Not a Mirage!

This is NOT a mirage! It is a genuine article from the Times! While it's true that it is from 1982, it's a very real reminder of where rates have been and how great they are today! Over the years, this particular article has come in very handy when I've had clients wrestling with decisions dealing with a difference of 5.25% versus 5.375%.  How a 1/8 % difference could possibly matter would be punctuated with a reminder of the  old 18%  rates.

Note that if the rates had "slid" to 17.54%, they were substantially higher just prior to the slide. We all remember (at least those of us who have toiled in this industry for a while), a "stampede" to refinance when the rates dropped to 13.5%. It seemed to us at that time that a natural place for the mortgage rates to be was between 8.5% and 10%. Those heretofore "normal" parameters were twice the rate that can be obtained today. Currently, an applicant for a mortgage with sound credit and a 20% down payment can expect a mortgage in the upper 4's or low 5's percent! One has to wonder if we will ever see these rates again. Add to the equation the fact that prices of properties have dropped dramatically and we find a buying opportunity not seen for a very long time.

                               While it's true that the banks have become more careful in lending and underwriting criteria have become tighter, the loans do get committed and most which are committed do, ultimately close. 

                               Sure, we have to sweat a bit more, but the deals are out there.

                               

Rental Scams--- BEWARE!

Obviously, much of the focus of my blogs has to do with transactional Real Estate, often referred to as purchases and sales. This particular entry is "off topic" to the extent that it has to do with rentals; more specifically, a new rental scam that I found after a close family member of mine reported to me that he found an apartment in midtown Manhattan in a doorman building for $850 per month.

It's axiomatic that if it seems "too good to be true" it probably is. A rental in midtown for $850? Impossible! Correct!

As we looked into this particular possibility, my "skepticism antenna" went into high alert. I assumed it was some sort of a come-on, but it became much more.

 

Upon my relative's expressing preliminary interest in the apartment to the owner of the apartment via an online ad reply, the "landlord", who stated that they lived in the UK, replied that they were interested in finding tenants who would be the right fit for their precious condo.

Of course, they needed an "application fee" which, because they were in the UK, needeed to be wired to them.  This would have given them access to a bank account.

Next, it was revealed, that of course after the lucky tenant was selected, a routine credit check would have to be done. This would give them access to social security numbers.

Need I say more? Perfect...almost. I'm sure some have fallen prey to this scam; as a matter of fact, after some "googling" I discovered that these "UK" landlords were more likely from Nigeria where many of the internet scams seem to originate.

I also ran across a simpler type of rental scam where a Manhattan women was recently arrested and accused of offering apartments for $538-$823 per month for one and two bedroom apartments.  Her game was allegedly confined to  $5.00 application fees. Yet, when more than 1000 application fees came in,  she was busted.

Too good to be true?  You bet!

CLIENT NEWS:

Milena Govich, who we all enjoyed as she co-starred in Law & Order (the mothership)  has now guest starred in another role a bit less serious in some ways:

The USA network series PSYCH which aired first Friday 1/23 at 10:00pm EST/9:00pm CST.  The
episode is called "Earth, Wind, and ...Wait for it" and it will be re-airing
throughout the week in case you missed it on Friday.  As always, check your
local listings, but for night owls in the NYC area it will re-air:


Sunday 1/25 @ 11:00pm
Tuesday 1/27 @ 1:00am

Additionally, starting on Saturday, you can watch the episode online at

 http://www.usanetwork.com/series/psych/video/fullep/

Wow!.  Be on the lookout for another one of these little reminders later this
spring when Milena, as the infamous "Candy", the good-hearted hooker, returns to RESCUE ME!

Client news update:

Apologies to all for omitting this yesterday:

Rob Perkins, the drummer for Michael Buble, (or is Michael Buble the singer for Rob Perkins?) will be concluding 14 months of touring the world with a concert at Madison Square Garden on December 5th.  They will be filming the concert for an upcoming DVD release.  www.michaelbuble.com

That's big!!

Here's a gift, courtesy of Debbee May:

http://www.theradio.com/

Enjoy!!!

And please have a safe Thanksgiving Holiday.

Just what kind of bargains are out there?

Everyone is asking the same question: "how low is low?"

Perhaps Thanksgiving is a questionable time to examine the plight of the market, but one person's distress is another's opportunity. As interest rates came down further this week and the various bank bailouts have freed up some lending money, the focus stays on price. NY Magazine recently ran the following article demonstrating the types of bargains that are available. Of course these are only a sampling of what the various boroughs are witnessing, but they are not unique. 

