By Brian-Logan Reid, Broker

I do my best to keep my eyes and ears open for properties and owners that fall into financial hardship, as some of my investor clients keep capital ready to put to use in these types of situations.

As of this writing, there are no foreclosures set for Nantucket property owners. There has to be a public notice put out (normally in the Inquirer & Mirror) when a property is going to a foreclosure auction, and I have yet to see any notices.

If you want a great overview of foreclosures and the process, check out Zillow’s Wiki…

By Brian-Logan Reid, Broker

I started using Zillow just about as soon as it launched and there really should be a disclaimer along the lines of “For entertainment purposes only”. 

There are at least three major problems with Zillow as I see it:

1.  Zillow only uses public information which is not always (read: more often times) NOT completely accurate;

and

2.  Zillow is a COMPUTER company that relies on their COMPUTERS to aggregate information and numbers and then throws them into a “proprietary” formula, without considering the myriad other factors that make up a property’s true value;

and

3.  As a result of this potentially faulty information, owners, buyers, agents and whomever else is using the service is probably getting an inaccurate estimation of the value of the property, thus creating misconceptions and (often times) overINFLATED “Zestimates” of the property’s value.

Don’t get me wrong, I love Zillow and it may turn out to be a useful service as more information is gathered and analyzed.  My main concern, though, is to have to convince my home owner clients and buyer clients that Zillow is more for entertainment purposes than for actually trying to determine a property’s true market value.   It may be a good place to start, but that’s about it. 

I mean how can a computer determine a value for a property that is in “Fair” condition versus one that is in “Very Good” condition?  How can a computer determine a value for a property that is adjacent to a noisy and smelly restaurant?  How can a computer determine a value for a property that has “Distant Ocean” views versus “Pond Views”?  My point is it tends to be these ’soft’ features and qualities in ADDITION to the raw numbers, that make up the true value of a property. 

Maybe for commercial real estate, where values are predominately based on numbers such as price per square foot, lot sizes, etc., Zillow may come into it’s own.  But I remain unconvinced that Zillow will (at least in the near future) become a useful tool for residential real estate.

POSTED: 6:55 a.m. EDT, March 21, 2007

HONOLULU, Hawaii (AP) — Japanese billionaire Genshiro Kawamoto has selected the first four of eight Native Hawaiian families that will each rent one of his multimillion-dollar homes in the exclusive oceanside Kahala area for $150 a month.

The low-income families could move into the furnished Kahala Avenue homes, purchased in 2005 for $2 million to $3.4 million each, as soon as this weekend.

“They will be living in heaven now,” said Kawamoto, a 75-year-old real estate tycoon.

Among Kawamoto’s four rental homes is one with five bedrooms and 5½ bathrooms. The 6,489-square-foot home was built in 1989 and is more than three times the size of the average house on Oahu. It was purchased by Kawamoto in August 2005 for $3.4 million.

The families were selected from 3,000 people who wrote him in response to his plan announced in October to rent to low-income Hawaiians.

Kawamoto said it was difficult to choose families because there was so much interest. He also expects to select four more tenant families as early as next month.

He said he is renting the homes “because the affluent people can help the least fortunate people.” (more…)

By Brian-Logan Reid, Broker

In the time that I’ve lived on Nantucket, I’ve witnessed Nantucket become ever more a playground for the rich (or what is becoming more so the case, the VERY rich).  After some conversations with friends and colleagues, I began thinking about all the ways that Nantucket may just be becoming a secluded playground for the affluent:

• The Nantucket Yacht Club - Members only - you could imagine what it’s like trying to get into this club (I’ve heard the wait list is over 30 years…) 
• The Great Harbor Yacht Club - Members only (still under construction) - 300 members, membership cost is $300,000… 
• The Sankaty Head Golf Club - Members only - I’ve heard the membership cost is only $30,000 (and maybe I’m missing a 0), but the wait list is extremely “extensive”…
• The Nantucket Golf Club - Members only - Membership cost is $450,000 and a five year wait list…
• The Westmoor Club - Members only - This most recent tennis club does not have a wait list, but the membership cost is $250,000 (last I heard)…
• The Sconset Casino - Sconset residents and renters only - a tennis club located in Sconset; nominal membership cost…
• The Nobadeer Swim and Tennis Club - Members only - a facility located in Mid-Island with tennis courts, full gym and spa - membership cost is $25,000 (at least that’s what it was 2 years ago)…
• The Point Breeze Hotel is undergoing an enormous renovation that will convert it into a luxury hotel with full spa and five star restaurant; memberships will probably be available…
• Time and Place Homes owner Mitch Wiley recently purchased several condo units and outbuildings on Nantucket Harbor.  I believe he will be creating a truly unique collection of high-end condos/houses/cottages located right in Town and right on the harbor…

Wow!  I didn’t realize how exhaustive the list really is!  Well the good news…I think…is that because of a lack of large contiguous property left to build on Nantucket, no more golf courses will be built! (hmm…on second thought, don’t hold me on that). 

