Sam Khater, Freddie Mac’s chief economist, says, “Mortgage rates fell for the third consecutive week, continuing the general downward trend that began late last year. Wages are growing on par with home prices for the first time in years, and with more inventory available, spring home sales should help the market begin to recover from the malaise of the last few months.”
News Facts
30-year fixed-rate mortgage (FRM) averaged 4.35 percent with an average 0.5 point for the week ending February 21, 2019, down from last week when it averaged 4.37 percent. A year ago at this time, the 30-year FRM averaged 4.40 percent.
15-year FRM this week averaged 3.78 percent with an average 0.4 point, down from last week when it averaged 3.81 percent. A year ago at this time, the 15-year FRM averaged 3.85 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84 percent with an average 0.3 point, down from last week when it averaged 3.88 percent. A year ago at this time, the 5-year ARM averaged 3.65 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
State officials held hearings last week into Con Ed’s ban on new natural-gas customers in much of Westchester, but it’s the state itself that blocked new gas pipelines. What’d anyone expect?
Now, it turns out, the county’s nightmare may begin sooner than thought: When Assemblywoman Amy Paulin, who represents southern Westchester, asked Con Ed if it could delay the ban (set for March 15), the utility was frank: Supply and demand determine whether there’s enough gas, it said. So shortages could occur even beforethen.
Paulin isn’t the only one worried: “A March 15 deadline is just far too soon,” warned County Executive George Latimer. And the ban could choke an economic comeback in Westchester. “A moratorium of no new hookups would create a very chilling effect” on the “revival” in New Rochelle, Yonkers and White Plains.
Yet Con Ed has been warning for a long time now. In 2017, it tried to get the Public Service Commission to let it offer incentives to pipeline developers, who feared being denied permits — but was turned down.
The PSC denies that Con Ed came to it with any “pipeline solution,” Paulin said, but public documents show that’s not so.
Let’s face it: Even if the state forced Con Ed to sign up new customers, the utility still couldn’t deliver gas it doesn’t have.
Yet this disaster is entirely self-inflicted. To suck up to climate-change radicals, who hope to do away with all fossil-fuel-based energy, Gov. Cuomo has been slow to OK new pipelines. In response, pipeline companies have lost interest in New York.
Absent new gas supplies, businesses and residents will shun the county. No one will freeze, but Westchester faces new economic drag.
And New York City’s not far behind.
One hope: a court ruling last month that states can’t use their water-quality certification process to delay federal licensing of hydropower plants. “The scope of the ruling enhances the odds” that the Constitution pipeline will be built, notes Rob Rains of Washington Analysis. Constitution’s sponsors want the court to rule against New York efforts to block the pipeline.
Alas, anti-pipeline foes are gaining steam in New York. Last year, city Comptroller Scott Stringer bucked labor unions to denounce the plan for the Northeast Supply Enhancement pipeline, a source of natural gas that’s vital to the city’s growth. At least seven public-advocate wannabes have now joined him.
Maybe they want to send city folks fleeing, much as a dead economy has Upstaters doing. Then again, if everyone leaves, there’ll be no need for natural gas . .
VIEWS41KSHARE221Designed to amplify nature, these cozy, modern cabins invite you to embrace the simple life.
Winter is the perfect time to rally family and friends for a cabin getaway, featuring days in the unspoiled snow and nights spent nursing hot (spiked) cider around the fireplace. If you’re dreaming about your own rustic retreat in the wilderness, look no further for inspiration than these 20 modern winter cabins below that demonstrate a deep respect for their snowy, wooded surrounds.
Described by Seattle–based Olson Kundig Architects as “a steel box on stilts,” this three-story cabin in upstate Washington is fitted with four 10′ x 18′ steel shutters that are rolled over the glass windows, so it can be sealed off from the elements when not in use. In fact, the client requested that Delta Shelter be virtually indestructible: the steel exterior makes it fire-resistant, while its steel-beam legs protect it from flooding.
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Built in 2005 for a client looking for a compact, easy-to-maintain shelter for his and his friends’ adventures, Delta Shelter’s design was inspired by structures like tree houses and fire lookouts.
Architect Håkon Matre Aasarød, partner at Oslo–based studio Vardehaugen Architects, led the design of Cabin Vindheim—an off-grid cabin deep in the alpine landscape near Lillehammer, Norway, whose spaceship-like appearance gives it an otherworldly presence.
The cabin’s concept was simple: To create a cabin that is small and sparse yet spatially rich. The 55-square-meter (592-square-foot) cabin, commissioned by a private client and completed in 2016, comprises a large living room, bedroom, ski room, and small annex with a utility room. It functions off the water and electricity grids.
Designed by Montreal–based MU Architecture, Nook Residence is an all-white retreat that harmonizes with the snowy landscape outdoors.
Squinting through Quebec’s seasonal fluries, one might not immediately register the Nook Residence, an all-white retreat that purposefully blends into the winter landscape. The house, designed by MU Architecture, presents itself to passersby as a blank monolith; yet around the corner, it opens onto Lake Memphremagog through expansive windows and an interior balcony.
This sleek cabin by Reiulf Ramstad Arkitekter adapts to the slope of the terrain, and divides into two branches of living areas. The same timber cladding of the exterior extends onto the roof, creating a unified expression.
Designed by Reiulf Ramstad Arkitekter for a family of four, the Split View Mountain Lodge is a holiday home near the village of Geilo, Norway. The main volume splits out to form additional annexes that frame individual views of the surrounding mountains.
The minimalist cabins of this Norwegian hotel offer elegant shelter, while striking a remarkable communion with the sublime, natural environment. Billed a “landscape hotel,” the lodge features nine separate rooms that offer distinct views of the topography.
Set in a beautiful stretch of fjord country about 250 miles northwest of Oslo, the Juvet Landscape Hotel is the kind of place you could not even dream up. The minimalist design of the Juvet’s rooms bring guests into close contact with the Valldola River and the sublime valley beyond it.
International firm Snøhetta created this new addition to Sweden’s Treehotel that’s perfect for stargazing. Barring a fear of heights, you can choose to lay your sleeping bag on the double-layered net that connects the cabin’s two bedrooms and enjoy a night under the stars.
Hovering over a concrete plinth, Troll Hus is a vacation home that accommodates three generations of skiers in Tahoe, California. The concrete base houses ski storage and a changing area during the snowy season. And when the family isn’t skiing, they can enjoy a partially roofed patio during the summer.
Located in California’s Sugar Bowl neighborhood, this shadowy lair by Mork-Ulnes Architects looks like something out of fairy tale. “We call the house Troll Hus, with a reference to the otherworldly beings in Norse mythology and Scandinavian folklore that are said to dwell in remote mountains,” architect Casper Mork-Ulnes says.
This snug guesthouse in upstate New York, designed by Studio Padron, boasts bright and modern interiors that are a surprising contrast to its dark cedar facade.
Jason and Suzanne Koxvold commissioned Studio Padron to design a 200-square-foot guesthouse on their Ellenville, New York, property. The geometric structure’s dark cedar cladding contrasts with the inviting interior, which is heated by a cast-iron Jøtul stove. A layer of built-in bookshelves made from felled oak lumber also helps insulate the building in winter.
This carbon-neutral house by Helsinki studio Avanto Architects has a facade of dark-stained wood, but light wooden interiors. The retreat allows the owners to live simply, growing their own herbs and vegetables and catching pike at nearby Vaskivesi Lake. There is no running water; the home is solar-powered, well-insulated, and is warmed by the fireplaces.
Shaped like a cross, this four-cornered villa offers four different views of its location on an island in Finland. Avanto Architects created a black exterior, dotted with large windows, to make it invisible from the nearby lake.
Teeming with owls, moose, and black bears, the snowy forests of Eastern Quebec make an ideal site for a winter fortress. It was perfect for Canadian architecture firm _naturehumaine’s latest client, a behind-the-scenes movie guy who wanted a secluded place to recuperate from intensive, exhausting projects. Its geometric silhouette that echoes the classic typology of the region’s gable roof barns.
Architects Stéphane Rasselet and David Dworkind delivered with a strikingly simple concept, anchoring two stacked, rectangular volumes into a steep mountainside surrounded by awe-inspiring vistas.
On a sloping, woodland site in Wintrop Washington, CAST Architecture has created a family retreat that allows the landscape to flow through the structure. Super-insulated walls and ceilings, energy-efficient windows, and an efficient radiant heating system minimize energy consumption—even in snowy winters.
This cabin has a commodious kitchen and living area that encourages family and friends to come together for meals and conversation.
Raised to capture views of Mont-Sainte-Anne, High House is a minimalist home in Quebec, Canada designed by Paris-based studio DELORDINAIRE with white, concrete panel cladding that blends into the snowy environment, and stilts that allow sunlight to penetrate the space throughout the day.
White concrete panel cladding and corrugated steel roof panels give this cabin a crisp, geometric form that almost melts into the landscape on bleary, snowy days.
In Hellerud, a borough of Oslo, Norway, local firm Arkitektur + Design used heat-treated pine and bricks to fashion a cozy, family retreat dubbed Stairway to Heaven.
Stairway to Heaven is located on the clients’ parents’ land, just steps away from the homeowner’s childhood home. Two siblings were also building homes on the property, making it a true family compound. The architects were mindful to create a home that utilized the views, but also allowed for privacy between residents.
