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pound ridge homes

Price Increases Bring Buyers Into the Market | Pound Ridge Real Estate

In ordinary markets, when prices are volatile, market players tend to shy away. This is one of the reasons why even the stock markets are very sensitive to price changes. In a report from businessinsider.com, the reverse is true in the housing market, as price volatility is actually an invitation to investors to join the party.

In a study conducted by James P. Smith, Zoe Oldfield, Richard Blundell and James Banks on the relative volatility of specific housing markets in the UK and the US, they surmised two major conclusions. The first being, individuals are more likely to purchase a home earlier in life in places that have high volatility in prices. The second being, people would move to a larger home in places that have high volatility in prices.

While this seems to go against common sense, the group said in their paper, “Typically, risk averse individuals will avoid risky assets as volatility increases. In this paper, we show that owner-occupied housing is an exception to that rule.”

The researchers discovered that people intuitively dive into the large waves price volatility creates in the housing market. In a report from sciencedaily.com, the willingness of these buyers to risk their money not only creates the fluctuations but also is directly related to the price volatility in the housing market.

According to research conducted by fellows from the University of Kansas, namely Associate Professor for Economics Shu Wu and fellow authors Joseph Fairchild of Bank of America and Jun Ma from the University of Alabama, the risk taking in a market place triggers the volatility.


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Beautifully Restored Marcel Breuer Masterpiece | Pound Ridge Real Estate

All photos via Klemm Real Estate

Location: Litchfield, Connecticut
Price: $2,495,000

Hailed as the first piece of modern architecture in Litchfield, Connecticut, the 1950 Stillman House by Modernist great Marcel Breuer brought glass, colors, and clean lines to an historic New England town that was until then all about colonials. The 2,359-square-foot masterpiece, which would usher in more modern works in Litchfield by other members of Breuer’s Bauhaus-inspired cohort, the Harvard Five, is set on over two acres of secluded hilltop grounds. When current owners purchased it from the Stillman family in 2009, it was in desperate need of repairs. What followed was a four-year total restoration that introduced contemporary luxuries while maintaining Breuer’s original intentions.

Now on the market for $2.495M, the property includes a main house with four bedrooms, a guesthouse with a large sunken living room, floating staircases on the interior and exterior, and the most covetable pool. As seen in a 1950s black-and-white outdoor shot below, one end of the pool was adorned with a striking geometric mural by American sculptor Alexander Calder. The pool wall has since then been rebuilt after it deteriorated, and today, a facsimile of the artwork stands, continuing a dynamic dialogue with the blue, yellow, red, and grey strips on the front facade. On the interior, one end of a fireplace also sports the original Sound Waves mural by Bauhaus artistXanti Schawinsky.


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Existing home sales slightly rebound after last month’s plummet | Pound Ridge Homes

Existing-home sales slightly ticked back up 1.2% in February after last month’s plummet, but tight inventory levels pushed price growth to its fastest pace in a year, theNational Association of Realtors said.

Lawrence Yun, NAR chief economist, said although February sales showed modest improvement, there’s been some stagnation in the market in recent months.

“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” he said. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.”

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.2% to a seasonally adjusted annual rate of 4.88 million in February from 4.82 million in January. Sales are 4.7% higher than a year ago and above year-over-year totals for the fifth consecutive month.

This is not too far off Zillow’s (Z) forecast that the seasonal adjusted annual rate would rise 1.3% to 4.88 million in February.

The median existing-home price for all housing types in February was $202,600, which is 7.5% above February 2014. This marks the 36th consecutive month of year-over-year price gains and the largest since last February with it was 8.8%.

In addition, total housing inventory at the end of February increased 1.6% to 1.89 million existing homes available for sale, but remains 0.5% below a year ago (1.90 million). For the second straight month, unsold inventory is at a 4.6-month supply at the current sales pace.

The percent share of first-time buyers barely increased, growing to 29% in February from 28% in January, marking the first increase since November 2014. First-time buyers represented 28% of all buyers in February 2014.

All-cash sales were 26% of transactions in February, down from 27% in January and down considerably from a year ago when it was 35%.

Individual investors, who account for many cash sales, purchased 14% of homes in February, down from 17% last month and 21% in February 2014. Sixty-seven percent of investors paid cash in February.

Distressed sales, foreclosures and short sales, were 11% of sales in February, unchanged for the third consecutive month and down from 16% a year ago. Eight percent of February sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 17% below market value in February (15% in January), while short sales were discounted 15% (12% in January).


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Striking Out Again and Again | Pound Ridge Real Estate

Spring training has just started but thousands of homeowners are already striking out for the second time.

Black Knight reports that in January foreclosure starts reached at 12-month high. Repeat foreclosures were up 11 percent month-over-month and made up over half of January foreclosure starts; first-time starts were up just 0.33 percent.

The month’s data showed that both first-time and repeat foreclosure starts reached 12-month highs, although there was clear separation in the levels of increase between the two. According to Trey Barnes, Black Knight’s senior vice president of Loan Data Products, separation also continues to be seen between judicial and non-judicial foreclosure states across multiple performance indicators.

“Overall foreclosure starts hit a 12-month high in January, and that held true when looking at both first-time and repeat foreclosure starts individually,” said Barnes. “Repeat foreclosure starts made up 51 percent of all foreclosure starts and increased 11 percent from December. In contrast, first-time foreclosure starts were up just a fraction of a percent from the month prior. Similarly, Black Knight found that January foreclosure starts jumped about 10 percent from December in judicial states as compared to just a 1.7 percent increase in non-judicial states. Judicial states are also seeing higher levels of both new problem loans and serious delinquencies (loans 90 or more days delinquent, but not yet in foreclosure) than non-judicial states, although volumes are down overall in both categories.

