Archive for November, 2009

DINKs: Beautiful woman embracing husbandA DINK household is one “in which there are two incomes and no children… DINKs are often the target of marketing efforts for luxury items such as expensive cars and vacations”  as defined by

DINKs have a lot going for them.  With two incomes and none of the expenses required to raise a couple of kids, they are commonly the consumers of the best things in life from the finest restaurants and fabulous travel to luxury labels and premium services.  In fact, there’s a plethora of websites devoted solely to DINKs and a world of experts who are ready and able to help spend all that discretionary income.

The downside?  If there is one, it’s that he extra income also means they are likely to find themselves in the highest tax brackets.     That means that sheltering income is extremely important.  In addition to 401K’s, IRA’s, tax-deferred investments and the like, home ownership is virtually a no-brainer.

One excellent web site, Dual Income No Kids Finance, affirms that buying a home offers significant financial advantages for DINKS. Sharing the title of “co-grand poobahs,” bloggers Miel and James provide lots of info, including the average  net worth of DINK families:


Given such high average income levels, Miel and James strongly advise investing in a home:“If you don’t own your home, and are in otherwise in good shape, you should strongly consider buying a home. There are number of benefits to owning your own place. First, and foremost you have a tremendous tax advantages as the mortgage interest and property tax [for Condos or the tax deductable portion of Coop maintenance] payments can be written off your taxes. Owning real estate also provides important protection against inflation and housing can be an important asset when you reach retirement after the mortgage is paid off.”

For those who are buying for the long term (five to ten years), possibly the best pay-off is the appreciation in the home’s value when it comes time to sell.  Traditionally, a home purchase has been one of the best possible investments. Please refer to the Prudential Douglas Elliman/Miller Samuel’s Manhattan 10 Year Residential Sales Trend Analysis (1999-2008 PDF).

Categories : DINKS
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More Flexibility for Manhattan Condo Buyers

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Mortgage Rates Coop

Condominium buyers in the New York area often paid little mind to Federal Housing Administration mortgages, either because these government-backed loans had relatively low dollar limits or because federal rules put them beyond the reach of most condo associations.

But last year, the federal government raised the maximum F.H.A. loan amount to $729,750 from $362,790 for high-cost areas like Manhattan and northern New Jersey. It recently extended that ceiling through 2010. F.H.A.’s new rules will open an important lending option to condo buyers, especially those with weak credit.

  • Although interest rates may be higher, borrowers with credit scores as low as 600 can often qualify.
  • They can secure a mortgage with a down payment of less than 5 percent. The downside, though, is that borrowers must pay an F.H.A. insurance premium, similar to private mortgage insurance. On a $729,750 mortgage, the maximum conforming mortgage in New York City, with a high LTV (say if you put down 5% on a $768K condo), that could add over $450 to the monthly payment.
  • Most condos include in their ownership agreements the “right of first refusal.” Such language grants the condo association the right to buy a unit at the price listed by the unit’s owner. In the pastt FHA had barred such clauses but now that restriction has now been dropped.
  • The government has also streamlined the process for lenders that want to qualify a condominium for the F.H.A. program. Lenders can now approve condos without applying to the government, if they believe the condominium complies with F.H.A. lending policies. The F.H.A. will permit these “spot approvals” until Jan. 31, 2010, but lenders say they are hopeful the government will extend the policy beyond that date.
  • The government also relaxed rules that had limited the number of condominiums that would qualify for F.H.A. loans. Under the old rules, if more than 50 percent of a new development was unsold, the F.H.A. would deny a loan. Now, just 30 percent of a development must be sold before an F.H.A. borrower can qualify.
  • In addition, the old rules capped, at 30 percent, the share of condos that could have F.H.A. loans in a given development. Now the figure is 50 percent.

Graph and above points excerpted from November 20, 2009 NY Times article by Bob Tedeschi

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New York State Department of LaborManhattan’s October 2009 unemployment rate remained at 9.2% from September but has has increased  3.7% from October 2008.

New York City’s October unemployment rate as a whole ticked up .1% from last month’s 10.2% rate but up 4% from 6.3% reported in October of 2008.

Worst hit was the Bronx at 13.4% (+.2%), followed by Brooklyn 11.1% (+.1), Queens 9.2% (+.1%) while Staten Island remained the same at 8.9%.

The New York State Department of Labor reported the state’s rate of unemployment is the highest since April of 1983.

