Bubble Wrap: May 2006

Hopefully your friends can still write

In Mightier Than the Board the NY Times explains the importance of reference letters for potential co-op buyers.

Boards typically require three to six letters from friends, employers and professional colleagues. And depending on the building and the candidate, the letter-writing ritual can make the difference between acceptance and rejection. But, brokers lament, letters of recommendation continue to be chronically misunderstood, occasionally faked and frequently bungled — sometimes to comic effect.

Extraordinary boom behind us.

Over at the Matrix, Jonathan Miller blogs punctuation: Its Official: Greenspan Declares Housing Boom Now Over

Greenspan said he doesn’t see home prices falling on a national basis, but instead in certain areas of the country. He warned reduced access of Americans to equity loan extraction would have an economic impact, which has had an “important effect” in stimulating the economy.

His based his comments on the fact that sales volume and mortgage applications are down.

Builders submit bids for Governors Island

The NY Post reported that the several developers have submitted bids for the redevelopment of Governors Island.

As officials yesterday solicited final proposals to redevelop the historic island, among those tendering plans were The Related Companies, the Downey, Calif.-based Industrial Realty Group and Federal Development, of Washington.

Sources said all three are interested in building mixed-use projects that include conference centers, tourist attractions, hotels and educational space.

Average sales price for Manhattan apt drops 6.8%

The Real Deal covers a recent Halstead report which shows month-to-month declines in average and median sales prices.

Manhattan sales prices dip, report says

Manhattan apartment prices dipped in April, according to a new report, revealing again that the borough’s sales market isn’t what it used to be. The average sales price for a Manhattan apartment dropped 6.8 percent from March through April to $1,236,287, according to the report released Thursday by Halstead Property.

Homeowners taking out equity in refinancings

Peter G. Miller, author of The Common-Sense Mortgage, says that a record number of mortgages are being refinanced with larger loans.

From Refinancing Before The Storm in RealtyTimes:

In the first quarter of 2006, Freddie Mac says that 88 percent of its loans that were refinanced were replaced with loans that were at least 5 percent larger. This is the highest rate of equity withdrawal in the past 15 years.

Given more equity, many borrowers have decided that the best way to pay for refinancing is with a bigger loan rather than a higher rate. That would readily account for the huge number of loans that are at least 5 percent larger.

Fax this to the Mayor

The always excellent Walk-Through blog at the New York Times asks Where’s the Collapse?

The good news in the numbers on March’s housing sales isn’t convicing anyone that the residential real estate market isn’t going to tank some more, but it is causing some who have been predicting the worst to reconsider the soft landing scenario.