Property Grunt

Saturday, April 28, 2007

Roll Call: Sellsius Edition

Congratulations to Sellsius on their launch. We've all been waiting a long time for this.

Those of you who have an obsession with Brooklyn will love this.



Landmark Meets Modern in Brooklyn with Bill Menking, Editor, The Architect’s Newspaper; Architects Ismael Leyva and Michael Wetstone (Beyer Blinder Belle); artist and muralist Richard Haas and developer Jed Walentas of Two Trees Management.

Presented by the Brooklyn Chamber of Commerce




(April 25, 2007) BKLYN DESIGNS (MAY 11- 13), NY’s most consumer-friendly design show, is kicking-off NYC Design Week with the biggest exhibit yet. Celebrating its fifth anniversary, BKLYN DESIGNS is now an established design event that attracts buyers and attendees from all over the world. BKLYN DESIGNS boasts an impressive list of trend-setting exhibitors of contemporary furnishings including: furniture, lighting, linens, rugs and decorative accessories.

DATE/TIME: Friday, May 11, 10am– 8pm; Saturday, May 12, 10am– 7pm; and Sunday, May 13, 11am– 6pm

PLACE: 3 DUMBO Brooklyn Locations - St. Ann’s Warehouse, 38 Water Street; Smack Mellon Gallery, 92 Plymouth Street & the BD Annex, 81 Front Street


Largest- ever BKLYN DESIGNS line-up of 63 jury-selected exhibitors
28 Debuts…featuring up-and-coming designers exhibiting for their first time
20 Green Designers to show a host of clever green solutions/products for home/office
BKLYN DESIGNS+ - a brand new cash-and-carry market of fashion and home accessories
A look at the next generation…Pratt Institute student exhibit + design competition

PROGRAM HIGHLIGHTS (free with admission):

A Conversation with Ralph Pucci with Linda O’Keefe of Metropolitan Home
Pratt Panel on Green Design with alums, professors & Fred Bernstein, NY Times + Metropolitan Home
Brooklyn Style - designers Chris Coleman, Chris Kraig & Ellen Hamilton discuss trends with Annie Block, Interior Design and Jen Renzi from House & Garden
Going Green: Doable or Daunting? The Grenier House - A Case Study with Mike Cannell, Dwell, Karesse Grenier, NYC real estate broker (mother of actor and green advocate Adrian Grenier), David Bergman, Philip Higgs and Laura Gropper, GreenHomeNYC.
Landmark Meets Modern in Brooklyn with Bill Menking, Editor, The Architect’s Newspaper; Architects Ismael Leyva and Michael Wetstone (Beyer Blinder Belle); artist and muralist Richard Haas and developer Jed Walentas of Two Trees Management.
BAC Exhibit of Prototypes and Models Born in Brooklyn at the powerhouse Arena + readings/book signings with authors Akiko Busch, Kira Gould & Lance Hosey and Susan Szenasy, Metropolis
Focus on BAM Cultural Arts District with Bruce Fowle, Joe Chan, Danny Simmons & Susan Szenasy
Mother’s Day Pastry Demonstration by Kate Zuckerman of Chanterelle for moms/kids at BSH.

AROUND DUMBO: Galleries, Retailers and Restaurants will welcome attendees with special events and promotions through the first Brunch Under The Bridges program.

PARTIES NOT TO MISS (free with Show Admission/Bracelet):

BKLYN DESIGNS - KICK OFF PARTY / DWR Brooklyn Heights Studio, Friday, May 11, 8:30pm
BKLYN DESIGNS - ART MEETS DESIGN PARTY/ Forté Condo – Exhibit curated by gallerist/artist Danny Simmons, at the new FX Fowle Forté Building in Fort Greene, Saturday, May 12, 8:00pm

TICKETS: Tickets are $12 per person per day. Pre-registered design trade attend for free.

INTERVIEWS: Mark Kessler, Interim President, Brooklyn Chamber of Commerce; Karen Auster, Producer, BKLYN DESIGNS and all exhibitors/speakers available for interviews/studio tours.

MORE INFORMATION: 718-875-1000 x146 or chloe@austerevents 718-243-1414

Also Haute Living had some dinner in South Florida which the Grunt was not invited to.

On Monday, April 23rd, Haute Living magazine, in conjunction with Ms. Audrey Ross of Esslinger Wooten Maxwell Realtors, hosted the Board of Regents for a "Who's Who in Luxury Real Estate" dinner on South Beach. The evening was also sponsored by South of Five, a luxury development on South Beach.

The event took place at The Temple House, a luxurious 16,350 square foot private residence owned by Dan Davidson. The Temple House, designed by world famous Art Deco architect L. Murray Dixon, is the largest single-family residence in South Beach, The Temple House is currently listed by Audrey Ross for $17 million.

More than 80 of the biggest names in luxury real estate from across the world came together to make this event a spectacular night to remember.

Seth Semilof, co-publisher of Haute Living, said, "The evening was a success, thanks largely to the dedication of Audrey Ross. That's the pleasure of working with such a successful individual; you know that your event will be flawless."

The evening began with the "Who's Who" being picked up by coach limousine at the Ritz Carlton, Key Biscayne. Bottles of Moet flowed freely throughout the ride from the Ritz, and continued throughout the evening. A five-star restaurant provided the catering.

Industry power-players in attendance included Brian Losh, chairman and CEO of Ewing & Clark Incorporated in Seattle, and publisher of Who's Who in Luxury Real Estate; Meghan Barry, vice president of Ewing & Clark Incorporated; Ron Shuffield and Beth Butler, the president and general manager of Esslinger Wooten Maxwell, owned by Warren Buffet's real estate arm, Homeservices, Inc.; James Beasley, president and CEO of Beasley & DeVarreau, the Las Vegas division of Sotheby's International Realty; Andie Richardson, president and CEO of Romac, the St. Maarten division of Sotheby's International Realty; Donald D. Pearson, owner of Kurfiss, the Pennsylvania division of Sotheby's International Realty; Kay Brown, owner of Norris & Company, the exclusive Vero Beach affiliate of Christie's Great Estates; Cora Bett Thomas, president of Cora Bett Thomas Realty, the exclusive Savannah affiliate of Christie's Great Estates; Michael Saunders, president of Michael Saunders & Company; Gerard P. Liguori, owner of Premier Estate Properties, the exclusive Boca Raton affiliate of Christie's Great Estates; Barbara A. Reynolds, president of the North American market for Realty One Living in Ohio; Amy Norman, senior vice president in charge of corporate growth & development for Harry Norman Realtors, Atlanta's leading independent real estate firm; and many others.

Kamal Hotchandani, co-publisher of Haute Living, said, "The dinner provided the perfect event for members of the luxury real estate community to come together and celebrate their collective success. We were proud to be able to provide the forum in which this could take place, and look forward to hosting the "Who's Who" in the near future."

Wednesday, April 25, 2007

Random thoughts.

The last couple of days have been quite strange. The national housing markett is continuing its meltdown with a drop in sales not seen since 1989, yet according the great Jonathan Miller, Manhattan is pulling a rocky of sorts as once rising inventories have begun to subside and sales have begin to kick in. And rental inventories have dropped to an all time low in Manhattan. To make things more interesting the Dow has broke 13,000.

How it usually works is that when the stock market goes up, the real estate market goes down and vice versa. And it appears this is what is occurring right now. Nationally, real estate is getting clobbered. But as we see right now, there are holdouts, particularly the Manhattan market.

So what does this mean? Are we still experiencing a dead cat bounce? Or is this something else entirely different? Has Manhattan jumped the shark on real estate bubbles? Or is it wishful thinking that the best is yet to come?

Manhattan has all the making of pulling a hat trick; Wall Street is having a banner year so far, especially with those hedge funds and with rental inventories at all time low, landlords are sitting on the catbird seat. Also commercial leases are being signed hand over fist. It appears the residential market is following suit.

What will probably be a decisive factor are the emotional states of buyers and sellers. Buyers for the last couple of years have been getting the crapped kicked out of them because of the high prices and lack of inventory. Sellers have also been licking their wounds seeing apartments remain on the market for what seems like an eternity without getting an offer or one worth responding to.

