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Archive for February, 2010

[Three Cents Worth #141] Manhattan Townhouses and the High Price of Being Single

February 26, 2010 | 5:34 pm | | Charts |

It’s time to share my Three Cents Worth on Curbed, at the intersection of neighborhood and real estate.

Three Cents Worth:
Manhattan Townhouses and the High Price of Being Single

Manhattan townhouses represent about 2 percent of all unit residential sales in Manhattan, but since I haven’t done much with that data lately I thought I’d analyze the premium between one-family and two-to-five-family townhouse properties.

First, I inflation-adjusted the average sales price for the three property types. As an aside, the rise in townhouse prices was at half the rate of condos over the past decade—the impact of the credit boom on condo new development skewed their price growth higher than townhouses…

[Click to expand and read full post on Curbed]

Check out previous Three Cents Worth posts.

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[The Housing Helix Podcast] Nancy Chemtob Esq., Chemtob Moss Forman & Talbert LLP

February 26, 2010 | 12:04 am | Podcasts |

I speak with Nancy Chemtob, a partner with Chemtob Moss Forman & Talbert, LLP a New York City law firm specializing in divorce, family and matrimonial law. My firm has done a lot of work with Nancy and her partners over the years and admire her approach and candor. Plus she’s fun to talk with.

The biggest asset in a divorce action is most often the real estate. The housing market crunch of the past 18 months has played havoc with the divorce process. What’s most interesting is the fact that divorce attorneys are often at the leading edge of a changing real estate market as their clients deal with the reality of market conditions within their strategy.

Note: I’ve got a new equipment set-up (again) and I am still wrangling with it so my audio track is a bit too loud. But Nancy makes her presence heard.

Check out the podcast

The Housing Helix Podcast Interview List

You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.

[Interview] Nancy Chemtob Esq., Chemtob Moss Forman & Talbert LLP

February 25, 2010 | 10:22 pm | Podcasts |

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[In The Media] Lawline TV The Housing Market 11-19-2009

February 23, 2010 | 10:58 am | | Public |

[click to play – “The Housing Market”]

Last fall both Dottie Herman, CEO of Prudential Douglas Elliman and I were guests on Lawline TV hosted by Alan Schnurman.

The segment didn’t air until after the new year and frankly, I forgot I could see it in its final form – until a friend of mine mentioned he watched it on TV the other day. The show doesn’t run on my cable service at home.

Alan gets both Dottie and I to describe what we were seeing in the market last fall. This was my third stint on his show at his Brooklyn studio and I’ve always enjoyed Alan’s company.

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[Trulia] Price Reduction Report – February 2010

February 22, 2010 | 12:00 pm | |

[click to open report]

Trulia released its Price Reduction Report for February 2010 and press release

After several years of significant price reductions, the amount of the deductions have been showing a decline. However, since there isn’t seasonal data to trend (the series started in mid-2009), we can only use this to confirm what we have already observed. California was one of the first market areas to see sharp price decline so sellers don’t have much more distance to travel to reach market and therefore they are at the bottom of the list. The months before the expiration of the tax credit program saw a rise in the amount of seller price declines. The subsequent renewal saw a sharp reversal of the pattern.

Major Metros in California Experience Biggest Decreases in Home Price Reductions SAN FRANCISCO February 16, 2010 – (, smart real estate search to help you make better decisions, today announced that 21 percent of homes currently on the market in the United States as of February 1, 2010 have experienced at least one price cut. This represents the second straight month of home price reductions at this level, the lowest level since Trulia started tracking price reductions in April 2009, and a significant decrease since November 2009, when 26 percent of homes had at least one price reduction. The total dollar amount slashed from home prices dropped to $22.6 billion compared to $28.1 billion in November, a 19 percent decrease. The average discount for price-reduced homes continues to hold at 11 percent off of the original listing price.

California Seeing Less Reductions

Of the top 50 major U.S. cities*, only seven had price reduction levels at 30 percent or higher in February 2010, down from 21 in November 2009. Eight cities have seen a decline by more than one-third, and five of those cities are from the state of California: San Francisco, Oakland, Sacramento, San Jose, and San Diego.

Tax Credit is Skewing Seller Behavior

The trend, in fact, is pretty clear – it’s what to make of it that’s the question. The months leading up to the pending expiration of the home buyer tax credit last fall saw a rising trend line of price reductions, here and across the country.

[The Housing Helix Podcast] Steven R. Wagner Esq., Wagner Davis, P.C.

February 22, 2010 | 6:00 am | | Podcasts |

I had a great discussion with Steve Wagner, an attorney who specializes in representing co-ops/condos, litigation and technology, among other areas. I have worked with his firm Wagner Davis, P.C. over the years on some crazy cases.

Steve has a wealth of knowledge, but don’t get him started on grandfathering in co-ops. Listen to find out why.

Check out the podcast

The Housing Helix Podcast Interview List

You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.

[Interview] Steven R. Wagner Esq., Wagner Davis, P.C.

February 22, 2010 | 12:01 am | | Podcasts |

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[The Housing Helix Podcast] Ryan Slack, CEO, Green Pearl Events

February 21, 2010 | 8:07 pm | Podcasts |

I have a great conversation with Ryan Slack, Founder and CEO of Green Pearl Events aka Green Pearl that specializes in real estate events for industry professionals across the US. Ryan was a co-founder of Property Shark before he started Green Pearl Events. He is all about delivering reliable information to his customers.

We cover a lot of ground including his background and some insights on social media I had never heard before.

Here’s a schedule of upcoming events hosted by Green Pearl Events.

Check out the podcast

The Housing Helix Podcast Interview List

You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.

[The Housing Helix Podcast] Manhattan Townhouse/Ten Year, Hamptons North Fork/Long Island 4Q 2009 Reports

February 21, 2010 | 8:00 pm | Podcasts |

I’m playing catch-up with my podcasts over at the The Housing Helix and here’s a collection brief summaries on the latest reports we released.

[click to open podcast]

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To get a copy of the reports go here.

The Housing Helix Podcast Interview List

You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.

[AVPO] Another Valuation Pseudo Offering: “Appraiser Assisted BPOs”

February 21, 2010 | 6:18 pm |

Last week the appraisal community was up in arms about a $55 “appraisal” product that was an appraisal but no self-respecting appraiser could complete the report completely, be USPAP compliant and still make a meager living. The consensus is that it will attract shysters and promote short cuts. There is a rabid discussion forum on this topic right now on LinkedIn if you are a member of the group.

A new product by First American has now appeared which is explained in technicolor by Tyler King, our resident Phish fan and hipster over at Commercial Grade called an AVPO:

So to recap: The (licensed) appraiser looks at a set of comps, from these comps logical adjustments are made, and the appraiser formulates a value opinion. Yes…I see…that sounds nothing like an appraisal.

aside: First American owns eAppraisIT, who’s slogan on their web site, incredibly, is “Redefining Value.” For those who may have forgotten, NYS AG Andrew Cuomo filed suit against eAppraisIT back in 2007 for conspiring with Washington Mutual to inflate real estate appraisals.

First American claims “this is not an appraisal” to which the Appraisal Foundation replies:

While it is not within our purview to determine whether any particular product or service complies with USPAP, we can tell you that, as far as USPAP is concerned, the product appears to qualify as an appraisal or an appraisal review assignment. The press release states, in part:

“While this is not an appraisal, a licensed appraiser confirms the specific set of values determined by a local Realtor® by looking at comparable sales and verifying accuracy. If discrepancies are found, the appraiser provides a new set of values, complete with an explanation of how they were determined.”

If an appraiser is required to comply with USPAP (such as a licensed appraiser in a state that mandates such compliance), the above product would have to comply with STANDARDS 1 and 2, or STANDARD 3.

