Embarking On A Gambling Venture
A report from the New York Observer. “Flipping a Manhattan townhouse, on the other hand, is supposed to be easier than flipping a burger. But things are not always as they seem, as celebrity chef Emeril Lagasse recently discovered. The bam bam man just sold his Gerogian style townhouse at 158 East 61st Street for a disappointing $11.5 million, the same price he paid for the 6,900 square-foot manse back in 2009, according to city records. He was rumored to be on the hunt for something smaller, which is probably a good thing given that he won’t be pocketing any extra cash from this sale (just the opposite—besides inflation, he’s paid out years of carrying costs and a broker’s fee).”
“The townhouse’s less-than-stellar performance after four years of ownership is actually perplexing, particularly given the luxury market’s near supernatural rebound after the recession.”
Larry Brown Sports on New York. “According to TMZ, Stephon Marbury owes just over $844,000 on his New York City condo and hasn’t made payments since March 2010. Marbury purchased the unit in 2006, which is around the time the real estate market was booming. Though the market has made a comeback this year, his property is likely worth less now than what he paid for it seven years ago.”
“US Bank reportedly wants Marbury to either pay the full amount owed on the property or get out so they can sell it in an auction. Marbury also lost a home in Los Angeles to auction last year. Maintaining a high credit score clearly is not among his top priorities. Marbury has been playing basketball in China and enjoying his status as a star in the enormous country.”
The Boston Herald in Massachusetts. “A dramatic increase in flood insurance rates under a new federal law and a redrawing of flood lines by the Federal Emergency Management Agency could harm property values and lead to a new spate of foreclosures just as Massachusetts is beginning to recover from the Great Recession, several speakers told a state legislative panel.”
“‘This affects buyers and sellers,’ said Kimberly Moccia, a mortgage consultant at Radius Financial Group. ‘Sellers are having to make reductions in prices … My concern is we’re going to see an influx of foreclosures.’”
The Lowell Sun in Massachusetts. “Through the first seven months of this year, home prices in the region have risen more than 12 percent from a year ago, interest rates have jumped more than a full percentage point and the Massachusetts unemployment rate has continued to hover at or around 7 percent. Real-estate agents say the phone is ringing, and at the other end of the line — more often than not — is a prospective home seller.”
“There are signs the recent surge — the median price for a single-family home sold in the NEAR region was $360,000, or about equal to its high-water mark achieved in mid-2006 — will, at the very least, taper off. Richard Howe Jr., register of deeds at the Middlesex North Registry of Deeds, said home sales for the 10-community region his office serves were lower in August when compared to the same month a year earlier. ‘What happens in September becomes important, as we will see if this is a trend or an aberration,’ he said.”
“Sales are still numerous but fall into one of three categories: long-term sales, where retired people with paid-off mortgages are cashing out; institutional sales of previously foreclosed property, as when a bank sells to a regular homeowner; and people who bought between 2003 and 2008 who owe still more than their properties are worth but who are looking to get out from the underwater investment.”
“‘If they have the means, then they are doing that,’ Howe said, adding they often bring a ‘five-figure check’ to closing to ensure their debt is fully paid.”
The Boston Globe in Massachusetts. “More than a few buyers are wondering what’s next and worried they could lose their savings if the market heads down again. Astrom is looking to buy a house in the Boston area but fearful that he could wind up in the red. ‘I am trying to buy a house right now for a long-term residence in a good school district to provide my kids with decent education and my family with decent housing, but I feel like I am embarking on a gambling venture that may either spell financial ruin or conversely nice profits depending on what cards are dealt to me.’”
“More than 60 towns and neighborhoods in the Boston area have already blown past records set during the bubble years, according to Warren Group. Overall, Boston area prices are just 15 percent below their 2005 peak. OK, but the bad news? Sure, home prices in Greater Boston have been more consistent than in many other major metro markets over the past decade — consistent as in consistently high.”
“All the talk of bidding wars and soaring prices apparently has swollen the heads of some sellers. There’s growing chatter in the business media about signs of a cool down. The August falloff was more dramatic than in past years, Redfin says in a new market survey. Anyway, the usual culprits are being trotted out — rising interest rates and soaring prices to name the top two.”
“But we are also seeing the return of the greedy seller, a favorite villain, who typically makes an appearance when buyers start getting edged out.”
