Save on Your Refinance

Came across this excellent article today regarding title insurance and refinancing:

http://www.inman.com/buyers-sellers/columnists/jackguttentag/dont-overpay-title-insurance

Title insurance is a safeguard against defects in the title of real property. This phenomenon came out of the era of non-computerized records (since the 1500s, basically), when it was very easy to impersonate someone, forge documents, or otherwise muddy the waters when it came to proving ownership of a property. Title insurance (coupled with title abstracts) basically come into play when there is a defect in title, such as an old lien on the property or a claim by a previous owner.

In New York, particularly in Manhattan, title insurance is rarely used. Some 80% of available residential units are co-ops, which are not considered real property, and therefore rarely involve title insurance. Title insurance is mostly applicable to real property ownership - including condos and townhouses or buildings of any kinds. In fact, mortgage companies require a title abstract - and usually also title insurance - before they will agree to the mortgage loan.

The author of this article - Mr. Guttentag - has highlighted a possible cost savings for owners of condos and townhouses who wish to refinance - namely, a discount on the reissue of title insurance. If you are thinking about refinancing your condo or house, this is required reading!

Dogs Are Classic New York...

NYC Real Estate Goddess entertained some family from out west over the last couple weeks. It's always fun to have the perspective of non-New Yorkers. Our own 1 bedroom apartment is about 750 square feet, so our cousins had some space to stretch out. I didn't take them "sight-seeing" - my version of showing them the quintessential tiny New York - particularly Manhattan - apartments that we're so famous for.

One thing they did notice was how many New Yorkers had dogs. Big dogs, little dogs, all kind of dogs. As mountain-dwellers with their own dogs, they wondered how we New Yorkers manage to care for their dogs. Answer: an elaborate system of housebreaking, strict scheduled walks, alternative transportation and/or totable dogs, and additional support. We love our canine friends. They brighten up our day. We bring them with us on the subway in approved (and not-so-approved) carriers. We have dog walkers shuttling them while we're at work so their not too uncomfortable. And of course, wee-wee pads have helped immensely. 

New York is such a dog town that the Westminster Kennel Club holds its annual dog show in New York's Madison Square Garden every year. This year - the 136th annual dog show, was where NYC Real Estate Goddess went to get her fix. Usually we just content ourselves with standing outside the Garden and peering at the specimens being walked. But not this year - we had to be in the thick of it. And so we were:

Scottish Terrier breed competition at 136th Westminster Kennel Club Dog Show

Here you see my favorite breed being judged - the Scottish Terriers. Truly these are a dog after my own heart. They are described on the Scottish Terrier Club of America as "aloof" and the breed introduction in the group competition says they feel "openly superior to their owners". But they are great little creatures - equal parts smart and cute, and very loyal. I was able to figure out which one would be named the winner (it's #6 - in the center of the photo). But I loved them all!

Backstage at the Westminster Kennel Club Dog Show is the best place to be - it's very hectic and crowded, especially as there was a lot of renovation going on at Madison Square Garden. They were shoehorning the benching areas everywhere they could, including behind the judging areas in the theater, and grooming was happening up in the wings!

Norwich Terriers in the Wings at the 136th Westminster Kennel Club Dog Show   

Here you see several of the Norwich (pronounced "NOR-itch") terriers getting ready for their show. They are shoehorned up into the wings of the theater stage left - luckily they are small and resilient, as are their groomers!

Backstage in the arena, the big dogs were on display. These guys have tons of personality and their owners give them lots of love.

Great Pyrenees Playing on the Bench at the  136th Westminster Kennel Club Dog Show   

I think this is a Great Pyrenees Mountain Dog - not sure as I couldn't get close to that bench, but it sure looks like one to me. 

I guess I'm a sucker for large dogs. I mean, they were so cute!  

Mastiff backstage at 136th Annual Westminster Kennel Club Dog Show

I mean, how do you resist this beautiful (and friendly) mastiff face?

Or this?

