Items of Interest BERNANKE, EVEN PAULSON SOUND GRIM AND GRIMMER Treasury Secretary Henry Paulson said the decline in the housing market stood "as the most significant current risk to our economy," according to the Wall Street Journal. Paulson even acknowledged that problems in credit, mortgage, and housing markets were much more severe than anticipated. "The ongoing housing correction is not ending as quickly as it might have appeared late last year," he said. "And it now looks like it will continue to adversely impact our economy, our capital markets and many homeowners for some time yet." He added that "the problem today is not limited to subprime mortgages as the number of homeowners having trouble making payments on prime mortgages is also increasing." Although Paulson said it looked to him as though housing construction had reached a bottom in the first half of this year, starts have declined again since June and data on permit applications and inventories of unsold homes "suggest further declines lie ahead." His comments followed by one day a gloomy assessment of both the mortgage and housing markets by Fed Chairman Ben S. Bernanke, who was quoted by the New York Times as saying, "Despite a few encouraging signs, conditions in mortgage markets remain difficult." He predicted that the housing market has yet to hit bottom. PROBLEMS ARE NOT CONFINED TO THE U.S. House prices in the United Kingdom, Ireland, Spain and France have fallen in recent months as borrowing costs have risen, and the Wall Street Journal says that economists warn the weaker tone is set to spread to other European countries. U.K. lender Halifax found that house prices fell 0.6 percent in September from August, the first decline reported this year. The annual rate of increase slowed to 10.7 percent from an 11.4 percent rise in August. Ireland's Economic & Social Research Institute and mortgage lender Permanent said Irish house prices fell 1.9 percent in August from a year earlier and by 0.3 percent from July of this year. In Spain, the most recent data from estate agent facilisimo.com show the average home price fell 0.3 percent in September from August, while data released by France's National Federation of Real Estate Agents showed house prices fell 1 percent in the third quarter from the second quarter, the first time prices have fallen since 1998. FOREIGNERS HAVE BEEN FLOCKING TO INVEST HERE With
the dollar at historic lows against the euro and other currencies,
real-estate agents, appraisers and developers say overseas buyers
are stepping up their purchases in the U.S., according to the
AS YOU GET OLDER, HOMES CAN ADAPT More people are opting to "age in place," or stay in their current home even as they get older, notes Alan J. Heavens in a Philadelphia Inquirer articles quoted by Realtor magazine. Making it easier are innovative approaches by a number of manufacturers. For example, Whirlpool's Maytag division is putting large Neoprene-gripped knobs on its washers and dryers so users can see and turn them easily. In addition, the company is turning out more refrigerators with bottom freezers so often-used food is at eye level. Several manufacturers are promoting hands-free faucets for people with arthritis, walk-in tubs, and grab bars that are less obtrusive than frequently installed today. Armstrong World Industries is redesigning its cabinetry to give greater access to storage to people who have trouble bending and reaching. And the National Association of Homebuilders Remodelers has added a "certified aging in place" specialist program. THERE'S WHITE AND THEN THERE'S WHITE Take a look at the portable guide of Inspirational Whites from Pantone paints, a fan deck of 68 shades from pure white to beige, counsels the Washington Post. Leatrice Eiseman, executive director of something called the Pantone Color Institute, says that pure, pristine white is cool, is highly reflective and can appear to have a blue undertone. It can be a good choice for low ceilings, large spaces that are very bare or minimally decorated, and rooms with lots of art. Any shade of white with a dollop of color can warm up a room considerably, she notes. If you choose white for kitchen walls, Eiseman says you should be aware of other whites in the room. For example, a white white on the walls can make almond-colored appliances appear dirty by comparison. White with a pink or peach undertone is good for a bathroom because it flatters skin tones. For ceilings, adding white to the wall color or a bit of the wall color to white creates a seamless blend, according to her. HURRY TO HOME DEPOT, BUT YOU'LL HAVE TO FLY Does hardware have a softer side? Home Depot Inc. thinks so, according to the Wall Street Journal. It is testing a warm-and-fuzzy approach to selling hammers, lighting and garage doors that is targeted at female shoppers. Softer? That's the Journal's word. The nation's largest do-it-yourself retailer is set to open the two test stores, called Home Depot Design Centers, later this month in Charlotte, N.C. and Concord, Calif. Jason Feldman, the company's senior director of merchandising, described the stores as a test "to romance