Mortgage applications decline for fourth week in a row in July.

Nasdaq.com reports that mortgage applications declined last week for the fourth straight week despite lower interest rates:

The Mortgage Bankers Association's seasonally adjusted index of mortgage application activity fell 5.1 percent in the week ended July 8, nearly identical to the 5.2 percent drop recorded the week before.

Refinancing, which makes up more than 65 percent of mortgage activity, slipped 6.2 percent. The MBA's measure of new home purchase applications edged down 2.6 percent.

This decline is not necessarily uniform throughout the entire country.

Copper thefts in Lower Merion Township, Montgomery County; downspouts, gutters

Click here for previous posts on increasing thefts of copper (and other metals) and how they reflect rising inflation. Previously, metal theft has focused on utility wires, catalytic converters, air conditioners, transformers, railroad tracks, etc. Abandoned or rehab real estate has often been targeted for copper theft in recent years.

From CBSPhilly.com comes the story of copper thefts targetting gutters and downspouts in occupied homes in Montgomery County:

A rash of copper thefts in Montgomery county has residents on alert

They may not seem like your typical targets, but thieves in Montgomery County are looking for copper. Gutters and downspouts made of the precious metal are being stolen from people’s homes along the Main Line.

Lower Merion Township Police have reported a significant increase in the thefts of copper down spouts and gutters being taken from homes throughout the area.

Pennsylvania HB 1696; Moratorium on county wide reassessments.

At the end of June, the Pennsylvania legislature enacted HB 1696, which imposes a moratorium on county wide reassessments in 4th class counties.

The full text of the bill appears here.

The Almanac covers the effects of this law on Washington County's reassessment plans.

The list of Pennsylvania's fourth class counties is as follows: Beaver, Butler, Cambria, Cumberland, Fayette, Schuylkill, Washington. The effect of this bill on Cumberland County is expected to be minimal, as Cumberland engaged in reassessment in 2010.

CCAP contains a breakdown of all Pennsylvania counties by class.

The moratorium shall last until November 2012 or until further reform is enacted - whichever occurs later.

Metal and copper thefts get more brazen in Pennsylvania and elsewhere; Cranberry Township; SEPTA car thefts;

I have written previously about rising metal theft as an indicator of continued inflation and its impact on real estate prices.

Recent news reports indicate that metal theft not only continues unabated in Pennsylvania and elsewhere, but that it has become more brazen and is being done at great risk to the thieves:

• In Cranberry Township (near Pittsburgh) thousands of residents remain without power because thieves (at great physical risk) stole "all the copper groundwire" at a substation on Route 19.


• SEPTA riders in Chester, Montgomery and Delaware Counties have been victimized by thefts of catalytic converters while their cars were parked in SEPTA lots during the day.


• Thieves near San Francisco knocked down 300 utility poles in order to steal copper wire and also stole an entire transformer - at great risk to themselves.


• In Sacramento, thieves have stolen a large number of brass components of fire suppression systems from commercial businesses.


• Pipe thieves near Detroit have caused possibly four house explosions by stealing the natural gas pipes from residential dwellings.


• Numerous churches near Miami have lost the use of their air conditioning when copper thieves stole copper tubing and wiring from a/c units.


• In early June, thieves caused a CSX train to de-rail in Massachusetts by stealing steel rails from the railroad line.
  

These cases are not simply an indication of rising crime due to the economic downturn. Metal theft is a specific type of crime that exists solely because inflation has pushed commodity prices higher. Metal theft goes hand-in-hand with an increase in legitimate scrap dealers, companies that offer to buy your gold on late night infomercials, rising gasoline and food prices and other commodity based activity.

Remember, commodity prices affect the economy as a whole. The real estate crash of 2006-2008 was accompanied by a major commodity price increase.

The market for commodities is robust, as the smart money flees the dollar (or defies physical and legal danger) in favor of hard assets. The desperation with which thieves now target metal provides specific evidence that inflation is out of control. All real estate investment decisions must accept this reality.

Federal foreclosure assistance; Emergency Homeowner's Loan Program (EHLP); Pennsylvania participation

From Nasdaq.com comes details of a new $ 1 billion federal program to bail out homeowners facing foreclosure. The bailout takes the form of interest free loans.

This program will have the effect of delaying the price correction that we have needed to reignite sales volume since the market crash of 2006-2008.

The program is available in 27 states, but does not include Pennsylvania. Residents of Pennsylvania may apply for PA administered assistance that draws funds from the federal program.

There are more details at The Boston Globe, including the information that in some cases, the loans might not have to be repaid at all.

Metal theft points to direction of inflation and economy

As inflation picks up, the value of scrap metal rises. These price increases affect real estate in two ways:

1. Increasing commodity prices can help predict the general direction of prices of all goods, inclusing real estate; and


2. Increasing scrap metal values place real estate at risk for theft and vandalism.

In particular, metal theft demonstrates the declining value of the dollar and the lengths to which thieves will go to obtain something with real value. Metal theft has been rising in recent years, and in particular in recent weeks. Consider the following news items:

• This year, thieves have stolen at least 50 city trash cans (iron) from the streets of Pittsburgh, with each can now having a scrap value of between $ 1,500 and $ 2,000.


• In Washington D.C., thieves are posing as road crews to steal underground copper wire, causing parts of the city (including traffic signals) to go dark.


• In Chicago, scrap metal thieves are suspected of stealing a handicapped child's wheelchair.


• In Sacramento, thieves were arrested dismantling railroad tracks in broad daylight for the purpose of stealing the metal.

The problem is nationwide and is no longer limited just to copper or just to abandoned houses or houses undergoing rehabilitation. Iron is considerably less valuable than copper, yet thieves are targetting that metal also.

Glut of foreclosed homes may deepen real estate downturn.

A recent article in the New York Times estimates that lenders own more than 872,000 foreclosed homes at this time:

All told, they own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider. In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.

For each home a lender sells, they foreclose on many more:

In Atlanta, lenders are repossessing eight homes for each distressed home they sell, according to March data from RealtyTrac. In Minneapolis, they are bringing in at least six foreclosed homes for each they sell, and in once-hot markets like Chicago and Miami, the ratio still hovers close to two to one.

Before the housing implosion, the inflow and outflow figures were typically one-to-one.

The problem is apparently widespread and will contribute to continuing stagnation for several more years.