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San Francisco

California’s housing market has been performing better than expected for well over six consecutive months and this April, the state saw home prices hit a 7-year high, according to the California Association of Realtors (CAR).  Both the median home price and home sales increased month on month.

Closed escrow sales of existing, single-family detached homes totalled 394, 070 in April, the seasonally adjusted annualized rate, said CAR.  That’s the figure that represents the total number of homes that would be sold in 2014 if sales throughout the year continue at April’s level, and adjusted to take account of seasonal factors that typically influence home sales.

The picture isn’t as simple as it looks at first.

April’s price was 11.6% higher than April 2013’s and April was the second consecutive month to see both year-on-year and month-on-month house price rises, while the statewide median price has risen year on year for the last 26 months.

Meanwhile, sales have risen month on month – but they’ve fallen hard year-on-year, while prices ride high.  April’s sales were up 7.4% from March’s 367, 020, but they’re down 7% from April 2013.

The median number of days it took to sell a single-family home fell to 33.8 days in April, a fall from the 35 days it took in March, but up from 27.9 days in April 2013.

‘With home prices increasing by double digits in 2013, many investors have decided to leave the market which is adversely affecting home sales as a whole,’ said CAR’s president, Kevin Brown.  ‘While the number of homes sold continued to decline form a year ago, the better-than-normal surge in sales activities in April is encouraging and could be an indication that we will see further improvements in the housing market in the next few months.’

Statewide, the median price of an existing single-family detached house rose 3.2% to $449, 360 in April compared with March, reaching its highest level since December 2007, pre-crash.

Various factors can affect median sales price – the ‘halfway point’ in the house price continuum, at which half of houses sold for more and half for less.  Types of homes can make a difference as well as a general shift in the market.  However, an effect as prolonged and large as this is likely to be a real shift in the market.

The effects of housing inventory and mortgage rates should also be factored in.  Housing inventory remained relatively tight in April, with an Unsold Inventory (UI) index of 3.5, down from March’s 4 but up from April 2013’s 2.8.  The UI measures how many months it would take to sell all the homes on the market at the current rate of sales.  April’s mortgage rate remained flat, with minor variation form march but up 0.89% from the previous year, according to Freddie Mac.

‘Looking forward, it is likely that we will see a more moderate level of price increase throughout the rest of the year, and further improvements in sales in the spring home buying season,’ said Leslie Appleton-Young, CAR’s vice president and chief economist.  ‘Increasing home prices, relatively higher interest rates, and tight lending standards, however, will continue to present affordability issues.  Primary home buyers may no longer have to compete with investors in 2014, but instead they need to worry about increased borrowing costs.’

Say hello to my little house: the grandiose tribute to poor taste and excess that housed the final hours of Tony Montana in the classic De Palma/Pacino flick ‘Scarface’ is on the market – after a clean-up and a facelift.

The opulent 10, 000 square foot property is surrounded by palm trees and Mediterranean gardens, and everything about it screams ‘Miami’ – so much so that a Miami house has run tours for years as the ‘Scarface mansion.’  In fact, though, the movie was shot on the other side of the country, in California’s Santa Barbara, where this 10-acre property is located on 631 Para Grande Lane.

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The mansion was built for James Waldron Gillespie, and the design deliberately evokes classical Greek and Roman sculpture throughout.  Designed by architect Bertram Goodhue in 1906, the property even has a name: ‘El Fureidis,’ meaning, ‘Tropical Paradise,’ and includes 5 bedrooms, 9 bathrooms and details including painted ceilings with gold leaf trim, tiled rooms and a unique pool  – very recognizeable from a certain angle – complete with fountains.

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The ostentatious poor taste that characterised the mansion in the film was added for characterization – the filmmakers thought that the home of Tony Montana should look crass and glitzy, so gold and statuary, including a gigantic pink neon globe bearing the legend,’ the world is yours!’ was added.  All that has been removed, though, leaving a home that’s certainly expensive but no longer looks cheap.