There definitely is some cache in saying “I’ve got a house on Nantucket”…maybe it has to do with this exclusive mentality…

Just some of my thoughts…

By James R. Hagerty
From The Wall Street Journal Online

About 1.1 million foreclosures are likely to result from jumps in monthly payments on adjustable-rate home-mortgage loans made in 2004 through 2006, according to a study by First American CoreLogic.

Christopher Cagan, director of research at the real-estate-information concern based in Santa Ana, Calif., said those foreclosures are likely to occur over six to seven years and won’t be enough to damage the national economy. (Financial markets could be hurt, however.

Dr. Cagan analyzed 8.4 million adjustable-rate loans made during those three years and estimated that 13% of them, totaling $326 billion, will end in foreclosures. After lenders resell those properties, the total losses for lenders or investors holding the loans will be $113 billion, he estimated. That is about 1% of total U.S. home-mortgage loans outstanding.

“The vast majority of borrowers will be fine,” Dr. Cagan said.

The estimates are based on an assumption that average home prices will remain about level with the December 2006 level over the next five years. If prices drop 10%, the number of foreclosures would jump to 1.9 million, Dr. Cagan projected. But a 10% rise in prices would cut foreclosures to 489,000, he estimated. When prices rise, people struggling with loan payments are more likely to be able to refinance into a loan with easier terms or sell their homes for more than the loan balance.

The projections include only foreclosures expected to result from jumps in interest rates that occur when loans “reset” from their initial interest rate to a higher one, usually after two to five years. They don’t take into account foreclosures that will occur for such reasons as job losses, deaths, divorces, illness or fraud.

The worst-performing loans will be those that started with low “teaser” rates, below 4%, the study predicts. On such loans, the typical rise in monthly payments at the reset is 118%, Dr. Cagan calculates.

Email your comments to rjeditor@dowjones.com.

– March 20, 2007

How the Subprime woes affect you
The impact of rising defaults is already being felt on Wall Street.  Here’s the impact on home buyers and sellers.

By Gerri Willis, CNN

March 15 2007: 1:23 PM EDT

NEW YORK (CNNMoney.com) — Stock markets have been struggling because of worries about lenders who underwrite mortgages for people with bad credit. Some two dozen companies have been affected.

Worse, the crisis is also hitting better known banks and Wall Street brokerages that invested in these loans. The reverberations are being felt from Tokoyo to London.

Video More video CNN’s Gerri Willis how a meltdown among U.S. subprime mortgage lenders affects consumers. (March 14) Play video

A recent study predicted that one in five subprime mortgages issued in 2005-2006 will fail.

For home buyers…

For this consumer, this means, there will probably be a tightening of credit.

It will be harder for you to get a mortgage, if you have less - than - perfect credit.

And if you do, the terms won’t be as favorable (think higher rates and more money down).

In addition, It could be harder to get an adjustable rate mortgage (ARM) because it can be seen as risky.

For home sellers…

If you’re trying to sell your home, there will be fewer buyers out there - and those buyers may have less to spend because they have less favorable mortgages. All that could lead to a lower selling price for your home.

The Mortgage Bankers Association predicts that housing won’t even regain its footing until near the end of 2007.

And there is an impact beyond the housing market. Remember, people don’t just borrow to buy homes. They take out home equity loans to pay for college education for their kids. Or home repairs, or to buy a new car.

Stowe gets a needed lift

By Gene Sloan, USA TODAY

STOWE, Vt. — Rod Kessler doesn’t mince words when he talks about the old chairlift to the summit of Spruce Peak.

		Small-town Vermont: The Stowe Community Center looks peaceful under a mantle of snow, which typically blankets the village from Nov. through April.
		Gene J. Puskar, AP

“It was a tough ride,” says the head of operations for Stowe Mountain Resort, recalling the infamously frigid crosswinds that would buffet skiers on the 13-minute trip to the top.

Like so much else in this aging grande dame of New England resort towns, once known as the Ski Capital of the East, the slow-moving Big Spruce lift hadn’t gotten an overhaul since the area’s heyday in the ’50s. It wasn’t just old; it was a relic.

