Chicago is Second City again...

...in house teardowns, otherwise known as "bash and build." Check out the article here.

Holiday Shopping Edition: Swiss Chocolate

Not everyone can buy Teuscher chocolate in the Bahnhofstrasse in Zurich, Switzerland. Fortunately, we have our own Teuscher here in Chicago. For the story of how Swiss chocolatiers are conquering the world, see this article in the New York Times. The trend is toward exotic flavors (chili pepper and even goat cheese) and darker chocolate. But the Swiss are obliged to turn their attentions abroad -- at 25 pounds of chocolate per capita per year, their compatriots couldn't eat more of the stuff if they tried (or unless they were British, who eat more -- and indeed I even know some Swiss people who prefer Cadbury to Spruengli!). But no one can beat Teuscher for presentation, so if you are looking for a special gift, check them out.

Photo by Dominic Buettner for the New York Times.

Should Chicago Take the Gamble?

Chicago politicians are tired of seeing a potential source of huge income leave the city and even the state. Should Chicago, with its checkered history, get into the casino business? Listen to the story here. NPR funnyman and Chicago native imagines "da casino" here

Good Press

Via The Real Estate Bloggers, check out this well-written, informative, and relatively upbeat article in the New York Sun.

Meanwhile, don't forget our party tomorrow! 'Tis the season!

The Big Freeze

No, I am not talking about our weather, but rather the announcement to come from the White House today on the freezing of interest rates on some subprime loans. Slate has a good summary of the coverage here.

Ben Stein, Scandalmonger

Ben Stein has caused quite an uproar with his editorial in the New York Times on the role of Goldman Sachs in the subprime scandal. You can read the original article here. NPR has an overview of the commentary, and Stein's reaction to it, here. If you still haven't had your Stein fix, you can listen to his own voice on why the credit crunch should not induce panic; or check out his website.

Happy Hanukkah

In honor of the first night of Hanukkah, here are some great recipes for potato pancakes (latkes) from epicurious.com.

Why The Holiday Season May Be a Great Time to Buy a Home

Check out this interesting post from the folks at The Real Estate Bloggers. They make some salient points. For example: "Sellers who are listing in the holiday period are motivated. Odds are they have a job change, a life change, or a mortgage they have to get out of. They need to sell their home and want to do so as quickly as possible. " On the other side of the table, you can of course expect fewer prospects looking to buy at this time of year. That is precisely why the buyers coming around in December "are actual buyers, not tire kickers."

Holiday Shopping Edition: Gifts for Men

"Though the male can be noble in reason and infinite in faculties, he is also easily amused by shiny toys, especially ones that do dumb things on his desk." These are the kind of dead-on insights provided by Patricia Marx in her article "Gifts for Men" in last week's New Yorker. She also gives lots of useful tips for real gifts -- even if most of the shop addresses are in Manhattan! Have a laugh and take a look.

Worth a Try?

Here's an original piece of advice for people having trouble selling their home: ever considered throwing in a personal chef? The younger set might be more interested in a permanent nanny...click on the link for more, or to make your own suggestion.

How Green Is My Alley

The NY Times has a piece today about the environmental impact of alleys in our fair city (picture credit Peter Wynn Thompson for the Times). Well worth a look!

Post-Thanksgiving Issue: Time to Tighten Our Belts?

Are Manhattan department stores "turning into something like a Tijuana street market for Germans"? The word "recession" is on a lot of lips. On the other hand, "the American economy has a history of unexpected resilience in the face of supposedly grim prospects." Highly recommended article.

The Sky Is Not Falling

This analysis of the media's role in the subprime fiasco makes for good and informative reading. The author, Bernice Ross, makes an important point about the geographic specifity of the crisis, which is largely limited to seven states (California, Nevada, Arizona, Florida, Michigan, Ohio, and Indiana). While the high rate of foreclosure may have generalizeable repercussions for the national market, it does not affect every homeowner or potential homeowner in the same way -- if indeed at all.

The Secret Is Out!

Check out this article on the Indiana Dunes -- only forty miles from our fair city! -- and its real estate.

Are You (Female) Waiting Too Long for Your Latte?

A new study in Boston reveals that women have to wait an average of 20 seconds longer than men to be served in coffee shops -- unless the staff is all female! I must say I never noticed -- but I will now start paying more attention...

New Michigan Avenue Development

Sam Zell and the Tribune Company

Check out this New Yorker profile of one of Chicago's most interesting personalities who almost single-handedly put REITs (Real Estate Investment Trusts) on the map.

(Not) Defying Gravity?

The New York Times follows The Boston Globe in reporting that Frank Gehry has been hit with a lawsuit by M.I.T. At issue is the Stata Center (pictured left, courtesy of the Times), which according to the plaintiff is leaking and creaking. Did the university cut corners in construction, as Gehry claims, or is it a design problem? Let the courts decide....

Five Top Reasons to Buy a Condo

In short (to see the American Chronicle article click on the link above):

1)Condos Do Not Require Upkeep
As any single-family-homeowner knows, this is a biggie!

2)A Condo is an Investment
Like a house...but unlike a rental. And in downtown Chicago, it is a very good investment!

3) Amenities
I am addicted to indoor swimming pools now -- for exercise and fun with my grandchildren -- but would hate to have to clean one!

4) Space
Square foot for square foot, condos are more reasonably priced than single-family-homes.

5)Social Life
Ever wonder why the elevator plays such a big role in soap operas and nighttime dramas?...

Chicago on a Shoestring

Click the above for the Frugal Traveler's take on our fair city!

Women Can't Win?

This article in the fashion section of the Times is about a lot more than fashion, or about fashion in its deepest sense. Yes, what you (if you are female) always suspected has been confirmed by the reasearch organization Catalyst:

"In 2006, Catalyst looked at stereotypes across cultures (surveying 935 alumni of the International Institute for Management Development in Switzerland) and found that while the view of an ideal leader varied from place to place — in some regions the ideal leader was a team builder, in others the most valued skill was problem-solving -- whatever was most valued, women were seen as lacking it."

The title of the report says it all: "Damned If You Do, Doomed If You Don't!" The article is not all doom and gloom, however. It also has some practical tips --so if you are a woman in the workplace, check it out!

For a completely different view, see the article by Sara Sklaroff in "The Wilson Quarterly" (http://www.wilsoncenter.org/index.cfm?fuseaction=wq.essay&essay_id=286628), which claims -- largely based on college-enrollment statistics (but also on Hillary Clinton) -- that women "are taking over." What will that mean?

"Schoolteachers, most of whom are women, will finally get the higher salaries they deserve for nurturing the next generation, but it will suddenly become apparent that ­hedge ­fund managers, almost all of whom are men, don’t really need to make millions of dollars a year for moving some numbers around on a computer screen. There will be more police on the streets, so women can walk alone at night without fear. In public, it will be socially unacceptable to spit, litter, scratch oneself, shout, urinate, or wear shorts with ­loafers. "

Well...one can dream, right? But the article doesn't rest with such simplistic distinctions. Women, it seems, can be just as nasty as their mates (or fathers or brothers):

"In fact, there’s evidence that women aren’t that much less aggressive than men—they’re just better at hiding it. Psychologists have found that while men channel their aggression through purported “rationality” (interrupting, criticizing unjustly, questioning others’ judgment), women are more likely to use “social manipulation” (gossiping, backbiting, ostracizing) to get what they want."

Scary or Merry?

Click the above to read the NY Times coverage of the Fed's decision to lower the interest rate!

New Hotel at IBM Plaza?

Crain's Chicago Business is reporting that plans are in the works for a hotel in the lower floors of the IBM plaza (in which the company no longer keeps its offices). The Mies van der Rohe tower would then, according to the terms of the deal, be granted landmark status.

Florida Withstands the Real Estate Hurricane

"The New York Times" has an interesting piece today on Florida real estate, a market in which Chicagoans too have a stake!

Is Big Brother Watching You?

If so, he is getting "smarter"! Click on the title for the NPR story on smart surveillance cameras in our fair city. For reading or listening.

Color Me Beautiful

Domestik Goddess (listed on our favorite links) is featuring a great tool today -- the online, limited version of "GenoPal," which can be purchased in an expanded edition for about $50. The fun thing to do is upload a picture, such as that of this living room above, and then push the button to receive a palette of colors that reflect and complement its decor. Click on the above link to see the palette for this picture, and here to see a detailed palette based on a single color (green):

http://www.genopal.com/online.php?hex=949A6B

It's lots of fun! --And a great tool for decorating or home staging.

Countrywide Changes Its Tune

NPR's "Morning Edition" has excellent coverage of Countrywide's change of heart: click on the link to read or hear the story about the decision to treat customers as such!

Silver Lining

The subprime loan crisis isn't bad news for everybody -- particularly buyers. The New York Times has an interesting article on house auctions (click on the title to read).

In the same paper, Paul Krugman's take on the Fed's coping plan has gotten a lot of attention.

Trump This

Chicago Real Estate Daily is reporting on a lawsuit filed against Donald Trump by a couple whose "friends-and-family" contract was declared null and void by the developer. We'll see what the courts say!

(Photo by Stephen J. Serio)

Chicago #2 in FSBO Sales

"The Real Estate Bloggers" are reporting today that Chicago is "Second City" -- behind only New York -- when it comes to people selling their homes without an agent. What they don't say is how much better both seller and buyer could have done with the right professional assistance, ha ha ! Here is the complete list:

1. New York, N.Y. (12.7 percent)
2. Chicago (5.1 percent)
3. Washington, D.C. (3.2 percent)
4. Miami (2.6 percent)
5. Los Angeles (2.3 percent)
6. Norfolk, Va. (2.1 percent)
7. Atlanta (2.0 percent)
8. Salt Lake City (1.8 percent)
9. Dallas (1.7 percent)
10. Tampa, Fla. (1.6 percent)

Weekend Shopping

When it comes to cell phones, I am a big fan of the hands-free headset. As with most technology, however, the market moves faster than the average shopper. Fortunately, "Slate" has an informative piece that will help you find your next earpiece. Check it out!

Age and Real Estate: The Young, the Old, and the Restless

Check out this great story on Generation Y (also known to some of us more mature types as Generation Why?) and their relationship to real estate.

http://www.realtor.org/rmomag.nsf/pages/Feat1200710?OpenDocument

On the other end of the scale, some sage advice for those contemplating a move in their 70s and beyond: to rent or to buy? That is the question.

http://rismedia.com/wp/2007-10-03/real-estate-in-your-70s-to-buy-a-home-or-rent/

Whatever your age, have a great weekend!

Property Taxes Are Coming Due!!

Don't be caught by surprise when that tax bill arrives! Cook County Residences can expect theirs in the near future. For more information from the county click on the link above. Past and future customers can also contact our offices with any further questions.

Real Estate Psychology: What are Buyers Thinking?

This is a very informative essay for people who are buying OR selling a home. Clear, concise, and interesting: what more can you ask for on a Monday morning?

Weekend Sweets and Treats

Looking for something to do this weekend (besides real estate)? "Daily Candy" has some suggestions.

The Other Gold Coast (no, not Australia)

Have a look at this new blog about life and real estate on the Gold Coast of Zurich, Switzerland. Did I mention it is written by my daughter?

Prairie Avenue Remembered

The Chicago Firehouse Restaurant is hosting an evening with two Prairie Avenue historians tonight. Visit their website for more details.

How to Sell in Today's Market?

Just in time for the weekend, some good advice on how to approach selling your home under current conditions. Rule Number One: find an excellent and experienced agent!

Empty Nest: Loss or Opportunity?

"The New York Times" has a great article today about the psychology -- and the decorating decisions -- of empty nesters. Well worth a look!

New Development in the Media

Please click on this image to see the 2 page spread we did to pre-launch our exciting NEW development at State and Huron.

Top Ten: Zip Code Edition

Always fun to compare and contrast!

New Addition to the Family

Watch this space for info on our new building, THE HURON! The Sales Office will be opening in early October. We can't wait to introduce this great opportunity at the corner of Huron and State.

In more personal news, my new grandson George Gumz Patterson arrived ahead of schedule on Wednesday, September 12! Welcome George, and special congratulations to big sister Edie!

Chicago not Second, Third or Tenth City

Chicago is NOT one of the top ten cities with overextended homeowners, whose housing payments of more than 50% of their income put them at great risk of foreclosure. As The Real Estate Blogger points out, the cities represented on the list are also those with the most dramatic (illusory?) gains over the past few years. Turn to "USA Today" to read the source story in full.

Dodging the Recession Bullet

The latest Anderson Forecast predicts a "bumpy ride" ahead during which recession is -- narrowly -- avoided. Inman news has an informative report (click on link to read). Illinois is not on the list of states expected to bear the full brunt of the crisis. Nevertheless, the author of the Forecast anticipates "a whole new mortage finance system when it's all over."

High-Rise Architecture

Good 9/11 reading on the state of high-rise architecture in America a year ago today.

The Rich to the Rescue

Daniel Gross has an interesting piece in "Slate" about the state of the economy. A good read to start out the week!

What Is Your Favorite Chicagoland Landmark?

Follow the link to cast your vote for the Chicagoland landmark most deserving of funding for restoration and preservation. I know my grandsons are going to be rooting for the Viking Ship! Others in the running include the Chicago Cultural Center and the Fountain of Time Sculpture.

And More Listening

Here is a great interview with Gary Keller, co-founder of Keller Williams Realty.

More Listening: American Heartland Escapes Housing Bust

Today's "Morning Edition" on NPR reports on the solid real estate market in the Midwest.

Listen Up: Real Estate Guys on OPM

Click on the link for informative radio shows on real estate topics that you can listen to on your computer or download onto MP3 players. The most recent topic is "Using Other People Money to Invest" -- it's well worth a listen.

Steve and Barry's

Steve and Barry's is planning a Magnificent Mile store. (You may need to register with Crain's to read the entire article).

Trump Tower

After Labor Day, we start to get reflective. This was the Trump building just a year and a half ago. How time flies!

Mortgage Malaise

How do pessimistic reports on the national housing market translate into opportunities for investors? Click on the link to find out, and don't forget to let us know your opinion.

How We Got Here

For those of you who like to work your way through holidays, here is another historical perspective piece from the Wall Street Journal: "How Credit Got So Easy." It sounds like a ditty that Brad Paisley should record, but in fact it is very informative (no disrespect to Mr.Paisley intended).

Self-Watering Plants

For Labor Day, we thought we'd share something that can save you some work. "Domestik Goddess" has drawn our attention to these little planters that come with their own IV drip. A great gift idea for the doctor, patient, or "black thumb" in your family -- if the drip is empty, it's time to refill! Have a good holiday.

Bash on Wabash

Looking for something to do today? The Bash on Wabash has something for everyone, from toddlers on up. Click on the link for details of this festival in the South Loop.

Real Estate and the Stock Market

Today's The New York Times Magazine has a historical take on property investments in America, the "topic du jour" in the wake of President Bush's remarks on Friday. Has the real estate market of our time become like the stock market of yesteryear? Let us hear your opinion.

Chicago-area home prices rise: report

From the Crain's Chicago Business Newsroom August 31 11:15:00, 2007 By Alby Gallun

(Crain’s) — Prices of homes in the Chicago area continued to rise through the first half of the year, albeit at a slower rate, according to a government report released Thursday.

An index of single-family home prices here rose 3.7% in the 12 months ending June 30, after rising 9.1% in the year-earlier period, according to the report from the Office of Federal Housing Enterprise Oversight (OFHEO). Chicago’s rate of appreciation ranks it 139 among 287 U.S. metropolitan areas that OFHEO tracks.

Home prices in the past year have flattened out or fallen in some areas amid rising mortgage rates, tighter lending standards and growing pessimism among buyers. OFHEO’s national price index rose 3.2% in the 12 months ending June 30, the lowest annual price increase in a decade. The index rose just 0.1% in the quarter.

“House prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates, and weakening buyer sentiment,” OFHEO Director James B. Lockhart said in a news release. “Significant price declines appear localized in areas with weak economies or where price increases were particularly dramatic during the housing boom.”
Ofheo tracks average prices based on repeat purchases or refinancings of the same single-family homes. Because Ofheo analyzes data from Fannie Mae and Freddie Mac, the data covers only properties that have mortgages up to $417,000, the limit on loans the government-chartered firms will buy.

Wenatchee, Wash., had the highest annual rate of appreciation in the country, 23.6%, followed by Provo-Orem, Utah, at 18.2%.

Merced, Calif., led price decliners, with an 8.7% year-over-year drop, followed by the Santa Barbara, Calif., area, with an 8.1% decrease.

Chicago-area home prices edged up 0.3% in the second quarter, and rose 45.0% in the five years ended June 30, according to the Ofheo report.

Why investors should consider real estate

This article struck a chord with me (I hope you like it too):

Thursday, April 12, 2007
By JEFF D. OPDYKE
The Wall Street Journal

With housing prices softening and subprime lenders tanking, investors have been running from anything that smells of real estate. But they may be bailing too quickly, as some parts of the sector are still doing well.
New money going into mutual funds that own real estate has plunged to just $2 million a week, on average, from nearly $400 million a week as recently as mid-February, according to AMG Data Services. Investors in droves are also selling off their shares in real-estate investment trusts, the publicly traded stocks of companies that own everything from apartment buildings to medical centers and shopping malls.

But in some cases, jittery investor sentiment isn't a good proxy for the strength of the underlying assets. It is true that residential real estate is struggling in many parts of the country. But commercial real estate is driven by job growth and the economy, and both are relatively healthy. In fact, commercial-building occupancy is growing nationally, while rents are up about 4.25 percent in the past year, according to Los Angeles-based CB Richard Ellis Group Inc. Midtown Manhattan set a record in March for the city's highest rents ever: $69.99 a square foot, on average.

There is another reason to think twice before fleeing the real-estate sector. From a financial-planning perspective, real estate is an asset that investors should have in their portfolios over the long term. That is because real estate serves as a counterweight to inflation, while REITs, according to data from research firm Ibbotson Associates, have a low to moderate correlation with stocks, meaning Wall Street's trends tend not to impact REIT trends.

Investment pros routinely agree that a portfolio should have between 5 percent and 20 percent invested in real estate that isn't a primary residence. But "real estate" encompasses everything from single homes and duplexes, to skyscrapers and apartments, to strip-malls, medical offices and assisted-living centers scattered around the country.

So where to invest, given the meltdown in some parts of the sector? The options are growing. Just last year, the Chicago Mercantile Exchange began trading futures and options tied to the movement of the S&P/Case-Shiller Metro Area Home Price Indices that track housing prices in the U.S. as well as a variety of cities, including New York, Miami, Chicago and Las Vegas. Meanwhile, just last month, Santa Monica, Calif.-based Dimensional Fund Advisors launched an international real-estate fund that provides investors access to markets where REITs are growing in popularity, including Singapore, Hong Kong, Japan and Turkey.

Here are some of the options to consider:

Real-Estate Mutual Funds and ETFs
The easiest means for creating instant diversity across regions and property styles is to buy a real-estate index mutual fund such as Vanguard's REIT Index fund, or an exchange-traded fund such as the iShares Dow Jones U.S. Real Estate Index fund. Both are low-cost options for owning broad exposure to various types of REITs, and both have fared well over the past year, though each has fallen off in the past couple of months as real-estate woes have mounted.
The drawback: You won't see the potentially big price pops you could by owning individual REITs or even the stocks of home builders.
Sector REITs

Not all real-estate sectors fire on the same cycle, since different sectors play off different economic drivers. Office properties, particularly in urban locations, currently offer the best opportunities, says Bob Gadsden, portfolio manager at New York's Alpine Woods Capital Investors, which runs the Alpine mutual funds. He says companies such as Vornado Realty Trust, in Paramus, N.J., and Boston Properties Inc. are examples of the REITs investors should consider.

Those companies operate in land-restricted markets such as New York City, San Francisco, Boston and Washington, D.C., cities "where there's limited ability to create new supply," says Ken Heebner, portfolio manager for the Boston-based CGM Realty Fund who singles out the same two REITs.

