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Sluggish stocks: Mixed earnings reports bring a mixed market. In early trading, the Dow is down about 40 points.
Loans shrink: Banks are still not lending the way they need to. WSJ survey shows that the total amount of loans held by 15 large U.S. banks shrank by 2.8 percent in the second quarter - and less than half of the loan volume in April and May came from new loans.
The numbers underscore two related trends weighing on the economy. Financial institutions are clamping down on lending to conserve capital as a cushion against mounting loan losses. And loan demand is falling as companies shelve expansion plans and consumers trim spending to ride out the recession. That combination is making it harder for the U.S. economy to rebound, and some analysts predict that loan portfolios won't start growing until the second half of 2010.
Jump in new home sales: The June increase was the largest since November 2008 and exceeded expectations. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier.
SD condos sit vacant: Some high rise units are going for less than half the asking prices from the market peak. That's when the median price of downtown condos hit $647,500. From the LAT:
Downtown San Diego, a 2.2-square-mile area, is now awash in condos. About 400 new and occupied ones are listed for sale, and more than 450 are in some stage of foreclosure and will eventually be put on the market. An additional 1,000 units that were under construction when the market soured are slated to be completed this year, adding to the glut and putting further downward pressure on prices. So far this year, 159 new homes have been sold downtown, according to DataQuick. At that pace, it would take several years to sell all the units recently completed or being finished this year. Developers are holding units off the market.
Hottest real estate market? That's the CA forecast for next year from financial data provider FiServ. Projections show home prices rising 5.7 percent in 2010 after falling 16.4 percent this year (other forecasts are far gloomier). From FiServ economist David Stiff (via OC Register):
Despite the state of California's economy and huge numbers of foreclosed properties for sale, we are forecasting stabilizing home prices because of the substantial improvements in housing affordability there. California's housing correction started about one year before most of the rest of the economy. Price declines have been very large -40% to -60% (although some of this decline reflects markets dominated by sales of bank-owned properties). Consequently, in many metro markets, relative to household income levels, home prices are near their pre-bubble levels.
Ad rates take tumble: CBS, NBC, ABC and Fox haves cut rates by single-digit percentages in at least some deals. If the lower rates hold, it would mark the first time since 2001 that all four networks have agreed to widespread cuts from the previous season's rates. (WSJ)
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.