Items of Interest THE CRYSTAL BALL IS CRACKED A roundup of the usual suspects does not provide reliable insights about where the market is or where it is headed. So, no citations here from the variety of sources usually found in this newsletter. There is an excess of evolving developments in Washington, and the prognosticators are either confounded by the current chaos or reckless in their predictions. Don't trust anything you see or hear now, perhaps even what you are reading this minute. The disruption of "normal" Wall Street activity, the reaction around the world to what is happening in the U.S. and the grim economic news about employment and economic growth have landed body blows to consumer confidence. At a time that the feds are moving boldly and mortgage rates are falling, many loan applicants are finding, paradoxically, they cannot get loans at favorable rates, or even at all, as lenders tighten their standards to levels unknown in decades. (Seller financing may well surface as the best choice for sellers and buyers alike.) Until the pot stops boiling, buyers have little choice but to see how the contents ultimately taste. Acting rationally, they will take very deep breaths before buying. Acting rationally, sellers will have to adopt new flexibility and asking prices that reflect today's uncertainty. The truth is that no one knows what is going to happen to the real estate market nationally or locally. In New York City - where 23 percent of employment income and five percent of the jobs have been related to the financial services industry - it is hard to imagine that the market won't be affected for a time, notwithstanding any unslaked thirst for real estate by foreign buyers. But don't believe anyone who tells you that they know precisely how, how long or by how much. The crystal ball is beyond cloudy. SEEING NO LIFT IN SALES, THE NAR LOWERS ITS FORECAST The level of home sales is expected to show little movement in the months ahead, according to the latest projections by the National Association of Realtors (NAR) issued before Wall Street's meltdown. In fact, the trade group now is expecting total sales of resale homes this year to drop 11.4 percent compared with 2007 and the median price of resale homes to fall 7 percent. Its index of pending sales fell 3.2 percent from June to July after a 5.8 percent decline from May to June. The July index remains 6.8 percent below the previous year. Said Lawrence Yun, NAR chief economist: "Pending home sales are oscillating month-to-month, with the long-term trend essentially flat. Overly stringent lending criteria imposed by Fannie Mae and Freddie Mac in the past month no doubt held back contract signings." Looking at what Yun calls "middle-ground assumptions," existing-home sales are projected somehow to rise 6.9 percent in 2009. After declining an average of 4-7 percent this year, the NAR forecasts home prices to gain by 2-4 percent next year. It projects a drop in sales of new homes to approximately 508,000 this year and 463,000 next year, down 34.4 percent for 2008. Housing starts are predicted to fall 17.1 percent next year. "Based on local market fundamentals, I expect robust home price growth in places like Denver and Houston over the next two years," Yun added. "In addition, the frequent reporting of multiple bids in California and Florida may be signaling a bottom in home prices in these areas. Nationally, home sales are stable now but are expected to increase in coming quarters." JAMES CRAMER ONCE AGAIN GOES OUT ON A LIMB CHINA, TOO, IS EXPERIENCING WAN SALES China has joined the United States, Britain, Spain and others on the list of nations suffering a real estate decline. Although the last national statistics showed single-digit growth from July 2007 to July 2008 in the average price of commercial and residential real estate, real estate brokers tell the New York Times that prices are down from peaks reached earlier this year, while the number of transactions has plunged. This downturn comes as the growth rate of Chinese exports has slowed and stock markets have plummeted. Brokers say that sales volumes first dropped precipitously in Guangzhou, and then the decline spread across the country. In some neighborhoods in the southeast, prices have dropped by 10-40 percent. In other parts of the country, transactions have fallen, but prices have only started to follow. For instance, the number of home sales has plunged by two-thirds in Harbin in the northeast, though prices are down as little as 4 percent from the same period last year. "It's collapsing; it's unbelievable, and most of it is from mortgages - I don't see how the housing sector is going at all," said Nicholas R. Lardy, a specialist in Chinese finance at the Peterson Institute for International Economics in Washington. He added that the decline was so precipitous that it had to reflect weaker demand for housing and not just regulatory restrictions on credit. SHARED APPRECIATION IS CHALLENGING REVERSE MORTGAGES A new product, frequently called a shared-appreciation arrangement or equity release, is gaining popularity among homeowners in or near retirement, says the Wall Street Journal. The premise of A MIND IS A MALLEABLE THING TO FACE Condo buyers in hard-hit markets across the country have been scouring their contracts for loopholes and flaws that would allow them to back out, notes the Wall Street Journal. Investors in Florida, where many were looking to flip their condos for a quick profit in a rising market, have been particularly aggressive in using the courts. And that's no surprise, given that the condo market there is one of the worst in the country, with average condo prices down 22 percent since the market peaked in 2005. Yet a series of recent legal decisions in the Florida courts indicate that it won't be as easy as buyers might hope to get out of these deals. The bottom line: Unless it's a bona fide contract dispute, an investor's chances of winning appear to be slim. Last month, the U.S. District Court in Miami dismissed two dozen federal lawsuits in which buyers said they were misled by an advertising brochure promising an "Olympic style" swimming pool at Opera Tower, a high-rise condo building near downtown Miami. Plaintiffs could not reasonably rely on the drawings or advertisements, Judge Patricia Seitz ruled. The contract clearly stated the pool was L-shaped and 2,530 square feet - smaller than Olympic size, she wrote. The developers claimed that "Olympic style" didn't refer to the pool's size but to the fact that it would have lanes. But attorneys who represent condo buyers say many of the complaints of contract violations are legitimate - and that the battle is not over yet. HOW DO YOU SPELL BUYER R-E-M-O-R-S-E A buyer who agreed to pay $53.5 million for two penthouse condominiums in the Plaza Hotel has sued developer El-Ad Properties for fraud, seeking a refund of his $10.7 million deposit and more than $20 million in damages, reports the Wall Street Journal. The lawsuit names the buyer of the penthouses only by corporate names, but people familiar with the deal identified him as Andrey Vavilov, a financier and former deputy Russian finance minister. The suit alleges that El-Ad engaged in a "bait and switch" in which the developer made - and failed to disclose - "unilateral and impermissible design changes" that diminished the condos' size, shrank windows and lowered ceilings. The lawsuit states that the penthouses were purchased "sight unseen," based on representations by El-Ad and models, since the units hadn't been built. Yet instead of the promised elegance, "the completed penthouses utterly fail to live up to the representations . . . of superior condition, quality and overall appearance," the suit says. El-Ad dismissed the allegations as baseless. Jay Neveloff, a lawyer representing the developer, in a statement said: "Its meritless allegations are aimed at camouflaging the purchaser's failure to meet his legal obligations to close" the purchase. As many as 25 apartments in the world-famous Plaza are back on the market, with many owners struggling to sell their units in the problem-plagued building, according to the New York. One of them belongs to Tommy Hilfiger, who is asking $50 million. There also are 20 apartments for rent ranging from $5,800 to $75,000 a month. HE APPARENTLY WANTS TO HOLD HER HAND Paul McCartney is on the lookout for another New York City apartment - this time, closer to the Upper East Side apartment of his new flame Nancy Shevell, says the New York Post. The newspaper quotes sources as saying the former Beatle, who has had a place on West 54th Street since the 1980s - where he and ex-wife Heather Mills last bunked together in the Big Apple - has been combing the area close to Shevell's East 83rd Street residence. "He's been looking at eight-figure apartments," says a real-estate insider. "I think he just wants to rid himself of the Heather factor." Plus, he reportedly lost much of his privacy a few years ago when the Museum of Modern Art added a glass facade that gives visitors an unobstructed view of his apartment. And he probably wouldn't mind adding more distance between himself and Mill' new downtown condo, which she recently bought at 173 Perry St. WHAT TOOK HIM SO LONG Willem Dafoe is seeking $850,000 for his rubber-clad Modernist house in the Hudson Valley of upstate New York, says the Wall Street Journal. The actor, who lives in Manhattan, bought the 2,200-square-foot house in 1988. In 1981, choreographer Eugene Loring commissioned the house and had it designed to blend into the landscape. A thick skin of gray-black rubber was stretched over the wood-frame exterior to complement eight car-sized boulders on the property. On 6.8 acres in Accord, a town just over 100 miles from New York City, the two-bedroom house overlooks a meadow and has a kitchen with a commercial stove, two and a half baths and a tower room that can be used as an office. "The house was really designed to work with the rocks," says listing agent Chris Pomeroy, adding, "It's extremely easy to maintain. You don't have to paint it." JIMMY CHOO CO-FOUNDER BUYS $20 MILLION BRONFMAN PAD Tamara Mellon, ex-wife of banking heir Matthew Mellon, has just paid $20 million for Edgar Bronfman Jr.'s sprawling condo in the Carhart mansion on East 95th Street, the New York Post reports. The 10-room pad in the former Lycee Francais school's limestone townhouse had a last asking price of $21.75 million. The 7,140-sf duplex penthouse is unfinished, with plans for five bedrooms, four bathrooms, two powder rooms, six terraces, a 40-foot living room with 12-foot ceilings, a 22-foot formal dining room, maid's quarters and a solarium. Mellon primarily lives in London with her 5-year-old daughter Araminta, and Bronfman surprised real-estate watchers when he bought the unit last November for $18.75 million after selling his East 64th Street townhouse for $50 million and buying a $19.5 million co-op at 1040 Fifth Ave., which he later sold. A STAR OF '24' BAGS A BROWNSTONE BARGAIN Kiefer Sutherland has picked up a circa-1830s Greek Revival townhouse in the West Village for $8.2 million - millions less than its original asking price, according to the New York Post. The five-story structure with approximately 4,750 square feet of open space includes plans for a five-bedroom single-family home with "fabulous open living and entertaining spaces and [an] elevator." The limited-liability company that was selling the Greenwich Street digs - and which purchased it in 2006 for $5.3 million - put it on the market for $12.99 million last January. Then it was lowered to $10.4 million in February. And then it was lowered again to its last asking price of $9.4 million. SHE FINALLY BIDS GOODBYE TO HER HERB FARM But not before dropping the price, says the Wall Street Journal. Marsha Mason, who has tried to sell the New Mexico property for more than a year, cut the price to just under $8 million, about 30 percent below the original listing. Nominated four times for an Academy Award for such films as 1977's "The Goodbye Girl," she bought the land raw for $1.5 million in 1992 and has said that she spent about $10 million on the property. Mason listed the farm in June 2007 for $11.5 million and cut the price to $11 million that fall. Dubbed the Double M Ranch, the 250-acre property is in Abiquiu, a village north of Santa Fe best known as the longtime home of artist Georgia O'Keeffe. The property includes an Argentine estancia-style main house of 5,800 square feet, an "art barn" with two apartments and two studios, and a guest house. About 140 acres are used for farming herbs, which Ms. Mason uses in a line of natural remedies. And a river runs through it. GET 'EM WHILE MAYBE THEY'RE HOT A new company, Aberdeen Townhomes, is buying up historic townhouses in the city and outfitting them with virtual doormen, concierge services and air-conditioned storage units for grocery deliveries, says the Sun. The first to be completed, at 24 W. 11th St., is offered at $17.5 million. "This is the only segment of the market that I would be truly comfortable in today - the ultra-luxury townhouse market," the owner of Aberdeen, James Cummings, said. At a time when condominiums on the Upper East Side are selling for as much as $48 million, this segment of the market is the "least affected" by the housing slowdown, he added. Cummings has so far acquired five townhouses that he is rehabbing, and he said he has several more in the pipeline, declining to elaborate. Behind the restored red-brick façade of the West 11th Street home, a white-oak-paneled entrance hall leads to a glass wall overlooking a patio, while an elevator travels between the 1,000-bottle wine cellar in the basement and the fourth floor. In the service entrance beneath the brownstone steps, the package delivery room is controlled remotely by a virtual doorman, who monitors the building from the Aberdeen management offices. An owner of an Aberdeen home also will have access to a super, who will shovel snow and repair light fixtures, and a concierge service run by Abigail Michaels Concierge. Free for a year, the concierge will book facials, make restaurant reservations and find Broadway show tickets. PRICES HAVE BEEN DRIFTING LOWER As the fall real estate season gets under way, buyers and sellers will have to contemplate a market in which average prices have begun to drift modestly lower and the national economic mood is grim, the New York Times reported a week before the crisis on Wall Street. A review of closing co-op and condominium prices in July and August shows average Manhattan closing prices off 7 percent in the third quarter to date and median prices off 6 percent, compared with the previous quarter, but above the levels of a year ago. These figures exclude sponsor sales at two hugely expensive condo projects - 15 Central Park West at West 62nd Street and the conversion of the Plaza Hotel on Fifth Avenue - that have driven up average prices in the last few quarters. Brokers said that over all, well-priced apartments were continuing to sell. Over the summer, there was something of a reverse 15 Central Park West effect: There was a surge in sponsor sales of lower-priced apartments in less expensive neighborhoods such as Lower Manhattan, Harlem and East Harlem. The result was a lowering of average and median prices somewhat. Jonathan J. Miller, an appraiser who prepares market reports for Prudential Douglas Elliman, said the decline in aggregate prices was a combination of seasonal trends and weaker conditions. But he said he was worried that the market might deteriorate next year, if the economy weakened and Wall Street bonuses were cut sharply. And that was before the meltdown. RATES CONTINUE TO DROP TO SEVEN-MONTH LOW The 30-year fixed-rate mortgage (FRM) averaged 5.78 percent for the week, down from last week's 5.93 percent, says Freddie Mac. Last year at this time, it was 6.34 percent. The last time the 30-year FRM was lower was the week ending Feb. 14, 2008, when it averaged 5.72 percent. The 15-year DECLINING RATE OF FORECLOSURES NOTED YEAR TO YEAR Foreclosure filings - default notices, auction sale notices and bank repossessions - were reported on 303,879 U.S. properties during August, a 12 percent increase from the previous month and a 27 percent increase from August 2007, according to data aggregator RealtyTrac. (RealtyTrac sells information on distressed properties on a subscription basis to home buyers, investors and real estate agents.) The annual increase of 27 percent was substantially lower than in previous months this year, when it was hovering around 50-65 percent. Part of the reason for the lower percentage increase was a spike in foreclosure activity a year ago. Observed CEO James J. Saccacio: "Over the past few months we've seen annual increases in default activity and auction activity moderating, and that trend continued in August, with default activity up just 10 percent from a year ago and auction activity up 7 percent from a year ago." Saccacio said legislation passed by several states to give troubled borrowers more time before foreclosure proceedings are initiated could be one reason for the smaller increases in default and auction activity. Loan servicing guidelines that encourage workouts and short sales as alternatives to foreclosure also could be a factor, he added. Either way, those measures may only delay, rather than prevent, some foreclosures. A MORTGAGE FIRM COLLECTS THE WAGES OF SIN A former owner of a Brooklyn mortgage firm has admitted that he stole $44 million from Fannie Mae between 1994 and 2004, says the New York Post. Leib Pinter, 64, will face a sentence of 10 years when he is due back in Brooklyn federal court Dec. 19. The former owner of Olympia Mortgage Corp., which went belly up in 2004, admitted pocketing the payoff proceeds for 257 mortgages that his company serviced for the nation's largest buyer of home loans. Pinter pleaded guilty to conspiracy to commit wire fraud. Still pending is the case against another former Olympia principal, Barry Goldstein. He is charged with conspiring with Pinter to rip off Fannie Mae and using falsified loan histories to sell a portfolio of nonperforming mortgage loans to Credit Suisse First Boston. FEDS FIND MINORITIES WERE SHORTCHANGED WITH LOANS A Federal Reserve Board analysis of millions of home loans suggests minorities were more likely to pay high interest rates when they took out a loan during the housing boom and then had a harder time getting a loan when the boom turned to bust, reports Inman News. The Fed study reveals that, as a group, nearly 200 independent mortgage companies that failed last year were much more likely to make higher-priced loans to minorities and that minority communities have been hit hardest by cutbacks in lending during the credit crunch. In its analysis of the Fed's report, the National Community Reinvestment Coalition (NCRC) said home-purchase loans to Hispanics fell 49 percent from 2006 and 2007, 35 percent for blacks and 22 percent for whites. MORTGAGE APPLICATIONS SURGED A WEEK AGO The Mortgage Bankers Association (MBA) says loan application volume soared 33.4 percent for the week ending Sept. 12 on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the increase was 65.3 percent compared with the previous holiday-shortened week but was off 1.3 percent compared with the same week one year earlier. The number of refinancings surged by 88.1 percent from the previous week, and purchase applications went up 2.4 percent. The refinance share of mortgage activity grew to 51.6 percent of total applications from 36.3 percent, while the adjustable-rate mortgage (ARM) share dropped to 4.0 percent from 6.4 percent. WANNA BUY A BRIDGE Color forecasters believe a citron yellow paint can help take the chill off the country's economic troubles, notes the Washington Post. And gray is said to be warm and welcoming. One shade of yellow, St. Elmo's Fire by Benjamin Moore, is being promoted not only for kitchens, where yellow traditionally resides, but for any room. "Yellow is a color emblematic of transition," says Esther Perman, a spokeswoman for the paint company. "Yellow is a feel-good color. (Creditors, take note, when mailing bills.) Notwithstanding, furniture retailers are taking a break from dark wood finishes and turning out gray furniture. "We see gray as the new neutral," says Kate Mulhearn, a spokeswoman for West Elm. "It's crisp, clean and elegant, and at the same time warm and welcoming." And it can make a whole meal in minutes! The California-based chain's current collection includes a gray coffee table, desk and wood-framed mirror. Mitchell Gold + Bob Williams is offering collections of light gray finished tables, and Pottery Barn has gray dining pieces, bedroom furniture and media suites. So, paint a wall, feel optimistic, buy some furniture. TO SOME, LOOKING AT BOOKS BEATS READING THEM Reading rates are down and Americans say they love casual living. And yet, one of the most KEEP THE HOME FIRES BURNING, BUT BRIGHTLY Fireplace surrounds or facades can be painted with latex paint, which can withstand temperatures much higher than typical fireplaces reach on their outer surfaces, according to the Washington Post. The firebox, of course, requires high-temperature paint. The bricks should be thoroughly cleaned before any painting. Scrub the bricks with a detergent solution, then rinse with clear water. Let the bricks dry well and apply a masonry sealer or primer. The latter will improve adhesion and help keep paint from soaking into the bricks. Use a high-quality latex or acrylic paint for the finish coats. The sealer and first coat of finish paint should be applied with a brush, which will let you work the paint into the pores of the bricks. Subsequent coats can be applied with a roller. Two or three coats are usually needed for good coverage. TECHNOLOGY, OIL AND TRADE BOOST 'SUCCESSFUL' CITIES Provo, Utah used its high-tech muscle to gain the top spot in the Milken Institute/Greenstreet Real Estate Partners 2008 Best-Performing Cities Index along with other growing technology-based and global trade centers in Utah, Texas, Washington, Alabama and the Carolinas. In the annual ranking of where America's jobs are being created and sustained, metros that are highly dependent on export-intensive industries also showed success. Several past leading cities fell as a result of the national decline in housing and construction markets, and metros that remain concentrated in manufacturing continue lag in the rankings. Rising energy prices have hindered the performance of cities where industries with high energy use are the key drivers, while benefiting those regions with significant oil and gas production and exploration activities. Said Ross DeVol, author of the report and director of Regional Economics at the Milken Institute: "We've seen energy, housing and even catastrophic events such as Hurricane Katrina impact a specific year, but consistently, those metros dedicated to growing their technology base and human capital beat the short-term shifts in the economy." The top 10 (with 2007 rankings in parentheses) of the 200 largest metros were, in order: Provo-Orem (8); Raleigh-Cary, N.C. (10); Salt Lake City (18); Austin-Round Rock (20); Huntsville (16); Wilmington, N.C. (2); McAllen-Edinburg-Mission, Tex. (7); Tacoma (50); Olympia, Wash. (37 in 2007 smallest-metros ranking); and Charleston-North Charleston (12). None of the 10 largest cities in the country ranked among the top 10. El Paso was this year's most improved, moving up 85 spots from 122nd to 37th, largely owing to a major expansion of the U.S. Army base at Fort Bliss. The biggest drop was Vallejo-Fairfield, Calif., which fell 123 spots after having declared bankruptcy because of falling revenues from sales and real estate taxes plus high labor. The lowest performers this year once again come from the industrial Midwest, with nine of the bottom 10 metros coming from Michigan or Ohio. The lowest-ranked metro was Detroit-Livonia-Dearborn, Mich. BUILDERS FEEL BETTER FOR THE FIRST TIME IN MONTHS Builder confidence in the market for newly built single-family homes rose for the first time in seven months in September, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI gained two points to 18, rising from its record low of the previous two months. Of course, that was before the events on Wall Street. CONSTRUCTION OF NEW HOMES REACHES 17-YEAR LOW Home construction tumbled a second month in a row during August, falling below expectations to the lowest level in 17 years, according to the Wall Street Journal. Housing starts decreased 6.2 percent last month to a seasonally adjusted 895,000 annual rate, the Commerce Department said. Single-family home groundbreakings also declined, and building permits fell sharply. Economists surveyed by Dow Jones Newswires expected August starts to drop by 1.6 percent. The level of 895,000 was the lowest since 798,000 in January 1991. Newly issued building permits also declined in August, suggesting that construction could continue to drop in coming months. Economists have been watching for signs that home construction, which has been a significant drag on U.S. economic growth, was beginning to stabilize. But the latest data, combined with gloomy sentiment among home builders and worsening problems in credit markets, suggest that conditions in the housing industry could worsen further. "A credit crunch is materializing with significant force that completely invalidates the notion that the housing slump is 'bottoming,'" said Roger Kubarych, chief U.S. economist at UniCredit, a markets and investment bank. The Game These Days is Chicken It is a perfectly nice corner condo on a high floor. The views through oversize windows are sweeping, taking in the Statue of Liberty to the southwest and up the Hudson River to the north. None of the 1,157 square feet is wasted. Not only do both bedrooms boast en suite baths, but there is a powder room as well. The closet space is excellent, and the galley kitchen offers a pass-through to the bright living/dining room. The 1986 pet-friendly building in Battery Park City itself is well regarded. There are a 24-hour concierge, an appealing backyard barbecue area, private extra storage, proximity to a lovely riverfront park, access to a school that is sought after, a garage and a nearby footbridge over the gulf called West Street that separates this essentially island community from the rest of Manhattan. Perhaps the only defects in the eyes of some buyers would be the nine-foot ceilings, the unimproved, if clean, baths, and the size of the kitchen - which measures 8'7" x 7'8" and which has been updated only with moderately priced appliances. The apartment is listed at $1.150 million with high common charges of $1,847 and real estate taxes of $1,123 monthly. Such a price is hard to explain. It evinces not a scintilla of appreciation for how the market has changed. The listing broker defends the amount, sheepishly it seems, by saying one in the same line two floors lower sold for just under $1 million six months earlier. And one two floors higher went for $1.2 million last year. Hey, it's not a rising market. Last year and six months ago were different, more robust markets, unaffected by the woes of Wall Street, which