and wow the customer." Big professional construction products like lumber and building materials will make way for bath and kitchen showrooms that are more extravagant and carry more products than those in the traditional Home Depot. "There is a showroom of doors and windows unlike any other we've ever tried," Feldman said. "She can buy a light bulb as well as all of the lighting," he said. "Or a major appliance plus the laundry detergent to go with it." Though there will be a garden center, the focus won't be on the act of gardening as much as the appreciation of outdoor living. The store lighting will be softer, the stockroom ceilings and the pallet racking will be gone, sight lines will be lower, the layout will be more open and the merchandise will be displayed on what retailers call "gondola shelving" such as that seen at grocery stores or mass merchants. But watch out for those strollers. FOR JANE, MUM'S THE WORD Jane Pratt, whose namesake women's magazine folded this summer, just sold her Manhattan townhouse for more than its $3.65 million asking price, according to the Wall Street Journal. The founder of Jane magazine and founding editor of Sassy had paid nearly $2 million for the 16-foot-wide home six years ago. The Greenwich Village house measures about 2,200 square feet, the floor plan shows. It has three bedrooms, three and half bathrooms, an eat-in kitchen, wood-burning fireplaces, a living room with a 12-foot ceiling, a dining room, family room, a home office and a skylight, according to the listing. It has a finished, windowed lower level and a landscaped back garden. The buyer couldn't be determined, and Pratt, who left her magazine in 2005 and began hosting a show on Sirius satellite radio, declined to elaborate. HE'S OBVIOUSLY NOT SINGING THE BLUES Billy Joel is adding another property to his new estate in Sagaponack. The piano man and his wife, Katie Lee Joel, have just gone to contract to buy the oceanfront property next door that has an asking price of $12.99 million, reports the New York Post. According to the listing, the 1.2 acres with 140 feet of oceanfront includes a "cute, renovated 3-bedroom/2-bath cottage," or the buyer can "build to suit." Joel may construct a music studio on the property. "There are a lot of building restrictions in Sagaponack," said his wife, who wouldn't confirm or deny their plans. "We can't even add on to our house. We have to stay within the original footprint." LENNY KRAVITZ RENOVATES, THEN OPTS TO MOVE AWAY The singer and songwriter, who has a yen for interior design, spent 18 months and more than $1 million renovating and redecorating his 6,000-square-foot penthouse duplex at 30 Crosby Street, through his own nine-member design firm, Kravitz Design, says the New York Times. Yet when the work was done, Kravitz put the apartment back on the market for $19.5 million, $7 million more than he was asking when he listed it for sale before the renovations began, and over $11 million more than he paid for it in 2001. Brokerage firm records show that the apartment was listed for as much as $17 million in 2002, then at $13.5 million and then down to $12.5 million in 2004. When the apartment was listed later at the lower prices, it could not be shown during much of this period because it was being rented, first by Nicole Kidman and later by Denzel Washington. A publicist who represents Kravitz said he did not renovate the apartment, which has 3,000 feet of terrace and rooftop space, to sell it. She said that after the work was done, he realized he wasn't spending as much time in New York as he had expected (he has homes in Paris and Miami), and with an album due out soon and a touring schedule ahead of him, he decided to unload it instead. WHERE HE ROAMED, THE PRICE IS NOW LOWER The owner of Buffalo Bill's 492-acre onetime hunting camp in Cody, Wyo., has cut its price to $9.75 million after it failed to sell for about two years at $12 million, says the Wall Street Journal. The log hunting cabin of William F. Cody - the buffalo hunter and Army scout famous for his long-lived Buffalo Bill's Wild West show - is intact but vacant on the property, called Irma Lake ranch. The property includes a roughly 9,650-square-foot main home, a two-bedroom caretaker's house and two guest houses converted from barns. Cody bought the property, as well as extensive surrounding land, in the late 1890s, when he was running his exhibitions featuring Annie Oakley and others. He visited the property only sporadically, partly because of his frequent touring. The current owner, retired Minnesota businessman Roger Hollander, renovated the main structures. PLEASE DON'T SHOOT THE MESSENGER A property owner is standing trial in El Cajon, Calif., for the death of a real estate practitioner, who was selling property the accused had inherited, says the San Diego Union in Realtor magazine. Michael Ray Jennison allegedly shot James Magot, an associate with Willis Allen Real Estate in LaJolla, Calif., twice in the head. The men were reportedly arguing over competing offers to buy the condo. A neighbor, James O'Kane, testified in Superior Court that Magot, who was a former Marine, was very aggressive. "He wanted things his way and he was hell-bound to get them," O'Kane said. "He was just right up in Mike's face." Bad idea! EVERYBODY INTO THE. . . MODEL APARTMENT As the second-home market in Latin America has emerged, so has a cottage industry of tour operators eager to attract foreign buyers seeking vacation retreats and investment properties, says the New York Times. Part vacation, part real estate boot camp, such trips walk potential home buyers through the legal and financial particulars of overseas ownership, as well as whisking them on tours of homes and developments on the market. Tropical Pathways (tropicalpathways.com) runs tours to Panama, the north coast of the Dominican Republic, the Yucatan Peninsula in Mexico and Roatan, an island off the coast of Honduras. The seven-day Panama tour is $1,399 a person, double occupancy, and includes accommodations, daily breakfast and lunch, and transportation throughout the country. Camilla Sands started her tour company, Simply San Miguel (simplysanmiguel.com), with some 15 different vacation options for visitors to San Miguel de Allende in the Sierra Madres of central Mexico, but she says it is her Real Estate Curious Tour that gets the most bookings. Topics addressed on the six-night trip - which costs $1,285 (double occupancy) with hotels, local transportation and some meals - include health care and home insurance. Tourgoers also meet architects and designers who can advise on how to comply with the town's strict architectural guidelines. SO MUCH FOR FOXTONS The discount real estate brokerage company listed $40.9 million in total liabilities and $488,000 in assets in a bankruptcy court filing, reports Inman News. About $35.4 million worth of liabilities is attributed to a loan by Heven Holdings, the parent company of London-based Foxtons. Officials at the U.S.-based Foxtons company, which has operated in Connecticut, New Jersey and New York, announced on Sept. 26 that they had terminated 350 of the company's 380 employees and later said that the company would file for Chapter 11 bankruptcy and planned to sell its active property listings to another brokerage company. Foxtons has estimated its commission due on sales contracts at $2.3 million, according to documents filed with the bankruptcy court. THERE'S LESS HERE THAN MEETS THE EYE The Antitrust Division
of the Department of Justice has launched a new Web site with
the aim of DEVELOPERS ARE PUTTING YOUR TOES IN THE WATER In the competitive market for second homes, developers are increasingly using water parks to attract buyers, reports the New York Times. Properties currently under construction include the 106-unit Hope Lake Lodge at Greek Peak, a ski resort in Cortland, N.Y., which will have an indoor water park with more than 500 feet of slides, and Silverline, a 90-unit luxury condominium development near Telluride, Colo., that will have a 40,000-square-foot, $18 million community recreation center with an indoor water park. By far the most common type of residence offered at indoor water parks is the condo-hotel. In the Wisconsin Dells alone, which calls itself "the water park capital of the world," more than 1,000 condo-hotel units have opened over the last few years at five parks. Similar developments are rising in Pigeon Forge, Tenn., and Reno, Nev. The boom can be attributed, in part, to the increased popularity of water park vacations at hotels. In 2002, according to Jeff Coy, president of JLC Hospitality Consulting in Phoenix, there were 50 hotels with indoor water parks. By the end of this year, there will be 184. Says he: "The old hotel swimming pool is a thing of the past." According to him, of the 36 indoor water park resorts scheduled to open in 2008, 24 are considering adding a condominium element to the property. FLAT OR DECLINING PROPERTY TAXES ARE HURTING SOME CITIES Across the country, local governments are feeling a financial strain driven largely by the nation's real estate downturn, reports the New York Times. City finance officers predict slowing revenue even as they remain under pressure to keep spending, especially in areas such as health care and pensions, according to an annual survey by the National League of Cities. To handle budget deficits they now expect, many cities are increasing fees for services, and some are considering raising property taxes, said the report. "We know what's coming here," said one author, Christopher W. Hoene, director of policy and research for the National League of Cities. "If the housing market continues to flatten out or even decline, we're in for some tough times for cities. "Even in New York, where revenue has soared the last several years, officials have been predicting a slowdown and are preparing for belt-tightening. The anticipated falloff is due in large part to lower expected profits on Wall Street and a projected decline in real estate transactions, rich sources of tax revenue. OHIO'S ATTORNEY GENERAL TAKES A SWING AT WALL STREET One of the sharpest attacks on Wall Street these days is coming from the Midwest, says the Wall Street Journal. That is where Ohio Atty. Gen. Marc Dann assigns much of the blame for the state's record mortgage-foreclosure rate - what he calls "the largest financial scam in American history." The 45-year-old Democrat has pursued several mortgage cases closer to home, delaying foreclosures involving New Century Financial Corp., a home lender now operating under bankruptcy-court protection. He has sued more than a dozen lenders and brokers for allegedly inflating home appraisals and engaging in other practices that misled troubled homeowners. Dann also has broadened his investigation to Wall Street. He is focusing on how investment banks packaged mortgages into securities and how credit-rating companies such as McGraw-Hill's Standard & Poor's, Moody's Investors Service, and Fimalac's Fitch Ratings evaluated those securities. The three firms downgraded hundreds of the mortgage-related bonds as the housing downturn grew more serious and low mortgage-underwriting standards became more apparent. Others focusing on the mortgage industry include the attorney general of New York, the Securities and Exchange Commission, and the Committee of European Securities Regulators. THIS YEAR'S LOANS TELL A STORY The subprime loans backing mortgage bonds created early this year are going bad even faster than those issued in early 2006, a year that set a record for delinquencies on such loans, according to two new studies cited by the Los Angeles Times. One of the studies, by Michael Youngblood, director of fixed-income research at FBR Investment Management in Arlington, Va., found no evidence that standards had tightened for subprime mortgages in this year's bonds despite a sharp rise in defaults that began late last year. "It really is astonishing," Youngblood said. "It's as if the lessons of the past two years were ignored in early 2007." It was only two months ago that Countrywide Financial, the nation's No. 1 mortgage lender, drastically tightened its standards for subprime loans, Youngblood said. A study released by Moody's Investors Service found that 2006 had eclipsed 2000 as the worst year ever for serious delinquencies in subprime loans backing securities. For bonds issued this year, 6.6 percent of the subprime loans backing them were seriously delinquent - at least 60 days past due or in foreclosure - four months after they were securitized. The comparable rate for 2006 was 4.2 percent. PITY THE MORTGAGE BANKERS They lost $50 per loan in 2006 in contrast to $258 per loan in 2005 as they failed to cut costs and match staffing to match declining originations, according to the Mortgage Bankers Association's (MBA) new annual cost study. While production revenues increased on a per-loan basis, this increase did not keep pace with the increase in production operating expenses; they grew by 17 percent to $3,416 per loan in 2006. Overall, the average firm posted pre-tax net financial income of $6.4 million in 2006 compared with $26 million in 2005. On a per loan basis, the net "cost to originate" increased to $2,476 in 2006 versus $2,049 per loan in 2005. Loan officer productivity fell from 141 retail loans closed per year in 2003 to an average of 62 in 2006. That helped push the net cost of originating a loan from $739 in 2003 to $2,746 last year, the study found. MORTGAGE RATES ARE MIXED The 30-year fixed-rate mortgage (FRM) was unchanged from last week at 6.40 percent this week, according to Freddie Mac. Last year at this time, it averaged 6.36 percent. The 15-year FRM this week was 6.08 percent,up from last week's 6.06 percent and from 6.06 percent a year ago. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.11 percent this week, down slightly from 6.12 percent the prior week but up from 6.11 percent in 2006. One-year Treasury-indexed ARMs averaged 5.76 percent, up from 5.73 percent last week 5.57 percent a year ago. A STUDY SHOWS THAT THE SUBPRIME MESS HIT FAR AND WIDE A Wall Street Journal
analysis of more than 130 million home loans made over the past
decade reveals that risky mortgages were made in nearly every
corner of the nation, even in affluent suburbs. LOAN APPLICATIONS INCH UP For the week ending Oct. 12, volume was 0.7 percent higher on a seasonally adjusted basis than one week earlier, according to the Mortgage Bankers Association. Unadjusted, it fell 9.3 percent but rose 0.7 percent compared with the same week one year earlier. Refinancing activity was 1.1 percent lower than the previous week and seasonally adjusted purchase applications increased 2.1 percent. Unadjusted, purchase volume went down 7.9 percent. The refinance share of mortgage activity eased to 45.3 percent of total applications from 46.2 percent the previous week, and the adjustable-rate mortgage (ARM) share slipped to 13.5 from 13.6 percent. WILL MORTGAGE CONDITIONS RELEASE PENT-UP DEMAND The consistently optimistic National Association of Realtors (NAR) thinks so. In the organization's latest forecast, Lawrence Yun, NAR vice president of research, contends that widening credit availability will help turn around home sales. "The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains," he said. Existing-home sales are expected to total 5.78 million in 2007 and