Friday, May 19, 2006

Condo To Reach New Heights



Tampa moves what would be the tallest building in the bay area one step closer to reality. Completion is expected in about four years.

By JANET ZINK, Times Staff Writer
Published May 19, 2006

TAMPA - A 51-story condominium that would be the Tampa Bay area's tallest building won preliminary approval Thursday from the Tampa City Council.

Daytona Beach developer Amon Investments plans to build a 630-foot tall condo tower at Washington and Morgan streets in downtown Tampa.

That tops the planned Trump Tower, previously touted as the bay area's tallest, by 37 feet.

"I just see good things with this building," said Wilson Stair, the city's urban design manager. "It's going to be a signature building downtown."

Stair gave high marks to the spire and lighting on top of the building, and a ground-floor arcade with colorful awnings and outdoor cafes along a 20-foot sidewalk.

The developers provided more than the city requires for open space and left plenty of room on the four corners of the block for public art, Stair said.

"It's a trendsetter," he said. "It's good to see these kinds of projects go in because they set a benchmark in what we expect in architecture as more buildings come in."

The building, temporarily dubbed Tampa Condo II, will include 472 units and 15,000 square feet of retail space. Prices will range from $300,000 for a 700-square-foot unit to $2-million for a 4,000-square-foot penthouse. Construction should begin in two years and be completed about two years after that, officials said.

While it would be the tallest in the Tampa Bay area, it would be considerably shorter than the state's tallest building, the Four Seasons Hotel in Miami, which is 800 feet tall.

"It will be quite a transformation from a surface parking lot into a stunning building," said City Council member Linda Saul-Sena.

The project voted on Thursday is only half of what Amon Investments originally planned for that corner of downtown. The company announced in December it would construct twin 625-foot towers connected by a sky bridge.

City officials, though, have discouraged the elevated walkway.

"We don't encourage sky bridges because it takes away from circulation on the sidewalk and also it crosses our rights of way and blocks light," Stair said. "If we were in a place where our climate was harsh like Minnesota, then it would be more acceptable. Here in Florida, we like to keep people on the ground. We only make exceptions when it's a public safety issue."

Fred Hill, vice president of development and construction for Amon Investments, wouldn't comment on the status of the second building.

"We have other interests in downtown Tampa besides these two sites," he said. "We're in negotiations for the purchase of various properties in downtown Tampa. Because of those negotiations, I'm only focusing my comments on what was presented today."

The project is part of a residential boom in and around downtown Tampa that includes more than a dozen buildings with greater than 20 stories.

Amon Investments is headed by Austrian-born investor Felix Amon. Since 2001, the company has focused on projects around Daytona Beach and Orlando.

Last year, Amon Investments turned its attention to the Tampa Bay area, starting with Clearwater.

Amon himself wielded a sledgehammer in December to pave the way for downtown Clearwater's first residential redevelopment project. Station Square, with 126 units and 15 stories, will rise along Cleveland Street, next to the city's historic post office.

The City Council is to take a final vote on the Tampa project June 1.

Information from Times files was used in this report.
� Copyright, St. Petersburg Times. All rights reserved.

NYC's Parc East Tower Sells in $158M Deal



 

May 17, 2006
By Barbra Murray, Contributing Editor

Parc East Tower, the 324-unit residential rental building at 240 E. 27th St. in Manhattan, just traded for $158 million in an off-market transaction. With the assistance of RMB Properties president & CEO Rama Bassalali as the sole broker on the deal, Wards Construction sold the 293,000-square-foot New York City property to global investment group Brack Capital, 39 years after having developed it.

"Wards was motivated to sell by the price," Bassalali said. "They got a very good offer."

The sale price was in line with the staggering figures seen last year. As per Marcus & Millichap Real Estate Investment Brokerage Co.'s 2006 National Apartment Research Report, investors seeking properties for condo conversions played a significant role in the brisk price appreciation, with over 5,300 units selling at a median price of nearly $500,000 per-unit; Park East went for about $488,000 per-unit.

Located between 2nd and 3rd Avenue on Manhattan's East Side, the 26-story Parc East also features 7,000 square feet of retail space, as well as a parking garage that accommodates public parking for 200 vehicles.

The new owner has fairly significant changes in store for the property. "Brack plans to renovate and get the attorney general's approval to convert the building from rentals to condominiums," Bassalali noted.

Ritz Condo To Start At $800K



24 residences will feature amenities of luxury hotel

By John Rebchook, Rocky Mountain News
May 17, 2006

The 24 luxury condos at the Ritz-Carlton Denver hotel will start at $800,000 each and will top out at more than $4 million for a penthouse, developer Charlie Biederman said Tuesday.

The units, called the Residences at the Ritz-Carlton Denver, are part of the former Embassy Suites hotel at 1881 Curtis St. that Biederman and partners are converting into the first Ritz in Denver. Units will range from 1,143 square feet to 5,561 square feet.

The condos are scheduled to open in summer 2007, about a month after the 202 rooms in the new Ritz make their debut.

The price equates to about $700 or more per square foot, among the highest prices for a condo development in Denver.

Katie Everett, who is listing the condos with fellow RE/MAX Classic agent Rike Palese, said they will go fast.

"I have eight really qualified people right now who are interested in buying them," Everett said. "We only have 24 units to sell, and there is a lot of pent-up demand. In other parts of the country, Ritz condos are selling for $1,800 per square foot."

Her current waiting list includes people downsizing from big homes in Cherry Hills Village, CEOs of companies and others from out of state who frequently do business in Denver.

Homeowner association fees, Biederman said, will average from $10 to $14 per square foot annually.

"So if you have a 2,000-square- foot unit, it will cost you roughly $20,000 a year in association fees," said Biederman, who is developing the project with partners Steve Roitman and Jim Cobb.

Jan Nelson of Kentwood City Properties said the condos at the Ritz will have an advantage in that they will open a year or two before similar condos in projects such as the planned Four Seasons.

"I think $700 per square foot is very doable in downtown, especially when attached to a name like Ritz, with all of its amenities," Nelson said.

She noted that some condos in Riverfront Park are getting around $600 per square foot and she recently sold a 4,500-square- foot condo in One Polo Creek in Cherry Creek for $880 per square foot.

On Tuesday, Biederman's team will begin accepting nonbinding reservations for the units. A reservation requires a refundable $25,000 deposit.

The reservations then will be converted into contracts in about 60 days, Biederman said.

Biederman said the residences, which will be on floors 15 through 19, will have their own elevator, lobby, lounge and concierge.

"They'll also have access to all the services of the Ritz, whether it is maid service, room service, valet parking or running errands," he said.

Also, buyers will get a membership to the 50,000-square-foot Athletic Club at Denver Place, as well as a 30 percent discount and other perks at every Ritz-Carlton hotel.

The average size of the rooms in the hotel will be 510 square feet, making them the largest Ritz-Carlton rooms in the nation, Biederman said.

Forty-seven of the rooms will be suites.

Vivian Deuschl, spokeswoman for the chain, said there may be some Ritz-Carlton rooms that are larger in hotels in Asia, but none elsewhere.

Byron Koste, head of the University of Colorado Real Estate Center, said the condo sales are needed to make the renovation, which will cost about $75 million, pencil out.

The project can be declared a success when Biederman has nonrefundable contracts, Koste said.

"Right now, he is testing the market, which is a very wise thing to do," Koste said.

"I wish him all of the luck. The Ritz name is a good name wherever it is.

"But the Ritz is only as good as the property. The $64,000 question is whether this location at this price is going to be Ritz-Carlton worthy.

"We'll have to wait and see."

Copyright 2006, Rocky Mountain News. All Rights Reserved.

New Orleans Real Estate Market Booming



Real Estate Market in New Orleans Booming After Hurricane Katrina

By RUKMINI CALLIMACHI
The Associated Press

NEW ORLEANS - The 2,200-square-foot house promises three spacious bedrooms and two-and-a-half baths a bargain at $175,000. Except for the fact that the home, located in one of this city's previously elegant neighborhoods, has been gutted to the studs and has no drywall, no wallboard, no fixtures.

"Home was flooded by Katrina," reads the advertisement posted by the listing agent at one of the city's largest real estate firms. "Ready to turn into your dream home."

