You can run, but you’ll never catch up

The lead article in today’s New York Times brings us some startling news: Some desperate buyers are having trouble selling their homes.

One case in point, Adam Rogers and his wife Gillian, whose place in Brooklyn remains on the market. They bought the Clinton Hill unit in January of 2006 for $599,000. Reports the newspaper:

“At first the the Rogerses asked $679,000, the price at which their neighbor had sold his apartment.

“They since cut the price several times and switched agents. . . The apartment is listed at $599,000; they will lose about $60,000 in transaction costs if it sells at that price.”

Next case: Elizabeth Demaray and her husband Hugo Bastidas, who paid $620,000 for their condo in East Harlem in February of 2007. This very spring, they put the apartment on the market for $715,000 “about what comparable units in the building. . . had sold for.”

Then there are Jon Vernon-Browne and Adriana Herrera, who purchased a condo in

Jon Vernon-Browne and Adriana Herrera, parents-to-be, bought a house; their condo must go, the Times says.

Manhattan’s Financial District for $1 million in February 2007. They listed it in May for $1.1 million and rejected a low-ball offer.

Another unhappy seller that the Times interviewed is Danielle Dugan, who bought her fifth-floor walk-up in2006 and has been trying to sell the Brooklyn Heights co-op for $357,000 since then. Having received one offer, which was unacceptable, she dropped the price of the apartment to $340,000.

Well, duh! 

On the surface, NYC’s job losses do not bode well

Jobs are inextricably connected to the health of the housing market for reasons that must be obvious.  That’s one reason that Washington, D.C., seems to be recovering from its housing blues.  After all, government dominates in the metropolitan region.

Thus, the news in yesterday’s New York Times about the city’s unemployment rate seems to suggest a grim outlook for the Big Apple.  But a closer look at the statistics may possibly imply otherwise.

In June, the city’s unemployment rate jumped to 9.5 percent,  the newspaper said. The rate of joblessness in the city had not been as high in almost 12 years. In May, it was 8.9 percent, significantly lower than the national rate of 9.4 percent for that month. More than 380,000 people in the city were unable to find work last month, an increase of about 170,000 from a year before, according to data released by the State Department of Labor.

The last time so many city residents were unemployed was in the early 1990s, in the wake of the long, deep recession after the 1987 stock market crash, said James Brown, a Labor Department economist.

Mortgage rates drop for the third week in a row

Probably, almost everyone thinking about buying real estate knows that mortgage rates are linked to the price of long bonds.  Thanks to the federal government’s stimulus money, there are lots and lots of the bonds on the market.

This week, the 30-year fixed-rate mortgage (FRM) averaged 5.14 percent, down from last week’s 5.20 percent, reports Freddie Mac. Last year at this time, it was 6.26 percent.  As for the 15-year FRM, it, too, was down, averaging 4.63 percent in comparison with 4.69 percent a week ago and 5.78 percent a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 4.83 percent this week, up slightly from last week’s 4.82 percent but lower than 5.80 percent one year earlier.

One-year Treasury-indexed ARMs averaged 4.76 percent this week, off from 4.82 percent; at this time last year, it was 5.10 percent.

For a 30-year fixed-rate mortgage, the rate reduction over the past five weeks translates into a monthly payment saving of $56 on a $200,000 loan, according to Freddie Mac.

(You’ll find extensive news about mortgages and the housing market in my biweekly newsletter.)

Declining rates have proved to motivate consumers, especially those interested in refinancing their existing mortgage.

When visitors enter a household, they know

Sometimes you’re not conscious of it, while other times it can overwhelm you.  But when you enter someone else’s home, you are immediately affected by its characteristic smell.

Do the owners have poor hygiene?  Do they own a cat or a badly behaved dog? Do they smoke. . . anything?  Is there an air of mustiness?  Do they wear cheap perfume?  I doubt that I have to go on since you undoubtedly know what I mean.

In my real estate career, I recall numerous times when a smell turned off a buyer, whether the buyer realized it or not.  If a home reminds someone of terminally ill kin, you can imagine how that prospect might well flee.  Or ethnic cooking can discourage a buyer who is not a racist but who happens to hate, say, curried food.  The lingering smell of grilled hotdogs would not please a vegetarian.

