SALES, PRICES BOOMED IN FIRST QUARTER, SAYS NEW REPORT The total dollar value of residential real estate sales in the city increased more than 63 percent compared with the first quarter of 2009, according to a report originated by the Real Estate Board of New York (REBNY). Sales volume grew as well, by 52 percent. But the number of sales transactions fell by 12 percent from the fourth quarter to the first. "Typically, the first quarter has slower sales activity than the last quarter of the year," commented REBNY President Steven Spinola. "I think this decline is an indication that we are returning to a more normal and healthy market and the unusually harsh winter we had. The growth in sales volume we have seen over the last year reflects a real positive trend and the worst is behind us." Spinola predicted a continued rise in sales. Of the $7.2 billion in total sales value for New York City in the first quarter, Manhattan sales constituted 56 percent; Brooklyn and Queens 17 percent; Staten Island, 7 percent; and the Bronx, 3 percent. Average home sales prices city-wide (cooperatives, condominiums and one-to-three-family dwellings) rose by 4 percent quarter to quarter, and 7 percent year to year. The average sale price of a home was $704,000, up 7 percent compared in a year, while it was off 5 percent, to $1,360,000, in Manhattan alone. For the full report visit the ResidentialNYC or REBNY sites. BROKERS PERCEIVE A SEASONAL BUYING SURGE, BUT NO PANIC The spring selling season in Manhattan is off to the strongest start in two years, according to major real-estate brokerage firms, the Wall Street Journal reports, adding that prices are sluggish. Spring is traditionally the busiest selling season and sets the tone for the rest of the year. Last year, brokers said there was no spring season to speak of, and sales were the weakest in a dozen years. Flashy new condominiums went months without ringing up a sale and when apartments did sell, they sold at a steep discount. But, says the publication, psychology has shifted this year as fears of recession fade, Wall Street bonuses make a comeback and stock prices rally. Still, brokers said they don't sense market frenzy and buyers are trying to be careful not to overpay. FEWER BUYERS SEEK LEGAL ESCAPE FROM CONDO CONTRACTS After tripling last year, the number of refund filings shrank to 43 in the first quarter, reports Crain's. According to data from state Atty. Gen. Andrew Cuomo's office, 475 complaints were filed in 2009 for condo-deposit refunds in contrast to the 168 requests filed in the same period one year earlier. At the latest rate, the number would reach approximately 172 complaints in 2010. "The era of wanting a deposit back is ending," said Adam Leitman Bailey, a real estate attorney. "That's because hardly anybody has signed new contracts in the last year." WITH SALES UP, SOME BELIEVE PRICES WILL DECLINE ANYWAY Home-sale activity has been picking up in communities across the New York metropolitan area. However, some economists believe that prices, which declined during the fourth quarter in most areas, will continue to move lower, says the Wall Street Journal. "Although affordability has been restored to a great degree, prices are still high relative to household income," said David Stiff, chief economist at Fiserv Case-Shiller, a financial-services firm. "We haven't returned to equilibrium yet," according to the economist. He added that the expiration of the federal tax credit for first-time home buyers, which ends today, also will weigh on prices. "We expect that prices will drop by a little bit more and will stabilize a little bit later than for the U.S. as a whole," according to Stiff. In his view, the region’s more expensive areas will experience less dramatic price declines than less expensive markets. HOUSING MARKET REBOUNDS ON LONG ISLAND'S EAST END There were 486 sales in the first quarter, 141.8 percent more than the same quarter of last year but 13.8 below the previous quarter, which attained a two-year high, reports the Miller Samuel appraisal firm. Although there were sharp gains in the number of sales, up from levels not seen in at least six years, listing inventory rose. There were 2,318 listings, up 1.3 percent from the same period last year and 7.4 percent from the last three months of 2009. The average sales price of an East End home leaped 42 percent to $1.57 million, up from $1.1 million in the first quarter of 2009. The median sales price, $800,000, showed a similarly dramatic uptick of 32 percent from the prior-year-quarter. The increases reflect the return of high-end sales to the market rather than a surge in individual home prices, said CEO Jonathan Miller. There were 28 sales above $5 million on the East End in the first quarter, up from only seven in the same period a year earlier. In the Hamptons, the average price was $1.75 million in the first quarter, up 33.5 percent from that period of 2009. "Rising inventory could be a concern going forward," Miller remarked. NEW REBNY GUIDELINES SEEK TO IMMUNIZE CO-OP BOARDS Aiming to "minimize board liability" and "define the appropriate roles of the co-op board and the agent," the Real Estate Board of New York has issued guidelines for co-op boards that specify application requirements and an explanation of how to reject and accept hopeful buyers. The organization recommends designating one or two individuals to receive and review the full application package, with the rest of the board or committee getting just the summary tax return pages without the supporting schedules. It further suggests having the packages submitted on a password-protected flash drive or CD to be read on board members' computers or