Recently, there has been a surge in high-end and luxury property flipping nationwide.
Beginning in 2011, flips of homes valued at $1 million or more have risen nearly 40% across the U.S., according to RealtyTrac.
Between 2011 and 2012, high-end flipping soared 456 percent in Phoenix (150 properties from 27); 867 percent in Orlando (29 homes from 3); and to 73 properties from 10 in Las Vegas.
A new version of a rule requiring lenders to keep a stake in risky mortgages that they securitize will be proposed by U.S. regulators in the last week of August, according to two people familiar with the matter.
The 500-page draft regulation written by a panel of six agencies will replace a more stringent proposal for the Qualified Residential Mortgage rule, said the people, who asked not to be identified because the plan isn’t public. The first version drew protests from housing industry participants and consumer groups when it was released in 2011.
The plan will require banks to retain a slice of mortgages when borrowers are spending more than 43 percent of their monthly income on all of their debt. The earlier version would have required banks to keep a stake in loans when borrowers were spending more than 36 percent of their income on all loan payments and in loans with a down payment of less than 20 percent. The rule will carve out mortgages backed by Fannie Maeand Freddie Mac, one of the people said.
The agencies will seek public comment before each holds a vote on the final rule. The agencies involved in the rulemaking are the Federal Reserve, Federal Deposit Insurance Corp., Department of Housing and Urban Development, Federal Housing Finance Agency, Office of the Comptroller of the Currency, and Securities and Exchange Commission.
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| Mt Kisco NY Real Estate Report | RobReportBlog | |
| 2013 | 6 months ending 8/8 | 2012 |
| 41 | Sales | 47 |
| $760,000.00 | median sold price | $503,500.00 |
| $395,000.00 | low sold price | $275,000.00 |
| $3,950,000.00 | high sold price | $2,875,000.00 |
| 3074 | average size | 2694 |
| $277.00 | ave. price per foot | $254.00 |
| 193 | ave days on market | 204 |
| $848,469.00 | average sold price | $694,371.00 |
| 95.88% | ave sold to ask | 94.80% |
When Louis Birdman and Gregg Covin decided to build a luxury condo tower on Miami’s Biscayne Boulevard, the developers won approval for a 750-unit tower rising 60 stories. They enlisted internationally acclaimed architect Zaha Hadid – it will be her first skyscraper in the Western Hemisphere — to design a $300 million concrete tower that will rise over Biscayne Bay.
But rather than carve out hundreds of studios and one-bedroom apartments, the Miami-based developers decided to try something less conventional: offer massive luxury spreads with enough square footage to rival standalone mansions. The resulting One Thousand Museum Tower plan consists of a mere 83 units spanning the full 60 stories.
“We are a very limited-edition building,” says Birdman of the project, which will break ground once a round of financing is complete. “We are not a small building, but we are small in terms of the number of units.”
One Thousand Museum Tower’s smallest units, half-floor apartments encompassing 4,600 square feet, start at around $4.9 million. Full-floor units will run up to $15 million and a duplex penthouse spreading across 11,000 square feet will likely have an asking price of $30 million. Units will have private balconies, 10- to 20-foot-high ceilings, floor-to-ceiling windows and access to swanky building amenities like a rooftop helicopter pad, a spa, indoor and outdoor pools, valet parking and “security” concierges.
Multifamily construction has roared back to life across the U.S. But rather than build low- to mid-range housing for the lion’s share of the population, more developers are going boutique, rolling out ultra high-end condo buildings with extra spacious, amenity-laden units promising a high degree of exclusivity.
Call them “limited edition” residences. Developers like Birdman and Covin are targeting this niche market because it translates into significantly more money for their efforts. “It’s a trend we saw in the marketplace of downtown Miami,” explains Birdman. “Units over 3,000 square feet are bringing a premium of almost double [the price per square foot] over average-sized units of 1,100 square feet.”
Other developers in the Miami area have caught on. Boutique hotelier Ian Schrager is peddling The Residences at the Miami Beach Edition, a luxury hotel-condo hybrid in Miami Beach comprised of 26 “limited-edition” condos scattered across the top floors of the existing hotel and in a new neighboring tower. The residences, set to be unveiled next year, are designed by architect John Pawson and will boast “outdoor rooms” stocked with private pools, dining areas and pergolas.
