Hamptons Holdouts - Unique Houses That Haven't Sold -- New York Magazine

We've all seen the signs whose colors have faded from the sunlight, as they get knocked over by wind storms and snowplows during the winter and then covered up by the tall grasses of summer. Sadly, some of these signs appear to have become permanant parts of the landscape. Here are a few from Steven Gaines. There's plenty more to come...md


Hamptons Holdouts - Unique Houses That Haven't Sold -- New York Magazine

Average Mortgage Rates Hit 4-Year High

Mortgage Rates Hit 4-Year High(June 22, 2006) -- An increase in mortgage costs last week discouraged home owners from refinancing.Refinancing's share of all loan applications slipped to 35.5 percent last week from 35.7 percent the previous week, and was down 43 percent from the same time last year, according to the Mortgage Bankers Association.The MBA says its Market Composite Index, a measure of mortgage loan application volume, last week declined 0.8 percent to 567.6.The average rate on a 30-year, fixed-rate mortgage jumped to 6.73 percent, the highest it’s been since May 2002. The average rate for a 15-year, fixed-rate mortgage increased to 6.37 percent and a one-year ARM increased to 6.22 percent.— REALTOR® Magazine Online

Harris Interactive | The Harris Poll - Doctors, Dentists and Nurses Most Trusted Professionals to Give Advice, According to Harris Poll of U.S. Adults

You don't want to see where real estate agents scored...md

Harris Interactive The Harris Poll - Doctors, Dentists and Nurses Most Trusted Professionals to Give Advice, According to Harris Poll of U.S. Adults

The Rant About The Rants - Don't Mess With Blanche

Are Banks, Newspapers Behind Recent Real Estate Industry Rants?by Blanche Evans

First, the blow below the belt.
On Tuesday, June 20, 2006, dozens of newspapers across the nation published the so-called report, "How The Real Estate Cartel Harms Consumers and How Consumers Can Protect Themselves," by the executive director of the Consumer Federation of America.
Then the uppercut, published the same day in the New York Times by a Brookings Institution senior fellow. "Commission Accomplished" is also a diatribe that criticizes the real estate industry and its commissions. Both reports are unabashed, unsubstantiated opinion pieces, and what's strange is that they both appeared on exactly the same day. Why?
Dozens of news services gleefully joined in the tarring and feathering of the real estate industry by reporting the CFA opinion piece as news when it should have been placed in the editorial section along with the Brookings Institution fellow's piece.
News organizations reported that the consumer group called the real estate industry a "cartel." Not one paper questioned why neither the CFA report or the Brookings Institute editorial had any quotes, facts, or anything other than the opinion of the authors. The real estate industry's side of the commission question was all but ignored by virtually every newspaper.
This isn't journalism. It's complicity. And with good reason -- newspapers are part of a different cartel -- the "Replace-Realtors-With-Us" Cartel.
To begin with, real journalists should ask themselves why they're getting a gift of a story. There are two sides to every story, and if you don't find out what the other side is, you're not doing your job.
Here are just a few questions that should have crossed these journalists' minds:
Why is opinion being released as news? What does the CFA or Brookings Institute have to gain from slamming real estate agents and what they earn?
Is this story true? Can it be substantiated? Are the facts correct? Why would CFA acknowledge that real estate commissions have come down from 6-7 percent, yet accuse the "real estate cartel" of holding consumers hostage to paying 6-7 percent? One of these can't be true -- so which is it? In all fairness, the CFA report dimly acknowledges other studies that have shown that commissions have fallen as much as two points nationwide, but failed to name the studies. And, if commissions are falling, then what's the complaint?
By now, any decent journalist's suspicions should be in overdrive. Next question. Why now? And what about that timing? Two prestigious consumer-oriented groups slamming commissions on exactly the same day? Sorry, folks, but that's a little too coincidental for me.
So, let's turn the tables. Who's interested in using the biggest newspapers in the nation to slam the real estate industry? And why did each paper go along? Why did the Chicago Tribune, Los Angeles Times, Washington Post and dozens of others do the exact same story in the exact same way without giving any attention or voice to the other side?
That should make a good journalist wonder: Do the newspapers have something to gain, too? Are newspapers part of the "Replace-Realtors-With-Us Cartel"? Let's find out.
(By the way, we don't have to prove there's a cartel. All we have to do is suggest that one exists, just as the research institutions and newspapers have done. Let's see if we can smear the "Replace-Realtors-With-Us" Cartel with as few facts as they used to smear the real estate industry.)
What we have is two venerable research institutions slamming real estate commissions on exactly the same day using the biggest name newspapers in the country. Coincidence? No. Planned attack. Yes. So who are the generals in the war room?
So find out using some questions from Journalism 101. We have the what happened and where it happened, so who, when, and why?
Who: Both research organizations claim to benefit consumers. Can the answer can be found in the donor-contributors to these institutions? Who is asking for these so-called opinion reports and editorials to be published, and what do they have to gain?
Surprise! With only a little digging we find out who. Guess who's been a major contributor to the Consumer Federation of America since 2001? "Bank of America," says Tom Stevens, president of the National Association of Realtors. Bank of America is the leading voice to get banks into real estate.
And to the Brookings Institution? "LendingTree and Bank of America funded a research report that was very unfavorable to the real estate industry last year," says Stevens.
Hmmmm. Now we're getting somewhere.
When: Since it was obvious from the timing of the two reports that they were intended to do maximum damage to the real estate industry, what was so important about this date - Tuesday, June 20, 2006? Why would more eyes have been tuned to this story on that particular date?
Turns out there was a reason. Congressman Mike Oxley -- that friend of banks and enemy of Realtors and chairman of the Financial Services Committee (that oversees banks) was scheduled to hold hearings about the real estate industry this week. (Oxley's number one campaign contributor category is commercial banks, by the way.) Unfortunately, due to a personal integrity problem, he had to cancel. Too late to pull the CFA release and the Brookings editorial? We wonder. Oxley is in hot water over alleged violations of federal campaign finance law. He has bigger fish to fry than Realtors right now.
Why: What do these people have to gain? It's no secret that banks want to get into real estate, and have used everything from the Treasury, to Oxley, to HUD, to the Department of Justice to accomplish it. They are the leaders of the Replace-Realtors-With-Us Cartel.
But guess what? There's a willing ally. Newspapers want to get into real estate, too. So they're only too happy to pile on Realtors. And they come with a handy cartel of their own!
Most of the major newspapers that published the CFA commission rants are partners in a strategic venture called Classified Ventures. The strategic partners, "whose objectives are to collectively capitalize on the revenue growth in the online classified advertising categories of automotive, apartments, and real estate," are Belo Corporation, Gannett Company, Knight Ridder, Inc., The McClatchy Company, Tribune Company, and The Washington Post Company.
Having had their butts kicked by Craigslist and eBay, not to mention Realtor.com, the newspaper cartel members are determined to get their classified ad business back. Managed by former Bank of America executive Tim Fagan, Classified Ventures owns HomeGain, a company that gives real estate agents the opportunity to compete for customers. One of the criteria used is commissions! May the lowest agent win! Then the agent gets to pay a hefty "referral fee" to HomeGain. (Whoever says commissions haven't come down hasn't been doing his homework! Another popular commission-crushing idea to get Realtors to give rebates to buyers, paid for out of referral fees they've given to companies like HomeGain and LendingTree. What's cool is that sellers don't know they're giving something to the buyer and the online company looks like a hero. What will they think of next?)
Also, because newspapers have largely been denied access to the real estate cartel's MLS listings, (even while they charge real estate agents ridiculous classified and display ad fees,) they are forced to pursue the FSBO market. According to the Classified Ventures website, the company allows consumers "access listings throughout our national network of local newspapers."
Hmmm. It's all coming together!
(Wasn't that clever -- making an accusation look like fact? So, prove it isn't true, Chicago, Washington, et al.)
Realtors - are you angry yet? Have you had enough yet? It's high time the real estate industry hit 'em back where it hurts, just like they hit the real estate industry.
What really ought to happen here is two things:
Every Realtor in America should jerk their housing ads to any newspaper that published the Brookings or the CFA "editorials." We should have a advertising holiday where not one agent puts an ad in the newspaper out of protest. Then, we can see if not having newspaper ads really hurt sales, which my guess is, it won't.
Forward this story to every Realtor in America so they'll stop putting money in the enemy's war chest. Every dime you give to newspapers is a dime that will be used to put you out of business. Stop supporting any company that wants to put you out of business!
If money talks for donors, it should sure as hell talk for advertisers.
Published: June 21, 2006

Related Articles:
Consumer Federation Report Repeats 1996 Accusations
Rotten Media Spin On Realtors Begins Anew
Bank Of America Launches Real Estate Center
Blanche Evans is the award-winning editor of Realty Times, the Internet's largest independent real estate news service, where she oversees the nation's leading real estate writers and columnists.
Known for her keen insight on real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is the author of two best-selling real estate books: The Hottest e-Careers In Real Estate, an Internet marketing primer for real estate professionals, and Homesurfing.net: The Insider's Guide To Buying And Selling Your Home Using The Internet, a comprehensive homebuying and selling guide.
In 2006, Blanche will have three new consumer books published, including:
Housing Bubbles, Booms and Busts, McGraw-Hill
National Association of REALTORS® Guide to Selling A Home, Wiley & Sons
National Association of REALTORS® Guide To Buying a Home, Wiley & Sons
In addition to authoring books and her duties at Realty Times, Blanche is sought out for her expert opinions by the nation's premier print and broadcast news organizations, including: CNN, The Wall Street Journal and The Associated Press. She's also in demand by real estate organizations -- from MLSs to real estate brokerage companies to large franchises -- who hire Blanche to address their groups and provide up-to-the-minute analysis of real estate industry happenings.
Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, recognized as one of nine "Notables," and was named "Top Reporter Covering the NAR," (Delahaye-Bacon's, 2005)
She can be reached at blanche@realtytimes.com

Commission Accomplished - New York Times

Theory is that these articles are written by either:
1- the few people left in the country whose family and friends don't rely on real estate sales for a main part of their income; or
2- resentful folks who have been priced out of the market they wish to live in because their income has not kept pace with real estate price appreciations.

It's a very responsible position, this journalism thing. You'd think that they would take it seriously!

Commission Accomplished - New York Times

The New York Observer Real Estate: Southampton Mansion Asking $48 Million

Southampton Mansion Asking $48 Million
Out on the East End, where many New Yorkers dream of being right about now, there is a high-priced mansion soon hitting the luxury market.

In Southampton, telecommunications mogul Donald Burns is preparing to list his massive house on Lake Agawam for $48 million, according to a source with knowledge of the listing.

Located on 10.5 acres, the grand home has a distinguished legacy since it was built in 1911. Architect Goodhue Livingston, of the renowned firm Trowbridge & Livingston, both owned and designed the home-which measures over 20,000 square feet. Mr. Livingston's firm also designed such notable buildings as the St. Regis Hotel, the J.P. Morgan headquarters on Wall Street, and the Hayden Planetarium.

Decades later, the family of Hamptons real-estate broker Michael Shaheen owned the palatial house, before selling it to Mr. Burns for around $20 million in 1999.

The sprawling property is comprised of three parcels: in addition to the main house, there is a 19th century barn and a seperate guest cottage. Also, there are two pools (one for the guest house, of course), a spa, and tennis courts.

Brokers Jay Flagg and Raymond Smith, of Prudential Douglas Elliman, will be listing the property, according a source. Mr. Flagg declined to comment.

- Michael Calderone

"Consumer" Report More Like Crabby Bickering

"In our twenty years of research and reporting on the residential real estate industry there has never been a more irresponsible, speculative, worthless report than this one. There is no research to back up a single opinion, just the authors using the bully pulpit to inflame fears among consumers about housing professionals and take shots at one of the most useful industries ever conceived.

There is much we can do to improve service to consumers, but the prescriptions listed by Brobeck and Woodall are totally baseless and useless. We should forcefully rebut this report and thereafter ignore anything that comes out of the Consumer Federation of America if this is the kind of junk on which they put their names."
Steve Murray
Editor, REAL Trends

Steve Murray is one of the most highly regarded consultants to the real estate industry. He works with many of the leading companies in the industry, helping them to improve their quality of operations through better management and agent development.

The much-awaited CFA report, which is attached below, does read like a family squabble, with emotional accusations and finger pointing, delivered in a way as to hammer home the point that the complainer is a victim.

I agree with Steve, that we have much to do to improve our service to consumers. This report just creates a wider divide between realtor and consumer, and if you think about how many realtors there are out there, nothing good can come of it. md

HOW THE REAL ESTATE CARTEL HARMS CONSUMERS AND HOW CONSUMERS CAN PROTECT THEMSELVES - CONSUMER FEDERATION OF AMERICA

HAPPY FATHERS DAY

Another Interesting Perspective...

This writer from The Times (London) is not Dame Edna, but if you read it in The Dame's voice, it's even more enjoyable. Looking at our area through the eyes of a foreigner is sometimes refreshing. They see things we take for granted and sometimes arouse our awareness of our own backyards.

“Never be afraid to laugh at yourself, after all, you could be missing out on the joke of the century.” Dame Edna Everage quote.


Go the Long way - Sunday Times - Times Online

Out Of Touch Reporter Talks to Top Broker and Bottom-Fishing Customer

If I sound annoyed, it's because I am! I don't know where Dan Dorfman has been for the last ten years, since he unceremoniously left Money Magazine and CNBC after allegations of insider stock trading, but he is clearly reaching for readers by writing an article about Hamptons real estate. After speaking to perhaps the best broker in the Hamptons, Diane Saatchi, who made some great points about the market (that Dorfman seemed to ignore) he then goes on to quote this so-called "buyer" who is going around offering $995,000 on homes listed at $1.59MM. These people have reportedly been looking for three years. They'll be looking for a great deal longer unless they get realistic with their offers. These are they types that work real estate agents who don't value their own time to exhaustion, and then end up buying a fizbo. They either feel that they are entitled to something they aren't, or don't really have the money to buy and are lonely, and they know that real estate agents love new customers like St. Bernards like skiers with broken legs. Like I said, if I sound annoyed, it's because I am!

In this market, it's not uncommon for properties to sell at 95-102% of asking price. Granted, the number of propeties selling since late 2005 has been down, but the median and average prices continue to rise steadily. When things do slow down in this market, actual selling prices MIGHT drop to 89-95% of ask, which happened in 2001 and again in 2003 for a few months.

So...stick to things you know about, Dan. To those "buyers" he quoted, they better keep the rental catalogues handy. md

Hamptons Is Cooling - June 16, 2006 - The New York Sun

How to Catch a Workout, if Not a Wave - New York Times

Members of the Hamptons Paddle Club in New York.
Photo by Mark Paris for The New York Times

How to Catch a Workout, if Not a Wave - New York Times

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EDITORIAL POLICY
CODE.TV does not accept promotional consideration; all content is strictly editorial unless otherwise indicated.

Manhattan Real Estate Prices Continue to Rise

New York City and The Hamptons are inextricably connected - just ask the limo drivers, helicopter pilots and personal assistants that make the 90-mile trip numerous times a week, especially during the summer.

A study completed a few years ago showed that 50% of Hamptons real estate buyers were from NYC, 30% were from Long Island (Nassau and Western Suffolk) and the remaining 20% of buyers came from all over the globe. I suspect that those numbers have not changed much recently, although it's altogether possible that the 20% may have grown since the dollar has been so weak against foreign currencies lately. That being said, there have been times when NYC real estate prices were falling and Hamptons prices were stable. At the moment, they appear to be on par. md
NY1: Top Stories

RealEstateJournal | Owners of Million-Dollar Homes Are Not Who You'd Think

300 people were surveyed, and 35% of them own second homes. An additional 35% are considering buying a second residence. Gillespie says he doesn't see that penchant for owning a second home changing anytime soon, despite rising interest rates.
The study actually found that 70% of respondents would not change their planned luxury purchases even if rates keep rising.

RealEstateJournal | Owners of Million-Dollar Homes Are Not Who You'd Think

Bernanke and Inflation: A Headache for Markets

Lou Barnes is a mortgage broker and nationally syndicated columnist based in Boulder, Colo. He writes for Inman News, an online real estate trade news service. He's one of the best, most informed real estate business writers around. He says interest rates may have topped out:

"Connect the dots…the Fed is reacting, leading only in its insistent forecast of economic slowdown ahead, a forecast joined by everyone, if only because every central bank on the planet is working to make it so. One scare story in the bond market has held that foreign rate hikes would drive up U.S. rates; didn't happen on Thursday, maybe because frightened stock money went to bonds, more likely because the whole world economy is topping out.

One of the most disciplined investment managers, Brad Bickham (Sergeant Bickham Lagudis) I think is on the trail of the right question, now: how slow will the slowdown be? Forget whether, and count on a reduction in inflation pressure. Bickham is looking for a soft landing (really hardly any landing at all), and his corporate earnings case is a good one. However, the behavior of stocks and commodities make me uneasy, especially about the deeply underpriced risk of credit default as central banks conclude four years of the easiest money any of us has ever seen."




WSJ.com - Bernanke and Inflation: A Headache for Markets

Soapbox | Appraisal Ethics, Ideas and Industry Issues

From Jonathan Miller's SOAPBOX:
Soapbox | Appraisal Ethics, Ideas and Industry Issues: "Today Hollywood is presenting us with a remake of The Omen, on this the purported birthday of the devil, 6-6-06. The original and the remake are being released 30 years apart, 1976 and 2006, and during both these periods we see some other similarities "

Housing Bubble About to Bust?

"On average, homeowners who have owned a home for at least three years feel that new mortgage interest rates will increase 1.6 percentage points over the next 12 months, with 50 percent expecting an increase between one and two percentage points. Sixteen percent anticipate a jump between three and four percentage points. "
Housing Bubble About to Bust? Consumers Say No in ING DIRECT National Survey:

TO BUY, OR NOT TO BUY...THAT IS THE QUESTION

OPINIONS ARE LIKE...
You would like to buy a second home in the Hamptons, but you're undecided; after all, your brother-in-law thinks you should wait until prices drop 30-40% before you jump in (and your brother-in-law rents because he's been waiting for Hamptons prices to drop 30-40% since 1997). News reports of Miami condo price drops are all over the place, as well as reports of the glut of pre-construction condo projects in Las Vegas, San Diego and Ft. Lauderdale. Virtually every business writer in the country has predicted a catastrophic collapse of the real estate market in a dramatic way. Have you noticed that since the web has entered its third dimension with blogs everywhere, online news and media reports, newstainment, Forbes, FNN, NYT, CNBC, etc., we can read the same story in three different publications, all written by different people? The real estate bubble has been a media darling since last fall and seems to have the shelf life of Monica Lewinski.

The agent you're working with in the Hamptons has sounded down lately. She says "nobody's buying...they're all waiting". She's had her real estate license for a year and a half after leaving a midtown ad agency for a "better life" in the Hamptons. She's never been through an ebb in the real estate business and was selling houses like non-fat sugar-free vanilla macchiatos until last fall.

BUY OR RENT?
So you're trying to decide between either renting a four-bedroom house with a pool for $40,000 for August through Labor Day, or pulling the trigger on that $1.5MM home you like so much in Watermill. You need some facts...fast.

First, screen calls from your brother-in-law. Second, do some research on your own. Third, get yourself a real estate broker with some experience, or at least someone who is part of an experienced sales team. One who knows how to look for opportunities in all types of markets.

GET THE FACTS
If you go to www.liprofiles.com, look under "Facts & Figures". By combining Southampton and East Hampton Township information, you'll end up with the following:

TOTAL SOUTHAMPTON AND EAST HAMPTON PROPERTY SALES (East End, South Fork)
Year.....# Sales......$ Volume.........Avg $......*Median $...%Inc
2002....3634.....2,405,599,090....661,970.....415,000.....100%
2003....3383.....2,727,731,500....806,305.....505,000.....122%
2004....3927.....3,991,663,068...1,016,466....636,667.....153%
2005....3439.....4,477,246,772...1,301,904....763,333.....184%
'06..Q1..633......1,057,961,290...1,671,345....829,833.....200%
*Median $ is estimate

The above figures indicate that for the first quarter of 2006, while the NUMBER of sales is down 25% vs '05 Q1 (849 vs. 633), the AVERAGE sales price is up 28% and the MEDIAN price is up 9%. Preliminary figures for April and May indicate that the same trend will continue: less number of sales and higher sales prices.

PRICES AND INTEREST RATES
So let's suppose that sales price increase rate slows by one-half and AVERAGE prices only go up 14% and MEDIAN prices only increase by 4.5%. Interest rates have increased roughly .5 to 1.0 point in the last six months, since the Fed has steadily increased its rates. If the interest rate goes up an additional .5 to 1.0 point in the next year, some people will be priced out of the homes they want.

An $850,000 mortgage at 6.5% interest calls for $5,373 in monthly payments. If you opt not to buy now and the property increases in value 10% (less than one-half the increases of the last four years), and if the interest rate on the now-$935,000 mortgage goes up to 7.5%, then payments will be $6,538, an increase of nearly 22% in the monthly payment. Make that a $1.5MM mortgage under the same scenario and payments go up $2,056 ($9,481 vs $11,537). And don't forget about that $40,000 rental.

So buy now, or buy later? You make the call. md

Welcome To "The Beach"

Lockhart Steele, Ben Leventhal and Noa Taffet of Curbed.com, the popular real estate blog that began in NYC and has stretched out to SF, have launched THE BEACH, which appears to be all about the Hamptons. Check it out - they've got some pretty neat things on the site. md



The Beach: Post-Plywood East: Golden Pear & New Paradise

When Does A Listing Stop Being A Listing?

We all know that some sellers put their homes on the market either for that "everything has a price" price or just to be able to have their friends see their house advertised for $XX millions. "Pssst! See that woman in the white dress with the big diamond earrings? She's the one who married that guy who left her that house and she's now cashing out." It's a familiar story...after three years on the market at an exhorbitant asking price, the property listing becomes virtually invisible, or worse, fodder for jokes (until, that is, some broker stumbles upon a buyer who walks into their office looking for...you know the rest).

Most Expensive Homes in the U.S. 2006: Northeast - Forbes.com