C.A.R. Reports Increased Home Sales, Declining Home Values, and Credit Crunch Impacted California's Housing Market in 2008

Rising home sales, declining home prices, stricter loan underwriting standards, and the financial market meltdown contributed to a turbulent year in California's housing market, according to the CALIFORNIA ASSOCIATION OF REALTORS(R)' (C.A.R.)

"State of the California Housing Market 2008-2009" report released today.
Sales generally improved over last year in all parts of the state, with significant price declines leading to sharp increases in the Central Valley and Southern California. Sales of existing detached homes hit bottom in the last quarter of 2007, and have since risen in year to year comparisons. Following two years of steep declines exceeding 20 percent, annual sales in the California housing market are expected to increase 12 percent to 395,600 in 2008, with a further 12.5 percent annual increase projected for 2009. The increase in sales is largely attributed to the growth in the absorption of distressed properties with mark-downs in prices.
Consistent with the increasing trend of distressed sales, almost one of five (19.8 percent) sellers sold their property because the property was in foreclosure, short sales, or default, an increase of 6 percent from 2007.

"Many home sellers sold their properties at a loss, as price declines eliminated equity gains," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "The number of sellers who sold their home with a loss almost doubled from 11.9 percent in 2007 to a record-setting 22.2 percent in 2008, well above 1.9 percent in 2006, and almost triple the long-term average of 7.7 percent." read more

Foreclosures: Are Home Buyers Missing An Opportunity?

You’d think now would be a great time to buy a foreclosed property, but a majority of Americans don’t think so. A new survey from real estate search site Trulia.com and foreclosure sale site RealtyTrac.com finds that only 47 percent of those surveyed would consider buying a foreclosed property, that’s down from 54 percent last spring.

It seems that negative sentiment surrounding foreclosures is turning buyers off of what should be some of the best real estate investment opportunities in decades. The survey says 80 percent of adults are concerned with negative aspects, such as hidden costs, a potentially risky purchase process, home price depreciation and personal connection with foreclosure (not sure exactly what that last one means, just maybe that there is a social stigma attached to a foreclosed home I guess).

Now I have to take this report with a grain of salt because I’m a stat gal, and I happen to know that foreclosure sales are not only abundant, but they’re on the rise. In Las Vegas, which boasts 30,000 foreclosures in 2008, two out of three home sales are foreclosed properties. In California, foreclosure sales are pushing up total existing home sales like never before. I’ve also been to several foreclosure auctions and there are plenty of bidders on hand.

You then have to pose the question: Who’s buying foreclosed properties? Is it the average American that would have been included in this survey or is it largely investors and investment companies?

The survey also says that 75 percent of respondents expect a discount “of at least 25 percent on a foreclosure purchase,” while 30 percent expect “a major discount of at least 50 percent” compared to a comparable home not in foreclosure.

Source

Median home price in Southern California falls below $300,000

Home foreclosures continued to drag home prices to new lows in November, as the Southern California median sales price slid to $285,000, its first dip below $300,000 since 2003.

The November median price was down 34.5 percent from the same month a year ago, and 43.6 percent below the peak price of $505,000 recorded during several months in 2007, the San Diego real estate information service MDA DataQuick reported Tuesday.

"It's really hard to say over and over, 'It's worse than we expected,' but we've been saying that for a long time now," said University of California-Los Angeles, economist Edward Leamer.

The flow of repossessed homes into the housing inventory persisted last month, undercutting all home prices and dominating sales. Previously foreclosed homes accounted for 54.6 percent of the properties sold in November, up from 18.8 percent in November, 2007.

Low prices pushed the total number of Southern California homes sold in November up 27 percent from a year ago. Economists say movement of foreclosed homes will help the market find its bottom, but a return to rising prices is a long way off.

When most sales are foreclosures, "those transactions simply repay lenders. They don't trigger a move-up purchase," said MDA DataQuick President John Walsh. That's because an individual selling a house will likely buy another, unlike the banks and investors selling foreclosed properties.

Leamer said the housing market is falling so fast it will most likely overshoot its optimal bottom, when home prices are in line with incomes.

Falling prices have made homes affordable. A National Association of Home Builders quarterly index showed that at the end of September, about one-fifth of Los Angeles area residents could afford the median-priced home. During the height of the real estate boom in 2005 and 2006, only about 2 percent of Los Angeles area residents could afford a median priced home, the index showed.