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Now, the mansion looks stately and palladian, with a dignified neoclassical frontage, bright blue pools divided into quadrants  and an estate packed with palm trees and formal gardens.  Inside, the gigantic piles of illicit substances and terrifying firearms have long since been removed.  Instead, there are parquet floors, statement modern furniture seamlessly integrated with the antiques and spacious, high-ceilinged rooms.  The main ‘conversation room’ features an 18-foot-high dome ‘modelled after the church of St. John Lateran in Rome,’ according to the brochure copy.  The recent refit replaced old-fashioned appliances, particularly in the kitchen, without affecting the mostly original fittings and fixtures.

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One reason why such a large house has so (comparatively) few bedrooms is that the original design was aimed at producing a house to entertain in rather than a dormitory.  Rather than extra bedrooms, space was given over to patios, an interior courtyard, a rooftop terrace, verandas and Persian gardens.  Indoors, the barrel-vaulted ceilings might interest you – if not, there’s a view out over the Pacific Ocean from every room.

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The price tag keeps falling, too: the home was last on the market for $35m in 2008, before selling for an undisclosed amount – maybe just over $2m, maybe about $6m, depending on who you listen to – to Russian financier Sergey Grishin.  Now it’s relisted for more modest sums and there’s even a rental option.  You can rent the mansion for $30k a month.

All Images: The Santa Barbara, California mansion made infamous in the 1983 movie “Scarface” starring Al Pacino as Tony Montana, is for sale. Tour inside “El Fureidis,” which means “tropical paradise.”  Courtesy Village Properties/Tom Ploch

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Rental Image

Demand for rental property in the USA remained strong in March, the last month for which figures are available, according to the National Association of Realtors (NAR).  48% of the organization’s members who are involved in lettings reported higher residential rents compared to 12 months ago, an increase from 46% in February.

That’s backed up by real estate firm Trulia, whose figures show average increases in the 3.9% year-on-year area.  That means rental increases are outpacing economic growth and food price rises – to say nothing of wages – and have become a driver of inflation.

Discussing the implications of the figures, the NAR said that rising rents may make home ownership more attractive, but may also slow the ability of those who are currently renting to save up for deposits.

‘The March data indicates a more upbeat confidence concerning market conditions compared to February,’ said the NAR’s chief economist, Lawrence Yun.

‘The improvement may represent the seasonal uptick in demand with the onset of Spring,’ suggests Mr. Yun.  ‘Confidence about the next six months also showed a slight improvement in March compared to February,’ he went on, an effect that’s unlikely to be down to seasonal changes.

The problems estate agents were reporting were low inventories of available housing stock, and difficulties in obtaining mortgage financing.  It’s therefore possible that some of the increased rental demand is coming from would-be buyers who aren’t able to move up.

Stronger rental demand is usually a good sign in a housing market where sales and prices are rising, since some purchasers are investors or landlords, and a market where people pay higher and higher prices for properties nobody wants to rent, or whose rents don’t make a profit, is obviously unsustainable.

In the USA, though, that’s not the story.  Instead it’s a market where many people would like to be purchasers, but can’t afford to make the capital outlay.  It’s also a market where the benefits of buying or renting are split geographically, with buying a better financial bet than renting in about half of US metro areas.

NAR members reported that the Qualifying Mortgage regulations and the increases in mortgage insurance premiums had adversely affected buyers’ ability to purchase property.

However, there’s good evidence that the rental upswing is powered by recovery in some places just as surely as it’s a symptom of a weak jobs market and high insurance costs in other places. One area of America where rentals are a sign of growth is Detroit, where median house prices in the metro area rose by double digits.  In January of this year, a BuzzFeed contributor named Drew Philp bought a Detroit house for $500.  But that illustrates an outlier, not the general trend.  As the motor industry picks up, jobs become more stable and secure and the rental market expands, purchase prices in Detroit have risen 38% year-on-year since January 2013, according to Realcomp.  Inventory and sales shrank as prices rose.

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Eileen Battisti


Eileen Battisti’s $280, 000 home was sold at a tax auction in Beaver County, Pennsylvania, in September 2011; taking the view, as she told newspapers, that ‘for the house to be sod just because of $6.30 is crazy,’ Ms. Battisti took the matter to court.  And many of use would agree with her – especially since she ‘didn’t even know about the $6.30.’

But the case didn’t come down to what was crazy: it came down to the law (by the time you’ve red this, you might think they’re the same thing) – and the judge was clear that the county tax claim bureau followed the letter of the law when it came to notifying Ms. Battisti of her outstanding debt.

That debt came to just $235.00, made up mostly of interest and fees on the original $6.30.  It isn’t owing now – the house sale generated about $116, 000 and most of that money is due to go to Ms. Battisti, who still lives in the house.

Looked at more closely, Ms. Battitsti’s story isn’t an uncommon one, especially for women of her generation: her husband handled all the finances, and he had recently passed away, dying in 2004.  Ms. Battisti says he never informed her of any $6.30 owing.

An attorney for the buyer was unavailable for comment, but the chief solicitor of Beaver County, Joe Askar, said the judge got the decision right, reading straight from the law books.

The judge, Beaver County Common Pleas Judge Gus Kwidis, wrote that the county tax claim bureau had complied with notification requirements in state law.  ‘There is no doubt,’ Judge Kwidis wrote, ‘that [Ms. Battista] had actual receipt of the notification of the tax upset scale on July 7, 2011, and Aug. 16, 2011.  Moreover, on Aug. 12, 2011, a notice of sale was sent by first class mail and was not returned.’

‘The court never wants to see anybody lose their home,’ Mr. Askar said, ‘ but at the same time the tax sale law, the tax real estate law, doesn’t give a whole lot of room for error, either.’

Addressing the question of whether Ms. Battisti knew about the $6.30, Mr. Askar said, ‘it’s bad – she had some hard times, I guess her husband kind of took care of a lot of that stuff.  It seemed that she was having a hard time coping with the loss of her husband – that just made it set in a little more.’

Ms. Battisti has declined to collect on the sale and plans to take her case to the Commonwealth Court to appeal further.  She’ll be allowed to stay in her home until a final ruling is handed down.   The court will be as constrained as Judge Kwidis was by the law, though, and as he put it, ‘under tax law, even if I feel sorry for her, I can’t do a thing for her.’

Overseas Property Mall

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Photo 1: Aaron Leitz Photography

…in theory, at least.  Seattle’s first Passive House has been built by NK Architects, in partnership with Cascade Built.  Completed late in 2013, the house, Park Passive House in Madison Park, is the first in Seattle to be certified by the Passive House Academy and authorized by the German Passivhaus Institute.

Constructed on a brownfield site that was regarded as barely suitable for homebuilding, the house has a near-airtight envelope that prevents heat loss –hence the attention-grabbing ‘hairdryer’ headline.  In fact, the house uses about as much energy to heat as a hairdryer does to run, though presumably you could go from room to room with a Babyliss and get a similar result!

Cascade Built founder Sloan Ritchie explains the rationale behind the house’s design: ‘Inefficient buildings are the number one consumer of energy in the world, and the largest contributor to climate change,’ says Mr. Ritchie.

The house is intended to use as near to zero energy to heat and cool as possible; in the case of Seattle’s latest contribution to environmentalism, that means a set of high-tech Intus high performance windows and a heat recovery ventilator, while carefully placed glazing in the building’s roof provide maximal natural light and incidentally provide great views out over the park.

A result of all this care to preserve every watt of energy, largely through insulation, is that the Park House uses about 80% less energy than a similar sized home the same size built to standard building codes, and about 90%-95% less energy for heating.

It’s economical in other ways, too: the Park House gets a floor area of 2, 710 feet out of a 2, 000 square foot footprint, in a design Ms. Ritchie calls ‘as bold as the Passive House concept itself.’

In some ways, Passive House design is not all that bold: the idea of passive solar building design, using sunlight to obtain the maximum possible heating effect, dates back to the Greeks and Romans, while super-insulation has been in use in Scandinavian countries particularly for some time; unsurprisingly, Scandic countries have jumped on the Passive House concept.