The pitch is less far-fetched than it may seem: Although vast swaths of this hurricane-battered city are still without electricity and basic services, residential real estate sales are at a fever pitch, a shining spot in an otherwise struggling economy.

For the first quarter of the year, sales of single-family homes in the greater New Orleans area zoomed to $826 million, a jump of 60 percent over the first quarter of 2005, when sales totaled $517 million, according to New Orleans Metropolitan Association of Realtors; 3,829 residential units were sold, 960 more than the same period in 2005.

Experts say there's nothing to be surprised about: One of the ironies of natural disasters is they're often good for real estate. It's a pattern real estate professionals witnessed in Florida after Hurricane Andrew and in Los Angeles in the aftermath of the Northridge earthquake.

"To use a terrible analogy, it's like watching 'Gone with the Wind' for the fifth time," said Arthur Sterbcow, president of Latter & Blum Inc., the 90-year-old real estate firm based in New Orleans. "It's completely predictable. The market reacts the same way each time. It's like watching a football game and having the play book in your hands."

Last year's play unfolded like this: As Hurricane Katrina bore down in late August, thousands fled.

Trying to stay close to home, many ended up putting down temporary roots in satellite communities like Baton Rouge, where evacuees pushed up residential sales 48 percent to $1.2 billion in 2005, compared to $788 million in 2004, according to the Greater Baton Rouge Association of Realtors.

But the pull of home is strong, and many evacuees have since returned to their flooded city.

Some were lucky enough to find their homes intact, needing only minor repairs. At the other end of the spectrum were people like Jim Peckenpaugh, 60, whose home in the upper-middle-class Lakeview neighborhood took on 9 feet of water.

He initially tried to find a dry house, but those in Lakeview were selling for more than $400,000, pricing him out of his own neighborhood. Instead, he found a bargain: a three-bedroom, also in Lakeview, selling for $250,000. That's because it swallowed only 3 inches of water.

It wasn't his first choice the first flooded house he tried to buy was snatched up by a more aggressive buyer. "At night, as I was driving around looking at houses, I would see people with flashlights doing the same thing," he said.

Most returning homeowners bought dry properties in the unharmed periphery of the city.

As those homes became scarce, more intrepid homeowners, as well as investors, began working their way toward the core of the city, say real estate agents and developers. National homebuilder KB Home has acquired 58 finished lots in New Orleans, as well as a 3,000-acre parcel in Jefferson Parish, a neighboring suburb.

"You hate to say it, but these disasters tend to spark an energy that people have to respond to," said Thomas Stevens, president of the Washington, D.C.-based National Association of Realtors. "Immediately after, what you see is this sense of, 'Oh my God, it's a disaster. What do we do?' And then people's lives get back to normal and they say, 'OK, I have a home. Do I repair it? Or do I sell it and buy another?'"

To be sure, the real estate picture is far from even: Areas like St. Bernard Parish, which took the brunt of last summer's storm, are lying fallow. Not a single house sold in the first three months after the storm; only one sold in the fourth month, fetching just $11,000 in an area where the average home once sold for $109,000, the New Orleans Realtors Association said.

The most heavily damaged neighborhoods are still in limbo: In order to get insurance, some homes will have to be raised as much as 3 feet, an expensive proposition. Rather than going through the expense and hassle of having their homes raised, many homeowners are choosing to buy in the city's less damaged neighborhoods, fueling sales there.

Although real estate transactions in many Gulf Coast firms are setting records, the road to ownership post-Katrina is far from smooth especially on the insurance front.

Both State Farm Insurance Co. and Allstate Corp., the nation's No. 1 and No. 2 insurers that together controlled over half the homeowners' insurance market in Louisiana pre-Katrina, have stopped writing new policies in New Orleans, the companies said. Finding affordable insurance is a struggle.

"I basically went down the list and called every single insurance company I could find. No one is writing in Orleans Parish right now," said Robert Boulanger, who's in the process of closing on an unflooded house just outside the French Quarter, one of the city's most desirable neighborhoods dating to the 1700s.

With private insurers pulling out, buyers are overwhelmingly forced to seek coverage from the state-run Louisiana Citizens Property Insurance Corp., which charges higher rates than its private-sector competitors. For 28-year-old Boulanger, a construction manager, that means he'll pay over $4,000 this coming year to insure the home he's buying for $240,000.

"It's really pushing the envelope of what I can afford," he said.

In flooded neighborhoods throughout the city, "For Sale" signs are sprouting from gray lawns, beside mounds of stripped wallboard. With doors punched in, Realtors advise prospective buyers to simply walk in: "Easy to show. Door is open," says one ad for a flooded, white shotgun.

Other ads promise the chance to own "the house of your dreams," as did the Coldwell Banker ad for the 2,200-square-foot home that caught the attention of 24-year-old Autumn Nurton.

"Before the storm, I could never have afforded a house like this. It's the house I've always wanted and now I can afford it," said the exuberant young woman. "I have to do the work, but in a sense that's even better because I can put myself into it. I've already sort of moved in in my heart."

Vegas Buyers Sue Developers After Condo Projects Cancelled





By Dan Ackman
From
The Wall Street Journal Online

With housing price growth slowing, home sales declining and interest rates and inventories of unsold homes rising, one might think buyers would be itching to exit condominium contracts any way possible. But in Las Vegas, a hot spot of the housing boom that has only recently started to show signs of cooling, some buyers are suing to stay in.

In one lawsuit, would-be condo buyers are suing the developers of the Vegas Icon condominium project -- affiliates of the New York-based Related Companies -- which announced plans to build and then cancelled the project. In another, filed by the same group of lawyers and settled last week, the plaintiffs had entered into reservation agreements, which involved putting some money down, to buy units in a project called Vegas Grand, just off the Las Vegas Strip, at specified prices. But the developers, Del American, based in Altamonte Springs, Fla., cancelled the reservations.

The plaintiffs allege the Vegas Grand developers needed pre-sales to obtain financing for the 880-unit project. In late 2003, they sold so-called reservations and then sent the buyers letters congratulating them on their new home purchases and urging them to tell their friends to buy as well. In April 2004, say lawyers for the plaintiffs, the developers issued a press release announcing they had "sold" 740 units and that sales were continuing at a brisk pace.

 

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$80M Conversion Creates New Style of Living






May 16, 2006

By April Michelle Davis, Contributing Editor

An $80 million conversion of the Roosevelt Building to luxury condominiums will make it the first residential building in downtown Los Angeles to house a subway station.

"The biggest attraction ... is (that) it's in a prime area," said Karin Lilegren, project manager at Killefer Flammang Architects. "It's a great location to be able to walk to a lot of venues."

With people becoming more concerned about commutes and the price of gas, the location of the subway station will affect interest in the property, Lilegren told CPN this afternoon. The building sits in the financial district, and the subway station is a hub for both the red and blue subway lines.

Having been built more than 80 years ago, the Roosevelt Building is being redesigned to complement its historic features. Killefer Flammang will not alter the street fa�ade, for instance, although it will replace the roof, adding penthouses, a pool, a sky garden, and indoor and outdoor lounge areas. It will also add a concierge; business meeting facilities; self and valet parking; and a three-bay, 24-foot-high entry portico.

Upon completion, the property will house 223 condominiums and two-level townhouses ranging from 800 to 2,600 square feet and 17 penthouses totaling more than 2,000 square feet and including patios.

The conversion is expected to be completed in early 2007. The units are tentatively priced in the mid-$400,000 range and should be available for sale in a few months.
 

Leading CB Richard Ellis Executive Joins Advisory Board of US CONDO EXCHANGE



$9-Billion Producer Places Bets on Prominence of Worldwide, Online Condo Marketplace
      
(Miami, FL - May 8, 2006) - US Condo Exchange, LLC, the online marketplace and global advertising portal for condominiums, today announced that CB Richard Ellis (CBRE) Vice Chairman Jay Massirman has joined US Condo Exchange's Advisory Board. Massirman is one of 12 Vice Chairmen nationally at CBRE, www.cbre.com, a designation reserved for the firm's highest echelon of sales professionals. He is one of the leading multifamily specialists in CBRE's nationwide network and has ranked as the firm's top sales professional in Florida and nationally for over a decade. His transaction experience includes debt and equity, structured finance, portfolio sales, land, hospitality redevelopment, apartments and condominium related transactions across the country, with transactions completed in his 20 years with CBRE at over $9.3 billion. Mr. Massirman will tap this wide and varied experience to help provide strategic planning and implementation to US Condo Exchange as the firm skyrockets in growth in line with that of the international condominium market.