Apartment REITs also offer some potential, as former homeowners slip back into the rental market in the wake of the subprime debacle and the exploding number of foreclosures. The increasing legion of renters is pushing demand higher, allowing apartment companies to raise rents. That is a good combination for leading apartment REITs such as Home Properties Inc. in Rochester, N.Y., and Denver's Archstone-Smith, said Gadsden.
Yet the foreclosure woes are dumping increasing numbers of homes into the residential property market at marked-down prices, and some are certain to land in the hands of real-estate investors who will turn them into rental properties. That means affordably priced rental homes will be competing against apartments for tenants. That is potentially bad for apartment REITs, said Heebner. Moreover, once the subprime crisis abates and interest rates fall again, renters will again become homeowners.

International REIT Mutual Funds
These operate just like domestic REIT funds, but they own real-estate trusts in various countries. A number of financial planners are now including them in client portfolios because "they provide another level of diversification," says Lance Alston, vice president at JWA Financial, a Dallas planning firm that in the past month has begun putting about half of its clients' real-estate exposure in the Dimensional Fund Advisors' International Real Estate Securities Portfolio.

Just like the U.S. commercial property market, commercial real estate globally is doing well amid a strong world economy. CB Richard Ellis global data show that rents are moving up by as much as 30 percent in some markets, while vacancy rates are falling.

Jeremy Mitchell, a financial planner in Sun City, Ariz., says his firm this year has been buying shares in Cohen & Steers International Realty Fund for clients because "you're putting a ceiling over yourself by focusing just on domestic REITs."

The risk: The REIT market in many countries is nascent, as is the local real-estate market. If global economies crumble, real-estate prices — and REIT prices — will come down.

Private REITs
Unlike REITs that trade on Wall Street, private REITs are generally available only through financial planners, advisers and brokers. These REITs typically maintain a constant share price — often $10 a share. And they generate income through their yield, often in the 5 percent to 7 percent range, and provide capital gains only when the portfolios are liquidated, sold to other real-estate companies or go public.

Dean Harman, a financial planner in the Woodlands, Texas, has been putting clients into a handful of private REITs, such as KBS, Wells and Hines real-estate investment trusts.

The benefit: income as well as price stability. When the Dow Jones Industrial Average fell more than 400 points in February, "the value of my clients' REITs didn't move," Harman said.

The drawback: a lack of liquidity. Private REITs allow withdrawals only occasionally, often once a quarter. Moreover, they generally require a holding period of at least one year, and for a few years after that the REIT generally redeems the shares at a discount to the original purchase price.

Home-Builder Stocks
These stocks have been hammered in recent months, yet companies like D.R. Horton Inc., Toll Brothers Inc. and KB Home might not be such a bad play for long-term investors. Their business doesn't need escalating home prices to succeed. They just need volume. It will take some time, but once the subprime and foreclosure shakeout has passed, the builders' stocks — all down roughly a third in the past year — could be fashionable again, says Ernie Ankrim, chief investment strategist at Russell Investment Group in Tacoma, Wash. "If housing prices stay soft, you'll see price declines in land and raw materials, giving the builders stronger margins."

International Real Estate

For a great informative study from the National Association of Realtors (NAR):

http://www.goldcoastresidences.com/internationalsurvey

#5 Chicago

08.21.07, 6:00 PM ET

BEST CITIES FOR SINGLES

RANKINGS

Singles 12
Nightlife 4
Coolness 4
Culture 4
Job Growth 32
Online Dating 2
Cost Of Living Alone 22

Population: 6,453,960
Percent Not Married: 33%
Young Professionals Rank: 16
Drunkest Cities Rank: 6

Most Eligible Bachelor
William Wrigley Jr. II, 43 Chairman of Wrigley

Don't be afraid to crack gum in front of this billionaire date. The divorced Wrigley chairs the world's largest gum producer and is moving the family business into candy land with the recent acquisition of the Life Savers brand. Suggest a baseball game at Wrigley Field or dinner in Wrigleyville.

Most Eligible Bachelorette
Jen Schefft, 30 Reality TV contestant, author

Schefft ended her starring role in the third season of ABC's reality dating-show hit The Bachelorette by rejecting not one but two marriage proposals—and that was after breaking off her engagement to Andrew Firestone, whom she had met as a contestant on The Bachelor. Earlier this year she published Better Single Than Sorry: A No-Regrets Guide to Loving Yourself and Never Settling.
Reported By Elisabeth Eaves

FULL COVERAGE >

from Forbes.com

Condo Hotels: What to Check Out Before You Check In

About 20 years ago on the high seas of south Florida's real estate market, many dated condo hotels lacked quality and prestige. The scourge of changing tax laws made them less attractive investments and many conversion projects were sunk.

In the late 1990s came The Mutiny, a hotel that took over the condo hotel concept, according to Joel Greene, president of Condo Hotel Center, an Internet real estate broker.

The owners of the apartment building in Miami gutted their property and turned it into a condo hotel or condotel, reintroducing the concept to the area and generating a pirate's plunder for its buyers, with unit prices increasing 10 times from beginning to sell-out. Other developers began following suit, revamping old hotels or constructing them brand new.

"Today there are approximately 60 or more condo hotels at various stages of development in Florida," says Greene. "By 2008, there will be several hundred condo hotels, located throughout the U.S. and around the world."
But before eager adventurers raid this ship, they must be aware of what they are getting into, says Greene, or be fooled by a treasure that falls short of the legend.

Condo Fever

A condo hotel, as defined by Greene, is a large, usually high-rise property located on prime real estate and operated by some of the biggest hotel names like Trump (TRMP) , Marriott's (MAR) Ritz-Carlton, Starwood (HOT) and Hyatt. It is usually used as a second or vacation home.
Unlike a traditional hotel residence, however, the condo hotel unit allows individual owners to place their unit in the hotel's rental program when not in residence. The revenue generated from the rental program is split -- usually 50/50 -- between the hotel operator and the owner.
Despite the slowing real estate market, condo hotels are continuing to thrive, largely because 74 million baby boomers are looking for places to spend their money.
"Condo hotels are part of at least 1% of every hotel project currently being built," Greene notes. Condo Hotel Center is contacted by three or four new developers each week.
"It's a win-win situation for all parties concerned," says Greene. But beware if you believe you'll reap a queen's ransom, because you're in for a disappointment.

Buyer Basics

A condo hotel unit is a hassle-free investment on prime real estate. When in residence, five-star amenities are at the owner's fingertips; when the owner is not around, the hotel maintains the property. Perhaps most enticing, however, is the ability to generate income through the hotel's rental program, helping offset ownership expenses.
To maximize profits from appreciation, buy your unit in preconstruction stages, Greene advises. Early buyers of the Trump Chicago condo hotel, for example, saw a 95% increase in the selling price before the building was 75% sold out, he notes.
But if profit, not pleasure is your concern, consider becoming a landlord.
Condo hotels are not registered as securities and can't be sold as investments, says Andrew Robins, partner in the lodging and gaming practice at Proskauer Rose. Buyers should view them as vacation spots with benefits, not buried treasure.
Generally, your unit will generate some revenue to offset ownership costs, but don't expect sizeable annual returns. Under Securities and Exchange Commission regulations, developers can't guarantee occupancy rates or revenues, so a premium brand name will generate higher rental income, but the accompanying pricey operating expenses can surprise and frustrate residents.
"Growth makes me cautious because not every hotel will work as a condo hotel," says Howard Nussbaum, president and CEO of the American Resort Development Association.

Appreciation depends on the destination, he says, so do your homework.

Developer's Duel

For the developer, condo hotels make good financial sense because they can recoup much of their construction costs up front, even breaking even upon completion of the property, says Greene.
The developer receives approximately 50% of the revenue form the condo hotel rental program and retains whole ownership of the property's meeting facilities, spas, lounges and restaurants.
But despite the allure, hire a good attorney, Nussbaum cautions.

"The recent proliferation [of condo hotels] has made for a level of popularity and desire that creates the opportunity for mistakes," he says.

The biggest challenge for developers, says Robins, is how to reconcile the need of a branded hotel to control the guest experience with a unit purchaser's typical rights.
The legal structure varies by state. In Florida, for example, the condo unit owner has very little input as to how the building is maintained and operated in order to assure that the hotel standard is upheld. The developer retains control over the look of the building in carpets, lobbies and hallways.
"The theory behind the [Florida] model is that the buyer of the unit doesn't want to buy just any condo unit ... but rather a brand [that meets] certain standards in terms of physical and operational qualities of the unit and building," says Robins.
In the New York market, says Robins, the level of control a condo association retains over common areas can't be altered in most cases, and unit owners have more control over operating expenses.

"There is a lack of certainty of the brand's ability to really control the standards," says Robins, but New York is such an attractive market that developers and branded operators are willing to take that risk.

Most importantly, developers everywhere must avoid focusing on the economics of the rental program, lest they violate SEC regulations.

Prime Land and Hot Sand

The risks involved for all parties aren't stopping the wild crusade of condo hotels around the globe with condos in Mexico, Panama and Costa Rica leading the way because of their attractive price ranges. A Trump studio unit in Fort Lauderdale, Fla., for instance, costs about $700,000 but a similar sized Trump unit in Panama City may only cost around $300,000.

"Trump is the number one developer [in the business] ," says Susan Greene, marketing director for Condo Hotel Center. "His stuff is just gold."

The 423 residences in Trump Tower Honolulu sold out in one day.

Some of the best deals today are found in Dubai, says Joel Greene, "where theme parks that will total more than twice the size of Orlando's Walt Disney World are currently under development."
In the U.S., Greene recommends Las Vegas, specifically Vdara, a planned condo hotel in the MGM Mirage (MGM) CityCenter.
Koloa Landing, a residential resort community in Kauai, Hawaii, will complete its 323 resort condos by 2009.

"We're trying to raise the bar as far as luxury," says sales director Jeff Skinner.

The property will be a refreshing change from the dated hotels in the area, and Skinner predicts 80% of the residents will participate in the rental program.
And deeded fractional ownership residences, like The Ritz-Carlton Residences, combine residency with the legendary services of the Ritz Carlton Hotel Company, including personal chefs and concierge services.
"Instead of paying $5 million for a slope-side vacation home in Aspen, this new breed of buyer is purchasing a three-bedroom residence at the base of the mountain for approximately $300,000 and using it for four weeks or more a year," says Ed Kinney, vice president of corporate affairs and brand awareness for the Ritz-Carlton Club.
In short, if you want a prime vacation spot without hassle or strain, a condo hotel is smooth sailing -- just leave the treasure map at home.

Copyright

By Annika Mengisen

TheStreet.com Staff Reporter

Which Way is the Market Going? (3)

This article from "Business Week" tackles the housing market's worries:

S&P Ratings News April 18, 2007, 7:36PM EST

Housing: Is the Worst Over?
S&P sees some tentative signs that the market is bottoming out, but it will take a while to get rid of excess inventory of unsold homes

by David Wyss From Standard & Poor's RatingsDirect

Like grief, a housing downturn is a multistage process. Stage 1 is denial: If I hold onto the house long enough, I'll get my price. For the U.S. housing market, this stage began in 2005 and ended in mid-2006. Stage 2 is anger: If I can't sell this house, I'll just cancel the sale of the house I was going to buy, and stay where I am. Cancellations of sales agreements now appear to have peaked. Stage 3 is acceptance: I'll get what I can and move on if necessary.

The U.S. housing market appears to be just now entering that third stage, which will probably continue through the rest of 2007. Sales will stabilize, but until the market finishes stage 3 and gets rid of the excess inventory of unsold homes, home prices will continue to drop.

Getting to stage 3 has been painful. In the current housing slump, starts have dropped to an average annual rate of 1.52 million over the past three months, from 2.07 million in 2005. The median existing home price is now down 3.1% from a year ago. By historical standards, however, the falloff in housing starts and sales is still moderate: In the average postwar recession, starts have plunged 50% from peak to trough and to a low of fewer than 1 million units. The decline in the median home price, though, is more uncommon, with the first year-over-year drop since the 1930s likely from 2006 to 2007.

Signs of a Thaw
And homeowners, particularly those with adjustable-rate mortgages, are feeling the financial pressure. Although the economy remains generally strong and unemployment low, higher interest rates are squeezing mortgagees who stretched too far to buy their homes.

Foreclosure rates are rising, though they're still moderate by historical standards.

The good news is some tentative signs indicate that the market is bottoming out, at least in terms of sales and starts. The winter is a bad time to look for signs (other than those that say "For Sale") because weather usually dominates month-to-month movements in sales and, especially, starts. Convincing evidence that the housing market has seen the worst won't appear until we get data on the spring buying season, which started in April.

But the early data suggest that starts are leveling out near 1.5 million and existing-home sales near 6.25 million. The inventory of unsold existing homes has come down to 3.55 million from 3.86 million in July.

Existing-home sales rebounded in January, to a seven-month high of 6.46 million (annual rate), but that remains down 4.3% from January, 2006, and is 8.7% below the record 7.08 million sales reached in the peak year of 2005. New home sales have been hit harder, plunging to a four-year low of 937,000 (annual rate) in January. That's down 20.1% from a year earlier.

Working on Affordability
The reason for the decline is that homes have essentially become more expensive. After all, for the average buyer, a home's price is the size of the monthly mortgage payment. As mortgage rates have risen to their current 6.2% (30-year conventional) from 5.5% three years ago, the effective cost of a house has risen nearly proportionately.

The change has pushed down the National Assn. of Realtors' affordability index (which is based on the monthly income required to qualify to buy the median existing home with a conventional mortgage) to 106.5 in the fourth quarter of 2006 from the record high of 136.5 in the first quarter of 2003.

What could improve affordability? For one thing, Federal Reserve rate cuts, which we expect to begin late this year, would make adjustable-rate mortgages cheaper, helping sales and moderating the impact of rate resets on adjustable-rate borrowers. However, just as the Fed's rate increases since mid-2004 have had little impact on long-term bond yields, and thus fixed-rate mortgages, Fed cuts will also have little impact on long-term rates.

Drag on the Numbers
Rate resets are normally capped in any year and have several more increases to go to catch up with the 4.25 percentage points in rate hikes the Fed has already imposed. Thus, even if the central bank begins to cut rates, resets will continue to push payments up.

Housing is the major factor slowing economic growth in the U.S. If not for the decline in residential construction activity, real GDP growth in the second half of 2006 would have been 3.4%, about even with the average of the preceding four quarters, instead of downshifting to 2.3%. We expect housing to subtract about a percentage point from growth in the first half of 2007. The indirect impact of housing on the economy, however, has so far been small.

Consumers haven't backed away from spending, with the personal saving rate remaining well below zero (negative 1.2% in February). The strong stock market has offset the lower increase in housing wealth. However, trouble could be around the corner if stock prices continue to fall.

Will Borrowing Slow?
One impact has been lower sales of building materials, furniture, and appliances, which are directly related to home purchases. Building material stores reported a 0.4% sales drop in January compared with a year earlier. Furniture sales were up 1.7%. That's below the 4.3% rise in overall retail sales, but at least it wasn't down. Appliance sales are hard to track because stores that sell them also tend to sell electronics, which have been very strong.

One of the biggest questions is whether the higher interest rates and slower rise in home equity values will trim borrowing. Because of home equity loans and cash-out refinancings, Americans have been using their homes as ATM machines. Last year, homeowners took $654 billion (nearly 7% of disposable income) out of their homes. Low interest rates make these loans cheap, especially because they're usually tax deductible.

So far, this activity doesn't seem to be tapering off very much. Refinancings remain high, though some of it probably stems from turning adjustable-rate loans into fixed rates as mortgage holders get the jitters. Moreover, Americans still have a lot of untapped home equity. In fact, the average loan-to-value ratio in the U.S. housing market has barely changed in recent years. It was 46% in the third quarter of 2006, compared with 42% at the end of 2001.

Some Possible Equations
Higher interest rates will probably cut down on borrowing, and thus—eventually—spending, but interest rates, rather than slower home price appreciation, will be the major force. Americans have no shortage of ways to borrow and seem determined to use all of them.
Our baseline U.S. economic forecast includes a two-year drop of 8% in the average existing-home price from the peak reached in early 2006. Along with the growth of income, this decline brings the ratio of home price to income back to 280% by 2010, still above its long-term average of 260%. If the home-price correction comes faster, however, it could help cause a recession. One possibility: Dollar weakness pushes up bond yields and thus mortgage rates, triggering a quicker drop in home prices.

In our alternative economic projection, we assume that bond yields rise sharply, carrying the mortgage rate up to 8% by the end of 2008. Home sales and prices plummet. The average existing home price tumbles 20% from its early 2006 peak, more than twice the decline seen in the baseline. Housing starts drop under 1 million units, a fairly typical recession falloff, by early 2008. The decline triggers a recession, starting in the fourth quarter of 2007.

The stock market drops sharply in response to both weaker earnings and higher bond yields, compounding the impact of lower house prices on wealth. The unemployment rate rises above 6% by yearend, instead of peaking near 5%, as in the baseline. Still, the recession is mild, similar to the 2001 or 1991 downturns.

Worst Case…and Beyond
This scenario is intended as a worst likely case. We believe it has about a 10% probability of occurring. The home-price correction would be severe, in fact unprecedented, at a national level. However, it would be similar to the size of declines seen in Texas in the mid-1980s or in New England in the early 1990s. Even so, the recession it generates is far from severe.

One exacerbating factor could be the subprime market. There's little question that lenders were too enthusiastic in lending money to people who were stretching to buy houses they perhaps shouldn't have bought. When investors become too complacent about risk, and get stung, they often overreact and become too cautious.

Legislative actions aimed at preventing foreclosure would increase losses to lenders and drive up the cost of mortgages. That could compound the effect of overcautiousness by making lenders even less willing to write mortgages. If mortgages are harder to get and more expensive, sales and prices could drop more, and a recovery in the housing market could become very difficult.

Of course, other events, such as oil price shocks or an overall recession, could make economic matters worse in the near future, and any of those possibilities would make our baseline scenario seem benign.

Wyss is chief economist for Standard & Poor's in New York.

Source: www.businessweek.com

Which Way is the Market Going? (2)

April 2007 Existing Home Sales Fall 2.6 Percent

May 25th, 2007 · No Comments

While this is not surprising, it explains some of the concern by real estate agents and brokers out there. Existing home sales dropped 2.6 percent for the month of April, 2007 as buyers stayed home.

The Northeast took the biggest hit losing 8.8 percent of it’s sales from the previous year. Sales in the West, South, and Midwest were tempered all down around 1 percent.

The National Association of Realtors reported Friday that sales of existing homes fell by 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units. That was the slowest sales pace since June 2003.

The median price of a home fell to $220,900, an 0.8 percent fall from the midpoint selling price a year ago. It marked the ninth straight decline in the median price.

Sales were weak in all parts of the country. The Northeast experienced the biggest decline, a fall of 8.8 percent in April from the March sales pace. Sales were down 1.7 percent in the West, 1.2 percent in the South and 0.7 percent in the Midwest. via Yahoo! Finance

Source: http://www.therealestatebloggers.com

Which Way is the Market Going?

Source: Crain’s Chicago Business

Percent Change in MSA (Metropolitan Statistical Areas) - House Prices through Q1 2007
Chicago-Naperville-Joliet, IL (MSAD)

MSA Rank* 1-Yr. 1-Qtr. 5-Yr.
109 5.06 0.86 47.80

Source: http://www.ofheo.gov/

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Illinois Housing Statistics

Illinois Home Sales Rise Again in March; Statewide Median Price at $198,000

March home sales in Illinois rose for the second consecutive month in 2007 while a mix of factors including weather and consumer confidence add up to a drop in sales compared to the record for March set in 2006. Total home sales were up 36.2 percent in March 2007 to 11,979 homes sold compared to 8,792 homes sold in February 2007. Sales were 20.3 percent below the all-time high for March of 15,024 homes sold in March 2006.

The Illinois median home price in March was $198,000, up 0.1 percent from $197,900 a year earlier. The median is a typical market price where half the homes sold for more, half sold for less. Year-to-date, home sales were down 14.2 percent to 29,390 compared to 34,235 homes sold January through March in 2006.

“In March we experienced the usual jump into the spring season with sales up well over February but we’re definitely in a market that is still finding its legs. The severe weather in February and March certainly took a toll on housing activity in Illinois,” said Robert Zoretich, president of the Illinois Association of REALTORS. “Tentative buyers and sellers are still trying to read the market and are taking their time in deciding whether to list or buy. This is a time when market conditions including favorable mortgage interest rates and inventory levels bode well for those who are ready to purchase.” Read the full release.
Illinois Condo Sales Close Second Best Year on Record in 2006; Fourth Quarter Statewide Median Price at $199,900
Condominium sales help bolster an Illinois housing market in transition throughout 2006, while fourth-quarter sales figures were down compared to the same period a year ago. According to the Illinois Association of REALTORS (IAR) fourth quarter report, total home sales (which include single-family homes and condominiums) totaled 35,186, down 16.0 percent from 41,883 home sales in the fourth quarter of 2005. For the year, total sales were down 8.9 percent in 2006 with 167,860 homes sold compared to 184,199 sales in 2005. The fourth quarter 2006 median home sale price was $199,900, down a slight 0.5 percent from $201,000 a year earlier.

“The Illinois housing market reported a modest slowdown in sales compared to other regions of the country which had sharper declines due to overheated market conditions. Although local markets will vary, REALTORS are reporting signs of the market picking up and are looking for slow, steady gains in both home sales and price appreciation in 2007,” said IAR President Robert Zoretich. “The homeownership rate in Illinois reached 70.8 percent in the fourth quarter of 2006 and is slightly ahead of the national rate of 68.9 percent. Conditions in Illinois are promising for long-term demand going forward.”

Link to the 4Q06 release and year-end charts.
4Q06 All Sales Report
4Q06 Single-Family Report
4Q06 Condo Report

© Illinois Association of REALTORS®

The Facts About FSBOs

A close look at "For-Sale-By-Owner" (FSBO) datafrom NAR's 2006 Profile of Home Buyers and Sellers

Each year a small army of home sellers throw caution to the wind and “go it alone” — without the assistance of a licensed real estate professional.

This ever-decreasing band of risk-takers, ventures into the land of pricing, marketing, screening, scheduling, showing and paperwork, with the goal of saving some money. It's often an experience they find less than rewarding.

The numbers (if not the sellers) tell the story.

In 2006, just 12 percent of sellers chose the FSBO (“For Sale By Owner”) route, down from 13 percent the previous year, according to NAR’s 2006 Profile of Home Buyers and Sellers. This is down from about 20 percent in 1987.


But more telling than the decline in FSBOs is the fact that 40 percent of all FSBOs sold their homes to someone they knew prior to the transaction. This means that only 7 percent of all home sales are open market FSBO transactions. The rest are simply unrepresented sellers in private transactions.

From NAR's 2006 Profile of Home Buyers and Sellers

Eighteen percent of FSBO sellers indicated that preparing the home for sale was the most difficult task when selling without the assistance of an agent, followed closely by understanding and performing paperwork (16 percent) and selling within their desired time frame (15 percent).

As for profit — after all is said and done, FSBOs don’t always come out with fatter wallets. Again, the numbers tell the truth.

Homes sold with the help of a real estate professional in 2006 sold on average for 32 percent more than FSBO sales. The median FSBO selling price in 2006 was $187,200, compared with $247,000 for agent-assisted transactions.


Other FSBO Resources:Field Guide to Working With FSBOs2006 NAR Profile of Home Buyers and Sellers

Copyright NATIONAL ASSOCIATION OF REALTORS®Headquarters: 430 North Michigan Avenue, Chicago, IL. 60611-4087DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-20201-800-874-6500

Fourth Quarter Metro Home Prices & State Sales Likely Have Hit Bottom

WASHINGTON, February 15, 2007 -

Existing-home sales in most states were down from year-ago levels in the fourth quarter, marking the likely bottom for the current housing cycle, while prices in many areas corrected as a result of sellers’ willingness to negotiate, according to the latest quarterly surveys by the National Association of Realtors®.

Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate (1) of 6.24 million units in the fourth quarter, down 10.1 percent from a 6.94 million-unit level in the fourth quarter of 2005. Even with the general decline, six states showed increases in the sales pace from a year ago and one was unchanged. Complete data for three states were not available.

In the fourth-quarter, metro area single-family home prices, examining changes in 149 metropolitan statistical areas, (2) show 71 areas had price gains from a year earlier, including 14 metros with double-digit annual increases, and 73 areas had price declines; five were unchanged.

David Lereah, NAR’s chief economist, said it appears the fourth quarter was the bottom for the current housing cycle. “This information confirms 2006 was the year of contraction, and hopefully the fourth quarter was the bottom of this current business cycle,” he said. “Home sales are leveling at historically high levels, and examination of data within the quarter shows home prices stabilizing toward the end. When we get the figures for this spring, I expect to see a discernable improvement in both sales and prices.”

The national median existing single-family home price was $219,300 in the fourth quarter, down 2.7 percent from a year earlier when the median price was $225,300. The median is a typical market price where half of the homes sold for more and half sold for less. For all of 2006, the median price rose 1.4 percent to $222,000.

A new comparison of annual single-family home prices in metropolitan areas shows that typical sellers experienced healthy gains on the value of their home over the last five years in almost all 131 available areas, even in areas with recent price declines.

NAR President Pat Vredevoogd Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said a broader view of home prices is necessary because housing is a long-term investment. “Since the typical owner stays in a home for six years, it’s more useful to look at the five-year comparison for metro area home prices – most of them are seeing strong gains,” she said. The median five-year price gain is 41.8 percent.

Combs said there’s a lag in measuring market conditions. “The fourth quarter data is showing us recent history, but right now, buyers are responding to seller pricing and incentives, and there’s a bit of a pent-up demand as a result of buyer hesitation during the second half of 2006. We’re not looking for big changes, but a gradual rise in sales and home prices is projected – that will be good for the overall housing market and related industries.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 6.25 percent in the fourth quarter, down from 6.56 percent in the third quarter; the rate was 6.22 percent in the fourth quarter of 2005.

The biggest total sales increase was in Indiana, where existing-home sales rose 13.7 percent from the fourth quarter of 2005. In Arkansas the fourth-quarter resale pace rose 11.1 percent from a year earlier, while Texas experienced the third strongest gain, up 6.2 percent.

Over the last five years, metro areas with the largest single-family price gains include the California areas of Riverside-San Bernardino-Ontario, up 155.3 percent, and Los Angeles-Long Beach-Santa Ana, up 142.3 percent, followed by the Miami-Fort Lauderdale-Miami Beach area of Florida, up 135.4 percent.

In the fourth quarter, the largest single-family home price increase was in the Atlantic City, N.J., area, where the median price of $339,800 was 25.9 percent higher than a year ago. Next was the Salt Lake City area, at $223,600, up 22.7 percent from the fourth quarter of 2005. The Trenton-Ewing area of New Jersey, with a fourth quarter median price of $289,000, increased 18.9 percent in the last year.

