Howard Jackson's 2009 REAL ESTATE  MARKET FORECAST ©®™

 

Residential

Catastrophic news about the housing market, the mortgage crisis and the dire economic side effects impacts, locally,  nationally and worldwide , are everywhere.  This aspect of the economy effects everyone. What has happened in the past year and projected forward for 2009 and beyond effects everyone's economics, "feeling of wealth", finances and view of most peoples' largest asset. Four powerful forces are at work ( mortgage financing, business credit,  investor and consumer confidence).  These forces have been sharply effected negatively and somewhat suddenly although the evidence of this was apparent substantially before general notice.  The ramifications have the range from a complete financial disaster to a benign blip on one's financial statement. But for 2009 going forward, how can these powerful forces, their somewhat complex, but demonstrable interactions with the economy, real estate market, "feelings of wealth" be described, defined and explained in such a way that is simple enough to be understood and acted upon by most, but yet sophisticated enough so that economic policy, financial decisions and every day living decisions be rationally assessed and made. Keep in mind that some of these financial issues were created by "rocket scientists" who didn't consider the word "simple".   Factors such as "economic multipliers" for example, compound the effects, either positively or negatively, of a change in the value of residential houses or the number of houses being build. I don't want to make this explanation complicated but I think we all know what I mean. This was compounded with related and subsequent investments using credit default swaps.  This will be covered in depths later.

                                                Please note that in my 2008 Annual Real Estate Market Forecast, I did correctly forecast a downturn in the residential real estate market along with the profound side effects . I also have most all of the backup  and supporting information for your review.  I didn't want to include it here since it is so detailed, thorough, descriptive, it would clutter this forecast, unnecessarily. But just a few things to reiterate and recap.

As stated earlier, the housing boom started to peak in 2005 and the market was showing signs of disconnect in 2006.  Here is a chart showing the housing market starting to disconnect in 2006.  Other examples are stated later.

It should be noted that in specific markets, some of the loss in value is greater and some is less.  California had 8 of the 10 worst markets and Florida had 2.  New York Metropolitan area, which include parts of New Jersey, Westchester had relatively little damage, so far.

First of all, the current economic debacle had its root cause in the sub-prime market.  Homeowners in mass were issued mortgages on purchases, many with little loan to value ratio.  The mortgages has teaser rates for 2 years and then the rates were bumped up to market immediately thereafter.  Thus an homeowner, for example, had a starting payment of $350 per month which then jumped to $1,500 per month or more. The initial resets didn't seem to be a problem but then the economy continued to weaken and job losses mounted. The disruption in income seemed to accelerate the wave of foreclosures.  An economist from Wachovia also described poor underwriting which contributed and accelerated the problem.  He said, "Shoddy underwriting on mortgages" is the primary cause of the housing crisis, says York, the Wachovia economist. "People got caught off-guard by how bad it was."  My and I'm sure many others' retort would be: " How in the world could you put someone in a house they could barely afford today, knowing that in two years they never could?"

The Case-Shiller study also quantified certain key aspects of the residential situation, namely income relative to prices paid and the relationships there to. These are things we "know" but when you see the actual numbers, it makes perfect sense.

• Income —Home values floated at about three times average household income from 1950 to 2000. In 2006, the average household income was $66,500. Under the traditional model, home prices should have been about $200,000. Instead, the typical home sold for $301,000.

•Rent —Homes traditionally have sold for about 20 times what it would cost to rent them for a year. In 2006, houses were selling for 32 times annual rent.

•Appreciation —Existing homes grew in value by less than 0.5% per year, after adjusting for inflation, from 1950 to 2000. From 2000 to 2006, home prices rose at an average annualized rate of 8.2% above inflation and peaked with a 12.3% jump in 2005. Housing prices began to fall in the second quarter of 2006.

Please note that these remarks are national in nature and specific market vary.  But the relationships are constant.

        FORECLOSURE WAVES

If it was just that, this contagion would be limited and short lived. But it wasn’t.  There were “derivative” financial products, whose value was derived from the underlying mortgage products, designed by “rocket science” types, and sold to many, who didn’t really understand them. But some of this was initially and still is good, the securitization of mortgages. This allows banks to keep lending for they can sell the mortgages previously made into the secondary market - literally to investors (large and small) around the world.  This kept the supply of mortgage financing flowing.  This was the accelerating cause which caused the financial meltdown.  So it was not the normal interaction of supply and demand that caused it. But in simple terms, sub-prime residential loans were packaged into pieces and sold to investors across the world.  A credit default swap (CDS) was added to make the investment "less risky".  CDS  were similar to insurance but not regulated but the Insurance Departments.  To make matters worse, the rating agencies gave their imprimatur to them.  So these investments were gobbled up by all of the big pension funds, investors world wide and the average person's 401K's.  But then came the Norma Portfolio - please see the 2008 forecast and the appetite for these now called "toxic" portfolios stopped.  The residential financing market backed up and you can see what happened.  When the investors went to call on the CDS to make good on the defaults, the CDS's turned out to be worthless.  An unusual example, the CDS's turned out to be similar to buying in an insurance policy that the person next to you wouldn't freeze to death during the year.  And then 1,000's of persons suddenly did. And almost all of the CDS's were worthless.  The true extent won't be known until later in 2009. It is apparent that there is much more to this.  Additionally there were other enhancing factors that fanned the fires of this.  That's why these types of products enhance the value of a stock or security in an up market but in a down market the reverse is true.  In 2005, the residential real estate market was nearing its peak.  In that year, the median price of a home in a county on Long Island went up 38%.  So that was the mentality that frenetically fueled this. 