is a few blocks away, never mind the state of the city's real estate and the nation's economy. In fact, says the listing broker, there is an offer that the sellers are reluctant to accept even though they are eager to move on. It is high time that they and other sellers came to grips with the new reality. If they don't accept an offer that is lower than they wish for yet is all they deserve, they will have only themselves to blame for owning a property that languishes and finally goes for even less than the offer they received. If they continue to hold out, the game of chicken will almost certainly end badly with sellers' blood on the parquet floor. Below are other properties listed by various brokers and seen recently: Upper East Side
Downtown
Upper West Side
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"The converted bears, as well as the panicked sellers desperate to bail out and nervous buyers afraid to jump in, will be dead wrong nine months from now, when housing prices bottom," he writes in New York Magazine. "In fact, I'll call the precise date of the housing-market turnaround. It will begin on June 30, 2009. Let me give you ten reasons why everyone who now thinks there's no end in sight to weakening home prices will look like a fool in nine months and will miss the best opportunity to buy since the 1989-1991 real-estate crash."
the arrangement is the same: A homeowner agrees to give up part of a home's future appreciation in exchange for cash - typically 10-15 percent of the property's current value. Shared-appreciation agreements can make financial sense for some older adults. For one, they offer some protection against the current turmoil in real-estate markets. If a property's value has declined by the time the owner decides to sell it or terminate the contract, the homeowner gets to keep some or all - depending on the product - of the cash he or she is given upfront. And homeowners aren't saddled with monthly payments as in the case of a home-equity loan. Also, closing costs are typically less than that of a reverse mortgage (the fees for which new legislation are limiting). But these deals also carry considerable risks, according to some real-estate experts. In the first few years of a contract, lenders are generally protected from bearing their share of the losses. And if a home appreciates over the life of an agreement, this approach could prove more costly than a conventional loan.
FRM slid to 5.35 percent in comparison with 5.54 percent the previous week and 5.98 percent a year ago. The 15-year FRM has not been so low since the week ending March 27, when it averaged 5.34 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 5.67 percent this week, down from 5.87 percent last week and 6.21 percent last year. One-year Treasury-indexed ARMs averaged 5.03 percent; last week, the rate was 5.21 percent and last year, 5.65 percent. "Interest rates for 30-year fixed-rate mortgages fell for the 5th consecutive week, amounting to a total decline of about 0.75 percentage points," said Frank Nothaft, Freddie Mac vice president and chief economist. "As a result, mortgage applications surged nearly 58 percent since August 15, largely led by a 122 percent gain in applications for refinancing, according to the Mortgage Bankers Association (MBA). The MBA also reports that fixed-rate mortgages are currently the predominant choice among homebuyers and families looking to refinance. Over the first two weeks of September, 95 percent of new applications were for fixed-rate mortgages. Since the end of 2007, the number of ARM applications fell by almost 50 percent."
popular rooms in big new houses is a library, observes the Wall Street Journal. Their appeal is often about creating a certain ambiance. "Libraries connote elegance and quality," says New York architect and interior designer Campion Platt, adding that most of his wealthy clients want one, even if they do most of their reading online. In the latest annual National Association of Home Builders consumer survey, 63 percent of home buyers said they wanted a library or considered one essential, a percentage that has been edging up for the past few years. Many mass-market home builders are including libraries in their house plans, sometimes with retro touches like rolling ladders and circular stairs. Often (like, uh, most of the time), the books are purely decorative and don't say much about the family who lives there. The books that people really read, like paperback novels and how-to guides, often are kept out of sight elsewhere in the home.
