December 03

Foreclosure ruling sends message to lenders

Newsday
11/28/2009
ALFONSO A. CASTILLO

A Suffolk judge's decision to wipe out the mortgage debt of a foreclosed-upon East Patchogue couple may send a message to predatory subprime lenders that unless they work to save their customers' homes, they stand to lose everything, some real estate attorneys said.

"This case shows the change in the tide as to the sentiment about mortgage foreclosures in general," said Woodbury bankruptcy attorney Craig Robins, who called Suffolk County Court Judge Jeffrey Spinner's decision "a good demonstration that courts are not going to tolerate this type of conduct by the mortgage companies anymore."

The judge's ruling against the lender - IndyMac Mortgage Services, based in Pasadena, Calif. - was without doubt highly unusual. In addition, it was perhaps without precedent. A search of published reports nationally turned up no similar action, and several attorneys said the decision was the first of its kind, at least on Long Island.

But some wondered whether the precedent set is a positive one and others questioned the legal soundness of the ruling.

"It's encouraging as a citizen, but as a practitioner, I can only think that if the judges have the authority to throw out mortgages, who's going to be lending money?" Commack real estate attorney Lita Smith-Mines said.

Read More..

http://www.newsday.com/long-island/foreclosure-ruling-sends-message-to-lenders-1.1626914

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November 19

Charles Wang's Messy Second Act

Business Week
11/12/2009
Steve Hamm

New York entrepreneur Charles B. Wang, who made his mark in software, is busy reinventing himself as a real estate tycoon. He's pushing a mammoth $3.8 billion mixed-use development in suburban Hempstead, Long Island, surrounding the Nassau Coliseum, where his New York Islanders hockey team plays.

Since the project will include a fix-up of the Coliseum, which the plain-spoken Wang calls a "dump," it has won the backing of pols, including Senator Charles Schumer (D-N.Y.). But Wang is running into resistance from local leaders over concerns that the 150-acre development will adversely affect traffic and the environment.

After waiting nearly two years to get the project approved, Wang is threatening to uproot the Islanders if Hempstead doesn't O.K. his plans soon. Tensions are escalating. "I don't give him a deadline for delivering the Stanley Cup to Long Island, and he shouldn't give us a deadline for approving his project," says Kate Murray, the Hempstead supervisor.

Read More...

http://www.businessweek.com/magazine/content/09_47/b4156030711852.htm

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November 12

Mitchell-Lama Guidelines Undergo Renovation

 

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http://www.globest.com/news/1537_1537/newyork/182156-1.html

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September 16

Mayor of London and Mayor of New York Announce Tourism Agreement to Boost Visits
Reuters

9/15/2009

Ken Kelling

The Mayor of London Boris Johnson and New York Mayor Michael R. Bloomberg today announced a two-year tourism agreement between New York City and London to boost travel between the two cities.

The cities will provide each other with outdoor media advertising space and NYC & Company and Visit London, their respective tourism arms, will share best practices as a way to maximize travel between the two destinations and will assist each other with at least one publicity event in each city.

The Mayors made the announcement during an international conference at Columbia University where the two Mayors met to discuss their financial sectors, the diversification of their economies, building and maintaining their capital plants and expanding housing affordability. Visit London CEO Sally Chatterjee and NYC & Company CEO George Fertitta, and Columbia University President Lee Bollinger joined the Mayors for the announcement.

Mayor Boris Johnson said: "London and New York City share many similarities, including a strong sense of optimism and determination, along with a great appreciation for diversity and innovation. Our common cultural ties, not least absolute dedication to providing world-class services and experiences for both residents and visitors, make the two cities exceptionally well poised to combine knowledge as well as resources to impact the economies and future of the cities."

Mayor Bloomberg said: "Now more than ever, as we work to limit the effects of the ongoing global financial downturn, it is important to find new ways to grow a diverse array of economic sectors, and tourism is among the most important for New York City. New York City and London, both significant sources of travel for each other market, can learn a great deal from one other and we will work together to highlight each other's strengths and remain leading global cities."

Read More...

http://www.reuters.com/article/pressRelease/idUS174218+15-Sep-2009+PRN20090915



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A Bright Spot in Housing: Construction Costs
New York Times

9/16/2009

Casey B. Mulligan

Yesterday the Bureau of Labor Statistics released its producer price index for residential construction. Its significant increase from July to August is a good sign for the housing market.

The producer price index for single-unit residential construction measures the average change over time in the selling prices received by domestic producers of houses. The chart below displays the index for each month of 2008 and 2009.
source: Casey B. Mulligan, using data from the Bureau of Labor Statistics

The price index is of economic interest because it is an important determinant of the prices of existing homes. Few people want to pay more for an existing house than they would pay for having one built new. As a result, the housing P.P.I. is an important ingredient in economic forecasts of housing prices. For example, once it was clear that the housing “bubble” was over, it was (part of) the basis for my forecasts last fall of how far housing prices would ultimately fall (see also Edward Glaeser’s post).

Additionally, the housing construction P.P.I. is more amenable to real-time analysis than are the housing price indices. For example, the Bureau of Labor Statistics releases its P.P.I. within about two weeks of the end of a given month, whereas the Case-Shiller index is not released for another two months.

