Items of Interest U.S. SALES REMAIN WEAK Sales of new single-family homes were up 2.8 percent in July to a seasonally adjusted annual rate of 870,000 units from June, the U.S. Commerce Department reported. The July sales pace was 10.2 percent below a year earlier. Meanwhile, total existing-home sales - including single-family, townhomes, condominiums and co-ops - slipped 0.2, according to the National Association of Realtors (NAR). Seasonally adjusted, they were 9 percent below July 2006. Chief Economist David Seiders of the National Association of Home Builders commented that the tightening of lending standards and problems in the financial sector, which deepened last month, will delay housing's recovery "at least until mid- to late-2008." Although the inventory of new homes for sale edged down slightly, the equivalent months' supply at the July sales pace was a heady 7.5 months, down from 7.7 months in June. Pointing out the obvious, NAR Senior Economist Lawrence Yun said that "home sales probably would be rising in the absence of the mortgage liquidity issues of the past two months." Sales of previously owned single-family homes dipped 0.4 percent from June and 9.3 percent from July 2006; the median dropped 1 percent to $228,600 from the previous year. Still, existing condominium and co-op sales rose 1.4 percent in June but were 7.5 percent below July 2006. The median was $230,600, up 2.4 percent from a year ago. NO SIGN OF THE HOUSING SLOWDOWN ENDING SOON Data through June released by Standard & Poor's for its S&P/Case-Shiller Home Price Indices shows continued negative annual returns in the U.S. National Home Price Index, the 10-City Composite and the 20-City Composite, as well as 15 of the 20 metro area indices. The quarterly S&P/Case-Shiller U.S. National Home Price Index - which covers all nine U.S. census divisions - was down 0.9 percent from Q1 2007 and down 3.2 percent from Q2 2006. "The pullback in the U.S. residential real estate market is showing no signs of slowing down," said the reliably gloomy Robert J. Shiller, chief economist at MacroMarkets. "The year-over-year decline reported in the 2nd quarter of 2007 for the National Home Price Index is the lowest point in its reported history, which dates back to January 1987. On a regional level, 17 of the 20 metro areas are showing declines in their annual growth rate from what was reported in May." Notably, adds the Wall Street Journal, the S&P/Case-Shiller survey found that prices in the New York City metropolitan area declined, even though most local real-estate agents say prices for expensive condominiums in Manhattan continue to surge. There are two explanations for the difference. First, the S&P/Case-Shiller survey covers only single-family homes, not condominiums and cooperatives, which dominate the Manhattan market. Also, while prices are still rising in parts of the city, they are starting to decline in the suburbs. INDEX SHOWS SMALLEST QUARTERLY INCREASE SINCE 1994 U.S.
home prices increased only slightly in the second quarter of 2007,
according to a government index that omits properties sold or
refinanced with mortgages of more than $417,000. Compiled by the
Office of Federal Housing Enterprise and Oversight (OFHEO), the
House Price Index (HPI) was 0.1 percent higher in the second quarter
than in the first quarter of 2007 - below the revised growth rate
of 0.6 percent for the previous quarter and the lowest since the
fourth quarter of 1994. Prices in FREDDIE MAC FINDS LOWER RATE OF APPRECIATION No surprise, but the company says home-price appreciation slowed to an annual rate of 0.4 percent during the second quarter, the slowest quarterly growth rate in more than 12 years, according to Freddie Mac. However, its latest Conventional Mortgage Home Price Index "Classic Series" excludes homes with nonconforming mortgages (of more than $417,000) while drawing on data from sales of homes and also appraisals undertaken for mortgage refinancings, notes Inman News in its story about the survey. The Classic Series index showed home values appreciated 3.3 percent on average for the 12 months ending in June compared with 10.2 percent growth during the same period a year earlier. When refinancings were excluded and only sales of homes with conventional mortgages were analyzed, Freddie Mac found home prices appreciated at an annual rate of 5.8 percent during the second quarter. But year-over-year appreciation in the purchase-only index amounted to just 2.5 percent, down from 8.4 percent for the 12 months ending June 2006 and the index's slowest annual rate of growth in 14 years. The difference in second-quarter home-price appreciation in the two home-price indexes, said Frank Nothaft, Freddie Mac vice president and chief economist, may be that the owners of properties that sell "have made real improvements in the homes since they were last observed in our database." Another possibility may be that appraisers are getting more conservative in their evaluations, Nothaft said. YOU DON'T BELIEVE EVERYTHING YOUR READ OR HEAR, RIGHT On television, radio and the Internet, the mortgage industry is as ebullient as ever, observes the New York Times. For example, Quicken Loans continues to run its signature spot on radio stations. "This is a rate alert," the advertisement starts off, sounding much like a newscast. "Slower economic growth has caused the Fed to keep interest rates flat, and the market has responded with some of the lowest mortgage rates in years." As more homeowners fall behind on mortgage payments and investors abandon the industry in droves, mortgage companies are facing greater scrutiny over their lending practices and disclosures to borrowers. One area where regulators are paying closer attention is advertising that promises tantalizingly low payments without clearly disclosing the myriad strings that accompany the debts. It is a tactic that has been widely used - and, critics say, abused - by lenders trying to lure new customers. LowerMyBills.com, a site owned by the credit agency Experian that funnels borrowers to mortgage lenders, has become a prolific advertiser on the Web with its impossible-to-miss ads that feature dancing cowboys and a video of a woman jumping and screaming with joy, presumably after being approved for a loan. The Federal Trade Commission and attorneys general in states such as Ohio and New York are looking into the ads as part of more comprehensive reviews of lending practices during the housing boom. JUNK FEES ARE JUST TRASH What's junk in obtaining mortgage? According to Robert J. Bruss in the Washington Post, the best way to determine if a fee is necessary is to ask yourself, "What benefit am I receiving for this fee?" For example, an appraisal fee is a legitimate charge because the lender requires an independent appraisal and you will benefit by knowing the appraiser's opinion of the property's fair market value. Other examples of legitimate fees include those for tax service, courier, flood certificate, recording, title insurance and notary. But unnecessary junk charges, which provide the borrower with no specific benefit, include processing fee, application fee, administration fee, documentation fee, warehousing fee, underwriting fee and, when the lender runs out of names, miscellaneous fee. INVESTORS ARE DISPROPORTIONATELY DEFAULTING Defaults