Manhattan has still a lot of offer for residents with a strong market and an economy that is still running on cylinders. Or course the brand itself has never been better. Thank you Mayor Bloomberg.

With those attributes in mind, buyers are going to take advantage of this second wind and a market that is now plush with fresh inventory. Sellers might also be more apt to negotiate with their asking prices and will be open to sensible yet profitable offers.

Or maybe this is as good as it gets and the next quarter is when the Manhattan real estate market gets dragged under by the undertow of the national landscape.

I don’t know. What I do know is that a lot can happen in the next couple of months.

You have to figure out what is best for you. If you are a buyer, can you afford the payments? Is this where you want to live? Are you willing to make the commitment? Sellers, what is the right price for your property? Is it realistic? Are you willing to take the risk of losing money if your demands are not met? Are you willing to be flexible and to be able to get out of the market?

Let's be careful out there.

Tuesday, April 17, 2007

Roll Call

Portfolio has arrived. Sara Clemence and her crew have whipped out a badass magazine about money, wealth and all things that reek of capitalism. One of Sara's favorite articles is titled Faking and Entering which is about real estate poseurs. It is not only a great article but also features tips on preventing poseurs from showing up on your front lawn.

It is a double whammy for Kelly Kreth.

First off she will be featured on Sirius radio on a show called the Extreme Success Show hosted by Karan Salmansohn

Kelly scored a major account for a condo in Bushwick, Brooklyn. I hope they never refer it to as West Bushwick.



Eight Unit Building Designed by Scarano Architects PLLC Slated to Open for Sales Mid-April

Century 21 NY Metro Chosen as Exclusive Sales Agent for 979 Willoughby Condominiums

( New York , New York , April 17, 2007) Vintage Builders announced today that they have completed a new development project in the Bushwick area of Brooklyn at 979 Willoughby , on the corner of Willoughby and Evergreen Avenues.

The building consists of eight units: two studios starting at $399K, four 1 BRs starting at $465,000 and two, 2 BRs triplexes, starting at $688,000. Each apartment comes with a garage and utility room. All apartments have roof deck access. Square footage of apartments range from 500 sq. ft to 1000 sq. ft. Several of the apartments actually feature a parking garage that is accessible directly from inside the apartment without going outside; the parking garage connects to the living level of the unit.

“This is a section of Brooklyn that is in transition for both builders and investors alike. If you will, it is the more affordable extension of East Williamsburg and therefore more attractive to those buyers and investors. It has more personally and since my mother grew up a few blocks from this development, which during her time, was a poor slum. I made her a promise I would be a pioneer to make the area better,” says Harold Tischler, vice president, Vintage Builders.

“Without the leadership and vision of our president, Marc Weisz, this project would not have come to fruition. He has grown the company’s development in Brooklyn by leaps and bounds,” expounds Tischler.

Vintage Builders has over 16 years of experience in real estate in various aspects, including contracting, consulting, and developing. This is the second new development project they have participated in and they aim to develop in all different areas of Brooklyn . The first project was at 1515 W. 4th St. where they created a six-floor complex filled with loft-like apartments that have elevators open directly into the units

The building was designed by Stephen Conte of Scarano Architects PLLC. His vision has given rise to a project whose interiors soar to great heights creating the ambiance and feel of an inspiring space. This modern building has a loft-like feel that uses natural light to make the open spaces feel more airy than any other units on the market today. The façade features huge expanses of windows that allow sunlight to filter through the whole of each unit. Tischler says these windows are a way to glimpse into the “soul of the building.”

“To design a new building in an emerging area one cannot help but feel like a pioneer during the early days of the development of America . The difference now, however, is that this area was allowed to slip into decay and is now being reborn,” says Robert Scarano, president, Scarano Architects. “With Dozens of new buildings produced each year and many in up and coming areas like this, Scarano Architects, has lead the industry in cutting edge design which attracts buyers of all backgrounds and ages. Each project breaking price points and giving value which in just a few years of ownership rewards each person who buys into the development.”

Tishler has announced that Century 21 NY Metro will be the exclusive sales agent for the project, which will begin sales in mid-April.

“Century 21 is the only truly global real estate brand in New York City and has a history of getting the job done effectively and ethically,” explains Tischler.

“This is a great opportunity for us to expand into Brooklyn and use the power of the C21 network to penetrate the new development market,” says Mike Simon, president, Century 21 NY Metro.

Sunday, April 15, 2007

An Open Letter to Whole Foods 2 and the roll call

Dear Whole Foods,

Remember this letter? I have to admit I had fond memories since it got me on Gawker.

Anyways, I was in the lower east side and I decided to check your new digs. First of all I would like to tell everyone do not walk but run to the lower east side Whole Foods. Gawker's coverage doesn't do justice to what this place offers. It is a combination of market/high end eatery and all sorts of organic goodness.

I am happy to report that when I went to the restroom, located on the top floor all the way in the back past the restaurants, I did not encounter any bladder hussies. In fact, there was no line for the women's bathroom. Perhaps it was due to the fact that I was there at around 6pm and missed the bathroom rush. But I think the designers decided to put the bathroom back there so that you would pass the delicious food, the views, then forget you had to take a leak. Maybe I am thinking too highly of myself but I would like to think I contributed to this new design.

On with the roll call.

If this pops up in Manhattan, I wonder how they will do.



New Company Represents Buyers,

Uniquely Charging a Flat Fee of $3995 for Properties in the Massachusetts Area

Boston, Massachusetts (April 10, 2007) –Territory Real Estate, (TRE), which offers buyer representation for a flat fee of $3995, announces its official launch today. The new company, owned and operated by Marla Mullen and Terry Sanford, has its offices located in Boston , MA . TRE will provide brokerages services that cover the complete range of residential buying categories including single family homes, condos, lofts, and townhouses, to homebuyers in the Massachusetts area.

“Any compensation we receive above this $3995 flat fee we rebate back to the buyer. Our average rebate is over $9,000,” comments Marla Mullen, co-founder, TRE.

Consumers interested in purchasing a home can log onto, create an account, and begin searching for properties. Once they locate properties they are interested in, TRE handles everything to create a hassle-free way to purchase a home. Consumers can visit and purchase properties by requesting tours and submitting offers directly through the TRE website. Homebuyers can also purchase properties they have found on other sites through TRE. To learn more about the real estate market in the Massachusetts area, users can also log onto the Territory Real Estate Blog which is updated daily and includes helpful information for home-buyers.

While working as traditional agents Mullen and Sanford became increasingly frustrated by the ever-present conflicts between agents and consumers. They found that agents spent most of their time trolling for new business and only a small fraction of it actually doing the real estate work. They found that the commission-based price structure had little relevance to the cost or quality of an agent’s work. And finally, they found that many agents would withhold listing information to manipulate consumers into contacting them.

“We believe these actions increase the amount of unproductive busy work for the agent and can frustrate consumers. We chose to become an exclusive buyer agency because we wanted to avoid the double dealing and conflicts of interest that occurs when a listing agent represents both parties in a transaction. We saw an opportunity to develop a professional firm that lived up to its promise of unbiased representation and Territory Real Estate was the answer,” explains Mullen.

“Our unique business model is being well received by our clients. Our goal is to use the internet to streamline the process and make purchasing a property low cost and hassle-free. We believe providing clients more tools and more information will change the way real estate is bought in this country,” expounds Terry Sanford, co-founder, TRE. “We plan to roll our concept out nationally very soon.”

Both co-owners founded TRE while living in New York City . They eventually left NY to found TRE in Boston because of REBNY's restrictions on displaying listing data. Co-owner, Marla Mullen, previously worked as a sports agent for six years in New York City , representing various male and female professional athletes in a wide variety of sports. Co-owner, Terry Sanford, previously worked as a traditional real estate agent for a firm he helped his uncle found in Nantucket , MA , Sanford Real Estate. He also has experience as a marketing consultant/sales agent for a residential team at Douglas Elliman in New York City .