An end to the housing price decline is welcome because low housing prices are the main reason for the extraordinary prevalence of foreclosures.

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http://economix.blogs.nytimes.com/2009/09/16/a-bright-spot-in-housing-construction-costs/


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August 26

Broker facing jail after admitting to embezzlement

Mercurynews.com

The Associated Press

08/25/2009

SAN RAFAEL, Calif.—A Marin County real estate broker is facing up to eight years in jail after admitting to swindling nearly $1.4 million from six people in a series of financial scams.

Marin County prosecutors say Kirtikumar Menon pleaded guilty to eight felony counts Monday, including embezzlement from elders, forgery and other charges

According to prosecutors, he swindled his victims through a series of complex real estate and financial deals handled by his Mill Valley-based Argentum Real Estate and Mortgage Inc.

Read More...

http://pittsburgh.bizjournals.com/pittsburgh/stories/2009/08/24/focus1.html

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Sales Drought Hits Ranches: Unreal Estate


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U.S. Investors Abandon Europe

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Commercial real-estate lending stronger in Denver than rest of nation


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August 18

Barry Sternlicht's Starwood Capital Group Increases IPO to $800 Million

By LINGLING WEI and LYNN COWAN

Barry Sternlicht's Starwood Capital Group, a private-equity firm specializing in real-estate investments, increased the size of its initial public offering of a real-estate investment trust to $800 million on late Tuesday, marking the biggest IPO to hit the market this year, according to people familiar with the matter.

Starwood is among a slew of private-equity firms planning to form publicly traded REITs to buy or originate debt used to finance offices, retail centers and other real estate. Other such offerings in the pipeline include those by Apollo Management LP and Colony Capital LLC. That business is becoming more attractive partly because property prices have fallen so far that investors expect to pick up bargains and also because the federal government is promising low-rate financing to investors willing to buy existing mortgage debt held by banks.

The Starwood REIT, called Starwood Property Trust Inc., boosted the size of its deal from the $500 million as originally planned, according to these people. It begins trading Wednesday on the New York Stock Exchange under the symbol STWD. A spokesman for Starwood Capital declined comment.

The move stands in sharp contrast to the offering by PennyMac Mortgage Investment Trust more than a week ago. PennyMac, established by former executives of Countrywide Financial Corp., raised $335 million by selling shares, less than half of the $750 million the company hoped to get when it filed its IPO plan in May.

Some analysts attributed the relative success of the Starwood offering to the involvement of Mr. Sternlicht, a well-know real-estate investor. The Starwood REIT could potentially capitalize on the ongoing dislocation in the commercial real estate market, and the subsequent void in capital, to originate new loans and other debt investments with less competition than when the debt markets were more liquid, analysts say.

Mr. Sternlicht signaled to investors that he's confident enough in the offering to put his firm's money on the line. SPT Investment, LLC, an affiliate of Starwood Capital, bought one million shares of the REIT in a private placement at the IPO price of $20 a share, according to the IPO prospectus.

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The original article is available at:

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Reappraising Home Appraisers - Wall Street Journal
 

By JAMES R. HAGERTY

After being blamed for helping to inflate home values during the housing boom, the appraisal business is again coming under fire.

Squeezed by a drop in fees, some appraisers are compensating by driving long distances to handle more assignments. Their wanderings are raising questions about whether they know enough about the neighborhoods to accurately assess the value of homes—which has implications for both home buyers and owners.

Bob Blake, a flight-test engineer who lives in Palm Beach Gardens, Fla., was shocked when an appraiser who traveled 44 miles from Port St. Lucie, Fla., valued his home at $228,000 in late May. Mr. Blake's mortgage broker, Skip McDonough, protested to the appraisal-management company, Nations Valuation Services Inc., that the appraiser had failed to look at comparable homes. Eventually, Nations sent another appraiser, who valued the home at $295,000. The dispute delayed Mr. Blake's refinancing by more than six weeks.

A spokesman for Nations Valuation declined to discuss the details of the appraisals but said, "We feel we handled it properly."

Appraisals are supposed to shield home buyers from paying too much and lenders from overestimating the value of collateral. If appraisals come in too high, buyers may overpay, making defaults more likely. If they are too low, it becomes hard to sell or refinance homes. Many real-estate agents and builders say that the pendulum has swung too far toward caution, and that lowball appraisals threaten to snuff out any recovery in the housing market.

In June, Evie Salazar traveled about 75 miles from her office in Corona, Calif., to do an appraisal in Cathedral City, Calif. Usually, Ms. Salazar says, she tries to work within about 40 miles of her home, but business was slow at the time she accepted that job. "You do what you've got to do at times to feed the family and pay the bills," she says.

Ms. Salazar, an appraiser for the past 12 years, says she researched the Cathedral City market carefully and did a good job. But many real estate agents and mortgage brokers charge that some wandering appraisers are coming up with dubious estimates. Too many appraisers are getting assignments in places where they "just don't know the nuances," says Rick Turley, who oversees the San Francisco Bay area for the Coldwell Banker real-estate-brokerage chain.

The debate over appraisals is inflamed by a natural tension: Real-estate agents and mortgage brokers, who need to complete transactions to collect their fees, are unhappy when an appraiser nixes the sale price. But it also suggests that there may be unintended consequences to an attempt by New York Attorney General Andrew Cuomo to reform the appraisal business.

Using the threat of litigation, Mr. Cuomo last year prodded the government-backed mortgage investors Fannie Mae and Freddie Mac into adopting a new code of conduct for appraisers. Since those two companies provide funding for the bulk of U.S. home mortgages, the code, which took effect May 1, has become the national standard for most home loans.

The code bars loan officers, mortgage brokers or real-estate agents from any role in selecting appraisers. One result is that more lenders have outsourced the selection to appraisal-management companies, or AMCs, which take a sizable cut of the appraisal fee, often 40% or more. The AMCs pay appraisers as little as $175 to $200 per assignment, compared with the $350 or more that many get when they work directly for a lender.

"Many appraisers are struggling to survive on the fees paid by the AMCs," says Bill Garber, a spokesman for the Appraisal Institute, a trade group based in Chicago. Appraisers are being asked to work faster even as their fees are cut, and that conflicts with the goal of getting reliable appraisals, he says.

Squeezing Appraisers

Appraisal-management companies deny they are squeezing appraisers too hard. A spokesman for banking giant Wells Fargo & Co., which owns an AMC, says it "has invested substantial time and resources in the quality control of the valuation process to, among other things, ensure that individual appraisers have relevant knowledge of the markets and properties they review." A spokeswoman for Mr. Cuomo says the new code is working well and helping protect appraisers from pressure to inflate estimates.

Appraisers are required to follow a set of national rules known as the Uniform Standards of Professional Appraisal Practice. Among other things, those rules require that "an appraiser preparing an appraisal in an unfamiliar location must spend sufficient time to understand the nuances of the local market."

Yet some appraisers who travel long distances to find work may be hard-pressed to spend "sufficient time" in an unfamiliar market. LaRon Hall did an appraisal in early June on a home being sold in Palm Desert, Calif., about 86 miles from his office in Rancho Cucamonga, Calif. He says he needs to accept jobs within a broad swath of Southern California to earn a living. Under the new appraisal code, Mr. Hall says, "you're getting less money and you're having to do more. ... It's definitely a sticky situation."

Mr. Hall appraised the three-bedroom home at $186,000, far above the $138,000 for which it sold in late June. Concerned about accuracy, the mortgage lender that financed the purchase rejected Mr. Hall's appraisal and ordered one from another party before making the loan, according to a person involved in the transaction.

A spokesman for Equifax Inc., whose AMC unit ordered the appraisal in Palm Desert, says Mr. Hall has an excellent record on appraisals and that Equifax has a "rigorous quality-control process."

Though consumers can't choose their own appraiser—unless they're paying cash for a home—they should request a copy of the appraisal and examine it to see whether it contains any errors in the description of the property and whether the nearby homes, or "comps," used to gauge its value are truly comparable. If they aren't, the consumer should present any evidence of flaws to the banks and insist that the appraisal be reviewed and redone if necessary.

Carol Kearns, herself a real- estate agent, complains that an appraisal done on her own Montvale, N.J., home in June was "an unprofessional guess." The appraisal came in at $730,000, which was more than enough to qualify Ms. Kearns and her husband, Robert, to refinance their mortgage. But Ms. Kearns, upset at what she sees as sloppy work, maintains that the home is worth more than $900,000.

The appraiser was Uchenna Eboh, whose employer, Kobi Group, is about 46 miles away in Mendham, N.J. Ms. Kearns says Mr. Eboh didn't seem to know her neighborhood and used dissimilar houses as "comps." Among those, she says, were two on much smaller lots and one on a busy street corner.

'Reasonable Proximity'

A colleague of Mr. Eboh says he couldn't comment and referred questions about the appraisal to the AMC that ordered it, Lender Processing Services Inc.'s LSI unit. A spokeswoman for LPS says the appraisal "followed the processes required" by federal standards and LSI's "more-stringent requirements." She says LSI "only uses local, knowledgeable appraisers located within a reasonable proximity to the properties."

Sometimes appraisers are called on to express opinions on the values of faraway homes without even seeing them. LandSafe, an appraisal unit of Bank of America Corp., in May assigned Jane Price, an appraiser in Dallas, to review another appraiser's estimate of a home in Cathedral City, Calif. Ms. Price didn't visit the neighborhood in question, but her review cited nearby homes she used to determine comparable value.

Ms. Price declined to comment. A spokeswoman for Bank of America says Ms. Price was asked to do only a "desktop review" of the original appraisal. "California is a state which has a lot of market information available, which allows a reviewer to gather credible data about a property even when they are not in the immediate area," the spokeswoman adds.

The original article is available at:

http://online.wsj.com/article/SB10001424052970203496804574348712795471006.html

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California's Real Estate Problems Might Be Getting Worse per Marketwatch and Zillow

Commentary: Despite some claims, situation actually may be getting worse

By Brett Arends, WSJ.com

NEW YORK (MarketWatch) -- Is California's real-estate crash finally hitting bottom?

Some people think it might have.

But color me skeptical.

OK, there is some good news.

Subprime blight areas in the Central Valley and the Inland Empire, which led the crash, have been collapsing at a slightly slower pace recently.

According to Zillow, the real-estate information company, median prices in Stockton -- a contender for the title of Subprime Central -- have been falling by a little over 2% a month for the past three months. That may sound pretty bad -- and it is pretty bad -- but everything needs context: Last winter the rate was more than 3% a month, and early last year the rate was nearly 4%

In places like Modesto, San Bernardino and Riverside, the story is similar.

Stan Humphries, Zillow's chief economist, sees grounds for optimism. "It points to a bottoming of the market," he says.

Mark Hanson, an independent (and bearish) real-estate analyst, agrees that there are some signs of life. He says there's a lot of bottom-fishing going on. In the worst hit areas, the cheaper homes are actually being snapped up right now. "Supply is at a multi-year low," he says. "It's down 60% from last year. You're seeing 15 offers for every house."

The main buyers are first-timers, armed with their one-off $8,000 taxpayer gift, and investors.

Recent low interest rates have helped. And prices there have fallen so far that homes may be genuinely cheap. Dean Baker, co-director of the Center for Economic Policy and Research in Washington, D.C., says real-estate markets are usually about right when homes cost about 15 times rental values. And in a recent report he found that paces like Stockton and San Bernardino have finally fallen through those key levels.

So, it's good news?

Put that Napa Valley fizz back in the icebox.

Here are the problems.

First, there is no sign of a slowdown in the waves of foreclosures hitting the California market.

If anything, they're getting worse. And that's bad news for real estate, no matter how cheap it is.

Foreclosures actually have surged since a temporary lull last winter, according to RealtyTrac, Inc., which follows the data. And while that's received some attention, it's only part of the story.

If you want to see what's coming next, you really need to look at the notices of default. Banks send those out when a homeowner has missed several mortgage payments. They typically don't show up as actual foreclosures for another five or six months, following legal steps.

The current picture is not pretty. Notices of default have been surging in recent months, according to RealtyTrac.

In the first half of the year they averaged 48,000 a month, hitting nearly 51,000 in July.

That's a lot higher than the first half of last year. Two years ago the figure was just 17,000 a month.

And then look at unemployment. In California, the picture has been startling. The number of jobless has doubled since the start of the recession. The unemployment rate is now 11.6%. You have to figure that is going to push up the rate of delinquencies and defaults still further.

Meanwhile, negative equity is at surreal levels. Zillow estimates 67% of homes in Stockton are worth less than their mortgages. A recent study by two economists at the New York Federal Reserve said the negative equity on all the homes in Los Angeles, San Francisco and San Diego topped out at more than $20 billion. The figure was $14 billion just in L.A. And those figures were from several months ago.

And now the crash is starting to spread to some of the higher-end areas.

James Caldwell, broker at Prudential California Realty in San Francisco, says the market is getting wobbly even in posh Pacific Heights.

"We have over two years' worth of inventory" in the condo market, he says glumly. "The norm is about six to nine months." And several months ago he closed his office across the Golden Gate Bridge in Sausalito. Business had just died.

Prices in Sausalito have been tumbling since last summer.

Baker's analysis found that while real estate had become reasonably priced in crash towns like Stockton, the same certainly isn't true in the upscale neighborhoods. He believes prices in San Diego, Los Angeles, San Francisco and Silicon Valley are still far too expensive compared to rents.

Sell Beverly Hills, buy San Bernardino?

It's easy to laugh. Real estate, of course, doesn't substitute too easily. But neighborhoods, and regions, aren't completely immune from one another, either. If price gaps between them get too wide, some marginal owners will trade down and fewer will trade up.

Only time will tell if that happens this time. But it's still too early to call the bottom for California.

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The original story is available at:

http://www.marketwatch.com/story/no-light-at-end-of-california-real-estate-tunnel-2009-08-17?link=kiosk

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August 11

Hamptons.com: Self-Correcting Real Estate Market Takes First Baby Steps In Right Direction
Second Quarter Reports Better Than Plummeting First

By Andrea Aurichio

The real estate market on the East End is good or bad, improving or tanking, depending on whom you talk to and what you read. However, the numbers for the second quarter of 2009 are higher than they were for the first quarter of this year. Property courtesy of Susan Breitenbach, The Corcoran Group

Southampton - Sales are down, prices are lower and inventory is up. That much is certain as real estate agents enter the second half of the year analyzing market data gathered over the last six months. The big question, have we seen the bottom yet, remains unanswered.

The real estate market on the East End is good or bad, improving or tanking, depending on whom you talk to and what you read. Despite these mixed messages, the bottom line is clear amid market reports cluttered with graphs and discussions of quintiles that are often obtuse and difficult to understand -- the numbers for the first half of 2009 are lower than they were in 2008 which means the market is down.

However, the numbers for the second quarter of 2009 are higher than they were for the first quarter of this year. This indicates an up turn and a heralds a shift in cautious expectation.

According to George Simpson, of Suffolk Profiles, the numbers to watch are the figures for this year - not the numbers from last year.
"The number of sales has increased in the last three months along with the median price and total sales volume. That's very big news," George Simpson of Suffolk Profiles declared. “The market is coming back." Simpson has been monitoring East End real estate sales for years. According to Simpson, the numbers to watch are the figures for this year - not the numbers from last year.

“Agents should not be doing a year over year analysis," Simpson said. “They should be looking at this year and watching the quarterly sales increases. Statistically we can expect the third quarter to be better than the second quarter."

That is the recovery theory that agents and sellers are happy to hear. But there is no denying the year over year analysis indicating the market this year is not good compared to last year. In fact, the numbers indicate the market on the East End has been declining steadily since 2007.

CPF Indicator

A clear cut indicator of the drop in sales is the corresponding drop in revenues collected for the Community Preservation Fund, referred to commonly as the CPF. The CPF derives its revenues for land preservation by collecting a two percent transfer tax at the closing table each time a property changes hands in any of the five East End towns.

Southampton Town has emerged as the largest collector of these funds over the years since the fund was established in 1998. In 2007, Southampton's fund topped out at $53.5 million. This number decreased to $32.97 million in 2008 according to figures released by New York State Assemblyman Fred Thiele's office this month. This year the town collected $8.35 million for the first half of 2009.

Real estate agents across the region do not need a report to tell them which way the wind is blowing or how the market is playing out as they search for customers on a daily basis while coping with their anxious clients. It takes longer to sell a house this year than it did last year. Sagaponack property courtesy of Sotheby's International

At this rate, Southampton Town officials hope to end the year with an estimated $16 million in revenue if sales continue at the current rate. This number could increase if there is an increase in sales activity, however there is an established pattern of decline which may indicate next year's totals could be half of the year end 2009 revenues. Statistically this number can be expected to decrease in much the same way Simpson predicts his numbers will increase in the third quarter.

Prudential Douglas Elliman and the Corcoran Group, two corporate real estate firms with offices from Montauk to Manhattan, released their second quarter reports this month indicating a severe decline in sales as well as selling prices for the first half of 2009 compared to totals for the same time in 2008.

Corcoran reports a total sales volume of $396 million for the first half of 2009. The figure is a startling contrast to the firm's 2008 sales volume total of $949 million. These totals are based on Corcoran's sales on both the North and South Forks. The North Fork total is based on sales conducted from Aquebogue to Orient. The South Fork data tallies sales from Remsenburg to Montauk.

While these numbers are discouraging, the Corcoran Group has found a way to spin it by encouraging buyers to take the plunge noting the growing inventory and falling prices make it an ideal time to buy a home on the East End.

Phones Still Not Ringing

Real estate agents across the region do not need a report to tell them which way the wind is blowing or how the market is playing out as they search for customers on a daily basis while coping with their anxious clients. It takes longer to sell a house this year than it did last year. Buyers are scarce. The phones aren't ringing. When a house sells, it often sells for considerably less than the owner's original listing price. Inventory on the North Fork is moving slowly.

Waterfront homes have remained on the market for months, if not years, as sellers hold their price or make minor price reductions. A few years ago when the market was “hot" this type of listing would be sold within 30 days. Bidding wars and back-up offers were common. Now they are few and far between.

Agents on the North Fork point to a French Chateau style home on Long Island Sound in Jamesport as a case in point. The house, first listed with a NYC broker, went on the market for $3.5 million in 2006. The house has not sold. The property is now listed for sale at $1.665 million, a figure that represents more than a 50 percent price reduction. The first time homebuyers said to be favored by this market have not materialized despite the lure of low interest rates and available financing.

North Fork broker John Nickles, of Lewis and Nickles Real Estate LLC, reported market activity for second homes in the $400,000 range. “It helps if the house is close to the water," Nickles said, “and has beach rights. Then it will sell."

Nickles has been in the real estate business over 40 years and serves as the president of the Hamptons North Fork Realtors Association (HANFRA). “First hand, in the trenches," Nickles notes, “we have a seen an increase in sales in the last seven weeks." The big money is sitting on their hands according to Nickles. His observation is backed up by the number of choice bay front properties that have not sold this year.

Real estate signs on houses along the roadways of the Hamptons are as plentiful as the deer that dart across them. Even luxury housing often traded among the recession proof segment of the population is moving slowly. In some cases homeowners have dropped their prices as much as $10 million as they wait for a buyer to come along. Sometimes these dramatic price reductions are the result of a realty check after a seller has failed to attract any interest in a property that has gone on the market for what agents refer to as “an ambitious price."

Corcoran's report indicates a 16 percent drop in the average price of homes in Sagaponack, a locale that has been cited by Forbes magazine as one of the wealthiest zip codes in America. In 2008, the average home price in Sagaponack was $4.144 million. This year the number has dropped to $3.439 million. The median price dropped from $2.65 million to $2.2 million, or 17 percent, in one year.

The decline in average as well as median prices is across the board, with a few blips on the chart where these values have increased slightly on both the North and South Forks.

Prudential Douglas Elliman's report take's its own stance on the drastic price reductions describing the gap between the listing price and the contract price as a “listing discount." While that may be a nicer way of telling a seller to take a hit and make a deal, the fact remains, houses, condos and vacant land on both the North and South Fork are selling for considerably less than they did last year, and far less than they did two years ago giving buyers good reason to wait it out.

An Historical Perspective

“If you are going to comment on the market you have to take a historical perspective," Richard Stauffer, of the Hamptons North Fork Realtors Association (HANFRA) said. Independent owner brokers like Susan Von Freddie of Village Real Estate in Hampton Bays have that perspective. “I've been here 37 years," Von Freddie said. “We are all in the same boat, whether we are owners, brokers or corporate firms. Things are slow. We are doing a few deals but they are not jumping out at you. It's not like the old days," she said repeating the familiar refrain that punctuates most real estate agents' conversations these days. Von Freddie noted an increase in the number of year-round rentals but reported a lackluster summer rental season dominated by weekly rentals rather than seasonal leases.


Read More:

http://www.hamptons.com/News/Main-Articles/8528/Self-Correcting-Real-Estate-Market-Takes-A-Baby.html


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Daily News: Unlocking the keys to easing mortgage woes
Monday, August 10th 2009, 10:50 AM

The announcement of President Obama’s Making Home Affordable plan took the mortgage industry by storm but, so far, it’s been slow going to actually get consumers help.

So slow, in fact, the Treasury officials last week disclosed how many eligible mortgages had been modified by major banks — seen as an attempt to shame the laggards, such as Bank of America and Wells Fargo, into moving more aggressively.

“This is a big problem — 3.1 million people are 60 days past due. The pipeline of troubled borrowers is still very large,” said Faith Schwartz, executive director of Hope Now, an alliance of housing counselors, mortgage lenders and other industry professionals.

Why has the plan not been more of an immediate success?

Part of the answer is that many homeowners who need help are confused. Also, many servicers weren’t ready to deal with the influx of people needing modifications.

Here’s how to figure out if you’re eligible:

You have to meet a litany of requirements. You must be the occupant, can’t owe more than $729,750 on a one-unit home, your first mortgage must have originated before Jan. 1 and your monthly payment has to be more than 31% of your pretax income. You’re also going to have to prove financial hardship.

If you qualify, your loan servicer will reduce your interest rate until your monthly payments are less than 31% of your pretax income. They can bring the interest rate as low as 2% to make that happen.

If you’re unemployed, you may not get a loan modification. You have to be able to make the payments and there is only so much your lender can do to bring those down. They’ll first try to lower the interest rate, then they may extend the life of the loan so you’re paying it off over a longer period of time (and paying more interest over the long haul as a result). They could even defer a portion of the amount you owe until the loan matures. But if you don’t have sufficient income to make any of these options result in an affordable payment — or your servicer doesn’t want to go to these lengths — you may be out of luck. That means painful options, such as a short sale or foreclosure, become more likely.

Know that a loan modification hurts your credit score. Your lender has to report the fact that your loan was modified; the formula used to calculate your score regards a modification as a negative. How badly you’re hit depends on how high your score was in the first place.

“Borrowers need to stay very focused on working with their servicer by calling them and, if they’re not getting a status update, they should contact a third party like Hope Now,” Schwartz said. “You will get help, and the servicers have agreed not to foreclose on anyone without looking through the alternatives.” Having a guide as you move through this process is priceless because they’ll explain your options in plain English.

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http://www.nydailynews.com/money/2009/08/10/2009-08-10_jean_chatzky_unlocking_the_keys_to_easing_mortgage_woes.html


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Wall Street Journal Blogs: Shadow Inventory in New York City
By Emily Friedlander

    Prices of condos at Toll Brothers’ Northside Piers in Williamsburg has seen large price cuts.

Is shadow inventory casting a pall over the already weak housing market in Manhattan and Brooklyn?

We’ve written about shadow inventory in post-bubble markets, which appear to be on the mend, posting more home sales and shrinking home supply. However, some speculate that banks are holding foreclosed properties off the market to prevent a flood of low-priced homes from depressing prices. In post-bubble areas, shadow inventory also includes would-be home sellers who rent out their properties.

A new article in Crain’s New York points to a different sort of shadow inventory–a glut of new condos in buildings nearing completion. In better times, the article says, units in new condo developments typically hit the market as much as a year before the official ribbon-cutting. And in NYC, pre-Lehman, they sold. These days, empty buildings in various stages of construction are more the norm. Pre-sales, if they’re happening, aren’t moving apartments. Particularly in the two New York City markets Crain’s analyzed: Williamsburg, Brooklyn and Manhattan’s financial district. (The publication had some reporting assistance from a New York appraisal firm and local brokerage Aptsandlofts.com.)

Downtown, their analysis found that while there are 410 condos for sale, there are also nearly 1,000 units “lurking in the shadows.” The number includes units that are held by developers in soon-to-be completed buildings, as well as those kept off the market by banks and by individual owners who are waiting for conditions to improve before they tack up “For Sale” signs, Crain’s says.

In Williamsburg, a building boom has helped put 2,820 units on the block this year, according to Aptsandlofts.com. But  2,760 units will come on line next year. Last month New York magazine provided a fascinating look at the Williamsburg neighborhood–which it said has come to look like Miami, with its looming empty luxury developments:

    Walk down virtually any block and you’ll come across an amenity-laden building that sits nearly empty: relics of a moment in history that seems, increasingly, like a fever dream. Some developers with iffy financing have quietly been forced to go rental, others have lowered prices to the point where losses are inevitable, and a handful of projects, including two buildings Maundrell had been selling, have gone into foreclosure.

