Items of Interest U.S. RENTS KEEP ASCENDING They rose 1 percent in the first three months of 2008, according to Bloomberg News in Realtor magazine. It was the 24th consecutive quarter that rental property rates have risen, according to New York-based real estate research firm Reis Inc. The last time rents fell was the first quarter of 2002, when they declined by 0.2 percent, according to Reis. A soft housing market beset by stricter loan terms and falling home prices is the "dominant driver" pushing people to rent apartments, said Sam Chandan, chief economist at Reis. New York had the highest average rent at $2,790 a month, followed by San Francisco at $1,801, Fairfield County, Conn., at $1,759 and Boston at $1,620, Reis said. HOUSING STARTS CONTINUE TO FALL
According to the U.S. Commerce Department, total housing starts
dropped nearly 12 percent to a seasonally adjusted annual rate
of 947,000 units between February and March, while single-family
THIS PURCHASE COULD DEPRESS HER ALL OVER AGAIN Brooke Shields and her husband Chris Henchy have gone to contract to buy a Greek Revival townhouse on West 10th Street, says the New York Post. But it will require some time and money to restore it to a sparkling single-family residence. The vacant four-story, 22-foot-wide home, with a $5.6 million asking price, is presently configured with four apartments with 18 rooms, including four kitchens and eight fireplaces. There is a south-facing 800-square-foot garden, plus the original wide-plank floors, mantels and moldings. Shields and her husband, who also have a West Coast home, will continue residing downtown with their two children until the new place is renovated. WAS IT LOVE AT FIRST SIGHT Andy Roddick, just engaged to a 20-year-old bikini model named Brooklyn, has bought his first Manhattan apartment, a condo at East 22nd Street near Gramercy Park that was listed for $1.195 million, reports the Observer. An old brewery, the one-bedroom unit has one bath, a dining area off the kitchen and a five-by-five walk-in closet. The apartment has exposed wood beams and brick, plus a lofted storage space above that dining gallery. Is he leaving Texas for Manhattan? "I'm a homebody," he said in 2005. "Give me an option of going gallivanting around New York City or going out on the lake in my boat and listening to music, the boat is looking good to me." A BANKRUPT ART DEALER IS SHEDDING PROPERTY Lawrence Salander is in negotiations to list his Millbrook, N.Y., second home for $6.2 million, a person familiar with the talks says, according to the Wall Street Journal. Salander, once one of New York's most prestigious art-world figures, now faces a host of irate clients and business partners who claim he and his gallery owe them tens of millions of dollars for failing to pay clients for works he sold on consignment and for other improprieties. He filed for protection in November under Chapter 11 of the U.S. Bankruptcy Code. Salander has already listed for $25 million his six-story townhouse on Manhattan's Upper East Side, about half a mile north of the now-shuttered Salander-O'Reilly Galleries. Millbrook is a popular second-home destination about 90 miles north of New York City. The former dealer paid $4.75 million for the Manhattan house in 2004. As for Salander's gallery, the New York Times reports that the property leased by the gallery just went on the market at the highest offering price ever for a Manhattan mansion: $75 million. Needing a bit of work, the house, at 22 East 71st St., is 45 feet wide, rises five stories and has an English basement. It is topped by a green mansard roof and a series of balconies surrounded by stone balustrades. Containing about 22,000 square feet (with the right to build about 13,000 square feet more), the building has had its upper floors used for offices in recent years. The building's owner is Aby Rosen, who paid only $15.65 million for it in 2004. THE VIEW MUST BE SOMETHING ELSE Joy Behar has bought one apartment at Astor Court on the Upper West Side for approximately $3.5 million and is selling another unit in the building, according to the New York Post. The talk-show co-host already owns two apartments in the ornate building constructed in 1916 by Vincent Astor, the last husband of Brooke Astor. On Broadway between 89th and 90th streets, the building features a large courtyard garden. LEONARDO'S ROOM(S) The actor, in Boston with Martin Scorsese filming Shutter Island, just bought a Hudson River-facing apartment at Riverhouse, an ecofriendly Battery Park City development that's been LEED-certified gold (the second-highest rating for green buildings), reports New York magazine. He was spotted numerous times arriving at the site's sales office on his bike. It's a great fit for DiCaprio, one of the first megawatt celebrities to go green: The builders will use only non-pollutant materials and finishes, and residents will be provided with twice-filtered air and solar-powered energy. THE HOTEL WASN'T THE QUEEN OF MEAN'S ONLY PALACE Leona Helmsley's Greenwich, Conn., estate is officially on the market with a hefty $125 million price tag, reports the Wall Street Journal, noting that property taxes total more than $1.8 million. Known as Dunnellen Hall, the estate of more than 40 acres was at the center of Helmsley's 1989 federal tax-evasion trial, when she was accused of illegally billing her company for more than $3 million of property renovations. The former model died in August at age 87. The 1918 manor house of more than 20,000 square feet has views of the