Nestled within a forest near Ontario’s Kawartha Lakes, this modern cabin name Lake Cottage by Toronto–based architecture firm UUfie has an exterior clad in mirror panels that reflect the natural surroundings.
The cabin is surrounded by a thick forest of birch and spruce.
Set high on a soaring granite outcropping, I-Kanda Architects’ Cabin on a Rock is a modernist, prefab cabin in New Hampshire with a 24-foot-wide sliding glass wall that captures the most scenic views.
“The 900-square-foot cabin perches on one piece of granite, projecting precariously over a steep drop-off to afford dramatic eastern views across the valley below,” says Isamu Kanda, principal at I-Kanda.
To meet with strict Alpine valley building regulations when designing this mountain house in the French alpine commune of Manigod, Studio Razavi Architecture took great care in analyzing local historical buildings to understand what their forms accomplished functionally, and how they shaped the local architectural culture.
The base of this cabin is constructed out of cast-in-place concrete with formwork using the same wood as the floor cladding above.
Set within a hardwood forest along the shores of the Bras D’or Lake, and respectful of its surroundings, this cabin in Nova Scotia, Canada, was designed by local practice Nicholas Fudge Architects with a clear separation between the public and private realms.
This 1,900-square-foot home was assembled on-site in just two days with wall panels consisting of staggered 2′ x 4′ studs on a 2′ x 8′ plate, which eliminates thermal bridging and maximizes energy efficiency.
Designed by Canadian architect Brian Mackay-Lyons, Enough House is a Cor-Ten steel holiday rental home with wood beam ceilings and a blend of modern and vintage furniture. A 24-foot-wide corner window looks out to the valleys in the north, and a 12-foot window frames distant views of the beach. The house is available for rent through Boutique Homes.
Enough House by MacKay-Lyons Sweetapple Architects resides on Brian MacKay Lyons’ Shobac farm in Nova Scotia, a campus that allows the firm to experiment with form, materiality, and building. The Cor-Ten steel cabin, which features exposed Douglas fir plywood sheathing and stained pine flooring inside, houses an intern architect.
Chad and Courtney Ludeman, the husband-and-wife team behind Philadelphia’s design-driven Lokal Hotel, transformed this classic 1960s A-frame cabin in New Jersey into a Scandinavian-inspired holiday retreat in the woods.
The material palette consists of concrete, bleached flooring, pine plywood, and lots of matte black and white.
Mork Ulnes Architects designed this compact, pinwheel-shaped, pine-clad cabin on a hilltop side in the north of Oslo with four wings that branch out for distinct views.
Planning regulations required a gable roof, which the architects split into four shed roofs carefully designed to respond to heavy snow shed and meet spatial and aesthetic wishes.
The average interest rate offered in the U.S. is 4.84 percent, according to findings from online lending exchange LendingTree. Rates tended to fall within a fairly narrow range across the country – there were no states with rates below 4.74 percent or in excess of 4.96 percent.
The average down payment across all 50 states is about $28,000, while the average loan offered in the U.S. is $224,297.
Here’s a look at the conditions prospective homebuyers are currently facing in the housing market, as compiled by LendingTree:
Highest interest rates
The states with the highest average interest rates are:
New York: Average interest rates in the Empire State are 4.96 percent, the highest in the country.
Iowa: In Iowa, residents face the second-highest interest rates, at 4.93 percent.
Arkansas: At 4.92 percent, residents in Arkansas only face slightly lower rates than Iowans.
Lowest interest rates
The states where interest rates are the lowest include:
California: The Golden State has the lowest interest rates, on average, at 4.74 percent.
New Jersey: Follows California with the second-lowest rates of 4.75 percent.
Washington & Massachusetts are tied for the third place spot, each state offering average rates of 4.76 percent.
Highest down payment
The states where consumers tend to put down the highest average down payment is New York, at $43,404.
Lowest down payment
On the flip side, residents in West Virginia typically only need to put down a little bit more than $15,000.
Lowest APR
The state with the lowest average APR is California at 4.83 percent.
MediaNews Group/Inland Valley Daily Bulletin via Getty Images | Digital First Media | Getty ImagesWorkers install solar panels on the roofs of homes under construction south of Corona, California. The California Energy Commission in May 2018 adopted new energy building standards requiring solar panels for virtually all new homes built in the state starting in 2020.
In 2013 De Young Properties built a single-family house in central California that defied nearly three generations worth of homes the family business had constructed. It was a net-zero energy building — it had the potential to produce as much energy as it would consume in a year. De Young didn’t build another one for four years, but within that period the company refined its designs to be more energy-efficient and technology-focused and drove down costs.
“Energy bills tend to be pretty high and onerous, and you usually have to sacrifice comfort for your energy bill or your energy bill for comfort, and we saw an opportunity to advance in this realm and become a leader,” said Brandon De Young, executive vice president.
In 2017 De Young Properties started the process of constructing three communities near Fresno, California, with more than 140 single-family homes in three different communities that will have the same level of energy efficiency. So far the homebuilder has constructed half of the first community, Envision at Loma Vista, and is in the process of beginning the other two. The cost of each home is typically between $350,000 and $450,000 — and carries an additional $10,000 over the cost of De Young’s comparable non-zero energy properties.
The homebuilder’s early investment in zero-energy construction was prescient. If you buy a new house in California within the next few years, there’s a good chance it will be built along similar lines. In December, California instituted a new requirement that calls for most new homes and multi-floor residential buildings up to three stories high to include solar rooftop panels beginning in 2020. Depending on the specifics of the design and the residence’s energy consumption pattern, solar panels could produce all the electricity needed for the home. The state’s ultimate goal is to produce net-zero energy homes that reduce the state’s carbon footprint and make buildings energy self-sufficient.
California is one of the world’s largest economies
This is the first time a state has built this requirement into its code, but similar regulations exist in cities like Tucson, Arizona, as well as the City of South Miami, the first introduced in Florida. Renewable energy mandates like residential rooftop solar come at a time when California has faced an unprecedented series of wildfires, with at least some of the natural disasters linked to more extreme weather patterns in an era of climate change.
The Net-Zero Energy Coalition estimates the U.S. has only 5,000 net-zero energy single-family homes and over 7,000 net-zero multi-family homes. That number could expand in 2020 to over 100,000 net-zero energy homes, based on the average annual new home constructions in California.
“California by itself is one of the largest economies in the world,” said Jacob Corvidae, a principal at the Rocky Mountain Institute. “What happens there has some impact, and it’s going to be an impact that has an effect on the rest of the country because they’re going to be figuring out ways to make solar cheaper and that scale will help bring down the cost.”
De Young PropertiesA home within De Young Properties’ Envision at Loma Vista community outside Fresno, California.
In 2017, the U.S. Department of Energy estimated about 39 percent of the total energy consumed in the country was in the residential and commercial sectors. A majority of the energy was produced by fossil fuels like coal, petroleum and natural gas.
Net-zero energy and zero energy-ready homes — which can be zero energy if solar panels are installed or their capacities are increased — are built to be more energy efficient than a typical building. This includes adding extra insulation, high-quality windows, LED lighting, low-flow water fixtures, heat-reflecting roof tiles and energy-efficient appliances that, when combined, reduce the amount of energy the house consumes.
On the outside, the houses are built to optimize energy efficiency with significant airtight construction and economical roofs, walls, windows and foundations, said Sam Rashkin, Chief Architect of the Building Technologies Office in the Department of Energy’s Office of Energy Efficiency and Renewable Energy. These technologies also allow for better temperature regulation, low-humidity, less noise and minimize exposure to dangerous pollutants.
Cities with the most zero-energy buildings
City
Number of Units
Sacramento, CA
853
Vancouver, BC
723
Davis, CA
664
Portland, OR
365
New York, NY
361
Austin, TX
346
Honolulu, HI
338
Clarkdale, AZ
323
Washington DC
317
National City, CA
268
Net-Zero Energy Coalition
There is no one-size-fits-all design for zero-energy homes. In De Young’s housing market, the modern style — homes you might find on a Google search with flat walls and a box-like look — are not as prevalent, so the company configured the homes to come in an array of styles, such as cottage, modern-farmhouse, and Italian-inspired variations.
“You don’t have to do it that [modern] way. We found out that you can build a zero-energy home that looks just as beautiful as any other home,” De Young said.
Costs of going zero energy
California commissioners anticipate the new mandate will add $40 more to a monthly mortgage payment, but with an $80 return on heating, cooling and lighting over a 30-year term. The upfront cost to a single-family house will be approximately $9,500 with savings of $19,000 over 30 years.
Ann Edminster, a board member of the Net-Zero Energy Coalition and a green building consultant, argues that people shouldn’t be thinking of the upfront costs in isolation. Home buyers can make decisions in a house’s design that offset the additional costs for net zero-energy upgrades, such as sacrificing decorative housing elements.
“It’s the same thing as asking for a roof rack on your car. You’re going to pay extra,” Edminster said, referring to design choices homeowners already make which result in higher costs, and in some cases, less energy efficiency.
De Young PropertiesA net zero energy home under construction by De Young Properties. Adding solar panels to a roof will not alone get a house to net zero energy. Choices in the framing and window design are part of required energy-efficiency upgrades.
In De Young’s case, making a home energy efficient usually costs an additional $10,000 before adding solar panels, which makes the home zero energy. Purchasing a solar system outright could add between six to 12 percent to the price, De Young said. The company has a partnership with Tesla which offers zero-down leases on its solar panels, among other financing options. In 2017, 41 percent of residential solar was owned by a third-party, which includes monthly leases and power purchase agreements, or PPAs, that allow customers to pay per kilowatt-hour of generation.
Charles Kibert, a professor at the University of Florida’s College of Design, Construction and Planning, said there are some drawbacks to relying on solar. The panels require ample roof space, a certain orientation that allows for optimum energy production and consistent weather conditions.
“All those factors put together and my experience is that you have to try really hard to have a net zero home,” Kibert said, adding that how people manage their home is a big factor. “Living behavior every day drives energy consumption pretty reliably.”
Problems with the grid
The issues go beyond individual homes to the grid itself.
Kibert said there are two methods for reducing the carbon footprint beyond zero-energy homes: a low-carbon grid and better renewable energy storage. The current method of generating energy for most grids still depends on fossil fuels, but he said a few have moved to renewable energy like hydropower. California is far ahead of many U.S. states with its utilities already producing between 30 percent to 40 percent of energy from renewable sources.
Storing produced renewable energy remains costly, which is why people remain connected to the grid.
“If you had storage in your home and you were careful about your energy consumption, you would be effectively off the grid,” Kibert said. “You wouldn’t have to worry about it, but storage is expensive.”
Tesla’s Powerwall home storage solution has a cost of roughly $7,000 per unit. Tesla recommends two units for a home to be powered 100 percent with renewable energy and have at least 24 hours of power during a utility outage, which brings the total cost to over $14,000 — excluding installation costs that range from $1,000 to $3,000, according to the company.
Edminster said it is clear that the grid will not be disappearing anytime soon. The California mandate only requires homes to meet a higher level of efficiency and use solar, but that doesn’t mean residents won’t be able to use gas from the grid — it only offsets electricity use.
She said we are much further along in building energy-efficient homes than energy-efficient grids. “The efficiency side is pretty dialed in so that if someone felt like being zero-net energy by placing solar panels on their roof they probably would be pretty close to being zero-net energy.”
Zero-energy homes highlight a commitment to efficiency and the effort to reduce individual energy consumption. Ultimately, the objective is to find a healthy, reduced level of energy consumption. “What we really want is at the level of the social fabric to have our energy consumption to be met by renewable sources,” Edminster said. “That’s the big goal.”
The downtowns of most major American cities were a great investment, even for those who bought in the real estate crisis a decade ago — and the premium gap between city centers and their suburbs continues to widen, a new survey of urban real estate finds. The only question is: Who can afford it?
In Philadelphia, Boston and Manhattan, home-hunters need to pay a premium of well over $300,000 to live in the heart of the city, according to Property Shark, a unit of Yardi, the global property management and services company. Its study, which examined the median sale prices of homes in 34 major U.S. cities between 2008 to 2018, found the price appreciation coincided with a many cities’ population booms and growing household incomes.
IRINA IVANOVA/CBS MONEYWATCH
But it’s not only wealthy coastal cities enjoying the surge in urban home prices. In troubled Detroit, where the overall population is shrinking, the disparity is even greater. Real estate in the city’s downtown area has a median price tag of $229,250, compared with $37,000 for non-downtown property within the city’s 142 square miles.
The West Coast is the only region where downtowns haven’t kept pace with outlying areas, thanks to a huge runup in home prices across the board.
“California simply has a higher number of large cities compared to other states,” added report author Eliza Theiss, “and each city has its own specific reasons why a downtown will be a hotspot, or an area that will not be able to compete.”
For example, despite being a tech center, San Jose’s downtown doesn’t have the potential to compete for home-hunters with nearby Mountain View, Palo Alto or Cupertino. Likewise San Diego, despite its oceanside location, loses out to neighboring La Jolla and Torrey Pines, she said.
In recent years, some downtowns have benefited from tax breaks and redevelopment that has lured young professionals back to the cities, creating the “cultural shift” that has made them so expensive, Theiss said. Among the new amenities are sports stadiums, convention centers, “green” recreational belts, food festivals and parades. New public and private transportation options make it unnecessary to own and garage a car, eliminating a major expense for city residents.
Workers are also flocking to the cities for jobs. “Sacramento is a great example of how a downtown can be revived and turned into an economic engine and an attractive place to live and work,” she said of the California state capital, which is an exception to the report’s West Coast rule.
