9/5 WSJ.com: Developments

September 05, 2009

9/5 WSJ.com: Developments

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WSJ.com: Developments

Friday Diversion: Madoff, Gallin Homes Listed on Long Island
September 4, 2009 at 11:59 am

: Associated Press; Bernard Madoff’s Montauk home. More photos.

This week E.T.’s home in Los Angeles escaped wildfires that threatened Michael Jackson’s tigers. Here’s what else was going on in the higher reaches of the market:

On Tuesday, the U.S. Marshals Service said Corcoran Group would list Bernard Madoff’s Montauk, N.Y., beach house for $8.75 million. Located just east of the Hamptons, the home on 1.2 acres measures 3,014 square feet and has four bedrooms and three bathrooms. The sale includes all of the home’s contents, including artwork and personal belongings like towels, shoes and raincoats. Mr. Madoff, who bought the property in 1979, valued it at $3 million in estimates federal regulators filed last year. Photos

Talent manager Sandy Gallin, who has represented Michael Jackson and Barbra Streisand, lists his Hamptons estate for $32 million. Mr. Gallin, who has made a second career out of fixing up homes and then selling them, assembled the 14-acre property in Bridgehampton, N.Y., by combining three adjacent lots in 2001. He spent four years building a shingled traditional home, which has seven bedrooms and eight bathrooms in 6,500 square feet. It also has more than 6,000 square feet of outdoor entertaining space. Mr. Gallin also added a 1.5-acre pond and a pool to the property. Photos (WSJ)

Actor Ben Stiller lists his nearly-one-acre property in Los Angeles’s Hollywood Hills for $12.5 million. It includes a restored 5,334-square-foot Spanish-style house that was built in 1929. It also has a three-story contemporary Mediterranean house measuring 4,062 square feet. In addition to the two houses, the property includes a one-bedroom guesthouse. (Los Angeles Times)

Actor Nicolas Cage lists his apartment in Midtown Manhattan for $9.75 million. The 3,550-square-foot unit is actually made up of two adjacent condominiums on the 48th floor of the Olympic Tower, a 51-story building on Fifth Avenue. (Zillow)

John Huntsman Sr., the billionaire founder of chemical maker Huntsman Corp., lists his 64-acre retreat in Deer Valley, Utah, for $55 million, making it one of the priciest listings in the West. The 20,000-square-foot home, built from reclaimed timbers from Yellowstone National Park, has 12 bedrooms, 16 bathrooms and an indoor pool. The land is zoned to hold another 21 homes. Mr. Huntsman bought the property in 1986 as a retreat for his nine children and their families but hasn’t used the property in years. Photos (WSJ)

Mexican telecom billionaire Carlos Paralta lists his condominium in New York CIty’s Trump Tower for $13.5 million. The three-bedroom unit includes a Jacuzzi. (New York Observer)

Steve Black, the co-chief executive officer of JP Morgan’s investment bank, sells his estate in Greenwich, Conn., for $18.9 million. Shopped quietly for $21 million, the 14.8-acre estate includes a 1930 English manor that has six bedrooms and eight bathrooms in 14,470 square feet. It also has a greenhouse, a guest cottage and a pool. Mr. Black bought the property for $13.75 million in 2001 and renovated it. (WSJ)

Former Goldman Sachs partner Donald C. Opatrny Jr. sells his 25.5-acre estate for $18.7 million, about 22% off the original asking price of $23.9 million. The estate includes a 13,500-square-foot Georgian colonial home with six bedrooms and seven bathrooms. (WSJ)

The former Los Angeles home of actress Bette Davis hits the market with a price tag of $2.45 million. The home is a renovated three-bedroom, two-and-a-half bathroom condominium measuring 2,242 square feet and is located on the fourth floor of the Colonial House, which was designed by architect Leland A. Bryant in 1930 and is listed on the National Register of Historic Places. The home has treetop views, hardwood floors and a terrace. (Los Angeles Times)

Actress Milla Jovovich sells her home in Los Angeles’s Beverly Hills Post Office neighborhood for $2.75 million. Ms. Jovovich bought the home in 2001 and lived in it for a couple of years before renting it out. The home has four bedrooms and four bathrooms in 3,582 square feet. It also has a pool, as well as canyon and city views. Built in 1975, the Hollywood Regency-style home was designed by John Woolf. (Los Angeles Times)

A triplex at Julian Schnabel’s Palazzo Chupi in New York City is taken off the market. Most recently listed at a reduced price of $14.95 million, the unit was also offered with the pink building’s only other remaining unit, a duplex, as a package for $27.9 million. Now, the duplex is listed alone for $12.95 million. (The Real Deal)

Photographer Annie Leibovitz buys some time — a month — to respond to a lawsuit filed against her by Art Capital, from which she borrowed $24 million to pay off her debt. Art Capital brought the suit in order to gain access to Ms. Leibovitz’s real estate properties to show them to potential buyers. Without a deal, the photographer could either go into bankruptcy or lose her properties and picture catalog to the company. (New York Post)

Real Estate News: FHA Losses, Prime Borrowers Feel Pain
September 4, 2009 at 10:10 am

Real Estate News compiles a daily real-estate wrap-up from each morning’s Wall Street Journal and other news sources.

Losses Spark Concern Over FHA (WSJ): The FHA, hit by mortgage-related losses, is in danger of seeing its reserves fall below the level demanded by Congress, which could raise concerns about whether it needs a bailout.

Troubles For ‘Prime’ Borrowers Intensify (WSJ): The long recession and rising joblessness are taking an increasing toll on the nation’s most credit-worthy borrowers, who are falling behind on mortgage and credit-card payments at a faster pace.

Mortgage Rates Fall, Boost Sales (WSJ): Interest rates on home mortgages dropped this week, with the 30-year fixed-rate mortgage averaging 5.08%

Debt Clouds Future of Fontainebleau (WSJ): South Florida’s Soffer family is grappling with troubles at the fabled Miami Beach Fontainebleau hotel, which has breached the covenants of a $670 million construction loan.

Better Buy? Condo or Townhouse (WSJ): Our columnist responds to a first-time buyer in Boston who wonders which type of home will better hold value.

Homeownership Good for Kids? Maybe Not (Time): A new study shows that, contrary to popular belief, homeownership may not offer educational advantages for children.

The FHA, hit by mortgage-related losses, is in danger of seeing its reserves fall below the level demanded by Congress, which could raise concerns about whether it needs a bailout.

Chicago Landlord Sues the Sheriff for Slow Evictions
September 4, 2009 at 9:43 am

: Associated Press; Sheriff Dart

A Chicago landlord is fed up with Cook County Sheriff Tom Dart, who made headlines earlier this year for halting evictions on foreclosures. He’s now suing the sheriff in an effort to put an end to policies aimed at slowing foreclosures and evictions, according to a report by CBS’ Chicago affiliate.

Dart earned a glowing profile as one of Time Magazine’s 100 most influential people earlier this year. (That piece was penned by Abner Mikva, the Chicago judge who became one of Barack Obama’s earliest political mentors). But Mike Slinkman says that the sheriff’s refusal to process evictions is hurting his rental business, which includes hundreds of units in 50 buildings.

“My only recourse is Sheriff Dart. That’s what the law is. And when he’s failing to do his job egregiously, I am forced to, I’m fighting for my livelihood,” Slinkman told the TV station. He’s filing a case in federal court that says Dart is deliberately pausing evictions for political gain that costs landlords thousands of dollars a month.

The sheriff’s office denies any political motive, and says the lawsuit is likely related to a policy against evicting renters in temperatures below 15 degrees or in cases where extreme weather could lead to hardship.

Hovnanian: Done with Fort Myers?
September 4, 2009 at 9:26 am

: Getty Images; Hovnanian’s lots were 30-40 miles away from the water. Pictured here, Ft. Myers beach.

Builder Hovnanian Enterprises has apparently high-tailed it out of Fort Myers, Fla, four years after it scooped up a local builder to gain the top spot in what was then a booming region.

Back in August of 2005–at the height of the housing frenzy–New Jersey-based Hovnanian acquired First Home Builders of Florida, according to the News-Press.

But the market quickly crumbled. Hovnanian recently dumped its last 1,409 lots for $4.2 million–about $3,000 a pop, some fetching less than 10% of what they would have commanded four years ago, the paper reports.

The buyer was identified as Lehigh Investment Group LLC, a group of Czech investors.

“I think that was the last move regarding their exit from our market, actually,” Jack Solloway of Fort Myers-based Rapid Rescue LLC, who reportedly brokered the deal for the buyers, told the News-Press.

Hovnanian, the nation's sixth-largest builder by 2008 closings, declined to comment.

Most of the lots Hovnanian reportedly sold are located in Lehigh Acres, 30-to-40 miles from the coast — making them less valuable in a state where water access is prized. It's also a blue-collar town that was hard hit when construction jobs slowed.

"They bought something at the top of the market with a lot of individual single-family lots," said Steve Hagenbuckle, managing principal of TerraCap Partners in Cape Coral, Fla., a real-estate private-equity fund. "It was an inland rural area that is less desirable."

Fort Myers overall is one of the nation's biggest boom-to-bust markets. Median existing-home prices more than doubled between 2002 and 2005, peaking at about $322,000 in December of that year: Just a few months before Hovnanian's cash deal.

In 2007's first quarter, the builder wrote off $93 million related to the souring region, citing "a continued substantial decline in sales pace and general market conditions as well as increasing cancellation rates." Hovnanian - which reported its 12th consecutive loss Wednesday - hasn’t started a house there since March of 2007, the News-Press reported.

The Cape Coral-Fort Myers market has one of the nation's highest foreclosure counts, with one in every 64 housing units slapped with a foreclosure filing in July, according to RealtyTrac. Mr. Hagenbuckle said the Lehigh Acres area is a big contributor to that statistic.

That's dragging down prices: The area's average single-family price tumbled to $82,139 in July from $145,000 a year ago. Sales are picking up dramatically cutting inventory, as investors and first-time buyers take advantage of the lower prices, Mr. Hagenbuckle pointed out.

Still, there's another lingering problem from the housing frenzy: Homeowners report drywall imported from China is causing corrosion and foul-smelling odors. Of the roughly 1,200 cases reported nationwide, three-quarters are in Florida, with many in Fort Myers.

In its earnings call Thursday, Hovnanian said it has had just five drywall incidents in Florida.