Seven weeks after the sales office opened in January, more than half of the 26 condos – which had been priced 200% higher than the local market — had reportedly already found buyers, for an average of more than $3,000 per square foot. In March two side-by-side Edition penthouses totaling more than 16,000 square feet (including 9,843 square feet of interior space) went for $34 million in South Florida’s most expensive condo deal to date.
Luxury Housing’s Latest Trend: ‘Limited-Edition’ Residences – Forbes.
As YouTube’s former director of product, Hunter Walk can explain how cat videos and other “viral” content are changing the world.
For real estate professionals, the implications are deeper than the phenomenon of viral videos. The rapid increase in the spread of information and feelings of connectedness engendered by social media are changing the nature of citizenship itself.
Walk knows his stuff, having joined Google in 2003 where he also managed product and sales efforts for the search giant’s contextual advertising business. He was also a founding member of the product and marketing team at Linden Lab, the creators of online virtual world Second Life.
Hunter Walk, YouTube’s former director of product, talks about “How Cat Videos Are Changing the World: Global Media & Global Citizenship.” (18:38).
– See more at: http://www.inman.com/2013/07/22/how-cat-videos-are-changing-the-world-video/#sthash.PKAUmhXy.dpuf
“Zorba, have you ever been married?”
“Am I not a man?” Zorba says. “Of course I’ve been married. Wife, house, kids, everything — the full catastrophe!”
Zorba wasn’t saying marriage or having children was a nightmare. He was reflecting on life, with its sadness, tragedies, trials and tribulations.
When I read the news about NAR and realtor.com amending their marriage agreement, Zorba came to mind.
From a business angle, the history of realtor.com fits the bill of the “full catastrophe.” It’s a narrative of fear, boldness, criminality, insider dealing, greed, success and secrets — and in this case a troubled marriage.
Lately, revisionist history abounds about this epic real estate insider story.
Home prices in the U.S. rose 12.2% year over year in May 2013 according to CoreLogic (www.corelogic.com), which provides data on the real estate markets, and they were up 2.6% from April to May. Home prices rose in all but two states in May.
At the same time that home prices are soaring, interest rates are on the rise, with the average 30-year fixed rate mortgage currently now well over 4%, according to Bankrate.com (www.bankrate.com/mortgage)
Given these trends, some homeowners may think that it is too late to take action to save money on some of the largest home-related expenses. That is not necessarily so. In fact, even with home prices and interest rates up, there are still plenty of money-saving opportunities that could save homeowners hundreds or even thousands of dollars.
Refinance
It is not too late to refinance a mortgage. Sure, mortgage rates have risen somewhat, but they remain low historically. Depending on a homeowner’s situation, there are several possibilities to lower monthly payments by refinancing. For example, refinancing might make sense for:
A homeowner who expects to be in his home indefinitely and who still has a mortgage with an interest rate well above what is available in today’s market. Although a rule of thumb once was that for a refinance to make financial sense, it needed to result in at least a one percentage point reduction in the mortgage rate, in fact, depending on the upfront cost of the refinance, the reduction in monthly payment, and how long the homeowner expects to own the home, even a lesser reduction could be a big money-saver over time.
A homeowner who doesn’t expect to own his home more than five to seven years and can lower his rate by refinancing to a five-year or seven-year adjustable rate mortgage (ARM).
A homeowner who believes that interest rates are likely to continue to go up and, therefore, who wants to refinance an ARM to a fixed rate loan.
Home prices in the U.S. rose 12.2% year over year in May 2013 according to CoreLogic (www.corelogic.com), which provides data on the real estate markets, and they were up 2.6% from April to May. Home prices rose in all but two states in May.
At the same time that home prices are soaring, interest rates are on the rise, with the average 30-year fixed rate mortgage currently now well over 4%, according to Bankrate.com (www.bankrate.com/mortgage)
Given these trends, some homeowners may think that it is too late to take action to save money on some of the largest home-related expenses. That is not necessarily so. In fact, even with home prices and interest rates up, there are still plenty of money-saving opportunities that could save homeowners hundreds or even thousands of dollars.
Refinance
It is not too late to refinance a mortgage. Sure, mortgage rates have risen somewhat, but they remain low historically. Depending on a homeowner’s situation, there are several possibilities to lower monthly payments by refinancing. For example, refinancing might make sense for:
A homeowner who expects to be in his home indefinitely and who still has a mortgage with an interest rate well above what is available in today’s market. Although a rule of thumb once was that for a refinance to make financial sense, it needed to result in at least a one percentage point reduction in the mortgage rate, in fact, depending on the upfront cost of the refinance, the reduction in monthly payment, and how long the homeowner expects to own the home, even a lesser reduction could be a big money-saver over time.
