PROPERTY TAX ASSESSMENTS LAG PRICE DECLINES New York City has announced that the total property tax assessment roll for the fiscal year beginning July 1 will rise tentatively to $796.6 billion, an increase of 0.12 percent. For apartments, the assessment is going up 5.09 percent. For single-family homes, the increase is 3.97 percent. State law requires New York City to tax property on a percentage of market value, known as the assessed value. The law limits how much assessed values, and therefore taxes, can rise for homes and small residential properties in a given year. In years following market growth, assessed values continue to rise even if market values decline, as is the case for fiscal year 2011, which begins July 1. There’s greater detail in the Service You Can Trust blog. FED REPORT FINDS SIGNS OF STABILITY IN HOUSING MARKET New York City's housing market has shown some signs of stabilizing, according to the latest Federal Reserve’s Beige Book, a compendium of anecdotal reports. Co-op and condo prices continued to decline in the fourth quarter but at a more moderate pace than earlier in the year in both Manhattan and the outer boroughs, the document said. “Moreover, the number of transactions picked up, both from the third quarter and from a year earlier, and the inventory of unsold units, though still fairly high, fell 25 percent from late-2008 levels,” the Fed found. It added that Manhattan's apartment rental market also showed signs of stabilizing in December, as both rents and inventories were virtually unchanged from November. Still, the Beige Book continued, rents remain well below year-earlier levels, especially when landlord concessions (fee waivers and free rent for one to two months) are factored in, though some of the more aggressive incentives are reportedly being scaled back. J.P. MORGAN HAD A POINT, BUT THIS IS JUST A HOUSE (A NICE ONE) A palatial and historic Fifth Avenue townhouse that was sold to a Russian oil tycoon by the family of Doris Duke four years ago for $40 million is back on the market - for $50 million, according to the New York Post. The eight-level Beaux-Arts-style Duke-Semans mansion commands the corner of Fifth Avenue and 82nd Street. Built in 1901, the mansion was snatched up by billionaire Tamir Sapir for $40 million - $10 million less than the original asking price. The property is currently divided into a penthouse duplex apartment on top of a five-story spread and doctor's office in the basement. It features 12 bedrooms, 14 bathrooms, 11 wood-burning fireplaces and no partridges squatting in a tree. NUMBER OF BANK-OWNED PROPERTIES SOARS IN TWO YEARS The foreclosure crisis has driven the number of bank-owned properties in New York City to 1,750, a six-fold increase in just two years, a new report shows, according to Crain’s. Although only a small percentage of the properties that entered foreclosure over the last 15 years ended up as being owned by banks, mortgage companies, mortgage-backed security trusts and other investors, a study by the Furman Center for Real Estate & Urban Policy found a staggering rise in bank-owned inventory over the last three years. That inventory rose from 290 properties in December 2006 to 1,750 in September 2009. The center documented 1,072 real-estate-owned (REO) properties in Queens, 245 in Brooklyn and 226 in Staten Island. Of the homes that end up as bank owned, nearly half are bought and resold within a year for significant profit. Between 1995 and 2007, properties flipped within a year were resold at an average of 45 percent more than the purchase price. HERE’S THE SKINNY ON THAT HOUSE IN THE VILLAGE Manhattan’s skinniest house, at 75 1/2 Bedford St., has sold for $2.175 million, reports Curbed.com. The 9.5-foot-wide house of an indeterminate mid 1800s construction date went on the market for $2.75 million at the end of August, and then was reduced to $2.499 million before it found a buyer. That buyer's identifying information is obscured. Seller Stephen Balsamo paid $1.6 million for the 999-sf house in a bidding war in 2000, and the place now is listed for rent at $10,000 a month. RENTALS SURGED AT YEAR’S END Manhattan rental transactions soared in the fourth quarter of 2009, according to market reports released by two large city brokerages, says the Real Deal. A report released by Prudential Douglas Elliman estimated that the number of rental transactions in Manhattan leaped 47.6 percent to 2,456 in the fourth quarter from the same period of 2008. Citi Habitats, the city's largest rental brokerage, said it did more than 2,600 transactions in the fourth quarter, an increase of 30 percent from roughly 1,800 in the prior-year-quarter. Moreover, listing