New York City has been nearly immune to the housing slowdown. And thanks to foreign buyers, that may continue.
In Manhattan, where the median home costs exceed $1 million, prices were actually up 14 percent in the second quarter of 2008 compared with 2007. And prices in desirable suburbs have held steady.
Now home sellers, real estate practitioners, and mortgage lenders are listening uneasily to the bad news from Wall Street, wondering if now is the time that prices will take a nosedive.
“This can't be good, because people are losing jobs," says Ellen Bitton, CEO of Park Avenue Mortgage Group. "Nobody would have ever thought that a Lehman would go out of business."
But some real estate practitioners are dubious that prices will go down. They say an influx of foreign buyers, taking advantage of the weak U.S. dollar, will actually drive prices up.
Wealthy buyers from Italy, Russia, and Great Britain in particular have snapped up properties in recent months, taking advantage of their strong currency compared with the U.S. dollar."
Everybody wants a piece of the city," says Debra Duneier, senior associate broker with Corcoran Group. "People with money will seize the opportunity to buy real estate."
Source: The Associated Press, Alan Zibel (09/15/2008)
Wednesday, September 17, 2008
Thursday, September 11, 2008
Waterfront Markets: The 10 Most Pricey According to Forbes
As Mark Twain might have said, “Buy [waterfront] land; they’re not making any more of it.”
Waterfront properties top Forbes’ list of expensive places to live.
Using Coldwell Banker’s annual Housing Price Comparison Index, Forbes identified the most expensive waterfront neighborhoods. Whether it’s lakeside property in the northern states or riverfront in the Midwest, expect a markup.
Here are the 10 most expensive waterfront markets:
1. La Jolla, Calif., median price: $1.85 million
2. Santa Monica, Calif., $1.65 million
3. Santa Barbara, Calif., $1.6 million
4. Newport Beach, Calif., $1.54 million
5. San Francisco, $1.51 million
6. Boston, $1.5 million
7. Palos Verdes, Calif., $1.3 million
8. Kihei, Maui, Hawaii, $934,950
9. Key West, Fla., $818,239
10. Bellevue, Wash., $814,483
Source: Forbes, Matt Woolsey (09/09/2008)
Now, as those of us know in the Northwest, these numbers seem very VERY wrong! If the median waterfront home in Bellevue is $814,483 then it must be 1980... because traditionally waterfront prices have doubled every ten years. You would be hard pressed to find a waterfront home for under 1.5 million in areas like Rainier Beach let alone West Bellevue! Either way, the prices in the other areas listed are higher than here, but those numbers do not represent the actual statistics for waterfront property, they simply cannot be correct!
Waterfront properties top Forbes’ list of expensive places to live.
Using Coldwell Banker’s annual Housing Price Comparison Index, Forbes identified the most expensive waterfront neighborhoods. Whether it’s lakeside property in the northern states or riverfront in the Midwest, expect a markup.
Here are the 10 most expensive waterfront markets:
1. La Jolla, Calif., median price: $1.85 million
2. Santa Monica, Calif., $1.65 million
3. Santa Barbara, Calif., $1.6 million
4. Newport Beach, Calif., $1.54 million
5. San Francisco, $1.51 million
6. Boston, $1.5 million
7. Palos Verdes, Calif., $1.3 million
8. Kihei, Maui, Hawaii, $934,950
9. Key West, Fla., $818,239
10. Bellevue, Wash., $814,483
Source: Forbes, Matt Woolsey (09/09/2008)
Now, as those of us know in the Northwest, these numbers seem very VERY wrong! If the median waterfront home in Bellevue is $814,483 then it must be 1980... because traditionally waterfront prices have doubled every ten years. You would be hard pressed to find a waterfront home for under 1.5 million in areas like Rainier Beach let alone West Bellevue! Either way, the prices in the other areas listed are higher than here, but those numbers do not represent the actual statistics for waterfront property, they simply cannot be correct!
Tuesday, September 9, 2008
Home Design Gets Inspiration From Hotels
More people are taking their design inspiration from high-end hotels, where they develop a taste for modern Wenge furniture, luxury bedding, candles. and even mood music.''
Today's boutique hotels are quite special,'' says interior designer Susan Stockton, owner of London By Design in Thiensville, Wisc. "They offer a wonderful mood, an almost Zen-like feel.''
Among the elements of modern hotel style in the bedroom: contrasting dark wood paired with white or light neutral bedding; sharp-angled furniture lines mixed with soft pillows; metal accent lamps paired with organic art; oversized headboards and, if space permits, a sitting area.
''It's a simple formula,'' says interior designer Erinn Valencich of Omniarte Design in Los Angeles. "It's the contrast that provides the pop.''
Source: The Miami Herald, Audra D.S. Burch (09/07/08)
Today's boutique hotels are quite special,'' says interior designer Susan Stockton, owner of London By Design in Thiensville, Wisc. "They offer a wonderful mood, an almost Zen-like feel.''
Among the elements of modern hotel style in the bedroom: contrasting dark wood paired with white or light neutral bedding; sharp-angled furniture lines mixed with soft pillows; metal accent lamps paired with organic art; oversized headboards and, if space permits, a sitting area.
''It's a simple formula,'' says interior designer Erinn Valencich of Omniarte Design in Los Angeles. "It's the contrast that provides the pop.''
Source: The Miami Herald, Audra D.S. Burch (09/07/08)
Most Expensive Housing Markets
Eight out of the top 10 most expensive housing markets in the U.S. are in California, while eight Midwestern cities are among the 10 most affordable, according to the Coldwell Banker Home Price Comparison Index released today.
The study compared the average value of 2,200-square-foot houses with four bedrooms, two and a half baths, and a family room, plus a two-car garage, in 315 U.S. markets.
The results make it easy to conclude that some people pay a lot more than others for the same living space.
The average sales price of the homes that met the survey criteria was $403,738, a drop of 4.4 percent from 2007.
The 10 least expensive markets were:
1. Sioux City, Iowa
2. Jackson, Mich.
3. Akron, Ohio
4. Canton, Ohio
5. Garyling, Mich.
6. Minot, N.D.
7. Arlington, Texas
8. Muncie, Ind.
9. Killeen, Texas
10. Eau Claire, Wisc.
The 10 most expensive markets and their average sales prices were:
1. La Jolla, Calif.: $1,841,667
2. Greenwich, Conn.: $1,787,000
3. Beverly Hills, Calif.: $1777,475
4. Palo Alto, Calif.: $1,740,333
5. Santa Monica, Calif.: $1,653,333
6. Santa Barbara, Calif.: $1,599,667
7. Newport Beach, Calif.: $1,546,250
8. San Francisco, Calif.: $1,513,181
9. Boston, Mass.: $1493,750
10. San Mateo, Calif.: $1,366,475
Source: The Associated Press, Alex Veiga (09/09/08)
The study compared the average value of 2,200-square-foot houses with four bedrooms, two and a half baths, and a family room, plus a two-car garage, in 315 U.S. markets.
The results make it easy to conclude that some people pay a lot more than others for the same living space.
The average sales price of the homes that met the survey criteria was $403,738, a drop of 4.4 percent from 2007.
The 10 least expensive markets were:
1. Sioux City, Iowa
2. Jackson, Mich.
3. Akron, Ohio
4. Canton, Ohio
5. Garyling, Mich.
6. Minot, N.D.
7. Arlington, Texas
8. Muncie, Ind.
9. Killeen, Texas
10. Eau Claire, Wisc.
The 10 most expensive markets and their average sales prices were:
1. La Jolla, Calif.: $1,841,667
2. Greenwich, Conn.: $1,787,000
3. Beverly Hills, Calif.: $1777,475
4. Palo Alto, Calif.: $1,740,333
5. Santa Monica, Calif.: $1,653,333
6. Santa Barbara, Calif.: $1,599,667
7. Newport Beach, Calif.: $1,546,250
8. San Francisco, Calif.: $1,513,181
9. Boston, Mass.: $1493,750
10. San Mateo, Calif.: $1,366,475
Source: The Associated Press, Alex Veiga (09/09/08)
Mortgage Applications Soar on Monday
Mortgage brokers say Monday was the busiest day they can remember in the last couple of years.
The average rate for a 30-year fixed-rate loan fell to 6.04 Monday, about a third of a percentage point lower than on Friday, before the federal takeover of Fannie Mae and Freddie Mac. On a $200,000 loan, that’s about a $500 annual savings – significant but not enough to turn around the housing market, analysts say.
Nevertheless, at online mortgage firm Quicken Loans, applications Tuesday were more than double what they had been in recent weeks, says Bob Walters, the firm’s chief economist.
Source: The Washington Post, Dina ElBoghadady and Renae Merle (09/09/08)
The average rate for a 30-year fixed-rate loan fell to 6.04 Monday, about a third of a percentage point lower than on Friday, before the federal takeover of Fannie Mae and Freddie Mac. On a $200,000 loan, that’s about a $500 annual savings – significant but not enough to turn around the housing market, analysts say.
Nevertheless, at online mortgage firm Quicken Loans, applications Tuesday were more than double what they had been in recent weeks, says Bob Walters, the firm’s chief economist.
Source: The Washington Post, Dina ElBoghadady and Renae Merle (09/09/08)
NAR Forecast: Home Sales to Hold Steady
The level of home sales is expected to show little movement in the months ahead, according to the latest projections by the NATIONAL ASSOCIATION OF REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, fell 3.2 percent to 86.5. In June, the Index was at 89.4, which was a 5.8 percent jump from May. The July index remains 6.8 percent below July 2007 when it stood at 92.8.
Lawrence Yun, NAR chief economist, says home sales continue to edge up and down. “Pending home sales are oscillating month-to-month, with the long-term trend essentially flat,” he says. “Overly stringent lending criteria imposed by Fannie Mae and Freddie Mac in the past month no doubt held back contract signings.”
Looking at middle-ground assumptions, existing-home sales are projected to total 5.01 million this year before rising 6.9 percent in 2009 to 5.35 million. After declining an average of 4 to 7 percent this year, home prices are forecast to rise by 2 to 4 percent next year.
New-home sales will total about 508,000 in 2008 and 463,000 next year, down significantly from 775,000 in 2007. With builders motivated to clear inventory, housing starts, including multifamily units, will probably fall 17.1 percent in 2009 to 801,000 units from 966,000 this year.
Regional Markets Stable
Even with the latest pullback, pending home sales have been fairly stable on a national basis for nearly a year, with dramatic local market differences continuing, according to NAR. “
Contract signings have been steaming ahead, nearly doubling in activity from a year before in several California and Florida markets,” Yun says. “The outer Washington, D.C., exurbs also are coming around very strongly. The Northeast region retreated following a robust gain in the previous month, and soft activity was observed in the broad midsection of America despite very affordable conditions.”
Here's how the PHSI fared across the United States:
Midwest: rose 2.8 percent to 81.6 in July but remains 2.4 percent below a year ago.
South: unchanged, holding at 93.7, but is 13.4 percent below July 2007.
Northeast: fell 7.5 percent to 73.6 in July and is 13.2 percent below a year ago.
