Category Archives: Pound Ridge

Home Prices: The Tilting of America | Pound Ridge Real Estate

The chart below from Case-Shiller’s release today of its July data says it all.  Prices now are shifting a lot on a monthly basis.  The range between appreciating and depreciating markets seems to be growing and no longer do the “sand” states, judicial foreclosure states or foreclosure states or cities with the best economies and most jobs.

Rather, with the possible exceptions of Cleveland and Boston, appreciating markets are to be found west of the Mississippi and depreciating ones to the east, as if America were a great raft at sea with too much weight on one end.

These are seasonally adjusted month-over-month increases and they are particularly important because both seasonally adjusted existing sales and pending sales dropped unexpectedly in August, according to NAR.  Like Case-Shiller, NAR found annualized prices in the West (7.1%) much higher than the East (2.4%)2015-09-29_13-30-14

 

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http://www.realestateeconomywatch.com/2015/09/home-prices-the-tilting-of-america/

FHFA House Price Index Up 0.6 Percent in July | Pound Ridge Real Estate

Washington, D.C. – U.S. house prices rose in July, up 0.6 percent on a seasonally
adjusted basis from the previous month, according to the Federal Housing Finance Agency
(FHFA) monthly House Price Index (HPI). The previously reported 0.2 percent change in June
remains unchanged.
The FHFA HPI is calculated using home sales price information from mortgages sold to, or
guaranteed by, Fannie Mae and Freddie Mac. From July 2014 to July 2015, house prices were up
5.8 percent. The U.S. index is 1.1 percent below its March 2007 peak and is roughly the
same as the November 2006 index level.
For the nine census divisions, seasonally adjusted monthly price changes from June 2015 to
July 2015 ranged from -1.2 percent in the New England division to +1.6 percent in the
Mountain division. The 12-month changes were all positive, ranging from +2.1 percent in the
New England division to +9.4 percent in the Mountain division.

 

source: FHFA report

Underwater homes continue to surface | Pound Ridge Real Estate

The U.S. rate of underwater homeowners – those who owe more on their home than it’s worth – continued to drop in the first half of 2015. But condo owners are still more likely to be stuck in negative equity than people who own single-family homes.

Homes in the low end of the housing market are more likely to be underwater. Fortunately, while homes across the U.S. are appreciating, homes at the low end are appreciating faster. This is causing the negative equity rate to decline.

In the U.S., 14.4 percent of all mortgaged single-family homes are underwater, according to Zillow’s Second Quarter Negative Equity report. Condos are lagging behind in the recovery, at 19.3 percent.

Overall, more condos than homes are upside down in every large U.S. housing market except Pittsburgh, Detroit and Memphis.

Here are the top 10 markets where condos are deeper underwater than single-family homes:

  1. Jacksonville, FL. The negative equity rate for single-family homes in Jacksonville is at 21.3 percent, more than half the 41.5 percent rate for condos.
  2. Chicago, IL. 32.6 percent of condo owners in Chicago are upside down on their mortgage, and 19.2 percent of single-family home owners are upside down on theirs.
  3. Orlando, FL. Orlando comes in third with 16.8 percent of single-family homes in negative equity and 29.9 percent of condos are in the same boat.
  4. Sacramento, CA. 12.5 percent of single-family homeowners in Sacramento owe more on their home than it’s worth, compared to the 25.4 percent of condo owners.
  5. Las Vegas, NV. The negative equity rate for condo owners in Las Vegas is 36.7 percent. The rate is 23.8 percent for single-family homeowners.
  6. Providence, RI. 25.9 percent of condo owners in Providence are upside down on their mortgage. The rate drops to 14.4 percent when it comes to single-family homes.
  7. Columbus, OH. Single-family homes in Columbus have a 13.1 percent negative equity rate, compared to a rate of 24.6 percent in condos.

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http://www.zillow.com/blog/negative-equity-improving-182981/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ZillowBlog+%28Zillow+Blog%29

US Homes Sales soar in July | Pound Ridge Real Estate

Americans stepped up their home-buying for a third straight month in July, as sales accelerated to the strongest pace in eight years.

The National Association of Realtors said Thursday that sales of existing homes rose 2 percent last month to a seasonally adjusted annual rate of 5.59 million, the fastest rate since February 2007. Sales have jumped 9.6 percent over the past 12 months, while the number of listings has declined 4.7 percent.

Steady job growth and relatively low mortgage rates have convinced current homeowners to purchase homes, while first-time buyers remain scarce. The housing market contains a mere 4.8 months’ supply of homes, meaning that prices are rising for an increasingly narrow set of properties.

The slow six-year recovery from the Great Recession has finally revitalized the housing market. Home sales have soared in recent months, as more current homeowners have returned to the real estate market for an upgrade or to downsize as they approach retirement. Yet the upswing also reflects increasing problems with affordability that have left first-time buyer on the sidelines.

“When first-time homebuyers compete with people who are more qualified borrowers that have additional cash, they tend to lose,” said Budge Huskey, chief executive of the real estate brokerage Coldwell Banker.

The median home price climbed 5.6 percent over the past 12 months to $234,000. Just 28 percent of the purchases last month went to first-time homebuyers, a group that historically accounted for 40 percent of sales. A more balanced market would contain six months’ of supply-instead of less than five-and provide potential homebuyers with a greater selection of homes.

Current homeowners with equity have been able to absorb some of that price appreciation as they’ve shopped for another home. But the recent sales explosion also reflects two critical factors: the economy adding a solid 2.9 million jobs over the past 12 months and the average, 30-year fixed mortgage rate staying around 4 percent. At roughly two percentage points below the historical level, mortgage rates have reduced monthly borrowing costs for buyers.

Still, the trajectory of mortgage rates- and sales- going forward is unclear.

It’s possible that a weakening global economy will cause more investors to buy U.S. Treasury bonds, a move that has historically held down mortgage rates. The average mortgage rate has slipped slightly as China has endured stock market volatility and reduced the value of its currency.

Yet the Federal Reserve is preparing to raise a key interest rate for the first time in nearly a decade. Economists say the Fed could lift its fed funds rate from near-zero as soon as September, an increase that would potentially cause mortgage rates to rise. When Fed officials previously announced plans in 2013 to pull back on other forms of economic stimulus, mortgage rates suddenly spiked and derailed home sales for several months.

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http://hosted.ap.org/dynamic/stories/U/US_HOME_SALES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-08-20-12-08-48

Farm real estate values decrease slightly | Pound Ridge Real Estate

The U.S. Department of Agriculture recently announced Nebraska’s 2015 farm real estate value and cash rent for cropland has decreased by 2 percent.

Allan Vyhnalek, educator at the Platte County Extension Office, said based on the changing prices of corn and soybeans, the decline in real estate value is “absolutely expected.”

In February 2015, the University of Nebraska-Lincoln published a report on farm real estate that gave specific numbers for regions within the state.

The east region, which includes Platte and Colfax counties, saw an overall decrease of 3 percent. Dryland cropland decreased by 9 percent and other types of cropland (pivoted, gravity irrigated, etc) decreased by 3 percent. However, the values of grazing land increased, tillable by 16 percent, non-tillable by 20 percent and hayland by 24 percent.

Due to the 2005 ethanol mandate, Vyhnalek said crop prices jumped to $5 to $7 a bushel for corn and $11 to $15 a bushel for soybeans. When grain prices rose, so did the cost of production and real estate. According to the 2015 UNL real estate report, over the past five years the east region’s real estate values increased by 89 percent.

Statewide, values increased by 116 percent.

Prices for corn are now around $3.41 a bushel with soybeans at $8.85 a bushel, lower than previous years.