What is bold about the Passive House concept is the idea of utilizing all these strategies at once to achieve a radical environmental effect: ‘Passive House design standards offer a way forward towards net-zero building with strategies that are relatively easy to implement – better windows and doors, more insulation, improved air sealing. Unlike asking people to stop driving their cars, Passive House reduces our carbon footprint while increasing comfort and quality of life,’ in Ms. Ritchie’s words.

In a nicely poetic nod to the ethos behind the house’s design, a tree salvaged from the construction site provided the timber for the staircases and touches like the bathroom counter top.

NK Architects sees the completion of Park Passive as the beginning, not the end.  Says Boyd Pickrell, Principal at NK: ‘Passive House’s focus on performance, human comfort and simplicity aligns well with our approach to design. It supports our mission to create dense urban housing that is responsive to people’s needs and supportive of highly sustainable lifestyles. We work on a variety of housing scales, and we intend to apply this expertise not only to future single-family projects but also to our larger multi-family projects nationwide where even greater energy efficiency gains can be realized.’

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The city has seen three years in a row of record sales and two years of rising prices, and the Miami real estate market shows no signs of letting up.  The market in Florida’s principal city started out the year with strong sales, robust prices and new listings.

In January, residential real estate sales increased 11.6% year-on-year, according to data from the Miami  Association of Realtors.  The rise was sharper for condominium sales than for family homes – single family homes saw a rise of 9.8% year on year, while condos rose 12.9% the same year.

Prices have increased more than sales, with the average sales price for a family home rising 32.3% year-on-year from $308,978 in January 2013 to $408,626 in January of 2014.  The average sale price of a condominium rose by 24% in the same period, from $290,378 a year ago to $361,295 in January this year.

The rate at which prices are rising is accelerating, too.  In January, family home prices rose by 16% to a median $225,000, and condo process jumped 24.4% to $186,000.

Condominium prices have been rising for slightly longer than family homes too.  Condo prices have now been rising for 31 months, while family homes have seen a few months less – 26 months.

Liza Mendez, chairman of the board of the Miami Association of Realtors, was positive about the changes, saying, ‘while the Miami real estate market continues to strengthen, rising inventory is fortunately creating a more balanced market between buyers and sellers.  Such balance reflects the health of the local market.’

Ms. Mendez believes the balance that’s being restored to the Miami market comes as sellers are tempted onto the market by rising prices.  Backing up her thoughts, the figures for new listings show single family homes listed 13.8% more in January 2014 compared to a year ago, while condo listings rose by 20.1% in the same period.

The Miami Realtors’ Association considers these rising listings a reflection of the success of its campaign to encourage owners to sell during the 2012-2013 years when Miami experienced a shortage of housing stocks.

‘The current performance of the Miami market reflects seller confidence.  Home owners in Miami have recovered value lost during the downturn and have realized it’s a good time to sell, which is bringing much-needed supply to the local market after years of very limited housing inventory,’ says Francisco Angulo, residential president of the MAR.

At the current sales pace, there’s a 5.6 month supply of single family houses and a seven month supply of condominiums, an upward shift of over 20% on last year’s figures.

Other figures indicating a healthy market show Miami real estate selling quickly and usually close to the asking price, with the median number of days a house spends on the market falling year-on-year by 2.1%.  The average percentage of the asking price a Miami home sells for is 95.4%, showing a modest 1% rise from a year ago and indicating that pricing is accurate to the market value.  For condominiums, the average percentage of asking price was 96.1%, showing a slight 0.7% decrease from last year.

The number of cash sales fell slightly over the last year and all-cash sales accounted for a declining percentage of both condo and house sales.  This indicates that the percentage of cash-rich buyers is falling, an indication that the Florida market in general and the Miami market in particular is reliant on broadbased support from residents and second-homers, rather than on investors and developers.

