Marketplace

Phoenix bumps Philly for the 5-spot

Congratulations Phoenix, you're now the 5th largest city in the U.S.! Or, please accept our condolences, if that's how you prefer to spin it. Like it or not, our population continued its spread away from major industrial centers in 2006. That's according to estimates released by the Census Bureau today.

The shift over the past 50 years or so has been extreme. The folks crunching the numbers have found that, despite an overall population that's nearly doubled, 16 of the top 20 cities have shrunk since 1950, some by more than half.

The 10 most populous U.S. cities
2006 population estimates, according to the U.S. Census:
1. New York: 8,214,426
2. Los Angeles: 3,849,378
3. Chicago: 2,833,321
4. Houston: 2,144,491
5. Phoenix: 1,512,986
6. Philadelphia: 1,448,394
7. San Antonio: 1,296,682
8. San Diego: 1,256,951
9. Dallas: 1,232,940
10. San Jose, Calif.: 929,936
(USA Today)

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Countrywide: two more years of housing slump?

The housing market's caught in its worst slump in 16 years — sales of existing homes fell 3.8 percent in June, the fourth straight month of weakness. Yesterday, mortgage lender Countrywide said a recovery might not be in the cards until 2009. More Countrywide borrowers with good credit are falling behind on loans. That news triggered a sell-off in the stock market yesterday.

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Another one bites the dust

Today, the sagging housing market claims one of its biggest casualties yet: American Home Mortgage plans to close most of its operations and lay off more than 6,000 people. The company will probably have to file for bankruptcy by Monday. Two years ago, American Home's stock traded at nearly $40. Last night it was worth about $1.50. This is also a sign that the scope of the problem is widening. American Home Mortgage was handing out loans to people with decent credit, not the riskiest subprime borrowers.

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Another subprime shoe drops

Fallout from the subprime mortgage mess has hit Europe. The biggest bank in France, BNP Paribas, won't let investors from take money out of three funds with holdings in U.S. subprime loans. The bank's having trouble determining what these funds are worth. At the end of last month, they were valued at nearly $3 billion. Just last week BNP Paribas said it would be virtually untouched by subprime problems. Now it's 'Katie bar the door.' Overnight bank lending rates in Europe have taken a big jump, and that's likely to spell trouble for Wall Street.

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Singing the Big Box blues

We got some numbers from Wal-Mart and Home Depot this morning that say a lot about the U.S. economy. Wal-Mart turned in smaller-than-expected profits for the second quarter — and cut its profit forecast for the year. CEO Lee Scott blamed economic pressure on his customer base, saying it's no secret people are running out of money toward the end of each month. And Home Depot reported a 15 percent drop in quarterly profits. Just two words explain that one: housing market.

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Running out of real estate

The past decade has been a brilliant time to be a real estate agent, but with home prices plummeting and buyers short on loans, some agents are thinking about a career change. The National Association of Realtors says for the first time since 1997, it's gonna have a drop in membership. About 4 percent. Last year, the group had 1.4 million members, nearly twice as many as a decade ago.

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A knight in banking armor

Bank of America is coming to the rescue of struggling mortgage lender Countrywide Financial.
B of A just made a $2 billion investment in Countrywide, buying non-voting shares that can be converted to common stock. If those shares are converted, B of A would hold more than 15 percent of Countrywide's stock. In other words, Bank of America is now Countrywide's largest shareholder.

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Housing jobs disappearing fast

It's been a while since one industry has seen so many job losses, so quickly. In the past week, mortgage lenders have laid off more than 12,000 people. Yesterday, Lehman Brothers closed its subprime business. Accredited Home Lenders shut down 65 branches. HSBC closed an office. For the year, we're talking 40,000 jobs so far, according to Challenger, Gray and Christmas. The last time we saw something like this was after 9/11 when some 100,000 airline employees lost their jobs.

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Yup, it's a buyer's market

We haven't seen home prices drop this much in at least two decades. Standard & Poors said this morning that home prices fell 3.2 percent in the second quarter compared to last year. That's the biggest decline since S&P started tracking the numbers in 1987. Wall Street isn't taking it well.

