Posted by: Chris Palmeri on July 01
The parallels are almost eerie. A world-famous singing sensation, known for his distinctive dance moves, glittery wardrobe and bizarre behavior, dies of heart failure amidst a pile of prescription drugs. Fans line up outside the gates of his estate—waiting to pay their respects to the King. It’s Michael Jackson we’re talking about though, not Elvis. But there is still plenty of speculation that Jackson’s famous home—Neverland Ranch—could become a tourist attraction ala Presley’s Graceland.
For days rumors swirled that his family was considering a public viewing of Jackson's body at Neverland, a 2,800 acre spread, located 33 miles northeast of Santa Barbara, Calif. News crews booked hotel rooms. AT&T and Verizon were allegedly moving in emergency cell phone antennas. The appearance of a cement truck at the ranch on June 30 had readers of celebrity gossip site TMZ.com speculating there may even be a crypt under construction.
The man who controls the ranch, real estate investor Thomas Barrack, is mum about the long term plans. Barrack’s Colony Capital bought the $22 million mortgage on the property just before it went up for auction last year. It’s now owned in a joint venture with Jackson’s estate, says Barrack spokesperson Joanne Lessner. She released an effusively worded letter from Barrack to local residents on June 30. Citing pioneering California missionary Junipero Serra, Jackson’s 2005 acquittal on child molestation charges and “a Western tradition of kindness and hospitality,” Barrack asks his neighbors to bear with the public onslaught and let the world take in the “magic elixir” of the Santa Ynez Valley.
Locals say it is highly unlikely Barrack or the Jackson family could get permission to build a Graceland-like tourist attraction at the site, however. Local real estate broker and long time area resident William Etling recently blogged about the issues that might prohibit such a development. The ranch, he notes, is zoned for agricultural not commercial use. After talking with a local mortician, Etling says it is unlikely that Jackson’s body could legally be buried on the property.
Then there is the issue of the community support. Last year voters in Santa Barbara County shot down a candidate for supervisor who was seen as pro-hotel development. Locals, including celebrity residents such as Bo Derek and David Crosby, have vigorously opposed expansion plans by the local Chumash Indian casino. Lately locals have taken to calling the ranch Never!-land.
As a real estate broker, Etling would seemingly have an interest in seeing more development of the bucolic region, which saw a surge in tourism five years ago after the movie Sideways was filmed there. But Etling says the largely wealthy area residents have no interest in opening more of their valley to John Q. Public. “It would depreciate our property to have that carnival,” he says. “It’s not that type of place. It’s very stable. There’s not a lot of mobility.”
Jackson’s ranch is located about five miles north of the tiny wine country hamlet of Los Olivos. It’s one of the most beautiful spots in the country, blessed with rolling hills, vineyards and cool, damp air from the nearby ocean.
It is a part of the world Barrack knows well. He’s owned a ranch and vineyard near Neverland for three decades. Last year he reached a settlement with neighbors that allowed him to open his Happy Canyon Winery to wine salespeople and critics but not for public wine tastings, which locals had opposed.
Retired venture capitalist Bob Field, who says his own property overlooks Barrack’s vineyard, has another suggestion for his neighbor—dismantle Neverland and take it piece by piece to Las Vegas, where Barrack’s company owns the Las Vegas Hilton and an interest in Station Casinos—a string of gambling joints aimed at local residents. “This is a small valley,” Field says. “We don’t have the roads, hospitals or airport. It will take him multiple years to develop anything here. It would cost him a fraction of that in Las Vegas. The day it opened, there would be many times the visitors.”
If a Neverland museum doesn’t get developed in Vegas or Los Olivos there are other cities that might welcome it. The mayor of Jackson’s hometown of Gary, Indiana is practically begging to have the star’s remains find a permanent home there.
Posted by: Chris Palmeri on July 01
Investors purchase stocks online. Will they buy somebody’s mortgage over the Web as well? A start-up called BigBidder.com hopes so.
The backers of BigBidder already run lfc.com, a commercial real estate auction site, and Freedom Realty Exchange (fre.com), a site that sells homes online.
Paul Lyons, a senior vice president of the company, says BigBidder is auctioning off home loans owned by banks, mortgage companies and other investors. The loans are both performing and non-performing—--the latter meaning the homeowners aren’t making their monthly payments. Lyons says much of the site’s sales are in “re-performing” loans, meaning the home owner was delinquent until the lender changed the terms of the loan and now the borrower is making payments again.
