With mortgage rates almost flat, activity drops

Freddie Mac says the 30-year fixed-rate mortgage (FRM) averaged 5.03 percent for the week, up from last week’s 5.00 percent but way below 6.46 percent last year at this time.

And the Mortgage Bankers Association’s latest report is that loan application volume for the week ending Oct. 23 dropped 12.3 percent on a seasonally adjusted basis from one week earlier.   On an unadjusted basis, the decrease was 2.8 percent compared with the previous week, which included the Columbus Day holiday.

Kicking him when he’s down and up is just fun

Robert Shiller now is warning that house prices in some areas of the U.S. could be approaching bubble territory, Global Edge reports.

Home prices in San Francisco and elsewhere have risen by double-digits over four months and look they as if they are in “bubble territory,” Shiller contended, adding:

“It is entirely possible that even with the bad news we are getting, home prices could start a major increase. . . What happens from here will depend on people’s animal spirits and speculative impulses.”

He also predicted rising unemployment would not stop prices from ncreasing:

“Even in the Great Depression real home prices were rising with the unemployment rate above 12 percent. . . Just because we have high unemployment does not mean the stock market cannot boom and the housing market cannot boom.”

Shiller, of course, is that Yale economist who correctly predicted that the recent housing bubble would burst and gave his name to half of the flawed index that he shares with Karl E. Case.

Shiller made the bubble forecast for years.  He was right, eventually.  Even a clock is right twice a day.

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Malcolm Carter
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Charles Rutenberg Realty
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New York, NY 10022

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Malcolm@ServiceYouCanTrust.com
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Man’s best friend has a friend in housing court

These are grim days for co-ops with no-dog policies: New York’s housing courts are making it nearly impossible to evict residents who flout bans on dogs, according to Habitat magazine in BrickUnderground.com.

The sky is falling! The sky is falling!

In today’s New York Times, reporter David Streitfeld discovers that a number of others, including me, have been saying for months: Home prices and sales could continue to decline.  The way the article is written would lead–and doubtless will lead–readers to believe that the sky is falling.

Yes, it’s undeniable that many variables could change the anemically recovering housing market.  Among them are consumer confidence, unemployment rate, inflation, mortgage rates and a rise in the rate of foreclosures.

Manhattan rents were generally flat in October

Rents, which generally decrease in the fall, were relatively flat this month, but the Real Estate Group of New York reports that prospective tenants seemed to be pushing up prices in trendy neighborhoods such as SoHo and TriBeCa.

On average, Manhattan rents were off approximately a half percent from September, and supply was rising again.  Inventory in Manhattan went up 1.72 percent, posting the first significant increase in vacancies in six months.  The biggest month-to-month change was in doorman studio units, which increased 2.09 percent.   (You’ll find much more on the Manhattan housing market in my free bi-weekly e-newsletter.)

The charts above are taken from the Real Estate Group's report.

Inventories are back on the rise.

Case-Shiller sees rate of price decline still slowing

The Case-Shiller Home Price Indices, which (I never tire of saying) omit apartments, show that the annual rate of decline of the 10-City and 20-City Composites improved in August compared with July.

August was approximately the seventh month of improved readings, beginning in early 2009.

Gee, new condos that sprang up spring leaks

“There’s always an underlying number of lawsuits about defects, but about a year ago the number started to increase.  And over the next two years there’s going to be an explosion, because of all the buildings that were built at about the same time.”

So Stuart M. Saft, a real estate lawyer and the chairman of the Council of New York Cooperatives and Condominiums, told the New York Times in a story that led the real estate section on Sunday.

Going once and then going one more time

If you have your heart set on buying an apartment or single-family home in Riverdale or Queens, you may well get a great deal in two separate auctions announced over the weekend.

First, Riverdale in the Bronx.  The Solaria, a 20-story condominium on W. 237th Street, towers over the surrounding low-rise neighborhood with a glass-walled facade that echoes the sleek buildings now seen all over Manhattan, the New York Times observes.

It has a rooftop observatory with a telescope, a children’s playroom, an entertainment center and lounge, balconies, on-site parking, large layouts — in short, everything except buyers.  As of last week, only 10 buyers had actually closed on apartments, the last in September 2008.

Now the developer is offering the remaining 54 units at auction on Nov. 22 in what Jim Corum, the president of REDC, the California auction company that is handling the sale, called an “accelerated marketing plan.” He said it presumably with a straight face.

Your bonus question: Will next year be better?

Before the collapse of Lehman Brothers on Sept.15, 2008 and the thousands of layoffs that had blood running in the Street, Wall Street money evidently fueled the New York housing market, especially luxury properties.

At the time, it was said that 7 percent of the city’s payrolls were linked to financial services and produced 23 percent of the employment income.

The conventional wisdom has been that the tribulations of the stock market would profoundly affect not only home prices in Manhattan but also stifle their recovery.

True, in the fourth quarter of 2008 and into the first quarter of this year, the Big Apple’s housing market was moribund and Wall Street’s woes indubitably were a root cause.

Now, however, the market is showing signs of life. 

Court hands Stuyvesant Town owners huge defeat

The Court of Appeals dealt a financial blow this morning to the already beleaguered owners of the sprawling Stuyvesant Town and Peter Cooper Village complexes in Manhattan when it ruled that they improperly began charging market rents on thousands of apartments, the New York Times reports.

The ruling by the state’s highest court may mean that the current owner, a partnership of Tishman Speyer Properties and BlackRock Realty, and the former owner, Metropolitan Life, may have to pay an estimated $200 million in rent overcharges and damages to tenants of some 4,000 apartments.

The court, in a majority ruling (two of the six judges dissented), said the owners improperly raised rents beyond certain set levels at the complexes while receiving tax breaks from the city for major renovations.

The decision could also affect landlords of as many as 80,000 apartments across the city who also may have improperly raised rents and deregulated apartments while receiving special tax breaks.

Tishman Speyer Properties and BlackRock, which purchased the properties in 2006 for a record-breaking $5.4 billion, are already under enormous financial pressure. The partnership is running out of cash to pay building loans and could default within the next several months.

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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