Entries from January 2006 ↓

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The Denver Business Journal has a very honest article that should be read by anyone selling a house in todays market. It seems we are always comparing our own home to the spectacular one  that sold down  the street, or the one  that sold at the  top of an overhyped market. Being human, we feel that our home deserves top dollar like the other homes have achieved. Well, Elizabeth Richards tell us that the reality may be different.

An average property possesses one or more of the following characteristics:

• It does not “wow” with extraordinary finishes;
• It does not evoke an emotional connection with a buyer due to its historic and architectural charm;
• It is not in a prime or heavily sought after location;
• It does not scream out to be “the deal of the century.”

In essence, it all comes back to supply and demand. If your property is not a rare and sought-after breed, it’s deemed average. Much like comparing your children to others, sellers like proud parents have a very difficult time acknowledging when their home may be average at best.
What is the cause behind this overpricing phenomenon? A main source is current sellers who bought at the height of the market a few years ago and paid top dollar, and now are deciding out of either necessity or desire to sell. These folks are unable to come to grips with the reality that they may just break-even or, worse yet, have to bring money to the table. No doubt that such a situation would be a tough reality to accept.  via the Denver Business Journal

So when you are selling your home, remember to price it to sell for the market, not for what you need to sell it at. Otherwise you will be fighting a frustrating and uphill battle.

In a call to arms, and a pointed rebuke of the lead developer at the World Trade Center, Michael Bloomberg called upon New York to declare rebuilding the site a top priority.

Mayor Michael Bloomberg said his most important priority for Lower Manhattan is to “push forward on the redevelopment of the World Trade Center.” During his State of the City address, he called on WTC developer Silverstein Properties to “do the right thing and hand off responsibility for building Towers 3 and 4, in exchange for a reduction of its rent.”
“We need to push aside individual financial interests and focus on what’s best for our city,“ he continued. “That means it’s time to pick up the pace of commercial construction, and to build for uses that reflect the realities of the market and the needs of Lower Manhattan -like the retail development that’s so crucial to linking the site back into the life of the city.”
In response, Janno Lieber, director of World Trade Center development for the Silverstein organization, says, “We share the Mayor’s goal of rebuilding the World Trade Center site as swiftly as possible and welcome his involvement. The Silverstein organization is eager and determined to move forward as quickly as the government bureaucracies will allow.”  via GlobeSt.com

The Hilton Times Square which is located in New York City on 42nd Street a half block west of Times Square for a purchase price of approximately $242.5 million to the Sunstone Hotel Investors, Inc.

The Hilton Times Square is on the 21st through 44th Floor of a building just off Times Square and offers outstanding views of the borough of Manhattan.

Hilton Times Square Web Site

Politics must pay very well. I know that Senator McCain’s father was an Admiral in the Navy, but I did not know that they came from such money that they could afford and maintain a 11,000 square foot house, plus afford to live in Washington DC.

Sen. John McCain, R-Ariz., tests the declining real estate market as he tries to sell his recently price-reduced $3.75 million Phoenix mansion.
      The 11,000 square foot estate, with its nine bedrooms and eight bathrooms — and eight surveillance cameras — has been on the market for three months.
      Only six prospective buyers have checked it out, the Arizona Republic says. That led to a half-million-dollar price cut. via The Washington Times

Update: The home was from his wife’s side of the family.

The 11,000-square-foot residence, near Glendale and Central avenues, is being listed for $4.25 million. Cindy, the daughter of Valley liquor-distribution magnate Jim Hensley, grew up in the mansion. The home has since been expanded and renovated. The gated estate sits on 2 acres. It has a large guesthouse, nine bedrooms, eight bathrooms and plenty of security cameras. via the Arizona Republic

As home sales slow down and refinancing dry up with rising interest rates, the  mortgage industry is looking at a rough year. To try to counteract this trend, the industry has decided to add new options for serving the customer. The Mortgage Weblog has found this interesting tidbit on changes in the mortgage industry.

Mortgage practitioners are seeing these fee based services as a way to build long term client relationships. “There’s no better way to build a sizable client base, create recurring revenue streams, and promote and maintain client trust and loyalty than to serve the best interests of your clients,” says Leon Morris, executive director of MIFSP (the Mortgage Institute for Financial Services Professionals). “Whether the homeowner is looking for a mortgage, a second opinion on a mortgage, a Mortgagor Financial Representative(TM), or assistance in evaluating and retiring and existing mortgage, as a mortgage practitioner you want to be the only person the homeowner looks to before, during and after mortgage origination. via The Mortgages Weblog

It will be interesting to see how this plays out.