I'd also like to use this forum to wish all  who read this, as well as your loved ones, a very Happy and Healthy Thanksgiving!

New York Magazine's:

Surf the First Wave of Panic-Selling

• Published Nov 2, 2008

147 Waverly Place, Apartment 1E Was: $1.995M. Now: 1.499M  Photographs courtesy of the brokers

Even in a good year, the fourth quarter often shows a decline in real-estate sales, and this is not looking like a good year. The properties here offer the heftiest markdowns in town by percentage, per the huge database at Streeteasy.com; check there or on Trulia.comfor more (try searching “price reduced” or “price reduction”).

---

Manhattan 
610 EAST 5TH STREET, APT. 4. 
Gut-renovated one-bedroom walk-up. 
Initial Price: $575,000 
Current Price: $359,000 
Savings: $216,000 (37.6 percent) 
Broker: Louis Rosado, Brown Harris Stevens. 
Why the Discount? “A quick sale,” says Rosado. “That’s the goal.”

205 EAST 16TH STREET, APT. 1E. 
Three-bedroom condo with 17-foot ceilings. 
Initial Price: $4.5 million 
Current Price: $3.395 million 
Savings: $1.105 million (24.6 percent) 
Broker: Christopher Rounick, Sotheby’s.

529 EAST 87TH STREET, APT. 4-5W. 
A 2,000-square-foot, four-bedroom, three-bath third-floor walk-up with rooftop rights. 
Initial Price: $2.4 million 
Current Price: $1.499 million 
Savings: $901,000 (37.5 percent) 
Broker: Richard Healy, Halstead. 
Why the Discount? Two offers have disintegrated. “I scratch my head with this one,” says Healy.

2056 FIFTH AVENUE, APT. 2A. 
A one-bedroom duplex in Harlem.
Initial Price: $1.1 million 
Current Price: $799,000 
Savings: $301,000 (27.4 percent) 
Broker: Jessica and Brian Armstead, the Corcoran Group. 
Why the Discount? The lower level’s “somewhat below grade,” says Jessica, so even if it’s likely to be configured with two bedrooms, it technically has only one.

801 RIVERSIDE DRIVE, APT. 4G. 
A classic five in a newly converted Washington Heights prewar. 
Initial Price: $825,000 
Current Price: $599,000 
Savings: $226,000 (27.4 percent) 
Broker: Sandy Edry and Russell Miller, Citi-Habitats. 
Why the Discount? Edry says a previous broker set the first price.

34 EAST 38TH STREET, APT. 1A/2A/3A. 
A 2,100-square-foot townhouse triplex co-op with fourteen-foot ceilings and three fireplaces. 
Initial Price: $1.999 million
Current Price: $1.499 million 
Savings: $500,000 (25 percent) 
Broker: Andrew Kramer, Corcoran. 
Why the Discount? The apartment was in contract after an initial price cut to $1.699 million, but the buyer didn’t pass the co-op board. So it’s back to the drawing board with an even friendlier price, says Kramer.

147 WAVERLY PLACE, APT. 1E. 
A 975-square-foot loft with a planted private terrace. 
Initial Price: $1.995 million 
Current Price: $1.499 million 
Savings: $496,000 (24.9 percent) 
Broker: Eric Fleming, Corcoran. 
Why the Discount? The owner bought the space as a bachelor; he’s fallen in love and is “anxious to sell” and move, says Fleming. Moreover, he bought at a great price during the condo conversion, so it’s all gravy anyway.

---

Brooklyn 
19 GRACE COURT, APT. 2D, BROOKLYN HEIGHTS. 
A fully renovated one-bedroom, one-bath co-op in a pet-friendly building. 
Initial Price: $799,000 
Current Price: $549,000 
Savings: $250,000 (31.3 percent) 
Broker: Dennis McCarthy and Patricia Neinast, Corcoran.

860 DEKALB AVENUE, APT. 5, BEDFORD-STUYVESANT. 
A two-bedroom, two-bath condo. 
Initial Price: $564,400 
Current Price: $399,999 
Savings: $164,401 (29.1 percent) 
Broker: Sharon Burroughs-Clarke, Corcoran. 
Why the Discount? It’s the developer’s first project, and she wants to goose sales in this uncertain market.

