Daily Archives: April 14, 2009

Foreclosures resume

After laying off for awhile to see what Obama had to offer in the way of bailouts for homeowners, the major lenders have concluded, “nothing” and started in again foreclosing homes.  Fannie Mae, Wells Fargo and Chase have all resumed pushing foreclosures through the pipeline. Which will reduce prices but start restoring some sanity to the market.

Ronald Temple, co-director of research at Lazard Asset Management, expects home prices to fall 22% to 27% from their January levels. More than 2.1 million homes will be lost this year because borrowers can’t meet their loan payments, up from about 1.7 million in 2008, according to Moody’s Economy.com.

I won’t be at all surprised to see Mr. Temple join me in the principal’s office tomorrow morning. What a pessimist!

UPDATE: Sheesh, here’s another spoilsport!

New York Area Home Prices to Fall 15%, Rosen Says By Dan Levy

April 14 (Bloomberg) — Home prices in the New York City metropolitan area will fall as much as 15 percent as Wall Street firms cut jobs and slash bonuses, according to Kenneth Rosen, an economist at the University of California, Berkeley.

Luxury vacation markets such as the Hamptons on the east end of Long Island, New York; Lake Tahoe in California; and Aspen, Colorado will also suffer as the recession deepens, said Rosen, chairman of the Fisher Center for Real Estate and Urban Economics. Prices may fall 20 percent in those areas.

“These declines are happening but aren’t showing up in the data yet,” Rosen said in an interview. “Any place hit by the financial crisis will have substantial declines.”

The S&P/Case-Shiller index of prices in 20 U.S. cities fell 19 percent in January from a year earlier, the biggest drop on record. New foreclosures, a glut of unsold homes and eroding household wealth are driving down prices amid the worst housing crisis since the 1930s. The U.S. economy shed 663,000 jobs last month and the unemployment rate rose to a 25-year high of 8.5 percent, according to the Labor Department.

In New York City, apartment prices fell 19 percent in the first quarter from a year earlier to an average $805,000, the Real Estate Board of New York said last week.

Rising Unemployment

City Comptroller William Thompson predicted in March that 250,000 jobs would be lost in the five boroughs before the recession ends. New York City’s unemployment rate rose to 8.1 percent in February from 6.9 percent in January, a record month- to-month increase, according to the state Labor Department.

Across the U.S., Rosen predicted house prices will fall another 7 percent, with parts of California, Florida, Nevada and Arizona posting additional declines of as much as 15 percent as those states absorb record foreclosures.

The housing market’s cumulative price drop from peak to trough will be 25 percent with, a “bottoming” period that begins this year and may last two years, Rosen said.

“Job losses are large and the foreclosure inventory is rising,” said Rosen, who also runs Rosen Real Estate Securities LLC in Berkeley, a hedge fund with about $300 million in assets. “It’s going to get worse before it gets better, even with the best government efforts.”

 

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Barack? Oh Bomb’em

Pirates seize four more ships. Kill them all.

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Four contracts today

Like that robin, this hardly makes a spring market, but four in one day is more activity than we’ve seen recently. No big blockbusters and two that probably are selling close to what was paid for them five years ago, but that’s okay. Life.

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Take this, Walt!

Walt Noel has written in (in crayon, naturally) questioning whether there could possibly be any such thing as a “president” for that august body, The Greenwich Association of Realtors. We are as secretive as Skull & Bones and I’m sure to get in trouble by exposing this but I’m just boiling mad so the heck with it. Walt, here’s a picture of our past President, disguised as a mere member of the Loyal Order of the Water Buffalo. So there.

"Wilma, how do you price a Rembrandt?"

"Wilma, how do you price a Rembrandt?"

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mean ol’ bloggers

8 Sherwood Lane
8 Sherwood Lane

So I’ve been invited in for a chat tomorrow with the President of the Greenwich Association of Realtors. The exact nature of that talk wasn’t discussed but I have a strong suspicion that the subject of blogging will come up. My response will be polite, because I’m always a polite fellow, but I am not feeling terribly contrite and don’t think I’ll feel any particular remorse. But in advance, here’s an example of why I suppose so many real estate agents in town are angry at me. This house on Sherwood Lane was first listed in November 2007 for $5.8 million. I did not write about it – really, I didn’t – but it was clear, even to a moron like myself, that it was never going to sell for that price. And it didn’t. Today, one year and a few months later, it’s been marked down almost $2 million, to $3.995. Now I don’t expect flack from the original broker because I had nothing to do with the house not selling, but our inventory is jammed with over-priced houses and when I point that out, (some of) my peers explode and complain that I’m exposing the dirty little secret of Greenwich real estate. Airing the family’s dirty laundry. Hogwash.

Recently an almost-new house came up for sale asking $1.9 million. I mentioned it on this blog, saying that, while it was a well-built home, it was built into a cliff, had no yard and was located on a busy street. The builder, I noted, had originally tried to get the price that the sellers were now attempting and it was only after a year of effort and dropping his price substantially that he found a buyer. I wished the sellers well in achieving what their seller had been unable to do. I immediately received a complaint from their agent. These were nice people, she explained, who had to sell the place because they were moving out of state. All the more reason to price it appropriately, I would have thought, but the agent insisted that I was ruining the market for them. I don’t have that power, and the very experienced agent surely knows that.
Today, five months later, they dropped the price to $1.3. Did I do that, or did the market? I guess I’ll be discussing that tomorrow with the President of the GAR. I will blog about what happens, of course.

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Cool! According to the Dept. of Homeland Security, this is a rightwing extremist blog!

Gosh, I haven’t felt so honored since my Yippie days during the Viet Nam War, another government sponsored disaster. Making the rounds today is this report from our country’s DHS, which purports to identify and describe rightwing extremist groups.

Rightwing extremism in the United States can be broadly divided into those groups, movements, and adherents that are primarily hate-oriented (based on hatred of particular religious, racial or ethnic groups), and those that are mainly antigovernment, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely. It may include groups and individuals that are dedicated to a single issue, such as opposition to abortion or immigration.

Do you remember – and I’ll bet you do, since it was only a few months ago when someone else was our president, that to dissent was to be patriotic? Now, it seems, that’s inoperative. Vote for change indeed.

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Land sale on Meadowcroft

17 Meadowcroft

17 Meadowcroft

Asked $5 million just a few weeks ago and under contract today. It’s a shame to see this meadow go but it least it yields some useful information as to what a building site (3 acres in the R2 zone) is worth.

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