October 2008

There are 13 blog entries for October 2008.

Trump is having issuesNot entirely, but he is getting pressure from his lenders. One of his current projects is the Trump International Hotel & Tower in Chicago. It will be 92 stories which is the tallest building constructed since the Sears Tower was built in 1973. Usually Trump has several partners on his deals, but as this article explains, he went in this one solo.

So far, Mr. Trump has lined up buyers for a bit less than $600 million of condo units and condo-hotel units in a residential market that has virtually seized up. Yet he owes lenders as much as $1 billion when the loans are due, according to public records and several people familiar with the project. He has closed around $200 million in sales so far, with roughly $380 million still in contract. The retail

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Housing SlumpSome very good points are made by June Fletcher about when the housing market should bottom, and the lessons we can learn from this current crisis. I entirely agree with all her comments about the economy, housing market, and especially what is written below.

As terrible as this is for people who have lost or will lose their homes, overall, this painful contraction is necessary—a counterbalance to the era of easy money and over-leveraging. When it is over, homes won't be worth as much as they were before, but their prices will be more in line with people's incomes. Loans won't be given to everyone with a pulse, but they will be available to people with good credit. The market will be back to normal.

Perhaps by then we'll have learned some lessons:

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MortgageSo what do you think? Do you agree with Mr. O'Neil's opinion below?

President Bush's former treasury secretary Paul O'Neill says Congress should scrap plans for a new economic stimulus package and instead require that no future home mortgage be awarded without a 20 percent down payment.

If every mortgage was backed by a 20 percent down payment, O'Neill said, the financial system would be protected long-term, even if some individual investments or businesses failed. "If you can't afford a home mortgage, we shouldn't give you one," he said.

Seems a little harsh to me. I agree with his views about home ownership, but 20% seems a bit steep. I bought my first 3 properties with 5% down and I've never missed a payment. 100% financing is different

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Good news on commodities. Crude oil is lower and is now trading at $63.15 a barrel. That's down from $70.89 Tuesday when I initially blogged about it. I filled my car this week with premium gas for $2.91/gallon. Not bad. That number should be even lower this weekend and in the coming weeks.

The Euro has continued it's tailspin hitting $1.26 this morning and is now trading at $1.2669. Bad news, the Dow is down another 400 points today. Take it for what it's worth as I'm not a Wall Street guy, but I do see the stock market bottoming in 2008. I have a couple private wealth manager friends at Barclays(formerly Lehman Brothers) and BNY Mellon. All of them are putting their best clients into real estate! Haha! I wish. But seriously, if you are in the market

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Just some thoughts here and I would appreciate yours. I see the economy and the national real estate market bottoming in the next 6-9 months. In Boston, the real estate market continues to be surprisingly resilient. I see a few things that should have long term benefits for our economy and consumer spending.

Real Estate EconomyTo the left is a chart of crude oil prices over the past year. Since July 2008, crude oil has dropped from a historic high of $147.55 to where it settled at today, down another $3.36 to $70.89 a barrel. Consumers will benefit from this drop in many ways, but most noticeably in the reduction in gas prices. Almost every industry is affected by the price of gas, especially airlines, delivery services, and real estate agents!

 What about the Euro?

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California Home Sales JumpSome interesting data was released today by MDA DataQuick with regards to the California real estate market. It's pretty mind boggling to think sales in California could increase 65% year over year, especially in this environment. As stated in the article, the increased activity is due to people buying foreclosure resales at substantial discounts from their values just a couple years ago. In fact, 51% of those sales last month were foreclosure resales! Also, the statewide median home price went down to $283,000, a drop of about 34 percent from $430,000 in September last year.

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W Boston Hotel & ResidencesHere are some exclusive photos taken Friday of the new W Boston Hotel & Residences in the Theatre District. The building is located at 100 Stuart Street which is directly across the street from restaurants Rock Bottom and California Pizza Kitchen. The building is one of Boston's newest luxury condo/hotels and is currently under construction. There will be 235 hotel rooms situated on floors 3 through 15.

There will be 123 condo Residences and those will be housed on floors 16 through 28. Similar to The Intercontinental, the building will have a separate hotel and condo entrance on the 1st floor. The remainder of the ground floor will host a yet to be named restaurant, lounge/bar, spa and may have a couple other commercial spaces. W Boston Hotel & Residences

The W Residences

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Home PricesAssessments for 2009 will been released this January, but don't expect your real estate tax bill to go down anytime soon. If you would like to contest your homes assessment, visit http://www.cityofboston.gov/ and search for tax abatement. The site gives you specific instructions on how to ask the City of Boston for a reduction in your taxes. There is a bit of work involved, but if you are successful, it will be well worth your time.

Link to CNNMoney

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Real Estate NewsSome good numbers were released yesterday on pending home resales.

The index of pending home resales rose 7.4 percent, the most since October 2001, after falling 2.7 percent in July, the National Association of Realtors said yesterday in Washington.

Amidst all the negative news, this was a welcome surprise. The data was based on sales that took place prior to the current Wall Street crisis that today saw the Dow close at 8,579.19, it's lowest level since '03.

From my experience, deals have recently been more difficult to close, but there are still buyers out there. If you can get financing, this winter may be a great time to buy a home. The people that will be selling our owners that have to sell. This creates tremendous opportunities for

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Gibson Sotheby's Closes South Boston OfficeSo I was driving up West Broadway in South Boston this morning. As I drove by what used to be the second nicest South Boston real estate office, I noticed Gibson Sotheby's had shut down their South Boston branch. FYI, the nicest office is ours!

This branch had only been open for a few years, but it was still surprising. I called their office phone number, but there was no answer. I also contacted one of their agents to get some info, but have not heard back yet. Gibson Sotheby's is down to 6 offices with branches in the Back Bay, Waterfront, Dorchester, Westwood and two in the South End. Formerly Boston's largest independent real estate firm, Gibson Domain Domain was acquired in November 2006 by Sotheby’s International Realty

As the economy

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