West: dropped 10.6 percent to 90.3 but is 6.5 percent higher than July 2007.
Factors Influencing the Market
NAR President Richard F. Gaylord says there’s been a surge in FHA mortgage applications.“
Unfortunately, many people in high-cost areas aren’t familiar with FHA programs, which is why we produced a toolkit so REALTORS®, lenders, and other real estate professionals can familiarize themselves with this increasingly valuable program,” he says.“
FHA is taking a more active role in serving a broad cross section of home buyers, but it will take some time to fully get up to speed. We’re working with regulators to improve the process, and the good news is that this is becoming a big help to first-time buyers,” Gaylord says.
Yun says there are many ambiguities in the marketplace.
“The economy is producing more, yet cutting jobs. A first-time home buyer tax credit and lower interest rates on newly conforming jumbo loans favors consumers, yet buyer confidence remains low,” he says. “Even with the Treasury Department’s direct intervention in the secondary mortgage market, it is unclear if we will go back to sound normal underwriting criteria, or if it will remain overly stringent. The housing market outlook is very cloudy.”
Yun mentioned that the speed and timing of a recovery depends on local market conditions.
“Based on local market fundamentals, I expect robust home price growth in places like Denver and Houston over the next two years,” Yun says. “In addition, the frequent reporting of multiple bids in California and Florida may be signaling a bottom in home prices in these areas. Nationally, home sales are stable now but are expected to increase in coming quarters.”
Other factors influencing the housing market:
1. Mortgage rates: The 30-year fixed-rate mortgage, which also has been moving up and down, should trend up to 6.6 percent by the end of this year, edging up to 6.7 percent in 2009. NAR’s housing affordability index is likely to remain favorable throughout 2008, averaging 13 percentage points higher than last year.
2. Growth in the U.S. gross domestic product: The GDP is forecast to remain positive with a growth rate of 2.0 percent for all of 2008, and 2.0 percent also next year. The unemployment rate is estimated to average 5.8 percent over the coming year.
3. Inflation: As measured by the Consumer Price Index, inflation is anticipated at 3.8 percent this year and 1.6 percent in 2009. Inflation-adjusted disposable personal income is projected to grow 1.8 percent in 2008 and 2.1 percent next year.
Source: NAR
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, fell 3.2 percent to 86.5. In June, the Index was at 89.4, which was a 5.8 percent jump from May. The July index remains 6.8 percent below July 2007 when it stood at 92.8.
Lawrence Yun, NAR chief economist, says home sales continue to edge up and down. “Pending home sales are oscillating month-to-month, with the long-term trend essentially flat,” he says. “Overly stringent lending criteria imposed by Fannie Mae and Freddie Mac in the past month no doubt held back contract signings.”
Looking at middle-ground assumptions, existing-home sales are projected to total 5.01 million this year before rising 6.9 percent in 2009 to 5.35 million. After declining an average of 4 to 7 percent this year, home prices are forecast to rise by 2 to 4 percent next year.
New-home sales will total about 508,000 in 2008 and 463,000 next year, down significantly from 775,000 in 2007. With builders motivated to clear inventory, housing starts, including multifamily units, will probably fall 17.1 percent in 2009 to 801,000 units from 966,000 this year.
Regional Markets Stable
Even with the latest pullback, pending home sales have been fairly stable on a national basis for nearly a year, with dramatic local market differences continuing, according to NAR. “
Contract signings have been steaming ahead, nearly doubling in activity from a year before in several California and Florida markets,” Yun says. “The outer Washington, D.C., exurbs also are coming around very strongly. The Northeast region retreated following a robust gain in the previous month, and soft activity was observed in the broad midsection of America despite very affordable conditions.”
Here's how the PHSI fared across the United States:
Midwest: rose 2.8 percent to 81.6 in July but remains 2.4 percent below a year ago.
South: unchanged, holding at 93.7, but is 13.4 percent below July 2007.
Northeast: fell 7.5 percent to 73.6 in July and is 13.2 percent below a year ago.
West: dropped 10.6 percent to 90.3 but is 6.5 percent higher than July 2007.
Factors Influencing the Market
NAR President Richard F. Gaylord says there’s been a surge in FHA mortgage applications.“
Unfortunately, many people in high-cost areas aren’t familiar with FHA programs, which is why we produced a toolkit so REALTORS®, lenders, and other real estate professionals can familiarize themselves with this increasingly valuable program,” he says.“
FHA is taking a more active role in serving a broad cross section of home buyers, but it will take some time to fully get up to speed. We’re working with regulators to improve the process, and the good news is that this is becoming a big help to first-time buyers,” Gaylord says.
Yun says there are many ambiguities in the marketplace.
“The economy is producing more, yet cutting jobs. A first-time home buyer tax credit and lower interest rates on newly conforming jumbo loans favors consumers, yet buyer confidence remains low,” he says. “Even with the Treasury Department’s direct intervention in the secondary mortgage market, it is unclear if we will go back to sound normal underwriting criteria, or if it will remain overly stringent. The housing market outlook is very cloudy.”
Yun mentioned that the speed and timing of a recovery depends on local market conditions.
“Based on local market fundamentals, I expect robust home price growth in places like Denver and Houston over the next two years,” Yun says. “In addition, the frequent reporting of multiple bids in California and Florida may be signaling a bottom in home prices in these areas. Nationally, home sales are stable now but are expected to increase in coming quarters.”
Other factors influencing the housing market:
1. Mortgage rates: The 30-year fixed-rate mortgage, which also has been moving up and down, should trend up to 6.6 percent by the end of this year, edging up to 6.7 percent in 2009. NAR’s housing affordability index is likely to remain favorable throughout 2008, averaging 13 percentage points higher than last year.
