December 2011

Increased concerns about European debt issues and the pace of global economic growth caused investors to shift to relatively safer assets this week. As a result, mortgage rates declined a little to near the lowest levels of the year.

Investors hoping for the European Central Bank (ECB) to expand its role in providing aid to euro zone countries were again disappointed. The ECB clearly indicated that it currently has no plans to introduce any major new aid programs. It appears that ECB officials believe that the appropriate next step in easing the debt issues is for tighter budgetary discipline. Along those lines, European Union officials suggested that working out the details of an agreement on fiscal integration between the many EU countries may take

‘Investment’ and ‘development’ in the real estate market are two terms we have not heard much of these past few years. Fortunately for our city, however, residential developers and real estate investors are doing their part to keep the Boston housing market going strong, in spite of the lagging regional economy. A recent article on Boston.com explains that multi-family housing projects are on the rise, thanks to the profit-making combination of rising rent prices, low vacancies and interest rates hovering around 4 percent. This formula has resulted in increased rates for investor returns compared to what we have seen the past few decades, and hence an opportunity for high profits in an extremely difficult market. Demand for apartment

With little economic data in the US this week, the focus was on Europe. Some investors were hoping that a more concrete plan to address the region's issues would be announced during the week, but they were somewhat disappointed. As a result, relatively safer assets saw gains, and mortgage rates ended the week lower.

A highly anticipated EU summit left investors with mixed feelings and produced little reaction in financial markets. On Friday, European leaders announced that at least 23 of the 27 members of the European Union have agreed in principle to tighten their fiscal coordination and to limit budget deficits. The details, which will determine the effectiveness of the plan, are to be worked out in the future. In essence, investors viewed this news as

New 43-Story Condo Planned for Kakaako

According to "Honolulu Magazine" online, "By now you've heard that Kewalo Development, a subsidiary of A&B Properties Inc., has unveiled its plans for a 43-story, upscale residential condo between the Hawaiki and Koolani buildings. It looks nice, but what's going to make it different from the other towers in the area?

In keeping with the trend to go green, A&B is incorporating a variety of energy-efficient technologies, including:

• A heat recovery system to centrally heat hot water for all residences as well as the pool
• LED lighting in the common areas
• Lighting systems in the common areas to enable use as needed
• Dual air conditioning controls in two- and three-bedroom residences
• Low-emissivity,

This week, the effects on mortgage rates from increased optimism about Europe and stronger than expected US economic data were offset by increased expectations for additional Fed purchases of mortgage-backed securities (MBS). As a result, mortgage rates ended the week with little change.

Global actions taken this week increased optimism that the European debt situation will improve. On Wednesday, major central banks around the world announced a joint program to lower the borrowing costs for banks. This will increase liquidity and decrease the risk of failures. China also lowered rates for the first time in three years. It appears that central bankers in Europe and China are becoming more willing to risk higher future inflation to spur economic growth. In

Owning Continues to Become More Affordable Relative to Renting, but Several Obstacles Prevent Many From Biting

By: Nick Timiraos

Home prices and mortgage rates have fallen so far that the monthly cost of owning a home is more affordable than at any point in the past 15 years and is less expensive than renting in a growing number of cities.

The Wall Street Journal's third-quarter survey of housing-market conditions in 28 of the nation's largest metropolitan areas found that home values declined in all but five markets compared with the second quarter, according to data from Zillow Inc. Meanwhile, rent levels have risen briskly across the country and mortgage rates, hovering around 4%, are the lowest in six decades.

As a result, monthly