CL&P, housing fund join to assist first-time home buyers

Under a state tax credit program, a partnership between a nonprofit mortgage lender and Connecticut Light & Power Co. is helping push affordable housing and "smart growth."

The Housing Development Fund received $500,000 Tuesday from CL&P toward the Workforce Housing Downpayment Fund. The program helps first-time homebuyers who earn up to 100 percent of the area median income ($117,800 for a family of four in the Stamford-Norwalk area) purchase houses in the same communities where they work.

The fund is intended to encourage high-density and pedestrian-friendly growth in downtown areas.

"These programs are vitally important to our community," said Thomas Dorsey, a manager of governmental affairs for Northeast Utilities System, the parent company of CL&P.

Joan Carty, the president of the Housing Development Fund, said the grant will provide each homebuyer in the workforce program with as much as $20,000 in loans toward downpayment costs.

The loans do not have to be repaid until the property is sold, Carty said.

Dorsey presented the check to Carty Tuesday morning at the Housing Development Fund's offices on 100 Prospect St. Also in attendance was state Sen. Andrew McDonald, D-Stamford.

McDonald was one of the legislators involved in passing the state financing plan that made the grant possible.

Under the Housing Tax Credit Contribution Program, nonprofit agencies involved in affordable housing can apply for up to $500,000 in tax credits. read more

U.S. MBA’s Mortgage Applications Index Rose 2.9% Last Week

Mortgage applications in the U.S. increased 2.9 percent last week as more homeowners refinanced to take advantage of lower interest rates.

The Mortgage Bankers Association’s index of applications to buy a home or refinance a loan rose to 841.4 from a revised 817.7 a week earlier. The group’s refinancing index increased 6.5 percent, while the purchase gauge dropped 4.5 percent.

Declining mortgage rates, brought on by Federal Reserve actions to purchase mortgage-backed debt, are making it more attractive for existing loan holders to refinance. Even so, the faltering economy continues to discourage home purchases.

“Sales have pretty much flattened out all year,” Richard DeKaser, senior economist at National City Corp. in Cleveland, said before the report. “It’s still a bad market. A broader- based rebound remains far in the future.”

The refinancing gauge rose to 4156 from 3901.9 the prior week, while the purchase index fell to 286.1 from 299.6.

The Fed yesterday cut its target federal funds rate to a range of zero percent to 0.25 percent and said it will do whatever is necessary to ease the recession.

“Weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time,” the Federal Open Market Committee said in a statement.

Fed’s Debt Purchases

The Fed’s plan to purchase up to $500 billion in so-called agency debt as well as up to $100 billion in direct debt of Fannie Mae and Freddie Mac and the Federal Home Loan Banks has sent mortgage rates tumbling. The average rate on a 30-year fixed-rate loan fell to 5.18 percent last week, the lowest in more than five years, from 5.44 percent a week earlier. read more

Home loan rate flat after Fed cut and headed lower

An aggressive rate cut by the Federal Reserve on Tuesday did little to lower U.S. home loan costs, but the Fed's promise to expand a massive mortgage debt purchase program if needed should push rates down.

The average 30-year fixed mortgage rate was 5.30 percent late Tuesday after the Fed sliced short-term lending rates to near zero, according to HSH Associates, a mortgage information provider. The night before, the rate was 5.28 percent.

Rates should decline as the Fed's sweeping debt purchase programs kick in, housing analysts said.

Rather than the Fed's rate cut, which more directly impacts shorter borrowing costs, fixed mortgage rates would drop because "the Fed did announce some important and expanding supports for other markets and mortgage markets especially," said HSH vice president Keith Gumbinger, in Pompton Plans, New Jersey.

The government's aim in these debt purchase programs is to bolster the mortgage market, free up lenders to make new and lower-rate loans and stimulate the worst housing market since the Great Depression.

"Really there's some enthusiasm about those opportunities as we roll forward into 2009," Gumbinger said.

The Fed last month said it would buy up to $100 billion of U.S. agency notes issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The Fed has made two purchases totaling $8 billion over the past two Fridays.

The central bank also said it would purchase up to $500 billion of mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae. read more

AVID Home Studios Says Borrowed Home Plans May Prove Costly

According to AVID Home Studios, Using Duplicated or Borrowed Architectural Plans for a New Home Could Cost More Than the House Itself; Little Known Copyright Laws Prevent the Use or Duplication of Any Home Plan Without the Permission of the Original Designer; These Laws Encompass More Than Just the Drawings; They Protect the Design of the Actual Structure Itself; Even After Modifying an Existing Plan, a Home Owner or Home Builder Could Face Huge Fines and Penalties by Using a Home Plan Without Proper Licensing Agreements

To build a new home, builders need home plans. Today, professional home design firms like AVID Home Studios use sophisticated web sites to help builders find the perfect home plan. Home design services have expanded far beyond the traditional architect and anyone with a web browser can purchase a plan from a number of e-commerce warehouses. But, most people are unaware of strict copyright laws that protect the intellectual rights of these home designs and the penalties that go with them. Not understanding the license restrictions of a purchased home plan may come back to haunt the builder with severe consequences.

Despite the gloomy news, many people are building new homes. However, in light of this gloomy news many people are trying to save upfront construction costs by using and reusing existing home plans. Copying or modifying home plans may seem to be perfectly legal for some, but for others it is downright stealing. "Some builders claim that changing an original design will nullify copyright protection," states Bill Elliott, COO of Avid Home Studios. "But, unless you can prove that your design was created without the knowledge of an existing plan, you may be liable." This feeling is shared by many designers who feel their skill, effort and creativity is insulted when their work is flagrantly copied.

As with any other work of art, sculpture or literature, home plans are protected by Federal copyright laws because they are "original works of authorship fixed in a tangible medium." Up until 1990, that "tangible medium" included only the drawing. As long as the drawing was not copied, a home could be built using the information contained within the drawing. This changed with the Architectural Works Copyright Protection Act of 1990. Now, not only is the drawing protected, but both the interior and exterior designs of the building itself are protected by law. A home builder can no longer use one plan to build multiple houses or borrow plans to build just one house. In fact, building a home by using the existing structure as a guide -- without plans -- violates today's copyright laws.

Infringing on these federal statutes can carry huge penalties. Not only will the builder be at risk, but the home owner as well. Violators will be required to pay actual damages from the infringement (the cost of the plan itself) plus any profits from the sale of those plans. Moreover, the fines can include the profits made from the sale of the home and penalties of up to $150,000 for each home built from the plans. To avoid these penalties, builders need to read the license agreement that comes with the home plan purchase. If a builder wants to construct more than one home from a plan, the designer may sell the documents with a "multiple build" license. Many design firms require "reuse" fees allowing a builder to construct one more home from the same plan. Avoiding these minimal upfront fees can lead to severe consequences. read more

NetShops, Inc. Donates Furniture for Deserving Family Featured on ABC's 'Extreme Makeover: Home Edition'

NetShops, Inc., a leader in online web retailing, today announced that the company has donated a large assortment of outdoor furniture to a deserving family that will be featured on ABC's hit series, "Extreme Makeover: Home Edition."

The Tutwiler family has been hard hit by two separate incidents. Patrick Tutwiler, a U.S. soldier, was shot in the neck by an Iraqi sniper. The attack left Tutwiler with traumatic brain injury, Post Traumatic Stress Disorder, memory loss and speech problems. Less than one year after his return home, Tutwiler's modest home was hit by an F4 tornado. Patrick and his wife, Crystal, pulled the family into a closet and used their bodies as human shields while the tornado tore the house apart. Patrick, Crystal, their four children and nephew were living on a nearby military base temporarily until Patrick was given his official military discharge. Due to Patrick's injuries and his current part-time employment, the family's finances can't afford to rebuild or purchase a new home. ABC-TV's "Extreme Makeover: Home Edition," which airs on Sunday nights at 8:00 p.m. ET, spent the week of Nov. 11th, 2008, building this dedicated soldier a safer and stronger place that the family can call home.

Omaha, Neb.-based NetShops, Inc. proudly contributed to the seven-day transformation of a new home for the Tutwiler family in Chapman, Kansas. NetShops, Inc. donated unique, quality outdoor patio furniture, including four rocking chairs, two matching side tables and one porch swing. The furniture will be used to refurbish the Tutwiler's outdoor porch and the town's damaged community safehouse, which will now double as a community center for the elderly.

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U.S. MBA’s Mortgage Applications Index Fell 7.1% Last Week

Mortgage applications in the U.S. dropped last week as fewer Americans sought to purchase a home even as mortgage rates fell.

The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan fell 7.1 percent to 796.8 from the prior week’s eight-month high of 857.7. The group’s refinance index slipped 0.9 percent, while the purchase index plunged 17 percent.

Declining household wealth and the deepening credit crunch are making it harder to buy a home or refinance a mortgage. The three-year housing recession is likely to extend well into 2009 as property values continue to fall.

“Mortgage applications for purchases remain subdued,” Anna Piretti, a senior economist at BNP Paribas in New York, said before the report. “Tighter credit standards suggest actual lending remains constrained, weighing on sales.”

The refinancing gauge decreased to 3767.3 from 3802.8 the prior week, while the purchase index dropped to 298.1 from 361.1.

Mortgage applications surged 112 percent in late November after the Federal Reserve pledged to purchase up to $500 billion in so-called agency debt as well as up to $100 billion in direct debt of Fannie Mae and Freddie Mac, the world’s two largest mortgage buyers, and Federal Home Loan Banks.

The Fed’s plan has sent mortgage rates tumbling. The average rate on a 30-year fixed-rate loan dropped to 5.45 percent last week, the lowest level since March 2004, from 5.47 percent the prior week. At the current rate, monthly borrowing costs for each $100,000 of a loan would be about $564.66, down $72 from three months ago.

More Refinancing

As more homeowners seek to switch out of their adjustable- rate loans, the share of applicants seeking to refinance mortgages increased to 76.1 percent from 69.1 percent of total applications in the prior week.

Today’s report also showed the average rate on a 15-year fixed mortgage decreased to 5.09 percent, the lowest since February, from 5.13 percent. The rate on a one-year adjustable mortgage climbed to 6.76 percent from 6.61 percent. read more

Housing Aid Applicants Criticize D.C. Freeze

Dana Grinage -- voice cracking, tears flowing, heart racing -- explained to D.C. Council members what it was like to come tantalizingly close to her dream of owning a home, only to have it taken away by their decision to freeze millions of dollars from a popular housing program that helps residents with down payments and closing costs.

"I did everything that was asked of me," she said during a committee hearing yesterday, reading a statement as her hands trembled. Grinage, 26, had saved her meager wages, improved her troubled credit rating and lowered her expenses to qualify for a loan through the city's Home Purchase Assistance Program (HPAP).

But Grinage's application was stalled, with about 250 others, after the D.C. Council voted last month to suspend $11 million of HPAP's $34 million budget. At the time, council members did not know that Mayor Adrian M. Fenty's administration planned to propose redirecting an additional $11 million in HPAP funds to other projects.

The council's vote all but suspended HPAP. Last month, the director of the Department of Housing and Community Development told the Greater Washington Urban League to stop processing program applications. Only applicants with home purchase contracts approved before Nov. 14 were allowed to move forward. read more

Private residence club can make vacation home abroad a dream come true

Les Tso, and his wife, Sharon Tso, an avid golfer, own a one-ninth share at the Residence Club at PGA West in La Quinta.

Los Angeles resident and admitted Italo-phile Vera Campbell wanted a vacation villa in Tuscany. Not just any old house -- she wanted a place where she could host a dozen friends, sip a little Vino Nobile and savor la dolce vita without worrying about burst pipes or leaky roofs.

"If I had tried to find all of that in a private home, with all of the maintenance costs, it would have been in the millions," Campbell said.

Then, she toured Castello di Casole, a private residence club set on 4,000 acres of rolling hills on the outskirts of Siena. It includes a 17th century castle that is being reinvented as a boutique hotel as well as eight large renovated farmhouses. For $600,000, Campbell bought a one-tenth share of one of the houses and, paying $15,000 in annual dues, is guaranteed at least four weeks a year in her 4,000-square-foot villa and full use of all amenities.

Before she arrives on visits, a phone call ensures that her kitchen is stocked, her hot tub is bubbling at exactly the right temperature and her artwork is hung just so. She faxes the concierge her itinerary with special restaurant and private winery tour requests. Staff members plot out the trip, complete with driving directions and estimated driving times.

"I knew what all the complications and costs could be on buying and maintaining a foreign property that would be sitting empty most of the time," said Campbell, so she considered the residence club a good option.

