Items of Interest The Big Apple THE RENTAL MARKET TO GET EVEN TIGHTER
An increase in rental
d BAD APPLES ARE NOT TOO HARD TO FIND Only the most unscrupulous agents find ways to increase their bottom line by evading co-broking - the practice by which a listing broker shares the commission with the broker who brings in a buyer. Cutting a co-broker out of a deal can mean a difference of thousands of dollars to the broker who grabs the sale but can give the buyer and seller the short end of the stick, notes the Real Deal. The practice is a breach of an agent's fiduciary responsibility to his client and is most prevalent when the market is tight. The acquisition of an exclusive listing requires brokers to disseminate listings to other firms within 72 hours of getting a contract for an exclusive, under the Real Estate Board of New York rules, and to present all offers to the seller. Market observers say there are plenty of less-than-ethical ways to step outside the boundaries of those arrangements. Agents can steer the seller to a direct buyer offering less money than a buyer with an agent and say the former is more qualified than the latter. Agents can encourage a client to buy an apartment in a more expensive building and area of the city in order to sweeten the agents' portion of the commission. In other cases, agents with an exclusive listing fail to return calls immediately or show up for appointments with an interested customer who has a broker. Some agents don't show their clients properties being represented by other brokers. PUT IT THERE The most expensive garage parking spot, at 2 E. 60th St., now costs at least $1,183 a month, and more than $1,300 a month for an "exotic" car such as a Rolls-Royce, a Bentley or an Alfa Romeo, exclaims the New York Sun. With many garages in that neighborhood charging more than $1,000 a month for oversize vehicles, the garage next to Mayor Bloomberg's mansion on East 79th Street and Fifth Avenue suddenly seems like a bargain at $829 a month. Compare those fees with the town of Bakersfield, Calif., where the most expensive parking lot charges about $50 a month. Midtown Manhattan has for years been the most expensive neighborhood in America to park, according to the annual Colliers International North America Parking Rate Survey, which rates London's parking the world's most expensive. With most of the city's priciest lots functioning near capacity, it seems that many Manhattan residents are willing to pay any price for the luxury of keeping a car in the city to allow for a spur-of-the-moment getaway. Some garages are even charging $200 for the right to reserve a spot. AN EMPTY LOT TO BECOME A GREEN RESIDENCE The owner of the Upper East Side lot where a suicidal doctor blew up his townhouse will seek city approval to put up an "eco-friendly" residence that she expects to sell for as much as $30 million, says the New York Sun. Plans for the site would be submitted later this month to the city's Landmarks Preservation Commission, a representative for the owner and developer, Janna Bullock of the Russian Investment Group, said. Earlier this year, Ms. Bullock paid $8.3 million for the property, on which she plans to build a single-family home featuring a modern-style stone façade, an all-glass elevator, a Japanese-style courtyard garden, a landscaped roof and a subterranean swimming pool. In the still empty lot, now littered with garbage and debris, Ms. Bullock intends to erect a five-story, 8,000-square-foot townhouse that meets the sustainability and energy efficiency standards of the U.S. Green Building Council. INVENTORY PLUNGES IN MANHATTAN Total Manhattan co-op/condo inventory at the end of May 2007 was 5,456 units, down 25.7 percent from May 2006 and down 11.7 percent from April 2007, according to Jonathan Miller, president and CEO of residential real estate appraisal firm Miller Samuel. The supply at the end of May of 5,456 units is actually below the five-year average of 5,598 units, which includes the recent peak of 2006 (June 2006, 7,640 units) and trough of 2004 (December 2004, 3,922 units). IF YOU OWN PROPERTY, YOU DOUBTLESS KNOW THIS New York
City taxpayers would get a larger-than-expected break on their
property taxes under a deal announced by city leaders on a $59
billion budget, according to the New York Times. TWO-BEDROOM APARTMENTS TOP THE FIELD The irrepressible Jonathan Miller, president and CEO of residential real estate appraisal firm Miller Samuel, sees varying popularity in the number of bedrooms found in condos and co-ops sold during the first quarter. Comparing the last quarter of 2004, when sales were at a recent low, and the most recent completed quarter, he found that the most significant difference in the co-op market was a drop in sales of studios and an increase in two-bedrooms as a percentage of market share; studios fell from 22 percent to 17 percent, a change which is likely reflective of the rise in short-term mortgage rates over this period, Entry-level co-op apartments were one of the largest entry points for first time purchasers coming from the rental market. Two-bedroom co-ops are usually the largest market segment and showed an increase of 34 percent, to 41 percent. (The drop in entry-level co-op sales doesn't mean fewer studios were actually sold in the recent quarter since the total number of sales between these two periods increased 45.5 percent.) In the condo market, just the opposite pattern occurred between studio and two-bedroom apartment. While the total number of sales increased 80.4 percent between the two periods, the market share of two-bedrooms dropped while studio market share increased. The market share of two-bedrooms slipped from 53 percent to 48 percent. At the same time, studios jumped 6 points from 8 percent in the fourth quarter of 2004 to 14 percent in 1Q 07. Although three-bedrooms are a small segment, the drop of 1 percentage point in market share is large, perhaps because of lack of availability, rather than lack of demand. Boldface
