Friday, October 23, 2009

Real Estate market in New York, and Connecticut is improving

Real Estate market in New York, and Connecticut is improving

This weekend positive news has been reported by real estate brokerage companies in the Tri-State area. According to Houlihan Lawrence and Century 21 there has been an increase in requests for showings this weekend.

In NYC condo sales jumped 45.6 percent from the second quarter to the third, helping boost the median sales price of both new and re-sale units, according to a report prepared by the appraisal firm Miller Samuel Inc. for Prudential Douglas Elliman Real Estate.

In Connecticut home forclosures have decreased and new reports show that the real estate market has hit the bottom in Connecticut.

Throughout Connecticut, single-family home sales climbed nearly 7 percent in September, making it two straight months of statewide sales gains, but prices were off more than 13.5 percent.

The gains in home sales for two consecutive months is a good boost for Connecticut's housing market, especially since sales have been slumping since 2005 Condo prices in New London County fell from a median of $173,250 last August to $160,000 this year. The more than 7 percent decrease in prices came despite a sales-volume increase of 28 percent.



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Thursday, October 22, 2009

Help From Fannie and Freddie for Foreclosed Homes

From the NY Times article:

HOME buyers are not accustomed to getting much help with their mortgage financing; generally, they’re happy just to get a loan closed.

At least one group of borrowers, though, could get a break. Fannie Mae and Freddie Mac, the government-controlled companies that buy mortgages in bulk from lenders, are offering financing incentives for buyers of foreclosed homes that Fannie and Freddie own.

Home buyers have until Oct. 30 to apply to take advantage of Freddie Mac’s SmartBuy program, which began in July and offers up to 3.5 percent of a home’s sale price to help cover closing costs.

To qualify, the home must be a principal residence and must be chosen from Freddie Mac’s HomeSteps Web site for its foreclosed properties (homesteps.com/homeshoppers.htm). Loans must close by year’s end. The HomeSteps properties also include two-year warranties on major appliances and electrical, plumbing, air-conditioning and heating systems.

HomeSteps includes relatively few properties in New York City and the surrounding counties, however, in part because Freddie Mac accepts few loans greater than $417,000. Last week, for instance, the site had no homes in Manhattan and five in Westchester County, including a three-bedroom apartment in Yonkers and a four-bedroom home in South Salem, both listed for $300,000. (There were a few more homes in New Jersey and in Fairfield County, Connecticut.)

Nor does the Fannie Mae program, HomePath.com, have many foreclosed homes for sale in the greater New York region. A one-bedroom apartment on West 110th Street, selling for $378,000, was the site’s only Manhattan listing last week. (Thirteen homes were available in Nassau County, by contrast.)

The incentives for buyers in Fannie Mae’s ongoing program are even more aggressive than those offered by Freddie Mac.

Through participating lenders, Fannie will offer mortgages to buyers who make a down payment of 3 percent, and these buyers do not have to secure private mortgage insurance, or P.M.I., as they would when doing business with nearly any other lender.

A Fannie Mae spokeswoman, Amy Bonitatibus, said the company “already owns the risk” on the property. “So buyers can save a couple hundred dollars a month in insurance,” she said.

Fannie Mae will often offer closing cost assistance to buyers, so long as they negotiate for it. Unlike Freddie Mac’s, Fannie’s assistance level is not capped. Under the program, the average homeowner has received payments equivalent to 3.75 percent of the loan’s value.

Until June, Fannie Mae also offered to pay for home repairs during the borrower’s first six months in the property, up to $3,000. The company is considering whether to renew, or change, that program.

Also, in areas hit hardest by the economic downturn that have qualified for federal financing through the National Stabilization Program, which helps distressed communities, Fannie Mae may discount its foreclosed properties by up to 15 percent.

Most of Fannie Mae’s foreclosure incentives are offered to buyers who will use the property as their primary residence, or so-called public entities like Neighborhood Housing Services and other organizations that rehabilitate properties and sell them to owner-occupants.

Banks, meanwhile, have been leery of offering financing incentives on foreclosed homes. But Brad Geissen, the chief executive of Foreclosure.com, which, among other things, posts listings of foreclosed homes, said that in his discussions with banking executives, banks appear ready to offer similar programs.

“We’re starting to see banks loosen up on financing and consider a number of different incentive programs to move their inventory,” Mr. Geissen said. “I know a number of banks who are getting ready to release programs like this, between now and the end of the year.”

