I have been working with a client in Brooklyn who is currently renting an apartment in Manhattan.  He and I have been looking at properties for about 6 months or so.  We have looked at multi families in Harlem and Hells Kitchen, but lately we have been focusing on Brooklyn.

While the cash flows on the properties in Manahattan were decent (and much better than they were a year ago), the numbers on the Brooklyn properties make them appear to be screaming buys.

The building that we are looking at for a second time tomorrow is a 2 family that was valued at $1.25mm two years ago.  It was on the market for $750K earlier this month, and is now down below $700k.  It will be a short sale, but for the value that my client is getting, it will be worth the hassle.  The rent on one of the units is $2,300.  His mortgage w/  a 25% downpayment won't be much more than that, so if he chooses to live in the other unit, he will essentially be living for free.  Could the property decline more in value?  Possibly, but as far as my client is concerned, at these numbers, he has so much positive cash flow, he feels well insulated...plus he will buy and hold.  He also realizes that timing a market bottom is nearly impossible.  Better to stress test the numbers against worse case scenarios, crunch and re-crunch the numbers, and if everything still feel right after a good night's sleep, then move forward w/ the process!

So we'll see how things shape up after tomorrow visit.  If my client decides that this is not the right home for him, I may decide to purchase the property as an investment.

Rich Bouchner, Managing Director

Commodore Property Group

By Peter S. Green

Jan. 27 (Bloomberg) -- Home prices in the Hamptons, New York’s oceanside resort favored by financiers and celebrities, fell 14 percent in the fourth quarter as Wall Street cut jobs and the U.S. recession spurred sales to plunge.

The median price in Long Island’s Hamptons and the North Fork slid to $690,000 from $800,000 a year earlier, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The number of sales dropped 41 percent and the inventory of properties rose 19 percent.

“The market is in stagnation,” said Paul Brennan, regional director for the Hamptons at Elliman. “If you sell in this market, it’s usually one of the three D’s: death, divorce or debt.”

The recession and credit crisis pushed New York City’s unemployment rate to 7.4 percent in December after almost 19,800 jobs were lost in the finance and insurance industries. The city may lose as many as 243,000 jobs by the end of March, according to a forecast by the Independent Budget Office.

Warner Music Group Inc. Chairman Edgar Bronfman, Blackstone Group Chief Executive Officer Steven Schwarzman, Renco Metals Inc. Chairman Ira Rennert and film director Steven Spielberg have bought homes in the Hamptons, also known as the East End. Communities there include East Hampton, Sag Harbor, Amagansett and Bridgehampton, about 100 miles east of Manhattan.

Sales Decline

Sales have declined in all but one quarter since the first three months of 2005, Miller Samuel Chief Executive Officer Jonathan Miller said in an interview. Homes stayed on the market 150 days, down from 166 days in the year earlier period.

“The East End is showing the same sort of patterns we are seeing throughout the New York region -- weaker price trends and a drop in the level of sales,” said Miller.

Manhattan apartment sales fell for the fourth straight quarter at the end of 2008 as the national housing slump hit the metropolitan area. Transactions dropped 9.4 percent to 2,282 units from a year earlier, Miller Samuel said in a Jan. 6 report.

Across the U.S., home prices fell 8.7 percent in November from a year earlier as foreclosures increased and companies shed jobs, the Federal Housing Finance Agency said on Jan. 22.

In Hamptons towns excluding the North Fork, the median price fell 7.9 percent to $875,000. In the North Fork alone, the median declined 14 percent to $500,000.

Luxury Prices Rise

In a sign that the Hamptons luxury market is avoiding the property slump, prices rose 22 percent to a median of $1.16 million in the area south of the Montauk Highway. It includes Bridgehampton and East Hampton and the villages of Amagansett and Montauk, which have some of the most expensive homes.

The median price of all luxury homes, the top 10 percent of sales in the quarter, rose 8.4 percent to $4.66 million. The survey counted 36 sales of luxury properties, down from 61 in the year earlier period.

Prices fell the most west of the Shinnecock Canal where the median declined 9.2 percent to $525,000. East of the canal, prices fell 0.6 percent to $1.22 million.

North of Montauk Highway (Route 27), including Sag Harbor, prices dropped 3.2 percent to a median $750,000.

Buyers are nervous as prices fall and firings at banks and securities firms keep coming, said Dottie Herman, chief executive of New York-based Prudential Douglas Elliman.

Cautious, Worried Buyers

“People are worried and cautious and most buyers are out looking for a deal,” Herman said in an interview. “I was in Saks last week and I almost always pay full price and I said: ‘Why should I? I can get a deal.’”

In the North Fork, 106 properties changed hands in the fourth quarter, 39 percent fewer than the year earlier period. The number of unsold homes rose 49 percent to 538.

Many properties are also sitting on the market because sellers haven’t yet cut their price to reflect the economy’s decline, Miller said. On average, homes sold for 15.4 percent less than their asking price, compared with 8.1 percent a year ago.

“I have never seen sellers so disconnected from the market and my rough approximation is that they are about a year behind,” said Miller. “You had seven go-go years. That’s ingrained in the markets’ psyche.”

Renovation Road

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FOR much of 2007 and 2008, Matthew Leaney was concerned about the ballooning cost of his apartment renovation.

Richard Perry/The New York Times

ROOMMATES Matthew Leaney in his duplex in Harlem with Bauer, his Rottweiler.

Brownstone to Bachelor Pad

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Richard Perry/The New York Times

The kitchen is top drawer and the sleek dining room seats a crowd, although Mr. Leaney says he rarely cooks.

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Richard Perry/The New York Times

The pink sofa and Bauer the dog may not be the best combination, but Studio Sumo’s renovation pleased Matthew Leaney by replacing small rooms with loftlike spaces.

He could have been investing for retirement. Instead, he said, he was spending his money on kitchen appliances and bathroom tiles. And feeling like a spendthrift.

But in the wake of last year’s financial meltdown, he feels less conflicted. After all, he said, “If I hadn’t been spending the money here, I would have been putting it in the stock market.”

Thanks to the market’s decline, he said, “the opportunity cost of my decision is a lot less. And I got everything I wanted.”

Mr. Leaney, 32, sells financial information terminals to investment professionals. “I don’t earn enough to have this place,” he said, surveying his duplex unit, with its custom-made steel stairway and huge windows opening onto a large roof terrace. “It’s kind of like a dream.”

It’s a dream he achieved through a combination of luck and savvy.

Mr. Leaney grew up in Sandford, a village in southwestern England with fewer than 100 people. (The houses there have names, he said, instead of numbers.)

After attending college in Nottingham, he went to work in London; in 2002, his employer, Thomson Reuters, offered him a job in New York.

Exploring the city, he decided that Harlem was “the most obvious place to live.” He liked the quick subway ride to his Times Square office, the beauty of the area’s historic buildings, and the friendliness of the people he met. The small-town boy, he said, felt right at home.

“Harlem is a place I am proud to defend to people who have never been here but have plenty of opinions,” Mr. Leaney said. His first Harlem apartment was in a new co-op building at 330 West 145th Street, called the Hamilton. He bought that place in 2003.

But the apartment wasn’t as quiet as Mr. Leaney, who has trouble sleeping, had hoped.

So in 2007, he sold it for more than twice what he had paid. “I made an absolute killing,” he said.

He set out to find a new home on a top floor, so there wouldn’t be noise from above. He was also attracted to old buildings, and determined to find outdoor space to share with his Rottweiler, Bauer, named for the lead character on the television series “24.” (Mr. Leaney said the name sounds macho, which as a Brit he pronounces “match-o.”)

When he saw his current place, it met every requirement on his list. Or, as he put it, “it was gob-smackingly on point.”

The space was atop a handsome limestone town house, on West 143rd Street between Amsterdam and St. Nicholas Avenues in the Hamilton Heights Historic District, that had been converted to three units.

The apartment Mr. Leaney liked encompassed the third floor and part of the fourth floor. All together, the place had about 1,200 square feet indoors, and another 600 square feet outdoors on the fourth-floor roof. Mr. Leaney paid $517,000. The maintenance was less than $200, although it was recently raised to $342, low even for a no-frills building.

When he first saw the space, it was chopped up into tiny rooms — exactly the opposite of what Mr. Leaney had in mind. “I wanted the eye to be able to travel the whole length of the space,” he said.

Word of mouth led him to Studio Sumo, a Long Island City architecture firm founded by Sunil Bald and Yolande Daniels. As redesigned by Sumo, the space is wide open and sleekly detailed, with reflective surfaces and gee-whiz electronics that suggest a 1960s bachelor pad.

The upstairs is reached by a steel stairway, which because of the narrow hallways had to be welded on-site. The shower is a glass cubicle that projects into the bedroom; the private areas can be closed off from the roof terrace with sliding panels.

Mr. Leaney said he trusted the architects on almost everything, but stopped short of allowing them to paint the apartment’s east wall. He said he liked its exposed brick as a counterpoint to the slickness of the rest of the apartment.

