News Alerts, Sept. 4, 2013, Afternoon Edition, 5 New Articles, Real Estate +, Don't Miss Them

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  1. Manhattan Condo Prices | Manhattan Condo Market

    Discounts? We suspect it's mostly savvy negotiating by most sellers/price setters. We aren't alone in that.

    August 29, 2013 02:28PM. By Hiten Samtani

    In a Manhattan market rife with tales of bidding wars and multiple price hikes, it's hard to think of high-end units trading at a steep discount. But certain sales in some of the city's most storied buildings have done just that.

    Certain high-end apartments may be priced unrealistically, according to broker Gea Elika of Elika Associates, who wasn't on the list. "It's probably because there's an emotional value for the seller," or because sellers are testing the market, hoping to stir up interest and ignite a bidding war, he said.

    But unlike in the buildup to the last boom, buyers nowadays are savvier, and keep a far firmer grip on their checkbooks, Miller said. The restraint of tight credit made them even more cautious, he added.

    Read the source article … http://therealdeal.com/blog/2013/08/29/m anhattans-top-10-apartment-discounts-pho tos/


  2. Antonio Fatas on the Global Economy: What $3.4tn will not buy you.

    As we've mentioned before, this is the proper way to view China's foreign reserves (mostly US dollars).

    The linked article is fairly detailed.

    Friday, August 30, 2013. By Antonio Fatas ["…the Portuguese Council Chaired Professor of European Studies and Professor of Economics at INSEAD, a business school with campuses in Singapore and Fontainebleau (France), a Senior Policy Scholar at the Center for Business and Public Policy at the McDonough School of Business (Georgetown University, USA) and a Research Fellow at the Center for Economic Policy Research (London, UK).]

    Where do foreign reserves enter into the picture? The accumulation of foreign reserves comes from two sources: the funds generated from current account surpluses and the (net) investment flows into China. For example, when a multinational invests in China (FDI), that flow, if unmatched by any other flow, leads to an accumulation of foreign reserves. As Paul Davies points out in his article, those reserves cannot be simply considered wealth of China because FDI represents a liability. Correct. The right number is the one where all assets and liabilities are taken into account, which is the blue line in the Chart above, the net foreign asset position which stands just below 30% of Chinese GDP (about $2tn). This number is indeed lower than the total amount of foreign reserves that China holds ($3.4tn).

    The important thing not mentioned in Antonio's article concerns whether the Chinese data is ("are" if you're a Latin stickler) trustworthy. Many in-the-know people believe China's economic and financial stats are very fuzzy at best and for a whole host of reasons, corruption not the least of them.

    Read the source article . .. http://fatasmihov.blogspot.com/2013/08/w hat-34tn-will-not-buy-you.html


  3. Five Reasons Housing Isn't Ready to Drop Dead – Bloomberg

    By Caroline Baum Aug 28, 2013 3:00 PM GMT-0700

    Hissss! That's the sound of the air coming out of the housing market. At least that's what some folks thought they heard when the U.S. Census Bureau reported a 13.4 percent dive in new home sales in July, the biggest decline in more than three years and one that coincided with a sharp increase in mortgage rates.

    Don't start writing housing's obituary just yet. First, the residential real-estate market just got going. Only in the last two years has residential investment contributed in any significant way to economic growth. It has to make up for lost time.

    Second, what might look like a lack of demand may actually be a dearth of supply.

    There is definitely a dearth of supply of affordable housing for sale or rent. There's also a dearth of decent jobs available for unemployed and underemployed people.

    … the first move off the lows tends to energize the fence-sitters more than deter potential buyers, according to Michael Carliner, an economic consultant who specializes in housing.

    However, that is the exact opposite of what just happened, as cited in the opening paragraph of the article: "…a 13.4 percent dive in new home sales in July, the biggest decline in more than three years and one that coincided with a sharp increase in mortgage rates." That was no mere coincidence. It was causal.

    Read the source article … http://www.bloomberg.com/news/2013-08-28  /five-reasons-housing-isn-t-ready-to-dr op-dead.html


  4. Matt Wallace: Defer income taxes on exchanges of real estate | The Times Herald | thetimesherald.com

    Underutilized:

    Aug. 31, 2013. By Matthew M. Wallace ["attorney and CPA"]

    The real estate market is starting to pick up again. Prices are rising. You have decided to sell the rental or other business or investment property you have owned for years. You have been holding off selling because you have fully depreciated the property. When you do sell it, the proceeds will mostly be taxable gain. Is there something that you can do?

    Yes, there is. Structured properly, you can sell that rental or other business or investment property and not immediately recognize any taxable gain on the sale. You do have to jump through some hoops. Generally, no gain or loss is recognized when business or investment property is exchanged for "like-kind" property.

    By using the "like-kind" exchange rules under Section 1031 of the Internal Revenue Code, you can sell your rental or other business or investment property, pay no taxes upon the sale, defer the gain and taxes and use the entire net proceeds from the sale of your old real estate to purchase other business or investment real estate.

    So long as the purchase price of your new "like-kind" replacement property is at least as much as the selling price of your sold real estate, you can defer the gains and taxes indefinitely.

    If your replacement property costs less than the selling price of what you sold, you have certain mortgages discharged or you receive other property for the sale of your business or investment real estate that is not "like-kind," you might have to recognize some gain on the sale.

    What is "like-kind" property?

    If you exchange a residential rental apartment building for a residential rental apartment building, that clearly meets the definition of "like-kind" property.

    However, "like-kind" property is not limited to identical property. As long as your replacement property is used for business or investment, it generally qualifies for "like-kind" treatment.

    You can replace your office building with an apartment building, your vacant land held for investment for a retail store or your industrial building for a shopping center.

    Read the source article … http://www.thetimesherald.com/article/20 130831/NEWS01/308310015/Matt-Wallace-Def er-income-taxes-exchanges-real-estate


  5. The End of the Emerging-Market Party by Ricardo Hausmann – Project Syndicate

    Price inflation is not GDP-type growth.

    By Ricardo Hausmann ["former minister of planning of Venezuela and former Chief Economist of the Inter-American Development Bank, …professor of economics at Harvard University."]. Aug. 30, 2013

    CAMBRIDGE — Enthusiasm for emerging markets has been evaporating this year, and not just because of the US Federal Reserve's planned cuts in its large-scale asset purchases. Emerging-market stocks and bonds are down for the year and their economic growth is slowing. To see why, it is useful to understand how we got here.

    Consider Brazil. Only 11% of its China-beating nominal GDP growth between 2003 and 2011 was due to growth in real (inflation-adjusted) output. The other 89% resulted from 222% growth in dollar prices in that period, as local-currency prices rose faster than prices in the US and the exchange rate appreciated.

    Some of the prices that increased were those of commodities that Brazil exports. This was reflected in a 40% gain in the country's terms of trade (the price of exports relative to imports), which meant that the same export volumes translated into more dollars.

    When the mainstream media reports GDP of various nations, how often does it explain things in inflation-adjusted terms? Not often.

    Read the source article … http://www.project-syndicate.org/comment ary/the-reversal-of-nominal-gdp-growth-i n-emerging-countries-by-ricardo-hausmann


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