Yankees center fielder Johnny Damon and his wife, Michelle, are
asking $8.2 million for a New York apartment - close to 50 percent
more than they paid last year, says the Wall Street Journal. The
2,410-square-foot unit is in One Beacon Court, a 2005 condominium
building in midtown Manhattan where other owners include singer
Beyoncé Knowles, former General Electric chief Jack Welch
and Mr. Damon's teammate Bobby Abreu. The 39th-floor apartment
has three bedrooms, a kitchen with a breakfast area and a corner
living/dining room with views to the south and west. Records show
Damon and his wife paid nearly $5.6 million for the apartment
in February 2006, shortly after he signed a four-year, $52 million
contract with the Yankees. Now, the couple is looking in the suburbs. TRUMP PULLS THE PLUG Real estate magnate Donald Trump has sued the developer of the $300 million, 52-story Trump Tower condominium project in Tampa and pulled out of the deal, says the Orlando Sentinel in Realtor magazine. Trump said in the lawsuit that developer SimDag owes him more than $1 million in licensing fees. Also, Trump accuses SimDag of failing to sell enough of the $700,000 to $6.2 million condos to meet contractual obligations. Trump, who ordered the developers to stop using his name on the project, says he's entitled to half the profits of the sale of the 190 condos and a licensing fee of $2.8 million. HE'S PLANNING TO TOUCH DOWN IN FLORIDA SOMETIMES Football player Doug Flutie has gone home again, paying $2.1 million for an oceanfront house in Melbourne Beach, Fla., where he spent much of his childhood, says the Wall Street Journal. The five-bedroom Key West-style home, about 60 miles southeast of Orlando, was built in 2003 and has a pool and Jacuzzi, and ocean and river views. Listed for $2.3 million, the home sold in a month. Flutie lives full-time in Natick, Mass., but his parents live in Florida and he will use the house for holidays and in the summer. THIS MAN WILL HAVE ROOM, NO DOUBT, FOR HIS PIANO Billy Joel is about to become the owner of Roy Scheider's oceanfront home in Sagaponack. A rep for the Piano Man confirmed to the New York Post's Braden Keil he's in contract to buy Scheider's Hamptons spread, which had a most recent asking price of $18.75 million. Meanwhile, the "Jaws" star and his family are staying at the American Hotel in Sag Harbor, where, Scheider told Page Six, he'll live until construction on his new home in the quaint boating town is completed. MARSHA IS SAYING GOODBYE TO NEW MEXICO No, not that Marsha. Marsha Mason is trying to sell her New Mexico home, including an organic herb farm, for $11.5 million, notes the Wall Street Journal. The 250-acre property - in Abiquiu, about 50 miles north of Santa Fe - is called the Double M Ranch and includes a 5,800-square-foot house and roughly 140 acres of farmland. The Rio Chama runs through the property, which also has a 5,700-square-foot "art barn" with two studios and two apartments, a separate three-bedroom guesthouse and a greenhouse. Mason says she bought the raw grazing land for $1.5 million in 1992, after her divorce from writer Neil Simon, and spent about $10 million building the structures and developing the farm, which has an annual yield of 2.5 tons of herbs. The star of "The Goodbye Girl," 65, lives on the property full-time but plans to move to Connecticut or New York because of theater projects in New York City. The Market AS USUAL, THE NAR PUTS A POSITIVE SPIN ON A DIP A forward-looking indicator based on pending home sales "shows the housing market could edge down but appears to be in the process of leveling off," according to the National Association of Realtors (NAR). The Pending Home Sales Index, based on contracts signed in April, stood at 101.4, down 3.2 percent from an upwardly revised March reading of 104.8. The index is 10.2 percent lower than April 2006, and the revised March index was 10 percent below a year earlier. Contends Lawrence Yun, NAR senior economist: "It looks like we may be leaving a period of market disruptions. For the past two months, the pending home sales index has been similar in year-ago comparisons, which means home sales might ease but should be fairly stable in the months ahead." Existing-home sales declined in part because some subprime lenders went out of business and disrupted the market in April, he says, adding that the impact "appears to be diminishing" as mortgage applications have risen in the last month. "This tells us that some borrowers who originally planned to finance with subprime mortgages are finding suitable loans in the conventional market, which will help to stabilize home sales," Yun notes. On the other hand, he acknowledges that psychological factors seem to be holding buyers back as they look for "clear signs that the market has bottomed." And on the third hand . . . ? BERNANKE SAYS HOUSING'S DRAG ON ECONOMY MAY LINGER Fed Chairman Ben Bernanke has told international bankers that recent readings indicate housing demand weakened further over the first four months of the year, reports Inman News. "As you know, the downturn in the housing market has been sharp," Bernanke said. "From their peaks in mid-2005, sales of existing homes have declined more than 10 percent, and sales of new homes have