MANHATTAN INVENTORY SINKS, 2009 PRICES HALF OF 2000’s There were 6,851 listings on the market at the end of 2009, 24.6 percent fewer than the 9,081 listings in 2008, which was the highest level of inventory in the past decade, according to the Miller Samuel appraisal firm. The 2009 inventory level was in line with the 6,860 average annual inventory level of the past decade, resulting in a monthly absorption rate of 11.1 months. That proportion of sales to supply was up from 10.6 months in 2008 and above the 9.2 monthly average over the past decade. “The cause of inventory decline in the first half of the year was the trend of sellers removing their property from the market in hopes of re-listing when market conditions improve substantially,” the firm said. “The decline in inventory in the second half of 2009 was attributable to the surge in sales activity simply working off the properties on the market.” In 2009, the number of sales sank 27.9 percent to 7,430 from 10,299 in 2008 and 13,430 in 2007, the Real Deal noted. Still, the median price of a Manhattan co-op or condo last year surged 113 percent from $399,000 in 2000, while the average sales price climbed 96 percent from $710,778. In 2000, the average price per square foot was $522, about half of what it was in 2009, the report said. The decade saw more price appreciation than either of the two prior decades, CEO Jonathan Miller observed, increasing by 96 percent throughout the 2000s but by only 26 percent in the 1990s. Areas that had the most price appreciation over the past decade were what Miller called "fringe" neighborhoods such as Harlem. You can wade through the whole report. THE TIMES DUBS 2010 THE YEAR OF THE RENTER At least 16 new rental buildings are expected to open in Manhattan in coming months, ranging from small buildings to 500-unit high-rises, for a total of more than 3,500 apartments, according to the New York Times. Brooklyn will get an additional 3,500 new apartments as well, including units in some buildings that opened in late 2009. While 7,000 new apartments is a relatively small number for a city where 70 percent of 8 million residents live in rentals, many of the new buildings are concentrated in just three neighborhoods: Manhattan’s Hudson Yards area, downtown Brooklyn and Williamsburg. The apartments are becoming available at a time when average rents are down by about 25 percent from the market’s height in early 2008; vacancy is close to 2 percent, compared with just under 1 percent in 2007 and 2006; and the city is still losing jobs. As a result, the new buildings are offering a range of incentives to lure tenants, including one to five months of free rent, free gym memberships, American Express gift cards and even free iPods. IN THE HAMPTONS, TIME MARCHES ON Over the past decade, East End homes have gotten bigger, more elaborate and more expensive, according to a 10-year market report prepared by the Miller Samuel appraisal firm, says the Real Deal. In 2009, the average sales price of a home in the Hamptons alone was $1.52 million, up from $607,014 in 2000. The median sales price jumped 124 percent to $825,000 from $367,250 in 2000, the report shows. The increase reflects the addition of larger homes to the housing stock, said CEO Jonathan Miller. “People were seeking larger homes in the country on larger pieces of property, and that became the new image of the Hamptons," Miller said. Judi Desiderio, CEO of East End brokerage Town & Country Real Estate, added that she began to notice the shift towards larger homes in the Hamptons around eight years ago. "Ten years ago, they weren't buying McMansions," she said. "They were buying a reasonable home, maybe around 3,000 square feet, which they could enjoy with their family and friends. Then all of a sudden, people started to build bigger. Bigger was better." Better for what? A SECOND REPORT ALSO DOCUMENTS CHANGES IN THE HAMPTONS A study by Town & Country Real Estate of the Hamptons between 2005 and 2010 indicates that 2005 was the peak year for sales activity in the region, says the Real Deal. Of the 11 markets it tracked for the report, seven saw their highest number of home sales in 2005 before tanking. The best year for high-end home sales appeared to be 2007, when the median sold price attained $999,000, the greatest rise in five years. The hardest hit markets over the last five years were Sag Harbor Village and the Southampton area (which includes the North Sea village); each saw volume drop 67 percent over the five years. The Southampton area also saw the greatest decline in sales activity, with the volume dropping 69 percent to $83.5 million in 2009 from $273 million in 2005. BATHING-SUIT AND TENNIS-RACKET SALES SURELY WILL BOOM TOO The median sales price of a property on Long Island’s entire East End was $701,161 in the fourth quarter, 1.6 percent higher than in the same period last year and 0.2 percent more than in the prior quarter, the Miller Samuel appraisal firm reports. It was the first year-over-year increase in median sales price since the first quarter of 2008. The average sales price was $1,313,264 in the fourth quarter, down 11 percent from the earlier year and 2 percent from the third quarter. There was a general decline in prices at the high end of the market after rising faster than the overall market in prior years, the company said. In the Hamptons alone, the number of home sales shot up more than 59 percent above the same period in 2008, but the average sales price was off by 12.3 percent. The median sales price plunged 30.5 percent to $807,000, and inventory reached 1,634, an increase of 6 percent over the same time in 2008. JUDGE’S INTERPRETATION LEAVES CONDO OWNERS IN THE HEAT In a legal blow to New York condo purchasers suffering second thoughts, a U.S. District Court judge has rejected the claims of two buyers trying to wriggle out of their contracts at the luxury Harlem development Fifth on the Park, reports BrickUnderground.com. According to the decision, a pair of buyers sought to cancel their 2007 contract on a $999,999 unit and retrieve their $49,999 deposit. Another pair of buyers wanted to break their contract for a $1.4 million unit and get back their $143,000 deposit. Both pairs claimed that because the initial offering plan was for more than 100 condos, the Interstate Land Sales Full Disclosure Act (ILSA) required the developer to file a property report prior to contract signing. By failing to do so, they contended, the buyers had two years to rescind their contracts. But the court found that the developer had to have actually sold at least 100 units for the property-report filing requirement to take effect. According to the developer’s attorney, Daniel Ross, only some 90 units had been sold. Although similar cases in Florida had been decided the other way, Ross commented, “the judge read the same statute and the guidelines issued by HUD and ruled that the statute didn’t say what the plaintiffs wanted it to say.” IN THEIR BACKYARD IS BAD, BUT IN THEIR BUILDING RILES RESIDENTS A registered high-risk sex offender who served more than 14 years in prison for vile attacks on three Long Island girls works as a super at several Upper West Side buildings, the New York Post discloses. The newspaper said tenants have complained he has tried to shake them down for sex. William Barnason, 57 - whose registry indicates one female victim older than 17 - had access to keys for the more than 50 apartments in the three buildings he oversees, terrifying some residents. In September 1987, Barnason - already in prison for sexually abusing a 5-year-old girl - was sentenced to 10 to 20 years after pleading guilty to rape, sodomy and sexual-abuse charges related to an attack on three Suffolk County girls between ages 5 and 7. Released in 2001, he was hired by landlord Stanley Katz shortly after his release. Barnason lives at 144 W. 73rd St., where he is the super and rent collector, a job that provided him with keys at two other Katz buildings - 140 and 142 W. 75th St. Katz attorney Santo Golino said there were no plans to dismiss the super and subsequently told the Post that Barnason, who wisely declined comment, no longer has the keys. Katz is evaluating what other plans he might have for Barnason, the lawyer added. ON ITS WAY TO THE UPPER WEST SIDE, TRADER JOE’S STAYS MUM Trader Joe’s will take over the retail space at 200 West 72nd St. on the southwest corner of Broadway in March and is expected to complete renovations by August, according to City Councilwoman Gale Brewer, reports WestsideIndependent.com. The company has yet to release an opening date for its store, but it could be the end of the summer or early fall as long as the renovation goes according to plan. However, a company spokeswoman wouldn’t discuss anything about the store’s schedule, including the opening date. RELIABLE BLOGGER SEES PICKUP IN THE MANHATTAN MARKET A total of 222 new contracts were signed during the last week of January, reports UrbanDigs.com. Such activity comes after a HERE’S ONE LIST ON WHICH YOU DON’T WANT TO FIND YOUR NAME The New York City Department of Finance has announced that it will notify 24,963 homeowners that they are at risk of having a lien sold on their property to a private collector if they do not pay off outstanding property-related payments such as real estate taxes and water or sewer charges, according to the Real Deal and the New York Post. The list serves as a 90-day warning for property owners and aims to educate buyers on different payment programs available. Approximately 80 percent of the properties on last year's 90-day warning list avoided a lien sale, according to government records. Brooklyn led the five boroughs of listed properties - some 11,000. PATERSON WANTS CO-OP BUYERS TO PAY A TRANSFER TAX Gov. Paterson’s proposed budget includes more than $50 million a year from the buyers of co-ops, reports the Observer. The provision concerns loans for co-ops, which have long been free of taxation, although taxes on equivalent condos and houses run between 2.05-2.175 percent of any mortgage. The budget seeks to allow the city to impose the mortgage recording tax on co-ops, an idea proposed decades ago and left to molder. "Ultimately, this is an issue of equity and tax fairness," commented Matt Anderson, a spokesman for the state's Division of the Budget. Recording taxes do not currently apply to co-op mortgages because actually they are not mortgages at all. Officially, a co-op buyer purchases shares in a corporation that owns a building, not a specific piece of real estate. Thus, a buyer cannot obtain a mortgage on property, but rather a loan backed by shares of the building. Testifying at a budget hearing in Albany in late January, Mayor Bloomberg said the budget proposal was "good news" for the city. TOWNHOUSE PRICES PLUNGE FROM 2008 RECORD HIGH The 2009 median sales price of a Manhattan townhouse fell 31.9 percent from the record set in 2008 to $3.4 million from $4.995 million, according to the Miller Samuel appraisal firm. The other price indicators showed a consistent trend over the same period; the average sales price fell 32 percent to $5,012,736 and price per square foot, 31.2 percent to $1,111. “The decline in prices was not attributable to a shift to a larger mix of smaller sized sales as illustrated in the year over year consistency in square footage,” the firm’s report said. “The average size of a townhouse sale was 4,512 square feet in 2009, down nominally from 4,565 square feet in 2008 and was consistent with the 4,481 square foot annual average over the past decade.” SMALL PROPERTIES TOP NEW YORK FORECLOSURES Of the more than 100,000 New York City properties that entered foreclosure between 1993 and the first half of 2009, the vast majority was one-to-four-family buildings; 34 percent were single-family homes and 50 percent were two-to-four-family buildings, reports the Furman Center of New York University. The inventory of bank owned (or REO, meaning Real Estate Owned) properties in New York City remains “far smaller” than the inventory in many other large cities that have seen higher rates of foreclosure and softer housing markets, the report said. YOU CAN COMPARE APPLES TO APPLES WITH NEW STORE SITE Upper East Side residents may soon have a better selection of produce and dairy products to choose from, says Crain’s. Fairway Market is in negotiation for a lease at 240 E. 86th St., between Second and Third avenues, according to two real estate sources. The retail space boasts nearly 60,000 square feet and formerly housed a now-bankrupt Circuit City and a Barnes & Noble. Sources told Crain’s that competition has been hot, with potential retailers including Whole Foods and Nordstrom Rack also trying to rent the space. The lease is expected to be completed within the next 40 days, but a deal could fall apart if both parties do not agree on terms, the sources noted. AN ECONOMIST SAYS PRICE GAINS DON’T REFLECT FUNDAMENTALS Housing economist Dean Baker, the co-director of the Center for Economic and Policy Research, contended at a risk conference that a housing bubble persists, the Wall Street Journal reports. Adjusted for inflation, home prices are still 15-20 percent higher than they were in the mid-1990s. “There’s no plausible fundamental explanation for that,” he maintained. His argument rests on a situation in which rental apartment vacancies are reaching record highs, many segments of the housing market are still oversupplied and the core demographic in the country - the baby boomers - are reaching the age where they’re more likely to downsize, buying less house in the years to come. Baker predicted that home prices were far more likely to increase annually at the rate of inflation, at best. “If anything, I expect housing to be weaker than normal rather than stronger over the next decade,” the economist declared. “People who say this is a temporary story, there’s no real reason to believe anything like that.” FREDDIE MAC’S NEW CEO SPECULATES THAT THE BOTTOM IS NEAR “We’re seeing signs of stabilization” in housing, Freddie Mac CEO Charles Haldeman told the Detroit Economic Club. “The numbers will always bounce around some, but from home sales to house prices, it appears that nationally we may at last be approaching a bottom.” A large wave of homes now in foreclosure potentially hitting the market at prices that are destructive is, he continued, “the big downside risk to all this.” But he added that “upside factors” include the tax credit for home purchases that was extended through April 30 and low mortgage rates. Haldeman said that Freddie Mac expects the 30-year fixed rate to remain at 5-6 percent throughout 2010. ‘SOME SIGNS OF TENTATIVE STABILIZATION’ SEEN BY CREDIT-SUISSE In a new report on the outlook for the U.S. housing market, Credit Suisse says extraordinary government support - including the loan-modification crusade, massive purchases of mortgage securities and tax credits - have fostered “some signs of tentative stabilization,” according to the Wall Street Journal. Yet, the bank warned that “significant risks remain” involving what will happen to the nearly 8 million households that are in mortgage limbo - behind on their payments or mired in the ever-lengthening foreclosure process. The key to keeping prices fairly steady this year, a Credit Suisse report by Chandrajit Bhattacharya and his team contended, is to prevent or postpone enough foreclosures to ensure that “distressed” sales of houses don’t account for more than 25- 30 percent of all sales. LOOK FOR A NEW KIND OF HOUSING MARKET, SAYS RESEARCHER As the U.S. economy recovers, emerging trends in demographics and consumer behavior will become major drivers of new housing opportunities, according to John K. McIlwain, senior resident fellow of the Urban Land Institute (ULI). Those drivers will result in a residential market vastly different from the one that existed prior to the recession, he says in a new research paper. “The old ‘normal’ will not return,” McIlwain told ULI trustees at a meeting. “Over time, a new mode of metropolitan development will emerge, presenting opportunities and stiff challenges. Those who fail to understand these new trends will find themselves building what is no longer in demand.” The growing number of consumers who are choosing to walk away from those mortgages suggests a fundamental change from the long-held notion of homeownership as the ultimate American dream, he explained. This disillusionment over homeownership as a way to build wealth could persist for decades to come, as those entering the housing market will be more apt to rent longer and to place more emphasis on buying for shelter rather than investment purposes. In the report, McIlwain predicts home appreciation will slow considerably, to approximately 1-2 percent annually in the next decade and that home ownership will continue its decline from a peak of almost 69 to about 62 percent. FEELING MORE OPTIMISTIC, REAL ESTATE EXECS ALSO WORRY Senior real estate executives report that declining fundamentals and deterioration in Net Operating Income (NOI) pose formidable challenges to the commercial real estate sector, which encompass encompassing office buildings, shopping malls, warehouses, hotels and apartment buildings. That was the consensus expressed in the Real Estate Roundtable's first quarter Sentiment Index. The index rose to 73 on a scale of 100, up from 63 in the previous quarter. The Sentiment Index indicates that confidence in market conditions may be on the mend, yet industry leaders remain guarded in their improved outlook. The Current Conditions Index, which measures market conditions today versus one year ago, came in at 69, a 13 point increase. The Future Conditions Index, which measures market conditions today versus one year from now, came in at 77, an increase of seven points from the last quarter. RATES REMAIN STABLE, MERELY EDGING UP The 30-year fixed-rate mortgage (FRM) averaged 5.01 percent this week, up from last week’s 4.98 percent but below 5.25 percent last year at this time, according to Freddie Mac. The 15-year FRM was 4.40 percent, also up slightly; it was 4.39 percent last week and 4.92 percent a year ago. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) rose to 4.27 percent 4.25 percent but was nearly one point below last year’s 5.26 percent. The one-year Treasury-indexed ARM averaged 4.22 percent, down from 4.29 percent; at this time last year, it was 4.92 percent. “Mortgage rates remained relatively stable for a second week amid news of a strengthening housing market," said Frank Nothaft, Freddie Mac vice president and chief economist. “Residential fixed investment rose for two consecutive quarters over the last half of 2009 following a steady quarterly decline since the beginning of 2006.” He added, “Banks have yet to unwind the tightening that occurred over the last two years. Moreover, substantially fewer banks expected credit quality to deteriorate over the coming year.” SUSPECTED MORTGAGE FRAUD REMAINS HIGH AFTER LEVELING OFF After six years of double-digit growth, reports of suspected cases of mortgage fraud by lenders leveled off in the first half of 2009 but remained at a historically high level, according to a government report, says Inman News. The Financial Crimes Enforcement Network (FinCEN) said depository institutions reported 32,926 cases of suspected mortgage fraud in the first half of 2009, an increase below 1 percent from the same period in 2008. In a previous report, FinCEN said it received 64,816 reports of cases of suspected mortgage fraud in all of 2008, a 23 percent increase from the year before but the smallest annual increase since 2002. After peaking at 93 percent in 2004, growth in suspicious activity reports related to mortgage fraud was 41-44 percent in 2005-07. See the “Department of the Wages of Sin” below. SERIOUS MORTGAGE DELINQUENCIES ARE ON THE RISE Freddie Mac reports that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business increased to 3.87 percent in December, up from 3.72 percent in November and from 1.72 percent one year earlier, according to CalculatedRisk.com. 4 SUNBELT STATES ACCOUNT FOR THE TOP 20 FORECLOSURE RATES RealtyTrac’s year-end report shows that cities in four Sun Belt states accounted for all top 20 foreclosure rates in 2009 among metro areas with a population of 200,000 or more. But foreclosure activity showed signs of spreading into previously insulated areas as unemployment became more of a driving factor, the Web firm said. California accounted for nine of the top 20 metro foreclosure rates, followed by Florida with eight, Nevada with two and Arizona with one. The highest-ranked metro area outside of those four states was in Boise City-Nampa, Idaho, which ranked No. 24 with 4.66 percent of its housing units receiving at least one foreclosure notice in 2009. Provo, Fayetteville, Portland, Ore., and Rockford, Ill., posted foreclosure rates above the U.S. average in 2009, while Honolulu, Minneapolis and Seattle saw an increase at more than twice the national pace over the past 12 months. “While it was expected that cities from states with the highest levels of foreclosure activity would top the charts, there is evidence that we’re entering a new wave of foreclosures, driven more by unemployment and economic hardship than what we’ve seen over the past few years,” said CEO James J. Saccacio. REFINANCING TO TAKE CASH OUT TRENDS DOWN In the fourth quarter of 2009, 33 percent of borrowers who refinanced their loan lowered their principal balance, according to Freddie Mac’s quarterly Refinance Report. This is the highest “cash-in” share since Freddie Mac began tracking the characteristics of refinance transactions in 1985. DEPARTMENT OF THE WAGES OF SIN The former president of Hesperia, Calif.-based Mortgage One Corp. has been sentenced to 13 years in federal prison and ordered to pay nearly $30 million in restitution for what prosecutors said was his central role in a mortgage fraud scheme involving 905 FHA-backed loans, says Inman News. John Richard Varner, 56, is among 15 defendants convicted to date in a mortgage fraud scheme involving two HUD-approved lenders - Direct Endorsement Lenders Mortgage One Corp. and M-1 Capital Corp. Prosecutors said the scheme in 1997-2002 relied on falsified loan applications and straw buyers to obtain FHA mortgage insurance on loans that Mortgage One and M-1 Capital funded and then sold to banks including Firstar Bank and Chase Manhattan Mortgage. The fraudulent loans cost the Federal Housing Administration (FHA) and HUD $29.6 million, including interest paid by HUD during the foreclosure and resale process, prosecutors said. Richard Elroy Giddens, 69, the former CEO of Mortgage One, pleaded guilty to the same charges and was sentenced in September to 6.5 years in prison. And in Indianapolis, eight individuals have been sentenced to serve a total of 26 years in prison for their roles in an area mortgage fraud scheme that prosecutors said involved at least 136 fraudulent loans totaling $16.6 million. The scheme involved purchasing properties at fair market value, usually by means of an option agreement or unrecorded land contract, and reselling them at much higher prices to straw buyers who used their good names and credit to obtain loans but contributed none of their own money to the deals. MORTGAGE ACTIVITY BOUNCES BACK The Mortgage Bankers Association (MBA) reported that mortgage loan application volume for the week ending Jan. 29 climbed 21 percent higher on a seasonally adjusted basis than the previous week. Unadjusted, the increase was 23.5 percent. Refinance activity grew 26.3 percent, and purchase applications went up 10.3 percent, seasonally adjusted; unadjusted, purchase volume was 17.5 percent above the previous week and 11.2 percent lower than the same week one year ago. “Mortgage application volume rebounded last week, returning the purchase and refinance indexes to levels from mid-December,” said MBA Vice President Michael Fratantoni. “Rates continue to hover around 5 percent, quite low by historical standards, but are well above the record lows seen in 2009, and hence are not generating substantial refi volume. We expect that rates will rise over the next few months as the Federal Reserve winds down its MBS purchase program, and this will likely lead to a decline in refinance volume.” The refinance share of mortgage activity rose to 69.2 percent of total applications from 67.6 percent the previous week, and the adjustable-rate mortgage (ARM) share decreased to 4.5 percent from 4.7 percent. AMERICANS WILL TRADE SOME FRILLS FOR SMALLER HOMES Americans want smaller houses and are willing to strip away popular rooms such as home theaters to accommodate changing lifestyles, consumer experts told audiences at the International Builders Show in Las Vegas, according to the Washington Post. "This is a traumatic time in this country, and the future isn't something we're 100 percent sure about now, either. What's left? The answer for most home buyers is authenticity," said Heather McCune, director of marketing for Bassenian Lagoni Architects in Newport Beach, Calif. "Buyers today want cost-effective architecture, plans that focus on spaces and not rooms, and homes that are designed 'green' from the outset." she said. The key for home builders is "finding the balance between what buyers want and the price point." For many buyers, their next house will be smaller than their current one, said Carol Lavender, president of the Lavender Design Group in San Antonio. Current buyers find appealing large kitchens that are open to the main family-living area, old-fashioned bathrooms with claw-foot tubs and small spaces such as wine grottos. "It's all about family togetherness - casual living, entertaining and flexible spaces," she observed. Paul Cardis, chief executive of Avid Ratings, which conducts an annual survey of buyer preferences, said there are 10 "must" features in new homes: large kitchens with islands, energy efficiency; home office/study, main-floor master suite; outdoor living room, ceiling fans; master-suite soaker tub; stone and brick exteriors; community landscaping, and two-car garages. SHIP-SHAPE APARTMENT’S CONTENTS HEAD FOR MUSEUM SHOW Mario J. Pulice, the creative director at publishing house Little, Brown has turned his two-bedroom on the Upper West Side into something of a shrine to what was once the largest, the fastest and - according to him, anyway - the most beautiful ocean liner in the world. The New York Times says his living room looks something like a state room on the Normandie, the seagoing Art Deco tour de force of the 1930s, from the off-white color scheme to the Jean Dupas panels on the wall and the blond-wood Gaveau piano in the corner. That baby grand once was a permanent resident of the suite in which Marlene Dietrich was a mere guest. His dining room has chairs from the first-class dining room. Movers will take much of Pulice’s collection to the South Street Seaport Museum, where a major exhibition about the Normandie, “Decodence,” will open Feb. 18. “Decodence” will trace the Normandie’s glamorous beginnings and its ignominious end, flopped over on its side after a fire at the Passenger Ship Terminal in Manhattan. “It’s very much like you’re walking into that ship,” said the museum’s director, Mary Pelzer, of Pulice’s home. “He lives and breathes it as if he worked on it.” HOME BUILDERS SUFFER 50% CUT IN SHARE OF HOUSING MARKET Home builders have lost half their share of the U.S. housing market in the past two years, largely because of competition from cheap foreclosed houses, says the Wall Street Journal. In 2009 only 7.6 percent of the homes sold were newly constructed, down from the average of about 16 percent over the previous two decades. But home builders are fighting back, cutting prices, promising to complete homes faster and warning about the risks of buying foreclosed property. A large share of today's buyers are first-timers who want to qualify for a federal tax credit that expires April 30. C’EST LA VIE MERVEILLEUSE IN FRANCE, SAYS MAGAZINE A publication that ranks 194 countries to come up with its list of the places that offer the best quality of life has put France at the top for the first year running. “This isn't about best value, necessarily,” International Living writes. “It's about the places in the world where the living is, simply put, great.” The magazine considers nine categories: cost of living; culture and leisure; economy; environment; freedom; health; infrastructure; safety and risk; and climate. The top 10 countries are, in order, France, Australia, Switzerland, Germany, Germany, New Zealand, Luxembourg, United States, Belgium, Canada and Italy. Of France, the editors conclude: “Its tiresome bureaucracy and high taxes are outweighed by an unsurpassable quality of life, including the world's best health care.” The world’s best health care? Who cares while downing an almond croissant in the shadow of Notre Dame? COOLING MARKET IN HONG KONG QUIETS CONCERNS ABOUT A BUBBLE Hong Kong’s de facto central bank said the city’s residential property market cooled in the fourth quarter, allaying concerns a real-estate bubble may be forming, according to the Wall Street Journal. Local home prices jumped 27 percent last year as Hong Kong emerged from recession and funds poured into the city from mainland China amid a credit boom. To ease public concerns about local home prices becoming unaffordable, the government has said it will fine-tune its land-supply policy to avert a bubble if necessary, while other agencies have also moved to keep a lid on prices. Officials reported that Hong Kong’s monthly residential property transactions fell to around 9,000 in December from more than 11,000 in September. But many analysts believe the downside is limited and that mass residential prices could rise even up to 10 percent this year because of low interest rates and pent-up demand from end-users. Others warn of some correction this year because of an outflow of funds, especially from China, as Beijing has begun to tighten its monetary policy. WHAT ARE THE PITFALLS OF BUYING IN A NEW DEVELOPMENT In a comprehensive discussion of the pros and cons of buying new construction, the New York Times says there are two major minefields to keep in mind. The first is financial. What happens to your investment if the building doesn’t sell out? The second is bricks and mortar. How can you avoid buying in a place that was poorly constructed? “There’s always an inherent risk when buying new construction,” said real estate lawyer Aaron Shmulewitz. Be wary of buildings that have big blocks of apartments owned by investors. If a single entity owns, say, 20 percent of the building and cannot pay the common charge, the residents may have to make up the difference. If possible, get a mortgage contingency written into the contract, the Times suggests. And if construction halted as the building was going up, it’s important to ask when and why. In addition, before you close, walk through the apartment, ideally with an engineer or inspector, and make sure everything is in good working order. PLANNED GAY RETIREMENT COMMUNITY RUNS INTO OBSTACLES A hillside development in the Sonoma Valley city of Santa Rosa was supposed to become one of the nation's first retirement communities specifically for gays and lesbians, notes the Wall Street Journal. That was in 2005. Today, the project, called Fountaingrove Lodge, is still months