on mortgages where the owner does not live in the house are a
major driver of the defaults in four of the states with the fastest
rising rates of seriously delinquent loans, according to the LOAN VOLUME RISES For the week ended Aug. 31, mortgage loan application volume increased by 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, there was a 0.2 percent decrease compared with the previous week but 10 percent growth compared with the same week one year earlier. Refinancings went up by 2.3 percent from the previous week, and purchase applications rose by 0.4 percent seasonally adjusted. On an unadjusted basis, the purchase volume fell by 1.9 percent from the previous week. The refinance share of mortgage activity increased to 41.4 percent of total applications from 40.4 percent the previous week, and the adjustable-rate mortgage (ARM) share dropped to 12.6 percent from 15.0 percent. RATES MOVE UP, BUT BARELY The 30-year fixed-rate mortgage (FRM) averaged 6.46 percent for the week, up from last week's 6.45 percent and a notch below 6.47 percent at this time last year, according to Freddie Mac. The 15-year FRM this week was 6.15 percent compared with 6.12 percent the previous week and 6.16 percent a year ago. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.32 percent this week, down from 6.35 percent last week and above the 6.14 percent average for the week in 2006. One-year Treasury-indexed ARMs were 5.74 percent versus last week's 5.84 percent and last year's 5.63 percent. FORECLOSURE RATES REACH A NEW HIGH The seasonally adjusted delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 5.12 percent of all loans outstanding in the second quarter of 2007, up 28 basis points from the first quarter of 2007 and up 73 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 1.40 percent of all loans outstanding at the end of the second quarter, an increase of 12 basis points from the first quarter of 2007 and 41 basis points from one year ago. The rate of loans entering the foreclosure process was 0.65 percent on a seasonally adjusted basis, seven basis points higher than the previous quarter and up 22 basis points from one year ago. The quarter's foreclosure starts rate is the highest in the history of the survey, with the previous high being the first quarter's rate. Increases in foreclosure starts in California, Florida, Nevada and Arizona account for the rise, rather than a nationwide drop in the rate of foreclosure filings, said MBA Chief Economist Doug Duncan, who added that 34 states had decreases in their rates of new foreclosure. "While the seriously delinquent rate for prime fixed loans was essentially unchanged from the first quarter of the year to the second, and the rate actually fell for subprime fixed rate loans, that rate increased 36 basis points for prime ARM loans and 227 basis points for subprime loans," the economist said. The upward trend in delinquencies and foreclosures may continue for up to a year, he averred. "We do not yet believe we have seen the peak," Duncan said. "There is some hope that will occur within the next two to four quarters." Much depends on what happens with interest rates and how much monthly payments increase for borrowers with 2/28 hybrid ARMs when their interest rates reset, Duncan said. LAYOFFS HIT MORTGAGE INDUSTRY HARD National City Corp., Countrywide and Lehman Brothers announced more than 3,000 layoffs, notes Inman News. National City Corp. said it was laying off 1,300 workers at National City Mortgage as part of "aggressive steps" to respond to changing conditions in the mortgage markets. Lehman Brothers said it would lay off 850 workers worldwide as part of a restructuring plan for its residential mortgage origination business. And Countrywide Financial Corp. said it cut 900 jobs, mostly in its mortgage production divisions. CNBC and National Mortgage News have reported that Countrywide has plans to lay off 6,000 to 10,000 employees. UNSOLD APARTMENTS WILL CAUSE VACANCIES TO RISE Apartment vacancies are likely to rise as home owners who can't sell their properties seek tenants, according to the real estate research firm Reis Inc., says Bloomberg News in Realtor magazine. "You'll find condos for rent in almost every major market," notes Sam Chandan, Reis' chief economist. "For renters, a vacant condo is easily substitutable for a vacant apartment." Reis projects that the U.S. apartment vacancy rate - 5.8 percent last year - will rise to 6.2 percent this year and stay there through 2009. The rate will start to drop again in 2010, dipping to 6.1 percent before declining again in 2011, to 5.9 percent, according to Reis. EXCESS INVENTORY LEADS FITCH TO GRIM PREDICTION The most challenging issue for housing markets is likely to be excess inventory, according to analysts at Fitch Ratings, reports Inman News. Fitch now forecasts sales of existing single-family homes will fall 10 percent, to 5.83 million, in 2007, while sales of new homes will be off 23.5 percent, to 812,000. Total housing starts are projected to be 1.3 million, or 28 percent lower than 2006. Houses for sale rose above 500,000 during the past 21 months, a level "that has often presaged major industry downturns." There was a 7.5-month supply of new homes on the market in July, and enough existing homes to handle 9.6 months of demand; 5.5-6 months of supply represents equilibrium of supply and demand. The average new-home price will fall 2.5 percent in 2007, Fitch projects, while the median new-home price will slip 1.5 percent; such estimates do not include sales incentives such as upgrades that don't show up in transaction prices. "Fitch's forecast for the housing sector in 2007 has become more bearish," the analysts' report