Articles

Brokers Prepare for Wall Street’s Bonus Season, NYT

No matter what happens with the size of bonuses or the tax breaks, sellers should remain cautious. Those who are clinging to the possibility of bonuses, he said, may want to take into account that “the bonus thing is not anything like it was, because so much of it is as restricted stock options versus cash. Yet everyone still sees it as a panacea.” In other words, in this market and this economy, erstwhile panaceas are not what they may seem. And as one adage suggests, there is nothing louder than the sound of a halo crashing down from the head of an erstwhile angel.

In real estate, this is the season to obsess about the bonus season. Wall Street bonuses, in the pre-housing-crash years, were a major economic engine driving sales in the city from January through the spring. They can be a broker’s bread and butter — brioche with brie, really, when you’re talking about multimillion-dollar bonuses and multimillion-dollar apartments.But since the economy melted down, bonuses have been up, down and spinning all around. Anticipation has had brokerages and developers panting one minute and totally depressed the next. And the speculation this year over bonuses has been unusually intense; the question of Congress’s extending or eliminating Bush-era tax breaks that have been in place for much of the last decade has only fueled conjecture. Will bonus payouts come early this year so the recipients can avoid potential tax increases?
By Sarah Kershaw, Dec. 9, 2010 NYT

LInk to article

The 25-Year 'Foreclosure From Hell', WSJ

Nationwide, there were 2.1 million mortgages in some stage of foreclosure as of October, according to research firm LPS Applied Analytics. The average loan in foreclosure—the process typically starts when a loan becomes 90 days past due and a bank files a complaint—had been in default for 492 days as of October, up from 289 days at the end of 2005, according to LPS. In Florida, one of the states where foreclosures are handled by courts, the average loan in foreclosure has been delinquent 596 days.

OKEECHOBEE COUNTY, Fla.— Patsy Campbell could tell you a thing or two about fighting foreclosure. She's been fighting hers for 25 years.The 71-year-old retired insurance saleswoman has been living in her house, a two-story on a half acre in a tidy middle-class neighborhood here in central Florida, since 1978. The last time she made a mortgage payment was October 1985. And yet Ms. Campbell has been able to keep her house, protected by a 105-pound pit bull named Dodger and a locked, rusty gate advising visitors to beware of the dog."They're not going to take this house," says Ms. Campbell. "I intend to stay in this house and maintain it as my residence until I die....Many Florida real-estate lawyers say it is the longest-lasting foreclosure case they have ever heard of.The story of how Ms. Campbell has managed to avoid both paying her mortgage and losing her home, which is currently assessed at more than $203,000, is a cautionary tale for lenders that cut corners and followed sloppy practices when originating, processing and servicing mortgages. Lenders are especially vulnerable in the 23 states, including Florida, that require foreclosures to be approved by a judge.
By Robbie Whelan, Dec. 4, 2010 WSJ

Link to article

12/04/10 wsj

Affluent Investors Flee to Cash, WSJ

Why do we care how the affluent invest? Because there are 26 million such households in the country, and without them, it’s hard to see any fundamental turnaround in the economy or U.S. financial markets.

A new study shows that affluent investors have all but given up on stocks. For them, 2011 is all about cash. A full 40% of investors with between $100,000 and $1 million in investible assets say they are likely to put their money into cash over the next 12 months, according to the study from Spectrem Group. That’s nearly twice the number who say they plan to invest in equities.Only 17% of the group plans to buy fixed-income products, 12% plan to put money overseas and 6% plan to buy real-estate. The most obvious reason is that after losing a chunk of their retirement during the crisis, affluent investors aren’t prepared to be burned again.
By Robert Frank, Dec, 8, 2010 WSJ

Link to article

East Wind Lifts Europe Luxury Sales, WSJ

 LONDON —  Luxury goods have enjoyed a heady recovery in Europe from the dark days of 2009, and the good news looks set to continue into Christmas, with sales boosted by spending from Chinese tourists.But retailers caution that if the euro climbs sharply, some of that retail strength could diminish.Global sales in the luxury market—which includes such high-end goods as apparel, handbags, watches and cosmetics—declined 8% last year, according to consulting firm Bain & Co. Sales and earnings have surged since then, as have stock prices. The Dow Jones Luxury Index, which measures the performance of companies world-wide that derive a sizeable portion of revenue from luxury goods and services, has risen 34% in the last year. And a large proportion of the recovery has come from tourists in Europe taking advantage of a euro that in June hit its lowest level in four years.
By Kathy Gordon, Dec. 3, 2010 WSJ

Link to article