setting up a secure website for applications. WITH ENOUGH DOUGH, ANYTHING IS POSSIBLE Rebeka Mercer, a daughter of hedge-fund manager Robert Mercer and co-owner with her sisters of an upscale Midtown baker, and her husband Sylvain Mirochnikoff have spent the last 16 months and more than $28 million buying six adjoining units in the 41-story Heritage at Trump Place on the Upper West Side, says the Wall Street Journal. Combined, the units as currently configured could create a triplex with 17 bedrooms taking up most of floors 23 through 25. Floor space totals 13,962 square feet, more than twice the size of Gracie Mansion and about a quarter the size of the White House. No plans had been submitted as of last week for renovations of the units. Family money funded the buys. Michigan lawyer Ron Sabo, who sold one of the units to Mercer and her investment banker husband, says she once told him that they planned to use the 24th floor for the family's living space and the 25th floor for entertaining. "To be happy," Mirochnikoff allows as his sole comment, "it's better to live out of the public" eye. RESIDENTIAL PERMITS PLUNGE IN 2009, OFF TO SLOW START IN 2010 A New York Building Congress analysis of U.S. Census data finds that the New York City Department of Buildings issued residential permits for just 6,057 units in 1014 buildings in 2009, an 82 percent decline in units from 2008. The previous low for the decade was the year 2000, when residential permits were issued for 15,050 units. The declines were most pronounced in Brooklyn, followed by Manhattan. In January and February 2010, 463 units were permitted throughout the five boroughs versus 576 units in the first two months of 2009. The cost of construction per unit in 2009 rose to $114,013 from $90,215 in 2008, the first time it topped $100,000 for a year and likely because of a tilt toward higher-end units. FOREIGNERS ARE INVESTING IN COMMERCIAL BUILDINGS AGAIN Foreign investors are leading the way as New York's commercial real-estate sales market shows signs of coming back to life, says the Wall Street Journal. German, Mexican and Israeli investors have won the bidding in many of the most high-profile deals over the past 12 months. For example, GLL Real Estate Partners of Munich recently paid $41.9 million for about 14,000 square feet of retail space in a SoHo building designed by Pritzker Architecture Prize-winning architect Jean Nouvel. Meanwhile, Mexican billionaire Carlos Slim is under contract to pay $140 million for an 11-story New York City office building at 417 Fifth Ave., according to a person familiar with the matter. And last year Israeli investor IDB Group paid $330 million for HSBC Holdings PLC's New York office tower. "Safety is often something foreign buyers are looking for," while "some domestic money may be more opportunistic," said Matt Bronfman, managing director of Jamestown Properties, a private-equity firm in Atlanta that buys U.S. real estate on behalf of German investors. RENTAL MARKET STARTS TO STRENGTHEN Rents are beginning a slow climb, having risen 1.10 percent in April since March and 0.27 percent above 2009 numbers, according to the Real Estate Group NY. In addition, some landlords have already begun to pull incentives in preparation for the summer months. "These are both positive indicators that the market is finally gaining strength," the firm said. Yet vacancies are up 1.17 percent across Manhattan, creating some doubt as to the sustainability of the rent upticks. In buildings without doorman units, rents rose 3.61 percent. Non-doorman two-bedroom units continued to be the weakest category, with rents down 0.36 percent from March and 1.38 percent versus 2009. APTHORP CONVERSION DRAW'S CUOMO'S ATTENTION The New York attorney general's office is taking a close look at plans to convert the Apthorp apartment building, Assemblywoman Linda B. Rosenthal tells the New York Times. The attorney general must sign off on all co-op and condominium conversions, but Rosenthal and unnamed officials say that Atty. Gen. Andrew M. Cuomo's office is conducting an unusually detailed review of the Apthorp, a 165 -unit building that is a city landmark occupying an entire block at Broadway and West 79th Street. It is not clear whether the inquiry is a sign of potential problems with the conversion or merely an indication of the building's high profile - a number of celebrities, including Al Pacino, Rosie O'Donnell and Nora Ephron have called it home - and its highly mobilized tenants' association. The building's developer, Apthorp Associates, says it met the threshold of 15 percent sales, but the attorney general's office has been interviewing would-be buyers to make sure they are legitimate purchasers who plan to live in the apartments. AREA BUYERS HAVE EASIER TIME GETTING JUMBO MORTGAGES Obtaining a jumbo mortgage is becoming a little easier for home buyers in the New York area, according to the Wall Street Journal. Jumbos in the tri-state area are mortgages that exceed $729,750. "The rust has slowly been shaken off as banks re-learn how to do portfolio lending," says Keith Gumbinger of HSH Associates, a financial publisher. Even though the crisis has made credit guidelines more stringent, "there is definitely more money available," observes Melissa Cohn, president of Manhattan Mortgage Co. Moreover, rates on jumbo loans have also fallen to their lowest levels in years. Last week, the average 30-year fixed-rate jumbo loan carried a 5.76 percent rate, just above the all-time low of 5.55 percent in June 2003, according to HSH Associates. Hybrid" adjustable-rate mortgages that carry a fixed rate for the first five years are now as low as 4.25 percent, down from 5.25 percent one year ago, says David Adamo, chief executive of Luxury Mortgage Corp., a mortgage bank in Stamford, Conn. "The availability of money has improved and the price of that money has improved," Gumbinger adds. "No one would characterize it as great, but slowly but surely, things have been getting better." KENNEDY SCHOOL ECONOMIST FROWNS ON HISTORIC DISTRICTS The Kennedy School's Edward Glaeser recently published in City Journal an article that was highly critical of these restrictive districts in New York, arguing that they drive up prices and increase income stratification by limiting housing development, says the Observer. At NYU's Wagner School, he attacked Jane Jacobs' idealization of preservation, which held up low-rise and historic Greenwich Village as a model urban neighborhood. "I think of this is as where Jane Jacobs was wrong,” the economist declared. “Jane Jacobs had a very Greenwich village-based vision of what urbanism was like. Greenwich Village is terrific, but it's not the only urban model." Glaeser said there was “no reason why high densities are somehow destructive” to urban life. “And she's also dead wrong when she thought that preserving older buildings was going to make sure that affordable housing was possible. It's actually the opposite,” he continued. “She got her economics completely wrong. Stopping the construction of new buildings is how you make sure that buildings are expensive." LOW RATES ARE LITTLE CHANGED THIS WEEK The 30-year fixed-rate mortgage (FRM) edged down to 5.06 percent for the week from 5.07 percent the prior week, Freddie Mac reports. Last year at this time, it averaged 4.78 percent. The 15-year FRM was unchanged at 4.39, but was lower than 4.48 percent a year ago. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) slipped to 4.00 percent from 4.03 percent the prior week and 4.80 percent one year earlier. The one-year Treasury-indexed ARM averaged 4.25 percent, up from last week's 4.22 percent and below last year's 4.77 percent. "Mortgage rates on 30-year fixed loans have averaged about 5 percent over the first four months of this year, staying within a band of roughly a quarter percentage point and virtually matching 2009's annual average," said Chief Economist Frank Nothaft. "These low rates have been helping to moderate house price declines over the course of the year." THE DEPARTMENT OF DUBIOUS DISTINCTIONS GETS CROWDED The New York City region was the nation's leader for mortgage fraud in 2009, according to a report by LexisNexis Mortgage Asset Research Institute (MARI). The report finds that 12 percent of the 67,190 Suspicious Activity Reports (SARs) filed with the Financial Crimes Enforcement Network in 2009 were from the New York metro area. New York's rise to the top of the pile came amid a surge in such cases last year. "The data suggests that in 2009 there was a 7 percent increase in the number of incidents of fraud reported on top of the 26 percent increase reported in 2008," said Jennifer Butts, MARI manager of data processing and report co-author. "While this is a noticeable increase, we believe that mortgage fraud is significantly understated." Application misrepresentation - which represented 59 percent of all reported fraud types - was the most common type of fraud in 2009 for the sixth consecutive year. Appraisal and valuation misrepresentation grew to 33 percent in 2009 from 22 percent in 2008. TAX CREDIT PROGRAM PUSHES UP PURCHASE-LOAN ACTIVITY
FORECLOSURE ESTIMATES ARE ALL OVER THE LOT Analysts at Barclays Capital estimate that banks and mortgage investors including Fannie Mae and Freddie Mac owned 480,000 homes at the end of February, says the Wall Street Journal. Under the bank's previous methods, the estimate for February would have been more than 600,000. But RealtyTrac, another data provider and one of the few other firms that regularly makes such calculations, puts the number at 758,000 foreclosed homes. Barclays explains that it has acquired more data on mortgages and refined its methods for analyzing foreclosure trends. According to housing economist Tom Lawler, the total is more than 550,000 but probably below than the RealtyTrac estimate. FORECLOSURE ACTIVITY IS 16% HIGHER THAN A YEAR EARLIER RealtyTrac reports that cities in California, Florida, Nevada and Arizona once again accounted for all top 20 foreclosure rates in the first quarter among metropolitan areas with a population of at least 200,000. At the same time, the majority of those top metros reported that foreclosure activity fell from the first quarter of 2009. Foreclosure activity declined on a year-over-year basis in 14 of the cities in the top 20 and in eight of the cities in the top 10. In contrast, foreclosure activity in the first quarter increased on an annual basis in 159 of the 206 metro areas tracked in the report, and foreclosure activity nationwide increased 16 percent from the first quarter of 2009. NEW DISCLOSURE REGS STYMIE LENDERS In a survey of 3,000 of mortgage and banking customers of Equifax, only 56 percent of the 105 respondents who answered all the questions have adapted to new RESPA requirements and implemented all necessary technology for compliance. The new Real Estate Settlement Procedures Act (RESPA) regulations mandate that lenders and brokers provide customers with a standard Good Faith Estimate (GFE) that clearly discloses all loan terms and closing costs. Closing agents then must provide borrowers with the new HUD-1 Settlement Statement that clearly compares consumers' final costs with the originally quoted costs. Beginning May 1, the final price for several services, including the credit report, must be within 10 percent of the quoted price or lenders may face penalties. Approximately 72 percent of respondents stated that they are seeing borrowers confused about the multiple sets of documents they receive for disclosure and 79 percent say it now takes longer to take an application and disclose to the borrower. SHILLER PEERS INTO CRYSTAL BALL, BUT FORECAST IS HEDGED Robert Shiller, the Yale economist who co-created the S&P/Case-Shiller indices, tells the Motley Fool that unusual circumstances such as the Fed's purchase of mortgage-backed securities makes him distrust the current housing trend. "I'm worried that it might get reversed," he said in an interview. Asked whether he envisions a double-dip in the housing market, he conceded that it was "hard to quote probability." Said Shiller: "If you just looked at the trend of home prices, you might conclude the probability is very low. We're less than a year into this boom, and booms have lasted much longer than that. That's why it's very hard to compute probabilities. But I think that it doesn't look real. It doesn't look like this is really another boom like the one that we had in the 2000s." HOUSING MARKET IS STABILIZING, HAMPERED BY INVENTORY Housing is stabilizing, but excess inventory and shadow supply are hindering recovery, according to Fannie Mae economists. Their outlook projects economic growth of 3.1 percent for all of 2010, notwithstanding the recent dip in growth for the first quarter. However, Chief Economist Doug Duncan said that "significant improvements in the labor market and consumer spending will be the big hurdles as we move toward recovery in the housing market and broader economy." He added that "we see key indicators for existing home sales, including pending home sales and purchase applications, are showing good signs of a pickup." BILLIONAIRE FROM THE MORTGAGE MELTDOWN NOW IS BULLISH John Paulson, the hedge-fund manager famous for betting against mortgage securities, is now bullish on the U.S. housing market and the economy, says MarketWatch. House prices have stabilized and could climb 8-10 percent in 2011, he said in a conference call with approximately 100 investors. RESPECTED ANALYST SAYS THE WORST IS OVER Metrostudy founder Mike Castleman tells Fortune that the excess inventory of both finished homes and DATA FIRM OFFERS LOWER FORECAST THAN LAST MONTH'S First American CoreLogic says it expects a softer housing recovery than in its previous forecasts. The mortgage data firm, which issues a monthly LoanPerformance Home Price Index (HPI), says it now expects inventory to rise with the expiration of tax credits and slower than expected sales over the winter. "Collectively, these effects act to contract demand (put downward pressure on prices)," the firm observed. After a "modest" increase this spring and summer, CoreLogic projects a decline in the national single-family combined index of 3.4 percent from February 2010 to February 2011. Twenty-nine of the 45 largest Core Based Statistical Areas (CBSAs) are projected to experience continued price depreciation on a year-to-year basis, according to the current forecast, the firm now says. That number compares with only 14 out of the 45 in last month's forecast. See tables and additional details on the Service You Can Trust blog. BUILDERS NOW BATTLE EACH OTHER TO STOCK UP ON LAND Across the U.S., home builders are battling to acquire land lots in preparation for ramping up home construction, says the Wall Street Journal. While volume is tough to track, analysts report that land deals have been rising rapidly in recent months, causing land prices in some of the nation's weakest housing markets to rise for the first time since 2006. "There's been an absolute land rush," said Gregor Watson, a partner with McKinley Partners, a California-based real-estate fund that works with builders. That marks a big shift from the downturn, when builders halted development and liquidated land for pennies on the dollar. Now the companies are spending millions of dollars to boost their land supply, optimistic that sales will pick up once the employment picture improves. But the push is creating some concerns about whether builders could be overreaching. MAN FINDS WAY TO GET RICH QUICK With some 16,000 ticket holders anxiously waiting for the raffle of a lifetime, Nassau County's district attorney announced that she's going after the man behind the raffle of a Massapequa waterfront home, reports CBS News. "He took upwards of $800,000 and the auction was never held, so we're getting to the bottom of this," said Dist. Atty. Kathleen Rice. Although tickets went for $50, the auction hasn't occurred eight months after they went on sale. "It appears as if maybe this was never going to be an auction and was a pure scam," Rice said. The five-bedroom, four-bathroom house is owned by John Luongo, who said in August that he lost his job and was unable to sell the home, so decided to raffle it off instead. Luongo postponed the raffle multiple times because he said the 10,000 tickets he sold covered only half of his costs. Now, Luongo has called off the raffle entirely and claims to have refunded 10,000 ticket holders, but many say they haven't seen the money. Home raffles are illegal in Nassau County, except when conducted by a charity. PRICES AND SALES IN MEXICO PLUMMET The years-long trend of Americans buying homes and expatriating to Mexico has collapsed, done in by the recession, swine flu and an epic crime wave, according to CNNmoney. The drug wars especially have bit into the housing market in Mexico," said Tom Kelly, a follower of Mexican real estate trends and author of "Cashing In on a Second Home in Mexico." Information on prices of homes being sold to expatriate Americans is sketchy, but Kelly estimates overall declines at 20-30 percent since the peak. In the high-crime communities close to the U.S. border, the drop has been even steeper, perhaps 40 percent or more. 3,500-ACRE RANCH SETS U.S. RESIDENTIAL RECORD THIS YEAR Texas energy executive Kelcy Warren has bought a roughly 3,500-acre Colorado ranch for $46.5 million in what brokers believe to be the biggest residential sale in the U.S. this year, says the Wall Street Journal. Near Pagosa Springs – you don't where that is? - the ranch has acres of meadows and forests, plus lakes, seven miles of river and an 82-foot-long pool. There's an almost 14,000-sf log cabin-style main residence plus several guest cabins and a glass lodge with a retractable roof for spa activities. The ranch originally was listed for $88 million two years ago and, more recently, $68 million. The sale price beats the $43 million paid by New York money manager Lewis A. Sanders for a 10-bedroom contemporary and guest house in Aspen last summer, a transaction believed to set the U.S. record last year. LATE DESIGNER'S PARIS DUPLEX IS LISTED AT $31.4 MILLION Pierre Bergé, longtime partner of Yves Saint Laurent and president of the Pierre Bergé-Yves Saint Laurent Foundation, has put their 5,200-sf Paris apartment on the market at an asking price of €23.5 million, or $31.4 million, says the New York Times. The unremittingly elegant duplex in the heart of the Faubourg Saint-Germain has 11 rooms, a 4,700-sf garden and the late couturier's signature colors. Saint Laurent and Bergé moved into the place in 1970 and bought it eight years later. "The interiors have very beautiful proportions," said renowned French decorator and YSL friend Jacques Grange. "The salon is immense - and the oak paneling and windows framed in black bronze are the best of Art Deco." To Grange, "It is the apartment of an aesthete. I understood why Yves took it in five minutes. It was really meant for him." DESIGNING MEN LIST CURRENT HOME, PLAN NEW SHELTER Jonathan Adler and Simon Doonan, the creative director of Barneys New York, are asking just under $1.8 million for their beach house in New York's resort community of Shelter Island, says the Wall Street Journal. The couple bought the place for $185,000 in 1998 and gut-renovated it. The 1,300-sf, mid-century modern house has cathedral ceilings in the double-height great room. The half-acre property, north of the Hamptons, comes with a veranda and a 75-foot-long pool. Much of the décor, sourced heavily from Adler's collections, also is for sale. In 2008, the couple paid $1.9 million for a 1.4-acre property on the other side of the island and now plans to move early this summer into a home they're building. TWO IN THE CITY PUT CHELSEA CONDO ON THE MARKET The actor Kyle MacLachlan and his wife Desiree Gruber, an executive producer of "Project Runway," have put their apartment up for sale, reports the New York Times. They are asking $2.875 million for a three-bedroom condo at the Chelsea Mercantile, at 252 Seventh Ave. and 24th Street. WILL SHE BE LOST WITHOUT HER CONDO Since she recently got married, actress Yunjin Kim, who stars in a certain ABC series, has sold her Honolulu condominium for $621,000, records show, according to the Wall Street Journal. It had been listed at $575,000. In a high-rise building in downtown Honolulu's Financial District, the condo has two bedrooms, two bathrooms and ocean views. In 2005, Kim purchased the condo in a building with pool and gym. THIS APARTMENT OFFERS A TOUCH OF CLASS The Park Avenue apartment where Louis Auchincloss, critical chronicler of the upper crust who passed away in January, is on the market for $3.9 million, according to the Observer. The high-floor, three-bedroom unit at 1111 Park Ave. has north and east exposures, prewar moldings a need of updating. HE IS WHAT HE IS Kelsey Grammer is adding some glamour to master-of-the-universe-heavy 15 Central Park West, notes the New York Post. While co-starring in "La Cage Aux Folles," he has rent a 2,500-sf three-bedroom condo for slightly less than its $29,000-a-month asking price. WOULD YOU LIKE A PAIR OF SHOES WITH THAT APARTMENT
SO HE KNOWS SOMETHING ABOUT MONEY AFTER ALL Former Treasury Secretary Henry Paulson has listed his three-bedroom house off Massachusetts Avenue in Washington for $4.6 million, says the Washington Post. He bought the three-bedroom dwelling, which sprawls down a wooded slope, for $4.3 million almost four years ago. A previous occupant was someone of whom you've also heard: Jon Corzine. Paulson and his wife Wendy are said to be moving back to the Chicago area, where he grew up and spent much of his Goldman Sachs career. There are two half-baths, huge windows, stone patio and fountain. Adjacent to a park, the home was built in 1940 and gut-renovated in 2001, adds the Wall Street Journal. The Paulsons, both nature enthusiasts, have bought over the years 7,500 acres of an island off Georgia's coast, paying more than $32 million. The couple also maintains a home on five acres in Barrington, Ill., part of a farm where Paulson grew up. THEY’RE NESTING DUE SOUTH OF THEIR HOMELAND Canadian actor Paul Gross, best known for starring role in the Paul Haggis television series “Due South,” bought a converted commercial loft space on the Lower East Side with his wife Martha Burns, an actress who also is Canadian. The couple, who have two children, bought the three-bedroom, fifth-floor apartment at 62 Orchard Street for $2.2 million from Smart Design engineer Eric Freitag and his artist wife Jil Weinstock; they had bought the loft space completely raw and abandoned for $275,000 in 1998. WALL STREET DYNAMO'S WIDOW ASKS DYNAMITE PRICE FOR CO-OP Bruce and Claude Wasserstein paid close to $35 million for a 7,000-sf duplex penthouse at the old Stanhope Hotel, 995 Fifth Avenue, a couple of years ago, the Observer recounts. It was listed for $47.5 million then. Now: $65 million. HAVING MOUTH AND SOMEONE’S EAR, HE’S SOLD HIS D.C. DIGS Karl Rove is in contract to sell his five-bedroom Washington D.C. home, which had been listed for $1.59 million, reports the Wall Street Journal. The name of the prospective buyer couldn't be learned, and a person familiar with the transaction said the sale price was close to the asking price. Rove and his wife Darby bought the three-level brick house for $799,000 in 2001. The Federal-style residence in the northwest suburban neighborhood of Kent was built in 1968 and has several fireplaces, a formal dining room, a patio and a yard. Rove divides his time between Washington and Austin these days, according to a spokeswoman, who declined to comment further. BUYING CAN BE A GOOD ALTERNATIVE TO RENTING IN SOME AREAS "In some once bubbly markets, prices have fallen so far that buying a home appears to be a bargain," says the New York Times, basing its analysis of prices and rents in 54 metropolitan areas. In South Florida, Phoenix and Las Vegas, house prices relative to rents are as low as in places that never experienced a bubble such as Indianapolis and St. Louis, writes David Leonhardt. "But in a handful of other areas, including San Francisco, Seattle and Portland, Ore., house prices remain significantly higher than they were before the bubble began. People who buy a home in these areas will face higher monthly costs than if they rented, even after taking tax deductions into account." In New York and Los Angeles, Leonhardt says, average house prices have fallen enough that buying may now be a good deal for many families. "Yet there are still significant pockets where renting looks promising - including parts of Manhattan, the New York suburbs and Orange County, Calif.," he observes. And the cost difference between buying and renting is as narrow as it has been since 1993, according to a study on homeownership by Marcus & Millichap Real Estate Investment Services for the Associated Press, reports Realtor magazine. In 45 metropolitan areas, the study concluded that the gap between a monthly payment on a median-priced home and median rent on a similar property is on average $256. RESALE OF HOMES IN MARCH RISES 6.8 PERCENT The number completed sales of single-family homes, townhomes, condominiums and co-ops was 6.8 percent higher in March than in February, according to the National Association of Realtors. Boosted by the tax-credit deadline, the total was 16.1 percent above March 2009. "The big question is what happens after April," Steven Blitz, a Majestic Research economist, told the New York Times. "We know sales will go back down again." Inventory rose 1.5 percent to an 8.0-month supply at the current sales pace, down from an 8.5-month supply in February. The median price for previously owned homes was $170,700 in March, up 0.4 percent from March 2009. Sales of distressed homes, typically sold at a 15 percent discount, were unchanged at 35 percent of the volume. Single-family home sales were 7.3 percent greater than February and 13.3 percent more than a year ago. The median existing price was $170,700 in March, up 0.6 percent from March 2009. Five metro areas experienced double-digit price increases, including San Diego, St. Louis and Boston. Existing apartment sales increased 3.1 percent over February; they were 39.3 percent higher than one year earlier. The median was $170,600, 0.7 percent lower than March 2009. NEW-HOME SALES SKYROCKET IN MARCH
MANY HOMES REMAIN ON THE MARKET, THE JOURNAL SAYS The Wall Street Journal's latest quarterly survey of housing-market conditions in 28 major metro areas found that inventories of homes for sale, as well as the number of distressed borrowers, remain very high in many metro areas. Despite the effects of tax credits, "we're still in a very fragile housing market," said Ivy Zelman, chief executive of Zelman & Associates, a research firm, who doesn't expect a full recovery before 2013. The Journal survey found that Miami, Orlando, Tampa, Las Vegas, Phoenix and Atlanta have some of the highest concentrations of distressed borrowers at risk of losing their homes. The supply of homes already on the market is well above the national average in Charlotte, Jacksonville, Nashville, Chicago and Philadelphia. Among metro areas with relatively low rates of delinquent borrowers and for-sale inventories: Boston, Denver, Dallas, Houston, Minneapolis, San Francisco and Washington, D.C. CASE-SHILLER REPORTS PRICES TURNING UP – ON AVERAGE The S&P/Case-Shiller Home Price Indices, which do not include apartment sales, show that the annual rates of decline of the 10-City and 20-City Composites improved from January to February. For the first time since December 2006, the annual rates of change were positive. The 10-City Composite was up 1.4 percent from where it was in February 2009 and the 20-City Composite, 0.6 percent. However, 11 of 20 cities saw year-over-year declines. Only Dallas and Portland, Ore., failed to post improvement from the previous month. As of February average home prices were at levels similar to late summer/early autumn of 2003. From their peak in June/July of 2006 through the trough in April 2009, the 10-City Composite was down 33.5 percent and the 20-City Composite, 32.6 percent; the peak-to-date figures were -30.7 percent and -30.3 percent respectively. San Diego was the only market that continued to show improvement in home prices between January and February. All other metros and the two composites showed declines from their January levels, with 12 of the metropolitan statistical areas (MSAs) falling by at least 1.0 percent during the month. Charlotte, Las Vegas, New York, Portland, Seattle and Tampa posted new index lows. The two latest markets to post new index lows, New York and Portland, showed peak-to-February declines of 21 percent and 23.0 percent, respectively. "While the year-over-year data continued to improve for 18 of the 20 MSAs and the two Composites, this simply confirms that the pace of decline is less severe than a year ago," said S&P executive David M. Blitzer. "It is too early to say that the housing market is recovering." DATA FIRM ALSO DOCUMENTS INCREASE IN PRICES National home prices, including distressed sales, increased by 0.3 percent in February in comparison with one year earlier, according to First American CoreLogic and its LoanPerformance Home Price Index (HPI). In January, year-over-year prices declined 0.5 percent. Excluding distressed sales, year-over-year prices increased in February by 0.6 percent in contrast to January's drop of 1.1 percent. On a month-over-month basis, the national average home price index was off 2.0 percent from January, possibly because of seasonality. The index was up 0.3 percent from the last year but down 30.6 percent from the peak. House prices fell 4.9 percent from the recent peak in August 2009 (although some of the decline is seasonal). "February's year-over-year increase in the HPI breaks through an important psychological barrier," said Chief Economist Mark Fleming. "While the increase in the HPI is encouraging, expectations for increased inventory as federal housing stimulus expires moderates our forecast for 2010. Prices will continue to bounce along the bottom while inventory levels remain elevated." HOME OWNERSHIP IS AT 10-YEAR LOW The homeownership rate of 67.1 percent in the first quarter was 0.2 percentage points lower than one year earlier and 0.1 percentage point off from the previous quarter, the Census Bureau reported. As for the rental vacancy rate, it rose to 10.6 percent from 10.1 percent a year ago and was 0.1 percent below the previous quarter. NEW SELLERS TEND TO SET HIGHER LISTING PRICES New sellers are pricing their homes higher and home sales activity is increasing in the lowest price segment, according to real estate statistics firm Altos Research, reports the Real Deal. While properties are lingering longer on the market than they were in either 2008 or 2009, price reductions are steadily improving, the firm said. The firm's slide presentation is available here. FUTURE BUYERS UNDETERRED BY END OF TAX CREDIT, SURVEY FINDS In a survey by Prudential Real Estate and Relocation Services, 65 percent of respondents say that the end of tax credits won't reduce their interest in buying a home, according to Realtor magazine. Over the next five years, 79 percent said they expect real estate prices to increase and 20 percent expect prices to rise substantially. Only 12 percent said they thought prices will fall. The suspiciously optimistic research also found that the majority of consumers believe that homeownership is a good investment, with 75 percent saying it is better than stocks or bonds, 72 percent preferring it to mutual funds and 74 percent saying it surpasses savings accounts. REMODELERS EXPRESS INCREASED HOPE According to the latest National Association of Home Builders' (NAHB) Remodeling Market Index (RMI), remodelers' assessment of current market conditions jumped to 47.0 from 36.4 on a scale of 100 in the fourth quarter of 2009. Future indicators of remodeling business leapt to 48.9 from 31.4. A measure incorporating both current and future conditions, called the RMI Index, rose to 47.9 from 33.9. The RMI has been running below 50, the difference between negative and positive expectations, since the final quarter of 2005. The first quarter 2010 is the best showing since the first quarter of 2006. "Although the overall RMI and most of its components are still slightly below the breakeven point of 50, the recent improvements suggest that the remodeling market may soon reach its bottom and begin to grow in the coming months," remarked NAHB Chief Economist David Crowe. "However, professional remodelers are still operating in a highly competitive marketplace and dealing with consumers who are uncertain about the future." Sellers Invariably Pay the Price for Renovating There is one axiom in real estate that sellers rarely get: In a slow market, it normally is all but impossible to recoup the cost of a major renovation. A handsome, stylish and uncommonly appealing one-bedroom apartment exemplifies that truth. At the height of the housing market, the current owners purchased the 850-sf co-op in a distinguished pre-war doorman building for $575,000 in 2007 and then undertook a year-long renovation that set them back significantly in excess of $200,000. They made not a single discernible mistake in doing so – except investing so much money in an apartment they would leave sooner than expected. The one-bedroom unit in the high 80s at West End Avenue possesses no open views, but the northern exposures into an extremely wide courtyard with a lush garden are better than acceptable. If buyers are to find fault with the place, which went on the market Feb. 5, that would be the only one. With 10-foot-high ceilings, the co-op features well-proportioned rooms, a large entry foyer, two enormous walk-in closets, oversize windows, period details and a mostly high-end kitchen that has a dishwasher, apartment-size Viking gas stove with exterior ventilation, filtration system and Shiva Gold granite countertops on a breakfast bar that separates the space from the living