Popular Real Estate Blogs: December 2011

Friday, December 30, 2011

Frogs & Snakes vs Golfers: Matier and Ross bring word that...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Monday, December 19, 2011, by Sally Kuchar

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How To Make a Christmas Tree with Chalkboard Paint

This past week at the place where I do yoga each morning, this great big Christmas tree had sprung up on the wall. Painted quickly and neatly with taped off edges and black chalkboard paint, I love how vivid and charming it is. After this, the tree got filled in with chalk Christmas decorations for the holiday party that night. Click below for more pics and the Giant Chalkboard Menorah as well.

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Conspicuous Correlation: Retail Sales November 2011

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Beyond Bailouts To Handouts

The Herald Tribune reports from Florida. “Much of the slippage in Florida’s share of older residents can be linked to the economic downturn and housing crisis. Census Bureau projections had predicted a 17.8 percent share for Florida in 2010, anticipating a wave of early retirees that did not materialize. The recession’s effect on stock portfolios and housing prices forced many would-be Florida retirees to delay moving, said Pat Neal, president of the Lakewood Ranch development company, Neal Communities. The average age of his customers, he said, has gone from 59 to 63.”

“‘People postponed everything,’ Neal said. ‘It’s now six years later and the biological clock has continued to tick. You know how it goes: denial, acceptance, resignation. People are resigned to the fact that their home in Cincinnati will never have the value it did in 2005.’”

“The total number of bankruptcy filings in the Middle District of Florida is trending down for the first time since the onset of the Great Recession in 2007. At least one bankruptcy attorney said the number of filings might increase in 2012. ‘A lot of the people who were over-leveraged on their credit card debt have already washed through the system,’ said Mark Hildreth, a bankruptcy attorney with Shumaker Loop & Kendrick, in Sarasota. ‘That’s one reason for the drop. But another reason is that banks pulled back on foreclosure filings for much of 2011.’”

“Now that banks have begun ramping up their foreclosure filings again, bankruptcies could follow. Real estate investors, developers and builders are the biggest casualties, according to data tracked by the Herald-Tribune’s Inside Real Estate blog.”

The Orlando Sentinel. “Through the first 11 months of the year, bankruptcies in the Orlando area are down 16 percent from the same period last year, according to the latest federal-court figures. People are working overtime or multiple jobs to make ends meet, keep creditors at bay and avoid bankruptcy. Gwen Donovan, a Cocoa fitness instructor, said she was working seven days a week at three different YMCA locations until she was laid off in June. Now searching for jobs, working part-time and facing foreclosure, Donovan said she is determined not to declare personal bankruptcy.”

“‘I really don’t want to do that — it’s just not right for me,’she said. ‘But my creditors won’t work with me, and the bank is not really working with me. I feel like I’m being forced into bankruptcy, and I don’t want it. I really can make things work if they’ll just stop raking me over the coals.”‘

“‘One of the things we’ve seen is that there has been an incredible increase in the amount of payments that people have made on their credit-card debt,’ said Richard Schram, a senior executive at CredAbility of Central Florida, a consumer-counseling operation. ‘You also have a lot of unemployed people who have depleted their 401(k) funds to pay down their debt and fend off creditors.’”

‘Many people simply have nothing left, Schram said. ‘If you’re unemployed and delinquent on your mortgage or in foreclosure, and you have no savings left, no equity in your house, no resources to pay down your debt, there’s really no incentive to declare bankruptcy,’ Schram said. ‘It’s really a no-win situation: They know they owe, but there’s nothing they can do about it.’”

“As attorneys general in other foreclosure-battered states step up their investigations into fraudulent mortgage practices by large U.S. banks, some Florida groups are accusing state Attorney General Pam Bondi of being soft on the giant lenders. ‘We wanted to convey the idea that we want her to put pressure on the banks to be positive and forthright with their clients,’ said Jerry Pena, a community organizer. ‘… Her stance was that she didn’t feel the banks were as liable as the media portrayed them to be, and people shouldn’t have gone ahead and signed the mortgage paperwork, and that they knew what they were getting into.”

The Destin Log. “Destin resident Randolph Branham was convicted Dec. 15 of conspiracy to commit bank fraud and bribery of a loan officer. Prior to the trial, four others indicted in the scheme pled guilty, which included Crestview attorney Chris Cadenhead, two Destin residents, Jackie T. Fair Jane M. McDonald, and former loan officer Larry J. Malone, of Bainbridge, Ga.”

“During the trial, it was proven that in order for McDonald and Fair to obtain a penthouse condominium located in Destin, Cadenhead, Branham, and Fair conspired to defraud the financial institution, Southwest Georgia Farm Credit, ACA, located in Bainbridge. As a part of the conspiracy, Branham contacted Southwest Georgia Farm Credit’s then-Chief Lending Officer, Malone, to ask that he assist Cadenhead in obtaining a $500,000 loan from the bank, which was going to be used to help purchase the penthouse condominium. With the understanding that Malone would receive a financial benefit in the form of a bribe, Malone agreed to assist and, thereafter, authorized the $500,000 loan to Cadenhead.”

“Three months later, Malone approved a second loan for $700,000 to refinance the first loan and a $150,000 check was sent to Cadenhead. The evidence showed that, from the proceeds of that second loan, Malone was given a $50,000 check, which represented the payment of the bribe originally negotiated by Branham, Branham received a $25,000 check, Cadenhead took $25,000 for himself, and another individual also received some of the money.”

“Thereafter, McDonald obtained loans through fraud in her name for the penthouse condominium with the assistance of Fair and Cadenhead. As a result of Branham’s conviction, Branham faces a maximum sentence of 30 years in prison on both Counts One and Two.”

From TC Palm. “As a way to help clean up neighborhoods, city officials are looking to require foreclosed properties be registered in a database and the mortgage holders pay an annual fee. City commissioners and staff met at a workshop to discuss the possibility of mirroring a St. Lucie County ordinance that generates money to pay for fixing up foreclosed properties falling into decay, such as by mowing overgrown lawns. The registration holds someone accountable for a foreclosed property.”

“Mayor Bob Benton said registration wouldn’t solve the problem of blight on the city due to foreclosed properties, but it would help. Police Chief Sean Baldwin said he likes the idea of registration as a crime prevention tool. Blight and crime have a direct connection, Baldwin said. The latest crime related to foreclosed properties is the theft of recyclable materials, such as copper and aluminum. He said criminals are stealing $25,000 to $30,000 worth of materials from electrical wiring and plumbing to get $50 to $60.”

“Baldwin said people don’t check on foreclosed properties and don’t know when materials have been stolen, which causes problems for the Police Department when it comes to enforcement.”

The News Chief. “Polk County’s total foreclosure filings - default notices, scheduled auctions and repossessions - were down 15 percent in November compared with the year before, and fell 33 percent from October, according to RealtyTrac. Lakeland Realtor Gate Arty said there is still intense local demand for foreclosure properties because of the ongoing supply issues. ‘Any time a foreclosure listing hits now, it almost harkens back to the market of ‘05 and ‘06, where you have multiple offers almost instantly,’ said Arty, of Keller Williams Realty.”

The St Petersburg Times. “From July 2010 through November 2010, Tampa Bay lenders recorded 2,971 short sales with a median price of $112,000. In the same period this year, banks recorded 3,700 short sales with a median price of $89,900 in Pinellas, Hillsborough and parts of Pasco and Hernando counties, according to My Florida Regional MLS data. While short sales have risen, foreclosure sales in the bay area plummeted from their peak of 1,549 in March to 505 last month, a 67 percent drop. The 505 sales last month is 23 percent lower than November 2010.”

“Hungry investors are now entering bidding wars on short sales because the supply of bank-owned homes is so low. ‘The investors are all over these,’ said Craig Beggins, owner of Century 21 Beggins Enterprises in Apollo Beach. ‘They have no choice. This is going to cause the average prices to go up. The cheap houses are going away.’”

The Star. “The U.S. housing market remains in such a state of crisis that homeowners and banks have moved beyond bailouts to handouts — they’re donating unwanted properties to charity. This year alone Real Estate Donations has been handed the keys to over 100 homes from folks who can no longer afford them. That’s a ’significant’ jump from the six to 12 properties that used to be donated to the non-profit agency each year before the subprime mortgage crisis and the collapse of the U.S. housing market, says Charles Konkus who started the charity 11 years ago.”

“Many are in such bad shape, or have been stripped bare during the months they sat empty during the lengthy bank foreclosure process, Konkus has had to turn them down.”

“The program has allowed folks such as New Jersey resident Ellie May, 86, to escape ongoing taxes and upkeep on the dilapidated Florida bungalow she and her now deceased husband hadn’t used in years. When it proved impossible to sell given all the distressed homes up for sale in Florida, her son, Victor Tagliaferro, contacted Real Estate Donations.”

“By April the home should be renovated and ready for an aged vet who has first gone through counselling around how to budget and live within their means, says Konkus. ‘We’re a long way from a recovery, but programs like this may help,’ says Tagliaferro. ‘At least they get people into houses and back into neighbourhoods.’”

“More than two years ago, Chase Magnuson was hired to create George Washington’s ‘real estate gifting program’ because other charities were refusing to accept real estate donations from homeowners just looking to walk away. So far it has closed on 13 properties, from a retail complex to office buildings, rental homes, condos and parcels of land, says Magnuson. ‘I get a number of calls every week on all types of properties. Too often I have to tell them, ‘You have more mortgage than the property is worth and there’s no ‘gift’ in that.’”

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What $785K Will Get You:: A four-bedroom, 3,050-square-foot duplex in Chicago;...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Thursday, December 22, 2011, by Sarah Firshein

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Thursday, December 29, 2011

FLW's Taliesin Apprentices: The legendary architect Frank Lloyd Wright...

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On The Pulse: Ceridian-UCLA Pulse of Commerce Index November 2011

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Sonic.Net Wants to Wire You: Sonic announced on Wednesday it has...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Friday, December 16, 2011, by Philip Ferrato

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From Curbed Marketplace: Swanky Telegraph Hill Condo Has Views Galore

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, December 20, 2011, by Sally Kuchar

Here now, From Curbed Marketplace, highlighting an intriguing real estate listing from the many thousands of properties found in the Curbed Marketplace. Browsing the Marketplace and spot a property worthy of being featured? Send it to the tipline.

Telegraph Terrace in the Telegraph Hill neighborhood has a 3-bed, 3-bath, 2,473-square-foot, two-story condo up for grabs. The building was built in 1988, and it looks like the condo's had the same owner since then. Every single floor has bay views, including Alcatraz and the Bay Bridge. Asking price? $2,395,000. Property highlights include a deck and patio and a jacuzzi tub in the master suite.
· 184 Francisco Street, #6 [Redfin]

184 Francisco Street, San Francisco, CA

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Controversies: While not everyone will like the...

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Awesome Austin House Tours Best of 2011

What surprised us about the awesome home tours that came out of Austin this year was not just how amazingly designed they were, but how varied each one was. Every single home we featured was so uniquely suited to its inhabitants, and we find that sort of commitment to personal style completely inspiring.

TOP ROW
• 1 Erin's Warm & Wood-Wrapped Austin Bungalow
• 2 Eclectic & Cool South Austin Bachelor Bungalow
• 3 LonAnne's Vintage and Modern Texas Charmer
• 4 Nana's Warm and Modern Family Home
• 5 Ami and Sean's Colorful, Welcoming & Art-Filled Home

We also felt like every Austin house tour really imparted a lesson about getting to know yourself, listening to your own style needs and sometimes thinking outside of the box to create a home that really stands out from the rest. Like how creative artist Erin realized early on that by working with a design professional, in this case a budget-sensitive local architect, could help save her more money in the long run, and they were left with an amazing, wood-wrapped home with efficient storage. Or one of our favorites of the year, Elizabeth's house, that blew every "rule" out of the water with every inch of the bold and imaginative home that was treated with creativity, authenticity and color.

BOTTOM ROW
• 6 Elizabeth's Colorful and Adventurous House
• 7 Marco & Shanna's House of Style
• 8 Carly & Jason's Cozy, Charismatic & Glamorous Home
• 9 Chris & Roger's DIY + Modern Farmhouse
• 10 Michael's Masculine & Modern Open Studio

Welcome to Apartment Therapy's Best of 2011 roundup! From December 19 through January 1 we are rounding up our favorite (and your favorite) posts from the past year.

Images: See linked posts for full image credits

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Wednesday, December 28, 2011

From Curbed Marketplace: A Private Island With a Dose of Revolutionary War Backstory

During the Revolutionary War, a small island in Maine's Penobscot Bay was used as a British point of defense until it was captured in 1779 by a group of Continental Marines led by none other than Paul Revere. Today that privately owned land mass is known as Nautilus Island, and while it appears more peaceful than power-mongering, the grandeur of its past life persists. For sale: the whole 37-acre estate, replete with a six-bedroom main house (built in 1882 and since updated), a two-bedroom farmhouse, a guest house, a vineyard, a boathouse (retrofitted with a sweet-looking bar), a 300-foot dock, not to mention a 23-foot boat. About those interiors, they're just about as upper New England-charming as it gets, with an original wood staircase, a stone fireplace, exposed brick, and views of the water. Outside, there's a pool, a tennis court, gardens, and more—all with lighted paths leading the way. Good news for lubbers of land and sea: the place has just been PriceChopped to $7.995M, down from its initial $10.6M ask.

· Nautilus Island, Brookville, Maine [Zillow]
· Maine's Nautilus Island Re-Listed for $7.995M [Realtor.com]

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Snakes Recoil, Frogs Weep: San Francisco park officials say they...

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Animal Houses: While some incorrigible youngsters are shacking...