BigBidder charges the buyer a fee of from 1% to 5% of the loan purchase price, depending on the size of the loan. Some recent deals include an $83,000 first mortgage carrying a 9.8% interest rate on a 3 bedroom house in Gas City, Indiana. It sold for less than half of the loan amount. Meanwhile, a $100,000 adjustable rate second mortgage on a home in North Hills, California currently carrying a rate of 6.2% sold for just 25 cents on the dollar. Both of those loans were performing.
Lyons says documentation, such as the original loan application and credit reports on the borrower, is available on the Web site. I’m not recommending anyone dive into this kind of investment, certainly not without a lot of thought and research. Judging by those discounts the sellers don’t think these loans are going to get paid back in full any time soon.
Posted by: Chris Palmeri on June 30
The latest Standard & Poor’s/Case-Shiller housing index numbers out today show the market falling less dramatically than it had been earlier in the year. The 10 and 20 city indices were both down 18% in April, versus the same month in 2008. But that decline was less severe than it had been in January, February and March.
"The pace of decline in residential real estate slowed in April,” says David Blitzer, Managing Director and Chairman of the Index Committee at Standard & Poor's. ”Every metro area, except for Charlotte, recorded an improvement in monthly returns over March. While one month’s data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in a few of the regions."
The worst hit cities include Phoenix (down 35%), Las Vegas (-32%) and San Francisco (-28%). Best performers were Denver (only down 4.9%), Dallas (-5%) and Boston (-7.7%). Dallas has held up the best since its market peaked in June 2007, falling only 9.6%. Phoenix fared worst, off 54% from its June 2006 peak.
Cameron Findlay, the Chief Economist of mortgage site LendingTree.com, says the clearest sign of where the housing market is now, lies not in a national price index from two months ago but in the cost of mortgages today. Rates on a 30 year conventional mortgage have dipped down to 5.37% from a recent high of 5.74%. That’s telling us the housing market hasn’t recovered. The Fed is still committed to buying $300 billion of long-term Treasury bonds to inject more liquidity into the system, he notes.
“There was a wide anticipation that the Fed would ease off on, not purchase as much,” he notes. “Bonds started selling off, rates started rising.” That's changed. Findlay expects rates to stay at this level at least until the Fed finishes its bond buying in September or until more convincing signs emerge that the housing market has come back.
“It’s still down,” Findlay says of the Case-Shiller index. “The only positive news is that Colorado slightly improved. There’s still extreme pressure due to (mortgage) delinquencies.”
Posted by: Chris Palmeri on June 29
I stopped by Dwell on Design, a home design show sponsored by Dwell magazine at the Los Angeles Convention Center this weekend. This was the kind of event I expected to be really slow during the Great Recession. It cost $25 to get in and had a lot of cool, but pricey products on for sale, everything from $3,000 Ligne Roset arm chairs (and they are cool) to my bottle of Vitamin Water which cost $3.80 including tax (convention center pricing). There was actually a pretty decent-sized turnout.
The big hit seemed to the handful of prefab homes on display. Green Inc. is a Los Angeles company that makes dwellings out of converted shipping containers. That’s one of their homes above.
Modern-Shed makes the most stylish sheds you’ve ever seen. Like the Green Inc. structures, Modern-Shed’s products start at around $10,000. The company wisely positions them not as a hipper replacement for the $1,000 aluminum shed you could buy at Sears but as a low-cost addition to your home. While my wife and I liked that idea, my mother-in-law and niece didn’t seem to too keen on sleeping in the shed.
Also generating a lot of interest was a 400 square foot cottage made from reclaimed wood and other products. The cottage was very cool, kind of a cross between a shabby chic country house and the Unibomber's cabin. It’s made by an Austin company called Reclaimed Space, which auctioned off that actual home on eBay. The winning bidder paid $75,000. I remember one of the staffers in the house saying that home typically sold for $60,000, although in this case half the proceeds went to Habitat for Humanity.
Posted by: Peter Coy on June 29
As if celebrities didn't have enough problems--like paparazzi and wrinkles--along comes the housing bust to tarnish their silvery existence. Chicago Tribune real estate columnist Mary Umberger rounded up a bunch of celebs who are having trouble selling expensive homes, including the above-mentioned Mel Gibson, 50 Cent, Tim Geithner, and Richard Gere. Christie Brinkley's unsold home shows up in a story by Laura Mann of Newsday. That's the tippy top of Christie's house, known as Tower Hill, in the photo. It's been on the market for $30 million ever since 2007. Don't feel too bad for the uptown girl, though. According to Newsday, she bought Tower Hill in the late 1990s for less than $3 million.
