Category Archives: Luxury Homes

“Granite Islands And Backsplashes”: Even Singlewide Trailers Are No Longer “Affordable”

 

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Since the early 1900s, millions of Americans have relied on trailers as a source of no-frills, affordable housing.  In fact, roughly 22 million Americans live in trailer parks today, but the industry is hardly the stable source of affordable housing that it used to be…a lesson that 73-year-old Judy Goff of Naples, Florida recently discovered the hard way after Hurricane Irma ripped through her park and destroyed her home, along with roughly 1.8 million others.

As Bloomberg points out, when Goff went to a local LeeCorp dealer lot to replace her $46,000, 1,200 square foot trailer with something of similar size and value, what she found instead was “manufactured homes” stuffed with high-end upgrades like granite counter-tops and vaulted ceilings that rendered them too expensive for her $23,000 per year of income.

Last month, Judy Goff, a 73-year-old hardware store clerk whose double-wide in Naples, Fla., was blown to bits, pulled into a LeeCorp Homes Inc. sales lot and wandered through models with kitchen islands and vaulted ceilings. In the salesman’s office, she got the total price, including a carport, taxes, and removal of her destroyed trailer: $140,000. “I don’t have that kind of money,” said Goff as she stood amid the wreckage of her old home, whose walls and ceiling were stripped away, leaving her leather furniture and a lifetime of possessions to bake in the sun. “That was all I had.”

Goff—who just wants to replace the wrecked 1,200-square-foot trailer that she bought 17 years ago for $46,000, including the cost of land—says she feels boxed in. Her mobile-home community won’t allow single-wide homes or older used models as replacements. And every home must have a carport. She’s willing to give up such upgrades as the higher-end countertops, but that probably won’t be enough. Between her Social Security check and income from her job at Ace Hardware Corp., she earns only about $23,000 a year. “I just want a home that’s equal to what I had,” she says. “My home was a beauty.”

“I get that higher-end countertops and kitchen islands are where the better margins are, but that’s also going to put homes out of reach for a lot of buyers,” says Doug Ryan, director of affordable homeownership at the Washington nonprofit Prosperity Now. “The storm is revealing a whole lot of problems in the low-cost housing market.”

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Meanwhile, as we note frequently, while the cost of manufactured homes has surged, the pay for the bottom fifth of American wage earners has been somewhat stagnant for nearly two decades now. Even after a modest uptick recently, the bottom 20% of households have seen their income fall 9% since 2000, in real terms.

But, as low-income households have found it increasingly difficult to rebuild after devastating hurricanes, the surge in manufacturing home pricing has been a boon for billionaire Warren Buffett who made a big financial bet on the largest manufactured housing builder, Clayton Homes, back in 2003.

The industry, led by Warren Buffett’s Clayton Homes Inc., is peddling such pricey interior-designer touches as breakfast bars and his-and-her bathroom sinks. These extras, plus manufacturers’ increased costs for labor and materials, have pushed average prices for new double-wides up more than 20 percent in five years, putting them out of reach for many of the newly homeless.

Phil Lee, the 74-year-old founder of LeeCorp, has been riding a wave of retiring baby boomers who want affordable luxury. Driving a reporter in his black BMW SUV through Bayside Estates in Fort Myers Beach, where many of the fanciest homes he sells are installed, Lee points out units with pitched roofs that look almost indistinguishable from conventional homes, facing canals with boats tied outside. Their owners, former dentists, doctors, executives, and others, spent upwards of $150,000 to buy aging units just to clear the way for something more luxurious. On a palm-lined street flanked by ranks of 1970s-era trailers, Lee sees profit. “There’s no end to replacing these homes,” he says. “You get a hurricane in there and it really accelerates things.”

