Tide of 'Underwater' Housing Recedes
Morning Money Memo…
The long dark shadow of the worst housing bust in many decades is receding. A new report today from RealtyTrac shows that 9.3 million homes were "deeply underwater" last month - meaning they were worth at least 25 percent less than the combined loans secured by the property. That's 1.6 million less than at the beginning of 2013.
"The underlying number one reason that we're seeing this decrease in negative equity is rapidly rising home prices," says RealtyTrac's Daren Blomquist. "We've now seen 20 consecutive months where the median price of a home in the country has increased on a year-over -year basis."
But the foreclosure crisis isn't over. Las Vegas, Detroit, Orlando, Chicago and some others are still struggling with a high percentage of borrowers who owe more than their properties are worth. "You're still seeing almost one in five homeowners with this negative equity," says Blomquist. "But it is definitely headed in the right direction."
More shoppers are buying stuff online. Fewer people are going to stores. One of the largest department store chains is reacting. Macy's is laying off 2,500 employees as the company begins a restructuring designed to save $100 million per year. Five stores are being closed. But Macy's plans to hire in its online operations.
The CEOs of Samsung and Apple will meet to talk about settling a bitter two year legal battle. It's over designs and technologies of smartphones and tablets. A filing with a federal court in San Jose, Calif., reveals the meeting will take place by Feb. 19. The agreement to meet was made in response to a court order to submit a proposal for settlement discussions before a new trial begins.
IBM wants to make more money out of Watson. The computer company plans to set up a new Watson business unit to develop and sell cognitive computing technology. IBM expects to spend $1 billion and hire 2,000 employees to staff the New York based unit. Watson first hit the headlines in 2011 when it competed against humans and won a three-day round of the game show "Jeopardy," answering obscure trivia questions. The computing system learns responses through trial and error.
China's auto sales soared 15.7 percent last year to nearly 18 million vehicles. The Chinese market is now the largest in the world. Automakers including General Motors and Toyota reported record China sales in 2013 and BMW said it's become the company's biggest market. Competition is intensifying as automakers plow billions of dollars into developing models to suit Chinese tastes. Some have launched low-cost brands for China's new car buyers.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow