EXPENSIVE MANHATTAN CO-OPS LEAD RISE IN SPRING PRICES A rise in apartment sales in Manhattan during the spring selling season, especially among expensive co-ops, led to an upward bump in average prices, according to an analysis of recent transactions. Preliminary figures compiled by the Wall Street Journal show that the median price of a Manhattan co-op hit $685,000 last month, up 9.5 percent when compared with the previous month and 14 percent higher than May 2009, when co-op prices bottomed. The median condominium price was $1.2 million, up by 4.6 percent compared with the previous month and 13.8 percent versus May 2009. The gains in median prices don't necessarily mean that prices overall are appreciating, according to the newspaper's analysis, which found that sales picked up the most for higher-end properties. During the second quarter to date, median co-op prices were up 4.8 percent from the previous quarter and 6.7 percent from the second quarter of last year. Median condo prices were up 12 percent from the prior quarter and 1.1 percent from the same period a year ago. THE REGION'S MORTGAGE DELINQUENCIES OUTPACES OTHERS
EUROPE'S ILLS HAVE BUYERS FROM THERE PULLING BACK HERE Europe's brewing economic turmoil threatens to claim a more local victim: New York City's residential market, reports the Wall Street Journal. That's because the declining value of the euro and the British pound has sharply increased prices that Europeans must pay after they translate their currency into dollars. The euro's 25 percent depreciation against the dollar, to less than $1.20 earlier this month, means that Europeans are paying a quarter more for New York property in dollar terms than they did two years ago. The British pound, valued at $2 in March 2008 but recently trading below $1.45, has taken a similar plunge. While some New York brokers say that affluent buyers from abroad will be attracted to a stronger dollar and the relative stability of property in the city, others say Europe's debt crisis has already made some jittery about indulging in a Manhattan pied–à–terre or tying up cash anywhere outside their home countries. YOUR NEIGHBOR MAY NOT WANT TO 'FRIEND' YOU The Internet search has become a part of one of the most opaque and arcane screening processes of all: the New York co-op board review. But, as the New York Times points out, many co-ops and the management companies that oversee them say they do not routinely use the Web to dig for dirt on prospective buyers. They say the standard co-op application package - tax returns, bank statements, salary verification, credit check, reference letters and board interview - gives a complete and reliable picture of the applicant. Information gleaned from Facebook, blogs or other Internet postings "is not pure data," said Beth Markowitz, the president of Merlot Management, a company that manages 32 co-ops and condominiums throughout Manhattan. Therefore, she said, it is not necessarily "true, accurate or unbiased." SALES OF HIGH-END CONDOS OUTPACE CO-OPS Demand is stronger for high-end condominiums than for cooperatives, observes the Wall Street Journal. According to data from appraisal firm Miller Samuel, it takes longer to sell a high-end co-op than a condo. In May, for example, Miller Samuel found that the number of months it takes to sell available inventory was 16.2 months for co-ops priced between $3 million and $5 million. For condos in the same price range, it took 11.5 months. For co-op units priced $10 million and above, it was 52 months versus condos, which had an absorption rate of 20 months. Jonathan Miller, president of Miller Samuel, said the gap between condos and co-ops partly reflects changes in demand. Foreign luxury buyers continue to buy condos because they're easier to acquire, but high-paid Wallstreeters aren't spending as much and are buying fewer. One of the consequences of these changes is that expensive co-ops saw larger price adjustments than lower-end co-ops. For prices of $1.5 million and under, the absorption rate for co-ops was slightly faster than for condos. OUT-OF-TOWN APPRAISERS RANKLE REAL ESTATE AGENTS Since changes adopted a year ago in the way appraisers are appointed, New York real-estate agents have been complaining about an influx of outsiders who don't understand the intricacies of Manhattan real estate and have repeatedly low-balled prices in their appraisals, the Wall Street Journal observes. Under the new industry-wide rules, mortgage brokers, real-estate agents and loan officers are banned from choosing their own appraisers. The result has been an increase in the use of out-of-town appraisers and - brokers and developers say - a greater likelihood of lower-than-expected property estimates that can put agreed-upon sales deals at risk. The new rules went into effect in May as part of a settlement with state Atty. Gen. Andrew Cuomo's office, which was examining their appraisal process. Although the new appraisal rules are in effect nationally, real-estate professionals say the impact has been particularly acute in New York, where appraisals can vary widely from block to block and many individual properties are unique. Determining how much value to assign to a partial park view or how much renovations will likely cost can require local knowledge, brokers say. Ana Maria Sencovici of the "Apple, Peeled" blog goes into greater detail from the perspective of appraisal executive Jonathan Miller. SOON LANDLORDS WILL HAVE TO DISCLOSE BEDBUG MENACE A bill forcing New York City landlords to tell potential renters about bedbug infestations was approved the New York State Senate and Assembly, according to Assembly Member Linda B. Rosenthal, reports BrickUnderground. Gov. David Paterson must sign the legislation to make it law, and a Rosenthal spokesperson said there was no reason to believe he won't do so in the next couple of months. STABILIZED RENTS TO GO UP LESS THAN USUAL Rents for New York City's one million rent-stabilized apartments will rise less than in the past several years under increases approved by the Rent Guidelines Board. For leases renewed in the year following Oct. 1, rent may increase 2.25 percent for one-year terms and 4.5 percent for two years. THERE'S A NAME FOR THINGS THAT HAVE YOU LOOKING UP Crown molding, that sometimes simple or ornate strip of architectural embellishment, represents a mix of classical Greek aesthetics, Victorian sensibilities and modern ingenuity, notes the Washington Post in a disquisition about the stuff. While molding can disguise a careless paint job or less-than-plumb surface, its main purpose is decorative. It is available in a range of natural and man-made materials and a zillion designs. Adding crown molding can be an inexpensive weekend project for a do-it-yourselfer or a costly operation for a team of master craftsmen. BUT HE DIDN'T EVEN TRY ALL THE PERFUMES OF ARABIA Pity Stephen Treffinger, whose mission it was to find out the best stain remover. For the New York Times, the poor (but undoubtedly immaculate) fellow tested 17 stain removers on an array of substances applied to white cotton napkins. A "generous" amount of each product - spray, gel or roll-on stick - was applied to the stains, he writes with needless use of the passive voice. Then, each napkin was washed separately, to avoid cross-contamination, in a machine set to the hot-water cycle with an ounce of liquid laundry detergent. Too bad he wasn't around when Lady Macbeth really, really, really needed him. You can learn the results here. TO HAVE A GOOD NIGHT, DON'T EXPECT TO SLEEP TIGHT If you're loose with your coin, it will cost you $33,000 for E.S. Kluft & Co.'s hand-tufted, king-size Palais Royale mattress and box spring, currently the most expensive American-made mattress set on the market, according to the Wall Street Journal. The company says it has sold some 100 – only? - since introducing it in 2008. Or when Kluft puts it on the market later this year, the price of its Sublime model will run $44,000. Perhaps you could justify even $69,500 for the Vividus king-size mattress set from Hästens Sängar of Sweden - if besting the Rockefellers is your thing and your trust fund is robust. Hästens says it takes 160 hours to assemble this mattress entirely by hand, which has a Swedish-pine frame with thick layers of horsehair, cotton, flax and wool inside. (Apparently, cold weather slows down more than molasses.) The company says it has sold 250 world-wide since introducing the mattress in 2006. Even at the middle-to-upper-middle tiers, mattress prices are creeping up as companies cater to mainstream demand for luxurious sleep. The lineup of products aimed at the luxury end of the market is expanding, says Jodi Allen, Sealy's chief marketing officer. The company's higher-end Stearns & Foster mattresses are $1,200 -5,000 and take twice as long to make as the company's Sealy-brand mattress. So she says. WHEN THE CATS ARE NOT STRAYS, THEIR OWNERS DO PAY The latest trend that the New York Times elected to document is something called the "catio," as in "cat patio." Some cat owners who would never dream of letting their pets roam free outside have come up with a creative compromise: an enclosed space - usually in the form of a screened-in porch or deck - that allows them to share the great outdoors. "The cats, they like to sit out there," said Stefanie L. Russell, 44, referring to the balcony of her 12th-floor Greenwich Village apartment, where a homemade enclosure keeps her three Burmese cats safe. Catios also have made inroads in the suburbs, where they range from small, practical structures – such as a box made of wood and chicken wire - to all-out fantasy cat playgrounds, replete with tunnels and scratching posts. On the low end of the market are collapsible stand-alone enclosures that can be used anywhere and cost as little as $40. For people with small yards, there are room-size enclosures - typically with a few shelves where cats can sleep or look around - that can be bought or built for $125-500. EPA ISN'T GETTING THE LEAD OUT JUST YET The Environmental Protection Agency (EPA) has decided to delay enforcement of the new rule for removing and repairing lead paint. In revised guidance, EPA acknowledged that remodelers in many parts of the country have been unable to obtain the required training to comply with the rule. While remodelers, electricians, heating and air conditioning technicians, and other contractors must adhere to lead-safe work practices, including special equipment filters and a ban on open flames, EPA will not take enforcement action against firms that have been unable to obtain certification until Oct. 1. FOR PEACE OF MIND, HERE'S HOW TO GET ORGANIZED Gretchen Rubin, author of the recent best-selling book "The Happiness Project," thinks living an orderly life definitely makes people happier. "In the context of a happy life, a messy coat closet should be trivial," Rubin disarmingly tells the Washington Post. "But there is something about getting ahold of physical clutter that makes people feel energized, freer and happier. Order contributes to inner calm for most people." Ahold? If you think getting organized will make you happy, check out the newspaper's advice for your junk drawer, hall closet, kids' school papers and photo storage. 20% OF LISTINGS ENDURE PRICE DISCOUNTS AVERAGING 10% By the beginning of June, 22 percent of listings currently on the market experienced at least one price reduction, a slight decrease from 23.6 percent one year earlier, says Trulia.com. The total dollar amount discounted was $26.7 billion and the average discount held at 10 percent off the original listing price. Las Vegas posted the biggest drop, 67 percent, and New York was ninth on Trulia's list, off 21 percent. Price reduction levels for luxury homes remained at 21 percent of homes seeing a price reduction; their average decline was 14 percent. The data - from brokers, third party aggregators and Multiple Listing Services (MLSs) - do not include foreclosure properties. HOME CONSTRUCTION PLUNGES 10% APRIL TO MAY Privately-owned housing starts in May were 10.0 percent lower than April estimate but 7.8 percent higher than one year earlier, the U.S. Commerce Department reports. Following the expiration of homebuyer tax credit, building permits fell 5.9 percent from the April estimate, though rose 4.4 percent more than May 2009 to the smallest amount of planned construction since then. The decline in housing starts in May was entirely on the single-family side, where the government's tax credits for first-time and repeat buyers had the greatest impact in the previous months. In that segment, starts fell 17.2 percent, their slowest pace since May of 2009. MAY SALES OF PREVIOUSLY OWNED HOMES DIP AS PREDICTED
SALES OF NEW HOMES PLUMMET IN MAY Sales of newly built, single-family homes declined dramatically in May following the expiration of the homebuyer tax credit program in the previous month, says the U.S. Commerce Department. The data show that sales fell 32.7 percent to the lowest number on record since the government started keeping track in 1963. Inventory declined by half a percent in May to the lowest point in nearly four decades, yet diminished sales activity caused the months' supply of homes to rise from 5.8 in April to 8.5 in May. DATA FIRM REPORTS SECOND STRAIGHT MONTH OF PRICE RISE CoreLogic says its Home Price Index (HPI) shows that annual home prices in the U.S. increased in April, the second consecutive monthly increase. Including distressed sales, national home prices increased by 2.6 percent in April 2010 from April 2009, an improvement over March's year-over-year price increase of 2.3 percent. On a month-over-month basis, the national average home price index increased by 0.8 percent versus March, and that growth was stronger than the previous one-month increase of 0.1 percent from February 2010 to March. Said Chief Economist Mark Fleming: "The monthly increase in the HPI shows the lingering effects of the homebuyer tax credit. "We expect that we will see home prices remain strong through early summer, but in the second half of the year we expect price growth to soften and possibly decline moderately." LOWER-PRICED HOMES POST 0.8% GAIN FROM MARCH TO APRIL U.S. house prices rose 0.8 percent on a seasonally adjusted basis from March to April, according to the Federal Housing Finance Agency’s monthly House Price Index (HPI). The previously reported 0.3 percent increase in March was revised to a 0.1 percent increase. For the 12 months ending in April, U.S. prices slipped 1.5 percent to a level that was 12.8 percent below its peak in April 2007. The index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac - that is, no more than $729,750 in high-priced markets and much less elsewhere. THAT ENDURING QUESTION, TO RENT OR BUY, IS RE-RE-RE-VISITED To rent or to buy? For millions of Americans, that is the question, says Bloomberg BusinessWeek, which explores the issue without providing clear answers. MANSION GOES TO THE DOGS, SO AN HEIR CONTESTS WILL If ever there was a shaggy dog story, this is one, thanks to the Wall Street Journal, which spins the long tale of Miami heiress Gail Posner, a daughter of the corporate takeover artist Victor Posner. When woman died in March at age 67, the Chihuahua Conchita and two other dogs inherited the right to live in her seven-bedroom, $8.3 million Miami Beach mansion, their comfort ensured by a $3 million trust fund. The canines weren't the only ones who benefited from the heiress's munificence. Seven of her bodyguards, housekeepers and other personal aides were left a total of $26 million, and some also were allowed to live, rent-free, in the mansion to care for the dogs. Now, in an attempt to revoke the will, Posner's only living child, Bret Carr, has filed a lawsuit against a bevy of his mother's former staff members and advisers alleging a dark intrigue. Household aides, he claims, drugged his sick mother with pain medications and conspired to steal her assets by inducing her to change her will and trust arrangements in 2008. There's more, much more. Others, including his mother's trust attorney, he charges, used their influence to bend her wishes. Carr, who was bequeathed a relatively paltry $1 million in his mother's will, makes the claims in a lawsuit filed in probate court in Miami-Dade County. LIFERS, IRS EMPLOYEES FRAUDULENTLY CLAIMED TAX CREDIT Among findings in a Treasury Department report on homebuyer tax credits was that $9.1 million went to 1,295 prisoners who were incarcerated at the time they reported having purchased their home. In addition, J. Russell George, the Treasury inspector general for tax administration, estimated that 2,555 taxpayers received inappropriate credits on 2008 tax returns totaling $17.6 million for home purchases prior to the dates allowed by the law. "This is very troubling," he averred. "Congress created and modified the homebuyer credit to stimulate the economy and help taxpayers achieve the American dream, not to line the pockets of wrongdoers." The report estimated that 14,132 individuals received erroneous credits totaling at least $26.7 million, including 241 prisoners serving life sentences at the time they claimed that they bought new primary residences; 10,282 taxpayers whose homes also were used by other taxpayers to claim the credit (including 67 taxpayers who said they bought the same home); and at least 34 IRS employees who claimed the credit despite indications that they owned a home within the past three years. WHO WILL UNLOCK THE DOOR TO HER ESTATE Alicia Keys has lived in a 9,000-sf house in Syosset, on Long Island's North Shore since 2004. Now, she's selling it – for $3.85 million, reports the New York Times. Built in 1981, the quaisi-Mediterranean-style abode on a cul-de-sac has seven bedrooms, six and a half bathrooms, a piano room and a three-car garage. There are in back a 2,000-square-foot deck, a pool, a pool house and a Jacuzzi. HE'S AN AMERICAN ACTOR IN NEW YORK Griffin Dunne and his bride of nearly a year, Anna Bingemann, who sold their two-bedroom duplex in a prewar building on East 10th Street for $2.2 million, just bought a three-bedroom condo on Lafayette Street in SoHo for $2.8 million, according to the New York Times. WHEN IT COMES TO WORLDLY GOODS, SHE'S A TRENDSETTER The Material Girl is adding a floor to her new $32 million Upper East Side triple-wide townhouse, and the New York Post says it will consist mostly of a gym, city plans show. Why? Because Madonna can. The addition will add 1,614 square feet to the East 81st Street mansion, bringing the total square footage to 13,847, not including the cellar. She also is tearing up the existing bedrooms and baths, creating a new master suite on the third floor with a boudoir flanked by a giant walk-in closet and a master bath. There will be a hair salon across the hall and a separate closet for her luggage. A total of 10 bedrooms and 13 bathrooms is planned. The first floor has a drawing room and what is labeled on building plans as a "security living room" with adjoining bar. The Georgian-style mansion, which has a 3,000-sf garden, also includes an elevator and two-car garage in what is described as the basement level, but it actually is the ground floor. Madonna is adding a wine cellar and playroom one flight below. Building permits filed with the city so far put the cost of renovations at $1.7 million. DID HE LEAVE ANY TRICKY HATS BEHIND Henrik Lundqvist, a Swede who plays goalie for the New York Rangers and for his country's Olympic team, has sold his condo on the Upper West Side, says the New York Times. The two-bedroom 1,300-sf apartment at 225 West 83rd St. has an open floor plan. It's on the 20th floor of the postwar building. The final sale price was not available, but the asking price was $1.75 million. DID THIS PLACE MAKE HER FEEL LIKE A NATURAL WOMAN Carole King is relisting her 128-acre Idaho ranch, this time for $16 million, reports the Wall Street Journal. King, 68, has used the Stanley, Idaho, ranch as her primary residence since 1981. She listed it in 2006 for $19 million and took it off the market in 2008 while access was being upgraded. She's selling to be closer to her family, who live in Los Angeles. Surrounded by national forest, the ranch is some 60 miles northwest of Sun Valley and includes a 7,300-sf lodge with five bedrooms and a main house with a deck overlooking a creek. There are eight guest cabins, barns and a log cabin-style recording studio. Hot springs feed two pools and warm the lodge and recording studio. MOST RATES REACH ALL-TIME LOWS The 30-year fixed-rate mortgage (FRM) averaged 4.69 percent this, down from last week's 4.75 percent and 5.42 percent at this time last year. The 15-year FRM was 4.13 percent; it was 4.20 percent last week and 4.87 percent a year ago. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84 percent in comparison with 3.89 percent a week ago and last year's 4.99 percent. The one-year Treasury-indexed ARM was 3.77 percent this week, down from last week's 3.82 percent and last year's 4.93 percent, dropping to the lowest it has been since the week ending May 6, 2004, when it averaged 3.76 percent. Freddie Mac began collecting rates for 30-year fixed loans in April 1971, 15-year fixed mortgages in September 1991 and five-year hybrid ARMs in January 2005. "Mortgage rates for all but traditional one-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the homebuyer tax credit," said Frank Nothaft, vice president and chief economist. NUMBER OF LOAN APPLICATIONS SLIDES ALONG WITH RATES The Mortgage Bankers Association (MBA) mortgage loan application volume for the week ending June 18 fell 5.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the decrease was 6.0 percent. Even refinancing applications dropped, 7.3 percent, while purchase applications slumped 1.2 percent seasonally adjusted. Unadjusted, purchases dropped 2.3 percent; compared with the same week one year ago, the decline was 36.8 percent lower. The change in total purchase applications was driven by a 4.4 percent decrease in government applications, while conventional purchase applications increased by 1.0 percent. FORECLOSURES MAY HAVE PLATEAUED
FEDS CLAIM CRACKDOWN ON MORTGAGE FRAUDSTERS Federal authorities say they have filed criminal charges in recent months against 1,200 mortgage brokers and others accused of cheating banks and borrowers of $2.3 billion, notes the Los Angeles Times. White-collar crime experts said the size and scope of "Operation Stolen Dreams" represents an unprecedented crackdown on mortgage fraud. Of the criminal defendants listed, 336 already have been convicted and 206 have been sentenced. In one of the New York cases, a tax preparer is accused of selling fake pay stubs and tax documents to mortgage and real estate brokers who allegedly used the documents to apply for loans. Authorities said 17 people were indicted as a result of that investigation. In another New York case, prosecutors allege that a company offered to help struggling homeowners around the country but did nothing once the borrowers paid the firm's upfront fees. Separately, the ringleader of a group of four individuals accused of defrauding lenders out of more than $10 million using more than two dozen subprime loans on properties in New York City and the vicinity pleaded guilty in Manhattan federal court, authorities said, according to the Real Deal. Sharmon Howell, also known as Sharmon Wade, admitted that he was part of scheme in 2006 and 2007 using straw buyers who gave false information to lenders about income, assets and intent to live in the homes. Howell faces up to 30 years in prison and a $1 million fine. HOMES ARE SLIMMING DOWN The size of new and completed single-family homes declined last year, dropping to a nationwide average of 2,438 square feet, according to Census Bureau data examined by the National Association of Home Builders (NAHB). After increasing for nearly three decades, the average size peaked at 2,521 square feet in 2007 and was essentially flat in 2008 before dropping in 2009. "We also saw a decline in the size of new homes when the economy lapsed into recession in the early 1980s," said NAHB Chief Economist David Crowe. "The decline of the early 1980s turned out to be temporary, but this time, the decline is related to phenomena such as an increased share of first-time home buyers, a desire to keep energy costs down, smaller amounts of equity in existing homes to roll into the next home, tighter credit standards and less focus on the investment component of buying a home." After increasing for nearly 20 years, the proportion of four-bedroom homes topped out at 39 percent in 2005 and fell to 34 percent last year. For single-family homes with three bedrooms, the proportion grew from 49 percent to 53 percent. As for bathrooms, 24 percent of homes had three or more of them last year, a decline from the peak of 28 percent in both 2007 and 2008. The percentage of single-family homes with two bathrooms increased from 35 to 37 last year. RETIREES FACE HURDLES IF TRADING DOWN TO SMALLER HOME
MORE RESIDENTS SAY THEY PLAN TO BUY HOMES THAN YEAR AGO In May of 2009, only 3.0 percent of the 717 New York State residents polled by the Siena (College) Research Institute of Loudonville said they planned to buy a home. Last month, that number rose to 4.7 percent. Those results compare with 3.7 percent in May 2008 and 5.3 percent in May 2007, close to the height of the housing boom. (Lehman Brothers imploded on Sept. 15, 2008.) With respect to undertaking a major renovation, the numbers starting in 2007 were 20.6 percent, 16.9 percent, 13.8 percent and, this year, 17.8 percent. Consumer confidence rose 1.2 percent statewide in May, led by metropolitan New York City-dwellers, whose confidence rose by 3.6 percent. For much more information, visit the Service You Can Trust blog. TAX CREDIT SAPS BUILDER CONFIDENCE Snapping two consecutive, but modest, monthly gains, builder confidence in the market for newly built, single-family homes fell back to February levels, according to results of the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It dropped five points to 17 in June. "We expected some softening in the market following the expiration of the home buyer tax credit and this report seems to verify this assumption," commented Chief Economist David Crowe of the National Association of Home Builders. The index component gauging current sales conditions fell five points to 17 on a scale of 100, while the component gauging sales expectations for the next six months declined four points to 23. A score of 50 divides optimism and pessimism. HOUSE SHOPPING NOSEDIVES AFTER TAX CREDIT DEADLINE Home buyer traffic fell by 45 percent in May from April, according to Campbell Surveys, which polls 3,000 real-estate agents monthly. Measuring home buyer traffic on a scale from 1 to 100, the index declined to a 35.1 reading in May from 63.5 in April. A reading of 50 on the index represents flat purchase activity conditions, and May's reading was the first to drop below that mark since last September. ECONOMIC ISSUES TRAPPED BIG CITY POPULATIONS Several of the nation's biggest cities saw populations grow faster last year than any year in the 2000s as the recession and housing bust kept people from moving out of state or to the suburbs, according to the Census Bureau, reports the Wall Street Journal. Chicago saw its population increase 0.8 percent between July 2008 and July 2009, the fastest pace of the decade. Denver, Seattle and Dallas also posted their highest annual growth rates. Of the 34 U.S. cities with more than 500,000 residents, 19 grew faster last year than the year before, according to an analysis by William Frey, a demographer at the Brookings Institution. New York City, the nation's largest city, with about 8.4 million people, continued to grow steadily. The city's population expanded 0.5 percent in 2009, compared with 0.4 percent a year earlier but down from 0.7 percent in 2007. ARE ENOUGH HOMES BEING BUILT TO MEET DEMAND CNNMoney makes the unqualified prediction that the nation "is simply not building enough homes to keep up with potential demand." Noting that 672,000 new homes were started in April, the Web site says that number on an annualized basis would meet less than half the long-term run rate needed to meet the nation's natural population growth. "It is ironic, but there is a growing consensus that there may be a new housing shortage coming," James Gaines, a real estate economist with Texas A&M, was quoted as saying. In 2009, only 398,000 new households were formed, according to the Census Bureau, an amount that is much lower than the average and a quarter of the number formed just two years earlier. "The decline in household formation is artificial," said Gaines. "The young are moving in with their parents. There's even doubling up among working class people. There's a pent-up demand coming if and when the economy recovers." Kind of a big "if," no? MORTGAGE RATES TO RISE MORE SLOWLY THAN EXPECTED Economists with the Mortgage Bankers Association project that 30-year fixed-rate mortgages are likely to rise into the high 6 percent range by the end of 2012 on a more gradual slope than previously projected, says Inman News. In a June 11 forecast, they predict a rise to 5.4 percent during the fourth quarter of this year, reaching 6 percent in the last three months of 2011 and averaging 6.6 percent in the fourth quarter of 2012. In a previous May 12 forecast, the economists predicted the same endpoint but with more of the increase coming sooner rather than later. GLOOMY HOUSING OUTLOOK PREDOMINATES AMONG ECONOMISTS Housing analysts have grown more pessimistic about the outlook for U.S. home prices as sales slump, a new survey shows, according to the Wall Street Journal. A monthly report by MacroMarkets found that 56 percent of the 106 economists and other analysts surveyed expect home prices to decline this year. That is up from 40 percent a month ago. Among the economists who reduced their forecasts for home prices this year was Scott Anderson of Wells Fargo. "We're seeing a loss of momentum" in housing demand since the expiration of the tax credit, he said, and that lull could last until next spring. The job market remains weak, he added, and foreclosed homes continue to weigh on the housing market. A number of economists offered their opinions. HARVARD REPORT: HOUSING RECOVERY STILL CHALLENGED Record foreclosures continue to pressure markets and millions of homeowners, says the latest annual report from Harvard's Joint Center for Housing Studies. "Elevated vacancy rates, record foreclosures, the expiration of the homebuyer tax credit and continued high unemployment are all causes for concern," observed Center Director Nicolas P. Retsinas. However, he added, very low mortgage interest rates and recovering labor markets should be enough to shore up sales and housing starts once an expected dip due to the expiration of the federal homebuyer tax credit passes. Eric S. Belsky, executive director, contended that jobs growth is tied to the strength of the housing rebound. Said he: ". . . If employment growth surprises on the upside or downside, housing numbers could too." But the report warns that consequences of the recession and the financial crisis will linger. An estimated one in seven homeowners have homes worth less than what they owe on their mortgages and nearly 5 million need their home prices to rebound by 25 percent before they are back above water. In addition, according