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Sunday, December 23, 2007
Economic indicator drops sharply in November
The U.S. leading index, which is intended to gauge future economic activity, dove 0.4 percent in November following a 0.5 percent drop in October, the Conference Board reported today. The index score of 136.3 in November was the lowest since mid-2005.
This index has fallen in four of the past six months, and seven of the 10 indicators that make up the index fell in November.
Large declines in stock prices, initial claims for unemployment insurance, the index of consumer expectations, and real money supply pulled down the index in November, and the only positive results were for vendor performance, average weekly manufacturing hours, and manufacturers' new orders for nondefense capital goods.
The index rose 0.1 percent in September following a 0.9 percent drop in August. During the six-month span through November, the leading index fell 1.2 percent, with half of the index components showing decline.
A coincident index, which indicates the current state of the economy, rose 0.2 percent in November to 125.1, following a 0.1 percent drop in October and a 0.1 percent gain in September. This index rose 0.8 percent during the six-month period through November.
source: lendinguniverse.com
This index has fallen in four of the past six months, and seven of the 10 indicators that make up the index fell in November.
Large declines in stock prices, initial claims for unemployment insurance, the index of consumer expectations, and real money supply pulled down the index in November, and the only positive results were for vendor performance, average weekly manufacturing hours, and manufacturers' new orders for nondefense capital goods.
The index rose 0.1 percent in September following a 0.9 percent drop in August. During the six-month span through November, the leading index fell 1.2 percent, with half of the index components showing decline.
A coincident index, which indicates the current state of the economy, rose 0.2 percent in November to 125.1, following a 0.1 percent drop in October and a 0.1 percent gain in September. This index rose 0.8 percent during the six-month period through November.
source: lendinguniverse.com
Positive news for Realtors in '08
In all the years I've been writing this column, I have never received such an outpouring of response as I did from the two November articles on how media coverage of negative housing news is hurting our industry.
In spite of gloom and doom of recent news reports on the state of the nation's housing, there is plenty of good news, the most recent of which comes from the National Association of Realtors.
Laurence Yun, the chief economist for NAR, had plenty of positive news for Realtors at last month's conference. Yun attributed much of today's subprime mortgage problem to greed. Wall Street wanted the 10-12 percent return that subprime mortgages yielded as opposed to the smaller returns from more traditional mortgage products. His take on the Wall Street types: "They gambled. They lost."
Yun's outlook for 2008 sees a shift from greedy speculators to serious homeowners. 2008 will be a year of opportunity where there will be serious, healthy business. Furthermore, Yun predicted that the market returns to normal by 2009.
According to Yun, one of the biggest mistakes that reporters make is talking about national trends. Nationally, 2007 was the fifth best year ever on record. Home prices declined about 1.5 percent after a 50 percent run up in prices.
The challenge is that national numbers are pretty much irrelevant. Yun argues that talking about national averages is about as effective as having a national weather forecast. Like the weather, all real estate markets are local. In fact, you may have a buyer's market and a seller's market operating within a single market area based exclusively upon price point. Here are the other key pieces of positive news from Yun's economic report:
1. New housing starts: Even though these are dropping, there was too much building in recent years. The market is simply adjusting to normal supply-and-demand pressures. The inventory is "being controlled which makes stabilization occur more quickly."
2. Foreclosures: According to Yun, the 41 percent increase in foreclosures has resulted primarily from investor-heavy real estate purchases in Arizona, California, Florida and Nevada. The majority of these individuals are flippers whose investments did not payoff. More importantly, the number of foreclosures in Utah, New Mexico, North Carolina and South Carolina is actually declining.
3. Under-priced markets and superstar cities: Although the coastal markets are still overpriced, Middle America is under priced. Nevertheless, Yun cites a new trend termed, "superstar" cities. These cities will command premium prices, regardless of what the market does. There is so much wealth concentrated in these areas, that measurements are simply not predictive. In addition to London, Paris, Tokyo and New York, Yun also identified San Francisco, Miami and Seattle as potential new superstar cities.
4. The recovery has started: Other than the three states hit heavily by job losses in the automotive industry (Indiana, Michigan and Ohio), the states that first experienced a downturn in the Northeast, are now in recovery. Specifically, Connecticut, Massachusetts, New York and Rhode Island were the first to feel the slump and are now well into a recovery. Furthermore, there appears to be a pent-up demand for first-time buyer properties due to a large number of Gen Ys (born 1977 to 1994) that are now buying their first homes. Falling interest rates will motivate many of these buyers to step into the market now.
5. New jobs and corporate profits are still strong: Corporate profits are still strong with companies as diverse as Microsoft and Jack Daniels reporting close to record profits. Furthermore, the economy has generated 4 million net new jobs and wages are rising.
6. A weak dollar may harbinger more foreign investment in U.S. real estate
Although the decline of the U.S. dollar will end up costing us more when we go overseas or purchase imports, it has resulted in more manufacturing jobs returning to the U.S. It also may mean more foreign investment in U.S. properties as well. Just a few years ago, the Canadian dollar was only worth 70 cents in U.S. currency. Today, the Canadian dollar has been hovering at about $1.05 to $1.10 U.S. What this means is that we can expect more Canadians and Europeans to be purchasing U.S. property, because our prices are approximately 50 percent cheaper than they were just three years ago.
7. Real estate: Still the best shelter: For those agents who represent reluctant first-time buyers, Yun points to some interesting research from the Federal Reserve. Between 1995 and 2004, the average renter accumulated $4,000 in wealth. In contrast, the average homeowner accumulated $184,400. Furthermore, the typical homeowner holds their property for six years. Within this period of time, NAR's research shows that approximately 97 percent of the homeowners will have a positive equity position after that period of time.
Bottom line: 2008 represents the best window that buyers will have to find excellent deals with excellent financing. Get the word out there. If they wait, prices and interest rates will be higher and the reluctant buyer may be forced out of the market.
source: lendinguniverse.com
In spite of gloom and doom of recent news reports on the state of the nation's housing, there is plenty of good news, the most recent of which comes from the National Association of Realtors.
Laurence Yun, the chief economist for NAR, had plenty of positive news for Realtors at last month's conference. Yun attributed much of today's subprime mortgage problem to greed. Wall Street wanted the 10-12 percent return that subprime mortgages yielded as opposed to the smaller returns from more traditional mortgage products. His take on the Wall Street types: "They gambled. They lost."
Yun's outlook for 2008 sees a shift from greedy speculators to serious homeowners. 2008 will be a year of opportunity where there will be serious, healthy business. Furthermore, Yun predicted that the market returns to normal by 2009.
According to Yun, one of the biggest mistakes that reporters make is talking about national trends. Nationally, 2007 was the fifth best year ever on record. Home prices declined about 1.5 percent after a 50 percent run up in prices.
The challenge is that national numbers are pretty much irrelevant. Yun argues that talking about national averages is about as effective as having a national weather forecast. Like the weather, all real estate markets are local. In fact, you may have a buyer's market and a seller's market operating within a single market area based exclusively upon price point. Here are the other key pieces of positive news from Yun's economic report:
1. New housing starts: Even though these are dropping, there was too much building in recent years. The market is simply adjusting to normal supply-and-demand pressures. The inventory is "being controlled which makes stabilization occur more quickly."
2. Foreclosures: According to Yun, the 41 percent increase in foreclosures has resulted primarily from investor-heavy real estate purchases in Arizona, California, Florida and Nevada. The majority of these individuals are flippers whose investments did not payoff. More importantly, the number of foreclosures in Utah, New Mexico, North Carolina and South Carolina is actually declining.
3. Under-priced markets and superstar cities: Although the coastal markets are still overpriced, Middle America is under priced. Nevertheless, Yun cites a new trend termed, "superstar" cities. These cities will command premium prices, regardless of what the market does. There is so much wealth concentrated in these areas, that measurements are simply not predictive. In addition to London, Paris, Tokyo and New York, Yun also identified San Francisco, Miami and Seattle as potential new superstar cities.
