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Friday, February 25, 2011

Tax breaks on real estate deals for people like A-Rod cost city 900M a year

A city program gives huge tax abatements to condo owners in newly built housing. A-Rod, for instance, will pay just $100 a month in taxes on his new $6 million bachelor pad.

Tax breaks on real estate deals for people like A-Rod cost city 900M a year

Yankees star Alex Rodriguez will pay virtually no property tax for a $6 million apartment he is buying on the upper West Side.
Rodriguez will be billed around $1,200 this year in real estate tax for his 3,000-square-foot, five-bedroom penthouse with spectacular views of the Hudson River.
Over the next 10 years Rodriguez and his fellow residents will continue to receive huge discounts on their tax, a city housing official said.
For Rodriguez, a full tax bill would be at least $60,000 annually, the latest city assessment records show.
A spokeswoman for Extell, the company that built the 2-year-old luxury Rushmore Towers near the West Side Highway, declined to discuss the taxes on the slugger's new bachelor pad.
But the only two penthouses that went into contract this month at the Rushmore, each of which was listed at more than $6 million, have been assessed at a little over $100 per month in taxes, one real estate expert told the Daily News.
So how is it possible that tens of thousands of ordinary city residents struggle each year with soaring tax bills for their co-ops, condos and homes, while the Yankees' $33-million-a-year star gets to pay next to nothing?
Well, Rodriguez and many other well-heeled New Yorkers have learned to take advantage of a little-known tax abatement program that has existed for decades.
The politicians and real estate insiders call it the "421A" program. It grants as much as a 98% percent tax abatement for up to 25 years to condo owners in newly built housing.
The bulk of the 421A benefit has gone to luxury housing in Manhattan, though a few reforms by City Hall and the Legislature in 2007 at least required developers to build 20% affordable housing to qualify for the tax abatement.
This year alone, the 421A program will cost our city more than $900 million in lost revenues, the Independent Budget Office says.
That's money that could prevent layoffs of firefighters and teachers. That could fund senior citizen centers and pay for after-school programs.
You haven't heard much about this, but the 421A program ended in December for any new construction. But the city's powerful real estate industry is determined to get it renewed and even get it expanded. Its lobbyists are working feverishly behind the scenes to pressure Council and lawmakers in Albany.
Brooklyn City Councilman Brad Lander has been leading the fight against that renewal.
It's too much of a giveaway to developers, Lander says, especially since there's already a glut of luxury housing in this town.
The developers want to link any extension of rent stabilization laws for tenants, which the Legislature must vote on by June, to a deal on extending the 421A tax abatement for builders.
The industry hopes Gov. Cuomo, who made a name for himself a long time ago as an advocate for affordable housing, will take their side.
In so many ways, big and small, the minority who have the big money keep trying to get government to give them more financial breaks at the expense of the rest of us.
"Where's the fair share if people who have paid millions of dollars for an apartment get away with paying no real estate taxes, when people in co-ops are being slaughtered?" said Bayta Lewton, of the Coalition for a Livable West Side.
Even before the pennant race begins, A-Rod has become the poster boy in another race - to end these tax abatements that have run amok.

Wednesday, February 23, 2011

January home sales decline 23 percent

January home sales decline 23 percent

Dayton-area home sales in January mirrored sales numbers of a year ago, representing a slump in sales from December highs.

In January, there were 554 single-family home sales, a difference of only five sales from January 2010 when the area recorded 559 sales, according to the Dayton Area Board of Realtors. In December, sales were 23 percent higher, with 718 transactions on the books.

Bob Wilson, DABR president, said sales typically are lowest in January and February.
“Increases are usually seen in the spring, when families begin looking again and traffic through available homes picks up,” Wilson said.

Not only were sales down year-over-year, but sales volume, and average and median sales prices, also experienced declines.

Sales volume dropped to $56.4 million — a 10 percent decrease compared to January 2010 — and average sale price was $102,000 — a 9 percent decrease. Similarly, median sale price fell 13 percent year-over-year to $79,000.

“Sale prices are historically lower during slower, bad weather months and with school in session,” Wilson said.
The supply of listings at the end of January was 15 months — or 8,428 properties. Inventory levels were up 8 percent from January 2010, when the area had a 14-month supply.

Friday, February 18, 2011

This Is Not a $1 Million Home ...

This Is Not a $1 Million Home ...

Homeowner Sues Mortgage Company, and Wins!

All Patrick Rodgers wanted was for someone at his mortgage lender to talk to him. But when the bank ignored repeated requests, the Philadelphia homeowner sued -- and won.

According to Rodgers, all he wanted was for the lender to answer his questions about its demand for him to purchase more home insurance.

Yet the bank still hasn't responded, Rodgers says, even though it has paid the $1,300 judgment.

Rodgers, a concert promoter who in January 2002 purchased a 6-bedroom, 3-bath Tudor-style home for $179,000, did as all homeowners do when they obtain a mortgage: He purchased home insurance to cover its replacement value should it ever be destroyed in a fire or other catastrophe.

About seven years later, his mortgage lender, Wells Fargo, asked him to insure the home for $1 million after an insurance inspector valued it at that amount. The amount was an estimate of what the home would cost to replace, reported the Philadelphia InquirerRodgers balked. Wells Fargo went behind his back and bought him a policy, so Rodgers sued when the bank refused to respond to his inquiries.

Although home values have waxed and waned since he purchased his house in the Wynnefield Heights neighborhood, there's one thing this founder of Dancing Ferret Concerts knows for sure: The 1925-built home has never been worth $1 million.

"The area we are in is kind of close to the wrong side of the tracks," he told AOL Real Estate in a phone interview. "It was comparable to other prices in the neighborhood at the time." In fact, property records we dug up show that a smaller six-bedroom home across the street sold for $185,000 just seven months after Rodgers moved in.

"If you moved the house about five minutes west of here the price would go down about half and 15 minutes the other direction, it would go triple," he said.

Wells Fargo never sent Rodgers an appraisal report showing its estimated $1 million value, he says. To substantiate a change in the replacement value, up or down, a person or entity must show proof of the changed value through an "accepted industry rebuild estimators or an appraisal with the cost to replace new on the dwelling," says Mark Boyer, CEO of Foundation Financial Group in Jacksonville, Fla.

"The market value and the insurance coverage amount are in no way related," says Mark D'Agostino, the owner and president of R.F. D'Agostino Insurance Agency Co., in Brockton, Mass., outside of Boston. "The coverage amount is the cost to rebuild the home in the event of a total loss; the homeowner can ask that the replacement cost be reevaluated at any time. Going up is generally easier to do than going down."

Outside of some exterior repairs he did to the home a couple of years after he purchased it, Rodgers hasn't made any other upgrades or changes that would warrant such a drastic increase in value.

So Rodgers said no to Wells Fargo's request for additional insurance. Then Wells Fargo bought it for him, and his insurance company notified him that the new policy would cost him an additional $500 per month above his previous policy.

Rodgers wrote to Wells Fargo explaining his situation and demanding an explanation for its actions. By law under the Real Estate Settlement Procedures Act, Wells Fargo had 20 days to respond. When it didn't, Rodgers wrote another letter letting them know they had missed the deadline, and giving them one more chance to respond. After another 60 days had passed and Wells Fargo missed another RESPA-mandated deadline, Rodgers moved for a judgment against his lender for failure to respond. His reward: a default judgment of $1,000 since a Wells Fargo representative never appeared in court.

When the lender didn't pay up, Rodgers contacted the Philadelphia sheriff's department for help. The sheriff scheduled a sale of the items in a Wells Fargo office to cover the monies owed to Rodgers. That, along with media reports, got Wells Fargo's attention and they sent Rodgers several checks totaling the approximately $1,300 they owed him for the RESPA violation, court costs, sheriff's levy, and scheduled sale. (The sheriff's sale has been cancelled now that the bank has paid.)

Rodgers has received the money, but no phone call or letter. "No one from Wells Fargo has reached out to me yet and that was the point for me in initiating all of this. It wasn't that I wanted to litigate and get $1,000. I just wanted someone from Wells Fargo to talk to me."

Wednesday, February 16, 2011

Home prices down 7.6% in January

Home prices down 7.6% in January

os Angeles County's median home price fell 7.6 percent in January to $305,940 and sales were off 25.4 percent from December, the California Association of Realtors reported Tuesday.

The price of an existing, single-family home was down 3.4 percent from $316,700 a year earlier, but sales eked out a meager 1.8percent gain.

Other regions throughout California weathered much heavier December-to-January price declines, including Butte County (-21.7 percent), Santa Barbara (-19.4 percent) and Santa Cruz (-15.5 percent).

California home sales rose in January, marking three consecutive monthly increases and posting their highest level since May 2010, while the statewide median price declined to its lowest level since June 2009.
California's median price for January was $278,900, down from $305,020 the previous month and $284,600 a year earlier, the CAR report noted.

"Although prices typically fall seasonally in January and February of each year, the decline in the median price can primarily be attributed to the after effects of last fall's foreclosure moratoria," said Leslie Appleton-Young, CAR's vice president and chief economist. "More distressed properties are coming on to the market, which led to an uptick in sales of distressed properties during January."

The trend, she said, is expected to continue as lenders seek to get those properties off their books.
Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora, aid her office was bustling in December.

"We really worked on our people skills and just getting out there working," she said. "We opened 58 escrows - that was unbelievable for December."

Rodriguez said things are aren't that tough for first-time buyers who are qualified.

"If you work hard and price things right and get people to do what they need to do, it's not a problem," she said.
Optimism is in short supply among U.S. homebuilders, a sign that the depressed housing market will slow the economy's gains this year.