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AM Linkage: Muni-Themed Wedding; California Going After Fannie and Freddie; Palo Alto Hates Rails; More!

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A Chat With One King Lane's Doug Mack: Over at Fast Company there's a...

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On the Market: Classic New England Colonial Stocked With a Yoga Studio

If it's not totally obvious from looking at the photos, according to the brokerbabble for this home in Fairfield, Conn., "the floor plan has been opened up," leaving the 2,700-square-foot interiors looking all the larger thanks to the lack of furnishings. The four-bedroom house, located in one of the town's "most sought after beach neighborhoods," was built in the late '70s and has 2.5 bathrooms, a backyard deck with access to the renovated kitchen, an in-ground pool, a tool shed, and what the listing text calls a "finished dance studio." Since "yoga studio" sounds way tonier, let's call it that; the property hit the market about a month ago for $899K.

· 42 East Paulding Street, Fairfield, Conn. [Zillow via Zillow Blog]

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Tuesday, December 27, 2011

Bathrooms: Remodels, Ugly Tile, and Storage Ideas Best of 2011

Welcome to Apartment Therapy's Best of 2011 roundup! From December 19 through January 1 we are rounding up some of our favorite (and your favorite) posts from the past year.

Images: See linked posts for full image credits

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AM Linkage: Public Park Woes; Berkeley's Public Housing Problem; Dolores Park Playground Update; More!

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Linkage: Floating Stairs; M.J. Memento Mori; Sun Tracking House; More!

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Curbed Cup 2011: Curbed Cup First Round: (7) The Panhandle vs. (10) La Lengua

The Curbed Cup, our award to the San Francisco neighborhood of the year, is kicking off with 16 'hoods competing for a glorious JPEG of an illustrated trophy. This week we'll have two matchups per day, and all the results and full tournament bracket will be reviewed on Friday. Voting for each pairing ends in the wee hours the next morning. Let the eliminations commence!
[Photo via Jason Rosete]

The Panhandle (or NoPa if you're into naming an entire neighborhood after a newish restaurant) didn't receive a ton of buzz this year. Most young things call it home because of its central location and inexpensive housing. It's true, the Panhandle has a slew of sensible and even quirky condos that are decently priced around the 600K mark. And hey, it has San Francisco's first parklet.

Many a microhoods are creating each year, but how many stand the test of time? And more importantly, how many get a mention on local television? When La Lengua first popped on the scene people were skeptical, but then the Google Gods acknowledged it and most haters quietly accepted its existence. It's a fun nabe, one you can read more about here. Another reason it made the list: It helps out its neighbor during a time of need.

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Monday, December 26, 2011

House of the Day: A Roaring Twenties Brick Estate in New Jersey for Under $2M

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Wednesday, December 21, 2011, by Rob Bear

Have a nomination for a jaw-dropping listing that would make a mighty fine House of the Day? Get thee to the tipline and send us your suggestions. We'd love to see what you've got.

Location: West Orange, N.J.
Price: $1,998,000
The Skinny: It might not possess the political connections of the former Edison estate in town, but this 15-room 1920 brick Tudor in West Orange, N.J. packs a lot of top-dollar style into a $2M package. The highlight of this offering is the well-tended formal acreage, detailed with fountains bordered by flagstone, broad brick patios, and an assortment of garden outbuildings. To our eyes, these 2.65 acres seem perfect for a summertime soiree, but we don't get a good look at the interiors from the listing photos, so it's hard to determine the condition. Still, provided the roof isn't leaking ceaselessly, $2M is a good deal for five bedrooms, seven bathrooms, and original '20s detailing.
· West Orange Twp [Realtor.com]
· Home of Thomas Edison's Son, A Former New Jersey Governor [Curbed National]

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The Empire State Manufacturing Survey: December 2011

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Handmade is Here to Stay: Our Favorite Finds Best of 2011

Growing and expanding since 2005, it's safe to say that Etsy has brought handmade and vintage goods into the mainstream, becoming a household name and forever changing the lives of many artisans and crafters—as well as shoppers. Here are fifteen of our favorite Etsy collections from 2011—find everything from contemporary furniture to garden gnomes!

TOP ROW
• 1 Handmade Gifts for the Home
• 2 Vintage Bookends
• 3 Contemporary Furniture Finds
• 4 Ten Vintage Treasures
• 5 Etsy Does Your Garden

MIDDLE ROW
• 6 Kitchen-Inspired Art
• 7 Creative and Affordable Lighting
• 8 Encouraging Prints
• 9 Decorative Pillows Under $25
• 10 Bold Artwork

BOTTOM ROW
• 11 Calendars for 2012
• 12 Garden Party Must-Haves
• 13 Housewares to Be Thankful For
• 14 Five Festive Finds
• 15 Ten Luxury Beds

Welcome to Apartment Therapy's Best of 2011 roundup! From December 19 through January 1 we are rounding up our favorite (and your favorite) posts from the past year.

Images: See linked posts for full image credits

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Feed Me: Our siblings over at Eater SF...

Our siblings over at Eater SF have a compiled an extensive list of where to eat at both Oakland International Airport and San Francisco International Airport. Like us, you've probably had bad experiences with airport food. It's pricey and greasy and generally not delicious. Quit eyeballing the prettiness of Terminal 2 and pull up Eater's handy guides before your final boarding call. [Eater SF]

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Closed For Business: A few commercial vacancies are about...

A few commercial vacancies are about to pop up in the Mission, Tenderloin and SoMa. Under pressure from the feds, several medical marijuana clubs have shut their doors. "It looks like the U.S. attorney has won this round," San Francisco attorney Brendan Hallinan said. "They've succeeded in shutting down the four dispensaries they targeted." The dispensaries received letters from the U.S. attorney two months ago stating that the feds will side-step the pot clubs and go after their landlords. Rather than fight evictions, the four clubs have opted to shut down. [ABC Local/photo via Shutterstock]

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Celebrity Real Estate: Tom Brady and Gisele Near Completion on $20M SoCal Spread

Photo: Boston Globe

The star quarterback and the (would-be) homecoming queen are almost done assembling their massive dream house in Los Angeles. We knew something big was coming when Tom Brady and Gisele Bundchen dropped a heady $11M for a piece of Brentwood hillside. Then the ever rich and good looking duo spent an estimated $9M building out this enormous French-inspired mansion. Not that the pair have ever had any cash flow problems, but the sale of Tom's sprawling condo in NYC's Time Warner Center for $17.5M couldn't have hurt their new house plans. Meanwhile, perhaps to the ire of Patriots fans, the Brady's have listed, and recently price chopped, their Boston penthouse, currently on the market for $10.5M.
&3183; Brady and Bundchen's Brentwood House is Almost Finished [Curbed LA]
· Tom Brady Sells Time Warner Condo to Vermont's Richest Man [Curbed NY]
· Tom Brady, Gisele Bundchen Price-Chop Back Bay Manse [Curbed Boston]

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NAR Revises the Great Housing Decline

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Sunday, December 25, 2011

Trulia’s Real Estate Crystal Ball for 2012

As we wrap up 2011, Trulia’s Chief Economist looks ahead at what’s in store for the battered housing market and which cities have a big reason to celebrate the New Year.

