Real Estate News

Interest rates can't stay low forever -- but mortgage watchers now expect rates under 5 percent for the next year, thanks in part to "quantitative easing," the latest scheme from the Federal Reserve to stimulate the economy.

The average rate on a 30-year, fixed-rate mortgage was just 4.23 percent with a 0.8 percent origination fee, according to the latest Primary Mortgage Market Survey from Freddie Mac. That's just a hair above the record low set a few weeks ago.

"I think rates are going to do about what they are doing now," said Amy Crews Cutts, Freddie Mac's deputy chief economist.

Tawny Kitaen, the former Whitesnake music video babe and a star of the cheesy 1980s classic "Bachelor Party," was recently forced to sell two of her luxury Orange County, Calif. homes at a steep loss.

The first property, an Irvine, Calif. penthouse sold for $2,520,000. While it's unknown how much the home was bought for, public records show that Kitaen borrowed $2,627,140 against the property in August 2007, presumably when the home was valued higher.

The second, a Newport Beach house purchased in August 2007 for $2,700,000 sold for $1,810,000 – almost a third less than she bargained for. Both properties were transferred on Oct. 29.

Billionaire Paul Tudor Jones, one of the world's most successful hedge fund managers, is different from you and me: For one, his houses are bigger.

The founder of the pioneering Tudor Investment Corp. is asking $30 million for his 6,250-acre hunting retreat. The Adirondack-style main house has 10 bedrooms and 14,000 square feet, including a great room with a glass wall, a decoy room and a yoga studio. Jones' property also includes two guest houses, an equestrian facility, a sports complex and multiple ponds. Oh, and it's also perfectly situated on Maryland's pristine eastern shore.

Jealous yet?

Read on to see more amazing photos.

The housing market charted further into unknown territory on Friday, as pending home sales fell after two months of growth.

The National Association of Realtors (NAR) announced Friday that contracts signed in September slid 1.8 percent to 80.9, down from an upwardly revised 82.4 in August. In context, an index of 100 reflects average contract activity seen in 2001, the first of five boom years for existing-home sales.

One factor cited for the stammering recovery is the recent impact of the foreclosure moratorium, which disrupted sales in many states. But despite the unsteady recovery, analysts remain hopeful that sales, along with consumer confidence, will improve next year.

"For 2011 we should see more than 5.1 million existing-home sales, up from about 4.8 million this year," said Lawrence Yun, NAR chief economist at the 2010 Realtors Conference and Expo on Friday. "Housing starts are expected to rise to 716,000 in 2011 from 598,000 this year."

Why would Renée Zellweger sell her two prime co-op apartments on New York City's Upper East Side? If you believe what you read in the tabloids, the reason may be her new (alleged) squeeze, actor Bradley Cooper ("The Hangover"). Zellweger and Cooper were spotted together recently in Beverly Hills (pictured left).

Zellweger bought the pair of New York City apartments, which occupy the full second floor of a building on East 82nd Street, for a total of $8.2 million in 2007 and 2008. One is a three-bedroom, 3.5-bath apartment, made from two apartments Zellweger bought and combined: She is asking $6.975 million. The other is a one-bedroom, one-bath, which is selling for $1.975 million.

When Robert Shiller, Yale economist and co-creator of the revered S&P Case-Shiller index speaks, the real estate world listens.

The last time the Case-Shiller housing price index came out, 12 of the 20 U.S. cities tracked showed decelerations -- meaning prices in those cities have been flat for more than a year. With the first-time homebuyer's credit in our rear-view mirror, Shiller says that he is worried the housing market could see a downturn in prices because no one knows what new stresses lie ahead, especially with newcomers in Washington.

"The homebuyer credit did create an end to declining home prices, but it didn't create a strong enough recovery," Shiller told GuruFocus.

Then there's hedge fund titan John Paulson, who thinks everyone ought to be out there buying homes and gearing up for housing inflation. The man who made billions betting against the sub-prime mortgage market said just this summer that we are in the midst of a sustained recovery, with a less than 10 percent risk of a double-dip recession.

Shiller versus Paulson: Whom to believe?

Actress Amanda Seyfried of "Letters to Juliet," "Big Love," "Mamma Mia!"and "Mean Girls" fame knows how to pick winning roles and buildings. She wanted one of the 103 condos in New York City's Devonshire House bad enough to pay $250,000-plus more than the $1,875,000 asking price of just over $1.9 million for a two-bedroom, two-bathroom unit on the fourth floor.

Although her purchase was made over the summer, word didn't hit the Internet sooner because she purchased her pad through an LLC (Limited Liability Partnership) that does not identify its owner.

Devonshire House was famous long before the 24-year-old actress was born. An Emery Roth-commissioned building (the Duke of Devonshire requested a tower inspired by his London home), it has also been a home to fellow actress Gwyneth Paltrow and playwright Neil Simon. (He leased one of the penthouses.)

While defaulters living for free may be helping to stimulate the economy with money they can spend on things other than their mortgage payments, most of the rest of us will feel the pain as the foreclosure freeze delays the healing process for the housing market. Yet some think a delay in foreclosures might not be bad for the banks.

In fact columnist, Peter G. Miller, thinks the delay in foreclosures that we've seen so far over the past year or so could have "prevented the financial system appearing significantly worse." He thinks the "national fudging process" of the banks may be able to go on a bit longer as they wait "until property values increase for real."

Right now the banks are carrying many of these foreclosed properties at a higher value than they are worth today. Once they sell them off, they'll have to report the true value of the assets they are holding.

In September 2010 the estimated shadow inventory of delinquent loans, foreclosures and bank-owned properties was 7 million in the U.S., according to Fitch Ratings. Fitch expects the liquidation timelines to continue to increase because of both modification efforts and foreclosure defects. This will result in more severe losses for residential mortgage-backed securities (RMBS), because they will have higher carrying costs and slowed cashflow. Not only are banks affected by the delays but other holders of RMBS securities also will feel the pain, they include pension funds and insurance companies.

It will take more than three years to sell all the properties having loans that are seriously delinquent, in foreclosure or under REO, says a recent report. This shadow inventory, coupled with a lethargic buying crowd is affecting sellers -- from owners of low-end homes to luxury mansions -- who can't move their properties at prices they would like, even if they are not facing foreclosure.

One of those affected is Heidi Steiger, an investment banker who wants to sell her luxurious 12,000-square-foot home (pictured left), in the lakeside town of Tuxedo Park, N.Y., so that she can move to Florida, now that she no longer has children at home. But after several price reductions, the 1909 stone-and-stucco Georgian on 19 acres, known as Top Ridge, still hasn't sold.

The data in the Nov. 1 report released by Fitch Ratings reveals that, based on recent liquidation trends, it will take more than 40 months to clear existing distressed inventory. In judicial foreclosure states, such as Florida, it is expected to take even longer than the national average. And so long as distressed homes are on the market, that means challenges for people like Steiger, who aren't underwater or facing foreclosure, but simply want to sell at a decent price.

Actress Jessica Alba is trying to lease out her 3,035-square-foot Beverly Hills home for $8,950 a month. The three-bedroom multi-level home owned by the Dark Angel is being offered fully furnished, which means you better have a thing for Balinese-style living.

Any takers for this thing of beauty?

The rental, we mean.

The home features dark hardwood floors, a light-filled living room with double-height windows and ceilings, a screening room that could be converted into an additional bedroom, and a large family/game room. The master suite has a large walk-in closet and spa-like bathroom.