then rise to 6.12 million next year in contrast to 6.48 million in 2006, according to Yun. He forecast new-home sales to be 804,000 this year and 752,000 in 2008, down from 1.05 million in 2006, adding that a recovery for new homes will be delayed until next spring. "A cutback in housing construction is a positive sign for the market because it will help lower inventory and firm up home prices," the economist said. Housing starts, including multifamily units, are likely to total 1.37 million in 2007 and 1.24 million next year, down from 1.80 million in 2006. Prices or previously owned homes will probably slip 1.3 percent to a median of $219,000 in 2007 before rising 1.3 percent next year to $221,800, according to Yun. The median new-home price should drop 2.1 percent to $241,400 this year, and then increase 1.0 percent in 2008 to $243,900. AN INDEX'S DECLINE MAY OR MAY NOT MEAN SOMETHING Declining home prices boosted affordability during the second quarter, reducing the risk of price declines in 28 of the 50 largest metropolitan areas, according to an analysis by PMI Mortgage Insurance, says Inman News. PMI said its U.S. Market Risk Index - which takes into account economic factors such as home-price appreciation and volatility, affordability and employment - fell for the first time in two and a half years during the second quarter. Scores in many areas remain elevated and risk remains high nationwide, said Mark Milner, PMI's chief risk officer. "We have seen a significant slowdown in price appreciation nationwide, and appreciation has gone negative in some areas," Milner said. "That's improved affordability, which is being reflected in the risk scores. But risk is still high and it's way too early to say we're at an inflection point." The average risk score for the 50 largest metropolitan statistical areas (MSAs) remained near an all-time high of 329, which translates into a projected 32.9 percent chance of price decline in those areas during the next two years. That's down from 346 during the first quarter. During the second quarter, 11 MSAs had risk scores of 500 or above, correlating to an estimated 50 percent or greater chance of price declines in the next two years, compared with 15 MSAs in the first quarter. The 11 MSAs were in California, Arizona and Florida. Home-price appreciation, which peaked in the second quarter of 2005, has been "decelerating" in seven in the last eight quarters; while prices are still going up on average, they are not going up as fast. Large MSAs were more likely to experience price declines in the second quarter - a reversal of past trends that indicates price declines are starting to take hold even in more populated areas where prices and employment are typically more stable, the report concluded. BANKERS SEE 18% DECLINE IN MORTGAGE ORIGINATIONS Mortgage originations
are expected to fall 18 percent in 2008, dropping below the $2
trillion mark for the first time since 2000, the Mortgage Bankers
Association (MBA) said, Inman News reports. Although economic
fundamentals remain sound, housing is "clearly in a deep
recession," said MBA Chief Economist Doug Duncan. He expects
the pace of home sales to remain below 2007 levels until YOU'VE BEEN WARNED The Internal Revenue Service is stepping up scrutiny of a popular tax strategy used by real-estate investors, observes the Wall Street Journal. IRS officials agreed to take action in response to a report by a Treasury Department unit urging the agency to improve its oversight of like-kind exchanges, or so-called "1031" tax-deferred exchanges. In the wake of the Treasury report, "I think you can expect increased IRS enforcement and oversight activity," said Louis Weller, national director of real-estate transaction planning for Deloitte Tax LLP in San Francisco. IRS officials are "aware of a lot of pushing-the-envelope activity by taxpayers." The report said IRS staff reported "potential abuses" such as transactions involving properties that aren't "like-kind," or exchanges with "related parties" or "incorrect property basis figures." The Treasury report said more oversight is needed: "There appears to be little IRS oversight of the capital gains [or losses] deferred through like-kind exchanges." The authors said it seems "the IRS is relying on taxpayers to voluntarily comply with the tax law" in this area. NOT ALL FORECLOSURES ARE CREATED EQUAL In calculating sale prices versus estimated market values of foreclosed homes, RealtyTrac.com notes that 68,426 foreclosed homes sold in 2007 in the third quarter, up from 54,886 in 2006, according to Dow Jones Business News in Realtor magazine. The average sales price dropped from $271,000 to $239,000. The discount-to-market ratio increased slightly from 76.42 percent to 77.68 percent, meaning that a buyer would receive a little more than a 22 percent savings or "discount" on a foreclosure purchase. The states with largest discounts were Alabama, $133,834 price, 59.95 percent discount; Pennsylvania, $110,936 and 61.68 percent; Indiana, $99,255 and 63.5 percent; Ohio, $90,300 and 64.7 percent; and Missouri, $144,768, 67.25 percent. The states with smallest discounts