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Countrywide job cuts getting wider

Struggling mortgage lender Countrywide Financial is dropping another 900 jobs nationwide, mostly in mortgage divisions. This is in addition to 500 positions eliminated last month. In a statement, Countrywide says the latest round of layoffs came in response to the troubled housing market and economic conditions. In recent weeks, the company has borrowed $11.5 billion and sold a $2 billion stake to Bank of America to keep operating its retail banking and mortgage lending businesses.

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Looking for a home with a full rebate?

For the last year, a couple near Pittsburgh has been trying to sell their home: $400,000 for a four-bedroom. These days, it's been tough luck. So the couple, Bob and Ricki Husick, have come up with a deal: Buy the house now, and when Bob and Ricki pass away, get a full-cash back rebate. And if the buyer agrees to care for them in old age, inherit the couple's retirement home in Arizona.

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Report: Mortgage crisis won't top out til 2010

The numbers on defaulted home mortgages this year have been staggering -- $46 billion worth through August. Treasury Secretary Henry Paulson told the Wall Street Journal next year's number will be significantly bigger. The firm Credit Suisse says the mortgage crisis won't top out until 2010, with about $270 billion in defaulted loans. Mayors from the cities hardest hit by home foreclosures will meet next week. They need strategies to keep falling properties values from dragging down the quality of life. Communities in Arizona, California, Florida, Indiana, Michigan, Nevada and Ohio have been hit the hardest.

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Most severe housing recession since WWII

If that doesn't tell you just how bad things are, maybe this will drive it home: Moody's Economy.com reports today housing markets across the country will crash and suffer price drops of more than 30 percent before the crisis is over. And it's going to be a while before the end is in sight. Moody's chief economist Mark Zandi says the housing recession will continue through early 2009. But he says it won't be until 2010 before we see any decent improvement in sales, construction and pricing.

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Hidden treasure hits a wall

Scruples question of the day. A contractor found $182,000 hidden behind the wall of a house in Cleveland. The money might have been there since 1927. The homeowner has the stash, but she's being sued by the contractor, who claims he should get some of it. They happen to be former high school classmates.

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More foreclosure numbers out

If the Fed goes for another rate cut and Washington finishes up the stimulus plan, some analysts say it could give the housing market a boost. As if we needed any more evidence of just how bad the housing picture is, new figures are out this morning. The number of U.S. homes that slipped into some stage of foreclosure in 2007 was almost 80 percent higher than the previous year. RealtyTrac says many homeowners started to fall behind on mortgage payments in the last three months. That means more foreclosures this year.

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A different kind of home-buying risk: scams

Federal prosecutors have charged 19 people in a nationwide mortgage scam. They say the ring -- which appears to be based in California -- stole nearly $13 million in home equity and involved more than a hundred homeowners. Victims have been found in as many as 18 states -- including California, Oregon, Washington and Nevada. The operation worked like this: The scammers contacted strapped homeowners. They offered to pay their bills by cashing out the equity in their homes. In some cases, homeowners would sign over their titles and pay "rent," while their equity would cover the rest of their monthly payments. After using up the equity, the ring would allegedly sell the home. There may be several other rings like this throughout the country. The FBI says it has received 60,000 reports involving mortgage fraud this year.

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Deal near to help struggling WaMu

The private equity firm TPG and other investors are nearing a deal to invest $5 billion in Washington Mutual, according to a report in the Wall Street Journal.

The Journal says an agreement has not been finalized.

Washington Mutual, the country's biggest savings and loan, has lost billions in the
national mortgage crisis. Investors have lost more than 74 per cent of their investment in the past year.

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March housing market reports out this week

Home lenders and borrowers are watching this week for two reports on the housing market.

The National Association of Realtors will release its March figures on sales of existing homes. That's out tomorrow. On Thursday, the Commerce Department announces the numbers for new home sales last month.

Analysts aren't optimistic. They predict sales will be down in both categories.

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GM buys HQ it's been renting

The conditions in the real state market are not bad news for every one. It's a buyers market, after all. And GM figured this is a good time to buy its headquarters in downtown Detroit --
for $626 million. A bargain. The car maker had been leasing the space since 1996. GM also paid $200 million for a couple of office properties near Pontiac.

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