The upshot for New Yorkers? Lower prices for buyers and renters. Developers who can’t sell units are converting them into rentals and that trend is expected to continue. “More inventory will continue to lower rents,” Crain’s quotes Marc Lewis, president of Century 21 NY Metro, who believes that Manhattan vacancy rates are closer to 5% than the 2% reported by most industry players.

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http://blogs.wsj.com/developments/2009/08/11/shadow-inventory-in-new-york-city/


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CBS News: Home Sales, Recovery Slow
June's 11-percent jump in new home sales is the largest increase in more than eight years. But the housing market is far from a complete recovery. Ben Tracy reports.

From CBS News

Original at:

http://www.youtube.com/watch?v=CfLGHQ1mDxE&feature=related


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Associated Press: June New Home Sales Rise 11 Percent

Another promising sign in the troubled housing market. Sales of new homes rose by 11 percent in June - the largest amount in more than eight years and at the strongest pace since last November. (July 27)

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Tampa Bay Online: Bay area submerged mortgages hit 49%
By SHANNON BEHNKEN

sbehnken@tampatrib.com

Published: August 11, 2009

TAMPA - Nearly half of Tampa Bay area homeowners owe more on their mortgages than their homes are worth, according to a Zillow.com index released today.

In the second quarter, 49 percent of people who owned single-family homes were in that predicament, up from 45 percent in the first quarter.

Home values in the Tampa-St. Petersburg-Clearwater metro area fell 22 percent in the second quarter compared with the same quarter of 2008. The home value index for the area was $126,400, a 41 percent drop from when the market peaked in 2006.

Unlike home sales data, the real estate Web site's index measures the value of all homes, not just those that sold in a particular period.

The report does track home sales. It shows sales rose 8.9 percent in the second quarter and were up 4.6 percent from the year-ago number.

Nationally, home values posted their 10th consecutive quarterly decline, falling 12.1 percent year-over-year to an index value of $186,500 in the second quarter, the report states.

Twenty-three percent of owners of single-family homes in the United States owe more on their mortgages than the homes are worth, relatively flat compared with 22 percent in the first quarter.

The report tracks value estimates in 161 areas.

More information on Bay area real estate trends can be found at www.zillow.com/local-info/FL-Tampa-Metro-home-valu....

Reporter Shannon Behnken can be reached at (813) 259-7804.

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http://www2.tbo.com/content/2009/aug/11/na-bay-area-submerged-mortgages-hit-49/news-realestate/


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The Money Times: Home prices continue to fall but at a slower rate
New York, August 11:

From bad to worse! At the end of the second quarter of the current year, close to 25 percent of mortgage holders in the nation owed more than what their homes were actually worth.
untitled.jpg Zillow.com, a real estate valuation site, reported that 18 of the 142 declining metropolitan areas have posted at least three consecutive quarters of smaller year-over-year home value declines

The percentage of such homes, termed as underwater mortgages, is likely to rise to 30 percent by mid-2010, given the fact that the job losses refuse to stem.

Falling prices

Data shared by Zillow.com reveals that the decline in prices has dealt a body blow to the homeowners.

The single-family houses have registered a fall of 12 percent in the estimated median value in the quarter compared to the comparative period last year.
The median price in the current quarter stood at $186,500 as U.S. home values posted their 10th successive quarterly decline.

Stan Humphries, Zillow’s chief economist, said, “The negative-equity rate will rise and spin off more foreclosures. I see a substantial downside risk to prices and don’t think we’ll see a bottom until the middle of next year.”

In fact, this Negative equity has been the chief blight for many homeowners. Such a scenario neither enables them to refinance their loans, nor allows them to sell their homes.

Values plummeted as much as 40 percent to around $106,500 in Merced, California. Centro, California, came a close second and registered a 38 percent drop to $117,400. Las Vegas filled the third slot with a 35 percent decline to $140,500.

In San Francisco and Marin counties values of homes slid more than 15 percent. "San Francisco had bucked the trend for a long time, and in metro regions the higher-end areas tend to hold their value longer. But eventually those areas succumbed to some degree to the housing recession," Humphries said.

The rising inventory of unsold homes

A whole lot of homes are lying unsold, dragging the prices down. According to the National Association of Realtors, the rate at which sales are ticking, it will take more than nine months for the 3.8 millions unsold homes to find buyers.

For the six year period 2000 to 2005, the turnover rate was 4.5 months. Thus at present, the rate has doubled.

In June, 22 percent of total U.S. home sales were on account of foreclosures. Almost a third of the homes were sold at a price that did not cover even the purchase price of the home.

"Foreclosure resales are buoying overall sales numbers, but their low prices are keeping home values down," Humphries opined.

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http://www.themoneytimes.com/featured/20090811/home-prices-continue-fall-slower-rate-id-1079614.html


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from the Wall Street Journal: 4 Signs Your Home Is About to Lose Value
Despite signs that the real estate market is bottoming out, millions of homeowners are likely to find themselves in worse shape within the next two years.

Nearly half of the nation’s 52 million mortgage borrowers will have negative equity by the end of the first quarter of 2011, up from the 14 million at the end of this year’s first quarter, according to estimates in an Aug. 5 report by Deutsche Bank (DB: 64.44, -2.39, -3.57%). With so many borrowers underwater – or owing more on their home than it’s worth – the risk is high that they’ll default and their homes will go into foreclosure, says Mark Zandi, the chief economist at Moody’s Economy.com. (Moody’s Economy.com estimates that 17.5 million mortgage borrowers will be underwater by early 2010.)

Negative equity is the product of several factors. The most significant weight is the broad and persistent decline in home values. A Zillow.com index of home values fell 12.1% year-over-year during the second quarter, resulting in a total drop of 22.3% since the market peaked in mid-2006, according to an Aug. 11 report by the online real estate marketplace. Many buyers who bought their home around the peak with a 20% down payment have lost that dollar amount.

“The continued decline of U.S. home prices will contribute to rapidly rising rates of negative equity,” Karen Weaver, a Deutsche Bank research analyst, wrote in the report. “The most obvious implication is for mortgage defaults.”

Current homeowners, or those shopping for a home and who are concerned that they’ll end up underwater, should consider how long they expect to live in their house. Being underwater doesn’t affect homeowners unless they plan to sell, Zandi says.

Individuals who are staying put for at least the next five to seven years will likely recoup the lost value of their home, says Amy Bohutinsky, a Zillow.com spokeswoman. In addition, homeowners should refrain from borrowing against their mortgage, she says.

Those who find themselves underwater can turn to the federal Making Home Affordable plan, which can help you refinance or do a loan modification. You’ll have to meet the eligibility requirements listed here.

Whether you’re at risk for falling behind may have more to do with the economy and your neighborhood than your job, your credit or your income. Here are four warning signs that you’re heading underwater.
Foreclosures in your neighborhood

The quickest way to end up underwater is to live in a neighborhood that’s plagued by foreclosures.

When one home on your block goes into foreclosure, your home’s value drops by 1%, Zandi says. But that isn’t a one-to-one relationship. If two homes on a block go into foreclosure, your home’s value will drop by more than 2%.
As homes go into foreclosure, they create a domino effect, lowering home values throughout a neighborhood in a cascade beyond homeowners’ control. (For more on factors that reduce a home's value, read our story.)
Homes lingering on the market

When “For Sale” signs linger in a neighborhood for three or more months, that may mean buyers and sellers can’t agree on a price. In that environment, homes are unlikely to sell unless the seller lowers their asking price.

“The time on the market is always a good barometer of demand for homes and for the price homes are transacting at,” Zandi says. “The longer it appears that neighbors are taking to sell their home the more likely it is they’re not getting the price they want and that prices are falling.”

Compare the time it took for homes to sell in your neighborhood three years ago vs. today; if it’s taking weeks or months longer to sell, the prices homes can fetch are dropping, Zandi says.
Increasing unemployment

In most cases, the cities where homes have lost the most value during the past year also possess the highest unemployment rates.

Homes in Merced, Calif., have lost 40.2% of their value year-over-year, the biggest loss of home values in the nation, according to Zillow.com. The city’s unemployment rate is the fifth-worst among 372 metropolitan areas at 17.6%, according to June data from the Labor Department. El Centro, Calif., where home values plunged 37.6% year-over-year (the second-biggest drop in the country), has the worst unemployment rate at 27.5%.

Individuals living in areas battered by high unemployment are likely to see their home values drop further, especially if they live in areas dependent on dwindling industries – like Central Valley, Calif., and the mortgage lending business or Detroit and the auto industry, Zandi says.
Homes in disrepair

Dented siding, peeling paint and broken porches could be signs that neighbors are having trouble making ends meet and can no longer pay to take care of their home, Zandi says. Or they may have gotten an appraisal and discovered their homes have dropped in value and are no longer worth the cost of repairs. Inevitably, as the condition of homes in your neighborhood worsens, home values are likely to drop.

“The mere fact that they’re not investing in their homes will affect you too,” Zandi says.
What Underwater Borrowers Have Common

Risky mortgages
Some 77% of option-ARM borrowers and 50% of subprime mortgage borrowers were estimated to be underwater as of the first quarter of 2009, according to the Deutsche Bank report. With option-ARMs, borrowers could make minimum monthly payments that didn't even cover the loan's interest. As the market declined, these balances grew over time. With subprime mortgages, borrowers often had poor credit scores and little documentation of their financial situation. In both cases, borrowers often ended up with a large motgage relative to the house's price.

Date of purchase
Individuals who bought their home between 2003 and 2008 are at risk of being underwater because they bought while prices were rising, Zandi says. The risk is greater for those who bought between 2005 and 2006, as the market approached its peak.

Excessive borrowing
Many individuals borrowed against their home when it appreciated in value during the bubble by taking out a second mortgage or tapping into a home equity line of credit or home equity loan. This borrowing left their home with less equity to weather the drop in home values.

Home's location
The areas that have been hit the hardest by plunging home values include the "sand states" of Arizona, California, Florida and Nevada because they brought the most speculation, easy credit and overbuilding during the bubble, Zandi says. Also hurt: the states where unemployment is especially high and manufacturing jobs have been eliminated like Michigan, Ohio and Indiana, Zandi says.



Read More...

http://www.smartmoney.com/Personal-Finance/Real-Estate/4-Signs-Your-Home-is-About-to-Lose-Value



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