Not surprising, Louisiana is receiving the largest amount of a 11.5 billion dollar grant from Congress.

Louisiana will receive $6.2 billion in federal block grant assistance – the maximum it was eligible to receive – it was announced by HUD Secretary Alphonso Jackson Wednesday.
Jackson, along with Gulf Coast rebuilding coordinator Donald Powell, announced the distribution of $11.5 billion allocated by Congress.
The block grants allow the individual states to determine how best to use the funds during their recovery. Jackson said he hoped that the majority of the money would be used to help secure housing for displaced residents.
“Today, we take another major step toward fulfilling the President’s pledge to rebuild the Gulf region,” said Jackson. “This is an investment in long-term recovery and re-building lives. It’s my hope that families who once had a home, can return home.”  via WWLTV.com.

Donald Trump is looking at a property to build a new skyscraper in Dallas, Texas. This looks like a new turn for the developer who has concentrated on the New York Metropolitan area and Southern Florida.

We’re literally looking at something right now, and if we do it we’ll make it very, very successful,” Trump told the Dallas Business Journal by phone from New York Thursday.

While he declined to provide specifics, the wealthy entrepreneur said he’ll visit the tower’s proposed site next month when he speaks at the Learning Annex Real Estate Wealth Expo at the Dallas Convention Center.

“The speech is giving me the incentive to go out and look at the land,” Trump said. “The land that we’ll purchase will be terrific, if we decide to do this.”  via Dallas Business Journal

I wonder if this means a new direction for Donald Trump and his organization. It could be that prices in New York are too high to develop anything profitably right now and to get new projects started might mean looking in a new direction.

The housing market is an integral part of the economy. As this New York Daily News Article points out, the market is in for a shake out.

The big question now is whether home prices will come crashing to earth with even more severe consequences.
The National Association of Realtors reported yesterday that sales of existing homes climbed to an all-time high of 7.072 million units in 2005, up 4.2% from 2004 and the fifth straight year sales have set a record.
However, in a sign of slowing activity, sales fell by 5.7% in December, marking the third straight monthly decline - something that had not occurred since early 2002.
“The bloom is definitely off the housing rose. Housing peaked last summer and has been weakening ever since,” said Mark Zandi, chief economist at Moody’s Economy.com.
Analysts are forecasting that sales of both existing and new homes will fall this year, perhaps by as much as 10%, reflecting the adverse impact of rising mortgage rates and buyer resistance to current price levels. via New York Daily News

Developer Robert Shaw is purchasing the former campus of Barat College and is turning it into Barat Woods, a condominium development. Barat College merged with DePaul University in 2001, but higher than expected operating costs forced DePaul to close and sell of the campus.

Today, officials from DePaul, Barat Education Foundation and City of Lake Forest joined Shaw to announce the site’s sale at the historic Old Main building.

Terms of the deal were not disclosed. Shaw declined to say how much he paid for the land other than that the sum was “less than $20 million.” He said he hoped to start building in early 2007, assuming the city approves his development plan.

Saying he has lived within a mile of the 23-acre campus for 37 years, Shaw promised to plan carefully and to consider its aesthetics.via Chicago Tribune

The Bastion of Bubble Bloggers gets Batty whenever a realtor or Builder makes a Bold prediction on a Bolstered and Boisterous 2006 market. Well, as a wise man once said, “you ain’t seen nothing yet.” It was such a  good story, even Bloomberg is even covering it.

Singapore home prices will rise this year at more than twice the 3.8 percent pace of 2005, according to the forecast of Chong Swan Lek.
His prediction comes not from studying the real estate market or economic data, but from a type of fortunetelling known as geomancy.
“It’s the year of fire and earth, which means you’ll make money out of property,” said Chong, 65, a fourth-generation Chinese geomancer. “We can expect anything between a 7 and 10 percent rise in property prices.” via Bloomberg.com

So which would you prefer, Geomancy or American Entreprenurial Spin. Both will never tell you the downside, but with an ear to the ground, provide a good deal of fun for the investor.

Other resources :

• Geomancy.net