This does not bode well. I will doing a future entry on how this will further reset the real estate dynamic in New York City.

Foreclosure Auctions increase substantially in Los Angeles, Miami, and New York City in the First quarter of 2007; Seattle Stabilizes

New York City, April 12, 2007 –, the premier real estate data site, announces its quarterly report covering first-time residential foreclosures in New York City, Miami, Seattle, and Los Angeles for the January-March 2007 time period.

Four-City Findings (Request report for details):
· Foreclosure Auctions: recorded 2453 first-time trustee sales in Los Angeles, 554 foreclosure auctions in New York City, 987 in Miami-Dade County, and 382 in Seattle for January-March 2007.
· Foreclosures per Household: Miami had 692% more properties scheduled for foreclosure per household during the quarter than New York City, 236% more per household than Seattle, and 162% more per household than Los Angeles.

New York City:
· New Foreclosure Auctions: There were 554 new residential foreclosures in New York City (5 boroughs), a 56.5% increase from the fourth quarter of 2007 (354 foreclosures).
· Foreclosures by Borough: Of the boroughs, Queens had the highest number of foreclosures in Q1 2007 (319, a 91% quarterly increase). Sixteen of the top-20 zip codes for foreclosures were in Queens. Manhattan again had very few foreclosures (25) for the quarter.

“The number of new foreclosure auctions in New York City returned to levels seen last year at this time and follows the typical seasonal up-tick after the last quarter of a year. However, the foreclosure levels in Queens are worrisome,” stated Ryan Slack, chief executive officer,

Los Angeles County
· Trustee Sales: Los Angeles had 2453 trustee sales during the period, an increase of 24.14% from the fourth quarter of 2007. The top 3 zip codes in Los Angeles County for trustee sales were in Lancaster and Palmdale.

Seattle (King County)
· Trustee Sales: King County had 382 new foreclosures in the first quarter of 2007, an increase of 3.24% from the fourth quarter of 2007. The top zip codes were 98178 and 98042.

Miami-Dade County
· Foreclosure Auctions: There were 987 new residential foreclosures in Miami-Dade for the quarter, a 30.56% increase from Q4 2006. For a list of the top 20 Miami zip codes for foreclosure auctions, request the report.

Real estate investors can browse current foreclosure listings for the following areas:

Los Angeles Foreclosures:
Miami Foreclosures:
New Jersey Foreclosures:
NYC Foreclosures:
San Francisco Foreclosures:
Seattle Foreclosures:

Hopefully they won't be talking about West Buswick.

Remaking Bushwick

New Living Spaces combine Progressive Style with Sustainable Living

NEW YORK, NY ( April 2007 )— Visionary Manhattan design-build firm Lifeform, best known for its sensible boutique-style projects in the up and coming areas of Brooklyn, is transforming rundown apartment buildings into a vibrant lively communities with a new breed of environmentally-sensitive tenant. The firm reuses the original building elements, including structural members, flooring and architectural details, and then redistributes them throughout the newly renovated apartments.

Bushwick is now considered by many to be the new hottest neighborhood in New York and the new edge in urbanity. Lifeform is setting the standard for new communities in the area, staying true to its landscape and by incorporating modern elegance and sustainable materials into the projects.

THE PROJECT: 163 Montrose

The neighborhood of Bushwick, Brooklyn is conveniently situated on the Montrose Ave stop of the L train. 163 Montrose transformed a run down construction into a three stories loft like apartment building. After months of intensive renovations and dedicated work, the apartments were rented within a week by a very demanding market.

The renovation included gutting out apartments and the structural reinforcing of the building, foundation, new kitchens ,bathrooms, electrical, plumbing, renovation of the backyard, and the construction of a second floor outdoor deck.

Environmental features were given to this renovation by restoring the wooden floors to it’s original condition in a recycling process. The facade was fully reformed using a natural mineral plaster and energy saving double glazed windows. Most notably, the studio has salvaged old wooden columns and beams and reused them for structural and architectural purposes. The apartments were given an outdoor space providing the inhabitants with a healthy and stress free environment.

As it happened in SoHo, West Chelsea, and Williamsburg , the first wave of artists arrived in Bushwick in the 90's. Bushwick’s population continues to grow as it becomes a key destination for the new artist and young community. The tenants of 163 Montrose are young professionals such as photographers, fashion editors, engineers, journalists and Ivy League professors who were tired of the rising prices and limited space in Manhattan .



Lifeform is a Manhattan based Studio for Architecture, Design-Build and Development .Since it was formed in 1999 by Rafi Elbaz; the Studio has created work that ranges from contemporary buildings, to private houses, interiors and humanitarian dwellings. Their projects reflect modern, personal and functional places for living. It is known for its forward thinking and its commitment to quality and architectural detail.

Creativity, sustainability, efficiency and the ability to adapt to changing needs are primary objectives. The studio continues be committed to the evolution of space and the role of choice and responsibility.

Lifeform is a winner of the First Step Housing competition; its work was featured in the Pompidou Center , Paris and the Urban Center , NYC. It was awarded a “Jury Selection” for its entry in The High Line Competition. The studio’s work was selected to be among the ‘Best of 2005’ by Archinect.

Founder Rafi Elbaz, graduated from Cooper Union School of Architecture in 1995. He has worked with Peter Eisenman, Raymond Abrahams and Joseph Paul Kleihues where he worked on distinguished and high profile commissions. Rafi Elbaz has exhibited at the Centre Pompidou in Paris, The Urban Center, and The Center for Architecture NYC, Grand Central Station, and other venues. He has done installations at PS1/MoMA in NYC and The Tirana Biennale in Albania . He is an adjunct professor at Pratt Institute, and has been a visiting critic at various universities. Elbaz’s work have been widely covered in the US and international media including New York Times, Domus, Interni, Architects Newspaper, Architecture, H.O.M.E., Metropolis, Surface, and *Wallpaper. He was recently published in a book edited by Architecture for Humanity for his outstanding design for the homeless of New York , and was nominated as a finalist for the Sustainable Leadership Awards of 2006 by the IIDA, AIA and CoreNet Global

Thursday, April 12, 2007

So It Goes

I have never read any of his books, but I knew of his reputation and despite his literary pedigree he displayed a wicked sense of humor when he showed up in Rodney Dangerfield movie. Goodbye Mr. Vonnegut. Perhaps in the near future I will visit the Slaughterhouse Five.

I once had a discussion with this guy I know about the Justice League of America and we began to focus on the Martian Manhunter. Besides being a shape shifter, he was the last of his kind and was always haunted by his loneliness.

Our discussion quickly became ugly when the subject of the Manhunter’s feeling of being an outcast came up when this guy described the Manhunter as the” N-word of the super heroes.” If you don’t know what the N-word means, then look it up in Google because I am not going to explain it to you. And make sure you do it in the privacy of your own home.

I was shocked, not because it was the first time I heard him say that word, but how causally he said it. My immediate reaction was to tell him not use that word. His immediate reaction was to say that the N-word was just a word. Nothing else. And then he tried to maneuver the argument onto me by making personal attacks on my character.

Now, I have had memorable bouts of foot in mouth disease, but I make an effort not to say that word and other racial slurs in public, hell even in private. I am just not comfortable talking like that.

Here’s some background. First of all this gentleman and I are not African-America. We both come from good homes, good communities and went to good schools. I think he is a good guy and he is not a racist in the classical sense (Whatever the hell that means. I mean is there such thing as a classical racist? It is either you are or you aren't?) but I have noticed that he has the tendency to be reckless with his words. Besides that incident, every now and then, he would say something offensive to me, but pass it off as a joke or state that he had the freedom of speech to say what he wanted. I realize now he says these things to provoke a reaction for conflict or humor. But it is hit or miss. He is a masterful debater and I think he should go to law school. But despite his talents he does not have the wherewithal to be a lawyer.

I bring up this story up because of Don Imus. As everyone knows by now, he is officially unemployed due to some derogatory remarks he made about the Rutgers Women’s Basketball team.

I have never been a Don Imus fan because as far as I am concerned there is Howard Stern and white noise. Also I never understood what the hell he was saying with his incomprehensible mumbling. Please understand that I am not judging Imus or Sharpton or race relations.

I just want to talk about the freedom of speech. I am a blogger. And the freedom of speech has given me the right or privilege, to express myself. I will fight for the right of free of speech for anyone. Even people I dislike. Because the right of free speech is for all, not for a select few.

That is why I firmly believe that the sudden end to the career of Don Imus is not an attack on free speech but free speech in action.

Yes. You heard me. MSNBC and CBS firing Imus is an act of free speech. First of all Don Imus can say whatever he wants. He is free to go on any street corner to speak his mind; he can go on a speaking tour and discuss what happened. He has not been imprisoned or physically restrained by anyone or any entity from speaking. The only thing he can’t do at this time is speak on the airwaves. That will probably change with satellite radio.

The removal of Imus was not by the government or some type of oligarchy. He was removed by a growing chorus of people who strongly disapproved of what he said about the Rutgers Women’s basketball team. They did not use violent means to oppress him and as far as I know there were no physical threats. They simply spoke their minds of how they felt and made the general public aware of their outrage. Seeing how that public was upset and realizing that viewers do not watch programs that upset them or buy products that are advertised on programs that are upsetting, they canned Imus.

That is how free speech in America works. Is it perfect? Nope. Has it hurt America at times? I can give a laundry list of incidents of where free speech has gotten America into some major jams including the one on the other side of the world. For better worse, this is our system.

What it all comes down with free speech is that a person has the right to say what is on their mind, however others have a right to respond in kind. That’s the deal. Everyone has the right to say what they want. You don’t like it? Don’t live in America. That is why I am not alarmed in anyway about the Imus development. Because everyone has been put on notice. Even Al Sharpton. In his last broadcast, Imus pointed out thatSharpton owes some apologies to the acquitted Duke lacrosse players. Meredith Viera also threw a couple of shots when she pointed out to Sharpton that the hip hop community is also guilty of displaying misogynistic behavior to African American women yet they are not being held accountable.

As for this gentleman, like I said he is a nice guy but I have to admit it bothers me the way he talks sometimes. Yes. He has the right to speak his mind. But I have the right not to listen. Hey. Another fringe benefit of free speech! He is always welcome to talk to me but only if he learns some manners.

Wednesday, April 11, 2007

Rent vs. Buy

The argument of whether to rent or buy reminds of that Miller Lite campaign which was Tastes Great, Less filling. I remember being bombarded with ads where D List celebrities would debate which was the best way to describe Miller Lite. As an adult, I see this a pointless argument because as long as it gets you drunk, who gives a f**k?

My position on whether to rent or buy is that it depends on who you are. You have to figure out what your own best interests are and what you are financially capable of. For instance, if you pay 500 bucks in a rent controlled apartment, it may not be in your best interest to buy something but instead save your money and putting into some other type of investment vehicle. Or maybe you did the numbers and realized that the rent you are paying now equates a monthly mortgage payment and you are better off buying a place, particularly with the tax benefits.

But I have to admit, the comments on Curbed about Rent vs. Buy are quite entertaining and educational.

According to Urbandigs, this is a great time to be a landlord in Manhattan.

In my opinion, the trend of decreasing rental inventories has been going on since 2005. This is due in part that a lot of people who were priced out, simply decided to re-sign their leases. This put a huge crimp in the real estate food chain because when buyers decided to stay put in their rentals, there were no vacancies for the incoming fresh meat.

I predict that the upcoming rental season will be just as bad as last summer if not worse for people looking for apartments and brokers. From what I know about last summer, it seemed that almost every deal was a co-broke. With the lack of inventory, rental agents were fighting tooth and nail for listings. I have heard that the merger between one rental agency and a famous brokerage (You figure it out.) has brought nothing but aggravation for the rental agents because their rental database is now fully accessible to that other company. In fact it was not uncommon for some managers to have pocket listings that were only known to their own agents.

There were also stories of agents who were willing to be flexible with the fee. All they did was cut their own companies out of the deal and had their clients write the check to them personally. I know of a couple of agents who got busted for this practice, which I do not recommend because it is illegal.

I expect to hear more broker horror stories, more rental client horror stories and more incidents of illegal practices. I think Craig Newmark will be swamped with dealing with more bait and switch artists and if I were him I would put the Craigslist community on notice that the New York City rental season is about to go Defcon 1. In fact I wouldn’t be surprised if Dateline decides to do a segment called “To Catch a Rental agent.”

And if it is a great time to be a landlord in Manhattan, it is also a great time to be a landlord in New York City in general. Because all of those people who can’t afford the rents or the fee will simply bug out and go to the other boroughs for cheaper places to live. I expect parts of Queens will be declared the new Williamsburgs as more young people flood the area.

Those of you who own condos or any type of residential property that can be rented, I strongly advise your investments in proper shape and to determine your condo's rental policy and the proper rent. You are going to have a lot of traffic coming your way.

Buckle up. It is going to be one helluva ride.

Monday, April 09, 2007

Spinola's Way and is that Jonathan Miller in your pocket or you just happy to see me?

One of the things I enjoy about real estate is examining the actions that occur in the industry, whether it is a trend or the actions of a player.

About a year ago, Steve Spinola of REBNY wrote a scathing letter condemning Tom Acitelli's article about the internet’s growing influence in the real estate brokerage industry.

It is funny how things change in a year. Now Spinola is trying to get the members of REBNY to jump on the online bandwagon. Of course, some people just want to ride on their own.

Listing Service Dream in Disarray

Below are some points of interest

After weeks of maneuvering by the board to meet the objections of smaller firms, the two largest brokerage companies in Manhattan, Prudential Douglas Elliman and the Corcoran Group, announced last week that, partly because of the costs involved, they were planning to boycott the new Web site (name and address yet to be determined).
“We are not participating,” said Pamela Liebman, the president and chief executive of Corcoran. “We wish the Real Estate Board good luck.”

Ms. Liebman said that Corcoran’s sister companies — Citi Habitats and the Corcoran Sunshine Marketing Group — will also decline to participate.
Dorothy Herman, the president and chief executive of Prudential Douglas Elliman, said in an interview, “At this point we are not joining, either.”

Listings are gold to brokers. The more listings they have, the more money they make. So why wouldn’t they participate in a system that allows more access to their competitor's listings? Because those listings do not belong to them. And in order for them to get access to those listings, they need to show their exclusives. As far as they are concerned they are the stars of the show, why share the limelight? They can make more money with their own exclusives and limiting co-brokes.

Now you would think that since they already share their listings on R.O.L.E.X, that they wouldn’t care. But you have to understand, the system that Steve Spinola is pushing is one that is accessible to the PUBLIC! This is why Corcoran and Elliman want no part of this. Anything that deals with displaying their listings to the public, is something they want in their control not in the hands of a third party.

Steven Spinola, the president the Real Estate Board of New York, which represents the real estate industry, from major building owners to brokers, said he still hoped that when the final product was ready, the major brokers and smaller competitors would decide to sign on. “It will have the most accurate and comprehensive listings,” he said, “and it will catch on quickly.”

But it is clear that the defection of the two companies, if not reversed, will be a major blow to the site’s claim to comprehensiveness. Together, Corcoran, Prudential and Citi Habitats represent 63 percent of Manhattan listings and of Manhattan brokers among the 10 largest companies, according to figures in an industry survey by The Real Deal, a trade magazine, last May.
The Corcoran Sunshine Group, which markets new buildings, is now representing 30 buildings with about $5 billion worth of apartments and about 100 brokers, according to Ms. Liebman.

Under the proposal, companies are being asked to pay an initial fee based on size, $12,500 for a large company and an additional $100 a year for each agent represented on the site. Corcoran and Elliman, with the most brokers, would pay the largest bill, but they are not sure they will get their money’s worth. Mr. Spinola said he was budgeting about $1 million to market the site.
“I spent a lot of money on my Internet site,” Ms. Herman said. “I have not seen a comprehensive business plan showing how they are going to market it and how they are going to build traffic.”

