 |
|

Two-Way Housing Numbers, One-Way
Street
It is news that should surprise no one: housing prices are falling. According
to the quarterly S&P/Case-Shiller index released earlier this week, prices
declined 1.4% nationwide for the first quarter, against an 11% rise in the same
period in 2006. It was the first such decline in 15 years, and some of the
strongest evidence to date that the talk of a softening housing market is making
an impression on sellers.
Of course, there are other, rosier viewpoints: figures released on May 31 by
the Office of Federal Housing Enterprise Oversight showed that housing prices
increased 0.5% in the first quarter. The OFHEO index includes refinancings,
which are not included in Case-Shiller. The OFHEO boost, nonetheless, was at the
slowest pace for the gauge in a decade.
Case-Shiller's monthly 20-city index also showed a decline of 1.4%, while the
ten-city index saw values drop 1.9%.
In other words, any way you slice it, gravity is taking firmer hold on the once
buoyant U.S. housing market.
The only question at this point is actually a twofer: how far and how fast?
The answer appears to also be evident in OFHEO and Case-Shiller, as in the two
reports released last week on existing and new-home sales. They all indicate a
somewhat mixed picture, although one definitely tinged toward the downside.
Existing-home prices hit a four-year low as empty nesters and overstretched
borrowers continue to bring their homes to market, even as home builders also do
their best to clear an inventory backlog that now stretches out more than eight
months. This group dropped prices enough – nearly 11% over the previous year -
to spark a 16% surge in home-buying, a reflection of spring fever and something
that few expect to be repeated anytime soon. Still, against that rise,
individual sellers of existing homes will continue to face pressure to lower
prices more. And builders, facing softer markets in most cities – the 20-city
index showed price declines in 13 areas – will also have to continue to work to
meet buyers' lowering price expectations.
Indeed, as the traditional summer lull in sales looms, this could be a pivotal
time in the psyche-sensitive world of residential real estate, especially as
more buyers sense that time and leverage (the emotional kind) are on their side
and push harder for cost-cutting.
Meanwhile, the tightening of the other kind of leverage – i.e., mortgage lending
– will also keep some home buyers off the market, especially in harder hit areas
such as San Diego and South Florida (San Diego and Detroit were the two
hardest-hit markets, pricewise, in the quarterly Case-Shiller report).
But just as in the apparently conflicting new and existing home-sales reports,
the Case-Shiller data also paints a picture of a national market with distinct
regional differences. One area of the country that seems to hold particular
promise is Microsoft country: prices in Seattle were up 10%, while those in
another Pacific Northwest capital, Portland, Ore., rose 7%. Clear across the
country, in the still-booming financial-services basin of Charlotte, N.C.,
prices climbed 7.4% year-over-year.
Not surprisingly, once-skyrocketing Las Vegas and Phoenix were hit hard – sort
of. Las Vegas prices were down 1.6% between September 2006 and March of this
year. But that's still after stunning runups between 2003 and 2006.
But in other cities where an oversupply in the condo markets suggests that
single-family housing would be at risk, prices actually came up. Two stunning
examples: Chicago, where prices gained 1.3%, and Miami, up 1%. And in Atlanta,
where stories of overbuilding and sprawl are legion, prices rose 2%.
Gains like these, though encouraging, are far more likely
to indicate an early plateau in the downward movement of pricing than an actual
bottom. Indeed, the apparent stability of these markets is reminiscent of
another stealth danger that plagues homeowners, as it often goes undetected: dry
rot.
Still, some home builders may have pulled in the reins enough to ride through a
continuing downdraft with relatively less pull on their own share pricing. Toll
Brothers (nyse: TOL), Beazer Homes (nyse: BZH) and St. Joe (nyse: JOE) have
already suffered through some bumpy times in the past twelve months, but they
have each taken their blinkers off. That said, how well the market holds its own
during the normally slow summer sales season should offer some guidance for how
much further homeowners and home builders will be willing to let things slide.
A Woman’s Market Is in the Second Home
As women play ever-larger roles in family real estate decisions, developers from
Florida to Florence are seriously rethinking the luxury second-home market.
For women buying into this market, it takes more than a celebrity-designed golf
course and a gourmet kitchen to entice them to invest in an expensive second
home, experts say.
“It’s not only boomer women who are a powerful force in the worldwide real
estate market; it’s women as young as 30,” said Wanda McPhaden, executive
partner of the Connecticut-based BCA Real Estate Investments. “Women are making
75 percent of home-buying decisions now — either as single women or for their
families.”
At Montesoro, a private residential community being built in the southern
California desert, the traditional golf component has been retooled for women
with separate tees, wider fairways and a women’s golf program designed by a
former LPGA player.
“We recognize that women are essentially the decision-makers in the purchase of
a second home,” said Gregory Perlman, the developer of Montesoro.
In acknowledgment that there is more to enticing the female buyer than offering
a Tom Fazio-designed golf course, Montesoro’s marketing materials play up the
surrounding Anza-Borrego Desert State Park and the “adventure advisers” on staff
to arrange mountain biking, horseback riding and rock climbing expeditions.
(continued above right) |
 |

|

|

....A
Woman's Market is in the Second Home (continued from below left)
Jo Jones saw firsthand how enthusiastically women embrace the elements when,
as a concierge, she organized a series of mountain snowshoe expeditions for
homeowners at the Residences at the Chateaux in Deer Valley, Utah, a top
American ski destination. The property offers fractional ownership of
three-bedroom units.
“The program was originally designed to be a family affair,” Ms. Jones said,
“but it turned out the kids were in ski school and the men wanted to ski, so
it became a women’s trip. They felt safe because there was a trail and a low
possibility of getting lost, yet it was remote enough to experience utter
peace and quiet. Out in the wilderness, they weren’t obligated to be a wife
or mother and could reconnect with themselves.”
There are lots of occasions to reconnect with — or to discover — oneself at
the Cliffs, a collection of seven luxury residential communities on 20,000 acres
in the Carolina Blue Ridge Mountains. The Cliffs has seven golf courses designed
by stars of the game but takes the spa component a step further, billing itself
as a “luxury family wellness resort.”
Other amenities include stables, an organic farm, a nature center, an
18,500-acre lake, 25 miles of groomed hiking trails and access to properties in
British Columbia, Chile and Patagonia that are owned by the Cliffs’ founder, Jim
Anthony.
Three years ago Riley Murphy, a lawyer from Colorado, paid $545,000 for a
3,500-square-foot home on 1.67 acres at the Cliffs Valley. She said she was
impressed by the setting and extensive facilities, but what really astonished
her was how comfortable she felt there as a single woman.
“I have no qualms about attending lectures or wine tastings or eating at the
club by myself,” Ms. Murphy said. “It’s not like being in a suburban community,
where there’s a bias against single women. It’s a ready-made lifestyle offering
a variety of social opportunities to meet people with varied backgrounds from
different parts of the country and the world.”
(continued above right) This sense of immediate entrée was one
reason that Fiona Foley, a psychologist from Dublin, bought a fractional
interest in a three-bedroom apartment at Palazzo Tornabuoni in Florence.
“It offered an opening into the Italian way of life,” she explained. Palazzo
members have exclusive access to: the spa and outdoor pool at the nearby
Four Seasons Hotel, set to open in 2008; the owner’s vineyard; and a
concierge to arrange everything from restaurant reservations to grocery
shopping.
Ms. Foley bought the apartment while in Florence for the weekend with her
daughter; her husband, a stockbroker, never saw the place.
But fractional ownership appealed to the couple. “We didn’t want anything
high maintenance; we already had that,” Ms. Foley said, alluding to their
five-bedroom weekend home on 16 acres in the West Cork area of Ireland.
The fractional model makes it feasible for buyers — especially single women
like Vera Campbell, a self-described “type-A personality, first-wave boomer”
— to contemplate second homes without stressing over upkeep. Ms. Campbell’s
passion for food and wine led her to Tuscany and the purchase of an interest
in a five-bedroom villa at Castello di Casole, a private residence club near
Siena, which offers both fractional and complete ownership.
Ms. Campbell, who lives in Los Angeles and owns an apparel manufacturing
company, liked the fact that the property’s ancient castle had been
transformed into a five-star boutique hotel with a spa and several
restaurants. “I wanted it to be a destination, not just a place to stay,”
she said. “This was truly an impulse buy. I said, ‘I’m going to treat myself
because I deserve this and because it’s a wonderful way to get my brother,
sister and parents to spend a week or 10 days together as a family.’ ”
Getting the entire family together was the goal of Patty Dolan, a
Pennsylvania native, in buying a second home at the Yellowstone Club in Big
Sky, Mont. And when her husband, Jim Dolan, a developer, turned the adjacent
property into Spanish Peaks, a residential community on 3,500 acres,
gatherings took on even more significance.
“What appeals to me as a woman is keeping the family together,” said Mrs.
Dolan, the mother of six boys. “Even if you’re single, you’re part of a
family, whether it’s nuclear or blended. And let’s face it, it’s the woman
who gathers everyone together and generally makes all the arrangements.”
In planning the display homes at Spanish Peaks and designing the
clubhouse, “great spaces to gather together” were as important to the Dolans
as the vistas and ski-in/ski-out access. A spa, a challenging golf course,
attentive service — all that was fundamental. But what they really sought to
create were spaces that made it easy for people to hang out as a group, like
the cozy restaurant they built on the mountain, where they now meet for
lunch after skiing.
“It’s not the structure of the house as much as the transformation from
house to home that I’m interested in, when there are people sitting in front
of a fireplace or lying on the floor playing a board game,” Mrs. Dolan
explained. “People can say I have a beautiful house, but if they don’t say I
have a beautiful home by the time they leave, it doesn’t mean anything.”
|
|
|
 |
|
 |

