Although Realty Digest will be on hiatus for the holidays, you can keep up with significant news by visiting, bookmarking or subscribing to the Service You Can Trust blog. The posts always differ from or amplify what this newsletter contains, so read one almost every day and call Malcolm in the morning. PROPERTY SHARK FOUNDER TAGS WORST AREAS FOR SELLERS Matthew Haines, who founded PropertyShark.com, and his team dug into third-quarter numbers to help pinpoint the five areas of prime Manhattan that have been toughest on sellers, says New York Magazine. They based their findings on how long it takes a typical seller to find a buyer there (Manhattan average: 150 days), median-price drops over the past two years (Manhattan overall: 10 percent) and the number of closed sales relative to the total number of properties on the market (the average is 23 percent, and higher is better). The dubious distinction goes to Chelsea/Flatiron/ Union Square/ Hudson Yards, Midtown/Midtown South, Soho/Tribeca/Little Italy, Upper East Side/Carnegie Hill and Battery Park City/Financial District/South Street Seaport. If you want to know more, check out the article. CONSTRUCTION STARTS TAIL 2008 BY $1.4 BILLION A New York Building Congress analysis says that projects worth $3.9 billion started in the third quarter, similar to the second quarter’s $4.1 billion. More than twice the $1.8 billion in starts during the first quarter, the total is well below the third quarter of 2008 ($5.3 billion). The third quarter has been the strongest of the year for residential construction starts. Construction began on a total of 907 dwelling units from July through September in comparison with 506 in the second quarter and 859 in the first quarter of 2009. The current rate, however, is just a fraction of the New York City’s third quarter 2008 residential construction output of 3,206 units. Building Congress President Richard T. Anderson said it was “encouraging to see further evidence that construction activity in general has stabilized considerably after an abysmal start to the year.” WELL, THAT’S WHERE THE MONEY IS Banks have been turning the Upper West Side into a kind of walk-through ATM, helping push out the small businesses that give the neighborhood its charm, contends the Westside Independent. Since 2002, the number of bank branches on the UWS has almost doubled, with branches now outnumbering Starbucks three to one, in contrast to nationwide bank branch growth of approximately 15 percent over the same period. As of the summer, there were 47 bank branches in zip codes 10023, 10024 and 10025, plus six credit unions and stand-alone ATMs. Between the spring of 2001 and the fall of 2008, average retail asking rents swelled almost 60 percent on the Upper West Side. Because banks and chains have large corporations standing behind them, property managers prefer them to small business owners, who cannot afford higher rents anyway. Yet the recession stopped new growth in banks between 2008 and 2009. Commercial broker Faith Hope Consolo predicts that apparel companies and home furnishing stores are likely to be the next big movers in the area, as the “900-pound guerilla just puts a different suit on.” Meantime, the average asking rent fell 25 percent between the fall of 2008 and the spring of 2009. The whys and wherefores get extensive treatment on the Web site. MANHATTAN RENTAL MARKET CONTINUES TO SAG FROM 2008
IN HARD TIMES, DO YOU STIFF THE DOORMAN The useful Web site BrickUnderground.com put together an anecdotally-derived range of tips. A number of factors influence your place in the range, including size of the building. Here goes: Super, resident manager: $75 – $500 ($100 - $150 average); doorman, concierge: $50 - $250 ($50 - $150); porter, handyman: $10 - $75 ($20 - $30); garage attendant: $25 - $100 ($50 - $75). As the Web site points out, cookies are appreciated. But they don’t count. APPRAISER SAYS ABSORPTION APPROCHES 10-YEAR AVERAGE Considering how long it would take to sell off supply with current level of sales activity, Jonathan Miller of the Miller-Samuel appraisal firm says the absorption rate continues to improve; it is approaching the 10-year 10.0 month average for the Upper East Side, Upper West Side and downtown market areas of Manhattan. The East Side absorption rate has slowed significantly above $1.5 million, Miller relates, while the West Side rate has fallen in higher price segments up to $3 million. As for downtown, the absorption rate has declined in higher price segments. For more details, including Miller-Samuel charts, visit the Service You Can Trust blog. SOME CO-OP BOARDS EASE BUILDING RESTRICTIONS While the current economic climate has made co-op boards pickier when it comes to approving buyers, some brokers have attempted to get them to compensate for increased choosiness on the financial side by easing up in other areas - from pet policies to pied-à-terres, according to the Real Deal. The goal is to speed up sales and increase prices by appealing to a wider variety of purchasers. "The boards are realizing that to enable shareholders to get the maximum price for their apartments, they have to be a little more flexible with regard to the buyers," said Stuart Saft, a partner at law firm Dewey & LeBoeuf, and the chairman of the Council of New York Cooperatives and Condominiums. Of course, boards are still insisting that potential shareholders have steady jobs and plenty of cash. In addition, they are less likely to accept residents who are self-employed or whose incomes fluctuate from year to year. "We have to be sure this person does not become delinquent," observed Bruce Cholst, a partner at real estate law firm Rosen Livingston & Cholst, and a member of his own co-op board. PROPERTY MANAGER IS CHARGED WITH THEFT FROM BUILDINGS Mark Modano abused his position by siphoning off more than $1 million from six of the dozens of rental and co-op buildings that he managed throughout Manhattan in a Ponzi-type scheme, District Attorney Robert Morgenthau said, according to the New York Post. Modano, 50, used the cash for personal expenses, including a trip to Italy and theater tickets, prosecutors said. Hardest hit was a building at 805 Madison Ave., from which Modano allegedly siphoned off $634,000. Modano, who pleaded not guilty, faces up to 15 years in prison and mushy pasta if convicted. CASH IS NOT ONLY KING, BUT NEARLY OMNIPOTENT In this market, cash can be the only way to close a sale, according to brokers, attorneys and developers interviewed by the Real Deal. And discounts often await all-cash buyers, within reason. There are other benefits: less paperwork and fewer delays in closing transactions. “Cash used to be king, but now it's the emperor," says Luigi Rosabianca, a real estate attorney who reports that 50 percent of his clients have paid cash so far this year versus 20 percent in 2007 at the market's peak. Too, real estate brokers tell the publication that cash has made up 40-100 percent of their sales in the last few months. Sellers nervous about contracts being scuttled at the last minute are driving the trend, Rosabianca allows. They're offering to lop 5 percent off their prices - which are already down 20-30 percent because of the downturn - and to pick up transfer taxes if buyers pay with cash. Closings can sometimes occur within a lighting-quick 10 days in contrast to two months if buyers need to secure a mortgage, he adds. IN THIS LAWSUIT, A CIGARETTE IS A SMOKING GUN In a decision with major implications for smokers and those who live next to them, a New York civil court has found that smokers can be liable to their neighbors under nuisance and negligence laws, reports BrickUnderground.com. “Neighbors bothered by secondhand smoke don’t have to keep guessing what their rights are. It’s a cause of action that’s now recognized under the law - it’s a precedent,” exclaims Victoria Kennedy, who represented the owners of a $2.1 million Tribeca condo. “People can no longer say they have a right to smoke in their apartment even if it impacts their neighbors.” In the decision, which denied the defendant’s motion to dismiss a civil lawsuit seeking $25,000 in damages, the judge relied in part on a case of a commercial tenant who sued an adjoining tenant for nuisance caused by secondhand smoke. Liability extends to both the smoker and the owner of the unit occupied by the smoker. No word on any appeal. COURT DEALS BLOW TO COLUMBIA HOPES FOR EMINENT DOMAIN A New York appellate court has ruled that the use of eminent domain to create a new West Harlem campus for Columbia University was unconstitutional, the Observer reports. The case was brought by the owners of a set of storage warehouses and of two gas stations in the footprint for the 17-acre campus, called Manhattanville. Contending that the area was blighted, Columbia had said it needed eminent domain to establish a full, contiguous campus so as to build a large, interconnected underground facility throughout the area. Warner Johnston, a spokesman of the Empire State Development Corp. (ESDC), said the state would appeal the action. "The process employed by ESDC predetermined the unconstitutional outcome, was bereft of facts which established that the neighborhood in question was blighted, and ultimately precluded the petitioners from presenting a full record before either the ESDC or, ultimately, this Court," the 3-2 decision said. "In short, it is a skein worth unraveling." The decision found that the clear beneficiary of the eminent domain was Columbia, not the public. It court said further that, by buying up property and not maintaining sidewalks, Columbia had helped to create blight. Moreover, the university underwrote costs for the entire project without funds from the city or state. MORE TENANTS ARE BECOMING DEADBEATS, PANEL SAYS The percent of residential apartment dwellers in the city who are not paying their rent has as much as quadrupled since the market weakened last year, say industry leaders on a panel during a daylong forum on multi-family properties, according to the Real Deal. "Collections, especially in New York City, have become more of an issue," said Mark Stern, senior vice president at Waterton Residential, a Chicago-based building owner and operator. "[They are] going from the 5 percent range to now 10 or 20 percent in collections." Mason Sleeper, a principal with the real estate investment firm Praedium Group, told of similar distress. “You have your collection issue which is increasingly creeping up to becoming a little bit of a problem," he said. COUNT ON THIS ADVICE FOR A GREENER KITCHEN When choosing a new countertop with an eye on the environment, the Washington Post suggests that you keep in mind a number of considerations. Among them are: the raw materials used, opting for renewable, recycled renewable or "post-consumer" recycled renewable; the amount of energy required to make the product, including all transportation; the distance from the source to your house; indoor air quality since some materials emit volatile organic chemicals; ease of maintenance; and the product's life cycle, including the possibility of recycling or re-using it. There’s much more detail available. CHINESE DRYWALL IS EMITTING ACIDIC FUMES Federal regulators said there is a "strong association" between chemicals emitted by Chinese drywall and metals corrosion, reports the Wall Street Journal. The finding could pave the way for the government to help homeowners facing billions of dollars in repair bills. But who will pay for the damages remains unclear. The Consumer Product Safety Commission said a federal investigation has shown levels of hydrogen sulfide to be higher in some houses built with Chinese drywall than in those without it. The findings include results from an indoor-air study of 51 homes and two other preliminary studies on home corrosion. Nearly 2,100 homeowners in 32 states and Washington, D.C., have maintained that their homes were damaged by chemicals emitting from Chinese drywall. Many of the affected homes were built in 2006 and later in areas of the Southeast, and most complaints have come from Florida and Louisiana. Some builders used the Chinese product because of a domestic shortage during the housing boom. Homeowners have complained of health problems such as bloody noses, headaches and asthma attacks, but regulators said more studies are needed to determine whether there is a link between the drywall and health or safety issues such as fire hazards possibly from damaged electrical wiring. TAKE A BREATH (BUT NOT IF YOU OWN THAT CHINESE DRYWALL) According to the Environmental Protection Agency, Americans spend on average about 90 percent or more of their time indoors, where pollutant levels may be two to five times - and occasionally more than 100 times - as high as the levels outdoors, observes the Washington Post. Glenn Fellman, executive director of the Rockville-based Indoor Air Quality Association and Indoor Environmental Standards Organization, offers plenty of advice on how to keep those nasties out of your home. LOW RATES BREAK 38-YEAR RECORD The 30-year fixed-rate mortgage (FRM) averaged 4.71 percent for the week, down from last week’s 4.78 percent and last year’s 5.53 percent, according to Freddie Mac. The 30-year has never dropped so low since Freddie Mac began its weekly survey in 1971. The 15-year FRM this week was 4.27 percent in comparison with 4.29 percent the prior week and 5.77 percent at the same time last year. This loan, too, broke last week’s record, the lowest since Freddie Mac started tracking it in 1991. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) edged up to 4.19 percent from 4.18 percent; a year ago, it averaged 5.77 percent. The one-year Treasury-indexed ARM slipped to 4.25 percent from last week’s 4.35 percent and 5.02 percent a year earlier. It has not been this low since the week ending June 30, 2005, when it averaged 4.24 percent. LENDERS ENDURE BIG DROP IN BUSINESS IN THIRD QUARTER Bank of America, the country’s largest mortgage lender, saw business drop off 14 percent in the third quarter, while total U.S. mortgage originations were down about 25 percent, according to a report by MortgageDaily.com, says the Real Deal. Overall third-quarter volume was 22 percent lower than it was in the second quarter, the report indicated. Compared with a year ago, however, fundings were 40 percent higher. Wells Fargo came in at No. 2 from No. 1 in the second quarter ranking. Wells saw volume fall by more than one-fourth from the second quarter. Originations at third-place JP Morgan Chase were off 10 percent from the second quarter, while GMAC Financial Services came in about 17 percent lower. ECONOMIST SEES NO RISE IN RATES UNTIL 2011 Telling the New York Times that the credit crunch is the driving force behind the Federal Reserve’s mortgage purchase program, Ian Shepherdson, chief U.S. economist at High Frequency Economics, says the initiative is not about driving down mortgage rates. Instead, the program is about trying to prevent a collapse in the money supply. When the Fed buys assets, it creates deposits, helping offset the credit pullback. If the Fed weren’t buying mortgages with both hands, Shepherdson estimates, the money supply would be falling 1 percent a month. The message amid this gloom, he contends, is that the Fed isn’t likely to raise interest rates anytime soon. In fact, he doesn’t anticipate an increase in rates until the spring of 2011. “I would be astonished if they raised rates in the heart of the credit contraction storm,” Shepherdson says. “The credit contraction will last for a couple of years, and if the Fed is interested in offsetting it, they will have to buy assets through next year.” But Keith Gumbinger, a vice president at financial publishers HSH Associates, predicts that the end of Fed intervention will push rates up about three-quarters of a point to somewhere in the mid-5 percent range. By late 2010, he forecasts, the rate will be closer to 6 percent. NEW BANKRUPTCY LAW IS LINKED TO FORECLOSURES Wenli Li and of the Philadelphia Federal Reserve Bank and Michelle J. White of the University of California, San Diego say a 2005 reform that made declaring personal bankruptcy more difficult increased mortgage defaults and home foreclosures. The reform sharply increased debtors’ cost of filing for bankruptcy, causing a sharp reduction in the number of filings. Because credit card debts and other types of unsecured debt are discharged in bankruptcy, filing for bankruptcy loosens homeowners’ budget constraints and makes paying the mortgage easier, according to the economists. “Thus,” the economists write in a report you can read, “the 2005 reform set the stage for an increase in mortgage defaults by making bankruptcy less readily available. In other words, reducing the ability to file for bankruptcy increases the probability of mortgage default.” They estimate that the reform caused some 800,000 additional mortgage defaults and 250,000 additional foreclosures to occur in each of the past several years. MORTGAGE ACTIVITY GREW DURING THANKSGIVING WEEK The Mortgage Bankers Association says mortgage loan application volume increased 2.1 percent on a seasonally adjusted basis for the week ending Nov. 27 from the previous week. On an unadjusted basis, however, activity fell 29.3 percent. Refinancing applications went up 1.7 percent and purchase volume, 4.1 percent adjusted for the holiday. The results include an adjustment to account for the Thanksgiving holiday. The unadjusted purchase amount dropped 30.4 percent; it was 34.9 percent lower than the same week one year ago. The refinance share of mortgage activity rose to 72.1 percent of total applications from 71.7 percent