Best regards,

John S. Brenan
Director of Research and Technical Issues
The Appraisal Foundation
(202) 624-3044

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[Surety Bonds] Some States Are Cracking Down On Appraisal Management Companies

February 21, 2010 | 5:30 pm | |

Since appraisal management companies are now responsible for the super majority of appraisals being ordered through lenders for mortgage purposes due to HVCC and AMCs are not a regulate institutions, the consumer is exposed more than ever to the potential for low quality appraisals, continuing to undermine the public trust in the appraisal profession. I suspect trend this has the potential to push errors and omissions insurance rates higher and provide more exposure to the mortgage lending system.

I firmly believe that 5-7 years from now we will be looking back to today’s AMC trend and will be saying: “if we only did something about it.”

Admittedly I know very little about surety bonds and this is no sales pitch or a solution to the AMC problem. I am more interested in understanding ways to protect the consumer against negligence and instill confidence in the appraisal process. To require AMCs to pay for surety bonds in order to operate in a state sounds like it provides an easier way for consumers to go after AMCs for negligence. Feedback or suggestions welcome.

According to Wikipedia, a surety bond is a contract among at least three parties:

  • The obligee – the party who is the recipient of an obligation,
  • The principal – the primary party who will be performing the contractual obligation,
  • The surety – who assures the obligee that the principal can perform the task

I was contacted by Jay Buerck of who wrote provided the following post on surety bonds and appraisal management companies. He indicated that 6 states brought about new AMC legislation last year and it is expected to grow in the coming years. His article is simply trying to make everyone aware of this fact.

States nationwide are introducing tougher oversight and regulation of appraisal management companies. The push is part of a growing effort to bring more consumer protection and transparency to the home-purchasing process.

In all, six states: Arkansas, California, Nevada, Louisiana, Utah and New Mexico ó ushered in new AMC legislation in 2009. Industry officials expect another 15 to 20 states to consider adopting similar measures this year.

Appraisal management companies are becoming increasingly important because of sweeping changes to regulations for home valuations nationwide. The stricter regulations are geared toward boosting consumer safety and stabilizing the housing market.

“There is a significant belief out there that mortgage fraud played a significant role in the meltdown in the housing market, and any unregulated entity that is out there presents the possibility for mortgage fraud to creep back into the system,” Scott DiBiasio, manager of state and industry affairs for the Washington, D.C.-based Appraisal Institute, a global association of real estate appraisers, told Insurance Journal this winter. “I think legislators recognized that this was a gaping loophole that needed to be corrected.”

Taking consumer protection a step further, Arkansas became the first state to add a surety bond requirement to its appraisal management statutes. The new legislation requires that AMCs post a $20,000 surety bond with the stateís real estate appraiser board.

Surety bonds are essentially three-party agreements that ensure businesses or people follow all applicable laws and contracts. A surety bond also provides consumers and tax payers who are harmed by the business with an avenue of financial recourse.

Most of the new AMC legislation requires companies to make sure their appraisals are in line with the Uniform Standards of Professional Appraisal Practice. Theyíre also responsible for ensuring they use certified and licensed appraisers only.

There are also some financial disclosure and transparency requirements in some states.

“We need to have and the public deserves to know who owns, operates and manages these appraisal management companies,” DiBiasio said. “I think the $20,000 surety bond is really there to provide some minimal protection to consumers.”

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[Three Cents Worth #140] Examining Manhattan’s Snake-like Listing Discounts

February 21, 2010 | 4:38 pm | | Charts |

It’s time to share my Three Cents Worth on Curbed, at the intersection of neighborhood and real estate.

Three Cents Worth:
Examining Manhattan’s Snake-like Listing Discounts

This week I presented the two types of listing discounts we track each quarter for co-ops and condos in Manhattan to get a sense of whether sellers are being realistic. Listing discount is the measure of the difference between the asking price and the contract price, measured as a percentage.

When I began to measure listing discounts a decade ago I felt its usefulness was limited, because at that time it was becoming conventional wisdom to price a listing closer to its market value. Before that the tendency was to list higher, because sellers were wary about leaving money on the table in case they got lucky. Any comparison with those periods would show a decline in the listing discount because of the new marketing viewpoint, rather than as a market trend in supply and demand…

[Click to expand and read full post on Curbed]

Check out previous Three Cents Worth posts.

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