Economists Pronounce the Recession Over

The majority of economists surveyed by the Wall Street Journal say the recession is over and Federal Reserve Chair Ben Bernanke deserves another term.
Of the 47 economists the newspaper surveyed, 27 said the recession has ended and 11 predict another trough this month or next. The rest refused to commit. But they were nearly unanimous is saying that Bernanke should be rehired.
Gross domestic product is expected to grow 2.4 percent in the third quarter at a seasonally adjusted annual rate. Economists were also heartened by a better-than-expected jobless report in July.
Source: The Wall Street Journal, Phil Izzo (08/12/2009)

No Bones About It: This Is a Dog House

Paris Hilton’s Chihuahuas – Tinkerbell, Marilyn Monroe, Prince Baby Bear, Harajuki, Dolce, and Prada – have closed on new digs, reports Life & Style magazine. The property in Hollywood is a $325,000, 300-square-foot canine palace complete with a balcony, a backyard, living room furniture, and a chandelier – plus central air.

“It’s a miniature version of my house,” says Hilton. “I designed it with the help of my interior decorator, Faye Resnick. I wanted it to be fun, cute, comfortable and beautiful. My friends just love it and think it’s so adorable and cool.

”Source: Life & Style (08/05/2009)

Convicted Ponzi Schemer's Properties Hit the Market

The federal government is about to sell off more than $20 million in real estate owned by Ponzi scammer Bernard Madoff. Properties for sale include his Upper East Side Manhattan duplex; valued at $7.5 million; his 3,000-square-foot, Long Island, N.Y., beach house, $7 million; and his 6,475-square-foot Palm Beach, Fla., mansion on the Intracoastal, $7.5 million.

Besides these properties, the Feds are selling Madoff’s 55-foot fishing boat for $1.5 million, approximately $6 million in furniture, and they’ve already unloaded a three-bedroom vacation house on the Cote d'Azur for $1.48 million.

Some observers say the government’s estimate for the Manhattan duplex and the Florida mansion to be high, but they think the Long Island beach house may be bid up beyond the sale price because it is closer to the water than current zoning would allow.

Source: CNNMoney.com (08/03/2009)

6 Real Estate Investment Basics

Miami real estate investor Kenneth D. Rosen outlines his “Big Six” investing guidelines in his new book, Investing in Income Properties.
Here are his six principles in a nutshell. He says all of them need to be present to make a deal worth doing. “If one’s not there, you stop and you don’t buy,” he says.
Location. “A” locations are in areas where there is little land left to build on and the neighborhood has a certain prestige.
No-frills design with quality construction. He looks for three or four parking spaces per 1,000 square feet, no more than 15 percent of space devoted to common areas, and simple but visually pleasing design.
Few or no vacancies. Buildings with lots of small offices are easier to keep full than those that rely on renting out entire floors to one tenant.
Potential for appreciation. Older buildings with lower rents have the most upside potential. As leases expire, the new owner can raise the rent.
Available financing. Find a financial pro to help negotiate the right provisions.
Sale price based on existing income. Avoid buying based on projected income.Source: Miami Herald, Matthew Haggman (08/03/2009)

Don't Abandon Underwater Mortgages

David Bach, author of The Automatic Millionaire Homeowner: A Lifetime Plan to Finish Rich in Real Estate, pooh-poohs the notion that it makes any sense at all to walk away from a property that is underwater.

In an interview with the AOL.com personal finance Web site, Walletpop.com, Bach said about 50 percent of homes in foreclosure are there because their owners walked away from underwater real estate. He calls that “stupid, short-term thinking” and recalls a condo he bought in New York City in 2003. He put down $600,000, then property values dropped and he lost all his equity. “I was bummed,” he said.

But the loss wasn’t permanent. Four years later he sold the condo for $3.65 million – and made a $1.5 million profit, after commissions and taxes.

Some people might have thought it was “logical” to walk away, he said. “But it would have cost me $1.5 million.”

Source: WalletPop, Zac Bissonnette (07/23/2009)

Buyers Shouldn't Wait on Falling Prices

Fear of overpaying for property is common these days, especially in places like New York where prices continue to be unstable.

If you are potential buyer who is frozen because you are concerned that you will pay too much, here are some factors to consider:

• Waiting for the right time can be expensive. Some buyers would have more equity today, despite falling prices, if they had bought when they were first considering it, instead of continuing to pay rent.



• Financing is fickle. Some people who were highly qualified last year can’t find financing this year because the credit market has tightened or their personal financial situation now makes them an undesirable borrower.



• Interest rates are headed up. If prices decline by another 10 percent, but interest rates increase by 1 percentage point, the monthly payment will be the same.

Source: The Wall Street Journal, Douglas Heddings (07/27/2009)

When Will the Housing Market Rebound?

When will the housing slump finally end? Even the experts' crystal balls are hazy.
The Wall Street Journal, which Thursday reported its latest quarterly survey of housing data, says it depends on which city or part of the country you’re talking about.
Home sales were up compared to last year in Washington, D.C., and Northern Virginia, Orlando, Minneapolis, Southern California, and the San Francisco Bay area, according to findings from research firm MDA DataQuick as well as reports from local real estate practitioner organizations.
Sales declined in New York City and nearby Long Island, Chicago, and Charlotte, N.C., and the outlook was particularly bleak in Miami-Fort Lauderdale and much of Florida, Detroit, and Las Vegas.
But Jody Kahn, an analyst at John Burns Real Estate Consulting, a research organization, points out that there are variations even in the hardest-hit metro areas with the most attractive neighborhoods continuing to thrive.
Employment is the most telling factor, says Mark Zandi, chief economist at Moody's Economy.com. "If people don't have jobs or fear losing their jobs, then buying homes is out of the question," he says.
Source: The Wall Street Journal, James R. Hagerty (07/23/2009)