SOME PRICES ACTUALLY ROSE IN AUGUST While a significant portion of listings – roughly 33 percent, according to Streeteasy.com – saw price cuts last month, there was an increase in sales and many brokers started elevating asking prices to enhance their units’ image, leave room for haggling or adjust to their perception that the market was turning around. Upwards of 850 homes in Manhattan sold in August, according to figures compiled by the Real Deal using Streeteasy.com data, in comparison with approximately 760 transactions made a month prior. Almost 5 percent of all Manhattan homes on the market last month saw price increases, the data show; those price changes averaged 6.4 percent across the price spectrum. Said appraiser Jonathan Miller of Miller Samuel: “The story to me, based on the numbers, is not that listing prices are rising, it’s that because asking prices fell sharply you didn’t see the same amount of increase that you did last year.” Kathy Braddock, a founding partner with real estate consultancy Braddock + Purcell and the New York brokerage Charles Rutenberg Realty, said that in any market, price hikes are a risky move. Because apartment histories – including price fluctuations – are readily available, she believes that they’ll dissuade buyers. THE MARKET MAY BE RETURNING TO NORMAL
HIGHER UNEMPLOYMENT PLAGUES THE CITY Continuing layoffs on Wall Street drove New York City’s unemployment rate to 10.3 percent in August, a 16-year high that underscores the need to retrain former financial services workers for other jobs, state officials say, according to the New York Times. In the year since the Lehman Brothers investment bank collapsed, the number of unemployed city residents has risen to more than 415,000, the highest total on record. Commented M. Patricia Smith, the state labor commissioner: “Our economists don’t see the financial-services sector ever coming back as strong as it was.” The city’s unemployment rate, which rose from 9.5 percent in July, is now well above the national rate of 9.7 percent. Until July, unemployment had been the same or lower in the city than it was in the country for more than 18 months. Last month, the state’s unemployment rate rose to 9 percent from 8.6 percent in July. “While the job market is tight,” Mayor Michael Bloomberg averred, “the city is losing jobs at less than half the rate of the rest of the country. This is an important sign that despite the challenges, people continue to be optimistic about the city’s future.” HOW DO YOU SPELL CHUTZPAH A 175-sf studio in Morningside Heights has gone on the market for $195,000 with maintenance of $170 a month, notes New York magazine. When they began converting 535 West 110th St. to a co-op earlier this year, the building’s sponsors decided to gut the top floor, where the maids’ rooms used to be, and carve one- and two-bedroom apartments out of it. They built three, and had 175 square feet left over. The leftover became the studio, which measures 10 by 14 feet, plus a bath. If you were to bring in a queen-size bed, which would take up nearly 20 percent of the room, there’d be just enough space for a dresser, a chair and a couple of end tables. To reach the apartment, the new owner – if there ever is one - has to exit the elevator one floor below and take a separate flight of stairs. MAN’S FRIENDS ARE PROVING BEST ONLY IN FAIR WEATHER More than one million pets will be placed for adoption this year because of foreclosure, according to the American Society for the Prevention of Cruelty to Animals in the Wall Street Journal. Families moving in a hurry may leave their pets behind, new rental homes don’t allow pets, or the families simply can’t afford Fido any longer. Enter the first-ever Brooklyn Bridge “Pup Crawl.” The event, an organized, evening dog walk over the bridge on Saturday, aims to raise donations and awareness about the furry side of foreclosure. Through the Pup Crawl site, in excess of $1,000 has been donated that will be funneled to animal shelters in New York, Florida and Los Angeles. “I can’t imagine losing your job, your house and losing your pet on top of all the other emotional stress you’re dealing with,” says Joseph Hassan, one of the Pup Crawl organizers. “We’re trying to help these little guys out until the economy picks up again.” RENTS IN MANHATTAN LAG A YEAR AGO BY 10 PERCENT Rents have stabilized, but at levels nearly 10 percent back from already depressed 2008 numbers, according to the Real Estate Group of New York’s latest report. The largest gains since August were in non-doorman two-bedroom units, which increased by 2.03 percent. Still, the modest gains have done little to mitigate the lag in year-over-year price comparisons. The decrease in inventory that Manhattan saw in August accelerated in September – down 5.58 percent overall, with non-doorman units falling 7 percent and doorman units, 4.32 percent. There is much more detail in the Service You Can Trust blog. IF YOU’RE LIKE THESE FOLKS, DON’T EVEN THINK ABOUT DÉCOR Despite their self-imposed isolation, Homer and Langley Collyer, the basis of a new novel by E.L. Doctorow, were never truly alone, maintains the New York Times. The famous hoarders share their New York story with myriad recluses, hermits, exiles and pack rats who resided in the city, among them: Leona Helmsley; Nikola Tesla, who died in a hotel room surrounded by pet pigeons; Joe Franklin; Steve Ditko; William M. V. Kingsland, real name Melvyn Kohn; Yoshio Kishi; Patrice Moore, who was trapped for two days but survived after a bookcase and stacks of magazines and books collapsed in his cluttered Bronx apartment in 2003; Christina Copeman, whose skeletal remains had gone unnoticed from a year to 18 months; Carole Ann Cirone; Vycheslav Nekrasov; Charlotte Moss; and Bettina Grossman, who rarely left her Chelsea Hotel rooms for 30 years and had to sleep on a deck chair in the hallway. TWITTER WON’T BE NESTING HERE Twitter will not spend any of its new pile of money – a $100 million investment just announced that means the company is valued at $1 billion - moving to New York, company co-founder Biz Stone tells the Silicon Alley Insider. "New York is an amazing, vibrant city, but Twitter is definitely not moving,” he says. “We're based in San Francisco and this is where we will stay." The Wall Street Journal floated a rumor that Twitter was considering re-locating to the Big Apple twice in the past week. ALL THE RAGE, CERAMIC TILES CAN BE A PROBLEM Ceramic tiles are very rigid and the tiles eventually crack or loosen, notes the Washington Post. The usual solution is to strengthen the floor joists to add rigidity to the floor. A simpler, yet less trendy, solution is to switch from ceramic tiles to more flexible flooring such as vinyl tiles or sheet vinyl. So says the newspaper. THE MACHO MATTRESS MAY BE COMING INTO VOGUE
CASH FOR COUCHES IS CATCHING ON An array of home furnishing retailers and manufacturers is introducing trade-in programs for everything from outdated entertainment centers to stained ottomans and used mattresses, says the New York Times. At Ruby & Quiri, a family-run home furnishings center in Johnstown, N.Y., customers receive a $25 gift card for every piece of used furniture they turn in or $50 for upgrading an appliance to an Energy Star model. At Pacific Manufacturing in Phoenix, a used piece of furniture earns clients 10 percent off the purchase of any new furniture item or mattress. Similar programs have sprung up in Portland, Ore., Chicago and Lexington, Ky., along with variations such as Credit for Clunkers at 1-800-Mattress, Cash for Couches at Lillian August in Connecticut, and what some retailers are calling Cash for Teakettles, which Chantal Cookware will introduce next month. Craigslist, beware. A NON-PROFIT SAYS DON’T BREATHE DEEPLY AT HOME One in three homes in U.S. metropolitan areas have at least one problem such as water leaks, peeling paint, holes or rodents that could harm residents' health or safety, according to a study by a non-profit research group called the National Center for Healthy Housing. "It is a wake-up call," Ron Sims, deputy secretary of the Department of Housing and Urban Development, told USA Today. "The report validates what we've been saying at HUD, that we need to restore homes. You can't be healthy if your house is sick." The study is the first to compare metro areas based on 20 health-related housing characteristics in the Census Bureau's American Housing Survey. It finds that cities with the highest rates of healthy homes included Charlotte, Anaheim, Calif., and Atlanta. Oakland, San Francisco and New York City were among those ranked lowest. The most common problem: water leaks, which can cause mold that can trigger allergies and asthma. NEW RULES AIM TO PROTECT APPRAISERS FROM PRESSURE The Federal Housing Administration will implement new rules for appraisals on Jan. 1, says Inman News. The new guidelines will ensure FHA appraisal policies are in “full alignment” with rules employed by Fannie Mae and Freddie Mac since May 1, the Department of Housing and Urban Development said in a press release. Realtors, homebuilders and lenders have complained that the new rules governing appraisals for Fannie and Freddie – the Home Valuation Code of Conduct – have derailed home sales since they were implemented. The rules have led to an increased use of appraisal management companies, which, critics say, sometimes hire appraisers with little experience in the markets in which they are asked to value properties. LOW INTEREST PERSISTS FOR FIXED-RATE MORTGAGES Freddie Mac reported that the 30-year fixed-rate mortgage (FRM) was unchanged this week at 5.04 percent. Last year at this time, it averaged 6.09 percent. The 15-year FRM this week was 4.46 percent, down from last week’s 4.47 percent and 5.77 percent a year ago; it was the lowest level since Freddie Mac started tracking the rate in 1991. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was unchanged at 4.51 percent from the prior week but compared with 6.02 percent in 2008. The one-year Treasury-indexed ARM averaged 4.52 percent, down from 4.58 percent last week and 5.03 percent last year. AND HERE’S FAIR WARNING THAT RATES COULD GO UP Federal Reserve policy makers announced that they would slow down the Fed’s program to buy almost $1.5 trillion worth of mortgage-related securities and stretch it out through the end of March, reports the New York Times. That program is aimed at keeping mortgage rates low and propping up the housing market. But the Fed now dominates the mortgage market so much that many analysts predict it will be difficult for the central bank to extract itself. “I don’t think there are enough private buyers to replace the central bank,” said Sung Won Sohn, professor of economics at California State University. “If there is even an inkling that the Fed is going to start selling by 2010, we would see mortgage rates go up right away.” Fed officials did not even hint at a timetable for selling the central bank’s huge mortgage portfolio. But to prevent disruptions when it simply stops buying, the Fed said it would gradually phase out its purchases over the next six months. Even that could cause heartburn for prospective home buyers. Analysts estimate that the Fed is buying more than 80 percent of new mortgage-backed securities. FORECLOSURES COULD PROLONG THE MORTGAGE CRISIS Legal snarls, bureaucracy and well-meaning efforts to keep families in their homes are slowing the flow of properties headed toward foreclosure sales, even when borrowers are in deep distress, according to the Wall Street Journal. While that buys time for families to work out their problems, some analysts believe the delays are prolonging the mortgage crisis and creating a growing "shadow" inventory of pent-up supply that will eventually hit the market. The size of this shadow inventory is a source of concern and debate among real-estate agents and analysts who worry that when the supply is unleashed, it could interrupt the budding housing recovery and ignite a new wave of stress in the housing market. Ivy Zelman, chief executive of Zelman & Associates, a research firm based in Cleveland, believes 3-4 million foreclosed homes will be put up for sale in the next few years. The question is whether the flow of these homes onto the market will resemble "a fire hose or a garden hose or a drip," she says. LOAN ACTIVITY IS BOOMING The Mortgage Bankers Association reports that mortgage loan application volume increased 12.8 percent on a seasonally adjusted basis for the week ending Sept. 18 over the prior holiday week. On an unadjusted basis, the change was 24.6 percent compared with the previous week and 14.0 percent compared with the same week one year earlier. Refinancing volume went up 17.4 percent from the previous week, and purchase activity, driven by applications for government-insured loans, rose 5.6 percent from one week earlier. The share of purchase applications that were government-insured was 45.7 percent, the highest share since November 1990. The refinance share of mortgage activity grew to 63.8 percent of total applications from 61.0 percent the previous week, and the adjustable-rate mortgage (ARM) share increased to 6.7 percent from 6.0 percent. IN HONG KONG, KOWLOON CONDOS ASK SKY-HIGH PRICES Luxury apartments in the once-unglamorous Kowloon district have suddenly become some of the most expensive properties on the planet, thanks in part to strong interest from mainland Chinese investors, says the Wall Street Journal. Two penthouse units at a luxury condominium known as the Cullinan are the most conspicuous sign of the trend. They are on the market for the equivalent of $38.7 million apiece, or about $9,675 a square foot. The 4,000-sf suites occupy floors 91-93 atop both of the roughly 885-foot-tall Cullinan towers, featuring outdoor swimming pools and sweeping views of Hong Kong's famous harbor. Beat that 15 Central Park West! SALES IN THE HAMPTONS ARE ALIVE BUT NOT KICKING The number of new deals put into contract jumped to 156 in August from 62 in July, according to a broker cited by the Wall Street Journal. Home sales also rose 34 percent, to 344 units, in the second quarter from the prior quarter, according to Suffolk Research Service, a local real estate data firm. While up, that's far less than the 576 units sold in the second quarter of 2008. The median sale price of a home on Long Island's East End was $560,000 in the spring of this year, down 32 percent from the peak price of $825,000 in the first half of 2007, according to Suffolk Research. In August, there were 4,900 homes for sale in the Hamptons, or roughly the equivalent of about three years of inventory, according to StreetEasy.com. From May 1 to Aug. 31, pre-foreclosure filings in the Hamptons jumped 31 percent, to 294 from year-earlier levels, according to Long Island Profiles, a publisher of real-estate and foreclosure data. Brokers remain circumspect about whether the surge heralds a real recovery. Summer sales were "mediocre at best," says Peter Turino of Brown Harris Stevens. "This is probably a temporary improvement. I think we'll have a very slow winter." THE TIMES QUESTIONS A PRECEPT FOR BUYERS It’s a good time to blow up a long-standing but under-examined maxim of real estate - that you should always stretch financially when buying your first home, says the New York Times. “No one is quite sure who came up with this idea, though suspicions rest on real estate agents or kindly parents with the best of intentions who never expected that real estate prices could fall,” writer Ron Lieber, continues. “Whatever its origin, the economists and financial planners I spoke with this week are almost unanimous in their rejection of it.” Lieber helpfully provided a list of seven suggestions that the experts provided. YOU CAN PURCHASE YOUR FINAL HOME FOR A PITTANCE Cemeteries and funeral-property Web sites report a burgeoning marketplace for the sale of burial plots by individuals, many of which have been in families for years, reports the Wall Street Journal. In Orlando, Fla., Greenwood Cemetery has seen a record number of customers coming in to sell their plots back to the municipal-owned facility. Greenwood considers what a customer paid for the plot and will offer as much as $1,500, then resell it on the open market. In Dayton, Ohio, David's Cemetery reports that in the past year it has seen roughly double the number of clients coming in to sell their spaces back to the cemetery. Web sites such as Grave Solutions and Plot Brokers, which advertise spaces and broker sales of cemetery properties, also have seen an uptick in postings. Caskets-N-More, a Glendora, Calif.-based business that sells funeral products and brokers sales of cemetery properties, reports a doubling of people wanting to sell their plots, to about 20 new postings a month from 10 a year ago. (More? Buckets of chicken?) Plots sell quickest and cost the most in places where people tend to retire such as Florida, Arizona, Texas and Southern California, according to Ken Brant, who runs the Grave Solutions Web site. Generally, sellers post plots for about half of what a comparable one would retail for at the cemetery. NO LONGER PALSY WITH HUSBAND, ALLY DOESN’T DALLY Ally Sheedy has put on the market her two-bedroom apartment at the Boulevard, a West 86th Street condop where the actress lived with David Lansbury, from whom she has filed for a divorce, according to New York magazine. The asking price is $1.295 million for the unit, which has a terrace, in a building with health club, pool, playroom, squash court and parking. Born in New York City and once a student at the Bank Street School, Sheedy remains on the Upper West Side in a rental to her liking. WHERE IN THE WORLD IS HE NOW Matt Lauer has bought a waterfront cottage in Southampton, N.Y., for its full asking price of $2.15 million, says the Wall Street Journal. The 1,500-sf Cape Cod was on the market for about three months before Lauer made his offer. Set on about 0.7 acres, the home has three bedrooms, two baths, a country kitchen and wraparound deck overlooking both the lawn and a large pond connected to Little Peconic Bay. The property, which also features a boat dock, includes 85 feet of pond frontage. Through a spokeswoman, the Today Show anchorman declined to comment. AFGHANI BIGWIG WILL LIVE SWELL
JOURNALIST’S WIDOW TRADES BIG PLACE FOR A SMALLER ONE The widow of Ed Bradley, who died at 65 in 2006, has sold the couple's apartment on New York's Central Park West for close to its $6.995 million asking price, according to the Wall Street Journal. In the St. Urban, a 1906 Beaux-Arts building, the nine-room, 3,600-sF co-op overlooks the Jacqueline Kennedy Onassis Reservoir and has four bedrooms, three bathrooms and a maid's room. The building has a doorman, a gym and a basketball court. The unit, which Bradley bought in the 1970s, first went on the market in October for $7.8 million. Patricia Blanchet-Bradley is moving to another apartment in the same building. OH SAY CAN YOU SEE. . . THE HOUSE NEXT DOOR There is a “for sale” sign in the front yard, but strollers won’t see it, says the New York Times. That’s because the street is closed to nonresidents by order of the United States Secret Service. The house at 5040 South Greenwood Avenue, next door to the Hyde Park residence of President Obama and his family, is owned by Bill and Jacky Grimshaw. They are the empty-nesters who decided to sell their 6,000-sf residence after 36 years. “We think there’s a premium,” said broker Matt Garrison, who does not intend to put an asking price on the house. “We don’t know what the Obama effect is.” On the third floor, in a playroom, a large picture window offers a sweeping view of the red brick Georgian-style house that Obama bought in 2005 for $1.65 million. Prospective buyers would have to be screened for security reasons before being taken seriously. Prof. Grimshaw, 71, says he never has to lock his doors. “But I also know that there are some people who would never live under these circumstances,” he added. “I’m just hoping for a good patriot, a good family man, a good Democrat.” Would he sell to a Republican? “Only if push came to shove.” FORMER AMEX CEO SELLS ESTATE FOR 25% BELOW HIS ASK Former American Express Chairman and CEO James Robinson III has sold his 35-acre Warren, Conn., estate to architect Santiago Calatrava for $5.5 million; the asking price was $7.35 million, says the Wall Street Journal. Robinson, 73 and now a general partner of RRE Ventures, bought the property in the 1980s with his wife Linda. The 5,500-sf 1930s home, which has five bedrooms and five baths, overlooks a lake and comes with two tennis courts and a pool. Calatrava, 58, has designed bridges around the world, an extension of the Milwaukee Art Museum and the glass-and-steel transit hub at the former World Trade Center site. He moved to New York in 2007 after years of living in Paris and Zurich. The architect and his family also own property in nearby Kent, Conn. BROADWAY LUMINARY IS TURNING OUT HIS HOUSE LIGHTS At 834 Fifth Avenue - where the hoi polloi will never tread and Rupert Murdoch is spending $400,000 to enlarge the exercise room in his $44 million triplex - a 13th-floor, 11-room, 4,750-sf duplex has just been put on the market, according to the Observer. It belongs to Judy and Hal Prince, 81, and it can be yours for $33 million. The duplex’s top floor has only two proper bedrooms, the floor plan shows, plus a massive bedroom/media room, a dressing area, two terraces, a maid’s room and a laundry room. HOW THE OTHER SIDE (OF THE SEA) LIVES The 70-acre estate rises high over St. Bart, reports the Wall Street Journal. Balinese bungalows with ocean views, tennis courts, swimming pools and music and dining pavilions dot the property. Now, it's the latest home of Russian billionaire Roman Abramovich, a person close to the deal told the newspaper. With its nearly $90 million sale price, the property is one of the most expensive private homes ever sold, but for the oligarch it will be just one of many spectacular possessions, which also include the world's largest privately owned yacht, a Colorado ski estate, England's Chelsea soccer team and a contemporary art collection valued at more than $100 million. The seller of the Governor Bay property was Jeet Singh, 46, co-founder of Art Technology Group, now known as ATG, the Cambridge, Mass., maker of Web software used by retailers. Singh, 42, who says he bought the estate in 2000 and "didn't lose too much" on the deal. And that’s with a $90 million sale. A STARCHITECT EXPANDS HIS HORIZONS Norman Foster has bought a second unit at white-glove co-op 912 Fifth Ave., bringing the amount of his total purchases in the building to $13.9 million, says the Real Deal. According to city documents, the Pritzker Prize winner and his wife closed on unit 8B June 29 for $6.7 million, just two months after purchasing unit 8A for $7.2 million. The couple plans to combine the units into one large floor-through apartment in the luxe pre-war building between 72nd and 73rd streets, said a source. When news broke of Foster’s initial purchase, brokers wondered why the architect would be interested in a "long and thin" apartment with only two rooms facing Central Park. Neither unit was officially on the market, and Foster was unavailable for comment. HE MAY BE THINKING OF HIS SALE AS A BOGIE Fred Couples, the former No. 1 golfer who made 23 straight Masters cuts, has sold his 11,000-sf Montecito, Calif., home for $9.56 million, nearly 25 percent below the asking price, according to the Wall Street Journal. Couples, 50, bought the five-acre property in 1999 for $4 million. The six-bedroom colonial house has ocean and mountain views and, yes, a putting green. There's a three-bedroom guest house with two baths, tennis court, pool and nine-car garage. Couples moved in 2007 to another home, in La Quinta. The buyers are Ben Trosky, who had a career in the financial industry, and his wife Cheryl. NEW-HOME SALES RISE BUT FALL SHORT OF EXPECTATIONS Sales of new one-family houses in August were at a seasonally adjusted annual rate of 429,000, the U.S. Commerce Department reported. That amount was 0.7 percent above the revised July rate, but it was 3.4 percent below August 2008. The median sales price of new houses sold in August 2009 was $195,200; the average, $256,800. Seasonally adjusted, the number of houses for sale at the end of August was 262,000, representing a supply of 7.3 months at the current sales rate. PRICES DROP, BUT SALES OF PREVIOUSLY OWNED HOMES FALL BACK Sales in August of existing single-family homes, townhomes, condominiums and co-ops declined 2.7 percent from July but were 3.4 percent higher than in August 2008, reports the National Association of Realtors (NAR). In the previous four months, sales had risen a total of 15.2 percent. But total housing inventory fell 10.8 percent, representing an 8.5-month supply at the current sales pace as opposed to a 9.3-month supply in July. Unsold inventory totals are 16.4 percent lower than a year ago. The national median existing-home price for all housing types was $177,700, down 12.5 percent from a year earlier. Distressed properties continue to distort the median price because they generally sell for 15-20 percent less than traditional homes, NAR said. For single-family homes, sales fell 2.8 percent, remaining 2.5 percent above August 2008; the median price was $177,500, down 12.1 percent from a year ago. Existing condominium and co-op sales slipped 1.6 percent from July, but they were 10.1 percent higher than a year ago; the median price was $179,300, 15.7 percent below 12 months earlier. WITH EXPIRING TAX CREDIT, BUILDERS TAPER PRODUCTION Overall housing starts rose 1.5 percent in August, but single-family starts declined 3 percent, ending what had been a five-month run of improvements, according to the U.S. Commerce Department. Single-family permits also edged downward in August, by 0.2 percent. At the same time, multifamily housing starts climbed 25.3 percent from an extremely low level in the previous month, and permit issuance rose 16 percent from an all-time low in July. "The tax credit has been helping buoy demand for new homes since its passage in February, but builders are concerned about what happens after it is gone," said Chief Economist David Crowe of the National Association of Home Builders. "On top of the credit's impending expiration, builders continue to grapple with a severe lack of credit for housing production loans and inappropriately low appraisals that are tied to the use of distressed properties as comps.” HOMES MORTGAGED FOR LESS THAN $729,750 GAIN IN PRICE U.S. home prices rose 0.3 percent on a seasonally-adjusted basis from June to July, according to the Federal Housing Finance Agency. The agency tracks only conforming mortgages, those under $417,000 in most cities and under $729,750 in high-priced markets. (The previously reported 0.5 percent increase in June was revised downward to a 0.1 percent increase.) For the 12 months ending in July, U.S. prices fell 4.2 percent, 10.5 percent below its April 2007 peak. FORBES PROBES MULTI-YEAR PRICE CHANGES CITY BY CITY Though home prices in many areas still have room to drop, economists say some of the country's real estate markets are showing early signs of repair, says Forbes magazine. But just as subprime lending, the housing bubble and the country's subsequent wave of foreclosures had distinct consequences in separate areas of the country, the publication adds, the recovery also will look dramatically different by region. “When prices do rise, they'll inch, rather than soar, and some areas won't match their pre-bubble prices for a decade, according to home price forecasts by Moody's Economy.com,” Forbes notes. "When people see prices rising, they think housing is a good investment," says Celia Chen, Moody's Economy.com research staff senior director, specializing in housing economics. For some time afterward, these buyers will bite, helping to push prices even higher. But, "sentiment can turn when prices are proceeding very quickly," says Chen, referring to post-bust buyer reaction. "At some point people can think, 'It's not realistic, nothing is supporting this increase,' and there's a drop in demand for housing." Moody's predicts a 16.08 percent decrease in prices nationwide by the end of the year. By 2012, however, prices will be 3.7 percent above 2009 levels, and, says Moody’s, they will have nearly reverted to their pre-2009 state by 2014. ANNUAL CENSUS SURVEY DOCUMENTS DROP IN HOUSE VALUES Comparing the nation’s profile in 2008 with that of 2007, the U.S. Census Bureau reports that median home values dropped in 2008 after rising steadily since 2000, according to the New York Times. Also, the homeownership rate fell half a point, to 66.6 percent, the lowest since 2002. Among blacks, who have been disproportionately affected by foreclosures, homeownership fell a full point, to 45.6 percent. The median price of an owner-occupied home fell nationally (by 2 percent, to $197,600) and in 22 states. The biggest declines were in Nevada (16 percent), California (both 15.5 percent) and Florida (9 percent). Increases in value were recorded in Texas, Utah, Wyoming, Oregon, Pennsylvania, Tennessee and North Carolina. The highest housing costs for homeowners with mortgages were in California, New Jersey, Hawaii, Connecticut and Massachusetts. For more on the survey, visit the Service You Can Trust blog. AS THEY AGE, AMERICANS FAVOR ONE-STORY HOMES IN THE BURBS A new survey reveals that Americans 55 and older would prefer suburban living in single-story homes with amenities, particularly high-speed Internet access, for their later years. Respondents to the survey by the National Association of Home Builders (NAHB) and the MetLife Mature Market Institute also said they don't consider so-called universal design a priority. Consumers indicate they want amenities such as non-slip floors, larger medicine cabinets, lower kitchen cabinets and emergency call buttons, but those features are not as widely included in new homes. One-third of consumer respondents would choose a close-in suburb and nearly another third prefer an outlying suburb. About one-quarter would choose a rural community and 9 percent prefer a center-city setting. Single-story homes are a clear first choice among respondents (79 percent) over two-story (15 percent) or split-levels (6 percent). While conventional wisdom dictates that older buyers would be looking to downsize, most consumers say they'd like their next home to be the same size as their current one. QUALITY OF NEW HOMES IS SAID TO HAVE IMPROVED Customer satisfaction with new-home builders and new-home quality have improved notably from 2008, according to J.D. Power and Associates. Overall customer satisfaction rose for a second consecutive year, averaging 811 on a 1,000-point scale in 2009 and up from 779 in 2008. Markets with the highest levels of overall satisfaction in 2009 include Orange/San Diego, Sacramento, Phoenix, Inland Empire, Calif., and Tampa. In addition, overall satisfaction has increased in 22 of the 23 individual markets that also were surveyed in 2008. FED ECONOMIST SAYS BROKERS ACTUALLY HELP SELLERS
BUILDER CONFIDENCE EDGES UP TO A PATHETIC LEVEL Builder confidence in the market for newly built, single-family homes edged higher for a third consecutive month in September, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI rose one point (out of 100) to 19 this month, its highest level since May of 2008. Any number over 50 indicates that more builders view sales conditions as good than poor. "Today's report indicates that builders are starting to see some glimmers of light at the end of the tunnel in terms of improving sales activity," commented Chief Economist David Crowe of the National Association of Home Builders (NAHB). "However, the fact that the HMI component gauging sales expectations for the next six months slipped backward this month is a sign of their awareness that this is a very fragile recovery period and several major hurdles remain that could stifle the positive momentum.” STATE TAXES FOR RETIREES CAN VARY WIDELY No matter where retirees alight, federal taxes will be about the same, observes Kiplinger’s Personal Finance in the Washington Post. But your state and local tax burden may vary. People planning to retire "often use the presence or absence of a state income tax as a litmus test for a retirement destination," says Tom Wetzel, president of the Retirement Living Information Center. "But higher sales and property taxes can more than offset the lack of a state income tax." Seven states - Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming - have no state income tax. Two states - New Hampshire and Tennessee - tax only dividend and interest income that exceeds certain limits. But many of the remaining 41 states and the District of Columbia that impose an income tax offer generous incentives for retirees. If you qualify, moving to one of these retiree-friendly areas could be cheaper than relocating to a state with no income tax. For a state-by-state tax guide, including special exemptions for seniors and a rundown on how various types of retirement income are taxed, see an interactive retiree tax map. MOODY’S PREDICTS RECOVERY WILL LAST A DECADE It could take more than 10 years to get back to boom-level prices, according to MarketWatch.com. (See Forbes item in “Research” above.) “For many reasons, the rebound will be disproportionately small compared to the decline,” Moody’s said in its latest outlook on the residential market. “It will take more than a decade to completely recover from the 40 percent peak-to-trough decline in national home prices.” On home values, the analysts said price volatility has been “particularly wild” during this housing cycle, with a giddy run-up followed by the dramatic crash. However, prices “will behave in a much more moderate manner during the recovery.” On a regional basis, Moody’s said hard-hit states such as Florida and California will be among the last to recover and “will only regain their pre-bust peak in the early 2030s, well after the nation does.” And, a decimated Wall Street will weigh on New York’s recovery, although the state’s overall price decline will be less severe, the analysis said. Please click here for more information on Moody’s report. Wish Not, Sell Not Comparing two properties in the same line of a building often can prove to be illuminating. In the case of two co-ops in a building in the mid 80s between Amsterdam and Columbus avenues, the notion holds true. To a degree. On the lower floor, facing south over an expanse of tennis courts, the one-bedroom, one-bath apartment with home office/nursery/spare bedroom/den was decently improved a while ago, though the bath is only fair. The freshly painted 800-sf unit in a 1948 pet-friendly building has good closet space, hardwood floors, an attractive faux-painted wall in the bedroom, a kitchen that looks to be from the 1980s and a sunken living room. The extra room is nice, but the apartment’s exposures from the second floor will discourage most buyers. Offered in March for $699,000 with monthly maintenance of $892, the property is now listed at $675,000. The fifth-floor unit went on the market in October, and its price has been stuck at $749,000 with maintenance of $865. (It’s not clear why the maintenance charge for the lower unit is higher than the other’s.) The apartment was renovated superbly, and the place shows beautifully. Particularly dramatic is that nifty extra room, which currently functions as an office and occasional guest room; it has a sliding door of translucent glass and a huge corner window looking through the sunny living room toward the windows at the far end. The handsome, kitchen features maple cabinetry, high-end appliances, granite countertops and a cork floor. The apartment is significantly more open, airy and stylish than the one on the lower floor. In addition, it is three floors higher than the courts below. Certainly, the co-op on the higher floor has greater value than the one below. Arguably, it seems obvious that one reason for the difference in prices is the cost of the renovations on the fifth floor; the sellers appear determined to recoup their investment. But the market has made clear that both units are overpriced. On the basis of price per square foot - $844 on the second floor and $936 above it – there is serious disconnect from the market, especially for an unremarkable building with little more in the way of amenities than a live-in super, private storage, central laundry and a bike room. And never mind the obstacle of those tennis courts. Other properties listed by various brokers that have been seen in recent weeks:
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The market appears to be behaving much more normally this fall than it did over the last 12 tumultuous months, says the New York Times. A comparison of data from two of the city’s largest real estate brokerages and two Web sites that follow the industry shows that the number of listings added in Manhattan after Labor Day was similar to last year’s. Because the listing level is considered normal, said appraiser Jonathan Miller, “we see it as a sign of confidence, that consumers are willing to see this as a market they can sell their property in.” It is not that boom times have returned, he said, only that the steep decline had abated. “It shows we’re going in a better direction,” Miller continued. “I think that direction is sideways as opposed to through the floor.” Still, new data from StreetEasy.com suggests that asking prices are about 24 percent below levels last year at this time. According to StreetEasy, the median asking price for the week that ended on Sept. 13 was $860,750. The week after Labor Day 2008, the comparable figure was $1,100,000. After Labor Day 2007, it was $1,050,000. Both NYTimes.com and StreetEasy had more than 450 new listings in Manhattan the week after Labor Day. StreetEasy said the increase of 462 apartment listings was similar to the jump last year after Labor Day of 472. 
After years of catering to women, manufacturers are setting their sights on men, observes the Wall Street Journal. The new macho mattresses they're introducing have "muscle-recovery properties" and cooling technology on the theory that men are more likely to feel too warm in bed. The bed frames feature built-in TVs, iPod docking stations, wine coolers, safes and other guy-friendly gadgetry. Hollandia International’s ‘Sphere’ bed includes a champagne cooler just in case. The cave-like structure comes in fabrics including suede and microfiber. The flat screen TV is embedded in frame and includes a remote control. One buyer confesses that his wife was less than enthusiastic when he picked out the bed six months ago. He delighted in showing her that the TV could be lowered into the footboard via remote, and he let her pick out the color and pattern of the mattress fabric. His wife declined to comment. (Maybe she’s out of town a lot?) 
The Permanent Mission of Afghanistan to the United Nations has a lovely new apartment, reports the Observer. The group spent $4.235 million for a 2,840-sf apartment at Trump World Tower, plus a $5.4 million commercial space at 633 Third Avenue. H.E. Zahir Tanin, whose title is Ambassador Extraordinary and Plenipotentiary, Permanent Representative of the Islamic Republic of Afghanistan to the United Nations, is listed in the deeds. Got that? "We did purchase a residence for the ambassador," his assistant said. "Sunshine, peacefulness and views define this beautiful high floor corner residence, which lays claim to marvelous southern views of the Chrysler and Empire State buildings as well as long range vistas of the East River and beyond," the listing begins. It says that the three-bedroom's design is chic and smart; its study/dining room and eat-in kitchen are "elegantly refined for comfortable living;" the cabinetry is "tailored mahogany;" the building has "private Pilates and massage rooms;" and the corner apartment's layout is "the most desired" in the building.
Examining the effects of an inherent conflict of interest between a seller of a house and the real estate broker hired by the seller, economist Oz Shy of the Boston Federal Reserve found that while the pressure brokers exert on sellers to reduce prices generates faster sales and hence improves social welfare, the usual commission rate of 6 percent exceeds the seller’s value if the sale is handled by a single agent. “On the other hand, if several agents (such as the buyer’s and seller’s brokers and the agencies that employ these realtors) split the commission,” he writes in a report laden with formulas, “then a 6 percent commission rate may be required to motivate the broker to sell at a high price.” He continues: “Real estate brokers are connected via computerized networks that expose them to a large variety of houses for sale. Buyers are aware of that and will therefore hire an agent who is also connected to the same network. Sellers know that buyers tend to hire agents who are also on this network, which induces more sellers to enlist. This ‘snowball’ effect can potentially magnify until all sellers and buyers connect via agents to the same network of realtors.” At the same time, the report contends, agents may provide sellers with certain information on the housing market in order to lead them to settle on a lower price compared with the price that would maximize sellers’ expected gain. Lower prices would increase the probability of finding a buyer and also would shorten brokers’ expected waiting time until the transaction takes place, allowing them to collect their commission sooner.
