• 'Slow-motion disaster': California houses sinking into the ground

    Rich Pedroncelli / AP

    Robin and Scott Spivey walk past the wreckage of their Tudor-style dream home on Monday. They had to abandon it when the ground gave way causing it to drop 10 feet below the street in Lakeport, Calif. Officials believe that water that has bubbled to the surface is playing a role in the collapse of the hillside subdivision, forcing the evacuation of eight homes and endangering another 10.

    By Tracie Cone, The Associated Press

    LAKEPORT, Calif. -- Scott and Robin Spivey had a sinking feeling that something was wrong with their home when cracks began snaking across their walls in March.


    The cracks soon turned into gaping fractures, and within two weeks their 600-square-foot garage broke from the house and the entire property — manicured lawn and all — dropped 10 feet below the street.

    It wasn't long before the houses on both sides collapsed as the ground gave way in the Spivey's neighborhood in Lake County, about 100 miles north of San Francisco.

    "We want to know what is going on here," said Scott Spivey, a former city building inspector who lived in his four-bedroom, Tudor-style dream home for 11 years.

    Eight homes are now abandoned and 10 more are under notice of imminent evacuation as a hilltop with sweeping vistas of Clear Lake and the Mount Konocti volcano swallows the subdivision built 30 years ago.

    The situation has become so bad that mail delivery was ended to keep carriers out of danger.

    "It's a slow-motion disaster," said Randall Fitzgerald, a writer who bought his home in the Lakeside Heights project a year ago.

    Unlike sinkholes of Florida that can gobble homes in an instant, this collapse in hilly volcanic country can move many feet on one day and just a fraction of an inch the next.

    Officials believe water that has bubbled to the surface is playing a role in the destruction. But nobody can explain why suddenly there is plentiful water atop the hill in a county with groundwater shortages.

    Rich Pedroncelli / AP

    Jagtar Singh gazes from the doorway of one of the bedrooms that collapsed as the ground gave way beneath his home in Lakeport, Calif.

    "That's the big question," said Scott De Leon, county public works director. "We have a dormant volcano, and I'm certain a lot of things that happen here (in Lake County) are a result of that, but we don't know about this."

    Other development on similar soil in the county is stable, county officials said.

    While some of the subdivision movement is occurring on shallow fill, De Leon said a geologist has warned that the ground could be compromised down to bedrock 25 feet below and that cracks recently appeared in roads well beyond the fill.

    "Considering this is a low rainfall year and the fact it's letting go now after all of these years, and the magnitude that it's letting go, well it's pretty monumental," De Leon said.

    County officials have inspected the original plans for the project and say it was developed by a reputable engineering firm then signed off on by the public works director at the time.

    "I can only presume that they were checked prior to approval," De Leon said.

    The sinkage has prompted county crews to redirect the subdivision's sewage 300 feet through an overland pipe as manholes in the 10-acre development collapsed.

    Consultant Tom Ruppenthal found two small leaks in the county water system that he said weren't big enough to account for the amount of water that is flowing along infrastructure pipes and underground fissures, but they could be contributing to another source.

    "It's very common for groundwater to shift its course," said Ruppenthal of Utility Services Associates in Seattle. "I think the groundwater has shifted."

    If the county can't get the water and sewer service stabilized, De Leon said all 30 houses in the subdivision will have to be abandoned.

    The owners of six damaged homes said they need help from the government.

    The Lake County Board of Supervisors asked Gov. Jerry Brown to declare an emergency so funding might be available to stabilize utilities and determine the cause of the collapse. On May 6, state Sen. Noreen Evans, D-Santa Rosa, wrote a letter of support asking Brown for immediate action. The California Emergency Management Agency said Brown was still assessing the situation.

    On Wednesday, the state sent a water resources engineer and a geologist to look at the problem. Sen. Dianne Feinstein sent a representative the next day.

    Lake County, with farms, wineries and several Indian casinos, was shaped by earthquake fault movement and volcanic explosions that helped create the Coast Ranges of California. Clear Lake, popular for boating and fishing, is the largest fresh water lake wholly located in the state.

    It is not unusual for groundwater in the region to make its way to the surface then subside. Many natural hot springs and geysers receded underground in the early 1900s and have since been tapped for geothermal power.

    Homeowners now wonder whether fissures have opened below their hilltop, allowing water to seep to the surface. But they're so perplexed they also talk about the land being haunted and are considering asking the local Native American tribe if the hilltop was an ancient graveyard.

    "Someone said it must be hexed," said Blanka Doren, a 72-year-old German immigrant who poured her life savings into the house she bought in 1999 so she could live on the rental income.

    The home shares a wall with her neighbor, Jagtar Singh — who had two days of notice to move his wife, 4-year-old daughter and his parents before the hill behind the back of his home collapsed — taking the underside of his house and leaving the carpet dangling.

    Doren is afraid that as Singh's house falls it will take hers with it. Already cracks have spread across her floors.

    Damaged houses in the subdivision have been tagged for mandatory removal, but the hillside is so unstable it can't support the heavy equipment necessary to perform the job.

    "This was our first home," said Singh, who noticed a problem in April when he could see light between the wall and floor of his bedroom. A geotechnical company offered no solutions.

    "We didn't know it would be that major, but in one week we were gone," he said.

    So far insurance companies have left the owners of the homes — valued between $200,000 and $250,000, or twice the median price in the county — dangling too. Subsidence is not covered, homeowners said. So until someone figures out whether something else is going on, they'll be in limbo.

    "It's a tragedy, really," contractor Dean Pick said as he took photos for an insurance company. "I've never seen anything like it. At least that didn't have the Pacific Ocean eating away at it." 

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    © 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Police: Ex-employee shoots former boss in head at Los Angeles real estate firm

    View more videos at: http://nbclosangeles.com.

    By Samantha Tata and Beverly White, NBCLosAngeles.com

    An ex-employee of a real estate company shot his former boss in the head Thursday afternoon in Los Angeles, according to police.

    The victim, who has not been named, was in a critical condition in a hospital Thursday.

    The shooting happened at Venture Commercial Realty on the fourth floor of a high-rise building in Koreatown.


    Fire officials received a report of shots fired at about 3:45 p.m. local time (6:45 p.m. ET).

    More stories from NBCLosAngeles.com

    LAPD Sgt. Dino Caldera said that officers had gone room-to-room in the building, searching for the gunman.

    "Officers responded … to what they believed at that time was an active shooter-site type of situation," he said. "So they used those kind of tactics to go into the building and clear the rooms as they entered."

    The suspect put his hands up when confronted by police and was arrested. He was expected to be booked on a charge of attempted murder.

  • U.S. sues BofA over alleged mortgage fraud

    The U.S. is suing Bank of America on behalf of Fannie Mae and Freddie Mac, with CNBC's Scott Cohn.

    By Reuters

    UPDATED 2:11 p.m. ET: The United States filed a civil mortgage fraud lawsuit against Bank of America, accusing it of selling thousands of toxic home loans to Fannie Mae and Freddie Mac that went into default and caused more than $1 billion of losses.

    Wednesday's case, originally brought by a whistleblower, is the U.S. Department of Justice's first civil fraud lawsuit over mortgage loans sold to Fannie Mae or Freddie Mac.

    It also compounds the problems that the Bank of America, second-largest U.S. bank, has faced since its disastrous 2008 purchase of Countrywide Financial Corp, once the nation's largest mortgage lender.

    According to a complaint filed in Manhattan federal court, Countrywide in 2007 invented a scheme known as the "Hustle" designed to speed up processing of residential home loans.

    Operating under the motto "Loans Move Forward, Never Backward," mortgage executives tried to eliminate "toll gates" designed to ensure that loans were sound and not tainted by fraud, the government said.

    This resulted in "defect rates" that were roughly nine times the industry norm, but Countrywide concealed this from Fannie Mae and Freddie Mac, and even awarded bonuses to staff to "rebut" the problems being discovered, it added. The scheme ran through 2009 and caused "countless" foreclosures, it added.

    "The fraudulent conduct alleged in today's complaint was spectacularly brazen in scope," U.S. Attorney Preet Bharara in Manhattan said in a statement. "This lawsuit should send another clear message that reckless lending practices will not be tolerated."

    Bank of America did not immediately respond to requests for comment.

    Since paying $2.5 billion for Countrywide on July 1, 2008, the Charlotte, North Carolina-based bank has lost nearly $40 billion on mortgage litigation and requests by investors to buy back soured loans, Credit Suisse estimated on October 5.

    Some of these costs related to Merrill Lynch & Co, which Bank of America bought at the beginning of 2009.

    According to court records, the case had been filed under seal in February by Edward O'Donnell, a Pennsylvania resident and former executive vice president at Countrywide Home Loans who had worked there between 2003 and 2009.

    The United States later joined the case. It seeks triple damages under the federal False Claims Act, as well as civil penalties.

    It is unclear whether O'Donnell has hired a lawyer. O'Donnell could not immediately be reached for comment.

    Federal regulators seized Fannie Mae and Freddie Mac on September 7, 2008 and put them into a conservatorship.

    Bharara's office has in the last 1-1/2 years brought five civil fraud lawsuits against other lenders under the False Claims Act over alleged reckless residential mortgage lending, involving loans insured by the Federal Housing Administration.

    In February, Citigroup Inc settled its case for $158.3 million and Flagstar Bancorp Inc settled for $132.8 million, while Deutsche Bank AG settled in May for $202.3 million. Cases are pending against Wells Fargo & Co and Allied Home Mortgage Corp, Bharara said.

    On Monday, Congressman Barney Frank, who chaired the House Financial Services Committee in 2008, said Bank of America should probably be shielded from government lawsuits over Merrill, which it bought in part at federal officials' urging, but he said he knew of no such urging to buy Countrywide.

    Bank of America shares were up 2 cents at $9.38 in afternoon trading on the New York Stock Exchange.

    The case is U.S. ex rel. O'Donnell v. Bank of America Corp et al, U.S, District Court, Southern District of New York, No. 12-01422.

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  • Morgan Stanley sued by ACLU for alleged mortgage bias

    By Reuters

    The American Civil Liberties Union sued Morgan Stanley on Monday, in what the group said is the first lawsuit against an investment bank alleging racial discrimination over packaging subprime mortgage loans into securities.

    The lawsuit alleges Morgan Stanley encouraged a unit of now-bankrupt New Century Financial Corp to target black borrowers disproportionately with loans that had a strong possibility of foreclosure and unjustifiably high costs. Morgan Stanley received significant fees from packaging and selling these loans as securities to institutional investors, while the borrowers faced high risks of default, the ACLU said.

    "With this lawsuit, real victims of the subprime lending scandal are stepping forward to hold investment banks like Morgan Stanley accountable for the devastation the banks wrought in their lives and in our economy," ACLU Executive Director Anthony Romero said in a statement.

    A Morgan Stanley spokeswoman had no immediate comment on the lawsuit.

    The complaint was filed in U.S. District Court in Manhattan on behalf of five Detroit residents. It alleges that Morgan Stanley went beyond the traditional role of an investment bank by helping to fund loans made by New Century, setting loan volume goals and establishing terms of the loans.

    The ACLU asked the court to certify the case as a class action. It said as many as 6,000 black homeowners in the Detroit area may have suffered similar discrimination as a result of being offered loans that many could not afford.

    The alleged practice twists past claims that banks engaged in "red-lining," or refusing to provide loans and other services in low-income areas.

    "These loans were mass produced and they were built to order, not to serve homeowners," Elizabeth Cabraser, a co-counsel for the plaintiffs, said at a news conference Monday morning. "It's reverse red-lining. It violates the Fair Housing Act."

    Discriminatory practices connected to the securitization process were endemic during the last decade throughout much of the financial services industry and across the nation, the ACLU said.

    Critics of securitization, in which banks package loans into securities for sale to sophisticated investors, say it allows banks to be reckless in their credit policies because they do not end up holding the loans. Advocates say that by removing loans from bank balance sheets, it allows them to stimulate the economy by extending credit across a variety of sectors.

    Trillions of dollars of mortgage, credit card, automobile and other consumer loans have been securitized and sold to investors. Many of the home loans bought by the banks are insured by agencies such as the Federal Home Loan Mortgage Corp., or Freddie Mac, and Federal National Mortgage Association, or Fannie Mae.

    The ACLU lawsuit follows a spate of new litigation against Wall Street by U.S. federal and state authorities over banks' roles in triggering the financial crisis that began more than four years ago.

    JPMorgan was sued by New York State Attorney General Eric Schneiderman for alleged subprime mortgage abuses at an investment bank that it purchased during the financial crisis. The U.S. attorney in Manhattan filed fraud charges against Wells Fargo Corp two weeks ago for a "reckless pattern" of making questionable home loans that allegedly cost government hundreds of millions of dollars in insurance settlements.

    Massachusetts earlier sued Morgan Stanley for securitizing home loans, alleging violations of a state consumer protection law. The ACLU said that case did not address the issue nationwide nor link the alleged abusive practices to discriminatory policy.

    Lawyers for the plaintiffs also include the National Consumer Law Center and Lieff Cabraser Heimann & Bernstein, a San Francisco-based law firm.

    The case is Beverly Adkins et al v Morgan Stanley, U.S. District Court for the Southern District of New York, No. 12-7667.

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  • High rents, tight credit put many at the mercy of the market

    Jessica Rinaldi / Reuters

    World War II veteran Howard McGowan, 88, is facing a 50 percent rent hike on the one-bedroom apartment in Malden, Mass., he and his wife have shared for 25 years.

    By Michelle Conlin and Ilaina Jonas, Reuters

    One night last spring, David Hall returned home to his studio apartment outside Boston to learn that his monthly rent had spiked from $725 to $995.

    It would be much cheaper for the maintenance manager to buy a nearby starter house than to stay put. But his mortgage broker told him that while his credit score was good, it was not high enough to meet banks' tough standards, he said.

    "I know if I walk into a bank, they are just going to laugh at me," Hall says. "So I'm stuck."

    He is not alone.

    Five years after the housing bubble burst, the United States is in the midst of a housing affordability crisis. Home prices have fallen a third from their peaks, but many Americans cannot benefit because they cannot get a mortgage.

    With credit tight, many consumers have no choice but to rent. Others who can afford to buy are also renting, because they view real estate as a lousy investment. With this increased demand, rents in some cities have jumped by double-digit percentage rates.

    In the 12 months ended in May, rents rose 14 percent in San Francisco and 11 percent in San Jose, California, according to real estate data provider Zillow. Last year in Minneapolis, they spiked 11 percent even as home values sank 8 percent.

    Apartment rent sticker shock gets worse 

    People with lower incomes have long struggled to find affordable housing, but many in the middle class are now hurting, too.

    Most personal finance experts recommend allocating no more of 30 percent of family income to housing, but nearly 40 percent of Americans are paying more than a third, according to the U.S. Census Bureau's American Community Survey.

    In New York City, one-third of households are spending more than half their pay on rent.

    "We have falling incomes, rising rents and nothing but substantial upward pressure on those rents," says Chris Herbert, director of Harvard University's Joint Center for Housing Studies. "And nothing in the cards suggests it will turn around anytime soon."

    Today's housing market is a buyer's paradise.

    It is now cheaper to buy a home than it is to rent in virtually every major city in the United States, according to John Burns Real Estate Consulting.

    But for many in the renter class, buying even a modest home is impossible because financing is so hard to secure.

