by Calculated Risk on 7/08/2010 08:30:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending July 3, the advance figure for seasonally adjusted initial claims was 454,000, a decrease of 21,000 from the previous week's revised figure of 475,000. The 4-week moving average was 466,000, a decrease of 1,250 from the previous week's revised average of 467,250.
...
The advance number for seasonally adjusted insured unemployment during the week ending June 26 was 4,413,000, a decrease of 224,000 from the preceding week's revised level of 4,637,000.

Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims since January 2000.

The four-week average of weekly unemployment claims decreased this week by 1,250 to 466,000.

The dashed line on the graph is the current 4-week average.

Initial weekly claims have been at about the same level since December 2009. Historically the current level of 454,000, and 4-week average of 466,000, would suggest ongoing weakness in the labor market.

by Calculated Risk on 7/07/2010 11:59:00 PM

From Nick Timiraos at the WSJ: Apartment Vacancies Fell in Quarter

The national apartment vacancy rate stood at 7.8% at the end of June, according to Reis Inc., a New York real-estate research firm. That was down from the 8% vacancy rate during the first quarter, which was the highest vacancy rate in 30 years. ...

Rents gained by 0.7% during the seasonally strong April-to-June period, the biggest quarterly gain in two years.

This is still near the record vacancy rate set last quarter. This decline fits with the recent survey from the NMHC that showed lower apartment vacancies.

Note: the Reis numbers are for cities. The overall vacancy rate from the Census Bureau was at a near record 10.6% in Q1 2010.

by Calculated Risk on 7/07/2010 08:20:00 PM

From David Levitt at Bloomberg: U.S. Commercial Property Sales Trail Six-Year Average (ht Mike in Long Island)

In top cities such as New York and Washington, owners who owe more than their properties are worth are instead finding new sources of equity and lenders are willing to restructure their loans, [Sam Chandan, Real Capital’s chief economist] said. In less attractive markets, banks have been extending loans, waiting for higher prices so they don’t record losses ...

From Carriick Mollenkamp and Lingling Wei at the WSJ: To Fix Sour Property Deals, Lenders 'Extend and Pretend'

A big push by banks in recent months to modify [commercial real-estate] loans—by stretching out maturities or allowing below-market interest rates—has slowed a spike in defaults. It also has helped preserve banks' capital, by keeping some dicey loans classified as "performing" and thus minimizing the amount of cash banks must set aside in reserves for future losses.

Restructurings of nonresidential loans stood at $23.9 billion at the end of the first quarter, more than three times the level a year earlier and seven times the level two years earlier

With office vacancy rates at a 17 year high, and mall vacancy rates at a 19 year high, there is going to be a long wait ...

by Calculated Risk on 7/07/2010 04:53:00 PM

From the Committee of European Banking Supervisors (CEBS) Key Features of the extended EU-wide Stress Test

The objective of the extended stress test exercise is to assess the overall resilience of the EU banking sector and the banks’ ability to absorb further possible shocks on credit and market risks, including sovereign risks, and to assess the current dependence on public support measures.

The exercise is being conducted on a bank-by-bank basis using commonly agreed macro-economic scenarios (baseline and adverse) for 2010 and 2011, developed in close cooperation with the ECB and the European Commission.
...
On aggregate, the adverse scenario assumes a 3 percentage point deviation of GDP for the EU compared to the European Commission’s forecasts over the two-year time horizon. The sovereign risk shock in the EU represents a deterioration of market conditions as compared to the situation observed in early May 2010.
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The results of the stress test will be disclosed, both on an aggregated and on a bank-by-bank basis, on 23 July 2010.

The document has a list of the 91 banks.

More from Bloomberg: EU Stress Tests Will Cover 91 Banks, Assume Bond Drop

by Calculated Risk on 7/07/2010 01:25:00 PM

I see "Priced Reduced" on many For Sale signs these days ...

From Thomas Grillo at the Boston Herald: Boston sellers cut prices (ht StickyDownside)

There’s a silver lining for would-be home buyers who missed the April 30 deadline for the $8,000 federal tax credit: Sellers are dropping prices.

The average price reduction for a single-family home or condominium in the Bay State last month was 8 percent, or $38,883 off the original asking price, according to real estate search engine Trulia.com.

In Suffolk County, which includes the cities of Boston, Chelsea, Revere and Winthrop, the price reduction was $43,288, or 7 percent off the listing price.

Also these price reductions are one of the key reasons why a number of deals didn't close by June 30th - the deals just wouldn't appraise at the agreed upon price because identical units are now being offered for less.