Rich Bouchner New York City Real Estate

NYTimes

Some real estate brokers at the Corcoran Group have lately picked up a phrase that Pam Liebman, their chief executive, has borrowed from a friend, a line she uses whenever people admit they’ve splurged on something a little luxurious: “That’s so August of you.”

Embedded in the line is a touch of judgment — the sense that not only is big spending unusual these days, it’s a little out of fashion, maybe even a little tasteless. For that reason and that reason alone, Sharon Baum, one of Corcoran’s top-earning agents (she sold the $40 million Duke mansion on Fifth Avenue in 2006), has decided to get rid of her Rolls-Royce, a car she has made her trademark since 1996.

In the years after she started leasing the car, it seemed a sign of Ms. Baum’s prescience, an early symbol of the smooth ride the luxury market would enjoy for the next 12 years. Ms. Baum made the Rolls a key part of her brand, even showing the car and its driver, Abdul Jaffeer, in the promotional page she included in every Corcoran folder she handed out to a prospective buyer.

Ms. Baum said she could still afford the monthly lease — upward of $3,000 — and the high costs of repairing and garaging the car. She’s giving it up, she said, only because she has come to feel deeply uncomfortable riding around in the Rolls, spacious and well-appointed though it may be.

“I want to adjust to the times,” Ms. Baum said as she and Mr. Jaffeer stopped outside 580 Park Avenue, one of the city’s more prestigious prewar co-op buildings. The Rolls, a deep forest green, had all the yachtlike features one would expect — rich beige leather, shiny metal accents, issues of Quest magazine in a pocket in the back of the driver’s seat. At times, Ms. Baum has leased one with a DVD player so kids could watch “SpongeBob SquarePants” while their parents inspected ceiling heights and kitchen renovations (Mr. Jaffeer doubled as baby sitter, even reading children’s books sometimes).

“We’ve had a great time with this car,” Ms. Baum said. “But now, with the recession, it’s not an appropriate time — nor do I want to be riding around in a Rolls-Royce.”

A few weeks back, Ms. Baum said, she was taking around a client who was thinking about running for office. “He told me, ‘I probably shouldn’t be seen getting into a Rolls-Royce,’ ” she recalled. “He was sort of joking, but you know what they say: In every joke there’s a grain of truth.” Ms. Baum has been thinking about using her Audi station wagon instead, although she worries that even without her granddaughter’s car seat, it won’t always be big enough to accommodate large groups of clients.

Ms. Baum’s lease on the Rolls runs until 2010, and it’s airtight. So she’s contemplating trying to cut a deal with the company that leases the car or using the Web to find someone who’s leasing a less-ostentatious car and is willing to make a swap — though she knows that she will likely be out serious money in such a deal. And if she can’t find such an arrangement, she’s all but ready to simply garage the car and eat the monthly cost, rather than keep driving it around.

So Ms. Baum may end up paying handsomely for the privilege of looking thrifty, or at least conservative. It’s a bad enough sign of the times when people who have no choice are forsaking their luxuries at a loss; now it looks like luxuries have so lost their value, even some people who can afford them are willing to pay to unload them.

Good luck recovering from that, Madison Avenue.

OVER the past two decades, as Manhattan’s grit has been harder and harder to find amid all the shiny surfaces, diehard New Yorkers raised a chorus of complaints about the loss of the city’s essential character. Maybe some new voices will soon be heard, sorry to see some other extreme symbols of the city — visions of pie-in-the-sky, fantasy-style wealth like a Rolls-Royce — retreat or disappear.

As Ms. Baum’s Rolls rounded 59th Street and Madison Avenue last week, two middle-aged women waiting for the light to change followed it with their eyes, poking each other and pointing at the car as it passed. They smiled broadly and tried to peer in the tinted windows as if to catch the eye of whoever had the good fortune to be riding inside.

They didn’t look like they resented that passenger; they looked like the sighting had made their day, as if they’d spotted a rare and delightful bird in fligh

Prices to start at 70% off previous market levels.