fallen by 30 percent." Home prices "decelerated sharply" last year after appreciating at a rate of 9 percent from 2000 to 2005, the Fed chief continued. Prices continue to be "quite soft" so far this year, although outright price declines have been concentrated in markets that showed large increases in earlier years. Despite the drop in home building, the inventory of unsold new homes has risen to more than seven months of sales, well above the average for the past decade, Bernanke noted. The adjustment in the housing sector is still ongoing, "and the slowdown in residential construction now appears likely to remain a drag on economic growth for somewhat longer than previously expected," he added. Saying that the impact of problems in subprime lending have had on housing demand has probably already been felt, Bernanke added that, eventually, fundamentals such as growth in incomes and relatively low mortgage rates should prop up demand for housing. THERE ARE SIGNS THAT HOUSING IS BOUNCING BACK So says Business Week, which points in Realtor magazine to the following evidence: Sales of new homes soared 16.2 percent in April, the largest monthly gain in 14 years, reaching an annual rate of 981,000; total single-family sales - both new and existing - during the first four months of the year have averaged 5.5 million, about the same pace as in the final four months of last year; through May 25, the four-week average of applications for new mortgages was at its highest level since early 2006, according to data from the Mortgage Bankers Association. "To put the decline into perspective, nationwide home prices are up 29.2 percent over the past three years and 64.3 percent over the past five years," the magazine points out. "That should be enough to comfort consumers who might be worried about the value of their homes." This and That BUT WHAT DO YOU REALLY THINK No longer satisfied
with feedback from friends and family, amateur decorators are
increasingly turning to home-design Web sites and forums where
strangers weigh in, observes the Wall Street Journal. Apartment
Therapy says it receives about 100,000 unique visits a day and
that pictures of ordinary people's homes are consistently among
the most-viewed features. Rate My Space, part of HGTV.com, says
it has logged more than 14.5 million page views since it launched
in February - and now has more than 24,000 members who have posted
photos of their decorating projects. But beyond the friendly praise
("would love to sleep in this room!") and discussions
about the merits of bamboo flooring, these sites have added a
new dimension to the normally genteel realm of home decorating
- the unvarnished truth. "The mauve shower curtain says that
the owner/decorator is over 80-years-old," read one recent
post on Rate My Space. "If you are, then fine. Otherwise,
get a new curtain." YOUR IRA CAN BE INVESTED IN REAL ESTATE, CAREFULLY By law, IRAs cannot hold certain assets including life insurance and collectibles such as art, antiques, gems, coins and most precious metals, says the Wall Street Journal. For many people, though, real estate is the alternative investment of choice, according to Tom Anderson, president of PENSCO Trust, a custodial firm specializing in self-directed IRAs. Anderson and other experts caution that while investing in real estate is permitted in an IRA, such transactions involve complex Internal Revenue Service rules and violating them could lead to substantial taxes and penalties. For example, even if a vacation home is rented out most of the time, the investment could be considered a prohibited transaction if the owner uses it even occasionally while it's in the IRA. Watch out for other rules and pitfalls. You can't invest in property you already own. Rental income must flow back into the IRA, and the IRA must pay for all expenses associated with the property. The IRA will pay tax on unrelated debt financed income (UDFI), which is the income and/or capital gains attributable to the leveraged portion. For that reason, Anderson says, carrying debt in a real estate investment transaction is a bad idea if there's any significant risk that the IRA will be unable to pay the mortgage payments. The safest route for IRA owners is to act as passive investors in projects run by third parties. COMMISSIONS ARE SLIGHTLY RISING ON AVERAGE IN THE U.S. A review of revenue and cost data from hundreds of brokerages by the industry publication Real Trends shows that the average commission rose by nearly one-fifth of a percentage point last year, to just under 5.2 percent, according to Kenneth R. Harney in the Washington Post. That turnaround came despite the growing number of real estate firms that offer discounted standard commissions or limited-service options in which consumers pay lower fees but perform some of the tasks traditionally handled by full-service real estate agents. During the 1980s and early '90s, 7 percent was considered the standard full-service commission rate in many large metropolitan areas. During the late '90s and into the housing boom years, average commissions dropped steadily through the 6 percent level and stabilized around 5 percent. Research
Two Northwestern
University economists who chose different methods to sell their
homes have concluded in a study on home-sales data from 1998 to
2004 in Madison, Wis., that people in that city who sold their
homes through real estate agents typically did not get a higher
sale price than people who sold their homes themselves. When the
agent's 5-6 percent commission is factored in, the for-sale-by-owner
people came out ahead financially, reports the New York Times.
It is not irrelevant that Madison is home to one of the biggest
for-sale-by-owner Web sites in the country. The economists pitted
that site against the local multiple listing service operated
by real estate agents. There are asterisks. The authors cautioned
that they did not know whether the results from Madison applied
to the country as a whole; certainly, selling a house without
a real estate agent would be harder in a city without a heavily
trafficked for-sale-by-owner Web site. The authors are also analyzing
Madison data from 2005 and 2006, when the housing market cooled
after a long run-up, to see how their findings might have changed.
The researchers did find that homes on the multiple listing servic TO LIVE LONGER, YOU MAY WANT TO MOVE Go to Hawaii, Colorado or New Mexico - states where residents enjoy the longest lives, according to a new report by Eons Inc., a media company that produces content about "life on the flipside of 50," says Realtor magazine. Using data from more than 450,000 adults over the age of 50 who shared information in an online longevity calculator, the report ranks all 50 states on a variety of factors related to living a long and healthy life. Honorable mentions go to California, Arizona and Vermont. The states with the lowest calculated age expectancy were West Virginia, Missouri, Louisiana, Arkansas and Illinois. But the difference in age expectancy between the highest and lowest on the list was just under three years. A STUDY FINDS JUST TWO DETERMINANTS TO A STRONG MARKET The presence and magnitude of job loss and the presence and magnitude of overbuilding are the crucial determinants of both the probability that a place will experience a price decline and the magnitude of the decline, according to Harvard's Joint Center for Housing Studies. Interest rates appear to play a relatively minor direct role, though they may play an important indirect role. First, they can be important contributors to economic slowdowns and recessions that slow or turn job growth negative. Second, rising interest rates, by making housing more unaffordable, can slow price appreciation and thereby abruptly reduce speculative demand and the demand for primary and second homes that may have contributed to overbuilding. "While there does appear to be a relationship between how much prices go up and whether and by how much they fall, the relationship does not hold in many cases and is difficult to disentangle from the job losses and overbuilding that often occur at about the same time," the study observes. For example, overheated house prices can contribute to overbuilding by sparking speculative activity and pulling forward primary and second home demand. In addition, overheating is a less robust predictor of elevated price decline probability and magnitude than overbuilding and net job loss. THOSE SUBURBS ARE GETTING OLD America's suburbs are aging more rapidly than the nation's central cities as the first suburban generation grows older, says the New York Times, quoting a new Brookings Institution report. At the same time, there are early signs of a possible trend of wealthier and more educated older suburbanites moving to the cities. The analysis suggests that in most places, the fastest growth in elderly populations will result from the aging of baby boomers already living there, rather than from an infusion of retirees. Around New York City, the proportion of people 65 and older in the suburbs surpassed the city's share in the 1980s. An earlier exodus of baby boomers, coupled with a continuing migration of older people, mean that the elderly population in New York State is expected to grow at a slower rate than in any other state from 2000 to 2040. WHERE PRICES ROSE FASTER, FORECLOSURES WERE LOWER Areas of the U.S. with greater house-price appreciation last year tended to have lower delinquency rates on subprime mortgages, economists at the Federal Reserve Bank of San Francisco said, according to the Wall Street Journal. Economists there also found the reverse to be true. They said one possible explanation was that sharp declines in the pace of home appreciation lowered borrower expectations for future appreciation of rates, making homeownership a less attractive investment. "The finding that changes in delinquencies are related to house-price deceleration raises the possibility that the increases in delinquencies reflect not just borrower distress but also a decline in the demand for housing," the Fed economists said. Borrowers in markets with rapidly appreciating house prices may have been less likely to be delinquent, as those economies were probably stronger overall. Distressed borrowers in a strong housing market may have also been better positioned to pursue alternatives to delinquency. Those borrowers could have built up more home equity and been better able to sell back their home to pay back the remaining principal or to refinance existing mortgages to ones that would offer lower, more affordable payments. ARE YOU LIKE OTHER BUYERS OF LUXURY HOMES The largest percentage of luxury home buyers falls into the 40-50 age group (48 percent), followed closely by the 50-65 age group (44 percent), according to an outfit called the Luxury Home Council. Its "2007 Membership Survey of Luxury Housing Market Trends" also found that the most common occupation of luxury home buyers is that of an entrepreneur (51 percent), followed by large business executive (46 percent) or medical doctor (24 percent). Unsurprisingly, the vast majority of luxury home buyers active in the market today are best described as "new money." But what is the group's definition of "luxury." Let's just say the average listing price for luxury homes is, in its words, "nearly $900,000." Enough said. The Mortgage Biz
