Making Suburbia More Livable by WSJ

Related to my previous posting about mass transit usage and the relationship between housing value and walkability, WSJ has done very interesting article about "Making Suburbia More Livable" by building walkable neighborhood.

Below is the project Mableton, Ga:

Local officials are working on plans to fashion a community where people can live more easily throughout their lifetimes. To that end, the plans call for developing several "nodes":

• 1) New housing and retail space and services would enable residents to age in place.
• 2) An arts center would expand an existing amphitheater and add galleries and live-work units for local artists
• 3) A new town center, coupled with greenways, would make Mableton more pedestrian-friendly.
• 4) A civic center would include wellness and fitness centers.
• 5) A historic area would feature restored homes and a commuter rail stop.
• Details of proposed changes in Mableton (.pdf)

I believe you will see more and more of this type of projects in coming years!

Happy Investing!!!

New Study Shows More Walkable Homes Are Worth More

CEOs For Cities has issued new report about "How Walkability Raises Home Values in U.S. Cities".

This data is compares house value in the neighborhood with "median walkablity" Vs. "75% percentile walkability" using walkability score from www.walkscore.com. For example, in Austin Tx, the house with 75% percentile walkability (74) is $23,871 more valuable Vs. the one in median walkability (62) neighborhood.

Interestingly, in 13 out of 15 metropolitan area, more walkable homes are proven to be worth more (car dependent Las Vegas NV and Bakersfield CA was only exception).

Contribution of Walk Score to Housing Values
Metro	Median	75% Percentile	Walk Score Estimated Housing Gain from Moving to 75% Percentile
Arlington	71	82	19,028
Austin	62	74	24,871
Bakersfield	31	51	-2,242
Charlotte	54	71	33,763
Chicago	86	92	31,562
Dallas	46	51	4,278
Fresno	49	60	7,427
Jacksonville	35	51	12,951
Las Vegas	43	55	-7,157
Phoenix	46	58	18,689
Sacramento	49	62	34,345
San Francisco	57	68	32,837
Seattle	68	82	19,789
Stockton	51	10	10,338
Tucson	51	66	10,841

As I pointed out in previous blog posting about mass transit usage, I think US is slowly moving away from car-dependent suburbia to mass transit oriented walkable neighborhood.

So make sure that you check the walkscore when you purchase your new house!

Happy Investing!!!

Homeowners who 'strategically default' on loans a growing problem

This is article from LA Time about rising number of "strategic defaulters". This is rising trend and I have posted it while back.

Here is the summary of finding!

* The number of strategic defaults is far beyond most industry estimates -- 588,000 nationwide during 2008, more than double the total in 2007. They represented 18% of all serious delinquencies that extended for more than 60 days in last year's fourth quarter.

* Strategic defaulters often go straight from perfect payment histories to no mortgage payments at all. This is in stark contrast with most financially distressed borrowers, who try to keep paying on their mortgage even after they've fallen behind on other accounts.

* Strategic defaults are heavily concentrated in negative-equity markets where home values zoomed during the boom and have cratered since 2006. In California last year, the number of strategic defaults was 68 times higher than it was in 2005. In Florida it was 46 times higher. In most other parts of the country, defaults were about nine times higher in 2008 than in 2005.

* Two-thirds of strategic defaulters have only one mortgage -- the one they're walking away from on their primary homes. Individuals who have mortgages on multiple houses also have a higher likelihood of strategic default, but researchers believe that many of these walkaways are from investment properties or second homes.

* Homeowners with large mortgage balances generally are more likely to pull the plug than those with lower balances. Similarly, people with credit ratings in the two highest categories measured by VantageScore -- a joint scoring venture created by Experian and the two other national credit bureaus, Equifax and TransUnion -- are far more likely to default strategically than people in lower score categories.

* People who default strategically and lose their houses appear to understand the consequences of what they're doing. Piyush Tantia, an Oliver Wyman partner and a principal researcher on the study, said strategic defaulters "are clearly sophisticated," based on the patterns of selective payments observable in their credit files. For example, they tend not to default on home equity lines of credit until after they bail out on their main mortgages, sometimes to draw down more cash on the equity line.

Well, as writer points out at the end of article, it is possible that lender may figure out the way to sniff out "strategic defaulters" from "desperate defaulters". So, if you are doing short sales or apply for loan modifications, you may want to move fast!

