Housing Barometer: Recovery Staggers Forward | Chappaqua Real Estate
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Monthly Archives: March 2014
Here’s why housing prices have been going up | Pound Ridge Homes
These 10 Housing Markets Are Looking Bubblicious | Bedford Hills Real Estate
What Housing Bubble? Trulia Says U.S. Home Prices Still 5% Undervalued | Armonk Real Estate
Eliot Spitzer puts $145M worth of apts. on the block | Mt Kisco Real Estate
Real estate scion and former governor Eliot Spitzer is selling a big portfolio of apartments his family owns on the East Side in a deal that could fetch $145 million or more.
Mr. Spitzer has put 144 rental units at the Corinthian, a huge apartment tower his father Bernard Spitzer began building in the mid 1980s and finished in 1987. Robert Knakal, chairman of the brokerage firm Massey Knakal Realty Services, is marketing the apartments and confirmed the units were on the market.
“The market for any type of property today, but especially residential assets, is spectacular,” Mr. Knakal said. “It’s a great time to take advantage of it.”
The 57-story building, at 330 E. 38th St., is one of Manhattan’s largest residential towers, with 863 units, and a distinct columnar facade that provides the apartments inside with curving bay windows that offer sweeping views of midtown. The Spitzers sold most of those apartments in the years immediately after they constructed the tower, but when the city’s sales market slowed by the late 1980s, they decided to hold on to 144 units and convert them to rental properties.
The family has held onto the apartments, which are scattered throughout the tower, ever since.
Having lost a tightly-fought bid for city comptroller last year and with his father in his 80s and in poor health, the deal is also a sign that the younger Spitzer has begun to take a more active hand in steering the family’s real estate business. In December, he acquired a prime development site in the Hudson Yards for $88 million.
The sale of the Corinthian apartments could be a way for Mr. Spitzer to raise capital for future acquisitions or help finance the purchases he has made.
“Eliot is very sensitive to the fact that the family has extracted as much value as it can from some of the assets it owns,” said Jeffrey Moerdler, a real estate attorney with the firm Mintz Levin, who is a friend of Mr. Spitzer’s and handles the legal work for many of his real estate transactions, including this current sales effort. “He’s trying to monetize those buildings and revinvest in assets that have the opportunity to generate new value.”
Oliver Vows Lower Canada Role as Banks Cut Mortgage Rates | Cross River Real Estate
Canadian Finance Minister Joe Oliver said today he will continue to reduce potential risks to taxpayers of a downturn in the housing market after banks cut their lending rates to the lowest in about a year.
Oliver told reporters he spoke to Bank of Montreal (BMO) Chief Executive Officer Bill Downe about the lender’s decision to lower mortgage rates in time for the spring home-buying season. Oliver said in a statement earlier today he’ll keep monitoring the market. They were his first comments on housing since replacing Jim Flaherty on March 19.
Policy makers, led by Flaherty, have tightened rules that govern mortgage lending amid concern the balance sheet of the federal agency that backstops mortgages has grown too large. The value of home loans insured by Canada Mortgage & Housing Corp. has almost doubled since the end of 2006.
“The government is gradually reducing its involvement in the mortgage market,” Oliver said he told Downe.
Most recently, the federal government began collecting a“risk fee” of 3.25 percent from Canada Mortgage & Housing on the insurance it writes.
Is homeownership a smart investment again | Pound Ridge Real Estate
One year ago, Trulia’s Rent vs. Buy Report, released by online real estate aggregator Trulia, found it was 44% cheaper to buy a house than to rent. Today, the gap has narrowed, due in part to rising interest rates and home prices. The newest edition of the report finds that buying a home is now 38% cheaper than renting. The report compares costs for a seven-year period using five calculations:
1. The average rent and sale prices for an identical set of properties;
2. The initial total monthly costs of owning (assuming 20% down and a 30-year fixed-rate mortgage at 3.5% interest, as well as annual maintenance, insurance, utility, and property tax expenses) and renting (monthly rent plus renter’s insurance);
3. The future total monthly costs of owning and renting;
4. One-time costs and proceeds (for owning, this includes closing costs and capital gains tax of 15% for gains above the $500,000 annual exclusion; for renting, this includes one month’s security deposit); and
5. The net present value to account for opportunity cost of money (this compares cash flows over time).
According to the report, homeownership remains cheaper across the nation and in all of the 100 largest metro markets. However, these findings speak broadly to the national market, and there are several situations where it still makes more sense to rent. Here, we look at some of the reasons why it’s a good time to buy for many Americans, and circumstances when it might make more sense to rent.