away from city approval and has stopped marketing and selling units. Even its developers say they don't know when it will ever be completed. The Lodge has elicited a debate over the environmental impact of development and has also prompted questions about whether homophobia is a reason for the delay. "This project seems to be taking a great deal of time, but it all depends on who you ask to identify why," says John Sawyer, a city councilman who was an adviser on the Lodge project in its early stages. U.K. HOUSING RECOVERY FALTERS The United Kingdom's housing market lost momentum toward the end of 2009, dashing hopes that the market was headed toward long-term residential recovery, says the Real Deal. Real estate agents reported fewer price increases among listed properties in December than November, according to the Royal Institution of Chartered Surveyors, an independent regulatory professional group. Property values have fallen nearly 20 percent during the recession. And Home prices are poised to fall further, according to industry experts surveyed in the suggestively named British market publication House Price Crash. James Thomas, head of Jones Lang LaSalle's U.K. residential department, has said that prices will drop by about 7 percent in 2010, while others surveyed were somewhat more optimistic. In London, adds the Wall Street Journal, prices are now down a mere 9 percent or so from their 2007 peaks, according to data tracked by mortgage giant Nationwide Building Society. In the fashionable center of town—where the properties cited at the top of this article are all located—the prices are astronomical. Overall, the Journal reports, British prices have only fallen about 12 percent from the peak. When compared with household incomes, they stand far higher than they did even in 1989 at the peak of the last property bubble. THEY’RE WALKING, NOT SWIMMING, AWAY FROM UNDERWATER HOMES New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying, says the New York Times (weeks after the Wall Street Journal observed the same phenomenon). The number of Americans who owed more than their homes were worth was virtually nil when the real estate collapse began in mid-2006, but by the third quarter of 2009, an estimated 4.5 million homeowners had reached the critical threshold, with their home’s value dropping below 75 percent of the mortgage balance. Their numbers are now projected to climb to a peak of 5.1 million by June - about 10 percent of all Americans with mortgages. Using credit bureau data, consultants at Oliver Wyman calculated how many borrowers went straight from being current on their mortgage to default, rather than making spotty payments. They also weeded out owners having trouble paying other bills. Their estimate was that 588,000 owners, or about 17 percent, defaulting in 2008 chose that option as a strategic calculation. DEPARTMENT OF THE WAGES OF SIN (CONTINUED) Former real estate practitioner Rodney Lee Foreman and Atlanta real estate firms Coldwell Banker Joe T. Lane Realty and Coldwell Banker Bullard Realty have agreed to pay $160,000 to settle discrimination allegations, says Realtor magazine. They had been charged with illegally steering prospective home buyers toward certain neighborhoods and away from others based on race and color, the U.S. Justice Department announced. The National Fair Housing Alliance and HUD set up a sting in 2004 leading to the allegations. According to the complaint, Foreman refused to schedule showings for Fair Housing Act testers unless he knew the race of the potential customer, telling the anonymous testers over the phone, "I didn't know if you are a Caucasian or not." The Fair Housing Act prohibits discrimination based on race, sex, national origin and other characteristics, a measure that makes it illegal for brokers to comment on a neighborhood’s or building’s composition. WITH $35 MILLION AND A DREAM, HE BOUGHT AN ADEQUATE PLACE Media mogul Jeffrey Katzenberg has paid $35 million for a house in Beverly Hills, says the Wall Street Journal. Katzenberg, who co-founded the DreamWorks studio, now is chief executive of DreamWorks Animation. The six-acre property, which was never on the market, sits just above the Greystone Mansion, a Beverly Hills landmark. A long private drive leads to a house on a promontory. The home belonged to aerospace pioneer Simon "Si" Ramo, who was instrumental in the development of the intercontinental ballistic missile and co-founded TRW. ‘US’ BECAME ‘HIS’ AND ‘HERS’ IN ’95, BUT ‘THEIR’ HOUSE NOW IS HERS Rolling Stone founder Jann Wenner has finally given up ownership of the Upper West Side townhouse that he shared with Jane Wenner until their marriage dissolved in the mid-'90s, say Cityfile and the Observer. Property records show that Jane paid Jann $4 million for his share of the five-story townhouse at 37 West 70th St., which the couple jointly purchased from the estate of Perry Ellis back in 1987. Although the couple separated in 1995, after 28 years of marriage and three children, the pair never actually was divorced and Jane remains a partner in the Wenner media empire. Since the couple's split, the publisher of Men's Journal and Us Weekly has lived with Matt Nye. They currently live in their own townhouse on West 74th Street, and they purchased, in October 2009 a 1.5-acre oceanfront home in Montauk for $11.9 million. When not on West 74th Street or the Long Island Sound, Wenner, his partner and their own brood of three children can spend time on the 62.9-acre estate in upstate Tivoli that they bought in 2007 for $5.8 million. Wenner also owns a home in Sun Valley. Just a guess: They have household help. Attention deficit disorder? SHE MAY BE NOT BE OVER, BUT UNDER, THE MOON WITH THIS SALE Cher, whose extent of plastic surgery has been outdone only by Joan Rivers, got $8.72 million at an auction of her newly built home on three-quarters of an acre in the Hualalai Resort in Hawaii for $8.72 million, reports the Los Angeles Times. The unidentified buyer is from Arizona. Concierge Auctions, which handled the sale, had estimated before the sale that Cher’s 8,821-sf luxury compound overlooking the ocean and a golf course would sell for $8 million-12 million. Cher paid $2.9 million for the site in 2009. The performer, who estimates that she has owned 18 homes in her lifetime, designed the house and five bungalows around a garden courtyard and a swimming pool. No falls or extensions, though. WHEN BUYING IN THE HAMPTONS, HE HAD A GOOD WHOLE DAY George Stephanopoulos, co-host of ABC's "Good Morning America," purchased a Hamptons home for $3.5 million, says the Wall Street Journal. That’s 7 percent less than its asking price. The 4,500-square-foot shingled home was built in the 1890s and expanded in 1993. On one acre, the house has five bedrooms, four baths, a powder room and three fireplaces. There's a pool, outdoor shower and separate guest cottage. Stephanopoulos, 48, and his wife, comic actress Alexandra Wentworth, are in the process of moving from Washington, D.C., to New York City. STUDIO OWNED BY LATE ARTISTS OF NOTE GOES ON THE MARKET The Greenwich loft in which Leon Golub and Nancy Spero had lived and worked has been listed for $2.7 million, according to the Observer. An elevator opens directly onto the 3,200-sf loft, making for surprise visitors when the key inside the thing isn’t locked. The main open workspace feeds into two small bedrooms set against the backdrop of exposed brick, hardwood floors and 12-foot ceilings. Golub's work has been removed from the space and archived since his death from post-surgical complications at 83 five years ago, while Spero's touch remains in the studio, alongside remnants of her work and her used supplies. She died in October of heart failure at the age of 82. A FORECLOSURE GAVE THIS SELLER NO WAY OUT The Las Vegas home that Nicolas Cage lost to a bank has sold for an undisclosed amount close to the asking price of $4.95 million. The 14,306-sf home has a 16-car subterranean garage, an elevator, theater, six bedrooms, seven and a half baths and a memorable view of the Las Vegas Strip. Cage bought the home in September, 2006 for $8.5 million. Owing the IRS around $6 million in back taxes, the actor has had to endure foreclosures on two properties in New Orleans, one in California and the one in Las Vegas. HOUSE WITH A PEDIGREE GOES ON THE MARKET Katie Lee, that fashionable cook, is putting on the market a Perry Street townhouse that she and Billy Joel purchased in 2006 for $5.9 million when they were still married, reports the New York Post. The asking price for the home, which has four bedrooms, four bathrooms, four fireplaces, an elevator, a landscaped garden, a predictably upscale kitchen and a landscaped terrace, is $12.9 million. The 4,000-sf townhouse features a pool, now covered, installed by the previous owner, self-styled sculptor and Johnson & Johnson heir Seward Johnson. When Joel split with Lee, he sold his share to her for $3 million, and it’s not clear whether a piano was or is included. IS THERE TROUBLE IN THE HOLLYWOOD HILLS A 1960 Hollywood Hills house owned by pop singer-songwriter Christina Aguilera has come back on the market at $6.25 million after a short time off the Multiple Listing Service. Originally listed for $7.995 million in April 2008, the renovated home has a 1,200-sf master bedroom suite, a screening room that seats 18, a gym, a pool and a 12-person spa, according to the Los Angeles Times. One Steve Hermann, who has been designing and renovating homes for about 15 years, sold the 6,500-sf house to Aguilera, 29, in 2003 for $5 million. With views encompassing downtown L.A. and the ocean, the four-bedroom, seven-bathroom house sits at the end of a cul-de-sac. BURNING DOWN THIS HOUSE WOULD NOT BE A GOOD IDEA David Byrne has picked up a new condo in Chelsea, says Cityfile. The former frontman of the Talking Heads paid $3.875 million for a four-bedroom penthouse at 231 Tenth Ave. It first went on the market for $5.2 million in 2008. Sounds like a fire sale. HASN’T HE SEEN ENOUGH FLAMES IN HIS JOURNALISTIC LIFE Globetrotting newsman Anderson Cooper will soon be able to cool his heels in an old Greenwich Village firehouse - complete with brass fire poles - that he's turning into a new home, says the New York Post. The century-old building on West Third Street was nominated this week for a place on the National Register of Historic Places. Neighbors have seen Cooper visiting the firehouse regularly since it was sold in September for $4.3 million by the New York Board of Fire Underwriters, which operated the private Fire Patrol 2 out of the building beginning in 1906. The fire patrol was disbanded in 2006, and the fire patrol finally sold the four-story building last year. Cooper has hired architect Cary Tamarkin, known for residential conversions, and the plan is to retain those poles. The 8,240 square feet of space - not including a two-story former stable in the rear yard - will give him four times as much space as his current penthouse duplex on West 38th Street. A DIVA’S DUPLEX SELLS AT A DISCOUNT Soprano Catherine Malfitano and her husband Steven Holowid, an actor, musician and singer, recently sold for $2.6 million their three-bedroom, three-and-a-half-bath duplex at 79 Laight Street, according to the Observer. On the Tribeca waterfront, the loft was listed last March for $3.099 million. The apartment, which has ceilings and windows that are double height as well as a wood-burning fireplace, is in the 1853 United States Sugar Building. SHE AND HER HUSBAND ARE ON THE MOVE Actress Katey Sagal, a star of "Married With Children," and her husband, writer-actor Kurt Sutter, have listed their home in Los Angeles' Hollywood Hills for $4.98 million, according to the Wall Street Journal. The 1937 traditional country home of about 6,000 square feet, on almost an acre, has four bedrooms, eight baths and four fireplaces. There's a 1,500-sF guest house with a gym, an office and a studio. The couple bought the home in 2005 and spent about $1 million renovating and installing the sport court. SIGNED CONTRACTS TICK UP FROM NOVEMBER, SHOOT UP OVER YEAR The Pending Home Sales Index based on contracts signed in December increased 1 percent from last November and 10.9 percent from December 2008, reports the National Association of Realtors (NAR). In November, the monthly index fell 16.4 percent after a surge from the anticipated end of the now extended home buyer tax credit. Buyers who have a contract in place to purchase a primary residence by April 30 now have until June 30 to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers. NAR Chief Economist Lawrence Yun expressed his belief that the extended and expanded tax credit will encourage 2.4 million households to take advantage of the provision this year. “While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun said. Last year there were 5.16 million existing-home sales, that is re-sales of homes that were not newly constructed. HOME RE-SALES DROP IN DECEMBER, SURPRISING SOME BY AMOUNT Sales of previously owned homes fell in December after first-time buyers rushed to complete deals during the months leading up to the original November deadline for the tax credit. But, according to the National Association of Realtors (NAR), prices edged up from one year earlier and re-sale activity rose on an annualized basis. Including one-family houses, townhomes, condominiums and co-ops, prices plunged 16.7 percent and volume was 15 percent higher than in December 2008. Sales of previously owned homes were 4.9 percent above the total in 2008. It was the first annual sales gain since 2005. The national median existing-home price for all housing types was $178,300 in December, 1.5 percent more than the prior year. NEW-HOME SALES TIE 44-YEAR LOW Sales of new one-family houses in December were at a seasonally adjusted annual rate of 342,000, 7.6 percent below November’s rate and 8.6 percent below one year earlier. On an adjusted basis, the 23,000 new homes sold during the month equaled the previous record low set in December 1966. The median sold price was $221,300 and the average was $290,600. Seasonally adjusted, inventory rose to 231,000 houses for sale at the end of December, representing 8.1 months of supply at the current sales rate but below the record of 12.4 months in January 2008. FEDERAL FIGURES SHOW A SMALL RISE IN PRICES IN NOVEMBER U.S. house prices rose 0.7 percent on a seasonally adjusted basis from October to November, according to the Federal Housing Finance Agency’s (FHFA) monthly House Price Index. October’s previously reported 0.6 percent increase was revised downward to 0.4 percent. For the 12 months ending in November, U.S. house prices rose 0.5 percent, but they were 10.3 percent below the peak in April of 2007. The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac and thus do not exceed $729,750 in cost. PRIVATE FIRM SEES ‘FURTHER EVIDENCE’ OF RECOVERY November 2009 provided further evidence of recovery in housing, according to Radar Logic, which said transaction counts in all 25 Metropolitan Statistical Areas (MSAs) tracked by the research firm increased on a year-over-year basis. The count grew in nine of the eleven months ending November 2009, including the four months from July to October. Historically, the transaction count has declined during this period, Radar Logic related. Prices also increased year-over-year in eight of the 25 MSAs. More MSAs posted gains in November than in any month since July 2007, the month after the peak in the firm’s index. California led the recovery in prices with four of its five MSAs posting year-over-year price gains. “We believe that the housing market is poised for significant recovery,” said Michael Feder, president and CEO of Radar Logic. “Affordability measures are at their highest levels in years and home sales are moving toward normal levels. Nationwide, foreclosure sales have declined from 29 percent of total sales in November 2008 to 23 percent of sales in November 2009.” Prices decreased 4.2 percent across all 25 metropolitan areas. Eight of those areas experienced year-over-year price increases, the highest number since July 2007. Half were in California. CASE-SHILLER INDEX FINDS MIXED MESSAGE IN LATEST NUMBERS The S&P Case-Shiller indices disclosed that the annual rates of decline of its 10-City and 20-City composites continued to improve in spite of price decreases being measured across many markets during November. It was approximately the tenth month of improved readings in the annual statistics, beginning in early 2009. Further, it was the third consecutive month that the statistics have registered single-digit declines after 20 consecutive months of double-digit drops. The 10-City and 20-City Composite Home Price Indices fell 4.5 percent and 5.3 percent, respectively, in November compared with the same month last year. According to Case-Shiller, average home prices across the United States were at levels similar to late 2003. From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5 percent and the 20-City Composite, 32.6 percent. The peak-to-date figures through November 2009 were -30.0 percent and -29.2 percent, respectively. While the company cited “broad improvement in home prices as measured by the annual rate,” only five of the markets saw price increases from October to November, and four – Charlotte, Las Vegas, Seattle and Tampa – posted new low index levels as measured by the past four years. At the same time, month-over-month improvements were seen in Los Angeles, Phoenix, San Diego and San Francisco for at least six consecutive months. And Dallas, Denver, San Diego and San Francisco have finally entered positive territory from a year earlier. For a skeptical view of the numbers in this section, consider visiting the Service You Can Trust blog, where you’ll find numerous critical posts on a range of real estate subjects. FORBES SAYS IT’S A GOOD TIME TO CEASE RENTING IN SOME CITIES In Portland, San Francisco, Minneapolis and Washington, D.C., the premium to buy - the spread between what you’d spend on renting and what you’d pay each month for a mortgage - is far narrower now than its 15-year average, observes Forbes magazine, which used a boatload of data to reach its conclusions. “And economists predict a significant home-price hike in five years,” according to the magazine. “So upgrading will cost much less than usual, and home buyers are likely to get a good return on their investment.” OVERVALUED HOUSING PERSISTS IN A MINORITY OF MARKETS A new report by IHS Global Insight and PNC Financial Services says just 87 of 330 U.S. markets are overvalued, with Atlantic City topping the list, according to CNN Money. Atlantic City is 30.2 percent over fair market value, the report finds. The most undervalued market is Las Vegas, where homes sell for 41.4 percent below fair market, followed by Vero Beach, Fla. (-39.8 percent), Merced, Calif. (-37.7 percent), and Cape Coral, Fla. (-36.8 percent). The conclusions were based on a comparison of median home prices, local interest rates, population densities and income, plus historic premiums or discounts. HOMES IN SKI AREAS TEMPT VACATIONERS Vacation-home seekers who see recessionary opportunities have been looking to buy in ski resorts, observes the Wall Street Journal. Many have been ready to pay in cash, especially for a great deal such as a $900,000 slope-side condominium for $500,000 or a studio in town for half the asking price. They are getting what they want because it is the best buyers’ market in 20 years, real estate agents said, with inventory at levels not seen since 2001. Patti Brave, a broker in Cordillera, Colo., said that the first seven months of 2009 were dismal but that the rising stock market had helped drive up sales. Still, prices at Vail and Beaver Creek are off by 10 percent or more in the last three years. In Jackson, Wyo., “Buyers are paying cash and determining the market,” said one broker, adding that prices have fallen by as much as 50 percent since 2007. “Phones are ringing and people are walking into our offices again,” Martha Johnson, president of Rivers to Peaks Big Sky Real Estate in Big Sky, Mont. related. A recent client, William Martin, 53, and his wife Susan, 51, of Locust Grove, Ga., paid $275,000 for a condo listed at $600,000 in the Big Sky Town Center. “It is not crowded, not pretentious and the price was right,” he remarked. OFF IN DECEMBER, RESIDENTIAL CONSTRUCTION SURPASSES ITS LOW Residential construction spending was off slightly in December and is now about 10 percent above the bottom in June 2009, according to the U.S. Commerce Department. Private residential construction spending is now 61.5 percent below the peak of early 2006 but was up10.3 percent from a year ago. ARCHITECTS’ BILLINGS EDGE UP AFTER DECLINING IN NOVEMBER On the heels of a more than a three point drop in November, the Architecture Billings Index (ABI) had a “negligible” increase of less than one point in December, according to the American Institute of Architects (AIA). As a leading economic indicator of multi-family housing, institutional and commercial construction, the ABI reflects the approximate nine-to-twelve-month lag time between architecture billings and construction spending. The index for December rose to 43.4, up slightly from 42.8 on a 100-point scale and indicating a continued decline in demand for design services. “The main impediment to an economic turnaround for the design and construction industry remains frozen credit markets,” said Chief Economist Kermit Baker. “And the longer this situation persists, the more dire the news for the architecture. We continue to hear that there are numerous viable projects out there awaiting financing.” FED SURVEY SAYS BANKS CONTINUE TO TIGHTEN LOAN STANDARDS January’s Senior Loan Officer Opinion Survey by the Federal Reserve Board finds that banks continued to tighten standards on residential real estate loans over the past three months. “In line with recent patterns, a small net fraction of banks tightened standards on prime residential real estate loans over that period, and a somewhat larger net fractions of banks tightened standards on nontraditional residential real estate loans,” the report said. “In addition, a moderate net fraction of banks reported weaker demand from prime borrowers for residential real estate loans.” Survey respondents said demand from customers seeking nontraditional mortgages also weakened further over the survey period. Only a small net fraction of banks reported having tightened standards on revolving home equity lines of credit over the past three months in the Fed’s arcane words, but a large net fraction of banks continued to report lower demand for such loans. U.S. HOME OWNERSHIP RATE DIPS BELOW 2000 LEVEL The Census Bureau reports that 2.7 percent of owners’ residences were vacant in the last quarter of 2009, while the national vacancy rate for rental housing was 10.7 percent. For homeowner vacancies, the current rate was not statistically different from the fourth quarter 2008 rate of 2.9 percent or from the rate of 2.6 percent in the third quarter of 2009. The homeownership rate of 67.2 percent for the current quarter compares with 67.5 percent in 2000 and 66.9 percent in 1999. White householders reporting a single race was highest at 74.5 percent. The rate for “All Other Races” householders was second at 58.4 percent, and single-race black householders was lowest with a rate of 46.0 percent. You’ll find detailed tables and additional information in the Service You Can Trust Blog. LITTLE CHANGE SEEN IN MARKET CONDITIONS FOR RENTAL BUILDINGS Apartment industry market conditions are little changed from three months ago, according to the National Multi Housing Council’s (NMHC) latest quarterly survey. For the first time in the survey’s history, at least 60 percent of responses to each question indicated conditions were unchanged from the previous quarter. This quarter saw a continued uptick in sales volume and equity financing, which represent another step, albeit a small one, toward a more normal transactions market, after 2009 recorded the lowest number of transactions of the decade,” said NMHC Chief Economist Mark Obrinsky. “The weakest performing index is the Market Tightness Index,” said Obrinsky, “underscoring the fact that full recovery of occupancy and rents will require job growth to return to the economy. When that happens, and as a large wave of Echo Boomers begins to enter a supply-constrained market, we should see above average rent growth.” What Do You Think It Is Worth? The question is as predictable as a cold day in . . . winter. And the answer is invariably frustrating to the buyer: “What is it worth to you? You are the one who has to live there.” Still, the question is a fair one if it is themselves they also ask. To get a good answer, they need to have explored the market themselves, making their own judgments of the value of the various properties they see. Of course, they need as well to rely on both the experienced eye of their broker – their own broker, not the listing broker – and on the comparable sales that broker has been able unearth. In the end, though, the assessment must fall in the lap of the buyer, whose personal needs may well outweigh an abstract calculation. Buyers might decide to pay a premium for a property that reminds them of their youth, is in a building where close friends will be neighbors, makes walking to work a possibility or possesses an ineffable and arresting charm, among other attributes that the individual treasures. Often buyers cannot even articulate why a particular apartment or house tugs at them so demandingly. Only infrequently do buyers fail to say they are in love with a property on which they make an offer, easing perceiving its possibilities. The decision to make an offer is almost always emotional, and rare are the buyers who end up happy after talking themselves into a property that requires them to bend their expectations and make excessive compromises. (“Excessive” is the key word here since literally every buyer is forced to accept tradeoffs.) The emotional component of real estate sales is a variable that makes it impossible to predict with certainty the price for which any one property will sell. That’s what makes pricing a property as much art as quasi-science. When it comes judging the worth of a property and setting an asking price, apartments are much easier than townhouses. One reason is that there are thousands more condos and co-ops and thus thousands more comparable sales. In fact, townhouse sales make up only a single-digit percentage of all property sales in the Big Apple and readily can consume a year or more prior to finding buyers. How, then, to evaluate a townhouse as seller or buyer? Many characteristics of an apartment also apply to a townhouse, but every factor is magnified when applied to a townhouse. Among the common issues are location, condition and size. The aesthetic of a block appears to be of greater importance in a townhouse as does the appeal of the exterior. The greater the width of a townhouse (yes, size), the bigger the cost. The number of terraces and working fireplaces matters a great deal. Also important is the rear garden and its surroundings. Inside, a townhouse with an elevator always fetches top dollar. One in which original details enjoy a synergistic relationship with a modern renovation is bound to attract buyers. Indeed, a completed renovation is especially desirable these days since a gut renovation easily can range up to $2 million and last two years. Other qualities are the number of stories, the number of bedrooms and baths and, more than anything, the practical use of space. As for the infrastructure, have the plumbing and electrical systems been updated? Is there an effective burglar alarm system? Are the flooring and joists in good shape? Is there zoned air conditioning and heating? Carrying costs, too, need to be taken into account. These include property tax, insurance and utilities. Another consideration is whether the townhouse already has been converted to single-family use. If there are tenants, what is their ability to remain and at how much rent? Could there be use problems with the city? If the property is to be purchased, rented or partially rented, what is the current and potential income? Finally, there are questions surrounding the townhouse market itself. Such dwellings commanded exorbitant prices a few years ago when families with children were looking for place to live with four and five bedrooms, but the influx of new large condos have given them options that were relatively rare in the past. Whether townhouse prices are exorbitant today is a matter of opinion – their cost has plunged recently - and that explains why the ones immediately below cover a range that is not always explicable. The townhouses and apartments critiqued here have been listed by various brokers and seen recently. Townhouses
Large Apartments
Diverse Apartments
Some of Manhattan's Latest Listings Please click here to view a sampling of properties newly listed by various brokers. To see more of them or to obtain more information, please don't hesitate to be in touch. Click Here to Sign Up For Your Free Issue of Realty Digest!
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The report also showed that the share of borrowers who increased their loan balance by 5 percent or more during the fourth quarter was at a record low of 27 percent. The previous lowest cash-out refinance share was 33 percent and occurred during the second quarter of 2003. “In the fourth quarter, about $11 billion in home equity was cashed out by homeowners when they refinanced their conventional prime-credit home mortgage, the smallest quarterly amount in nine years. Over 2009, the total amount of equity cashed out was just under $70 billion, the lowest annual total since 2000, when $26 billion was extracted,” said Amy Crews Cutts, Freddie Mac deputy chief economist. “The main causes of the decline in cash-out refinance are declining home prices in many areas of the country that have eliminated equity that could have been extracted and tighter underwriting standards for loan-to-value ratios. Among the refinanced loans in our database, the median appreciation of the collateral property was a negative 2 percent over the median life of the prior loan of 3.6 years.”
Housing inventory at the end of December fell 6.6 percent to a 7.2-month supply at the current sales pace, up from 6.5 months’ supply in November. (Six months’ inventory is considered balanced between supply and demand.) Although sales of distressed homes, which generally sell at a discount, accounted for 32 percent of the volume, an increased number of mid- to upper-priced homes in the sales mix spawned the first year-over-year gain in median price since August 2007. Economists surveyed by Dow Jones Newswires had expected only an 11.6 percent decrease in sales, and a Thomson Reuters' survey of economists had forecast a 10 percent decline. Sales of just single-family homes fell 16.8 percent December from November but were 12.7 percent above December 2008. For all of 2009, single-family sales rose 5 percent. The median price was $177,500 in December, 1.4 percent above a year earlier; it was $173,200 averaged during 2009, down 11.9 percent from 2008. As for apartments, prices fell 15.4 percent from November, but sales were 34.7 percent higher than a year earlier.