They already have their own brand recognition and spend a fortune on their own advertising and marketing. For all we know, the parties that have opted out of the listing service are probably having their own research and development team working on an alternative. Eventually the majority of real estate transactions will take place online and these brokerages probably think their time and resources are best spent upon developing their own tools.

Hall F. Willkie, the president of Brown Harris Stevens, said his company and its sister company, Halstead Property, would be participating. He said that the new site would drive traffic to brokers’ Web sites as well.
Frederick W. Peters, the president of Warburg Realty, who is working on Rebny’s Web efforts, said that he believed most smaller firms would also sign up.
But Klara Madlin, who runs a boutique brokerage with 15 agents, said that she would wait. “I’m on the fence on whether it will be any value to me,” she said.

So why would Hall F. Willkie, one of the great scions of Brown Harris Stevens, think of joining forces with REBNY? First of all with the big guns bugging out, REBNY is outmanned and outgunned so he may have cut a deal with Spinola to the advantage of Brown Harris Stevens. But I think the real reason why he has joined forces with REBNY, is that Mr. Willkie, like everyone else, is uncertain about how this listing service will impact his company. And rather then spend the resources of Brown Harris Stevens on their own site, he will simply work with REBNY and observe to see how this goes. If the worst happens and the site is a flop, he will be able to pull out but not without learning what mistakes REBNY made with their site.

To quote the Godfather

"Keep your friends close, but your enemies closer" - - Michael Coreleone

If you want to know how a master appraiser works, read this article on Jonathan Miller.

You know Jonathan Miller is a badass, because he is also in the trenches with the best of them.

Friday, April 06, 2007

Roll Call: Easter and Passover Edition

Greetings folks, Here’s the roll call.

I saw this on the Today show this week about how Craigslist was used as a weapon delivery system when a woman’s house was pretty much gut renovated because of someone put a fake craigslist ad announcing that everything in the house was free for the taking.

Marshall Mcluhan
would argue that the medium is in the message but I say if whether it is through email television, or radio, when someone says the word free, common

Ali Rogers discovers how through the power of loss her sponsoring brokers is able to pump some adrenaline into her business with her entry The big chair

And Zillow made an important announcement about their site regarding features that will further extend their goals in world domination.

Zillow.comTM Launches Home Q&A
“Ask Questions, Share Answers”at the heart of numerous new features harnessing knowledge of agents, homeowners and neighbors

Seattle – April 4, 2007—Real estate Web site today announced the launch of Zillow™ Home Q&A, among other new features aimed at further opening the site up to community contributions. Home Q&A is the ability for anyone to ask questions and share information and insight about more than 70 million U.S. homes.

“The release of Zillow Home Q&A enables anyone to ask any question about any house for the Zillow community to answer,” said Rich Barton, Zillow CEO. “This is the next step in our quest to help make everyone smarter about real estate. A quest that began with publishing ZestimateTM values last year as a starting point to answer the critical question, ‘How much is this home worth?’ Since then, we have enabled homeowners and agents to update home facts, post homes for sale, and set their Make Me MoveTM prices. Over half a million people have made these contributions so far, and we’ve only begun to scratch the surface in helping people get answers to critical real estate questions.”

Visitors to can now “ask a question” or “answer a question” about millions of homes, right on that home’s Zillow Web page. Anyone can rate answers as “helpful” or “not helpful,” and each contribution links back to a user’s profile page – telling visitors, for example, if the question was answered by a local agent or other real estate professional, or if the contributor frequently answers questions within the Zillow community.

“Today, some of the most colorful and important information about homes and real estate is trapped inside the heads of local experts – agents, homeowners and neighbors,” said Lloyd Frink , Zillow president. “By allowing people to freely ask questions and share information online about homes, we hope to unlock, for the community as a whole, a powerful vault of data – such as an agent sharing insight into a neighborhood, or a potential buyer asking the shortest commute route downtown.”

In addition to Home Q&A, other new features announced today include:
- Anyone – agent, homeowner, buyer – can create free profile pages with photos, narratives or contact information. All site contribution links back to the user’s profile page.
- Anyone can now indicate whether a home is for sale and at what price. Prominent space on the page is reserved for homeowners and listing agents who might subsequently enter information on that home.
- Anyone can now add an unlimited number of photos to any home’s Web page – for example, historical photos of homes, before-and-after shots, or neighborhood photos.
- Additionally, today marks the launch of Zillow EZ Ads, a self-service, low-cost and geographically-targeted way for agents, other professionals and home sellers to buy ads on Zillow map pages for specific ZIP code searches. The ads take a few minutes to create and can be bought easily with a credit card. EZ Ads can link to profile pages, homes for sale on Zillow or outside Web sites.

More than 150,000 real estate agents currently visit each month; these professionals have some of the most useful knowledge to share with the Zillow community. With many of these new features, Zillow is now providing a free platform for these professionals to answer questions and contribute to conversations, interacting with the millions of buyers and sellers who visit site. All contributions – whether Q&A, a wiki edit to the Real Estate Guide, home posted for sale or EZ Ad – can link back to a professional’s Zillow profile page.

In addition to community ratings of answers, any content on can be flagged for review by Zillow’s customer service team. Contributions deemed not constructive or off-topic will be removed.

One of the most-visited U.S. real estate sites on the Web, Zillow attracted more than four million unique visitors in February 2007, just one year after the site’s launch. Nearly 90 percent of Zillow visitors own a home, and half (54 percent) plan to buy or sell in next two years. Zillow’s growing database has data and Zestimate values on more than 70 million U.S. homes. Other community features previously launched include the ability for homeowners to update and edit information on their home, and post an owner’s estimate. Since this feature launched in fall 2006, more than 600,000 homeowners have updated their home information.

For more information and commentary from the Zillow team, or to ask a question about the new features, visit the Zillow Blog at

Broadcast media: for free broadcast-standard b-roll, visit to preview and request video, either digitally or by tape.

About is an online real estate community where homeowners, buyers, sellers, and real estate agents and professionals can find and share vital information about homes, for free. Launched in early 2006 with Zestimate values and data on millions of U.S. homes, Zillow has since “opened up” the site to community input, data and dialogue, including Home Q&A. Zillow’s goal is to help people become smarter about real estate – what homes are worth, what’s for sale, and what local experts have to say about real estate and individual homes. One of the most-visited real estate Web sites, Zillow was the only online company named by Advertising Age magazine to its 2006 “Marketing 50” list of the most powerful consumer brands. Zillow is headquartered in Seattle and has raised $57 million in funding., Zillow, Zestimate and Make Me Move are trademarks of Zillow, Inc.

History will remember this man as a hero of the Japanese people.

Professor Yoshimi is man with a lot of guts to take on not only his own government but the denial of his own nation. Even if his fellow citizens dislike him now, future generations of Japanese will revere as the man who brought about the Japanese government to make amends for past atrocities committed against the innocent.

He will also be remembered as the man who tempered any of China’s motivation from turning the entire nation of Japan into a parking lot.

Here's the article.

March 31, 2007
In Japan, a Historian Stands by Proof of Wartime Sex Slavery
IT was about 15 years ago, recalled Yoshiaki Yoshimi, a mild-mannered historian, when he grew fed up with the Japanese government’s denials that the military had set up and run brothels throughout Asia during World War II.
Instead of firing off a letter to a newspaper, though, Mr. Yoshimi went to the Defense Agency’s library and combed through official documents from the 1930s. In just two days, he found a rare trove that uncovered the military’s direct role in managing the brothels, including documents that carried the personal seals of high-ranking Imperial Army officers.
Faced with this smoking gun, a red-faced Japanese government immediately dropped its long-standing claim that only private businessmen had operated the brothels. A year later, in 1993, it acknowledged in a statement that the Japanese state itself had been responsible. In time, all government-approved junior high school textbooks carried passages on the history of Japan’s military sex slaves, known euphemistically as comfort women.
“Back then, I was optimistic that this would effectively settle the issue,” Mr. Yoshimi said. “But there was a fierce backlash.”
The backlash came from young nationalist politicians led by Shinzo Abe, an obscure lawmaker at the time in the long-ruling Liberal Democratic Party, who lobbied to rescind the 1993 admission of state responsibility. Their goal finally seemed close at hand after Mr. Abe became prime minister last September.
Mr. Abe said he would adhere to the 1993 statement, but he also undercut it by asserting that there was no evidence showing the military’s role in forcing women into sexual slavery. His comments incited outrage in Asia and the United States, where the House of Representatives is considering a nonbinding resolution that would call on Japan to admit unequivocally its history of sexual slavery and to apologize for it.
To Mr. Yoshimi, Mr. Abe’s denial sounded familiar. Until Mr. Yoshimi came along 15 years ago, the government had always maintained that there were no official documents to prove the military’s role in establishing the brothels. Mr. Abe was now saying there were no official documents to prove that the military forcibly procured the women — thereby discounting other evidence, including the testimony of former sex slaves.
“The fact is, if you can’t use anything except official documents, history itself is impossible to elucidate,” said Mr. Yoshimi, a history professor at Chuo University here.
The emphasis on official documents, according to Mr. Yoshimi and other historians, has long been part of the government’s strategy to control wartime history. In the two weeks between Japan’s surrender on Aug. 15, 1945, and the arrival of American occupation forces, wartime leaders fearing postwar trials incinerated so many potentially incriminating documents that the Tokyo sky was said to be black with smoke. Even today, Japan refuses to release documents that historians believe have survived and would shed light on Japan’s wartime history.
Although Mr. Yoshimi found official documents showing the military’s role in establishing brothels, he is not optimistic about unearthing documents about the military’s abduction of women.
“There are things that are never written in official documents,” he said. “That they were forcibly recruited — that’s the kind of thing that would have never been written in the first place.”
John W. Dower, a historian of Japan at the Massachusetts Institute of Technology, said Mr. Yoshimi’s “extremely impressive” work has “clarified the historical record in ways that people like Prime Minister Abe and those who support him refuse to acknowledge.”
MR. YOSHIMI grew up in Yamaguchi Prefecture in western Japan, in a household with fresh memories of the war. He traces his interest in history to a junior high school lecture on the nation’s American-written, pacifist Constitution and its guarantee of human rights. He was impressed that the Constitution “even had something to say about a kid like me in the countryside.”
After completing his studies at the University of Tokyo, Mr. Yoshimi concentrated on Japan’s postwar democratization. It was while searching for documents related to Japan’s wartime use of poison gas in the Defense Agency’s library that he first stumbled upon proof of the military’s role in sexual slavery.
Mr. Yoshimi copied the document but did not publicize his finding. At the time, no former sex slave had gone public about her experiences, and awareness of wartime sex crimes against women was low.
But in late 1991, former sex slaves in South Korea became the first to break their silence. When the Japanese government responded with denials, Mr. Yoshimi went back to the Defense Agency.
Of the half-dozen documents he discovered, the most damning was a notice written on March 4, 1938, by the adjutant to the chiefs of staff of the North China Area Army and Central China Expeditionary Force. Titled “Concerning the Recruitment of Women for Military Comfort Stations,” the notice said that “armies in the field will control the recruiting of women,” and that “this task will be performed in close cooperation with the military police or local police force of the area.”
In another document from July 1938, Naosaburo Okabe, chief of staff of the North China Area Army, wrote that rapes of local women by Japanese soldiers had deepened anti-Japanese sentiments and that setting up “facilities for sexual comfort as quickly as possible is of great importance.” Yet another, an April 1939 report by the headquarters of the 21st Army in Guangzhou, China, noted that the 21st Army directly supervised 850 women.
Mr. Yoshimi went public by telling Asahi Shimbun, a national daily newspaper. The attention led to years of harassment from the right wing, he said, including nightly phone calls.
These documents had survived because they had been moved 25 miles west of central Tokyo before the end of the war, Mr. Yoshimi said. The postwar American occupation forces had then confiscated the documents, eventually returning them to Japan in the 1950s.
DESPITE the government’s efforts to hide the past, Mr. Yoshimi succeeded in painting a detailed picture of Japan’s wartime sexual slavery: a system of military-run brothels that emerged in 1932 after Japan’s invasion of Manchuria, then grew with full-scale war against China in 1937 and expanded into most of Asia in the 1940s.
Between 50,000 and 200,000 women from Japan, Korea, Taiwan, China, the Philippines, Indonesia and elsewhere were tricked or coerced into sexual slavery, Mr. Yoshimi said. Thousands from Korea and Taiwan, Japanese colonies at the time, were dispatched aboard naval vessels to serve Japanese soldiers in battlefields elsewhere in Asia. Unlike other militaries that have used wartime brothels, the Japanese military was the “main actor,” Mr. Yoshimi said.
“The Japanese military itself newly built this system, took the initiative to create this system, maintained it and expanded it, and violated human rights as a result,” he said. “That’s a critical difference.”
Mr. Yoshimi said he was unsurprised by the most recent moves to deny the wartime sex slavery. He said they were simply the culmination of a long campaign by nationalist politicians who have succeeded in casting doubt, in Japan, on what is accepted as historical fact elsewhere.
In 1997, all seven government-approved junior high school textbooks contained passages about the former sex slaves. Now, as a result of the nationalists’ campaign, only two out of eight do.
“Mr. Abe and his allies led that campaign,” Mr. Yoshimi said, “and now they occupy the center of political power.”

Wednesday, April 04, 2007

A tale of two markets

On Tuesday the market jumped from joy from new housing data.

NEW YORK (AP) -- Stocks surged Tuesday on signs of resilience in the housing market and the U.S. consumer, with falling oil prices giving investors an extra reason to rally. The Dow Jones industrials gained more than 120 points to reach a five-week high.
The National Association of Realtors' index for pending sales of existing homes rose in February at a seasonally adjusted annual rate of 0.7 percent. The index is well below where it was a year ago but stronger than investors expected, reassuring them that the housing sector, while weak, is not being pummeled by the struggling subprime mortgage sector.

Fears that lending problems will spill over into the rest of the economy have been a major factor behind the market's volatility of the past several weeks. The uptick in home sales was slight but came as a pleasant surprise to investors who had been bracing for the worst.

"That says people are getting mortgages, people are buying houses, people have incomes, jobs, all that good stuff," said Kim Caughey, equity research analyst at Fort Pitt Capital Group. "You'd never go out and buy a house if you think you're going to get laid off. Consumers are optimistic about the future, and as we all know, the consumer drives this economy."

As I was perusing the real estate news sites, I came across this report from Inman News.

An index that tracks pending home sales dropped 8.5 percent in February compared to the same month last year and rose 0.7 percent since January, the National Association of Realtors reported today.

The Pending Home Sales Index
, which is based on signed contracts for sale transactions that have not yet closed, reached 109.3 in February. An index of 100 is equal to the average level of contract activity in 2001, which was the first year to be examined and the first of five consecutive record years for existing-home sales, the association noted.

Regionally, the index fell 9.7 percent in the Midwest, 8.2 percent in the West and Northeast, and 8 percent in the South in February compared to February 2006.

David Lereah, NAR's chief economist, said in a statement that "unusually bad weather in February" may be a factor in the index. Also, he said, "We also may be seeing some fallout from a decline in subprime lending. Problems in the subprime mortgage market will become more apparent over time, and they will modestly depress the overall level of improvement in existing-home sales we expect as the year progresses."

The index is based on a national sample that typically represents about 20 percent of transactions for existing-home sales. In developing the model for the index, the association demonstrated that the level of monthly sales-contract activity from 2001-04 parallels the level of closed existing-home sales in the following two months.

Confused? As was I until I walked over to The Big Picture which gives the rundown on why Wall Street may have prematurely popped their wad on this news.

Let's put aside for the moment the source of the data -- the National Association of Realtors (NAR) -- and delve into the data itself:

The Pending Home Sales Index, based on contracts signed in February, stood at 109.3 – down 8.5 percent from February 2006 when it reached 119.4, but is 0.7 percent higher than a downwardly revised reading of 108.5 in January. Earlier, mild weather caused the index to spike at 113.3 in December."

So from January to February, real estate contract signings to buy existing homes appear to have increased 0.7%. This is measured by the NAR’s "index of signed purchase agreements." Year-over-year, the contract signings dropped 8.5%, hardly an encouraging data point, but that small fact didn't seem to slow down the woefully misinformed pundits one bit. The monthly data was an improvement from January, which suffered a month-to-month drop of 4.2%.

So what does this small monthly gain mean? Let's go to the NAR release:

"An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales. There is a closer relationship between annual changes in the index and actual market performance than with month-to-month comparisons. As the relatively new index matures and seasonal adjustment factors are refined, the month-to-month comparisons will become more meaningful over time." (emphasis added)

Bloomberg notes that “The existing-home sales report is based on a sample of about 40 percent of transactions in the multiple listing service used by real estate agents, while the pending-sales index [the one we are presently discussing] covers about 20 percent.” That's right -- this 0.7% monthly gain is extrapolated from one out of five contracts. And as the NAR notes themselves, the year-over-year changes is much closer to reality than the month-to-month measure.

So back to our punditry: What does this data -- a major negative, according to its source -- have to do with yesterday's rally?

Most likely nothing.

The inimitable Bill King points out that if any of the T-Heads bothered checking the overnight futures activity, they would have seen very clearly that the markets were being bought up way prior to the 10 am news release:

"A cursory look at a SPM chart reveals that the rally started just before Europe opened in the
wee hours of Tuesday. Yes, that is the window when people tend to commence gaming of the SPMs.

The second wave of the rally commenced about 7AM ET. The third wave of the rally started just before the 10AM ET release of the Pending Home Sales number."

The following chart is courtesy of King, who points out all the fun was had long before the 10 am release

Bill adds:

"After the early rally, stocks traded sideways, amid excruciating ennui, for the balance of the session.

The rally, due to lack of later follow through and vigor, appears to be the handiwork of someone, or more, that exploited this week’s high absenteeism and lack of enthusiasm.

Ain’t high finance grand?"

At this stage of the game it appears that Wall Street will take any positive development, no matter how minor, as an opportunity to create momentum. But will it be enough?

Monday, April 02, 2007

Roll Call: The open up a can of whoop ass edition

Well, Trump won at Wrestlemania 23.

Of course Stone Cold Steve Austin demanded payment for Trump giving Vince that haircut. I am sure Rosie was creaming in her jeans when she saw that.

This morning Roseanne Colletti did a segment on the how the mortgage/foreclosure crisis was affecting Mahattan. It pretty much covers the same ground as the New York Times article. What I found interesting was when Roseanne Colletti mentioned Bear Stearns had formed a strike force to deal with the foreclosure crisis by reaching out to owners of distressed properties and helping them hold onto their homes.

Here's the rundown from Bloomberg.

EMC Mortgage Corp., the Bear Stearns subsidiary that specializes in buying and servicing troubled mortgages, formed the 50-member squad to meet with homeowners having difficulty making their payments, the New York-based securities firm said in a statement today.

Defaults on U.S. subprime mortgages -- loans made to borrowers with poor credit ratings or high debt burdens -- rose to a four-year high in the fourth quarter. Mortgage servicing companies are trying to arrange alternative payment plans to minimize foreclosures and losses to investors who buy bonds backed by the loans, Standard & Poor's said last month.

EMC's loan-modification team, dubbed the ``Mod Squad,'' will hold workshops in cities with the highest number of at-risk borrowers to educate them about their choices and explore restructuring of their loans, Bear Stearns said. The team will start a six-city tour in Dallas on May 4.

This is actually a brilliant move on Bear Stearns part. Image wise, it presents them as a company that is taking action in ensuring the well being of the people who are taking the brunt of this foreclosure tsunami. It also sends a message to their peers that everyone needs to knuckle down and do their part to prevent any worsening of the situation.

More importantly these workshops also serve as a preemptive strike in dealing with the upcoming storm of foreclosures.

Wall Street banks don't want to foreclose on properties because we're not in the real-estate business,'' Tom Marano, head of Bear Stearns's mortgage business, said in an interview. ``What EMC is trying to do is modify people's loan payments if they are delinquent but want to stay in their house.''

The last thing this industry wants is to play landlord. As financial institutions, they do not have the infrastructure to properly maintain and sell these properties. It would require them to outsource it to specialist like brokers and property managers, costing them time and money. By helping these people hold onto their homes, they are placing the capital outlays onto another party.

However there appears to be a contrast with the approach that Bear Stearns is taking in dealing with foreclosures and their perspective on the sub prime crisis. If you type in Bear Stearns and sub prime in Yahoo news. You get this list of articles.

According to one of the articles, Bear Stearns takes the position that the sub prime crisis will not spread.

Trivia: Did you know that Bear Stearns played a key role in bringing the WWE public?

And what is probably a real big surprise to absolutely no one is that New Century Financial Corp, one of the biggest sub prime lenders has declared bankruptcy.

Sunday, April 01, 2007

What about Manhattan? Part 3: April Fool's

You're asking for it Grunt!

I am just as surprised as you all are that I am still writing about this myself since I have already done two entries which include What about Manhattan? part 1 and part 2. But when this article came up, well, I couldn’t pass it up. Just bear with me with my commentary on this article and I promise you there will a nice treat at the end of this entry.

The Battle for a Mortgage

AS homeowners across the country have dealt with the declining values of their houses and their ballooning mortgage payments, most New Yorkers seem to believe that the market here doesn’t play by the same rules.

But in recent weeks, a growing number of New Yorkers, often with six-figure salaries and reasonably good credit, have begun to find that mortgages are harder to get as lenders try to stem losses from loans to the weakest, or subprime, borrowers.
While mortgage brokers insist that most buyers in New York can still close deals, they also warn that people with any red flags on their mortgage applications will face delays and will pay higher fees. Potential problems include low credit scores or high credit-card balances or listing a suspiciously high salary for a given job.
“You’re going to pay the piper for any little mistake,” said Melissa Cohn, the president of Manhattan Mortgage Inc. She said her brokers — who last year arranged more than $3 billion in mortgages, mainly in New York City — were spending twice as much time on each application as they did a month ago because of new lending requirements, and she expects the situation only to get worse.

There appears to be some type of consequence from the sub prime meltdown. It appears that Manhattan is not as invulnerable as everyone thought.

“The impact is going to be much greater as banks demand that people have clean credit to get the best mortgages,” she said.
Buyers like Lee and Kimberly Au had to adjust their expectations. The Aus wanted to buy a one- or two-bedroom condominium costing $800,000 to $1.25 million at the Atelier on West 42nd Street, now that their 8-year-old son has a modeling contract in New York. But they quickly learned that they could no longer get 100 percent financing, even though Dr. Au makes more than $700,000 a year as a surgeon in Hawaii. So the couple settled on a $625,000 studio and used $62,500 in savings for the down payment.
Eric Eisenberg, the mortgage broker handling the deal, said that even though the Aus put up more cash, the transaction was far more difficult to close than it once would have been.
“About three weeks ago, I would have gotten this done by snapping my fingers,” said Mr. Eisenberg, who is the executive vice president of the EFI Capital Corporation, a mortgage brokerage based in Garden City, N.Y. “Now it’s a very lengthy and time-consuming process where every bit of paperwork has to be done to the T. The guidelines are literally changing every hour.”

Dr. Au is a surgeon in Hawaii. Do you know how rich you have to be to live in Hawaii? Yet even the lenders weren’t impressed with his qualifications.

Until recently, many New Yorkers found it fairly easy to get mortgages. Then banks that made loans to subprime borrowers started running into trouble when the borrowers found it impossible to pay their mortgages and fell into foreclosure. As a result, banks have cut back on all types of loans.

Nationally, indicators show that the real estate market is in turmoil. A report issued on March 23 by the National Association of Realtors said that existing home sales in February 2007 jumped 3.9 percent from the month before but were 3.6 percent lower than the same month the year before. A report issued on March 26 by the Commerce Department said that new home sales in February dropped by 18.3 percent from the year before, to a seven-year low.

In any case, lenders who are experiencing an increase in foreclosures are tightening standards on mortgages across the board.
“Lenders are going to scrutinize borrowers more carefully” in the next six to nine months, said Doug Duncan, the chief economist at the Mortgage Bankers Association in Washington. He added, “The pendulum is probably going to swing too far in the other direction before it settles.”
That means more New Yorkers are already having to provide more documents to get approvals for all types of mortgages. For example, some brokers who used to get loans approved by lenders without proof of assets from divorces now require the actual decrees. Other mortgage lenders are requiring W-2 forms or pay stubs that they didn’t ask for before.

In other words, lenders are requiring a full body cavity search on the finances of the borrowers.

Credit scores typically measure a number of factors, from how promptly borrowers pay their bills to how much credit-card debt they have. The rankings range from 300 to 850. David Strause, a private mortgage banker with Countrywide Financial in New York, said that prime borrowers who can negotiate the best rates typically have scores of 700 or more. Borrowers in the “Alt-A” category have mid-tier credit levels, with scores between 620 and 680. Subprime borrowers have scores below 620.
Ms. Cohn of Manhattan Mortgage said that six months ago she could negotiate mortgages at good rates for borrowers with credit scores of more than 660. That score now has shifted to 700 “to open any doors,” she said.

In many cases, economists say, borrowers are going to be treated like subprime and Alt-A borrowers for what would seem to be fairly common mistakes, like not paying a few bills on time or carrying a lot of debt.

They do not want to take any more chances. The party is over and a lot of people are discovered to be deadbeats now that the check is due.

“One of the myths is that subprime is a province of the poor,” said Mr. Duncan of the Mortgage Bankers Association. “Subprime is a province of people who don’t manage credit well,” regardless of their incomes.

Tom Acitelli has presented a very strong case that there is no sub prime presence in Manhattan but not to be a wet blanket, I still would not be surprised to see a sub prime presence pop up in Manhattan. Remember these words.

“Subprime is a province of people who don’t manage credit well,” regardless of their incomes.

When I first started out doing rentals, I had a client who I thought was a slam dunk. She was an executive at a well known company and had a great salary. I found a place she loved and we put the application in.

The next day the management company called and told me to keep her the hell away from their buildings. It turned out her credit was beyond atrocious. From this experience I learned that you don’t have to be poor to have bad credit. There are plenty of rich people who can’t qualify to get a cell phone without a co-signer.

The Aus recently found that their credit scores had slipped into these lower categories. Dr. Au, who has four surgical offices in Hawaii, saw his score dip to a subprime level after he and a relative invested in a project, which Ms. Au would not discuss. She said the relative had missed some payments.

See what I mean?

Corey Miller, a technical designer of men’s and women’s outerwear who makes about $140,000, counting his salary and rental income, bought a three-family house in 2005 in Crown Heights, Brooklyn, with a friend for $525,000.

At the time, he and his friend were able to get 100 percent financing for the property because Mr. Miller had a credit score of more than 720. After spending nearly $50,000 on renovations — new floors, kitchens and cabinets — he signed leases on his two apartments that brought in about $3,000 in monthly income. He and his friend live in the third unit. He then had the property reappraised and found out that its value had risen to $750,000.

But the $25,000 he charged to five credit cards for the renovation work lowered his credit score to 690, and his prospects for refinancing were diminished. When he tried to refinance the building, applying for a 30-year mortgage for $550,000 at an interest rate of 6.25 percent, his application was rejected.
His broker, Joe Levy, the president of Middlegate Mortgage in Manhattan, said that Mr. Miller had too much debt on his credit cards and because his was a three-family property, he was applying for an unconventional mortgage.

So Mr. Miller, who recently received a large tax refund, paid down his credit-card balance to about $15,000. Now he carries a lower ratio of overall debt to available credit. He plans to reapply for a new mortgage when his credit score is updated this month.
“We’re playing the waiting game until April 15,” he said. “Then we’re going to resubmit.”

As soon as I read the words “But the $25,000 he charged to five credit cards for the renovation work..” I realized this guy was in for some turbulence. Limit your credit cards to the essentials, folks. Credit card debt is not tax deductible and it should never be considered on the same level as cash. Will Mr. Miller be able to get out of this? Maybe, maybe not, it depends on how far the lenders will look back on his financial history.

Last April, Dan Simonette, a labor and employment lawyer, took out a $200,000 second mortgage on his home in Prospect Heights. He wanted to renovate the first floor to make it accessible for his 75-year-old mother, Noreen, who is blind.
His credit score had dipped to about 500 because of bills incurred in a divorce and the cost of hiring a home attendant for his mother. At the time, Mr. Simonette, who makes more than $100,000 a year, got a second mortgage with an 11.75 percent interest rate from the Emigrant Savings Bank.

By December, he had improved his credit score slightly and tried to refinance at more than a dozen banks. Early last month, he finally was able to get a 6.8 percent interest rate with Fremont General, a subprime lender based in Santa Monica, Calif. But the day the loan was supposed to close, Fremont said it was selling its subprime business. Mr. Simonette’s mortgage ended up being one of the last loans that Fremont executives approved.

He said that based on his experience, borrowers can expect the application process to take more time than normal. “It was harder to get answers,” he said. “It was harder to get a return call.”

This guy is a lawyer. A f**king lawyer. A lawyer never goes hungry in Manhattan because they are always needed. And even he is having trouble getting financing.

Remember this quote from Tom’s article?
In short, in Manhattan, sub prime mortgages aren’t common because they can’t be common. The system’s evolved to one favoring those with good credit or a lot of liquid money.

In my last entry, I stated that having either good credit or lots of liquidity may not be enough with the changing state of the Manhattan market. Below is an example of that condition becoming a reality.

Since Labor Day, Ellen Kapit, an agent with Sotheby’s International Realty in Manhattan, has been trying to sell her two-bedroom co-op in Midtown for $1.375 million so that she can buy a smaller apartment in her building. She has also been trying to sell a house she owns in Southampton for $875,000.
She found a $995,000 house in Sag Harbor that she thought might be easier to rent out when she wasn’t in residence. She wanted to get a 90 percent mortgage until she sold her apartment or the Southampton house, or both. She didn’t expect any difficulties, because she has an excellent credit score in the mid-700s and annual income of more than $100,000 a year.

Her mortgage broker, Lenny Holler, a senior loan officer at Preferred Empire Mortgage in Manhattan, suggested that she take out a “cross-collateralized loan,” which means that it would include both Hamptons houses and that the lender could foreclose on both if there were any problems.

But the lenders wanted to charge more than they would have even a few months ago. Ms. Kapit was to pay about 7.5 percent in interest on the mortgage for the new house and 10.25 percent on a $500,000 bridge loan, plus two percentage points as a closing fee. The points translate to $10,000, meaning her closing costs would total of $29,000.
Ms. Kapit finally backed out of the deal for the Sag Harbor house until she sells her apartment or her Southampton house.
“Maybe at that time I won’t need to borrow as much,” she said.

Ladies and Gentlemen, I would like to introduce you to the Punisher.

It is already too expensive to buy in Manhattan as it is but when you dump this aggravation on top of the process, then there will be some buyers who may feel they are being needlessly being penalized for the mistakes of others. They might act like Ms. Kapit and simply withdraw till the next cycle starts. And if this movement begins to snowball, well, we know the end of that movie.

What is ironic to me is that it was always assumed that rising interest rates would be the Punisher of the real estate market. But it appears now that it is the mortgage industry itself that is creating this dramatic shift in the financial climate.

Those of you who still think I am off target, I recommend you read Jonathan Miller’s blog. He has two great entries on sub prime mortgages and the effect it is having on the market. He was actually the first person I heard that stated the consequences the sub prime crisis was going to have on the rest of the mortgage industry.

Subprime Locations: No One Is Safe

Required Reading: Primer on Subprime - Its About Credit Tightening And Fed Cuts

I know it is rather depressing. But hopefully this picture of the Knicks Dancer will assuage your worries. Look at the beautiful dancing girls.