concluded. "This is principally due to the impact from even tighter credit standards for home buyers and the effect of disruptions in the secondary markets for subprime, Alt-A and jumbo mortgages." NAHB SEES NO PRICE APPRECIATION UNTIL 2009 Said Chief Economist of the National Association of Home Builders (NAHB), "I don't expect to be seeing systematic price appreciation resurfacing until 2009," according to Inman News. The price drops could be deeper before then than during the early 1990s, he added, saying that home prices tend to be "sticky" on the down side; that is, they typically don't drop as much during a down market as they increase during the boom phase of a real estate cycle. "If you look at the mountain of price appreciation that we had in those earlier (boom) years, the declines have been pretty modest to this point," Seiders noted. "They probably won't go all that far beyond what happened in the early 1990s." Seiders expects the annual rate of new-home sales to bottom out at 800,000 in the fourth-quarter. For the full year in 2007, he expects 843,000 new-home sales, and he said he expects that number to rise to 869,000 in 2008. The rapid run-up in housing prices, sales and production in 2003-05 was clearly unsustainable, Seiders said, changing the tune he kept singing until last year. MARKET 'BOOM PSYCHOLOGY' IS BLAMED FOR SLOWDOWN Declines in U.S. housing prices are likely to continue and spread to other parts of the world, writes Yale University economics professor Robert Shiller in a paper presented to the Federal Reserve at the end of August, reports Market News International in Realtor magazine. "While it is possible that prices will continue to go up as is commonly expected, there is a high probability of steady and substantial real home price declines extending over years to come," writes Shiller, who warned for years about an imminent burst of a bubble. Shiller says economic fundamentals cannot explain the 86 percent rise in real home prices between the bottom in the fourth quarter of 1996 and the peak in the first quarter of 2006. Instead, he says the high appreciation was owing to market "boom psychology" - what he calls "a social epidemic" of speculation based on expectations of ever-rising home prices. The United States has been undergoing "a classic speculative bubble, driven largely by extravagant expectations for future price increases," he maintains. "As such, the situation may well result in substantial declines in real home prices eventually." While acknowledging that it is possible home prices will head back up, he adds that it is more likely that they will go down. "Major declines in real home prices - even 50 percent declines in some places - are entirely possible going forward from today or from the not too distant future," he alone persists in projecting. WILL THE MORTGAGE SITUATION AFFECT MANHATTAN The country's
mortgage crisis has left prospective buyers and real estate watchdogs
wondering how hard it will hit the Manhattan residential real
estate market, notes the Real Deal. The second half of the year
is traditionally slower for sales, and the anticipated first-quarter
bump from Wall Street bonuses will suffer as those checks are
predicted to be smaller in early 2008. In short, there could be
some serious ripple effects, according to the publication. While
Manhattan buyers and sellers hadn't rushed to the sidelines in
August, this month could usher in a significant drop-off in sales
activity. "I think in the fall, there will be a heightened
sensitivity to the availability of credit and how that will affect
housing. I think it's more of an issue in other parts of the country,
but it certainly has people wondering here," A BROKERAGE IS ACCUSED OF BIAS, SELLING OVERVALUED HOMES A federal judge ruled that a discrimination lawsuit filed by eight African-American home buyers against United Homes can move forward, according to the New York Law Journal in Realtor magazine. The lawsuit alleges that the New York real estate company targeted minorities as part of a conspiracy to sell overvalued homes in poor condition, financed with predatory loans. The decision was largely procedural, confirming that the plaintiffs clearly presented their complaint against United Homes, which has sold more than 1,000 properties in the past few years. Its development projects include a 296-unit, $168 million condominium in Brooklyn. The plaintiffs say in their lawsuit that they responded to ads on the subway or local newspapers promising "We Make Dreams Come True." Their lawsuit contends that they were then rushed through a streamlined process in which they accuse the various defendants of conspiring to sell them overpriced, defective houses at unfair mortgage rates. The defendants - United Homes, its subsidiaries, and attorneys Michael Cheatham, Benjamin Turner and Edward L. Schiff, among others - have asked to have the lawsuit dismissed on various grounds. They have argued that the buyers failed to allege required "discriminatory intent," but the court has denied that argument, along with their other requests for dismissal. GET IT OUT The Department of Sanitation is providing the opportunity on Sunday, Sept. 9, from 8 a.m. to 2 p.m. for you to recycle unwanted electronics such computer, monitors, desktop printers or scanners, TVs, VCRs and DVD players, and cell phones. Or you can donate "gently" used clean clothing and linens. The place to go is the southeast corner of 17th Street and Broadway in Union Square. A VIEW WITH A ROOM With outdoor showers springing up on apartment rooftops and hotel terraces as the sexiest new amenity to take Manhattan. "The urban appeal is growing. I would say it's a definite upward trend," comments Ethan Fierrom, the author of "The Outdoor Shower: Creative Design Ideas for Backyard Living, from the Functional to the Fantastic." At Blue, a new condominium at 105 Norfolk St., the 14th-floor unit boasts an outdoor shower on its 950-square-foot terrace. Because the building is many stories higher than anything else around it, the resident will have a variety of views, the marketing agent of the 32-unit building, told the Sun. The unit, which had an asking price of $3.25 million, closed last month. A penthouse apartment at 147 Waverly Place also has an outdoor shower. The unit, which sold more than a year ago for $10 million after five potential buyers locked horns in a bidding war, has a 1,100-square-foot terrace. At Sky Lofts, 145 Hudson St., the penthouse has just been redesigned to include an outdoor shower. It is going on the market in October, with an asking price of more than $30 million, and is scheduled to be completed by December. Another new development in Times Square, 1600 Broadway, will have an outdoor shower on its rooftop "observatory deck," which, seems to be unusually well named. ARTIST HOUSING FOR ARTS' SAKE Gov. Eliot Spitzer signed a new bill that provides what advocates say is much-needed housing dollars for New York artists, reports amNewYork. The bill gives grants of up $12,000 to a single artist over a two-year-period and up to $20,000 to a group of artists for live-work space in neighborhoods out of which artists have been priced. Financing for the new program will have to wait until negotiations for next year's budget next spring. But the fact that Spitzer has signed the bill shows it is a priority for him, backers say. The number of live-work spaces that the new bill will fund also will have to wait until after budget negotiations, but people with knowledge of the legislation predicted that it would provide for approximately 40-50 units. NOTHING NEW HERE On Sept. all the architectural salvage dealers in the New York City area will gather in the school yard of PS 11 in Clinton Hill (at Washington and Greene avenues) 10 a.m.-4 p.m. in an event called Salvage Fest 2007. You can browse and buy an array of old building parts, fixtures and lighting from merchants such as Moon River Chattel, Olde Good Things and Demolition Depot. In addition, Build It Green will have a drop-off station for recycling any odd building materials you may have lying around. Admission is free. ARE CONDO PRICES IN NEW YORK CITY VULNERABLE So far, condo prices in New York have held their ground while those in other markets around the country have declined. That could be changing soon, speculates Andrew Marks in Crain's NewYorkBusiness.com. Noting that consumers will be facing stricter lending standards and that, therefore, fewer buyers will qualify for mortgages, he says demand will be lower over the next 18 months, just as 25,000 new condo units come on line in the city. Even worse, if the credit crunch deepens over the next few months, it could threaten year-end bonuses on Wall Street. Developers are already sweetening their deals to attract buyers. AFC Realty Capital is marketing luxury condos, ranging in price from $700,000 to $1.5 million, at West 127th Street and Fifth Avenue in Harlem. It's now offering prospective buyers subsidies on their mortgages in the form of interest-rate buy downs of as much as 1.5 percentage points. David Tillman of Mission Capital Advisors, which helps lenders sell off nonperforming assets, observes that high-end projects such as 200 Chambers St. and 445 Lafayette St. still have units for sale. "Anyone who says New York's residential market is impervious to problems elsewhere is smoking crack," he says. CAN YOU TOP THIS A group of homeowners is holding firm on an ambitious goal: To break the record for the most expensive home sale in American history. The price to beat is $103 million, says the Wall Street Journal. The highest residential sale to date - investor Ron Baron's $103 million purchase earlier this year of a 40-acre compound in East Hampton - was never publicly listed, and the deal was so secret that the brokers weren't named. There are five contenders for the current prize, including a Beverly Hills compound once owned by William Randolph Hearst and Marion Davies that's listed for $165 million; the Aspen home of Saudi Prince Bandar bin Sultan, which has been visited by the past three U.S. presidents ($135 million); and an estate overlooking Lake Tahoe with a staircase modeled after the one aboard the Titanic (a dark horse at $100 million). All have come on the market since summer 2006. Robert Kass, who is co-listing the fourth contender - a Los Angeles chateau for $125 million - recently spent a month traveling to London, Moscow, Istanbul, Dubai and the Côte d'Azur meeting with potential customers. "There are buyers that could be in Pakistan," says Shari Chase, who is handling the Tahoe estate. Or the moon. Brokers and owners say they aren't involved in a footrace, but they do admit to keeping tabs on the competition. Donald Trump, whose Palm Beach estate rounds out the list at $125 million, dismisses Prince Bandar's $135 million asking price as a case of "some character putting on a price just to try to top Trump." More contenders are on the way. Developer Frank McKinney is building a house in Manalapan, Fla., that he plans to list for "at least" $135 million, while land baron Tim Blixseth is asking $155 million for a yet-to-be-built Montana estate. Entertainment billionaire David Geffen has quietly shopped his historic 9.4-acre Los Angeles estate for $100 million, according to a broker who has shown the property. Geffen says his home in Los Angeles is not for sale. Except, no doubt, for the right price. The U.S. doesn't have a monopoly on extreme listings - or extreme sales. The international home sale record is thought to be held by a London property that sold in 2004 for £70 million (about $128 million at the time). A Paris home is on the market for €100 million, or roughly $135 million. YOU INVITE AN AUDIT BY MOVING TO A LOW-TAX STATE Some relatively high-tax
states are increasingly cracking down on individuals who claim
to have moved out of state but still maintain strong connections
to their former homes, the YOUR HOME IS ONLY YOUR CASTLE, NOT YOUR NEST EGG If the current turmoil in the housing and credit markets tells us anything about retirement planning, it should be this: Think twice about how big a role your home will play in subsidizing your future. So says the Wall Street Journal, which notes that many families in recent years have been able to think about retirement with some measure of confidence. That's because the value of their homes, in most cases, soared. The thinking goes something like this: If my budget gets tight in retirement, the equity in my home will serve as a safety net. Indeed, a study released last week by Bell Investment Advisors in Oakland, Calif., found that 68 percent of surveyed 60-year-olds count their personal residence as a retirement asset. And of that 68 percent, one in four say their home represents half or more of their retirement savings. You might be planning to sell your house and move to a smaller and less-expensive home as you enter retirement. What happens, though, is that retirees often end up staying where they are (most people, after all, like