Happy Investing!!!

Mass Transit Share by Metropolitan Area

Forbes.com come has posted interesting ranking about "America's Cleanest Commutes", based on American Community Study 2008. And they ranked San Francisco as No.1. While I don't necessarily agree with their methodology, I thought it is interesting to share the "share of commuting method" --- Mass Transit, Car Pool or Drive Alone as follows:

MSA	Mass Transit	Car Pool	Drive Alone
New York City MSA	30%	7%	50%
San Francisco MSA	14%	11%	64%
Washington DC MSA	13%	11%	66%
Trenton-Ewing, N.J.MSA	12%	8%	69%
Chicago MSA	11%	9%	71%
Seattle MSA	8%	12%	69%
Honolulu MSA	8%	16%	64%
Boston MSA	7%	11%	71%
Portland MSA	6%	11%	71%
Los Angeles MSA	6%	12%	73%

The report says that, due to recession, share of mass transit and car pool has increased slightly. But it has LONG way for US to "transit" to energy efficient non-car-dependent society (Yes -- I was raised in Tokyo).

Anyhow, as for the real estate appreciations, I believe those cities with strong mass transit and high walkability will win as 1) more and more people are craving for "walkable" neighborhood and 2) gas price continue to go up and 3) Americans are aging rapidly.

Happy Investing!!!

Food Related Articles

This is for memo purpose.

Great Eating in San Francisco - Carry On - Travel + Leisure http://bit.ly/19LQBc

The 50 best foods in the world and where to eat them | Life and style | The Observer http://bit.ly/ngiFK

Mad Men Manhattan - Articles - Travel + Leisure http://bit.ly/1ePcPd 3 minutes agoMad Men Manhattan - Articles - Travel + Leisure http://bit.ly/1ePcPd

Happy Eating!!!

Strongest Metro. Weakest Metro - Metromonitor Q2 2009

Brooking Institute has issued MetroMonitor Q2 2009. They classified Top 100 US metropolitan area by Strongest 20, Second Strongest 20, Middle 20, Second Weakest 20 and Weakest 20 by the following criteria:

- Percent change in employment, from peak employment to 2009Q2 - Percentage point change in unemployment rate, June 2008 to June 2009 - Percent change in gross metropolitan product, from peak GMP to 2009Q2 - Real percent change in housing prices, 2008Q2 to 2009Q2 STRONGEST 20 METRO Austin-Round Rock, TX Baton Rouge, LA Columbia, SC Dallas-Fort Worth-Arlington, TX Des Moines-West Des Moines, IA El Paso, TX Harrisburg-Carlisle, PA Honolulu, HI Houston-Sugar Land-Baytown, TX me Jackson, MS 20 Little Rock-North Little Rock-Conway, AR McAllen-Edinburg-Mission, TX Strongest Oklahoma City, OK Omaha-Council Bluffs, NE-IA Pittsburgh, PA Rochester, NY San Antonio, TX Tulsa, OK Virginia Beach-Norfolk-Newport News, VA-NC Washington-Arlington-Alexandria, DC-VA-MD-WV SECOND STRONGEST 20 METRO Albany-Schenectady-Troy, NY Albuquerque, NM Augusta-Richmond County, GA-SC Baltimore-Towson, MD Boston-Cambridge-Quincy, MA-NH Bridgeport-Stamford-Norwalk, CT s Buffalo-Niagara Falls, NY etro Colorado Springs, CO m Denver-Aurora-Broomfield, CO Hartford-West Hartford-East Hartford, CT Second-strongest 20 Indianapolis-Carmel, IN Kansas City, MO-KS Madison, WI Memphis, TN-MS-AR New Haven-Milford, CT Ogden-Clearfield, UT Poughkeepsie-Newburgh-Middletown, NY Raleigh-Cary, NC Scranton--Wilkes-Barre, PA Syracuse, NY MIDDLE 20 METRO Allentown-Bethlehem-Easton, PA-NJ Birmingham-Hoover, AL Charleston-North Charleston-Summerville, SC Chattanooga, TN-GA Columbus, OH Greenville-Mauldin-Easley, SC Knoxville, TN Minneapolis-St. Paul-Bloomington, MN-WI os Nashville-Davidson--Murfreesboro--Franklin, TN etr New York-Northern New Jersey-Long Island, NY-NJ-PA Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Middle 20 m Portland-South Portland-Biddeford, ME Provo-Orem, UT Richmond, VA Salt Lake City, UT Seattle-Tacoma-Bellevue, WA Springfield, MA St. Louis, MO-IL Wichita, KS Worcester, MA SECOND WEAKEST METRO Akron, OH Atlanta-Sandy Springs-Marietta, GA Bakersfield, CA Charlotte-Gastonia-Concord, NC-SC Chicago-Naperville-Joliet, IL-IN-WI Cincinnati-Middletown, OH-KY-IN Cleveland-Elyria-Mentor, OH Fresno, CA Greensboro-High Point, NC Los Angeles-Long Beach-Santa Ana, CA Louisville-Jefferson County, KY-IN Milwaukee-Waukesha-West Allis, WI New Orleans-Metairie-Kenner, LA Oxnard-Thousand Oaks-Ventura, CA Phoenix-Mesa-Scottsdale, AZ Sacramento--Arden-Arcade--Roseville, CA San Diego-Carlsbad-San Marcos, CA San Francisco-Oakland-Fremont, CA San Jose-Sunnyvale-Santa Clara, CA Tucson, AZ WEAKEST 20 METRO Boise City-Nampa, ID Bradenton-Sarasota-Venice, FL Cape Coral-Fort Myers, FL Dayton, OH Detroit-Warren-Livonia, MI Grand Rapids-Wyoming, MI Jacksonville, FL Lakeland-Winter Haven, FL Las Vegas-Paradise, NV Miami-Fort Lauderdale-Pompano Beach, FL Modesto, CA Orlando-Kissimmee, FL Palm Bay-Melbourne-Titusville, FL Portland-Vancouver-Beaverton, OR-WA Providence-New Bedford-Fall River, RI-MA Riverside-San Bernardino-Ontario, CA Stockton, CA Tampa-St. Petersburg-Clearwater, FL Toledo, OH Youngstown-Warren-Boardman, OH-PA Some of the key findings are: - Differences in economic performance among metropolitan areas remained stark. - The South is overrepresented among both the 20 metro areas that suffered the most in the recession and the 20 that suffered least. - Only a handful of metropolitan areas showed early signs of full recovery from the recession. - Several metro areas showed signs of beginning to recover from the recession, and the rate of economic decline slowed in many more. - Centers of auto and auto parts production continued to post sharp overall employment and output declines. - Metro areas that specialize in banking had less severe job losses than the nation as a whole since the end of 2007. - Signs that the housing market is stabilizing were apparent in many metro areas, though rising foreclosures continued to weaken some metropolitan markets. - Pittsburgh, the site of the G-20 meetings on September 24 and 25, 2009, ranks among the U.S. metropolitan areas least affected by the recession. Happy Investing!!!!

FHA Will Tighten Credit Standards

As expected, FHA will tighten lending guideline for FHA mortgage.

Under planned rules, the agency said lenders making FHA-insured loans would need to show net worth of at least $1 million, up from $250,000, and further increases might be sought later. The agency is seeking to ensure that lenders have funds available to compensate the FHA if their loans fail to meet quality standards.

For refinancings of FHA loans, the agency plans new rules for verifying income and other quality-control checks. It also will impose a maximum loan value of 125% of the current estimated home value on refinanced loans, in line with government-backed mortgage investors Fannie Mae and Freddie Mac.

Appraisals will be valid for no more than four months, down from six to 12 months previously. The FHA also plans to change rules aimed at averting pressure on appraisers, making them more consistent with those adopted earlier this year by Fannie and Freddie. Mortgage brokers or bank employees paid on commission won't be allowed to order appraisals.

In addition, the FHA plans to hire a chief risk officer for the first time.

In short, FHA is saying "if something goes long, FHA will not insure loan loss and will go after you".

While "There will be no taxpayer bailout," FHA Commissioner David Stevens said, I think approx. 30% of FHA mortgage that was issued in 2008 are under water. So soon, I expect tax payer bail out of FHA mortgage.

Anyway -- this will certainly slow down First Home Buyer driven US residential real estate market and it will cause "second dip" in real estate price, especially in former bubble area such as California and Nevada. It will be interesting to see how it goes in early 2010.

Happy Investing!!!