Not the nicest properties, but great bargains for the handy.....

Mass real estate auctions are coming to New York City. This Sunday at the Jatvits Center USAuction.com expects 3,000 people to show up looking for a bargain. A sad comment on the New York City housing market, but between this and condo auctions that were announced in Feb, hopefully we will start to see a floor in real estate prices beginning to form. Not too dissimilar to stock market technicals, the housing market needs to form a support line before prices can firm, and eventually beginning to rise again. Tough medicine to swallow, but necessary to clear inventory.

Next Sunday, 232 foreclosed homes in the New York will be sold to the highest bidder at a big auction set for Manhattan’s Jacob K. Javits Convention Center. This is the second time USHomeAuction.com, a Irvine, Calif.-based real estate auction firm, is holding an event in New York City. Its first sale took place last year, when the city was just starting to feel the fallout from the subprime crisis that has crippled Florida and other parts of the nation.

“In the past, there weren’t enough foreclosed New York homes to hold an auction,” said Rick Weinberg, a spokesperson for USHomeAuction.com. “This year I suspect that there will be a second and third auction in the city.”

In January, New York City foreclosures soared 64% from December and were up 5% from January 2008, according to real estate site PropertyShark.com. There were 278 foreclosures in the city. Single and two-family homes in the Queens neighborhoods of Jamaica, South Jamaica, Hollis and St. Albans recorded the most foreclosure filings. February foreclosure numbers are expected later this week.

USHomeAuction.com works with banks and lenders and stages sales events whenever there is a critical mass of inventory in each market. Last year, the firm auctioned 83 New York homes for a total of $16 million. Last year was also a record year for 18-year-old USHomeAuction.com, which nationwide auctioned off 32,799 homes for a total of $3.4 billion. The majority of the homes were in hard-hit California, Florida and Arizona.

The auction firm expects more than 3,000 attendees on March 8 at the Javits Center. Starting bids for houses are discounted by a minimum of 70% from their previously valued price. For instance, one 2,500-square-foot house in Jamaica valued at $555,000 has a starting bid of $69,000, according to USHomeAuction.com.

“They’re not the nicest properties, but people can get a great bargain, especially if you’re handy,” said Mr. Weinberg.

www.gotham-realestate.com

AS she began hunting for a new home for herself and her teenage son, B. J. Casey knew she might not find all of what she wanted: a second bathroom, a fireplace, outdoor space, great light, and that indefinable quality that would make an apartment feel right enough to live in for the next 30 years. Still, she hoped

B. J. Casey and Jonah are surrounded by windows, and lots of light.

“This is a long-term buy,” she said, “a place where your mother can come, a place where your son can bring his friends and a place you want to grow old in.”

Dr. Casey — she was Betty Jo growing up on the family farm in Kinston, N.C. — studied experimental psychology at Appalachian State University in Boone, N.C., and later received her Ph.D. from the University of South Carolina, at Columbia. She and her former husband settled in Princeton, N.J. She spent several years commuting by train and two subways to Weill Cornell Medical College, where she is now the director of the Sackler Institute for Developmental Psychobiology.

After separating from her husband three years ago, she moved to a rental on the top floor of a six-story walk-up in Yorkville.

The sunny two-bedroom one-bath apartment had a private rooftop terrace, a washer-dryer in a small closet/office, and a wood-burning fireplace — “guaranteed warmth no matter what the weather is like,” she said. The $4,000 monthly rent was worth it, she said, because she wanted “something a little special.” Her son, Jonah, now 14, who lives in Princeton and attends Princeton High School, joined her there on weekends and holidays.

But two people could hardly fit into the kitchen, and both she and Jonah are expert cooks. Even as a baby, “he was always in the kitchen with me,” Dr. Casey said. “I used to make organic food and put it in ice trays.”

The rental, she knew, was temporary, only until she found a place for the long haul. She spent endless hours perusing online real estate sites, where she had fun looking at pictures. “It is addictive,” she said.

Ideally, Jonah would have his own bathroom. The many plants she owned needed plenty of light, and a terrace or balcony was necessary for outdoor grilling. Dr. Casey figured her new home would cost around $1 million, although she could go higher. Throughout the city, she found few places that were affordable, big enough and nice enough. Most were not quite right, lacking a feature like a second bathroom.

Last spring, she considered a nicely renovated duplex of 1,150 square feet in a small co-op building on West 85th Street, listed at $1.2 million with a monthly maintenance of $1,100. But it was a top-floor walk-up with no laundry in the unit, and it felt hemmed in by neighboring buildings. (It sold last summer for $1.1 million.)

Shortly afterward, she considered another co-op duplex, this one in her old Yorkville neighborhood, also for $1.2 million. Maintenance was around $1,300. But the Juliet balcony, just 3 by 5 feet, wasn’t for barbecuing. There was an unsuitable spiral staircase that she would need to replace. And, again, there was no laundry in the unit.

“I saw signs that said: Please don’t use the laundry room before or after a certain hour,” Dr. Casey said. “These are the hours I work, and I would never get my laundry done.” She also began to wonder about the wisdom of buying a co-op. “I thought, what if they start imposing all these rules? I kept thinking, I can’t wash my clothes when I want to. The things I really wanted weren’t quite there.” (The Yorkville duplex dropped to $990,000 and is currently off the market.)

All along, she had been drawn to Harlem. She found herself continually visiting 2056 Fifth Avenue, at 127th Street, formerly called Rhapsody on Fifth. A Beaux-Arts building more than 100 years old, the place had once been a meeting center for the Finnish community and more recently a church, before being converted to condominiums.

When she first saw it last spring, construction was in progress, but “I found myself not wanting to leave the building,” she said. “I felt like I was at a friend’s house.” She loved the penthouse that faced Fifth Avenue, which was at the top of her price range.

Her interest was clear, said the sales agent, Brian Armstead of the Corcoran Group. “Most people, when they come see the apartments, don’t want you to see how they are feeling,” he said. But in this case, “her face lit up and she couldn’t fake she didn’t like this apartment.”

It had everything Dr. Casey wanted: 1,400 sunny square feet of penthouse, with two terraces totaling 600 square feet, a washer-dryer stacked in a closet, a gas fireplace and windows galore overlooking the rooftops of Central Harlem.

She bought the condominium in late summer for $1.25 million, and moved in with Remi the cat. The common charge and taxes are around $1,600 a month.

Prices in the building recently dropped to attract more interest, Mr. Armstead said. The other penthouse, which has more space indoors and less outdoors, is now on sale for $1.05 million.

“There has been no buyer’s remorse,” Dr. Casey said. “I didn’t get such a bad deal.”

Now, in the morning, she prepares coffee while turning on the fireplace with the remote control. “I still giggle,” she said. Remi, curled up close to the fire, seems in danger of singeing his fur. The plants thrive in the sun. “There is so much light it is impossible to get cabin fever because you feel you are outdoors,” Dr. Casey said.

Jonah has his own little wing, with a small terrace off his bedroom. “I love this apartment,” he said. “It is my favorite apartment I’ve ever been in. We love to sit outside and have a grill-out. It’s one of our things.”

The big kitchen is “a nice change,” he added. “My special dish that my mom taught me is salmon with basil-lemon reduction,” but he experiments as he goes.

The neighborhood, with its cheery and busy streets, puts them in a good mood. “People take you in as family,” Jonah said.

“It is the realest community,” Dr. Casey said. “It’s crazy how people look after each other. I had a cold and was sniffing a lot and my head was bent down, and this gentleman thought I was crying and these warm deep brown eyes were looking into mine, with him saying, ‘Are you O.K., miss?’ I am in a neighborhood where people say what they are thinking. I feel people appreciate life here, and that feels like home. Everyone said I was crazy to want to get everything, which I ended up getting in the end.

As many Gotham-RealEstate readers know, we have both a New York City real estate brokerage as well as mortgage firm, which give us a unique view to both sides of a real estate transaction. While there are many bargains to be had for those looking to buy a new York condo or coop, getting a mortgage can be a different story. Let's forget about jumbos for a moment, which have their own set of issues (see some of my prior posts), but even mortgages backed by Fannie and Freddie (those with loan amounts under $625K) are facing tough hurdles.Strong credit worthy borrowers are being forced to pay higher fees, wait longer or are just being rejected out right. One of the best ways to get our economic pumps primed again is to allow folks to take advantage of lower rates and to buy unsold homes. Fannie and Freddie say that help is on the way...lets just hope that it gets to us in time to make a difference.

The article below from Bloomberg does a nice jo of summarizing the current mortgage dilemma.

By James Sterngold

Feb. 27 (Bloomberg) -- Brian Wickert, a mortgage banker in Butler, Wisconsin, prides himself on screening applicants carefully. That’s why he was stunned when a customer who sailed through four home loans tried to do a refinancing in January, only to be rejected by three national lenders.

The borrower’s credit standing and income were solid, said Wickert, 47, president of Accunet Mortgage. The problem was that, with home sales plummeting along with prices, the appraiser couldn’t find the required three comparable sales in six months within a one-mile radius.

“The business has gotten tougher than I’ve seen it,” Wickert said. “The person who has decided he wants to give himself his own personal economic stimulus package by refinancing at low rates is being stymied by the rules and the fees. Too many people are being excluded.”

Bankers around the country say one reason the housing market hasn’t stabilized is that while mortgage rates have come down, hurdles have gone up. Rising default rates and bank losses have made lenders more risk-averse, leading to higher fees, increased insurance rates and difficulties refinancing loans.

The average rate on a 30-year fixed mortgage dropped to 5.07 percent for the week ending Feb. 26 from 6.63 percent for the one ending July 24, according to data compiled by McLean, Virginia-based Freddie Mac. Meanwhile, the percent of mortgage applications that led to closings fell nationwide to 59 percent in the first half of 2008 from 66.3 percent in 2006, the most recent period for which data is available, the Mortgage Bankers Association reported.

‘Too Tight’

“Underwriting standards have changed from lax to too tight,” said Lawrence Yun, chief economist at the Chicago-based National Association of Realtors. “The pendulum is swinging too far the other way. We can’t stabilize the housing market if buyers can’t get reasonable mortgages.”

Help may be on the way. Under the terms of President Barack Obama’s housing plan announced Feb. 18, as many as 4 million homeowners on the verge of foreclosure will be eligible to have their loans modified to reduce monthly payments. Another 5 million, whose homes are worth less than the principal of their mortgages, also may be able to refinance.

The program, which takes effect March 4, only covers borrowers whose mortgages are owned or insured by Washington- based Fannie Mae or Freddie Mac -- about 40 percent of the total, according to Inside Mortgage Finance, a Bethesda, Maryland-based newsletter. They must still prove they have a solid payment history and sufficient income to meet monthly payments, and the loan can’t be more than 105 percent of the appraised value of the home to qualify.

FICO Scores

Those not covered by the Obama plan will have to contend with lenders requiring higher FICO scores than in the past or charging upfront fees to borrowers with scores once considered excellent. San Francisco-based Wells Fargo &; Co., the second- largest U.S. home lender, boosted the minimum score for Federal Housing Administration and Veteran Affairs loans it makes through brokers to 620 on Jan. 27 from 600.

“A score of 700 was once near perfect,” said Gwen Muse Evans, vice president of credit policy at Fannie Mae, the government-controlled company that helps set lending standards. “Today, a 700 performs more like a 660 did. We have updated our policy to take into account the drift in credit scores.”

Consumer credit scores, called FICOs after creator Fair Isaac Corp., range from 300 to 850. The average FICO score on mortgages bought by Freddie Mac and Fannie Mae rose to 747.5 in the fourth quarter of last year from 722.3 in 2005, according to Inside Mortgage Finance.

Higher Fees

Accunet’s Wickert said that a 660 FICO score would have qualified most borrowers for loans with no upfront fees in the past. Now, someone trying to borrow $200,000 with a 660 score would have to pay a 2.8 percent fee, or $5,600, he said. Even someone with a 719 score would have to pay $1,750 in cash.

Wickert said that if customers don’t want to pay the fees in cash, he can increase the interest rate, since the wholesale banks he sells his mortgages to would pay more for the higher rate over the life of the loan. Before the crisis, a quarter-of- a-percentage-point increase in the rate was sufficient to cover a 1 percent fee. Now, Wickert said, he needs to double that.

Robert Satnick, a mortgage broker in California’s San Fernando Valley, said he has a customer whose efforts to refinance a loan at a lower rate might cost her about $600 a month more because the value of her condominium has declined.

The owner has good income and a FICO score in the high 700s, he said. The dilemma is that the value of her home has dropped to about $400,000, the amount of her mortgage. As a result, banks will charge her an upfront fee of 1.75 percent on a 6 percent refinancing. She also has to buy private mortgage insurance, adding another $63 a month to her cost.

‘Out of Reach’

“This is now a great opportunity to buy or refinance,” said Satnick, 44. “But getting the mortgage has gotten so hard it’s putting those properties out of reach of a lot of people.”

Another strain on consumers is a planned increase by Fannie Mae of add-on fees called loan-level price adjustments, which lenders often pass on to borrowers. Someone with a 699 FICO score borrowing 80 percent of the value of a home used to pay 1 percent in price adjustments. As of April 1, Fannie Mae will raise that to 1.5 percent. For a borrower with a 659 score, the adjustment will climb to 3 percent from 2.25 percent.

“These are targeted pricing adjustments aimed at aligning price with risk for the highest risk products in the market today, including interest-only loans, cash-out refinancings, low credit scores, high loan-to-value loans and condos,” said Fannie Mae spokeswoman Amy Bonitatibus.

Staff Reductions

Another issue is that mortgage lenders have eliminated jobs, slowing down the approval process.

“We’re very thinly staffed because we don’t know how long this will last,” said Christopher M. George, president of CMG Mortgage in San Ramon, California, referring to the global financial crisis.

George said he has gone from almost 800 employees in 2006 to 250. Nationwide, employment in the mortgage industry declined to 280,000 in December from 505,000 at the peak in February 2006, according to data compiled by the Mortgage Bankers Association in Washington.

Even with a smaller staff, George said, his underwriters do more checking than in the past. Before the crisis, he said, CMG asked borrowers to fill out an Internal Revenue Service form that allowed the lender to confirm income information, though it rarely sent the form to the IRS. Now, George said, CMG sends the form in before the closing, scrutinizes appraisals and contacts banks to check on the account balances of the borrowers.

“Everything is checked, and that makes it harder for some people,” he said.

Refinancing Program

Fannie Mae, taken over by the government in September after losses on its mortgage holdings, says it is doing what it can to help borrowers and is urging mortgage bankers to do the same.

A new program called DU Refi Plus that takes effect April 4 is intended to make it easier for consumers to refinance their mortgages, even if the value of their homes has declined. Lower FICO scores will be accepted, the requirement for an appraisal or home inspection will be waived in some cases, and borrowers will be able to submit a single pay stub to confirm their salaries rather than more extensive documentation.

Fannie Mae says it still won’t be easy to make low mortgage rates more accessible.

“There needs to be some creativity to get back into the marketplace and get through this fear,” said Fannie Mae’s Evans. “The message we’re trying to promote is we can’t be afraid to lend. We want to get back to the mentality of looking at prudent ways to say ‘Yes.’”

Wickert, whose mortgage-approval rate has declined to 93 percent from 98 percent a year ago, said the issue requires a flexibility that only a few lenders are showing. The customer who was rejected by three banks got her mortgage approved by a fourth, which focused on her high income and credit score, not the appraisal rule, he said, adding weeks to the process.

“A lot of people are frustrated because the rates look good, but someone has raised the bar on them,” Wickert said.