Items of Interest HOME CONSTRUCTION CONTINUES PLUNGE TO RECORD LOWS Housing starts and permits fell for a seventh consecutive month in January, according to the U.S. Commerce Department. New-home production fell by 16.8 percent, while permits for new housing construction fell 4.8 percent. "Today's housing report was even weaker than most analysts expected," noted Chief Economist David Crowe the National Association of Home Builders (NAHB). "Clearly, builders are waiting for consumers to return to the marketplace before putting their crews back to work, which is the prudent, though painful, thing to do at this time." Single-family housing starts fell 12.2 percent, while multifamily starts dropped nearly 28 percent. January permit issuance, which can be an indicator of future building activity, declined 8 percent. The January numbers were much bigger than Wall Street expected. Economists surveyed by Dow Jones Newswires had forecast a 4.9 percent decline. The last time starts rose was June 2008. Year over year, housing starts were 56.2 percent below the pace of construction in January 2008. "While this means the economy will be very weak in the near term, cutting down excess housing inventories is a critical component of getting home prices to stabilize (which is at the heart of the financial crisis, and won't occur until inventory/sales ratios for housing get back to 7-8 months of supply from 13 now), economist Michael T. Darda of MKM Partners told Dow Jones. THE FOURTH QUARTER WAS NOT, UNSURPRISINGLY, A GOOD ONE Most metropolitan area median home prices trended down from a year earlier, and sales of RENTALS OF LUXURY HOMES ARE HURTING TOO In Seattle, a waterfront home appraised by two agents at $15 million is for rent for $10,000 a month, down from $14,000 a month ago. In San Francisco, a Pacific Heights Georgian owned by Kirk Hammett of Metallica, went on the market for $14,000 a month. It had been on the market for $9.5 million. In some cases those rents wouldn't even cover the taxes and maintenance cost of the homes, observes the Wall Street Journal. "At least they're paying the utilities," says Richard Goodwin, of renters who recently snapped up his newly constructed Aspen home, estimated to be worth $5 million, for $4,000 a month. New Canaan, Conn. real estate agent Lawrence Story has "been in the business 30 years and I have never seen anything like this." He says there are 22 rental listings for $9,000-20,000 a month, more than double the number a year ago. Apartment rents (single-family-home rents aren't tracked) fell nationwide in the fourth quarter of 2008 for the first time since 2003 and are expected to fall by 1.7 percent this year, a projection larger than any annual figure on record, according to Reis Inc., a New York City real-estate research company. MOODY'S SAYS HOUSING MARKET'S BOTTOM MAY BE NEAR Despite the darkening national economic outlook and the weak conditions in the housing market, some positive signs give hope that housing is about to hit bottom, according to a comprehensive new study by Moody's Economy.com. The report predicts that house prices will stabilize by the end of this year and that the national Case-Shiller house price index will decline by another 11 percent from the fourth quarter of last year for a total peak-to-trough decline of 36 percent. "Despite the darkening national economic outlook and the weak conditions in the housing market, some positive signs give hope that a bottom in the housing market is coming into view," the report says. By the end of this unprecedented downturn, house prices will have declined by double digits peak to trough in nearly 62 percent of the nation's 381 metro areas, according to the study, which adds that price declines will exceed 30 percent in about 10 percent of metro areas. The report projects that peak-to-trough declines for metro areas will be 66 percent in Miami, Fla., 63 percent in Riverside-San Bernardino, Calif., 58 percent in Phoenix, 56 percent in Las Vegas, 53 percent in Los Angeles, 38 percent in Washington and 33 percent in New York. UNEMPLOYMENT WILL KEEP MORE RENTAL UNITS VACANT Housing experts expect multifamily vacancy rates soon to reach 8 percent nationwide, higher in some areas, according to forecasts cited by Investor's Business Daily in Realtor magazine. "Apartment vacancies in the fourth quarter went from around 6 percent to 6.7 percent, so it was a very quick reaction," says Hessam Nadji, managing director of research for real estate brokerage Marcus & Millichap. Top-of-the-line properties are having the greatest difficulty finding tenants, while Class B and C buildings are holding up better. "People are dialing down their residential expenses," says Richard Anderson, BMO Capital Markets analyst. The downturn is pushing down sales prices for apartment buildings, and construction was off 35 percent in 2008. Marcus & Millichap predicts the decline will be another 40-50 percent in 2009. "If you fast-forward to 2011 and 2012, you will see very little new supply and favorable renter demographics in the number of 18- to-34-year-olds," Nadji predicts. TO MOST READERS, THE HOUSING PLAN MEANS LITTLE The Obama administration's housing plan aims to help millions of homeowners who fall into two categories: Either they have been struggling to pay their mortgages or they have been shut out of the refinancing market, says the New York Times. The initiative gives lenders incentives to modify the mortgages of the three million to four million homeowners on the brink of foreclosure or who cannot make their monthly payments. The goal is to reduce the payments to levels they can afford. The plan also aims to help the four million to five million homeowners who have been unable to refinance their mortgages because their home values dropped, erasing much or all of their home equity. Some of them would have a fresh shot at refinancing. While the administration offered some details about the programs, more information will be available on March 4, when the programs begin. For additional detail, click here for an informative Times Q & A. RATES FALL ACROSS THE BOARD The 30-year fixed-rate mortgage (FRM) averaged 5.04 percent for the week, down from last week's 5.16 percent and 6.04 percent last year at this time, according to Freddie Mac. The 15-year FRM was 4.68 percent. It averaged 4.81 percent last week and 5.64 percent a year ago. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 5.04 percent in comparison with 5.23 percent last week and last year's 5.37 percent. One-year Treasury-indexed ARMs averaged 4.80 percent, down from 4.94 percent the prior week and 4.98 percent a year ago. "Mortgage rates followed bond yields lower this week as recent economic reports suggest the economy is still slowing, which reduces the future threat of inflation," said Frank Nothaft, Freddie Mac vice president and chief economist. "And consumer sentiment fell in February for the first time in three months to near its lowest level since May 1980, while industrial production slowed in January by more than the market consensus. In addition, the Federal Reserve lowered its growth forecasts for this year during its policy-setting meeting on January 27-28, noting a deeper contraction in the economy as the credit crunch tightens." JUMBO MORTGAGES ARE STIMULUS PLAN'S STEP-CHILDREN The Treasury's "financial stability" fact sheet makes only a passing reference to borrowers of NEW REGS FOR APPRAISERS MAY NOT INJECT MUCH TRUTH Retained by lenders or brokers, home appraisers frequently colluded in overestimating the worth of houses to justify large mortgages and the lucrative fees each member of the real estate food chain received at closing, says Business Week. Faced with investigations and lawsuits, the home-finance industry has agreed to a government-approved code of conduct for appraisals that takes effect on May 1. The new rules promote the use of middlemen between the nation's 60,000 freelance appraisers and the lenders and brokers. The middlemen, known as appraisal management companies, or AMCs, are supposed to prevent lenders and brokers from pressuring appraisers to exaggerate assessments. But among those joining the swelling ranks of this formerly niche business are some of the same subprime players that helped inflate the real estate bubble in the first place. FANNIE EASES ITS INVESTOR LOAN RULES To speed recovery of the housing market, Fannie Mae in March will begin purchasing and guaranteeing mortgages for borrowers carrying loans on as many as nine other properties, up from the current limit of three, says the American Banker in Realtor magazine. However, the number of months of reserve payments that must be held by investors will rise to six in June from two currently. "One of the things that leads the economy out of a housing crisis is when prices get cheap enough that investors start moving in and buying things," says Joe Garrett of the Berkeley, Calif.-based consulting firm Garret, Watts & Co. REFINANCINGS CAUSE LOAN APPLICATIONS TO BOUNCE BACK The Mortgage Bankers Association (MBA) says mortgage volume for the week ending Feb. 13 soared 45.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the change was 47.7 percent compared with the previous week and 5.2 percent higher than with the same week one year earlier. Refis went up 64.3 percent, and purchase activity rose 9.1 percent from one week earlier. The refinance share of mortgage activity increased to 74.2 percent of total applications from 66.7 percent the previous week, and the adjustable-rate mortgage (ARM) share decreased to 1.7 percent from 2.5 percent of the total. THE LONG ARM OF THE LAW REACHES MORTGAGE SCHEMERS Federal prosecutors in Manhattan have charged four New Yorkers with conspiring to obtain more than $10 million in fraudulent home mortgage loans in a plan that relied on former prisoners living in a halfway house and residents of a public housing project to pose as home buyers, says the New York Times. Most of the mortgages, which were subprime loans provided to borrowers considered high credit risks, are now in default or in foreclosure, according to a federal indictment in Federal District Court in Manhattan. THIS SALE BRINGS THE MARKET'S PROBLEMS HOME TO THE FED Travis Jackson, a 27-year-old loan officer at First Citizens Bancorp, just bought Federal Reserve Chairman Ben Bernanke's childhood home at a foreclosure sale, the Wall Street Journal reports. In 1945, Bernanke's grandparents, Jonas and Pauline, bought the land on East Jefferson Street for $750. Four years later, they built a single-story brick house on the property. The couple then sold the place to Bernanke's father Philip in 1960 for $22,000. Ben and his two siblings were raised there. In 1976, Philip deeded the property for $1 to his wife Edna. Two decades later, the Bernankes sold the house to a couple from Texas for $72,500 and moved to North Carolina. In September, 2006, the Texans put the house on the market. The 2,383-square foot home has four bedrooms and three bathrooms, with a large car port. The couple fell behind on their payments, and, under financial strain, broke up again last June. Twenty-one months after they bought the house, the bank that served as trustee for the mortgage-backed security began foreclosure proceedings. In December, Jackson and his girlfriend, Beth Webster, bought the Bernanke house from the bank for $83,000. THIS NEW HOUSE NEEDS NO WORK Bob Vila, former host of "This Old House," has opted for an apartment carved out of the top floor of a century-old commercial building facing Madison Square Park in Manhattan, reports the New York Post. Vila and his wife Diana Barrett chose a place with a "dream kitchen" that has "rich ebonized cabinetry" and a two-zone wine cooler, according to the building's promotional material. Property records indicate that the couple closed in mid-January on a 2,500-sf two-bedroom penthouse with a 700-sf private roof deck and a wood-burning fireplace on the 20th floor of 15 East 26th St., which also is known as 15 Madison Square. Having gone to contract two years ago, when the first apartments came on the market, he paid $5.9 million. Vila had owned two apartments at Museum Tower, high above the Museum of Modern Art. He sold a one-bedroom apartment that he used as an office in March 2007 for $2.85 million and a second apartment, 2,200 square feet in size, last May for $4.5 million. 'SEND YOUR MONEY,' GORDON SUMNER MAY WELL BE SINGING The musician better known as Sting, has listed his four-bedroom 6,600-square-foot duplex apartment at the Brentmore, at 88 Central Park West near 69th Street, for $26 million, according to the New York Times. Sumner first listed the apartment, formerly owned by Billy Joel, in August 2006, a few months after he signed a contract to buy a four-bedroom penthouse duplex with a terrace at 15 Central Park West, then under construction a few blocks to the south. The co-op was offered for $24 million, reduced briefly to $20 million, and then taken off the market. The asking price has risen to $26 million, despite the weakening of the market. Both of Sting's apartments face Central Park, but with different views. His co-op at the Brentmore has 18 eight-foot windows but is on the second and third floors. His new apartment is on the 16th and 17th floors, with a view down at the treetops and many, many less wealthy folks. AND THE BAND PLAYED ON Carnegie Hall's executive and artistic director Sir Clive Gillinson recently turned down a 3,335-square-foot, four-bedroom apartment that the hall had bought for him, the Observer reports. The price for the East 63rd Street condo at the Barbizon/63, custom-made aquarium included, was $8.4 million, according to city records. "As the economic picture had changed significantly since the contract for the apartment had been signed," Carnegie Hall's vice chairman and treasurer, Klaus Jacobs, emailed the weekly publication, "Clive Gillinson suggested that the apartment be rented out until the economy improves, and the board accepted his suggestion." Said the conductor, "I just think it's completely right. Like every organization, one is insane if one is not looking really rigorously at every aspect." SOMEBODY EVIDENTLY LOVES THIS PROPERTY Although Ivan Lendl had dreamed of turning his 450-plus-acre estate into a golf course, the New York Post reports that his hopes will be put on hold now that former tennis pro is unloading the property in Goshen, Conn. The estate, listed at $25 million, is in contract. In Litchfield County, the property includes a 43,000-sf stone house with 10 bedrooms, 12-plus baths and a lower level with an indoor pool, basketball court and gym. The home also has an outdoor pool, pool house, caretaker's house, horse stables, formal gardens and, of course, a tennis court. Lendl and his wife Samantha have five daughters - including three successful junior golfers. No word on the new owner. THERE'S NO BUSINESS LIKE SHOE BUSINESS Fashion designer Kenneth Cole has sold his penthouse at 101 West 79th St., between Columbus and Amsterdam avenues, for more than $6 million lower than its original asking price, according to Cityfile.com. The 2,700-sf home sold for $12.5 million to an entity called Fundo Azul LLC. Cole's four-bedroom penthouse was originally listed at $18.95 million, then was reduced to $16.95 million in December before being sold at the lower price. Although the fashion mogul has owned the apartment since '85, the family spends most of its time at homes on Sutton Place and in Westchester. So, he bought the penthouse why? LATE JOURNALIST'S APARTMENT LINGERS ON THE MARKET The widow of journalist Ed Bradley, who appeared for more than a quarter-century on "60 Minutes," is asking $7.4 million for their nine-room apartment, notes the Wall Street Journal. In the St. Urban, a 1906 Beaux-Arts co-operative building on Central Park West, the 3,600-sf unit overlooks the Jacqueline Kennedy Onassis Reservoir and has four bedrooms, three bathrooms and a maid's room. Bradley bought the apartment, which has been on the market since October, in the 1970s. Mrs. Blanchet-Bradley is moving to another apartment in the same building. MARKET FOR ENTRY-LEVEL UNITS IS SHOWING STRENGTH The average price per square foot for studios rose by as much as $49 from the fourth quarter of 2007 to 2008, according to one report in New York magazine. One-bedrooms improved by $19, while the rest of the market declined. Another survey found median condo prices gaining the most among studios from 2007 to 2008 (16 percent). "Studios are selling better than they did a year ago, while much larger units aren't," says Streeteasy.com's Sofia Kim. Over the past year, studios have consistently made up about 10 percent of the listings on the market. In the last three months of 2007, they represented 9.6 percent of properties going into contract - in other words, they sold at an average rate. This past quarter, with inventory noticeably higher, they generated nearly 14 percent of the contracts, and in the first two weeks of January, studios made up 17 percent of deals. Studios that found purchasers also spent a week less on the market than in 2007; nearly everything else logged more time. One reason: Interest rates are quite low, and recent price corrections mean most studios and many one-bedrooms can now be financed with conforming loans - capped at $625,500. A RECORD AMOUNT OF HOUSING STOCK IS ACHIEVED The city now has more than 3.33 million units of housing stock, the highest number since 1965, and the number of units increased in all five boroughs between 2005 and June 2008, according to a government survey cited in the monthly Real Deal magazine. Preliminary results of the 2008 New York City Housing and Vacancy Survey show that the rental vacancy rate was 2.88 percent between February and June 2008, down from 3.09 percent during the same period in 2005. The survey, which includes data only through June, does not address the impact of the financial crisis on city real estate. The number of rent-stabilized units fell by 17,000 since 2005, and the number of people paying more than 50 percent of their income for rent was 29.4 percent compared with 28.8 percent in 2005. CONDOS' FINANCIAL HEALTH COULD BE AT RISK As the city's fortunes buckle and heave, differences between condos and co-ops have potentially rendered some of the city's condo buildings dangerously exposed to the downturn, says the New SOME INDIVIDUALS ARE SEEING RAINBOWS In the waning weeks of 2008, the state administered more than 700 licensing exams to aspirants looking to join the ranks of agents, reports the New York Times. "We've been much busier than we thought we'd be," said Stephanie Barron, a manager at the New York Real Estate Institute, which offers licensing courses for brokers and agents. Despite such current interest in entering the real estate profession, the situation used to be even more intense: 25 percent fewer people took the sales agent exam in December than at the end of 2007. The state once offered three exam sessions a week; since July it has offered two. But that still leaves hundreds of new agents seeking to become licensed. In October, 742 sales agent exams were administered; in November, 565. MANSIONS IN GREENWICH GO BEGGING Nearly 50 mansions built on spec for the hedge-fund set - and priced from $5 million to $25 million - sit empty in the Connecticut suburb, where the real-estate market has tanked, according to the New York Post. "They're going nowhere. Nothing's selling," said Christopher Fountain, who writes a blog about the Greenwich real-estate scene. "There are just so many of these brand new houses sitting there, and nobody's going to buy them." Among the languishing estates: a 22,185-sf Georgian mansion on 4.8 acres off prestigious Round Hill Road with eight bedrooms, elevator, butler's pantry, home theater and fancy flourishes such as crown moldings in the closets. The sale price is $25 million, and it has been on the market since May. There were 161 houses from $5 million to $95 million for sale in Greenwich as of a week ago, according to Realtor.com. Greenwich home sales dropped 40 percent last year from 2007 and foreclosures, once almost unheard of, shot up 1,000 percent. Eleven properties were foreclosed in 2008 compared with just one in 2007. The plunging home sales have taken a toll on the burg of 62,000 residents, where the $157,232 median income invariably places it among the richest towns in America. The town just laid off 39 workers. LAW IS UPHELD ON RECIPIENTS OF SECTION 8 VOUCHERS A New York City law that makes it illegal for landlords to discriminate against tenants who receive government subsidies has passed its first major legal test after a justice in Manhattan upheld a broad interpretation of the law, says the New York Times. The law, which went into effect last March, prohibits landlords from discriminating against tenants based on their use of federal rent subsidies known as Section 8 vouchers or any other form of local, state or federal government assistance. Tenants who receive the Section 8 subsidies pay about 30 percent of their income toward rent, and the vouchers cover the rest. BUILDER CONFIDENCE CONTINUES TO SLUMP "Job losses and tightening credit continue to depress current and future multifamily construction," said David Crowe, chief economist of the National Association of Home Builders (NAHB). The component of the trade group's Multifamily Rental Market Index (MRMI) that gauges supply found that conditions sank dramatically in the fourth quarter of 2008, down to 22.4 for affordable apartments and 18.6 for market rate apartments; the results compare with 45.3 and 40.00, respectively, from the same time a year ago. On the Multifamily Condo Market Index (MCMI), the supply component fell 11 points from the fourth quarter of 2007, dropping to a new record low of 7.8. Survey responses are used to create a scale of 0 to 100, with a rating of 50 generally indicating that number of positive responses is about the same as the number of negative responses. Looking ahead six months, builders and developers are only slightly less pessimistic than they are for the present. OPTIMISIM ABOUT SINGLE-FAMILY HOMES REMAINS VERY LOW The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) held in the single digits for a fourth consecutive month in February. The HMI rose a single point, to 9, virtually unchanged from an all-time record low in the previous month. "Home builders are especially concerned about the continually rising number of foreclosures and short sales, which are flooding the market with excess inventory and undermining overall home values," commented Chief Economist David Crowe of the National Association of Home Builders. "This is one reason that home builder expectations for the next six months declined in the February HMI even though traffic of prospective buyers has improved somewhat and present sales conditions were basically unchanged." THIS IS A MUST-READ FOR FIRST-TIME BUYERS They are eligible for a refundable tax credit equal to 10 percent of the purchase price of their home, up to $8,000, if they made the purchase after Jan. 1 and before Dec. 1, 2009, says the New York Times. Unlike a similar credit that Congress provided last year, you don't have to pay this one back over 15 years. The new credit, however, does phase out for individuals with incomes over $75,000 or married couples with incomes over $150,000 who file their taxes jointly. Also, you forfeit the credit if you sell the house within three years. THE CHINESE ARE COMING, THE CHINESE ARE COMING And that's a good thing. According to the Wall Street Journal, a special Chinese tour group is heading to the United States later this month to go bargain hunting for houses at foreclosure prices. More than 40 affluent house hunters from across China will begin a trip to Boston, New York, San Francisco and Los Angeles on Feb. 24 in search of cheap homes to buy. Their goal: to find investment property and housing their children could use when they go to the USA to study or work. Their budget: $300,000 to $800,000 apiece. JUST BRING A TOWEL AND $60 MILLION TO THESE BEACHES Southampton, N.Y. captured the 2008 title for most expensive beachside home sale on Long Island's East End. And, reports Bloomberg, the second and third most expensive ones, too. A six-acre oceanfront estate on Gin Lane sold for $60 million, including eight bedrooms, tennis courts and a guest house, according to a report by property broker Town & Country Real Estate. That was followed by a $27 million Southampton manse on two ocean-front acres and a seven-acre, $26.6 million Southampton property. Hamptons home prices fell 14 percent last quarter as Wall Street cut jobs and the recession spurred a drop in sales. Of the 10 most expensive East End, Long Island, homes sold last year, seven closed before the September collapse of Lehman Brothers. Homes sales in the Hamptons fell 41 percent in the fourth quarter compared with a year earlier, according to the Miller Samuel appraisal firm. HIGH-STATUS ARCHITECTURE FIRM IS SLASHING ITS PAYROLL Foster + Partners, the architecture firm famous for the pickle shaped "Gherkin" tower in London, plans to lay off 300 employees, reducing its staff by nearly one-quarter, says the Wall Street Journal. Norman Foster is among the world's best known architects. His works also include the Reichstag in Berlin and the newly opened Beijing airport. The firm, based in London, has had big projects canceled. A massive 118-story tower in Moscow, which would have been Europe's tallest skyscraper, was canceled in late 2008. A skyscraper at the site of the World Trade Center has been delayed. A proposed tower in St. Petersburg for energy giant Gazprom has been stymied by financing issues. TO LIVE IN MONTE CARLO, IT'S BEST TO WIN AT THE TABLES For the second consecutive year, the resort area tops a list of the world's most expensive housing markets, boasting average prices of $4,420 per square foot, according to a report in Forbes. "Monte Carlo is a city of the rich, small and concentrated," says Matthew Montagu-Pollock, publisher of Globalpropertyguide.com, the online real estate research firm that released the report. "The primary reasons for such high prices are related to a shortage of space and tax havens." Moscow ($1,937 per square foot) and London ($1,928 per square foot) ranked second and third. A surprising turn was New York's drop to No. 6, from No. 2, as growth in Asian markets pushed Hong Kong and Tokyo to the top five. Residential apartment prices in Hong Kong and Tokyo were as high as $1,373 and $1,103 per square foot, respectively, in last year's survey. In New York, the average price per square foot was $1,384. Mumbai, rounds out the top 10, with prices averaging $851 per square feet. CHICKENLESS HOMES CAN'T SUPPORT THEIR MORTGAGES For the rising group of farmers who have lost contracts, there are no chicks, no revenue and no money to pay off their coop mortgages, says the Wall Street Journal. Chicken houses without chickens or contracts have virtually no resale value. And with the poultry industry in retreat, rival producers aren't looking for new growers. Today's chicken houses are bigger and more sophisticated than the coops of yore. Made from corrugated metal and wooden beams, the cavernous shacks can be longer than a football field and cost more than $200,000. To maximize profits, many farmers own at least four, meaning high six-figure mortgages are common. The houses grew in number and size as world-wide chicken consumption spurred greater production. But chicken demand has slowed along with the global economy. For the first time since 1975, the U.S. is expected to produce fewer chickens than in a prior year. STRETCHED, MORE HOUSEHOLDERS SEEK ROOMMATES Craigslist's roommate postings nationally increased 70 percent to 476,045 in January 2009 from 279,389 in January 2008, says spokeswoman Susan MacTavish, according to USA Today. Peter Francese, who studies housing trends for ad agency Ogilvy & Mather, saw similar housing arrangements during the recession in the early 1990s. He estimates that the Census data showing that the number of households with non-relatives will rise from 11.2 million 2007 (the latest available year) to 12 million last year. Cruz Mayfield, 19, leased his $885-a-month one-bedroom apartment in Las Vegas three weeks ago and four days later lost his job at Best Buy. Now, he's trying to rent the bedroom for $350 a month and crash on the couch. "I'm even thinking about joining the Marines," he says. "It's the only place that's hiring." FOR $85 MILLION, A LOS ANAGELES MANSION CAN BE YOURS A Los Angeles developer is asking $85 million, one of the highest prices in the U.S., for a 48,000-sf mansion in the city's Bel-Air neighborhood, says the Wall Street Journal. The seller is Mohamed Hadid, who built many Ritz-Carlton hotels in the 1980s and now specializes in constructing massive homes in L.A., Mexico and elsewhere. Hadid says he paid roughly $7.5 million for the land about six years ago and spent another $59 million to build the house for his own use. As one might hope, there's a music room, a library, a ballroom seating over 200 people, a Turkish hammam and a gym. The 2.2-acre property also features a pool, a tennis court, a 20-car motor court and, of course, seven fountains. A FORECLOSURE COULD PROVIDE THAT SECOND HOME Second-home buyers are finding a silver lining in the hundreds of thousands of foreclosures that now dot popular communities throughout the Sun Belt: bargains, reports the New York Times. Far from being rundown or neglected, many vacation homes now in foreclosure are just a few years old, with amenities like pools and high-end kitchens. Finding and buying a foreclosed property is easier, too, thanks to a wealth of online tools and a growing familiarity with the process among banks and real estate agents. Of the more than 2.3 million properties in the United States that received a default or auction notice or were seized by lenders last year, approximately 580,000 were in Florida, Arizona and Nevada. Still real estate experts caution that the abundance of foreclosed properties and the ease of finding them online do not guarantee a bargain. Depending on the type of foreclosure, some deals can involve a degree of risk and frustration. "Ignorance is definitely not bliss when you are buying a foreclosure," said Alexis McGee, president of Foreclosures.com. "Above all, don't pay market price," she declared. For the whole article, click here. OF COURSE, YOU RECALL THE POPULARITY OF THE TERRARIUM That 1960s icon remains alive and kicking, the Washington Post observes. Essentially an enclosed, glazed container, a terrarium could be something as small and readapted as a Mason jar or something grand and purpose-built such as a reproduction Wardian case, the wood-and-glass tabletop greenhouses that 19th-century explorers used to keep rare plants alive during far-off expeditions. The bell-like glass jars called cloches also work. But you don't need a fancy cloche or museum-quality case to create your own little universe. Tovah Martin, a garden writer and houseplant expert, sees terrariums in unexpected guise: cookie jars, glass jars for cotton balls, cake stands, fishbowls, vases and apothecary jars, to name a few. Martin's new book, "The New Terrarium," champions the idea that terrariums, in all their shapes and forms, are back in vogue. "They can be very stylish," she said. "They can be totally now." If you want to hop on the bus, click here. When Enough is Not Enough Considers these three apartments selected randomly:
Few will fail to understand the desire of virtually all sellers to make as much money as possible when they put their properties on the market. Harder to understand is their evident failure to realize that prices today are little different - perhaps even no different at all - from what they were two or three years ago. To these and a preponderance of other sellers, the market is beside the point. They don't want just to make money: They are determined to make a lot of money. And if that is not their objective, the least amount for which they want to settle is a sum that costs them nothing, including their purchase and anticipated sale costs. They refuse to acknowledge the need to bring money to the closing table when they bought at the height of the market and seek to sell soon afterward. In the first example, the co-op must be very nice, indeed. Let's say the owners invested an exorbitant $1 million in renovations, bringing their costs (excepting two closings) to $3.9 million. By what reasoning, do they imagine their apartment is now worth nearly $5 million? The price, inevitably, will drop in time. The unit in the second example above is on only a second floor and admittedly needs renovation. After much more than a year on the market, it has failed to find a buyer. What in the world justifies a price that still is $300,000 higher than the sellers paid only two and a half years ago? Certainly, no buyer is going to sing that song. As for the third example, the owners there also have proved stone-deaf to the market's wails of change. They cling to the fantasy that they can recoup their costs, and so they will continue to wait. It happens that the owners of the apartments above purchased their units fewer than five years ago. Imagine how much money sellers who bought 10, 20 or more years ago hope to rake in by obstinately pricing their properties as if nothing has changed. More important, imagine the carloads of cash such sellers will carry away even if they go to contract at today's prices. Although the deflating bubble has caused expectations of real estate as an investment to balloon, most sellers seemingly have lost sight of why they bought those units. They purchased those apartments to live in and maybe hoped that they would do well when it came time to sell. Those apartments are primarily homes; only secondarily might they demarcate the path to profit. If they choose to sell only a year or two after having purchased their homes, well, they'll have no option but to face today's market's realities. Many owners have yet to learn their hard lesson. One seller who finally figured it out owns a four-bedroom, five-bath co-op at 1120 Park Ave. Now listed for $9.75 million, this duplex with five terraces and two fireplaces was first put on the market more than a year ago, for $11.5 million. The price was cut to $10.75 million in October. In 2006, the owners bought the unit for $10 million. There is, in sum, no escaping the fact that for too many sellers, enough is never enough. Below are properties listed by various brokers that were visited recently: Upper West Side
East Side
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previously owned home rose in only six states from the last three months, according to the latest survey by the National Association of Realtors (NAR). A total of 134 out of 153 metropolitan statistical areas had declines in median prices of existing single-family homes. One area was unchanged and 18 metros reported price gains. Foreclosures and short sales accounted for 45 percent of transactions in the fourth quarter, dragging down the national median existing single-family price to $180,100 - 12.4 percent below the fourth quarter of 2007. Total state existing-home sales were down 6.4 percent from the third quarter and 5.9 percent below the prior year. The largest sales gain in the fourth quarter from a year earlier was in Nevada, up 133.7 percent, followed by California (84.7 percent), Arizona (42.6 percent) and Florida (12.5 percent). In the apartment sector, metro area prices fell to a median of $186,000, down 15.8 percent.
mortgages that exceed limits by Fannie Mae and Freddie Mac, which start at $417,000 and can go as high as $729,750 in the most expensive housing markets, notes the Wall Street Journal. Treasury pledged only to consult with the Federal Reserve Bank regarding such mortgages. Because the loan limits don't allow Fannie and Freddie to buy loans larger than $625,500, there's no secondary market for those jumbo loans. That means the cost of lending is higher because banks must keep jumbo loans in their portfolios. Banks have tightened standards on jumbo borrowers, which real estate professionals say has frozen high-end sales. While jumbo rates are low by historical standards, many borrowers aren't able to get a loan without big down payments. The lack of jumbo financing is a problem not just for new buyers, but for those who want to refinance. 
York Times. If a condo unit is the subject of a foreclosure, the bank gets first dibs on the equity; that means some condo buildings will collect nothing but dust from residents who have also failed to pay their common charges, leaving the remaining owners to shoulder the burden of higher costs or reduced services. Defaults on common charges began to spike last fall, according to lawyers hired by increasingly jittery boards to file liens (the first step toward foreclosure) against owners in arrears. While lawyers are reporting a rash of defaults among co-op owners, too, the risk to the building (and by extension to the defaulter's neighbors) is slight by comparison. That's because a co-op building is entitled to its share before the bank can claim anything in the event of foreclosure (the ultimate consequence of nonpayment of maintenance charges).
