Monthly Archives: November 2012

In L’Aquila, Italy, Lessons for Rebuilding From Storm | Chappaqua Realtor

That earthquake, in April 2009, killed hundreds and left tens of thousands of L’Aquilans homeless, shuttering the city’s graceful and extensive historic center, which was its cultural and economic heart. “Temporary” housing was constructed: “new towns,” as Italy’s prime minister then, Silvio Berlusconi, boasted about the sad, isolated, cramped and costly apartments he ordered for displaced L’Aquilans along nowhere stretches of the city’s outskirts, cut off from mass transit and civic life. There was no infrastructure created or public consensus reached about combating sprawl, or what to save or sacrifice and how.

Since then Italian officials have kept promising to restore the city to its former self, but fewer than a dozen buildings have so far been repaired among the hundreds damaged in the center, which is a virtual ghost town. Never a tourist mecca, despite its pretty churches and squares, L’Aquila was a working town of some 75,000, home to a university and to many families with local roots dating back to the Middle Ages.

These days, tourists arrive to gawk at the rubble. Ruin porn has become the new local industry.

A sign of progress came in October, when President Giorgio Napolitano arrived for the opening of a new concert hall designed by Renzo Piano in a park in central L’Aquila, one of the few urban initiatives since the quake. Mr. Napolitano criticized the “new towns” for diverting attention and resources from the primary challenge of returning life to the city center. The regional government has now gained control over recovery efforts from a succession of failed authorities in Rome. But magical thinking remains a problem for residents and politicians, as usual after a disaster, while memories of the quake are fading outside the region.

What’s the relevance for the New York area? Notwithstanding the need for big change and straight talk in the face of hard science about rising sea levels and increasing storms, public officials have mostly followed the Italians’ lead, promising devastated homeowners to reconstitute ravaged neighborhoods in harm’s way. They have all but conceded that a policy of retreat and relocation is a political impossibility.

I’ve gone to L’Aquila several times since the quake, the first a couple of days after it struck, most recently before the opening ceremony for Mr. Piano’s hall, to see it under construction and to speak with residents and the city’s planning chief, Pietro Di Stefano. “We went into a labyrinth of the absurd,” he told me. “We needed a new plan.”

Then he talked about retrofitting a few buildings here and there in the city center. He seemed resigned to the futility of arguing for the demolition of homes and for new construction while owners were still petitioning the state for money. That didn’t sound like much of a plan to me.

I mentioned Mr. Piano’s project. Conceived by the architect and his friend Claudio Abbado, the conductor, as a way to bring some culture and night life back to the center, the 240-seat concert hall links multicolored cubes, pavilions made of spruce from Trent, the northern Italian province that sponsored the project. (The hall was not quite finished for the opening ceremony and, as so often happens in Italy, was shut right afterward. There are supposedly plans to finish it and organize concerts next year.)

An anomaly in L’Aquila’s historic city, the hall was partly engineered as a prototype for the sort of recyclable, quake-resistant wood construction that could handsomely and cheaply replace damaged stone houses in the center, so people might finally move back there. Per square foot, the hall cost a fourth of what the “new towns” did.

At the suggestion of wood buildings, Mr. Di Stefano stiffened. He started to pet the nearest stone building as if it were the family Labrador. “Impossible,” he said.

“This is a city of stone,” he insisted. “These homes were built by families here over hundreds of years, and they have their histories. What would Florence be without Giotto, or Pisa without the tower? The buildings are who we are.”

Is a city the assortment of its buildings or the life that happens in and around them? L’Aquila has fine architecture, including Baroque churches and early-20th-century Rationalist office blocks. These could be retrofitted and reopened, and a couple already have been. But it is really the public spaces — the streets and piazzas — that make the city special. Officials charged with saving the center, fixated on buildings instead of urbanism, seem not to realize this, and let L’Aquila die a little more each day.

And so now, in the main square, old men gather on sunny mornings, driving from miles away. They stroll the main street, as they did before the quake, then scatter by day’s end to their far-flung new homes. Antonio Antonacci, a retired lawyer, chatted in the empty Piazza Duomo with three friends when I stopped by.

“It’s still the only city center we have,” he told me.

New Yorkers aren’t particularly married to old stone houses. The city has a history of audacity and adaptability. Both have fueled the region’s prosperity. But heedless planning in the last century has also made many people skeptical about large-scale infrastructural change.

That said, some storm-ravaged New York homeowners have already made known that they’re contemplating resettling in safer neighborhoods, and Shaun Donovan, the United States secretary of housing, whom President Obama appointed to spearhead federal relief efforts after Hurricane Sandy, seems open to big ideas. A calamity can also be an opportunity, for ambitious politicians, and not least for a second-term president, now liberated to think decades ahead.

Although L’Aquila may be unlike New York in most crucial ways, its last few years suggest that a disaster doesn’t just destroy homes and take lives. It tests a city’s, and a nation’s, imagination and capacity to change.  

Follow Michael Kimmelman on Twitter, @kimmelman.

Real Estate Market Trends: Pending Home Sales Rise | Pound Ridge Realtor

Pending home sales – a predictor of signed housing contracts – rose 5.2 percent in October, according to the latest real estate market trends reported today by the National Association of Realtors.

The association’s Pending Home Sales Index has realized 18 consecutive months of annual gains, reaching a reading of 104.8 in October, the highest level since March 2007, excluding a few spikes stimulated by the first-time home buyers’ tax credit, said the Chicago-based trade association.

“We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation, and rising consumer confidence about home buying now that home prices have clearly turned positive,” Lawrence Yun, the association’s chief economist, said in a statement.

Home prices rose more than 11 percent in October 2012, compared to October 2011, according to the association. The gains have raised total home equity by $760 billion since the beginning of the year, according to Yun, a figure that could reach $1 trillion by year end.

The Pending Home Sales Index tracks home purchase contracts that have been signed, but not completed. A sale is typically finalized within 60 months of signing. The index reveals regional real estate market trends, according to Yun. “Contract activity surged in the Midwest and is showing very healthy gains in the South, but was down slightly in both the Northeast and West.”

In other real estate market trends, the Commerce Department yesterday reported a 0.3 percent dip in sales of new single family homes for October of 2012. Despite the drop, the seasonally adjusted annual rate of 368,000 home sales for October is 17.2 percent higher than the 314,000 rate for October 2011. Inventories stand at 147,000, a 4.8-month supply at the current sales rate.

“The latest numbers are right in line with our forecast, which projects that sales will resume a slow, upward trajectory going forward and will end 2012 about 20 percent ahead of 2011,” said David Crowe, chief economist for the National Association of Home Builders, a Washington, DC, trade association that tracks real estate market trends.

Tax Hit Looms on Mortgage Relief for Troubled Homeowners | Bedford Realtor


Troubled homeowners who get a break from their mortgage lenders might not be so lucky with Uncle Sam, and could face hefty tax bills unless Congress acts to extend a key provision.

The tax provision currently allows some homeowners—mostly those facing foreclosure—to avoid paying taxes on certain relief they receive on their mortgages.


The provision covers mortgages where lenders forgive a portion of the principal, a key component in the $25 billion federal-state settlement over mortgage-foreclosure abuses. It also affects homeowners who do “short sales,” where banks agree to allow a property to be sold for less than the debt owed.

In 2007, as the foreclosure crisis erupted, Congress exempted homeowners from treating some forgiven mortgage debt as taxable income, in a bid to encourage banks and borrowers to seek foreclosure alternatives. But that provision is set to expire Dec. 31, causing headaches for homeowners such as Brad and Connie Bates.

Mr. Bates has been working since August to get his mortgage company, Bank of America Corp., BAC -0.41% to approve the sale of his three-bedroom home in St. Petersburg, Fla., for less than the $180,000 he owes. He has a buyer willing to pay just $65,000, and the shortfall would be counted as income if Congress doesn’t extend the tax-relief provision.

“If they don’t get together and deal with this tax problem, it just creates a disincentive to do the responsible thing,” says Mr. Bates, a 58-year-old retired Air Force veteran who bought the home in 2001. “The tax hit is going to be enormous.”

While the real-estate industry has focused on potential caps to the mortgage-interest deduction, the expiration of the 2007 tax provision “is the most important piece of housing legislation [that] no one is talking about,” said Isaac Boltansky, a policy analyst at Washington-based Compass Point Research & Trading, a dealer broker for institutional clients.

Rep. Jim McDermott (D., Wash.), who has introduced a three-year extension of the tax measure in the House of Representatives, said: “It’s as if you’re handing someone a life ring and then you cut the rope. It doesn’t make sense.” The Senate Finance Committee passed a one-year extension as part of a broader tax package with a 19-5 vote in August.

Mr. McDermott said he is confident Congress will ultimately pass an extension. “There’s no question,” he says.

But the uncertainty over the timing of that extension—which could become ensnared by the broader talks on the “fiscal cliff,” the looming mix of tax increases and spending cuts—is raising the blood pressure of real-estate agents who work with distressed homeowners.

“You may have a large number of people here who sit back and fight the foreclosure process” if the provision isn’t renewed, said Steve Capen, a real-estate agent with Keller Williams Realty in St. Petersburg.

Many of his clients who are trying to secure a short sale are “already in a tough situation,” he said.

Sergei Zhurkov would face a particularly large tax hit for the short sale on his Dunedin, Fla., home. He owes around $750,000 on two mortgages and has an offer of $200,000 for the house. “I have no job. How am I supposed to pay taxes on this?” said Mr. Zhurkov, 62. “It makes no sense. I am completely broke.”

The short sale has been approved by Wells Fargo WFC -0.80% & Co. after a protracted negotiation, but the buyers are having difficulty getting approved for a mortgage.

The looming expiration of the tax provision comes at a critical time for the housing market. Banks have ramped up short sales, approving nearly 340,000 in the year ended in September, according to CoreLogic Inc., CLGX -0.27% a data firm. That has helped to stanch the flow of foreclosures onto depressed housing markets, limiting both price declines and lenders’ losses.

If the tax provision expires, it could also deal a serious blow to the $25 billion mortgage-foreclosure settlement that five national lenders struck with 49 states and the federal government in March. That deal requires banks to use the bulk of the penalties for borrower aid, including at least $10 billion in principal reduction. So far, lenders have forgiven around $2.6 billion on nearly 22,000 mortgages under the settlement, or around $117,000 per homeowner.

Mr. Bates’s short sale has been held up because his mortgage company has said the home is worth at least $135,000. He says his home isn’t worth anywhere near that because of extensive water and mold damage from a leaking roof that he can’t afford to replace.

“The property has basically fallen down over our heads. A short sale is the only way we can deal with this,” Mr. Bates said.

Bank of America has “worked with urgency to help more than 100,000 customers complete short sales this year,” said a BofA spokeswoman. “We are working to help Mr. Bates receive those same benefits.”

The current debt-forgiveness provision is limited to $2 million in mortgage debt and applies only to loans that were used to acquire or “substantially improve” a principal residence. Absent any extension, borrowers would have to prove to the Internal Revenue Service that they are insolvent to avoid the higher tax consequences.

In some cases, homeowners who go through foreclosure would still be left with higher taxable income, if banks agree not to recoup any shortfall between the debt owed and the amount recovered through the foreclosure.

Write to Nick Timiraos at

A version of this article appeared November 30, 2012, on page A4 in the U.S. edition of The Wall Street Journal, with the headline: Tax Hit Looms on Mortgage Relief.

The value of conversation | Pound Ridge NY Real Estate

I don’t think conversation gets the respect it deserves.  Consider these facts:

I love my wife.  After a little more than half our lives together I can confidently say that she is the most important and influential person I have ever known.  She is half my life, literally, as the direct result of conversation.  It’s how we fell in love and how we stay that way.

I love my children.  They’ve taught me, tested me and have been the fuel propelling me towards my better self.  I stagger daily, but will never stop striving to be worthy of guiding them and preparing them for happy lives.  Conversation is where the work of parenting gets done.  It’s the countless explanations to my three year old and the countless excuses from my teenagers.

I am profoundly grateful for my business partners.  Together we are so much stronger, better, faster and fun than we could ever be apart.  Conversation is the glue, the playground and key to the magic factory that lets this happen.  It is the stone against which we sharpen our ideas and the salve that remedies our failures.

I believe that the quality of our lives is determined by the quality of our conversations.  So let’s be good at this.  Here are my ground rules: 

  • Ask questions.  There’s no better way to start a conversation.  “Have you lived here long?”  “Did you hear about (blank)?”  “I love your (blank), where did you get it?” are some of my favorites.  They are guaranteed to get a reply, but then you need to keep the conversation going.  How?
  • Be interested first.  Great conversation is a dance.  It’s give and take, and wit, and repartee… but listening is critical.  Instead of waiting for them to stop yapping so you can pivot to your story, try asking follow up questions instead.  Like this- “Interesting.  I’ve wondered about that, what is it you like most about (blank)?”
  • Ask for opinions.  This stops questions from feeling like an inquisition and it invites fresh thinking.  The question “What’s your opinion?” and statement “In my opinion” both leave room for discussion.  It communicates that you’re interested in what they think – and that’s so much more important than how tall, short, fat, rich or pretty we are.  When we ask someone what they think, they immediately give us a free upgrade in their good peeps ranking.
  • Make friends.  If this is your goal you will almost never fail.  Meet strangers with an open and accepting heart, and you’ll suddenly find new friends everywhere you go.


And now, a word of caution from my pal William Shakespeare: the tip of the tongue reveals the depth of the mind.

I used to think he was simply referring to intelligence, but he’s really talking about the transparency of our motivations as revealed by what climbs out of our word holes.   So be cautious and resist the temptation to ‘always be closing’.  Yes, you need sales, but don’t rush it.  If you cultivate, nurture and build relationships; sales will follow.

So here’s the simple recipe for increasing opportunity: be more interested.

If you want more opportunity, be interested in more people.  It’s just that simple.  Stay in touch with them.  Start conversations and give them a reason to keep you top-of-mind besides what you do for a living.

If you do this, I promise the rewards will be surprising.  You’ll have more fun, make more friends and realize that you don’t need to talk about what you do to do more of it.

Pending home sales reach five-year high | Bedford NY Real Estate

Pending home sales jumped 5.2% to 104.8 in October, its highest level since March 2007, the National Association of Realtors reported Thursday. Annually, pending sales increased 13.2% from October 2011, reflecting 18 consecutive months of rising sales.

The Pending Home Sales Index released by NAR releases data based on contracts, not closings.

NAR Chief Economist Lawrence Yun believes buyers are reacting to favorable market conditions. “We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation, and rising consumer confidence about home buying now that home prices have clearly turned positive,” said Yun.

Despite a 0.3% rise in pending home sales in September, analysts were skeptical based on Wednesday’s new home sales numbers. However, the increase in today’s report “should renew expectations for a positive contribution from the housing sector,” Econoday said.

The index report shows very distinct regional patterns. “Contract activity surged in the Midwest and is showing very healthy gains in the South, but was down slightly in both the Northeast and West,” Yun said.

The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market.  All regions are up from a year ago, with double-digit gains in every region but the West.”

“Though the hurricane’s effect on Northeast sales during November is still a question, today’s report points convincingly to building momentum for existing home sales,” said Econoday. “The Dow is moving to opening highs following today’s report.”

Click on the image below to see the full index.