Terms such as “mobile home” or “trailer” are now verboten in an industry striving to break free of its downscale origins. Buffett’s Clayton Homes, which produces almost half of all new manufactured housing in the U.S. and competes with such companies as Cavco Industries Inc. and Champion Home Builders Inc., still builds lower-priced units, but there’s barely a sign of them on its website, which is mostly devoted to high-price models. The 2,000-square-foot Bordeaux features a separate tub and shower, a computer station, and a mud room, with prices starting at $121,000 and ranging as high as $238,000, not including delivery and installation costs. Clayton declined to comment.

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Of course, while mobile homes are becoming increasingly cost-prohibitive for low-income families in Florida and Texas, Silicon Valley’s future tech billionaires can’t seem to get enough of them.

Source: ZeroHedge

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Pabst Mansion in Illinois Gets Another Price Cut

Sold in 1999 for $6.95 million the 14,000-square-foot home is now on the market for $3.9 million

It isn’t often that a historic estate with 21st-century features, finishes and amenities is available at a 20th century price, and yet that’s exactly what is on offer at the Pabst Mansion on Sheridan Road in Glencoe, Illinois.

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Sited on 2.2 acres, the 14,000-square-foot house was built in 1936 by architect Willian Pereira.

On the market for two years, the price was just reduced to $3.9 million, nearly $3 million less than what it sold for in 1999 at $6.95 million, according to the Cook County Recorder of Deeds. The current owner, who bought the home in 2014, originally listed it for $6.3 million in June 2015. In May 2016 the asking price was lowered to $4.95 million and since then, has reduced the price several times before this latest drop.

Crain’s Chicago Business first reported the price reduction, noting how the house’s sale price has decreased from the 1999 price tag, in each of the mansion’s subsequent sales. It sold for $5.2 million in 2009 and $4.8 million in 2014, when it was bought by the current owner, an insurance executive, according to the public records.

Sited on 2.2 acres, the 14,000-square-foot house was built in 1936 by architect Willian Pereira, who became famous in later years for his work in California, including the Los Angeles International Airport’s space-age control tower and the Transamerica pyramid in San Francisco. The house is known as the Pabst Mansion because of its first owner, Harris Perlstein, who ran Milwaukee’s Pabst Brewing Co. after the merger with his company Premier Malt Products.

On the inside, the house’s details and amenities are extensive. There is a large oval dining room, a paneled library, a bar and entertainment room, a game room, an exercise room, and a party-sized screening room, according to the listing agent. Situated at the end of a long gated driveway, the grounds include a pool with water slide, a half basketball court and a hedge shaped like a maze.

“The new price is an extraordinary value,” said Coldwell Banker listing agent Wendy Friedlich.

| Mansion Global

This is What the Most Expensive House in the United States Looks Like

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In Bel Air, California, ultra-luxury home developer Bruce Makowsky has unveiled his most ambitious project yet, 924 Bel Air Road. Listed at US$250 million it is the most expensive home ever listed in the United States.

To attract the clientele Makowsky is targeting, he is selling more than just a home he is selling a lifestyle. Whoever buys 924 Bel Air not only gets the home, but a full-time, 7-person staff for 2 years, a US$30 million car collection and all of the artwork, wine, furnishings and extras you can imagine.

Below you will find a gallery of this insane property along with a video tour and a list of some of the most unbelievable highlights and inclusions. For more information visit 924belair.com.

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– List price: US$250 million (previous US record $195 million mansion in Manalapan, Florida)
– 38,000 sq. ft. over 4 floors with 2 commercial elevators lined in alligator skin and handcrafted, polished steel staircase
– 12 bedrooms, 21 bathrooms, 3 kitchens, 6 bars, massage and spa room, fitness center, bowling alley
– 2 wine and champagne cellars, 85 ft Infinity pool, 40-person home theatre, 18×12 ft retractable outdoor tv screen
– Includes $US 30 million car collection, all artworks, wine and champagne collection, helicopter, boat
– Comes with 7 pre-paid, full-time staff including chef, chauffeur and masseuse for two years.