One broker has written how she and her clients used to classify smells in categories under the umbrella of  “funk.”  There were “paint funk,” the quasi-toxic but cleanliness-implying smell of freshly painted walls; “cat pee funk;” “cigarette funk;” and “bio funk,” the description of which I will spare you.

A vanishing icon endures on West End Avenue

They were placed on virtually every street corner, tucked into the recesses of numerous bars and ensconced in many a drug store – the kind of pharmacy that had soda fountains dispensing chocolate Cokes and lime rickeys.

You may not recall those iconic installations in such locations, but I do.  And anyone who’s seen Clark Kent transform himself into Superman – who hasn’t? – knows what I’m talking about: The telephone booth, the real thing with an accordion door that turned on a dim overhead light when closed.

It turns out, reports the New York Post, that West End Avenue on the Upper West Side of Manhattan

What’s a buyer without a broker to do? And why?

While making my rounds of open houses the other day, I ran into a lovely couple from New Jersey who are planning to add a Manhattan residence to the real estate they already own.  In search of an apartment near Lincoln Center that might have outdoor space and certainly will have open exposures, they’ve been checking out the market for some time.

They’ve gone through several brokers, they told me, partly because the couple is not quite ready to buy and is determined to avoid compromise.  So they, like me, visit open houses on their own.  (I do it to keep up to date and to write my “Out and About” column in my biweekly newsletter.)

I noticed them shuffling through computer printouts and newspaper classifieds as they tried to figure where next to go.  I also overheard them calling a broker that they found in the material in the hope of seeing another apartment a few minutes later.  (They succeeded.)

Injecting myself into their conversation, I had to find out why they themselves were doing all the research and making the appointments without the assistance of a broker.  After all, a good broker saves time, stays on top of the market, knows or learns useful information about a property that might pique a customer’s interest, and doesn’t cost the buyer a cent.

A good example of how a well-informed broker can help would be the view unmentioned in the listing (for obvious reasons) from the second-floor apartment pictured below.

Big trash receptacles in the photo are closer than they appear to be.

Having been surprised by such a view, which they rationally decided was unacceptable, why does this couple and do so many other buyers persevere on their own?

Yard sales are nice, but they’re not for everyone

Not that I need a reminder, but an article in the recent AARP (gulp!) magazine highlights how different Manhattan is from much of the rest of the world.

One of the photos in AARP's latest magazine.

I can’t say that the piece made me nostalgic for my time in Washington, D.C., but it did shine a bright light on one of the manifold ways that life outside the Big Apple is so much more in keeping with our views of the Heartland.  If I ever encountered anything like a yard sale in New York, I don’t recall it.

‘The Sky’s the Limit’

I’m 75 pages into a book called The Sky’s the Limit by Steven Gaines, and it’s one you may well want to pick up.

Not only is the prose exceptionally deft, but the author melds gossip, insider information about Manhattan co-ops and tautly related urban history.  I started it with some hesitation, and now I look forward to each time I can return to the quickly turning pages.

One anecdote that I had to share with you, dear Reader, concerns the iconic Edward Lee Cave, whose small and snooty real estate brokerage was absorbed by larger brokerage earlier this year.  (The author says he won’t consider representing the seller of a co-op, and no condos at all, worth less than $5 million.)

When you work with a broker, caveat emptor

I’m never thrilled to expose the imperfections of other real estate brokers, but I do believe it is my duty to write about breaches of ethics and immoral or even illegal practices.  Not only do I express my concerns with regularity in this blog, but you’ll find additional accounts in my latest biweekly newsletter.

So it is that I am happy to recommend a short piece by SmartMoney titled “10 Things Your Real Estate Broker Won’t Tell You.”  It is well worth reading.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
http://www.ServiceYouCanTrust.com

Pretty pictures tell a dark story about housing

Based on the Case-Shiller national index, which omits apartments, T2 Partners says housing prices will level off at 40% from the peak, another 5-10% from the end of the first quarter this year.  “It’s almost certain that prices will reach these levels,” the investment advisory firm predicts.

T2 Partners makes these additional points: