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Articles
Expensive Manhattan Co-Ops Lead Sales; Overall Prices Less Firm, NYT
Market reports said that even as overall average prices rose, prices in most individual categories, such as studios or one-bedrooms, were flat or falling. This suggests the average price rise was due more to the changing mix of apartments sold than to a fundamental shift in the market. It isn't clear whether that pattern will recur in the second quarter.And with the stock market down, and European buyers holding off because of a declining euro, worries over a worsening economy could also put a damper on a Manhattan housing
recovery in the months ahead.
A rise in apartment sales in Manhattan during the spring selling season, especially among expensive co-ops, led to an upward bump in average prices, according to an analysis of recent transactions, giving hope to brokers and analysts looking for a housing turnaround Preliminary figures compiled by The Wall Street Journal show that the median price of a Manhattan co-op hit $685,000 last month, up 9.5% when compared with the previous month and 14%higher than May 2009, when co-op prices bottomed. The median condominium price was $1.2 million, up by 4.6% compared to the previous month and 13.8% versus May 2009.The latest data lend support to brokers, in midst of what is usually the biggest selling season of the year, who have reported a significant turn in sales activity.The gains in median prices don't necessarily mean that prices overall are appreciating. The Wall Street Journal analysis found sales picked up the most for higher-end properties,which pushed up the average.
By Josh Barbanel, June 14, 2010 WSJ
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06/14/10 WSJ
U.S. Housing Market Recovery Depends on Jobs, Harvard Report Says, BB
Job growth will be the key factor in whether the U.S. real estate market can extend a recovery after the end of the federal homebuyer tax credit, according to a Harvard University study. High unemployment is fueling the foreclosure crisis and discouraging the household formation that drives property demand, according to the State of the Nation’s Housing report issued today by Harvard’s Joint Center for Housing Studies. The weak labor market resulted in people “doubling up,” or sharing residences, rather than buying their own home, the report said. “What happens with jobs will matter the most to the strength of the housing rebound,” said Eric Belsky, executive director for the center in Cambridge, Massachusetts. “If employment growth surprises on the upside or downside, housing numbers could too.”
By Kathleen M. Howley, Jun 14, 2010 Bloomberg
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Trading Down: Can It Still Bankroll Your Retirement? WSJ
People took an enormous amount of money out of their homes during the bubble—$358 billion in the peak year of 2005 alone, according to Goldman Sachs. So-called cash-out refinancings raised mortgage burdens sharply. That, combined with the price plunge, has wiped out trillions in home equity during the bust, making empty-nesters unable to trade down easily.
The Hornes of Holliston, Mass., sold this house for a smaller one nearby, but haven't enjoyed the windfall they expected.Trading down to a smaller home is a retirement-planning staple. According to an April study by the Society of Actuaries, 20% of not-yet retirees say they plan to downsize after the last child leaves the nest. But it is getting a lot harder to do, even for wealthier people. A study by the Joint Center for Housing Studies at Harvard University, scheduled to be released on Monday, shows that while mobility has slowed across all age groups during the real estate bust, "mobility rates among seniors have posted the sharpest drop." Trade-downs in March comprised about 8% of total home sales, down from 12% in October 2008, the first year for which there are historical comparisons, according to
the National Association of Realtors.
By M.P. McQueen, June 12, 2010
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How the New Wealth Taxes Will Hit You, WSJ
The health-care bill that Congress passed in March contained two surprising new taxes to help pay for the changes: an extra 0.9% levy on wages for couples earning more than $250,000 ($200,000 for singles) and a new 3.8% tax on investment income on those same people (technically, people with "adjusted gross incomes" above those amounts). Each tax signals a radical change in policy. For workers, the extra 0.9% levy puts a progressive element in what used to be a totally flat tax. The 3.8% tax on investment income also knocks down a longstanding wall by applying a "payroll" tax to unearned income. Until now, FICA taxes for Social Security and Medicare have applied only to wages, not investment income. While many details remain unclear and the Internal Revenue Service hasn't issued any guidance, here are preliminary answers to the most important questions taxpayers are asking.
By Laura Saunders, June 12, 2010 WSJ
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Millionaire Population Bounces Back to Pre-Crisis Peak, WSJ
"While the aggregate numbers suggest the wealthy have recovered, they mask widespread differences among the wealthy.Many millionaires lost their fortunes while other folks made new ones."
The number of millionaire households in the world has bounced back to boom-time levels, according to a new study.The 2010 Global Wealth Report by The Boston Consulting Group says there were 11.2 million millionaire households in the world at the end of 2009, a 14% jump from 2008. That puts the millionaire count about where it was in the good old days before the global financial crisis.The U.S. had especially strong growth, with the number of millionaire households rising to 4.7 million–still the largest number of millionaire households in the world. That means that roughly 4% of American households are millionaire households. (Singapore had the highest “millionaire density” with 11% of all households being millionaires).The global growth at the top–driven by last summer’s rebound in financial markets–marks a stark contrast with the continued malaise at the middle and bottom. As a result, inequality around the world has widened.
By Robert Frank, June 10, 2010 WSJ
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