With its extensive built-ins, the apartment didn’t need a lot of furniture. But Mr. Leaney invested in a giant pink sofa from Moroso (not the most sensible purchase, he said, when you have a 150-pound black dog that sheds) and a Pantalla “lacquered crystal” dining table from Moura Starr in SoHo. His desk, in a small office in the front of the apartment, is by Philippe Starck.

He said the renovation went over budget, costing about as much as he paid for the apartment. But “much of it,” he said, “was my own fault. The appliances didn’t need to be Viking and Sub-Zero” — especially since his usual dinner is takeout.

He also didn’t need to furnish the apartment with expensive furniture, “at least not straightaway,” he said. By doing everything at once, he said, “I put myself under a lot of financial pressure.”

In December 2007, although the place was far from finished, he moved in. “I was tired of paying for two places,” he said.

In June, the job was finally declared complete. But there is a still a punch list, which some days gets longer, not shorter. Recently, water damage in one corner of the living room led to an insurance claim. “It’s been drama after drama after drama,” Mr. Leaney said.

Many of the problems are with electronics — Mr. Leaney wanted to avoid wall switches in favor of touch-screen controls, but the system doesn’t always work as advertised. When it does, he said, “it’s just spectacular.” He wakes to the sound of Howard Stern on the radio, the shades going up automatically, and the sun streaming in over the Upper Manhattan rooftops.

Harlem, Mr. Leaney said, “has provided an English guy with the American dream.”

575 Grand Street #E206 New York, NY 10002   800 Square Foot One Bedroom, One Bath,  Coop with Balcony.

$490,000

Maintenance: $618

575 Grand Street # E206

Located in the East River Coop is located at Grand and Madison Streets on the Lower East Side. It is the mid section of a three wing 20 story building - one of 4 hi rises that comprise the coop. There is a front courtyard with trees and plantings as well as a lovely private gated park in the rear. The apartment is a 800 square foot one bed room, one bath with an eat-in kitchen, and balcony. Coop amenities include a large, fully equipped fitness center, 2 private parks, 24hr security/attended lobby, children's playroom and community rooms. Just one block from beautifully redone East River Park with ball fields, tennis courts, running track and amphitheater. M14A and M22 buses stop just outside or walk to F, J, M and Z trains.

Call Rich Bouchner, Managing Director, at 646.825.5734 to view.

 Please click here to view complete listing.

IF you’re in the market for a new home, especially in an area where housing prices are typically high, it might make sense to wait a few weeks. Doing so could mean a significant reduction in your monthly mortgage bill — that is, if the lending industry and Congressional leaders have their way.

Both groups have been lobbying President-elect Barack Obama to include in an economic stimulus package a provision that would again raise the limits on “conforming loans,” which are mortgages eligible to be purchased by Fannie Mae and Freddie Mac, two government-sponsored agencies that resell packages of loans to investors.

Last year, the conforming loan limit was temporarily increased from $417,000 to $729,750 in the New York City area, and to $708,750 in Fairfield County, Conn. (Loan limits are based on median home prices; in areas with lower home prices, it was $625,500.) The limit was raised to help to bolster demand for higher-priced houses in a slumping real estate market.

The government made a similar attempt to spur sales in late 2007, when it decided to keep the conforming loan limit at $417,000, reversing a longstanding practice of moving the limit in accordance with the housing market. (Because the average home price fell in 2007, the limit should have been reduced.)

On Jan. 1, the conforming loan limit was set at $625,500 in all regions, disadvantaging borrowers in areas of higher-cost housing like New York City.

Interest rates on nonconforming, or jumbo, mortgages are typically higher than rates on conforming loans because they are considered riskier without a guarantee that Fannie Mae and Freddie Mac will buy them. The agencies are required by law to buy only conforming loans.

Looking to improve real estate sales in higher-cost areas, the provision sought by Congressional leaders would put the conforming loan limit at $729,750.

Borrowers with 30-year fixed-rate loans of $417,000 to $625,000 — categorized as agency “jumbo loans” — pay about three-quarters of a percentage point less than those with the conventional jumbo mortgages (though they pay about a quarter of a percentage point more than those with mortgages below $417,000).

By changing the “jumbo conforming” terms to include a hypothetical $700,000 mortgage, a borrower with good credit would qualify for a 5.25 percent interest rate on a 30-year fixed-rate mortgage, based on current rates, rather than the average 6 percent rate for jumbo mortgages, according to Oded Ben-Ami, a senior loan officer with the Sterling National Mortgage Company in Great Neck, N.Y.

