Alex Pollock: On Housing, There Will Be More Lean Years Ahead

It is nearly five years since the peak of the housing bubble, and that highly leveraged sector, with its $11 trillion in residential mortgage debt, continues to struggle. Home values just posted their biggest quarterly decline since late 2008, largely due to a steady stream of foreclosures.

But if we consider that the housing bubble inflated from roughly 1999 to 2006, that made seven fat years. An ancient authority would suggest that seven lean years should follow. That would mean two more lean years to go—not a bad prediction.

Actually, what we experienced was a double bubble: one in housing and a parallel one in commercial real estate, which has mortgage debt of $2.4 trillion. Both of these sectors used the opening years of the new century to run up leverage and asset prices to an unsustainable 90% increase, with housing peaking in the second quarter of 2006, and commercial real estate in the fourth quarter of 2007.

via Alex Pollock: On Housing, There Will Be More Lean Years Ahead – WSJ.com.

Foreclosures: How one Broward development is fighting through foreclosures

The ad for Pompano Beach Highlands hit Life magazine in October 1955. It was paid for by the builder, who pitched retirees on the perks of owning a home in Florida.

“On U.S.1, halfway between Miami and Palm Beach, with Ft. Lauderdale minutes away, Pompano Beach Highlands offers a richer, fuller life at much less cost.”

The community of one-, two- and three-bedroom homes with jalousie windows on large lots sprouted in the late 1950s, transforming over the next several decades into a middle-class haven for people of all walks of life.

via Foreclosures: How one Broward development is fighting through foreclosures – South Florida Sun-Sentinel.com.

Is the Condo Revival in Miami the Real Thing?

A few years after losing $1 billion in the real-estate crash, Jorge Pérez and his Related Group of Florida are planting seeds for new projects near the felled stumps of the old.

In the Journal earlier this week, we profiled Mr. Pérez , the “condo king of Miami” who, despite losing two of his trophy buildings, the Icon Brickell and the Trump Hollywood, could be on the rebound.

During the condo boom of the last decade, Related was Miami’s most prolific developer of condos, putting up more than 15,000 and tallying a few banner sales years, including 2007, when the company hawked more than $1.5 billion in real estate.

via Is the Condo Revival in Miami the Real Thing? – Developments – WSJ.

Foreclosures reforged

Sweeping new measures to help financially struggling Hawaii homeowners avoid foreclosure became law last week.Some observers are hailing the bill signed Thursday by Gov. Neil Abercrombie as one of the strongest in the nation and possibly a model for other states.The bill, Senate Bill 651, is being touted as one of the highlights of the recently concluded legislative session, which was largely consumed by work on balancing the state budget.

via Foreclosures reforged .

Don King, Mel Gibson and the ‘Home Alone’ House

Boxing promoter Don King has relisted his more than three-acre oceanfront property in Manalapan, Fla., south of Palm Beach, for $20 million. The gated estate, which contains two homes, was originally offered in early 2009 for $27.5 million. Mr. King took it off the market last summer.

The larger of the two homes has nine bedrooms and nearly 18,000 square feet of living space. It’s built around a coquina stone courtyard with waterfalls and ponds. The smaller five-bedroom home has about 6,800 square feet, an outdoor cabana with a kitchen and an ice-cream parlor. There are two swimming pools and a replica of the Statue of Liberty in the yard. The property includes 300 feet of ocean and Intracoastal Waterway frontage.

Mr. King, 79, has represented clients like Muhammad Ali and Mike Tyson. He purchased the larger house in 1999 for $7.8 million; he paid $6.5 million for the other house the same year. Mr. King’s wife, Henrietta, passed away in December at age 87.

via Real Estate News About Don King, Mel Gibson and the ‘Home Alone’ House | Private Properties.

Letter from home column: lenders are tough even on the rich

How hard is it to get a mortgage? Hard enough that even millionaires are throwing up their hands in frustration and disgust.

Patrick DiPinto, a Coldwell Banker agent on Longboat Key, says just two of his past 30 deals have involved buyers who sought mortgages to make the purchase. But one of those cases illustrates how mortgage underwriters, who acted like cheap floozies a few years ago, are now imitating the nun in “The Blues Brothers.”

“It seems like they don’t even want business," says DiPinto of the lender in this case. “I had a million-dollar deal. The people were putting down 50 or 60 percent, had $4 million in the bank, $1 million-a-year salary, 39 years as an attorney, two 850 credit scores, own all their property outright. They wanted 500 grand, and their process has just been a big nightmare.”

via Letter from home column: lenders are tough even on the rich.