Long Island Sound and features a carriage house and pool house. Originally built at a cost of $1 million, the place has marble floors, limestone walls, 15th-century fireplace mantels and a walk-in silver closet. If only those walls could talk. Or, maybe it's better that they can't. JUMBO MORTGAGES JUST LOOSENED UP Freddie Mac has agreed to purchase billions of dollars of new conforming jumbo mortgages with original loan amounts up to $729,750 from Wells Fargo Home Mortgage, Chase, CitiMortgage and WaMu. Freddie Mac conforming jumbo mortgages can be used to finance properties in hundreds of high-cost markets designated in the Economic Stimulus Act of 2008. As a result, qualified borrowers can now apply for an array of fixed-rate or adjustable rate conforming jumbo mortgages that will be less expensive than non-conforming jumbo loans in high-cost markets. Borrowers can use Freddie Mac conforming jumbo mortgages to finance up to 90 percent of a property's value. Freddie Mac Chairman and CEO Richard Syron said the quasi-government organization expected conforming jumbo mortgages to have rates that are as much as half a percentage point below the jumbo market rate. While specific product availability may vary by lender, Freddie Mac has said it will buy 15-, 20-, 30- and 40-year fixed-rate, fully amortizing conforming jumbo mortgages; 30-year fixed-rate mortgages with 10-year interest-only periods; fully amortizing 5/1 adjustable-rate mortgages (ARMs) and 5/1 ARMs with 10-year interest-only periods. Qualified borrowers also can obtain cash-out refinance conforming jumbo mortgages that provide a maximum cash-out of $100,000. RATES FLATTEN The 30-year fixed-rate
mortgage (FRM) this week was unchanged from last week at 5.88
percent. Last year at this time, it was 6.17 percent. The 15-year
FRM this week of 5.40 percent was down from FORECLOSURE ACTIVITY SKYROCKETED LAST MONTH U.S. foreclosure activity increased 57 percent in March compared with the same month a year ago, data provider RealtyTrac reported, according to Inman News. Nevada continued to lead the nation with one foreclosure filing for every 139 households, nearly four times the national average. At the national level, there were 234,685 total foreclosure filings in March, which includes filings for properties in default, scheduled for auction and real-estate-owned, or REO, foreclosure properties that have been repurchased by a bank. The national rate of foreclosure in March was one filing for every 538 households. The national foreclosure rate was up 5 percent in March from the previous month. Said James J. Saccacio, chief executive officer of RealtyTrac: "On a year-over-year basis, default notices were up nearly 57 percent and bank repossessions were up nearly 129 percent, but auction notices were up only 32 percent, indicating that more defaulting homeowners are simply walking away and deeding their properties back to the foreclosing lender. This deed-in-lieu-of-foreclosure process allows the lender to take possession of a property without putting it up for public foreclosure auction." STATES ARE INDIVIDUALLY BATTLING FORECLOSURES They are experimenting with a broad range of solutions, including emergency loans and agreements to limit high interest rates, says the New York Times. The result is a rapidly changing patchwork of local approaches, some far-reaching, others modest, according to a survey issued by the Pew Charitable Trusts. Among other measures, 20 states have created intervention programs, 13 have set up counseling hot lines, 14 have assembled task forces and nine have established funds for emergency loans or refinance loans, totaling $450 million. The states face an uphill battle, in part because of resistance from the lending industry to new regulation. Only nine states require mortgage brokers to consider the best interests of borrowers when making loans, and only seven require lenders to assess borrowers' ability to repay. At the same time, state governments are hamstrung by declining revenues as a result of the housing meltdown. REFIS PUSH UP MORTGAGE ACTIVITY The Mortgage Bankers Association says loan applications rose 2.5 percent for the week ending April 11 over the previous week. On an unadjusted basis, the increase was 2.7 percent and, compared with the same week one year earlier, up 16.4 percent. Refinancings went up 5.2 percent, and purchases grew by 0.8 percent in a week. The refinance share of mortgage activity increased to 53.5 percent of total applications from 52.2 percent the previous week, and the adjustable-rate mortgage (ARM) share slipped to 6.0 percent from 6.5 percent. GREENSPAN SEES END OF PRICE DECLINES THIS YEAR The former Federal Reserve chairman said the drop in U.S. home prices will probably end "well before" early next year as the number of houses on the market diminishes, aiding an economic rebound, according to Bloomberg.com. "It will not be until early 2009 that we will get close to having eliminated most of this" home inventory, the fallible forecaster told a conference in Tokyo. "But it is very likely that home prices will stabilize well before that." Once the markets start to stabilize, especially if the real economies don't go into a severe recession, "we can expect a recovery to begin to take place," Greenspan, 82, said via satellite from Washington. "It will be slow, it will be hesitant." Asking himself whether the country has reached a point where prices are stable, he said the answer would not be known for a couple of months. Said he, "It looks as though we're going to get a very large rate of liquidation, but not until the second half of this year." WITH PENDING SALES SLIPPING, THE NAR EXPRESSES OPTIMISM Little change is expected
in sales of previously owned homes over the next few months before
improving notably during the second half of the year, according
to the latest forecast by the National Association of Realtors
(NAR). "Existing home sales could start to show a sustained
increase within a few months unless there are some additional
economic problems or excessive inflationary pressure," says
Chief Economist Lawrence Yun. "We're looking for essentially
stable sales in the near term, AREAS WITH MODERATE PRICE RISES SHOW LESS RISK FOR DROPS The Housing markets that didn't experience steep run-ups in prices during the housing boom are starting to show a reduced risk of price declines in the next two years, according to a risk index published by PMI Mortgage Insurance Co., says Inman News. The chance that housing prices will be lower in two years declined in 32 of the 50 largest U.S. housing markets during the fourth quarter, PMI said. That's an abrupt turnaround from the third quarter, when PMI said the risk of price declines increased in 39 of the 50 largest markets. By PMI's measure, there was a greater than 50 percent chance of price declines in 14 of the nation's 50 largest housing markets, up from 13 in the previous quarter. Risks continue to increase in states where growth in house prices "significantly" exceeded historical norms during the housing boom, including markets in Florida, California, Arizona and Nevada. But in areas of the country where prices grew at a "more sustainable rate," the risk that prices will fall in the next two years began to decline slightly during the fourth quarter. "We still expect the housing market to stabilize sometime in the second half of this year in response to expansionary monetary and fiscal policy, while builders continue to reduce the number of single-family housing starts into 2009," PMI analysts said. "If this occurs, then the inventory of unsold homes should peak later this year and fall throughout next year. As a result, the downward pressure on national house prices should begin to abate in the second half of 2008. It is likely, however, that prices will continue declining well into 2009, as inventories will still be large (even if falling)." NO RECOVERY IN REMODELING ACTIVITY SEEN THIS YEAR Falling consumer confidence and a weakening economy are inhibiting remodeling spending, according to Harvard's Joint Center for Housing Studies. The Leading Indicator for Remodeling Activity (LIRA) reports that homeowner spending for home improvement activity will continue to decline, falling by an annual rate of 4.8 percent through the end of 2008. "Spending on home improvements continues to be sluggish, as homeowners respond to falling home prices," notes Nicolas P. Retsinas, director of the Joint Center for Housing Studies "The fall-off in pending home sales suggests a long and slow recovery." It looks "unlikely" that there will be any improvement in the remodeling market until 2009, adds Kermit Baker, director of the Remodeling Futures Program of the Joint Center. "Currently, the second half of this year is shaping up to be weaker than the first half," he prognosticates. HE'D PROBABLY TRY TO SELL THAT BRIDGE AS WELL A brazen real estate agent who was fired after his boss realized he didn't have a license kept right on pushing properties, pulling off a series of scams with customers to whom he showed apartments and then pocketed their fees has been arrested on related charges, says the New York Post. Hassan Abadi, 26, also was indicted for swindling a woman out of a $10,000 loan, swiping a pricey pair of earrings, skipping out on a hotel bill - and even trying to buy a puppy with a bank card he allegedly stole, sources said. "He's a very crafty liar," said Abadi's duped ex-boss, George Goshadze, of the New York City Dwellers real-estate company. "So many people have been scammed." Goshadze began getting suspicious of Abadi when the boss couldn't find Abadi's license in state records, authorities said. When Goshadze began putting the squeeze on Abadi, the employee allegedly began pulling off a series of scams involving an apartment at 28 E. 14th St., according to the Manhattan district attorney's office. Using keys he'd stolen from City Dwellers, prosecutors charge that in early March, Abadi met three different women at that apartment and accepted checks totaling $785 in application fees. He then had them fill out forms detailing their bank accounts and Social Security numbers. He failed to respond to subsequent calls from the women, who then learned he had been fired on March 14, the complaint said. Even the day after he was canned, Abadi allegedly pulled off a similar swindle, accepting $250 in application fees from a woman to whom he showed an Upper East Side apartment, another complaint said. BUYER'S REMORSE DOES NOT SWAY A JURY A Carlsbad, Calif., real estate broker who showed a couple dozens of properties before they plunked down $1.2 million for a home near a golf course fulfilled his fiduciary duties to his clients and was not negligent, a jury has ruled, says Inman News, citing the Voice of San Diego. RE/MAX agent Mike Little was sued by his former clients, Marty and Vern Ummel, who claimed they paid $150,000 too much for their home in northern San Diego County. The Ummels claimed Little failed to tell them about similar homes nearby that sold for less. Little's attorney, David Bright, said the agent was unfairly blamed for the decline in value of the Ummel's house after they purchased it in July, 2005. Bright argued that homes that sold for less than the couples' had features that made them less desirable. After a two-week trial, a jury found that Little did not breach his fiduciary duty to the Ummels, providing assistance in their three-month house hunt that included advising them on offers they made on other homes. SO YOU WANT TO BE IN PICTURES By renting one's home out for TV, movie and commercial shoots, as well as magazine editorials, owners can recoup thousands of dollars, says the Hollywood Reporter. This realization has caused location companies to be flooded with calls from people eager to list their properties. Most surprising, say the call recipients, is that a large percentage is coming from an upper echelon of sellers: multimillionaires with multimillion-dollar homes. "Literally no one - and I mean no one - would allow their homes to be used for locations when they went on the market because they expected a lot of activity and quick sales," says former TV exec and Malibu Locations' co-owner Marshall Coben. "Then, all of a sudden, we started getting calls from the realtors - the same ones who would never return our calls." One of those calls was regarding an estimated 20,000-square-foot home in the coastal suburb of Pacific Palisades with city views. "Mansions in Hollywood and the Hills are one thing," says Coben, "but you don't get mansions in the Palisades. And here is this home sitting on the market for around $20 million. Needless to say, these are not houses that would normally be in the business of filming, since a few thousand dollars here or $100,000 there, in income, is generally insignificant to the owner of a $20-million home." Says he: "It really speaks to the desperation of the real estate market right now that these homes are competing with each other for the few thousand dollars a film shoot can bring in." WEAK HOUSING MARKETS ARE SURFACING GLOBALLY In Ireland, Spain, Britain and elsewhere, housing markets that soared over the last decade are falling back to earth, the New York Times observes. Property analysts predict that some countries will face an even more wrenching adjustment than that of the United States, including the possibility that the downturn could become a wholesale collapse. To some extent, the world's problems are a result of American contagion. As home financing and credit tightens in response to the crisis that began in the subprime mortgage market, analysts worry that other countries could suffer the mortgage defaults and foreclosures that have afflicted California, Florida and other states. Once-sizzling housing markets in Eastern Europe and the Baltic states are cooling rapidly as nervous Western Europeans stop buying investment properties in Warsaw, Tallinn, Estonia and other real estate Klondikes. Further east, in India and southern China, prices are no longer surging. With stock markets down sharply after reaching heady levels, people do not have as much cash to buy property. Sales of apartments in Hong Kong, a normally hyperactive market, have slowed recently, with prices for mass-market flats starting to drop. In New Delhi and other parts of northern India, prices have fallen 20 percent over the last year. Much of the retrenchment seems to be following the basic law of gravity: What goes up must come down. With low interest rates helping to inflate housing bubbles in many countries, economists said the confluence of falling prices was predictable, if unsettling. SHORT SALES ARE PROVING TO BE TROUBLESOME With a short sale, the borrower sells the home for less than the amount owed and the lender forgives the difference, notes the Wall Street Journal. The sale releases borrowers from their obligations. For mortgage holders, it can be less costly than foreclosing - and could provide protection against future price drops. For buyers, it can be a chance to buy a home at an attractive price. As the housing market continues to weaken, the number of short sales is edging upward: They currently account for approximately 18 percent of home sales. But it can be extremely difficult to get these deals completed. Unlike a traditional real-estate sale, a short sale requires the approval of not only the buyer and the seller, but also the mortgage-servicing company. In many cases, loans have been packaged into securities - which means that the mortgage servicer must consider the interests of the investors who own the loans. Deals can fall apart because the mortgage company rejects the price that has been agreed upon by the buyer and seller. Long delays in getting an answer from the mortgage servicer are another obstacle. The process can be so frustrating that some real-estate agents and home buyers have decided that a short sale isn't worth the effort. INEVITABLY, TRENDS ARE CHANGING FOR COUNTERTOPS The trend now, designers and suppliers told the New York Times, is toward warmer and softer materials used centuries ago - for example wood, copper and soapstone. For a more modern look, glass, composites and recycled materials are being used. The most popular woods for counters today are walnut, teak and wenge, sometimes paired with copper. Both require more maintenance than granite. Some people are choosing seamless sheets of textured glass. ThinkGlass has a line of luminous and glacial-looking solid glass countertops that the company said were more sanitary than granite and just as durable, though a spokeswoman