Monthly payments on that $700,000 mortgage (excluding property taxes and insurance) would drop to $3,865 from $4,197, Mr. Ben-Ami said. The borrower would also save on fees — to get the jumbo mortgage, he or she would have had to pay a “point,” or an additional $7,000 upfront fee.

While borrowers who choose to wait for the government to change the conforming loan limit could derive significant savings, Mr. Ben-Ami says they are also “taking a gamble.”

Interest rates could increase, he said, and banks could place restrictions on loan amounts or further tighten their lending criteria. (Some in recent months have required borrowers to prove that they have liquid assets equaling 25 percent of the loan amount.)

Another element of risk, Mr. Ben-Ami said, is the borrower’s own financial situation.

“If you can qualify now while you still have a job,” he said, “should you make your move now?”

Other mortgage specialists urged borrowers not to wait.

Stephen Habetz, the chief executive of Threshold Mortgage in Westport, Conn., said, “Homeowners with large loans who are waiting on the sidelines may well find long delays and not the large drop in rates they are anticipating.”

At the start of January, Mr. Habetz noted, there was already a backlog of mortgage applications ready to be processed.

www.cpg-nyc.com

www.gotham-realestate.com

Though New York City and national mortgage rates are at historical lows (near 5%), mortgage applications have dropped a bit.  It appears as though potential borrowers expect rates to fall even further.  These must be all the same people who know when to sell their stocks right at the top and to buy right at the bottom!  I have many mortgage clients who won't pull the trigger until they can get a certain rate, even though a refi at current rates will save them ten of thousands of dollars over the life of their loan.  An old Wall Street saying comes to my mind.  Bulls make money.  Bears make money. Pigs get slaughtered!

From CNBC.com

Applications for U.S. residential mortgages slipped from a five-year last week as homeowners delayed refinancing ahead of expected federal action to lower housing costs, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity fell for the first week in four, dropping 8.2 percent to 1,143.8 in the week ended Jan. 2.

Borrowers may have delayed applications in anticipation of the Federal Reserve's program to purchase up to $500 billion in mortgage-backed securities, which is aimed at lowering rates lenders can charge to consumers, an MBA economist said.

The Fed began its purchases on Monday, fueling a sharp drop in premiums that investors demand to own the bonds, and by extension, a probable drop in mortgage rates this week, analysts said.

Fixed 30-year mortgage rates averaged 5.07 percent in the week, up from 5.03 percent the prior week, according to the MBA's survey. The rate has plunged from 6.47 percent at the end of October, mostly after the Fed announced its intentions.

"With all the talk the Fed is buying (MBS), rates could drop further and (borrowers) may say, 'Why not wait a little more'" before refinancing, said Orawin Velz, associate vice president of economic forecasting at the MBA.

CNBC.com

The jump in applications during December may have been driven by homeowners already "on the fence" and prepared to refinance on a drop in mortgage rates, she added.

Tony Crescenzi, chief bond market strategist at Miller Tabak & Co., wrote in a client note on Tuesday that he expects average 30-year fixed rates to fall at least to 4.75 percent.

Helping push rates lower, investors accepted on Wednesday the smallest yield premiums on MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae in more than three months.

Broken down, the MBA's seasonally adjusted index of refinancing applications decreased 12.3 percent to 5,904.5 last week. The gauge of loan requests for home purchases increased a third straight week, by 7.3 percent to 344.2.

The Fed has also embarked on a task to buy up to $100 billion in unsecured debt of Fannie Mae [FNM  0.76    -0.09  (-10.59%)] , Freddie Mac [FRE  0.76    -0.10  (-11.73%)] and the Federal Home Loan Banks in a move also aimed at lowering interest rates. The Fed demand has lowered the institutions' borrowing costs, encouraging them to buy more mortgages or provide more money to lenders.

The plans to lower mortgage rates are seen as one of the most promising federal efforts to stabilize the housing market, which is in its worst downturn since the 1930s. However, because lending standards have tightened across the industry, many borrowers will not be helped no matter how low the rate.

Soaring foreclosures are also fueling a downward trajectory in home prices, encouraging buyers to delay entering the market.

An index of pending home sales this week dropped to its lowest level since the data series began in 2001, according to the National Association of Realtors.

"Although lower mortgage rates will help stimulate demand, the benefit will be insufficient to lead the market to a trough in the near term," UBS analyst David Goldberg said in note to clients.

The mysterious sweet smell that swept over parts of the city more than three years ago returned on Monday night.

The city’s 311 information line was flooded with callers reporting the smell of maple syrup, or something like it, wafting across several neighborhoods, a spokesman for the Office of Emergency Management said.

Nearly all of the calls — 35 in just a few hours — came from areas in Manhattan, the spokesman said, although one caller reported smelling the sweet scent across the East River in Queens.

Department of Environmental Protection agency investigators were searching for the source of the smell late Monday night and early Tuesday morning, the agency’s spokesman said.

The strange, syrupy scent has descended on parts of New York City and New Jersey at least three times before. Beginning in the fall of 2005, people in various areas of the city and nearby New Jersey reported the scent.

Some have theorized that the smell came from New Jersey. Others theorized that it was generated by a candy factory in Manhattan. There were also fears that the odor was linked to an act of terrorism.

Officials ruled the odor harmless but never solved the mystery of its origin.

Only in New York.  This is a first for me.  Buyer dies..seller keeps downpayment money...only in New York.

1150 Park Avenue

In a recently settled lawsuit, the seller of an Upper East Side cooperative unit got to keep a down payment from a buyer who died before the closing.

Glen Altman was in contract to buy a co-op for $2.3 million at 1150 Park Avenue, between 91st and 92nd streets, and paid a $230,000 down payment. She was approved by the board, but before closing on the unit, she passed away.

Altman's estate wanted the down payment to be returned, but the Manhattan Supreme Court ruled that the seller could keep the money.

Ira Matetsky, an attorney at the law firm Gafner & Shore, who was not involved with the lawsuit but wrote about it in his firm's newsletter, said the seller won the suit because there was no provision in the contract stating that if the buyer died, the contract could be broken.

"In some situations, a contract contains a standard provision that if a purchaser should pass away before the closing, the contract is null and void," Matetsky said. "This case arose, and the contract didn't say one way or the other."

Altman, who passed away in 2005 at age 74, was survived by her daughter, Tracy Altman Warner. Warner, a Corcoran Group agent, and her attorney were not immediately available for comment. Altman and her husband, Edwin, who passed away in 2003, ran a wholesale diamond company called M.B. Altman Sons. The lawsuit was settled in October.

According to the lawsuit, the estate argued they were not obligated to go forward with the purchase because the contract called for occupancy by Altman only. However, there was no provision in the contract to cancel the deal.

JoAnn Schwimmer, an associate broker at DJK Residential, said she had never heard of a situation like that before. "It seems immoral," Schwimmer said of the seller keeping the down payment.

Roberta Axelrod, director of residential sales and rentals at Time Equities, said that in a few of her deals, lawyers have requested that a provision be put into a contract that would cancel the deal if the purchaser passed away.

"None of my purchasers have ever died," Axelrod said, "but the way it technically works is that unless you put it in the contract that you have the right to cancel it, the estate is bound to [the purchaser's] obligation."

If a purchaser buying a condo passed away, the estate would have to buy the unit if there wasn't a provision in the contract canceling it. In the case of a co-op, however, the estate has to be approved by the board.

The co-op board president at 1150 Park Avenue, Herbert Appel, testified that the estate did not submit an application to go forward with the sale, and if the estate had wanted to purchase the unit, its application would have been considered by the board, although an estate has never bought a unit in the building.

Matetsky the attorney said, however, that typically a co-op board -- which has stringent requirements for approval -- would not allow an estate to buy a unit as it wouldn't know who from the estate would move in.

And in a case where an estate is required to go forward with the sale, Time Equities' Axelrod said, the seller can still decide to cancel the contract and return the money.

Saw this on luxist.com. Some very nice real estate porn. I guess it pays to play for the Yankees....even if you don't win a ring!

Bobby Abreu in NYC, Estate of the Day

Posted Jan 5th 2009 1:02PM by Deidre Woollard
Filed under: Estates, Sports

Baseball player Bobby Abreu has had his apartment in One Beacon Court in New York City listed since last March but since it seems like Abreu might be soon leaving New York for the West Coast (both the Dodgers and the As have expressed interest) we thought it might be time to give him a little sales help. One Beacon Court has seen big baseball sales before, Johnny Damon had an apartment here, selling a 2,410 square foot apartment for around $8 million. But that was in 2007. Abreu's apartment is a two bedroom with a large living room and dining room and a master bath with a soaking tub. You'd be buying this one for the views more than anything else although all the finishes are as luxurious as you would expect. Abreu has had this place on the market for $7.9 million without a price cut. Back in March, Big Time Listings reported that Abreu paid $3.5 million for the property in 2005, so it seems he could lop a bit off the price and still make a profit. It seems like it's time to do so.