My crystal ball is never as crystal-clear as I’d like, but I do think that we can expect a gradual economic recovery to move the housing market a few steps back toward normal in 2012. Even so, we still have a long ways to go. As we exit 2011, prices still not have rebounded after their huge declines, inventories are still well above normal, and the foreclosure rate is still far higher than before the bubble. Even the best possible 2012 won’t get us halfway back toward normal.

Before getting into the predictions, let me be upfront about what I’m assuming. After 14 months of job gains, I expect the economy to continue its slow but determined recovery. I don’t do my own macroeconomic forecasts, but every single one of the fifty-ish economic forecasters surveyed by the Wall Street Journal expects the economy to grow throughout 2012, and that makes sense to me. Of course, any unexpected severe political or financial crisis could tip us back into recession, and then all bets are off. Here’s to hoping that doesn’t happen.

My five predictions for housing in 2012:

1) Delinquencies will go down, but foreclosures will go up. Fewer borrowers will fall behind on their payments next year, thanks to the strengthening economy and refinancings. The share of delinquent borrowers is already down more than a quarter from the peak a couple of years ago. But many borrowers who fell behind on their payments during the housing crisis are still in limbo: last year’s robo-signing controversy threw a wrench in the gears of the foreclosure process. That means that some delinquent loans haven’t yet entered the foreclosure process, and even fewer moved all the way through foreclosure — especially in Florida and other states where foreclosures require a longer legal process. Once a settlement is reached with banks over robo-signing in those states, we’ll see a new wave of foreclosures and foreclosure sales that’s long overdue. It’s a necessary step in getting the housing market back to normal even though it will be painful for people who lose their homes — and will rattle American’s confidence in the housing recovery.

2) Rents will rise – which is a bad thing. With fewer people buying homes and more people losing their homes to foreclosures, the rental market is only going to get tighter especially in older, dense cities like New York, Washington DC and San Francisco. High rents will hold back economic growth if businesses can’t pay workers enough to have a roof over their heads. Squeezed city-dwellers won’t get relief until late 2012: that’s when a wave of new multi-unit construction projects that started late this year will be completed and available for rent. To tackle growth-killing high living costs in the priciest cities head on, local governments need to get rid of height restrictions and arduous permitting processes, which hold back urban construction and push development to the suburbs.

3) Mortgage rates will inch up – which will probably be a good thing. A stronger economy will push Treasury bonds and mortgage rates up because inflation becomes more likely and investors demand higher rates to hold bonds. The Fed’s “Operation Twist” will prevent rates from rising too much, but other forces could push rates up higher or, alternatively, send them falling. If investors think the U.S. government will have trouble paying its debt – which they might if the government can’t agree to raise the debt ceiling or narrow the deficit — they’ll demand higher rates because of that risk; but global economic uncertainty – even here at home — could lower American interest rates if investors think American bonds are safe relative to other investments. Got whiplash yet? You’re forgiven. Lots of factors can push rates up or down. For the housing market, which direction rates go is less important than why. Gradual economic recovery is good news for the housing market even if it means higher mortgage rates – that’s what I think will win out next year. We’ll have higher rates for a reason we can cheer.

4) Government will sit on its hands. In election years, politicians don’t take risks: they’re more talk and less action, so don’t expect any bold housing policy reforms next year. What’s more, with the housing market now recovering, we’re not in enough of a crisis to force political opponents together. The time has passed for bold government action on housing. We’ll look back wistfully on the modest policy wins of 2011: borrowers who’ve kept up their payments can now refinance under the expanded HARP program, and the government is planning ways to sell or rent out vacant homes it owns (which will probably be announced in early 2012). But these targeted policies won’t move the needle on national foreclosures, sales or prices.

5) Smart cities are hot. In 2012, the local housing markets that will enjoy rising prices, new construction or both, are those that start the year with stronger job growth and fewer empty homes holding back the market. Based on these factors, along with other leading indicators, here are my top five cities to watch:

—Austin, TX, and Houston, TX. The bloom’s not off the yellow rose of Texas. Steady job growth and a construction revival make Austin and Houston two of my five cities to watch. Texas isn’t hung over from the housing boom like the other big states of the South and West, so there’s little to hold back growth. Honorable mention to Fort Worth and San Antonio.

—San Jose, CA. Wasn’t California at the center of the foreclosure crisis? Didn’t prices there fall more than everywhere else in the country? Yup. But there’s no such thing as the California housing market: California is almost as diverse as the U.S. Even though prices plummeted and foreclosures skyrocketed in inland California, the coast is another world. San Jose’s perennially tight housing market makes it faster to bounce back. The San Jose market –which includes most of Silicon Valley – has rapid job growth and the lowest vacancy rate in the country.

—Suburbs of Boston, MA. This Cambridge-Newton-Framingham market just west of Boston has a strong jobs engine and, like most of New England, missed the worst of the housing bubble. Honorable mention goes to Worcester, one step further west, and Boston’s northern suburbs around Peabody. These areas all benefit from offering more bang for the buck than crowded, expensive Boston: this is because most people looking to move are searching in more suburban or smaller areas than where they live now.

—Rochester, NY. That’s my hometown, and knowing what’s happened to Kodak and other pillars of the local economy, I was surprised when Rochester scored on the top 5 list. (I applied the same formula to all cities and did not have my thumb on the scale.) Prices – which fell little during the boom – are stable, and the economy has weathered blow after blow and is expanding.

What do these markets have in common? Three – Austin, San Jose, and the area west of Boston – are technology centers. In those three metros, as well as in Rochester, a center of high-skill manufacturing industries, education levels are well above the national average. As the recovery proceeds, smart cities are leading the way. During the housing boom, the go-go cities tended to be lower-skill, lower-education metros. But in 2012, smart is hot: it’ll be the revenge of the nerds.

Links to Trulia Insights blog posts:

Jobs Report Bodes Well for Housing

Asking What Our Country Can Do For Housing

Where Construction Activity is Rumbling

The Federal Government’s Re-Fi Plan: The Good, The Bad and The Ugly

Renting Out Government-Owned Homes is the Right Move – But Probably Wouldn’t Make Any Difference to You

Where Vacancies are High

Popularity: 1% [?]

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Linkage: Minimalist Kitchens; Google Engineer's Lair; Eameses; More!

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Beware of the Big Bad Home Sales Revisions

We already know the housing crash was bad, perhaps the worst in history; tomorrow we will learn that it’s worse than we thought. Sold sign

The National Association of Realtors, for a number of reasons I won’t get into because they’ve been widely reported, overcounted home sales during part of the last decade and has spent the better part of this past year figuring out just how badly they did that.

They consulted with economists at the Federal Reserve , Fannie Mae, Freddie Mac, the Department of Housing and Urban Development, the mortgage bankers, the home builders, as well as umpteen other housing specialists, and tomorrow they will release their results.