Thomas Dobbe, regional vice president of Farm Credit Services of America, said the increased cost of equipment, fertilizer, seeds, etc., could have “acted as a damper” on the real estate market, but it’s too early to tell if this decrease is a fluke or the start of a trend.

“It may be an indication that the market will not go any higher,” Dobbe said, “or a sign that the market is taking a breather. We won’t know if it’s done going up or if it will continue to go up.”

Dobbe and Vyhnalek said the value of an individual plot of land depends more on the quality of its soil and topography than overall trends. Property taxes will continue to increase, and the value decrease is unlikely to affect rental prices.

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http://columbustelegram.com/news/local/farm-real-estate-values-decrease-slightly/article_5aa2a5fb-19a8-5bf5-a12e-7f9662df4625.html

As housing prices skyrocket in New Orleans, miniature houses are the answer | Pound Ridge Real Estate

This house in the Irish Channel is being built on an 880-square-foot lot. It goes on sale next month.

Photo by CHERYL GERBER

This house in the Irish Channel is being built on an 880-square-foot lot. It goes on sale next month.

Tiny houses veer between fad and architectural fascination in cities across the world, but in New Orleans ­— where waterways and old plantantion lines make frequent curiosities out of the street grid — they may be finding a natural home.

With undeveloped standard-sized lots increasingly scarce among the most sought-after neighborhoods along the Mississippi River, architects and developers are looking for building opportunities on small parcels that have been overlooked until now. While planners around the country tout the urban-infill trend as a counterweight to suburban sprawl, some New Orleanians worry the smaller structures may congest their neighborhoods.

Architect Jonathan Tate and developer Charles Rutledge say they have identified more than 5,000 irregularly-shaped vacant lots traditionally seen as too tiny to be built upon. In the hopes of transforming some of these parcels into new small-but-affordable housing stock, they are building their first “starter home,” a house on an 880-square-foot lot in the 3100 block St. Thomas Street in the Irish Channel.

“The lot on St. Thomas ‘wasn’t worthy of a house’ is what the neighbors said,” Tate says.

Irish Channel real estate has skyrocketed in value over the past few years, but Tate and Rutledge say it has 20 to 30 irregularly sized empty lots that measure less than 900 square feet. They think if they could use the land to build smaller houses, they could utilize empty space and also open up an increasingly expensive neighborhood to first-time homebuyers.

“The Irish Channel is particularly interesting because the value is going way up, and it’s pushing people out,” Rutledge says. “We want to see how to make housing more affordable without cheap architecture.”

The solution on St. Thomas Street has been to buy a smaller plot of land and build a smaller house, which will have lower construction costs. The house looms tall and thin on a sliver of land between a Creole cottage and a warehouse. That’s the practice of cash house buyers in Knoxville.

“If we’re working with odd lots, we can be inventive with how we use space and [take advantage of] all parts of the lot,” Tate says. “Stylistically, its contemporary, but there’s enough familiarity to them.”

Real estate agent Tracey Moore, who will put the house on the market in August, has said the team is filling a particular niche in the real estate market that has yet to be addressed.

“Smaller lots are hard to deal with, but because they’re small, they’re still somewhat affordable,” Moore says. “Most of the time, these lots are just sitting there with grass growing or people are putting trash on them.”

Moore says for someone trying to break into the housing market in a trendier neighborhood such as the Irish Channel or Bywater, smaller lotsare the only things left. Though the thought of developing irregularly sized lots isn’t necessarily new, developers often overlook them because they may not turn as much of a profit, Moore adds. Tate and Rutledge acknowledge this, and say their first house on St. Thomas may need to sell for more to make up for the potential of losing money on the sale of future starter homes in the area.

They bought the 16-by-55-foot lot on St. Thomas for $22,000. By comparison, a regular-sized lot in the area recently sold for $285,000, and that’s not including the price of building a house. Houses in the area have sold for up to $400 per square foot. The team hopes to sell starter homes for around $200 per square foot.

“We’re trying to provide an alternative option for someone with a price point that doesn’t exist in this part of the city,” Tate adds.

Affordability is a major reason tiny houses have drawn increasing interest around the country. Gregory Paul Johnson, founder of the Small House Society in Iowa City, Iowa, told The New York Times the notion of very small houses becoming popular would have been absurd in the early 2000s.

“But there are so many powerful forces at work right now, like rising energy costs and the mortgage crisis,” Johnson told the newspaper. “I think people want small homes because they cost less to purchase, maintain, heat.”

But one person’s innovation may be another’s imposition. Several neighbors recently turned out to protest another narrow home on a small lot on Chestnut Street.

The developer, Logistics Park LLC of New Orleans, is planning a two-story home for the lot at 4621 Chestnut St. The house would be 12-feet, 10-inches wide, 65 feet long, and 28 feet tall, for a total floor area of approximately 1,500 square feet.

The lot itself measures 21 feet across, nearly half the 40 feet normally required, but the city granted a construction permit in March because “a single-family lot can be developed on by right” under usual circumstances, said Leslie Alley of the City Planning Commission. City officials, however, did not notice that the lot had been commonly owned with the neighboring lot property until just last year, Alley said, which means a variance should have been required.

When neighbors pointed out the prior common ownership of the neighboring lots, a stop-work order was issued and a hearing set before the Board of Zoning Adjustments. Anne Raymond, representing the developer, told the board that the lot width dates back nearly a century.

“The lot area and width are the historical lot area and width from 1908,” Raymond said. “It is how it is.”

The July 13 hearing also brought a number of neighbors in opposition. Justin Chopin, who lives on the Valence Street side of the block, said the lot is too small to be independently developed, and the developer should have known that when they bought it.

“They had to do so knowing it was never going to be conforming to the zoning regulations,” Chopin said. “There’s not ample parking. It doesn’t fit with the construct of the other houses.”

Lorraine Neville, whose husband is musician Art Neville, said the lot was always part of the neighboring home as a side yard.

“I know this to be true; it was never an independent lot,” Lorraine Neville said, noting that she had a letter signed by 15 adjacent neighbors opposing the construction.

 

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http://www.bestofneworleans.com/gambit/tiny-houses-in-new-orleans/Content?oid=2724392

Susan Macarz

Strong Chicago housing sales in June | Pound Ridge Real Estate

Chicago’s housing market continued its rebound last month as existing-home sales in the nine-county area grew 14.2 percent in June from last year — to their highest level since 2006.

Existing-home sales rose to 13,100 in June, the highest since June 2006, when 13,193 homes were sold, the Illinois Association of Realtors reported Wednesday.

Also fueling the rebound are median housing prices, which, at $232,500, were 5.7 percent higher than a year ago, the trade group said.

Homes sales in the city of Chicago surged 9.3 percent, to 3,110 properties moved, at a median price of $290,000, up 5.5 percent from a median price of $275,000 reported a year ago.

Median prices on condominiums in the city, however, grew at a slower pace, rising 4.5 percent from a year ago to $324,000. Inventory in the city remains tight, down 10 percent from last year.

The number of condo units sold rose 8.4 percent to 2,027 from a year ago.

The burst in home sales growth was unexpected last month and it could be just a “one-month blip,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois.

“We forecasted positive sales growth but not of this magnitude,” he said adding, “We’re very hesitant to say that it’s the start of a robust trend.”

Nor does the report signal a bubble forming. Adjusted for inflation, “We’re only at 89 percent of 2007 prices,” Hewings said. “Our prices are recovering in a classic Midwest, modest way.”

Nationally, existing-home sales increased 3.2 percent to a seasonally adjusted annual rate of 5.49 million homes, putting sales at their highest level since February 2007’s 5.79 million, according to the National Association of Realtors.

The strong uptick in activity, as well as fewer cash sales, larger average loan sizes and more loans getting approved, has caused the Mortgage Bankers Association to significantly boost its outlook for mortgage originations that it made just a month ago.

Home-purchase mortgage originations are now expected to increase to $801 billion, compared to a previous forecast of $730 billion.

“We expect this trend to continue into 2016 and beyond, as the broader economy and job market continue to improve,” Mike Fratantoni, the association’s chief economist, said in a statement.

The association also said it expects mortgage rates to hit 4.5 percent by year’s end.

Helping keep prices high in the Chicago area is the lack of homes listed for sale. Housing inventory in most counties was down in June, with the exception of Lake and DuPage counties, where inventory rose 1 percent and 4 percent, respectively.

 

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http://www.chicagotribune.com/business/ct-june-housing-prices-0723-biz-20150722-story.html

America’s Most Violent (and Most Peaceful) States | Pound Ridge Real Estate

While violent crime rates in the country have fallen steadily over the past several decades, the United States is still one of the less peaceful nations in the world. According to the Global Peace Index 2015 report, the United States ranked 94th out of 162 countries. However, the peacefulness of American communities varies considerably within states.
Following the example of the Peace Index, 24/7 Wall St. generated an index to rank the peacefulness of each state in the nation. States with high violent crime and homicide rates, as well as high estimated small arms ownership and high incarceration rates were identified as less peaceful, while states with lower incidence of these factors were more peaceful. According to our index, Maine is the most peaceful state, while Louisiana is the least peaceful.

Click here to see the least peaceful states in America.

Click here to see the most peaceful states in America.

In an interview with 24/7 Wall St., Aubrey Fox, executive director of the U.S. office at the Institute of Economics and Peace, said, “A perfectly peaceful place would be a place where there is no violence and no fear of violence.” He explained this would be a place with no crime, no police spending, a strong government, and a healthy economy.

According to Fox, one of the largest drags on peacefulness in the country and in individual states has been the high levels of homicide and incarceration. Only three of the 10 least peaceful states had incarceration rates that did not exceed the national rate of 498.1 per 100,000 Americans. In all of the most peaceful states, incarceration rates were well below the national figure.

5 Drivers of Peace

Less peaceful states needed to have relatively large police forces. The ratio of law enforcement employees to state residents exceeded the national proportion of 285.5 law enforcement workers per 100,000 Americans in eight of the 10 least peaceful states, while all of the most peaceful states had proportionately small police forces.

There are two ways to look at the relationship between peace and enforcement, Fox explained. While the perfectly peaceful community would have zero police officers, communities need to invest in policing to deal with local threats and lower crime. However, “There is typically a point at which you get less return on your investment,” Fox said.

Fox gave an example of a community with crime at a 50-year low, but where police are spending seven times as much to keep it that way. “We really need to ask how much of a lost opportunity cost is that?” Fox argued. In fact, U.S. crime levels are at their lowest level since 1972. Police spending was far lower at that time, however, according to Fox.

The connection is far from well-understood, however. Crime continued to drop in the U.S. during the most recent economic downturn, for example. During the downturn, police spending fell dramatically.

Still, economic costs add up the less peaceful a community becomes, and poor socioeconomic climates can lead to less peacefulness. “Being poor or having less access to resources does put you on a path that is less peaceful,” Fox said.

The manner in which these factors lead to violence, however, is very difficult to establish empirically. John Roman, senior fellow at the Urban Institute, an economic and social policy think tank, said, “The biggest predictor of whether there’s violence is dense clusters of unskilled young men.” He went on to explain that poor socioeconomic factors such as low educational attainment, high poverty rates, and high unemployment all lead to more violence by contributing to higher numbers of unskilled young males.

Read more: America’s Most Violent (and Most Peaceful) States – 24/7 Wall St. http://247wallst.com/special-report/2015/07/15/americas-most-violent-and-most-peaceful-states/#ixzz3gRvMfKQT

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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http://www.realtytoday.com/articles/20081/20150713/

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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http://curbed.com/archives/2015/07/01/