93 LEXINGTON AVENUE, APT. 3, CLINTON HILL.
A 2,500-square-foot loft. 
Initial Price: $1.3 million 
Current Price: $995,000 
Savings: $305,000 (23.5 percent) 
Broker: Angela Ferrante, Brown Harris Stevens. 
Why the Discount? The owners “need to move on,” says Ferrante.

---

Queens 
2116 45TH AVENUE, LONG ISLAND CITY. 
A 2,800-square-foot, four-story townhouse in the Hunters Point Historic District. 
Initial Price: $1.395 million 
Current Price: $1.195 million 
Savings: $200,000 (14.3 percent) 
Broker: Miles Chapin, Warburg Realty. 
Why the Discount? “A reaction to what’s going on,” says Chapin.

64-05 YELLOWSTONE BOULEVARD, APT. 513, FOREST HILLS. 
Three-bedroom, two-bath penthouse in the new Novo 64 condos. 
Initial Price: $1.35 million 
Current Price: $1.15 million 
Savings: $200,000 (14.8 percent) 
Broker: Novo 64 Sales Center.

---

The Bronx 
4919 GOODRIDGE AVENUE, RIVERDALE. 
Four-bedroom 1915 Dutch colonial near the Fieldston School. 
Initial Price: $3 million 
Current Price: $2.395 million 
Savings: $605,000 (20.2 percent) 
Broker: Anne Shahmoon, Halstead. 
Why the Discount? The seller wanted to try aiming high at first, says Shahmoon.

---

Staten Island
607 VAN DUZER, STAPLETON AREA. 
A two-bedroom, two-bath townhouse with attached garage. 
Initial Price: $269,000 
Current Price: $215,920 
Savings: $53,080 (19.7 percent) 
Broker: Joe Fruscione, Fillmore Real Estate. 
Why the Discount? The house is listed as “bank owned”—typically a foreclosure.

Total Savings: $394, 463
(Average discount on all fourteen properties)

Tumultous Times

It seems that the two most frequent questions I get lately are:
Bob, so what's your take on the Real Estate market?(as if I would know) and
Bob, when are we going to see a new blog from you?
So, now I get to kill two birds with one stone (apologies to my animal loving friends who know me better).
For the last few years we've wondered when we would see a "correction" in our local Real Estate market. Prices rose at alarming rates fueled by very generous bank appraisals. A typical middle class young couple could no longer afford to buy in most areas of Manhattan or some areas of Brooklyn.
As part of the financial collapse we've witnessed on Wall Street, the long overdue Real Estate "correction" has arrived. Most professionals involved in Real Estate will tell you that if this is "correct", bring back the "incorrect" times. The industry is suffering. Title companies and abstract companies related to them are laying off employees; many bank attorneys are likewise downsizing.

From my perspective and those of my colleagues with whom I've chatted, deals are somewhat fewer, more difficult to bring to contract, more difficult to obtain financing on and more difficult to close.

There is so much "psychology" involved. Potential sellers who might be "trading up" are afraid to commit to a purchase due to the uncertainty of their buyers financing and therefore the tenuous nature of their sale.
Buyers are facing more difficult mortgage hurdles and, where applicable, more difficult coop boards.
Is it all bad???

OF COURSE NOT.

Within these tumultuous times lie opportunities, especially for buyers (probably why we call it a buyers market, duh). At the height of the market, buyers were at a disadvantage and they knew it. In Manhattan, buyers were often coerced to waive their mortgage contingencies. Citywide, buyers of new Condos were required to pay NY City and NY State transfer taxes (generally paid by the sellers in arms length transactions) as well as sponsor attorney fees and miscellaneous "creation fees".

Recently, I've seen, particularly in new Condos, large price reductions, sponsor paying the above mentioned fees and even "incentives" like sponsor prepaid common charges, free parking spaces, storage etc.

In other words, if a potential buyer is confident that his/her job is secure, just as Warren Buffett is urging people to see the Wall Street free fall as a buying opportunity, a similar logic applies to our Real Estate market.
Prices are lower, interest rates are still very low; in the high "5"s or low "6"s. The lending banks are still interested in granting mortgage applications...they are just much more careful about the process.
Mortgages are available for people who can show W2 income and have 20% deposits available.
Perhaps the clouds do have a silver lining. Lets hope so.

No good Real Estate News....So here's some "Client News"

One would have to live in a cave to not know the Real Estate news is not great, yet Brooklyn and Manhattan seem to remain relatively lively as real estate markets are concerned. Clearly the woes of the banks are making financing more problematic, but mortgage money is available for those borrowers who are not on the fringe in terms of deposit amounts and the ability to furnish documentation.

OK....now the good stuff:

Instead of dwelling on Real Estate (no pun intended), I'm pleased to report on three of my client beauties:

Laura Piquado has just finished her run as Mrs. Stockmann in Ibsen's " An Enemy of The People". I was delighted to attend one of her performances and I can report that Laura's performance, as well as those of her co-stars, was riveting! Next time I'll make sure to report of her appearances well in advance.

Milena Govich, who has starred in NBC's "Law and Order" and "Conviction" before that, as well as many other credits, has a great "gig" coming this fall, but I've been sworn to secrecy for the moment. As soon as I'm allowed, I'll share the details here.

In the meanwhile, Milena is having fun. Please join her for the Grand Opening of the new Donna Distefano Jewelry Atelier.
Donna is an incredibly gifted jewelry designer, and a dear personal friend of hers. She has been a jeweler of the stars for over ten years, and it would be cool to attend the grand opening celebration of her gorgeous new space. Milena tells me she has loved wearing her jewelry both on the red carpet and in her daily life, and it never fails to attract attention. Come be a guest and experience firsthand her genuinely creative artistry.
Wednesday, October 137 West 20th Street, Suite 1106(between 5th and 6th Avenues)New York City6:00pm-9:00pm
RSVP:guestlist@donnadistefanoltd.com212-594-3757

Last, but not least, Sarah Blaze is currently in Reno, Nevada in rehearsals for "The Barber of Seville" where she lights up the stage as Rosina in this production staged by the Nevada Opera. For those few fortunate souls who may be in Reno in early October, these are the details:

Gioachinno Rossini's
The Barber of Seville
Friday, October 3, 2008 - 7:30 pm
Sunday, October 5, 2008 - 2 pm
"Figaro! Figaro! Figaro!"
Performed at the Pioneer Center for the Performing Arts
Sung in Italian with English Supertitles
Gioacchino Rossini's The Barber of Seville has been hailed as a masterpiece of comedy ever since its premiere. When the bumbling Doctor Bartolo schemes to marry Rosina, Figaro (the barber of Seville) steps in to save the day and insure that her true love, the handsome Count Almaviva, gets her instead! The beautiful and dynamic Sarah Blaze (our Cinderella from 2007) returns as Rosina; Mark Walters (our fiery Pirate King from 2007) brings Figaro to vibrant life; and Joseph Muir (last heard at Nevada Opera in La Traviata in 2001) makes a long-awaited comeback as Count Almaviva.

I'll make it a point to notify everyone when Sarah next performs in a venue closer to our fair city.

"Without stress, I'd get no exercise at all!" RATE LOCKS

I wish I could claim credit for the stress/exercise line, but I can't. Nonetheless, rate locks seem to be responsible for most of the stress my purchasing clients experience and, consequently, pass along to me and my staff.
Each and every time I sit with clients to sign contracts, I give them a letter designed to address issues they will face during the purchasing process. The letter includes a paragraph on "rate locks", a mortgage device which has me convinced that the banking industry is in cahoots with the drug and alcohol industries, because rate locks make us all crazy.

My letter to my clients says: "Rate Lock: You will be given the opportunity by your lender to lock your rate. Since these rate locks expire, it is imperative that you not lock your rate unless and until you are certain that you will close during the lock period".

Not only do I give this letter to my clients, I read it to them as well and emphasize the importance of NOT locking the rate too soon. Yet it seems as though the buyers run (not walk) to their lender afterwards to lock the rate! It amazes me that most buyers do understand that the typical time from contract to closing is 60-90 days, yet they still hurry to lock prematurely.

Now, that the rate has been locked too soon, we have to struggle to try to close before the rate lock expires; not an easy thing to do, especially in coop purchases where coop approval is necessary. There are so many unpredictable factors to deal with which impact on the timing of a closing, not the least of which is the seller's "agenda". Is the seller having a house built, moving to Florida or Arizona, going into a rental etc? The dynamics of a real estate deal, give a typical buyer very little "leverage" to compel a seller to close in a timely manner without the threat of litigation (not a pleasant thought).

While it's true that many lenders "offer" a rate lock extension, these extensions do not come inexpensively.

OK....so let me say it again "Don't lock the rate!" At least don't lock it knowing it will expire before we close. Or....be prepared to quietly and without objection pay the fees.