Jay Hollander's Weblog

Welcome to the Real Estate Law weblog. Here you'll find items pertaining to real estate from a lawyer's perspective.

Thu Jul 13, 2006

Bubble Metrics

I came across a very interesting website, that of the Center for Economic Policy Research, an organization that's done alot of looking into the housing bubble issue and that has alot of articles that you'll find interesting and informative.

What's really noteworthy, though, is a unique bubble calculator that seeks to measure whether you'd be better off renting or buying by plugging in the price, mortgage terms, location and projected hold time into the fields, which then takes into account projected changes in home price in that area over the projected hold period. The results may frighten you.
http://www.cepr.net/calculators/hb/hcc.html

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Fri Jul 07, 2006

Expected Report of Year Over Year 2nd Qtr Condo Price Declines

Today's NY Sun reports that an expected industry report on condo prices will show softening on a year over year basis for the second quarter.

As the article recites, industry analysts opine on whether they foresee a repeat of the coop collapse of the late 1980's when oversupply combined with softening demand and tax reform to cause a sharp drop in prices.

Some, according to the article, feel the City's overall healthy economy will prevent this recurrence in the case of condos.

http://www.nysun.com/pf.php?id=35479

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Tue Jun 27, 2006

Problems When the 1031 Tail Wags the Dog

Here's an interesting article about what happens when investors, in their zeal to meet the stringent time requirements of a 1031 exchange, invest in properties in areas they're unfamiliar with and do so without their usual degree of due diligence.

http://www.realestatejournal.com/buysell/markettrends/20060615-hagerty.html?refresh=on

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Wed Jun 21, 2006

Taxes and Commercial Real Estate Activity in NY

Today's NY Sun has an interesting article sure to reinvigorate the timeless intellectual arm wrestling about whether booms and busts in real estate are primarily driven by tax policy or the business cycle.

This article focuses on the infamous "Cuomo Tax", formally known as the Real Property Gains Tax, enacted in the '80's by then Governor Mario Cuomo. In short, the tax that excluded townhouses and one and two family houses, surcharged capital gains on most other commercial property transactions above $1,000,000 by 10%, preceded a slowdown in the NY marketplace.

Its repeal by Cuomo's successor, George Pataki, either coincided with or caused the beginning of the most recent boom in New York commercial real estate, depending on your philosophy.

Read about both sides of the issue in David Lombino's piece at http://www.nysun.com/article/34784?page_no=1

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Another View on the Bubble-No Bubble Coin Toss

Glenn Roberts, Jr. of Inman News today quotes from findings of the Anderson Forecast, an economic report out of UCLA.

According to the report, housing is more likely to head for a crash rather than the gradually deflating balloon we've all be hearing about lately.

For more, check out the article ( subscription required) at http://www.inman.com/hstory.aspx?ID=53488

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Tue Jun 13, 2006

New Flipping Rules from HUD

Today's Inman News reports on new anti-mortgage fraud FHA regulations of significance to flippers.

If you're looking to sell an investment property to someone seeking FHA insured financing, new rules issued by the agency need to be examined.

Under the rules, effective in early July and intended to inhibit predatory lending on overpriced properties, FHA financing will not be available for sales of homes purchased by the Seller within the previous 90 days. Further, to be eligible for FHA financing, the Seller must be the actual owner of record.

There are some exceptions, of course, but none that undermine the purpose of the rule.

For more, see http://www.inman.com/hstory.aspx?ID=53130

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Mon Oct 24, 2005

Anticipated Higher Heating Bills Affect Investors Differently

A report issued today shows what most investors already know, that heating costs are expected to go up dramatically this Winter. http://tinyurl.com/cja6z

Still, the data highlights an important consideration for real estate investors between residential and commerical investments.

In multi unit residential units, while some buildings may have tenants pay their individual heating bills, depending upon how the building is metered, the common area charges are usually borne by the building owner.

By comparison, in many commercial properties, tenants pick up a share of common area expenses as well as their own sub-metered utlility costs, a potential dramatic savings in out of pocket costs to a commercial owner.

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Sun Oct 16, 2005

Think real estate is priced too high? - The Universe's the Limit

Today's San Francisco Chronicle carries an article discussing the fascinating issue of private property rights on the Moon, asteroids and throughout the Universe. http://tinyurl.com/ar37f

Illustrative of the issues is the case of Nemitz v. U.S., in which the Plaintiff, who had pushed the envelope by filing for parking fees when NASA landed a probe on the asteroid EROS, as to which Nemitz had previously filed a land claim on an experimental Seton Hall University online registry back in the 1990's.

The lower court and Ninth Circuit Court of Appeals both rejected the claim but, in an age where governments are rekindling interest in manned exploration, property rights in space is a topic of increasing interest to individiuals and corporations alike.

In fact, there's an entire web site devoted to space law, including, the growing body of property rights issues arising out of it. http://www.spacelawstation.com/cases.html#1

But is celestial real estate investment as good as that of the old terra firma variety? After all, since scientists tell us that the Universe is expanding, they are making more of it, aren't they?

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Mon Oct 10, 2005

Flippers Beware!

This week's Barron's has an interesting article by Steve Bergsman, detailing how the market for flipping commercial properties is fast disappearing.

Often thought to be the province of residential home purchasers who learn their craft from late night infomercials, many large commercial properties have, themselves, turned over often in a relatively short period of time.

Larger commercial properties may not be flipped in months, like single family homes, although they can be, but many have flipped several times in just a few years, as is detailed in the article.

Rising interest rates and rising expectations for capitalization rates have conspired to deflate hopes of commercial flippers or "active managers", as they like to be called.

Read more at http://tinyurl.com/b54gq ( Subscription Required)

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