Median fourth-quarter metro area single-family prices ranged from a very affordable $78,400 in Elmira, N.Y., to nearly 10 times that amount in the San Jose-Sunnyvale-Santa Clara area of California where the median price was $760,000. The second most expensive area was San Francisco-Oakland-Fremont, at $733,400, followed by the Anaheim-Santa Ana-Irvine area (Orange Co., Calif.), at $690,700.

In addition to Elmira, N.Y., other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania, with a fourth-quarter median price of $80,000, and Decatur, Ill., at $89,200.

In the condo sector, metro area condominium and cooperative prices – covering changes in 58 markets – show the national median existing condo price was $220,900 in the fourth quarter, down 2.1 percent from the same period in 2005. Thirty-one metros showed annual increases in the median condo price, including seven areas with double-digit gains; 27 metros had price declines.

The strongest condo price gains were in the Austin-Round Rock area of Texas, where the fourth quarter price of $160,000 rose 16.5 percent from a year ago, followed by the Newark-Union area of New Jersey and Pennsylvania, where the median condo price of $352,600 rose 16.4 percent from the fourth quarter of 2005, and Springfield, Mass., at $160,400, an increase of 14.6 percent.

Metro area median existing condo prices in the fourth quarter ranged from $102,600 in Wichita, Kan., to $580,300 in the San Francisco-Oakland-Fremont area. The second most expensive reported condo market was Los Angeles-Long Beach-Santa Ana, at $402,000, followed by the San Diego-Carlsbad-San Marcos area of California at $358,200.

Other affordable condo markets include Bismarck, N.D., at $103,500, and Greensboro-High Point, N.C., at $119,100.

Regionally, the Northeast saw an existing-home sales pace of 1.04 million units in the fourth quarter, which was 6.6 percent below a year ago. The median Northeastern resale single-family home price was $274,600 in the fourth quarter, which is 2.5 percent below the same period in 2005.

After the Atlantic City and Trenton-Ewing areas, the strongest price increase in the Northeast was in Pittsfield, Mass., with a median price of $220,600, up 4.7 percent from the fourth quarter of last year, followed by the Albany-Schenectady-Troy area of New York with a median price of $198,700, up 4.1 percent.

Total existing-home sales in the South were at an annual rate of 2.49 million units in the fourth quarter, down 8.5 percent from the fourth quarter of 2005. After the gains in Arkansas and Texas, the next strongest increase in the South was in Kentucky, up 5.6 percent from a year ago, while Mississippi rose 2.0 percent.

The median existing single-family home price in the South was $181,700 in the fourth quarter, which is 3.7 percent below a year earlier. The strongest increase in the South was in the Beaumont-Port Arthur area of Texas, where the median price of $120,000 was 15.1 percent above the fourth quarter of 2005. Next was Raleigh-Cary, N.C., at $226,300, up 14.5 percent from a year ago, followed by the Cumberland area of Maryland and West Virginia, with a 14.4 percent gain to $98,000.

In the Midwest, total existing-home sales declined 8.6 percent to a 1.43 million-unit annual level in the fourth quarter compared with a year earlier. The median existing single-family home price in the Midwest was $161,800, down 4.2 percent from the fourth quarter of 2005.

The strongest metro price increase in the Midwest was in the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price of $116,400 was 6.6 percent higher than a year ago. Next was Dayton, Ohio, at $119,500, up 5.9 percent from the fourth quarter of 2005, and Rockford, Ill., at $121,500, up 5.7 percent in the last year.

In the West, the existing-home sales pace of 1.28 million units was 17.8 percent lower than the fourth quarter of 2005. The best performance in the region was in Alaska where existing-home sales rose 0.4 percent from a year earlier.

The median existing single-family home price in the West slipped 0.4 percent to $355,100 during the fourth quarter. After Salt Lake City, the strongest increase in the West was in the Salem, Ore., area, at $223,100, up 14.9 percent from fourth quarter of 2005, followed by Farmington, N.M., at $183,000, up 14.0 percent, and Spokane, Wash., at $189,200, up 12.2 percent from a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #

(1)The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing. NAR began tracking the state sales

© Copyright NATIONAL ASSOCIATION of REALTORS®

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Barneys move may shake up Oak

Block of boutiques could see development wave

January 29, 2007 By Thomas A. Corfman and Eddie Baeb
-----
Barneys New York is close to a deal that would move its Oak Street store across the street and double its size in a proposed new building, a development that would signal a dramatic transformation of the tree-lined block of quiet boutiques and salons.

The luxury department store would lease about 100,000 square feet in a five-story structure to be built on the site bounded by Oak, Rush and State streets, according to sources familiar with the negotiations between Barneys and developer Mark Hunt of Chicago-based M Development LLC. Mr. Hunt declines to comment.

Barneys would move in two years when its lease expires on its 46,000-square-foot store at 25 E. Oak St.

The Chicago location is a fraction of the size of Barneys' flagship stores in Manhattan and Beverly Hills, Calif. A spokeswoman for Barneys, a division of New York-based Jones Apparel Group Inc., didn't return calls for comment.

Oak Street, once a quaint strip of gray-stone and red-brick buildings, is already a haven for national and European luxury retailers such as Italian clothier Prada and French leather-goods designer Hermès. But a Barneys deal would be a key step in a wave of new development along Oak Street, including possibly the retailer's current site.

That, in turn, could boost other developers' chances of luring high-end retailers to nearby projects, such as the Elysian Hotel, under construction at Rush and Walton streets, and a proposed mixed-use development for a site at State and Walton that includes the Scottish Rite Cathedral, say real estate brokers not involved in the Barneys deal.

"With the lack of supply of high-rent, specialty-store space along Michigan Avenue, this deal could open up significant opportunities for new fashion and high-end-goods retailers to come to Chicago," says Stanley Nitzberg, a principal in Mid-America Real Estate Corp., an Oakbook Terrace-based retail real estate firm.

The new Barneys building could also include a Citigroup Inc. bank branch at the corner of State and Oak, sources say. The branch would move from a 6,800-square-foot storefront that's part of the Esquire Theater building at 58 E. Oak St., which is owned by Mr. Hunt. He is working up plans to replace the shuttered theater with a retail and boutique hotel development. If the Barneys move is completed, its current site is expected to draw interest from developers.

But the department store's current landlord also is expected to market the space to new tenants and could charge substantially higher rent. Barneys, which has been at the location since 1992, currently pays an estimated rent of less than $28 a square foot a year, not including taxes and expenses. That figure is well below the market on Oak, where prime street-level space can rent for $250 a square foot. Some places would need to take out payday loans with that big of a difference. Ben Ashkenazy, president of New York-based Ashkenazy Acquisition Corp. and a member of the landlord group, did not return calls requesting comment.

Copyright 2007 by Crain Communications Inc.