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Wednesday, October 21, 2009

What NYC Real Estate Can $1 Million Buy?

While this price used to be stratospheric, it is nice to know that you still get a lot more for your money on Staten Island, as can be seen from this NY1 artcile and video.

The search to see what buyers can get for their money in New York City real estate continues. NY1's Jill Urban filed the following report on what can be bought in the $1,000,000 range.

So what can you get for a million dollars? That's our price point this week as we continue to see how far you're your money will go in New York City real estate.

First, we found a two bedroom, two bath condo in the financial district.

"We are sitting in a two bedroom, two bath loft with 11 foot ceilings. It has two exposures, the bathrooms feature white subway tile with marble counter top and the kitchen offers lacquered cabinetry and stainless steel appliances from Dacor," said 99 John Sales Director Brad Ingalls.

The floors are oak and there is a foot of concrete between apartments so it's very quiet. The place is priced at $1,020,000. Common charges are $671 a month and taxes are $407 per month with six years left on the tax abatement. This doorman building includes all the amenities like a roof deck, gym and a tenants lounge. It's been on the market for about six months.

Over in Park Slope, Brooklyn, we found a great two bedroom, two bath in a brand new eco-friendly building.


"We are seated in the Silhoutte, the penthouse unit. This is a two bedroom, two bath. It comes with two full width balconies as well as a 600 square foot rooftop garden with views of the Statue of Liberty and Lower Manhattan. This also features a 12 foot vaulted ceiling in the living room and kitchen areas," said Green Envy Development President Robert Roth.

This fourth floor walkup is totally eco-friendly. Aside from using environmentally conscious materials, the building will mostly be powered by solar energy, and has a stormwater recapture system on the roof for irrigation.

It's listed at $970,000 and common charges are $250. Taxes are $33 with 10 years left on the tax abatement. It's brand new construction and has been on the market for two weeks.

And lastly, for just under a million we found a large single family home in the Richmondtown section of Staten Island.




















"It's a magnificent four bedroom home that was totally redone back in 2002. It features a brand new kitchen, stainless steel appliances, granite, two car heated garage with travertine flooring. It has a master bedroom suite with two walk in closets and a 3/4 marble bath," said Josephine Lee of Robert Defalco Realty.The home sits on 10,000 square feet of land and includes a backyard with a pool, and a finished basement. The house is listed at $999,900. Taxes are approximately $6,000 a year and it's been on the market just over a week.

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Tuesday, October 20, 2009

Aging Boomers Want More Modest Homes and Easy Living



The current housing downturn has taken some steam out of housing demand from the 55+ population, but a “55+ Housing: Builders, Buyers and Beyond” survey conducted in February by NAHB and the MetLife Mature Market Institute identifies significant opportunities in this market for both builders and remodelers at a time when a weak economy has forced households across the age spectrum to reassess how much housing they can afford.

The research was conducted largely to determine how well builders were meeting the preferences of this age demographic, and the results found that the industry was largely on the same wavelength as its potential customers.

The 1,500 consumers participating in the survey showed a strong preference for single-family detached homes in a suburban setting. Despite recent housing price declines, members of this group have retained considerable amounts of equity or other financial assets, giving them the wherewithal to purchase the relatively modest-sized homes that are shaping up as the mainstay of this market.

Low-maintenance and the availability of various services emerged as key concerns for 55+ households, and unlike their counterparts from just a few years ago, these consumers exhibited a strong desire for technology-driven amenities, particularly high-speed Internet access.

Compared with survey responses from 254 builders who specialize in the 55+ market, consumers were not as aware of many universal housing features as they should be. And like the general population, they started losing some of their enthusiasm for green building principles when it came time to start paying for products that are priced at a premium. Builders, the survey found, will have to lead and educate 55+ prospects in both of these areas.

At a Sept. 23 “55+ Housing by the Numbers — Part II” webinar focusing on the newly released survey findings, NAHB Chief Economist David Crowe noted that the market has gained some ground since the polling was conducted early this year, when consumers were watching their savings dwindle and builders were seeing sales grinding to a halt.

“But the study does reflect the very latest in the changing perceptions of what is most important in housing for this age cohort,” Crowe said.

A ‘McMansion Revolt’

From a builder’s perspective, a viable 55+ market is taking shape, according to Steve Bomberger, president of Benchmark Builders in Wilmington, Del.