Reasons to Buy
Peggy Jennings, a Broker/Realtor with Prudential Great Smokys Realty in Sylva, North Carolina, cites favorable interest rates, good inventory and relaxed loan requirements as good reasons to buy now. “Interest rates are still good. The inventory is improving as more people are deciding it’s time to sell. There’s going to be a lot of good inventory coming up, especially since the foreclosures from a couple years ago are now rehabbed and ready to sell,” says Jennings.
http://homes.yahoo.com/news/is-homeownership-a-smart-investment-again–215619685.html
10 Common Landing Page Myths: Busted | Bedford Corners Realtor
I remember when I found out the Tooth Fairy wasn’t real. My whole world was shattered. Granted, I was about eight, but I was furious to find out that my parents had been putting a quarter under my pillow every time I’d lost a tooth, not a sweet fairy named Daphne who lived in a castle made out of my pearly whites. Continue reading
Survivors Face Foreclosures After Reverse Mortgage Borrower’s Death | Waccabuc Real Estate
There are a number of reasons someone might take out a reverse mortgage: to pay for prescriptions or medial care, to subsidize their daily living expenses or even to settle their fear of becoming a burden to their family. But the product that was designed to keep elderly consumers in their homes is now wreaking havoc on their surviving loved ones.
Children and surviving spouses of reverse mortgage borrowers are finding that the loans are threatening their own livelihood and that lenders aren’t being upfront about their options to resolve the debt, The New York Times reports.
Reverse mortgages allow a borrower, 62 years or older, to convert the equity on their home into a lump sum or monthly payments. The funds are not required to be paid back until the borrower moves or dies
Although the reverse mortgage industry has been in decline since the financial crisis — only 51,000 loans were taken out in 2012, far below the 115,000 loans taken out in 2007 — the default rate is on the rise and surviving family members are left with the bill.
And that’s just the situation that Isabel, whose story is told in the Times piece, found herself in when her mother passed away. Now, she has a stack of foreclosure notices for her parent’s home because she was never told her options in resolving the debt.
Her mother began borrowing against the equity of her home in 2009. When she died two years later the outstanding reverse mortgage balance hovered around $308,000. The company that extended the loan moved to foreclose on the house unless Isabel paid the debt in full.
However, Department of Housing and Urban Development regulations for reverse mortgages require banks offer survivors the option to settle the loan for 95% of the home’s current fair market value. Because reverse mortgage loans are tied to the equity in one’s home, it is a finite amount, which can fluctuate with the changing home value.
When Housing Prices Become Fish Stories, the Economy Suffers | Chappaqua Real Estate
Over at Wonkblog, Christopher Ingraham points us to new research from Ireland suggesting that an awful lot of people don’t know how much they paid for their houses. I’ve adapted the main chart from the study on the right. As you can see, most people who get this wrong underestimate how much they paid—sometimes by gigantic amounts. Very few people overestimate how much they paid, and virtually no one overestimates by more than a quarter or so.
What accounts for this? As it happens, the authors are mostly concerned with how this poor recall affects estimates of the wealth effect—which I admit I didn’t really understand.1 Because of this focus, they don’t spend a lot of time speculating on the underlying causes. But they do mention that the older the loan, the less accurate people are; that younger people remember better than older people; and that errors are smaller among the well-educated.
But none of this explains why the bad recall is overwhelmingly on the low side. So here’s my guess: people lie. Or, more charitably, they’re in denial. They don’t want to admit to themselves or their friends how much they lost during the housing crash. Or, when prices are rising, they like to brag about how much they’ve made. Everyone else claims to have made a killing, so they slice a little bit off their buying price to make it seem like they made a killing too. No one wants to be a sucker, after all. Do this enough times, and eventually you come to believe it yourself.