.L.A.

“Victor is an interesting, complicated person,” Ms. Lietz said. “The real estate business in general is very clearly a white man’s business.  And so, he had to maneuver as an African-American man in that context, which certainly wasn’t easy. Without a doubt he had to build a business with considerable headwinds against him.”

In that vein, Mr. MacFarlane explained that it was fine with him, at this point, to be dealing in much smaller deals.

In today’s post-crash reality, “much more important is your sphere of influence,” rather than huge dollar figures attached to big developments, he said. “That’s usually enough to get by.”

estevens@baycitizen.org

Article source: http://www.nytimes.com/2011/07/10/us/10bcstevens.html