their homes), or - if they do sell - buy a home of equal or greater value. THESE TRAILERS CAN'T BE TRASH A killer kitchen, funky furnishings and million-dollar views of Ajax Mountain in one Aspen, Colo. home, reports the Denver Post. The home is in Smuggler Park, the latest Aspen address where residents are seeing their home prices go through the roof - often an aluminum one. Some trailer homes here are selling for between $500,000 and $1 million, and several are priced well beyond that. The Smuggler Trailer Park is known in the community as one of few remaining neighborhoods where home owning working-class locals reside. In recent years, mobile homes in the area have sold for more than $1 million dollars. "It's startling, unbelievable, mouth-dropping," said veteran Aspen Realtor Janet Mitchell. You can say that again! The park is a five-minute walk to town and sits in an area that is surrounded by newly built multimillion-dollar, single-family homes. Adds Mitchell: "It's right dead-center (in) Aspen. Location, location, location." HOUSING SLOWDOWN IS AFFECTING GOVERNMENT BUDGETS Tremors from the housing market's slump are straining the budgets of state and local governments from coast to coast, sending officials scrambling to plug gaps, according to the Wall Street Journal. Rising defaults on subprime home loans are boosting the inventory of unsold homes and driving sale prices lower. That's cutting into housing-related revenues from building-permit fees, taxes on contracting and recording property transfers, and even sales taxes. As a result, legislators in Florida, which was at the forefront of the housing boom, plan a special session this month to consider deep budget cuts to offset a projected $1.5 billion funding gap. California forecasts a shortfall of at least $5 billion in next year's budget. And Chicago faces a $217 million gap in its $5.6 billion budget for 2008. In the Kansas City, Mo., area, more than two dozen agencies that serve the homeless are likely to lose at least some of their funding this year. Meanwhile, the tiny town of Sultan, Wash., near Seattle, has had to lay off the janitor at City Hall, forcing office workers to take over bathroom-cleaning duties. JUMP ON THIS PROPERTY NBA all-star Allen Iverson has listed his five-bedroom home in an exclusive Philadelphia suburb for $6.3 million, according to the Wall Street Journal. The 32-year-old guard was traded to the Denver Nuggets last year. Iverson and his wife, Tawanna, paid $5 million in 2003 for the roughly 14,000-square-foot home on four acres, public records show. It's located in Villanova, according to the listing, about 20 miles northwest of the city, on Philadelphia's wealthy Main Line. Built in 1991, the four-level French-style house has arched Palladian windows, a 12-person movie theater, a billiard room and a guest suite with a kitchenette. The master suite is decorated with crystal chandeliers and has a closet with room for 500 pairs of shoes, its capacity presumably depending on their size. The property also has a pool house, a hot tub and a stream. BANKRUPTCY FORCES AUCTION OF LOU PEARLMAN'S ABODE The Orlando-area mansion owned by the founder of the Backstreet Boys and other popular boy bands, was auctioned off for $7.1 million in a bankruptcy auction, reports the St. Petersburg Times in Realtor magazine. About 400 people attended the Orlando auction, which included multiple boxes of memorabilia from the Backstreet Boys and NSYNC. Another 178 bidders participated online. MUSIC MAKES THE WORLD GO ‘ROUND Grammy award-winning producer James Harris III, known professionally as Jimmy Jam, sold his lakefront home in Minnesota in June for $7 million, reports the Wall Street Journal. The 24,000-square-foot home on 3.6 acres had been listed for over a year at $9 million. A longtime Janet Jackson collaborator, Harris and his wife Lisa have relocated to Los Angeles. Their seven-bedroom house is on Lake Minnetonka in Minnetrista, about 25 miles west of Minneapolis. Harris paid $750,000 for the land in 1990, which has about 360 feet of lake frontage, and designed the two-story contemporary house himself. It has barrel-vaulted ceilings, an indoor and an outdoor swimming pool, a 16-seat screening room and two offices, as well as a 12-car garage. While the producer took his numerous pianos and awards with him, he left more than 50 televisions that were bolted to the walls. Harris and his producing and business partner, Terry Lewis, have dozens of platinum records to their name. In addition to producing albums for Janet Jackson, with whom they have won two Grammys, they have worked with Mariah Carey, Usher and Boyz II Men, among others. Earlier in their career they toured with Prince as members of The Time. WHAT GREEN SCREEN WILL WORK ON A TERRACE OR BALCONY A Sky Pencil Japanese holly does well in a container, provided you can keep it moist during dry spells, says the Washington Post, adding that it remains green year-round. Also useful would be Green Giant arborvitae in pots. The key to keeping evergreens looking good in planters is to keep them well watered throughout the year. They may take on a duller shade of green in winter, but they are still effective screening plants. If your outdoor space is in full shade, your options become far more limited. The native holly, Ilex opaca, is more shade-tolerant than others, including the popular Foster's holly. Other options: a cultivated variety such as Old Heavyberry, the Japanese nutmeg yew, Torreya nucifera, or hemlocks, but the will lose their lower branches as they grow upward into the light. WASH THOSE CLOTHES INTO YOUR HAIER Haier, the Chinese appliance manufacturer, has introduced a compact model that attaches by hose to a sink faucet, says the Washington Post. Measuring about 30 inches high and 17 inches wide and deep, it can wash 6.6 pounds of laundry in 21 to 82 minutes, depending on the volume of dirty duds. But you're on your own for drying them. Not on the company's Web site, the unit has a price of around $179. RENT IS A BURDEN FOR A GROWING NUMBER OF FAMILIES A new study by an advocacy group, the Center for Housing Policy, found that the number of working family renters paying more than half their income for housing grew 103 percent from 1 to 2.1 million between 1997 and 2005. The number of working family homeowners paying more than half their income for housing increased at a significantly slower rate, rising 75 percent from 1.4 million to 2.4 million during the same time period. While critical housing needs