For the first time since the end of 2006, the Fed’s quarterly Senior Loan Officer Survey found some easing of standards on commercial and industrial loans to small companies, or those with annual sales of less than $50 million. Based on responses from 57 domestic banks and 23 U.S. branches of foreign banks, the Fed survey found that the improvement was focused at big U.S. banks — which had been keeping credit very tight following the financial crisis — mainly as a result of competitive pressures. “While the survey results suggest that lending conditions are beginning to ease, the improvement to date has been concentrated at large domestic banks,” the U.S. central bank said. Lending in financial markets nearly came to a standstill following the collapse of Lehman Brothers in September 2008, forcing the Fed to step in by flooding the financial system with cash by buying government debt and mortgage-backed securities. Despite the huge reserves accumulated by banks, credit has remained tight amid weak demand by households and firms facing an uncertain economic outlook. A few large banks reported having eased standards on prime mortgage loans to consumers, but a small net fraction of the remaining banks reported having tightened standards on these loans. (www.wsj.com)
Wall Street Journal (8/16/10); Luca Di Leo and Meena Thiruvengadam

With neither foreclosure nor mortgage modification working to stabilize the market, economist Dean Baker argues that instead of foreclosing on a loan and evicting the family, the lender should take ownership of the house and rent it out to them at a market rate for an extended period. In many areas, rents are much lower than mortgage payments, so the family can afford to stay put. Eventually, once the market recovers, the bank could sell the house. This would reduce the supply of foreclosed homes for sale; keep neighborhoods intact and maintain values by avoiding the blight of boarded-up, abandoned homes; would not bail anyone out; and would keep families off the street, but wouldn’t force them to pay more than the going rate for rents. Among its drawbacks, this approach would not work for everyone; some home owners would not be able to afford the rent and others wouldn’t want to rent. Also, banks don’t want to be landlords and they could potentially lose money by not selling the house now. (www.dowjones.com)
Dow Jones News Service (8/20/10); Rex Nutting

Robert Denk, a forecaster at NAHB, expects Iowa to return to a nearly “normal market” by the end of 2011. 2000-03 are considered years in which there was a normal market for the state, with construction of about 10,000 homes annually. So far, Iowa is on pace this year to build about 6,000 homes, 54% below peak construction in 2005, according to building permit data from the U.S. Census Bureau. Iowa home building is up about 24% from January to June compared with the same six months last year, data show. Denk expects the housing recovery to occur first in energy and farm states. It will take much longer in boom-bust markets like Nevada, Florida and California and economically depressed states like Michigan. Those states are expected to regain only about 50% of their normal markets next year, he said. Devan Kaufman, president of the Home Builders Association of Greater Des Moines, said builders like him are adjusting. “Right now, we’re not building new homes,” said Kaufman, who owns Kaufman Construction in Cumming. “But it’s not by choice. Thankfully, we’ve done quite a bit of remodeling and we’re in discussion with families about building new homes.” Bill Kimberley, owner of Kimberley Development, said the recession has created some opportunities for the Ankeny company to expand into new markets and offer new products. Kimberley purchased about 200 discounted lots from lenders to bankrupt developers. Lower lot prices means Kimberley can build homes costing less than $200,000, which is a new market for the builder of homes typically costing $350,000 and more. “We saw the high-end market dwindle, so we decided to branch out, expand our market and expand our plans,” Kimberley said. The 32-year building veteran said he’s seeing increased sales in both high-end and more affordable markets. The company sold a $500,000 speculative home featured in last month’s Home Expo Show in West Des Moines. “People are beginning to realize that these opportunities aren’t going to be around forever,” he said. Denk and Kimberley said financing continues to be a stumbling block for most builders. “The hoops you have to go through have increased about tenfold for everyone,” said Kimberley, who tries to have about 30 speculative homes available across the metro area. (www.desmoinesregister.com)
Des Moines Register (8/7/10); David Elbert and Donnelle Eller

The recession has not been kind to many new condominium developments in New York City. Some have stalled mid-construction; others have shuttered their offices because of inactivity; some developers have had to return deposits to buyers as prices took a nosedive. But two years after the real estate market seized up, some of the hardest-hit developments have found ways to rise from the ashes. In some cases, the original developers avoided default by renegotiating their construction loans, and in others new developers stepped in and took over. In all cases, the need for reinvention has been paramount. To adjust to a market strikingly different from the high-flying one that reigned when these projects were conceived, developers have not only created new marketing campaigns but also substantially changed the buildings themselves. Focusing less on trendiness and more on value, they have redesigned lobbies, combined apartments to create more family-sized units and swapped luxuries like private roof cabanas for shared amenities like common roof decks. The changes all seek to appeal to today’s much more skeptical buyer. At be@schermerhorn, a 246-unit condo in downtown Brooklyn that stood unfinished and vacant for most of 2009, a new owner started selling apartments in the building three months ago, after deciding to broaden the target audience of buyers and also create amenities like storage space and a roof deck. “We retooled the project to what we think fits the market today,” said Michael Phillips, the creative director of Jamestown Properties, an original investor that has now taken over both the building and the troubled mortgage of the developer. The changes that Jamestown made were “less about grand gestures and more about sensitivity to consumer interest,” Phillips said. “Maybe in the last economy, big, glossy marketing and overpromising was acceptable, but that’s really not relevant for buyers today.” Jamestown assumed that the original marketing plan aimed at 20-somethings was too limited. Its first brochures showed beautiful young people dining out or shooting pool. New marketing materials feature a child reaching for a juice box at a local market and an older gentleman leaving the building with his dog. Inside the building, bold design colors were traded for more neutral ones; part of the parking garage was converted to 60 storage units; and six private roof cabanas were turned into a common roof deck. Jamestown also cut prices by 25% and obtained approval for loans through the FHA. After three months back on the market, they have about 140 accepted offers. (www.nytimes.com)
New York Times (8/20/10); Vivian S. Toy

As the U.S. population ages, more home owners may need to contemplate what steps to take about steps. Buyer preferences vary by region. While ranch houses are popular in many parts of the Sun Belt, the default in the Washington, D.C. region is a two-story Colonial. Some buyers, especially, those with children, prefer two-story houses because they separate public and private areas. However, older buyers overwhelmingly would choose one-story living, according to an NAHB consumer preference survey. While 52% of all buyers said they would prefer a single-story house, that number climbs to 79% among buyers 55 and older. “Stairs are going to be an obstacle and sometimes a hazard,” said Vince Butler, president of Butler Brothers, a Fairfax County, Va., builder specializing in renovation. He teaches classes for other builders who want to earn a Certified Aging-in-Place Specialist designation, a program designed by NAHB and AARP. When he evaluates a home, Butler said, he asks, “Is there a way to configure the house so they don’t have to use the stairs?” In the Washington region, he said, the biggest challenge is that very few houses have a full bathroom on the first level. One way to approach the situation is to make existing stairs safer. Bright lighting at the top and bottom — with switches at both landings — is a start. Railings on both sides are a big help, allowing you to support yourself while carrying things or to use both hands as needed. Make sure the railings go a bit past the top and bottom of the stairs for added safely. Think about friction — whether the carpeting or wood allows your feet to get a grip. Assess visual contrast, too, especially looking down a flight. Can you see the individual treads? Some people can climb steps but don’t have the stamina to do so often. In those cases, a remote electronic door lock and an intercom could, for instance, permit someone to let in a grocery delivery without extra trips. (www.washingtonpost.com)
Washington Post (8/14/10); Maryann Haggerty

While kitchens are still high on the interest list for buyers and home owners, NAHB is reporting that remodeler survey respondents say that a bathroom remodel was one of their most common projects during the first six months of 2010 — as many as 61% worked on these jobs. Those home owners who are in the design phase of their remodel — especially for a bathroom, but for other areas too — should make sure that they will end up with enough light. HouseLogic.com concurs that lighting should be made a priority. “When it comes to adding creature comforts, your first thoughts might be multiple shower heads and radiant-heat floors. But few items make a bathroom more satisfying than lighting designed for everyday grooming,” writes author and residential builder John Rhia. Poor ventilation is another concern. Homes that were designed without bathroom windows that open can quickly develop mold, mildew and stale air if there isn’t a very good ventilation system installed. High-quality bathroom fans help. These are often not thought of because they’re not obvious “fun toys” like heated floors, but bathroom ventilation systems that exhaust to the outside are vital. (www.realtytimes.com)
Realty Times (8/6/10); Phoebe Chongchua