The 30-year
fixed-rate mortgage (FRM) averaged 6.74 percent for the week,
up from last week's 6.53 percent and last year's 6.63
percent, according to Freddie Mac. The 30-year FRM has not been
higher since the week ended July 20, 2006, when it was 6.80 percent.
The 15-year FRM this week went up to 6.43 percent from 6.22 percent
the previous week. A year ago, it averaged 6.25 percent. The 15-year
FRM has not been higher since the week ended last July 6, 2006,
when it was 6.44 percent. Five-year Treasury-indexed hybrid adjustable-rate
mortgages (ARMs) averaged 6.37 percent this week, up from 6.24
percent. A year ago it was 6.23 percent. The 5-year ARM has not
been higher since the week ended July 6, 2006, when it averaged
6.39 percent. One-year Treasury-indexed ARMs were 5.75 percent,
up from last week's 5.65 percent. At this time last year,
it averaged 5.66 percent, the highest since the week that ended
July 27, 2006, when it was 5.78 percent. "Mortgage rates
moved sharply upward this week, with rates on 30-year fixed-rate
mortgages jumping more than 20 basis points, the largest upward
movement in over three years," said Frank Nothaft, Freddie
Mac vice president and chief economist. "These moves parallel
rising yields on Treasury securities, as concerns about inflation
pressures and continuing strength of consumer and business spending
have dimmed hopes for an interest rate cut." FAIR ISAAC, WHICH ISSUES CREDIT SCORES, TIGHTENS STANDARDS It now will adjust its FICO scoring formula to protect lenders and FICO scores from abuse of authorized user credit card accounts by a new kind of credit repair service that sells consumer credit card histories to credit applicants "in order to purposefully misrepresent the applicants' own credit history to lenders and other businesses." The adjustment removes authorized user accounts from consideration by its newest scoring. An authorized user is a person permitted by a credit account holder to use an account, typically a family member who is managing credit for the first time. Used legitimately, authorized user account information has helped both lenders and consumers by enabling lenders to use FICO scores when making credit decisions for consumers who are starting to establish a credit history. AVAILABILITY IS EXPANDING FOR REVERSE MORTGAGES Reverse mortgages for second homes, until now available through a handful of small regional banks, will soon be offered by at least two national lenders, reports the Washington Post. Bank of America, which recently announced an agreement to acquire the reverse-mortgage business of Seattle Mortgage, is expected to roll out the second-home wrinkle as soon as the purchase is completed this summer. BNY Mortgage, which recently introduced the first jumbo fixed-rate reverse mortgage, also will allow reverse mortgages on second homes under certain guidelines. A BNY spokesperson said the New York-based lender would allow its new Prime Advantage fixed-rate jumbo reverse mortgage on a second home, provided the owner did not already have a Prime Advantage loan on the primary residence. MORTGAGE ACTIVITY IS ON THE RISE Loan application volume for the week ended June 9 went up 6.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the rise was 7.4 percent compared with the previous week and 16.1 percent compared with the same week one year earlier. Refinancings increased 5.6 percent from the previous week, and purchase applications grew by 7.2 percent. The refinance share of mortgage activity remained unchanged at 38 percent of total applications, but the adjustable-rate mortgage (ARM) share went up by 18.7 from 17.8 percent. LATE PAYMENTS ARE HIGHER THAN A YEAR AGO The delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 4.84 percent of all loans outstanding in the first quarter of 2007 on a seasonally adjusted (SA) basis, down 11 basis points from the fourth quarter of 2006 and up 43 basis points from one year ago, according to the Mortgage Bankers Association (MBA). The delinquency rate does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process was 1.28 percent of all loans outstanding at the end of the first quarter, an increase of nine basis points from the fourth quarter of 2006 and 30 basis points from one year ago. The rate of loans entering the foreclosure process was 0.58 percent on a seasonally adjusted