A homeowner who doesn’t expect to own his home more than five to seven years and can lower his rate by refinancing to a five-year or seven-year adjustable rate mortgage (ARM).
A homeowner who believes that interest rates are likely to continue to go up and, therefore, who wants to refinance an ARM to a fixed rate loan.
Reassess
If a homeowner did not get the value of his home lowered for tax purposes after the real estate bubble burst and, therefore, still is paying taxes on an assessment that is well above the current market, the rebound in real estate values should be a wake-up call that now is the time to take action. Even though real estate prices are up, in many (if not most) markets, they are still well below their peaks, so for many homeowners, the opportunities to lower property taxes as a result of a reassessment could be substantial.
First Person: How to Lock in Savings as the Real Estate Market Heats Up – Yahoo! Finance.
If you happen to own a historic building, you could be sitting on a tax deduction gold mine. If you meet various strict IRS requirements, you may be able to donate a facade easement to a charity and reap a substantial charitable tax deduction.
However, you need to be careful. Due to past abuses by some property owners, the IRS tends to be very suspicious of facade easement deductions.
A facade easement is a legally binding agreement that the owner of a historic structure enters into with a charity whose mission includes historic preservation. The owner gives up the right to demolish or make other destructive alternations to the exterior of the building.
The easement, which must run with the title to the property forever, gives the nonprofit the right to review and preapprove any changes to the building exterior.
All other rights and obligations of ownership, such as the right to sell or lease the property, and the duty to maintain it, remain with the owner. The owner may also make any changes he or she desires to the building interior.
Why would a homeowner want to grant a facade easement? Two reasons: (1) it ensures that the historic character of the exterior of their structure will be preserved; and (2) it may result in a tax deduction — a deduction that could be substantial.
– See more at: http://www.inman.com/2013/07/19/turn-your-historic-buildings-facade-into-a-tax-break/#sthash.5jyTvXoj.dpuf
Turn your historic building’s facade into a tax break | Inman News.
Fewer new problem loans, declining levels of negative equity and shrinking inventories of bad loans from the boom era have helped to reduce mortgage delinquencies by the largest year-to-date decline since 2002.
The May Mortgage Monitor report from Lender Processing Services found that the national delinquency rate continued to fall in May, Delinquencies are down more than 15 percent since the end of December 2012, coming in at 6.08 percent for the month.
As LPS Applied Analytics Senior Vice President Herb Blecher explained, much of this improvement is supported by the fact that new problem loan rates are approaching the pre-crisis average. “Though they are still approximately 1.4 times what they were, on average, during the 1995 to 2005 period, delinquencies have come down significantly from their January 2010 peak,” Blecher said. “In large part, this is due to the continuing decline in new problem loans — as fewer problem loans are coming into the system, the existing inventories are working their way through the pipeline. New problem loan rates are now at just 0.73 percent, which is right about on par with the annual averages during 2005 and 2006, and extremely close to the 0.55 percent average for the 2000-2004 period preceding.
“As we’ve noted before,” Blecher continued, “negative equity appears to still be one of the strongest drivers of new problem loans, and — primarily buoyed by home price increases nationwide — that situation also continues to improve. We looked once again at the number of ‘underwater’ loans in the U.S., and found that the total share of mortgages with LTVs of greater than 100 percent had declined to just 7.3 million loans as of the end of the first quarter of 2013. This accounts for less than 15 percent of all currently active loans and represents a nearly 50 percent year-over-year decline.”
Though recent volatility in mortgage loan interest rates are not yet reflected in the data, the Mortgage Monitor did show that 2013 origination activity remained strong through April, with that month’s 835,000 new loans representing a 1.8 percent increase from March and a 34.1 percent growth from the prior year. The May data also showed an increase in prepayment rates, indicating that refinance activity, and likely associated originations, remained strong despite that month’s increased interest rates. LPS will continue to monitor the data to see what impact rate increases may have on originations in the months to come.
As reported in LPS’ First Look release, other key results from LPS’ latest Mortgage Monitor report include:
Total U.S. loan delinquency rate: 5.08%
RealEstateEconomyWatch.com » Delinquencies Drop as Bad Boom Loans Fade Away » Print.