The Miami market offered great investment opportunities a few years ago, but investors were stymied by low inventory.  Overseas buyers have been a traditional prop of the Florida market, but it looks like it’s a market with a future, but not an unsustainable bubble waiting to burst.  Maybe it’s that new balance Ms. Mendez spoke of.

Sheryl Crow

Sheryl Crow is still seeking to sell her Nashville – area ranch.  Cross Creek Farm, in the College Grove area south of Nashville, it has already been relisted twice and is now on offer at about half the original asking price.

Sheryl Crow has been struggling to sell her Nashville-area ranch since 2010, and has recently relisted it at an even lower price.

The farm used to be close to Ms. Crow’s heart, judging by a 2008 interview for People in which she said, ‘We have a ‘white-trash backyard… We pop out the side of the tour bus and set up our lawn chairs, the baby pool and the iPod speakers. It’s totally a tailgate.’

Ms. Crow’s 51-acre equestrian ranch, Cross Creek Farm, sounds authentically country, appropriately enough for the star who was nominated for two American Country Music Awards last year.  Ms. Crow extensively redecorated what was once a very traditionally-styled Southern mansion, aiming for a more family-friendly home – though some more macabre touches, like the vintage bar she installed in the barn, flanked by two Wild West death masks, edged back into Southern Gothic territory.

But Cross Creek Farm clearly no longer feels like home to Ms. Crow, and she’s anxious to sell.

It might be all she wants to do, but mortgage advisor Zillow says Ms. Crow’s home might still be on the shelf because the price is still too high.

According to Zillow’s calculator, ‘Zillow Blog says, ‘a buyer could expect a monthly payment around $15,489, assuming 20% down on a 30-year fixed mortgage,’ placing the home at the high end of College Grove’s housing market.

The 10,433 square foot farm’s spec is certainly strong enough to sell: it has a 14-horse barn, an outdoor pool and indoor arena.

The path to a successful sale has been a winding road, though.  Ms. Crow first put Cross Creek Farm on the market back in 2010 for $7.5 million and relisted it in 2011 with a 40% price cut.  Now the property is back on the market a third time for $3.85 million, though it has been cut down in size to make a sale easier – the original 175-acre parcel of land was proving to be ‘a handful to sell,’ according to The Tennessean’s Nancy Mueller.  After a handful of price manoeuvres and an unsuccessful online auction, Ms. Crow is still struggling to move the farm.

If you’re considering moving to a mansion in rural Tennessee, Cross Creek Farm might be just what you’re looking for.  For $3.85 million – offers may be accepted – you’ll get 50 acres of land, a saltwater pool with fountains, the main estate home, staff quarters, that barn, of course, and a basement recording studio, as well as two solar systems that take care of about 50% of the farm’s energy needs – and a ‘rocking-chair porch’ thrown in.  The farm is also a great hay producer.  Well, if it makes you happy…

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Image source: WikiMedia

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The strength of the Brazilian Real against the Dollar is giving Brazilians more buying power in the US property market than they have had for a generation. Because of this the growing Brazilian middle class is buying up Florida properties, mainly in Miami, according to a Folha de Sao Paulo study released Monday.

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A few months ago, a report by the National Association of Realtors told us that Florida is by far the most popular region with foreign buyers with 22% of sales. The next closest was California with 12%, followed by Arizona with 11% and then Texas with 7%. Also dominant in the market was Canadians. Taking advantage of the price reductions and the strong loonie (currently at parity with the US Dollar), Canadians are currently making 23% of all foreign purchases in the US according to the National Association of Realtors.

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aspen-colorado Aspen, Colorado’s prominent real estate firm Aspen Sotheby’s International Realty closed their doors to business on Feb 13th and have now been taken over by Morris and Fyrwald Real Estate.

This comes as a huge shock in the industry. With major player like Aspen Sotheby’s going bust people are starting to get worried. After the demise of Coates, Reid and Waldron, another big player that was acquired by Joshua & Co, was announced earlier this month, the Sotheby acquisition is proving to be the second major shake-up in the glittering resort town of Aspen, Colorado.