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In an interview with CNBC, Makowsky likens the home more to a mega yacht than a house, stating:

Megayachts have gone from 150 feet to 300 feet or more and they can cost up to $500 million,” he said. “People spend two weeks a year on a yacht, but they live in a house. I wanted this to be the ultimate megayacht, but on land.” [source]

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According to CNBC, the “auto gallery” features some of the rarest, fastest and most expensive cars in the world and come with the home. The collection includes a one-of-a-kind Pagani Huayra ($2 million+); the famous “Von Krieger” 1936 Mercedes 540 K Special Roadster($15 million+); and 10 of the rarest and fastest motorcycles ever built.

The most expensive home ever sold globally is believed to be a US$221 million penthouse in London, England. Globally, there are homes listed for more than US$300 million but none in the U.S. tops Makowsky’s US$250 million listing. [source]

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Source: Twisted Sifter

Glut in Luxury Apartments: Boom Set to Fizzle in 2017

Real estate is has been one of the economic bright spots in the US for several years.

But rising interest rates and a glut of luxury apartments portends a slowdown in 2017.

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The Wall Street Journal reports Luxury Apartment Boom Looks Set to Fizzle in 2017

Landlords of upscale properties across the U.S. are bracing for rough conditions in 2017 that will likely force them to slash rents and offer deep concessions as a glut of supply brings a seven-year luxury-apartment boom to an end.

The turnaround follows a more-than-26% jump in U.S. apartment rents since early 2010, far outstripping inflation and income growth. But in 2016, rents rose a modest 3.8%, a significant drop from the recent high of 5.6% year-to-year growth in the third quarter of 2015, according to a report to be released Tuesday by MPF Research, a division of RealPage Inc. that tracks the U.S. apartment market.

Developers in New York are already offering up to three months of free rent on some projects. In Los Angeles, some landlords are offering six months of free parking, and some in Houston are waiving security deposits. Meanwhile, MPF Vice President Jay Parsons said he expects little or no rent growth in urban rental markets this year.

“This will be a very challenged leasing environment almost everywhere,” Mr. Parsons said.

More than 50,000 new units were rented by tenants in the fourth quarter in the U.S., six times the number in the year-earlier period. But that demand was overwhelmed by the 88,000 new units that were completed in the quarter, the most since the mid-1980s, according to MPF.

That gap looks set to widen in 2017. More than 378,000 new apartments are expected to be completed across the country this year, almost 35% more than the 20-year average, according to real estate tracker Axiometrics Inc.

The New York area alone will be flooded with nearly 30,000 new apartments in 2017, double the historical average, according to Axiometrics. Roughly 85% are luxury units.

Dallas is expected to see nearly 25,000 new apartments delivered, compared with the long-term average of roughly 9,000 new apartments a year, according to Axiometrics. Los Angeles is expected to get roughly 13,000 new apartments, nearly double the historical average.

Nashville could see some 8,500 new apartments, more than triple the typical 2,400 apartments completed annually.

John Tirrill, managing partner at SWH Partners, an Atlanta developer that has several projects under way in the Nashville area, is leasing a new five-story property with a fitness center, yoga and barre studio and swimming pool. He has lowered rents from $2.25 a square foot to $2.10 a square foot—a $150 discount on a 1,000-square-foot apartment—and is offering one to two months of free rent.

Banks are pulling back on lending, which could help slow the pace of construction starting in late 2018.

“We’re just being really selective,” said John Cannon, a senior vice president at Pinnacle Financial Partners, a Nashville-based financial-services company that has increased its focus on multifamily lending in the last couple of years. “Multifamily has a large number of units on the ground that they really have to demonstrate some absorption.”

2017 Real Estate Synopsis

  1. New home sales and existing home sales are already slowing because of mortgage rates.
  2. A huge supply of apartments will come online in 2017.
  3. Banks are tightening lending standards for apartments.
  4. Mall space is hugely overbuilt.

by Mike “Mish” Shedlock

Tear Downs Are On A Tear

Houston lost its locally famous Bullock-City Federation Mansion in 2014 to a developer who plans to erect townhouses on the site.

The house may not have been worthy of a place on a list of historically significant structures. But the 5,000-square-foot structure that was erected in 1906 on a 30,000-square-foot lot was the first in the sweltering Texas city to have air conditioning. And its demise was mourned by more than a few people.

“It’s a beautiful building,” Ernesto Aguilar, general manager of KPFT Radio, which sits next door, told the Houston Chronicle at the time. “It is sad to see a piece of Houston history going the same way as many others do.”

Tear downs — in which builders or private individuals purchase an aging, outmoded house, then demolish it and replace it with a modern home that will suit today’s homeowners — are currently on a tear in Houston. Permits for tear downs are up by 22% in the city this year.

And that phenomenon isn’t limited to Houston. Barry Sulphor, a real estate agent in the Los Angeles area, counts no less than 100 tear down sites in the so-called beach cities where he plies his trade: Hermosa Beach, Redonda Beach and Manhattan Beach. “And I’m sure there are just as many in Venice, Santa Monica and Beverly Hills,” Sulphor says.

According to the National Association of Home Builders’ best count, nearly 8% of all single-family housing starts in 2015 were attributable to tear down-related construction. That’s roughly 55,000 older houses gone forever, and that’s on top of the 31,800 single-family tear down starts in 2014.

In some instances, the houses that are destroyed are outmoded, functionally obsolete relics that no longer serve a useful purpose. But in other cases, they work just fine and simply lack up-to-date amenities. And some have historical significance that may or may not be worthy of saving.

Usually, the places that replace a tear down are larger, covering more of the lot and rising higher than the old place — often to the maximum height allowable under local zoning rules.

Sulphor recently sold two lots where the old houses were taken down. One was bought for $1.35 million by a builder who plans to put up a house with a nearly $4 million price tag. The other was purchased for $2.15 million by a retired couple who “love the creativity of working with architects to design luxury beach properties,” according to Sulphor. “When the new place is completed, it will fetch close to $5 million.”

Not everyone sees the benefit of tear downs. The leading opponent is the National Trust for Historic Preservation, which argues that they are an “epidemic” that is “wiping out historic neighborhoods one house at a time. As older homes are demolished and replaced with dramatically larger, out-of-scale new structures, the historic character of the existing neighborhood is changed forever.”

Richard Moe, a former president of the National Trust, said, “From 19th-century Victorian to 1920s bungalows, the architecture of America’s historic neighborhoods reflects the character of our communities. Tear downs radically change the fabric of a community. Without proper safeguards, historic neighborhoods will lose the identities that drew residents to put down roots in the first place.”

But the NAHB, which admits that tear downs “have become a significant modus operandi” for its members in some parts of the country, counters that the new houses often “breathe new life into older communities.”

Because tea rdowns are sometimes controversial, folks considering buying an older place with the idea of taking it down and putting up a new house should proceed cautiously. Often, these old homes are not advertised for sale on the open market or in the multiple listing service, so the challenge begins with finding out about one, says Sulphor. And once you do, the agent suggests making absolutely sure the condition of the current home is such that it cannot be salvaged.

Would-be buyers should also determine, before making an offer, whether what they plan to build conforms to local restrictions. Preservationists often use — or try to change — local building codes to push back against tear downs.

On the other hand, people trying to sell old properties that are tear down candidates should make sure whatever offers they receive are legit, Sulphor advises. Look for the proof that they have the funds to close the deal, especially if they say they will pay with cash and have no need of a mortgage.