Among shared vacation home alternatives, private residence clubs like Castello di Casole are a relatively new concept that has grown quickly over the last few years as prices for prime resort real estate have topped out and residence club developers have refined the concept to appeal to upscale buyers.

In a residence club, members purchase a deeded share in a resort residence and, after paying annual dues, can stay for three to 12 weeks a year and use all of its amenities. Most clubs also have space-available provisions that allow members to stay for an unlimited number of days on a last-minute basis without charge. read more

Olson Homes Willow Walk Spotlighted as One of California's Most Successful Redevelopment Communities

Willow Walk in Compton, CA

The City of Compton's newest residential community, Willow Walk, has been recognized as one of California's most successful redevelopment projects and currently leads the nation in homebuyer satisfaction for new home communities.

Developed on a 6.5 acre vacant site, the Willow Walk website was designed by The City of Compton and The Olson Company. This collaboration focused on the enhancement of the local residential and retail business district offering home buyers 124 stylish townhomes in a neighborhood setting just a short walk to Compton's downtown shopping district, services and City Hall.

Residents and local commuters utilize the adjacent MetroLink transit stop at Willow Walk providing convenient, economical transportation options to employment, retail, entertainment and recreation throughout the Los Angeles area. "We are extremely proud of the success Willow Walk has generated for our city and the surrounding region," said Eric Perrodin, Mayor, City of Compton. "This is a good example of a public / private partnership that comes together with a common vision to create affordable home opportunities in a convenient, In-town location," noted Mayor Perrodin.

Willow Walk was recognized as the nation's highest scoring new home community for homebuyer move in & delivery satisfaction according to Eliant, the foremost consumer research company to the new home building industry. Willow Walk scored top honors for buyer surveys from over 173 new home communities throughout the United States for the period of April - September, 2008 and includes 11 criteria such as the sales purchase experience, home options, construction and home readiness.

First time home buyer Sheri Ingram couldn't be happier with her experience. "I chose to buy my new home at Willow Walk because of the affordable pricing, location to transportation and it was close to my job. I could not have made this happen without the help of The City of Compton and The Olson Company," said Ingram, a recent Willow Walk homebuyer. read more

Home Builders Soar On Lower Mortgage Rates, But Pain Persists

Improved mortgage rates sent shares of home builders higher Wednesday, but no one thinks the residential crisis is over.

As consumers raced to lock in lower rates, applications to refinance existing loans jumped 203.3% last week from the week before, while mortgage applications to buy a home climbed a seasonally adjusted 38%, according to the Mortgage Bankers Association's weekly survey.

That news, a result of the U.S. government's recent pledge to inject $800 billion into the ailing credit markets, gave the building sector a boost. The Dow Jones US Home Construction Index jumped, most recently up 6.10%, led by Beazer Homes USA's (BZH) stock rising 19% to $1.65. Other builders that gained included Meritage Homes Corp. (MTH), up 9.5% to $10.82; Hovnanian Enterprises ( HOV), up 13% to $2.08, and Standard Pacific Corp. (SPF), up 7.4% to $1.75.

Of course, the continued housing downturn has left building shares so depressed that large percentage gains can involve small monetary movements. Still, the mortgage headlines were welcome news for watchers of both new and existing housing markets. Mortgage rates have remained stubbornly high - despite widespread government efforts to bring them down - and an activity flurry shows pent-up demand.

These reduced rates will assist cash-strapped Americans and help homeowners avoid adding to the swelling foreclosure counts. read more

The Government Hopes the Snakes Can Solve the Lizard Problem

The U.S. government is looking a bit like the management of Springfield in the latest housing “rescue” plan. This plan, floated late today, involves using government might to bring down interest rates to monstrously low levels to stimulate housing demand. From the Journal:

The Treasury Department is considering a plan to revitalize the U.S. home market that would push down interest rates for loans to purchase a home, according to people familiar with the matter. The plan, which is in the development stage, would temporarily use the clout of mortgage giants Fannie Mae and Freddie Mac to encourage banks to lend at rates as low as 4.5%, more than a full point lower than prevailing rates for standard 30-year fixed-rate mortgages.

The message is clear: cheap money helped get us into the mess and cheap money is going to get us out. This idea should be recognized for what it is; the snake to solve the lizard problem. The solution may do more damage long-term than the current problem. Pressing artificially low interest rates in the short-term will simply create a generation of homeowners who either can’t or will refuse to move because the subsidized interest rates that funded their purchase will vanish, leaving them with no hope of an equal montly payment on a similarly priced home.

The Journal confirms the worst fears by noting that the Treasury is all but admitting it desperately wants to pump back up the housing bubble:

Treasury views this plan as potentially halting the slide in home prices by enabling borrowers to afford bigger loans, thus increasing demand and pushing up home values. The lower interest rates would be available only to borrowers who are buying a home, not those refinancing a mortgage. read more

The New York Times Features VA Mortgage Center.com

In Current Economic Crisis, VA Home Loans Outrank All Others in Housing Market

VA Mortgage Center.com, a private company specializing in VA loans, recently appeared in a New York Times article for its expert knowledge and advice about VA home loans -- a niche market that is succeeding albeit the current housing situation. In a time when many Americans are struggling to obtain a home loan, the VA loan offers United States veterans and service members an option with benefits unlike any other; surprisingly, few service members are aware they are entitled to those benefits.

VA Mortgage Center.com wants to spread that knowledge. Jay Romano, writer for The New York Times Real Estate Q&A, interviewed VA Mortgage Center.com CEO Nathan Long about "The Ins and Outs of a VA loan."

"A VA loan allows an eligible service member to get 100 percent financing on a home without having to pay for private mortgage insurance," Long was quoted in the article. He explained that typically, "if a purchaser borrows more than 80 percent of the value of a home, the lender requires him or her to purchase mortgage insurance."

The VA home loan is guaranteed by the United States Department of Veterans Affairs, which not only relieves the borrower of paying private mortgage insurance, but also requires no money down. The loan allows sellers to pay closing costs, has looser credit and income standards and is easier to qualify for than a conventional loan. read more

Property-tax collections climb as home prices fall

Property taxes are rising across the USA despite the steepest drop in home values since the Great Depression.

Home values dropped 17% in the third quarter compared with the same period in 2007, reports the S&P/Case-Shiller Home Price Index. At the same time, property tax collections across the USA rose 3.1%, according to the U.S. Bureau of Economic Analysis.

State and local governments are on track to collect more than $400 billion in property taxes this year, the most ever. One reason: Laws in most states that prevent big tax hikes when property values soar also block big tax drops when values sink.

The housing market collapse has caused a recession that's hurt sales and income tax collections.

But property taxes — collected mostly for public schools — have escaped serious damage. As a result, public education is one of the few sectors of the economy still adding jobs.

"Property taxes aren't always popular, but they are a very stable tax, even in tough times," says Thomas Gentzel, executive director of the Pennsylvania School Board Association.

Property taxes haven't fallen since 1934, the BEA says.

What's keeping property taxes up while home prices fall:

• Property tax limits. Most states cap how fast taxes rise in boom times. In bad times, the same laws keep taxes from falling and even permit modest increases on most homes.

Arizona, California, Florida and Nevada — the four states hit hardest when overheated real estate markets crashed and triggered waves of foreclosures — all have tax laws that work this way.

Tonight Show host Jay Leno's property taxes on his Beverly Hills home will increase $1,500 this year to $54,000, even though home values in the area fell by one-third since last year, California public records show. Reason: His mansion is taxed based on the $2.5 million purchase price in 1987, plus 2% annual increases.

Nevada schools will collect $730 million in property taxes this year, up 5%, says Nevada deputy school superintendent James Wells. "Property taxes are a bright spot. Sales taxes are the problem," he says. read more

Manhattanites Purchase Penthouse Home at The Classic at Kew Gardens

The Kamali Organization has announced the sale of a two-story penthouse at The Classic at Kew Gardens, the new collection of 52 luxury New York City condominium homes located in this sought-after Queens neighborhood.

The fifth-floor penthouse -- the largest home in the distinctive six-story building -- features 1,385 square feet of living space with three bedrooms, three baths and four terraces offering 561 square feet of outdoor space.

According to The Marketing Directors, Inc., the building's marketing and exclusive sales agent, the home sold for $850,000.

"The Classic continues to gain traction with buyers from throughout New York City who recognize the extraordinary value offered in these upscale condominium homes," notes Jackie Kamali, a principal of the development firm that bears his name.

"We're gaining a competitive edge in the marketplace thanks to our combination of exciting floor plans, upscale amenities and a desirable location in the heart of Kew Gardens with easy access to Manhattan. Buyers also appreciate The Classic's 15-year tax abatement which enhances the value even more."

The penthouse was sold to current Manhattanites who are leaving their Park Avenue South apartment for The Classic.

"Our buyers were attracted to the home's two-story layout and numerous custom appointments - including an expansive skylight which helps flood the home in natural light," notes Jacqueline Urgo, President of The Marketing Directors, Inc. "The four terraces were also a hot selling point as they provide opportunities for extending the living experience outdoors." read more

Horton Trumped By TARP

Actions by the U.S. Treasury on Tuesday were all home building investors needed to push the sector up, fueling hopes that a bottom for housing is near.

Shares of D.R. Horton (nyse: DHI - news - people ) were up 38.0%, or $1.90, to close at $6.90, on Tuesday afternoon. The other builders were enjoying a jump in their stock prices as well; Lennar (nyse: LEN - news - people ) rose 33.8%, or $1.55, to $6.13, while Pulte Homes (nyse: PHM - news - people ) was up 12.1%, or $1.06, to $9.82.

The Federal Reserve undertook a massive program to reflate the U.S. economy Tuesday, focusing on consumers and, most important for the home builders, housing. The central bank is planning to purchase $500.0 billion of mortgage-backed securities and buy $100.0 billion in direct obligations from Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks. Pulling all of that debt out of the market and putting cash in the hands of its previous holders, should reduce borrowing costs. The Fed also said it would make loans totaling $200.0 billion to holders of recently issued asset-backed securities, again encouraging new loans to be made. read more

Mortgages head down

The mortgage averaged 5.97% for the week ending Nov. 26, down from last week's 6.04% average. The 30-year mortgage averaged 6.10% a year ago; it hasn't been lower since Oct. 9, when it averaged 5.94%.

"Interest rates for 30-year fixed-rate mortgages fell for the fourth consecutive week as signs the overall economy is flagging lowered most interest rates market-wide," said Frank Nothaft, Freddie Mac chief economist, in a news release. "And economic growth in the third quarter was revised downward this week, led by the first decline in consumer spending since the fourth quarter of 1991 and the largest drop since the second quarter of 1980."

The 15-year fixed-rate mortgage averaged 5.74%, up slightly from last week's 5.73% average. The mortgage also averaged 5.73% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.86%, down from last week's 5.87% average. They also averaged 5.86% a year ago. And 1-year Treasury-indexed ARMs averaged 5.18%, down from last week's 5.29% average. The ARMs averaged 5.43% a year ago. read more

New home sales in U.S. plunge in October

American new home sales in October fell to their lowest level in 17 years, according to data released by the U.S. government Wednesday.

The U.S. Census Bureau said the sale of new houses tumbled 5.3 per cent in October to an annualized rate of 433,000. That compared to 457,000 one month earlier and was the weakest showing since 1991, the federal agency said.

In addition, the 24,000 reduction was a far worse result than economists had expected for the month.

A dramatically weakening economy combined with plunging consumer confidence have American buyers putting the possible purchase of a new or existing home on hold.

"Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions," said Lawrence Yun, an economist with the Washington-based National Association of Realtors, when that group released existing home sales figures earlier in the week.

The number of existing homes in the United States that were sold in October fell 3.1 per cent compared to September and was 1.6 per cent below the annualized rate in October 2007.

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UPDATE 1-Home Retail buys Alba, Bush trademarks from Alba

Britain's Home Retail Group (HOME.L: Quote, Profile, Research, Stock Buzz) on Thursday said it had acquired the rights to the Alba and Bush trademarks from Alba Plc (ABA.L: Quote, Profile, Research, Stock Buzz) for 15.25 million pounds ($23.54 million) in cash.

Home Retail, which owns high street catalogue retailer Argos and DIY chain Homebase, said it had bought the rights to the trademarks for exclusive use on consumer electronics and certain other goods sold in its Argos stores after Alba decided to end the supply of these branded products as part of a restructuring plan.

"The trademarks are household names with very strong heritage, which have high awareness and purchase frequency with Argos customers," Home Retail said in a statement.

It said the financial arrangements were such that it expects the deal to broadly earnings neutral for the year ended February 2010. read more