inventory dropped 21 percent to 5,255 units, from 6,640 during the fourth quarter of 2008, according to the Elliman report, which was prepared by appraiser Jonathan Miller. His report pegged the average monthly rent of a Manhattan apartment at $3,789, 4.3 percent lower than a year earlier and roughly on par with third-quarter 2009. The median rental price was $2,900, dropping 9.4 percent from 2008 and 1.7 percent from the previous quarter. "If you factor in owners' concessions, rents are probably down 10 percent," Citi Habitats President Gary Malin said. NOW A LANDMARK, WEST SIDE CHURCH COULD CRUMBLE A long-running battle between West Park Presbyterian Church on the Upper West Side and its neighbors has ended with its designation as a city landmark, quashing plans to use part of the historic property to build a condo tower. The New York Post said the unanimous vote by the Landmarks Preservation Commission was hailed as a victory by neighbors and local preservationists who want the 116-year- old red sandstone church to remain as is. But church members and their pastor, the Rev. Robert Brashear, insisted that the church, which can no longer be used for services, doesn't have the money to fix the crumbling structure at the corner of Amsterdam Avenue and West 86th Street. "Today's designation . . . will not preserve our beloved church building,” the minister said. “Instead, it will hasten its demise." Rev. Brashear now holds services for his congregation at another church a block away. NO PLACE FOR GUESTS? EXPECT PLENTY OF ROOM AT THE INNS Nearly 100 hotels are scheduled to open in major American cities this year, according to the New York Times. The Big Apple will have almost half of the new hotels, 46, according to Smith Travel Research. Thirty of them are to open in Houston, with others scheduled to welcome guests in Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami and Washington. Excluded from the total are new hotels opening in the suburbs. REBNY WEIGHS IN WITH CITYWIDE SALES STATISTICS The total dollar value of residential real estate sales in the five boroughs increased 22 percent to $7.9 billion between CONDO SALES IN MANHATTAN DECLINED STEADILY OVER YEAR The Manhattan condo sales market showed a steady monthly and year-over-year decline, according data compiled by Yale Robbins, a real estate publisher and database resource, reports the Real Deal. The number of sales in November 2009, the most recent month for which the data was available, hit 371, down 9 percent from the previous month's sales total and 10 percent year over year. The Manhattan condo report, which was compiled using the company's database of approximately 3,300 condos and co-ops, showed that the average sales price of Manhattan condos in November was $1.49 million, down 18 percent from the month before, when the average price hit $1.81 million and down 11 percent from November 2008, when the average sales price was at $1.67, according to the report. BEWARE NOCTURNAL CREATURES WEARING MASKS Between 2003 and 2008, one rabid raccoon was found in all of Manhattan, says the Westside Independent, but city health officials have confirmed 16 rabid raccoons in the borough in the last month and a half. Although the city’s Health Department said it found “only” four rabid raccoons in Manhattan in 2009 through Dec. 3, the virus has continued to spread, mostly in the northern part of Central Park and less so in Morningside Park. The city is planning to vaccinate the raccoon populations in Riverside, Central and Morningside parks. One of the masked marauders was found on 110th Street and Lenox Avenue and one on West 117th Street and Morningside Avenue. The department warns residents to stay away from stray animals, keep pets leashed and call 311 if you see any raccoons. Raccoons, skunks, bats, stray dogs and cats are more likely to have rabies than other animals. If bitten by one of the animals, wash the wound immediately with soap and water, check with a physician and call 311 to report the bite. CITY’S UNEMPLOYEMENT RATE HITS 10.6%, TOPPING THE NATION’S The Big Apple lost 142,000 jobs between December 2008 and 2009, the State Labor Department reports. The city’s unemployment rate was 10.6 percent in December, seasonally adjusted, in comparison with 10.0 percent in November and 7.0 percent one year earlier. It was a 17-year high and well below the U.S. rate of 10 percent. Employment in financial activities was unchanged over the month, as a small seasonal gain in real estate and rental and leasing was just offset by a small loss in finance and insurance. Seasonally adjusted, the state’s unemployment rate climbed over the month from 8.6 percent in November to 9.0 percent in December 2009, matching a 26-year high. Nearly 425,000 city residents were unable to find jobs in December, easily the most in the 33 years in which those records have been kept. The number of unemployed state residents increased from 832,200 to 868,600 over the same period. "In December 2009, New York State's unemployment rate remained well below the nation's rate,” said Peter A. Neenan, director of the Division of Research and Statistics. “Experience suggests that the unemployment rate may continue to increase in the early stages of an economic recovery as some firms are slow to hire new workers and job seekers re-enter the labor force." M. Patricia Smith, the state labor commissioner, told the New York Times: “The city’s rate is obviously the most disturbing one in the mix. What this shows is that the economy is still volatile. People are still nervous about the economy.” 30-YEAR RATES FALL BELOW 5% AGAIN THIS WEEK The 30-year fixed-rate mortgage (FRM) averaged 4.99 percent for the week, down from last week’s 5.06 percent and 5.12 percent at the same time last year, according to Freddie Mac. The 15-year FRM was 4.40 percent compared with 4.45 percent last week and 4.80 percent last year. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) dropped to 4.27 percent from 4.32 percent the prior week and 5.24 percent one year earlier. The one-year Treasury-indexed ARM averaged 4.32 percent, down from 4.39 percent. At this time last year, the 1-year ARM was 4.92 percent. NEW REGS AIM TO COVER CREDIT ISSUES FOR BORROWERS The Federal Trade Commission and the Federal Reserve have published regulations designed to safeguard loan applicants from needless overcharges on interest rates caused by erroneous or outdated information in their national credit bureau files, observes the Washington Post. The rules require lenders to alert consumers whenever derogatory credit data cause them to be charged higher rates, higher down payments or less than optimal terms on a "risk-based pricing" system. Generally, the higher your credit score, the lower the rates and fees you're quoted. The lower your scores, the higher your costs of credit. Home mortgage lenders are likely to provide consumers with notices including their credit scores, a bar graph allowing them to see where their scores rank against other consumers, the name and contact information for the credit bureau that provided the information, key factors that might have lowered the score and guidance on how to correct mistakes in credit files. JUSTICE DEPARTMENT TAKES AIM AT MORTGAGE FRAUDSTERS Attorney General Eric H. Holder Jr. told a congressional commission that the F.B.I. was investigating more than 2,800 mortgage fraud cases, almost five times as many as the 534 inquiries in 2004, according to the New York Times. Of the cases, 1,842 involved more than $1 million in losses each. As of November, federal charges related to mortgage fraud were pending against 826 defendants. Assistant Attorney General Tom Perez told the Times that the Justice Department was launching a major campaign against banks and mortgage brokers suspected of discriminating against minority applicants in lending. A new unit, for which at least four lawyers and an economist are to be hired, will focus exclusively on unfair lending practices. LENDERS HIDE BEHIND ‘WORKSHEETS,’ ‘LOAN SCENARIO’ FORMS Mortgage lenders nationwide have had to issue new good-faith estimates to applicants since Jan. 1, notes the Washington Post. Under the regulations set by the Department of Housing and Urban Development, the estimates that lenders provide upfront must be accurate - the same or nearly the same as the fees charged at closing. The reformed good-faith estimate, or GFE, requires lender-related fees to remain unchanged from application to closing and allows only up to a 10 percent difference for estimates in other areas such as title insurance and closing fees. Now, the lender must eat the difference from estimates. Many loan officers and lending institutions are sidestepping the new, price-bound GFE by giving shoppers "worksheets" and "loan scenario" forms that come with no legal requirements for accuracy. In effect, they are unforeseen substitutes for the new GFEs, wide open to lowballing and bait-and-switch games in the wrong hands. HUD officials say they plan to conduct a review of their growing use. UP FROM PRIOR WEEK, LOAN ACTIVITY IS HALF OF A YEAR AGO The Mortgage Bankers Association says mortgage loan application volume increased 9.1 percent on a seasonally adjusted basis for the week ending Jan. 15 from one week earlier. On an unadjusted basis, the growth was 10.4 percent, but it fell 52.3 percent below the same week one year earlier. Refinancings went up 10.7 percent over the previous week, and purchases grew 4.4 percent on a seasonally adjusted basis. Unadjusted, purchase applications increased 9.8 percent but were 19.1 percent lower than a year ago. The refinance share of mortgage activity rose to 71.7 percent of total applications from 71.5 percent the previous week, and the adjustable-rate mortgage (ARM) share edged up to 4.1 percent from 4.0 percent. FHA BEARS DOWN ON BORROWERS The FHA says it will raise insurance fees that borrowers must pay and will cap the amount of cash that sellers can contribute for closing costs, reports the Wall Street Journal. Starting this summer, it also will require borrowers with credit scores below 580 to make a minimum 10 percent downpayment. The FHA insures more than one-third of all new home loans and doesn't lend money itself. An upfront insurance premium that borrowers must pay (and can roll into the loan) will rise from 1.75 percent of the total loan amount to 2.25 percent beginning this spring. In addition, the FHA will reduce the amount of money that sellers can kick in for closing costs to 3 percent of the sale price, down from 6 percent. NEW ‘GREEN’ MATERIALS FOR COUNTERTOPS MAY INTRIGUE YOU At the U.S. Green Building Council's trade show in Phoenix recently, the Washington Post encountered products called IceStone, Bio-Glass and Eco. IceStone countertops are made of concrete and an aggregate, recycled glass. Bio-Glass is made from recycled bottles. They are broken into much larger pieces than IceStone uses, and these bigger shards are melted just enough to fuse the stacked layers into a 3/4-inch-thick countertop. Eco countertops, which look exactly like Silestone, are a mix of recycled products including glass from bottles and windows; porcelain from dishware, sinks and toilets; stone scraps; and crystallized ash. The three countertops share another distinction: They are the only countertop materials that have Cradle to Cradle certification. DO YOU SUFFER THE HEARTBREAK OF CLOGGED DRAINS Among products pitched by the 1,100 exhibitors at the International Builders’ Show in Las Vegas this week was one that caught the eye of a Wall Street Journal reporter. PF WaterWorks was hawking a drain that, it promises, won’t ever clog. Sanjay Ahuja, a vice president of the Houston company, said the drain’s shape produces turbulence that propels debris through the pipes. The drain is made of clear plastic, so anything that does get lodged in it can be seen. A dial provides a way to dislodge objects that get stuck. (Whether it works by calling a plumber is not reported.) Ahuja dropped a wedding ring into the drain to prove his point, and no plumber had to be summoned. WHAT’S A GARDEN IN AN APARTMENT? IT’S A TERRARIUM The allure of a microcosmic, self-sustained landscape is that anyone can have a garden with a terrarium, including the apartment dweller, people who don't like to fuss with plants and those on the road a lot, notes the Washington Post. Tovah Martin, a garden writer and houseplant expert, says the key to success is methodical preparation and, because terrariums usually don't drain, careful and economic watering. Suggesting a base layer made up of a mixture of granulated aquarium charcoal and quarter-inch gravel, she says that terrariums work best in bright, indirect light and should be kept away from direct sunlight. Other keys to success are starting with plants free of diseases and pests and scooping out sick plants. Martin likes ferns, members of the prayer plant and gesneriad families, rhizomatous begonias, peperomias, creeping fig and bromeliads. Slipper orchids are good too. HOMEOWNERS, DON’T SCREW UP YOUR TAX DEDUCTIONS If you escrowed money with your lender for taxes last year to be paid in 2010, the Washington Post notes that you cannot take a deduction for these taxes when you file your 2009 return. But if you bought a house last year, you may have reimbursed your seller for a portion of the prepaid taxes through the end of 2009. Review your settlement sheet (the HUD-1); line 106 on Page 1 should reflect this tax adjustment. When you receive your annual statement from your lender showing the amount of taxes paid last year (Form 1098), that amount may not be included because it was just an adjustment between buyer and seller and not a payment collected by the lender. CLAIM PROCESS IS DISCLOSED FOR FIRST-TIME BUYER CREDIT The Internal Revenue Service has released the new Form 5405 for homebuyers to claim the first-time homebuyer credit. The IRS also announced new documentation requirements to deter fraud related to the credit. Taxpayers claiming the homebuyer credit must file a paper tax return because of the added documentation requirements - a copy of the settlement statement (HUD-1) or, for a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy. The new law allows long-time residents of the same main home to claim the credit if they purchase a new principal residence. To qualify, taxpayers must show that they lived in their old homes for five consecutive years during the eight-year period ending on the purchase date of the new home. Such claimants should attach Form 1098, property tax records or homeowner’s insurance records. More details on claiming the credit can be found in the instructions to Form 5405, as well as on the IRS’s First-Time Homebuyer Credit page. BE SURE YOUR HOME ALSO IS YOUR RESIDENCE The concept of "principal residence" is critical in our tax laws, observes Benny L. Kass in the Washington Post. To qualify for the first-time-home-buyer tax credit, the house you buy must be your principal residence. If you want to claim the exclusion of up to $500,000 in capital gains ($250,000 if you are not married) when you sell your home, that property must be your principal residence. When you file your annual income tax return, you can deduct the interest you pay on your mortgage (up to a certain limit), and you can deduct the real estate tax paid to your local government. The deductions are available for your principal residence and for one vacation home. If in dispute, the key issues are where you pay state and local income taxes, where you vote, what address is on your driver’s license, where you receive mail, and the locations of your banks, recreational clubs and religious organizations. Other Items of Interest
IF YOU WANT A STEADY DIET OF CHINESE FOOD, MAYBE WAIT China's urban-property prices rose at their fastest pace in 17 months in December, adding to concerns that an asset bubble may be forming, says the Wall Street Journal. The national government already has expressed concern that real-estate prices are rising too quickly, particularly in large coastal cities, after real-estate stimulus measures introduced late in 2008 touched off a boom in home buying and property values. Property prices in 70 of China's large and midsize cities rose 7.8 percent in December from a year earlier, extending November's 5.7 percent rise. Prices in December rose 1.5 percent from November, accelerating from November's sequential rise of 1.2 percent. December was the seventh consecutive month that urban-property prices rose from year-earlier levels. RECESSION SEVERELY WOUNDS TIMESHARE BUSINESS The recession has been particularly tough on the timeshare business, reports Gannett News Service in Realtor magazine. Sales dropped 48 percent in 2008 and 40 percent in 2009. They are likely remain flat in 2010, CEO Howard Nusbaum of the American Resort Development Association estimates. SPORTS FANS, TAKE NOTE, THEN HEAD WEST AND NORTH As the 2010 Olympic Games in Vancouver near their Feb. 12 start dates, prices are falling on a wide range of homes and apartments for rent during the two-week time period, according to the Wall Street Journal. Lorraine Stekl, who handles these rentals for Breakaway Vacations, says the average price per bed has fallen from $500 per night a month ago to less than $300. That approximates the amount for which those properties would rent when the Olympics are not in town. LACKING NINE LIVES, AN ACTRESS MOVES ON Emmy-winning actress Linda Dano (known for her roles on “Another World” and “One Life to Live”) has sold her West End Avenue co-op to an unnamed buyer who is in the wine business, reports the New York Post. That buyer negotiated to buy the 1,100-sf one-bedroom fully furnished, including linens and towels in the $1.5 million transaction. Dano is moving to a rental just off Fifth Avenue on the Upper East Side. HE SELLS AN APARTMENT THAT’S NOT FAWLTY Monty Python's John Cleese recently sold his Upper East Side apartment at 196 East 75th St. to his former wife, psychotherapist Alyce Faye Eichelberger Cleese, says the Observer. Cleese sold her the apartment for $1.492 million; they bought the two-bedroom unit in June of 2007 for $1.4 million. The couple was married in 1992 and bitterly divorced in early 2008, with the actor/writer paying his ex $20.6 million in cash and assets. In Oslo, the first stop of a one-man tour that continues, Cleese told the sold-out audience: "I'm here, my friends, because frankly I need the money. I've fallen on hard times. I'm having to pay $20 million to a woman who I believe is the special love child of Bernie Madoff and Heather Mills." HER ATTRACTION TO HER CO-OP HAS WANED Glenn Close is putting her two-bedroom, two-bathroom apartment in the Beresford at 211 Central Park West on the market for $11.8 million, according to the New York Post. Rock Hudson – if the walls could talk - once owned the 19th-floor residence. Current neighbors include Jerry Seinfeld, John McEnroe and Vikram Pandit. The Close apartment features a fireplace, two terraces and a maid’s room. The actress also has a place at 140 Charles St. in Greenwich Village as well as homes in Bedford, N.Y. and Palm Beach, Fla. WHERE’S THE BEEF? IT WAS HERE Restaurateur and celebrity chef Charlie Palmer is asking $11.5 million for the five-story Manhattan townhouse that housed his former apartment as well as his first restaurant, Aureole, says the Wall Street Journal. The 21-foot-wide Upper East Side townhouse is zoned for living and working. (Aureole moved to a bigger space in June.) The first three floors and the basement comprise restaurant, office and prep space. The fourth floor is split into two apartments and the fifth is a 1,220-sf one bedroom unit with a terrace. The third floor also could be used as residential space. Palmer, 50, bought the building in 1987 to open Aureole. He lived on the fifth floor until the early 1990s. "It was a little too close to work,” he concedes. “You'd find yourself never leaving the building.” HOUSING STARTS SLIP BELOW DECEMBER, RISE ABOVE 2008 New home construction in December was 4.0 percent below the revised November estimate but 0.2 percent above the December 2008 rate, reports the U.S. Department of Housing and Urban Development. Single-family housing starts last month fell 6.9 percent below November. But issuance of building permits was 10.9 percent higher than the prior month and 15.8 percent above the year earlier. Single-family permit authorizations were 8.3 percent above the November figure, but multi-family permits dropped 36.9 percent below December 2008. FED SEES LITTLE CHANGE IN HOME PRICES SINCE DECEMBER Homes sales increased toward the end of 2009 in most Federal Reserve districts, the Fed said in its January Beige Book," which consists of reports from various observers. FORECLOSURES JUMP 21% OVER ONE YEAR RealtyTrac says default notices, scheduled foreclosure auctions and bank repossessions were 21 percent higher than in 2008 and 120 percent more than in 2007. The company’s latest report also shows that 2.21 percent of all U.S. housing units (one in 45) received at least one foreclosure filing during the year, up from 1.84 percent in 2008, 1.03 percent in 2007 and 0.58 percent in 2006. Said CEO James J. Saccacio: “After peaking in July with over 361,000 homes receiving a foreclosure notice, we saw four straight monthly decreases driven primarily by short-term factors: trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline.” But there was a “substantial” increase in December, he remarked, adding that “a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond as lenders gradually work their way through the backlog.” SAN DIEGO HAS STEEPEST PRICE DROP ON FORBES LIST Prices of single-family homes are dipping nationwide and will inch perilously close to their January 2009 bottom, according to a new report from the Altos Research firm. The San Diego Metropolitan Statistical Area (MSA) has seen the greatest three-month drop in asking prices of the 27 markets that Altos tracks; the decline was 7.3 percent between October and December. Altos' numbers, which omit apartments, reflect an unsteady market in general, according to Forbes. Its 10-city composite, which it uses as a proxy for the national market, shows a 1.4 percent drop since October. "The combination of an expired tax credit and rising interest rates would be a catalyst for re-testing the bottom," said CEO Mike Simonsen of Altos. Most markets have seen price drops of less than 3 percent, but analyzing whole metropolitan regions and excluding apartments distorts the numbers. In New York City, Altos found that home prices fell by 2.3 percent in the last quarter, to a median of $638,082, contrary to reports by the big brokerage firms here. “But there may be trouble in store for the Big Apple, which peaked late and whose real estate market was more directly affected by the Wall Street implosion of late 2008,” Forbes contended. “Its inventory of listed homes has increased by 4.2 percent since October.” MANY CONSUMERS DOWNPLAY ORGANIZED SOCIAL ACTIVITIES New survey results from the National Association of Home Builders (NAHB) and the MetLife Mature Market Institute compare the preferences of individuals 55 to 64 years old with those of the 65-plus group. The institute’s research director, John Migliaccio, says it was “very telling” that the younger group reported enthusiastically their desire for services such as home maintenance and repair as part of their next home purchase along with services typically sought by older homeowners such as housekeeping, onsite health care and transportation. He adds that the foregoing desires were ranked higher than the one for organized social activities. That find was a surprise, according to Migliaccio. Moreover, the younger age group showed more interest in technology-heavy features, while the older group expressed a stronger preference for a single-story floor plan or one with a first-floor master bedroom and a variety of universal design features. FOREIGN INVESTOR INTEREST MAY HINT AT U.S. RECOVERY Foreign investors in real estate say they remain committed to the U.S. as their preferred real estate investment opportunity. BUILDER CONFIDENCE SLIDES TO 7-MONTH LOW Builder confidence in the market for newly built, single-family homes declined one point on continuing concerns about the poor job market and large number of foreclosed homes for sale, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The January HMI fell one point to 15 (on a scale of 100), its lowest point since June of 2009. Consumers are waiting to see significant positive signs of improvement in employment and confidence, said Chief Economist David Crowe of the Home Builders group. "Meanwhile, competition from foreclosed homes is also severely impacting new-home sales,” he noted. “That said, expected improvement in the job market this spring will help propel the housing recovery as we head into the prime home buying season." Some Sellers Just Don’t Get It Not only do many sellers frequently fail to understand market dynamics, but their failure to do so means they won’t get the price of their dreams. A perfect case in point is a 975-sf two-bedroom, one bath co-op in the low 80s within sight of Central Park that has an asking price of $810,000 with monthly maintenance of $1,133. So far, so good. There are Brazilian flooring, high-end washer/dryer, two exposures (with fair views), oversized windows, plenty of closets, a large foyer with built-in bookcases, and additional storage. Now for the bad news. What this place doesn’t have is a second bath, impressively updated kitchen and bath, or high ceilings. Moreover, both the kitchen (55.5 square feet) and the second bedroom (84 square feet) are depressingly small. And that lone bath, conveniently situated next to the kitchen, is so tiny that its dimensions aren’t even given. The building itself is unexceptional, and its architecture leaves much to be desired among the charming pre-war buildings that surround it. Constructed in 1947, it has a full-time doorman and a bicycle room. Pets are permitted only with board approval. Any hope that the owners might have of selling for $810,000 will prove to be empty. That’s because they bought the place in June of 2007 for $829,000 in an overheated market. Wouldn’t you know that was the original offering price when the sellers put the unit on the market in November with visions of almost breaking even dancing in their heads. Proving their reluctance to accept the reality of a tepid market, they cut the price about all the way down to $810,000 a month later. They are the running behind the market with such a small reduction. In fact, they are not even in the same race as every other property available for purchase. Below are other recently visited properties that are listed by various brokers: Upper West Side
Elsewhere
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Exceptions were San Francisco, where demand for housing has been steady, and Kansas City, where residential real estate activity has eased since the December book (which isn’t really a book). In New York, Richmond, and Atlanta, residential real estate activity was described as mixed. In the Atlanta district, existing home sales increased, but new home sales decreased. “In all districts, sales of lower-priced homes tended to increase proportionately more than sales of higher-priced homes, due at least in part to the first-time buyer federal tax credit, according to real estate contacts,” the document related. “In several districts, real estate contacts reported that the original expiration date for the credit boosted sales in November and led to a more than usual slowdown in sales in December.” However, some Fed contacts were said to have noted that the extension of the credit into 2010 could give an added impetus to the expected seasonal sales upturn this spring, the Fed continued. Residential construction activity remained at low levels in most Districts, although home building was reported to have increased in the Chicago and Minneapolis districts.