Sellers should also realize that selling a property “as-is” does not insulate them from their obligation to disclose any issues that might impact value. The term “as-is” means only that the house is being offered and sold in its present condition.

by Lew Sichelman | National Mortgage News

Leak Reveals Secret Tax Crackdown On Foreign-Money Real Estate Deals In Vancouver

Confidential briefing for CRA auditors outlines strategy to tackle suspected tax cheats who do not report global income or who ‘flip’ homes – but reveals that last year, there was only one successful audit of global income for all of British Columbia

A backhoe destroys a C$6 million mansion in Vancouver’s Shaughnessy neighbourhood this year. The destruction of the well-kept home prompted community outrage and was cited in a briefing for Canadian tax auditors looking into Vancouver real estate transactions. Photo: Twitter / @DeborahAMG

A secret strategy briefing for Canada Revenue Agency auditors has revealed plans to crack down on real estate tax cheats in Vancouver, with 50 auditors being assigned to investigate purchases funded by unreported foreign income.

Presentation notes for the seminar, delivered to auditors on June 2 and leaked to the South China Morning Post, show that only one successful audit of worldwide income was conducted in British Columbia in the past year, in spite of Vancouver’s reputation as a hotspot for immigrant “astronaut families” whose breadwinners often work in mainland China and Hong Kong.

The plans, which come amid a furore over the role of Chinese money in Vancouver’s runaway housing market, were provided by a Canada Revenue Agency employee who attended the June 2 briefing. The briefing is identified as a “protected B” confidential document on the cover.

The cover for a confidential CRA briefing for auditors. Photo: SCMP Pictures

But the employee feared the sweep would prove inadequate. “Sure, they’ve upped the numbers because it’s hitting the papers,” they said. But on average, they estimated, each redeployed income auditor would only be able to conduct 10 to 12 audits per year – about 500 or 600 in total. “This is nothing,” compared to the likely scale of the cheating, they said.

Confidential briefing notes for CRA auditors reveal how the Canadian tax agency is targeting unreported global income and other issues related to real estate sales in the Vancouver region. Photo: SCMP Pictures

That estimate is in keeping with the briefing text which says the crackdown will “review the top 500 highest risk files within our region”.

The briefing lists four areas being targeted for audit under the CRA’s “real estate projects”, launched in response to “significant media attention”: unreported worldwide income, property “flipping”, under-reporting of capital gains from home sales, and under-reporting of Goods and Services Tax (GST) on sales of new homes.

‘High-end homes, minimal income’

The time-consuming global income audits will tackle “individuals living in high-valued areas in BC who are reporting minimal income not supporting their lifestyle”, as well as those who buy “high-end homes with minimal income being reported.”

The supposed case of a C$5.8 million home bought by someone who claimed a tax break intended for the poor is cited in the CRA briefing. Photo: SCMP Pictures

The presentation includes a photo of a luxury home supposedly bought for C$5.8million whose owner claimed the “working income tax benefit” for low earners. It also lists the tuition fees of Vancouver private schools.

 

Confidential briefing notes for CRA auditors show that 50 income tax auditors are being redeployed to tackle real estate cheats in BC. Photo: SCMP Pictures

Property flippers who swiftly resell homes for profit will meanwhile be audited to see if their properties truly qualify for exemption from capital gains tax, granted to people selling their principal residence.

The briefing describes various excuses given by owners who moved out of newly purchased homes, including a negative feng shui report, the “bad omen” of tripping over a crack in the sidewalk, and a painter dying in the home.

It cites the highly publicized case of a well-kept 20-year-old, C$6million mansion that was simply torn down after being bought, prompting community outrage.

Yes, we are getting a response now, but the government has known about this issue for a few years. They held back

CRA employee

The briefing does not say the owners of this home, or the $5.8 million home, are tax cheats and nor does the SCMP suggest so.

The CRA employee said the briefing, which was streamed online, was delivered by CRA’s Pacific region business intelligence director, Mal Gill.

The CRA briefing lists various excuses given by people who moved out of new homes, apparently claimed as principal residences. Photo: SCMP Pictures

Gill declined to discuss the briefing. “I cannot confirm anything to you,” he said, referring the SCMP to a CRA communications manager.

