Entries from September 2006 ↓

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Billy Joel, the iconic singer from Long Island, is selling his 14,000 square foot home for 37.5 million dollars. The home in Centre Island, a hamlet on Oyster Bay Harbor, also has a guest cottage and a pool house.  Joel has another home in Sag Harbor, along with homes in Greenwich Village and Miami.

His main reason for wanting to leave Centre Island, the sources said, is his frustration over not being able to build a dock for his three boats. No new piers have been approved in decades because local officials arranged with the feds for the harbor to become a national wildlife refuge in the early 1970s to stop a proposed bridge from Bayville to Rye. As a result, Joel has kept his $2.5-million commuter yacht Vendetta, fishing boat Alexa and a pontoon landing craft across the harbor in Oyster Bay. Joel has complained about the restriction.

The listing by Daniel Gale / Sotheby’s International Realty notes that the Piano Man’s spread includes a 14,000-square-foot brick, gabled house with 1,550 feet of frontage on Oyster Bay Harbor. Among the amenities is a domed-roof indoor pool room where Joel had the pool filled in to create the perfect acoustical home for a grand piano. Also on the grounds are a guest cottage and a pool house.

Billy Joel is ‘movin’ out’ - Newsday.com.

A great example of the law of unintended consequences, truck sales are down 14 percent as the housing slowdown has affected builders and homeowners who would use equity to buy a vehicle. The builders and construction workers are cutting back on expenditures as new construction looks to slow in the near term. That is affecting the car companies right in the pocketbook as pick up trucks are their best selling vehicles, and the most profitable.

Now it has changed.

As home construction and prices rose in recent years, builders and their employees bought pickups for work while consumers used home-sale profits to indulge in the trendy vehicles. From 1995 through last year sales of full-size pickups surged 46 percent, becoming the domestic industry’s largest product category in sales and one of the most profitable.

So far this year, sales of the big trucks are down 14 percent, hurt by a housing slowdown that caused existing-home prices to drop for the first time in 11 years last month….

A majority of the big trucks are sold to businesses or to people who use them for work, and the building trades are heavily represented among both groups, said analyst Rebecca Lindland of Global Insight Inc. in Lexington, Massachusetts.
These buyers generally will stick with full-size vehicles if the housing market remains robust when gasoline prices rise, she said. If the housing market weakens only slightly, hefty incentives may keep truck sales going.
“But if the housing market has suddenly taken a nose dive, it doesn’t matter how good the deals are,” Lindland said. Home- sale prices were still climbing when gasoline at U.S. pumps reached a record average of $3.05 a gallon on Sept. 5, 2005, according to AAA, the nation’s biggest motoring club. The average was $2.356 a gallon yesterday.

Bloomberg.com: U.S..

If you are ready for a laugh..

It looks like the major players in Washington and Baltimore development are going to redevelop a strategic part of the waterfront that was a sign of 60’s urban renewal gone bad. There were 17 teams competing for this project, with the team representing PN Hoffman of the District and Baltimore’s Struever Bros. Eccles & Rouse winning.

A team of developers was chosen last night to transform 47 acres of the Southwest Washington waterfront, from the 12th Street Bridge to Fort McNair, into a multimillion-dollar neighborhood with housing, restaurants, shops, offices and cultural attractions.

Continue reading →

The ebb and flow of real estate values and demand is always interesting to watch. Seattle was one of the great casualties of the dot – com blow up, with commercial rates dropping significantly in the early part of the century.

Now it is the exact opposite, the cities commercial demand is exploding as the combination of population and corporate demand is placing pressures on a city that because of geographic limitations, has very little room to expand. And it is not just retail and class A office space, warehouse pricies have gone up 23 percent in the past year.

Seattle is finally recovering from the dot-bomb, and office space is now undervalued compared with other West Coast cities, creating a frenzy, he said.
Some cities, such as Dallas and Phoenix, respond to an increase in demand by constructing more buildings just beyond the next highway. That’s almost impossible in Seattle because of the water. As a result, local rental rates are spiking.

Continue reading →

In the past few years, agents on the coasts really have not needed to invest in themselves and their tools. As long as they were good bird dogs, finding listings or buyers, these agents did not need to stay on top of the tools of the trade to make a fantastic living.

Now with the velocity down drastically and buyers and sellers seemingly at war over price and deals, these agents need to expand the spectrum of things they offer to remain competitive.

The Bay Area had a technology show for real estate agents that showed off the lastest tools that can make the transactions go smoother for both the agent and the participants. Tools such as electronic signatures for emailed documents or tools to help homes close will help these realtors find clients and help sell their homes faster.

More than 100 real estate professionals mingled with the tech sector here Thursday, learning how to keep their listings updated, incorporate the newest software and learn about gadgets to make clients’ homes more attractive.
“I think the real estate industry is so far behind as far as technology goes,” said Ezequiel Rojas, a loan consultant with Stellar Home Loans in Concord. “And it looks like what we’re seeing today is a lot of the tech fallout seems to have discovered that.”
Rojas attended the Bay Area Real Estate Tech Fair 2K6 along with his father and boss, Milton Rojas. They were looking for software to make communication easier between the lender and clients, including learning more about Docusign, a Seattle-based company that creates electronic signatures for documents. via the ContraCostaTimes.com

Some quick news and notes from the Real Estate Blogosphere.

