Posted by Jonathan J. Miller -Tuesday, October 30, 2007, 10:51 PM
Its been nearly two years since I wrote about the St. Joseph statue, which was appropriate in late 2005, as the housing boom shifted gears. There has been more coverage of St. Joseph as of late, a sign of a weakening market perhaps (who says housing isn’t emotional).
In today’s WSJ, there was a fun (or sad, depending on your take) article When It Takes a Miracle To Sell Your House.
Well, St. Joseph is back (actually upside down). In Catholicism, St. Joseph, a carpenter, is honored as the husband of Mary and foster father of Jesus. Representing a humble family man, he is the patron saint of home, family and house-hunting. Here’s a full blown history.
The Catholic saint has long been believed to help with home-related matters. And according to lore now spreading on the Internet and among desperate home-sellers, burying St. Joseph in the yard of a home for sale promises a prompt bid. After Ms. Luna and her husband held five open houses, even baking cookies for one of them, she ordered a St. Joseph “real estate kit” online and buried the three-inch white statue in her yard.
Suggested use of the statue:
- bury it three feet from the rear of the house (facing away)
- bury it next to the front door facing away from the home.
- display in the house.
- bury in a potted plant in an apartment.
The sales pace of the statues is now double at catholicstore.com.
Who needs housing stats, lets start tracking sales of these statues. Its a booming business with a lot of places to purchase them (if you’re wondering):
Posted by Jonathan J. Miller -Tuesday, October 30, 2007, 5:41 PM
In Bobbi Rebell of Reuter TV’s Euros fueling NY condo market the weak dollar is discussed as a key driver of foreign demand. Arguably its a very dated topic since foreign demand has been a factor in the New York market for more than a year and also correlates with GDP levels of the various European economies. However, its still a factor in the current condo market, and specifically with new development.
Posted by Jonathan J. Miller -Monday, October 29, 2007, 2:04 PM
The PDF version of the 3Q 2007 Manhattan Market Overview [Miller Samuel] that I write for Prudential Douglas Elliman is available for download. I have been writing these market reports for them since 1994.
In addition, you can see the methodology that went into the report including the neighborhood boundaries and the type of content we have available.
You can also build your own custom data tables using the aggregate report data (from 1Q 89 through 3Q 2007) and view a series of quarterly market charts, most related to the current market report.
…Manhattan remains contrarian, but with reasonable expectations The high level of sales activity, combined with declining inventory levels, listing discounts and marketing times has not resulted in significant price appreciation year to date. This suggests a market psyche containing reasonable expectations of both buyers and sellers. This is a significant departure from the contentious conditions between market participants seen in the past several years, evidenced by patterns of sharply rising prices and declining sales. Buyers were being priced out the market and sellers had been conditioned to a rapidly appreciating market over the prior five years. In addition, Wall Street mortgage and credit market problems that appeared in mid-July and August have yet to show an impact in market data for the current quarter. Existing mortgage underwriting guidelines have become more strictly enforced with fewer exceptions allowed. A lower number of mortgage options and higher qualifying requirements for buyers is expected to temper the flow of sales activity…
Download report: 3Q 2007 Manhattan Market Overview [pdf]
Posted by Jonathan J. Miller -Monday, October 29, 2007, 12:01 AM
A map of the fire-stricken areas [LA Times]
Here’s a good summary of the fire situation in Southern California:
By late Tuesday, the blazes had burned 420,424 acres — about 656 square miles — and destroyed 1,155 homes, making them nearly as large as the fires in October 2003 that are considered the biggest in California history. Although only one death has been directly attributed to the fires, five others have been linked to them.
There was an interesting economic take on the eventual aftermath of the Southern California fires. In Tom Sullivan’s article Beyond the Flames in this week’s Barrons. Here’s synopsis from Seeking Alpha California’s Economy May Get Post-Fire Boost.
“It’s an oddity of economic accounting…but the sharp initial pain could possibly turn into long-term stimulus,” says Alan Gin, an economics professor at the University of San Diego. How? Insurers will absorb the bulk of losses, and the eventual rebuilding boom, helped by a generous doses of federal aid, is sure to pump hundreds of millions into the Golden State.
It looks like the region is going to need it. According to the RPX Monthly Housing Report that I author for Radar Logic, the data and analytics firm, the San Diego market has seen one of the largest price declines over the past year.
The decline in housing impacts everyone employed within the real estate industry, including construction workers, contractors/trades, architects, landscapers, real estate agents, mortgage brokers, lenders, appraisers, lawyers and probably a slew of other professions and occupations I can’t think of at the moment. This silver-lining scenario is not a zero-sum situation, but at least the potential economic stimulus is better than nothing.
Posted by Jonathan J. Miller -Friday, October 26, 2007, 12:01 AM
Its been a long time coming.
There is now a movement at the federal government level to create oversight of the mortgage broker industry.
US Representative Barney Frank introduced legislation yesterday that would establish for the first time close federal supervision of mortgage brokers, who have become the dominant providers of home loans – particularly the subprime loans at the heart of the foreclosure crisis.
Whether or not this legislation passes, this industry needs oversight and not self-policing. The majority of residential mortgages are being issued through wholesale channels (mortgage brokers). There are certainly excellent mortgage brokers out there but the system needs checks and balances.
As it relates to appraisals, I have always contended that the person who is paid a commission on the issuance of a mortgage to a consumer should have no say in assessing the loan quality. There is too much of a chance for self-dealing.
Bank of America announced today that it will cease lending through wholesale channels. Translation: no mortgages through mortgage brokers.
WaMu tried to be proactive to preempt more regulation from coming down the pike.
The companyâ€™s new rules apply to its loans marketed through 19,000 independent mortgage brokers, among other outlets, but not through its own branches. Earlier this month, it began requiring brokers to verify that they have disclosed key loan terms, spelled out in simplified language. Washington Mutual will also call borrowers before the mortgage closes to review the terms.
The Federal Reserve consumer panel made recommendations today including:
- Not to use the teaser rate to qualify.
- Require escrow payments for property taxes and costs tied to buying a house.
- Limit or eliminate prepayment penalties.
There’s still a lot of marketing goin’ on.
It struck me as a little fishy but at about the same time, the White House was also busy.
Posted by Jonathan J. Miller -Thursday, October 25, 2007, 9:51 PM
In the New York Times article today Reports Suggest Broader Losses From Mortgages indicates that employment levels will be impacted from the job losses associated with problems in the mortgage industry. So now we have, lower levels of mortgage production, lower levels of construction and lower levels of consumer spending.
I guess thats why federal funds futures are indicating a 70% probability that the Fed will cut rates at their next meeting by 25 basis points.
Since August, Lawrence Yun, Chief Economist of the National Association of Realtors, has kept characterizing the mortgage and credit market problems as temporary. Every month, as the blogosphere continues lament the loss of his predecessor, David Lereah, Mr. Yun has been able to continue the tradition of reality distortion and he does not disappoint.
Temporary? Relative to what? Will mortgage problems continue on forever? Of course not. Merrill Lynch reported an $8B loss due to mortgage related problems today. National lenders are having difficulty selling paper to the secondary market investors. Will this problem go away in a few months? I don’t see how.
If we relied on Mr. Yun’s use of the word temporary and heeded his advice back in August and September, credit market issues would have long been resolved. For next month, here are some alternatives to the word temporary. I vote for fugacious.
I have long lamented how NAR has missed its golden opportunity to gain the trust of the consumer as being the authority on the housing market, despite the fact that they are a trade group. Rather than leveraging the wealth of information at their disposal, they provided comments like this:
“Mortgage problems were peaking back in August when many of the September closings were being negotiated, and that slowed sales notably in higher priced areas that rely more on jumbo loans,” he said. “The good news is that mortgage availability has markedly improved in recent weeks with interest rates on jumbo loans falling, and more people are applying for safer and conforming FHA mortgage products.
The quote attempts to parse out problems with the mortgage markets from the timing of contract and closing dates. Elements of the statement are correct, but out of context, and ultimately paint an inaccurate picture.
Speaking of disconnect, did you hear George Carlin’s comments on The View about the fires in southern California regarding people losing their homes?
Posted by Jonathan J. Miller -Thursday, October 25, 2007, 3:49 PM
Episode IV: Square Footage Causes Confusion
Doug Heddings, a successful New York real estate brokers who wants to get to the bottom of the square footage problem and fellow blogger at TrueGotham presents his fourth installment of the series: TrueGotham TV Explores Square Feet: Episode Four. This week’s discussion includes how square foot inconsistencies arise and what is their cause.
Episode I: [True Gotham] True Square Footage Is Multi-Dimensional
Episode II: [True Gotham] True Square Footage Methodology Is An Idea
Episode III: [True Gotham] True Square Footage Is Not Gross Nor Standardized
Posted by Jonathan J. Miller -Wednesday, October 24, 2007, 11:35 PM
Its Wednesday (barely), so its that time of the week to provide my Three Cents Worth as a post on Curbed. I looked at the volatility of the change in price per square foot over the past decade. Some curbed readers would rather eat fast food.
To view Three Cents Worth: PPSF Volatility, A Nice Spread
Check out previous Three Cents Worth posts.
Posted by Jonathan J. Miller -Tuesday, October 23, 2007, 11:46 PM
Getting Graphic is a semi-sort-of-irregular collection of our favorite BIG real estate-related chart(s).
Source: Joint Center for Housing Studies.
Click here for full sized graphic [pdf].
The Joint Center for Housing at Harvard University released its quarterly The Leading Indicator for Remodeling Activity (LIRA):
â€œAs homeowners become increasingly concerned about falling house prices and a slowing economy, home improvement spending is draggingâ€ explains Nicolas P. Retsinas, director of the Joint Center for Housing Studies. â€œCoupled with very modest home sales, spending levels are likely to fall.â€
Economic conditions are currently mixed and the futures markets are projecting the 65% likelihood of the Fed reducing rates by another 1/4 point, with more decreases in the future. The impact of the housing market has not had a chance to completely impact the economy. During the recent housing boom, rising labor and material costs were kept in check by low mortgage rates.
Remodeling expenditures are projected to decline through mid-2008 although I must admit that seems conservative. The LIRA indicator is a moving average and the impact of tightening credit during the quarter is likely not included in the report results.
Posted by Jonathan J. Miller -Monday, October 22, 2007, 12:01 AM
I have had the pleasure of providing a monthly chart for the Economic Spotlight section of Crain’s New York Business magazine since September 2003. Here is the latest, which appears in the current issue of Crain’s New York Business.
Source: Crain’s New York Business
Go here for a complete archive of my Crains’s New York Economic Spotlight charts that have been published. They are organized by year.
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