"To have an executive the caliber of Jay Massirman bring his expertise to US Condo Exchange speaks enormously to the vision and inroads the firm has made in creating a transparent, worldwide marketplace for condos," said James Haft, Co-Founder and Chief Financial Office of US Condo Exchange. "Just as Mr. Massirman has helped lead CBRE to national prominence, we expect him to assist us in guiding US Condo Exchange to international prominence."

"You cannot overestimate the growing importance of online real estate markets," added Jay Massirman, Vice Chairman of CB Richard Ellis, the world's leading provider of commercial real estate services. "US Condo Exchange is helping create the future and with it tremendous possibilities for all condo marketplace participants. As the business in the multifamily and condo markets continues to proliferate, it's logical to round out that business with online market alternatives."

Mr. Massirman is based in the Miami office of CBRE. US Condo Exchange has offices in Miami and New York City.

About US Condo Exchange - US Condo Exchange, www.uscondex.com, which aims to be the "eBay of the condo market", is a multi-media publisher and one stop marketplace where buyers, sellers, developers and financial intermediaries can publish and access data for informed condo decisions on-line. The exchange offers buyers and brokers exhaustive research capabilities, provides sellers cost-effective access to a worldwide customer base, and offers developers and financial intermediaries objective real-time data for development and underwriting decisions. The exchange also serves as a global advertising portal for the condominium marketplace. US Condo Exchange curre ntly has nearly 50,000 listings valued at over $23 billion, with a U.S. and global rollout planned over the next 24 months.

$158M Tower On 27th



By LOIS WEISS

May 17, 2006 -- PARK East Tower, a 26-story block-front apartment building at 240 E. 27th St., was just sold for $158 million to Brack Capital.

Built in 1977 on Second Avenue by Wards Construction, which was also the seller, the 292,000-foot structure includes 324 apartments and a 200-car garage. Duane Reade is the retail tenant.

Rama Bassalali of RMB Properties was the exclusive broker. He said the price equates to $500,000 per unit or $540 a foot, and at 16 times the gross rents equates to a cap rate of just under 4 percent. Israeli-based Brack, led here by Moshe Azougi, intends to convert it to a condo. "The seller could not refuse such a great price," said Bassalali.

*

The Lower East Side is getting happier feet now that a new Timberland "concept store" and showroom has leased at 15 Rivington St.

The two-level 3,000-foot shop by the Rivington Hotel will be the cobbler's second Manhattan location. The first, at 709 Madison Ave. at 63rd St., opened in 1996.

Brian Katz of Katz & Associates brought in the retailer, which he says had been seeking the "right" downtown spot for several years. Caroline Banker of Prudential Douglas Elliman repped the owner.

*

The 92nd Street Y will sell the Steinhardt Building at 35 W. 67th St.

The five-story double townhouse with 22,000 feet and several meeting rooms should appeal to theater groups and not-for-profits.

Brian Gell, Timothy Sheehan and Edward Midgley of CB Richard Ellis will hawk the property, donated in 2001 by philanthropist and Y Board member Michael H. Steinhardt, and valued at the time at $16 million. The building's current programs will move to temporary facilities for three to five years while the Y headquarters at 1395 Lexington Ave. is reconfigured to include them.

The townhouse began life in 1904 as a home for elderly, indigent Swiss women and later housed young Swiss women.

Refurbished in 1999, it has a 175-seat music performance space, a 72-seat screening room, a 115-seat lecture/reception hall, a caf�/bar and professional kitchen, a lounge/reading room, five multipurpose classrooms, an exercise room with locker facilities and an art gallery.

*

The former East River location of the Bulova Corporation in Greenpoint is being marketed by David Junik of Griener Maltz with an asking price of $61 million.

The site at 77 Commercial St. can be built to 307,000 feet of residential and retail on a 107,000-foot plot. It's just next to George Klein's planned 1 million-foot redevelopment of the Lumber Exchange Terminal, which could also have a Manhattan Water Taxi stop.

Artist Frank Stella recently bought a site for a studio nearby, through Junik. "Artists are already envisioning the coming transformation of the area," says Junik.

*

Smack by the new Cunard and Princess Cruise Lines terminal in Red Hook, a contract is being negotiated in the mid-$70 millions for two warehouses of more than 500,000 square feet on 1,100 feet of waterfront that can include 2,500 feet of retail frontage.

This would be good news for passengers who disembarked from the Queen Mary 2 to find a desolate area with no shopping.

Seven Eastern Consolidated Properties professionals, led by Peter Hauspurg, chairman & CEO, are handling the marketing for Bruce Batkin. Located at 160 and 162 Imlay St., the six-story buildings were constructed "like battleships" in 1911 for the New York Dock Company Railroad and are next to Piers 11 and 12.



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Tuesday, May 16, 2006

U.S. Real Estate Prices Rise 10% in First Quarter



Price appreciation for condos lags that of single-family homes
Monday, May 15, 2006
Inman News


 About 40 percent of U.S. metropolitan statistical areas tracked by the National Association of Realtors had double-digital annual existing-home price increases from first-quarter 2005 to first-quarter 2006, the trade group reported today, and 16 metro areas had price declines.

The national median existing single-family home price was $217,900 in the first quarter, up 10.3 percent from first-quarter 2005 when the median price was $197,600. The median is a typical market price where half of the homes sold for more and half sold for less. In the fourth quarter of 2005, the annual rate of home-price appreciation was 13.6 percent.

Metro area condominium and cooperative prices, covering changes in 56 markets, show the national median existing condo price was $224,100 in the first quarter, up 5.2 percent from a year earlier. Twenty-seven metros showed double-digit annual gains in the median condo price, and five areas had declines, the association reported.

The largest single-family home price increase was in the Phoenix-Mesa-Scottsdale area of Arizona, where the first-quarter price of $268,300 rose 38.4 percent from a year ago. Next was Orlando, Fla., at $260,500, up 34 percent from the first quarter of 2005. Gainesville, Fla., with a first-quarter median price of $210,100, increased 31.9 percent in the last year.

Median first-quarter metro-area single-family prices ranged from $52,500 in Danville, Ill., to 14 times that amount in the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $746,800. The second most expensive area was the San Francisco-Oakland-Fremont area at $720,400, followed by the Anaheim-Santa Ana-Irvine area (Orange County, Calif.), at $712,600.

Other low-cost markets include, Decatur, Ill., the second least costly metro, at $80,000, and the Youngstown-Warren-Boardman area of Ohio and Pennsylvania, with a first-quarter typical resale home price of $81,100.

In the condo sector, the strongest gains were in the Phoenix-Mesa-Scottsdale area, where the first-quarter price of $179,600 rose 38 percent from a year ago. In the Honolulu area, the median condo price of $309,000 rose 34.9 percent from the first quarter of 2005, while Miami-Fort Lauderdale-Miami Beach, at $221,500, increased 31.4 percent. The condo price series will be expanded in the future as more data becomes available.

Metro-area median existing condo prices ranged from $97,400 in Bismark, N.D., to $615,300 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was Los Angeles-Long Beach-Santa Ana, at $404,600, followed by the San Diego-Carlsbad-San Marcos area of California at $382,200.

Other low-cost condo markets include Greensboro-High Point, N.C., at $108,000, and Dallas-Fort Worth-Arlington, at $112,800, the association reported.

Regionally, the strongest increase in the median existing single-family home price was in the West, where the price rose 12 percent to $344,000 during the first quarter. After Phoenix-Mesa-Scottsdale, the strongest increase in the West was in Spokane, Wash., at $172,100, up 26.3 percent, followed by Eugene-Springfield, Ore., at $223,600, up 25.3 percent from the first quarter of 2005, and the Tucson area, at $248,600, up 24.9 percent.

In the Midwest, the first-quarter median existing single-family home price of $158,800 rose 6.7 percent from a year earlier. The strongest metro increase in the Midwest was in Waterloo-Cedar Falls, Iowa, where the median price of $109,700 was 26.8 percent higher than the first quarter of 2005. Next was Decatur, Ill., up 14.3 percent, and Cedar Rapids, Iowa, at $134,600, up 13.4 percent in the last year.

In the Northeast, the median resale single-family home price during the first quarter was $285,200, up 6.6 percent from a year ago. The strongest increase in the region was in Elmira, N.Y., at $88,500, up 18.8 percent from the first quarter of 2005, followed by Trenton-Ewing, N.J., with a median price of $264,900, up 17.5 percent, and Atlantic City, N.J., at $251,700, up 15.8 percent.

In the South, the median existing single-family home price was $179,700 in the first quarter, up 6.6 percent from a year earlier. After the Orlando and Gainesville areas of Florida, the strongest increase in the South was in Ocala, Fla., at $159,800, up 30.8 percent from the first quarter of 2005. Next was the Virginia Beach-Norfolk-Newport News area of Virginia and North Carolina, where the first quarter median price of $221,100 was 27.1 percent higher than a year ago, and Deltona-Daytona Beach-Ormond Beach area of Florida, at $212,600, up 25.4 percent.

NAR chief economist David Lereah said in a statement, "With the supply of homes picking up very nicely in many areas of the country, pressure is coming off of home prices," he said. "By the time we report second-quarter data, I expect most areas will be returning to normal rates of price growth in the single-digit range. Consumers generally can expect normal price appreciation for the foreseeable future, providing solid returns over time."

Thomas M. Stevens, NAR president and senior vice president of NRT Inc., said inventories have picked up more strongly in the condo sector. "Although we continue to have areas of hot growth, we're finding more broadly balanced conditions across the country in the condo market."

The national condo price is higher than the median single-family home price because there is a high concentration of condos in the most expensive metropolitan areas. Within a given area, the typical single-family home costs more than the median condo price, the association reported.

National and regional quarterly prices have been revised back through 1989; the only revision to the metro price series is the normal annual revision for 2005 with revised fourth quarter data, the Realtor group reported. The fixed reporting sample of representative multiple listing services for national and regional data has been updated to reflect geographic changes over time. In addition, regional weights have been updated and aligned to the 2000 Census, but changes in price patterns are consistent with previously reported data, the association also announced.

"Regional median home prices include rural areas and samples of many smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns," the association also reported.

NAR began publication of metropolitan area median single-family home prices in 1982; the metro-area condo price series was launched earlier this year when fourth-quarter 2005 data was reported.

***

Affordable Homes Scrapped



 
Builder notes taxes in choosing apartments instead of condos
Sun reporter
May 14, 2006

Erika Middleton had done everything right. She was working full time, was saving instead of spending and had qualified for a rare, moderately priced condominium going up in a plum new location: 1901 West.

After plunking down a $1,000 deposit, she signed a contract on a two-bedroom, two-bathroom model offered for $179,500. She was looking forward to moving out of her parents' city home in late August or early September.

"I was very excited with still being able to live in Annapolis, and I just thought it was the opportunity of a lifetime," she said. "I was just waiting to move in."

But for Middleton, 26, move-in day has been put on indefinite hold.

The developer of 1901 West, Wood Partners, has decided to convert the units to apartments, noting the more costly tax consequences of building condos.

The surprise announcement has shaken Middleton and 26 other buyers - 13, including Middleton, qualified for units through the city's affordable housing program - and city leaders who had been looking forward to increasing Annapolis' stock of affordable housing.

"I was so upset I actually started crying," said Middleton. "I didn't expect this to happen, especially if I was keeping everything up on my end."

She received a letter Wednesday from Wood offering the option of renting one of the units at 1901 West, but she is not interested.

Dean Wilson, a spokesman for Wood Partners, declined to comment Friday.

Housing prices have soared in Annapolis, reaching an average price of over a half-million dollars last year. The city passed a law in 2004 that requires developers of new subdivisions to allocate 12 percent of units as "work force housing." At least 6 percent of new or rehabilitated rental units must be set aside.

Wood's change cut the number of affordable homes in the 300-unit project from 36 to 18.

Theresa Wellman of the Department of Planning and Zoning said that the city will meet with developers of 1901 West next week to determine how to administer those 18 rental units.

"It's a great program, it's worked in other jurisdictions, so we'd like it to work in Annapolis," she said. "We're trying to do everything we can."

The complex, built on the site of a former lumberyard at Chinquapin Round Road and West Street, includes a fitness center, sun deck and movie theater. The luxury apartments feature stainless-steel appliances, maple cabinets and granite countertops.

Middleton, a registered nurse, still intends to pursue homeownership but doesn't expect that she will be able to find anything through the city's program in the near future.

"Nothing is up and coming, so who knows how long it's going to be for something to happen like this again," she said.

Alderwoman Classie Gillis Hoyle of Ward 3 said she and Mayor Ellen O. Moyer were discussing how to get other properties on the market more quickly. The mayor is eyeing Landings at Spa Creek, Hoyle said, to determine whether developers of that complex would be willing to sell condominiums at a reduced rate under the city's program.

Moyer, who could not be reached for comment Friday, is also in talks with the city attorney to see whether the city was taken advantage of, Hoyle said.

"If we did anything special to help them along the way, I think they owe us for that, because now we don't have anything," Hoyle said. "But I don't know that they owe us anything other than a moral obligation."

Hoyle, who sponsored the affordable-housing legislation, said she was disappointed with the recent developments but optimistic that the program will ultimately result in increased homeownership.

"It's unfortunate that it didn't happen with them, but now we have to step back. Hopefully some of the individuals who wanted to buy will rent until something else opens up," she said. "There has to be some kind of solution. We can't just walk away and see this as a disappointment for people."

nia.henderson@baltsun.com


Copyright � 2006, The Baltimore Sun | Get Sun home delivery

'Lucky' Condo King Sees Beyond U.S. City's Froth U.S. Housing Boom: After The 'Gold Rush' : Urban Transformation



 
Jacqueline Thorpe
Financial Post

'If you ask me what the No. 1 risk is to the U.S. economy: It is going to be what the house-price landscape is, what happens to house prices.' -- David Rosenberg, chief North American economist, Merrill Lynch

MIAMI - Catch the opening credits of CSI Miami, the forensic police drama, and you will see the handiwork of Jorge Perez, founder and major shareholder of The Related Group of Florida.

His luxury condominiums -- Portofino Tower and Murano Grande -- come into view as the show reveals a city sizzling with money, beautiful people and sex.

From tacky to hip in little more than a decade, Miami has undergone one of the greatest urban transformations in U.S. history and Mr. Perez has been a driving force behind it.

It has been a long time brewing for Mr. Perez, 57, who has been in the development business for 25 years.

Born in Buenos Aires, to Cuban parents, he started out building suburban apartments and affordable housing.

With a canny sense of timing he switched to building condos about a decade ago just as the craze took off. He believes urbanization and city intensification will continue to be the trend for the United States, even after the current froth blows over.

"We took a lucky bet, the market has exploded and we've become the largest multi-family developer in the country -- not just in Florida but in the country," says Mr. Perez, speaking a mile a minute in his office in Coral Gables.

"I think we have been the catalyst for the redevelopment of the major cities in South Florida ... this whole urban expansion."

He has 19 projects under development, most luxury condominiums and has built 400 communities with 55,000 units in the last 25 years.

Design is the fun part of his job, but also essential to stay ahead of consumer demand, he says.

"When you see new people coming in with sales offices, I'm going and looking and seeing what materials they're using for their kitchens and bathrooms," he says. "I'm doing that not only here but in New York and Dallas and California. When I go to Europe I go to the bathroom and kitchen shows."

The Italians, he says, still lead in the design of fixtures.

His designers include Philippe Stark, who is working on his ICON project in Miami Beach.

Toronto-based firm Yabu Pushelberg is designing the interior of Apogee in South Beach, which will be the crown jewel of the Related empire.

The "creative manipulation of texture and colour" will "contribute to the consummate living experience for residents" at Apogee.

It will have the latest high-tech gadgetry, including fingerprint door entry and smart wiring. Residents will be able to access the valet service, reserve pool lounge chairs, or book a spa treatment through a touch panel in their home. In drawings, it looks like a gigantic mille feuille cake.

