Archive for May, 2011
By Ruth Mantell
WASHINGTON (MarketWatch) — The average rate on the 30-year fixed-rate mortgage declined to 4.71% in the week ending May 5, hitting the lowest level since January, down from 4.78% in the prior week, according to a survey released Thursday by Freddie Mac, a buyer of residential mortgages. Last year, the rate was at 5.00%. To obtain the latest rate, payment of an average 0.7 point was required. A point is 1% of the mortgage amount, charged in prepaid interest. “Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week,” said Frank Nothaft, chief economist at Freddie Mac, in a statement. The rate for 15-year fixed-rate mortgages averaged 3.89% in the latest week, down from 3.97% in the prior week. The rate on the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.47%, down from 3.51%. The 1-year Treasury-indexed ARM averaged 3.14%, down from 3.15%.
Note from TMN: This is good news although I expect rates to rise at QE2 ends this summer. Our current problem is not the rates themselves but the underwriter guidelines which continue to be very strict. We certainly needed some correction in the guidelines but the pendulum swung so far that it is nearly impossible even for well qualified buyers to find financing. We need a little more common sense from the lenders to revive the housing market.
Earlier this week the developers of the Haymeadow residential project submitted their proposal to the Town of Eagle for review. While the project will undergo significant changes as it progresses through the planning process, the facts as submitted are:
- The Haymeadow parcel is 660 acres.
- The proposed density of the Haymeadow project is 979 homes or about 1.5 homes per acre.
- Approximately 60% of the parcel will remain open space.
- The project will be phased with three specific neighborhoods. Neighborhood A, which includes around 400 units, would be the first phase of development because it is located closest to town. It is also the most dense part of the proposal.
- It is expected it will take at least 20 years to build out the project.
The property is adjacent to the Eagle Pool and Ice Rink site southeast of town. Annexation petitions have also been submitted and in the weeks and months ahead, the project will be examined by the Eagle Planning and Zoning Commission, and ultimately the Eagle Town Board.
Many questions will have to be answered before moving forward with this project, including:
- Will the local real estate market support a project of this size, even if it doesn’t start for several years? The Eagle market is being driven downward by bank owned properties and short sales. Most builders believe it is cheaper to buy than build. How long will it take for that to change?
- Will the Eagle infrastructure support this project, including water and sewer services?
- How will Eagle resolve the significant traffic issues that already exist on Eby Creek Road and how will this project contribute to those solutions?
- How will this project impact wildlife movements across the parcel?
- I will be personally impacted by this project. I live on Brush Creek Road and would like to see traffic diverted from Brush Creek Road to the main road through this subdivision.
As a real estate broker, in general I support new residential projects throughout the Valley. 86% of the County is federally owned land so what land we have to build on should be utilized in the most efficient manner that fits with the community needs. I’ll need to look more closely at the details of this proposal as it moves forward through the review process.
My guess is that this project will ultimately be placed in front of the Eagle voters as Eagle River Station was. Even as controversial as ERS was, this project stands to polarized voters even more as this parcel is not located between a freeway and a highway and is much more picturesque. It will be an interesting process. Stay tuned.
Last week the lender that holds a $61 million note on the Ritz-Carlton building in Bachelor Gulch filed a foreclosure notice. The details are:
- Notice filed on 4/27/11
- Currently scheduled sale date is 8/24/11
- The original outstanding balance was $61 million
- The outstanding principal balance is $61 million
- The lender is Lehman Brothers Holdings Inc., Doing Business as Lehman Capital, a Division of Lehman Brothers Holdings Inc.
- The grantor is Bachelor Gulch Properties, L.L.C.
Doing a little digging, Bachelor Gulch Properties, L.L.C. is part of the Gencom Group, headquartered in Miami. From the Gencom website; “Founded in 1987 by Karim Alibhai, Gencom Group is one of the nation’s leading domestic and international investment and development firms specializing in the hospitality and residential real estate sectors.”
Don’t confuse the owner of the building with the management company of the hotel, which is Ritz-Carlton. Gencom owns the real estate and has a management contract with Ritz-Carlton to operate the hotel.
Personally, I don’t see this proceeding to a sale in August. This could be a move by Gencom to restructure their financing. I don’t see this having any impact on property values in Bachelor Gulch or skiing in Bachelor Gulch next season. Whatever does happen, it will be interesting to watch.
I attended the Opera Il Trovatore by Verdi at the Solaris CineBistro in Vail yesterday. These are HD events broadcast to theaters across the nation. It was my first experience with this format and I loved it.
The opera was a little dark but the voices superb. I was amazed at the HD resolution on the screen. Plus, I don’t think one could find a better place to view the opera on the big screen. The CineBistro is first-class. The visuals were stunning and the sound crystal clear. In addition, the movie serves drinks and food to patrons in their seats before and during intermission. A fine way to spend a Saturday afternoon.