4. The recovery has started: Other than the three states hit heavily by job losses in the automotive industry (Indiana, Michigan and Ohio), the states that first experienced a downturn in the Northeast, are now in recovery. Specifically, Connecticut, Massachusetts, New York and Rhode Island were the first to feel the slump and are now well into a recovery. Furthermore, there appears to be a pent-up demand for first-time buyer properties due to a large number of Gen Ys (born 1977 to 1994) that are now buying their first homes. Falling interest rates will motivate many of these buyers to step into the market now.
5. New jobs and corporate profits are still strong: Corporate profits are still strong with companies as diverse as Microsoft and Jack Daniels reporting close to record profits. Furthermore, the economy has generated 4 million net new jobs and wages are rising.
6. A weak dollar may harbinger more foreign investment in U.S. real estate
Although the decline of the U.S. dollar will end up costing us more when we go overseas or purchase imports, it has resulted in more manufacturing jobs returning to the U.S. It also may mean more foreign investment in U.S. properties as well. Just a few years ago, the Canadian dollar was only worth 70 cents in U.S. currency. Today, the Canadian dollar has been hovering at about $1.05 to $1.10 U.S. What this means is that we can expect more Canadians and Europeans to be purchasing U.S. property, because our prices are approximately 50 percent cheaper than they were just three years ago.
7. Real estate: Still the best shelter: For those agents who represent reluctant first-time buyers, Yun points to some interesting research from the Federal Reserve. Between 1995 and 2004, the average renter accumulated $4,000 in wealth. In contrast, the average homeowner accumulated $184,400. Furthermore, the typical homeowner holds their property for six years. Within this period of time, NAR's research shows that approximately 97 percent of the homeowners will have a positive equity position after that period of time.
Bottom line: 2008 represents the best window that buyers will have to find excellent deals with excellent financing. Get the word out there. If they wait, prices and interest rates will be higher and the reluctant buyer may be forced out of the market.
source: lendinguniverse.com
2008 not so great, says builders' economist
Single-family housing starts are expected to plummet 29.3 percent this year compared to 2006, and to drop another 23.6 percent in 2008, National Association of Home Builders chief economist David Seiders said in a forecast report Thursday.
Seiders expects house values to fall about 10 to 15 percent from the peak of the boom to the low point in the downturn, with further price erosion next year. He said the price declines should ease some housing-affordability problems.
"This year has turned out to be much weaker than I had expected a year ago," he said, and he blamed the "progressive meltdown of the housing finance system" for the housing market's unexpected rate of decline.
"The probability of recession has probably increased fairly significantly in a short period of time," and Seiders said he estimates a 40 percent chance that the economy will sink into recession in the next two quarters.
"We really are right now in a danger zone in terms of overall economic activity. I think it's fair to say that the overall economy is slowing pretty dramatically in the fourth quarter."
Single-family housing starts are projected to drop about 53.7 percent from an annual peak of 1.72 million in 2005 to an anticipated low of 796,000 in 2008 before recovering to 885,000 starts in 2009.
Single-family new-home sales peaked at a record 1.28 million in 2005 and are expected to bottom out at 741,000 in 2008, and then to rise to 838,000 in 2009.
New-home sales dropped 18 percent from 2005 to 2006, and are projected to fall 24.4 percent this year compared to last, drop 6.6 percent in 2008 and rise 13.1 in 2009.
And the builders' group expects single-family sales of previously owned homes to drop 13.3 percent this year compared to 2006, to a total of 4.95 million. That follows a 7.7 percent year-over-year drop in 2006. Seiders also expects a 13.4 percent year-over-year drop in 2008 and an 8.4 percent rise in single-family resale home sales in 2009.
The latest annual forecast for the National Association of Realtors, meanwhile, predicts similar gloom for the real estate industry this year and next, with a 27.6 percent drop in housing starts, a 24.3 percent drop in new-home sales, a 12.5 decline in existing-home sales, a 1.7 percent drop in existing-home prices, and a 1.6 percent drop in new-home prices expected from 2006 to 2007.
The Realtor group forecast also anticipates a 19 percent decline in single-family housing starts, a 12.9 percent decline in new single-family sales, a 0.4 percent rise in existing-home sales and no change in existing-home prices, and a 0.4 percent rise in new-home prices in 2008 compared to 2007.
Seiders' forecast anticipates that many of these categories will shift from a quarterly decline to a quarterly rise in mid-2008.
Residential fixed investment -- which is a measure of construction spending for housing, brokerage commission on home sales and improvements to existing structures -- fell 4.6 percent in 2006 compared to the prior year, and is expected to fall 17.3 percent this year and another 17 percent in 2008 before rising 6.5 percent in 2009, according to the NAHB forecast.
Seiders said he expects Federal Reserve officials to further cut the federal funds rate and to stabilize the rate at about 4 percent for much of 2008, with an expected rise to 5 percent in 2009. The Fed's Open Market Committee this month lowered its target rate for the federal funds rate by 25 basis points, to 4.25 percent.
The inventory of for-sale homes is abnormally high, Seiders said, and it will take time to work through this overhang. He said about 2.1 million vacant homes are on the market for sale -- which includes new and resale single-family homes and condos -- with as many as 700,000 exceeding normal market conditions.
"As sales begin to improve, this will whittle down excess inventory, allowing the production of new homes to begin moving forward in the latter half of 2008."
Some markets will take longer to recover, he said, noting that job losses in the Detroit area could stall a housing recovery there, and overheated markets in Florida also could be facing more pain than other markets, as examples.
Jerry Howard, executive vice president and CEO for the builders' group, said he is encouraged by legislative and regulatory changes that Congress and the Bush administration have worked toward, which seek to ease the foreclosure problem and reform the regulation of the lending industry, government-sponsored entities Fannie Mae and Freddie Mac, and the Federal Housing Administration's loan programs, among other aims.
NAHB supports a rise in the FHA loan limit for high-cost markets and flexible down-payment requirements to benefit a larger group of prospective buyers, and the group supports H.R. 1427, which relates to reform of Fannie Mae and Freddie Mac.
Seiders said that were it not for problems in the mortgage finance market, the housing downturn would not have been so pronounced.
"It's pretty clear that a lot of potential buyers have been holding off on home-buying," he said. "We have actually seen household formation rates looking pretty darn weak in the last four to six quarters."
Seiders noted that there is an expected wave of mortgages that are due for a reset in rates next year. And while the mortgage finance industry has sought to address this anticipated tide by allowing some subprime borrowers more leeway by temporarily freezing rates or offering an opportunity to refinance to more conventional forms of financing, he said there could be a big problem if such programs do not have the desired effect.
He said that his forecast makes "some key assumptions on the policy side. I'm counting on the Fed to really do whatever it takes to keep the economy out of recession."
source: lendinguniverse.com
Seiders expects house values to fall about 10 to 15 percent from the peak of the boom to the low point in the downturn, with further price erosion next year. He said the price declines should ease some housing-affordability problems.
"This year has turned out to be much weaker than I had expected a year ago," he said, and he blamed the "progressive meltdown of the housing finance system" for the housing market's unexpected rate of decline.
"The probability of recession has probably increased fairly significantly in a short period of time," and Seiders said he estimates a 40 percent chance that the economy will sink into recession in the next two quarters.
"We really are right now in a danger zone in terms of overall economic activity. I think it's fair to say that the overall economy is slowing pretty dramatically in the fourth quarter."
Single-family housing starts are projected to drop about 53.7 percent from an annual peak of 1.72 million in 2005 to an anticipated low of 796,000 in 2008 before recovering to 885,000 starts in 2009.
Single-family new-home sales peaked at a record 1.28 million in 2005 and are expected to bottom out at 741,000 in 2008, and then to rise to 838,000 in 2009.
New-home sales dropped 18 percent from 2005 to 2006, and are projected to fall 24.4 percent this year compared to last, drop 6.6 percent in 2008 and rise 13.1 in 2009.
And the builders' group expects single-family sales of previously owned homes to drop 13.3 percent this year compared to 2006, to a total of 4.95 million. That follows a 7.7 percent year-over-year drop in 2006. Seiders also expects a 13.4 percent year-over-year drop in 2008 and an 8.4 percent rise in single-family resale home sales in 2009.
The latest annual forecast for the National Association of Realtors, meanwhile, predicts similar gloom for the real estate industry this year and next, with a 27.6 percent drop in housing starts, a 24.3 percent drop in new-home sales, a 12.5 decline in existing-home sales, a 1.7 percent drop in existing-home prices, and a 1.6 percent drop in new-home prices expected from 2006 to 2007.
The Realtor group forecast also anticipates a 19 percent decline in single-family housing starts, a 12.9 percent decline in new single-family sales, a 0.4 percent rise in existing-home sales and no change in existing-home prices, and a 0.4 percent rise in new-home prices in 2008 compared to 2007.
Seiders' forecast anticipates that many of these categories will shift from a quarterly decline to a quarterly rise in mid-2008.
Residential fixed investment -- which is a measure of construction spending for housing, brokerage commission on home sales and improvements to existing structures -- fell 4.6 percent in 2006 compared to the prior year, and is expected to fall 17.3 percent this year and another 17 percent in 2008 before rising 6.5 percent in 2009, according to the NAHB forecast.
Seiders said he expects Federal Reserve officials to further cut the federal funds rate and to stabilize the rate at about 4 percent for much of 2008, with an expected rise to 5 percent in 2009. The Fed's Open Market Committee this month lowered its target rate for the federal funds rate by 25 basis points, to 4.25 percent.
The inventory of for-sale homes is abnormally high, Seiders said, and it will take time to work through this overhang. He said about 2.1 million vacant homes are on the market for sale -- which includes new and resale single-family homes and condos -- with as many as 700,000 exceeding normal market conditions.
"As sales begin to improve, this will whittle down excess inventory, allowing the production of new homes to begin moving forward in the latter half of 2008."
Some markets will take longer to recover, he said, noting that job losses in the Detroit area could stall a housing recovery there, and overheated markets in Florida also could be facing more pain than other markets, as examples.
Jerry Howard, executive vice president and CEO for the builders' group, said he is encouraged by legislative and regulatory changes that Congress and the Bush administration have worked toward, which seek to ease the foreclosure problem and reform the regulation of the lending industry, government-sponsored entities Fannie Mae and Freddie Mac, and the Federal Housing Administration's loan programs, among other aims.
NAHB supports a rise in the FHA loan limit for high-cost markets and flexible down-payment requirements to benefit a larger group of prospective buyers, and the group supports H.R. 1427, which relates to reform of Fannie Mae and Freddie Mac.
Seiders said that were it not for problems in the mortgage finance market, the housing downturn would not have been so pronounced.
"It's pretty clear that a lot of potential buyers have been holding off on home-buying," he said. "We have actually seen household formation rates looking pretty darn weak in the last four to six quarters."
Seiders noted that there is an expected wave of mortgages that are due for a reset in rates next year. And while the mortgage finance industry has sought to address this anticipated tide by allowing some subprime borrowers more leeway by temporarily freezing rates or offering an opportunity to refinance to more conventional forms of financing, he said there could be a big problem if such programs do not have the desired effect.
He said that his forecast makes "some key assumptions on the policy side. I'm counting on the Fed to really do whatever it takes to keep the economy out of recession."
source: lendinguniverse.com
Overnight real estate rates in 3-day drop
Long-term mortgage interest rates were down again Thursday, and the benchmark 10-year Treasury bond yield rose to 4.05 percent.
The 30-year fixed-rate average sank to 5.74 percent, and the 15-year fixed rate dipped to 5.3 percent. The 1-year adjustable rate was down at 5.49 percent.