“We are seeing purchasers looking for smaller or more modestly sized homes than in the past,” Bomberger said. Previously, it was common for the husband to come into the sales office and complain that the homes were too small. “We don’t hear that anymore,” he said. “Most 55+ households are not looking for the grandiose styles of the past; there is a McMansion revolt in the 55+ market.”

Survey results confirmed that most 55+ consumers are not interested in buying a larger home. Although preferences for size tend to increase with household income, the current home of those surveyed measures a median 1,886 square feet, close to their preferred median home size of 1,903 square feet.

However, Bomberger observed that it will be “a little tough” to include everything these buyers want in this sized home. More than half (51%) of the respondents preferred three bedrooms, and another 18% four bedrooms or more. They also wanted two baths and a two-car garage.

Bomberger said that his customers “are spending less on luxury.” They typically are looking at ceiling fans, sun room additions and finished basements — “an opportunity to get more space for the buck,” he said.

“It’s all about technology,” he added. “Today’s buyers are techno-charged,” and they are asking for computer niches, structured wiring, multiple television jacks, mounted flat TV screens, programmable thermostats and advanced security systems that include smoke detectors and fire alarms. “They are not afraid of gadgets that have a lot of buttons and a lot of lights,” he said. “Today’s buyer is computer savvy, a big change from 10 years ago.”

Prospective buyers have at least some knowledge of universal design, Bomberger noted, and he said he focuses on applying these features to the overwhelming desire in this age group for single-level living. A single-family home was preferred by 79% of the consumer respondents, and of the 15% who indicated a desire for two stories, about three-quarters said they wanted the master bedroom to be located on the first floor.

Bomberger said he tries to minimize steps at the entryways into the home, although that is not easily accomplished with most garages. As many roll-ups as possible are used for slab-on-grade construction, “and we do our best to minimize steps” into garages and basements, he said. However, he advised, “don’t put it in their face to remind them of future disabilities they may have.” For example, too many grab bars, which can be installed later as they are needed, can be a definite turnoff to these buyers.

“Having everything taken care of is the most important thing” in the minds of these buyers, Bomberger said. They don’t want to have to worry about raking the leaves, shoveling the sidewalks or cutting the grass.

He said that it is important for the builder to know what services their buyers are looking for and then determine what they can and cannot deliver. “We have a high preponderance who would like in-home maintenance and remodeling. This is not our expertise, so we try to refer them to a contractor.”

In a look at services and amenities, the survey found that twice as many consumers want transportation services and minor or major home repairs as those who currently have them; three times as many want van service and partial housekeeping and four times as many want home-delivered meals and personal care services.

The survey reported that builders, in choosing a site, focus on proximity to a shopping center (70%), walking/jogging trails (58%), a hospital or doctor’s office (55%) and churches (53%).

In the meantime, 55+ consumers said they considered the following home features as most important: a kitchen open to the family room (73%), a washer and dryer (rated 4.5 on a five-point scale), ample storage space (4.3 out of 5), windows that open easily (4.2 out of 5) and easy-to-use climate controls (4.2 out of 5).

Survey research has found that 90% of 55+ home buyers are moving either within the same general area or from a different part of the same state. And their primary reason for making the move, cited by 63%, is to be able to realize a maintenance-free lifestyle. Forty-six percent said their motivation for moving was to be closer to family or friends, and 32% said they were attempting to lower their living costs.

Hunkering Down for Tough Economic Times

As virtually every segment of the nation’s housing industry, 55+ housing has seen demand significantly dampened by the current housinig downturn. 55+ households have been stymied in their ability to sell their existing homes by a lack of available buyers. There has also been reluctance to sell at the rock-bottom prices it can take to be competitive in the current marketplace. A sharp decline in 401(k) and other investment retirement plans last fall was further discouraging news for these prospective home buyers.

Ramps and a stepless threshold at the entrance of the Eskaton National Demonstration Home.

February’s surveying found a distinct minority of 55+ households identifying themselves as potential home buyers, but Crowe pointed out that these translate into substantial numbers because of the large size of the post-World War II baby boom that will be fueling increases in the size of this population in the years ahead.

