Subprime woes spread to pricey real estate.

NEW YORK – The subprime mortgage crisis is spreading to a somewhat unexpected place: homes costing more than $500,000.

As lending has rapidly gotten more restrictive for borrowers taking out large loans, sales of expensive homes have fallen sharply around the country during what should be one of the busiest seasons for buyers and sellers, mortgage bankers and real estate agents say.

To some degree the change is due to difficulty getting financing, as borrowers are finding fewer lenders willing or able to fund “jumbo” mortgages, loans for amounts greater than $417,000. Such loans are too big to be guaranteed by government-sponsored housing finance agencies Fannie Mae, Freddie Mac or Ginnie Mae.

Given the troubles in the subprime sector, investor appetite for all types of mortgage loans not guaranteed by housing finance agencies has nose-dived.

Banks until recently were able to offload the risk of many jumbo mortgages by selling the loans to investors. But now, as investors burned by the subprime debacle have become extremely picky about what they will buy, banks are having to keep more of these loans on their own books and as a result are charging higher rates.

Some lenders _ such as Countrywide Financial Corp. _ have made a point of saying they’re now most focused on making loans that can be guaranteed by Fannie and Freddie.

Other lenders have simply tightened up their lending standards, for example by no longer making jumbo loans to lenders who can’t fully document their income, even if they make large down payments and have stellar credit histories.

The banks that are still making jumbo loans are charging substantially higher rates to compensate for the lack of investor demand. Borrowers who could have gotten rates as low as 6.5 percent in June are now having to pay as much as 9 percent.

But aside from the financial impact of higher rates, in certain high-priced real estate markets, the effect of the suddenly tighter lending environment is more psychological, mortgage bankers and real estate agents say, as buyers and sellers alike don’t want to plunge into an uncertain future.

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Global Property Guide, a real estate research firm, recently issued a report ranking the most expensive flats in Europe. Currently, property value is on the rise throughout much of Europe, and real estate in locations such as the Baltic region are seeing an increase in value. Rental yields (profit yields) in several European cities are above 10%. The extremely small and distinguished principality of Monaco currently wears the crown for most expensive real estate in the Europe.

Monaco has an average price of $ 24,900 per sq meter, making the principality the most expensive real estate in Europe, but profit yields are low at 2.4%. A 35 sq. meter apartment of this expensive real estate yields an average return of 2.12%, while a 195 sq. meter apartment yields an average return of 2.64%.

Real estate in Central London’s exclusive neighborhoods is also quite expensive, averaging $14,522 per sq. meter and claiming the location of the second most expensive real estate in Europe. Paris and Amsterdam were both noted as having some of Europe’s most expensive real estate.

Monaco still has them topped, by a wide margin actually. It makes sense that such a small wealthy geographical location would have the most expensive real estate in Europe. This makes Monaco extremely exclusive and its property in high demand for those able enough to afford it. Property prices in Monaco have steadily risen over 10% a year in the last decade.

Some of the most sought after property in Monaco is located in the area known as Carre D’Or (Square of Gold), located close to the world famous Place Du Casino. Most of the available properties in Monaco are expensive apartments. Other expensive real estate include penthouses overlooking the harbor and Formula 1 circuit. There are a number of villas and townhouses located on the hills that also boast extremely high property values.

Monaco has recently unveiled its plans to expand its borders by adding 25 acres of expensive real estate into the ocean through the construction a platform, using the same technology that off-shore oil rigs utilize. The new district will boast upmarket shops and reportedly about $3.7 billion ($4.9 billion) worth of luxury residences.

Patrice Cellario, Monaco’s director of planning was quoted in a recent article saying:

“We hope this extension will be a self-contained area with a complex mix of people. We’re not looking to create a residential area for the rich, though of course we want to welcome well-off foreigners to Monaco.”

Source: most-expensive.net

The bar for luxury residential real estate in Hong Kong, already one of the most expensive areas in the world, has been raised.

The Peak, at 1,811 feet above sea level, is the highest point on Hong Kong Island and has symbolized prominence and wealth since the 19th century. Formally known as Victoria Peak, it towers above the heart of the city and has spectacular, 360-degree views of all of the surrounding islands. To live there signifies a status level for which captains of industry from around the world are willing to pay top dollar.

Last month, The Peak exceeded its own lavish reputation, with local headlines claiming it is the site of the most expensive residential piece of land in the world. The government land auction of 12 Mount Kellett Road fetched $231 million from Sun Hung Kai Properties — 134 percent of the opening bid and a projected $5,417 per square foot.

And that’s for just the land.

Why the historic high price? It’s a simple supply-and-demand equation. Property here, the most sought-after low-density neighborhood in Hong Kong, comes available so infrequently that some of the world’s richest line up to buy.

Read more:� abcnews.go.com

POLICE must have back-up before answering calls for help on the Flemington and North Melbourne high-rise estates.The directive was issued last week after a series of attacks on officers and police vehicles by youths armed with rocks, bricks and makeshift spears.

One in five calls to Flemington police were from the housing estate, Divisional Superintendent Brett Guerin said.

In an unprecedented move in Moonee Valley, police will also be equipped with head-mounted cameras when conducting a scheduled operation at the Racecourse Road and Holland Court public housing blocks.

Superintendent Guerin said the cameras would protect police as well as the public.

“We want our officers to do what they have to do, but we want complaints to be reduced. It can ensure that police act professionally.”

The effectiveness of the cameras will be reviewed and could be used for future operations.

As reported last week, police officers, two security guards and a youth worker were injured by up to 50 young males at a Flemington Community Centre dance party on November 3.

By: Charmaine Camilleri

Learn more:� moonee.yourguide.com.au

A condo is not only purchased by young people or first time home-buyers. In fact, many seniors find that maintaining a big empty home may be too much for them because they can no longer perform and maintain the day-to-day work in their home. Another group of people that are willing to buy condos are working people that are always busy. They have no time for maintenance so they would rather pay the association dues.
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Home renovations are very flexible but before you can even hammer a single nail, you’re going to need money to pay for it.
You can turn to cash and liquid assets to fund your home renovation – your savings and checking accounts, as well as saving bonds. This way you don’t have to deal with interest rates, extra charges, nor do you have to be dependent on anyone else. On the downside, this could deplete your savings. This option is only good if you have lots of cash to spare.
If you’re doing a specific project, you can take out a home equity loan. This is ideal for large projects like additional rooms, and it offers lower interest rates than credit cards or personal loans. However, if you deplete your equity, the sum you receive when you eventually sell your house will be significantly lower. Also, the large amount you will receive might tempt you to buy things that are not part of the renovation project.

There are a lot of advantages to buying a condominium unit, the main one being that you don’t need to worry about maintenance of the property. When you buy a condo, you will be charged a monthly fee that goes to the condominium association. This fee is different from the one you pay for your mortgage. Every condo owner has to pay association dues. While it might seem like an unnecessary fee at first, these are used to cover all types of maintenance the building might need. For instance, if the roof needs to be replaced, the condo owners don’t need to shoulder the expenses. The association fees also cover upkeep of the property, the salary of the maintenance crew, and the maintenance of the amenities like the swimming pool.