Mr. Perez is clearly obsessed with his job. "I'm not saying that I'm making every decision -- with this many units it's impossible," he says.

"But at least once a month, more like twice a month, I go and take a day, two days off and get in the car with a driver so I don't have to park, I go through every one of my jobs and see where they are, how the sales are doing, see what the construction is doing."

He says he is nimble enough to figure out where the next trend will be as the current market cools. It sounds like a point of honour.

"For me not to respond would be throwing in the towel," he says. "I could -- we've got enough projects in the pipeline that are already sold for the next three years for me to say, 'Hey, let me just concentrate on construction.' But then that's boring."

With a much lower profile than Donald Trump, Mr. Perez's offices are in a rather shabby little building on an unspectacular street in Coral Gables. Related has been there since its start.

But it will soon move into slick new digs at one of his developments in Miami. Hopefully, Mr. Perez is not superstitious and that's not one of those freakish signs the market is about to dive.

 

Condo Rising To New Highs



 

Unit sales up 40% in last year

By IAN WILSON, BUSINESS EDITOR
May 12, 2006

Condominium sales in Calgary have jumped an eye-popping 40% over last year, according to ReMax.

The real estate company's 2006 condo report, released today, said more than 2,500 units were sold during the first quarter, up from 1,799 sales in the same period of last year.

Condo prices in the city, meanwhile, have leapt 23% year-over-year.

That represents a more than $40,000 increase, bringing the average to $220,437.

"None of us have ever seen a market like this," said Rick Bumphrey, a ReMax broker who's worked in Calgary for 27 years. "It's so hard to predict what's going to happen in this kind of market."

Young professionals and first-time buyers are driving the condo market and despite the rapid price hikes, the report calls residential properties in Calgary "a bargain" compared to Toronto and B.C. markets.

"Affordability has become a serious issue across the country," said Elton Ash, ReMax's regional executive vice-president for Western Canada.

"Despite relatively low interest rates and the availability of longer amortization periods, many first-time buyers are finding they have to stretch their budgets to realize the dream of home ownership."

Ash said condos offer the best option in terms of both affordability and location.

The popularity of condos is made evident by the fact they now make up 28% of total residential sales in the city, with half of those purchases occurring between the $150,000 to $250,000 price point.

"To date, there appears to be little resistance to rising prices," said the report.

The greatest upswings in de-mand have happened in Mission, Connaught, Bankview, Eau Claire, Altadore/Garrison Woods and south Calgary.

Sales of luxury condominiums have also been hot, with 49 units over $500,000 being snapped up so far this year.

That compares to 20 luxury condo sales during the first quarter of 2005.


Downtown Vacancy May Soon Be Filled



JS ONLINEBUSINESS:

Owner hopes condos, parking will revive site

By TOM DAYKIN
tdaykin@journalsentinel.com
Posted: May 11, 2006

You could say the long-empty, decrepit office building, sitting near Water St. and Wisconsin Ave., one of downtown Milwaukee's most visible corners, sticks out like a sore thumb. But that would suggest this property attracts attention.

Instead, the eight-story building is lost between its higher-profile neighbors, the 100 East office tower to its south and a 16-story office building to its north.

"It's a dead, lifeless building," said Sheldon Oppermann, of Compass Properties LLC, which owns the 80,000-square-foot building at 731 N. Water St.

That may soon change. Compass, which also owns the neighboring 295,000-square-foot office building at 735 N. Water St., is seeking financing -including help from City Hall - to revitalize both properties.

The plan: convert the entire ground floor and the eastern half of the upper floors at 731 N. Water into a parking structure, providing additional parking spaces for 735 N. Water tenants. That would help draw more businesses to 735 N. Water, which has lost tenants in recent years to newer downtown buildings.

The western half of 731 N. Water, which overlooks the Milwaukee River, would be converted into condominiums, with one unit on each of the seven upper floors, Oppermann said. Selling those residential units, each with about 3,500 square feet, would generate cash to help pay for the parking structure, he said.

Compass hopes to begin the work as soon as it can obtain financing, Oppermann said. He declined to provide a specific budget estimate but said it will cost several million dollars.

He wants the parking structure to be completed by the end of 2007, when much of the Marquette Interchange reconstruction will be done. When that traffic-snarling project is finished, there will be a burst of interest from suburban businesses seeking to move downtown, Oppermann said. Those companies, he said, want to attract and retain professional employees by locating near downtown's attractions, nightlife and new housing - emulating Manpower Inc.'s recent decision to move its headquarters to downtown from Glendale.

"There's going to be a ton of people who don't want to be anywhere but downtown," Oppermann said.

Some commercial real estate brokers are skeptical that a large number of suburban companies are poised to move downtown.

However, Compass, owned by Stevens Point insurance executive John Noel, already has attracted some suburban tenants to 735 N. Water. They include Key Engineering Group Ltd., which moved from Cedarburg in 2004 and is leasing 5,200 square feet.

Key Engineering moved downtown in order to be closer to its clients, including banks, law firms and real estate developers, said Ken Wein, president. The move also put Key Engineering, a growing firm that operates offices in Washington, D.C., and Green Bay, closer to Mitchell International Airport and to its clients in northern Illinois, Wein said.

Other tenants at 735 N. Water include Chicago-based Private Bancorp Inc., which began leasing 13,000 square feet in 2005 when it opened a PrivateBank and Trust Co. branch. That brought a renovated lobby to the building.

A piece of history

The building at 735 N. Water qualifies as a historic property. It was completed in 1913 as the headquarters for First Wisconsin National Bank, which was later known as Firstar Bank before its acquisition by U.S. Bank.

The 731 N. Water building has a less distinguished past. Built in 1962, as an annex for First Wisconsin, it has been vacant for more than 15 years, the legacy of a prolonged legal dispute and split ownership between it and 735 N. Water.

Carley Capital Group of Madison sold both buildings in 1988 to American Landmark Properties Ltd. American Landmark didn't want to buy 731 N. Water but agreed to take it in order to obtain 735 N. Water. Carley agreed to finance the sale of 731 N. Water but later went bankrupt. The creditors formed Cardes Corp., which took over 731 N. Water in 1993.

Cardes and American Landmark, of Skokie, Ill., ended up fighting in court.

The unusual litigation centered on the utility systems - water pumps, heating equipment, chillers and electrical conduits - that served both buildings, which are connected. The systems are based at 731 N. Water, with the utility bills split between the two properties. American Landmark and Cardes argued over how those bills should be calculated.

Cardes finally sold 731 N. Water in 2001 to American Landmark to help settle the dispute.

Parking is an issue

Compass bought both buildings from American Landmark in 2002 for $11 million, according to assessment records. The purchase included a parking ramp at 740 N. Water St., built in 1928, that provides 300 spaces for the tenants of 735 N. Water.

But that's not enough parking for 735 N. Water to remain competitive, especially with new downtown buildings that come with modern parking structures, Oppermann said. The ideal ratio is to have two parking spaces for every 1,000 square feet of office space, he said, which leaves 735 N. Water about 300 spaces short.

As a result, only about 65% of 735 N. Water is occupied, down from 93% occupancy when Compass bought the building, Oppermann said. The building has an assessed value of $11 million, down from just more than $13 million in 2005.

"To keep this building relevant, I need more parking," Oppermann said.

Oppermann figures he can squeeze about 110 parking spaces into 731 N. Water. That will require installation of a freight elevator, which a valet will operate, to bring cars from the ground level to the upper floors, he said.

Oppermann hopes city officials will provide some financial help for the parking portion of the project. Compass might seek a tax incremental financing district, in which property taxes generated by the improvements pay back funds provided by the city.

The Department of City Development has not received a formal proposal from Compass, department spokeswoman Andrea Rowe Richards said. She said department officials are in the discussion stage with Compass.

Compass also may seek to connect 731 N. Water to the downtown skywalk system through its southern neighbor, the 34-story 100 East office tower, at 100 E. Wisconsin Ave. A doorway could be built to connect 731 N. Water to 100 East, which is connected to the skywalks.

