It looks like I picked the wrong week to quit blogging

I haven't quit. I am just going along with the theme of this clip.



So take your pick of disasters. We have Citibank banging on every door possible in Dubai and other foreign countries desperately trying to get cash. And it appears that misery loves company because now other financial institutions are joining the growing league of losers.

Bernanke right now is at precipice of history where whatever he does will not affect his legacy and the country but the entire world. Right now he is shifting through his bag of tricks to find temporary stimulus measures.

Ben S. Bernanke, chairman of the Federal Reserve, has told lawmakers that he can support short-term tax cuts or spending measures to stimulate the economy, even if they increase the budget deficit, as long as the measures are quick and temporary.

Oh this will definitely provide stimulus, for the parties that directly benefit from these measures. In other words the haves, not the have nots.

The New York Times has written an excellent piece on Bernanke and for those of you who believe in interest rate cuts, here is something to shake you out of that dream.

Bernanke also has strong reasons to worry, however, about easing rates too much. Inflation has failed to fall as the Fed expected. (In fact, lately it has been rising.) Also, lower interest rates induce foreigners to switch out of dollar-denominated investments like Treasuries and into currencies with higher yields. Thus, any rate cut would tend to escalate the stampede out of the dollar.

Say goodbye to those foreign buyers.

And of course let us not forget the beatdown the stock market is taking.

On the New York Front, real estate is giving warm fuzzies all around.

Harry Macklowe has screamed uncle by unloading the GM building. This is probably the best option for him at this point. The question is that will he get the price that he wants? The only real contenders are buyers who are drenched in liquidity because if he was having trouble getting financing to hold onto the GM building the there is no way in hell lenders are going to put up the cash for the buyers. And with the current volatility in the market those liquid heavy buyers are going to gouge him as much as possible.


Then we have this little ditty from the New York Times, which was trying to figure out what will be the next phase for the New York City Market. It pretty much covers the bases on the Wall street bonuses being paid in stock, lenders tightening up standards and apartments hanging out on the market longer than usual. It is chock full of interesting information that I recommend everyone to read.

There is one quote that really stood out for me and not in a good way.

Diane M. Ramirez, president of Halstead Property, is less concerned about a recession because the inventory of property on the market is currently low. She said that in the recession of the late ’80s, Manhattan dropped sharply because the city had an oversupply of apartments. “We had a deeper, longer recession than most cities,” she said. “We lost 20 to 50 percent value.”

The operative word here is currently. Which means now. Now inventory levels are low. What about the upcoming year? Can Ms. Ramirez tell me how things are going to be? Does she have a crystal ball? Because I sure as hell can’t tell what is going to happen to inventory levels a year from now.

What I do know is that we are dire straits right now to the point that inflation has hit its highest in 17 years.


Citibank plans on laying off a lot of people and they won’t be alone in cutting the flesh. If the recession hits hard enough, a lot of those people may decide to cut and run especially those who own. It will be probably more expensive to live in New York city since Bloomberg is considering rolling back 7% tax cut and getting rid of the $400 dollar rebate.

And let’s not forget those ARMs and other funky mortgage products buyers used to get that piece of the Manhattan dream. Are owners going to have the money when those mortgages reset?

With these variables and other ones that have yet to make themselves known it is possible that inventory levels could actually skyrocket with people needing to liquidate.

I think Jonathan Miller sums it best.

Another Inman News Real Estate Connect conference is behind us and as a result, I feel more informed, was able to meet new industry people, be exposed to new concepts, was able to see many colleagues, get another Inman bag full of pens and post-it note thingies. In other words, it was time well spent.

Brad Inman provided a great overview of his interpretation of where the market was going to the audience at the close of the conference, which was rational, clear and in many ways, the distillation of all the information and filtered spin that was presented over the previous three days. I need to listen to Brad more often - I wish his summary was available (Hey Joel, how about his summary for Inman TV?)