basis, four basis points higher than the previous quarter and up 17 basis points from one year ago. "The rate of delinquencies is being driven by what is taking place in seven states. The percentage of loans in foreclosure would be well below the average of the last ten years were it not for Ohio, Michigan and Indiana, and the rate of foreclosures started nationwide would have fallen were it not for the big jumps in California, Florida, Nevada and Arizona. Those states have special circumstances that do not reflect what is happening in the rest of the country," said Doug Duncan, MBA's Chief Economist and Senior Vice President of Research and Business Development. WALL STREET IS STARTING TO FEEL SUBPRIME EFFECTS Firms insisted for months that the meltdown in the subprime housing market was contained - and might even offer substantial opportunities for making profits. The market seems to have come back to bite them, the New York Times observes. Yesterday, Goldman Sachs reports that profits were flat from a year ago, as the weak mortgage market helped drive down fixed-income revenues by 24 percent. And Bear Stearns, a smaller firm but one with significant market share in the mortgage market, reports a 10 percent drop in net income, excluding a one-time charge, also largely the result of the tepid mortgage market. "The decline in mortgage revenues reflects the difficulty in the market around subprime, heightened underwriting standards and reduced securitization volumes," Sam Molinaro, the Bear Stearns chief financial officer, said. David A. Viniar, Goldman's chief financial officer, said he did not expect the subprime market "to get better for a little while." The Soothsayers
They are giving up on the idea that the U.S. housing slump will be quick and relatively painless, reports the Wall Street Journal. Instead, more are concluding the downturn that began nearly two years ago will last at least through the end of 2007. The culprits: a glut of homes for sale and growing caution among lenders who now regret being so free with their mortgages during the boom. Federal Reserve Chairman Ben Bernanke acknowledged in a speech that the housing market remains weak. A recent Merrill Lynch report tallies a record 2.2 million vacant single-family homes and condos for sale nationwide, about one million above the norm. Some local markets remain strong. Prices have continued to rise in Manhattan, Seattle, Houston and some other areas. But in much of the country, home prices have been flat to moderately lower over the past year. "We are not sure how deflating a $23 trillion asset class - the value of real-estate assets on the household balance sheet - will end, but we doubt that it will end well," Merrill economists wrote in their recent report. At a conference of mortgage lenders in May, David Lowman, head of the mortgage business at J.P. Morgan Chase & Co., warned: "The largest part of the problem in the subprime space is ahead of us, not behind us." Many borrowers who got loans the past couple of years are still paying the low initial monthly payments and have yet to face the steeper adjustable rates that kick in after two or three years. Once they do, foreclosures are sure to rise. Mark Zandi, chief economist of Moody's Economy.com, expects lenders to acquire about 900,000 homes this year and roughly the same number next year through foreclosures, up from an average of about 500,000 a year from 2000 through 2006. BUT NAR FORESEES 'GRADUAL' UPTURN IN THE MARKET Home sales are projected to move in a relatively narrow range with a gradual upturn becoming more pronounced by the end of the year, according to the latest forecast by the National Association of Realtors (NAR). Commented Lawrence Yun, NAR senior economist: "Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year. It's important to keep in mind that all real estate is local, and many markets are expected to have higher sales and strengthening prices during the second half of this year." Existing-home sales are projected to total 6.18 million in 2007 and 6.41 million next year in contrast to 6.48 million in 2006. New-home sales are forecast at 860,000 this year and 901,000 in 2008, down from 1.05 million last year. Housing starts are likely to total 1.43 million units in 2007 and 1.49 million next year, below the 1.80 million recorded in 2006. The national median existing-home price should ease by 1.3 percent to $219,100 in 2007 before rising 1.7 percent next year. The median new-home price will probably fall 2.3 percent to $240,800 this year, and then grow by 2.6 percent in 2008. "We continue to experience a temporary distortion in comparing median existing-home prices," Yun said. "Because the sales volume has shifted from many high-cost areas to moderately priced markets, we're not getting a true apples-to-apples comparison. When you look at other measures . . . overall home prices are rising slowly." AND HARVARD HOUSING EXPERTS ARE OPTIMISTIC As long as the economy continues to create jobs and builders trim production to match slowing demand, house