the previous week, and the adjustable-rate (ARM) share decreased to 4.8 percent from 5.3 percent. FANNIE MAE RAISES MINIMUM CREDIT SCORE TO 620 As the Federal Housing Administration (FHA) considers raising the minimum credit score requirement for new borrowers to reduce risks to the single-family insurance fund, Fannie Mae has increased the minimum borrower credit score from 580 to 620, according to HousingWire.com. Fannie spokesman Brian Faith said that recently delivered loans with credit scores below 620 have reached “a level of serious delinquency at a rate approximately nine times higher than other acquisitions during the same period.” YOUNG ENTRPRENEURS PAINT THE TOWN – ER, HOUSE – RED Foreclosed and vacant homes are becoming the sites of choice for some entrepreneurial partiers, according to USA Today in Realtor magazine. Police around the country are arresting young people who either rent vacant houses for a bash or just sneak in. In San Diego County, Sheriff’s Office Detective Jeff Lauhon says some well-organized entrepreneurs were asking real estate professionals for tours of large foreclosed homes in remote places. While touring the property, they would open a window or unlock an outside door so they could return and throw a party. “It turned into a business venture. They were charging admission to cover the cost of alcohol and to make a good profit,” Lauhon relates. In Tempe, Ariz., another party town, patrol officers have been assigned lists of foreclosed homes so officers can make sure nothing untoward is happening, says Sgt. Steve Carbajal. HOW BI— TALL ARE YOU, SUPERMAN Under new government guidelines, real-estate developers will have to state clearly the floor number and square footage of condominium units in their sales materials, according to the Wall Street Journal. Last month, blue-chip developer Henderson Land Development Co. said it sold a unit in its luxury condominium, 39 Conduit Road, for the equivalent of $56.6 million. The unit, which was marketed as being on the 68th floor of the building, was actually on the 44th floor. The building's floor numbering plan skipped scores of numbers deemed to be inauspicious (those containing the number four, for example, which sounds like a Chinese word for death) and highlighted the ones considered lucky (such as ones containing “eight,” which sounds like a word for prosperity). The top floor of the 46-story building is called the 88th floor. (No, Lois, anyone faster than a speeding bullet surely wouldn’t have to lie about his height.) Under the government's new measures, developers also will have to show the per-square-foot price of individual flats, using saleable area. At 6,158 square feet, the apartment at 39 Conduit Road sold for $9,200 per square foot. After stripping out the extras, the condo totals only 4,671 square feet - $12,000 per square foot. SOME CITIES GAVE MOST ECONOMIC SECURITY DURING RECESSION While no region has escaped the recession, Omaha, three Texas metros, a handful of Northeastern manufacturing bases and select southern cities make a Forbes list of those that offered the most economic security. The magazine said the cities’ diversified industry and relatively stable housing fundamentals have provided local residents with comparatively secure standards of living. Omaha, which topped the list, has had a healthy 1.3 percent gross metropolitan product (GMP) growth in the past year, a low foreclosure rate and a 5 percent unemployment rate. In order after Omaha, the cities were San Antonio, Austin, Pittsburgh, Harrisburg/Carlisle, Pa., Dallas/Fort Worth, Rochester, N.Y., Houston, Raleigh/Cary, and Baton Rouge. See the story here. RESIDENTS IN SOME ASSISTED LIVING ARE GETTING A RAW DEAL Financial problems have been mounting at a number of assisted-living and continuing-care communities, forcing some facilities into bankruptcies and inflicting new worries on residents and their families who thought their life plans were comfortably set, says Newsweek. In recent weeks, Erickson Retirement Communities, which manages 19 continuing-care retirement communities in 11 states, declared bankruptcy. Sunrise Senior Living Inc. posted a quarterly loss of $82 million and announced plans to sell off 21 of its assisted-living communities. Nationally, smaller retirement communities are raising their prices, changing the way they operate, selling themselves off to bigger chains or getting out of the business altogether. But the communities can become unaffordable, residents who fall behind in monthly payments can be kicked out, and some may find that the sizeable deposits they made to get their apartments in the first place have disappeared. MIAMI-DADE TO AUCTION FORECLOSED PROPERTIES ONLINE Miami-Dade County will use online auctions for the thousands of delinquent properties that have made South Florida a center of the recession, reports the New York Times. The Web site, will become fully operational on Dec. 7, making Miami-Dade the largest of 12 Florida counties in the process of replacing courthouse auctions with online sales. County officials expect to triple the number of properties sold, now about 450 a week, slowing the growth of an inventory of 110,000 foreclosures. The laws of many states require that auctions take place “on the courthouse steps.” In Miami, with 7,000 properties entering foreclosure each month, that stricture often has meant that auctions were held in small dank rooms where a handful of investors or their employees would jockey for properties. The online system would end, or at least make digital, what many officials describe as a process steeped in speculation, trickery and, occasionally, physical conflict. PRICES AND SALES IN EUROPE RE ON THE RISE Prime residential property prices in Europe are beginning to regain their poise, fueled by investor appetite for direct investment opportunities, cheap money and exchange-rate advantages, says the Wall Street Journal. London is leading the charge, but residential property in Switzerland, Monaco and the South of France also is sparking to life. The downturn hit prime property - those valued at €2 million and above - hard. Central London prime residential property fell 20-30 percent from peak to trough. Monaco and South of France property was off 20 percent. Many wealthy investors are buying prime residential property in Europe for investment reasons. Knight Frank, the upmarket London-based estate agent, said that 30 percent of its deals in the prime London market were sealed in October and September. Savills, another exclusive London estate agent, reported a similar rise in activity during the same period. "People are coming to us with saddlebags laden with money," said Trevor Abrahmsohn, who runs estate agency Glentree. FORGET ABOUT ELECTRONIC FILING FOR HOUSING TAX CREDIT If you're planning to claim a home-buyer tax credit on your 2009 tax return, the IRS says you must file a paper return in the agency’s attempt to fight fraud. Another requirement: Anyone younger than 18 on the date of the home purchase cannot claim the credit unless an older co-buyer is involved. THEY FIND THAT GRASS NOT ONLY EXISTS BUT CAN BE GREENER While urban and suburban real estate is still generally under pressure, the Wall Street Journal observes that the rural market is holding up better in many areas. In part, the support comes from folks sometimes dubbed "ruralpolitans." They are city and town dwellers who look at land as their new safe investment, one they hope could prove more stable than their jobs and 401(k)s and also provide a better lifestyle. Typically, the ruralpolitans fit into three groups: young people buying land as an asset or investment with vague hopes to live on it someday; exurban commuters who have jobs in big towns or cities but want to escape the sprawl; and back-to-the-land types who want to dabble in hobby farming. While the 76 million-strong baby boomers eyeing retirement represent the largest ruralpolitan segment, they're being joined by a growing contingent of 20-to-early-40-somethings freshly imprinted by this recession's pain. DON’T EXPECT BLAND IN THEIR NEW TOWNHOUSE Designer Marc Jacobs and Lorenzo Martone have closed on their townhouse at Superior Ink in Greenwich Village, says the New York Post. They paid $10.4 million for what is described as a "white box" of empty space on Bethune Street. The 4,440-sf townhouse features a private elevator, rear terrace and yard, and a roof deck. Houston Rockets owner Leslie Alexander previously paid $25 million for his place in the complex. BICOASTAL DEFENSIVE END DECIDES TO SELL PIED-A-TERRE Retired New York Giants defensive end Michael Strahan is offering his loft in Manhattan's Tribeca neighborhood for $1.875 million, according to the Wall Street Journal. Strahan, 38, is a football analyst on Fox NFL Sunday and also stars in the Fox sitcom "Brothers," which shoots in Los Angeles. The 1,911-sf condominium has one bedroom, a home office and two bathrooms. The high-floor apartment, with 15-foot ceilings and sandblasted brick walls, is in a converted pre-World War II commercial building. It has a full-time doorman, a gym and a kids' playroom. The defensive end, who played 15 seasons with the Giants before retiring in 2007, bought the apartment in August 2008 as a pied-à-terre but has hardly used the place. Strahan also owns homes in Texas and California. A DOWNTOWN CONDO HAS BECOME THE HOME OF THE BRAVE Samuel L. Jackson is reportedly the mystery buyer behind the purchase of a 2,578-sf condo at 76 Crosby St., says CityFile.com. The second-floor apartment, which was sold by Wall Street exec Eric Gross and just happens to be located next door to Gawker founder Nick Denton’s pad, was most recently listed for $4.35 million. Jackson reportedly is picking it up for just under $4.1 million. MEDIA MOGUL’S HEIR OPTS FOR A PAD FIT FOR BUDDHA Samuel I. Newhouse IV bought a “Zen-like” loft in Tribeca for $2,465,000, the Observer reports. There’s no mortgage filing, suggesting that he paid in cash. His new two-bedroom condo at 55 North Moore St. was listed in May for $2,625,000. The foyer features a back-lit Onyx wall and custom industrial pendant light, Venetian-plastered hallway and a gargantuan living/dining room, where the ceilings are tin-pressed, the walls are made of “Cuban hand-rubbed white washed brick” and the open chef’s kitchen’s temperature-controlled wine refrigerator holds a mere 40 bottles. HE SURELY WON’T LOVE THE ULTIMATE SALE PRICE Tennis champion Mats Wilander has trimmed the price of his home in the Idaho resort area of Sun Valley to $5.95 million, a 30 percent cut from the original listing price two years ago, says the Wall Street Journal. Wilander, a seven-time Grand Slam singles-event winner, bought the 81-acre estate in the 1990s with his wife Sonya and built a home there in 1999. The 10,500-sf contemporary house has seven bedrooms, eight baths, a large exercise room and a soundproofed music room. There's also a lap pool and hot tub, a guest house and caretaker's residence. A 20-minute drive from Ketchum, the estate is bordered by undeveloped private and public lands. TIMING PUTS HIM BETWEEN A ROCK AND A HARD PLACE Former “Dateline NBC” co-anchor Stone Phillips has put his 4,100-square-foot Flatiron loft condo on the market for $4.995 million. The three-bedroom, two-and-half-bath unit on a full-floor includes a soundproof media room and a library with floor-to-ceiling bookshelves. Philips bought the place for $4.45 million in 2005, when the market was strong. Phillips, whose $7 million contract was not renewed by NBC in 2007, is now producing documentaries, where the work must be rewarding in ways other than financial. IT’S NOT ONLY CLOTH THAT HE KNOW HOW TO CUT Fashion designer Christian Lacroix has sold a Paris apartment for €1.2 million, or approximately $1.8 million, the Wall Street Journal reports. Lacroix originally listed the apartment in January for €2 million. The 2,150-sf apartment is part of a late-17th-century building in the Marais district. The duplex apartment includes three bedrooms, two baths and an upper floor with public rooms designed around an interior patio of roughly 200 square feet. The apartment has 13-foot ceilings and includes original details such as French doors (shocking!) gilded moldings (more shocking!) in the master bedrooms. Lacroix, 58, bought the apartment nine years ago but has since purchased and moved into a slightly smaller apartment nearby. A Paris court has approved a restructuring plan for the fashion house that bears the Lacroix name and that has filed for bankruptcy-court protection. Under the plan, Lacroix's haute-couture and ready-to-wear operations will shut down. FOR THIS CHAMPION, IT IS ONCE AGAIN HIS MOVE Garry Kasparov, the youngest world chess champion in history, recently bought a $3.4 million penthouse apartment on 76th Street on Manhattan’s Upper West Side, according to the Observer. Kasparov also keeps residences in Paris, Moscow, Leningrad and New Jersey. The deed for the penthouse condo was filed under his name and that of his third wife Daria, with whom he has a young daughter. PAYING $1,462 A SQUARE FOOT, HE SINGS A HAPPY TUNE ANYWAY John Legend has paid $1.9 million for an apartment in New York's East Village and has gone into contract to sell a nearby unit, says the Wall Street Journal. The floor-through one-bedroom in a new glass-and-steel tower on the Bowery and East Fourth Street was originally listed for $2.3 million. The more than 1,300-sf apartment (originally a two-bedroom) has two baths, 14-foot ceilings and views north, south and west. "I didn't want a cookie-cutter place," said Legend about the apartment earlier this year, when he went into contract. The 15-story tower has a doorman and outdoor pool. He is selling his old condo, a two-bedroom place also in the East Village for around $1 million, though it was listed for $1.2 million. SIGNED CONTRACTS RISE NINE CONSECUTIVE MONTHS Pending home sales have climbed for nine months in a row, according to the National Association of Realtors (NAR). Based on contracts signed in October and undoubtedly propelled by the then-expiring tax credit (now extended), the Pending Home Sales Index increased 3.7 percent in September, 31.8 percent above October of 2008. The rise from a year ago is the biggest ever recorded for the index, which is at the highest level since March 2006. Warned NAR Chief Economist Lawrence Yun: “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6 million annually, but we were well below the 5 million mark before the home buyer tax credit stimulus. This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.” Cautioning that home sales could dip in the months ahead, he noted that it can take up to five months between the time buyers start looking at homes until they close. “Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring, when we get another surge, but the weak job market remains a major concern and could slow the recovery process.” NEW-HOME SALES IN OCTOBER JUMP 6.2% FROM SEPTEMBER Sales of new one-family houses in October were at a seasonally adjusted annual rate of 430,000, according to federal government estimates. TAX CREDIT SPURS SURGE IN OCTOBER’S EXISTING-HOME SALES Sales of previously owned single-family homes, townhomes, condominiums and co-ops jumped 10.1 percent over September, 23.5 percent more than one year earlier and at the fastest rate in 27 months, according to the National Association of Realtors (NAR). With prices falling below October of 2008, inventory also dropped. “It’s an impressive increase and shows a lot of pent-up demand for housing,” said Dean Maki, chief U.S. economist at Barclays Capital. “Buyers have enough confidence to take the plunge. The housing market recovery will be a durable one.” Said NAR chief economist Lawrence Yun: “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November. With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.” Noting a survey showed that 13 percent of first-time buyers said their previous contract was cancelled or fell through, Yun added that there “likely are many more buyers who were attempting to purchase but simply ran out of time.” Total housing inventory at the end of October fell 3.7 percent, representing a seven-month supply at the current sales pace in contrast to an eight-month supply in September. Unsold inventory totals slid 14.9 percent below a year ago to the lowest level since February 2007. The median price was $173,100 in October, down 7.1 percent from October 2008. For just single-family homes - which posted a 21.4 percent increase in sales over the prior October - the median was $173,100, down 6.8 percent from a year ago. Apartments recorded growth of 40.8 percent over the previous year, and the median price was price was $172,900, 10.4 percent below October 2008. CASE-SHILLER RECORDS 2nd QUARTERLY IMPROVEMENT IN ROW The S&P/Case-Shiller National Home Price Index posted an 8.9 percent decline in the third quarter versus the third quarter last year. It was a marked improvement over the 14.7 percent decline in the annual rate of return in the second quarter of 2009 and the 19.0 percent drop in the first quarter. The 10-City and 20-City Composites recorded annual declines of 8.5 percent and 9.4 percent, respectively. Both indices, which omit apartment sales and embrace the suburbs, have generally seen improvements every month since the beginning of the year. As of the third quarter of 2009, average home prices across the United States were at levels similar to autumn of 2003. Nineteen of the 20 metro areas saw improvement in their annual returns compared with the previous month, Cleveland being the only exception. San Francisco and D.C. have had six consecutive months of positive returns. Chicago, Minneapolis San Diego were positive for five consecutive months. In addition, nine of the Metropolitan Statistical Areas (MSAs) reported positive monthly returns for September, and four of those - Chicago, Detroit Minneapolis and San Francisco - were greater than 1.0 percent. Las Vegas remains the most depressed market, and while Detroit has inched up, the market still is at only 73 percent of its 2000 value. By comparison, Los Angeles, New York and Washington have maintained values of 70-80 percent above their 2000 averages. The New York metro area figures stayed somewhat steady month-over-month, according to the report, with September declining only 0.3 percent decline from August, the New York Times reports. THE FED DOCUMENTS RELATIVE STRENGTH AT LOWER END A majority of districts reported that the lower-priced segment of the housing market has outperformed the high end, observed the Federal Reserve in its latest Beige Book. Increases in sales activity were reported in the Boston, Cleveland, Richmond, Atlanta, Chicago, Minneapolis, Kansas City, Dallas and San Francisco districts, though sales were described as steady or mixed in the New York and Philadelphia districts. Multifamily housing markets deteriorated further in the New York and Chicago districts, according to the publication. “More broadly, a number of eastern Districts reported continued declines in home prices - specifically, Boston, New York, Philadelphia and Richmond,” it continued. “In contrast, prices were said to have firmed somewhat in the Dallas and San Francisco districts and stabilized in the Chicago and Kansas City Districts.” New York, Philadelphia, Richmond, Atlanta, Minneapolis and Kansas City saw relative weakness at the high end of the market, with relative strength at the lower end. “In most cases, this strength was largely attributed to the homebuyer tax credit (which was recently reinstated and expanded to include existing owners),” the Beige Book said. Although the level of new residential construction activity was generally characterized as weak, Atlanta, Kansas City and Dallas had some pickup in home construction. The Chicago and St. Louis Districts reported declines, and residential construction was described as flat or stabilizing by Cleveland, Minneapolis and San Francisco. THE FAMILY THAT PLAYED APART NOW STAYS TOGETHER Ten percent of adults younger than 35 told the Pew Research Center that they had moved back in with their parents because of the recession. Twelve percent had gotten a roommate to share expenses, 15 percent said they had postponed getting married, and 14 percent said they had delayed having a baby. In the Pew study, 13 percent of parents with grown children said one of their adult sons or daughters had moved back home in the past year. According to Pew, of all grown children who lived with their parents, two in 10 were full-time students, one-quarter were unemployed and about one-third said they had lived on their own before returning home. At the same time, the Census Bureau has reported that the portion of adults 18-29 who lived alone declined to 7.3 percent in 2009 from 7.9 percent in 2007. A decline that big has been recorded only twice before over three decades - in the early 1980s and the early 1990s during or after recessions. TODAY'S HOUSING MARKET DRAWS INVESTORS Affordable prices and foreclosures are attracting investors to the housing markets today, and the number of consumers interested in investing in real estate has doubled since March 2009, according to a new Move.com survey. The survey found that 12.1 percent of homebuyers plan to buy a home as an investment property versus 5.6 percent seven months ago. Foreclosure buyers account for 25.3 percent of consumers who want to make a purchase, with 42 percent of them regarding their purchases as investments and 57.6 percent planning to live in the homes themselves. Foreclosure investors intend to convert their foreclosures into rentals (13.2 percent), fix them up for re-sale (11.3 percent) or house a family member until the home can be sold at a profit (17.4 percent). Of those seeking a foreclosure for investment, just over half were 35-49 years old. Most foreclosure buyers (58.2 percent) expect to pay 20 percent or less than market price for a foreclosure, while 38.5 percent expect a 25 percent or greater discount. While, 73 percent expect their properties to appreciate 10 percent or more in five years, 28 percent expect their purchases to appreciate 20 percent or more during that same investment horizon. Almost a quarter of the prospective purchasers said they believe prices are as low as they will go. ONE IN FOUR U.S. HOMESOWNERS IS DROWNING The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23 percent, reports the Wall Street Journal. Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company. These so-called underwater mortgages pose a roadblock to a housing recovery because the properties are more likely to fall into bank foreclosure and get dumped into an already saturated market. Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20 percent higher than their home's value, the First American report said. More than 520,000 of these borrowers have received a notice of default, according to First American. Says Mark Fleming, the company’s chief economist: "It lowers homeowners' mobility because they can't sell, even if they want to move to get a new job." Even recent bargain hunters have been hit: 11 percent of borrowers who took out mortgages in 2009 already owe more than their home's value. GLOBAL INVESTORS ARE WARMING TO REAL ESTATE A survey by Barclay’s Wealth of 2,000 investors world-wide who have investible assets of more than $800,000 has found that 75 percent felt residential real estate looks attractive from an investment perspective. While few have the confidence to call the bottom with certainty, a growing number of high-net worth investors say that the descent has been deep enough to start preparing for the eventual upturn and are making selective investments, the company’s report said. “Indeed, in recent months, some real estate markets have bounced back strongly and are appreciating in value,” it continued. “Over the next two years, 35 percent of respondents plan to increase the proportion of real estate in their portfolios (not including their primary residence), while 48 percent plan to maintain their current allocations.” Although three out of four wealthy investors say that residential real estate is looking attractive, 60 percent say that tight credit conditions are preventing them from taking the plunge. Just under half expect an increase in the overall value of their real estate investments over the next two years, while 29 percent expect no change and 23 percent expect a decrease. By a substantial margin, most investors responded that they consider the U.S. to be the most attractive real estate market followed by the U.K. However, the survey also found substantial interest in emerging investment destinations such as China and India. Nearly half the women surveyed say real estate is a less risky investment than stocks, whereas only 37 percent of men agree. Similarly, while 44 percent of women find buying real estate more enjoyable than investing in other asset classes, just 28 percent of men feel the same way. Obtain a PDF of the entire report by clicking here. 36% INCREASE IN HOUSING STARTS IS PREDICTED NEXT YEAR Housing starts will increase by 36 percent next year and the housing sector will contribute to economic growth for the first time since 2005, according to the November survey by the National Association of Business Economics. The 48 professional forecasters see housing starts hitting 790,000 units in 2010, up from 580,000 in 2009. The economists also expect house prices will bottom out this year and rise 2 percent in 2010. "When asked what factors were driving the housing rebound, panelists identified low house prices and interest rates as the two most important factors," a summary of the survey results says. DATA COMPANY FORESEES A SPRING REBOUND First American CoreLogic predicts continued declines in most markets, albeit at a slowing rate, for the next six months, followed by a rebound in the spring. Above-average levels of foreclosures, inventories and unemployment will continue to take their toll in many major metropolitan markets in the short term, the company said in its latest report. “As the economy continues to improve and these factors improve, the forecast calls for housing prices to bottom for most markets by March 2010 and then turn positive,” the report continues. “This would yield the first positive year-over-year house price appreciation since the beginning of 2007. In September 2009, the forecast is projecting that 12-month appreciation for national home prices, excluding distressed, will be 1.1 percent, bringing price levels for that segment of the market back to levels in May 2004. The 12-month forecast is more negative now than in August as a result of recent increases in the unemployment rate.” ECONOMIST EXPECTS WEAK REBOUND IN PRICES Harvard University economist Edward Glaeser tells Money magazine that older, colder cities are unlikely to come back because their initial growth was tied to transportation costs, reports Realtor magazine. Now that few goods are moved by water, their productivity and number of residents have declined. Cities likely to grow include Atlanta, Dallas and Houston, which have a vibrant economy, warm climate, lenient building environment and smaller price drops through the housing meltdown, he says. But Glaeser doesn’t foresee property values rising to previous levels, even in attractive locales. “The harsh reality is that real estate prices that go up come down,” he contends. “I've found that for every real $1 increase in local market prices over a five-year period, prices go down 32¢ over the following five years.” 3 studios, 2 prices, 1 question A 1941 co-op building on a corner of Amsterdam Avenue in the low 90s has not one or two, but three studio apartments on the market at the same time. And, though they are profoundly similar, two of them went on the market at $50,000 more than the third one (which was described here a while back).
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The Manhattan rental market continues to lag in year-over-year performance, but November rents remained relatively stable versus last month, according to the Real Estate Group of New York. Overall, rents in the borough fell only 0.03 percent during the normally slow month of November. The largest price change actually was an increase in doorman one-bedroom units of 1.12 percent. Supply fell 5.36 percent overall but 11.94 percent in non-doorman units. You’ll find more information and some tables in the 
The 6.2 percent monthly increase compares with 5.1 percent over the same month of 2008. The median sales price of $212,200 was approximately $17,000 lower than the year earlier; the average was $261,100. Inventory slipped to a supply of 6.7 months at the current sales rate. “The October sales pace was a bit stronger than some folks expected, but the bad news is it remains incredibly low,” commented respected housing consultant Thomas A. Lawler. “The good news is the sales pace was enough for inventories to continue to go down.” Added Weiss Research analyst Mike Larson: “New home inventory is now plumbing depths we haven’t seen in 38 years. If you’re looking for a sign that builders will need to start swinging their hammers again soon, this is it.” For his part, Toll Brothers CEO Robert Toll said he's optimistic about the industry's progress. "The new home market is improving. We sense that it is, though slowly and through choppy waters." You’ll find additional comments in a Wall Street journal 