Housing market direction discussion throughout the conference was essentially presented by two camps which seemed to parallel the ongoing presidential primaries:
· Sales agents, brokers and NAR current and former employees [ie Republicans] — This group is nearly always providing a silver lining because they are paid for their ability to sell a vision or idea. Thats their job. Thats being said, I was surprised at the quantity of pollyanna-isms still peppering the reasoning why housing will recover in 2008. In the last two main session panels on the last day, it was very interesting to hear a lot of discussion about second home units and how they posed no greater risk than primary home units because they weren’t flips (reality check: when someone loses their job, which mortgage payment do they stop first: their family home or the ski lodge condo?)

· Economists and academics [ie Democrats] — There is an old saying that economists are paid to worry. Prescribers of the red light theory (people are more likely to remember the negatives such as all the red traffic lights they hit, rather than the green) love this stuff. The keynote panel discussion was terrific, (Barry Ritholz and Noah Rosenblatt were great at laying it all out) but everyone needed to receive counseling for depression when it was over.

Thats why this period of housing turbulence feels a lot like the presidential primaries. Its all about how the information is presented, whether or not its in the right context and whose interests are being served.

I have a headache.

North Carolina is the place to be

From the majestic mountains to beautiful Beaches.

North Carolina has something for everyone. With the tallest mountains on the east coast and beautiful beaches to boot it's no wonder that for the second straight year Americans are moving to North Carolina at a higher rate than any other state in the country according to a study by by United Van Lines. It is estimated that North carolina will be come the 7th most populous state in the next 10 years. This might be good for businesses, and even politicians, however I hate to see NC lose it's rual touch.

New Bern is attracting more than it's fair share of those who are relocating to NC. When retiree's first started moving to New Bern back in the late 1970's the vast majority were coming from New York or New Jersey. By the 1990's we were starting to see more folks moving here from around the Washington DC area. Today believe it or not, many are moving here from Flordia and California. Seems like the property taxes and cost of living have become so high in those areas folks are looking for a state with more reasonable taxes. Lets hope they stay that way.

I guess growth is ok but at the same time I hope we do not experience it to the extent that we lose our southern charm. Let's hope Eastern NC retains it small town flavor for many years to come. To learn more about New Bern go to www.newbern-nc.info.

Verboten

Are you really a financial wizard or do you just play one on tv?



This morning on the Today Show Jim Kramer and Erin Burnett were discussing the state of the market and at one point Jim Kramer did not want to mention the word recession for he did not want to feed into the psychology of the market. Then he went on saying the best thing that the Fed could do was lower interest rates because it would jump start the housing market because people would start buying houses again. I can't believe he said that. I wish I recorded it on my DVR, but I will try and track it down.

Did this guy really work at Goldman Sachs? If he did then he was overpaid. Even if interest rates were to plummet to the center of the earth, I doubt it would help the housing market. First of all the majority of the population is tapped out and I am not talking about money I am also talking about their credit, equity, everything. Banks, mortgage lenders and any institutions that were caught in the subprime undertow are only interested in keeping their heads above water.

There is no psychology or mind games being played. This s**t is for real. Even at Real Estate Connect they are aware of the downturn.

If Kramer keeps up with this bulls**t alot of people are going to switch to the Fox Business Channel.

Shall we zone?

At present, with the exception of airport zoning, Craven County does not have any zoning in place at this time. Over the years this has led to a hodgepodge of single family homes, multi family homes, trailer parks, and businesses all within the same areas. In addition, in Township 7 commercial development along service roads that were not designed for heavy volumes of traffic has led to serious traffic flow problems at the major intersections.
Tuesday night the Craven County Planning Department held a public information meeting to discuss what zoning can and can't do to help ensure balanced and stable growth in Township 7 and Township 6. The meeting was well attended, and feedback was mostly positive. Although there was initially some confusion about the City of New Bern's extraterritorial jurisdiction authority and ability to forcible annex I feel we all came away from the meeting having learned something.
Craven County was not so many years ago considered a rural area. When you were heading south from downtown New Bern on HWY 17, Simmons Street was the boundary for the city limits. Beyond that were small farms on Trent Road and as you crossed Racetrack Road you again saw mostly family farms. Across the Trent River with the exception of Old Cherry Point Road you found family farms and large tree farms. Now these areas are developing at a very rapid pace.
Several months ago at one of our regular scheduled meetings I asked my fellow County Commissioners to support me in asking the County Manager to hold a series of public information meetings to get input from the citizens and see how they feel about zoning in Township 6 and Township 7. I feel it is something we need and I hope the majority of the citizens feel the same.

Lay The Hammer Down

I still love this show!


Cityhammer is New York's #1 Remodeling Directory which not only lists home improvement providers but also provides ratings for these providers.

Cityhammer is the brainchild of Josh Brown and his amigo Ryan Perrotti who created this site after realizing the need for people to find the best qualified professionals and to avoid the worst ones.

Before the New Year, I had the chance to do an interview with Josh.


1. What motivated you to create City Hammer?

I had a baby in March of 2006. We spent January through March looking for help in turning the dining room in our upper east side junior four into a nursery. We needed a temporary wall guy, a painter to cover the walls, an electrician to do outlets in the new room, a handyman to assemble the crib and changing table, and a baby proofer to make sure the rest of the apartment was safe.

We had the "Big Yellow Book" which is just names and phone numbers,recommendations from friends (wrong numbers, no reliability) and the super/ maintenance guys in the building (the literal definition of "last resort").

Everything online was totally generic, like a digital phone book. Or worse, a lead-generating site for contractors, meaning 3 pages of forms to fill out, then waiting for the highest-bidding contractor to buy your name as a lead and call you when they get around to it (I'm from New York, I don't think so!).

Basically, I felt that in a city of 8 million people, it was about time that somebody built a directory of home improvement providers that was by New Yorkers, For New Yorkers. I developed the site with my best friend and a veteran of the residential Real Estate and Lighting Industry Ryan Perrotti....and cityhammer.com was born.

2. What is the objective of your site?

Our goal is to provide a true directory of customer-ranked Home
Improvement Professionals for people in the New York Area. We know we're doing something important every time we see a person who needs remodeling help emailing or calling one of the 500+ contractors and designers who have listed themselves on the site so far.

3. Do you have a construction background?

I call myself "the least handy guy in NY"; I call the super to change the batteries in my remote! My background is actually on Wall Street, but Ryan is definitely more construction-oriented than I am. Basically the site is built for people like me.

4. Since creating the site, what are the craziest stories you have heard?

Where to begin...people moving into brand new condos and ripping out 50 grand worth of kitchen cabinets and appliances for a redo (leaving vikings and subzeros on the curb!) people calibrating the distance from chernobyl to the town in spain where their tiles were made before purchase, lonely housewives complaining about phantom leaks to get a plumber to visit one-bedrooms outfitted with soundproofing for a recording studio, roof-top gardens commissioned and landscaped...in Hell's Kitchen parents in the midwest or on the west coast hiring top shelf interior designers for their recently-graduated sons and daughters' new apartments, sight unseen.

5. What are common mistakes people make in hiring a contractor?

I am constantly amazed at how much thought and time people will putinto researching a movie or a restaurant that will cost them under 100 bucks, compared with how little time the average person spends finding a remodeler or designer to help them create the space they're going to live in for years to come. I would say that a casual recommendation from a friend is not enough when it comes to fixing and redoing a home. Another reason to read up on a Pro is to verify that they are
licensed and insured to do the work you are requesting.Plenty of people will take a job, but not everyone is qualified to complete it.

6. What steps would you recommend people take in dealing with contractors?

I would say get multiple estimates, take a hand in picking out the
materials (wood flooring, tiles, paint colors etc.) and realize that sometimes, "cheap" is "expensive". You may be doing yourself a big favor by going with the mover or electrician or general contractor that comes highly rated and recommended, rather than the lowest bid. The cheap option can cost a lot more emotionally if you're unhappy with the outcome, or financially if the work needs to be redone.

Thanks again Josh!

Death and the Big Mack attack

Happy New Year folks! I am back in action, all I have is a very light cough. This week is going to be insanely busy blog wise.




Teri Karush Rogers has written an excellent article on the emotional trauma of an estate sale. Dealing with the death of a loved one is extremely painful as is the amount of sensitivity associated with selling a deceased family member’s home.

