Thursday, September 30, 2010

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LOCAL NEWS: Poor economy derails ‘green’ housing plan

Chelsea was slated to become a model of “green’’ residential development and innovation in 2011 with the completion of lofts along the city’s high-potential waterfront, where the Chelsea River meets Mill Creek.

Marketed in 2007 as the region’s “greenest’’ and “most ambitious real estate project,’’ the 350-unit Forbes Park mixed-use development was going to have energy-efficient “hybrid lofts,’’ most of which would have been powered by an onsite wind turbine and solar arrays, and was going to provide its residents with a shared fleet of electric cars.

The development struck the right chord with those wanting to live a greener lifestyle, and the deposits to re serve units started pouring in.

Then the economy nose-dived.

Urban Design and Development, the project’s Somerville-based developer, was unable to get enough funding to continue building on the 18-acre brownfield property, the same fate that fell upon countless other construction projects nationwide as the country sank into a recession. Today, a 240-foot tall wind turbine stands on the abandoned former printing factory site, a constant reminder of what next year could have looked like.

“The Forbes project is a victim of the poor economy,’’ said City Manager Jay Ash. “Construction activity has been halted, deposits have been returned. The developer and lenders involved are having discussions as to what will become of the site.’’

“Forbes Park has been impacted by the trauma associated with the negative national economy,’’ developer Blair Galinsky said in an e-mail. “However, the realization of outstanding potential for the most ‘green’ development in the nation remains our goal and we are working with a variety of concerned parties to identify the most efficient and effective way to restore the project to a vibrant and active status. It is a challenge, but we think the goal [is] well worth the effort.’’

James Bill, director of marketing and sales for the Forbes project, said financing was problematic after the downturn in the economy. Still, people’s excitement over the development, likely fueled by the designs showcased on the project’s website, has not waned.

“I still get phone calls about this,’’ Bill said.

The derailment is a particularly hard blow for the city, said Roseann Bongiovanni, city councilor and associate executive director of the nonprofit Chelsea Collaborative.

“It was supposed to be this model and here it is, completely dead,’’ Bongiovanni said. “The city can’t do anything until Forbes gets this funding set. We anticipated all this economic development and then it just stopped.’’

Urban Design and Development still has an active permit with the city, said John DePriest, Chelsea’s planning and development director. The project’s redevelopment companies, Forbes Park LLC and Seawall Realty LLC, in May were fined approximately $19,700 by the state Department of Environmental Protection over permitting issues, and the agency required them to do further cleanup to settle numerous environmental violations at the site. According to Joe Ferson, spokesman for the Department of Environmental Protection, the firms are complying with terms of the consent order and moving forward with the cleanup, slated for completion by Dec. 31.

“The city’s point of view is, yes, we would’ve liked to see the development go forward not only because it would’ve provided an innovative type of development, but also because of the housing and revenue opportunities,’’ DePriest said.

“It’s not totally inactive — they’re still doing environmental testing and still looking for ways to move the project forward.’’

The economy may not have been the project’s only deterrent. Forbes Park, Ash said, may have been too ambitious.

“The Forbes has always been a complicated project; there are a lot of complications in getting that done,’’ Ash said.

“It’s possible that some of the treatments that the Forbes development was going to feature might not be cost-effective or viable at this time.

“If this project failed while other projects did well, it would be a blow, but it’s not a blow,’’ he said. “The Forbes will get done one way or the other.’’ ’’

Katheleen Conti Boston Globe September 18, 2010

Wednesday, September 29, 2010

NEIGHBORHOOD TRENDS: More churches, temples on the market as congregations shrink

Increasingly, churches and temples end up on the market as their maintenance becomes unmanageable for shrinking congregations

Every so often, Wesley Martin turns the key to the double front doors, creaks them open, and takes a walk through the silent, empty church where he once worshipped.

So quaintly and quintessentially New England, with simple white clapboard and an angled roof, St. David’s Episcopal Church in Halifax has been closed for more than a year, the unavoidable end to years of ebbing attendance and mounting financial burdens.

Now, along with a number of other religious centers south of Boston, it waits for another purpose.

“It was something we hoped wouldn’t come,’’ said Martin, the church’s historian, who lives close by and periodically checks the building. “It was a sad decision. The name ‘St. David’s’ will always remain in my heart.’’

At several area religious buildings, “For Sale’’ signs have replaced letter boards advertising bingo, weekly Scripture readings, and upcoming bar mitzvahs. Roughly a half-dozen former churches, temples, and religious schools are on the market in towns south of Boston, including Halifax, Hanover, Stoughton, Milton, and Whitman.

All told, “there are substantially more church properties on the market than there were three years ago,’’ said Matt Messier of CNL Specialty Real Estate Services, which deals exclusively in sales of nonprofit property, and is listing Living Hope Foursquare Church in Hanover for $3.9 million.

All told, he described a roughly 30 to 40 percent increase in religious properties for sale in that time period; and a 10 percent bump in just the past year.

In many cases, it’s a conscious surrender to the continued assault of the recession — and a recognition that a rising tide of new members is unlikely.

“A larger percentage of churches are having difficulty maintaining the level of their congregation,’’ said Bob Gosselin, president of the Groton-based Gosselin Group, the broker for First Baptist Church of Whitman, now on the market for $325,000. Some congregations “have been reduced to such small numbers that they have to consider closure.’’

That’s the case for both St. David’s, whose roughly 20-family congregation voted to close the 35-year-old parish in April 2009, and First Baptist, which had 20 to 25 member families when it formally shuttered in June 2009. St. David’s parishioners have since scattered to area churches; First Baptist, meanwhile, still holds Bible study on Sundays and allows former members to come in to pray and reflect.

“Not everybody goes to church,’’ lamented Ed Winnett, the parish president at First Baptist. “It’s not on the calendar every week.’’

Temple Shalom in Milton, whose 22,000-square-foot building is available for an undisclosed sum, has similarly experienced a long-term “migration’’ of its members, according to Robert Rosofsky, chairman of its property sale committee.

After World War II, he said, there was a large Jewish movement out of cities; since then, it’s included less urban areas, such as Milton. So ultimately, Temple Shalom shrunk from a high of 400 to 600 active families to about 130. As a result, it can no longer sustain the temple’s upkeep.

“We just felt ‘Let’s do something new,’ ’’ Rosofsky said, noting that the 65-year-old congregation hopes to stay in the building through May 2011 before seeking another home.

“We’re an active congregation, and we’re planning to stay in Milton as an active congregation,’’ he said. “This is just a transition for us.’’

In other cases, though, it’s a transition in the other direction.

The South Area Solomon Schechter Day School in Norwood, for instance, is selling a building in Stoughton that it outgrew three years ago. The Jewish school moved to Norwood in 2007 after its enrollment ballooned and its “center’’ of families moved more toward that area, according to Jane Taubenfeld Cohen, head of school. Its former 26,373-square-foot building on Stoughton’s Turnpike Street — now leased to a nonprofit — is on the market for $1.8 million.

Meanwhile, a 12,491-square-foot temple on Robeson Street in Fall River is being advertised for $750,000; and brokers are looking to entice buyers for a 17,500-square-foot combined church and storage building on Geneva Avenue in Dorchester, listed at $1.85 million.

Despite their divine backing, religious buildings aren’t invulnerable to the forces at play in today’s cluttered real estate market.

Monday, September 27, 2010

LOCAL NEWS: Catholic bishops oppose repeal of state affordable housing law

Adding an influential voice to the campaign to save the Massachusetts affordable housing law, the state’s Catholic bishops declared their opposition yesterday to ballot Question 2, which would repeal the law.

“Housing is a human right,’’ said a statement released yesterday by all four of the state’s bishops: Cardinal Sean P. O’Malley, archbishop of Boston, Bishop George W. Coleman of Fall River, Bishop Timothy A. McDonnell of Springfield, and Bishop Robert J. McManus of Worcester. Keeping the law on the books would “preserve our state’s ability to act in the most effective way to meet the need of every individual for a decent affordable home,’’ the bishops said.

The law, known as Chapter 40B, has long been controversial in many suburban communities because it allows developers to bypass certain local zoning laws if municipalities don’t have enough affordable housing, defined as at least 10 percent of a town’s housing stock.

Last week, a study by the University of Massachusetts Donahue Institute said the law had generated $9.25 billion in construction and related spending over the last 10 years. According to the Citizens’ Housing and Planning Association, an affordable-housing nonprofit that opposes Question 2, about 12,000 proposed housing units would be endangered if the question passes.

Opponents of Question 2 say repealing the law would reduce the state’s economic competitiveness by making housing prices skyrocket in a state that already has some of the nation’s most expensive real estate. All three gubernatorial candidates, the Greater Boston Chamber of Commerce, and much of the business community oppose the repeal.

But supporters say that real estate developers are the main beneficiary of the law, and that repealing it would reassert local control over community decisions.

The “no’’ campaign has dominated fund-raising. Developers and affordable-housing groups have funneled $565,751 into the “no’’ campaign’s coffers since the beginning of the year, and are set to vastly outspend proponents in the fall. The Repeal 40B committee reported raising $4,965 through the end of August, according to campaign finance reports filed with the state.

John Belskis, the leader of the group supporting the repeal, said he wasn’t surprised by the church’s position, given that the archdiocese itself has an office that develops affordable housing.

“They are protecting one of their operating entities,’’ he said.

“I applaud their willingness to support affordable housing, but I think they are misunderstanding the intent of the repeal,’’ said Belskis, who described himself as a 76-year-old Catholic. “There’s a lot of Catholics who aren’t always happy with what comes out of the cardinal’s office. If the church wants to say 40B is a good idea, they are going to find a lot of people have a contrary opinion.’’

The Boston Archdiocese was one of the original backers of the law when it was passed in 1969, and has built 630 units in eight different properties under 40B — including the first development in the state built with the law, the 98-unit Northridge Homes in Beverly, completed in 1975.

The archdiocese has two more developments underway, a 41-unit apartment building in Billerica and a 66-unit development in Hanover, according to Lisa Alberghini, the president of the Planning Office for Urban Affairs, an affiliate of the Archdiocese of Boston that develops housing. Both are intended for seniors.

Alberghini said that the Billerica building would not be affected by the outcome of the referendum, but that the Hanover development could be derailed if Question 2 passes because it is not yet fully permitted.

Alberghini said that affordable housing is “an important social justice issue’’ and that the archdiocese doesn’t seek to make any profits from its housing projects.

“One of the reasons we do that is we fundamentally believe that people should have a right to choose where they live, and every community should contribute to providing that opportunity,’’ she said.

Alan Wirzbicki Boston Globe September 22, 2010

Sunday, September 26, 2010

MORTGAGE & FINANCE: GMAC Mortgage halts evictions

Foreclosures in 23 states affected

Ally Financial Inc.’s GMAC Mortgage unit has told brokers and agents to halt evictions tied to foreclosures on homeowners in 23 states including Connecticut, Maine, and Vermont.

GMAC Mortgage may “need to take corrective action in connection with some foreclosures’’ in the affected states, according to a two-page memo dated Sept. 17 marked “urgent.’’ Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to immediately stop evictions, cash-for-key transactions, and lockouts, according to the document, addressed to GMAC preferred agents.

The suspensions will “allow time to address a potential issue that was raised in a number of existing foreclosures challenging the internal procedure we used for executing one or more judicially required forms,’’ Ally spokeswoman Gina Proia said yesterday in an e-mailed statement. Foreclosures won’t be suspended and will continue with “no interruption,’’ she said.

Lenders and lawmakers have been trying to slow foreclosures and keep people in their homes as seizures set records. Bank repossessions climbed 25 percent in August from a year earlier to 95,364, according to RealtyTrac Inc., the Irvine, Calif.-based data provider. Detroit-based Ally, the auto and home lender formerly known as GMAC Inc., is 56.3 percent owned by the government after more than $17 billion of taxpayer bailouts.

The company has been working on the issue for “more than three months’’ and expects it to be resolved “within the next few weeks,’’ Proia said. She declined to provide further details, saying some of the cases are in litigation.

Suspensions will occur “where the related foreclosure could have been impacted by the same internal procedure. We are also reviewing certain previously completed foreclosures where the same procedure may have been used,’’ Proia said. The lender will suspend sales of bank-owned properties and extend closings 30 days. Buyers will be able to cancel any agreements to purchase and get their deposits back, according to the memo.

Barclays Capital analysts told clients in a note yesterday the action may involve issues with officials in so-called judicial states where lenders must appear before a judge before starting foreclosure proceedings. The moratorium may be an attempt “to ensure that the process does not have significant flaws that can leave it open to legal action in the future,’’ the analysts said.

Florida Attorney General William McCollum in August announced an investigation into three law firms that represent loan servicers in foreclosures. McCollum issued subpoenas to the firms, which are alleged to have submitted fraudulent documents to the courts in “numerous occasions’’ or failed to submit documents at all, according to an Aug. 10 statement from McCollum’s office.

The affected states are: Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, and Wisconsin.

Denise Pellegrini and Dakin Campbell Bloomberg News September 21, 2010

Saturday, September 25, 2010

NEIGHBORHOODS: BRA supports Seaport Square plan

The Boston Redevelopment Authority board last night unanimously approved the $3 billion Seaport Square development, a planned new neighborhood on the South Boston Waterfront.

Developers expect to break ground in the spring for the first phase of the project, an apartment building and “innovation center,’’ which will have space for meetings and demonstrations of new technologies. The entire project is expected to take 10 years to complete.

The development team of Boston Global Investors, Morgan Stanley, and WS Development still needs approval from the Boston Zoning Commission, which is scheduled to consider the project next month.

The project would be the largest single development in the city’s history and would create 20 new city blocks on what is now 23 acres of mostly parking lots. The developers are planning 22 buildings, which will include offices, hotels, shops, and condos.

At a public hearing last night, about two dozen construction trade union workers, South Boston residents, and social service advocates backed the development, saying it would provide jobs. No one spoke in opposition.

Robert Preer Boston Globe, September 22, 2010

Friday, September 24, 2010

LOCAL NEWS: City approves $50M, six-story student center for BU

The city's redevelopment authority has approved Boston University's plans for a $50 million, 99,600 square foot East Campus Student Service Center.

Construction on the six-story center, near the Allston-Fenway/Kenmore neighborhood line at 100-108 Bay State Road near the Deerfield Street intersection, will begin in the second quarter of 2011 and create 150 construction jobs, according the the authority.

The building will host a state-of-the-art, 900-seat dining facility in the basement as well as on the first and second floors. An undergraduate academic and career advising center will make up the third through sixth floors. Also planned for the lower level are a 25-seat coffee shop and a 150-seat multi-purpose room.

The project, which received the nod from the BRA Tuesday night, will replace an existing parking lot and a small two-story building at 108 Bay State Road, according to plans published on the authority's website.

Matt Rocheleau Boston Globe September 21, 2010

Wednesday, September 22, 2010

Lender Checklist: What You Need for a Mortgage

*W-2 forms — or business tax return forms if you're self-employed — for the last two or three
years for every person signing the loan.*Copies of at least one pay stub for each person signing the loan.

*Account numbers of all your credit cards and the amounts for any outstanding balances.*Copies of two to four months of bank or credit union statements for both checking and savings accounts.

*Lender, loan number, and amount owed on other installment loans, such as student loans and car loans.*Addresses where you’ve lived for the last five to seven years, with names of landlords if appropriate.

*Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.*Copies of your most recent 401(k) or other retirement account statement.*Documentation to verify additional income, such as child support or a pension.
*Copies of personal tax forms for the last two to three years.
Realtor Magazine

Tuesday, September 21, 2010

JUST FOR FUN: Google - Freeing You From The Burden Of Pressing Enter

BUYING & SELLING: Take the Stress Out of Homebuying

Buying a home should be fun, not stressful. As you look for your dream home, keep in mind these tips for making the process as peaceful as possible.

1. Find a real estate agent who you connect with. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the REALTOR® you chose is both highly skilled and a good fit with your personality.

2. Remember, there’s no “right” time to buy, just as there’s no perfect time to sell. If you find a home now, don’t try to second-guess interest rates or the housing market by waiting longer — you risk losing out on the home of your dreams. The housing market usually doesn’t change fast enough to make that much difference in price, and a good home won’t stay on the market long.

3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas from too many people will make it much harder to make a decision. Focus on the wants and needs of your immediate family — the people who will be living in the home.

4. Accept that no house is ever perfect. If it’s in the right location, the yard may be a bit smaller than you had hoped. The kitchen may be perfect, but the roof needs repair. Make a list of your top priorities and focus in on things that are most important to you. Let the minor ones go.

5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price or by refusing to budge on your offer may cost you the home you love. Negotiation is give and take.

6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself — room size, kitchen, etc. — that you forget about important issues as noise level, location to amenities, and other aspects that also have a big impact on your quality of life.

7. Plan ahead. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate home insurance, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.

8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be costs. Don’t leave yourself short and let your home deteriorate.

9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big financial commitment. But it also yields big benefits. Don’t lose sight of why you wanted to buy a home and what made you fall in love with the property you purchased.

10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually over from 1998 to 2002, a home’s most important role is to serve as a comfortable, safe place to live.

Realtor Magazine

Sunday, September 19, 2010

BUYING & SELLING: The 10-year rule for real estate

It may not be the best time to sell, but it might not be the worst either. Recent economic forecasts suggest that the housing recovery could take years. As a seller who has a strong motivation to sell, do you try to sell now or hold on for a better market?

First consider where you want to be in 10 years. How do you envision your lifestyle? Is your current home too big, too small, or in the wrong location?

Homeowners intent on moving from one house to another can take advantage of low interest rates, if they are able to sell their current home. You'll probably sell for less than you would have several years ago, but you may get a deal on the home you buy.

However, if you don't plan on living in your next home for the next eight to 10 years, this might not be a good time to make a move.

For sellers who purchased in recent years, selling requires a huge readjustment in their expectations. Many will probably sell for less than they paid; in some cases, a lot less. If they highly leveraged the purchase, or refinanced and pulled out equity, they may need to contribute cash to close the deal.

Sellers who have no cash reserves and need to sell for less than the amount of the loans secured against the property will need lender approval to complete a sale. This is called a short sale. In this case, or with a foreclosure, sellers don't have the option of buying another home until their credit is restored, which takes about two to three years for a short sale and five years for a foreclosure.

Some listings in prime, high-demand markets come on the market and sell quickly, leaving other sellers in the area perplexed. Why isn't their home selling? Why aren't they receiving bids from multiple buyers?

Listings that sell quickly are priced right for the market. They are homes that will work long term for the buyers, which means 10 or more years. They don't need updating; they're in move-in condition. And, they are usually located in high-demand, low-inventory neighborhoods. Buyers are waiting for these prime listings and will move quickly when they come along.

Saturday, September 18, 2010

JUST FOR FUN: Maggie Gallagher Meets Saint Peter

JUST FOR FUN: Eyes Closed

A different way to see the city.

Brad Laner - Eyes Close from Josh Laner on Vimeo.

BOOK REVIEW: 8 tips to survive a career disaster

Book Review
Title: "Harvard Business Review on Managing Your Career in Tough Times"
Authors: Various
Publisher: Harvard Business Press, 2010; 192 pages; $22

I don't normally review "job" books. Real estate and person finance tend to define the boundaries of my book review wheelhouse.

But after poring over all the astonishingly negative real estate data that came out a couple of weeks ago (15-year-low monthly existing-home sales rate! 11-year-high inventory! lowest rate of new-home sales since -- wait for it -- 1963!!), I've become increasingly convinced that the fortunes of the job market and the real estate market are inextricably intertwined.

And, like the housing market, I've seen the recent job market drama and trauma so up close and personal I can no longer pooh-pooh unemployment reports as overblown, or simply not applicable to people like me. I know attorneys who are out of work, among many other educated, professional, did-it-all-right folks who are struggling to keep their heads -- and incomes -- above water.

And beyond that, I know dozens of people who fall into the category of underemployed, working less-than-desirable freelance gigs, part-time jobs and even full-time jobs for which they are decidedly overqualified, so their personal career crises aren't even receiving the dignity of a tally mark on the government rolls -- they don't even rate to be discussed in news reports of the crisis.

The Bureau of Labor Statistics says the current unemployment rate is 9.6 percent; the most recent Gallup poll says that on top of this, about another 9 percent of Americans are underemployed.

Enter the Harvard Business Review, with a very real-world applicable volume of their Ideas with Impact series, "Managing Your Career in Tough Times." A compendium of eight essays, which all originally appeared in the monthly Harvard Business Review, many of these offer very fresh and expert perspectives on being strategic, staying employed (or surviving unemployment) and growing your mindset, leadership skills and career in today's recessionary and fast-changing corporate climate.

Each article is brief; the first, How to Protect Your Job in a Recession, presents readers with 10 pages of action steps ranging from the demeanor you should maintain to the actual changes you should make to the substance of your work during a soft economy.

Friday, September 17, 2010

MORTGAGE NEWS: Mortgage rates rise for first time in 12 weeks

Mortgage rates for 30-year US loans rose for the first time in 12 weeks as Americans sought refinancings amid record-low borrowing costs.

The rate for a 30-year fixed loan climbed to 4.35 percent in the week ended yesterdayfrom 4.32 percent, Freddie Mac said in a statement. The average 15-year rate was unchanged at a record low 3.83 percent, the McLean, Va.-based company said.

A five-month slide in interest rates has spurred homeowners to seek lower monthly payments, with the Mortgage Bankers Association’s index of refinancings more than doubling since the end of April.

Banks, as a result, can afford to allow rates to rise slightly, said Keith Gumbinger, vice president of HSH Associates, a publisher of consumer loan data in Pompton Plains, N.J.

A jump in prepayments may also be pushing down mortgage bonds relative to treasuries, he said.

Applications to purchase homes rose 6.3 percent in the week ended Sept. 3, according to the Mortgage Bankers Association. Pending home sales, considered a leading indicator, unexpectedly increased in July by 5.2 percent, the National Association of Realtors said Sept. 2.

The housing market weakened after a federal tax credit for buyers expired at the end of April. Sales of previously owned homes, which make up about 90 percent of the market, fell 27 percent in July to a new low, the Realtors group said Aug. 24.

The Federal Reserve said home sales in most of its 12 districts were “very low’’ or “declining’’ following the expiration of the tax credit, according the Beige Book survey of regional conditions released Wednesday

By Prashant Gopal Bloomberg / September 10, 2010

Thursday, September 16, 2010

LOCAL NEWS: Residents, BRA at odds on E. Boston site

Activists seek preserve; city wants industrial park.

A group of East Boston and Chelsea residents is battling the city over the future of 7 acres of degraded land on Chelsea Creek and rallying support for its hope of returning the former fuel-tank farm to a pristine wetlands.

But it faces a formidable obstacle in the Boston Redevelopment Authority, which is moving ahead with plans to convert the riverfront parcel into an industrial park for green companies.

The city says it is also planning some marsh restoration in the area, but the neighborhood group says it is not enough. And with a deadline looming, the Chelsea Creek Action Group is trying to drum up neighborhood support, plotting protests at City Hall and attempting to win official designation of the site as wetlands, which could protect it from development.

“There’s a battle going on for the site right now,’’ Eugene Benson, an environmental lawyer for the Chelsea Creek Action Group, told a gathering of people last month in East Boston. “It will either be a wonderful wetland or, if the city and the BRA get their way, it’s going to be an industrial site.’’

The site on Condor Street in East Boston was home to Hess Corp. fuel tanks until 1998, when Hess removed the tanks under community pressure. The Boston Redevelopment Authority bought the riverfront acreage for $1.9 million three years ago, but its development plans were delayed by the financial collapse and credit crisis.

Environmental activists and some neighbors of the East Boston site, meanwhile, were forming their vision of a natural wetland and bird habitat. To make the dream a reality, they have set their sights on a substantial pot of federal money that became available last year and is aimed specifically at funding environmental restoration in the Mystic River watershed.

The money comes from a $6.1 million pollution settlement that federal lawyers won last year from ExxonMobil after the oil giant pleaded guilty to criminal violations of the Clean Water Act in connection with a spill in 2006 at its Everett oil terminal that leaked more than 15,000 gallons of diesel and kerosene into the Mystic and Island End rivers.

The US district judge in that case set aside $4.6 million of the settlement for a special fund managed by US Fish & Wildlife under the North American Wetlands Conservation Act. The money must be spent in Massachusetts, with preference given to communities affected by the fuel spill.

The Chelsea Creek Action Group has applied to the federal program for $500,000 to buy the so-called brownfield from the BRA and another $1 million for an ambitious project to turn the land into a marshy wetland suitable for migratory bird habitat, some public access, and a system to manage storm water.

Wednesday, September 15, 2010

MARKET TRENDS: Refinancing boom, but little lift for economy

Borrowers savor low rates but tend to save, not spend.

Homeowners are flocking to refinance their mortgage loans at record low interest rates, but unlike past refinancing waves, few are using their homes like ATMs and cashing out to buy cars, take vacations, or remodel, according to mortgage bankers and economic statistics.

This newfound frugality represents a sea change in how Americans have viewed their homes in recent years, when rising values provided a ready source of borrowed money to support spending. Cash-out refinancings have plunged 90 percent since peaking in 2006, according to Freddie Mac, the government-owned mortgage company.

Instead, homeowners are taking advantage of 30-year mortgage rates in the low 4 percent range, and 15-year rates that are even lower, to reduce debt, increase savings, and strengthen household finances. Michael Lou, for example, recently refinanced his Quincy home, shaving a percentage point off the interest rate and slashing his monthly payment by more than $250.

And where is the extra money going? Into savings.

“We try to put money away because you never know what will happen ,’’ said Lou, 39, who owns the home with his partner. “At any moment, one of us could lose our job.’’

Lou’s experience helps illustrate why historically low interest rates have provided just a modest boost to the US economy, which depends on consumer spending for about 70 percent of activity. The last time interest rates fell toward record lows, in mid-2003, consumer spending surged at an annual rate of nearly 6 percent, according to the Commerce Department. This year, consumer spending has increased at a 2 percent rate.

Cautious spending and increased saving will reduce household debt, increase disposable income, and strengthen the US economy in the long term, analysts said, but for now, it means subdued consumption and weaker economic growth.

“Consumers won’t be paving the way for the recovery,’’ said Kenneth Rogoff, a Harvard University economics professor who has studied 800 years of financial crises and their aftermath. “We’re probably going through a long period where people are repairing their finances.’’

Lower mortgage rates, of course, are helping many families to improve their finances. Refinancing activity has jumped by more than 70 percent nationally since rates began their recent slide in June, according to the Mortgage Bankers Association, a Washington trade group. Many Massachusetts lenders say their business has doubled, tripled, or more because of the surge in refinancings.

Metro Credit Union of Chelsea, for example, has $82 million in mortgage applications — primarily refinancings — in the pipeline, up from $29 million in June and $13 million in January, said Robert Cashman, Metro’s chief executive.

John Battaglia, president of Cambridge Mortgage Group, a unit of South Shore Savings Bank of Weymouth, said mortgage applications — 65 percent refinancings — have more than quadrupled from a year ago.

Salem Five Mortgage Co., a unit of Salem Five Bank of Salem, estimates its applications have jumped at least five times since the beginning of the year.

In nearly all cases, homeowners are cutting payments, loan terms, or both, bankers said. Very few are taking cash.

Friday, September 10, 2010

LOCAL NEWS: $60m Liberty Wharf complex showcases public, open spaces

This is not your father’s Jimmy’s Harborside. With walls of glass, exotic woods, and sharply drawn angles, the new Liberty Wharf complex on the South Boston Waterfront is everything its predecessor was not: sleek, open and inviting.

Gone from the Northern Avenue property are Jimmy’s white stone walls and massive red sign, features that made the shuttered eatery a relic of a different era, when the waterfront was the province of industry and mostly walled off from the public.

In its place is a $60 million three-building complex by Cresset Development LLC that will include four restaurants, a plaza with outdoor seating on the water, and a public marina. One of the buildings will be a Legal Sea Foods that will have its own 4,000-square-foot roof deck, with a fireplace and a large, circular bar. It is scheduled to open this winter.

“We really tried to activate this space and make it more accessible,’’ said John Baxter, one of Cresset’s three principals. “It’s amazing that Boston has always had its back to the water in some regards.’’

Liberty Wharf offers a glimpse of how new development can change the Seaport District, where many other long-planned projects are only now inching forward. Cresset razed the old Jimmy’s and its crumbling wharf, and constructed three glass-walled buildings, leaving enough space between them for public access to the waterfront. The project was aided by $2.6 million in federal money awarded by the city.

“Its uses are consistent with the kind of energy we’re trying to create in the Innovation District,’’ said Boston Redevelopment Authority director John Palmieri, referring to the name the Menino administration has given to the Seaport area in an effort to attract technology companies.

The new complex, designed by Elkus Manfredi Architects, includes a 600-foot addition to the city’s Harborwalk and offers sweeping views of the water and city from a number of vantage points. The Harborwalk boardwalk is made of Brazilian hardwood, which was also used as interior and exterior finishes in the new buildings. There will also be a ramp and floating docks to accommodate water taxis, ferries, and private boaters.

The main building will include the three other restaurants: Del Frisco’s, a Houston-based steak house; a Jerry Remy’s sports bar; and a yet-to-be named Mexican restaurant.

The upper portion of the building will be office space, though Cresset has yet to find tenants for it.

A third building will be more like an enlarged kiosk where Cresset is looking to have a cafe or wine bar.

In a nod to their predecessor, the owners of Legal Sea Foods said they will name their new restaurant Legal’s Harborside. Housed in its own building, the 20,000-square-foot restaurant will be unlike any other in the Legal chain, said owner Roger Berkowitz.

“We want to take advantage of the water location to do something special,’’ Berkowitz said. “It’s going to have universal appeal.’’

Berkowitz said the first floor will offer casual fare, while the second will be traditional fine dining that will showcase more “exotic seafood that doesn’t often make its way onto Boston menus.’’

The roof deck will offer cocktails and lighter cuisine.

Casey Ross Boston Globe, September 1, 2010

Thursday, September 9, 2010

MORTGAGE & FINANCE: Reap benefits from cash-in refinance

Return on investment can beat other low-risk options

Cash-in refinancing means putting cash into a transaction by paying down the balance, as opposed to cash-out refinancing where you take cash out by increasing the balance.

Cash-in refinancing has become a hot topic recently because in the current market it is possible for mortgage borrowers to earn a very attractive rate of return on money invested in a balance paydown, at the same time that the returns available on other low-risk investments, such as government securities, CDs and money market funds, are lower than they have been at any time since the 1930s.

The high returns available from cash-in refinancing reflect several features of the current financial scene. Interest rates on very low-risk mortgages have never been lower, creating large spreads between those rates and the rates now being paid by millions of borrowers on their existing loans.

The problem is that the lowest rates on new mortgages are available only to borrowers who meet the risk requirements, which most do not.

These requirements include not only good credit and adequate income, but homeowner equity of 20-25 percent, which translates into loan-to-value ratios (LTVs) of 75-80 percent on new loans.

Many homeowners cannot meet the LTV requirement because of the decline in home prices that has occurred over the last four years. Further, mortgage insurance premiums on loans with LTVs above 80 percent have increased significantly for those without the very best credit.

Cash-in refinancing makes the best rates available to borrowers who would otherwise qualify for them but don't have enough equity in their property. Paying down the loan balance reduces the loan-to-value ratio on the new loan, which reduces the interest rate, mortgage insurance premium, or both.

The balance paydown, and the lower interest rate it makes possible, reduces both the monthly payment over the period the borrower expects to be in the house and the balance that has to be paid off at the end of the period.

The principal question the borrower should ask is whether the rate of return on the money used to pay down the balance and cover the closing costs on the new loan exceeds the return on alternative investments available to the borrower.

With Chuck Freedenberg, I developed a new calculator that shows the rate of return on an investment in a loan paydown in connection with a refinance. It is calculator 3f on my website.

Here is an example: John has a 6 percent mortgage with 300 months to go and a $100,000 balance, but his house is worth only $100,000, which makes him ineligible for a refinance. However, if he pays down the balance to $80,000, he can refinance into a 4.5 percent loan with closing costs of 2 percent.

Wednesday, September 8, 2010

BUYING & SELLING: 4 common real estate deal-killers

In May of this year, the sellers of an architect-designed home in the hills above Oakland, Calif., received two offers in less than two weeks. They accepted the offer from the buyers who seemed most committed to buying the house.

In less than 12 hours, the buyers backed out. Although they had been looking for a home for months and thought they'd decided where they wanted to live, they had a change of heart -- not about the house, but about the location. Buyer's remorse is one reason transactions fail.

The enthusiasm that permeated the home-sale market when the federal tax credits were available has waned. Economic news has been mixed at best. This has led to an increased reticence on the part of some homebuyers.

HOUSE HUNTING TIP: An easily avoidable reason why contracts fail is failure of sellers to disclose a significant defect in the property before the buyers make an offer. Some sellers resist having presale inspections done because they don't want buyers to know too much about what's wrong with their home until they fall in love with it.

This strategy might work for sellers in a hot market where prices are rising quickly. However, in today's market, buyers are diligent and cautious; falling in love takes a back seat to practicality.

In one case, sellers withheld a report that revealed significant foundation problems that could be fixed only at great expense. The buyers, who were buying at the top of their price range, were furious.

They wouldn't have made an offer had they known about the foundation upfront, particularly since the seller was unwilling to correct the defect. They wasted time and money on their own inspections. The deal fell apart and the sellers had to put the house back on the market.

Often contacts are so loaded with conditions unacceptable to the sellers that they don't make it to first base.

Tuesday, September 7, 2010

Op-Ed Contributor: A Dream House After All

IF you read the coverage of the latest figures on the sales of existing homes from the National Association of Realtors, you may well have come to the conclusion that the American dream is dead. It is indeed worrisome that sales in July were down 25 percent from a year ago.

But a little perspective is in order.

First, the bad news. What has happened in the housing markets since 2005 is a catastrophe that may take years for our economy to recover from.

Anyone who believed that home prices never fall has learned a tough lesson. The Case-Shiller price indexes released on Tuesday suggest that since their national peak in 2006, home prices have fallen by 29 percent. Some areas of course look better than others. Las Vegas is down 57 percent from its peak and Phoenix is down 51 percent. On the other hand, Boston is down just 13.5 percent and Dallas only 4.2 percent.

The effect on household wealth has been huge. Data maintained by the Federal Reserve show that the value of residential real estate directly held by households fell to $16.5 trillion in the first quarter of 2010, down from $22.9 trillion in 2006. It has yet to be determined who will end up bearing those losses. The decline in wealth has substantially reduced consumption, stifling the economy.

Depressing, yes — but the end of a dream? Not exactly. I have never quite understood what the American dream really means when it comes to housing. For some people, it means having a solid and fairly safe long-term investment that is coupled with the satisfaction of owning the house they live in. That dream is still alive.

Others, however, think the American dream is owning property that appreciates by 30 percent a year, making a house into a vehicle for paying bills. But those kinds of dreams have become nightmares for the millions of foreclosed property owners who have found themselves sliding toward bankruptcy.

But for people with a more realistic version of the American dream, buying a house now can make a lot of sense. Think of it as an investment. The return or yield on that investment comes in two forms. First, it provides what is called “net imputed rent from owner-occupied housing.” You live in the house and so it provides you with a real flow of valuable services. This part of the yield is counted as part of national income by the Commerce Department. It is the equivalent of about a 6 percent return on your investment after maintenance and repair, and it is constant over time in real terms. Consider it this way: when Enron went belly up, shareholders ended up with nothing, but when the housing market drops, homeowners still have a house. And this benefit is tax-free.

The second part of the yield on investment in a house is the capital gain you receive if it appreciates and you sell the house. Gains are excluded from taxation if the property is a primary residence and the gain is less than $250,000 for a single filer or $500,000 for a married couple filing jointly.

Consider a few other bonuses of buying a home today. You can deduct the interest you pay on the mortgage. Interest rates are about as low as they can get. And, don’t forget, home prices are down by 30 percent on average from the peak. The mortgage-interest deduction and the tax-free income from housing cost the government at least $200 billion a year.

During this recession the government has been doing even more on behalf of the American dream. It offered a tax credit of $8,000 to first-time buyers, and eventually $6,500 to other qualified buyers. Not only did the Federal Reserve continue to keep the short-term interest rates it sets at essentially zero, it purchased $1.4 trillion in mortgage-backed securities so that lenders could keep mortgage rates low.

Do the math. Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833. In addition, the down payment would be $42,600 instead of $60,000.

Friday, September 3, 2010

PROTECTING YOUR INVESTMENT: Resolving price vs. location debate

Does property meet buy-and-hold test?

Location has been touted by housing experts as the most important factor to consider when buying a home. Does this adage still hold, or has price trumped location as the most important consideration?

Historically, home values were largely dependent on location. Homes near major metropolitan centers were more coveted, and more expensive, than similarly sized homes in outlying suburban areas.

The recent frenzy of distressed homebuying activity in places like Concord in the East San Francisco Bay Area and Riverside County in Southern California raises the question of whether a fire-sale mentality has permeated the residential housing market.

Most of the foreclosure-sale activity that occurred in the fourth quarter of 2009 was speculative. Investors bought at huge discounts from peak price levels in areas that are not, by traditional standards, thought to be prime locations.

The profitability of these investments will depend on the strength of the economic recovery. To fix up and flip a foreclosure for profit depends on demand from financially qualified buyers.

Foreclosures that are fixed up to rent require tenants with jobs who can afford to pay enough to cover the investor's expenses and hopefully generate cash flow. In a strained economy with high unemployment, this can be risky proposition.

HOUSE HUNTING TIP: Although buying cheap housing may be a good strategy for some investors, buyers searching for a home they'll occupy should not let price be the primary factor influencing which home they buy.

A home that won't work for the long term is not a good deal even though it's cheap if you'll have to move again in a few years. In fact, you could lose money using this approach, particularly if home prices haven't stabilized by then.

It's also not a good idea to buy a home that's not quite right for you just to take advantage of today's low interest rates. The winning strategy for today's homebuyers is to buy and hold.

The homes with qualities that are in high demand are located near a major metropolitan center or have good public transportation to get there. They are close to shops, cultural venues, restaurants, parks, and have good public or private schools close by and good public services.

The location within a neighborhood, condominium complex or cooperative can make a big difference in value. A home on a quiet cul-de-sac will generally sell for more than one in the same neighborhood that's on a busy street. Premiums are paid for homes with views, leveled-out private backyards and good natural light.

Be wary of listings that appear to be underpriced. They could be priced low to generate multiple offers, so they might sell for more than the list price and more than you can afford to pay. Or, there could be other reasons why they are listed at a lower price.

Often the lower-priced homes in an area don't sell for more because they have incurable defects. An incurable defect is something you can't change like a shared driveway, close proximity to a freeway or an entry to the home that's two flights of stairs up from the garage.

These homes may sell well in a hot sellers' market when buyers overlook defects because prices are rising rapidly. But, these homes can be hard to sell in a down market when buyers are less forgiving and are willing to wait for the right house.

THE CLOSING: Ideally, you want to buy a home that will be in demand in any market. If you can't afford to buy one that's in move-in condition, it's better to buy a home you can afford and that needs only minor improvements than one that looks great but has an incurable defect like an unworkable floor plan.

Dian Hymer Inman News August 22, 2010

Thursday, September 2, 2010

NEW CONSTRUCTION: Housing planned next to Garden

A residential developer wants to tear down a parking garage next to TD Garden and replace it with 500 rental apartments.

Equity Residential, which has built several buildings in the nearby West End Apartments, filed plans for the new apartments yesterday. They would be in several buildings, and the 650 parking spaces of the five-story Garden Garage would be moved to an underground facility, with 200 spaces added.

The new complex would add to the redevelopment of the streets around the Garden in recent years.

Trinity Financial completed the Avenir apartments last year and is proposing to build another complex with a supermarket, parking garage, and dozens of additional apartments off Causeway Street. Equity Residential added five buildings to the old Charles River Park, since renamed West End Apartments.

An executive at Equity, a national developer, said plans for the Garden Garage site are being refined, and that the company will solicit input from neighbors in coming weeks on height and design of the new buildings.

“We are in the process of reviewing various scenarios,’’ said Greg White, a vice president of development for Equity. “As in the past, we will continue to work with the community at every stage.’’

Wednesday, September 1, 2010

NEWS: Home sales fall, casting shadow on economy

Down 26% in Mass. after credit expires

A precipitous drop in home sales in July following the expiration of the federal home buyers tax credit has economists and housing specialists worried the real estate market has stalled and will further undermine the economic recovery.

Although housing specialists had anticipated a drop-off in July after the expiration of the $8,000 first-time buyers credit, the decline was much worse than many had expected: 26 percent fewer home sales in Massachusetts than a year earlier, in July 2009, according to data released yesterday, bringing the number of sales to a 20-year low for that month.

A similar drop was recorded across the country. The National Association of Realtors reported home sales fell 27.2 percent nationally from the previous month, with sales of single-family homes at their lowest level since May 1995. Economists surveyed by Bloomberg News had predicted a 13.4 percent decline from June.

The results shook Wall Street, sending the Dow Jones industrial average down 1.3 percent, as investors worried that a slowing housing market will create a cycle of declining economic activity.

Karl “Chip’’ Case, a retired Wellesley College economics professor and longtime observer of housing markets, said the July sales figures were both surprising and disappointing. But he stressed it is still too early to say if the economy is in danger of slipping back into recession.

“I pray it’s not a double-dip,’’ he said. “There’s a lot of uncertainty in the world. It’s a slow recovery.’’

The July figures had many housing specialists and economists struggling to understand where the economy is going. Some, such as Lawrence Yun of the National Association of Realtors, said the numbers reflected buyers speeding up their purchases to meet the June 30 deadline for the tax credit. The housing market, he said, will need a few months to adjust.