room. Other assets of the apartment include new hardwood floors; Miele washer/dryer; and a glamorous bath with frameless glass shower enclosure, onyx accents in the marble-tiled walls and floor and custom vanity with under-mounted sink. The amount of money that the sellers spent, the energy that they poured into the renovation, the emotional investment they made in their design decisions and the quality of their taste are notably evident. But, unfortunately, they are going to lose in a big way. The last one-bedroom unit that sold in the building went for approximately $750,000 – before Lehman Brothers imploded and prices tumbled. The apartment under consideration here is listed for $849,000 with monthly maintenance of $1,015. Do the math: $575,000 plus $215,000 plus closing costs of an estimated $15,000 equals a break-even number of $800,000. Not gonna happen in a market that may be out of the woods but is far from fully recovered. "Make an offer," the listing broker confides hopefully during an open house, conceding that the price was an amount on which the sellers had insisted. It happens that the place went under contract just this week for an undisclosed amount. Whatever sum, there is no doubt that the sellers had to agree reluctantly to a number that will leave them poorer than they wish. It is a pity. The sellers' situation regarding this apartment is far from unique. It explains why the asking price of so many renovated co-ops, condos and townhouses remain stubbornly sticky, including some of those below that have been listed by various brokers and recently visited.
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 Mortgage Bankers Association reports that mortgage loan application volume this week decreased 2.9 percent on a seasonally adjusted basis from one week earlier; on an unadjusted basis, the drop was 1.9 percent. Refinancings fell 8.8 percent, while purchase volume jumped 7.4 percent on a seasonally adjusted basis and reached its highest level since October 2009. Unadjusted, purchase activity increased 8.5 percent compared with the previous week and 2.4 percent, with the same week one year ago. "Purchase activity continues to increase as we approach the end of the homebuyer tax credit program," commented Vice President Michael Fratantoni. "Purchase applications were up almost 9 percent from a month ago, with a disproportionate share of the increase due to government purchase applications. Government applications for purchasing a home accounted for almost 49 percent of all purchase applications last week." The refinance share of mortgage activity declined to 55.7 percent of total applications from 60.0 percent the previous week, its lowest since August 2009. The adjustable-rate mortgage (ARM) share was unchanged at 6.0 percent.
houses under construction has finally evaporated in places from Indianapolis to the California's Inland Empire. But the gains didn't come from what the market needs most: a resurgence in sales showing that Americans are getting optimistic and hence more willing to buy homes again. Cautioning that "this is no comeback," he attributes the improvement to a drop in housing production that's even deeper than the staggering drop in sales." Homebuilding has been so weak, for so long, that a few markets are even suffering from shortages, according to Castleman, and prices will actually rise in some places, including Washington, D.C., and Indianapolis. Prices should be stable in most others, such as Houston, Naples, Fla., Charlotte and Denver, the analyst maintains. "The good news is that builders will need to build a lot more houses than last year to keep up with demand," Castleman says. "That will help the economy by creating jobs."
Fashion's Gucci family is offering a midtown-Manhattan apartment to rent for $60,000 – up, sixty thousand – a . . . month, reports the Wall Street Journal. The recently gut-renovated seven-bedroom penthouse on the 50th and 51st floors of the Olympic Tower across from St. Patrick's on Fifth Avenue, has floor-to-ceiling views of New York Harbor and the Empire State Building. It has two private elevators. Maurizio Gucci, the former head of the fashion house and the grandson of the company's founder, Guccio Gucci, bought the place in the 1970s. He was murdered in Milan in 1995. Today, the apartment is owned by Maurizio's daughters, Alessandra and Allegra Gucci. For the latter, now living in Switzerland, the home is full of happy childhood memories. "It's part of the family," she says, adding that the family often spent Christmas there. Even at the asking price, the apartment is offered unfurnished. As for her treatment of that family member, she did not seem to notice the slight.
Sales of new single-family houses last month were 26.9 percent higher than in February and 23.8 percent above one year earlier, the biggest monthly increase in 47 years, reports the U.S. Commerce Department. The median sales price in March 2010 was $214,000, while the average was $258,600. Months of supply declined to 6.7 in March in comparison with 8.6 months in February and the all-time record of 12.4 months in January 2009. "The near record-breaking 27 percent increase over February was the result of home buyers taking advantage of the tax credit as well as a carryover of demand that was held back by unusually bad weather in February," commented Chief Economist David Crowe of the National Association of Home Builders. He added his expectation that sales would plateau in late spring and early summer. Said he: "Following that, the housing momentum will be carried forward by low interest rates, pent up household formations, excellent affordability conditions and a budding employment growth."