The 30-year Treasury bond yield edged up to 4.48 percent.
Rates and bonds are current as of 7:15 p.m. Eastern Standard Time.
Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.
In other economic news, the Dow Jones Industrial Average gained 38.37 points, or 0.29 percent, finishing at 13,245.64. The Nasdaq jumped 39.85 points, or 1.53 percent, closing at 2,640.86.
Stock figures are current as of 7:30 p.m. Eastern Standard Time.
source: lendinguniverse.com
The 30-year fixed-rate average sank to 5.74 percent, and the 15-year fixed rate dipped to 5.3 percent. The 1-year adjustable rate was down at 5.49 percent.
The 30-year Treasury bond yield edged up to 4.48 percent.
Rates and bonds are current as of 7:15 p.m. Eastern Standard Time.
Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.
In other economic news, the Dow Jones Industrial Average gained 38.37 points, or 0.29 percent, finishing at 13,245.64. The Nasdaq jumped 39.85 points, or 1.53 percent, closing at 2,640.86.
Stock figures are current as of 7:30 p.m. Eastern Standard Time.
source: lendinguniverse.com
Even Madonna can't find her dream home
Christmas is coming, and I walked by a crèche the other day. So naturally my thoughts turned to Madonna.
No, not that Madonna, the one represented in the crèche, who couldn't find a proper home in which to have her baby.
I was thinking about the other Madonna, the singer/dancer/businesswoman, who couldn't find a proper home in which to have her entourage.
The latest setback for Madonna Louise Ciccone Ritchie occurred in New York, where the board of her co-op, Harperly Hall, refused to allow her to buy another apartment to add on to the reported 6,000-square-foot apartment combination she already owns in the building.
She responded by filing a lawsuit, asking that the sale go through.
Yeah, that'll make the neighbors happy.
Poor Madonna. She's just like the rest of us, in that her dream home seems to be beyond her reach. Think of that the next time you're driving around clients who are bemoaning that they can't find the home they want. Madonna's got all that money, and she can't either.
For those of you who don't live in Manhattan, a little history lesson: Rich people in New York used to live in gigantor houses, many of which are so large and opulent by today's standards that they are run as museums -- the Morgan Library, for example, stands as a measure of massive turn-of-the-century wealth.
In the run-up to World War I, however, rich New Yorkers began to live next to each other. Laws changed, allowing for taller buildings; the subway expanded, so the city seemed more urbanized; and perhaps most importantly, fashions changed, so suddenly it was socially acceptable to live in a 12-room apartment.
I know, those seem like idyllic times, right? But in truth, the new neighbors in these buildings found themselves financially dependent on each other, and that didn't always work. The Great Depression hit many buildings hard. The San Remo -- a posh Upper West Side building that turned Madonna down as a buyer in 1985, when she was on the cover of Playboy -- was sold for a song in 1940. And Harperly Hall, the building that Madonna's trying to expand in, failed in 1941, according to the historian Christopher Gray, and was converted into rental apartments.
So maybe this co-op board turndown of Madonna's attempt to buy another apartment is unjust. Maybe it's simply about a board that watched a mogul assemble four apartments, and decided she didn't need a fifth. Nix on the blonde ambition! (Madonna's current duplex, reports say, contains a gym with a steam room for 10, a private beauty salon, and a master bedroom with two fireplaces.)
But it's also possible that the board in an 85-unit building remembers its history of financial tough times, and doesn't want too much ownership to be concentrated in the hands of one shareholder.
We spectators will find out as the whole mess gets hashed out in New York State Supreme Court.
In the meantime, if Madonna wants more space in New York, she'll be stuck with a townhouse -- or a condo. Again, the gossips report she's been looking for years, but the problem is -- and I say this without a trace of irony -- there's not a lot out there in the hyperluxury niche that's very nice.
The paparazzi-hating Park Avenue co-ops are not going to let her in. The Denzel Washington-housing Fifteen Central Park West, a mega-luxe condo just blocks from where she is now, seems like the logical building, but the $30 million penthouses are all sold. She could buy an Upper East Side townhouse -- our billionaire mayor prefers his to his official city residence -- but it's tough to get used to living vertically when you've been fairly sprawled out. Maybe she'll end up at the Plaza Residences (the converted Plaza hotel) though that seems a little stuffy for her.
Poor Madonna -- she has come a long way since she the '80s, when she lived in a trashy East Village apartment, but she still hasn't found the perfect pad. I guess that means she's still chasing the American dream like the rest of us -- but in this holiday season, when my heart hopes that everyone will find the home they want -- I really do feel sorry for her.
source: lendinguniverse.com
No, not that Madonna, the one represented in the crèche, who couldn't find a proper home in which to have her baby.
I was thinking about the other Madonna, the singer/dancer/businesswoman, who couldn't find a proper home in which to have her entourage.
The latest setback for Madonna Louise Ciccone Ritchie occurred in New York, where the board of her co-op, Harperly Hall, refused to allow her to buy another apartment to add on to the reported 6,000-square-foot apartment combination she already owns in the building.
She responded by filing a lawsuit, asking that the sale go through.
Yeah, that'll make the neighbors happy.
Poor Madonna. She's just like the rest of us, in that her dream home seems to be beyond her reach. Think of that the next time you're driving around clients who are bemoaning that they can't find the home they want. Madonna's got all that money, and she can't either.
For those of you who don't live in Manhattan, a little history lesson: Rich people in New York used to live in gigantor houses, many of which are so large and opulent by today's standards that they are run as museums -- the Morgan Library, for example, stands as a measure of massive turn-of-the-century wealth.
In the run-up to World War I, however, rich New Yorkers began to live next to each other. Laws changed, allowing for taller buildings; the subway expanded, so the city seemed more urbanized; and perhaps most importantly, fashions changed, so suddenly it was socially acceptable to live in a 12-room apartment.
I know, those seem like idyllic times, right? But in truth, the new neighbors in these buildings found themselves financially dependent on each other, and that didn't always work. The Great Depression hit many buildings hard. The San Remo -- a posh Upper West Side building that turned Madonna down as a buyer in 1985, when she was on the cover of Playboy -- was sold for a song in 1940. And Harperly Hall, the building that Madonna's trying to expand in, failed in 1941, according to the historian Christopher Gray, and was converted into rental apartments.
So maybe this co-op board turndown of Madonna's attempt to buy another apartment is unjust. Maybe it's simply about a board that watched a mogul assemble four apartments, and decided she didn't need a fifth. Nix on the blonde ambition! (Madonna's current duplex, reports say, contains a gym with a steam room for 10, a private beauty salon, and a master bedroom with two fireplaces.)
But it's also possible that the board in an 85-unit building remembers its history of financial tough times, and doesn't want too much ownership to be concentrated in the hands of one shareholder.
We spectators will find out as the whole mess gets hashed out in New York State Supreme Court.
In the meantime, if Madonna wants more space in New York, she'll be stuck with a townhouse -- or a condo. Again, the gossips report she's been looking for years, but the problem is -- and I say this without a trace of irony -- there's not a lot out there in the hyperluxury niche that's very nice.
The paparazzi-hating Park Avenue co-ops are not going to let her in. The Denzel Washington-housing Fifteen Central Park West, a mega-luxe condo just blocks from where she is now, seems like the logical building, but the $30 million penthouses are all sold. She could buy an Upper East Side townhouse -- our billionaire mayor prefers his to his official city residence -- but it's tough to get used to living vertically when you've been fairly sprawled out. Maybe she'll end up at the Plaza Residences (the converted Plaza hotel) though that seems a little stuffy for her.
Poor Madonna -- she has come a long way since she the '80s, when she lived in a trashy East Village apartment, but she still hasn't found the perfect pad. I guess that means she's still chasing the American dream like the rest of us -- but in this holiday season, when my heart hopes that everyone will find the home they want -- I really do feel sorry for her.
source: lendinguniverse.com
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