Voters in Berkeley are being asked to decide on a controversial measure this November that pits a developer and advocates of home ownership against some of the city’s renters and those concerned about the future of affordable housing in the area. The decisive issue is calling into question the city’s approach to new developments and quality-of life issues.

The ballot’s inclusion of Measure I, an initiative that would allow for more rental units to become jointly owned condominiums, has led to a backlash among some residents and city officials.

“I think we should be doing more, not less, about people who want to stay in our community and afford a place to live here,” said City Council candidate Jason Overman, who opposes the initiative.

Read the wholea article here (Daily Californian).

The Denver Post puts its spin on the latest housing numbers, which showed that home sale activity picked up in August, after seven months of steady decline. Nationally, new-home sales rose 4.1% in August to 1.05 million, according to a report issued this week by the U.S. Department of Commerce. The news has some area Realtors singing the praises of the Denver market.

“The national media would have people believe that the housing market is getting creamed, and that’s really not the case,” Thredgold said. “A lot of markets are doing very well, but they don’t get the hype the Floridas and the Californias do.

“Yes, there is a housing bubble on both coasts, but it is an issue somewhat exclusive to both coasts.”

Read the whole article here (Denver Post).

It looks like a fair amount of borrowers were a little less than truthful when applying for loans during the recent housing boom. According to the LA Times, lenders have reported over 4,000 borrowers to the FBI for suspicious activity in Southern California during the first 11 months of the government’s fiscal year, which ends Saturday. That’s double the number from 2005. Most of the activity stems from the heavy use of low-doc loans (also known as a stated-income loan, or the liar’s loan). A no-doc loan lets the borrower take out a mortgage without being checked for income, assets or employment.

The jump in reports of suspicious activity even as home sales have declined may stem in part from a lag in reporting. But the FBI and industry experts say the trend also reflects growing deceit by average borrowers who overstated their income, exaggerated their assets or hid their debts simply to qualify for a mortgage in the region’s sky-high housing market.

“There’s more of the little guy running around — people committing fraud for housing,” said Ronda Heilig, the bureau’s mortgage fraud program manager.

Read the whole article here (LA Times).

Not everything associated with real estate is cooling down this fall. Real estate investment trusts (REITs) have been quickly gaining value, even as the housing market as slows to a more nomal speed following the massive real estate boom of the past five years. Recenty the Dow Jones Wilshire REIT Index was up about 25%, including dividends, while real-estate portfolios gained about 13% in the quarter through Sept. 27, the highest for any domestic category.

Apartment REITs have been one of the hottest corners of the commercial real estate sector as the housing market unwinds from the speculative excesses seen in recent years.

When the housing market was in its heyday and mortgage rates hovered at rock-bottom levels, many prospective renters instead bought homes. Now more families have opted to rent as homes have become less affordable and long-term mortgage rates have crept higher this year, although they’ve pulled back a bit the past two months.

Read the whole article here (MarketWatch).

The St Petersburg Times looks at the causes of the recent real estate frenzy in central Florida and its aftermath. Prices began to skyrocket in the early 00’s because a combination of factors - low interest rates luring first time buyers from their rental apartments and a serious land shortage, which allowed flippers to buy up properties before they were built then flip them for a quick profit. The result? A serious glut of properties and few buyers.

“Inventory has quadrupled,’” said Brad Monroe, the New Tampa-based president of the Greater Tampa Association of Realtors. “Sales are off by 40 percent. There’s downward pressure on prices.”

A year ago, few home sellers needed open houses. Buyers were snatching up homes within a week of their appearance on the market.

Read the whole article here (St. Petersburg Times).

Pricing a home for sale has never been an exact science. But with the market shifting rapidly in some areas, it’s become even tougher to know exactly how much to ask. Price it too high and you risk losing valuable interest when the house first hits the market. And pricing it too low could mean financial hardship, especially if you have already committed to buying another property.

Traditionally, brokers have set listing prices by reviewing how much comparable homes sold for in a neighborhood. Now, with prices edging lower in many places and the number of homes on the market climbing, checking comparable sales is becoming less useful. At the same time, many would-be buyers are sitting on the sidelines, waiting to see how far prices will fall. Bigger inventories of unsold homes also are making it harder for sellers to figure out how to make their house stand out amid the competition.