2. Growth in the U.S. gross domestic product: The GDP is forecast to remain positive with a growth rate of 2.0 percent for all of 2008, and 2.0 percent also next year. The unemployment rate is estimated to average 5.8 percent over the coming year.
3. Inflation: As measured by the Consumer Price Index, inflation is anticipated at 3.8 percent this year and 1.6 percent in 2009. Inflation-adjusted disposable personal income is projected to grow 1.8 percent in 2008 and 2.1 percent next year.
Source: NAR
Why This Autumn is a Great Time to Buy?
This fall could be a particularly great time for first-time or buyers long out of the market to jump in, say a variety of real estate professionals.
Here are the reasons why:
1. Prices are probably as low as they are going to go as the market stabilizes, thanks to the government takeover of Freddie Mac and Fannie Mae.
2. Interest rates are likely to decline as Freddie and Fannie get government help.
3. The Federal Housing Administration recently boosted its loan limits to $729,750 in expensive areas. It's going to take some of that back come Jan. 1, when the loan limit will shrink to $625,500.
The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct.
1. People scraping dollars together for a down payment should try to set their closing for the end of this month.
- The tax credit will shave $7,500 off a first-time buyer’s federal tax bill due April 15. Buyers who don't owe tax, will get the money as a refund.
The government's definition of a first-time buyer is anyone who hasn’t owned a home in the last three years.
Source: The Washington Post, Elizabeth Razzi (09/07/08)
Here are the reasons why:
1. Prices are probably as low as they are going to go as the market stabilizes, thanks to the government takeover of Freddie Mac and Fannie Mae.
2. Interest rates are likely to decline as Freddie and Fannie get government help.
3. The Federal Housing Administration recently boosted its loan limits to $729,750 in expensive areas. It's going to take some of that back come Jan. 1, when the loan limit will shrink to $625,500.
The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct.
1. People scraping dollars together for a down payment should try to set their closing for the end of this month.
- The tax credit will shave $7,500 off a first-time buyer’s federal tax bill due April 15. Buyers who don't owe tax, will get the money as a refund.
The government's definition of a first-time buyer is anyone who hasn’t owned a home in the last three years.
Source: The Washington Post, Elizabeth Razzi (09/07/08)
Monday, September 8, 2008
Celebrity Real Estate Woes
Fame is no inoculation against ailing markets. Stars buy and sell at the wrong time, perform dubious renovations and forget about closing fees just like the rest of us. Among those hit hard by the housing crunch: Donald Trump, Ed McMahon and Sharon Stone.
By Candice Novak, U.S. News & World Report
Though seemingly immune to ordinary tasks, celebrities have not escaped the misery of real-estate deals gone bad, proving all socioeconomic strata are subject to the slumping housing market. As thousands of Americans grapple with the subprime loan mess, the higher-than-usual foreclosure rate that goes with it and a stagnant housing market, celebrities also are feeling the pain of bad real-estate decisions.
Ed McMahon, after his long career as Johnny Carson's sidekick on "The Tonight Show," was facing foreclosure of his estate in Beverly Hills, Calif., on which he owed $644,000 in mortgage payments. McMahon explained the predicament to CNN's Larry King in simple terms: "If you spend more money than you make, you know what happens." An anonymous buyer recently purchased the home for an undisclosed sum. McMahon had been trying to sell the property for $4.6 million, down from its earlier $7.6 million price.
Even sadder is the situation of the families whose houses were redone by "Extreme Makeover: Home Edition." A couple of homes redone as a part of the show are now for sale; their owners can't afford to pay the extra taxes assessed because of the improvements and added square footage.
These high-profile homes are just a taste of nationwide housing woes. A report from the online real-estate service Zillow.com shows that the rate of foreclosure transactions has increased nearly sevenfold in the past year. In the first quarter, 14.2 percent of transactions nationwide were homes in foreclosure, compared with 2.3 percent from the year-ago quarter. And one in four homes (26.1 percent) sold in the first quarter was sold at a loss.
The top screw-ups include buying and selling at the wrong time, not remembering to factor in closing fees when setting a price, and assuming that renovations will add to the selling price.
Joe Russo, author of "Selling Your House/Condo in This Housing Emergency of 2008: A Guide to Selling Your Home Now," says, "In this market, I would advise any seller to sell at the first opportunity they can." Very simply, the "pool of available buyers" is drying up, Russo warns, "and credit is getting tighter." He expects another two years of depreciation and at least four years before houses begin to appreciate on a large scale.
If the worst has already happened and a seller faces foreclosure, he or she should contact the lender to see about working out a forbearance agreement or other deal to give the borrower additional time to pay, says Zachary Schorr of Los Angeles-based Schorr Law, a commercial real-estate litigation firm.
"Banks are not in the business of buying and selling property; they simply want to have their loans repaid with interest," he says. Because of the unusually high number of homes banks have on their hands, they may be "more willing to work with a struggling homeowner" to come up with a deal, Schorr says.
When it comes to selling a house, you should spend sparingly on improvement. "It's not a good time to put major money into renovations," says Rob Harrington, chairman of OptHome, a company that provides consumers with a variety of real-estate information. The work often doesn't lead to a higher selling price. "Spend the money on the little things to provide a good curb appeal, but don't remodel the kitchen or bath" in hopes that will increase the final price, he advises. "It just doesn't translate over."
These are some of the biggest celebrity home blunders from the past half-year:
Donald Trump lowers price by $25 million, and sells
Donald Trump's mansion in Palm Beach, Fla., sold for the most ever spent on an estate in the United States. But that was after an equally impressive price cut: Trump lowered the cost from $125 million to $100 million after two years on the market. He sold the house to a Russian billionaire this month. Trump bought the 60,000-square-foot house called the Maison de l'Amitié for $40 million. He assigned one of his "Apprentice" show's winners to renovate the place, which added to the price.
CNET founder incurs net losses
Halsey Minor, founder of the CNET, sold his Bel Air, Calif., glass-and-glitz house for about $12 million just two years after buying the place for $20 million. There's been no explanation of the house's multimillion-dollar depreciation. The four-bedroom, nine-bath mansion was put on the market in June.
Strikeout
The lender foreclosed on retired baseball player José Canseco's 7,344-square-foot house in Los Angeles in May after he couldn't make payments. He bought the house, which was built in 2001 and has four bedrooms, six baths and a pool, for about $2.8 million in 2005. After a couple of multimillion-dollar divorces, Canseco was strapped for cash. He also lost "about $1 million" in equity in the house. The Wall Street Journal said Canseco could be one of the highest-profile owners to walk away from a mortgage. The house also had liens against it.
Bad bet
Professional poker player Annie Duke sold her mansion in Los Angeles's Hollywood Hills in June 2007 for $2.84 million, losing $10,000 on the deal. The 42-year-old Duke bought the 3,528-square-foot house in 2005. It was built in 1928 and had four bedrooms and three baths on a quarter-acre lot. Duke bets, matches and raises for a living, but the Columbia graduate had to fold on this one.
Neverland Ranch never paid for
Michael Jackson owes more on his loan than his fantastic estate in Santa Barbara, Calif., is worth. The King of Pop owed $23.21 million on his $23 million loan in November, causing the bank to foreclose on the property. On the same day the estate was to be auctioned in May, the loan was bought by Colony Capital LLC.
Fed chairman sees housing slump firsthand
Ben Bernanke isn't selling or in foreclosure, but his Washington, D.C., home has lost value in the housing and loan crisis he so closely follows as the Federal Reserve chairman. He bought the 2,600-square-foot, four-bedroom place for $839,000 in 2004. The value went up each year until this year. The proposed 2009 assessment is $885,290 — down from last year's $948,110.
Hard Rock Cafe co-founder sells
Peter Morton, co-founder of the Hard Rock Cafe chain, sold his beachfront house in Malibu, Calif., in February for $9.8 million — though he bought the property for $10.5 million in 2007. The buyer was media mogul David Geffen, who helped form DreamWorks.
Up Beverly Hills
Actress Sharon Stone attempted to sell her Beverly Hills mansion at about the price for which she bought it. When there weren't any takers, she lowered the asking price by almost $1 million in May. The price dropped from $10.95 million to $10 million on the Sotheby's listing. Stone bought the property through her Vanguard Trust in 2006 for $10.99 million.
Bust in Brewster, N.Y.
Actor Harvey Fierstein will lose money on his home, which is on sale through a broker in New York. Fierstein bought the rural, 3,640-square-foot, four-bedroom house in Brewster in late 2005 for $790,000. It is now listed for $749,900.
Swimming around zero
Olympic swimmer and model Amanda Beard is selling her bungalow in Venice Beach, Calif., for the same price she bought it for — $1.05 million. Beard, who purchased the 981-square-foot, 3-bedroom house in 2006, will likely lose money on the sale after dealing with closing costs.
By Candice Novak, U.S. News & World Report
Though seemingly immune to ordinary tasks, celebrities have not escaped the misery of real-estate deals gone bad, proving all socioeconomic strata are subject to the slumping housing market. As thousands of Americans grapple with the subprime loan mess, the higher-than-usual foreclosure rate that goes with it and a stagnant housing market, celebrities also are feeling the pain of bad real-estate decisions.
Ed McMahon, after his long career as Johnny Carson's sidekick on "The Tonight Show," was facing foreclosure of his estate in Beverly Hills, Calif., on which he owed $644,000 in mortgage payments. McMahon explained the predicament to CNN's Larry King in simple terms: "If you spend more money than you make, you know what happens." An anonymous buyer recently purchased the home for an undisclosed sum. McMahon had been trying to sell the property for $4.6 million, down from its earlier $7.6 million price.
Even sadder is the situation of the families whose houses were redone by "Extreme Makeover: Home Edition." A couple of homes redone as a part of the show are now for sale; their owners can't afford to pay the extra taxes assessed because of the improvements and added square footage.
These high-profile homes are just a taste of nationwide housing woes. A report from the online real-estate service Zillow.com shows that the rate of foreclosure transactions has increased nearly sevenfold in the past year. In the first quarter, 14.2 percent of transactions nationwide were homes in foreclosure, compared with 2.3 percent from the year-ago quarter. And one in four homes (26.1 percent) sold in the first quarter was sold at a loss.
The top screw-ups include buying and selling at the wrong time, not remembering to factor in closing fees when setting a price, and assuming that renovations will add to the selling price.
Joe Russo, author of "Selling Your House/Condo in This Housing Emergency of 2008: A Guide to Selling Your Home Now," says, "In this market, I would advise any seller to sell at the first opportunity they can." Very simply, the "pool of available buyers" is drying up, Russo warns, "and credit is getting tighter." He expects another two years of depreciation and at least four years before houses begin to appreciate on a large scale.
If the worst has already happened and a seller faces foreclosure, he or she should contact the lender to see about working out a forbearance agreement or other deal to give the borrower additional time to pay, says Zachary Schorr of Los Angeles-based Schorr Law, a commercial real-estate litigation firm.
"Banks are not in the business of buying and selling property; they simply want to have their loans repaid with interest," he says. Because of the unusually high number of homes banks have on their hands, they may be "more willing to work with a struggling homeowner" to come up with a deal, Schorr says.
When it comes to selling a house, you should spend sparingly on improvement. "It's not a good time to put major money into renovations," says Rob Harrington, chairman of OptHome, a company that provides consumers with a variety of real-estate information. The work often doesn't lead to a higher selling price. "Spend the money on the little things to provide a good curb appeal, but don't remodel the kitchen or bath" in hopes that will increase the final price, he advises. "It just doesn't translate over."
These are some of the biggest celebrity home blunders from the past half-year:
Donald Trump lowers price by $25 million, and sells
Donald Trump's mansion in Palm Beach, Fla., sold for the most ever spent on an estate in the United States. But that was after an equally impressive price cut: Trump lowered the cost from $125 million to $100 million after two years on the market. He sold the house to a Russian billionaire this month. Trump bought the 60,000-square-foot house called the Maison de l'Amitié for $40 million. He assigned one of his "Apprentice" show's winners to renovate the place, which added to the price.
CNET founder incurs net losses
Halsey Minor, founder of the CNET, sold his Bel Air, Calif., glass-and-glitz house for about $12 million just two years after buying the place for $20 million. There's been no explanation of the house's multimillion-dollar depreciation. The four-bedroom, nine-bath mansion was put on the market in June.
Strikeout
The lender foreclosed on retired baseball player José Canseco's 7,344-square-foot house in Los Angeles in May after he couldn't make payments. He bought the house, which was built in 2001 and has four bedrooms, six baths and a pool, for about $2.8 million in 2005. After a couple of multimillion-dollar divorces, Canseco was strapped for cash. He also lost "about $1 million" in equity in the house. The Wall Street Journal said Canseco could be one of the highest-profile owners to walk away from a mortgage. The house also had liens against it.
Bad bet
Professional poker player Annie Duke sold her mansion in Los Angeles's Hollywood Hills in June 2007 for $2.84 million, losing $10,000 on the deal. The 42-year-old Duke bought the 3,528-square-foot house in 2005. It was built in 1928 and had four bedrooms and three baths on a quarter-acre lot. Duke bets, matches and raises for a living, but the Columbia graduate had to fold on this one.
Neverland Ranch never paid for
Michael Jackson owes more on his loan than his fantastic estate in Santa Barbara, Calif., is worth. The King of Pop owed $23.21 million on his $23 million loan in November, causing the bank to foreclose on the property. On the same day the estate was to be auctioned in May, the loan was bought by Colony Capital LLC.
Fed chairman sees housing slump firsthand
Ben Bernanke isn't selling or in foreclosure, but his Washington, D.C., home has lost value in the housing and loan crisis he so closely follows as the Federal Reserve chairman. He bought the 2,600-square-foot, four-bedroom place for $839,000 in 2004. The value went up each year until this year. The proposed 2009 assessment is $885,290 — down from last year's $948,110.
Hard Rock Cafe co-founder sells
Peter Morton, co-founder of the Hard Rock Cafe chain, sold his beachfront house in Malibu, Calif., in February for $9.8 million — though he bought the property for $10.5 million in 2007. The buyer was media mogul David Geffen, who helped form DreamWorks.
Up Beverly Hills
Actress Sharon Stone attempted to sell her Beverly Hills mansion at about the price for which she bought it. When there weren't any takers, she lowered the asking price by almost $1 million in May. The price dropped from $10.95 million to $10 million on the Sotheby's listing. Stone bought the property through her Vanguard Trust in 2006 for $10.99 million.
Bust in Brewster, N.Y.
Actor Harvey Fierstein will lose money on his home, which is on sale through a broker in New York. Fierstein bought the rural, 3,640-square-foot, four-bedroom house in Brewster in late 2005 for $790,000. It is now listed for $749,900.
Swimming around zero
Olympic swimmer and model Amanda Beard is selling her bungalow in Venice Beach, Calif., for the same price she bought it for — $1.05 million. Beard, who purchased the 981-square-foot, 3-bedroom house in 2006, will likely lose money on the sale after dealing with closing costs.
Fannie, Freddie Takeover Keeps Mortgages Flowing
The federal government's sweeping takeover of mortgage market giants Fannie Mae and Freddie Mac is expected to have positive short-term benefits to the real estate market and opens the door for the industry to shape the restructuring of the companies.
The NATIONAL ASSOCIATION OF REALTORS® commended the Treasury Department's decision, which it said will bring much-needed stability and continued liquidity to the nation’s mortgage market."
This demonstrates that the government is clearly committed to keeping the flow of capital uninterrupted, which is crucial to the housing sector and the economy," NAR President Richard F. Gaylord said in a statement Monday.
Fannie and Freddie own or guarantee almost half of the country's $12 trillion in outstanding home mortgage debt.
"Fannie Mae and Freddie Mac play a vital role in the U.S. economy by making fair and affordable mortgage loans available for home buyers and owners," Gaylord said. "
Their critical mission must not be interrupted, and Sunday’s announcement goes a long way in making sure that does not happen."
What the Plan Involves
Under the Treasury Department's action, the two government-sponsored enterprises are placed in a government conservatorship and overseen by two government-appointed chiefs, former Merrill Lynch vice chairman Herbert Allison at Fannie Mae and former U.S. Bancorp CFO David Moffett at Freddie Mac.
Daniel Mudd, who led Fannie Mae for the last few years, and Richard Syron, his counterpart at Freddie Mac, have been relieved of their jobs.
The federal government is taking up to an 80 percent stake in the companies and will review their financial condition on a quarterly basis, injecting money into their operations as needed. The government is directing the companies to help stabilize housing markets by requiring them to increase their mortgage funding over the next year and a half.
For the long-term, the companies and their regulator, the Federal Housing Finance Agency, will begin planning for a major reorganization of their operations, away from their current 100-percent, privately owned model.
According to news reports, one of the models being discussed is something akin to a public utility, in which the government sets limits on the amount of annual return on equity to shareholders.
Positive Real Estate Impact
For the real estate industry, the short term impact is expected to be positive, says NAR Chief Economist Lawrence Yun. With the government now explicitly backing the companies' mortgage obligations, the market for the GSE securities will be treated more like Treasurys, thereby exerting downward pressure on rates, he says.
That will help drive a positive cycle of investment as investors return to the market, further lowering rates and generating funds to lenders to expand their mortgage loan operations. That is expected to help speed up housing sales in markets across the country and help stabilize home prices.
The main down side to the federal intervention will be felt by the companies' current shareholders, who will no longer receive dividend payments and whose holdings are diluted by the equity stake of the federal government.
Looking ahead, the directive for the companies and their regulator to start work on their long-term restructuring opens the door for NAR to help shape that process, and the association already has a process underway to do that, say NAR legislative and regulatory affairs analysts.
Source: REALTOR® Magazine Online
The NATIONAL ASSOCIATION OF REALTORS® commended the Treasury Department's decision, which it said will bring much-needed stability and continued liquidity to the nation’s mortgage market."
This demonstrates that the government is clearly committed to keeping the flow of capital uninterrupted, which is crucial to the housing sector and the economy," NAR President Richard F. Gaylord said in a statement Monday.
Fannie and Freddie own or guarantee almost half of the country's $12 trillion in outstanding home mortgage debt.
"Fannie Mae and Freddie Mac play a vital role in the U.S. economy by making fair and affordable mortgage loans available for home buyers and owners," Gaylord said. "
Their critical mission must not be interrupted, and Sunday’s announcement goes a long way in making sure that does not happen."
What the Plan Involves
Under the Treasury Department's action, the two government-sponsored enterprises are placed in a government conservatorship and overseen by two government-appointed chiefs, former Merrill Lynch vice chairman Herbert Allison at Fannie Mae and former U.S. Bancorp CFO David Moffett at Freddie Mac.
Daniel Mudd, who led Fannie Mae for the last few years, and Richard Syron, his counterpart at Freddie Mac, have been relieved of their jobs.
The federal government is taking up to an 80 percent stake in the companies and will review their financial condition on a quarterly basis, injecting money into their operations as needed. The government is directing the companies to help stabilize housing markets by requiring them to increase their mortgage funding over the next year and a half.
For the long-term, the companies and their regulator, the Federal Housing Finance Agency, will begin planning for a major reorganization of their operations, away from their current 100-percent, privately owned model.
According to news reports, one of the models being discussed is something akin to a public utility, in which the government sets limits on the amount of annual return on equity to shareholders.
Positive Real Estate Impact
For the real estate industry, the short term impact is expected to be positive, says NAR Chief Economist Lawrence Yun. With the government now explicitly backing the companies' mortgage obligations, the market for the GSE securities will be treated more like Treasurys, thereby exerting downward pressure on rates, he says.
That will help drive a positive cycle of investment as investors return to the market, further lowering rates and generating funds to lenders to expand their mortgage loan operations. That is expected to help speed up housing sales in markets across the country and help stabilize home prices.
The main down side to the federal intervention will be felt by the companies' current shareholders, who will no longer receive dividend payments and whose holdings are diluted by the equity stake of the federal government.
Looking ahead, the directive for the companies and their regulator to start work on their long-term restructuring opens the door for NAR to help shape that process, and the association already has a process underway to do that, say NAR legislative and regulatory affairs analysts.
Source: REALTOR® Magazine Online
Fastest Selling Zip Codes
Altos Research, which tracks real estate data all over the country, identified these ZIP codes in which homes for sale spent the fewest days on the market.
In cases where communities of relatively fast-selling real estate were clustered, the best ZIP Code in the area was chosen.
Overall, expensive homes and big bargains are selling with general ease, says Ken Gold, director of the Center for Real Estate Education and Research at Ohio State University. Meanwhile, homes in middle-income neighborhoods are selling the slowest, he says.
Here's the list of the Top 10 fastest-selling ZIPs:
Sunnyvale, Calif. 94087: 66 days on market
Austin, Tex. 78749: 68 days on market
San Diego, Calif. 92131: 70 days on market
Plano, Tex. 75075: 75 days on market
Portland, Ore. 97202: 77 days on market
Houston, Tex. 77094: 77 days on market
Wakefield, Mass. 01880: 79 days on market
Seattle, Wash. 98117: 86 days on market
Littleton, Colo. 80130: 90 days on market
Atlanta, Ga. 30340: 91 days on market
Source: Business Week, Prashant Gopal (09/05/2008)
In cases where communities of relatively fast-selling real estate were clustered, the best ZIP Code in the area was chosen.
Overall, expensive homes and big bargains are selling with general ease, says Ken Gold, director of the Center for Real Estate Education and Research at Ohio State University. Meanwhile, homes in middle-income neighborhoods are selling the slowest, he says.
Here's the list of the Top 10 fastest-selling ZIPs:
Sunnyvale, Calif. 94087: 66 days on market
Austin, Tex. 78749: 68 days on market
San Diego, Calif. 92131: 70 days on market
Plano, Tex. 75075: 75 days on market
Portland, Ore. 97202: 77 days on market
Houston, Tex. 77094: 77 days on market
Wakefield, Mass. 01880: 79 days on market
Seattle, Wash. 98117: 86 days on market
Littleton, Colo. 80130: 90 days on market
Atlanta, Ga. 30340: 91 days on market
Source: Business Week, Prashant Gopal (09/05/2008)
Friday, September 5, 2008
Stand Up for Cancer
Shawn Filer Real Estate is proud to endorse the Stand Up for Cancer movement and has just launched a new campaign to help this great cause. Shawn will personally be donating a percentage of his commission on all Real Estate transactions and encourages everyone who can to donate to the Stand Up for Cancer cause at https://www.standup2cancer.org/donate_splash.asp
Cancer is not a preventable disease and the current treatments are very painful and life-changing for for most people. Early detection is truly key, and we can only hope to find a true cure sometime soon. Nearly everyone has been affected by cancer, either directly or indirectly... and it's time to do something to help make a difference. Those of us in Seattle are fortunate to have the best cancer care in the Nation, and it's time to share our resources with the rest of the World.
Cancer is not a preventable disease and the current treatments are very painful and life-changing for for most people. Early detection is truly key, and we can only hope to find a true cure sometime soon. Nearly everyone has been affected by cancer, either directly or indirectly... and it's time to do something to help make a difference. Those of us in Seattle are fortunate to have the best cancer care in the Nation, and it's time to share our resources with the rest of the World.
Another week of loan improvement!
Volume Up 7.5%, Rates Down The Mortgage Bankers Association reports a 7.5-percent increase in home loan demand during the week ended Aug. 29.
The index indicates a 10.5-percent jump in purchase applications and a more modest 2.1-percent rise in refinancing requests.
Additionally, the group's index tracking mortgages backed by the FHA surged 19.9 percent. Refi demand accounted for 34 percent of all application volume and adjustable-rate loans accounted for 6.6 percent--versus 35.2 percent and 7.9 percent, respectively, the prior week.
The report also shows a drop in the 30-year fixed mortgage rate to 6.39 percent from 6.44 percent and a decrease in the one-year adjustable mortgage rate to 7.11 percent from 7.15 percent, while the 15-year fixed rate edged up to 5.96 percent from 5.94 percent.
Source: MarketWatch, Amy Hoak (09/03/08)
The index indicates a 10.5-percent jump in purchase applications and a more modest 2.1-percent rise in refinancing requests.
Additionally, the group's index tracking mortgages backed by the FHA surged 19.9 percent. Refi demand accounted for 34 percent of all application volume and adjustable-rate loans accounted for 6.6 percent--versus 35.2 percent and 7.9 percent, respectively, the prior week.
The report also shows a drop in the 30-year fixed mortgage rate to 6.39 percent from 6.44 percent and a decrease in the one-year adjustable mortgage rate to 7.11 percent from 7.15 percent, while the 15-year fixed rate edged up to 5.96 percent from 5.94 percent.
Source: MarketWatch, Amy Hoak (09/03/08)
Wednesday, September 3, 2008
Mortgage Applications Rise
Mortgage Applications Rise for Second Week Mortgage applications rose last week for the second week in a row. They increased 7.5 percent on a seasonally adjusted basis to 453.1 from 421.6 the previous week.
On an unadjusted basis, the index increased 5.8 percent compared with the previous week and was down 27 percent compared with the same week a year ago.
The refinance index rose 2.1 percent and the purchase index was up 10.5 percent. The increases coincided with a decline in mortgage rates.
> 30-year fixed-rate mortgages decreased to 6.39 percent from 6.44 percent
> 15-year fixed-rate mortgages increased to 5.96 percent from 5.94 percent
> 1-year ARMs decreased to 7.11 percent from 7.15 percent
Source: Mortgage Bankers Association (09/03/2008)
On an unadjusted basis, the index increased 5.8 percent compared with the previous week and was down 27 percent compared with the same week a year ago.
The refinance index rose 2.1 percent and the purchase index was up 10.5 percent. The increases coincided with a decline in mortgage rates.
> 30-year fixed-rate mortgages decreased to 6.39 percent from 6.44 percent
> 15-year fixed-rate mortgages increased to 5.96 percent from 5.94 percent
> 1-year ARMs decreased to 7.11 percent from 7.15 percent
Source: Mortgage Bankers Association (09/03/2008)
Population Boom
When the Census Bureau released population projections last month, more attention was paid to the country's changing racial composition than to the massive scope of the increase. What's clear is that the latest numbers will inevitably give the real estate business a boost.
The Census Bureau is projecting an increase of 135 million people in the U.S, a 44 percent rise, by 2050. That’s equivalent to the entire populations of Mexico and Canada moving to the United States.
The bureau estimates that this population boom, largely fueled by immigration, will require 52 million new housing units, along with more places for people to shop and work.
Source: The Washington Post, Steven A Camarota (08/31/2008)
The Census Bureau is projecting an increase of 135 million people in the U.S, a 44 percent rise, by 2050. That’s equivalent to the entire populations of Mexico and Canada moving to the United States.
The bureau estimates that this population boom, largely fueled by immigration, will require 52 million new housing units, along with more places for people to shop and work.
Source: The Washington Post, Steven A Camarota (08/31/2008)
www.shawnfiler.com redesign for Fall 2008
Just a quick note for everyone to check out the all new redesign of www.shawnfiler.com, now featuring luxury listings from Seattle to New York. Also, check out the concierge with new links every day to the best that Seattle has to offer.
Subscribe to:
Posts (Atom)
Posts