Through the skywalks, and their connections to The Shops of Grand Avenue and other downtown buildings, the condos planned for 731 N. Water would be more marketable, Oppermann said. Northwestern Mutual Life Insurance Co., 100 East's owner, is open to the idea, said Joseph Weirick, president of Polacheck Property Management Co., which operates 100 East.

"We think it would be a positive thing to expand the skywalk system downtown," Weirick said.

The 731 N. Water building needs help. A tour reveals crumbling ceiling tiles, a strong, moldy odor and gulls that have made the penthouse balcony their home. But there are also good views of the river through large windows, and the building's redevelopment potential is evident.

A residential development along the river side "has to be the best use of the property," Oppermann said.

Thursday, May 11, 2006

CBOE Futures Exchange to Offer Real Estate Index Based on NAR's Existing-Home Sales Data



CBOE FUTURES EXCHANGE TO OFFER REAL ESTATE INDEX BASED ON NAR'S EXISTING-HOME SALES DATA

CHICAGO AND BOCA RATON, Fla. (March 17, 2006)- The CBOE Futures Exchange (CFE) today announced that it plans to launch futures contracts based upon median prices in the National Association of Realtors existing-home sales data. Through a licensing agreement with NAR, CFE has created five new futures contracts designed to track the median price of existing-home sales nationally and in four distinct regions within the United States. CFE plans to launch the new contracts in the second quarter of 2006, pending regulatory approval.

"With the U.S. housing market valued at nearly $20 trillion, real estate is not only the hottest topic of conversation, it is an asset class unto itself that is arguably one of the most important segments of the U.S. economy," said CBOE Chairman and CEO William J. Brodsky. "CBOE gave careful consideration to the development of this contract to ensure that it had practical application for hedging as well as speculating, offering a chance to participate in the real estate market to a wide range of investors--whether your outlook is regional or national, bullish or bearish."


"The launch of the National Association of Realtors
Existing-Home Sales Median Price futures contracts marks an important milestone in the evolution of housing as an investment. Now investors, including homeowners, real estate professionals and companies in the real estate business, have a new way to participate in the housing market. In partnership with the CBOE, NAR is proud to be playing a central role in the creation of this new marketplace," said Thomas M. Stevens, NAR president.

"CBOE's selection of NAR's Existing Home Sales Series testifies to the quality of our data and the significant role the series plays tracking critical trends in the housing markets. Investors in the new futures contracts can be confident that the monthly series will report what is actually happening in the marketplace as accurately as possible," said David Lereah, NAR senior vice president and chief economist.


The National Association of Realtors
existing-home sales survey is a widely recognized median home sales indicator, and is broadly followed in the media. The NAR existing-home sales median price indicators are based on a large representative sample by local Realtor associations, boards and multiple listing services (MLS) across the nation that captures 40 percent of all existing-home closing transactions in its monthly data series.

CFE has created five National Association of Realtors
Existing-Home Sales Median Price futures contracts that track the median sales prices in the United States overall, and four regions in the country: Northeast, South, Midwest and West. These contracts will settle monthly. An additional 10 contracts based on various metropolitan area markets will also be launched. Those contracts will settle quarterly. Futures quotes will be based on 1/1000th the respective NAR Regional Existing-Home Sales Median Price levels. For example, as of January 2006, the national median sales price was $211,000, so the futures index level for this contract would be 211.00.

The new contracts will be traded electronically, via CBOE
direct, and will be cleared through the triple-A rated Options Clearing Corporation. At expiration, the futures contracts will be cash-settled, meaning settlement will result in the delivery of a cash amount based on the final settlement price, determined by the surveys conducted by the NAR.

In general, there will be at least two near-term months and two months in the February quarterly cycle for the Regional NAR Existing-Home Sales Median Price futures and two months in the February quarterly cycle for the Metro Area NAR Existing-Home Sales Median Price futures. Price quotations will be in minimum ticks equivalent to $50.00 per contract. Trading hours will be 8:30 a.m. to 3:15 p.m., Central Time. For more details and contract specifications, go to:
http://cfe.cboe.com.

The National Association of Realtors, "The Voice for Real Estate," is America's largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

The CBOE Futures Exchange is a wholly owned subsidiary of the Chicago Board Options Exchange Inc., offering an all-electronic exchange, open access market model, with traders providing liquidity and making markets. CFE is regulated by the Commodity Futures Trading Commission (CFTC). More information on CFE and its products, including contract specifications, can be found at:
www.cboe.com/CFE.

Water, Water Anywhere



 
 
 
March 31, 2006

Water, Water Anywhere

THE temperate climate and abundant wildlife were what first drew Daysi and Jorge Morey to the somnolent coastal town of Palm Coast, Fla., a four-and-a-half-hour drive north from their Miami apartment. Now they have another reason for owning a vacation home there: rising property values.

It was only about eight months ago that the Moreys paid just under $1 million for their four-bedroom, five-and-a-half-bath house in an amenity-rich resort community, a two-minute walk from the beach. If they sold it today, they said they were told, they could get at least $1.5 million.

"I think that's still pretty reasonable for something so close to the water," said Mrs. Morey, who runs a real estate business with her husband and has seen firsthand how prices in South Florida, where they specialize, have skyrocketed over the last few years.

But Florida is hardly the only hot spot for vacation properties. Even as the rest of the residential market is cooling, second-home sales in many parts of the country - especially near the water - continue to thrive, real estate specialists say. The reasons, they say, include still-low mortgage rates and continued demand from recreation-minded baby boomers, who are flush with cash or equity in their primary residences. Many are buying with retirement in mind, while others see real estate as a stable investment.

Indeed, sales of recreational homes, which totaled 1.02 million in 2004 and 850,000 in 2003, reached record levels last year, said Walter Molony, a spokesman for the National Association of Realtors, citing preliminary results of a survey conducted last month by the association. A report with the final numbers is expected to be released next week, he said. "The demographics are very bright for the second-home marketplace," said David Lereah, the group's chief economist. He predicts that second-home sales will continue to edge up this year, with rates on 30-year conventional mortgages expected to remain below 7 percent. But he also says he believes that prices will stabilize, particularly in those hot resort areas that have attracted speculative buying.

"Those days of 20 percent price appreciation per year are probably over for most markets," he said, "and I think that's a good thing."

FEW brokers and developers, though, say that they have seen much of a falloff so far this year (aside from the normal seasonal slowdown just after the holidays).

And nowhere has the rise in second-home prices been more prevalent, they say, than with properties on or near water, where most people seem to want to be despite last year's hurricane disasters.

"You're going to pay a 25 percent premium for a view and 50 percent to be on the water," said David Hehman, chief executive of EscapeHomes.com, an online marketplace for second homes and resort properties. He puts the nationwide average price of an oceanfront home at around $1 million, about 30 percent higher than last year. (By contrast, the average price of all homes sold by real estate agents that list on his site is $355,000, up from around $300,000, he said, though that encompasses everything from tiny cottages in the woods to multimillion-dollar spreads.)

The priciest coastal areas, according to EscapeHomes.com, continue to be in California, South Florida, parts of the Northeast and Hawaii, with interest in the Big Island, in particular, growing this year.

For Diane Saatchi, a senior vice president of the Corcoran Group who specializes in the Hamptons, on Long Island, one of the hottest beach areas in the country, "the activity is surprisingly strong on the buying side."

"The feeling was that the increase in interest rates we had was going to make people more cautious about buying second homes, but so far that hasn't happened - the market seems impervious," she said. "I hear more regrets from people who have waited."

Indeed, home prices in the Hamptons are up 8 to 10 percent from last year, according to Ms. Saatchi, with the median price now at $800,000. And that actually might seem like a bargain given the ever-growing inventory of homes in the eight-digit price range there, including a nine-acre oceanfront spread in Southampton on the market now for $62.5 million. Not to be outdone, there's also a 60-acre estate in Bridgehampton for $75 million, complete with its own golf course.

Even less flashy beach communities, though, like South Padre Island, Tex. - where buyers can still pick up a two-bedroom condominium with a water view for less than $300,000 - have experienced price gains. "The appreciation has been great down here, about 10 percent," said Nathan Konopka, an agent with Realty Executives, noting, too, a steady increase in luxury developments on South Padre, in the Gulf of Mexico, like the Sapphire South Padre, a 30-story condominium just breaking ground.

Mr. Hehman and other real estate specialists say that sticker-shocked buyers have increasingly been heading to getaways in less upscale, though not necessarily less appealing, areas like South Padre Island. And while price certainly plays a role in deciding where to buy, Mr. Hehman said that "the recent natural disasters have made some people go farther up north."

Some of the most sought-after second-home destinations on EscapeHomes.com, based on Web site searches, include areas far from the southern shorelines, like Bend, Ore., and the Pocono Mountains in Pennsylvania, as well as locales just on the periphery of the so-called hot spots: Holden Beach, N.C., in the Outer Banks, about 50 miles north of Myrtle Beach, S.C.; Flagstaff, Ariz., 30 miles from Sedona; and Palm Bay, Fla., a two-hour drive north of Palm Beach. (Also on the list: perennial favorites like Tampa, Fla.; Myrtle Beach; and Park City, Utah, a ski resort.)

Diane L. Jackson, an independent broker in Flagstaff, said that people who buy second homes there, a two-and-a-half-hour drive north from Phoenix, come for the many year-round activities - hiking, canoeing and elaborate biking and jogging trails - as well as the stunning vistas, including that of the vast ponderosa pine forests of Coconino National Forest. Median home prices are also a lot lower than in nearby Sedona - about $325,000 in Flagstaff, she said, which is roughly the Sedona entry price. Small condos and manufactured homes in Flagstaff can be found in the $200,000 range.

But as word of the area's affordability gets out, finding a place there is becoming more challenging. "Every house I looked at got sold out from underneath me," said David Hall, a geologist from Levittown, Pa., who with the help of Ms. Jackson bought a three-bedroom ranch-style house on 2.5 acres, for $220,000, three months ago. He and his wife, Evelyn, are planning to rent it out and hope eventually to retire there.

Another area getting attention lately is Palm Coast, Fla., about 25 miles north of Daytona Beach and where the Moreys have their vacation home. "There's a different energy here," Mrs. Morey said. She and her husband like having the pools (there are eight) and golf course in their development, called Hammock Beach, but they are also enamored with the small-town ambience, the parks and the assorted wildlife. (Their children and grandchildren, frequent visitors to their three-story, 4,500-square-foot retreat, just love watching the dolphins swim, they say.)

Though prices are still considerably less than those in many other parts of Florida, the area is steadily shifting to a market primarily of vacation or retirement homes, and the prices are starting to reflect the change, according to Jolita Barry, a local broker at By Appointment Only Realty. Two-bedroom oceanfront condos start at about $900,000, she said, though units by the Intracoastal Waterway start at about $300,000 and are as low as $120,000 farther inland.

(Mrs. Morey said that a comparable two-bedroom oceanfront condo in Miami Beach or Key Biscayne would start at $1.2 million to $1.7 million. Some real estate analysts, though, expect prices in South Florida, which has seen extensive growth in building, to level off.)

THE trick, it seems, may be in finding those hidden gems. (Of course, there's no guarantee those areas will turn into the next Lake Tahoe or Myrtle Beach.) "The emerging markets are the fun ones," Mr. Lereah said, "because they haven't really been discovered."

At least not by many people from outside the area.

South Padre Island, near the southernmost point of Texas, has always attracted a local clientele as well as college students on spring break, but only in the last year or so, brokers say, has it been discovered by outsiders looking for affordable beach homes. Similar bargains are also available a causeway away on the mainland, in Port Isabel.

Buyers can still find two-bedroom, two-bathroom condos on the side of Laguna Madre Bay in the $200,000 range, according to Mr. Konopka of Realty Executives, though similarly-sized beachfront condos on the Gulf of Mexico cost at least double. Houses usually start at around $300,000, he added.

"We've been getting people from all over the country, as well as in Canada, Mexico and the U.K.," Mr. Konopka said. "It doesn't make any sense to pay a million when you can get the same thing for $430,000."

Robert Carnahan, an engineer from Bingen, Wash., certainly felt that way. Mr. Carnahan, who was drawn to South Padre Island for its good windsurfing and kite-boarding, said that in November he spent around $200,000 - "an absolute steal" - for a two-bedroom condo on the Gulf of Mexico in a 10-story building. He plans to use it part of the year and rent it out the rest.

Other "areas to keep an eye on," according to data provided by EscapeHomes.com, include Kings Bay, Ga., on the southeast coast; Mountain Home, Ark.; and Spirit Lake, Idaho.

Brokers in those communities say they are seeing a steady pickup in interest. For example, in Mountain Home (population 11,100), tucked deep into the Ozark Mountains, second homes made up only 10 percent of the market three to five years ago, but today it's 15 to 20 percent, said Rodney Wagner, the principal broker and owner of the Mountain Home Real Estate Company. A big attraction is the trout fishing on the White and Norfork Rivers, along with relatively low prices and low property taxes.

"We just closed on a spectacular new house - 1,855 square feet, three-bedroom, two-bath five miles west of Mountain Home - for $140,000," Mr. Wagner said.

But prices shouldn't be the only criterion for buying, said Andrew Schiller, founder and president of Location Inc., a company that specializes in relocation software and runs the home search Web site NeighborhoodScout.com.

"When people purchase vacation homes they're investing in a location as well as a family retreat," Mr. Schiller said. "It makes sense to invest in a community that has quality schools. Better quality schools will command higher values. In a lot of vacation places people do live there year-round, because of the way people telecommute with their jobs now."

Mr. Schiller has his own list of emerging-market favorites as well. They include: Blue Hill, Me.; Guilford, Conn.; Somers Point, N.J.; Carolina Beach, N.C.; Mount Pleasant, S.C.; Port St. Joe, Fla.; Oak Harbor, Wash.; Gold Beach, Ore.; and Arcata, Calif.

And then there are once-popular areas that are popular again, like the Poconos. In some areas you can buy property for less than $100,000, brokers say, although more places cost at least $300,000. "Business is brisk," said Kathleen Caponigro, an agent with Wilkins & Associates Real Estate in Mount Pocono, Pa. "The Poconos are a good alternative for people who are priced out of the Hamptons and the Jersey Shore."

Barbi Yellin of Merrick, N.Y., said that she and her husband, Reuven, who bought a four-bedroom lakefront house in the Lake in the Clouds community in the central part of the Poconos two months ago for $375,000, "absolutely did not want the Hamptons."

"It's too expensive and too much of a 'happening,' " said Mrs. Yellin, a Hebrew teacher and one of Ms. Caponigro's clients. "We wanted a neighborhood, not a scene."

Another of Ms. Caponigro's clients, Lisa Bloom, an anchor and commentator on Court TV, bought a chalet-style four-bedroom house near the Camelback ski resort about 16 months ago.

Ms. Bloom and her teenage son and daughter spend almost every weekend there - it's just a 90-minute drive from their Manhattan condo - swimming, hiking and horseback riding in the warmer months and skiing, snowboarding, sledding (and sometimes igloo building) in the winter. They also bring along plenty of guests but leave behind the P.C.'s, TV's and makeup. (Ms. Bloom says she rarely wears any out there.)

"All day long I have to talk about blood, guts and gore; it's wonderful to be able to get away from it all, and so quickly," she said.

Sometimes, of course, it's not always easy. Like the day she was scheduled to close the deal on her house. It was Nov. 12, 2004, and a jury had finally reached a guilty verdict in the Scott Peterson murder trial. "I was literally dashing off the set," she said, "trying to find all the closing papers."

A Tale of Two (types of ) Cities





 Well, the boom is over and most of our nation's hot housing markets are cooling. Home sales are off 5 to 20 percent in some markets that were once setting annual sales records. But there have been no signs of bubbles bursting as of yet. Real estate activity began slowing about six months ago, and - perhaps with some fingers and toes crossed - our nation's housing industry is managing a soft landing. And quite nicely, thank you. It is true, some of those "hot hot hot" markets are experiencing more of a cooling down than are others, but there is also a silver lining to that: some of America's non-boom markets are showing signs of life.

During the real estate boom's five-year run (2001 to 2005), about 65 of the 135 metropolitan areas on which the National Association of REALTORS� tracks price data experienced robust price appreciation. The households living in - and investors investing in - those 65 boom markets during those five years enjoyed substantial equity gains on their properties and no doubt engendered the envy of non-boom homeowners and investors. Indeed, to the dismay of the remaining 70 metro areas, the boom seemed to discriminate as it passed over them. But today, the housing coin has flipped - sales are softening in (former) boom cities and gaining momentum in non-boom cities. It appears the haves and the have-nots have reversed places.

What is driving that reversal of fortune? The answer is: affordability. Quite simply, affordable metros are in favor and unaffordable metros are experiencing a correction. Let's look at both situations.


Afordable Metros
The recent real estate boom seemed to have bypassed Denver, Salt Lake City, Houston, and Albuquerque, New Mexico; now those markets are raising some eyebrows. In recent months, they have shown a pick up in sales activity. What all four of these metros have in common is a healthy local economy (evident in their job creation figures) and affordable housing prices. It is becoming increasingly clear that in the aftermath of the boom, households are now seeking affordable property to purchase (and live in). For example, there are cases where households living in pricey northern California neighborhoods (such as San Francisco) are moving from an area where the median home price is a lofty $730,000 to areas with substantially lower median home prices. Denver and Salt Lake City - as well as some still-hot markets like Las Vegas and Phoenix - could be the fortunate recipients of that trend.

Another way of viewing a healthy housing market is to look at the direction of months' supply of homes available for sale (the housing inventory). The top ten metros ranked by the largest year- over-year decrease in months' supply in February, reveals that nine out of those ten areas are affordable markets. Led by Austin, Texas, which experienced the largest decrease (falling from a 5.0-months' supply in February 2005 to 4.3-months' supply in February 2006), the remaining nine metros were Houston, San Antonio, Raleigh-Cary, Albuquerque, Mobile, Fort Myers-Cape Coral, Kansas City, Beaumont-Port Arthur, Texas and Baton Rouge. Only Fort Myers-Cape Coral, Florida experienced the real estate boom and has a median home price higher than the national median home price.

Again, all of these metros share the two characteristics that are attracting future home buyers - a healthy local economy and a relatively low median home price. I expect these metros as well as other affordable and healthy metros to exhibit slow- to moderate growth during the remaining months of this year.

Boom Metros
Phoenix, Naples, Florida, and Washington, DC all experienced the boom during the past five years, but are now showing strong signs of cooling. What they all have in common are a history of robust price appreciation and a healthy local economy. Ranking the top ten metros by the largest increase in months' supply (which is a sign of a "cooling" market) in February reveals that all ten metros were boom metros. From first to tenth are Phoenix, Palm Bay-Melbourne, Florida, Pensacola, Florida, Chicago-Naperville, Hagerstown-Martinsburg, Tucson, Orlando, Boston, Washington DC, and Worcester, Massachusetts. Phoenix experienced the greatest increase, where its months' supply rose from 1.2 months in February 2005 to 5.6 months in February 2006. Sales in all of these metros have also fallen within the past 6 months.


A Happy Ending
The good news is that affordable metros are beginning to expand while boom metros are cooling into a soft landing. There have been no bubbles bursting, as predicted by so many academics and Wall Street analysts during the past several years. The last time a bubble burst was in Boston in 1990/91.What happened in Boston? It experienced a negative local economic event - a sharp recession. During that time, Boston lost 15 percent of its labor force and the months' supply of homes climbed up to a remarkable 16 months! Something had to give so prices tumbled downward for the next four years. The difference between Boston's experience and today's cooling metros is the health of the local economy. Boston's economy experienced a contraction, while our boom markets all possess healthy, expanding economies. With job creation and income growth, households will continue to have the wherewithal to purchase property even in cooling local markets. That is a perfect recipe for a soft landing.

Downtown's Condo Craze



 
Project will add 100 units
May 10, 2006
 
After six years of battling uncertainties, another Downtown project is about to join the city's condominium craze.
The 3-acre Lockerbie Park will add 100 units to the growing inventory of Downtown condo options available.
Across the city, developers are competing to cash in on the trend of baby boomers, empty nesters and young professionals vying for a slice of maintenance-free city condo living.
Downtown Indianapolis Inc., an organization that promotes Downtown, estimates that more than 1,100 condo units will be available Downtown by 2010. Lockerbie Park is part of that trend.
Sitting on the fringes of the historic Lockerbie neighborhood, the project is expected to echo the urban brownstone style architecture of Boston, Chicago and San Francisco. It also will complement the historic feel of its surrounding neighborhood, officials said.
As backhoes worked in the background Tuesday, developer Hearthview Residential and partner Dinmont Development unveiled details of the $25 million project.
For Dinmont President Brian Knapp, the announcement was the culmination of years of planning and waiting.
Dinmont got the approvals to build the project in 2001. But that was before the 9/11 terrorist attacks and the stock market crash. Dinmont's original partner, Young & Laramore, bailed, and the project was shelved.
Two years ago, Hearthview offered its support and redesigned the plans.
Plans allow buyers at Lockerbie Park to choose from Lockerbie Park Plaza, a 30-unit midrise with underground parking, or the 70-home Lockerbie Park Brownstones with private garages and entrances. Prices range from $200,000 to $500,000.
Currently, 186 condominiums in that price bracket are awaiting buyers, said Julie Brooks, a Realtor for F.C. Tucker Co.
"That's a lot of inventory, but I don't think the future is bleak for developers like Hearthview," Brooks said. "They have an established reputation for quality products that's priced competitively."
Hearthview Residential already boasts several Downtown projects in its portfolio, including the Athletic Club Condominiums, Mill No. 9 and Meridian Arch.
"There's no place better than Downtown Indianapolis," said Jim Thomas, a partner at the firm.
"It's at its peak," Knapp agreed about the condo craze. "What we have come to learn is that the Downtown buyer is not a high-end buyer. They are just looking for hip units that give them a good value per square foot."
The key is to hit the preferred price range of $200,000 to $300,000, experts say.
A Downtown marketing group and residents along Lockerbie say the project will be good for the city and the neighborhood.
"Lockerbie Park will be instrumental in transforming the neighborhood, enhancing an important gateway into Downtown and bringing new customers to Massachusetts Avenue and the Culture District," said Tamara Zahn, president of Indianapolis Downtown Inc.

$70M Hilton Condo-Hotel Slated for Miami Suburb




May 09, 2006
By Hortense Leon, Southeast Correspondent

The St. George Residences and Hotel at the Hilton, a $70 million condominium-hotel development, is expected to begin construction sometime between August and October in Coral Gables, Fla., a Miami suburb, said Gary Prosterman, CEO & president of Memphis-based Development Services Group, a hotel developer and one of the joint venture partners in the project. The other joint venture partner is Atlanta-based City Centre Properties, a high-rise and mid-rise residential developer.

Development Services Group has developed 20 hotels in the southeast, mostly Hilton Group brands such as the Embassy Suites, Prosterman said. The St. George--which is being financed by a $55 million construction and land acquisition loan from Wachovia Bank-- represents the company's first foray into the Miami market. Although it is generally acknowledged that there is a glut of residential condominiums in the Miami area, Prosterman said that Coral Gables is unique. "Not only is there not an over-supply of residential condominiums in that city," he noted, "but Coral Gables hasn't had a new hotel in 25 years."

The reason for the dearth of hotel projects in Coral Gables is that the city has high barriers to entry, Prosterman explained. Yet, Coral Gables has a plethora of multi-national companies plus upscale stores and restaurants, all of which make it a good hotel market.

Although Prosterman and his partners purchased the one-and-half-acre parcel for the St. George only a year ago for $16 million, an earlier developer, Miami-based George Goldbloom, had spent four years shepherding the development through the entitlement process, but died before he could see it through to fruition, noted the Memphis-based developer. Prosterman and his partners did not make any architectural changes to the design for the St. George, nor did they ask the city for any entitlement changes after taking over the project.

The St. George, which will be built on the edge of downtown Coral Gables, will feature 83 one, two and three-bedroom condominium residences with 792 to 1,418 square feet and 117 studio and one-bedroom hotel-condominiums with 428 to 928 square feet. Preconstruction prices for the residential condominiums will start in the mid-$400,000s and for the condominium-hotels they will start in the mid-$200,000s.






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