A Young Girl Plays With a Leonberger entry at the 136th Annual Westminster Kennel Club Dog Show.

There were some great creatures in general. As a close second to my beloved Scottie, I really liked the Sky Terrier in the Terrier Group.

A Sky Terrier chills out in the benching area at the 136th Westminster Kennel Club Dog Show.

The ears are the pointy things behind the pigtails.

There's no end to the gorgeous dogs, and most of the animals you see at home are just as wonderful. Yes, we New Yorkers love our dogs and Westminster is right at home among us (even more so when they move the preliminary judging and benching to Piers 92-94 in 2013, thus alleviating some of the incredible crowding we experienced this year and allowing more dogs to enter!). 

New Yorkers love their dogs so much, in fact, that it's known pet owners will pay a premium in rent to have their beloved friends with them. In fact, an apartment my firm listed recently did not rent - in part, we believe, because all cat and dog owners were turned away.  So, landlords, food for thought: better rents to let these adorable creatures keep their masters company.

Do you have a story about how you successfully deal with pet owner tenants? Let me know!

New York Foreclosures Inversely Proportional to Delinquencies

Saw an article this week on New York State foreclosure and delinquency rates. The gist is that delinquency rates of loans (that means loans that are 30 days or more behind) have fallen as a proportion of all mortgage loans in New York State. Foreclosures, however, have risen during the same time. 

That may sound ominous but for the projections mentioned in this article regarding New York City Foreclosure and delinquency rates published in October 2011.  To recap, the article states that actual foreclosures in New York City (where the property goes to auction and is sold or taken by the bank) fell by 69% in third quarter 2011. However, experts cited a virtual moratorium on actual foreclosures forced by scrutiny and fallout from the robo-signing debacle. This earlier article states that the number of loans 90 days late was the same as in previous quarters in October 2011.

So, between the October 2011 article and this week's article... PROGRESS! It was predicted in October that a spate of mortgages currently in default (90 days late) would move through the foreclosure process, thus raising the number of foreclosures from the abnormally low number achieved in the 3rd quarter. So according to February's article, that happened. Foreclosures rose.

BUT, according to the February article, the number of delinquent loans fell. (Delinquent loans are loans that are 30 days or more late; this includes loans considered 90 days late which were previously defined as "in default").   30-day late loans fell as a proportion from 8.12% of outstanding loans to 7.98%. So, maybe New York State is starting to work its way through the housing crisis.

.14% of loans may not sound like much (and indeed may be somewhat accounted for by the number of loans that finally were foreclosed and therefore removed from the loan pool). So clearly New York has a long way to go. But every little bit helps. The February article puts the current levels of delinquency and foreclosures in historical perspective (5% of total loans go delinquent and .5% go to foreclosure), as well as national perspective (New York ranks 26th out of 50 in total delinquencies - right on the median). 

With the stock market, as a leading indicator, having been mostly positive from early 2010 through now, it follows that the real estate market would start to improve as a traditional trailing indicator. "Stopping the bleeding" in New York is one of the first steps.  It's nice to see some progress back from the brink.

Recycle your Electronics Year Round

If you're like me, there's a pile of useless, obsolete electronics sitting in a corner somewhere.  If you're like me on  a weak day, that electronic waste goes out with the garbage. If you're like me on a strong day, that electronic garbage sits in that corner, waiting until the Lower East Side Recycling Center hosts an e-waste pickup that's convenient to you.

If you're anything like me, getting there can be a bear. So far in the past 3 months I have dropped off useless electronic crap at Prospect Park, Cortelyou Road in Ditmas Park, Union Square, and Tekserve on 23rd Street.  And yet, there's more!  I have finally sucked the last out of my 2001-era Gateway desktop and it's ready to go. But it's sooooo heavy, and the most convenient drop-off was on one of the crappiest days of this blissfully mild winter.

