This newsletter is taking its annual break until right after Labor Day, but don’t despair: You can keep up with significant news in Malcolm’s blog, which will be updated irregularly. Find the blog at http://www.ServiceYouCanTrustBlog.com or http://www.MalcolmCartersBlog.com. Bookmark it or subscribe. As always, the blog mostly covers information absent from the newsletter. Have a great rest of the summer! NEW CONSTRUCTION AND RENOVATIONS DIVE, THEN PICK UP The New York Building Congress says the value of all construction projects initiated in the city during the first four months of 2009 totaled $2.05 billion, down approximately 80 percent from the first four months of 2008. The data encompass all project starts, including new construction as well as alterations and renovations to existing structures, and reflect the value of each initiated project through the entire period of construction. For May, however, the most recent month in which data are available, the volume of new construction starts was roughly equal to the all of the first four months combined. The amount also was far greater than the $712 million in construction starts in May 2008. In 2008, construction began on an average of 2,700 new residential units per month; for the first four months of 2009, the pace plunged to 460 units per month before rising to 671 units in May. TOP-PRICED PROPERTIES MOSTLY LANGUISHED IN 2008 That's the story with New York's most outstandingly lush real estate, says the Observer. Of the 10 properties that were asking over $45 million late last year, half are off the market without a sale, and only one has sold. But that listing, a Time Warner Center penthouse - where the master bedroom suite has an office, his-and-her dressing rooms, his-and-her bathrooms, and a gym - sold for $37.5 million. Its original price was $65 million. Window shoppers may enjoy the publication’s slide show of the 10 properties. “What’s different about this down cycle is there still appears to be unlimited demand once you reduce your price point for people,” said Dan Fasulo, managing director for research at Real Capital Analytics, which provided the data. (Presumably, he doesn’t mean “ordinary people.”) “And the problem is many owners and developers are into the project at pricing levels that don’t give them the flexibility to lower prices on the market without getting wiped out.” THESE DOORMEN HAVE AN EYE ON YOU Cash-strapped developers are trying to save bucks and lure buyers with lower common charges by installing "virtual doormen" - staffers sitting in command centers as far away as Florida who can buzz guests and deliveries into buildings at a fraction of the cost of a regular doorman, says the New York Daily News. One Manhattan-based company, Virtual Doorman, saw its sales jump last quarter with 10 new buildings, its biggest quarterly increase since starting in 2000. Cyberdoorman, based in the Bronx, said business could double this year to 76 buildings. Virtual Doorman provides services to 94 buildings in the city, including five that switched from human doormen this year. A remote-access doorman system costs about $24,000 a year for 24/7 coverage, while having a doorman on site 24 hours a day amounts to about $180,000 a year, developers said. MANHATTAN RENTS PLUNGE IN THE LAST YEAR Although nearly flat in month-to-month comparisons, July rents are down significantly in year-over-year comparisons, according to a new report from the Real Estate Group. The greatest changes are in doorman one-bedroom units, which fell 10.34 percent in the last 12 months. Non-doorman vacancies swelled by 6.08 percent, but doorman units continued to decline, by 3.05 percent. It was the fourth month of falling inventory in these units. Doorman prices saw a decline of only .26 percent in July, while non-doorman asking rents fell 1.17 percent. As prices have fallen across Manhattan, Midtown has come out as the leader in deals this summer. Rents there have decreased an average of 11.81 percent from a year ago. The best deals: Midtown non-doorman studio units, which dropped 15.34 percent. Much more information is available. THE HAMPTONS HAVE BEEN A RELATIVE BARGAIN There were 307 sales in the second quarter in the Hamptons, according to a new report by the Miller-Samuel appraisal firm. That was 43.3 percent below the 541 sales one year earlier but 52.7 percent higher than the 201 sales in the prior quarter. Over the same period, the number of properties listed for sale continued to rise. Listing inventory totaled 2,286 properties, 23.6 percent higher than the 1,849 properties listed during the second quarter of 2008. The monthly absorption rate - the number of months to sell all existing inventory at the current pace of sales - was 22.3 months, more than double the 10.3 month absorption rate average of the prior year quarter. And, oh, prices: Not including the North Fork, the median price fell 20.6 percent to $770,000 from one year earlier, while the number of sales dropped 34.4 percent, again minus the North Fork. TAKE A POWDER Gene Austin of the McClatchy-Tribune News Service quotes reader Jim Ireland in the Washington Post as saying he stopped a wood-floor squeak by sprinkling talcum powder into the cracks of boards in the noisy area. The powder can act as a lubricant and sometimes silence rubbing boards. Other possible lubricants include powdered graphite, liquid soap and furniture polish. Applying a lubricant should be considered a temporary remedy for minor squeaks, as it can backfire by caking up between boards or by causing stains. CRYING FOWL, NEIGHBORS SAY, ‘NOT IN YOUR BACKYARD’ There are no official statistics on how many city folk keep chickens, and the Wall Street Journal says it isn't clear whether urban coops are on the rise. But Randall Burkey Co., a Boerne, Texas, hatchery, credits a doubling of small orders for chickens and supplies in urban and suburban areas for boosting profit. One online network, BackyardChickens.com, has 35,000 members, up from about 10,000 a year ago. Restrictions have cropped up in the past 50 years as urbanization reached deeper into the countryside. Advocates, who tout the economic benefits of having free eggs, say the recession is driving an interest in backyard gardens that increasingly include chicken coops. But critics of the backyard coops say chickens attract raccoons, coyotes and other pests, and contend that the fowl create unsanitary conditions. Madison, Wis., in 2004 was one of the first cities to reverse a chicken ban, and other cities have followed suit, including Portland, Maine, and Vancouver, B.C. In other cities, chickens have become a nuisance as they roam city streets. In 2003, Miami formed a "Chicken Busters" squad. In Salem, Ore., city compliance officers inspect homes only when there are complaints. The city got around 30 complaints last year and now has received about one a week. Nancy Baker-Krofft, who unsuccessfully lobbied Salem in 2006 to change the law, says that when city officials come to inspect, she'll hide the birds in her son's room or check them into a neighbor's contraband coop, which she calls the "chicken hotel." Clucks Alan Scott, the head of the complaining neighborhood association, "It's like she has some underground railroad for chickens." KEEP YOUR COOL THIS SUMMER
THOSE WHO AGE IN PLACE NEED TO HAVE A SAFE PLACE While home might be cozier and cheaper than a residential center, it’s not always safer, observes the New York Times. Every year in this country, about 7,000 elderly people die in home-related accidents, and millions are seriously injured. Falls are the leading cause of injuries, but the elderly are also at risk for being burned by the stove, scalded by hot water or drowning in the tub. The home “environment can be a great support to independent living,” says Jon Pynoos, professor of gerontology at the University of Southern California, “or it can be a health care hazard.” If you want to make your own home or an older relative’s or friend’s home a safer and more supportive place to live, the Times offers basic guidelines. RATES BOUNCE UP ONCE AGAIN The 30-year fixed-rate mortgage (FRM) averaged 5.20 percent for the week, up from last week’s 5.14 percent and well below 6.63 percent last year at this time, according to Freddie Mac. The 15-year FRM was 4.68 percent versus 4.63 percent last week and 6.18 percent last year. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 4.74 this week, down from last week’s 4.83 percent and 5.49 percent a year ago. One-year Treasury-indexed ARMs averaged 4.77 percent this week in comparison with 4.76 percent the prior week and 5.49 percent at this time last year. WELL-QUALIFIED BORROWERS KEEP HEARING ‘NO’ Buyers once viewed as perfectly qualified are being denied mortgages, the New York Times finally reports. Brokers and bankers say that in past decades, the credit markets would almost certainly have accommodated many of these people. “The credit pendulum is stuck at ‘stupid,’” said Lou S. Barnes, an owner of Boulder West Financial Services, a Colorado mortgage bank. “I am turning down loans every day that my grandfather in his Ponca City, Okla., savings and loan in 1935 would have been happy to make. And he was tough.” The denials are occurring for a wide array of reasons: the buyers’ incomes are adequate but irregular; they are self-employed and take many deductions, reducing the taxable income on which lenders focus; their credit scores are below the cut-off point, which has been raised drastically; their down payments are less than 20 percent. FREDDIE MAC OUTLINES APPRAISER STANDARDS Appraisers "must be familiar with the local market" in which properties they are valuing are located, choose "appropriate comparable sales" and certify them as the homes "most similar" to the property being appraised, Freddie Mac said in a bulletin to lenders, according to Inman News. The mortgage giant said new rules for appraisals don't require that appraisers select distressed properties - including short sales, foreclosures or real estate-owned properties - when identifying "comparable properties" for valuations. However, if the appraiser determines that they are representative of the properties available to typical purchasers for the market in which the property is located, appraisers must consider their use, Freddie Mac said. FORECLOSURE FILINGS APPROACH 2 MILLION IN FIRST HALF RealtyTrac.com says there were 1,905,723 default notices, auction sale notices and bank repossessions on 1,528,364 U.S. properties in the first six months of 2009. The total equaled 9 percent more total properties than in the previous six months and a nearly 15 percent increase from the first six months of 2008. The report also shows that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year. Nevada, Arizona and Florida had the most foreclosures. FTC IS COORDINATING ATTACK ON MORTGAGE SCAMS The Federal Trade Commission announced a coordinated national effort to crack down on mortgage rescue scams, says Inman News. Federal regulators and 23 state attorneys general are taking action against 178 companies accused of deceptively marketing foreclosure rescue and loan modification services. In conjunction with the announcement, the agency said four new lawsuits would bring to 14 the total number of mortgage foreclosure rescue and loan modification scam cases that the commission has brought since April. NEW RULES TO PROTECT CONSUMERS TAKE EFFECT SOON If you're applying for a loan to purchase a primary or secondary home or planning to refinance, Kenneth R. Harney says in the Washington Post that you should be aware of a little-publicized new set of federal consumer-protection rules that takes effect July 30. Among other key changes, the new Federal Reserve guidelines require lenders to give you initial disclosures of your mortgage costs within three business days of your loan application. If you don't get them, you can pull the plug. An even more sweeping change is that lenders must deliver a copy of the real estate appraisal to you three business days before the scheduled closing on the loan. Harney outlines all the changes in his column. THOSE BROKERS OF RISKY MORTGAGES WEAR NEW CLOTHING
REFIS CONTINUE TO OUTPACE PURCHASE LOAN APPLICATIONS The Mortgage Bankers Association was up 2.8 percent on a seasonally adjusted basis for the week ending July 17 from one week earlier. On an unadjusted basis, the increase was 2.9 percent compared with the previous week and 6.6 percent compared with the same week one year earlier. Refinancings rose 4.0 percent over the previous week, while purchase applications were 1.3 percent higher. The refinance share of mortgage activity notched up to 55.5 percent of total applications from 54.9 percent, and the adjustable-rate mortgage (ARM) share of activity slipped to 4.8 percent from 5.0 percent. UNDERWRITERS TIGHTEN STANDARDS TWO YEARS IN A ROW The U.S. Comptroller of the Currency reports that commercial and retail underwriting standards tightened for the second consecutive year following a four year period of eased underwriting. ASPEN SEEMS TO HAVE RETAINED ITS LUSTER A mansion in Aspen, Colo., has fetched a boom-market price, says the Wall Street Journal. The 21,400-sf home sold week for $43 million. The 10-bedroom contemporary mountain home on 4.5 acres sits at the base of Aspen’s exclusive Red Mountain. The house of wood, glass and stone, completed in 2006, overlooks downtown Aspen and includes a heated outdoor pool, four-car garage and a guest house. The seller was a limited liability concern managed by Dallas real estate developer Daryl Snadon. The home was not on the market, listing broker Joshua Saslove told the Journal. An unidentified American family purchased the property through a limited liability corporation. FOR $425,000, A HAMPTONS ESTATE COULD HAVE BEEN YOURS Of course, you’d have been allowed only to rent it . . . for two weeks. That $425,000 is the most ever for a two-week East End rental, reports the New York Post. The home isn't even near the ocean. The rental, which an Eastern European businessman will occupy for two weeks in August, is known as Sandcastle. The nine-bedroom, 11.5-bath mansion includes a bowling alley, a skateboard ramp, a squash court and virtual-golf area, a rock-climbing wall, a DJ booth and a stage with a fog machine. There's also a gym, a spa and a pool with an underwater sound system. It also is listed for sale at $59.5 million. BUILDERS ARE DOING IT AGAIN Nationwide housing starts and permits posted substantial gains in June, according to the U.S. Commerce Department, which said there was a 3.6 percent gain in overall housing starts and an 8.7 percent gain in permit issuance. Single-family housing starts rose for a fourth consecutive month, posting a 14.4 percent gain, and permits for them increased for a third consecutive month, up 5.9 percent. But multifamily starts, which characteristically display greater month-to-month volatility, recorded a 25.8 percent decline following an unsustainably large gain in the previous month. Permits went up 18.8 percent from an abnormal low in May. (Based on builder confidence in “Research” below, the builders seem to be consistent.) TITLE INSURERS FEES FACE JUSTIFICATION OF FEES The U.S. title-insurance industry faces increasing pressure from regulators to justify the fees charged to consumers for ensuring they have clear ownership of their homes, reports the Wall Street Journal. Title charges range from several hundred to several thousand dollars - and last year totaled more than $10 billion for the title industry. Typically, 80 percent or more of the premium goes to the title-insurance agent, with the rest going to the insurer. Agents often handle the task of searching through and analyzing public documents, sometimes going back many decades. But in many states, consumers pay separate fees to the agents for that research, on top of the premiums. In the Washington Post, Jack Guttentag suggests that borrowers can minimize closing costs by focusing on the biggest charge - title insurance - letting the lender know that you will be buying it yourself. Borrowers today usually can beat the prices charged by the title companies selected by lenders or brokers by purchasing it themselves online. He recommends EntitleDirect.com. Other third-party charges are rarely a source of abusive overcharges, Guttentag notes in a column loaded with advice. A FORECLOSURE CANDIDATE ENJOYS SWEET TASTE OF SUCCESS Angela Logan will be able to make her mortgage payment after all, says the Bergen Record. The Teaneck actress and divorced mother of three resorted to a bake sale to save her home from foreclosure. Her goal was to sell 100 homemade “mortgage apple cakes” at $40 each to make the first of three payments of $2,560 to Bank of America; those payments would qualify her for a mortgage modification. “It’s a gleeful, joyful feeling, but it’s frightening,” Logan told the Record, which said she sold 500 of the cakes, including an order from Hong Kong. “I can’t sleep because I have to get those cakes baked.” A SLUGGER HAS BEEN STRIKING OUT Alexander Rodriguez is opting for a major buzz cut on his ritzy ranch in Coral Gables, says the Real Deal. A-Rod listed the waterfront estate for $14.9 million last October and just dropped the price to $9.9 million, a local broker said. And if he can’t find a buyer, he’ll take a renter willing to pony up $25,000 a month. He and his now-estranged wife Cynthia paid $12 million for the spread at 181 E. Sunrise Ave. in Coral Gables in 2004 with a mortgage of $5.5 million. Rodriguez dropped the price to $12.3 million in December and $11 million in February. IF HIS PRICE CUT WERE IN PENNIES, FAR WOULD THEY GO The price of rapper 50 Cent’s Connecticut mega-mansion has dropped again - to $10.9 million, according to the New York Daily News. The 50,000-sf Hartford home - once owned by boxer Mike Tyson - was first listed at $18.5 million, but the price keeps dropping. Fifty Cent bought it for $4.1 million in 2003 and reportedly spent $6 million on renovations and repairs. It has 19 bedrooms, 37 bathrooms, a gym, billiards rooms, racquetball courts and a disco with stripper poles. The home was for sale for nearly two years before being pulled off the market in May. HER ESTATE IS BACK ON THE MARKET Now that the interiors are redone, Cher has put her ocean-view Malibu estate back on the market for $41 million, says the Los Angeles Times. She had listed the home at $45 million in August but withdrew it in early May while the work was going on, according to her listing agent. The Italian Renaissance-inspired house, which Cher built in 1999, has seven bedrooms, nine bathrooms, a theater and a gym in the dwelling’s 13,126 square feet. It sits on 1.7 acres of bluff topped with a tennis court, an infinity pool and a guesthouse. YOU CAN BE SURE HIS NEW PLACE HAS A GREAT KITCHEN New York Times food writer, cookbook author and television personality Mark Bittman and his wife Kelly Doe paid $999,999 for a two-bedroom Upper West Side co-op unit at 17 West 71st St., says the Real Deal. The couple closed on the purchase of the 1,230-sf apartment in the nine-floor building July 7. IS THIS BILLIONAIRE FEELING THE COLD? Although Michael Jaharis moved up 276 spots on this year's list of the world's billionaires, Forbes noted in publishing its ranking in March that the $1.9 billion fortune had stayed merely flat. Maybe Jaharis, 81, took his standing to heart, speculates the Observer, (probably inaccurately) because city records show that the pharmaceuticals mogul just spent “only” $6.7 million on an apartment and maid's room at 1049 Fifth Avenue. The nine-room, 3,335-sf apartment was listed for $7.75 million. It has a limestone-floored 32-foot-long entrance gallery, a hefty living/dining room (its style is called "both uptown classic and downtown loft"), a mahogany-paneled library, and a master bedroom suite with a separate sitting area and dressing area. The New York Times adds that Jaharis purchased the place, according to his attorney, for guests. HE’S HITTING NOTHING BUT BOGIES When Greg Norman decided that the sale of his Jupiter Island estate wasn’t going to sell for $47.5 million, he hired contractors, filed the necessary legal work for massive renovations and raised the price of his Jupiter Island spread to $60 million, says the Wall Street Journal. Apparently, Norman is trying a new pricing strategy for his eight-acre seaside hacienda, listed in 2007 for $65 million. It languished on the market for almost a year, even after a drastic 27 percent price cut of $17.5 million. If Norman gets anywhere near his asking price, he will top the record price for a property on the island - the $44.5 million that neighbor and golf superstar Tiger Woods set in 2006 when he bought 12 acres and began building a family compound. SWINDLER’S APARTMENT FETCHES $8.2 MILLION AT AUCTION Marc Dreier’s glassy Midtown apartment with stunning views with the four-bedroom condo went for $8.2 million, reports the Real Deal. The New York Daily News identified the successful bidder as Ajit Jain, 57, the purported heir apparent of Warren Buffett's Berkshire Hathaway empire. He outbid 45 others for the four-bedroom, five-bath unit, which has 3,000 square feet, plus a 738-sf terrace. The unit, 34C, is in a Cesar Pelli-designed building at 151 East 58th St., known as One Beacon Court. “Right now, I have buyer’s remorse,” quipped Jain afterward, as he signed documents obligating him to the purchase. Included in the sale were all the furnishings and electronics in the apartment, but not a glass sculpture. Dreier, who has degrees from Harvard and Yale universities, pleaded guilty May 11 to a handful of fraud and money laundering charges. BUT HOW DOES SHE FEEL ABOUT THAT Lorraine Bracco - the New York Post’s favorite TV mob shrink and ex-wife of Harvey Keitel - has found a buyer for her Hudson River hideaway. Trey Anastasio, the lead singer/guitarist of the jam band Phish, is in contract to buy her cottage in the celebrity enclave of Sneden's Landing (part of Palisades) for around $2 million. The 1960s-style riverfront cottage (which Bracco and Keitel bought from Ellen Burstyn in 1989) was last listed at $2.7 million. The 1,800-sf three-bedroom, two-and-a-half-bath home sits on two acres. The home includes a wisteria-covered entrance, water views from the master bedroom and a waterfall, all in a woodsy setting. Its original asking price, in 2004, was $4.4 million. It could be the perfect quiet spot for the country-loving Anastasio, who will join area residents such as Al Pacino, Mikhail Baryshnikov and Bill Murray. HE’S AN ARTIST WHO KNOW WHAT HE LIKES The artist in question is Richard Prince, who just spent $11.5 million on an East Side townhouse, according to the Observer. Prince's new place at 57 East 78th St. was built in 1869. It features a marble kitchen; six bedrooms (or five, depending on the layout); a landscaped garden with trees; wine storage in the finished basement; and an 11-foot-tall living/dining room with a large window of beveled glass, a fireplace and French doors leading to a terrace. There also is a humidification system and a back-up generator. HE PROVES AGAIN THAT HE CAN TWIST AN ARM BUT GOOD Actor Mickey Rourke has rented a loft in Manhattan’s meatpacking district for $19,800 per month - less than half what the apartment fetched just four months ago, says the Wall Street Journal. The 5,000-sf loft has a private keyed elevator, four bedrooms, a media room and three baths. The full-floor apartment has blonde oak floors throughout and a sauna. A former tenant had rented the same apartment four months ago for $40,000 per month. EXISTING-HOMES SALES LAG JUNE 2008 BY ONLY 0.2 PERCENT Including single-family, townhomes, condominiums and co-ops, June sales of previously owned homes jumped for the third consecutive month as inventory eased and home prices declined less sharply, according to the National Association of Realtors (NAR). The increase was 3.6 percent, seasonally adjusted, over May, but volume dipped 0.2 percent below one year earlier. The median price for all housing types was $181,800 in June, 15.4 percent lower than June 2008 largely because of distressed properties, which accounted for 31 percent of sales. Single-family home sales were 2.4 percent higher than in May and 0.2 percent higher than a year ago. The median price was $181,600, 15 percent below June 2008. Existing condominium and co-op sales leaped 14 percent in June from May, but were 3.1 percent below the prior year. The median price was $183,300 in June, down 18.9 percent from a year ago. Total housing inventory at the end of June fell 0.7 percent, representing a 9.4-month supply at the current sales pace in contrast to a 9.8-month supply in May. “This is another hopeful sign - if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year,” commented NAR Chief Economist Lawrence Yun. ANOTHER MAY REPORT RECORDS WIDESPREAD PRICE GROWTH TOO
HOME SALES BACKED BY FANNIE AND FREDDIE RISE IN MAY U.S. home prices rose 0.9 percent on a seasonally-adjusted basis from April to May, according to the Federal Housing Finance Agency (FHFA). For the 12 months ending in May, U.S. prices fell 5.6 percent and 10.7 below the April 2007 peak. “Revisions and volatility of the monthly index make it hard to draw any conclusions, but the seasonally-adjusted [Home Price Index] for the first five months of this year is up 0.3 percent, or 0.7 percent on an annualized basis,” said FHFA Director James Lockhart. The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. YOU CAN SWEAR ALL YOU WANT, BUT IT WON’T HELP The Texas Transportation Institute (TTI) ranked 439 American metropolitan statistical areas on the basis of how many hours of delays the average commuter experiences in the course of a year above and beyond the length of their commute. The ranking, for Forbes magazine, had Los Angeles topping the list. Following, in order, were Washington, D.C.; Atlanta; Houston; San Francisco; Orlando; San Jose; Detroit; San Diego; and Miami-Ft. Lauderdale. The transit research group, which is affiliated with Texas A&M University, also found that the average commuter spends 36 hours a year in traffic. Once the recession resides, experts expect commuter congestion to get even worse. "Based upon this data, if the traffic congestion rates since 2000 should continue, San Francisco and Chicago will have worse traffic congestion than Los Angeles by 2015," says Wendell Cox, principal of Demographia, a St. Louis-based public policy consultancy. Click here for the whole Forbes package. MONEY PICKS ITS 100 'BEST' FAMILY TOWNS Using statistics from data services company Onboard Informatics, Money magazine says it crunched the numbers in order to zero in on America's best small towns for families. Topping the list is Louisville. No, not that one, but a town in Colorado where ice cream shops dot the historic downtown; families grab burgers at the cozy Waterloo Café; and a Friday-night street fair, with a beer garden, live music, and games for the kids, runs all summer. Also, Louisville is weathering the economic downturn well. The top reason residents give for moving here: the great outdoors. The magazine narrowed its search to towns that have a population of 8,500-50,000, excluded places where income is more than 200 percent or less than 85 percent of the state median, and those more than 95 percent white or with poor education and crime scores. On its Web site, Money discloses additional criteria and lists the top 100 towns. Allowing users to find the best place to live near their current locations, the site introduces some subcategories, including 25 best places for affordable homes, towns where there are the most jobs, towns with quick commutes, 25 best places for singles, best places for pricey homes, 25 towns where the residents are young, and places with the cleanest air. YOU CERTAINLY CAN COUNT ON FORBES TO COMPILE ITS LISTS First-time job seekers would be wise to consider San Jose, Cambridge, Mass., and Houston, among the nation's best places to begin a career, counsels Forbes magazine. It says those metros are home to America's strongest big and small companies and attract the country's most talented professionals. Recent grads desiring an equally dynamic area with fewer than one million people might head to Bridgeport, Conn., or Madison, Wis. Looking for fewer than 500,000 residents? Ann Arbor, Boulder, and Santa Barbara are strong options. Washington, D.C., and San Francisco landed in the top five among the large cities measured. If you’re ready to leave the nest and venture forth, you can analyze the recommendations in detail. BUILDER CONFIDENCE CREEPS UP Builder confidence in the market for newly built, single-family homes notched up two points in July to its highest level since September 2008, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI rose two points to 17, but that level was far below the point – 50 - where builders rate prospects as good. "Although today's HMI is positive news that helps confirm the market is bouncing around a bottom, the gain was entirely contained in the component gauging current sales conditions, while the component gauging sales expectations for the next six months remained virtually flat for a fourth consecutive month," noted David Crowe, the association’s chief economist. SURVEY FINDS HOUSING RECOVERY HOPPING AND SKIPPING The Wall Street Journal’s latest quarterly survey of housing-related data shows that the market for residential real estate is healing at varying speeds in different parts of the country. The Northern Virginia suburbs of Washington, D.C., and many areas in California that are near employment centers have shown signs of stabilizing, housing analysts say, while the outlook in other places - much of Florida, Detroit and Las Vegas - still appears bleak. San Diego and Sacramento have become more affordable, says Jody Kahn, an analyst at the John Burns Real Estate Consulting research firm. Kahn also thinks prospects are relatively good in Denver, Raleigh, San Jose, Austin and San Antonio. Thomas Lawler, an independent housing economist, says areas that seem to be nearing stability include San Diego, Sacramento, Minneapolis, Boston and the Virginia suburbs of Washington. Among metro areas that “still have a long road to recovery” are Detroit, Phoenix, Las Vegas, Miami-Fort Lauderdale and Chicago, Kahn adds. Lawler includes New York, Seattle and Portland, among others, in this category. Mark Zandi, chief economist at Moody’s Economy.com, notes, “If people don’t have jobs or fear losing their jobs, then buying homes is out of the question.” Looking ahead one year, the Web site sees the metro areas of Washington, Minneapolis, Houston and Dallas as among those likely to have unemployment rates below the national average. Those expected to be above the national average include Detroit, Las Vegas, Los Angeles, Miami, Orlando, Sacramento and Portland, Ore. FREDDIE MAC FORECASTS STEADY GAINS AFTER Q1 BOTTOM Freddie Mac analysts said home sales bottomed in the first three months of 2009 and will post steady gains each quarter, reports Inman News. Sales of both new and existing detached single-family homes are expected to bottom this year at 4.72 million - down 37 percent from 2005 - before rebounding next year, Freddie Mac said in its July 2009 Economic and Housing Market Outlook. Although home prices tend to lag, there are signs of "the seeds of turnaround" in prices, Freddie Mac said. National home prices are expected to continue falling for the remainder of this year and next, but the pace of decline is projected to be much more gradual next year than in the recent past. The analysis said they expect rates on 30-year fixed-rate mortgages to continue rising from their low of 5 percent in the second quarter of this year, reaching 5.5 percent in the final quarter of 2009 and 6 percent by the end of 2010. BANKS MAY BE MAKING PRICES LESS ‘STICKY’ THAN BEFORE
SOME EXPERTS SAY MAYBE IT'S TIME TO INVEST AGAIN Chicago financial research firm Ibbotson Associates said in late 2006 that somewhere between 9 percent and 22 percent of real estate belonged in an investment portfolio. Imprecise as that is, it would no doubt have to be adjusted considerably lower these days,” Forbes magazine acknowledges. It quotes David Swensen, the highly successful manager of Yale University's endowment, as saying individuals should put up to 20 percent of their assets into real estate even now. Should you count your house in the equation? Probably not. A key lesson of the recent crash is that Americans need to return to a more old-fashioned way of thinking about real estate, argues Michael Kirby, a longtime industry analyst and founder of Green Street Advisors. “You should own a house to provide shelter," he avers. "In a way it's not an investment, and it's not part of your investment portfolio. It's really just a living expense. By owning a house you are prepaying rent." Strip out inflation (and the fact that homes are much bigger than they used to be) and you find that home prices have scarcely budged over the past 120 years, according to Yale economist Robert Shiller. You can get into the weeds here. Is the Premium for Condos Still Worth It? In the old days, a rule of thumb was that condos should cost approximately 10 percent more than co-ops. That, of course, is an average that disguises a wide disparity of prices, which went as high as around $6,000 a square foot for trophy apartments (and, rarely, more). However, the days of such a price advantage may now be numbered. Here's why:
Below are some recently seen condos and co-ops that various brokers have listed:
Some of Manhattan's Latest Listings Please click here to view a sampling of newly listed properties. To see more of them or to obtain more information, please don't hesitate to be in touch. Click Here to Sign Up For Your Free Issue of Realty Digest!
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Even folks who believe that climate control is a God-given right may be questioning whether it has become a luxury they can no longer afford, ponders the New York Times. They are probably also wondering how they can survive without it. Shipments of window air-conditioners from manufacturers to distributors were down 39 percent in the first half of this year compared with the first half of last year, says the Association of Home Appliance Manufacturers, while the Air-Conditioning, Heating and Refrigeration Institute concedes that shipments of central air-conditioning units have been down 10 percent a year for the past few years.
Many of the same people who dispensed risky mortgages during the real estate bubble have reconstituted themselves into a new industry focused on selling loan modifications, reports the New York Times. Despite making promises of relief to homeowners desperate to keep their homes, many profit-making loan modification firms often fail to deliver, according to a New York Times investigation based on interviews with scores of former employees and customers, more than 650 complaints filed with the Better Business Bureau, and documents filed by the Federal Trade Commission in a lawsuit. Dozens of companies have been accused by state and federal authorities of fraudulent business practices. The F.T.C. has brought action against five companies and sent letters of warning to 71 others. Many of the companies formerly operated as mortgage brokers, the Times found.
Radar Logic research firm says the price per square foot for U.S. housing increased from April to May in 22 of the 25 metropolitan statistical areas (MSAs) covered by its new report. The price gains in most of these MSAs were larger than average for the month, possibly indicating that seasonal market forces are being augmented by a more lasting recovery in these housing markets. Radar Logic’s 25-MSA Composite increased 2.1 percent in May on a month-over-month basis, an improvement from its 1.2 percent increase in April. That index has gone up 3.7 percent since March 30, when it hit its lowest point since the end of the housing boom. The report calculates that in the key MSAs it studies, prices have fallen 33.5 percent peak-to-trough and 31 percent peak-to-current. May gains in home prices were particularly large in the West. “Clearly, the signs of a housing recovery we began to see in April continue,” said Radar Logic President Michael Feder. “At this point we are comfortable with the observation that . . . values in much of the country have bottomed, at least for now.” He added that “the notable exceptions are New York City and Las Vegas, where the local economies are struggling more than most, particularly as they relate to the traditional home buyers.” The biggest gainers were Milwaukee, Wis., 4.9 percent; Charlotte, 4.7 percent; Boston, 4.6 percent; Cleveland, 4 percent; Washington, D.C., 3.7 percent; St. Louis, 3.3 percent; Columbus, 3.2 percent; Seattle, 2.8 percent; Denver, 2.3 percent; and Philadelphia, 1.8 percent. For far more information, click 
It has taken many years for house prices to bottom out in the past because they are “sticky,” or slow to adjust downward even when supply surges and demand evaporates, observes the Wall Street Journal. That’s because homeowners are stubborn and often don’t need to sell immediately. This time around, contends independent analyst Thomas Lawler, things are happening a lot faster partly because banks are dealing with a foreclosure rate not seen at least since the Great Depression. Starting late last year, banks and other owners of foreclosed properties began selling them aggressively at whatever price the market would bear, even in the depths of winter when few buyers venture out. That has forced prices down much more quickly than would have been expected in some of the milder down cycles of the past, Lawler says.