were most severe in the West Coast cities of Los Angeles, Anaheim and San Diego, as well as the hot East Coast markets of New York and Miami, significant numbers of working families in every metro area - including those in Atlanta, Denver and Indianapolis - pay more than half their income for housing. In several markets, such as Los Angeles, New York and Newark, substantial numbers of working families also live in severely dilapidated housing, the study said. New York was the fourth least affordable rental market, second least affordable homeownership market and the second with critical housing needs. INDEX OF PENDING HOME SALES IS AT SIX-YEAR LOW The forward-looking indicator shows existing-home sales are likely to decline in coming months as mortgage disruptions work their way through the housing market, says the National Association of Realtors (NAR). The Pending Home Sales Index, based on contracts signed in July, fell 12.2 percent to a reading of 89.9 in July from the June index of 102.4, and it was 16.1 percent lower than July 2006, when it stood at 107.1. Commented Lawrence Yun, NAR senior economist: "It's difficult to fully account for mortgage disruptions in the index, and our members are telling us some sales contracts aren't closing because mortgage commitments have been falling through at the last moment," he said. "These temporary problems are primarily with jumbo loans, and there are continuing issues for subprime borrowers, but there are no serious problems for the majority of buyers who qualify for conventional financing or FHA-insured loans." Ups and Downs If any neighborhood has had its ups and downs and ups and downs and ups and downs, it is the East Village. Based on asking prices for property there, the area definitely is on the upswing once again. Another indication of the neighborhood's ups is how many high-priced apartments require a hike up many flights of stairs. Given its distance from subway stops, remoteness from first-rate grocery stores such as those in the Union Square area, and the absence of many other emblems of gentrification, the East Village has a popularity that is perhaps best understood by Generations X and Y and others of an adventuresome disposition and hardy physique. What the neighborhood has is a plentitude of hip bars and restaurants, a park that provides not one, but two, dog runs, and an ambience that teeters between offbeat and authentic. Diversity is its hallmark, Green Thumb pocket gardens are its special charm, a laissez-faire attitude is its character, and its aura of appreciation for the arts, especially, those in the vanguard, are a quality worth celebrating. Today, according to Wikipedia, the neighborhood is bounded by 14th Street on the north, the East River on the east, Houston Street on the south, and Broadway on the west. It lies east of Greenwich Village, south of Gramercy Park and Stuyvesant Town, and north of the Lower East Side. The East Village encompasses the neighborhoods of Alphabet City (Avenues A-D) and NoHo. Its center is probably best considered to be Thompson Square Park. During the 19th century,
the Astors and Vanderbilts had homes in the East Village, but
the waves of immigrants who flooded into New York City in the
1900s - Jewish, Irish and Italian working-class residents who
lived in tenements without running water - soon displaced the
elite, who moved uptown. Among those who have lived there were
Allen Ginsberg, Andy Warhol, Bob Dylan, Charlie Parker, Charles
Mingus, David Wojnarowicz, Debbie Harry, Edward G. Robinson, Emma
Goldman, Iggy Pop, Jack Kerouac, Jackson Pollack, James Cagney,
Jean Michel Basquiat, Jeff Buckley, Jello Biafra, John Coltrane,
Keith Haring, Leadbelly, Lenny Bruce, Leon Trotsky, LeRoi Jones,
Lou Reed, Madonna, Miguel Pinero, Norman Mailer, Patti Smith,
Philip Glass, Sun Ra, the Ramones, William Burroughs and Willem
DeKooning. Yet the East Village was Manhattan's red-light district
at one point. While regional and
national attention was directed toward the East Village hippie
enclave in the 1960s, the area's Puerto Rican residents built
"Loisaida" as a viable and vibrant ethnic enclave. In
1974, two poets and activists, Chino Garcia and Bimbo Rivas, called
their adopted home east of Avenue B, Loisaida to signify the area's
Puerto Rican heritage and identity, according to a University
of Minnesota book titled Selling the Lower East Side.
The name has since been retained. "Spanglish" for Lower
East Side, the sizeable ethnic residential enclave of Loisaida
evolved following two decades of migration flows, urban renewal
policies and a tightening of the city's low-income housing. Residents created associations such as Pueblo Nuevo and The Real Great Society/Charas, Inc., which peaked in the late 1960s. The Real Great Society, the agenda of which included economic empowerment, emerged out of two street gangs - the Lower East Side Dragons and the Assassins, which were centered in the Chelsea neighborhood. Other community-based organizations such as the Lower East Side Puerto Rican Action Committee surfaced as advocates of rapid and often radical social change. The Puerto Rican version of the Black Panthers - the Young Lords Party - was centered in the Bronx but was active on the Lower East Side and other barrios across the city. Local hermandades (brotherhoods), organized around island hometowns, sponsored street parties, dances and extravagant neighborhood processions on religious feast days. In the Lower East Side barrio, local poets and writers recounted the life left behind on the island, the migration narrative, and the hopes and harsh realities of urban life on the mainland. Poems, music and other cultural forms almost always made direct reference to the ancestral home but they also acknowledged a commitment to the Lower East Side as a Puerto Rican community. Loisaida remains a clear presence in the East Village, but gentrification is having an equally clear impact. Until the late 1990s, when low rents outweighed high crime rates and large numbers of artists and students moved to the area, Loisaida dominated Alphabet City. Over the last 100 years,
the East Village/Lower East Side neighborhood has been considered
one of the strongest contributors to American arts and culture
in New York. The East Village has also been the home of cultural
icons and movements from the American gangster to the Warhol Superstars,
folk music to punk rock, anti-folk to hip-hop, advanced education
to organized activism, experimental theater to the Beat Generation.