    Lending for home purchases hit a 12-year low of $404 billion last year, down from $1.4 trillion in 2006, according to trade publication Inside Mortgage Finance. That means mortgage credit is tighter than it was even before the housing boom.

    This year, lending is expected to drop even more, according to Inside Mortgage Finance.

    A recent Morgan Stanley research report states that the average credit score is 762 for a consumer securing a mortgage backed by government-sponsored enterprises like Fannie Mae . But 65 percent of Americans have scores below 750.

    In other words, a disproportionate number of mortgages are going to people with unusually good credit. A perfect score is 850, and anything below 660 is considered subprime.

    "Basically, access to credit for borrowers with less than spotless credit is severely limited," the Morgan Stanley report states. "A good chunk" of U.S. households are "cut off from mortgage credit on this count alone."

    For people who can get mortgages, rates are at their lowest levels in several generations. Add that to the cheap home prices, and houses are at their most affordable since at least 1970, when the National Association of Realtors began tracking this metric.

    Normally, high affordability translates into higher sales. And the housing market is showing some signs of recovery -- the S&P/Case Shiller index of home prices had its third consecutive monthly gain in April. Last week, the NAR said pending home sales had matched a two-year high in May.

    But any recovery has been tepid. The NAR said existing home sales had declined 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April. That is 34.2 percent above the July 2010 bottom of 3.39 million, but far short of the 5.5 million pace that the NAR considers healthy.

    "Home sales have just barely picked up from their cyclical lows, and that's because there are still constraints to borrowing," said Moody's Analytics economist Celia Chen.

    Part of the lender pullback has to do with the stringent regulations Washington put in place after the housing crash, says Michael Fratantoni, vice president of the Mortgage Bankers Association. These rules put more of the losses from bad mortgages onto lenders, instead of investors or government-sponsored enterprises.

    Then there is the climate of unstable home prices and a shaky labor market: "There's a risk that even a borrower with moderately good credit may fall behind," Fratantoni says.

    Consumers who cannot buy must rent, and that is where many Americans are feeling the pressure. A rent index from Zillow shows year-over-year gains for 70 percent of the U.S. metropolitan areas, while its home value index rose in only 7.3 percent.

    Only a few years ago, landlords in cities like San Francisco and New York were tossing in a month or two of free rent, sometimes with parking, to lure tenants into signing leases.

    Today, applicants are showing up at apartment viewings with copies of their unblemished credit reports and letters of recommendation from bosses and prominent friends, in the hopes of snatching up a place to rent.

    Equity Residential, one of the biggest apartment owners in the United States, has more renters with high credit scores than ever, Vice President of Operations David Santee said on an April conference call with analysts.

    Demand for apartments is also higher because many potential buyers in their 20s and 30s want to stay flexible - home ownership is not as attractive as it was to earlier generations.

    Still, plenty of people would prefer entry into the ownership class.

    Last spring Rosemary Wynder, a physician order specialist, found her rent shooting up. She decided to buy a house.

    But a bank glitch in February had caused one late car loan payment, dinging her credit score. The Utica, New York, resident has been unable to straighten out the mistake, and five banks have rejected her for a mortgage.

    "I've been crying," says Wynder. "I've been praying." 

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  • Billionaire Ellison books Hawaiian getaway, buys island of Lanai

    Getty Images

    A county of nearby Maui, Lanai is known as "The Pineapple Island." The majority of the land there was once owned by James Dole of Dole Food Co. Inc., who bought it in 1922.

    By msnbc.com staff

    The rich really are different from you and me. We go to Hawaii. They buy Hawaii.

    Billionaire Oracle CEO Larry Ellison is buying 98 percent of the island of Lanai, the so-called “Pineapple Island.”

    The land’s current owner, Castle & Cooke Inc., filed a transfer application Wednesday with the state’s public utilities commission, which regulates utilities on the island that serve its two resorts.

    The deal involves 88,000 acres of land, plus two resorts, two golf courses, a stable and various residential and commercial buildings, lawyers for Murdock told the utilities commission in its application. Ellison plans to pay cash according to the documents and reinvigorate the local tourism industry.

    Unfortunately the documents didn’t say how much Ellison is paying. The Maui News reported the asking price was $500 million to $600 million. What’s $100 million when you’re buying an island, anyway? Especially since Ellison has had no qualms about buying toys. Including a 454-foot yacht, McClaren F1 supercar, a bunch of planes and a tennis tournament. To start.

    An Oracle spokesperson said the company doesn’t comment on Ellison’s personal business.

    Ellison doesn’t always get what he wants. His repeated attempts to buy an NBA team have failed. Most recently when he lost our a bidding war for his hometown Golden State Warriors in 2010.

    Self-made billionaire David Murdock, who owns Castle & Cooke, said he would keep his home on Lanai and the right to build a wind farm, a contentious project that would place windmills on as many as 20 square miles of the island and deliver power to Oahu through an undersea cable.

    The 2 percent Ellison isn’t buying is owned by the state, county and private residents.

    With nearly 50 miles of coastline, two resorts and zero traffic lights, Lanai boasts plenty of unspoiled charm. Tourism officials tout the luxury at its Four Seasons hotels and rugged rural areas that can only be reached by vehicles with four-wheel drive. About 2,000 people live there. The majority of the island was once owned by James Dole of Dole Food Co. Inc., who bought it in 1922.