Sixty-three percent of the 55+ consumers who were surveyed by NAHB and MetLife said they were planning to age in place in their current home and 26% weren’t sure, leaving roughly 12% who said that they would be purchasing another home. Of those who indicated that they would be eventually moving, 8% said they planned to buy a home within three years and another 4% said they would start looking after three years.

About 56% of 55+ households currently live in communities where there is no predominant age group, the consumer survey found. Only 9% of the respondents live in an active adult, age-restricted community; 7% live in a community where there are no age restrictions but most buyers are 55+; and 28% reside in an independent living community.

The data indicated, however, that many in the 55+ age group would consider other options. Twenty-two percent of the respondents said they would consider moving to an age-restricted active adult community and 27% would consider a community where 55+ households predominate with no age restrictions. Another 28% would consider moving to an independent living community.

Survey responses found that there is some discrepancy between the cost of the 55+ product being built and the amount that the market will bear. Consumers said they were willing to pay just under a median $190,000 for their home, but builders reported they were producing homes with a median value of $287,000.

Unsurprisingly, not too many 55+ buyers appear to be in the mood for climbing further up the housing ladder. Forty-six percent of the builders surveyed said their customers were purchasing homes at the same value as those they were selling and 31% said they were buying less expensive homes than they formerly owned.

Preferences for financing were similarly conservative in this group. A 30-year fixed-rate mortgage was preferred by 41% and a 15-year fixed was the choice of 38%. Five percent indicated interest in a reverse mortgage.

However, 55+ home buyers are largely prepared to plow some of their wealth into their home purchase to scale down mortgage debt. Twenty-three percent said they would pay for their home in cash and 60% responded that they would make a high downpayment of 30% or more. Sixty-nine percent identified equity from their current home as the source of their downpayment; 28% said it would be drawn from investments.

Forty-one percent of the builders reported using price discounts last year as incentives to promote 55+ housing sales, 35% offered upgrade packages and 22% kicked in a free option, such as a third bedroom. However, 41% offered no special inducements at all.

Leading the Way on Universal Design

Survey findings indicated that builders will have to lead the way on universal design and green building, according to John Migliaccio, director of research for the MetLife Mature Market Institute, although 55+ households can be expected to become progressively more familiar with these concepts.

Undercabinet access is available under the countertop and kitchen sink to provide stool or wheelchair access in the Eskaton home.

“Builders do get the message about the importance of universal design,” Migliaccio told the webinar audience, and they are already providing the basic universal amenities, including: lever-handle doorknobs (80%), wider doorways (77%), wider hallways (72%) and separate showers and baths (65%).

But consumers clearly underestimate the value of these features, he said, rating them quite low compared to builders. Only 30% said they would be eager to get their hands on a lever-handle doorknob and less than half saw much purpose in wider doorways (48%), wider hallways (45%) and a separate shower and bath (48%).

The universal design features rated by consumers as somewhat to very important included: bigger bathrooms (64%), a full bath on the entry level (61%), extra lighting (56%) and non-slip floors (52%). Rated low were: lower electrical switches (15%), seating in the bathroom (22%), a shower without doors (23%) and higher electrical outlets (25%).

Migliaccio said that builders should keep in mind that most consumers are typically not living in a home or community designed for 55+ residents and may not have had the opportunity to experience universal design features. As they become increasingly more familiar with them, universal design features will eventually become as popular as cell phones and computers, he predicted.

Going Green

On the green home building front, many environmental features curried favor with the 55+ consumers surveyed, he said, including: energy-efficient appliances (79%), solar heating (63%), a water filtering system (58%) and allergen- and chemical-free building materials (42%).

But 55+ respondents revealed a disconnect in their willingness to pay for green amenities. About three-fourths said they would be willing to pay for high-efficiency heating, ventilation and air conditioning equipment, low E-glass, energy-efficient appliances and sealed joints. But far fewer were interested in paying for the preservation of open space (46%), low VOC paints (37%) and alternative building materials such as oriented strand board and engineered wood (37%).

Ninety-four percent of the builders reported that their buyers want more energy-efficient new homes; 55% said buyers specifically want Energy-Star rated homes.

The research in “55+ Housing: Builders, Buyers and Beyond” is the second part of a series. Released in April, the first-part, “Housing for the 55+ Market: Trends and Insights on Boomers and Beyond,” includes an in-depth profile of the 55+ market based on figures from the U.S. Census Bureau’s American Housing Survey from 2001 through 2007.



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Monday, October 19, 2009

Housing Starts Show Economy's Strengthening, Economist Says

An excerpt from Housing Giants:

August housing starts increased 1.5 percent to 598,000, according to today's new residential construction report from the U.S. Census Bureau and the Commerce Department. Single-family starts slipped 15,000, while multi-family starts jumped 24,000. The single-family drop reflects a not unexpected brief pullback from the initial surge in construction spurred by the $8,000 tax credit for new home buyers. The multi-family jump includes some catch up after a random, below trend number of starts in July. Total housing starts remain on a modest but erratic upward trend into the winter.
Overall, the housing starts report confirms that the market is progressively strengthening. Permits increased 15,000 to the highest level since last November. Un-started permits continued to decline. This means that current starts are largely either units already sold or needed as model homes or homes available for a quick finish. The current starts level is sustainable because it includes few speculative homes. Generally, home builders lack the credit for speculative starts.

Read the whole article here: http://www.housingzone.com/giants/article/CA6697536.html?nid=4760&rid=12237451


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Friday, October 16, 2009

Taking Care of Parents Also Means Taking Care of Finances



With an increasing number of active adults in Staten Island and an increasing number of seniors, more and more families are finding that they need to plan for their parents to be part of their financial planning. This article from the NY Times provides some interesting insight on planning for the elderly. The article covers talking to parents about their finances, ensuring all their legal pares are current, have been created if absent and are in order, as well as how to go about finding geriatric care.

The article also is a reminder that Staten Island is woefully short of active adult and senior housing, other than communities like The Club at Clove Lakes Park, the recently announced Seaview projects, Sunrise Assisted Living, and The Tides at Charleston.

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Thursday, October 15, 2009

Builder Confidence Rises for the Third Straight Month

From an NAHB article: Builder confidence in the market for newly built, single-family homes edged higher for a third consecutive month in September, reaching a level of 19, the highest since May of 2008, according to the latest NAHB/Wells Fargo Housing Market Index (HMI).

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Wednesday, October 14, 2009

People are Living Longer

The Assisted Living Federation of America article reports that: The Centers for Disease Control and Prevention (CDC) is saying that U.S. life expectancy is the highest it’s ever been – 78 years old, on average –mainly due to falling death rates in several categories. This latest statistic, combined with plentiful data about the aging population, is yet another reason investors are eyeing opportunities in the senior living sector.

U.S. life expectancy reached 77.7 years in 2006 and 77.9 years in 2007, which ranks the nation at about 30 among other countries. Japan has the longest life expectancy – 83 years – according to a report by USA Today.

In a related report, the National Institute on Aging and the Census Bureau, estimates that by 2040, seniors will be 14% of the world's population, instead of the current 7%. U.S. communities may not be ready. http://www.census.gov/prod/2009pubs/p95-09-1.pdf

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Tuesday, October 13, 2009

20% Down? Lower that for a BETTER mortgage rate

That headline goes against conventional wisdom, but this NY Times article examines why putting the full 20% down may not yield the best rate for a homebuyer.

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Monday, October 12, 2009

More signs of a housing revival

An excerpt from the CNN article:

NEW YORK (CNNMoney.com) -- New home building increased in August, a government report said Thursday, further signaling that home builders are regaining their confidence in the housing market recovery.

The Census Bureau reported Thursday that builders broke ground for 598,000 new homes during August, up 1.5% from a revised 589,000 in July. That was considerably higher than industry experts were predicting: The consensus analyst forecast compiled by Briefing.com was for 583,000 new starts.

Building permits rose 2.7% to 579,000 from a revised 564,000 in July.

On Wednesday, the National Association of Home Builders reported their index of homebuilder confidence had risen a point to 19, its highest level since May 2008.

Helping to boost demand for new homes has been the first-time homebuyer tax credit, which has enabled many builders to reduce their inventories of unsold homes.

"Many builders have not only reduced excess inventory, but now are actually reporting such low inventory that they need to start more homes to replace those they've just sold," said Brad Hunter, chief economist for Metrostudy, a real estate analytics firm.

Both starts and permits are still well off from their levels of a year ago. The number of starts is down 29.6% from 849,000 last August, and permits dropped 32.4% from 857,000 last year.

The housing starts report was the latest in a series of releases that indicate that the market may have bottomed. These include improvement in new home sales, existing home sales and housing prices.



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