• Sellsius Blog A Thon – As true competitors, and pretty cool people, Ardell DellaLoggia (Rain City Guide and Searching Seattle) and and Greg Swann (Bloodhound Blog) had their 101 102 Blog post in a day battle. They both crossed the finish line and my eyes are still crossed trying to real all of the posts. Some nuggets in there. And I just read a new post on Greg’s focus on blogging almost got the lovely Missus in hot water with Arizona’s finest. Yikes.
• A new blog to hit the blogroll is Transparent RE. It is tied to an escrow company that is using the newest technology. Pat Kitano has some interesting observations.
• And how did I find this site? A new Digg type Real Estate site, Real Estate Voices came across my radar screen. It is done by the folks behind Homethinking, and has some potential. I will be checking in for the next few weeks.

Tip of the Day:

That brings me to the point of how do you know that you will like a site? I had this taught to me a couple of years ago when I started blogging. Create a favorites folder that is named New in your web browser. Put sites that interest you in it for a week. After a week you typically can tell if it is a site you want to come back to. If so, add there RSS feed to your reader and move it to your favorites folder. If you do not like it, delete is a great key to use.

 

Approximately 100 average folks from Virginia were tricked into letting con artists involve them in a scam to defraud mortgage companies. Under the guise of an investment group, the Virginian families thought they were investing in homes in Indiana as part of a group. Instead the con artists sold the homes at inflated prices to these people using their credit and without their knowledge.

The borrowers, who include truck drivers, factory workers, a pastor and a hair stylist, say they were duped by acquaintances into signing stacks of documents and didn’t know they were applying for loans. Instead, they thought they were joining a risk-free “investment group.”

Now, many of the loans are in default, the borrowers’ credit ratings are in ruins, and lenders are pursuing the organizers of the purported investment group in court. Companies stuck with the defaulting loans include Countrywide Financial Corp., the nation’s largest home lender, and Argent Mortgage Co., another big lender.

A lawsuit filed by Countrywide accuses the organizers of acquiring homes and then fraudulently selling them for a quick profit to the Virginia borrowers. Representatives of the borrowers put the total value of loans involved at about $80 million, which would make it one of the largest mortgage-fraud cases ever. via the Wall Street Journal (subscription required)

I am scared that these kinds of cases are going to come to light as mortgage companies stopped doing their due dilligence in the name of speed and the bottom feeders of society are learning the tricks of the trade.

Update:

USA Today: ‘The company alleges that Robert Penn worked with relatives in Virginia and associates that included appraisers and mortgage companies to defraud the victims in a case that could total about $80 million in loans. In a lawsuit filed in Marion County, where most of the Indianapolis-area properties are located, Countrywide claims the defendants duped their victims by inviting them to take part in either an “investment opportunity” or a “real estate investment club.”’

via the IndyStar :

Australia is having a housing shortage in the wake of housing prices lowering and home sales market stagnating. People are not buying homes, so they are faced with the prospect of additional renters flooding the market. And guess what is happening? You got it, rental prices are increasing rapidly as demand for rental units is outstripping supply. What a surprise, huh. So to manage the process, landlords have come up with an auction system that is helping to determine the price of rentals and get the best return for their money. Another big surprise. Well the housing advocates are all up in arms, they think that by creating auctions, it will hurt the poor. As if the poor ever win when their is a shortage and prices increase. That is the way of markets folks… And guess what will happen when the rental prices increase? You are so smart, you guessed that housing prices will not seem out of whack and there will be a surge into home ownership as what was once way to high is now comparible to rent.

Within the next month, real-estate agents plan to begin the auction process on popular rental properties, by which prospective tenants will be required to bid against each other for the opportunity to lease a home. ACT Real Estate Institute president Peter Blackshaw is hoping the system will bring a better return for property owners. “We are here to represent their interests and try to get them a bit of a return, as much as we can, more than the meagre return they’re getting at the moment because of the tax take,” Mr Blackshaw said. But the executive officer of the ACT Tenants Union, Deborah Pippen, said the proposal was unfair. “It leads to an uneven playing field for tenants. It artificially drives up rent prices,” she said.

 Living in a market economy is the most effective way for assets to allocate and find their fair market value. There will be periods where the assets will over appreciate as we have seen in the housing market the past couple of years in some regions of the country. However, in the long term as Australia is finding out, equillibrium comes quickly and effectively.

• Housing prices are too high, market slows.
• Rental prices increase as there are more renters instead of homebuyers.
• High rental prices make homeownership more logical.
• People buy homes instead of renting.

We are in a flux period as the rental market is cheaper than owning. But this will even out quickly as long as the market is allowed to work.

According to state economists, the real estate slowdown is not going to be a cause of recession in the state. Those that feel the housing industry is the primary catalyst in economic development in California will have to live with the fact that as real estate prices find their equillibrium after the intense run up over the past few years, the economy will survive and not dive into a recession.

Other than the decelerating real estate sector, “all has been steady as she goes” in the state’s economy this year, said Ryan Ratcliff, an economist with the UCLA Anderson Forecast, which releases its quarterly report on California today.
Even in real estate, there were not any surprises, Ratcliff said. After multiple years of double-digit price inflation, housing prices, as expected, have flattened across the state and even declined in some areas, a trend that the UCLA forecasters expect to continue.
“If you buy a home today, you could sell it for about the same price in five years,” said Ed Leamer, director of the UCLA Anderson Forecast. Of course, after accounting for inflation, the house’s real value would have declined, he noted. UCLA is predicting that consumer prices will rise 4.5 percent this year, 3.3 percent in 2007 and 2 percent in 2008.
Leamer predicts California real estate will remain sluggish for a long time — at least five years — but with little price deterioration other than the failure to keep up with inflation.
“Relative to the historical norm, California homes are about 60 percent overpriced,” he said. “It takes five years to get rid of that.” After that period, he expects home prices to appreciate at a rate about 2 percent above the inflation rate.  via the San Francisco Chronicle