|
 |


Haven Exchange Clients Receive Monthly Statements from Union Bank
Happily for the clients and potential clients of Haven
Exchange, the recent alleged misappropriation of funds by a Nevada Q.I. is a
NON-ISSUE.
At Haven Exchange, ALL exchange proceeds are covered by our
Fidelity Bond and all funds are placed in separate, fully segregated, completely liquid, FDIC insured money market accounts at Union Bank of California. Every client receives a statement
directly from Union Bank of California each month, reflecting the activity and balance, including interest earned for their individual 1031 Exchange account. For your security, two
signatures followed by a changing, randomly generated encrypted security code are required for any release of your 1031 funds.
Exemplary 1031 Exchange Service is a requirement.
What has most impressed our customers is the reliable care they receive from our knowledgeable and enthusiastic staff. I have many years experience both in escrow and 1031 exchange, but my
team has really taught me something about customer service that I'm sure you will value. As much as I was able to teach them about 1031 exchange services, I feel very enriched by their
contribution. Everyone at Haven Exchange is committed to providing unsurpassed service to our clients. Your success is our success.
Haven Exchange is here for you 7 days a week, from 6am to 9pm PST so we can be available when you need answers. Because of the obvious advantage to our clients, we are highly responsive in
providing your 1031 Exchange documents, service and funds. This means the documents for your 1031 tax Exchange can be delivered within minutes and that we can fund your closing the same day
we receive the necessary signatures, up to 2pm PST.
Bang! Wabbit and Duck Season. It's a Buyer's
Market!
In
a recent report for homebuyers, all signs suggest that their time is now. In
many parts of the country, sellers have finally gotten the message by now, and
homebuyers must take the hint. Real estate experts say a switch in the
psychology of the housing market has helped buyers to see the silver lining
around the market's storm clouds and usher in the fine shopping weather. Two
years of stormy real estate markets appear to have created an ideal climate for
bargain-minded house hunters who know where to look.
David Lereah, the chief economist for the National Association of Realtors, said
that "we are now in a solid buyer's market," also added "It has been a seller's
market for many years, but now we are seeing people across the country making
deals and bringing prices down."
"What happened was, investors pulled out in droves, and the housing markets went
dead," comments Lereah, "When the investors stopped buying, regular buyers got
scared." A loss of confidence on the part of real estate investors triggered the
psychological switch, he says.
"Now they are making deals," Lereah says, speaking about the dearth of buyers,
sellers eventually realized they would have to make concessions on their sale
prices.
Mickey Levy, the chief economist for the Bank of America, points out that the
market is also suffering from an oversupply of homes created by an overzealous
home-builder community. If the downturn was simply a product of a short-term
panic, things would likely be back to normal by now.
He says that "While demand is picking up, there is still that large supply
overhang," and added "And while the numbers are starting to come up for sales,
prices still have a bit to drift before they start rebounding." With a listless
housing market, savvy buyers in many markets across the U.S. are finding
themselves in the best position they have been in for nearly a decade when it
comes to price negotiations.
Levy does warn, however, that not all sellers are in a dealing mood. He also
said that "Even though existing-home prices are basically flattish on a national
level, I would issue a bit of caution with that number," following up with
"Housing is inherently a local market, and national numbers are notorious for
not offering an accurate snapshot of what is happening in a particular market."
On the whole, Levy says to expect prices, on average, to drift slightly lower as
a function of clearing out excess inventory. And inventory is the key. So, while
prices in Southern California and parts of Florida may be down significantly,
other markets may still be enjoying healthy price gains.
|
Daily News and Advice

Read about the events shaping the Real Estate market today, find current interest rates, or browse the extensive library of advice and how-to articles written by some of the top
experts in Real Estate. Updated each weekday.
|

|
More Articles

|
|
 |