	SKIING STOWE
	Vertical drop: 2,360 feet Skiable acres: 485 Annual snowfall: 333 inches Trail mix: Beginner, 16%; intermediate, 59%; expert, 25% Ticket prices: One-day adult pass, $74; five-day pass, $224. Information: 800-253-4754; stowe.com.

But now, as Kessler eagerly points out in a midday ski tour, things finally are beginning to change — and change big — both on and off the mountain.

Big Spruce is gone, replaced this year by a new high-speed lift that reaches the summit in under 6 minutes. And that’s just a small piece of a $300 million, 10-year extreme makeover of the ski area now underway that developers hope will catapult Stowe back to the top spot among Eastern resorts.

“There’s not a resort in the world that we will not compete with,” boasts hotelier James Horsman, the Ritz-Carlton veteran tapped to run a new ski-in, ski-out luxury hotel and spa that will form the cornerstone of a posh new pedestrian village. It’s designed to lure vacationers from across the USA and even Europe.

The 170-room property, now under construction at the base of Spruce Peak, won’t open until next year. But already, the first elements of the new base area — luxury ski-in, ski-out cabins — are beginning to bustle with well-heeled skiers.

And there have been significant changes on the mountain over the past year, (more…)

NYT - 9/9/2005…another look back…

TOWN (ZIP CODE) / 2004 MEDIAN HOME PRICE

ASPEN, COLO. (81611) / $2.47 million
No surprise that this ritzy ski resort is the most expensive second-home market in the country. But there’s one surprising fact: $1 million won’t even buy a teardown anymore.

PALM BEACH, FLA. (33480) / $2.08 million
Ronald O. Perelman sold his home here last year for $70 million. But though prices are high, turnover of high-end homes in this old-line resort can be slow.

NEWPORT BEACH, CALIF. (92662) / $1.82 million
This ZIP code belongs to the city of Newport Beach but consists of tiny manmade Balboa Island. It’s nestled between the Balboa Peninsula and Pacific Coast Highway and has experienced a 40 percent rise in the median home price in the last year.

WATER MILL, N.Y. (11976) / $1.58 million

The median home price in this section of the Hamptons climbed 31 percent last year. Other Hamptons towns had even higher prices but have fewer sales last year.

MANTOLOKING. N.J. (08738) / $1.33 million
Wall Street types arrive by helicopter for weekends on this strip of high-end beach houses on the Jersey Shore. On the market right now is a five-bedroom bayfront house with sweeping views and a $6.25 million asking price.

NANTUCKET, MASS. (02554) / $1.15 million
No shock here. Once a whaling village, this 50-square-mile fishhook-shaped island off Cape Cod is dominated by the hyper-rich.

(Blogger’s note:  As of January 2007, the median home price on Nantucket was $1,852,500, while the average price was $2,574,000…)

SULLIVAN’S ISLAND, S.C. (29482) / $1.1 million (more…)

The Board of Selectmen last night voted 4-1 to sign the Notice of Intent for the Sconset Beach Nourishment Project which will allow the proponents to proceed with the permitting process at Conservation Commission.

As a property owner within the project area, the town had to give its permission to allow the Conservation Commission review to begin, and the board approved a motion last night that contained five conditions drafted by Town Counsel Paul DeRensis to protect the town’s rights as the project moves forward.

The Sconset Beach Preservation Fund (SBPF) has proposed the ambitious project to dredge 2.6 million cubic yards of sand from the western edge of Bass Rip Shoal, located about two miles off Sankaty Head, and dump it along the foot of Sconset Bluff in order save homes from coastal erosion.

“The Board of Selectmen and the Land Bank could (more…)

Written by: Andrea Messenger — 02/8/07
We all know that sensationalized news stories sell magazines. But one reporter has gone too far by unjustly bashing REALTORS - of course, as a REALTOR, I take this personally and am offended.

But the worst part is that this reporter is giving false information to consumers - and not only that, but if people actually follow some of his advice, they will clearly be harmed. I can only hope that anyone who reads his article will realize the absurdity.

Stephen Gandel of Money Magazine flaunts his foolishness in the article, “Is your realtor on your side?” (Yes, he also failed to use the proper REALTOR trademark.)

The subtitle of “Make sure your agent gets you the best house at the best price” indeed has redeeming qualities. After all, any of us hard-working REALTORS would agree that this is our job and we strive to do it well.

But instead of providing homebuyers with helpful tips on choosing the best REALTOR or avoiding common pitfalls, Mr. Gandel chose to bash REALTORS as greedy and “susceptible” to putting their interests above their client’s interests. (more…)