CBGB on the Bowery was recently shuttered. Club 57, on St. Mark's
Place, was an important incubator for performance and visual art
in the late 1970s and early 1980s, followed by 8BC. In the late
60s and later, the Electric Circus on St. Mark's Place was a counter-culture
magnet, and the vast, long-shuttered Saint became a highly popular
dance venue later on. Today, the Lower East Side still seems to be a young person's neighborhood, with its experimental music clubs, theaters and cutting-edge fashion. New York University is in the area, so there's no shortage of clientele here. Students regularly gather around the Alamo at Astor Place; the Alamo is a 15-foot steel cube designed by Bernard Rosenthal that revolves when pushed. Cooper Union, a school that holds a number of provocative public lectures and exhibits, was established in 1859 just in time for Abraham Lincoln to make a campaign speech in its auditorium. Today, Blue Man Group performs its popular Tubes Off-Broadway audience-participation performance art extravaganza at the nearby Astor Place Theater. The East Village boasts
one of the most varied assortments of ethnic restaurants in New
York City - from the crush of Indian eateries on the south side
of East Sixth Street (sometimes called "Little Bombay")
to McSorley's Old Ale House, a pub that seems unchanged since
it first opened in 1854. Close at hand, in what was once the home
of the Astor Library, the restored Public Theater has been the
opening venue for many now-famous plays. Alphabet City offers
an eclectic, if generally thin, mix of reasonably priced places
to eat, drink, shop and get that tattoo you've always wanted. Below are some of the properties listed by various brokers and visited recently: East Village
Upper West Side
Upper East Side
Elsewhere in Manhattan
Wake Up, Manhattan
In the article below, replete with the Queen's English, the author takes the occasion of a new exhibition in London as an opportunity to critique where buildings in the Big Apple stand in the world. Called "Landscapes of New York," the show opened Sept. 6 and runs through Oct. 3, at RIBA. New
York's skyline is one of the most distinctive in the world, By Tom Dyckhoff TimesOnLine When did New York get so old? Le Corbusier once called the city "a geyser whose fountains leap and gush in continual renewal," youthfully vigorous, of the Zeitgeist, while Old Europe slumbered. These days, though, the fountains trickle; cranes don't swing over Manhattan quite like they used to; every time I visit now I notice how wrinkly the dame is looking these days, the marks of age all the more shocking beside the ebullience of its youth. The city that 70 years ago was the epitome of Modernism had its crown stolen by Los Angeles in the 1950s. These days, if you want fast-paced urbanism head to Shanghai, not Fifth Avenue. Manhattan has become history, permanently frozen as it wants to remember itself, in a Buddy-can-you-spare-a-dime, browny-grey Gotham pallor of neon and Art Deco. That's just how urban history goes. It had its day, between Edith Wharton and the Son of Sam. Now, in its dotage, New York has simply joined the ranks of all the other former greatest cities of the world - Athens, Rome, London, Vienna, Paris, et al - envying those racy whippersnappers in the Far East and occasionally indulging in dodgy midlife makeovers. No bad thing, this. As recounted by Landmarks of New York, an exhibition about Manhattan's heritage opening at the Royal Institute of British Architects next week, many fine buildings were lost before the city that never sleeps started taking afternoon naps. Even as Manhattan was preparing for its golden age, the New York Mirror was lamenting the loss in 1831 of New Amsterdam's old Dutch houses through what Walt Whitman referred to as the city's "pull-down-and-build-over-again" spirit. America's heritage movement began, as Britain's did, in the late 19th century, after the Civil War, when America became suddenly aware of its age, of the importance of writing history - with stone and brick as well as with words. The British movement, though, was given fuel by the "creative destruction" of its Victorian cities' heydays - when society is in tumult, you appreciate the physical markers of its history all the more - a fever that took hold in New York only when it entered its own heyday with the turn-of-the-century skyscraper. It hit its zenith only after 1945, when Manhattan went on a building spree, uprooting its past for sledgehammer "urban renewal." "It was then that this modern city truly awoke to its past, became aware that it had a history," says the fabulously named Barbaralee Diamonstein-Spielvogel, curator of the exhibition, and doyenne of Manhattan's preservationist scene for 40 years. "Before then for most New Yorkers, it had been just go, go, go, don't look back." Diamonstein-Spielvogel is chair of the Historic Landmarks Preservation Centre in New York and, under four mayors, was the longest-serving commissioner for the New York City Landmarks Preservation Commission, the body that designates, or "lists" historic buildings, a body born during the 1960s. This was a traumatic time, she recalls. Parts of the city had already awoken to the negative side of modernisation during the 1940s when Robert Moses, the city's infamous planner, bludgeoned freeways studded with "housing projects" with the very Corbusian aim of unfurring the city's arteries for the greater good - in other words, getting the middle classes to the 'burbs. However,
these freeways sped chiefly through poorer neighbourhoods - for
political expediency. It was only when "creative destruction"
reached centre stage that New Yorkers started thinking that preservationists
were more than just pains-in-the-butt getting in the way of a
good business deal. The philosophical wind was already changing within architecture and planning as within culture as a whole, away from Modernism's broad-brush, towards the "PostModern" individualism of books such as Jane Jacobs's The Death and Life of Great American Cities (1961), a preservationist's gentle call to arms. The era
of preservation had begun, aided by the city's economic collapse
in the 1970s. Nobody wanted to build anything. New York? They
couldn't give it away. "People weren't paying any attention,"
Diamonstein-Spielvogel says. "So we just went ahead with
designations." They were both small - a colonial-style, 18th-century
survivor in Queens, say - and iconic - such as the Chrysler Building
(designated 1978) - together creating an image of "New Yorkness"
at both neighbourhood and city-wide scales. This was also the
moment when preservation got hip, by association. The city may