The dark side of the rising prices, of course, is gentrification. “There’s no going around it,” said Theiss. “With downtowns becoming trendy, the white flight of decades past has reversed, with higher income residents displacing long-term working-class and low-income residents, in some cases displacing existing communities.”
IRINA IVANOVA/CBS MONEYWATCH
But as downtowns price themselves out of reach, young professionals may migrate into other areas, spreading gentrification to other city neighborhoods, although that’s not always a sure thing. “The process of gentrification doesn’t always spread from one neighborhood to one that borders it,” she said. “If there are already well-established neighborhoods where home prices are quite high. it’s not an option. If the downtown is bordered by a more neglected area that’s mostly commercial space, then there is a lot of potential.”
Another issue is employment trends, with some tech companies opening satellite offices outside of pricy downtown centers. Amazon’s decision to open a new headquarters in Long Island City, New York, could bump up prices there, for example.
Even so, city lawmakers and planners may push back. “Many downtowns don’t have the necessary space or willingness to accommodate them,” said Theiss, “and not everyone is excited about seeing their downtowns change so much.”
One thing is clear. While there are exceptions, buying a downtown home of any kind is generally a moneymaker. Chicago may have its issues, but it was the city with the the largest difference between the downtown and the rest of the city, closing 2018 with a $675,000 premium.
To lure house hunters, sellers of high-end homes are slashing prices by as much as 30 percent. Many metro areas are succumbing to downward pressure from the U.S.-China trade war, uncertainty in Europe, rising interest rates, or a combination of all three. Of course, all real estate is local, so some discounts are better than others. Here’s where policymakers, central bankers, and developers are creating an environment for juicy deals today—or even better bargains tomorrow.
One Hyde Park.PHOTOGRAPHER: IAIN MASTERTON/ALAMY
LONDON
By the numbers: Home values in the city’s prime neighborhoods are 19 percent below their 2014 peak, according to broker Savills Plc.
What happened? Few sellers anywhere have faced such a poisonous economic cocktail as those in the Chelsea, Kensington, and Westminster districts, where tax changes on luxury properties have hit hard. Add in Brexit and an anti-money-laundering crackdown on cash from countries such as Russia and China, and demand for high-end homes has dried up. The discounts were enough to lure hedge fund billionaire Ken Griffin to spend £95 million ($122 million) on a mansion near Buckingham Palace in January, a cut of almost 35 percent from the original price.
Act now! A five-bedroom home in the city’s most expensive apartment block, One Hyde Park, has been languishing on the market for two years. The asking price is £50 million, down from £55 million.
Private jetty in Avalon Beach.SOURCE: FINE & COUNTRY
SYDNEY
By the numbers:Australian home prices have fallen more than 6 percent since their October 2017 peak. The decline in Sydney has been sharper—about 12 percent—making this the worst slump in four decades. Economists have predicted that Australia’s most populous city could see an additional 8 percent drop this year.
What happened? Easy credit caused prices to go crazy, then policymakers stepped in with a series of cooling measures including a restriction on banks from issuing interest-only loans popular with speculators. Regulations designed to deter foreign buyers, such as higher sales taxes, have only made it worse for investors, with many pulling out of the market. Because interest rates are at record lows and the country’s economy is growing modestly, it’s hard to see the window for bargain shopping closing anytime soon.
Act now! This four-bedroom home in Avalon Beach in Sydney’s Northern Beaches district comes with a private jetty, a boathouse, and a koi pond. Listed for A$6.9 million ($5.3 million) in December 2017, it’s now going for A$4.3 million, a 38 percent discount.
Palm Jumeriah.SOURCE: SAVILLS
DUBAI
By the numbers: Dubai’s residential prices are down about 25 percent since their 2014 peak, according to broker Jones Lang LaSalle Inc.
What happened? If politicians and central bankers are to blame in most other places, overzealous developers in Dubai are responsible for the emirate’s slump. Dubai is planning to erect a record 31,500 homes this year, double the annual demand of the past five years, raising the risk that prices could fall further, according to JLL.
Act now! A typical six-bedroom, 7,000-square-foot Signature Villas home on the artificial archipelago of Palm Jumeriah, among the desert city’s most expensive neighborhoods, costs 20.5 million U.A.E. dirham ($5.6 million), according to Savills. That’s down from 22.75 million dirham in 2014, the broker says, an almost 10 percent discount.
A Mayfair by the Sea 8 apartment.SOURCE: MAYFAIR BY THE SEA
HONG KONG
By the numbers: Home prices have been clipped almost 10 percent since August, according to Centaline Property Agency Ltd.’s Centa-City Leading Index. Several forecasts expect another 10 percent fall in 2019, depending on the direction of interest rates, with broker JLL warning in November that prices could plummet by 25 percent in 2019 if the U.S.-China trade war worsens.
What happened? Because of the Hong Kong currency’s ties to the U.S. dollar (it effectively imports American monetary policy), borrowing costs have gone up as the Federal Reserve has hiked rates. Also weighing on prices: an upcoming vacancy tax designed to stop developers from hoarding empty apartments in the hopes that they fetch better prices later. There are signs that investors are already unloading empty units in anticipation.
Act now! At Mayfair by the Sea 8, a development in the Tai Po neighborhood, apartments are selling for an average of HK$16,000 ($2,039) a square foot, more than 10 percent lower than the price of nearby developments last summer.
One Beacon Court.PHOTOGRAPHER: ANDREW HARRER/BLOOMBERG
NEW YORK
By the numbers: In the last quarter of 2018, the median price of Manhattan condos dropped below $1 million for the first time in three years, down 5.8 percent from a year earlier, according to broker Douglas Elliman Real Estate. For the most expensive homes, the market is worse: Sales of Manhattan properties priced at $5 million or more dropped 22 percent last year from 2017, their steepest decline in a decade, according to Stribling & Associates Ltd.
What happened? A postrecession building boom led to a glut of condos. The annual inventory of homes for sale rose 15.4 percent in 2018, according to real estate website StreetEasy. At the same time, federal changes that limit deductions on property and state taxes and mortgages have encouraged people to flee to lower-tax states. More than 8 percent of New York state residents will face higher taxes for 2018, with 29 percent of the highest earners seeing a hike, according to the Tax Policy Center.
Act now! In January, hedge fund manager Steven Cohen slashed the price of his penthouse at One Beacon Court to $45 million, a $70 million cut from its asking price of $115 million in 2013.
The Ailesbury Victorian.SOURCE: SAVILLS
DUBLIN
By the numbers: Prices in Dublin’s most desirable districts, including the D2 and D4 postal codes, fell 2.8 percent last year, according to broker Knight Frank LLP. That ended five years of price growth following a 56 percent collapse citywide starting in 2008.
What happened? Given how interconnected Ireland’s economy is with the U.K.’s, Brexit wobbliness is at least partly to blame for the falling prices, according to Knight Frank. The weak pound is deterring wealthy U.K. buyers, and limits introduced in 2015 by the Irish Central Bank on the amounts that can be borrowed have also helped cool the market. First-time buyers, for example, now have to put down at least 10 percent of the price.
Act now! A five-bedroom, five-bath Victorian home on Ailesbury Road, one of the most sought-after Dublin avenues, is now listed at €6.5 million ($6.8 million), a 13 percent discount from its 2016 asking price.
West Vancouver.PHOTOGRAPHER: RAMUNAS BRUZAS/ALAMY
VANCOUVER
By the numbers: Home prices fell 4.5 percent in January from a year earlier, and they’re now 8 percent below their June 2018 peak, according to the Real Estate Board of Greater Vancouver. High-price districts are faring much worse; properties in West Vancouver, which had been attractive to overseas buyers, are down 14 percent from the previous year.
What happened? After prices surged about 63 percent from December 2013 to December 2018—putting owning a home beyond the reach of most locals— Vancouver’s market developed an unhealthy dependency on foreign cash. China’s clampdown on money fleeing the country and local measures in Canada, including a 20 percent foreign-buyers tax, have discouraged the overseas high-rollers. At the same time, the Canadian government’s new tighter mortgage rules have made it even harder for locals to afford homes.
Act now! A five-bedroom house in West Vancouver for sale since December 2017 is now listed for C$6.9 million ($5.1 million) after a C$1 million price cut in November.
The Bosphorus.PHOTOGRAPHER: DIEGO CUPOLO/NURPHOTO/GETTY IMAGES
ISTANBUL
By the numbers: Luxury home values in the Turkish city dropped 4.3 percent in the final quarter of 2018 from the previous one, bringing the 12-month decline to 10.4 percent, according to Knight Frank.
What happened? An expanding middle class, readily available mortgage financing, and migration seem to be supporting the market for more affordable homes, but the sharp drop in the value of the lira has decimated the top end. Turkey’s currency is down almost 41 percent against the U.S. dollar in the past two years amid political tensions—with the U.S., within the Middle East, and inside Turkey. Additionally, investors have been spooked by President Recep Tayyip Erdogan, who lashed out against his central bank, raising concerns about its independence.
Act now! About 60 sought-after mansions on the banks of the Bosphorus—many of them built during the Ottoman Empire—were for sale as of October, according to a survey of brokers by Agence France-Presse. Although listings can be opaque, one modern six-bedroom home is for sale for 55 million lira, which converts to $10.5 million now compared with $14.5 million a year ago.
How Do You Say “Penthouse” in German?*
One city ripe for a future correction: Munich. It saw a 9 percent increase in home prices last year, and they’ve doubled in the past decade. While all of Germany’s big cities have seen rapid price appreciation from the influx of migrants and record-low interest rates, the Bavarian capital has been particularly affected by the global corporations that call it home, such as Siemens, Allianz, and BMW. Gross domestic product growth in Munich has significantly outpaced that of Germany as a whole, and unemployment is at its lowest level in 20 years.
Con Edison has requested a rate increase that, if approved, could have Westchester County customers paying about 6 percent more for electricity each month.
The company filed a rate request with the New York State Public Service Commission Jan. 31, seeking approval for rate requests totaling $695 million for the company’s electric and natural gas delivery systems. The increase would go into effect in 2020.
The utility’s Westchester headquarters in Rye. Photo by Ryan Deffenbaugh
Con Edison supplies natural gas to 1.1 million customers and electricity to 3.4 million customers in New York City and Westchester.
With the increase, the bill for a residential costumer in Westchester using 300 kilowatt hours would rise $6.10, to an average of $114.04 per month. The average monthly bill for a New York City customer for the same usage would increase $4.45, to $81.78. For a typical commercial customer in the region, the monthly bill would increase $80.96 to $1,970.67, an increase of 4.3 percent.
The average monthly bill for a residential gas customer, using on average 100 therms per month, would increase $17.28 to $176.34, according to Con Edison, an increase of 10.9 percent.
The utility said the rate increase would fund infrastructure improvements and other investments in clean energy, energy savings and customer service.
“Our proposal will build on the progress we have made in putting tools in the hands of our customers to help them manage their energy usage,” Con Edison President Timothy Cawley said. “We’re making it easier for them to take advantage of energy efficiency, charge electric vehicles and communicate with us. We’re also improving our response to severe weather events and taking steps to protect the environment.”
Through a rate case proceeding, the state Public Service Commission will render a decision on how much the utility can raise rates. The state is required to provide a decision within 11 months.
“Our number one priority is ensuring utility rates are fair and reasonable, and we will not allow a multibillion-dollar utility to line shareholders’ pockets at the expense of ratepayers,” state Department of Public Service spokesman James Denn said. “Today, Con Edison is seeking a rate increase, but to be crystal clear, one has not been approved.”
The state has assembled what it said is a panel of 50 experts to review the rate filing. The process also allows for public comment, which often draws from industry groups, consumer advocates and large-scale electricity and gas users.
The utility last sought a rate increase in 2016. The company asked the state to approve an electric increase of $482 million and a gas increase of $154 million. After a joint-agreement involving 22-separate parties, the PSC authorized a three-year rate plan in 2017 that allowed for annual electric increases of $199 million, and a gas increase of $35.5 million in year one, $92.3 million in year two and $89.5 million in year three. The decision, according to the PSC, included measures to boost the availability of energy efficiency and smart-grid technologies. Want to get further information? visit Public Service Commission of South Carolina.
While Con Edison’s proposal is for 2020, the company indicated in its announcement that it intends to discuss multiyear rate plans with the PSC. A multiyear plan, the company said, could result in lower annual increases and provide more cost certainty. It also agreed to a two-year rate plan in its 2014 rate case.
People don’t know what to expect, a lot of them are looking for different energy providers, as there are other companies that offer better electricity rates. You can look at the Green Mountain Energy rates as an example.
Among the efforts Con Edison said it would fund with the rate increase is its $100 million plan to increase the storm resiliency in Westchester. The four-year plan would strengthen the county’s overhead electric system. The company announced the plan last year amid public pressure from elected officials after a series of snow storms in March caused some of the most significant outages in company history.
Sam Khater, Freddie Mac’s chief economist, says, “The combination of cooling inflation and slower global economic growth led mortgage rates to drift down to the lowest levels in a year. While housing activity has clearly softened over the last nine months and the lingering effects of higher rates from last year are still being felt, lower mortgage rates and a strong job market should rekindle demand for the spring homebuying season.”
News Facts
30-year fixed-rate mortgage (FRM) averaged 4.37 percent with an average 0.4 point for the week ending February 14, 2019, down from last week when it averaged 4.41 percent. A year ago at this time, the 30-year FRM averaged 4.38 percent.
15-year FRM this week averaged 3.81 percent with an average 0.4 point, down from last week when it averaged 3.84 percent. A year ago at this time, the 15-year FRM averaged 3.84 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.88 percent with an average 0.3 point, down from last week when it averaged 3.91 percent. A year ago at this time, the 5-year ARM averaged 3.63 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
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