were Hawaii, $657,211 and 85.41 percent; Washington, $288,397, 83.68 percent; Virginia, $338,912, 83.48 percent; Massachusetts, $290,835, 83.03 percent; and California, $437,813, 83 percent. MANY INVESTORS ARE CHOOSING FORECLOSURE A growing number of investors are making the drastic decision to walk away from their properties and ultimately send their homes into foreclosure, lenders and real-estate agents say, according to the Wall Street Journal. Many investors who were hoping to quickly flip their investments are now left with homes that can no longer be sold for more than the mortgage debt. In many cases, these investors can't even find tenants willing to pay enough rent to cover hefty mortgages. According to an August study by the Mortgage Bankers Association, defaults on mortgages where the owner doesn't live in the house are a major driver of the defaults in Florida, Nevada, California and Arizona. One of the first effects of walking away from a mortgage is an assault on one's credit. The foreclosure could remain on your credit report for years and will sharply reduce your credit score, experts say. FORECLOSURE RATE IS LOWER THAN IN THE U.S. AS A WHOLE In the five boroughs, 1,849 city families entered the foreclosure process last month, 10 percent more than in September of 2006, but down from the 2,904 who filed in August, says the New York Post. Nationally, foreclosure filings jumped 99 percent, to 223,947 in contrast to last September. All five boroughs showed month-to-month drops in new filings, according to statistics released by RealtyTrac. LENDING RAISES QUESTION OF RACIAL DISCRIMINATION Home buyers in predominantly black and Hispanic neighborhoods in New York City were more likely to get their mortgages last year from a subprime lender than home buyers in white neighborhoods with similar income levels, according to a new analysis of home loan data by researchers at New York University, reports the New York Times. The analysis, by N.Y.U.'s Furman Center for Real Estate and Urban Policy, found that the 10 neighborhoods with the highest rates of mortgages from subprime lenders had black and Hispanic majorities and the 10 areas with the lowest rates were mainly non-Hispanic white. The analysis also showed that 19.8 percent of home purchase loans in the city last year were from subprime lenders, a higher percentage than in San Francisco (8.4 percent), Boston (14.2 percent) and Chicago (15.9 percent). The rate of subprime lending is far higher for minorities than for whites even at higher income levels. For borrowers earning $150,000-250,000, the rate of subprime loans was 20 percent for non-Hispanic whites in 2006, 50 percent for Hispanics and 62 percent for blacks. "It's almost as if subprime lenders put a circle around neighborhoods of color and say, ‘This is where were going to do our thing,'" Robert Stroup, a lawyer and the director of the economic justice program at the NAACP Legal Defense and Educational Fund, told the New York Times. RESIDENTIAL BUILDING IS BOOMING IN TWO BURROUGHS New York City's residential construction boom is zooming to a new record, thanks to development in Queens and Brooklyn, according to NewYorkBusiness.com. The city is expected to issue permits to build nearly 34,000 residential units this year, according to the New York City Department of Housing Preservation and Development. That will be the highest level since the city began keeping records in 1964. The current record of 33,084 units was set in 1972. All of the increase has taken place in Queens and Brooklyn, where the numbers of permits for the first eight months of the year were up 18 percent and 13 percent, respectively, compared with the same period in 2006. The number of permits declined 35 percent in Staten Island, 10 percent in the Bronx and 9 percent in Manhattan. commissioner. CRY ME A RIVER Having overseen the creation of the landfill in the 1960s that became Battery Park City, Charles Urstadt believes it can be done again. And he refuses to drop the idea, no matter how far-fetched others may find it, reports the New York Times. Urstadt, who was the first chairman of the Battery Park City Authority after it was created in 1968 and is now its vice chairman, has for years been advocating the potential benefits of adding 40 or 50 acres to Lower Manhattan. Richard N. Gottfried, an assemblyman from Manhattan who sponsored the Hudson River Park Act, called Urstadt's idea "outrageous." He said that law prohibited using landfill in the river between Battery Park City and 59th Street. "This idea keeps rising from its coffin," Mr. Gottfried said. If it can't be done around Battery Park City, Urstadt mused, "How about filling in the Harlem River? It doesn't do any good. The only thing it's used for is the Circle Line." BUILDERS' CONFIDENCE WANES STILL MORE Their optimism about the market for new single-family homes was further shaken in October owing to continuing problems in the mortgage market, substantial inventories of unsold units and the perceived effect that negative media coverage is having on potential buyers, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI fell two more points, to 