What it takes to sell a house varies from market to market. Some brokers are telling customers they need to underprice the competition — even if they think their home is more attractive. Sharon Baum, a senior vice president with the Corcoran Group in New York, recently listed a two-bedroom, two-bathroom apartment for $3.7 million. That was $100,000 less than the asking price for a similar unit five floors below, even though apartments on higher floors typically carry bigger price tags. “As buyers have more choices, you’ve got to make your apartment stand out,” she says.

Read the whole article here (Wall Street Journal).

A new forecast for by the University of California, Los Angeles says that the housing market is not expected to crash, although it will be in for a “soft landing” that will see prices hold steady. This forecast does take into account job growth, which is also expected to remain level for the foreseeable future. The Anderson Forecast also recommends that the Federal Fund Rate be lowered to 4.5% from its current level of 5.25% by mid-2007.

A separate Anderson Forecast report, “The California Report,” also does not expect a recession for the state. “We are still firmly convinced that the national economy is the primary driver at the state level: statewide home prices (in California) are unlikely to decline significantly unless there is a recession,” according to that report. “Real estate sectors will continue to decline, but without significant declines in another sector the net result will be a slowdown, not a recession.”

Read the whole article here (Inman News - subscription).

Corrupt appraisers beware: authorities are becoming increasingly aware of the tricks of the trade and are beginning to crack down on the widespread problem. In Colorado, the new director of the Division of Real Estate for Colorado Erin Toll is working to shutter appraisers who are artificially inflating home values, contributing to the state’s escalating foreclosure crisis.

Toll plans to go after “bad actor” appraisers as aggressively as she went after title insurers making kickbacks when she was a deputy insurance commissioner.

“Overinflated appraisals hurt everybody,” said Toll, who has been at the helm of the real estate division since Sept. 5. “Consumers are hurt when their property values are artificially inflated in price when they go to sell them.”

Read the whole article here (Rocky Mountain News).

As the housing market returns to normal after a five year party, some investors are finding out the hard way that condo investing isn’t the no-lose way to build a fortune. Condo investors in some parts of Florida are especially hard hit. Condo construction and conversion projects in cities like Miami and Tampa promised a never-ending stream of investment opportunites. The problem is, most of the buyers were other investors, and when they stopped buying, inventory exploded.

“The market is clearly oversupplied in many places,” said David Seiders, chief economist for the National Association of Home Builders. “The key symptom of that has been on the price front. Prices have taken a hit.”
Not wonderful news for those who have invested in condominium units with the intent to sell them quickly — and are still holding them. According to NAR data, 31% of investment purchases made between 2002 and 2005 were condos.

But it may not be time to jump off the condo’s balcony just yet. There still are investors entering some markets with the intent of purchasing one or more units and holding them for a few years. Some are encouraged by increased demand for rentals in certain areas and betting that long-term appreciation won’t skip a beat.
Seiders put it this way: “If you’re in it for the (short-term) price appreciation then you want to get out,” he said. “If you’re an investor wanting to rent them over time, you don’t necessarily want to get out of the investment.”

Read the whole article here (MarketWatch).

Oil money and foreign investments are transforming once-staid Moscow into a booming city of active cranes and soaring skyscrapers. And the boom is showing across all sectors. The city once known more for poorly-made consumer goods and chronic food shortages is now ranked the most expensive city in the world. Office space there renting for about $95 per square foot - an incredible price that’s two-thirds more than the price of office space in Midtown Manhattan. But as in any booming real estate market, there are real fears of a collapse.

Indeed, as Moscow real estate prices continue their ascent, there are growing fears that the market will overshoot. Russia’s reliance on volatile oil heightens the chance of unexpected shocks. But analysts play down the risk of a commercial real estate bubble. Demand continues to outstrip supply by a wide margin, says Irina Florova, head of research at CBRE in Moscow. While Paris and London each have 300 million to 400 million square feet of modern office space, more populous Moscow has just over 50 million—much of it Soviet-era construction that lacks air conditioning, sophisticated communications, and sufficient space for parking. Says Florova: “We don’t think we will have any crisis soon.”

Read the whole article here (BusinessWeek).