Items of Interest SALES OF PREVIOUSLY OWNED HOMES LEAP UP Existing-home sales jumped 5.5 percent in September from August, bringing the annual rate 1.4 percent higher than a year ago. Commented Chief Economist Lawrence Yun of the National Association of Realtors: "The sales turnaround, which began in California several months ago, is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island." He went on to note that inventory remained high and that price declines were pressuring owners. Total housing inventory fell 1.6 percent, representing a 9.9-month supply at the current sales pace, down from a 10.6-month supply in August and the second consecutive month of decline since July's peak. The median fell to $191,600 in September for all housing types, down 9 percent from a year ago. Distressed sales were 35-40 percent of transactions. "These are pulling the median price down because many are being sold at discounted prices," Yun said. "The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms." Single-family home sales increased 6.2 percent in September above August and were 3.8 percent above the level a year ago. The median existing single-family home price was $190,600 in September, 8.6 percent below one year earlier. Existing condominium and co-op sales were unchanged but 15.7 percent below September 2007, and the median dropped to $199,400, 10.2 percent off the previous year. INDEX FINDS CONTINUED BROAD-BASED DECLINES IN AUGUST August prices of existing single family homes across the United States followed a trend that prevailed throughout the first half of 2008 and has continued into the second half, according to the S&P/Case-Shiller index. "The downturn in residential real estate prices continued, with very few bright spots in the data," says David M. Blitzer of the Standard & Poor's index unit. "The 10-City Composite and the 20-City Composite reported record 12-month declines. Furthermore, for the fifth straight month, every region reported negative annual returns." Both the 10-City and 20-City Composites have been in year-over-year decline for 20 consecutive months. "Of the 20 regions, 13 of them had their annual returns worsen from last month's report," Blitzer went on. Phoenix and Las Vegas are reporting annual declines in excess of 30 percent, and Miami, San Francisco, Los Angeles and San Diego, in excess of 25 percent." For the August/July period, only two regions - Cleveland and Boston - had positive returns of 1.1 percent and 0.1 percent respectively. DEMAND FOR NEW HOMES REMAINS 'FUNDAMENTALLY WEAK' Sales of newly built single-family homes posted a 2.7 percent gain, according to the U.S. Commerce Department. The increase followed a downward revision for August and was almost entirely concentrated in the West, where sales bounced back from a very low level in August. Said Chief Economist David Seiders of the National Association of Home Builders: "The fact is that housing demand remains fundamentally weak and the housing contraction continues to weigh heavily on the financial markets and the overall economy." The number of new homes for sale shrank to 394,000 units in September, down from 425,000 units in August. At the current sales pace, there was a 10.4 months' supply of unsold new units on the market versus an 11.4 months' supply in August. The median number of months that completed new homes have been on the market moved up to 9.1, a new record. HOUSING STARS PLUNGE 6.3 PERCENT TO 17-YEAR LOW The U.S. Commerce Department said construction declined in September to a seasonally adjusted annual rate of 817,000 units, the slowest building pace since early 1991. Permit issuance, which can be an indicator of future building activity, also was down, by 8.3 percent. Single-family permits fell 3.8 percent and multifamily permits dropped 10.3 percent. "While lower than generally expected, the numbers are not surprising in light of our latest builder surveys and evidence of persistently high inventories of new and existing homes, weakening home prices, falling payroll employment and declining consumer sentiment," noted Chief Economist David Seiders of the National Association of Home Builders. Single-family starts declined 12 percent to the slowest pace of new-home production since August of 1982. Meanwhile, multifamily starts rose 7.5 percent, partially offsetting a big decline in the previous month. BUYERS ARE BACK, BUT PRICES COULD GO STILL LOWER So says the Wall Street Journal. Lower home prices are luring some buyers back into the U.S. PRICES ARE OFF 11.3 PERCENT IN A YEAR National home prices fell 11.3 percent from a year ago in August, and recently reported layoffs are likely to push foreclosure-related filings past the 3.2 million mark this year, according