The outlook by builders hasn't improved since the fall, when new-home sales were in the midst of their bleakest year in a half-century.

Less home building means fewer jobs for the economy. Construction work now accounts for about 5 percent of the nation's private employment. But nearly 2 million of the roughly 14 million unemployed Americans previously worked in construction.

Analysts say the economy needs to accelerate job creation before the housing industry can fully recover. Without more jobs and higher wages, home sales will stagnate.

"We probably won't see a strong recovery in construction jobs anytime soon," said Sal Guatieri, senior economist BMO Capital Markets. "Not a lot of people are showing up to builders' lots, not even to kick the tires. We just have to wait it out."

Saturday, February 12, 2011

Maui home sales rise but condo prices take hit

Maui home sales rise but condo prices take hit

Low-end transactions dragged down some of the island's housing market in January

More demand at the lower end of Maui's housing market helped expand sales volume but dampened median prices in January, according to a report.

The Realtors Association of Maui reported that sales of single-family homes on the Valley Isle rose 12.5 percent to 54 last month from 48 a year earlier. The median price was up 6.7 percent to $495,415 from $464,500.


The number of homes sold on Maui in January, with the median price and percentage change from the same month last year:

 SalesMedian Price
January 201154$495,415
January 201048$464,500
Pct. change12.5%6.7%

 SalesMedian Price
January 201187$295,000
January 201075$404,000
Pct. change16.0%-27.0%

Source: Realtors Association of Maui Inc.

The median price, which is a point at which half the sales sold for more and half for less, was affected by a rise in sales of lower-end homes, the report showed. A decrease in high-end home sales also kept the median from more than a modest rise.

In Maui's most active submarket, Central Maui, there were 13 single-family home sales for a median $355,000 last month, compared with seven sales for a median $405,000 a year earlier. In the high-end resort area of Wailea-Makena, there were no sales last month, compared with three sales for a median $3.5 million a year earlier.

A similar swing occurred in Maui's condominium market to produce a big decline in the median price, the data showed.

Maui condo sales rose 16 percent to 87 last month from 75 a year earlier, while the median sank 27 percent to $295,000 from $404,000.
At the low end of the condo market, Central Maui, there were 13 sales last month for a median $199,000, compared with three sales a year earlier for a median $280,000. At the high end, there was one sale in the resort area of Kapalua for $1.3 million, compared with five sales a year earlier for a median $840,000.

Sunday, February 6, 2011

Mortgage Rates Show Mixed Results This Week

Mortgage Rates Show Mixed Results This Week

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®) which shows mixed results in both long- and short-term rates this week.
30-year fixed-rate mortgage (FRM) averaged 4.81 percent with an average 0.8 point for the week ending February 4, 2011, up from last week when it averaged 4.80 percent.; Last year at this time, the 30-year FRM averaged 5.01 percent.

15-year FRM this week averaged 4.08 percent with an average 0.8 point, down from last week when it averaged 4.09 percent. A year ago at this time, the 15-year FRM averaged 4.40 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.69 percent this week, with an average 0.7 point, down from last week when it averaged 3.70 percent. A year ago, the 5-year ARM averaged 4.27 percent.

1-year Treasury-indexed ARM averaged 3.26 percent this week with an average 0.6 point, the same as last week when it averaged 3.26 percent. At this time last year, the 1-year ARM averaged 4.22 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, "Mortgage rates held relatively stable this week on news that the economy improved and inflation remained in check at the end of 2010. In the fourth quarter, the economy grew at a 3.2 percent annualized rate, compared to 2.6 percent in the third quarter, and was led by a 4.4 percent gain in consumer spending. In addition, the core price index for consumer expenditures rose by an annualized rate of 0.4 percent, which was the smallest increase ever since records began in 1959."

"In the fourth quarter of 2010, housing was the most affordable on record according to figures published by the National Association of Realtors® which date back to 1971."

Wednesday, February 2, 2011

Biggest price cut of the day is at 400 Alton Road in Miami Beach

Biggest price cut of the day is at 400 Alton Road in Miami Beach

The South Florida home to see the biggest price cut today is a four-bedroom, four-bathroom condo at 400 Alton Road in Miami Beach, according to data from Condo Vultures Realty. The $3.05 million Miami-Dade County home saw a $300,000, or 9 percent, price cut. It was originally listed for $3.45 million when it hit the market in July 2009, before its most recent price cut to $3.35 million four days ago. The 3,979-square-foot condo includes a terrace with ocean views. Carlos Sifuentes of Keller Williams Miami Beach has the listing. (Condo Vultures data includes condos and single-family home listings in the main metropolitan areas of Miami, Fort Lauderdale, West Palm Beach and Key West that are priced at $1 million and above, and that include photographs. Listings are taken from the South Florida MLS.) TRD