BIDDING WARS ARE BACK Brokers say that bidding wars are back, according to the New York Times. “They are breaking out in all sectors of the market, from $400,000 one-bedrooms in Brooklyn Heights to $7 million apartments with grand park views at 15 Central Park West and from stately Park Avenue prewar apartments to new condominiums in Williamsburg,” the newspaper maintains. In many cases, the jousting buyers start and end below the asking price. But in others, multiple bidders are pushing prices well above list price. Many of the bids are being made by buyers willing and able to pay all cash. Brokers say that bidding wars are almost always set up by listings that are “priced well,” and by that they mean 20-30 percent below the high-water marks of early 2008. Jonathan J. Miller, the president of the appraisal firm Miller Samuel, estimated that two-thirds of the roughly 4,000 apartments for sale in Manhattan are priced too high for the current market. “So,” Miller said, “you have this weird situation right now where you have above-average inventory, but people are fighting over the ones that are priced correctly.” There’s much more on the perceived bottom of the market in the Service You Can Trust Blog. HERE’S A TIP FOR ONE WOMAN WHO HITS ON DOORMEN Don’t do it. Real estate attorney Adam Leitman Bailey tells BrickUnderground.com that he was contacted recently by a condo board confounded by a serial propositioner. The problem involved a married female condo owner conducting afternoon booty calls targeted at doormen - approaching them with lines that included, “I need to be f----- by one of you now." That’s not all she needs – for example, a brain. In more civilized cease-and-desist letter, Bailey informed the woman that, according to the condo’s bylaws, she is liable for any money the condo spends to get her to stop her overtures as well as the amount the board might have to spend defending itself in a lawsuit by the doormen. "It seems to have done the trick so far," says Bailey, who didn’t admit to punning. Added Aaron Shumelwitz, a real estate lawyer: “If an employee is subjected to a hostile work environment, there could very easily be a sexual harassment claim against the employer even though it’s obviously not the condo demanding sex from him - like if he notified the condo board of the woman’s demands and it failed to take steps.” DELAYED DEVELOPMENTS ARE ON THE RISE The city's count of stalled construction projects in Manhattan has jumped 40 percent to 80 and have grown to 42 percent in Brooklyn, 38 percent in the Bronx and 6 percent in Queens, says the New York Daily News. Last month, the City Council passed a bill giving developers incentives to keep up their properties, allowing them to renew permits at stalled sites for up to four years if they keep up with safety requirements. "We're worried about the impact that it's having on neighborhoods," said Council Speaker Christine Quinn. IN JOHNNY CARSON’S WORDS, ‘WHO DO YOU TRUST?’ During the roller coaster ride that has been the residential real estate market of the past year, real estate firms have issued a veritable avalanche of market reports, notes the Real Deal. Each hopes to become the consumer's go-to source for information and grow their brand in the process. But there are now many reports available, often with wildly disparate information. “All of these firms believe in [issuing reports] as a way of marketing themselves and separating themselves from the competition," said Paul Purcell, a partner at real estate consultancy Braddock + Purcell and the co-founder of Charles Rutenberg Realty in New York. "It simply serves to confuse the consumer and make them wonder why each firm has different information." If you want to know more, click here. TENANTS IN FORECLOSED BUILDING ARE GETTING A REPRIEVE Gov. David Paterson and the New York State Legislature have passed a bill that will provide additional protection to New York state homeowners and renters facing foreclosure, according to the Real Deal. The bill will expand the mandatory 90-day grace period to holders of all types of home loans, not just subprime mortgages, so more homeowners will have time to address their situation before facing foreclosure. The bill also will help distressed renters, allowing them to remain in their apartment for the remainder of their lease or 90 days, whichever is longer, before receiving an official foreclosure notice. The bill additionally targets fraud, by prohibiting brokers who offer distressed property consulting services from accepting any payment up front. SALES OUTGROW INVENTORY, ESPECIALLY AT LOWER END The lower price strata of the market is doing better than the upper end, primarily because of the divergence between jumbo and conforming mortgage underwriting requirements, reports appraisal executive Jonathan Miller. Absorption (the percentage of inventory that is sold) has been better in the sub-million price strata than above $1 million over the past year. You’ll find more of his analysis, plus informative charts, on the Service You Can Trust blog. WALL STREET’S RECOVERY BOOSTS BONUSES, TRIMS LAYOFFS In a new report, New York State Comptroller Thomas P. DiNapoli says WallStreet’s 2009 profits are on track to exceed the record set three years ago, according to the New York Times. “Wall Street remains the engine that NYC UNEMPLOYMENT RATE IS HIGHEST IN 16 YEARS New York City’s unemployment rate held at 10.3 percent in October, its highest level in 16 years, the State Labor Department says, according to the New York Times. The only fields in the city that grew significantly last month were education and health services, which added a combined total of 21,600 jobs, said Labor Department analyst James Brown. Barbara Byrne Denham, chief economist for Eastern Consolidated, a real estate investment company, said that October appeared to have been the city’s worst month since December. She noted that the city lost 15,600 jobs in October and now had lost more than 125,000 jobs during this downturn. The biggest losses last month came in construction, securities brokerages, restaurants and retail stores, according to Ms. Denham. The number of unemployed city residents has averaged more than 413,000 for the past three months, a level it had not reached in more than 32 years of record keeping. The number of people working or looking for work in the city has remained above four million for almost all of 2009, up about 10 percent since the start of this decade. DO YOU RECALL THAT AUCTION OF A CO-OP AT 1056 FIFTH AVENUE It turns out that seven bidders remembered the date, Nov. 19, and one emerged a winner after a tedious duel with two diehards for a price that’s hard to believe. You’ll find all the details in the Service You Can Trust Blog. PROPERTY TAX INCREASE WILL BE A BIT LOWER THAN EXPECTED The New York City Department of Finance has announced that the new tax rate for fiscal year July 1, 2009 through June 30, 2010 will be 13.241 percent, lower than the 13.684 percent assumption used in the budget and up from 13.053 percent. There had been a consensus among the tax certiorari attorneys that a significant retroactive rate increase would be in effect as of January. The figure of 13.684 percent actually had appeared on the Department of Finance web site briefly during the summer, but the city was unable to obtain state approval of the higher rate. Still, it is expected that the effective rate of 13.429 percent for the first half of this year - which takes into account the retroactive adjustment covering the second half of the year - will continue for the fiscal year beginning next July. Got that? NEIGHORHOODS, NOT RACE, AFFECTED SUBPRIME LOAN RECIPIENTS Residents of largely non-white neighborhoods in New York City were far more likely to receive a subprime loan than those in largely white neighborhoods, regardless of the borrower's race, according to a new study from NYU's Furman Center, the Observer reports. The study, which controlled for differences in income and loan amounts, found that African-American borrowers living in neighborhoods with the lowest share of non-white residents had a 24 percent chance of receiving a subprime loan. That number increased to 38 percent if the borrower lived in a neighborhood with the highest share of non-white residents. For white borrowers in neighborhoods with the lowest share of non-white residents, the chance of receiving a subprime loan was 5 percent. Living in a neighborhood with the highest share of non-white residents increased the white borrower's chance of receiving a subprime loan to 18 percent. The figures for Hispanic borrowers in neighborhoods with lowest and highest share of non-white residents were 14 and 31 percent, respectively. OLD NEW YORK TIMES BUILDING GETS NEW LEASE ON LIFE The U.S. real estate arm of Africa Israel Investments Inc. has tentatively agreed with creditors to restructure its disastrous acquisition of the former New York Times headquarters in a deal that will wipe out more than $400 million in debt, according to people familiar with the matter, reports the Wall Street Journal. As part of the agreement, Africa Israel will give up half its ownership of the building to private-equity firm Five Mile Capital Partners, one of the building's creditors. The new venture of Five Mile and Africa Israel will infuse new money to repay existing debtholders, which are expected to take a major loss. THIS DOORMAN ADDS A NICE NOTE TO HIS SERVICE Doorman Barry Finer, a fixture at 155 E. 38th St. for 24 years, has recorded 16 songs that he composed for his debut CD, "I'm in Love," says the New York Daily News. A native of Ukraine, he embarked on his second career two years ago with the help of the building’s tenants. Some assisted with lyrics, and one gave Finer $500 to help cover recording costs. Finer, 50, began spending his Mondays off in a recording studio, putting together keyboard-driven songs about romance and New York City. “I think I put together a nice combination of songs," said Finer, who describes his sound as "Country-pop style." IF YOU DON’T HAVE A LIFE AND OWN A MANSION, READ THIS Homemade cider, from unsprayed apples, surpasses any you can buy, partly because of the experience of pressing. So exclaims a writer in the Washington Post. “Families talk about the fun they have cidering, with the kids washing the apples and tossing them into the hopper, one parent manning the chopper and the other cranking the press.” (It takes a village.) Having ordered a press with an electric chopper from Bob Correll at Correll Cider Presses, the writer spent a year and a half on his waiting list before her family’s arrived. The new press – the cost ranges from $689 to $1,229, a fact that is not disclosed to readers - had neighbors arriving with their apples to take a turn at it. Don’t want to fork over so much money? Ol’ Bob says he will take items in trade such as freezer meat, firewood, needed services and hardwood lumber. But he lives in Elmira, Ore. Hitch up the horses and alert Norman Rockwell. CELL PHONES HAVE CUT INTO LANDLINE USE The number of households with cell phones increased from 36 percent to 71 percent between 1998 and 2005, according to new data released by the U.S. Census Bureau. Householders who were 29 or younger went from 35 percent with cell phones in 1998 to 81 percent in 2005; over the same period, the group decreased ownership of landline phones from 93 percent to 71 percent. Landline phone ownership fell from 96 percent to 91 percent overall from 1998 to 2005. In 2005, 98 percent of householders who were 65 and over had a landline telephone. In addition, the Census Bureau found that: the number of households with a personal computer increased from 42 percent to 67 percent between 1998 and 2005; 92 percent of householders felt their neighborhoods were safe in 2005; and 96 percent had a microwave oven. SHOULD YOU GIVE YOUR DINING ROOM A SECOND LOOK The countdown is on for the holiday season, says the Washington Post, suggesting that “it’s time to take a good, hard look at your dining room and assess its readiness for entertaining from now until New Year's Day. The newspaper asked designers for tips to revive a dining room without spending a lot of time or money. The tips are hardly ground-breaking, but you may want to have a look at them. THE FEDS ARE LEANING ON LENDERS Starting Jan. 1, loan charges and settlement fees will be spelled out on a revised, more consumer-friendly version of the good-faith-estimate form that borrowers are supposed to receive within three days of their mortgage applications, notes Kenneth R. Harney in the Washington. Charges will fall into three broad categories on the form: Fees that cannot increase from upfront estimates to final closing; fee estimates that come with wiggle room and can increase by as much as 10 percent in the aggregate from upfront estimates; and fees that can increase without limit, mainly because the lender has no control over them or because they are difficult to predict weeks in advance. For details, visit the Service You Can Trust Blog. THE SUPER-RICH ALSO LIKE TO BORROW AGAINST PROPERTY Recent big-time home borrowers include fashion entrepreneurs, hedge-fund titans and baseball-team magnates, reports the Wall Street Journal. Home loans "are a really good source of cheap capital," says Robert Maguire, a real-estate tycoon who built some of the tallest officer towers in L.A. He has borrowed some $50 million against several properties, including his beach house, which features huge picture windows framing the Pacific near Santa Barbara, Calif. By hocking the house, so to speak, he and others say they are simply borrowing low in hopes of investing in something they believe will yield a high return. U.S. Trust, for one, has seen 33 percent more home loans this year than in 2008; the average size is over $3 million. The company’s Jan Reuter says clients are using the cash to buy stocks and other assets. Other major lenders tell a similar story. At the extravagant 15 Central Park West in Manhattan, five buyers have taken out mortgages ranging from $10 million and $35 million since the start of last year, according to public information collected by RealQuest data service. CHASE PLANS 60% INCREASE IN LOAN OFFICERS Chase says it will hire 1,200 mortgage more loan officers by the end next year, a 60 percent increase. "We have made a number of strategic investments in our organization," said Dave Lowman, head of home lending at Chase. "We have invested in new systems, aggressively grown our capacity and now are looking to increase our sales force. With our vast branch network and growing customer base, the opportunity for Chase loan officers is tremendous." (No spin there.) New loan officers will serve customers through bank branches in 23 states as well as in metro markets outside the bank's branch footprint such as Boston, St. Louis and Washington D.C. FORECLOSURES RISE 19% OVER A YEAR AGO RealtyTrac reports that default notices, scheduled foreclosure auctions and bank repossessions decreased 3 percent from the previous month but rose 19 percent higher than in October 2008. “Three consecutive monthly declines is unprecedented for our report, and on first blush an indication that the foreclosure tide may be turning,” said James J. Saccacio, chief executive officer of RealtyTrac. “However, the fundamental forces driving foreclosure activity in this housing downturn - high-risk mortgages, negative equity, and unemployment - continue to loom over any nascent recovery.” He foreclosure activity levels that are substantially higher than a year ago continue in most states. Nevada, California, Florida again had the highest rates of foreclosure, followed by Arizona, Idaho, Illinois, Michigan, Georgia, Maryland and Utah. FHA TEMPORARILY EASES RULES FOR CONDO PURCHASES The Federal Housing Administration (FHA), the federal agency that insures low-down-payment home loans for private lenders, LOAN CEILINGS HAVE BEEN EXTENDED The federal government recently extended through 2010 the maximum dollar amount for “conforming” loans, which meet all the guidelines of Fannie Mae and Freddie Mac, says the New York Times. For much of the past two years, the government has agreed to buy mortgages of $729,500 or less for properties in high-cost housing areas such as Manhattan and parts of northern New Jersey. That ceiling had been scheduled to be lowered to $625,500 at the end of this year, but Congress extended the higher limit last month through the end of 2010. Alan Rosenbaum, chief executive of Guardhill Financial Corp., said lenders in the region were charging rates an average of just under 5 percent for 30-year conventional fixed-rate mortgages of less than $417,000 - previously the limit for conforming loans and an industry benchmark for lower-risk loans. For mortgages of $417,000 to $729,500, the rates were about 5.25 percent, and jumbos carried average rates of approximately 5.7 percent. In some cases, jumbo borrowers were required to come up with higher down payments and to maintain higher cash reserves as well. And some lenders refused to offer jumbo loans on co-ops or condominiums that are not at least 75 percent occupied. LOAN APPLICATIONS FOR PURCHASES DROP TO 12-YEAR LOW The Mortgage Bankers Association (MBA) says mortgage loan application volume decreased 2.5 percent on a seasonally adjusted basis for the week ending Nov. 13 from one week earlier. On an unadjusted basis, the change was 3.3 percent. Refinancing activity slipped 1.4 percent, and purchase applications fell 4.7 percent. Seasonally adjusted, purchase volume has declined for six consecutive weeks and is at its lowest level since November 1997. Unadjusted, purchase activity plunged 7.9 percent from the previous week and 14.7 percent from the same week one year ago. The refinance share of mortgage activity increased to 72.9 percent of total applications from 71.5 percent the previous week, the highest proportion since the week ending May 15. The adjustable-rate mortgage (ARM) share dipped to 5.4 percent from 5.5 percent. ONE OF 10 HOMESOWNERS IS LATE WITH MORTGAGE PAYMENTS The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.64 percent of all loans outstanding as of the end of the third quarter of 2009, according to the Mortgage Bankers Association (MBA). That’s 2.65 percent higher than a year ago and also the record-breaking second quarter. In New York City, the delinquency rate went up 0.73 percent between the second and third quarters, reaching 8.84 percent. One in seven American households is behind on payments or in foreclosure, up from about one in 10 a year ago. The MBA reported that a total of 14.4 percent of first-lien mortgages were either 30 days or more overdue or in the foreclosure process, the highest rate since the MBA began reporting such data in 1972; it works out to about 7.5 million households at risk of losing homes and a percentage that is up from 10 percent a year earlier and 7.3 percent two years ago. “Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP,” said Jay Brinkmann, MBA’s Chief Economist. Prime fixed-rate loans continue to represent the largest share of foreclosures started and the biggest driver of the increase in foreclosures; 33 percent of foreclosures started in the third quarter were on prime fixed-rate and loans and those loans were 44 percent of the quarterly increase in foreclosures. “The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve,” Brinkmann declared. RATES THIS WEEK APPROACH RECORD LOWS Freddie Mac says the 30-year fixed-rate mortgage (FRM) averaged 4.83 percent for the week, down from last week’s 4.91 percent and last year’s 6.04 percent. The 15-year FRM was 4.32 percent, also down from last week, when it averaged 4.36 percent. A year ago at this time, it was 5.73 percent, and this week’s rate was the lowest since Freddie Mac began tracking it in 1991. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) of 4.25 percent was below 4.29 percent last week and 5.87 percent last year. The one-year Treasury-indexed ARM averaged 4.35 percent in comparison with last week’s 4.46 percent and last year’s 5.29 percent. THE JOURNAL EXPLAINS EVERYTHING ABOUT NEW TAX CREDIT The new law extends through next spring a temporary tax credit of up to $8,000 for some first-time home buyers. The measure also adds a new tax credit of up to $6,500 for certain repeat home buyers. You’ll find in this Wall Street Journal piece all the answer to all your questions. FEDERAL GOVERNMENT FAVORED OWNERS OVER RENTERS IN 2009 The Congressional Budget Office reports that the government devoted four times the amount of budgetary resources to homeownership as it devoted to rental housing. The total reached approximately $230 billion in spending and tax breaks for homeowners compared with some $60 billion for renting, the CBO found. More than two-thirds of Americans are homeowners, according to the Census Bureau, though the rate fell to around 67.5 percent earlier this year from a peak of 69.2 percent in 2004. BILLINGS BY ARCHITECTS ARE CLIMBING AGAIN The Architecture Billings Index (ABI) has reached its highest mark since August 2008, according to CalculatedRisk.com. As a leading economic indicator of construction activity, the ABI reflects the approximate nine-to-twelve-month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the October ABI rating was 46.1 on a scale of 100, up sharply from 43.1 in September. Still, the score indicates a continued decline in demand for design services. (Any score above 50 indicates an increase in billings). The new projects inquiry score was 58.5, following the 59.1 mark in September. “This news could prove to be an early signal towards a recovery for the design and construction industry,” suggested AIA Chief Economist Kermit Baker. “On the other hand, because we continue to get reports of architecture firms struggling in a competitive marketplace with a continued decline in commercial property values, it is far too early to think we are out of the woods.” BOXING AND BROADCASTING BRING BIG BUCKS Connie Chung and Maury Povich are in contract to buy a home listed for $8.98 million in the Embassy Row neighborhood of Washington, says the Wall Street Journal. "The house just felt extraordinarily right," said Chung, adding that Povich had been trying for years to get her to move to Washington, where the veteran anchor and talk-show host both grew up. The 12,500-sf English manor-style home has seven bedrooms and sits on a third of an acre. The house includes a music room and rooftop terrace and comes with a pool. The family plans to move from New York in 2010 or 2011, Chung related, declining to disclose the contract price. Built around 1929, the home was gut-renovated in 1990 by the sellers - Stephen Simon, the composer and former music director of the Washington Chamber Symphony, and his wife Bonnie. SHE LIKES WALKS ON THE BEACH BUT DOESN’T DISCLOSE HER SIGN Ronald Lauder has sold one of his Hamptons properties to his daughter Aerin, according to Newsday. The recorded price for the 2.77-acre property in Wainscott, which changed hands Oct. 5, was $5.256 million. Ronald Lauder owns several Hamptons properties, including residences in Wainscott, East Hampton and Westhampton Beach. Aerin Lauder Zinterhofer, who was married at the Wainscott home in 1996, is senior vice president and creative director of Estee Lauder, the company that her grandmother founded in 1946. “I love the fresh air and the smell of grass. To walk on the beach with my children and look for shells and stones is my idea of heaven,” Lauder Zinterhofer recently told In Style Magazine. Puh-leeze! ALONG CAME A HOUSE ON THE MARKET James B. Patterson has listed his Palm Beach, Fla., home for $14.95 million as he moves his family to an even larger place, according to the Wall Street Journal. The 7,970-sf plantation-style colonial home that's for sale has five bedrooms, seven baths and two powder rooms. It was built in 1955 and expanded in 1993. The property has a heated pool, spa, boat dock and 136 feet of frontage on the Intracoastal Waterway. For a writing studio, Mr. Patterson used a wood-paneled office with water views and two balconies. "I try not to face [the water] while I'm writing. It's too distracting," he says. The author is moving his family to a two-acre Palm Beach estate with a 20,505-sf main house that he bought for $17.45 million last summer. HER APARTMENT IS FARTHER THAN THIRD ROCK FROM THE SUN Actress Kristen Johnston has closed on the sale of her duplex at 296 West 10th St., reports CityFile.com. The two-bedroom apartment with a solarium and terrace, which Johnston listed for $1.795 million in June and went into contract to sell in August, sold for $1.7 million to costume designers John Orberg and Janet Kuhl. HE UNLOADS ONE OF HIS PERSONAL TREASURES Actor Nicolas Cage has sold his Olympic Tower condo at 641 Fifth Ave. for $7.5 million, says the New York Post. The three-bedroom, three-and-a-half-bath residence was listed at $9.75 million. A combination of two 48th-floor condos, the apartment comprises 3,550 square feet of space. The buyer is a New York-based limited liability company. If you yearn for a Cage property, it isn’t too late. He also has on the market a castle in Somerset, England; a 24,000-sf mansion on 26 acres bordering a bird sanctuary in Rhode Island; a Paradise Island mansion; and a private 40-acre island in the Bahamas. “I find ways of spending money that mystifies everybody around me,” Cage once said. Well, yes. CLOTH IS NOT THE ONLY THING HE CUTS SUCCESSFULLY Tommy Hilfiger has sold his Greenwich, Conn., home for $20 million, reports the Wall Street Journal. He first listed the estate more than a year ago for $27.9 million and reduced the price to $21.9 million earlier this year. Set on four acres and known as Stone Hill, the 20,000-sf Georgian mansion has eight bedrooms and nine baths. There's a movie theater, 2,000-bottle wine cellar, indoor basketball court, tennis court, gym, sauna, spa-treatment room and pool. The designer, 58, paid $18 million for the newly constructed home in 2005 and added custom millwork and exotic wall treatments including cashmere and crocodile skins. Hilfiger has moved to Manhattan, where he recently completed interior work on his duplex at the Plaza hotel. CONSTRUCTION OF NEW HOMES PLUMMETED IN OCTOBER Nationwide housing production fell 10.6 percent to a seasonally adjusted annual rate of 529,000 units in October as builders awaited word on tax-credit legislation, according to data released by the U.S. Commerce Department. "Builders were clearly in a holding pattern in October as the future of the home buyer tax credit hung in the balance," said Chief Economist David Crowe of the National Association of Home Builders (NAHB). "This is not surprising, given the fact that the tax credit had been the primary driver of construction and sales in the summer and early fall. However, the fact that permits for single-family construction remained roughly unchanged in the month is an indication that builders are preparing for the possibility of more favorable housing market conditions in the future.” Still, he added, “significant challenges continue to confront builders with regard to obtaining financing for viable projects and appropriate appraisal values on newly built homes." Permit issuance also fell, by 4 percent, largely because of an 18 drop on the multifamily side. Single-family housing starts declined 6.8 percent in October, the slowest pace since May of this year, and multifamily housing starts plunged by a 34.6 percent, the slowest pace on record. “It seems that the market has bottomed in terms of sales and starts, but that stability can be easily broken even if affordability is very high,” Celia Chen of Moody’s Economy.com told the Times. INDEX RECORDS STEEPLY LOWER HOME PRICE DECLINE National home prices fell 0.6 percent from August to September in Integrated Asset Services’ (IAS) monthly house price index, according to HousingWire.com. It was a relatively small decline, IAS said, compared with the shift of 3.1 percent at the same time last year. The default management and residential collateral valuation analytics service provider said the results indicate the decline in prices that traditionally occurs as the summer months wind down was delayed this year. However, the national results are somewhat skewed, as substantial price increases in large concentrated areas of California offset declines in other regions of the country, IAS said. “The number of transactions is generally up in all geographic areas,” said IAS President and CEO Dave McCarthy. “It’s very interesting that activity is more pronounced in areas with declining prices. This indicates to me that there is some bargain hunting going on.” The IAS index is a measure of non-conforming, bank owned and conventional sales transactions as well as those insured by the Federal Housing Administration and the Veterans Administration. PRICES SLIDE AND SALES OF PREVIOUSLY OWNED HOMES GROWS Most states continued to experience rising existing-home sales in the third quarter, with prices moderating in many metro areas, according to the latest survey by the National Association of Realtors (NAR). Sales of single-family homes and apartments went up 11.4 percent from the second to the third quarter, attaining a rate of 5.9 percent above in the third quarter of 2008. Sales increased from the second quarter in 45 states and the District of Columbia; 28 states and D.C. saw double-digit gains. Year-over-year sales were higher in 32 states and D.C. Commented Lawrence Yun, NAR chief economist: “We can’t underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector.” During the third quarter, 123 out of 153 metropolitan statistical areas (MSAs) reported lower median existing single-family home prices in comparison with the previous year; 30 had price gains. The national median was $177,900, 11.2 percent lower that the third quarter of 2008. For condos, the median was $178,000, down 15.4 percent. Four metros showed annual increases in the median condo price and 51 areas had declines. Distressed sales – foreclosures and short sales – accounted for 30 percent of transactions in the third quarter. “The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market,” Yun said. “Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures.” SLIGHT IMPROVEMENTS SEEN IN MULTIFAMILY SECTOR The multifamily sector showed signs of improvement in the third quarter of 2009, according to the National Association of Home Builders (NAHB). On a scale of 1-100, NAHB's Multifamily Market Rental Indices for the third quarter of 2009 showed that current starts of low-rent apartments rose from 22.2 to 30.4, while the index for low-rent starts in the next six months rose from 20.3 to 41.3. The index for current starts of market-rent apartments also rose, from 15.7 to 19.4, and, for future starts, from 19.1 to 32.7. The current condo index suggested upward momentum as well, rising to 24 in the third quarter of 2009, from 8.1 a year earlier. The future index for condo starts gained more than 20 points to reach 30.4 in the third quarter of 2009. The index measuring traffic of prospective condo buyers rose to 41.3 from 13.8 a year ago. All the multifamily supply indexes have been running below 50 since the third quarter of 2007. The current condo supply index has been below 50 since the last quarter of 2005. Also, the index measuring asking rents dropped from 50.8 a year earlier to 41.7, while the index that measures effective rents declined from 38.5 to 26.6. MARKET RESEARCH FIRM SAYS BORROWERS ARE LESS HAPPY Overall satisfaction among mortgage customers has declined to 739 on a 1,000-point scale, down 18 index points from 757 in 2008 as a result of tighter underwriting standards and longer turnaround times. The average time required to approve and close a loan has increased to nearly 47 days in 2009 compared with 30 days in 2008, according to the J.D. Power and Associates. Although the study also found that credit scores are higher among mortgage customers, the percentage of them with requests for additional documentation has grown to 45 percent from 33 percent in 2008. "While the more cautious approach to underwriting mortgages is justified, the longer turn times and more numerous requests for information tend to have a negative impact on satisfaction," said David Lo, director of financial services at J.D. Power. "Good underwriting and delivering a satisfying customer experience are not mutually exclusive, and some of the negative effects of a tightened lending environment can be mitigated by simply improving communication between lenders and customers." Branch Banking and Trust (BB&T) ranked highest among primary mortgage lenders with a score of 783. Wachovia followed with 781, while National City Mortgage and SunTrust Mortgage were third (769 each). In descending order, the other lenders were: Wells Fargo, Flagstar Bank, GMAC Mortgage and Bank of America. RECORD NUMBER OF FIRST-TIMERS BOUGHT HOMES IN 2008 The number of first-time home buyers rose to 47 percent of all home sales from 41 percent of transactions in last year’s study, the highest proportion on a record dating back to 1981, according to the National Association of Realtors (NAR). The previous high was 44 percent in 1991. “It’s interesting to note the last cyclical peak of first-time home buyers was during the last noteworthy economic downturn, with first-time buyers starting the chain reaction that led the nation out of recession,” commented Paul Bishop, NAR vice president of research. The median age of first-time buyers was 30 and the median income, $61,600. The typical first-time buyer purchased a home costing $156,000, down from $165,000 in the 2008 study, and plans to stay in that home for 10 years. The typical repeat buyer was 48 years old, earned $88,100, purchased a home costing $224,500 and plans to stay in that home for 12 years. Buyers used a wide variety of resources in searching for a home: 90 percent use the Internet, 87 percent rely on real estate agents, 59 percent yard signs, 46 percent attend open houses and 40 percent look at print or newspaper ads. As for purchases from for-sale-by-owner (FSBO) transactions, that level fell to a record low of 11 percent, down from 13 percent in 2008. The share of homes sold without professional representation has trended down since reaching a cyclical peak of 18 percent in 1997, a development that doubtless had NAR staff members dancing in their cubicles. BUILDERS CONTINUE TO EXPRESS DIMINISHED CONFIDENCE In a survey in which most responses were received prior to congressional action to keep an important home buyer incentive alive, builder confidence in the market for newly built, single-family homes remained unchanged at a low level in November, the National Association of Home Builders (NAHB) reported. The NAHB/Wells Fargo Housing Market Index (HMI) held flat at 17 out of 100, while its component gauging sales expectations for the next six months rose two points from the previous month, to 28. Fully one-third of respondents indicated that they have recently lost sales owing to low appraisal values, up from a quarter in July. FED HEAD SAYS HOME CONSTRUCTION MAY BE UP IN 2010 “Housing faces important problems, including continuing high foreclosure rates," Federal Reserve Chairman Ben Bernanke said in a speech quoted by the Wall Street Journal. "But residential investment should become a small positive for growth next year rather than a significant drag, as has been the case for the past several years." DEUTSCHE ANALYSTS DOUBT IMPACT OF NEW TAX CREDIT Deutsche Bank analysts contend in a new report that the tax credit’s impact going forward is likely to be uneven, according to the Wall Street Journal. However, the report concludes that the credit has psychological value in propping up the housing market. The analysts calculate that the expanded income limits in the new credit, which gives existing home buyers a $6,500 credit, could translate into another $150,000 in purchasing power. An $800,000 cap on homes eligible for the credit will exclude only around 3 percent of all homes, they say. “While the actual impact on sales numbers may be relatively light, the impact on consumer psychology, and that second-order impact on the housing market, could be meaningful and should serve to take a worst-case scenario off the table, at least over the next several months,” the report runs on. The impact of the credit also is likely to have uneven results geographically: An $8,000 credit in Cleveland, for example, offers buyers approximately 9.8 percent off of the median home price, while the same credit only accounts for 1.7 percent off the price in Honolulu. And in other markets, a glut of bank-owned property may offset any demand stimulated by the credit, including Miami and Fort Myers, Fla. MBA FORECASTS HOUSING RECOVERY, BUT A WEAK ONE Continued weakness in the job market and a lingering overhang of excess supply and shadow inventory remain significant obstacles to a rebound for the housing market, the Mortgage Bankers Association (MBA) observed in its monthly report. “2010 will be a tough year for the industry,” the group said. “Home sales should begin to pick up modestly, and home prices should begin to stabilize, leading to some growth in purchase originations. However, rising rates should significantly curtail refi originations.” Because of unknown future actions by the Federal Reserve and Treasury, “it is unclear how much rates will increase when the Fed steps out of the market completely,” the report continued. “Risks to our forecast remain to the downside with respect to economic growth,” it said, predicting that home prices will increase about 1 percent in 2010 after reaching a trough in 2009. In addition, MBA’s forecast is for mortgage rates to increase through 2010 to reach 5.7 percent at year’s end. EVER OPTIMISTIC, REALTORS GROUP SEES MANY MORE SALES IN 2010 Home sales will increase 15 percent, Chief Economist Lawrence Yun of the National Association of Realtors (NAR) told attendees at a conference of the group. He expressed the belief that the supply of homes would stabilize at the historic norm of six to seven months. But the inventory of homes above $500,000 will remain elevated in the near-term, Yun said. New-home sales, which compose approximately 10 percent of the market, will continue to be suppressed to some 550,000 units, down from more than a million during the boom. "Weakness in new-home sales shouldn’t be viewed as tepid demand," he added without explaining why. Should inflation grow, the economist continued, the housing recovery will be set back. FANNIE MAE VIEWS FUTURE WITH GUARDED OPTIMISM “It appears that the economic recovery is here, say Fannie Mae economists Doug Duncan and Orawin T. Velz in their latest analysis. “It is likely that the economy will achieve ‘reasonable’ growth in the fourth quarter of this year, thanks to policy stimulus and the inventory cycle,” the economists contend. “The question is whether that growth will be ‘durable,’ especially after the policy supports and the inv BANKER PREDICTS INCREASE IN LOAN RATES Denis Salamone, chief operating officer of Hudson City Bancorp, the nation’s largest thrift, is quoted in Realtor magazine as saying he doesn’t think that the market will stay “this low for many more months." Despite the Federal Reserve’s decision to keep short-term rates low, Salamone said that loan rates will rise if the Fed buys fewer mortgage-backed securities. It will take another 12-24 months to sell off excess inventory, he went on, saying that housing prices may continue to fall until the surplus shrinks. Waste not, want not Under the category of pet peeves, the file is thick. Most folks don’t much like popcorn ceilings, kitchens in which the refrigerator seems miles from the sink or windowless rooms created from the combination of two or more apartments. One pet peeve that doesn’t always register with buyers immediately is useless space that is not just an interior room. For example, too many apartments, most of them pre-war and especially those that have been renovated, suffer from space wasted on hallways. All too often, entrance to some pre-war apartments requires a hike from the door past one or two bedrooms, a closet and sometimes a bath before you ever get close to the living room. Real estate brokers like to call hallways such as these “galleries” in a spasm of puffery that best would be squelched. Consider the handsomely renovated three-bedroom, two-and-a-half-bath co-op in the low 70s that has an expansive living room separated from a corner dining room by leaded glass pocket doors, enormous eat-in kitchen dripping with fine taste, washer/dryer, generous closet space and details such as dentil molding and flawless original herringbone floors. There is no doorman, but a live-in super accepts deliveries. And other amenities are absent. On Riverside Drive with memorable river views from the ninth and top floor of a distinctive turn-of-the-century building that boasts impeccable financials and welcomes pets, the apartment has much to commend. But it suffers from a plethora of hallways. One is described as a 32-foot-long “entrance gallery.” Well, off that space are: two bedrooms, the kitchen and a powder room. Thirty-two feet! The second hallway is cleverly ignored altogether. It runs from the kitchen at least 20 feet to the dining room. Worse, from the point of view of wasted space, the hallway runs parallel to that so-called entrance gallery. Still, the asking price of $2.2 million with maintenance of $2,505 is not outrageous. On a much smaller scale, but no less egregiously wasteful is a three-bedroom, one bath floor-through co-op in a 1905 limestone row house in the mid 80s east of Broadway. The apartment is on the fifth floor of a walk-up, after which climb, the hallway may seem like a trek too far for anyone carrying shopping bags loaded with anything heavier than teabags. The kitchen is at the far end of the hall beyond two bedrooms of little more than 100 square feet each, bath defeated by the passage of time and cramped living/dining area. Square in shape and mildly modern, the open kitchen is adorned with laminate countertops and has windows overlooking brownstone gardens. At the front of the apartment facing the street is a space shown on the floor plan as the master bedroom but staged as the living rom; it is the biggest room in the apartment. Although the unit has a few good features – washer/dryer, new wood floors and a decorative fireplace – it has, understandably, been a hard sell. It went on the market two years ago for $1.15 million went off the market the following April for more than a year. The co-op was listed again in June for $949,000, and the price was cut to $895,000 with maintenance of $896 in July. There it remains. Good luck to the sellers; surely, they will need it at such an imaginative price. Below are other recently seen apartments that have been listed by various brokers:
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drives New York’s economy,” DiNapoli said in a statement. “It’s encouraging that the industry is recovering faster than forecast.” His report noted that the four largest investment firms in Manhattan - Goldman Sachs, Merrill Lynch, Morgan Stanley and the investment banking arm of JPMorgan Chase - earned $22.5 billion in the first nine months in contrast to losses of more than $40.3 billion in 2008. Member firms on the New York Stock Exchange earned a record $35.7 billion for their broker-dealer operations in the first six months, $8.9 billion more that the previous high in 2000. In turn, the profits are contributing to a resurgence of bonuses. Six of the top U.S. bank holding companies set aside $112 billion for salaries and bonuses, including deferred payments, in the first nine months, DiNapoli said. If the profits continue, bonuses at the six banks could exceed the $162 billion paid 2007. Employment in the securities industry in New York City fell by 28,300 jobs since its peak in November 2007, the comptroller said. But the report predicts that job losses in the sector are unlikely to exceed 35,000 by the end of the year, a much smaller number than previously forecast. 
is relaxing a variety of rules about condominiums through 2010, observes the Miami Herald. The new guidelines also increase from 30 percent to 50 percent the number of units in a project that can be financed with FHA loans. (However, FHA will make exceptions, even allowing up to 100 percent when buildings meet an additional set of more stringent criteria.) Further, now only 50 percent of units in a complex must be owner-occupied or sold to owners who plan to live in the units. In addition, a presale requirement in new construction is reduced to 30 percent compared with 70 percent for loans from conventional lenders. Among other of the new measures, lenders may submit mortgage loans for spot approval in buildings that have not been approved for FHA lending beyond that original deadline at the end of this year. “The best way to bring back some level of security is to get new buyers into those vacant units. You can't do that until new homeowners have access to financing,'' said Meg Burns, director of the FHA's single-family program development.
entory cycle wane.” They note that housing contributed to third quarter real GDP growth for the first time since the fourth quarter of 2005 and that homebuilding activity posted the deepest peak-to-trough decline in any recession since World War II. “One silver lining in the new home market is that, despite the drop in sales, the months' supply was unchanged at 7.5 months, as the number of homes available for sale fell proportionally with the sales pace,” the economists write. “The inventory of new homes has declined steadily since May 2007, reaching the lowest level since late 1982.” Unfortunately, they add, other data indicate a substantial excess supply of housing. Specifically, Duncan and Velz cite the Housing Vacancy Survey, which showed “worrisome” developments. Both the homeowner and rental vacancy rates moved higher in the third quarter. “After declining for two consecutive quarters, the homeowner vacancy rate edged up to 2.6 percent in the third quarter from 2.5 percent in the second quarter,” they observed. “While the rate has remained below a record of 2.9 percent at the end of 2008, it is much higher than its long-term average of about 1.7 percent.”