Lower East Side Recycling Center to the rescue! Today, a new PERMANENT drop off center was opened in the Gowanus section of Brooklyn. The new address is 469 President Street (corner of Nevins). I am so excited about this! We separate our garbage around here, and the space constraints make it painful to hang onto something you can't/don't use anymore, even though it doesn't smell!  But it's important to me that reusable materials get reused, and don't end up somewhere they can poison people.

I'm planning to head to their open house on Saturday. And I'm bringing a few old things with me!

REBNY opposes New Brooklyn Heights Commercial Landmark District

An interesting situation is unfolding at the eastern edge of Brooklyn Heights.  In September 2011 the NYC Landmarks Preservation Commission approved a landmark district called the "Borough Hall Skyscraper Historic District". This area includes 21 commercial buildings from the late 19th and early 20th century, from 7 story Romanesque-style to a modernist skyscraper, and several Art Deco era buildings as well. I frequent the area, and have often admired several of the included buildings, though I find the skyscrapers somewhat forbidding.

This week, Crains New York reported that the Real Estate Board of New York - an industry advocacy group representing most of the real estate agencies in Manhattan and many in the outer boroughs (my agency - M. Woods & Associates LTD -  is also a member of REBNY) - sent out direct mail to residents in the area asking them to oppose the landmark district and to press their City Council members to vote down the designation.  According to the Crain's article, the City Council has never denied or adjusted the borders of a historic district after it was approved by the Landmarks Preservation Commission (LPC).

The reason is because LPC has such a long process of considering proposed landmark districts, that most of the arguments have been hashed out by the time it gets to City Council. LPC has often designated smaller areas that ones proposed by preservationist lobbies such as the Greenwich Village Society for Historic Preservation (of which I am a member).  In this case, the Municipal Art Society of New York, Brooklyn Heights Association and New York Landmarks Conservancy proposed the Borough Hall Skyscraper Historic District.

Again, I frequent the area, and I do love the older Gothic and Romanesque buildings that were designated. I think there is a reason to protect these buildings. They are rather low buildings that are now in zoning districts that would allow much higher buildings, and therefore in danger of being torn down.  But I am undecided as to whether it is necessary to include the skyscrapers. After all, it's these are the tallest commercial buildings to be found in Brooklyn (with the exception of nearby Metrotech), now that the Williamsburg Savings Bank is mostly condominums.  In addition, which of these buildings is in danger of being torn down?  There are thousands of Art Deco era buildings on Manhattan that have been in service just as long, and are not deemed to deserve landmark status.

The reason given on the Municipal Art Society's web page speaks about recognizing the tremendous commercial growth that the district experienced "after (italics mine) the borough was consolidated into Greater New York."


REBNY's commentary has to do with the increased bureaucracy inherent with a landmark designation. It takes longer and is more costly to maintain the buildings' facades. I particularly note the quote from REBNY president Steven Spinola“The city just continues to landmark away its economic future.”  To some extent, I agree.  I support the landmarking of examples of past great architecture - I am around it more than most.  I am so grateful that the Village and Brooklyn Heights and Park Slope - all areas I love to be around - have been deemed worthy of landmark status.


But this issue has caused me to examine why I am so happy about it. And the truth came to me when I pondered when I thought about which buildings in this new district seemed deserving, others superfluous. The answer: height. While I love looking at all the Greenwich Village townhouses, I love more the sun on my face!  Same with Park Slope and Brooklyn Heights Brownstones. The townhouses are lovely, but I grew up in a Cape Cod and see the beauty there too.  Skyscrapers, in my opinion, don't need landmarks. But we do need more height restrictions in neighborhoods around the city. 


Another beef I have with Art Deco sky scrapers is the relatively small amount of window area they sport relative to their facade size. I worked in office buildings for many years, and often felt so stifled. How many occupational health studies have been done in office buildings that come up with a recommendation that more sunlight = more happy and productive workers? 


So here, I think REBNY has a point: we need to be able to innovate and upgrade. Particularly I think that is true of our commercial properties. It's hard enough with residential properties. Commercial properties should be icons of our future, not hallowed relics of our storied past.

