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Celebrity, Pop Culture

[Over Coffee] Quote: Understated Elegance

September 1, 2009 | 4:58 pm |

I wrote about the Madoff Montauk, Long Island home in my previous post, but something else was said that is worthy of a new post.

The phrase understated elegance is common real estate brokerspeak used by some real estate agents…not US Marshals.

“Every room is situated so that you have a left to right, 180 degree angle of the Atlantic Ocean,” said Roland Ubaldo, supervisory deputy US Marshal, who conducted a video tour of the property for the press last week. “It’s a panoramic view. You’re talking about guest bedrooms, master bedrooms, foyer, you name it, [all of them] have a view of the Atlantic Ocean; it really is breathtaking.”

And for the closing pitch…

“There’s an understated elegance, I believe, in this whole residence,” said Marshal Ubaldo. “It’s simple, stylish, but it is understated.”

Could you ever imagine a US Marshal uttering those words while showing a house (carrying a weapon, I assume)? My temples pulsate every time I think of it.

But it is clear that they mean business – and intend to sell for market value so the defrauded investors get back as much as they can (admittedly nominal).



[HGTV] Uprooted Casting Call For Buyers Who Started Over

August 25, 2009 | 11:55 am |

I expected the fallout from the credit crunch would reduce demand for new housing shows and old shows like “Flip this house” Of course I was wrong and television seems to have adapted to the new market conditions quite well.

I predicted the same demise for reality television 10 years ago as well so I’ll stick to valuation and price trends.

HGTV canvassed the blogosphere sending a notice for their new series “Uprooted” which suggests that there is endless material for our national obsession that is housing.

Here are the details if you need them.

HGTV’s new series “Uprooted is looking for high-energy home buyers who are saying goodbye to their hometowns, totally picking-up, and moving to a new place where everything is different. Whether they’re moving from the mountains to the ocean, a major city to the country, or making a move overseas, HGTV wants to hear your story.

We are looking for realtors to feature on the show as they walk their clients through the buying process.

In order to qualify: * You must have begun the closing process on their new home or will be closed mid September ’09 * Your old home must not immediately be occupied (unless current residents would allow filming) * You must not be moving because of retirement or military reasons. * Price range must be between 400k to 1 million.

We are especially looking for families moving to or from one of the following locations:

  • California
  • New York
  • Hawaii
  • Oregon
  • Colorado
  • New Mexico
  • Texas

Candidates and realtors who are chosen for the show will receive compensation.

If you want to be on the show e-mail casting@departure-films.com

Please include -your contact info and company information -where your clients are moving from -where your clients are moving to -when they are moving


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Real Estate Brokers/Agents Have An Image Problem

August 7, 2009 | 12:05 pm |

Harris Interactive does a poll every year at this time on prestigious occupations.

Firefighters are at the top (one of my sons is a firefighter!) as well as scientists, doctors, nurses, teachers, military officers and real estate bloggers (ok, ok that last one I slipped in to see if you were payin’ attention).

At the very bottom of the list were real estate agents/brokers after accountants, stockbrokers (no surprise there), actors (surprising given our celebrity culture) and bankers (yep, thats for sure).

I think NAR really missed out on a great opportunity during the transition from housing boom to bust a few years ago to be a trusted resource for the consumer. Short sighted thinking then is hard to erase from the collective consciousness.

Tomorrow is never too late.


[Shiller] But Something Is Definitely Different About Real Estate

June 8, 2009 | 11:27 pm | nytlogo |


Source: Portfolio.com

Professor Robert Shiller, a lightening rod of public discourse concerning anything housing, largely due to it’s emotional nature, pens an excellent piece in the New York Time’s Economic View column this weekend called Why Home Prices May Keep Falling.

This seems fly in the face “glimmering hope” and “green shoot” discussion beginning to emerge in the real estate conversation this spring as seasonal market forces took hold.

Heck, anything was better than last fall.

Apparently the federal government, via the famed “stress tests” doesn’t see housing prices stabilizing anytime before 2010 – makes sense since unemployment is projected to continue to increase through the end of next year, assuming the recession ends in 2009.

He frames the conversation around the fact that falling housing prices defy investment logic. That is:

Such long, steady housing price declines seem to defy both common sense and the traditional laws of economics, which assume that people act rationally and that markets are efficient. Why would a sensible person watch the value of his home fall for years, only to sell for a big loss? Why not sell early in the cycle? If people acted as the efficient-market theory says they should, prices would come down right away, not gradually over years, and these cycles would be much shorter.

He reiterates what people in the real estate business know to be true…

But something is definitely different
about real estate.

We still have excess supply, which will likely take a number of years to be absorbed even after the economy begins to stabilize. His reference to the 1990-91 recession resonated with me. Once it ended, housing prices didn’t stabilize for another four years.

In other words, housing markets are cyclical and housing markets are seasonal. That’s not a bad thing.


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Wondering If The Negative Gravy Train Has Left The Station?

May 6, 2009 | 12:34 am | nytlogo |

You’ve got to admire people that go out on a limb and call a market as a contrarian and turn out to be right. It’s a lucrative opportunity for those that are able to monetize it.

There is a lot of discussion lately about a slower pace of decline and that the end may be within the few years. The recession is expected to end at the end of this year and unemployment is expected to top out in about 18 months. In other words, there is plenty of room in the tank for financial opportunities for negativism.

Some notables who seem to continue to do well are:

The Housing Bubble Blog and others like it were screaming that the bubble was going to burst. They were right, despite all efforts by NAR to keep them in check. Ben Jones is one of the most prolific content posters and has the gold standard blog name for the subject. I’ve linked out and have been checking in with his work since late 2005. Although he is a free lance writer, his content appears to be collected by copying full articles from primarily newspapers and magazines around the country – with little or no analysis. Yet he’s consistent and finds a broad array of the key articles of the day. He still attracts hundreds of commenters on every post and all kinds of theories and ideas are shared. He takes donations and has banner ads. He’s created a grass roots feel.

But site traffic is down by more than half over the past year. Are people tiring of the negative?

Professor Robert Shiller, who is a very nice person and has published some terrific work on the wealth effect, economic psychology to name a few, was able to capitalize on the contrarian perspective with his book Irrational Exuberance and the subsequent update to include housing. He called the NASDAQ and housing market bubble correctly and has since released two additional books.

According to Shiller we are looking directly in the face of an enormous “speculative bubble” and the question is not whether stock prices will fall but when!

He tirelessly promoted the S&P/Case Shiller Home Price Index which has become the defacto standard for housing indexes by virtually all news outlets and economists. Despite his efforts and those of S&P, the trading markets for which the index was created, has yet to gain significant traction.

Nouriel Roubini, economics professor at NYU who is also known as Dr. Doom, has been spot on in his calling of the housing bubble. He was so blunt and negative that he quickly gained many detractors.

By late 2004 he had started to write about a “nightmare hard landing scenario for the United States.” He predicted that foreign investors would stop financing the fiscal and current-account deficit and abandon the dollar, wreaking havoc on the economy. He said that these problems, which he called the “twin financial train wrecks,” might manifest themselves in 2005 or, at the latest, 2006. “You have been warned here first,” he wrote ominously on his blog.

I’ve heard his consulting firm RGE Monitor is doing well but I have no way to confirm.

When he spoke at a convention in New York, several people quipped to me that they needed to jump out of a window because the world was ending.

Roubini was known to be a perpetual pessimist, what economists call a “permabear.”

He’s been hard to find fault with, and he fights with Jim Cramer calling him a buffoon. His recent opinion piece in the WSJ called We Can’t Subsidize the Banks Forever was strong, yet was also called to task for misquoting the IMF.

However this info was just released which makes Roubini right once again::

Regulators have told Bank of America that the company needs to raise roughly $35 billion in capital based on results of the government’s stress tests, according to people familiar with the situation.

Thus, I answered my question. The gravy train for pessimism is still in the station.


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Celebrities Have Appraisals Done

May 3, 2009 | 11:00 pm |

The headline: Kate Walsh Gets A House Appraisal is chock full of suspense.

Who would have thought that celebrities did what many mere mortals do? …and will the appraiser take more photos than the paparazzi?

Some questions likely flying through the minds of press right now:

  • Will the appraiser use a laser measuring device or a tape measure?
  • Will the appraiser consider the finished basement in the gross building area?
  • Will the cost approach exceed the sales comparison approach and what is the land residual?
  • Is the built-in 52″ flat screen tv in the den considered a fixture or chattel?

We can only imagine the excitement if TMZ finds out those answers and others.



Good Memories of Kemp, Cram-down Fall-down

May 3, 2009 | 10:16 pm | nytlogo |

Ok, so I’m not a Buffalo Bills fan (go Jets!) and I didn’t vote for Jack Kemp when he ran for president in ’88, but I did admire him, especially his stint as Secretary of Housing and Urban Development under Bush I.

He was on the cutting edge on the topic of home-ownership and tenant-own thinking even though his stint as HUD secretary didn’t accomplish what he set out to do:

As a bleeding-heart conservative, Kemp was a logical choice for Bush as the Secretary of Housing and Urban Development, whose job would be to foster public sector and private sector methods to meet the demands of public housing. However, the scandals of Reagan’s Secretary of Housing and Urban Development Samuel Pierce and the neglect of the president were obstacles from the start, and Kemp was unsuccessful at either of his major initiatives: enacting enterprise zones and promoting public housing tenant ownership. The goal of these two plans was to change public housing into tenant-owned residences and to lure industry and business into inner cities with federal incentives. Although Kemp did not affect much policy as HUD’s director, he cleaned up HUD’s reputation

In addition to opposition in Congress, Kemp fought White House Budget Director Richard Darman, who opposed Kemp’s pet project HOPE (Homeownership and Opportunity for People Everywhere). The project involved selling public housing to its tenants. Darman also opposed Kemp’s proposed welfare adjustment of government offsets. HOPE was first proposed to White House chief of staff John Sununu in June 1989 to create enterprise zones, increase subsidies for low-income renters, expand social services for the homeless and elderly, and enact tax changes to help first-time home buyers.

Kemp wrote a position piece on bankruptcy in early 2008 that covers the issue as it relates to home ownership and low and middle income families called Bringing bankruptcy home

Bankruptcy law is wildly off-kilter in how it treats homeownership. Under current law, courts can lower unreasonably high interest rates on secured loans, reschedule secured loan payments to make them more affordable and adjust the secured portion of loans down to the fair market value of the underlying property — all secured loans, that is, except those secured by the debtor’s home. This gaping loophole threatens the most vulnerable with the loss of their most valuable assets — their homes — and leaves untouched their largest liabilities — their mortgages.

Sometimes good ideas never see the light of day because of political disconnect.

The housing rescue plan was dealt a blow last week when the Senate killed the cram-down legislation that was a centerpiece of Obama’s housing recovery plan because investors and banks were worried they would be wiped out.

A cram-down is:

a term used in bankruptcy law to refer to the Chapter 13 provision that allows debtors to retain collateral as long as they offer repayment of the “secured portion” or fair market value of the collateral in their repayment plan.

The Senate was likely afraid that the bill would give bankruptcy judges to much sway over modifying outstanding mortgages and would indemnify servicers. Here’s a summary of the version the House passed.

On a merely a practical level, I was never sure how the services would handle the cram-downs since the mortgages were sliced up into many tranches.

According to DataPoints, a Moodys.com blog:

Without the incentives provided by the reform bill, we now estimate that 475,000 fewer voluntary modifications will occur, and with judicial modifications we project an additional 1.725 million foreclosures this year. This will significantly increase the inventory of unsold homes and place additional downward pressure on already-weak house prices. Equity values will erode further, leading to more defaults and placing greater pressure on prices, thereby prolonging both the depth and duration of the housing market correction.

In other words, when the commercial banks still hold sway over Washington, despite their financial condition and debt and the net result of this failed legislation may very well be worse.

Business as usual.


Dumb Money Yields Paradox of Thrift

April 29, 2009 | 10:55 am |
The Colbert ReportMon – Thurs 11:30pm / 10:30c
Daniel Gross
colbertnation.com
Colbert Report Full EpisodesPolitical HumorGay Marriage Commercial

My friend Dan is at it again – he claims to be on the “C” list of regular guests on MSNBC Countdown – now he’s achieved the pinnacle of every writer’s dream, to be interviewed by Stephen Colbert. He’s humping his new book, Dumb Money.

Colbert Nation summarizes:

Daniel Gross urges rich cable TV personalities to buy steaks, cigars and whiskey.

Very salient interview and I must say, very entertaining.


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[Essential Reference] State of New York City’s Housing and Neighborhoods 2008

March 12, 2009 | 12:01 am | furmancenterlogo |

It’s that time of year again - The Furman Center For Real Estate and Urban Policy just released their seminal annual report. It’s chock full of an amazing level of analysis on all 5 boroughs and an essential download.

Here’s the executive summary and the full report.

Regarding property appreciation over four decades:

  • Between 1974 and 1980, prices declined by 12.4% citywide.
  • Between 1980 and 1989, prices increased by 152%.
  • From 1989 to 1996, prices dropped by 29.3%.
  • From 1996 to 2006, the City’s latest boom, housing prices increased by 124%.

A couple of interesting points made:

  • On average, despite very high price levels, hous- ing prices in the City have not risen as much over the past two decades as they have around the country: in the most recent upturn, New York’s impressive growth of 124% was dwarfed by growth of 189% nationwide.
  • Eight of the ten neighborhoods with the largest increases in the 1980s boom were also among the neighbor- hoods with the largest price increases in the most recent boom.
  • Contrary to what one might expect, higher-income neighborhoods are not insulated from downturns, and investing in such a neighborhood does not necessarily guarantee strong future gains. Rather, prices in higher-income neighborhoods tended to grow less than the City average in the 1980s upturn and fall further in the 1990s downturn. In the most recent upturn (1996–2006), there was virtually no correlation between neighborhood income and sales price performance.


In Memoriam: New York just lost an essential New York media icon with the passing of Braden Keil of the New York Post to cancer. Combining celebrity and real estate, he always seemed to get the scoop. After starting off a bit shaky, I grew to appreciate my interaction with Braden and will miss him – he characterized his situation to me in early January: Life is indeed serving me up a lot of lemons.

I speak now from an especially close perspective to cancer but with a better outcome:
Cancer – for lack of a better word – sucks.



[Time to Blame] Because It Feels Good

February 14, 2009 | 12:02 pm | fedny |

Time magazine is starting to kick some online posterior these days reversing a slow erosion into irrelevance. I think it started with Justin Fox of Curious Capital and their expansion online has been worth following. (No, I am not a shareholder).

The financial crisis we are enduring is systemic and there is no one specifically to blame because nearly everyone is to blame, including my 2 cats, the mailbox and my old ipod. Rather than individuals, I think its better to look at the problems by industry and agency.

Still, it feels good to point the finger.

Here’s my take on it as ranked by overall impact. Nothing scientific here.

  1. Rating Agencies
  2. Investment Banks [Tie]
  3. Subprime Lenders [Tie]
  4. SEC
  5. American Consumer
  6. Investors of CDOs
  7. Bush Administration [Tie]
  8. US Treasury [Tie]
  9. Congress [Tie]
  10. Fannie Mae/Freddie Mac
  11. Commercial Banks/Mortgage Banks
  12. Federal Reserve
  13. Mortgage Brokers [Tie]
  14. Real Estate Appraisers [Tie]
  15. Clinton Administration
  16. FDIC, OTS, OCC
  17. Real Estate Brokers [Tie]
  18. Developers [Tie]
  19. Big Media
  20. Blogosphere

Did I miss anyone?

In their 25 People to Blame for the Financial Crisis piece, Time readers can vote for their favorites.

To vote for your favorites to blame as listed by Time.

To see the rankings from the Time survey.


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