YEAR-END REPORTS HINT AT HOUSING MARKET RECOVERY For the first time since the market collapsed in late 2008, sales activity and inventory in Manhattan stand at near normal levels, according to market reports compiled by Crain’s. (You’ll find an extended summary, tables and links on the Service You Can Trust blog.) Among the highlights was a continued increase in sales toward the end of 2009 to 2,473, up 8.4 percent from the same period a year ago and 10.9 percent from the previous quarter, the Miller-Samuel appraisal firm reports. That sum exceeded the 10-year quarterly average of 2,297 transactions, said CEO Jonathan Miller, attributing the spike to “a release of pent-up demand.” A separate report prepared by the Corcoran Group and PropertyShark.com estimates that 3,400 sales closed during the quarter, a 48 percent jump from one year earlier. “This is all good. We are seeing historically normal levels of sale activity and inventory, prices are stabilizing,” Miller said. “This is as optimistic as it could get.” Inventory continued to drop, with 6,851 listed units, down 24.6 percent from the end of 2008 and slightly below the 10-year average of 7,094 units. However, CEO Bill Staniford of PropertyShark warned that the inventory decrease may have resulted from sellers waiting for better days. Prices continued to stabilize in the fourth quarter, a stark contrast from the first half of 2009, when they plummeted by as much as 25 percent. Median sales prices were down 10 percent, to $810,000, from the same period last year and 4.7 percent from the third quarter of 2009. “By the time we hit the end of the year there was a comfort zone,” said Pamela Liebman, CEO of the Corcoran Group. “Sellers got real with prices. Buyers realized there is opportunity out there, and confidence has increased.” IF THE APARTMENT FITS, LIVE IN IT They do their dishes in the shower, sit sideways on the toilet and need to watch their weight just to fit into their bathrooms, reports the New York Post, which earlier chronicled the story of Zaarath and Christopher Prokop and their 175-square-foot micro-studio. Now, other New Yorkers emerged to share their tales of living small, including a 55-square-foot apartment in Hell's Kitchen and a 90-square-foot home on the Upper West Side. The first night that Felice Cohen, 39, slept in her 12-by-7 foot apartment - with a full-size loft bed only 23 inches from the ceiling - she had a panic attack. “But now I love it, it’s cozy,” she said of the unit, which rents for just over $700 a month. “I had to learn to sit sideways on the toilet so I don’t bang my leg on the tub.” TMI? NOW YOU CAN MAP MICE, RATS AND, YES, COCKROACHES A new Environmental Public Health Tracking Portal maps the most livable neighborhoods for mice, rats and cockroaches, reports BrickUnderground.com. Provided by the city government, the map shows that the Upper East Side had fewest and East Harlem, the most sightings of roaches last year. As for those furry, four-legged creatures, StuyTown/Turtle Bay had the smallest number and the Lower East Side/Chinatown, the greatest. WHEN BUYING REAL ESTATE, DEATH DOES NOT PART The Appellate Division of State Supreme Court has ruled that the seller can keep a deposit by a buyer who died before closing for the purchase of a co-op in a building at 1150 Park Ave. One Glen Altman signed a contract to purchase apartment 2A for the $2.3 million, put down a $230,000 deposit and bought the farm instead, before the sale could be completed, according to Curbed.com. Altman's heirs wanted the money back, but a clause in the contract made the sale binding on them. Their claim that the clause was negated by another clause - the "Proposed Occupants" section, which was left blank - held no water with the judges. In 2006, the apartment was sold, for $2.125 million. RENTS LAST MONTH WERE LOWER THAN ONE YEAR EARLIER Asking rents for units in doorman buildings in Manhattan were down 5.79 percent compared with December 2008, says the Real Estate Group of New York. But rents in non-doorman units were off just 1.74 percent. From November to December, rents for doorman units slipped 1.19 percent, yet non-doorman units rose 0.87 percent. Vacancies climbed 2.89 percent higher than in November. Although non-doorman units have maintained prices, their inventory rose by 6.08 percent. A New York research firm that tracks vacancies and rents in the top 79 U.S. markets, Reis Inc., reports that the citywide vacancy rate improved by 0.1 percentage point for the second straight quarter. But approximately 60 percent of rental buildings dropped their rents in the fourth quarter from the previous quarter, the firm says. Effective rents - which include concessions such as one month of free rent - fell 5.6 percent in the Big Apple last year, the worst since Reis began tracking the data in 1990. AND SEASONAL RENTAL TRENDS LAPSED DURING 2009
BLACKS NO LONGER PREDOMINATE IN GREATER HARLEM In greater Harlem, which runs river to river from E. 96th and W. 106th streets to W. 155th St., blacks are no longer a majority of the population - a shift that actually occurred a decade ago but was largely overlooked, according to the New York Times. By 2008, their share had declined to 4 in 10 residents. Since 2000, central Harlem’s population has grown more than in any other decade since the 1940s, to 126,000 from 109,000. But its black population - about 77,000 in central Harlem and about twice that in greater Harlem - is smaller than at any time since the 1920s. In 2008, 22 percent of the white households in Harlem had moved to their present homes within the previous year. By comparison, only 7 percent of the black households had. In Central Harlem, blacks account for 6 in 10 residents, and the proportion of whites living there since 2000 has more than doubled, to more than one in 10 residents - the highest since the 1940s. The Hispanic population, which was concentrated in East Harlem, is now at an all-time high in central Harlem, up 27 percent since 2000. PRIVATE SCHOOL BUYS UPPER WEST SIDE LANDMARK STABLE West 89th Street's Claremont Riding Academy, the city's last operating riding stable, was sold, shuttered and prepped for conversion into nine condos that were to hit the market by the end of 2008, Curbed.com reports. But the stable has been sold for $12 million to the Stephen Gaynor School, right behind Claremont on 90th street. The development group that purchased the five-story facility in 2007 paid $14 million. A THIRD OF LOAN OFFICERS FAIL LICENSING EXAMS Licensing exams, newly required by the federal government for mortgage loan officers, recorded failures by 31 percent among some 10,000 individuals who took the national test from July 30 to Nov. 30, reports the New York Times. Approximately 27 percent did not pass the state-specific component. The exam is not required of everyone - only those who work for mortgage brokerages and lenders such as Quicken Loans or Primerica. Employees of conventional banks such as Bank of America and JPMorgan Chase need only register with the National Mortgage Licensing System, which is administered by state banking supervisors. Applicants who fail the test must wait 30 days before they can try again. If they don’t pass the test by the state-imposed deadline, they cannot lend in the state. Remarkably, Thomas Pinkowish, an industry consultant and a co-chairman of the education committee of the Connecticut Mortgage Bankers Association, said prospective borrowers should not worry about the failure rate. “You could get 100 percent right on the test and still give bad advice,” he contended. Oh. RATES EASE BY 0.05% THIS WEEK
THE HOLIDAYS STIFLE LOAN APPLICATION VOLUME Mortgage loan activity dropped 22.8 percent on a seasonally adjusted basis to a 12-year low between the week ending Christmas and the prior week, according to the Mortgage Bankers Association. For the week ending New Year’s Day, an increase of 0.5 percent was recorded. On an unadjusted basis that does not take the holidays into account, the changes were down 46.9 percent and up 0.4 percent, respectively. For the week ending Dec. 25, refinancings fell 30.5 percent and purchase applications, 4.0 percent. During the next week, it was a decrease of 1.6 percent for refinancings and growth of 3.6 percent for purchases, seasonally adjusted. FED ECONOMIST TO BUY HOME, SAYING IT’S A POOR INVESTMENT Speaking only for herself, Karen Pence, who runs the Federal Reserve’s household and real estate finance research group, is telling the American Economic Association that homes are actually a terrible investment. Putting aside the fact that home prices have fallen dramatically, she notes that a home is an asset you cannot divide, say, to raise some cash as you might with a stock or bond portfolio. Other reasons that she cites: Transaction costs are very high; a home is asymmetrically liquid, meaning it’s easy to get money out when home prices are going up but not when they are going down; and home prices in a neighborhood tend to rise when the job market is improving in the area and fall when the job market is worsening. Still, she’s considering purchase of a house herself instead of continuing to rent in D.C. It seems her husband wants a dog and garden. For a fuller account of her point, go here. HIS SHOW NOT ONLY WENT ON, IT DIDN’T EVEN STOP Hal Prince didn't wait for the curtain to close on his Fifth Avenue apartment before beginning a new Upper East Side real estate production, says the Observer. He recently purchased for $12.5 million a 20-foot-wide seven-story townhouse with a Georgian façade at 48 East 74th St., described as having clean lines, soaring ceilings and perfectly proportioned rooms. Each story is large and loft-like with floor-to-ceiling windows, and "the entire house is flooded with natural sunlight from the rear glass wall and roof,” according to the listing. Streeteasy.com has $14.5 million as the last listing price. In September, the couple listed for $33 million their 11-room co-op, which remains on the market. SHE APPARENTLY IS NOT STRUCK BY THE OCEAN After building a house on Hawaii's Big Island but never living in it, Cher is auctioning off the property, reports the Wall Street Journal. Concierge Auctions, which is marketing the property at the Four Seasons' Hualalai resort (where residents include Charles Schwab and Michael Dell), anticipates bids between $8 million and $12 million on Jan. 18. There's no minimum bid, but there's an unpublished reserve price that must be met. Cher bought the 0.76-acre property in December 2004 for $2.9 million and began building the house last year. A gated courtyard leads to the main house, which comes with an infinity pool overlooking the fourth hole of the Ke'olu Golf Course. The main house is flanked by four one-bedroom bungalows and a detached media room. Since May 2008, the 63-year-old singer has had a Las Vegas show at Caesars Palace. HE BUYS SOUTH OF 14TH STREET Former New Yorker Oliver Stone is buying the stunning condo he was renting while shooting "Wall Street 2," reports the New York Post. The Los Angeles refugee is in contract to buy a $1.9 million, 1,600-sf apartment at One Morton Square - a luxury building with a garage catering to privacy-seeking celebrities such as Daniel Radcliffe, Amy Pohler, Will Arnett and Mike Myers. WHEN IT COMES TO BARGAINS, SHE RULES Judith Sheindlin, better known as "Judge Judy," has paid $6.75 million for a two-bedroom co-op at the Sherry Netherland on Fifth Avenue, according to Cityfile.com and the Observer. The 3,150-sf apartment on the 11th-floor has a separate 150-sf maid's room on the building's sixth-floor and originally was listed for $7.999 million. Although Sheindlin declined to comment through her publicist, it is presumed that this two-bedroom, two-and-a-half-bath corner apartment will function as a pied-à-terre for the TV judge, who ranked 13th on Forbes’ list of highest-earning women in 2007. According to her Web site, “although production takes place in Los Angeles, Ms. Sheindlin lives in Florida, where she enjoys working out daily, traveling, spending time with her 11 grandchildren, snorkeling, antiquing and, of course, bargain shopping.” Presumably not all at the same time. A MILLION-DOLLAR BABY DEMONSTRATES HER WORTH Hilary Swank has closed on a swanky $3.5 million, two-bedroom apartment at Superior Ink, says the New York Post. The trendy West Village complex of condos and townhouses at 400 W. 12th St. is attracting a glam crowd including Marc Jacobs, who’s renting there until the interior of his new townhouse is finished. Before she split from Chad Lowe three years ago, Swank lived in a $4 million Greenwich Village townhouse. BEL-AIR GIRL AND BEAU UNLOAD A VILLA Jennifer Lopez and Marc Anthony have sold their home in Los Angeles's Bel-Air neighborhood for $7.5 million to hedge-fund manager Mark Spitznagel, says the Wall Street Journal. The four-bedroom, five-bath house was originally listed for $8.5 million in 2008. Billed as a French-style villa, the walled and gated 0.75-acre property includes a guest house, swimming pool, stream and garden with an arbor. The 1941 home has hand-distressed oak floors and several fireplaces. Through a trust, Lopez and Anthony bought the 7,357-sf house in 2005 for $6.25 million and redecorated the place. Furnishings worth $1.3 million were part of the sale. The couple is in contract to buy a three-acre estate outside Los Angeles in the Hidden Hills area of the San Fernando Valley. The property, which has a $10 million asking price, encompasses more than 17,000 square feet of living space as well as a 20-seat theater and a recording studio. PENDING HOME SALES ARE DISAPPOINTING FOR NOVEMBER Signed contracts to purchase homes fell in November following a surge of activity caused by the original deadline for the first-time home buyer tax credit, reports the National Association of Realtors (NAR). The forward-looking Pending Home Sales Index fell 16 percent to 96.0 from an upwardly revised 114.3 in October. Yet it was 15.5 percent higher than one year earlier. “We thought it would drop 2 percent,” Jennifer Lee of BMO Capital Markets told the New York Times. “When you see 16 percent, the first thing you say is, what the heck happened here?” Lee called the drop from October to November “unnerving.” NOVEMBER SALES OF NEW HOMES DROP TO 7-MONTH LOW Sales of newly built single-family homes declined 11.3 percent in November, says the U.S. Commerce Department. The number of newly built homes on the market also fell, by 2.1 percent, a 7.9-month supply at the current sales pace. "The housing rebound has so far been largely supported by government programs, raising questions of sustainability as these programs come to an end next year," BNP Paribas economist Anna Piretti told the Wall Street Journal. Said Chief Economist David Crowe of the National Association of Home Builders in a statement: "As our builder surveys have indicated, the emerging housing recovery is on a bumpy path that is strewn with obstacles, including the extreme difficulties that builders are encountering in obtaining financing for new projects and inaccurate appraisals that are now scuttling a third of new-home sales. Today's report reinforces just how fragile the housing recovery remains and the potential damage that any further retardants could cause." BUT SALES OF PREVIOUSLY OWNED HOMES CLIMB 7.4 PERCENT Existing-home sales rose again in November as first-time buyers rushed to close sales before the original Nov. 30 deadline for the recently extended and expanded tax credit, according to the National Association of Realtors (NAR). Including single-family, townhomes, condominiums and co-ops, sales were at the highest level since February 2007. Economists surveyed by Dow Jones Newswires expected a 3.3 percent increase. NAR Chief Economist Lawrence Yun warned of a “temporary” sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit. Total housing inventory at the end of November declined 1.3 percent to 3.52 million, representing a 6.5-month supply and down from 7.0 months in October. Supply was 15.5 percent below a year ago; the last time there were fewer available homes was April 2006, when inventory stretched only 6.1 months. The NAR reported the median price for an existing home was $172,600, down 4.3 percent from $180,300 one year earlier and the smallest decline since a 4.1 percent drop two years earlier. HOUSING PRODUCTION JUMPS IN NOVEMBER Nationwide housing production rose 8.9 percent, according to figures released by the U.S. Commerce Department. Representing a rebound from an exceptionally slow month for housing activity in October, the gain resulted largely from a big increase on the multifamily side. Permit issuance, which can be an indicator of future building activity, rose 6 percent to the highest level in a year. Single-family permits rose 5.3 percent, while multifamily permits went up 8.8 percent. PRICES IN OCTOBER DECLINE 7.8% OVER 12 MONTHS National home prices, including distressed sales, declined by 7.8 percent in October 2009 compared with October 2008, according to First American CoreLogic and its LoanPerformance Home Price Index (HPI). It was an improvement over September’s year-over-year price decline of 9.5 percent. On a month-over-month basis, however, national home prices declined by 0.7 percent in October compared with September. Including distressed transactions, the HPI has fallen 30.1 percent from its peak in April 2006. Excluding distressed properties, the national HPI has fallen 21.5 percent from the same peak. There is a growing pending (shadow) supply of 1.7 million homes as of September 2009, up from 1.1 million homes a year earlier, real estate date information company said. At the current sales rate, the estimated pending months’ shadow supply was three months, up from roughly two months a year ago. The combined inventory (visible and pending supply) was 5.5 million homes in September 2009, down from 5.7 million a year ago. CASE-SHILLER INDICES RECORD ONLY ‘RELATIVE IMPROVEMENT’ The Case-Shiller Home Price Indices, which omit apartment sales, record improvement in the annual rate of decline of the 10-City and 20-City Composites in October compared with September’s reading. Average home prices across the U.S. were similar to the autumn of 2003. From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite was down 33.5 percent and the 20-City Composite, down 32.6 percent. With the “relative improvement” of the past few months, the peak-to-date figures were off 29.8 percent and 29.0 percent, respectively. The 10-City and 20-City Composite Home Price Indices declined 6.4 percent and 7.3 percent, respectively, compared with one year earlier. All 20 metro areas and both Composites showed an improvement in the annual rates of decline in comparison with September. Commented David M. Blitzer, chairman of the Index Committee at Standard & Poor’s: “The turnaround in home prices seen in the spring and summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat.” Added Karl E. Case, the Wellesley College economist who helped design the housing index: “I’m worried. Everyone’s worried. If prices sink 15 percent from here, which is a possibility, and the 2008 and 2009 loans go bad, then we’re back where we were before - in a nightmare.” There’s much more in the Service You Can Trust Blog. APARTMENT VACANCIES REACH 30-YEAR HIGH The vacancy rate ended the year at 8 percent, the highest level since the Reis Inc. research firm began its tally in 1980, reports the Wall Street Journal. As landlords scrambled to retain existing tenants and attract new ones, rents fell 3 percent last year. During the fourth quarter, vacancies increased in 52 markets, while they improved in 17 and stayed flat in 10. Marcus & Millichap is to release a separate report that forecasts a further 2-3 percent drop in apartment rents over the next year, most of which will be concentrated over the next six months. The report forecasts Washington, D.C., will be the healthiest rental market in 2010 for the second straight year. BUILDERS EXPERIENCE WANING CONFIDENCE According to the latest NAHB/Wells Fargo Housing Market Index (HMI), builder confidence in the market for newly built, single-family homes receded one point in December, to 16 on a scale of 100. Their mood fell to the lowest point since June. "As we anticipated, this is shaping up to be a bumpy recovery period for the housing market," commented Chief Economist David Crowe of the National Association of Home Builders (NAHB). "While some families may be just starting to factor the expanded tax credit into their potential home buying plans, many are hesitating because of the poor economy. At the same time, tight lending conditions for both consumers and home builders continue to pose considerable obstacles on the road to a sustained housing and economic recovery." ARCHITECTS DOCUMENT FURTHER PLUNGE IN ACTIVITY The American Institute of Architects (AIA) says its Architecture Billings Index, which measures economic activity in architecture and construction, fell to 42.8 points in November from October’s 46.1. The November figure represents an overall decline in demand for design services, according to the report. Said Kermit Baker, AIA's chief economist: "There continues to be a lot of uncertainty in the construction industry that likely will delay new projects in the near future.” PITY THE POOR REAL ESTATE BROKER Sales commissions in 2009 fell to the lowest level in seven years, driven down by sales of low-priced homes to first-time buyers using the federal tax credit, reports Bloomberg.com. Commissions through November dropped 6.2 percent from a year earlier to $40.6 billion, according to Bloomberg calculations based on the average commission rates from Real Trends Inc. and on home price and sales data from the National Association of Realtors (NAR). The dollar value of commissions fell to the lowest amount since 2002 even as the average U.S. rate per transaction rose to about 5.29 percent this year, the fourth consecutive annual gain. The average commission rate was 5.26 percent in 2008, according to Real Trends. Unsurprisingly, the number of U.S. real estate brokers and salespeople as of Sept. 30 (not all of whom are members of the NAR) fell 9.2 percent from a year earlier to 850,000, according to the Bureau of Labor Statistics in Washington. In the unlikely event you are a “civilian” reader who, for some reason has an interest in broker compensation, click here for the full story. MORTGAGE ASSOCIATIONS PROJECTS 5.5% RATE THIS YEAR The Mortgage Bankers Association predicts that rates on 30-year fixed-rate mortgages will rise from an average of 4.9 percent during the last quarter to 6.2 percent by the fourth quarter of 2011. The group forecasts that the rate will average 5.5 percent in 2010 and 6 percent in 2011, up from 5 percent in last year. "If you told me by the end of 2010 a 30-year rate was at 6 percent, that sounds about right," Mark Zandi, chief economist at Moody's, told CNBC. "I don't think there's any question rates are headed up." Added Lawrence Yun, chief economist of the National Association of Realtors: "Rates weren’t going to stay that low forever, but I don't see anything too alarming. Rates will still be considered attractive." BOTTOM FORESEEN IN MARCH The 45 largest metropolitan markets are expected to have prices decline an average of another 4.2 percent before bottoming in March of 2010, according to First American CoreLogic, a real estate data information company. “The declines will be driven primarily by the large levels of foreclosures in these areas,” it said. However, improvement in both levels of inventories and unemployment are projected to prevail in the spring of next year, resulting in an average year-over-year appreciation of just under one percent by October of 2010 for these metropolitan markets.” SOME FED OFFICIALS WORRY ABOUT END OF INCENTIVES According to minutes of the December meeting of the Federal Open Markets Committee (FOMC), reports the Wall Street Journal, “some participants still viewed the improved outlook as quite tentative and again pointed to potential sources of softness, including the termination next year of the temporary tax credits for homebuyers and the downward pressure that further increases in foreclosures could put on house prices.” In addition, they expressed concern that mortgage markets “could come under pressure” as the Federal Reserve's agency purchases of mortgage backed securities (MBS) wind down. The House that Hearst Built No, it wasn’t only San Simeon, that bricks-and-mortar paean to excessive materialism on a hill overlooking the Pacific Ocean in California that the publishing magnate had designed and constructed.
One-Bedroom Apartments
Some of Manhattan's Latest Listings Please click here to view a sampling of newly listed properties. To see more of them or to obtain more information, please don't hesitate to be in touch. Click Here to Sign Up For Your Free Issue of Realty Digest!
©
2009 Service You Can Trust |
||
|
Prospective tenants combed the city for value, looking in trendier areas or for improved service, reports the Real Estate Group of New York. The company said the result was deep discounts in traditionally less expensive neighborhoods such as Midtown, the East Village and the Lower East Side as landlords attempted to keep their properties competitive. Citywide average price changes over 2009 averaged an increase in non-doorman units of 0.26 percent, but fell by 4.39 percent in doorman buildings. “Seasonal trends in vacancies and prices were markedly absent this year,” the report found. “While Manhattan generally sees an influx of renters during the summer months, changes in employment contracts and the absence of these prospective new tenants prevented landlords from raising rents, causing prices to remain depressed through the fall. For more, check out the 
Freddie Mac says the 30-year fixed-rate mortgage (FRM) averaged 5.09 percent for the week ending Jan. 7, down from last week’s 5.14 percent but up from 5.01 percent last week at this time. The 15-year FRM was 4.50 percent in comparison with 4.54 percent last week and 4.62 percent a year ago. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was unchanged at 4.44 percent this week. It was 5.49 percent last year. The one-year Treasury-indexed ARM averaged 4.31 percent, down from 4.33 percent last week and 4.95 percent a year ago. Said Frank Nothaft, Freddie Mac vice president and chief economist: "Current interest rates for fixed-rate mortgages are just about at their annual average for 2009, while ARM rates are considerably below their averages for last year. As the economy strengthens further and the Federal Reserve decides to raise its overnight target rate, ARM rates will follow suit because they are typically tied to shorter-term interest rates."
"Home builders remain very cautious about starting new homes, and overall housing production is still down on a three-month average basis," noted Chief Economist David Crowe of the National Association of Home Builders (NAHB). "Understandably, it will take some time for the newly extended and expanded home buyer tax credit to start boosting sales in individual markets.” Single-family housing starts made up some of the ground they lost in October, posting a modest 2.1 percent gain, but multifamily starts bounced back with an increase of 67.3 percent from an all-time record low in the previous month. Noting that construction was still proceeding at a relatively slow pace, Thomas A. Lawler, founder of Lawler Economic and Housing Consulting, told the New York Times that amount was encouraging because it would allow vacant homes already on the market to be sold. “Everyone still agrees that there is a disturbingly high level of vacant homes still on the market,” Lawler said. “The best thing that can happen would be a continued subdued pace of construction.” Commenting on the growth of multifamily construction, IHS Global Insight was quoted in the Wall Street Journal as calling the gain from such a low level “meaningless.”