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Conforming Loan Ceiling of $729,500 Extended

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Mortgage rates include co-ops

BUYERS of homes in high-priced markets [like New York City] have some reason to cheer: the federal government recently extended through 2010 the maximum dollar amount for “conforming loans.” This will probably mean better options for borrowers who might otherwise have had to take out “jumbo” mortgages.

Conforming loans meet all the guidelines of Fannie Mae and Freddie Mac, the government-controlled agencies that resell packages of loans to investors, and are therefore eligible for purchase by these agencies. Jumbo mortgages, issued in amounts above the government’s maximum, are nonconforming. Because lenders assume less risk in making conforming loans, the interest rates are usually lower.

As reported by Bob Tedeschi of the New York Times

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According to a new J.D. Power and Associates study the average time required to approve and close a home loan has increased to nearly 47 days, compared with approximately 30 days in 2008. The reason? Increased scrutiny of loan applications and higher origination volumes driven by increases in refinancing. Not surprisingly, the longer wait times are fueling a decline in overall customer satisfaction with primary mortgage lenders.
The study also finds that credit scores are now higher among mortgage customers and the percentage of loan applicants who have been faced with requests for additional documentation has increased considerably—to 45 percent in 2009 from 33 percent in 2008.

“While the more cautious approach to underwriting mortgages is justified, the longer turn times and more numerous requests for information tend to have a negative impact on satisfaction,” said David Lo, director of financial services at J.D. Power and Associates. “Good underwriting and delivering a satisfying customer experience are not mutually exclusive, and some of the negative effects of a tightened lending environment can be mitigated by simply improving communication between lenders and customers.”

The 2009 Primary Mortgage Origination Satisfaction Study measures customer satisfaction in four key factors of the mortgage origination experience:

  • application/approval process
  • loan officer/mortgage broker
  • closing
  • contact

According to responses from more than 3,400 consumers who originated new mortgages within the previous 12 months here’s the top mortgage lenders BB&T (Branch Banking and Trust) 783 out of 1,000,  Wachovia 781, National City Mortgage  769, SunTrust Mortgage 769, Wells Fargo 754, Flagstar Bank 744, GMAC Mortgage  744,  Bank of America, 741



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Fed housing credit?

Fed housing credit?

Local media has been commenting since last August that New Yorkers seem to be blasé about the Recovery Package offer of $8,000 toward a new home. However, it was so popular nationally that Congress has extended that, and added a $6,500 offer for current owners who move.

Well, I wouldn’t pass it up if I were in the home market right now, and put my team to work finding out what you might buy with that free cash. Some new furniture and décor are obvious choices, and almost everyone needs something for their new home.

Or you could use it for other kinds of fun. Given my favorite pastimes, I might figure out how many lovely restaurant meals I could savor, including cuisine hot spots my wife and I usually reserve for special occasions.

But you have many other options. For about $600 to $1,600 you could score a pair of trendy Christian Louboutin shoes or boots at Saks, which offers 96 choices at your fingertips. Or there’s the current Prada event with hot items coming up, now available for pre-orders. While at Sak’s you could also pick up a steal on men’s watches, such as Breil Milano’s stainless steel chronograph strap watch at $1,250.

Or how about a Hermes bag? For classic Hermes, you can’t go wrong with the Birkin bag, starting at $6,000. Here’s a entire blog dedicated to the Birkin.

Here’s a tidbit from a local fashion blog: “Katie Holmes & Suri: Spotted on Madison Avenue of New York, little Suri had her own pint-sized version of Mom’s orange Hermes shopping bag. Later on, Katie was seen with a rare burgundy Garden Party Handbag that looked more like a boarding bag. The Hermes handbag offset her black pencil skirt and red heels. With all the goodies that could be stuffed into that spacious bag, Holmes was ready for anything.” The Evelyne, starting a bit under $2,500, is très chic now.

You can toast your new home with a rare champagne.  Dom Perignon Oenotheque 1993 is just $399.00 per 750 ml. bottle, limited to one per customer at Astor Wines.  Salon Blanc de Blanc, Le Mesnil – 1997 is more expensive at $459.99, but in greater supply.  You can buy a case of 6 for $2621.94.

Does your new co-op or condo allow pooches?  How about using your savings for today’s most expensive, pure bred, a Samoyed, starting at $3,000 or an English Bulldog at around $2,500.  On the other hand, if you adopt a nice homeless puppy from a shelter approved by the Humane Society, you’ll have lots of money to buy dog food and a really fancy collar, $18 and up from

And let’s not forget the sports fans.  How about season tickets to the Yankees next year?  Despite the World Series victory, top prices will actually decline, with field level seats at $250 per game for season ticket holders, down from $325 this year.