to the report, it will take time to work through all the homes in foreclosure. How does your garden grow? Nearly as rare as a Humboldt spotted lily is the city dweller who doesn't yearn for outside space. More often than not, it is garden space that buyers crave, a chance to dig into friable earth, raise a crop of juicy tomatoes and impress neighbors with a postage stamp lush with fragrant iris, iridescent roses or plumes of ornamental grass. Ah, but the price such buyers pay! Not only do such places command a premium - there is only so much vacant land in Manhattan – but the tradeoff for a garden may be unequal to the accompanying interior, which often features an awkward layout and questionable condition. It is the interiors that are the particular concern of this little essay. (For a different perspective on gardens, you'll want to see the long piece that led the New York Times real estate section last month and a subsequent article on outdoor space, each maddeningly published after this screed was drafted.) The gardens of concern here are those that struggle in the shade behind most brownstones. (Co-ops and condos on just one or two floors present similar problems.) Unsurprisingly, the apartments are on the ground floor; that, after all, is where the ground is. That means a descent usually via a bleak staircase into what ought to be a kind of hell but one that emerges, to some eyes, as heaven on . . . earth. So may it be, but only for those individuals who generally are willing to look past freaky flow, gloomy rooms and high prices. Consider the following three apartments, which share certain similarities:
Below are other properties listed by various brokers and visited recently:
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The New York region has the largest backlog in the country of delinquent mortgages that have yet to move through the foreclosure pipeline, says Standard & Poor's, according to the Wall Street Journal. There has been a rising number of foreclosures especially in suburban New Jersey and in Queens and Brooklyn. (Manhattan has a relatively small number of foreclosures.) At the current rate, it would take 103 months to clear the so-called shadow inventory of loans in the New York area that are more than 90 days delinquent or in foreclosure. That is nearly three to five times the national average. Miami has the second largest backlog, with a 62-month supply. Unlike New York, however, Miami's supply has fallen from a March 2008 peak of 129 months. New York's backlog has topped 100 months since early 2008.
Completed transactions that include single-family, townhomes, condos and co-ops slipped 2.2 percent from April but rose 19.2 percent above one year earlier, reports the National Association of Realtors (NAR). While the inventory of unsold homes ended May 0.1 months lower than April's 8.4 months, supply remained much higher than a balanced six-month level. Commented Lawrence Yun, NAR chief economist: "We are witnessing the ongoing effects of the home buyer tax credit, which we'll also see in June real estate closings. The national median price for all housing types increased to $179,600, 2.7 percent higher than May 2009. Distressed homes slipped to 31 percent of sales last month, compared with 33 percent in April and one year earlier. Apartment resales dropped 6.8 percent, seasonally adjusted, from April but were 32.6 percent above May 2009. The median existing condo price was $181,300, up 3.4 percent from a year ago.
The number of home loans in the foreclosure process may have peaked, according to Barclays Capital in New York, says the Wall Street Journal. Analyst Robert Tayon estimates that the number of homes in foreclosure was down 2.6 percent in April from March's level, to 1.95 million. The number of newly delinquent loans is finally declining, and loan servicers are managing to complete more foreclosures. Though the number of homes in the foreclosure process has fallen a bit, the number of foreclosed homes owned by lenders and mortgage investors continues to grow, Barclays notes. In April, it estimates, the total number of these REO (or "real estate owned") homes was 526,000, up from 522,000 in March. Barclays believes that the REO supply will peak in August 2011 at 545,000 before starting to diminish gradually. 
The same study cited the end of "The Soothsayers" shows that mobility has slowed across all age groups during the real estate bust and that mobility among seniors has posted the sharpest drop, according to the 
