January 15, 2014

Is It Really As Hot As We’ve Been Led To Believe?

Barron’s reports on New York. “The prices for real estate are going up everywhere – but in high-end New York. According to a Brown Harris Stevens study, the average Manhattan apartment sales price declined by 2% in the fourth quarter of 2013, to $1,553,599, versus the same time last year. Inventory is about 20% below levels last year, suggesting prices should be tight. They aren’t. Hall Wilkie, president at Brown Harris Stevens, says that after a few years of increasing prices, buyers are again approaching expensively priced condos and co-ops with skepticism. ‘They are very concerned that the price is justifiable,’ Willkie says. ‘They just don’t have the same confidence that prices will rise in the future.’”

The New York Daily News. “South Bronx residents will have to do without a residential component planned for a South Bronx development site. A two-story retail center will break ground in Hunts Point this year. The developer scrapped plans for a mixed-use housing complex above the stores. Now, the site will feature a Deals discount store, a McDonalds and a 312-seat Red Lobster.”

“‘People don’t have jobs,’ said Miriam Maldonado, a Soundview resident. ‘But we have new malls popping up all over.’”

The Boston Globe in Massachusetts. “The real estate market in Cambridge and Somerville is red hot, right? Or is it really as hot as we have been led to believe? Amid all the hoopla over rising prices, here’s a number that should give pause to even the most ardent real estate bulls. The number of expired or cancelled listings in our state’s top hipster hotspots rose sharply in the last three months of 2013 compared to the fourth quarter of 2012, according to Bill Wendel over at the Real Estate Cafe in Cambridge.”

“Somerville saw 50 cancelled or expired listings of homes and condos during the last three months of 2013, up from 37 during the fourth quarter of 2012. Cambridge also saw a jump in the number of sellers striking out, rising to 62 during the final months of 2013 from 59 the year before.”

“What’s telling, though, are the prices. The median price of the eight Somerville listings during the first week of January tops $700,000, with four of them on market in the $800,000 to $1 million-plus range, according to stats Wendel shipped over. That’s compared to a median price of just over $300,000 for the six Somerville listings that were on the market during the first week of January 2013.”

Greenwich Time in Connecticut. “Saving up for a down payment on a home in southwestern Connecticut is no easy task. With many banks standing firm on the need for a 20 percent down payment these days and some home prices topping out at well over $1 million, stashing away funds to make an offer on a ‘typical’ home can take residents well over a decade, according to a Hearst Connecticut Newspapers analysis.”

“In Greenwich, high home prices mean that the town’s average family would have to squirrel away 10 percent of its paychecks for 15.4 years to be able to afford the $200,000 required for a 20 percent down payment. ‘If you say to someone, ‘In order for you to have your home down payment in the next two years, you need to save $312 a week,’ the answer could be, ‘You’re an idiot. There’s no way I can save that,’ said Michael Matson, of Matson Financial Advisors Inc. in Danbury.”

WNPR in Connecticut. “Connecticut officials are campaigning for the extension of a federal tax provision that expired at the end of last year. It’s the tax relief provided for distressed families that have to sell their homes at a loss, or who go through a foreclosure. Debra Chamberlain of the Connecticut Association of Realtors said it’s a significant hardship.”

“‘These families have been hanging on,’ she told a news conference in Hartford. ‘They’ve been hanging on for years, sometimes. And at the point that they finally make the tough choice to sell that house short, or they’re unfortunately forced into foreclosure, we’re there, holding their hands, and helping them wipe away the tears, and figure where they’re going to get the money to move out of the house. The notion that they would then have to pay taxes on money for that shortfall is really unconscionable.’”

The Asbury Park Press in New Jersey. “In the years since the Great Recession tumbled housing prices and eviscerated personal incomes, a growing number of Americans have given up their homes and turned to renting. Many middle class Americans are in the same predicament. In 2013, 43 million Americans rented their homes, according to Harvard University’s Joint Center for Housing Studies. Rentals increased from 31 percent of the nation’s housing stock in 2004 to 35 percent in 2012, researchers found.”

“When John Morales gave up his Howell home of 14 years because his income as a laboratory technician did not rise at the same rate as his taxes and expenses, he said it was the ’saddest and worst’ day of his life. But more than a year after the sale, Morales believes he and his wife are better off. The two now rent a home in an adult community in Brick, he said. Renting has allowed him to concentrate on fewer aspects of the home’s maintenance and worry a bit less about money, he said. ‘I couldn’t keep going the way I was going,’ he said.”

Bits Bucket for January 15, 2014

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