    Ellison, 67, was No. 6 on Forbes list of richest humans -- the third American-- this year with an estimated net worth of $36 billion.

    Below, KHNL’s Jim Mendoza talks with Lanai residents about the purchase. Their overriding sentiment: Who is Larry Ellison?

     

    The Associated Press contributed to this report.

     

     

     

  • Foreclosure activity jumps in troubling sign for housing recovery

    By Allison Linn, NBC News

    The housing market has shown some promising signs of late, but a fresh batch of foreclosure data offers a reminder that any recovery from the housing bust will likely be slow, spotty and painful.

    RealtyTrac reported Thursday that foreclosure filings rose by 9 percent in May from a month earlier, to 205,990 total properties that were subject to default notices, scheduled auctions or bank repossessions.

    The jump in foreclosure activity was likely because lenders are finally getting to a backlog of homes they might have started foreclosing on last year if they weren’t facing criticism for cutting corners and pushing foreclosures through too quickly and without adequate controls, said Daren Blomquist, a vice president with RealtyTrac.

    He noted that the major increases came from properties that are just starting the foreclosure process.

    Still, the figures for May are down 4 percent from a year ago. In addition, the report noted, recent sales data suggests that not all homes with foreclosure filings will result in the bank taking the property.

    “Based on the rise in pre-foreclosure sales we’ve seen so far this year, a higher percentage of these new foreclosure starts will likely end up as short sales or auction sales to third parties rather than bank repossessions going forward,” Brandon Moore, RealtyTrac’s CEO, said in a statement.

    That’s important because bank-owned homes tend to sell for less than homes in earlier stages of foreclosure.

    RealtyTrac’s data shows that a home that is in pre-foreclosure sells for 21 percent less than a non-distressed home, on average. A bank-owned home sells for 33 percent less on average.


    Blomquist cautioned that some of these houses entering the foreclosure process will end up being repossessed by the bank. In addition, the increase in foreclosure activity that is expected as banks work through their backlog could put a damper on housing prices once again, at least in some parts of the country.

    “I actually think the stabilization in home prices and home sales is, in part, a result of the foreclosure inventory being artificially restricted over the past year and a half,” he said.

    The National Association of Realtors reported last month that existing-home sales rose 3.4 percent from March to April and were up 10 percent from a year earlier.

    Median home prices also were up about 10 percent in April from a year earlier. May data is due out next week.

    Record-low mortgage rates also could be providing a boost for the housing market. Freddie Mac said last week that the average rate on a 30-year loan dropped to 3.67 percent.

    Of course, with real estate it’s always all about location, and the foreclosure report showed that while some pockets of the country have seen some improvement others are still struggling. Georgia posted the highest foreclosure rate for the month, overtaking traditionally foreclosure-plagued states such as Florida, California, Nevada and Arizona.

    (You can click on the map above to get data by state, city or ZIP code.)

    Blomquist said while some cities seem to have broken the housing-bust cycle and at least stabilized, the data from Georgia illustrates the uneven nature of the market.

    “Georgia is still caught in the downward spiral of decreasing home prices, and that in turn is helping to fuel more foreclosures,” he said.

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    TODAY real estate expert Barbara Corcoran shows us how the other half lives, peeking into homes on the market that have been occupied by such celebrities as Zsa Zsa Gabor, Claire Danes, and Dwayne "The Rock" Johnson.

  • Rise in new-home sales bolsters sense of housing revival

    Courtesy of Allison Cramer

    Jacy Painter Kelly and her son, Painter, 5, cement handprints at their new home near Charlotte, N.C.

    By Bill Briggs, NBC News contributor

    While lugging 40 new cabinets into their nearly built home Wednesday, the Kelly family will gleefully stack another layer of chaos onto the saw-and-sales frenzy buzzing through their suburban Charlotte subdivision.

    “It is a crazy-bizarre scene," said Jacy Painter Kelly, who will move into her new, four-bedroom house in Baxter Village in August along with her two young kids and husband. "Sales are insane. And the Goodyear store across the street gets a lot of business from all the nails in (residents’) tires.” 

    The bustle at Baxter Village is part of a quickening home-construction pulse across the nation: New-home sales edged up 3.3 percent from March to April to a seasonally adjusted 343,000-unit annual pace after a 332,000-unit rate in March, the Commerce Department reported Wednesday.

    That is a far cry from the 1.3 million sold at the height of the housing boom in 2005, but still represents the latest sign the battered housing market has regained a semblance of normality.

    The median price of a new home sold hit $235,700 last month, up 4.9 percent from April 2011, according to Commerce statistics. A separate report Wednesday from the Federal Housing Finance Agency showed home prices also gained 1.8 percent in March after pushing 0.3 percent higher in February.

    When blended with Tuesday’s report from the National Association of Realtors that existing-home sales touched a two-year high in April, analysts say evidence of a modest real estate revival seems to be mounting. 

    Courtesy of Kevin Kelly

    Painter Kelly, 5, vacuums construction dust at his family's new home near Charlotte, N.C.

    “Things are looking good,” said Pat Newport, an economist with IHS Global Insight. “These are still very low numbers by historical standards. But when combined with the NAR report, this tells us that something is going on. Prices are stabilizing after adjusting for inflation.

    “It’s hard to get a good picture of the housing market early in the year because (warming) weather can distort the numbers. But I think the picture emerging is a good one. The housing market is getting better,” Newport added. “We had a very good first quarter, and the numbers are telling us it was more than just good weather helping the market.”

    Amid Wednesday’s fresh data dump, Newport called the FHFA release “the really good news” because “it showed prices are increasing pretty much across the board, in all nine census divisions.”

    Newly built homes represent less than 20 percent of the U.S. housing market, but they place a far larger footprint on the overall economy. Each home built creates an average of three jobs per year and produces about $90,000 in tax revenue, according to the National Association of Home Builders.

    The 3.3 percent rise in new home sales “is line with our expectations for a continued, modest increase in home sales as buyers gain confidence in the economy and their jobs,” said David Crowe, chief economist with the NAHB.

    TODAY real estate contributor Barbara Corcoran gives a peek inside five family-sized homes including a mountain oasis with covered porch in Boise, Idaho, a 1905 neoclassic home in Wilmington, Delaware with gleaming hardwood floors and a tropical retreat in Port St. Lucie, Florida.

    For the Kelly family, building made more budget sense than purchasing an existing home. They needed extra cash on hand and an opportunity to create a unique space to accommodate Jacy Painter Kelley’s in-home, kitchen-goods business, lucylucybangbang. She makes hanging dishtowels. From her work station, she needs to be able to keep track of her two children, ages 5 and 2.

    “We looked at existing homes. They just weren’t what we wanted. With my business growing quickly, I need a place in the home where I’m really central to everything,” Kelly said.

    “When you buy a previously owned house, you have to put a lot of cash down. You don’t have a lot left to make your home exactly what we needed. By building, you still have to put cash down but you can design just what you want it to be,” she added. “I don’t want to be tucked away by myself and I don’t want to be working in the dining room.” 

  • Record-breaking $90 million penthouse sale in New York

    One57

    The two-level penthouse features glass walls that offer near-panoramic park views.

    By Martha C. White

    What real estate downturn? A two-level penthouse with sweeping views of Central Park just sold for more than $90 million — a record price for New York, according to the New York Times. At nearly 11,000 square feet, the apartment takes up the top two floors of the 90-story One57 building, which will include 92 residences and a Park Hyatt hotel when it opens next year.

    One57

    At nearly 11,000 square feet, the apartment takes up the top two floors of the 90-story One57 building.

    A spokeswoman for the building said the exact price was subject to a confidentiality agreement, but that it was less than $100 million. The penthouse was listed at $98.5 million when the buyer agreed to purchase it three months ago. 

    That unnamed buyer is getting a lot for the approximately $8,000 per square foot they agreed to pay. The six-bedroom, eight-bathroom penthouse includes four fireplaces, a "grand salon" with 23-foot ceilings and glass walls that offer near-panoramic park views. The kitchen has handmade cabinets, granite counters, Miele appliances and a 132-bottle wine refrigerator. 

    Developer Gary Barnett declined to identify the buyer to the Times, only specifying that they didn't hail from Russia or any former Soviet state. He referred to them as a "very nice family" and said "people would recognize" them, according to the newspaper.

    One57

    The six-bedroom, eight-bathroom penthouse includes four fireplaces, a "grand salon" with 23-foot ceilings.

  • Even a $31.5 million bid won't snag Huguette Clark apartments for Qatari P.M.

    Brown Harris Stevens

    The view from Apartment 8W at 907 Fifth Avenue, a view that Huguette Clark gave up for the last 20 years of her life. The 5,000-square-foot apartment could still be yours for $19 million.

    By Bill Dedman, Investigative Reporter, NBC News

    NEW YORK — The prime minister of the Persian Gulf nation of Qatar was rebuffed this weekend in his attempt to spend $31.5 million for two of the New York co-op apartments of the reclusive heiress Huguette Clark.

    A person familiar with the decision said the co-op's board declined to grant the sheikh an interview, concerned primarily that the quiet character of the elegant building would change with the security demands of a foreign leader. He would be replacing, after all, a woman who was the world's quietest neighbor, having lived the last 20 years of her life in New York hospitals.

    Huguette Marcelle Clark, the heir to a Montana copper fortune, has been the subject of a series of reports on msnbc.com about her vacant properties and the management of her fortune. When she died last May at age 104, her properties included three apartments at 907 Fifth Avenue, at East 72nd Street, overlooking Central Park's Conservatory Water, near the statue of Alice in Wonderland.

    Karim Jaafar / AFP-Getty Images

    The prime minister and foreign minister of Qatar, Sheikh Hamad bin Jassim bin Jaber Al Thani, photographed in 2006. He was rebuffed in his effort to buy the New York apartments of the late reclusive heiress Huguette Clark.

    The Qatari prime minister, Sheikh Hamad bin Jassim bin Jaber Al Thani, was selected by the Clark estate after an auction, offering $31.5 million for Clark's two apartments on the 8th floor, a total of 10,000 square feet. That's half a million dollars more than the asking price. Hamad, who reportedly has two wives and 15 children, owns one of the largest yachts in the world, the 133-meter al-Miqab, which cost several hundred million dollars.

    Clark's third apartment, on the top floor, the 12th, found a buyer soon after it was listed, at or near the asking price of $24 million. The buyer is Boaz Weinstein, the well-known hedge fund manager and derivatives trader, formerly of Deutsche Bank and now with Saba Capital Management LP. He has signed a contract and is awaiting an interview with the co-op board.

    The three apartments combined cost Clark (and her estate) $28,500 a month in co-op fees, or $342,000 a year.

     

    The Qatari had not made the highest bid for the 8th floor apartments. He offered $31.5 million, less than the top bid of $33 million, according to a person familiar with the auction. The other bidders were the founder of a private-equity firm and the founder of a hedge-fund firm. It wasn't clear why the estate chose the lower bid.

     

     

     

     

    But the auction became moot after the co-op's board changed its mind, deciding not to allow the two apartments on the 8th floor to be joined into one. Even though the apartments had been listed separately, the estate had accepted bids only for the two together, after the co-op board had signaled that it would look favorably on a combination. But the board changed its mind after the auction, and the board declined to grant an interview to the Qatari, even if he were to purchase only one of the two apartments. Besides the security issues, the board was concerned about the disruption of construction, as well as the long-term imbalance of having a single owner with so large a share of the building. The Qatari had also let it be known that he was willing to pay top dollar for other apartments in the building for staff and relatives.

    Hamad is not only the prime minister but also the foreign minister of the emirate, and is the cousin of the emir, the country's hereditary ruling leader, Sheikh Hamad bin Khalifa Al Thani, who owns a house just down the block and across 72nd Street, between Fifth Avenue and Madison Avenue.

    Bill Dedman / msnbc.com

    A winter view of 907 Fifth Avenue in New York City, at 72nd Street on the east side of Central Park. The taxis in this view are headed east on 72nd, leaving the park.

    Now the real estate brokers must start over. Perhaps one of the other bidders will want to purchase only the $19 million apartment 8W, facing Central Park, or the $12 million apartment 8E. The apartments are said to need a lot of work, and the kitchens date from before World War II.

    The brokers from Brown Harris Stevens declined to comment, as did the attorney for the public administrator of New York County, who is executor of the estate. Proceeds of the sale will help pay estate expenses, with the remainder held for the winner of the court battle over the $400 million estate of Clark, who left two wills, one favoring her family and the other favoring her nurse, attorney, accountant and a public museum to be established in her oceanfront $100 million home in Santa Barbara, Calif.

    Her country estate in New Canaan, Conn., has been marked down to $17 million from its original price of $23 million.

    The New York Observer reported earlier Monday that the co-op board rejected a bid from an unknown buyer.

    Floor plans for the three apartments are available in our previous story.

    The full story
    More on the Huguette Clark mystery is at http://clark.msnbc.com/.

    Do you have information on the Clark family?
    Reporter Bill Dedman is writing a nonfiction book about the Clark family. If you have information, you can reach him at bill.dedman@msnbc.com.

    Rahul Kadakia of Christie's Auction House displays jewels discovered in heiress Huguette Clark's safe deposit box, including a pink 9-carat diamond ring.

  • London, NYC top the cities favored by the ultra-rich

    Suhaimi Abdullah / Getty Images

    The Merlion, a symbol of Singapore, is lit up in front of the central business district. The city, one of the world's most competitive, also has the largest GDP per capita anywhere.

    By Charles B. Stockdale, 24/7 Wall St.

    The votes are in and London is the most important city in the world -- at least, according to the ultra-wealthy. The Wealth Report, a new study by Knight Frank Research and Citi Private Bank, breaks down the 10 international cities that high-net-worth individuals consider the most important. 24/7 Wall St. examined the list to identify what it is that makes these cities exceptional.

    The report surveyed individuals worth more than $25 million in investable assets to find which cities impress them the most. The survey focused on several factors that can make cities important, including economic activity, political power, knowledge and influence and quality of life.

    A number of cities on the list are traditional hubs for business. New York and London, which sit at the top of list, are considered global financial centers. They are also important to the wealthy for other reasons, including good markets for luxury housing, strong educational resources, social stability, economic openness and personal safety.

    24/7 Wall St.: Cities where people can't afford to rent

    The list also features cities in countries with emerging economies, although they generally rank lower than the established Western urban centers. Beijing and Shanghai, while already two economic powerhouses, are quickly becoming important and represent fierce competition for the old guard. In fact, a number of leading commentators believe Shanghai will be the most important city in 2050.

    For each city among the top 10, 24/7 Wall St. included its estimated rank in 10 years. We included the average price of prime property for each city as well. Prime property is defined as “a location’s most desirable, and usually most expensive, property,” the price of which often reflects demand among the world’s wealthiest individuals. We also included the population of each city’s metropolitan area, which includes surrounding suburbs, based on data from the United Nations. That the cities vary in size reflects the fact that what is important to the rich does not necessarily translate to universal popularity.

    These are the most popular cities of the ultra-rich.

    1. London

    • Estimated rank in 10 years: 1
    • Avg. prime property price: $4,500/sq. ft. (3rd most)
    • Population: 8,631,325 (30th most)

    London, which is one of the world’s top financial centers, is considered the most important city by high-net-worth individuals -- and by a significant margin. It ranks the highest in economic activity, knowledge and influence, and quality of life categories. It is second in political power, behind only Washington, D.C. The city has an abundant supply of luxury housing, top-tier educational opportunities and a large population of the ultra-wealthy -- all characteristics that appeal to the rich. Despite competition from emerging Asian nations, London is expected to maintain its top position for the next 10 years.

    24/7 Wall St.: Highest-paid hosts on late-night TV

    2. New York

    • Estimated rank in 10 years: 2
    • Avg. prime property price: $2,200/sq. ft. (Manhattan) (17th most)
    • Population: 19,425,069 (New York-Newark) (6th most)

    New York is ranked second in both the economic activity and knowledge and influence categories. It is ranked third in the quality of life and political power categories. In 10 years, the city is expected to remain as the second-most important city. David Adam, managing director at Global Cities, notes in The Wealth Report that New York’s ability to attract a significant foreign workforce will keep it on top.

    3. Hong Kong

    • Estimated rank in 10 years: 6
    • Avg. prime property price: $4,400/sq. ft. (4th most)
    • Population: 7,069,378 (38th most)

    Hong Kong is seen as one of the world’s most important economic centers. At $45,301, it has the world’s fourth-largest GDP per capita and is expected to have the second-largest GDP per capita by 2050. Hong Kong is also very highly rated in the quality of life and knowledge and influence categories. The average price per square foot in the city is the fourth-highest for houses and the 10th-highest for apartments.

    4. Paris

    • Estimated rank in 10 years: 7
    • Avg. prime property price: $2,500/sq. ft. (11th most)
    • Population: 10,485,263 (21st most)

    Paris performs fairly well in all leadership categories considered by The Wealth Report. The city also has the 11th-most expensive prime property values. According to the report, Paris has long been a popular center for real estate investments by foreigners. Since 2009, prime office rentals have increased by 17 percent. The city is also a major destination for business and tourism. In 10 years, however, the city is expected to fall behind Beijing, Shanghai and Singapore in importance.

    24/7 Wall St.: Fast-food restaurants with the most unhealthy customers

    5. Singapore

    • Estimated rank in 10 years: 5
    • Avg. prime property price: $2,400/sq. ft. (13th most)
    • Population: 4,836,691 (60th most)

    Singapore is considered to have the second-highest quality of life. It ranks fifth-highest in economic activity, eighth-highest in knowledge and influence and eleventh-highest in political power. Singapore also is listed among the cities growing fastest in importance. The city currently has the largest GDP per capita in the world at $56,532 per person. It is expected to maintain this position through 2050. According to data from the Economist Intelligence Unit, Singapore is one of the most competitive cities in the world, along with New York and London.

    Click here to read the rest of the top 10 cities most favored by the ultra-rich.

     

  • One of three Huguette Clark apartments has found a buyer

    Brown Harris Stevens

    The view from Huguette Clark's apartment 8W, which still could be yours. The asking price is $19 million.

    By Bill Dedman, Investigative Reporter, NBC News

    NEW YORK — One of the three mysterious apartments of copper heiress Huguette M. Clark has sold for an undisclosed price. Her top-floor apartment, with 5,000 square feet of space overlooking Central Park, was on the market for $24 million, the most expensive of the three.

    The signing of a contract for apartment 12W was confirmed Monday by broker Mary Rutherfurd of Brown Harris Stevens, an exclusive affiliate of Christie's International Real Estate. The apartments have been on the market for less than a month.

    Still available: apartment 8W, also with a park view, at $19 million, and 8E, listed at $12 million.

    You can see the floor plans and descriptions of the apartments in our earlier story.

    The three apartments cost the reclusive heiress to a Montana copper fortune $28,500 a month in co-op fees, or $342,000 a year, while she lived for two decades in New York hospital rooms. Huguette Marcelle Clark has been the subject of a series of reports on msnbc.com about her vacant properties and the management of her fortune. When she died last May at age 104, she owned three apartments at 907 Fifth Avenue, at 72nd Street, in addition to an oceanfront estate in Santa Barbara, Calif., with an estimated value of $100 million, and a country house in New Canaan, Conn., recently put back on the market by the same broker at $19.8 million.

    The auction of the Clark jewelry collection, at Christie's New York, is scheduled for April 17. A slideshow of the Clark jewels is available at the home page for our Clark mystery series.

    When the apartments and jewelry sell, some of the money will be used to pay estate expenses, with the rest will be held for the eventual winner of the legal battle. On one side are members of the Clark family, grandchildren of her father from his first marriage, whom she included in one will and then cut out of her last. On the other side are her attorney, accountant, nurse and favorite museum, the Corcoran Gallery of Art in Washington, which were all named in the second will, which left the largest portion of her estate to create an art museum in her California home, with the next largest piece going to her nurse.

    Slideshow: A look at Huguette Clark's jewelry collection

    Christie's, New York

    Freed from their bank vault by the executor of the estate, the jewels of copper heiress Huguette Clark go on sale at Christie's New York on April 17, including a rare pink diamond and these emerald, pearl and diamond ear pendants. Which piece do you prefer?

    Launch slideshow

     

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