The case of a well-kept C$6million Vancouver home that was simply demolished after purchase is cited in leaked notes for Canadian tax auditors. Photo: SCMP Pictures

A spokeswoman said: “The CRA cannot comment or release information related to risk assessment or non-compliance strategies.”

However, she said real estate transactions in Toronto have been the subject of greater scrutiny, for some years. “More recently, the CRA has been actively monitoring and auditing real estate transactions in British Columbia,” she said.

“For the year ending March 31, 2016, the CRA completed 2,203 files [in BC and Ontario] related to real estate,” she said.

In addition to the 50 redeployed income auditors, the leaked briefing says CRA is assigning 20 GST auditors and 15 other staff to the real estate project in BC.

The CRA source said they leaked the material because, “like many people, I’m pretty disgusted by what’s happening here [in the Vancouver real estate market], and a lack of enforcement has been a part of the problem. Yes, we are getting a response now, but the government has known about this issue for a few years. They held back.”

The CRA briefing reveals that there was just one successful audit conducted on unreported global income in BC last fiscal year. Photo: SCMP Pictures

The employee said they were surprised to discover that only one successful audit of global income had been conducted in BC in the year to March 31. “That’s the ludicrousness of this. I was shocked when I saw this, and they only got C$27,000 in tax revenue out of it,” they said.

Asked whether this might show a widespread problem with undeclared worldwide income did not exist in BC, the source said: “No, what it shows is that inadequate people and resources have been put to the task. These [tax cheats] are highly sophisticated individuals, with good representation from their lawyers and accountants, and we are sending out our least experienced people to catch them. That’s the problem.”

Source cites CRA’s ‘racism fear’

Census data from 2011 has previously shown that 25,000 households in the City of Vancouver spent more on their housing costs than their entire declared income, with these representing 9.5 per cent of all households.

But far from being impoverished, such households were concentrated in some of the city’s most expensive neighborhoods, where homes sell for multi-million-dollar prices.

The source suggested CRA bureaucrats previously feared being labelled racist if they targeted low-income declarers buying real estate “because the vast majority of these cases, involving high real estate values, involve mainland Chinese”.

The crackdown was not intended for public knowledge, and instead was to satisfy “people from high up” in the CRA and government who wanted to know “what are you guys doing about this…there’s stuff hitting the papers every day”, the source said. Yet the briefing says the crackdown “will not address the major concerns about affordability of real estate”.

“The vast majority of these [undeclared global income] cases, involving high real estate values, involve mainland Chinese”

CRA employee

The source said there had previously been little done to check whether taxpayers were secretly living and working abroad while supporting a family in Vancouver. “There’s virtually no liaising done with immigration. The common auditor would never check when people are actually coming and going, to check whether they might be going back to China or wherever to work. You can be lied to, to your face: ‘Oh no, I live here [in Canada] full-time’.”

The leaked documents show that in in addition to the single audit on global income in the last fiscal year, CRA in BC conducted 93 successful audits on property flips, 20 on capital gains tax and 225 on under-reported GST. The audits yielded C$14.4 million in new tax, of which C$10million was GST. There was C$1.3 million in fines.

As of April 29, there were 40 audits of global income under way, 205 related to flipping, 34 related to capital gains and 428 related to GST.

The average Vancouver house price now sits around C$1.75million for the metropolitan region, while the Real Estate Board of Greater Vancouver’s “benchmark” price for all residential properties is C$889,100, a 30 per cent increase over the past year. However, incomes remain among the lowest in Canada, making Vancouver one of the world’s most un-affordable cities .

http://www.scmp.com/news/world/united-states-canada/article/1989586/leak-reveals-secret-tax-crackdown-foreign-money-real

The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email ian.young@scmp.com or on Twitter, @ianjamesyoung70