How much more stimulated could you get?  Check out my November 2 post  for housing stimulus dates and details. Go, Feds!

While checking out the food blogs this morning, I saw this wonderful little video on the The “sous vide” style low boil described in the video is a simplistic, yet effective variation on the much more precise method used by some professional chefs. (I tried it  and the eggs poached that way-but for a little less time- are really excellent!)

Sous vide literally means under pressure vacuum (thanks to Addélice’s comment) and refers to a cooking technique in which the chef seals food into an airtight plastic bag with a vacuum-packer (like a food saver or Seal-A-Meal) and then simmers it in water at a low and precise temperature.

The sous vide cooking method is memorialized in the book Under Pressure: Cooking Sous Vide by Thomas Keller, famed chef-proprietor of  Per Se in the Time Warner building in Manhattan’s Columbus Circle and The French Laundry in Yountville, California, in the Napa Valley. The book includes commercial preparation of receipts like Compressed Watermelon and Hayden Mango “Yolk”Salad of Heirloom Beets, Anjou Pear, Mache with Candied Walnuts and Blue Goat Cheese Coulis;   Air-cured Waygu, Treviso Leaves, Compressed Asian Pear and Whipped Pine Nut Oil.

The secret to sous vide is discovering the exact temperature required to achieve the most sublime results. My wife and I discovered these sublime results when we celebrated our anniversary last august at Per Se.


New York Mortgage Rates Week Ending October 30th 2009

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NYTimes Mortgage Rates

New York Times Mortgage Section November 6, 2009

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Buyers who can pay in full in cash for their co-op or condo apartments are in the driver’s seat.  Right now, being able to offer a seller a sure thing – with no surprises on the way to closing – will go a long way to assuring you of negotiating the best possible deal.

Pair some flexibility with cash, and you’ve got the magic ingredients of what I call FLASH.  Being flexible means being open to the seller’s needs in terms of setting the closing date – being ready to close immediately or allowing ample time for the seller to find a new home rather than demanding a quick move – offering to take care of needed repairs or accommodate the start of a school year.   With FLASH, you’ll find that the door to your new home is open, ready and waiting.

If you’re like most people – who can’t afford a full-cash sale – you can still find yourself in the “most attractive buyer” finals.  If you have great credit and can put down at least 20% on a jumbo conforming mortgage (up to $729,750 in New York), or at least 30% for higher mortgages, you’ll still set setting hearts aflutter.  Pre-qualifying for an adequate mortgage is a fabulous move to round out your VIP buyer profile

1 -The Numbers

  • Manhattan residential real estate has performed better than the broader U.S. real estate market.
  • Compared with losses of more than 40% for Los Angeles and San Francisco over the past few years, Miller Samuel reports in the third quarter 2009 Manhattan Residential Market Overview that the average price per square foot in Manhattan was $996 vs. $1289 as reported in the first quarter of 2008 , a price reduction of 23% from the peak.
  • Third-quarter 2009 data show prices declined at a lower rate while transaction volume surged 46%, a sign that the Manhattan market is starting to find its bottom.
  • As Donald Trump once said “It’s a water thing”. Manhattan is a landlocked island. While developers in most cities keep expanding outward, developers in Manhattan do not have this alternative.
  • Wall Street firms are expected to pay a record $140 billion in bonuses this year according to The Wall Street Journal. Regardless of whether these bankers deserve their lavish bonuses, their payday will boost Manhattan real estate prices.

2 -Capital of the World

  • Manhattan is a global must-see destination. Emerging markets like Brazil and China are creating wealth at a very high rate and churning out millionaires.
  • New York is often the first international destination new millionaires from emerging countries want to visit. It’s also one of the first places where they want to buy investment property or a pied-a-terre.

3- Diversity of Industry

  • Besides finance, New York has media, hospitality, advertising and professional services like law and accounting firms. These industries will be serving emerging-market economies and will benefit the local New York economy in terms of job creation and housing demand.
  • If not for the diversity of the current New York City economy, the unemployment rate would be even higher than 10.3% that was reported in August.
  • Sectors like education, health, leisure and hospitality have gained jobs, which partly offset the negative impact of the financial job losses.

4 -Quality of Life

  • New York City is one of the safest cities in the US.
  • The legal system is established and there is a better work-life balance compared with countries like China.
  • Transportation in Manhattan via the Subway system is efficient and reduces commuting time for those living in Manhattan.
  • The air in Manhattan is pristine compared to air in other global metropolises like Hong Kong.

Portions excerpted from NuWireInvestor reporting on a story written by Wei Min Tan of

NYC Median Age 2There’s no grass-mowing or snow-shoveling.  No need to endure the aggravation and expense of maintaining a couple of cars (unless you want to).  Mediocre restaurant chains are few and far between, and commutes that run an hour or more are unheard-of.  What could be better?

One of the city’s fastest-growing groups of residents is Baby Boomers (their clout is evidenced by the fact that their descriptor is usually capitalized, contrary to the basic rules of the English language).  Often empty nesters and retirees, many of these folks have been languishing in suburbia after raising their lovely children, missing the City’s vibrant culture.

Manhattan, of course, is arguably the biggest and best cultural center in America.  In fact, maybe, the world.  We have it all – whatever kind of entertainment you prefer, some of the world’s best museums, great opera, symphonies, jazz clubs, theater and more great restaurants than most of us will ever have the chance to dine in.

People 55 and older make up more than 20% of the borough’s population and they’re on the verge of a major growth spurt. While the elderly population increases across the city, Manhattan’s share is projected to increase 57.9 percent over 2000 to 2030, to 295,000 people 65 and older in 2030 according to the New York City Department For The Aging which published this report.

The figures are great news for anyone who’s a Boomer, empty nester or retiree.  It means Manhattan will continue to develop a fabulous array of the amenities you love the most.  You also have a great choice of homes, from beautifully-detailed pre-war apartments to new condos and lofts with in-house fitness and business centers.

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Yankees And Bronx Real Estate

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Yankees Win! NY Daily News photo

Yankees Win! NY Daily News photo

I’m not really a raving baseball fan but as long as Boston doesn’t win, I’m OK with whoever does.

John Massengale an architect and urban planner posted this brief  history:

“The boss of the Yankees, George Steinbrenner, complained about parking and a perception of crime, and said he might move his team if the city didn’t  build a new stadium for them. The then Mayor of the city, Rudolph Giuliani, proposed building a new stadium over a railyard on the west side of Manhattan, at a cost of $1,000,000,000.00.

The Bronx Borough President, the Honorable Fernando Ferrer, wanted to keep the Yankees in the Bronx by building what he called the Yankee Village.”

The rest is history as they say.

“The Yankees won. The world is right again,” team president Randy Levine said.

I was curious about how housing prices were doing in the Bronx since the construction of the new stadium so I visited Trulia’s  Bronx Real Estate Overview

Bronx median sales prices
Bronx Recently Sold Homes
Bronx median sales prices
Bronx Recently Sold Homes

Average price per square foot for Bronx NY was $201, a decrease of 9% compared to the same period last year. The median sales price for homes in Bronx NY for Jul 09 to Sep 09 was $390,000 based on 443 home sales. Compared to the same period one year ago, the median home sales price decreased 11.9%, or $52,500, and the number of home sales decreased 8.8%.

There are currently 3,048 resale and new homes in Bronx on Trulia, including 43 open houses, as well as 1,390 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Bronx NY was $463,916 for the week ending Oct 28, which represents an increase of 0.7%, or $3,009, compared to the prior week. Popular neighborhoods in Bronx include Riverdale and Throgs Neck – Edgewater Park, with average listing prices of $654,112 and $456,530.

Trulia’s Heat Map and neighborhood by neighborhood residential sales details here.

In addition to last week’s passage of a bill to extend through 2010 Freddie Mac, Fannie Mae and FHA loan limits  to $729,750, the extension and expansion of the home buyer tax credit is the pending business in the Has passed the Senate.

After a long week of negotiation on the credit, an agreement on the scope of both expansion and extension has been reached. The agreement on the extension and expansion of the credit is as follows:

  • Credit available for purchases before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.
  • Credit remains at $8000 for first-time purchasers. No change to definition of first-time purchaser.
  • New $6500 tax credit for repeat buyers who purchase between December 1, 2009 and May 1, 2010. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years.
  • Income limits are expanded to $125,000 on a single return and $225,000 on a joint return. Current law $20,000 phase-out retained.
  • New anti-fraud limitations are imposed.

The White House has indicated that President Obama will sign the has signed the legislation into law.

Here are the details directly fro the IRS.

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