to First American CoreLogic, reports Inman News. Year-over-year nominal home-price declines - changes over a 12-month period, unadjusted for inflation - have held steady at around 11 percent for three consecutive months, said Mark Fleming, chief economist for First American CoreLogic. "The current assessment is that we expect house prices to maintain their steady state or potentially begin to further accelerate downward in light of the economic pressures," Fleming said. "No news currently points to an expectation for an improvement in price levels in the near term." First American CoreLogic also said that 34 states saw nominal year-over-year price declines in August, led by California, Arizona, Nevada and Florida. Texas, South Dakota, Vermont and Mississippi eked out some price appreciation. NO, WAIT, THEY'RE DOWN BY 'ONLY' 5.9 PERCENT That's according to the Federal Housing Finance Agency, which charts only those sales backed by Fannie Mae and Freddie Mac. The agency says U.S. home prices fell 0.6 percent on a seasonally-adjusted basis from July to August, slightly less than the 0.8 percent fall in July. For the 12 months ending in August, U.S. prices fell 5.9 percent. The decline since the April 2007 peak was 6.5 percent. YOU CAN LEAD A WHITE ELEPHANT TO WATER. . . Real-estate brokers find themselves struggling to sell a growing number of "trophy homes" that are quietly gaining a new title: white elephants, observes the Wall Street Journal. The term hails from a legend that Siamese royalty gave albino elephants - revered but financially ruinous to maintain - to unpleasant courtiers. Today, the financial burden of carrying an overly big, overly unique manse is being shared by many wealthy owners, who are finding out the hard way that not everyone is willing to pay up for their vision of a dream home. Realtors concede a growing number of these pricey pachyderms are sitting unsold for months and selling at steep discounts, if at all. Some sellers are getting creative. On Thursday, the owners of Castlewood, a gothic castle in West Orange, N.J., hosted a live jousting competition to generate buzz among real-estate brokers. Designed in the 1850s, the 5,000-square-foot stone house is on two acres and features two towers, a staff apartment and a round bedchamber with a 28-foot-high domed ceiling. On the market for two years, the homeowners dropped the asking price to $2 million from $2.8 million, originally. BROOKLYN PRICES FALL BY 4.7 PERCENT The overall average sales price of a Brooklyn residential property was $575,287 in the third quarter, down 4.7 percent from the $603,428 average sales price of the same period last year, according to the Miller Samuel appraisal firm. Median sales price showed a similar pattern, slipping 5.6 percent to $510,000 in the quarter from $540,000 in the prior year quarter. There was a 4.5 percent decline in the condo median sales price to $505,493 over the same period. Co-ops showed little change in median sales price borough-wide over the same period. The median sales price of a co-op was down 1.7 percent to $280,000. The median sales price of one- to three-family properties declined 3.2 percent to $600,000. Luxury properties were consistent with the overall market, sliding 3.4 percent to $1.21 million. CON ED WANTS TO RAISE ITS RATES YET AGAIN The utility has asked state regulators for the right to raise electricity rates for the fiscal year starting in April beyond what it had already requested in May, citing higher property taxes and operating costs, reports the New York Times. In a filing to the Public Service Commission as part of its three-year "rate case," Con Ed sought $819 million in additional revenue for next year, up from the $654 million it requested in May. The company said that in addition to its higher costs, it has seen "slightly declining electric sales." When it submitted its application in the spring, the utility said a typical residential customer who pays $78.90 a month now would see his or her bill rise to about $85, and that would rise yet a little higher should the commission approve Con Edison's new request. SUBPRIME LOANS ARE MAIN CAUSE OF DROP IN NEW MORTGAGES The city as a whole saw a 14 percent decline in new mortgages from 2006 to 2007 compared with 25 percent for the country as a whole, says the New York Times. And almost all of the decline in New York was due to a shutdown in subprime mortgages, which can come with higher interest rates, fees and penalties and which accounted for nearly a quarter of all new mortgages in the city in 2006. Prime mortgage borrowing rates barely dropped. The reduction was largely because of a drop in the number of applications as the rate of denial both in New York City, 27 percent, and across the country, 19 percent, stayed more or less the same. The number of new mortgages to blacks and Hispanics fell sharply in New York City in 2007, while staying flat for white borrowers and - surprisingly - rising for Asian-Americans, according to an analysis of federal mortgage data released by the Furman Center for Real Estate and Urban Policy at New York University. SALES OF HARLEM CONDOS SLIDE PRECIPITOUSLY The plunge was 76 percent annually in the third quarter of 2008, from 237 closed transactions last year to just 57 for the three months ending Sept. 30, reports the Observer, citing data provided by research Web site PropertyShark on transactions between roughly 110th and 155th streets. Still, prices there increased 3 percent year over year in the third quarter, rising to a median sales price of $598,000. By comparison, the median price for a downtown condo was $1,275,000, according to one account. The area has seen rapid development during the prolonged real estate boom, and certain areas above 110th Street - for example, Hamilton Heights and Morningside Heights - are well past the emerging-neighborhood label. At the same time, other uptown neighborhoods such as Central and East Harlem are hitting the financial crisis and credit crunch in an awkward transitional phase of gentrification, the Observer said. APPLICATIONS TO BUILD NEAR SEVEN-YEAR LOW There were just three new building permit applications filed for Manhattan construction projects in September - the lowest number since September 2001, when only a single application was filed, reports the Read Deal. The three applications represent an 87 percent drop from the 23 filed in the same month last year. In August there were eight applications for buildings in Manhattan, according to Department of Buildings records. The average number of applications filed over the past 12 months in Manhattan was 17.7. The building applications filed for were for a four-story convent at 454 Convent Avenue in Harlem; an eight-story, 34-unit residential building at 59 East 2nd Street in the East Village; and a two-story commercial building at 508 West 20th Street in Chelsea. LENNY IS SINGING A DIFFERENT TUNE The price of musician Lenny Kravitz's 6,000-sf penthouse at 30 Crosby St. in SoHo has been lowered to $18.75 million from $19.5 million, reports the Real Deal. After picking up the apartment in 2001 for $8.5 million, Kravitz put it on the market for $13.25 million in 2004, then dropped the price to $12.95 million later that year before finally pulling it off the market altogether in 2006. Kravitz then spent 18 months renovating the unit and put it back on the market in the spring of 2007 for $19.5 million. ÇA VA TRES BIEN, N'EST-CE PAS Steve Martin is asking $28,000 a week to rent out his villa on the Caribbean island of St. Barthelemy, says the Wall Street Journal. The actor bought the house, which had been listed for $9 million, this past spring. In the hills of Lurin, the house has four bedrooms and four full bathrooms, with a large deck and wide views of St. Jean Bay. Renovated in 2003, the home has a mixture of American and local furnishings. The half-acre property comes with a caretaker's house, a pool, a lily pond and a Balinese-style gazebo. Martin, 63, rented the home last winter and purchased it "turnkey," including furnishings. The sale price wasn't disclosed. COLUMNIST AND FORMER POLITICIAN SELL THEIR CONDO Jimmy Breslin and his wife, former City Councilmember Ronnie Eldridge, have sold their condo at 2000 Broadway for $3.3 million, according to Cityfile.com. The 1,745-sf penthouse, which was reviewed in this newsletter's "Out and About" many months ago, has two bedrooms, three baths and a terrace. SHE'S A MILLION-DOLLAR BABE ALL RIGHT Oscar-winning actress Hilary Swank is in contract to pay $3.5 million for a two-bedroom apartment at the Superior Ink condominium building, a West Village development that's still under construction, according to the Wall Street Journal. Designed by architect Robert A.M. Stern, the new 17-story development, built on the site of a former factory along Hudson River Park, will have 68 apartments and seven townhouses. There will be a 24-hour concierge, valet parking, a gym and a screening room. The apartment units are 95 percent sold at an average of more than $3,000 per square foot, and completion is slated for spring 2009. JAYNE'S DAUGHTER CLEANS UP Almost exactly one year ago, actress Mariska Hargitay, Jayne Mansfield's daughter, paid $7 million for a Flatiron duplex penthouse, notes the New York Post. But her 2-year-old son got into a school on the Upper East Side, a long schlep from her new 4,900-square-foot apartment, so she put the eight-room duplex in the 1887 O'Neill Building on the market. City records now show that Hargitay just sold the place for $8.15 million, incredibly close to her asking price. According to the deed, the buyers are Ewa and Maurice Laboz, a huge New York City landlord. HE'S APPARENTLY IN SEARCH OF MORE PRESTIGE Two sources told the Observer that it's Hugh Jackman who's in contract to buy the Richard Meier-designed 11,032-square-foot triplex that was listed for $33 million at 176 Perry St. in the far West Village. According to floor plans, the living room, rec room and master bedroom are each 51 feet wide. There are a 54.5-foot-long "dining room/gallery;" a library; a music room; a pantry; a wet bar; and an upstairs exercise room around the corner from a sauna. But the contract is for somewhere above $25 million, a long way from the $40 million that Sun Microsystems co-founder Bill Joy was first asking and the $17.47 million he reportedly paid in 2002. But sources said "it's possible" Jackman, who used to rent in the building for a reported $35,000 a month and appeared in "The Prestige" in 2006, will walk. HOW MANY STRIKES BEFORE A-ROD IS OUT Alex Rodriguez is not just lowering the price of his Park Avenue apartment: He's also offering it for rent, says the New York Post. The Yankee is now asking $12.5 million for the fourth-floor, four-bedroom, 4,600-sf pad at Trump Park Avenue after listing it earlier this month for $14 million. Renting the place unfurnished would cost $50,000 a month. The Post's tour of the condo at 502 Park Ave. revealed elegant eight-room digs, flush with mahogany, herringbone floors, marble bathrooms, an unusual great room/chef's kitchen combination and a dark-paneled library. Rodriquez is said to plan on himself renting for the foreseeable future. AN IMPRISONED CEO AGREES TO A BARGAIN OF ANOTHER SORT Former Tyco chief executive Dennis Kozlowski has cut the price on his Nantucket, Mass., estate to $16.45 million from the original $23 million he sought about three years ago, according to the Wall Street Journal. Kozlowski paid $5 million for the house in 1997. The oceanfront home on the island's eastern shore borders a preserve and includes a 16-room, 7,000-square-foot shingle-style main house built in 1994, a guest cottage and a gym. The current asking price is less than the home's assessed value of $16.92 million. Mr. Kozlowski is more than three years into an 8 1/3- to-25-year prison term, after a jury convicted him of 22 of 23 counts of grand larceny, conspiracy and securities fraud linked to the extravagant perks and pay he awarded himself while running Tyco. Elsewhere in Nantucket, Goldman Sachs Co-President Jon Winkelried recently listed his estate for $55 million. FOR $21.4 MILLION, YOU CAN ENJOY FINLEY’S OCEAN VIEW In Del Mar, Calif., Major League Baseball player Steve Finley and his wife, interior designer Amy Finley, have put their beachfront house on the market, with an asking price of $21.5 million, about 14 times what they paid in 1995, says the Wall Street Journal. In 1995, the Finleys paid $1.54 million for the house, which is within walking distance of town, and have done some remodeling. Built in 1968, the 2,500-square-foot house has six bedrooms and three bathrooms on a 33-by-120-foot lot, according to the listing. In peak season, it has rented for as much as $18,000 per week. THE BOTTOM IS FORESEEN NEXT YEAR Real estate industry experts expect financial and real estate markets in the United States to bottom in 2009 and then flounder for much of 2010, with ongoing drops in property values, more foreclosures and delinquencies, and a limping economy that will continue to crimp property cash flows, according to a report by the Urban Land Institute and PricewaterhouseCoopers. In terms of investment, Seattle and San Francisco take the top two spots, beating out New York City, which has traditionally been ranked at the top for investment prospects. For 2009, New York slips to fourth place, placing after Washington D.C. Los Angeles "holds its own" in fifth place, but suburban areas outside that city will suffer. Las Vegas and Phoenix get "blown out," while Florida markets are described as in "disarray." Markets in the Midwest continue to lose more ground; however, Chicago manages a "fair" ranking in the region-wide decline. Meanwhile, the relative position of Texas markets has improved because of the oil industry. MBA SAYS MORTGAGE VOLUME, SALES, PRICES TRENDING DOWN The Mortgage Bankers Association (MBA) predicts total mortgage production in 2009 to decline to $1.67 million from this year's expected $1.86 trillion and last year's $2.3 trillion. Said Jay Brinkmann, MBA chief economist: "We expect residential investment to decline further through the first half of 2009, due to the excess supply of houses and weakened demand from the recession." REPORT SAYS HOMEOWNERSHIP REMAINS RISKY A study by the Center for Economic and Policy Research (CEPR) and the National Low Income Housing Coalition (NLIHC) says homeownership remains a costly and risky proposition in many "bubble-inflated markets." Evaluating the median house price and fair market rent, as determined by HUD, for the 100 largest metropolitan areas, the analysis concludes that many metropolitan housing markets continue to be subject to real estate bubbles but that prices are not out of line with rents in large parts of the country. According to the study, the most inflated markets currently see monthly homeownership costs outpacing rental costs by as much as 300 percent. RATES CONTINUE TO TREND UP The 30-year fixed-rate mortgage (FRM) averaged 6.46 percent for the week, up from last week's 6.04 percent and last year's 6.26 percent. The 15-year FRM was 6.19 percent in comparison with 5.72 percent last week and 5.91 percent a year ago at this time. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 6.36 percent this week, up from 6.06 percent; they were 5.98 percent the previous year. One-year Treasury-indexed ARMs averaged 5.38 percent up from 5.23 percent last week but off from the prior year's 5.57 percent. "Long-term mortgage rates followed long-term Treasury bond yields higher this week, pushing fixed-rate mortgages up to levels of two weeks ago," said Frank Nothaft, Freddie Mac vice president and chief economist. "The Federal Reserve's 0.50 percentage point cut in the discount rate and federal funds target rate was widely anticipated in the financial markets and is likely to keep short-term interest rates low; consequently, initial interest rates on ARMs, which tend to be set relative to other short-term rates, may remain near current levels." MORTGAGE CUSTOMERS' SATISFACTION ACTUALLY IMPROVES Despite increased doubts about the financial market and mortgage lenders, a study by J.D. Power and Associates finds that mortgage customers are more satisfied overall in 2008 compared with 2007. The industry average went up slightly, to 757, up 7 points from 2007. Improvements are evident in several key performance measures: Fewer customers report being asked for additional information after submitting their application; more customers are being provided with timeframes for application approval; and fewer customers report that their closing costs are higher than originally estimated. "The increase in overall satisfaction can be attributed, in part, to lower customer expectations," said Tim Ryan, director of the financial services practice. "At the same time, lenders are more diligent in delivering the elements of the experience that drive satisfaction." About one half of mortgage customers express some level of doubt about whether their loan representatives were acting in an ethical and honest manner and in their best interest. Seven mortgage originators scored above the industry average: SunTrust Mortgage, National City Mortgage, Wachovia, Wells Fargo, Bank of America, Washington Mutual and CitiMortgage. Scoring below the industry average in customer satisfaction were GMAC Mortgage, Chase and Countrywide Home Loans. LOAN VOLUME SURGES The Mortgage Bankers Association (MBA) says mortgage activity rose 16.8 percent on a seasonally adjusted basis for the week ending Oct. 24 above the previous week. On an unadjusted basis, the increase was 29.6 percent but was down 30.0 percent compared with the same week one year earlier. Refinancings went up 28.5 percent, while purchase applications grew by 8.5 percent seasonally adjusted. The refinance share of mortgage activity increased to 46.9 percent of total applications from 42.6 percent, and the adjustable-rate mortgage (ARM) share slipped to 1.9 percent from 2.7 percent. FANNIE'S AND FREDDIE'S BORROWING COSTS ARE NOT FALLING The U.S. takeover of Fannie Mae and Freddie Mac so far has failed to achieve one objective that government officials had envisioned: Borrowing costs for the two companies, which affect mortgage rates for consumers, are rising, not falling, notes the Wall Street Journal. The Federal Housing Finance Agency (FHFA), which regulates the government-backed providers of funding for home mortgages, seized management control of them in early September. The FHFA cited losses that could wipe out their capital, incapacitating them at a time when the government wants Fannie and Freddie to buy mortgages aggressively in an effort to drive down interest rates on home loans. NEVADA TAKES A DUBIOUS TITLE The state leads the U.S. in the proportion of households whose mortgage debt exceeds the current estimated value of their homes, a condition known as being "under water," according to a new study, reports the Wall Street Journal. First American CoreLogic, a real-estate data firm, estimated that 48 percent of owners of single-family homes with mortgages in Nevada are under water. That compares with 18 percent nationwide. First American said it based its estimates on data for 42 million properties, accounting for more than 80 percent of U.S. home mortgages.
With Washington and Wall Street are frantically seeking to stabilize markets by curtailing the onslaught of foreclosures, the Wall Street Journal notes that there are now at least four major plans to aid homeowners. But experts say it is difficult to design these programs in ways that reduce the indebtedness of the distressed without giving everyone else a reason to mail the keys back to their lenders. "If the lunch truly is free, the demand for free lunches will be large," said Paul McCulley, a managing director with the investment firm Pimco. More than 10 million homeowners are underwater, and their ranks are swelling. With a foreclosure, the owner becomes the bank, which will care for the house minimally. When the bank finally manages to unload the house months later, the fire-sale price will establish a new floor for the remaining neighbors. ARCHITECTS ARE FEELING THE PAIN Following three consecutive months of signs of greater stability in design activity, the Architecture Billings Index (ABI) fell precipitously, dropping more than six points. The American Institute of Architects (AIA) reported the September ABI rating was 41.4, down sharply from the 47.6 mark in August. (Any score above 50 indicates an increase in billings.) The inquiries for new projects score was 51.0. "With all of the anxiety and uncertainty in the credit market, the conditions are likely to get worse before they get better," said AIA Chief Economist Kermit Baker. "Many architects are reporting that clients are delaying or canceling projects as a result of problems with project financing." THE TIME COULD BE RIGHT TO MAKE A GIFT VIA QPRT Plunging real-estate values have made it an opportune time for older homeowners to give property to their children, while realizing big savings on gift and estate taxes, suggests the Wall Street BRICK(BAT)S FLY IN ONLINE JOURNALS Thanks to the housing crisis, real-estate blogs are blooming not only in number, but in nastiness, as thousands of strangers swap stinging critiques of high-end homes hitting the market, observes the Wall Street Journal. And bloggers say the pricier the house, the juicier the target. "The current real-estate market has brought out the worst in people," says David Gibbons, director of community relations for Seattle-based Zillow.com, a real-estate site where people can comment on discussion boards. Last summer, posters grew so "aggressively rude" at Brooklyn blog Brownstoner.com that founder Jonathan Butler began requiring every user to register with the site before they could post. "It got to the point where I couldn't leave my desk for half an hour," says Mr. Butler, who deletes inappropriate posts on his site. The surge in verbal abuse doesn't seem to be damaging the housing-blog business. For example, Curbed.com, which has sites for New York, Los Angeles and San Francisco, has seen its unique-visitor numbers climb to a million a month from 400,000 a month last year. At SocketSite.com, comments are up about 25 percent over the past three months alone. PRICES IN THE HAMPTONS SLIP AGAIN Home prices on Long Island's East End have continued their descent in the third quarter from last year's record highs, says the Real Deal. Average sales prices for all homes in the Hamptons and the North Fork tumbled 26.8 percent to $1.32 million, down from $1.8 million in the same period last year, according to the report, which was prepared by real estate appraisal firm Miller Samuel for Prudential Douglas Elliman. Median sale prices slid 17.3 percent to $729,000 from $882,000. Listing inventory jumped 9.8 percent year-to-year. In part, the precipitous slide in prices can be attributed to 2007's record high prices in the Hamptons, explained Jonathan Miller, president of Miller-Samuel, who prepared the report. In the top 10 percent of the East End market, listing inventory increased 45.6 percent over a year's time; the gain was from 351 homes to 511, the report said. The discount from the listing price nearly doubled from 7.5 percent to 13.8 percent. "The real extent of the impact will be in the first half of next year," Miller said. "That's when the reality of the bonus situation will hit." FOR FURNITURE MANUFACTURERS, SMALL IS GOOD Furniture manufacturers are responding to downsizing baby boomers and the growing appeal of urban living by reducing the scale of dressers, coffee tables, night stands and the like, according to an article in the Washington Post. They are compressing home offices into a single fold-out cabinet. And they're cutting back the size of sofas and entertainment centers that sprawled across the length McMansions walls. "Our sales have shifted from 70 percent overscaled to 70 percent the smaller scale now," Magnussen Home Furnishings chief marketing officer Don Essenberg said. "When it comes to scale, we've seen a return to what many in the industry have seen as a more appropriate and normal scale in furniture. It's less grandiose than we have seen in a decade or so." Smaller furniture also is part of a trend that shows consumers increasingly want to eliminate clutter and organize what's left, said Pamela N. Danziger, president of Unity Marketing, a marketing consulting firm that studies consumer behavior. "There is a whole new change in the way people look at luxury. It's moving away from being in-your-face, conspicuous consumption to how you feel in your environment," Danziger said. "It's a new, more European approach. It's not the size, it's what you've got in the home." FROM THE DEPARTMENT OF WHO WOULDDA THUNK IT An increasing number of individuals are hiring personal music stylists to pick out tunes for their homes just as they might hire an interior decorator to select furnishings. "Hearing the wrong music in the wrong space can be very disorienting," said Coleman Feltes, a music stylist in New York City. A D.J. known for creating mixes for Versace, Gucci and Dolce & Gabbana fashion shows, Feltes began his bespoke music service for individuals in 2006. Feltes and other music stylists typically visit clients' homes or look at photographs of them to assess their decorating styles and to understand layouts. They may also peruse clients' music collections to learn the genres and artists they've liked in the past. Though they consider clients' musical preferences, stylists said they are paid to be the final arbiters of what songs work in a space. "When clients hire me, they are buying into the Coleman brand of taste," Feltes said. Stylists typically charge between $50 and $250 per hour of music, which they usually download onto iPods but which can also be delivered on CDs. JONATHAN ADLER LIKES ORANGE. REALLY "Orange is the ultimate anti-depressant,"Jonathan Adler, the potter, decorator and shop owner tells the Washington Post. "It's the color of sunshine. It's crisp and refreshing. It will always be my go-to color for a jolt of happiness." Adler, whose signature "10 Commandments for a Happy, Chic Home" include "Thou shalt not be afraid of orange," says he pairs it with white, chocolate brown, navy and lemon yellow. Orange paint has gained popularity in the past few years, says Jackie Jordan, a director at Sherwin-Williams. "Two or three years ago, it was a bright, citrusy orange," she says. "Now we're seeing a little shift to the spicier side, with colors a bit more toned down." If you're thinking about painting with orange, it's best to do so in moderation, Jordan says. (Well, yeah.) A muted orange would work well in a powder room, she says, while a brighter shade would be fun for an accent wall in a child's bedroom. Another option: painting a single piece of furniture for a small yet bold statement. Or try Adler's approach and add an orange piece as a "punctuation mark" to your decor. "An orange lacquered tray, an orange ceramic bowl or an orange side table can instantly make a space feel hip and alive," he says. "How can you feel sad if you are eating your cereal out of a bright orange bowl?" HALF OF OWNERS BELIEVE HOME VALUE IS HOLDING UP Surprisingly, half of U.S. homeowners still believe their home is insulated from the nation's home value declines, says the Zillow.com Web service. In the third quarter, 49 percent of homeowners said they think their own home's value has increased or stayed the same over the past year. However, nearly three-quarters (74 percent) of homes have lost value in the past 12 months, according to preliminary analysis of Zillow's research. In the second quarter, 62 percent said their homes either increased in value or remained the same. Zillow's Home Value Misperception Index, which measures homeowners' perceptions of their home's value over time, shrank to 16 in the third quarter from 32 in the second quarter. An index of zero would mean homeowners' perceptions were in line with actual values. What the Wages of Wall Street Hath Wrought Salaries and bonuses are not at issue here. What is at issue is how the mess on Wall Street and the national economy have affected the price of housing in the Big Apple. Does the current economic environment mean real estate bargains are proliferating? Does it mean the bottom is here or near? Sorry, but the answer has to be this: maybe, maybe not. Certainly, the truth is buyers will find that the days are long gone of rapid price escalation and that a new period of fair pricing has dawned. Whether such pricing means "bargain" for buyers is open to question. Still, in an admittedly unscientific impression of today's market, it certainly seems that listing prices are starting out or becoming more realistic. There seem to be far more reductions than in the past. As inventory and days on market climb, price cuts appear to be happening more quickly than in recent months and years. Consider the building developed by Julian Schnabel in Greenwich Village. Richard Gere has been trying to flip a full floor apartment with four bedrooms and baths there since the spring. He bought the place in Palazzo Chupi for $12 million a year ago. Room proportions are grand, ceilings are 12.5 feet high, light streams in from all directions and there are huge French doors in every room leading to terraces with Hudson River views. The living room boasts a large wood-burning fireplace, and there is a covered 66-foot-long colonnade running along the entire north side of the apartment. Amenities include parking, elevator, air conditioning, pool and 24-hour doorman. Gere originally listed the apartment last spring for $17.995 million. Now it is $15 million. Sellers at almost every level are having to compete more and more fiercely for those buyers who have decided that sitting on the fence is too uncomfortable for them. Such buyers would rather move now to change their lifestyle - for example, scaling up or down, emigrating from the suburbs or moving to a different neighborhood - than postpone the gratification of a new life. That is especially true if they intend to stay where they move for some time. Examples abound, and you'll find a number of them below in the properties listed by various brokers and seen recently. Upper West Side
Upper East Side
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housing market, according to the newspaper, but foreclosures and a weakening economy are likely to keep downward pressure on prices for at least another year, economists say. A quarterly Wall Street Journal survey of housing data in 28 major metro areas shows that the glut of unsold homes listed for sale is shrinking in most of them. In many cases, sales have been stimulated by investors who are grabbing what they see as bargains on homes that can be turned into rentals. Metro areas with the biggest drops in for-sale signs include Sacramento and Orange County in California and the Virginia suburbs of Washington, D.C.
He added his belief that long-term rates will go down from their current levels "as massive liquidity injections by central banks around the world and other policy actions work through the system and demand increases for long dated debt." Brinkmann said that the 30-year fixed-rate mortgage yield should trend modestly lower, averaging 6.0 percent in the current quarter and remaining near that level through 2009 before trending up modestly in 2010. According to him, total existing home sales for 2008 will end up about 13 percent below those for 2007. Existing home sales are projected to rebound slightly in 2009, increasing by about 3 percent. Sales should increase by about 6 percent in 2010, the MBA forecast said, estimating that national average home price declines will continue through most of 2009, with states like California and Florida continuing to drive the national averages, but with a number of other states showing more modest decreases. Brinkmann said median home prices for new and existing homes are expected to be down by 6-7 percent for 2008 and that prices should decline at a more modest rate of about 3-4 percent in 2009 before rising slightly in 2010. 
Journal. They can do this by moving the home out of their estate with a so-called qualified personal residence trust, or QPRT, which allows homeowners to live in a property for many years before passing it on to their heirs. Though the trusts have been around for many years, many estate planners say now could be a good time to set one up since real-estate values have fallen dramatically in many markets. QPRTs are one of a number of strategies that wealth advisers and estate planners are recommending as clients cope with beaten-down financial markets and a nasty real-estate landscape. The goal: Put beaten-down assets into trusts now and reap benefits from their appreciation outside of your estate. With real-estate values low, executing a QPRT now ensures your estate won't contain a more-expensive home down the road, which could trigger a costly tax bill for your estate.