“People don’t maintain a high state of emotions for months on end,” said Thayer Cheatham Willis, a clinical social worker in Lake Oswego, Ore., and the author of “Navigating the Dark Side of Wealth: A Life Guide for Inheritors.”
Family dynamics can be recast for the better if heirs “grow up and realize that they can’t have everything they want,” Ms. Willis said. “That maturation step is when you accept the compromise and accept it with grace — and you see a future that you like. You can definitely come out of it as an improved family.”

As this article has demonstrated, this is a process that takes more time than usual due to family issues and money. That is probably why the passage of time is something that needs to happen in order for the heirs to get their bearings straight.


One passage that really grabbed my attention was the story about two sisters who decided to part ways with their parents’ real estate investments.

Georgea Kapassakis and her sister, Evelyn Capassakis (their father changed the spelling of the family name when Evelyn was born), inherited a trust that included the family home in Bay Ridge, Brooklyn; a vacation home on Long Island; and a number of rental properties. It took the sisters 15 years to finally dispose of everything, with the exception of the Bay Ridge house, which Ms. Kapassakis now owns.
“I felt I was still young at the time and it was too soon not to have any parents; it was too soon for my mother to go,” said Ms. Kapassakis, a speech-language pathologist who was in her early 30s at the time and had 3-year-old twins. “And she helped with baby-sitting, so I had to change my job. Many changes had to take place, and worrying about what was going to happen to the houses was too stressful.”
Her sister, a tax principal and estate-planning adviser at PricewaterhouseCoopers Private Company Services, agreed: “We were pretty much frozen by the inability to undo what my father had put together. He believed firmly in real estate as an investment.”
The pair often found themselves at loggerheads over how to manage the property and whose turn it was to pay for what. “There were times that tensions were pretty high,” Ms. Kapassakis said. “There were many properties, and each one was a headache. We couldn’t handle it personally because we each had our own careers and our husbands had their own jobs. I don’t think we managed it correctly.”
Eventually, the continual stress forced them to part with their parents’ legacy.

I truly believe in real estate as an investment vehicle, however there are certain rules you need to follow in order to be profitable. One rule is that real estate is maintenance intensive. Since you are dealing with a physical product, it needs to be properly managed. Even if you are buying into a REIT, there needs to someone hired to take out the garbage the tenants produce and to collect the rent.

What these sisters actually inherited was another set of newborn babies, which is what managing a real estate portfolio is like. It was their best option to liquidate their parent’s holdings, especially at this stage of the market.


It appears that Harry Macklowe might be in dire straits. According to the New York Times he has a huge 6.4 billion dollar bill to pay.

Awhile ago in a real estate development class, the teacher showed how Macklowe financed the purchase of the GM building. All I can say is that the New York Times article barely scratches the surface of how complicated the financing was.

Will Macklowe be able to pull a hat trick? I have no idea. Obviously with the credit market getting beaten down, it appears that Macklowe’s fundage options are limited. However, this situation reminds me of what happened to Rupert Murdoch did back when he started his American TV Empire. Murdoch had basically leverage himself into a corner, in fact when the payments were due, he showed up to his bankers with news that he had no money and worse he needed more funds in order to keep the business running.

This was a very dangerous time for Murdoch because the bankers could have exercised the option to liquidate everything. In fact there was one banker that was on the edge of pulling down the whole house of cards. However Murdoch was able to persuade them to stick around. From what I also understand what motivated the bankers to cut Murdoch slack was the realization that they were already so deep in the hole with Newscorp they wouldn’t even break even by liquidating now. Maybe this will occur with Macklowe?

New Bern High School Football Team is recognized

Today the 2007 4-a state football champions were honored with a parade and a pep rally. The parade began at the Police station on George Street and ended at Union Point where proclamations from Mayor Tom Bayliss and County Commissioner Renee Sisk were read and presented to the team. State Senator Jean Preston read and presented a letter of congratulations from the North Carolina State Senate. After the presentations a pep rally was held and the NBHS cheerleaders and the NBHS band put on a wonderful show. We wish the players the best as they move forward with their lives and hope they all continue futhering their education.