Category Archives: Bedford Corners NY

Inspector, contractor disagree on settlement concerns | Bedford NY Realtor

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DEAR BARRY: When we bought our home, our contractor was with us on the day of the home inspection. They both inspected the attic but had different opinions. The inspector said there were no problems, but our contractor said the ceiling joists were separated more than an inch from a beam. The inspector took a second look and said this was due to old settlement and was not a problem.

We should have listened to our contractor because since moving in we’ve noticed other evidence of building settlement. The front and back walls are leaning and the floor is sloped in one corner. If we had known all of this, we would not have bought the house. Do we have any recourse with the home inspector? –Dora

DEAR DORA: The home inspector apparently did not do an adequate job and should be accountable for failure to report observable defects. Separated framing in an attic is not something to dismiss as “old settlement.” Instead, your inspector should have recommended further evaluation by a structural engineer.

Recourse, however, is a legal issue that varies from state to state and is largely affected by the terms of the contract that you signed when you hired the inspector. These are points to review with an attorney. In the meantime, you should find out if the home inspector is insured for errors and omissions. If major repairs are needed, insurance coverage could determine whether the matter is worth pursuing.

But before you do any of these things, you should hire a structural engineer to determine the extent of the problem, whether it is a major issue or just old settlement, as reported by your inspector. Once you have an engineering report, you will know what work is needed and can obtain bids from contractors. At that point, you’ll be prepared to pursue recourse.

It is also recommended that you obtain a second home inspection. But this time, try to find an inspector with many years of experience and a reputation for thoroughness. If your home inspector missed evidence of building settlement, he probably missed other issues that need to be discovered.

DEAR BARRY: Our buyers backed out of the purchase contract because the home inspector’s repair estimates were very high. I was wondering if it is legal for a home inspector to provide such estimates. We and our agent were very angry with the inspector. Now our home is back on the market. Should we attempt to fix all the problems addressed in the inspection report before we can make a sale? What should we do now? –Yvonne

DEAR YVONNE: Some home inspectors provide repair estimates. Most do not. Whether the estimates in this case were accurate or inflated is the big question. The only way to know for sure is to get bids from contractors. Once you do that, you will know what is actually needed to make repairs.

At that point, you can repair some or all of the defects. Those that you do not repair can be disclosed to future buyers, along with the contractor’s bids.

via inman.com

A Federal Fix for a Foreclosure Fiasco | Bedford Hills Realtor

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The U.S. construction industry boomed through most of the 1920s as new office buildings, factories, warehouses and homes were built across the country.

A developing securities market, in which commercial bonds could be sold to finance construction, helped boost the housing surge. In 1928, however, the Federal Reserve tightened monetary policy to stem speculation, especially in the stock market, and housing investment began to fall.

When the global economic crisis triggered widespread unemployment and bankruptcies, property owners’ abilities to make mortgage payments crumbled. This was particularly unsettling because many home mortgages were five-year agreements with a balloon payment due at the end. Banks had repeatedly renewed these contracts, adjusting interest rates to prevailing levels.

As home values rose, families had made frequent use of second mortgages with high interest rates to make improvements or to realize cash for other purposes. By 1932, renewals had vanished and second mortgages went unpaid.

This mortgage-finance system rapidly fell apart. Foreclosures multiplied, to 1,000 a day by late 1932. Assets underlying mortgage loans were deflating even as householders’ payments became unreliable. What was the government to do?

President Herbert Hoover, though reluctant to support big government programs, recognized the scale of this looming disaster. He proposed that Congress create a system of Federal Home Loan Banks, with 12 districts and a membership drawn from mortgage-holding institutions, including insurance companies, cooperative banks and homestead associations.

The core idea was that “bonds, guaranteed by mortgages accepted by the home loan system, will be offered to the public to increase the circulation of money,” the New York Times reported.

The 12 banks would loan as much as $125 million, initially supplied by the Reconstruction Finance Corporation, to distressed building-and-loan firms, taking in good mortgages as collateral. They then would securitize these holdings, thus restoring their cash accounts to fund further lending, increasing the country’s cash flow.

Opposition from the banking industry was immediate. The primary objective was that the loan-bank system “further intrudes the government into private business,” the New York Times reported. “There is no lack of funds at present for the use of home mortgage institutions. The bill would encourage unhealthy home building.” Even worse, the home-loan banks’ bonds couldn’t be sold.

Despite objections, House and Senate committees pushed the bill forward, and on July 22, 1932, Hoover signed the legislation. The new institution’s chairman, Franklin Fort, soon called for a mortgage holiday to stop foreclosures until the system could get up and running. Forty states confirmed their assent.

The Federal Home Loan Banks opened their ledgers on Oct. 15, though it was far from clear, as New York Representative Fiorello LaGuardia put it, whether “the influence of selfish institutions would predominate” over the needs of hard-pressed homeowners.

Hoover had tried his best, and Election Day was just three weeks ahead.

(Philip Scranton is a Board of Governors professor of the history of industry and technology at Rutgers University, Camden, and the editor-in-chief of Enterprise and Society. He writes “This Week in the Great Depression” for the Echoes blog. The opinions expressed are his own.)

Read more from Echoes, Bloomberg View’s economic history blog.

To contact the writer of this blog post: Philip Scranton at scranton@camden.rutgers.edu.

To contact the editor responsible for this blog post: Kirsten Salyer at ksalyer@bloomberg.net.

via bloomberg.com

Pending home sales retreat after hitting 2-yr high | Bedford Hills Real Estate

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Pending home sales retreated in August after hitting a two-year high in the previous month, a trade group reported Thursday. . The pending-home-sales index fell to 99.2 from a upwardly revised 101.9 in July, the National Association of Realtors said The NAR initially said the July index was at 101.7. “The performance in month-to-month contract signings has been uneven with ongoing shortages of lower prices inventory in much of the country,” said Lawrence Yun, chief economist of the NAR. Compared to the same period in 2011, pending home sales were up 10.7%, marking the 15th straight month of year-on-year gains. A sale is listed as pending when the contract has been signed but the transaction has not closed, and an index of 100 is equal to the average level of contract activity during 2001.

via articles.marketwatch.com

Mitt Romney’s housing policy: GOP candidate offers ideas on mortgages | Bedford NY Real Estate

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Mitt Romney’s presidential campaign made the odd decision to release a new policy document about housing issues last Friday in the late afternoon. The Friday afternoon “news dump” is when you put things out that you think will reflect poorly on you, knowing that reporters will give them scant attention. The housing paper was doubly-obscured, first by the weekend and second by release of Romney’s tax documents the same day.

Burying housing policy was a strange choice for the Romney campaign, because housing policy (foreclosures, mortgage disasters, etc.) has been a giant failure for the Obama administration, and one where Romney could easily score substantive points.

Having spent my weekend perusing the Romney position paper, I’m prepared to offer an explanation for why they buried it: It sucks.

Faced with the opportunity to take a nice big swing at the piñata of Obama-era foreclosures, Romney whiffed, offering a “plan” chock of platitudes, bromides, and non sequiturs. Why the campaign preferred dumping it out when they thought nobody would notice to simply not releasing it is a mystery. But perhaps the greater mystery is why they couldn’t stir themselves to write a policy that made sense.

The context here is the epic failure of the Obama administration to do anything of sufficient scale to address the foreclosures roiling the nation. Foreclosures aren’t just unpleasant to the families that experience them, but also have significant knock-on consequences for the rest of the community and consequently constitute secondary shocks to a country already devastated by a severe recession.

In 2009, when the administration was at the peak of its powers—Fannie Mae and Freddie Mac nationalized by the federal government, banks desperately in need of federal money, the president popular and backed by large congressional majorities—President Obama didn’t think addressing the issue was important. His primary premise was the not-unreasonable one that the best solution to housing pain was overall economic recovery. A secondary, less-reasonable premise was that restoring the “confidence” of the banking sector was a key element of broad economic recovery. So at the margin the administration wasn’t interest in diverting federal time and money to housing problem, and discouraged solutions that would help indebted homeowners at the cost of hurting the very banks that TARP was supposed to prop up.

Later programs such as HAMP and HARP were hamstrung by extreme political paranoia about delivering aid to “unworthy” borrowers. So while the programs (especially HARP) have done some good, the policy has been to specifically not target the most severe needs. Bigger plans released this year would do more, but are being blocked by a holdover Fannie/Freddie regulator whom the administration didn’t replace when it had the chance.

To all this, Team Romney has essentially nothing to say. One of their five bullet points is that we need to improve the job market. Another is to sell government-owned foreclosed property to private investors, which is already happening. A third is to encourage short-sales as an alternative to foreclosure, which the administration has been doing for years now through various initiatives that seem to be bearing some fruit.

In terms of something the parties actually disagree about, Romney proposes to replace the Dodd-Frank Act with “sensible regulation.” If we repeal Dodd-Frank and its tools for orderly liquidation, what would we do instead? Well, the last plank of the Romney plan argues that “the Romney-Ryan plan will completely end ‘too-big-to-fail’ by reforming the GSEs,” i.e. Fannie Mae and Freddie Mac.

This is a real head-scratcher. Not only does Romney not say how he would reform Fannie and Freddie, he doesn’t even begin to try to explain how this would end the “too-big-to-fail” dilemma—presumably because it wouldn’t. Fannie and Freddie may have exacerbated the extent of the housing bubble, but this has literally no bearing on the question of whether or not the economy can survive the liquidation of a diversified mega-bank. If a bank goes bust under Romney’s plan—what happens? Nobody knows. Presumably something “sensible,” but Fannie and Freddie have nothing to do with it. Conservatives have long been rightly critical of Fannie and Freddie, and accurately warned that the free lunch they seemed to create for homeownership might someday prove quite costly to the taxpayer. But retreading a timeless conservative argument about the risks of federal loan guarantees, no matter how valid, isn’t a credible response to too-big-to-fail private banks or problems in today’s mortgage lending.

Romney’s housing plan is depressing. Faced with a clear policy area in which Obama has not succeeded, his opponent came out with a seven-page white paper so embarrassing the campaign dropped it on a Friday night.

This housing issue is the entire 2012 economic debate in miniature. There’s stuff to like in the Obama administration’s record, but there’s simply no denying that overall economic performance has been bad and the president deserves his share of the blame. But rather than giving us a pragmatic turnaround guy, the Republicans are offering a copy-and-paste agenda that could have been rolled out any time in the past 20 years and has nothing to do with today’s specific problem

via slate.com

Many High-End New York Apartments Have Modest Tax Rates | Bedford Corners Realtor

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Yet despite its sublime finishes, refined pedigree and nosebleed prices, the residential portion of that Manhattan building is officially valued by the city, for tax purposes, at only $332 per square foot. According to the Miller Samuel appraisal firm, the average price per square foot for apartments sold there over the past 18 months has been $7,813.

The remarkably low official figure is the result of a state law dating from decades ago that requires the city to calculate the value of condominiums and co-ops by using as comparable properties rental buildings, instead of apartment sales. At the tippy top of the market, populated by $20 million, $30 million, $40 million, even $88 million apartments, real estate experts say that truly comparable rental buildings essentially do not exist.

As a result, the owners of many of the highest-end apartments pay a far smaller percentage of their apartments’ sales value than other condo and co-op owners pay. So despite a boom in the sale of stratospherically expensive apartments in recent years, the city is unable to truly cash in.

“The highest-value ones are going to tend to be the hardest to line up,” said George Sweeting, deputy director of the city’s Independent Budget Office. Their resulting effective tax rates, he continued, “will be extremely low, even by the standards of the city.”

According to the Independent Budget Office, the overall city valuation for condos and co-ops is only about 20 percent of what it would be were the city allowed to use comparable sales. That is a striking discount, but one that shrivels in comparison with the market’s upper echelons, which means the percentage of the sales value that those apartments pay in taxes shrivels right along with it.

In a study of 2010 nationwide property tax rates, the average homeowner paid a median of 1.14 percent of home value that year, according to the Tax Foundation, a research group. In Manhattan, that figure was 0.78 percent. For the $88 million apartment at 15 Central Park West, 0.78 percent would be $686,000. But this year, the property taxes due on that penthouse were $59,000.

The relatively low tax bill was mainly due to its valuation, but the owners of that penthouse — the financier Sanford I. Weill sold it to a trust controlled by Ekaterina Rybolovleva, the daughter of a Russian billionaire — were also helped by a program called 421a, which gives developers big tax breaks for a certain number of years that they can pass along to condo buyers, in exchange for which the developers build or help finance affordable housing.

But even without the 421a abatement, the bill for the penthouse would have been only $145,000.

An apartment at the Plaza Hotel that sold for $48 million last year is valued by the city at $1.7 million. A condo at 80 Columbus Circle that sold for $30.55 million last summer is valued at $2 million. And the $88 million apartment is valued at $2.97 million, or just 3.4 percent. The impact on city revenue needs then ripples down.

“If a certain kind of property is systematically undervalued, another kind of property has to pick up the slack,” said Andrew Hayashi, a property tax expert at the Furman Center for Real Estate and Urban Policy at New York University.

The state law mandating the use of rental data has been on the books since the 1980s, when the market in the city was a very different place. Manhattan had more rent regulation, many fewer condos and lots of co-op conversions.

A 2006 city report said tying the value of co-ops and condos to rentals was expected to keep an apartment’s official value — and, thus, its property taxes — from rising too quickly, because rent regulation kept rental values relatively stable.

Today, to find a condo’s or co-op’s comparable rental cousin, the Finance Department looks at factors like age, location and size. Older buildings, even the grandest, often have a greater value discrepancy than new condos because older rentals are more likely to have at least some rent-stabilized unit; this means that the taxes on those properties are generally lower.

But for any truly lavish building, finding a comparable rental is a challenge. One of the rental buildings used to find the value of 15 Central Park West, for example, is 145 West 67th Street — a very tall, but otherwise unremarkable, building.

“We understand that the requirement by state law to ignore sales prices makes an already complex property tax system even more confusing for property owners, which raises questions of equity within the system,” Owen Stone, a spokesman for the Finance Department, said in an e-mail. “We are always looking for ways to make things more transparent.”

Property tax experts say that from time to time, some effort is made to rethink the way apartments are valued. But changes can be made only by the State Legislature, and the technical and political pressures tend to overwhelm the cause, which then is quietly put on a shelf.

“It’s not so easy to go and change one screw,” said Ana Champeny, a supervising analyst at the Independent Budget Office. “Potentially, you have to redo the whole system.”

These property taxes, of course, are not paid in a vacuum. The city does receive a transfer tax every time a property is sold, as well as a mortgage recording tax — though many high-priced homes are bought with cash. And while the property taxes on mansions in the sky may be a relatively low percentage of sales value, they are still substantial.

A spokeswoman for Extell, which is developing the luxury market’s hottest ticket of the moment, One57, where two apartments are under contract for at least $90 million, said the project would contribute over 1,000 construction jobs and hundreds of permanent jobs to the city.

As it happens, Extell has also applied for 421a tax abatements for One57.

But if the property taxes on these luxury apartments were to rise, would it even make a difference in sales to the superrich?

“I think you’d choke off that market,” said Jonathan Miller, president of Miller Samuel.

Mr. Miller said that in some instances, exceptionally high carrying costs had tugged down prices and slowed the pace of sales, even in apartments that cost tens of millions of dollars.

“The logic was that the high end of the market doesn’t really care if the monthly charges are high; it’s more readily absorbed than on the lower end, and that turned out not to be true,” Mr. Miller said. “The conventional wisdom was, ‘Ah, the wealthy don’t care!’ But of course they do.”

via nytimes.com

Mobile-friendly sites turn visitors into customers | Bedford Hills Real Estate

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The following post originally appeared on the Google Mobile Ads Blog.

 In this world of constant connectivity, consumers expect to find the information that they want, when they want it – especially when they’re on the go. We know that this applies to their web browsing experiences on mobile, so we took a deeper look at users’ expectations and reactions towards their site experiences on mobile. Most interestingly, 61% of people said that they’d quickly move onto another site if they didn’t find what they were looking for right away on a mobile site. The bottom line: Without a mobile-friendly site you’ll be driving users to your competition. In fact, 67% of users are more likely to buy from a mobile-friendly site, so if that site’s not yours, you’ll be missing out in a big way.

Discover these and more findings from, What Users Want Most From Mobile Sites Today, a study from Google (conducted by Sterling Research and SmithGeiger, independent market research firms). The report surveyed 1,088 US adult smartphone Internet users in July 2012.
The problem (and opportunity) is big…
While nearly 75% of users prefer a mobile-friendly site, 96% of consumers say they’ve encountered sites that were clearly not designed for mobile devices. This is both a big problem and a big opportunity for companies seeking to engage with mobile users.
Mobile-friendly sites turn users into customers
The fastest path to mobile customers is through a mobile-friendly site. If your site offers a great mobile experience, users are more likely to make a purchase.
  • When they visited a mobile-friendly site, 74% of people say they’re more likely to return to that site in the future
  • 67% of mobile users say that when they visit a mobile-friendly site, they’re more likely to buy a site’s product or service
Not having a mobile-friendly site helps your competitors
A great mobile site experience is becoming increasingly important, and users will keep looking for a mobile-friendly site until they find one that works for them. That means your competitors will benefit if your site falls down on the job (and vice versa).
  • 61% of users said that if they didn’t find what they were looking for right away on a mobile site, they’d quickly move on to another site
  • 79% of people who don’t like what they find on one site will go back and search for another site
  • 50% of people said that even if they like a business, they will use them less often if the website isn’t mobile-friendly
Non-mobile friendly sites can hurt a company’s reputation
It turns out that you can lose more than the sale with a bad mobile experience. A site that’s not designed for mobile can leave users feeling downright frustrated, and these negative reactions translate directly to the brands themselves.
  • 48% of users say they feel frustrated and annoyed when they get to a site that’s not mobile-friendly
  • 36% said they felt like they’ve wasted their time by visiting those sites
  • 52% of users said that a bad mobile experience made them less likely to engage with a company
  • 48% said that if a site didn’t work well on their smartphones, it made them feel like the company didn’t care about their business
Takeaways
While the research confirms what we already suspected — that mobile users actively seek out and prefer to engage with mobile-friendly sites — it’s a sobering reminder of just how quickly and deeply users attitudes about companies can be shaped by mobile site experiences. Having a great mobile site is no longer just about making a few more sales. It’s become a critical component of building strong brands, nurturing lasting customer relationships, and making mobile work for you.
To learn more about our study
  • Click here and join our free webinar on September 26 at 1 p.m. EST  / 10 a.m. PST
  • Get help on building a mobile-friendly site, visit howtogomo.com.
Posted by: Masha Fisch, Google Mobile Ads Marketing
via analytics.blogspot.com

Shadow Inventory: Less Scary | Bedford Corners Homes

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Visible inventory of homes on the market has been falling repeatedly. Existing home inventories are at an 8-year low, while newly constructed home inventory is near a 50-year low. As we enter the winter months, inventories will fall even further. Very little gets listed after Thanksgiving, and not until March will inventory show some additional choices for buyers.

Just because we are able to see low inventory today does not automatically mean that inventory will be low in the near future. There is also shadow inventory to monitor. These are properties not yet listed on the market but will surely come on the market since there are still plenty of homeowners under distressed conditions. CoreLogic indicated the shadow count has fallen from 2.6 million this time last year to 2.3 million today, according to its definition. If the shadow is defined as those homes in the foreclosure process or where mortgages have not been paid for 3 months or longer, then the count is higher at 3.4 million in the shadow pipeline today, though it is less than the 3.8 million from one year ago. Since not all mortgages that are 3 months late become an REO because a good portion catch up on payment later or get a “cure” via loan restricting, the actual number of properties reaching the market for sale will be measurably lower than the shadow count. Though one can dispute the definition and the exact size of the shadow, one thing that is consistent is that the shadow is less threatening today than one year ago.

A steadily diminishing shadow will naturally shed more light on normal sales. From 2009 to 2011, roughly one-third of all home sales were distressed properties. Based on recent data, the distressed share will be around 25% in 2012. The figure will reach the teens next year and probably single digits in two years.

What impact do falling distressed sales have on home values? The median price will be pushed up. As everyone knows, foreclosed properties sell for less. However since this negative impact will be less strong in the upcoming years, the median price of all transacted homes will be higher than when compared to the past few years. So aside from the normal supply-and-demand dynamics that have been pushing up repeat-price indices such as Case-Shiller and government price data, the median price will also be rising and probably faster because of the fewer distressed over the horizon.

Two years ago, the scariest of Halloween costumes was dressing up as Shadow Inventory. Today, not only have people gotten used to the sight, it is a greatly diminished figure.

Postnote: Shadow inventory is not falling in some judicial foreclosure states where a foreclosure process takes an incredibly long time because it requires a court approval. These states include Illinois, New Jersey, New York, and Connecticut. Though the intent is to keep financially troubled families from being forced out, there are increasing stories of gaming the system, where a homeowner does not pay the mortgage and collects money by renting out the property. As a result, any home price gains in these states will likely perform a “dead cat bounce” because of the very long shadow looming over them.

via economistsoutlook.blogs.realtor.org