hedged on whether a can of chickpeas falling from an overhead cabinet would chip it. New terrazzo products made of recycled glass are also generating enthusiasm. Vetrazzo makes a product using large and reflective shards of brilliantly colored glass. IceStone has a similar product created with smaller shards of glass, giving it a flecked appearance. Both are as durable as granite. Sales of quartz composite surfaces, also known as engineered stone, by manufacturers such as CaesarStone and Silestone, have steadily increased over the past five years, according to the companies and to kitchen designers. Quartz composite has the look and durability of stone because it is mostly stone - more than 93 percent quartz mixed with resin and pigments. Another import that is gaining interest is glazed Volvic lava stone by the French company Pyrolave. The colors are rich and glossy, reminiscent of French enameled cookware. For the environmentally conscious, there are kitchen counters made of recycled paper or sustainable wood pulp by companies such Richlite and PaperStone. 'TIS THE SEASON TO HELP YOUR HOUSEPLANTS As warmer temperatures and longer days prod them into growth, the urge to burgeon allows the plants to recover quickly from the trauma of repotting and pruning, notes the Washington Post. So line up your ficus, citrus, philodendrons and dieffenbachias, and examine their feet. Look for signs that the plant is pot-bound, such as using its roots as stilts to try to escape its container. Here's another indicator: If a plant never seems to get enough water, its roots may have displaced most of the soil. And the surest sign is the appearance of roots through the drainage hole. Don't take a plant in an eight-inch pot, say, and put it in a 12-inch one: Too much soil will stay wet, even in a well-drained pot, and the roots will melt away. A truly pot-bound character may be hard to release. Submerging the pot in water for half an hour may help, as will taking a knife and breaking the contact between the roots and the inside of the pot. A root ball that is a solid mass should be cut back on all sides by about one-third; then it can go back into the same pot. Don't remove all the old soil: You want the root ball to remain intact, but you must use fresh potting soil when backfilling. Don't use compost, garden soil or topsoil, which are too heavy or unsterile for houseplants. Fresh potting soil, which contains soil lighteners such as perlite, will restore the nutrients and soil texture that the new roots need. A little balanced fertilizer will help as the plants develop this spring, but don't overdo it. This is also a good time to trim plants as well. AND A GOOD TIME TO START VEGGIES IN POTS If New York Times columnist Anne Raver had only a few pots on a terrace, or a tiny outdoor plot, she writes that she would grow one big pot or a square foot of mesclun, a mix of salad greens that includes arugula, Japanese mustard, endive, and red and green lettuces. Simply fill a pot with a mix of potting soil and organic compost, and moisten well. Sprinkle the seeds over the surface, cover with a quarter inch of compost and water lightly to moisten the seeds. As the first baby greens grow, pull out any weeds and thin out the mesclun, eating the leaves you pull. Start more greens every couple of weeks and move the pots into semi-shade when hot weather arrives. Or switch to heat-tolerant lettuces, like oak leaf and buttercrunch. Fill a few smaller pots with herbs: Italian parsley, Genovese basil, dill, oregano, bay and rosemary. Plant one or two no-fail tomatoes, one each to a large pot, or one to a two-square-foot plot: one cherry type, like Mexico Midget, Jaune Flammé or Sungold, and a big juicy producer like Big Beef, Better Boy or Rutgers. Add a Meyer lemon in a big pot if you have a sunny spot where it can winter indoors and you can enjoy organic lemons all year. Edible flowers such as her favorite, Empress of India nasturtiums, can be tucked into pots or garden beds and plucked as a spicy garnish for salads. REBNY RECORDS SOARING PRICES IN THE FIRST QUARTER The average sales
price of a home in New York City reached $853,000, an increase
of 28 percent over the first quarter of last year, according to
the Real Estate Board of New York (REBNY). DON'T JUST THROW AWAY THAT OLD VIKING OR SUB-ZERO Enterprising recyclers such as Steve Feldman are persuading homeowners in the New York area to donate their unused or lightly used appliances - even top-end ones - to the charity he founded called Green Demolitions. He sends in a crew to dismantle and remove the kitchens, and provides paperwork for a charitable tax deduction. Then he sells the appliances and cabinets for a fraction of their original retail price through his stores in Bethel, N.Y., Honesdale, Pa., and Norwalk, Conn. and through his Web site, greendemolitions.org. In New York City, the nonprofit organization Build It Green! also offers kitchen items as well as other recycled materials. Justin Green, its program director, said a Valcucine kitchen, a Dada kitchen and a Sub-Zero refrigerator are currently available. The organization will not dismantle kitchens for donors but hopes to do so by midsummer. Profits go to the Solar One Education Center in Manhattan. Visit bignyc.org for more info. ROACH-R-GONE, SAYS THE CITY'S HEALTH DEPARTMENT The department is reporting progress in the war on cockroaches, says the New York Daily News. A department study found nearly 30 percent of all city households report having cockroaches, and noted that the problem is concentrated in low-income neighborhoods. In the past, infestation affected households at all income levels. Exterminators reported their belief that the roach problem is under control, thanks to new technology. "There are a lot of options," said Andy Linares, president of Bug Off in upper Manhattan. "Liquids, gels, aerosols, baits, granulators, growth regulators - all keep a lid on roaches." Vacuuming, steam-cleaning and over-the-counter insecticides also help, he said. MOST FORECLOSURE FILINGS IN 2007 COULD AFFECT TENANTS Nearly 60 percent of the 15,000 foreclosure filings in New York City in 2007 were for two-to-four- family or multi-family buildings, leaving a significant number of renters threatened by foreclosure. A conservative estimate puts the number of renter households impacted at about 15,000. A new analysis by NYU's Furman Center for Real Estate and Urban Policy finds that a majority of the nearly 15,000 mortgage-related foreclosure filings in New York City in 2007 were on multi-family buildings, and only about 40 percent were on condominiums or single-family homes. The analysis shows that over 30,000 households (or about 76,000 New Yorkers) are living in properties that entered the foreclosure process in 2007. The Center conservatively estimates that more than 15,000 of these households (or some 38,000 New Yorkers) were living in rental units. Most tenants living in buildings going through foreclosure face eviction if the property is sold at auction. Nearly 11,000 of the 15,000 renter households living in buildings that entered foreclosure in 2007 reside in Brooklyn and Queens. IT APPARENTLY IS NICE WORK IF YOU CAN GET IT Seven city building inspectors have come forward over the last 11 months to report being offered bribes of $45-3,000 to overlook violations during routine property inspections, the Department of Investigation reports, according to the New York Post. Nine people were arrested, including a building superintendent, two dry cleaners, three contractors, a Brooklyn restaurant owner and a Queens homeowner. Authorities said David Lima, 38, superintendent of 69 W. 107th St., offered two bribes totaling $3,000 after he was caught doing unlicensed electrical work. The owner and an employee of Alice's Dry Cleaners, 74 Second Ave., each allegedly gave $200 to an inspector who detected unacceptable carbon monoxide readings from the store's boiler. GO NORTH, YOUNG MAN (AND WOMAN) From 2001 through 2006, more than 23,380 Manhattanites relocated to the Bronx, according to an analysis by the Observer of I.R.S. data. Every year, the Bronx led the three other outer boroughs in net gains of Manhattanites. That includes Brooklyn, traditionally perceived as the natural next stop in a priced-out Manhattanite's real estate evolution. But Brooklyn has consistently run second to the Bronx this decade as an in-city relocation destination; Queens and Staten Island have run a distant third or fourth. Between 2005 and 2006, the last year I.R.S. data was available, 4,680 Manhattanites relocated to the Bronx and 3,731, to Brooklyn. From 2005 to 2006, just over 10,000 Manhattanites moved to the outer boroughs. BUILDERS ARE NOT FEELING ANY WORSE THAN IN MARCH Their confidence in the market for new single-family homes remained unchanged for a third consecutive month, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI held at 20, up marginally from the record low of 18 set in December of 2007. THE RICH SEE AN OPPORTUNITY IN THE HOUSING MARKET While many average Americans are skittish about the housing market, some of the country's richest citizens see the current conditions as perfect for buying, according to the Annual Survey of Affluence and Wealth in America, says the Wall Street Journal. Released by American Express Publishing and Harrison Group, a market research and consulting firm, the study found that 77 percent of the wealthiest people surveyed think real estate presents a "real opportunity" right now; 40 percent said they are in the market to acquire real estate this year. In the survey, "wealthy" meant having discretionary household income of more than $500,000 a year. Other survey participants were "upper middle class," with incomes between $100,000 and $149,000; "affluent," with incomes between $150,000 and $249,000; and "super affluent, with incomes between $250,000 and $499,000. The wealthy aren't alone in their belief that the real-estate market represents a buying opportunity: 67 percent of the upper-middle-class participants also agreed with that statement, as did 72 percent of the affluent and the super-affluent. "There are bargains out there . . . severe price pressure across the board," said Jim Taylor, vice-chairman of Harrison Group. That said, at the very top of the market, there is an abundance of buyers and that is holding prices steady at that level, he added. Still, the wealthiest were the most committed to buying soon. Only 17 percent of upper-middle-class participants said they were in the market to buy real estate this year, while 24 percent of the affluent and 26 percent of the super-affluent said the same. Is Your Realty Clock Ticking? In the universe of real estate, the question of whether this is the time to buy or sell is always getting asked. That the issue reverberates among prospective buyers and sellers is understandable, especially now. What day doesn't go by with stories in the news media about the housing crisis, the credit crunch, a recession, Wall Street layoffs locally and job loss nationally, foreclosures, and bailouts? Folks want to know where prices are headed. Some sellers perceive that the market is chilled, that buyers are nowhere to be found and that putting their property on the market should wait. For their part, many buyers perceive that waiting for the market's nadir is the best course to follow. Yet all we can know is the past, and it is not reliably precedent. What characterizes Manhattan are data that seem only to confuse the issue:
If the Manhattan market has started to cool, if, one reason among many may well be the uncertainty that buyers and sellers are experiencing. Consumer confidence has dipped nationally, the national economy is suffering, and worries about the fallout from the financial industry's monumental problems have had a noticeable effect. Although Wall Street employment represents 5 percent of the jobs in New York City, the industry's compensation accounts for 23 percent of its residents' income and, in general, a disproportionate number of sales at the high end. (So, three quarters of the city's residents remain well paid and able to purchase without fear.) And the credit crunch is making everyone question whether mortgage money will be available to buyers. Who is now qualified for a jumbo loan, at what cost and in what amount of time to receive underwriting? No wonder the local market is jittery. Let us ask these questions: When will the stock market recover to its former highs? When will the dollar regain strength? What will mortgage rates be in six months? In a year? In two years? When will the credit crunch end? Are we in a recession? If so, when will it be over? Implicit in the questions above is this overriding one: Can you time the market? It has been proved over and again that market timing for stocks cannot be successful (though of course contrarians can make out like bandits). In addition, most forecasts about the bursting of housing bubble (especially by Robert Shiller), were way off the mark - by years. So, if you don't know when the stock market will recover, in the months and years to come or the cost of lending in the future, how can you also know the shape of the real estate market, which is, of course, always local? What will be the timing there? You cannot know. It would be nice to catch the top as a seller or the bottom as the buyer - you know, buy low and sell high. But buying lowest and selling highest is virtually nothing but a matter of luck. That truth means that almost everyone will be buying or selling when the market is on the way up or down. If price were the only variable, the cost of doing so in either direction would be about the same, but individuals vary in their tolerance for either situation. Even if it were not a matter of luck, timing the market comes with serious consequences beyond levels of anxiety:
For those who are only buying, they can put an end to wasting resources on rent. Bernice Ross suggests several reasons that those who rent may want to think twice about sitting on the sidelines. Although she uses an example that is far too low for Manhattan, her reasoning is worth considering. Says she: "In most cases, people who lack a mortgage pay more federal and state income taxes than those who qualify for a mortgage deduction. You can use a mortgage calculator to illustrate this point. For example, assume that a buyer is currently paying $1,500 per month on a rental. If the buyer purchases a $300,000 property with $30,000 down and a fixed-rate 30-year mortgage of $270,000 at 6.25 percent, the buyer actually nets $24,262 more, assuming that appreciation keeps pace with inflation, the buyer owns the property for eight years, and is in the 28 percent bracket." In addition, current renters forgo the chance to reap the advantages of appreciation, at least in a long term that compensates for any short-term weakness. For folks who are buying and selling in the same market - say, from one Manhattan property to another - none of the issues raised here is pertinent: If prices decline on your own property, so will they be lower on those that you would like purchase, though mortgage rates and availability may change significantly. Most people understand that a home has many dimensions. For that reason, there is no need to postpone the gratification of improving a standard of living. After all, a new home is not only, not even primarily, an investment. It is foremost a place to live and enjoy. Waiting for certainty is really nothing more than trading today's known risk for tomorrow's unknown risk. You may hear your realty clock ticking clamorously, and the way to quiet it may, for you, mean acting aggressively now rather than waiting passively for a future that may hold worse news than today. Yes, there are imponderables. That defines the future. Always has and always will. Indeed, many folks find that any certainty is almost always easier to bear than uncertainty. But there are opportunities to be missed now, and, who knows, missed forever. Besides, anyone who plans stay in the same home for several years will overcome any of the market's cyclical effects. Apropos the foregoing little screed, it seems that sellers are beginning to approach pricing with a sense of realism. "Beginning" is the key word, but a recent tour around town of listings by various brokers suggests that a new mindset, while not prevailing, is emerging. The sample below, of which some will appeal to only a small segment of the market, appears to prove the point: East 30s
Upper East Side
Upper West Side
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!
©
2007 Service You Can Trust |
||
starts
fell 5.7 percent to a rate of 680,000 units. "Builders in
the field continue to report that prospective buyers are visiting
their model homes, but most are either unwilling or unable to
go forward with a purchase given the downward trends in employment
and home values as well as the tightening of mortgage credit conditions,"
commented Chief Economist David Seiders of the National Association
of Home Builders. Building permits slid 6.2 percent, and multifamily
construction continued to display extreme month-to-month volatility
in starts and permits with respective 24.6 percent and 5 percent
declines. Both housing starts and building-permit authorizations
were at the lowest adjusted annual rates in 17 years, and the
rate of single-family starts and building permits dropped for
the 12th consecutive month. The seasonally adjusted annual rate
of housing units authorized by building permits plunged approximately
40.9 percent year-over-year, while housing starts were down approximately
36.5 percent.
last
week's 5.42 percent and 5.89 percent a year ago. Five-year Treasury-indexed
hybrid adjustable-rate mortgages (ARMs) averaged 5.48 percent
this week, down from 5.56 percent the previous week and 5.92 percent
the prior year. One-year Treasury-indexed ARMs were 5.10 percent
this week, down from 5.18 percent. At this time last year, the
one-year ARM averaged 5.45 percent. "Interest rates for fixed-rate
mortgages held relatively steady for a second week, while ARM
rates continued to decline amid market speculation that the Federal
Reserve (Fed) may cut rates again at its upcoming Committee meeting,"
said Frank Nothaft, Freddie Mac vice president and chief economist.
"March's housing starts were the lowest since March 1991
and consumer sentiment in April fell to a 26-year low while homebuilder
confidence remains near record lows. Currently, the federal funds
future contracts suggest nearly a 100-percent probability that
the Fed will cut rates at the end of this month."
before
higher mortgage loan limits translate into more sales in high-cost
markets. The wider access to affordable credit should increase
sales activity notably this summer as pent-up demand begins to
be met." The Pending Home Sales Index, a forward-looking
indicator based on contracts signed in February, slipped 1.9 percent
below January and 21.4 percent lower than the February 2007 finding.
"The slip in pending home sales implies we're not out of
the woods yet, though an era of successive deep sales declines
appears to be over," Yun maintains, saying that existing-home
sales are likely to rise from an annual pace of 4.9 million in
the first quarter to 5.9 million in the fourth quarter. With relatively
weak activity in the first part of the year, existing-home sales
for all of 2008 is forecast to increase by 6.6 percent. "Exceptionally
weak home sales related to jumbo loans problems will depress home
prices in the first half of the year, but steady liquidity improvements
in the conforming jumbo-loan market will help prices recover in
the second half of the year," Yun says. He adds that the
aggregate existing-home price will probably ease by 1.4 percent
to a median of $215,800 for all of 2008 before rising 3.7 percent
to $223,800 next year. New-home sales are projected to fall 25.7
percent in 2008 before rising 4.6 percent next year. Housing starts,
including multifamily units, are estimated to drop 26.3 percent
this year, and slip another 0.5 percent in 2009. The median new-home
price will probably fall 3.6 percent to $238,400 in 2008, then
rise 4 percent next year to $247,800, according to the NAR.
Manhattan
had the highest increase in the average sales price of a home:
41 percent, bringing the average to $1,607,000. Brooklyn had the
second highest average home sales price increase in the city;
average home prices there climbed 3 percent. Manhattan had the
highest average sales price of an apartment: $1,552,000, a 40
percent more than the same quarter of 2007. Neighborhoods had
various percentage increases quarter-to-quarter. The average apartment
sale price on the Upper West Side had the biggest change, up 96
percent to $2,098,000. That neighborhood was followed by Murray
Hill, up 92 percent to $1,072,000 and Midtown West, up 50 percent
to $1,988,000. "These increases were driven by brisk sales
in new developments in these locations." REBNY said. The
organization noted that the highest average sale prices were in
Soho ($2,304,000) and Tribeca ($2,224,000), reflecting the generally
larger units there. 