financially have been on its uppers, but culturally it hadn't
been as vibrant for two decades. Manhattan's cultural swansong was celebrated by the architect Rem Koolhaas in his book Delirious New York (1978), a love letter to a city in which Modernism and PostModernism were colliding in a "culture of congestion" of thrilling unpredictability. When money started flowing through the city's veins again in the 1980s, the philosophical shift was complete. Age, not modernity, was aspiration's endgame. The rise and later dominance of gentrification in the city that gave birth to it meant that preservation was no longer an obstruction to the free market - it generated it. There may be some developers who still regard a landmark preservation order on a tasty building as economic suicide. "Most these days, though, see it brings with it a certain cachet," Diamonstein-Spielvogel notes. "Buildings and neighbourhoods aspire towards inclusion," while it remains the commission's duty to sort the wheat from the chaff, like an architectural bouncer. The flip side, though, was that for two decades the city was in what Frank Gehry calls its "20year torpor. For new architecture, who looked to Manhattan?" The city got fat, conservative and complacent, awakening only, ironically, with 9/11, and then the arrival of Michael Bloomberg as mayor. He was wise enough to note that when a city falls in love with its own image, it dies. Young blood - in architecture as much as economics - keeps a city alive. The list of the architects now working in Manhattan - Foster at Ground Zero; Rogers there and on the mammoth Javits Convention Centre and a huge new Downtown waterfront park; Jean Nouvel; Renzo Piano on the stately new New York Times skyscraper - should have Ken Livingstone green with envy. Yet, equally, this year the Commission has totted up its highest number of preserved buildings for 20 years. Perhaps the loss of the twin towers woke New Yorkers to the fragility of their city. "Maybe now we have some balance again," Diamonstein-Spielvogel says. "Preservation should never be dull, deathly. Instead
I think we've become a mature city. Older, wiser, better looking
than ever before." 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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the
second quarter of 2007 were 3.2 percent higher than they were
in the same quarter of 2006, the lowest annual price change since
the 1996-97 period. OFHEO's purchase-only index, based solely
on purchase price data, indicates less appreciation for U.S. houses
over the past year than does the all transactions HPI. The purchase-only
index increased 2.6 percent between the second quarter of 2006
and the second quarter of 2007, compared with 3.2 percent for
the HPI. However, for the second quarter, the purchase-only index
increase was slightly higher at 0.5 percent (seasonally-adjusted).
Said OFHEO Director James B. Lockhart: "Significant price
declines appear localized in areas with weak economies or where
price increases were particularly dramatic during the housing
boom." Noting that "these newest data show price declines
in many areas that were once at the center of the housing boom,"
Chief Economist Patrick Lawler added, "Nevertheless, in most
states, prices held their ground or increased slightly."
Of the 287 cities on OFHEO's list of "ranked" MSAs,
226 had positive four-quarter appreciation and 61 had price declines.
Eighteen of the 20 cities having the lowest four-quarter appreciation
rates were in Florida and California, where those cities experienced
price declines of 4.2-9.7 percent. 
Mortgage
Bankers Association (MBA). As of June 30, 32 percent of prime
mortgage defaults in Nevada were on non-owner occupied properties,
along with 24 percent of subprime loans. In Florida, the 
said
Jonathan Miller, president of appraisal firm Miller Samuel. Manhattan
is protected somewhat from mortgage woes because co-ops, the majority
of for-sale housing in New York City, maintain strict financial
standards, often requiring buyers to make large down payments
in cash - usually about 20 percent of the sales price. The fallout
could actually benefit an already hot rental market and rental
development. Miller said that he expects a slow September followed
by an even slower fourth quarter, regardless of the credit crunch.
Historically, apartments languish on the market at the end of
the year, and that figure has risen over the course of the several
past years. The total number of listings increased 8 percent between
August and September for the six years starting 2001, Miller Samuel
data show. The only drop in the two month-period occurred between
August 2003 and September 2003, when there was a 7.1 percent decline.
Seasonal trends aside, inventory has dropped dramatically in the
Manhattan market this year. There was a 35.8 percent year-over-year
drop in listings from July 2006 to July 2007, to 4,712 from 7,339.
Manhattan home prices rose this year. If 2007 follows the same
pattern as the previous six years, however, the average price
of a Manhattan home will drop in the fourth quarter; between the
third and fourth quarters of every year since 2001, prices decreased
(except for 2003, when prices between the quarters rose to $1.15
million from $1.13 million, a 1.8 percent uptick), Miller Samuel
data show. For the six-year period between 2001 and 2006, the
average sales price dropped more than 5 percent between the third
and fourth quarters, to $1.19 million from $1.26 million. "The
third quarter, we're still looking at the expectation of an active
market and a brisk level of sales activity but tempered somewhat
from the tightening credit situation," Miller said.
Wall
Street Journal observes. Massachusetts plans to hire additional
tax examiners over the next few months, some of whom will be assigned
to a special "domicile unit" as part of its tax-audit
program. In New York, considered among the most aggressive states
in pursuing such cases, tax officials say they have improved their
techniques for targeting tax dodgers. New York state-tax revenue
collections from residency audits rose to $112.9 million in fiscal
2007 from $83.4 million a year earlier, although the number of
audits is down. Of course, people who change states are still
subject to federal income tax rules, but state income tax rates
can run as high as 10.3 percent in California and 8.97 percent
in New Jersey. Besides Florida, Nevada and Texas, other states
with no state income tax for individuals include Washington, Alaska,
South Dakota and Wyoming. New Hampshire and Tennessee don't have
a broad wage-based income tax but do tax interest and dividends.