prices will keep climbing and the housing sector will likely achieve a soft landing, according to Harvard's Joint Center for Housing Studies in its annual report on the housing market. "Although house price growth will likely moderate in many areas, sharp drops in house prices are unlikely anytime soon," said the authors of this year's State of the Nation's Housing report. "Major house price declines seldom occur in the absence of severe overbuilding, major job loss, or a combination of heavy overbuilding and modest job loss. Fortunately, these preconditions are nowhere in evidence across the nation's metropolitan areas." (A press release on the report is included below.) Hearth and Home YOU CAN STOP ENVYING THOSE OUTDOOR ROOMS One of the decade's most visible symbols of excess, they have been a bonanza for manufacturers of everything from $3,700 waterproof pool tables to $130 patio umbrellas that emit a cooling mist. About one million households have outdoor kitchens, with such features as built-in grills and cooktops, outdoor stereos and TVs, refrigerators - even dishwashers, according to StandPoint, a research firm in Atlanta. But, the Wall Street Journal reports, some homeowners say they're falling out of love with their expensively furnished backyards, which require hours of upkeep and costly repair. Others are abandoning the rooms altogether. FOR WOMEN ONLY, A SITE FOR HOME IMPROVEMENT BeJane.com, a self-styled "women's home improvement immunity," is "all about helping women connect with each other." It's a place to "get inspired, to learn, and to give and receive advice about your home improvement projects," the Web site says. "It's also the perfect place to share and celebrate the results of your efforts with other women just like you." BeJane.com also offers an ever expanding range of home improvement articles, tips and tricks, videos, tutorials and how-to guides. In the creators' own words: "What differentiates us from other DIY sites is our focus on home improvement from a woman's perspective. No, that doesn't mean that we're all about pink. It means that we not only show you the 'how-to' that gets the project done in a way that's relatable and easy to follow, but we also focus on how that project will enhance your life - or, what we like to call the 'why-to.' Hey, if you're a digitally challenged guy, who's to know if you visit the site? Whether you can stand the saccharine is another story. Out and About Who'll Take Manhattan? Undeniably, Washington Heights has undergone a startling degree of gentrification over the last quarter century. Although Spanish continues to be a language often overheard and written on the signs of many storefronts, adding to the community's rich diversity, blocks that once boasted dreary dry-cleaning establishments, mom-and-pop stores featuring tired fruits and vegetables, and restaurants that dare the foodie to find anything worth mentioning, much has changed. It is not hard to find specialty wine shops, spas, upscale grocery stores (though unequal to a Zabars or a Dean & DeLuca) or inviting lounges and restaurants. That real estate brokers have taken to calling much of the neighborhood Hudson Heights is the best evidence of its transformation. What's next? The Hudson Heights Bridge? Aside from the differences over time, timeless views of the Hudson are especially winning in Washington Heights: The New Jersey Palisades across the water are verdant and bereft of high-rise buildings. In addition, this is a neighborhood with a number of parks (among them Fort Tryon), a museum (the Cloisters), good bus and subway service, and attractive apartments priced way below those in many other parts of Manhattan. Among the reasons for the disparity is its distance from Midtown - a good 20 minutes on the train, when it comes. But for those who cannot imagine themselves living in another borough, Washington Heights is an excellent option that provides good value in housing. Specifically, Washington Heights is on the high ridge in Upper Manhattan that rises steeply north of the narrow valley that carries 125th Street to the former ferry landing on the Hudson River. Though the neighborhood was once considered to run as far south as 125th Street, modern usage defines the neighborhood as running north from Harlem at 155th Street to Inwood, topping out just below Dyckman Street. At the northern end of Washington Heights, near Fort Washington Avenue and 183rd Street, is a plaque marking Manhattan's highest natural elevation, 265 ft above sea level, at what was the location of Fort Washington. It is the northern part of Washington Heights that is sometimes most correctly called Hudson Heights. The neighborhood has a large Dominican population (the area is sometimes called "Quisqueya Heights"). Since the 1980s, the neighborhood has been the United States' most important base for Dominican empowerment in the political, non-profit, cultural and athletic arenas. There is also a significant Jewish population, particularly in Hudson Heights subsection, descended from a previous wave of immigration, as well as students (and recent graduates) of the neighborhood's Yeshiva University. The declining German-Jewish population is based around Khal Adath Yeshurun, a direct continuation of the pre-war Jewish community of Frankfurt am Main, colloquially called "Breuer's" after Rabbi Dr. Joseph Breuer, founder and first rabbi of the congregation. Washington Heights also is served by a number of smaller orthodox synagogues, as well as the Hebrew Tabernacle, a reform congregation. Seen recently in the neighborhood are these units that various brokers have listed for sale:
Upper East Side Since the last issue, this is a sample of apartments listed by various brokers:
Upper West Side Some properties listed by various brokers:
Harvard's Take on the Market
"With interest rates rising and speculative demand cooling, the housing boom is coming under pressure, finds this year's State of the Nation's Housing report," the university's press release says. "As long as the economy continues to create jobs and builders trim production to match slowing demand, house prices will keep climbing and the housing sector will likely achieve a soft landing. Although house price growth will likely moderate in many areas, sharp drops in house prices are unlikely anytime soon. Major house price declines seldom occur in the absence of severe overbuilding, major job loss, or a combination of heavy overbuilding and modest job loss. Fortunately, these preconditions are nowhere in evidence across the nation's metropolitan areas.
"Even as the housing industry looks past the current softness to robust growth in the decade ahead, the challenges of providing affordable housing for low-income, and increasingly even middle-income households, are clear," concludes Retsinas. 'Slow growth in domestic discretionary spending at the federal level and the reluctance of state and local governments to relieve intense barriers to the production of more affordable housing make the road ahead difficult. Unless governments step up to these challenges, spending on housing will increasingly crowd out spending on pensions and savings among those with low and moderate incomes.' 'Harvard's Joint Center for Housing Studies is the nation's leading center for information and research on housing in the United States. Established in 1959, the Joint Center is a collaborative unit affiliated with the Harvard Design School and the Kennedy School of Government." Some of Manhattan's Latest Listings Please click here to view available properties. (To view all photos, tours, floor plans and maps, please use Internet Explorer.) Click Here to Sign Up For Your Free Issue of Realty Digest!
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2007 Service You Can Trust |
emand
generated by a strong local economy will result in
The
highlight is a 7 percent across-the-board cut in the property
tax rate, 2 percentage points more than the mayor proposed in
January. While the rate cut may not mean lower tax bills for everyone,
it will help offset soaring property assessments, officials said.
The Council was all but sure to approve the relief in a vote scheduled
for today. In addition to the property tax cuts, the budget would
renew the $400 property tax rebates for homeowners, which total
about $256 million a year. According to the city's estimates,
market values grew by 19 percent in 2006, double the increase
of the previous year. According to Council figures, the average
yearly tax bill for condominiums in the coming fiscal year, with
the rise in assessments combined with the lower tax rate, would
be $6,061. Compared with fiscal year 2007's average bill of $6,476,
that would be a savings of $415. Co-op owners, who are assessed
differently, would pay about $3,975 in the new fiscal year, compared
with fiscal year 2007's average of $3,944, an increase of $31.
e
sold somewhat faster than houses on the for-sale-by-owner site.
And the study did not place a value on other services provided
by agents in selling a home. The authors have presented their
paper at forums at many leading universities, but it has not yet
been submitted to a journal for peer review. Their findings fly
in the face of studies by the National Association of Realtors
(NAR). The group has said that houses sold via its members' local
multiple listing services get a 16 percent premium over homes
sold by their owners. In a 2005 survey of home buyers, the NAR
reported that FSBO (For Sale By Owner) houses sold for a median
price of $198,200 and those sold through an agent went for a median
price of $230,000, or 16 percent more. Two-fifths of those FSBO
sellers were selling to a friend, relative or neighbor, and that
might have led to lower prices, but agent-assisted sellers still
enjoyed a huge premium, the association said. The study found,
however, that homes listed with agents sold more quickly - with
a 25 percent probability of selling within 60 days versus a 16
percent probability for FSBO-advertised homes. On average, it
took FSBO homes 125 days to sell and agent-sold homes, 105 days.