Expectations are that home sales could be revised down anywhere from 10 percent to 20 percent. The Realtors’ chief economist said the revision would be, “meaningful.”

The revisions will likely not change the fact that last year saw the fewest homes sold on record. They will not change estimates of home prices, nor the home price drop since the 2006 peak, nor will they change inventories of unsold homes in month’s supply (how long it takes to sell that many homes) although absolute inventories will be revised lower. They will not affect monthly or annual percentage changes in sales recently.

The revisions will also have nothing to do with how many newly built homes sold, nor will they say anything about the health of the nation’s homebuilders.

Far more importantly, the revisions will have nothing to do with how many borrowers are behind on their mortgage payments or in the process of foreclosure, which is 6.26 million, according to numbers just released from Lender Processing Services.

The Realtors’ revisions will not change the losses at banks, losses to investors, and losses to the now government-owned mortgage giants Fannie Mae and Freddie Mac, nor to the Federal Housing Administration.

The Realtors’ revisions will change perception; they may even change consumer sentiment. Headlines will scream Wednesday morning, and reporters like me will jump in with the “breaking news” that far fewer existing homes sold over the past four years than previously thought.

The crash will look bigger, as the Realtors are only revising numbers starting in 2007, because “they did a side-by-side comparison of the calculations and the drift began only in 2007,” says an NAR spokesman. “So there was no need to revise earlier data. It appears that roughly half of the revisions come from the drop in FSBO’s [For Sale By Owner].”

Let me repeat what I just wrote: The crash will look bigger. Will that change anything in the economy today? Will it affect the housing market going forward? Will it hamper the fledgling recovery (which I’m not 100 percent sure is really taking hold)?

My guess is no, but the revisions — and the hue and cry surrounding them — will hurt consumer confidence, which was beginning to come around ever so slightly.

The homebuilders reported an increase in buyer traffic and buyer inquiries in December, and said gains in the past months are “an indication that pockets of recovery are slowly starting to emerge in scattered housing markets.” These new numbers will hurt that new-found confidence, not because of anything real on the ground, but because of the perception of just how far we fell.

It is commendable that the Realtors are correcting their miscalculations, but equally distressing that just as our outlook for the future was brightening ever so slightly, and homebuying demand was beginning to awaken, we have to be reminded of a very dark past, darker than we knew.

There are still considerable headwinds facing housing’s recovery, not the least of which are foreclosures, and potential buyers have to factor that into their decision making. They should not, however, be spooked by nasty new numbers that really just put an exclamation point on what we already knew … that housing went from an unprecedented boom to an unprecedented bust and took down our economy with it.

Questions? Comments? document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick

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The Lifestyle They Thought They’d Left Behind

Readers suggested a topic on expectations and the housing bubble. “How can most non-rich Americans reasonably expect to live in the future? Looking at the big costs, food, housing, transportation, education for the young, health care in old age, years in retirement. If it is less than in the past, what is the reason?”

A reply, “Demographics? More old consumers, less young producers? Unfunded promises? More promised money than actual money? A debt driven economy that can no longer acquire debt? A consumer-based economy powered by consumers who are broke?”

Another added, “Is there an implied guarantee in this country that we should live as well or better than previous generations?”

One said, “I like that suggestion and I hope you don’t mind if I expand on it and ask for a discussion on when and how the portion of the 50% that have jumped a few income niches in living standards through the use of credit will realize they’ve got to start sloughing off their material items and assume the lifestyle they thought they’d left behind.”

“It’s occurred to me that the bubble has lasted long enough in duration that some of the younger set (young 30s and below) may not realize that a lot of what they think is normal is smoke and mirrors and so they’re not acknowledging how far back the system is going to correct, not to mention any overshoot.”

“But it’s really not just about that age group. I remember watching my college friends (’83) buying bigger homes, 1 year after graduation, than what their parents had built up to after 20-25 years together. Right off the bat they put all the bells and whistles in them. It kind of did work out for us 80s graduates who if they were smart stayed in one home and are having mortgage burning parties now. Well I’ll be the first to admit while they were paying down their mortgae I was dropping $50-$100 a night in the Boston dinner/bar scene. Now their kids are out of school a year and buying homes even when single. Not sure it will work out so well for them but I wouldn’t be surprised to hear their parents are explaining everything works out just fine if you take the long view.”

“I believe a lot of people who think they’re ‘rich’ will find they just rode the credit bubble up. Some were smart enough to know it was a limited gig and exited appropriately. Many grew their wealth cautiously and it is protected probably as well as anyone can through hedges. But others were caught unprepared and are too late to unload assets.”

“I’m watching this group like a hawk. Yeah, their condescension when we didn’t follow them into the maelstrom angered us. Some even accused us to our face of being jealous losers. I’d love to say to them: You had a beautiful ride but may lose what to you is ‘everything.’ We had stability. Maybe we each got exactly what we wanted.”

Another had this, “How do 2 people survive in what has now become a 3 income household? As a necessity, not for procreation. There are child-labor laws, you know.”

A reply, “Funny you would mention that; I’ve long called the HELOC trend the ‘third income,’ to try to get people to understand how out of control American finances had become. There is no fourth income, so all that expansion had to STOP. And once it stopped, then it had to crash… which the government is desperately and constantly trying to delay and cover up. This must all end, and badly.”

“Food, transportation: these are highly dependent on the cost of energy. So they will be markedly higher.”

“Housing: will continue to fall and then stagnate for a generation. Sadly, too many will have not foreseen this, due to ideology, and will not be able to afford to buy with cash despite the cheapness.”

“Education for the young: this will continue to climb since it’s essentially a middle-class drug. But eventually (maybe 15 years from now) more and more people will reject it as an unnecessary cost. Lots of Americans now are hit with what’s effectively double taxation, since they pay their local property taxes for lousy local schools, while they send their kids to private schools on their own dime.”

“Health care in old age, years in retirement: we had it too good, and the time is here to pay the price. I just had a friend die at age 87. He expired from lack of nutrition in his own home, as he wished and as his family wished. There was no real possibility to keep extending his life at the cost of losing the family home. More and more people will have to make this choice, since economically there won’t be other choices.”

From Bridge Michigan. “Thousands of Michigan home and business owners have been the recipients of hundreds of millions of dollars in property tax cuts in recent years — a savings that few seem to recognize. The impact of that tax cut has been minimized for a variety of reasons. For many taxpayers, the cut in their property tax bills and declining incomes have ‘canceled each other out,’ said Craig Thiel, director of state affairs at the Citizens Research Council of Michigan.”

“Michael LaFaive, director of fiscal policy at the Mackinac Center for Public Policy, a free market think tank, agreed. ‘It only comes because they’re poorer,’ he said. ‘That’s not a tax cut to me. That’s just a recognition that people aren’t as wealthy as they once were.’”

“Walt Sorg, a retired talk radio host and Democratic candidate for a state House seat in Lansing, said the value of his Lansing condo, which he bought in 2005, has fallen about 50 percent. His tax bill is about $1,000 a year less than when he purchased it, even with the passage of several tax hikes during that time. Most of his savings are being spent to reduce debt, he said. ‘Everybody likes a tax cut,’ Sorg said. ‘But when I dial 911, I want someone to respond. I want fire and police services and good roads. None of the cost of providing those things has gone down 50 percent.’”

“Michigan State University economist Charles Ballard said he thinks most of those not spending their tax cuts on necessities are either saving it or using it to pay down debt. ‘A large number of people are over their heads in debt,’ he said. ‘They’re funneling some of it into paying student loans or paying off credit cards. It means they’re not putting that money into buying stuff.’”

“Mike Maziasz, a General Motors retiree living in Troy, said he thinks lower property values are a bad thing, particularly for retirees who want to move to a warmer climate, but can’t sell their homes without taking big losses. ‘Is it a little easier to write the (property tax) check? Yes,’ he said. ‘Do I like having a reduction in my property value? No.’”

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Hong Kong Bubble?: Hong Kong Residential Property Prices October 2011

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Saturday, December 24, 2011

Parklets: Haight-Ashbury's New Parklet, Ready for That Christmas Guinness

Upper Haight's first parklet is coming along. A project of the popular and adjacent Irish sports bar Martin Macks, it's expected to be open for business on Friday, December 23, with more extensive landscaping planned for installation in early 2012. The bricks are for a seating area- not a BBQ- and came from a recent seismic chimney-replacement project at a nearby c.1880's house. City-wide, all parklets will get reviewed after six months and no installation is permanent, but change is in the air. This past Spring, Haight Ashbury merchants banded together in reaction to some bad press.

While Martin Macks' parklet is the first project to wend its way through the bureaucracy, the group is working on improving Haight Street's landscaping and planning street closures for Summer, 2012. Similar to Golden Gate Park's Healthy Sundays but unlike the usual street fairs, with more emphasis on the pedestrian experience and less on the usual itinerant patchouli merchants/satay stands. As for the annual Haight Street Fair, you can look forward to a blowout 50th anniversary in 2017.
· Reminder: Now's the Time to Apply For That Parklet You Keep Telling Your Friends You're Going to Build [Curbed SF, includes video]
· Magnolia/Alembic Owner Joins 70 Merchants to Cleanse Haight Image [Eater SF]

1568 Haight Street, San Francisco, CA

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Globe Trotting: Direct Flights from Angkor Wat for This Cambodian Escape

Inspired by a traditional Cambodian fishing village, at least architecturally, the luxury resort of Song Saa is Cambodia's first private island development. Consisting of 27 individual villas, most of which have already sold to Asian buyers, the resort can be reached by speedboat from the nearby Sihanoukville international airport or directly from the famous temples at Angkor Wat via seaplane. One of the few unsold units, this one-bedroom, one-bathroom villa measures 3,200 square feet and boasts stunning water views, a private pool, and an aesthetic developed by Australian owners Rory and Melita Hunter. Rory, previously of advertising firm Saatchi & Saatchi, and Melita, a designer, happened upon the unspoiled islands while exploring in a fishing boat. The one-bedroom villa is currently offered for $1.75M.
· Cambodian Over-Water-Villa [WSJ]

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Top 10: The 10 Least Expensive Properties For Sale in Pacific Heights

Since the comings and goings of residential real estate significantly slows in December, this will be our last "10 Least Expensive Properties For Sale" in any given neighborhood post of the year. We've enjoyed searching the listings to bring you these weekly lists, and we hope you've enjoyed reading them. Have a neighborhood you'd like us to highlight in 2012? Shoot us an email or let us know in the comments. Onwards!

Today we'll be zeroing in o properties in Pacific Heights. Per realtor standards, the neighborhood's boundaries are Union and California Streets and Van Ness Avenue and Presidio Avenue/Lyon Street. Without further ado, Pacific Height's ten cheapest on the market abodes.

10) 2880 Jackson
Asking Price: $649,000
Square Feet: Unlisted
Price Per Square Foot: Unlisted
The Skinny: This 3-bed, 1-bath apartment's listing is a bit wonky. No square footage or apartment number listed and only an exterior photo. The building's a co-op, so you'll need full board approval before you can write a check for the place. Parking's not included and there are quarterly HOA does of $1,200.

9) 2121 Laguna, #2
Asking Price: $619,000
Square Feet: 650
Price Per Square Foot: $825
The Skinny: Listed in October and less than a month later its sale is already pending. This 1-bed, 1-bath condo's price per square foot is twenty bucks below the neighborhood average, which is a real deal if you consider its location. The condo faces Lafayette Park. Not a terrible front yard to have. There's 1-car parking in the garage and monthly HOA dues are $554.

8) 2295 Vallejo, #103
Asking Price: $615,000
Square Feet: 765
Price Per Square Foot: $804
The Skinny: This 1-bed, 1-bath ground floor condo offers up views of both the Golden Gate Bridge and the Bay Bridge. The condo recently underwent a renovation that included installing hardwood floors in areas of the main room and updating the kitchen's appliances. The unit's directly across the hall from the club room, sauna and gym. There's 1-car parking and monthly HOA dues are $423.50.

7) 1701 Jackson, #302
Asking Price: $569,000
Square Feet: 743
Price Per Square Foot: $766
The Skinny: This building was built in 2001, so it's only ten years old. This 1-bed, 1-bath unit has "$25,000 in upgrades!" We're talking cherry cabinets, granite countertops, stainless steel appliances, etc. There's also a private balcony. There's 1-car parking in the garage and monthly HOA dues are $586.73.

6) 2359 Jackson, #4
Asking Price: $564,000
Square Feet: Unlisted
Price Per Square Foot: Unlisted
The Skinny: This is the first Victorian to make it onto Pacific Height's list. And hey, it was built in 1895 so we're talking some good pedigree. As expected, this 1-bed, 1-bath condo has high ceilings and period details. The shared backyard has a brick terrace with lemon trees. Monthly HOA dues are $353.

5) 2051 Scott, #401
Asking Price: $550,000
Square Feet: 748
Price Per Square Foot: $735
The Skinny: We're seriously swooning over this top floor corner unit. It's a 1-bed, 1-bath condo that has a huge dining room, complete with bay windows. Monthly HOA dues are a low $250 and parking isn't included.

4) 2121 Laguna, #4
Asking Price: $539,000
Square Feet: 640
Price Per Square Foot: $842
The Skinny: This 1-bed, 1-bath condo has some upgrades like walnut flooring, stone countertops, plantation shutters and Japanese sliding shades. We should point out that Lafayette Park is directly across the street. Monthly HOA dues are $518.55 and there's 1-car parking in the garage.

3) 2839 Pierce, #1
Asking Price: $539,000
Square Feet: 720
Price Per Square Foot: $746
The Skinny: This 1-bed, 1-bath unit has been on the market since April of 2010. Chop after chop, not a single offer. Until November, that is. Its sale is currently pending. Monthly HOA dues are an extremely low $190.66 and there's 1-car parking.

2) 1177 California, #830
Asking Price: $448,000
Square Feet: 656
Price Per Square Foot: $683
The Skinny: Finally, a member of the Under 500K Club makes it onto the list. This is also the first appearance of a studio. Located in the Gramercy Towers, this junior condo has access to all the building's amenities, including a heated indoor pool and 24-hour doorman. Monthly HOA dues are a mind-blowing $830.10 and there's 1-car parking in the garage.

1) 1800 Washington, #314
Asking Price: $279,000
Square Feet: 476
Price Per Square Foot: $586
The Skinny: This studio condo has many strings attached. It's a below market rate unit. Meaning, you must be a 1st time homebuyer and income eligible. That means the maximum income one person can make is $104.400 and two people is $119,250. You must also have your homebuyer education certification/proof of class registration. Monthly HOA dues are 544.74 and there's 2-car parking in the garage.

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Celebrity Real Estate: Busty Brunette Barbi Benton Lists Her Bel Air Dream House

Former Playboy centerfold Barbi Benton and her husband, the sartorially daring real estate developer George Gradow, currently have their longtime Bel Air, Calif. home listed for $11.95M. Benton, who spent quite a few of her early years living with Playboy founder Hugh Hefner, has been splitting her time between Bel Air and Aspen, Colo., where she and Gradow own a spectacular hillside structure. Gradow, who made much of his money through investment in mobile home parks, recently spent a few years in the federal pen, courtesy of a conviction for tax fraud. Soon after his release in 2008, the couple listed this sprawling, 11,600-square-foot mansion for $17.5M, but after a series of price chops (and one price hike) the price is down to a lowly $11.95M. The house looks like it could be a product of the '70s, but was actually built in 1990, and sits on 2.75 acres with views over the nearby hilltops to the city.
· Barbi Benton Lists Los Angeles Dream House [The Real Estalker]

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AM Linkage: Difficult Dolphins, Unhappy Sailors, Zynga IPO

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PM Linkage: Presents For a San Francisco Enthusiast; SoMa Nightlife Turf Wars; Rincon Hill Dog Park Opens; More!

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Friday, December 23, 2011

Radar Watching: October 2011

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Philadelphia Feeling: Federal Reserve Bank of Philadelphia Business Outlook Survey December 2011

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Parks & Philanthropy: It's Official: Speedway Meadow is Now Hellman Hollow

[Speedway Meadow, now Hellman Hollow. Images via SF City Guides]

Rec & Parks Commissioners voted unanimously yesterday to rename Golden Pate Park's Speedway Meadow after San Francisco financier/banjo picker/philanthropist Warren Hellman, whose generosity over the years brought us the San Francisco Free Clinic and eleven years of underwriting the annual Hardly Strictly Bluegrass Festival in Speedway Meadow. Hellman is also credited with helping to make the park's sole underground parking garage a reality- serving the De Young and the Academy of Sciences- in the face of fierce opposition.

Speedway Meadow's origins are foggy for most of us, but it was once part of a horse/buggy race route for well-off San Franciscans in the park's early days. Recommended reading: Susan Saperstein's brief history of the Speedway at San Francisco City Guides. Below, the track in 1898, when you could still see the ocean over the sand dunes. The Polo Field took over the western part of the Speedway around 1900. More than a thousand earthquake refugees camped there in 1906; soon after, the serious landscaping began and it became the grassy picnic venue we know today.

· Warren Hellman honored with GG Park tribute [SF Gate]
· Golden Gate Park's Speed Road [SF City Guides]

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Bits Bucket for December 20, 2011

I watch/look at CRE every day.

One fundamental difference between commercial and residential is this:

1. The worst of residential loans were where the borrower put ZERO money down, lied about their income, borrowed on a floating rate, and paid more than anyone could possible afford, even if they had a job in the area around the home. This was a highwire act, and there was no net.

2. The worst of the commercial loans were 15% down (fairly uncommon though, most were still at least 20%, if not more), with income that you had to prove to the lender, at rents that were historically relatively high, but in my experience (which goes back about 15 years), not outlandish, and, for the most part, at fixed rates.

If you had a long-term lease to a stable business, with long term debt, the owner of the CRE has YEARS to reserve extra cash/figure out what to do IF they are overleveraged based on today’s rents/values. Some of the most highly leveraged loans were made in 2006/2007, and were 10-year loans at low interest rates (so we have a ways to go before those hit the wall). Also, much of the debt has recourse provisions, so, even if the property is underwater on value (because it is overrented, etc.), there is an incentive for the owner/guarantor of debt to keep paying on the mortgage as opposed to simply walking away.

There are only points of stress when the property no longer provides enough cash flow to service the debt, which happens less with commercial property than with single-family residential (that started out unable to make the payments).

Look at some of the most overleveraged commercial property REITs as a case study. As an example, DDR–in 2009, when people were worried that it was going to topple over under the weight of its own debt, it was STILL 90%+ leased, with largest amount of its income from WMT and Target, and, the most critical part, its debt service coverage was nearly 2x. Meaning if it’s interest payments were $50, it had cash flow of nearly $100 to make the payments. The risk was with being able to roll over the debt at the same leverage levels, NOT inability to make the payments if there was a willing lender. At it’s low, the stock price was at ~$2. Today, after raising a lot of equity (and diluting the shareholders by roughly 50%), it is generating cash flow of about $1 per year (even with the increased number of shares), and the stock price has recovered to nearly $12.

Ditto for First Industrial (FR; their occupancy fell more, but they didn’t need to dilute existing shareholders as much).

Where CRE has been most impacted has been with buildings intended for smaller businesses (rents could be substantially down, and it costs $ to re-tenant the buildings, which might not be economical given the capital structure), or buildings that were under construction during the crash (where the owner couldn’t make the interest payments with $0 in rent).

It will take longer for the CRE market to “reset”.

What is happening on the ground is as follows:
- DPOs (Discounted Payoffs), where the bank realizes that the group willing to pay the MOST for an asset is the existing ownership, so they allow the existing ownership group to raise the money to buy back the debt at a discount–since it is better economically than foreclosing/selling as REO;
- Bankruptcies/Restructurings, where the cash flow is more than sufficient to pay debt service, or there is demonstrable equity based on today’s values, but the bank doesn’t want to (or can’t, based on loss sharing agreements with FDIC, etc.), the court will either force an extension of the maturity, or let the property go to the bank;
- Short sale, for those banks that are accepting of the economics behind a DPO, but not willing/able to make a deal with the borrower
- Foreclosures/REO sale

The worst of the loans were to land (with no cash flow to service the debt, and the greatest collapse in values). These loans were the first to be worked through. The next worst are those with some cash flow, but not enough to service the debt–the resolution to these varies. The next category are those with cash flow to service the debt, but that there is too much debt relative to what a new lender would provide today.