18, in October, its lowest level since the series began in January of 1985. "Consumers are still trying to sort out market realities and get the best deals they can," noted Chief Economist David Seiders of the National Association of Home Builders. "Many prospective buyers may very well have unrealistic expectations regarding new-home prices as well as how much they can expect to receive for their existing homes. When the market is in proper balance, people can recognize a good deal when it comes along; at this point, they view a good deal as a moving target." ON THE ROAD AGAIN, MILLIONS OF AMERICANS In 2006, 39.8 million United States residents moved within the previous one-year period, reports the U.S. Census Bureau within a package of 34 tables. The moving rate remained statistically unchanged from 2005 at 14 percent. Nearly half of the reasons given for moving (18.4 million) were housing related, such as wanting a bigger or smaller house, according to the agency. The West had the highest moving rate (16 percent), followed by the South (15 percent), the Midwest (13 percent) and the Northeast (10 percent). Hispanics had the highest moving rate (18 percent), followed by blacks (17 percent), Asians (14 percent) and non-Hispanic whites (12 percent). In 2006, nearly one-third (30 percent) of all people living in renter-occupied housing units lived elsewhere a year earlier. The moving rate for people living in owner-occupied housing units was 7 percent. Most movers stayed within the same county (62 percent), while 20 percent moved from a different county within the same state; 14 percent moved from a different state and 3 percent moved from abroad. Bank on Beekman With its immaculate, quiet streets lined with trees and handsome residences, Beekman Place has maintained a reputation as one of the most desirable places to live on the East Side of Manhattan, notes the New York Times, from which much of what follows has been plagiarized. This small residential area just north of the United Nations takes its name from the narrow, virtually private street east of First Avenue that runs between Mitchell Place (a block-long extension of 49th Street) and 51st Street. Beekman Place proper has some of the city's most sumptuous apartment buildings and townhouses, many of which have lush private gardens and unobstructed views of the East River. Although the boundaries often are exaggerated as the ''Beekman Place area,'' most of its residents agree that the real thing consists of only Beekman Place itself, Mitchell Place and 50th and 51st Streets east of First Avenue. Each of these blocks has a character of its own. Mitchell Place, a narrow road running up from First Avenue on a ramp, is lined on its northern side with stately prewar apartment buildings (now cooperatives) and the Beekman Tower, a large Art Deco residential hotel. Brownstones, some with mansard roofs and elaborate wrought-iron balconies, prevail on 50th Street, and 51st Street primarily has apartment buildings. Beekman
Place is named for a descendant of William Beekman, one of the
early Dutch settlers in New York. The site of Beekman Place refers
to the location on which the family built its then summer house.
(Their main lodging was on Beekman Street in Downtown Manhattan,
according to Wikipedia.) In the 1800's, the Beekman Place area was considered a prestigious address, but by the turn of the century, the neighborhood had been taken over by the impoverished immigrants who had flocked to the East Side seeking work at the local slaughterhouses. Beekman Place regained its exclusivity in the 1920's, when Alfred Lunt and Lynne Fontanne, Elisabeth Marbury, Anne Morgan and Anne Harriman (Mrs. William K. Vanderbilt) moved there and into nearby Sutton Place. Home to many executives, professionals and entertainers, the neighborhood also has numbered among its residents John D. Rockefeller 3d, Gloria Vanderbilt, Rex Harrison and Princess Ashraf Pahlavi, the twin sister of the last Shah of Iran. Irving Berlin lived there for the 42 years until he died, in 1989. Perhaps the most prestigious building is One Beekman Place, built by the Rockefellers in 1930, says the New York Observer. Previous residents have included playboy Aly Khan; William J. Donovan, head of the O.S.S. under Franklin Roosevelt; and game-show mogul Mark Goodson. It is very difficult to get into the building, but once you do, it's almost impossible to get kicked out. That's unless you're Huntington Hartford, the A&P heir who lived in the penthouse in increasing squalor for three decades before getting the boot in 1982 - but only after his ex-wife Elaine, who was still living with him sporadically, was arrested for tying up a naked 17-year-old-girl who was working as his secretary and shaving her head. Current residents include TV newswoman Jane Pauley and her husband, cartoonist Garry Trudeau, as well as designer Arnold Scaasi and his partner, publisher Parker Ladd. Many of
the restaurants, stores and offices of midtown are within walking
distance, and the area is served by a westbound bus at 49th Street,
an uptown bus at First Avenue and a downtown bus at Second Avenue.
There is a subway station some blocks away, at 51st Street and
Lexington Avenue, and an entrance to the Franklin D. Roosevelt
Drive just south of the neighborhood, at 49th Street. As you may well imagine, living in such a neighborhood can cost plenty. Moreover, strict requirement levels for buying in the area make it a difficult address to acquire - albeit one that many believe is worth fighting for. Herewith a sample of properties offered by various brokers and viewed recently in Beekman Place and elsewhere: Beekman Place
Upper West Side
Greenwich Village
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 |
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Wall
Street Journal. Some are buying vacation homes in Florida, California
and Colorado that would previously have been considered out of
reach. Others are gambling that properties purchased now will
translate into savvy investments down the road, when both the
dollar and the U.S. housing market eventually rebound. Sales have
been heavily concentrated in a handful of states, including New
York, California and Texas. Florida alone accounted for 26 percent
of all U.S. sales involving foreign buyers in the year ending
April 2007, according to a report by the National Association
of Realtors. Foreign buyers accounted for up to 4 percent of all
U.S. sales during that time period, according to Lawrence Yun,
chief economist for National Association of Realtors. Foreign
businesses bought $11.3 billion of U.S. real estate in 2006, up
45 percent from a year earlier, according to the U.S. Bureau of
Economic Analysis. While those numbers refer mostly to commercial
and industrial properties, experts say they suggest increased
interest in the residential market, too. 
educating
consumers and policymakers about "the potential benefits
that competition can bring to consumers of real estate brokerage
services and the barriers that inhibit that competition."
Among its features, the site includes maps identifying states
with real estate laws that can inhibit competition, a calculator
to help consumers tally their potential savings when brokers pursuing
new business models compete for their business, and links to additional
government resources. Predictably, the National Association of
Realtors was displeased. Said spokesman Lucien Salvant: "The
real estate market is competitive. Real estate is probably the
most competitive industry in the world." Adding that the
real estate industry is unique in that industry participants share
vital information with their competitors, he observed that much
of the information on the Justice Department's site appear to
be focused on state-level issues.
Loan
data studied by the indicates that from 2004 to 2006, when home
prices peaked in many parts of the country, more than 2,500 banks,
thrifts, credit unions and mortgage companies made a combined
$1.5 trillion in high-interest-rate loans. (Most subprime loans
fall into this basket.) High-rate mortgages accounted for 29 percent
of the total number of home loans originated last year, up from
16 percent in 2004. About 10.3 million high-rate loans were made
in the past three years, out of a total of 43.6 million mortgages.
High-rate lending jumped by an even larger percentage in 68 metropolitan
areas. The Journal's findings reveal that the subprime aftermath
is hurting a far broader array of Americans than many realize,
cutting across differences in income, race and geography. From
investors hoping to strike it rich by speculating on condominiums
to the working poor chasing the homeownership dream, subprime
loans burrowed into the heart of the American financial system.
The data also show that some of the worst excesses of the subprime
binge continued well into 2006, suggesting that the pain could
last through next year and beyond, especially if housing prices
remain sluggish. Some borrowers may not run into trouble for years.
late next year and said prices could continue to decline beyond
that before flattening out in 2009. After adjusting for inflation,
Duncan said real housing prices could fall by 7-8 percent this
year and next. Much depends on what happens in credit markets,
Duncan continued. It could be nine months before investors in
such securities regain their confidence, he said. In the mean
time, a "massive surplus" of excess housing supply must
be worked off before investment in housing picks up. Duncan said
job losses in the mortgage lending industry could total 110,000,
reducing employment in the industry from a peak of 505,000 to
400,000 or less. The MBA forecasts sales of existing homes will
fall to 5.14 million in 2008, down 10 percent from an estimated
5.72 million homes this year and a 21 percent drop from 2006 levels.
Assuming that credit markets recover, sales of existing homes
are projected to rebound to 5.4 million in 2009, Duncan said.
Sales of new homes are expected to fall to 736,000 in 2008, down
from an estimated 819,000 in 2007 and 1.05 million last year.
The average price of an existing home could bottom out in 2008
at $212,900, down 4 percent from $221,900 in 2006. The MBA projects
the median price of a new home will fall to $235,900 next year,
down 4.3 percent from 2006, before rebounding slightly in 2009
to $238,600. 