One again the action is mostly in the judicial states.  Foreclosure starts were up almost 10 percent month-over-month in judicial states vs. just 1.7 percent in non-judicial.  “At the same time, foreclosure sale counts – essentially, completed foreclosures – have been decreasing more rapidly than the inventory of seriously delinquent loans in both judicial and non-judicial states. As a result, foreclosure pipeline ratios, the backlog in months of foreclosure and 90-day delinquent inventory based on current foreclosure sale rates, have been increasing across the board. In judicial states, the pipeline ratio now stands at 58 months; up quite a bit from the 47 months seen in 2013, but a far cry from its high of 118 months a couple of years before that. In recent months, non-judicial pipeline ratios have reached similar levels to judicial pipeline ratios. As of January, the non-judicial pipeline ratio was at 53 months, close to an all-time high. Throughout the housing crisis, non-judicial pipeline ratios were significantly lower than those in judicial states.”


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AD&C Loan Volume Grew 2.3% at End of 2014 | Pound Ridge Real Estate

Posting the seventh consecutive quarter of growth, the volume of residential AD&C loans outstanding expanded 2.3% for the final quarter of 2014.

The tight availability of acquisition, development and construction (AD&C) loans has been a factor holding back a stronger rebound in home construction. However, the stock of residential AD&C loans has been rising over the last two years.

According to data from the FDIC and NAHB analysis, the outstanding stock of 1-4 unit residential AD&C loans made by FDIC-insured institutions rose by $1.158 billion during the fourth quarter of 2014, a quarterly increase of 2.32%.

On a year-over-year basis, the stock of residential AD&C loans is up 17% from the final quarter of 2013.

4q FDIC ADC data

Since the first quarter of 2013, the stock of outstanding home building AD&C loans has grown by 25.5%, an increase of $10.4 billion.

It is worth noting the FDIC data represent only the stock of loans, not changes in the underlying flows, so it is an imperfect data source. Nonetheless, the consistent growth in the outstanding stock of AD&C loans is a positive development. NAHB surveys of builders also suggest improving lending conditions.

However, lending remains much reduced from years past. The current stock of existing residential AD&C loans of $51.2 billion now stands 74.9% lower than the peak level of AD&C lending of $203.8 billion reached during the first quarter of 2008.

The FDIC data reveal that the total decline from peak lending for home building AD&C loans continues to exceed that of other AD&C loans (nonresidential, land development, and multifamily). Such forms of AD&C lending are off a smaller 57% from peak lending. This class of AD&C loans has now registered six quarters of increases (3.76% for the fourth quarter of 2014).


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Joan Rivers’ Gilded East Side Penthouse | Pound Ridge Homes

The palatial Upper East Side penthouse that Joan Rivers called home for the last 25 years is now on the market. The queen of comedy died in September, leaving a void not only in the entertainment industry, but also her condo board, where she served as the president. Rivers loved her gilded apartment—she described the decor as “Louis XIV meets Fred and Ginger“—and told theTimes in 2012 that she had only listed it to “placate [her] business manager.” The apartment first hit the market in 2009 for $25 million, and was last listed in 2013 for $29.5 million. After her death, the condo was transferred to her daughter Melissa, who has now put it back on the market for $28 million. The triplex home measures 5,100 square feet and features four bedrooms, five fireplaces, and opulent things like “gilded antique boisserie paneling and columns.”

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Townhouse on One of NY’s Most Exclusive Gardens | Pound Ridge Real Estate

The 95-year-old Jones Wood Garden, located between Lexington and Third Avenues and 65th and 66th Streets, is accessible only via one of the 12 townhouses that surround it, and now one of those townhouses is for sale, asking $12.3 million. Forget Gramercy Park (that place is on Google Maps, for crying out loud)—this is the real super-exclusive stuff. So what if it’s mostly paved and looks a little dreary in the sole photograph?* Only 12 keys! Plus, there’s a fountain. And it was named after the family of Edith Wharton, who had previous owned the land. The townhouse itself isn’t too shabby, either.

* In an old Streetscapes from 1997, Christopher Gray writes that when the garden was first designed, “The Times said the garden foliage ‘will look best in winter.'” Hmm.


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Oil Prices and Mortgages | Pound Ridge Real Estate

Oil is pushing its way down to below $47.50 per barrel as of Monday, and there’s no sign it’s going to change anytime.

Saudi Prince Al-Waleed bin Talal says in an interview today that the days of $100 per barrel oil are over.

Some worry the recent plunge in oil prices could cause home prices to slip in the oil-producing markets of Texas, Oklahoma, Louisiana, and elsewhere, writes Jed Kolko, the chief economist for Trulia (TRLA).

“But it typically takes two years for oil prices to fully affect home prices in those markets,” Kolko writes. “At the same time, lower oil prices could boost home values in the Northeast and Midwest.”

Paul Diggle, property economist at Capital Economics, says in a client note that any drag on housing in oil-driven markets from drop in demand and from decline in employment in the United States would be offset by increased consumer spending power.

“If production and employment are scaled back, housing markets in some oil-producing States, which have recently been among the most buoyant, could potentially suffer,” Diggle writes. “But any drag that this may generate will be more than offset by the wider boost to household incomes. Combined with looser credit conditions, lower oil prices should therefore give housing a boost.”

He says that the slump in oil prices could have both positive and negative effects on the housing market. The negatives are centered on the shale-oil producing states, where extraction costs over the long-run may be higher than the current $50 per barrel oil price. A dip in oil production and investment would hit jobs and ultimately housing market activity.


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