The number of assets in the above three categories is large, and will create a lot of mini-crashes (asset by asset). To be candid, the number of mini-crashes is too great for it to all work through at once, so it will take time.

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Good Questions: From Filling Blank Walls to Framing Vintage FindsBest of 2011

Welcome to Apartment Therapy's Best of 2011 roundup! From December 19 through January 1 we are rounding up some of our favorite (and your favorite) posts from the past year.

Images: See linked posts for full image credits

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Bits Bucket for December 19, 2011

The FT dot com
December 19, 2011 6:27 pm
Hedge fund alarm bells are ringing over China
By Sam Jones

The eurozone’s political tarantella may still be roiling global markets but some of the world’s savviest investors are already turning their attention elsewhere.

It is not trips to Brussels or Frankfurt that analysts at large, secretive hedge funds are planning in the first few months of 2012, but data-gathering exercises in Shenzen and Guangzhou.

The past few weeks have seen China loom large in the nightmares of many hedge fund managers still smarting from a less-than glory-filled 2011. Concerns are rising for the global outlook over the increasingly negative economic signals emanating from the country.

As the Emerging Sovereign Group, a $1bn hedge fund backed by Julian Robertson and half owned by Carlyle, one of the world’s biggest private equity groups, told its clients in a recent note: “[we have a] gathering sense that the next act of this rolling global debt crisis may well play out in the East.”

Take the most obvious barometer. The Shanghai Composite has been locked into a steady downward trajectory since April that has seen it shed over 27 per cent of its value since then.

ESG sent a team for a two week “deep-dive research trip” to China in October, an investor told the Financial Times.

“Even though an aggressive stimulus program allowed China to sidestep a post-Lehman recession, rendering events there, for a time, secondary to developments in the US and Europe, the Chinese economy could soon take centre stage,” the firm said.

ESG is a voice to listen to: it is one of the few hedge funds that saw the eurozone crisis coming, and has made its clients a considerable sum as a result. Its flagship fund made 39.6 per cent in 2010 and is up a similar amount this year.

It is far from being alone.

“In China, both the official and the HSBC PMI [a reading on manufacturing activity] suffered significant losses in November,” Brevan Howard, the world’s second largest macro hedge fund, with assets of over $32bn under management, wrote to clients in its latest letter. “Worryingly, domestic demand was showing the bulk of the weakness according to both metrics.”

Brevan’s focus remains on the eurozone and US, but it has little doubt that growth in China is set to “moderate.”

But part of the problem many hedge funds face, even large traders like Brevan, is in reading the official data, which only gives a partial picture.

Few things, seemingly, cause greater alarm in Mayfair’s converted townhouses or Greenwich’s discreet office blocks than a lack of information. “Reading the economic pronouncements of the Chinese government is like kremlinology,” laments one UK-based hedge fund trader.

Faced with obscure communications, hedge funds such as GLG Partners are hiring their own analysts and intelligence gatherers on the mainland to stand outside factory gates, and, quite literally according to one GLG insider, “count the cars”.

The biggest worry most have of China is not just a manufacturing slowdown, however, but the popping of a massive credit bubble, finding accurate data on which is even more difficult.

The Bank of China’s new “total social financing” measure, which purports to cover the full gamut of credit extension, has, as ESG points out, increased by the equivalent of over 90 per cent of current GDP in the three years ending in 2011.

Now the measure is beginning to decrease, perhaps indicating the first signs of a crunch.
…

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Thursday, December 22, 2011

CityScapes: A Midcentury Modern Gem Called the "Athens of the Prairie"

Welcome to CityScapes, a column in which we explore some of the nation's oft-overlooked cities and towns: their local history and real estate offerings. Have a suggestion? Do let us know.

Screen-shot-2011-12-21-at-5.16.38-PM.jpg
Photo by Jon Coombs

Were it not for the industrialist J. Irwin Miller, Columbus, Indiana might have turned out like so many other indistinguishable small towns, but Miller, one of the co-founders of diesel engine manufacturer Cummins, was determined to make Columbus one of America's most architecturally admired cities. To that end, Miller set up the Cummins Foundation and offered to pay the fees of notable contemporary architects for public projects, so long as the client chose from a pre-approved list. The result are more than 60 buildings by prominent architects, including Eero Saarinen, I.M. Pei, Robert Venturi, Cesar Pelli, Richard Meier, and Robert A.M. Stern. It was Saarinen, a personal friend of Miller, who designed Irwin's personal residence (above). The interiors were crafted in exhaustive detail by superstar designer Alexander Girard, while the grounds were left to Dan Kiley, the preeminent postwar landscape architect.

Screen-shot-2011-12-21-at-5.19.21-PM.jpg
Photo by Jon Coombs

? The result of all those great minds working together is a breathtaking example of the height of midcentury design, spread over more than 6,800 square feet and 13.5 riverfront acres. Highlights include the cylindrical fireplace in the living room (above), the many personalized Girard fabrics, and horse chestnut trees lining the drive. Designated a National Historic Landmark in 2000, the Miller House was donated to the Indianapolis Museum of Art following the death of Xenia Miller, Irving's wife, in 2008.

Photo: wiki

? The Miller residence is hardly the only attraction in Columbus, which boasts five additional National Historic Landmarks, including Saarinen's North Christian Church. The church, completed in 1964, consists of a hexagonal base with a sloped roof leading to a 192-foot spire. This house of god has the distinction of being the last structure designed by Eero Saarinen before his death in 1961.

WHAT'S ON THE MARKET NOW:

Unfortunately, the Cummins Foundation's focus on public buildings and Miller's own stunning residence did not rub off on the construction of private homes. Without the financial assistance of the foundation, homeowners instead opted for affordable and traditional (read: boring) architecture. That shows in Columbus's somewhat lackluster housing stock. Nevertheless, here are three picks from the local market, because, hey, at least they're in close proximity to the masterpieces.

? Lying directly across the street from the North Christian Church, this three-bedroom brick manse has a better view than most of the city's architectural treasures. That's not to say this place is a treasure itself. Built in 1950, the 3,200-square-foot spread is listed for $220K.

? For something a little more upscale, if no better presented, try this 18-acre horse farm on the outskirts of town. Centered around a five-bedroom, "Williamsburg style" brick mansion built in 1977, the compound is equipped with two barns and a three-bed guest house. It's no Miller House, but it's still one of the more expensive homes in town at $1.1M.

? This 1907 Gambrel cottage is one of the more architecturally interesting houses for sale in Columbus, and also one of the cheapest, asking just $110K. The low price might be due to the interiors, which have neither been updated nor terribly well maintained. Still, at least someone hasn't swung in here on a granite and stainless steel spree. Let's just hope there's some hardwood underneath all that carpet.

· 20th-Century Fox [Dwell]
· 2796 Sycamore St [Zillow]
· 572 S 250 E [Zillow]
· 1602 Washington St [Zillow]

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