Archive for November, 2008

Real Estate Connect NYC 2009 Conference

Sunday, November 30th, 2008

Real Estate conference taking place from January 7-9th 2009 in New York City is INMAN News 7th annual gathering of leaders in real estate, finance and technology. They all come together to promote change and innovation within the industry.

Keynote speakers will be Robert Shiller, Gary Vaynerchuk and Andrew Ross Sorkin. Among featured speakers will be Craig Newmark, founder of Craigslist who will hold session titled, “How the Internet Culture is Changing the U.S.”

Many of them have said that real estate industry will most definitely undergo some major changes in 2009. This will be the opportunity to hear their insights as to where the industry is headed in these difficult times. In the past this conference drew top brokers, agents, mortgage brokers, technology company CEOs, directors and managers, entrepreneurs, press, analysts and investors from across the country.

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“Black Friday” bargains in NYC

Friday, November 28th, 2008
ABC News

ABC News

Post Thanksgiving sale, also known as Black Friday started as early as midnight as some stores opened their doors to an eager crowed gathered in the front. This holliday season everyone is looking to save extra money according to a recent Gallup Poll.

Those bargain hunters better get up real early as most stores have a limited supply of extra discounted goods.  Retailers need the profit from this second highest shopping day of the year. They are slashing prices to just barely make a profit on certain items hoping to drive the consumers through the doors.

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Happy Thanksgiving !!!

Thursday, November 27th, 2008

What are you thankful for this Thanksgiving?

Post your comments here…..

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New Real Estate Board Game

Sunday, November 23rd, 2008
Joel Harden founder and CEO of HCFD Corp. - a Philadelphia Real Estate firm developed Mogul: the Game of Real Estate Acquisition, Finance, & Management. He created the game few years back to, as he said, explain to his 11-year old daughter what it is he does for living.  Mogul teaches basics of real estate, investing, rate caps, mortgages, etc…
It is a family friendly game for 2-4 players and it’s original price tag was $199 but was lowered to $99.99. I guess the Real Estate market is effecting pretend investors and buyers as well.  Similar to  Monopoly, one Mogul player acts as a banker while each player starts with cash. Players roll the dice and move around the board.  They get to ”collect the rent”, make hard life choices like getting married or buying a house, do social things and don’t forget – pay the bills. Each player fills out a ”financial statement” and the player with highest “net worth” is a WINNER.
I would say this is a good opportunity to play around with flipping properties, buying and selling, investing in Real Estate without loosing a night of sleep and with pretend money.
 
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5 Ways to Winterize your Home (… and save money)

Wednesday, November 19th, 2008


 1. Outdated Heating or Cooling System.
This is a problem in more homes than you might think. According to the U.S. Department of Energy, “Heating and cooling account for about 56% of the energy use in a typical U.S. home.” Though today’s market is full of furnaces, boilers, heat pumps, and condenser units that are far more efficient than models produced a few decades ago, many of today’s homes are, unfortunately, often still equipped with heating and cooling units that waste more energy and money than necessary.
Even if a more energy efficient heating or cooling unit is not in your immediate budget, making sure that all of your ductwork is properly sealed can go a long way in helping your old system work as effectively and inexpensively as possible. Insider Tip: Also have your ducts and filters checked.

 

2. Insufficient Insulation
Insufficient insulation has a domino effect on your home. Poor insulation allows expensive energy to escape through your walls and ceiling, which makes your HVAC units work harder, which makes them less efficient and shortens their life. Not good. It is estimated that most insulation jobs average somewhere in the $1,500 to $1,900 range, and with many energy bills averaging over $300 per month, this initial investment will pay for itself quickly.

 

3. Old World Light Bulbs
It sounds simple enough, but for some reason, many Americans seem to be attached to their old, incandescent bulbs. The EPA says that using “compact fluorescent light bulbs (CFLs) in favor of comparable incandescent bulbs [can] save about 50 percent on your lighting costs.” Replacing halogen bulbs with CFLs can reap even more savings.

4. Avoiding Regular Maintenance
Everyone readily accepts that regular vehicle tune-ups and oil changes will save you a bundle in the long run. However, when it comes to the systems in our homes, many people are reluctant to perform the regular maintenance that industry professionals recommend. Most home maintenance is seasonal and is designed to make the elements of your house run and perform their best, such as weather-stripping doors, caulking windows, and changing furnace filters. These small items can make a big difference over the long haul.

5. Out with the Old Appliances
The Energy Star program was created to make it easier to purchase energy efficient appliances. Energy Star appliances are between 10% and 50% more efficient than a standard model, which means savings for you (not to mention a reduction in energy consumption and pollution on a grander scale). In addition, some Energy Star appliances are eligible for cash back subsidies by the government, so factor this into the price as you shop. Hint: No need to replace appliances that are relatively new and in good working order. But if you need new appliances, there is no excuse for not buying the most efficient model. You will spend more at the cash register, but far less over time.

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MARKET RECAP

Tuesday, November 18th, 2008

by Michael J. McGivney, SVP 

Stanley Capital Mortgage Company

Stress in the real estate market caused U.S. home sales to fall sharply between September and October, according to a national survey of more than 2,500 real estate agents conducted by Campbell Communications and reported at Housingwire.com. Survey results showed that buy-side respondents indicated a 19% drop in completed transactions through September. Falling home prices and the increasing share of deep-discount foreclosure sales drove the average purchase loan size to $219,000, down from $245,000 at the beginning of 2008.
Of course, the data is…dated. The Mortgage Bankers Association reported that its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended November 7 increased 11.9% to 425.0, up from the previous week when the reading hit its lowest since December 2000. The increase in home loan demand indicates some sign of market stabilization.
We could see a continued uptrend in purchase activity if mortgage rates remain stable. On that front, the trend is working to the market’s favor. Last week, the prime 30-year fixed-rate mortgage slipped five basis points to 6.39% while the prime 15-year mortgage dropped 13 basis points to 6.08%, according to Bankrate’s latest national survey. If there is a silver lining to an economic slowdown it is that mortgage rates tend to drop.
The good news is that consumers are feeling a bit more chipper than most pundits at expected. The Consumer Sentiment Index, compiled by the University of Michigan, shows sentiment improved in early November after dropping in October. Lower fuel prices played an important role in the improved outlook. Gas prices have declined 17% since late October. In many parts of the country, gas can be purchased for less than $2 a gallon.
The fact, often glossed over by mainstream media outlets, is that affordability is returning to the retail, housing and mortgage markets – and that’s a good thing.

If you were to weigh the balance of last week’s economic news, the scales would tip negatively, but not overly so.

 

 

 

Economic
Indicator

Release
Date and Time

Consensus
Estimate

Analysis

Industrial Production
(October)

Mon. Nov 17,
9:15 am, et

0.4% (Decrease)

Moderately Important. The expected decrease mirrors the overall economy.

Producer Price Index
(October)

Tues. Nov 18,
8:30 am, et

All Goods: 1.2% (Decrease)
Core: 0.2% (Increase)

Very Important. Further decreases in the PPI will quell any inflationary pressures.

Housing Market Index
(November)

Tues. Nov 18,
1:00 pm, et

15 Index

Important. The index is unlikely to show any improvement until 2009.

Mortgage Applications

Wed. Nov 19,
7:00 am, et

No Estimate Made

Important. Applications continue to ebb and flow with mortgage-rate volatility.

Consumer Price Index
(October)

Wed. Nov 19,
8:30 am, et

All Goods: 0.5% (Decrease)
Core: 0.2% (Increase)

Very Important. Lower consumer prices give the Fed more room to lower interest rates.

Housing Starts
(October)

Wed. Nov 19,
8:30 am, et

800,000 (Annualized)

Important. Lower prices are stimulating interest in the new-home market.

Federal Reserve FOMC Minutes

Wed. Nov 19,
2:00 pm, et

No Estimate Made

Important. The minutes will likely reflect a recessionary bias.

Leading Indicators
(October)

Thurs. Nov 20,
10:00 am, et

0.5%
(Decrease)

Moderately Important. Indicators will confirm current economic trends.

 

Negativity Sells…Unfortunately

The Treasury Department announced that it had scrapped plans to buy mortgage assets. Instead, the $700-billion Troubled Asset Relief Program (TARP) would continue to focus on direct capital injections to struggling banks and consider ways to help the “nonbank” financial sector. The media interpreted the strategy change negatively, hinting that Treasury Secretary Hank Paulson lacks direction and leadership.

That’s not the case. Many financial experts believe the best strategy to get lenders lending is with direct capital injections that improve their equity accounts. What’s more, the variability in the value of many of these mortgage assets is so great in this market that arriving at a fair price is nearly impossible, so a switch to direct-capital injection is perfectly sensible.

The same negative spin is often put on the mortgage market. Contrary to what you have read or heard, there is plenty of money available for home purchases, new home construction, and refinancing. While it is clear that guidelines for approvals have changed, becoming more restrictive due to the increases in mortgage delinquencies and foreclosures, loans are still available with zero down in some cases, borrower credit that is less than perfect, and down-payment assistance.

Unfortunately, too many potential home buyers are heeding the headlines, and not even applying for a mortgage for fear of being rejected. We can’t repeat enough that this is one of the most favorable home-buyers markets in years, and that there is plenty of money available. It would be a shame for any potential buyer to miss an important opportunity due to misinformation.

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Manhattan Apartments Decline in Value

Monday, November 17th, 2008
Crisis Hits Home for New Yorkers – Where Wall Street Meets Main Street

 

(MMJ) given the unprecedented events of the past 2 months we find it
necessary to provide an interim update on the state of the Manhattan
housing market. Declining prices, 10-15% per annum, are now clearly
broad based and affecting all neighborhoods. We have examined the data
and broken it down into two sets. Firstly, the closed sales and
secondly, the current pending deals and listings. These are our
findings based on the closed sales data as reported by The Real Estate
Board of New York (REBNY):


- Market conditions have been weakening since the
sub-prime crisis began in the summer of 2007. Effects were
generally contained to the tertiary sectors of the market until
2008.
- In March ’08, the weakness expanded into the broader
markets. Lenders tightened their underwriting criteria and demand
for apartments slackened.
- Average apartment price is down 8.8% since 1Q08. The
3Q08 average was $1,415,000 versus $1,552,000 for 1Q08.
- There were 4,019 closed apartment sales in the first
quarter of ‘08 and 3,664 in the 3rd quarter, also down 8.8%
- The median price of a Manhattan apartment peaked at
$920,000 in the second quarter and fell 8.2% to $845,000 in the
third quarter.The current data, pending trades and listings, are the best real time
indicators; however they are much more difficult to track. MMJ has
amassed a statistically significant sample (over 200 contracts since
September 1) from which we are able to draw the following conclusions:

- Market conditions have deteriorated further. Sales
volume (contracts) during September/October was off by
approximately 75% versus same period 2007.
- Numerous deals negotiated pre-September have been
re-traded and at lower levels
- Inventory levels are ballooning as absorption of new
developments drops off
- Job losses in the financial services sector are
widespread (estimated to reach 140,000 by year end) and expected
to continue
- Rental rates are also declining
- Overall Demand for housing is declining
-

In conclusion, the most current data indicate that prices have declined
at 10-15% per annum from 03/08 levels. Additionally, current trades are
now occurring at levels equal to the first half of 2006.
About MMJ & the Market Measure: Mitchell Maxwell & Jackson, Inc. is New
York’s largest residential real estate appraisal company. The Market
Measure reports periodic sales activity of specific property types
within established geographic parameters of New York City. With New
York’s largest residential sales database, the report shows changes in
the market by size, location, and price rang e. Quarterly and additional
reports can be found on the company website at www.mmja.com

 

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Weakening Financial Sector

Wednesday, November 12th, 2008

The broad financial activities sector is expected to lose more than 33,000 jobs from the 2007 peak through mid-2009.

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Trump Soho tops off, becomes tallest building in ‘hood

Tuesday, November 11th, 2008

Troubled luxury condo-hotel Trump Soho has topped out at 46 stories tall, making it the tallest building in Soho. The tower at 246 Spring Street is being developed by the Trump Organization, Bayrock Group and the Sapir Organization. Completion is expected for fall 2009. Prodigy International Development Sales is the exclusive sales and marketing agent for the project. The project has faced many obstacles during construction, including multiple violations from the Department of Buildings, one for a crane that smashed the window of an adjacent building. Three construction workers were hurt on the site, and in January, one worker fell to his death when the building’s scaffolding collapsed. TRD

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Internet vs. Traditional Buyers Survey – 2007 Highlights

Monday, November 10th, 2008

  VS. Housing market conditions are rapidly changing and are affecting the behavior of buyers.  Home buyers are more concerned about the direction of the housing market, are more cautious about their home buying process, and are spending more time doing research on their own before making a purchase.

During the transition period of 2006 and early 2007, home buyers adjusted their behavior to adaptto the new housing market environment. The 8th Annual California Association of REALTORS® (C.A.R.) Internet Versus Traditional Buyers Survey describes these changes among consumers in the real estate market, driven in part by the slowdown in the demand of housing, as well as by the influence that the Internet has on the real estate marketplace. 

KEY FINDINGS

-The share of Internet buyers has grown from 28 percent in 2000 to 72 percent in 2007, while the share of traditional buyers declined from 72 percent in 2000 to 28 percent in 2007. Growth in the use of the Internet in the home buying and selection process has been accelerated by the growth in broadband use. The two percentage point increase from 2006 to 2007, however, was the smallest increase since the inception of this study.

-Many home buyers preferred the dynamic online experience that the Internet offers over the static paper experience that print advertisements offer. Only 12 percent of all home buyers looked at newspaper/magazine ads to search for a home, while more than seven of ten home buyers used the Internet as a significant part of the home buying and selection process.

- ”Multiple pictures/slide shows” continued to be the online feature with the highest rating among all online features, followed by “Map/Directions”.

-Internet buyers were pleased with their experience of using the Internet during the home buying process, as 98 percent expressed above average levels of satisfaction. Almost all agreed that using the Internet helped them better understand the home buying process, more than nine of ten agreed that the Internet helped them understand home values better, and nine of ten agreed that using the Internet put them more in control of the home buying process.

-Home buyers became more patient and more careful about the purchase of their home, resulting in more time devoted to each part of the home buying process. They spent more time considering buying and investigating homes before contacting an agent, and they spent more time previewing homes with their agent. 

-Consistent with past years’ results, nine of ten home buyers hired an agent to assist them through the home sales transaction.

-With buyers being more concerned about housing market conditions, and more cautious about their home purchase, they expected quicker and more frequent communication from their agent. Agent qualifications, on the other hand, became secondary in the selection process, perhaps because of the lack of understanding about the value a REALTOR® brings to the transaction.

-When asked why they were satisfied with their agent, Internet buyers cited “always quick to respond” and “worked hard on their behalf” as the top two reasons, while traditional buyers said their agent “worked hard” and “negotiated good deal” on their behalf.

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