THAT's 700 Square Feet!?!

Found this post on the other day that highlighted a great issue: measuring square footage of a property and whether, or how, to report it.

With prices above $1000 per square foot in many parts of Manhattan, we care about every inch! As mentioned in this blog post, square footage is measured in several ways. In new development condos, for instance, the square footage is measured by the floor plate. That means some of the square footage in the apartment is between the drywall and the studs, unfortunately.

In prewar apartments, square footage is often (but not always) measured from interior wall to interior wall. Why the difference?  Because floorplans for the prewar buildings are often not available. As a result, new layouts are drawn using interior wall measurements only.  So next time you see a 650 square foot prewar and a 650 square foot recent development listing, and one feels a lot bigger, you know why.

The actual issue discussed in this blog post is whether to list the square footage of a property in the marketing materials. The author tells a story of a very particular buyer who tried to back out when the actual square footage differed from the listed amount by less than 1%.  That's a pretty extreme example to me, but it happens.

A colleague of mine doesn't list square footage because she finds that people have different opinions of the same number. Instead, she asks them to tell her how much they think the space is. Predictably, answers vary all over the map.

The truth is that layout greatly affects the perception of square feet. In my opinion, potential buyers will tell you how much usable square footage they see. Does the unit have a long hallway from the entrance to the foyer? Wasted Space. Square bathroom or narrow rectangular bath? The wide square shape may be perceived as larger. Galley kitchen or open kitchen with breakfast bar? That's a toss-up. Some will count the separate kitchen as more space, while others will perceive the narrow kitchen as smaller than it really is.

I've gotten pretty good at figuring out - within 50 square feet or so, how big an apartment is. Sometimes I work forwards. For instance, if a prewar apartment has a 12' x 22' living room and a 12' x 15' bedroom, then total square footage is likely between 750 (if a galley kitchen) and 850 (if eat-in kitchen).  Other times, I work backwards. For instance, if an apartment is a full floor of a townhouse, then you take the size of the town house (ie, 20' wide by 40' long, a typical size in the West Village) and subtract 50-100 square feet for the interior staircase. A longer house makes for a bigger apartment with an interior dining room and/or a second bedroom.

One thing I do not recommend is using a "rule of thumb" or "legendary" square footage. I once knew a seller who represented that his apartment was a certain square footage because "the coop assigns one share per square foot". Unfortunately, the buyer's appraiser found that the real number was nearly 300 square feet less. The buyer cared very much about the square footage and wanted a huge price drop. Turns out he cared about the price per square foot, even though the property appraised for the contract price. He didn't want it unless he was getting a deal, even though he'd been through the apartment several times and felt it met his needs. Ultimately, the sale died.  Moral of story: do take a measuring stick and measure the apartment yourself, even if you "know" what the rough number is.

As a broker (and a person with a decent - though hardly perfect - spatial perception), I appreciate an approximate square footage in the listing information. It helps me understand whether I should even bring a customer to a specific listing, or if it would be too small. I use floorplans and photos to help me make that decision (and the more information a listing has, the more likely I am to shortlist it for a customer).

Bottom line: Measure the property, even if you have documents stating a particular square footage. Always use the word approximate. Provide more visual information to complement the square footage information (floorplans, photos, etc.). It could save your sale.

Bedbug Scare Not So Bad This Year

You can't help but read anything about bedbugs without starting to itch a little... and then running to burn your sheets.  But Crain's brings good news!

http://www.crainsnewyork.com/article/20120101/HEALTH_CARE/301019970/1020

Yes it seems that all our vigilance is paying off - thank goodness! But just as with other scourges, bedbugs never were completely gone, and they are still out there, as the article says, particularly in hotels. So please, keep taking precautions, and we will all sleep a little better at night.

4th Quarter Manhattan Real Estate Prices Stayed Level

So according to the latest numbers as reported by the one of the largest (by volume) real estate agencies in Manhattan, prices remained steady during the last 3 months. That's a relief for home owners on the island.  According to the same report (and reported by New York Times), the actual number of sales fell.

Real Estate Prices in Manhattan are Steady, but Sales Fall

Might sound scary, until you understand why this likely happened - a 5.9% drop in the number of properties available for sale. In other words, in classic economics 101 form, supply went down, so price went up, or at least stayed the same.

I think that's the key story here. With supply down, prices held steady.  Other ideas - such as last year's increase in end-of-year closings to take advantage of the first-time buyer tax credit - are secondary at best.  Scarcity helps to drive up prices. 

There are still some issues keeping the market from flowing smoothly. For one, it's hard to get a loan if you're trying to borrow just over the Fannie Mae limit, but not way up into the luxury range (also mentioned towards the end of the NYT article).  So the fact that enough properties are selling to keep prices steady despite the adversity of the mortgage market is good news to me.

Unless we end up with more inventory.  According to an article in Crain's New York Business last week, NYC's foreclosure rates are going up as more properties complete the 1-2 year foreclosure process required in New York State.  The statistics were not broken out over the five boroughs, and Manhattan's share of foreclosures has been small so far.  But the trend bears watching.

Starbucks raises NYC latte prices

You have been sent this message as a courtesy of Crain's New York Business.
hanna has forwarded you the following message and link to a news item:

Starbucks raises NYC latte prices

---

Personal message from hanna:

Starbucks, not cool!

Regards,
hanna

---

This message was sent to: chancesports.nycregoddess@blogger.com by hanna (nycregoddess@gmail.com)
This page was sent at 10:19 pm Jan 3, 2012

2012 Predictions from General Investment Experts

I get Zack's daily "Profit from the Pros" email sent to me every day with a quick review on how the stock market did and commentary on what's next for the immediate day. Today I chose to read one of the linked articles as well entitled : "Treasuries, Stocks, Gold or Real Estate - Best Investment for 2012?"

1 of the analysts quoted picked real estate securities (home builders, REITS, etc.) as the top pick. Another made a comment, made by several other experts in recent national media, that the housing "bottom" could occur later this year.

I feel a little skeptical about this prediction. For one thing, there is still a lot of inventory sitting there. And another problem is that real wages (which means wages adjusted for inflation so you can compare one year to another) continue to drop. The fact is, when the majority of homeowners can't afford homes, then home prices drop.

Again, this is penalizing people who bought homes in the last 5-8 years, during the bubble, and have stayed current in their payments. They are going to continue paying much higher monthly payments, or sell at a price which won't recoup them enough for a down payment on a new home if they have to move. If they stay current, and wages continue to drop, then they will not have enough disposable income to a) enjoy life and b) keep the economy afloat with all their purchases.

Analysts are getting optimistic about 2012 because corporate earnings have rebounded a bit. I hope they are right. Naturally my livelihood depends on it, but I have to wonder if it wouldn't be a good idea to give all those hardworking people a little break?

Don't Get Duped : Mortgage Rates Didn't "Fall" To 3.94% | The Mortgage Reports : Today's Mortgage Rates & Strategy

This little gem popped into my inbox last week, and it's pretty interesting. Even as ads and the media trumpet "new interest rate lows", banks are raising fees to make up what they aren't able to make in interest.

When you speak to a mortgage professional, be sure to get the rate quote with points and without. If you pay no points, your mortgage payment will be higher. Depending on how much principal you borrow, the difference could be less than $20/month.

On the other hand, if your ratios are very close to maxed out (ie, debt close to 40% of gross monthly income), then paying points up front will reduce your monthly obligation and allow you to qualify for a mortgage that you might not otherwise.

Ask questions. Make sure you understand how many points you will pay up front in order to get that amazing low interest rate.

Don't Get Duped : Mortgage Rates Didn't "Fall" To 3.94% | The Mortgage Reports : Today's Mortgage Rates & Strategy: