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/

Staging Your Home

Have you considered the benefits of staging your home?


Our website offers advice in that direction as well as a new link to How2HomeStage.com...








http://www.goldcoastresidences.com/how2homestage



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