One example of this sub-prime situation is the IndyMac failure which has been widely publicized.   IndyMac became one of the leading home lenders in the country among a few others by specializing in questionable Alt. A mortgages, loans that did not require borrowers to provide full or even any documentation of their income. These loans were in addition to the sub-prime loans.

IndyMac was able to take those loans and sell them to investors eager to buy securities backed by loans that paid higher interest rates than traditional mortgages. These loans helped fuel the boom in home sales and home prices, by making money available to potential buyers who couldn't buy homes in the past. Many times Alt. A mortgages, also known as liar's loans, were used by people buying property for investment purposes rather than as their primary residence.

When home prices were soaring, the loans posed a limited risk to IndyMac or investors, because if a borrower defaulted, the home could be sold for more than was owed. Relatively few of the homes ever went into foreclosure because homeowners who couldn't afford the payments often were able to sell the homes for a profit. There were other "revelations" about this; other lenders such as Countrywide, Washington Mutual etc.

But as home prices started to fall in 2007, the default rates on the loans soared, and investors started to take large losses. IndyMac found it more difficult to sell the loans, and started absorbing losses on the loans. This happened in many other cases. there has been much negative comments of these loans and Indymac was the most expensive but not the largest bank failure. There were many others. The FDIC has raised insurance premiums from 5 cents per $100  to 12 cents per $100 of insured deposits to replenish its reserve back up to $50 Billion which is deemed adequate.

 

First of all, the current economic debacle had its root cause in the sub-prime market.  If it was just that, this contagion would be limited and short lived. But it wasn’t.  There were “derivative” financial products, who value was derived from the underlying mortgage products, designed by “rocket science” types, and sold to many, who didn’t really understand them.  This was the accelerating cause which caused the financial meltdown.  So it was not the normal interaction of supply and demand that caused it. These derivative type investments didn't have any "economic" value.  Although there was initial good at the start. This was the simple securitization of mortgages.  This gave banks the vehicle to "sell" the mortgages to investors worldwide and then have a new capital source to lend.  In the old days, once the bank loaned its limits, it couldn't make any new loans until new capital came in.

Secondly, although there were some underlying issues, such as : the lack of savings, overuse of credit which certainly are somewhat negative economic contributing factors, the US economy is the most powerful in the world.  As of the writing of this, many of the highly respected economic brains have been and are working on this issue and related ones.  This situation will ultimately turn out positively for the US and the world economy.  There was much economic and financial damage but it will be repaired, recovered and then some.  The sad part is that it could have been avoided and many have and are suffering now.

 All of the above have a direct and indirect bearing on real estate values.  There are clear reasons why this happened. 1. The proliferation of the sub-prime mortgages which, in a sense, created an artificial demand fueling new construction of homes and pumping up demand.  As you know, these and most all residential loans are sold into the secondary market which keeps the mortgage pump primed.  But, then “others” got involved, to take advantage of this huge cash generating machine and hybrid investments were created.  Many, even today, don’t full understand them.  You hear terms of “tranches”, “the Norma portfolio, credit default swaps.  The long and short of this it that these hybrid investments “derived” their value from the underlying mortgages.  Funny, we have heard the word derivative before and it wasn’t in a positive context. These “hybrid” investments were sold around the world and were rated “investment grade” and better by the rating agencies. Then went the residential market collapsed for there suddenly no longer existed a market for these “toxic” portfolios, the market backed up and then collapsed.

 

Further forensic explanation of this, who to blame, etc is well beyond the scope of this article.  But it was covered in depth in the Annual 2008 Real Estate Market Forecast and will be summarized  in the Annual 2009 Real Estate Market Forecast.

More than 1 million homes have been lost to foreclosure since the housing crisis hit back in August 2007, according a report last week from RealtyTrac, an online marketer of foreclosure properties. And foreclosures are expected to continue rising as the economy remains mired in recession.    Earlier this month analysts at Credit Suisse forecast 8.1 million foreclosures by the end of 2012, accounting for 16% of all U.S. mortgages. ( according to  CnnMoney)

In addition to the glut of foreclosed properties, which deters new construction and erodes the value of existing homes, the housing market is being drained of potential buyers by rising unemployment.

Economic statistics before this financial panic predicted growth, to a point.  After the panic, the estimates are negative in some cases.  Unemployment, after the panic, is projected upward. Following are two charts from Moodys.com which graphically illustrate this.

    NEGATIVE ECONOMIC FALLOUT IS SIGNIFICANT

   

Fallout on the Economic Outlook

 

Even though prices are down making many attractive deals, credit is very tight and many buyers can't capitalize on the opportunity further compounding the problem.

 When the new President comes into office, the effects of the bailout and recovery start to kick in, including the limitation and possible reversal of foreclosures and the selling season resumes in March 2009, I think all of this bodes well for the residential market which will have a “jolt” and uneven start forward and in an upward direction.

  

WHAT IS GOING ON NOW RESIDENTIALLY

 You have all heard reams and reams of bad news, stories.  I won’t reiterate it.  Right now, we have a lame duck President with less than 4 weeks to go before the New President –elect takes office.

 All of the past statistics for the year, two years are probably meaningless right now. But the bottom line is that the causative  event was the sub-prime mortgage situation which escalated out of control permeating into all the key areas of the global financial system.  There were other accelerating factors.  Talk compared this situation to the Great Depression. If left on its own, it would turn into a global depression. 

 To describe what is going on now is a global economy, which received a major financial shock, seeking to find “equilibrium” and getting back to normal with every known economic aid being used.

 A hastily put together group of  “experts” from the FED, Government, industry, the Senate, House with transparent motives put together a financial bailout package of over $700 Billion which is sure to be critiqued for decades. But it was a quick response.  Then there was a further financial bailout package. A true picture of this will ultimately be seen after the President -Elect takes office, establishes his economic recovery plan and things get underway.

  

WHAT TO WATCH OUT FOR GOING FORWARD RESIDENTIALLY

 In a time like this, everyone wants to know when this crisis will end and when will the normal or good times resume. When will the residential real estate market be normal again? This crisis will end eventually and the economy will resume in an expansionary mode and probably be even better than before.  The big question is “when”? The second big question is "how much damage will have been caused and to whom?"

 The key is to get the residential real estate market back on track which requires stabilizing the banks, lenders as well as the secondary market.  This also includes stemming and hopefully reversing  the wave of foreclosures. In addition, a boost to the economy must also occur so that “effective demand” for houses can be initiated, maintained and increased. This has started to happen to a point but more may need to be done after the inauguration of the New President.

 In economics, either the economy is expanding or contracting.  It is much harder to “start up” a declining or deflating economy rather than slow down a roaring economy.  This is the dilemma.  If it were just one of the major economies, that would be one thing. But in this case, it is the world economy. This will be discussed in various ways through this forecast.  The key word here is " coordinated".  The major economic powers are using "coordinated" efforts.

There are absolutely no reliable or discrete statistics to utilize to begin to make any kind of ironclad prognostications. There are historical references and economic theory.  But there are key factors that can be observed that can give pointers.  Following are these key pointers and information as to what they mean. It will all boil down to consumer motivation and behavior.  All of these address this indirectly.

 

         DOM – Days on Market- ( marketing time)

In order to determine that the residential real estate market is stable and back to normal is this.  The median sale price, month over month, for example has to show a gain.  The difference between the asking and selling price has to decrease. The days on market (DOM) has to decrease.  As these positive keys start to occur, this is the sign of an improving market. Decreasing DOM simply means that marketing time is decreasing - the property is selling faster.

This will also portent change.  If the days on market starts declining consistently over time, this is a sign of increasing demand. I expect DOM to continue to increase through the first quarter of 2009 and that it will drop substantially during the selling season. All of the bad news you have heard about this in the news during December 2008 really applies to the “non-selling” portion of the year. Although it is not good news, it is far from the bad new the headlines portray.    

A true test of whether or not the residential real estate market is improving is its performance in the 2009 selling season which will occur sometime between March 2009 and August 2009.  This is historically the strongest time of the residential real estate market. 

 All of the economic stimulus plans, the financial bailouts etc are fine and necessary.  But the true test of their “economic effectiveness” will be this.  If the results of the selling season of 2009 are positive, this will be the start of the turnaround not only of the local, regional and national economy but the global economy as well. The ideal would be to have the positive effects of the economic stimulus plans coincide with the selling season of 2009.

         Supply and Demand

 In the final analysis, supply and demand, a basic economic theory is what will prevail not only in the residential market but in any market.    Right now, there are far more homes ( supply) then people ready and able to buy ( demand ).  The market always tried to find equilibrium.  So under these conditions, prices will fall until such equilibrium occurs.  In the New York Metropolitan area, the negative effects have been minimum, so far, compared to other parts of the country. I don’t expect this to change much barring another “calamity” that hasn’t been exposed yet.

 With the infusion of the financial bailout funds, the economic stimulus packages and the yet to be announced plans of the New President, this will “crank” up the economy, produce jobs, ultimately effective demand which will ultimately cause demand to exceed supply with will start the housing market on the upward trend again.  Also population growth will also increase demand. This will have a strong impact on upward real estate values going forward. If the effects of the bailout, plus the economic stimulus plans coincide with the residential selling season, this will produce a major, jolt forward to the economy, residential real estate market and start the local, national and global economic turnaround by September 2009.  It is a real and distinct possibility.

 But in simple terms and I have said this before “ Mortgage money is the life blood of real estate”.  In spite of the best efforts of everyone, if banks are unwilling to lend; if the availability of mortgage money is less than it was when the times were “normal”, this will have an impact. Initially on “demand”.  All eyes are on the new President’s address, his economic stimulus plan and his marching orders to the “credit and lending’ side. More effective pressure has to be place on lenders to lend.  Following is a chart by Moodys.com regarding lenders tightening their standards.

A Residential Mortgage Credit Crunch

 

Since New York City is an international market, I expect to see international buying activity, particularly from China, Soviet Union from people and families who want to be in New York and other major markets and who can capitalize on what appears to be a once in a lifetime opportunity.

         Builder’s Confidence - New Housing Starts

 There have been significant ,negative headlines. According to CNN, builders confidence remained at at 17 month low.  The  glut of foreclosed housing on top of existing inventory tends to decrease the value of existing housing thus deterring new construction. Sales expectation index which is for sales six months ahead fell from 26 a year ago to 16 in December. Builders’ confidence is at historic lows as well as new home construction.  Housing starts were expected to come in at an annual rate of 730,000 for November, according to economist consensus from Briefing.com.  That's down from 771,000 during the prior month. The new annual rate for starts was the lowest since the department began tracking the data in 1959, and was down about 50% from the 2005 peak.

This is likely to continue in the negative until the demand / values for existing homes starts on the upward track again.  This will happen, but probably not in 2009 except in select areas.  So new home construction will continue to languish until employment rises again consistently and the glut of existing homes start to disappear from the market.

According to CnnMoney.com on October 31, 2008 as reported by Les Christie, here were statistics about 7.5 Million homeowners who are "underwater" meaning the amount of the mortgages owed is more than the market value of the home.

Top 10 states with underwater loans State # of mortgages % underwater Nevada 609,577 47.8% Michigan 1,145,572 38.6% Arizona 1,287,076 29.2% Florida 4,248,470 29.2% California 6,461,981 27.4% Georgia 1,456,327 23.2% Ohio 1,905,000 22% Colorado 1,045,773 18.3% New Hampshire 144,479 17.2% Texas 2,721,638 16.5%   Source:First American CoreLogic

Top 10 states with the fewest underwater loans State # of mortgages % underwater New York 1,554,607 4.4% Hawaii 201,188 5.6% Pennsylvania 1,413,181 5.7% Montana 87,181 6.9% Connecticut 678,766 7.4% Alabama 238,978 7.4% Oregon 641,820 7.5%% Washington 1,273,659 7.6% New Mexico 186,844 8.2% New Jersey 1,748,179 9.3%   Source:First American CoreLogic

 

New condominium, multi-family rentals will have a resurgence as the supply and demand get back in balance. 

Rates of change: Look for a slowing down of the negative’s such as unemployment, decline of property values.  Then the next step is stability and then increasing employment and rising property values residentially.

 

          Selling Prices of Existing Homes - Asking prices vs. selling prices

 Following is an historical chart published by NAR.

 

Following is a NAR Chart of historical sales by State:

Below is a chart published by NAR which shows the price changes in over 100 communities around the United States.  For the entire 2008, these are where the final numbers will probably settle in.  NAR, the National Association of Realtors chief economist Lawrence Yun predicts home prices will keep falling in 2009 but could return to their 2006 peak in three years, not counting inflation.  This is also a national prediction and local areas are different and will have different results. After this chart will be the rationale and conclusion for 2009.

 

First Published: August 14, 2008: 10:08 AM EDT

NAR 2nd quarter 2008 home prices

Metro Area	Median Price 1Q 2008	% Change (1-yr)
Akron, OH	$106,500	-15.0%
Albany-Schenectady-Troy, NY	$198,400	3.5%
Albuquerque, NM	$199,400	-0.1%
Allentown-Bethlehem-Easton, PA-NJ	$251,500	-6.9%
Amarillo, TX	$124,600	7.2%
Anaheim-Santa Ana, CA  (Orange Co.)	$553,300	-23.9%
Appleton, WI	$134,900	2.5%
Atlanta-Sandy Springs-Marietta, GA	$158,300	-9.8%
Atlantic City, NJ	$255,900	-1.5%
Austin-Round Rock, TX	$194,200	4.1%
Baltimore-Towson, MD	$280,500	-4.5%
Barnstable Town, MA	$349,700	-9.1%
Baton Rouge, LA	$164,000	-6.1%
Beaumont-Port Arthur, TX	$124,900	-2.2%
Binghamton, NY	$120,900	8.7%
Birmingham-Hoover, AL	$163,500	-0.8%
Bismarck, ND	$152,500	0.7%
Bloomington-Normal, IL	$152,800	-5.4%
Boise City-Nampa, ID	$191,000	-10.2%
Boston-Cambridge-Quincy, MA-NH**	$366,100	-10.8%
Boulder, CO	$375,100	-2.2%
Bridgeport-Stamford-Norwalk, CT	$449,500	-12.8%
Buffalo-Niagara Falls, NY	$108,200	4.7%
Canton-Massillon, OH	$102,800	-10.3%
Cape Coral-Fort Myers, FL	$178,100	-33.1%
Cedar Rapids, IA	$141,200	N/A
Champaign-Urbana, IL	$142,900	-1.4%
Charleston-North Charleston, SC	$215,100	-3.6%
Charleston, WV	$136,600	7.1%
Charlotte-Gastonia-Concord, NC-SC	$201,300	-2.9%
Chattanooga, TN-GA	$132,400	-2.1%
Chicago-Naperville-Joliet, IL	$257,600	-9.0%
Cincinnati-Middletown, OH-KY-IN	$139,500	-4.6%
Cleveland-Elyria-Mentor, OH	$117,500	-17.0%
Colordo Springs, CO	$214,700	-3.0%
Columbia, MO	$146,500	-0.7%
Columbia, SC	$149,500	0.8%
Columbus, OH	$145,700	-5.3%
Corpus Christi, TX	$144,400	6.2%
Cumberland, MD-WV	$101,500	-7.1%
Dallas-Fort Worth-Arlington, TX	$151,000	-3.5%
Danville, IL	$1,000	N/A
Davenport-Moline-Rock Island, IA-IL	$87,100	-19.9%
Dayton, OH	$116,900	-2.8%
Decatur, IL	$94,200	6.0%
Deltona-Daytona Beach-Ormond Beach, FL	$173,400	-10.2%
Denver-Aurora, CO	$225,200	-11.8%
Des Moines, IA	$156,600	6.0%
Detroit-Warren-Livonia, MI	$1,000	N/A
Dover, DE	$202,600	-3.4%
Durham, NC	$185,900	3.2%
Elmira, NY	$76,400	6.6%
El Paso, TX	$137,700	4.1%
Erie, PA	$104,200	4.3%
Eugene-Springfield, OR	$230,200	-4.4%
Fargo, ND-MN	$140,200	0.9%
Farmington, NM	$192,800	-4.5%
Ft. Wayne, IN	$96,500	-5.0%
Gainesville, FL	$204,800	-5.3%
Gary-Hammond, IN	$136,300	-1.1%
Glens Falls, NY	$167,900	-4.4%
Grand Rapids, MI	$112,500	-15.0%
Green Bay, WI	$150,400	-1.8%
Greensboro-High Point, NC	$153,200	-2.0%
Greenville, SC	$160,300	5.1%
Gulfport-Biloxi, MS	$143,300	-7.1%
Hagerstown-Martinsburg, MD-WV	$193,100	-11.7%
Hartford-West Hartford-East Hartford, CT	$253,900	-5.0%
Honolulu, HI	$636,000	-4.4%
Houston-Baytown-Sugar Land, TX	$153,400	-1.0%
Indianapolis, IN	$118,400	-5.5%
Jackson, MS	$129,500	-10.8%
Jacksonville, FL	$186,800	-6.0%
Kalamazoo-Portage, MI	$1,000	N/A
Kankakee-Bradley, IL	$134,000	-4.6%
Kansas City, MO-KS	$152,800	-3.1%
Kennewick-Richland-Pasco, WA	$163,400	-2.6%
Kingston, NY	$252,800	-4.6%
Knoxville, TN	$153,600	-4.1%
Lansing-E.Lansing, MI	$108,400	-19.0%
Las Vegas-Paradise, NV	$235,300	-23.6%
Lexington-Fayette,KY	$146,800	-1.0%
Lincoln, NE	$133,500	-3.3%
Little Rock-N. Little Rock, AR	$133,700	0.8%
Los Angeles-Long Beach-Santa Ana, CA	$417,800	-29.5%
Louisville, KY-IN	$134,900	-3.2%
Madison, WI	$227,400	1.7%
Memphis, TN-MS-AR	$131,600	-8.8%
Miami-Fort Lauderdale-Miami Beach, FL	$310,100	-19.3%
Milwaukee-Waukesha-West Allis, WI	$219,900	-4.1%
Minneapolis-St. Paul-Bloomington, MN-WI	$210,800	-7.2%
Mobile, AL	$138,900	-1.1%
Montgomery, AL	$144,200	-3.9%
Nashville-Davidson--Murfreesboro, TN	$1,000	N/A
New Haven-Milford, CT	$275,700	-7.0%
New Orleans-Metairie-Kenner, LA	$162,900	-1.9%
New York-Northern New Jersey-Long Island, NY-NJ-PA	$453,400	-5.3%
New York-Wayne-White Plains, NY-NJ	$498,500	-10.8%
NY: Edison, NJ	$373,000	-3.1%
NY: Nassau-Suffolk, NY	$466,600	-2.8%
NY: Newark-Union, NJ-PA	$420,000	-6.9%
Norwich-New London, CT	$241,500	-12.7%
Ocala, FL	$147,600	-13.6%
Oklahoma City, OK	$131,000	1.3%
Omaha, NE-IA	$138,000	-0.2%
Orlando, FL	$223,500	-15.7%
Palm Bay-Melbourne-Titusville, FL	$148,000	-19.3%
Pensacola-Ferry Pass-Brent, FL	$161,700	-4.1%
Peoria, IL	$124,800	3.7%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	$235,700	-3.0%
Phoenix-Mesa-Scottsdale, AZ	$205,100	-22.5%
Pittsburgh, PA	$125,200	1.4%
Pittsfield, MA	$222,900	-3.5%
Portland-South Portland-Biddeford, ME	$231,000	-5.7%
Portland-Vancouver-Beaverton, OR-WA	$286,100	-4.1%
Providence-New Bedford-Fall River, RI-MA	$269,200	-7.5%
Raleigh-Cary, NC	$213,200	-5.3%
Reading, PA	$153,600	-2.7%
Reno-Sparks, NV	$274,500	-17.3%
Richmond, VA	$1,000	N/A
Riverside-San Bernardino-Ontario, CA	$265,200	-32.7%
Rochester, NY	$119,200	1.7%
Rockford, IL	$120,700	-1.2%
Sacramento--Arden-Arcade--Roseville, CA	$229,500	-35.6%
Saginaw-Saginaw Township North, MI	$80,300	-7.6%
Saint Louis, MO-IL	$148,600	-5.5%
Salem, OR	$216,400	-5.0%
Salt Lake City, UT	$234,200	0.5%
San Antonio, TX	$158,100	2.5%
San Diego-Carlsbad-San Marcos, CA	$1,000	N/A
San Francisco-Oakland-Fremont, CA	$684,900	-19.1%
San Jose-Sunnyvale-Santa Clara, CA	$755,000	-12.7%
Sarasota-Bradenton-Venice, FL	$266,400	-14.5%
Seattle-Tacoma-Bellevue, WA	$380,500	-3.7%
Shreveport-Bossier City, LA	$142,500	3.9%
Sioux Falls, SD	$144,400	1.5%
South Bend-Mishawaka, IN	$89,400	-4.5%
Spartanburg, SC	$130,200	-2.3%
Spokane, WA	$196,600	-0.1%
Springfield, IL	$112,300	1.0%
Springfield, MA	$209,000	-3.6%
Springfield, MO	$121,200	-2.0%
Syracuse, NY	$123,600	0.8%
Tallahassee, FL	$166,400	-8.0%
Tampa-St.Petersburg-Clearwater, FL	$180,800	-18.8%
Toledo, OH	$104,100	-5.2%
Topeka, KS	$110,300	-1.3%
Trenton-Ewing, NJ	$318,900	1.6%
Tucson, AZ	$215,900	-13.7%
Tulsa, OK	$132,000	2.3%
Virginia Beach-Norfolk-Newport News, VA-NC	$239,700	-4.4%
Washington-Arlington-Alexandria, DC-VA-MD-WV	$370,300	-16.8%
Waterloo/Cedar Falls, IA	$115,400	1.7%
Wichita, KS	$122,800	3.5%
Worcester, MA	$247,300	-11.3%
Yakima, WA	$162,300	8.9%
Youngstown-Warren-Boardman, OH-PA	$71,700	-6.5%
U.S.	$206,500	-7.6%
NE	$269,000	-9.6%
MW	$161,500	-0.9%
SO	$177,000	-4.1%
WE	$290,600	-17.4%

Note1: California prices provided by the California Association of REALTORS®

 

On December 23rd, 2008, NAR issued a press release updating the housing sales numbers.  Here is a partial excerpt.  Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 8.6 percent to a seasonally adjusted annual rate¹ of 4.49 million units in November from a downwardly revised level of 4.91 million in October, and are 10.6 percent below the 5.02 million-unit pace in November 2007.  Regionally, existing-home sales in the Northeast dropped 12.0 percent to an annual pace of 730,000 in November, and are 18.0 percent lower than a year ago. The median price in the Northeast was $257,700, down 0.1percent from November 2007.

 In an article published by CnnMoney.com written by Les Christie, October 28,2008, a listing of the prices in the metro markets which showed none had an increase over the past 12 months.

In an article by the same author dated December 31, 2008, these figures are finalized for the year.  The article went on to say that   "home prices posted another record decline in October, falling 18% compared with a year earlier, according to a closely watched report released Tuesday."

The 20-city S&P Case-Shiller index has posted losses for a staggering 27 months in a row. In October, 14 of the 20 cities set fresh price decline records.

 

There has been nothing but bad news in the area of sales and sales prices of existing homes.   Below is an excerpt of a chart published on the Internet about statistics of this.

Please note the following, national charts done by Moodys.com which show the areas of the country in recession or expanding.

 

Along with that, note the change in residential real estate values from the peak.

Forecast Conclusions about the Residential Real Estate Market

 But the good news is that in the New York Metropolitan area the amount of decline is very low. I expect that overall in the Long Island, Westchester and New Jersey market a decline of -5% - -15% to be the maximum and I expect the market will bottom there. The 2009 selling season will a defining indicator. For the natural market forces present that drive the residential real estate market historically are very powerful.  Combining this with the "bailout" and " economic stimulus" packages and create an enormous, economic force capable of moving the economy forward. There also could be other stimulus types of events to encourage investment into housing.  For example, for a limited time - 2009 for example, the value of the down payment or a part there of could be used as a tax deduction on a new purchase.

 In Manhattan, I anticipate the declines will be somewhat less.  The properties with the least declines will be the less expensive properties in the better areas. These forecasts are considered to be “median”.  I don’t expect the recovery to be smooth, rather it will be uneven, choppy. I forecast that New York City, Long Island, the NY Metropolitan area will begin the lead out of the residential real estate market decline and it will also be the economic driving force to lead the United States out of the recession and into the next upward cycle. The bottom line is that is was housing that caused this debacle, loss of value, jobs, lack of consumer confidence etc. and it will be the resurgence of the housing market that will lead the economy out of it. I expect the first, positive signs of this will be the "residential  season" from March to August 2009.

  

Office

        OFFICE RENTAL MARKET

 

The results of this catastrophic, severe economic crisis has worked its way into the office real estate markets of almost all North America cities in two ways. First, the vibrant sales activity of 2005 to 2007 that produced record sales prices has come to almost an abrupt halt in 2008. Much of it due to financing issues.  Sales activity has dropped up to  90% from the high point. Prices have dropped, but with so little activity or liquidity, it is difficult to say by how much. This illiquid trend, if left unaddressed will prevail throughout 2009.  Financing issues, not directly related to rental activities will be addressed in a separate section of this forecast.

Secondly, the rental markets have softened significantly in the majority of the United States  markets. The rent increases have stopped and incentives have increased. The landlords are focusing on tenant retention at almost all costs. Rent trends of three  months ago are no longer relevant as transactions over the last three months have often been significantly more advantageous for tenants.

Without exception, the entire market is feeling the effect of the financial market negative side effects. The more volatile markets are correcting more quickly than the stable markets, like New York City, as usual.  While high prices paid put upward pressure on rental rates ( to achieve projected internal rates of return), market forces (supply and demand) are prevailing as expected. The combination of higher interest rates, recent acquisitions, and lower vacancy rates led to the higher rents in most markets in 2007. The credit crunch and no job growth the last 4 quarters have reversed the vacancy rate drop, which has caused rents to soften. Add to that the failure of such institutions as Lehman Brothers on Wall Street, major bank failures, as well as a declining job market, and the fact that the economy is "officially" in a recession paints a dismal, current, economic picture.  Almost every submarket is already showing signs of significant downward rent adjustments. Many tenants are slowing or eliminating plans for expansion. Some are consolidating.

Real estate executives are bracing themselves for a wave of sublease space coming to the market as a result of the thousands of layoffs announced by financial service companies and banks with major corporate offices in Boston. New York has had Wall Street, Lehman Brothers, Bear Stearns collapses ( not to mention other major banks),  the layoffs and other institutions such as Citibank who recently announced the lay offs of 53,000.  The hit will come in the office market which  has been an otherwise stable commercial real estate market.

Financial services companies, once the bedrock of the economy and the real estate office market, now seem to be shedding space at a record pace. With all of the layoffs, there is an ominous "feel" that there will  be a large amount of sub-lease about to come on the market very soon. But it still is a bit too early to tell.

Sublease space coming on the market — even in small increments — is the first sign there’s trouble ahead. As sublease space increases, rents soften and the overall market weakens. Sublease space is trouble for it erodes existing rentals since the landlords are competing for against this space.

This creates opportunities for tenants much the same as in the 1989/1993 time frame and to a lesser extent the 2001/02 time frame. Credit tenants with flexibility to move will find opportunities more abundant. When they are able to lock into long-term leases of eight years or more the opportunity increases. This presents a win-win scenario for both tenants and landlords as tenants can cut costs, upgrade space, and gain increased lease flexibility rights, while landlords can stabilize their rent flows.  It also creates situations where significant tenants are moved from one building to another.

New York City, Long Island, Westchester and New Jersey will be adversely affected by the financial meltdown and the Wall Street collapse.  Downtown New York City, just showing strong signs of recovery from 9/11 will probably be hit the hardest, with the other markets feeling the reverberations.

            Office Sales Market

As reported in the prior forecast, this market has been stagnant primarily due to financing.  There is a lot of pent up demand.  As the availability of financing increases and the office rental market sorts itself out, the sale market will improve dramatically.   I forecast 2009 to be a pivotal year with any major action in the later half of the year.  I believe it will be better than 2008, but not by much. One of the issues is the down payment required which has increased.  This affects the capitalization rate, thus the value.  Also the higher the down payment, the amount of potential purchasers are reduced.  There will be rapid improvement in 2010.  However for 2009, there could be a few gems of deals just under the radar and could be done with some innovative financing.

 

Retail

Given all the bad news about employment, retail sales, increasing retail vacancies and falling rentals, I forecast 2009 to be a negative year for new retail and mall developments.  Additionally there have been stories in the press that say that the US is over retailed.   "Our country has six times more retail space per capita than any other county," said Ellen Dunham-Jones, director of the architecture program at Georgia Institute of Technology.

There probably will be significant bankruptcies amount the major retailers, some malls will go dark, and downtown and main streets of the communities will see significant vacancies.  I expect this to continue across the board until unemployment starts to get reduced substantially. But a dark mall isn't necessarily the end of the world.  Ms. Dunham- Jones went on to say, "The good news is that this isn't the first time we'll see dead malls," she said. In an upcoming book, "Reftrofitting Suburbia," co-authored by Dunham Jones, she's included case studies of more than 100 places across North America that have turned dead malls or big-box stores into thriving community centers.

On December 31st, 2008 in a CnnMoney article written by  Parija B. Kavilanz, CNNMoney.com senior writer, entitled "Thousands of Stores to Disappear in '09", a number of points were made.  The first was 2008 was an "ugly sales year to haunt retailers in 2009". That disastrous holiday sales will ignite a domino effect of store closures and bankruptcies. Big box stores have been closing and that effects the remaining retail tenants who don't have the draw power on their own to being in customers.  This situation eventually will hurt the smaller remaining tenants if the big box user isn't replaced quickly. Michael Burden, principal with industry adviser Excess Space Retail Services, expects as many as 14,000 stores will close in 2009. "We could see among the highest ever number of closures," he said. He said states such as Nevada, California and Florida will be especially hard hit. Not surprising since they have the biggest residential real estate downturn. Bankruptcy used to be a way to restructure, plan a way out and continue in business. But debtor in possession financing is difficult or near impossible in this market.

 In past forecasts, I would place specific numbers on rental rates, vacancies.  Given the unique nature of what has happened, I won't in that way.  Instead, I would reiterate that the numbers - retail rentals and vacancies will be lower for the rentals and higher for the vacancies.  Specifically, it is impossible to quantify since the full scope of the bailouts and the financial recovery plans are not fully known.  But to say vacancies in the New York Metropolitan area will increase by 10% in the very good retail areas and 25% in the low end retail would not be inconceivable. Some malls, that were marginal even in the best times may have their highest and best uses changed to another use. In general, it will not be a good year for retail. But the well placed, well located, correctly tenanted mid to large retail locations should weather the storm in good shape.  This will also be true for the smaller retail.

 

Hotel

The hotel market had been doing well.  Then the price of gas started to skyrocket.  Airlines and cars were adversely affected and thus travel.  As the recession continued, this also affected travel which directly affects the hospitality industry. The STR Global website lists occupancy overall at 61.3% and ADR at $141.36.  Of course in areas such as Manhattan, the ADR overall is meaningless.  And any recent statistics are not useful since they are the result of a "spike" of an event.

While the overall effects of the recession, increased energy costs ( now declining) aren't in, it is forecast that hotel occupancy and ADR will continue downward through the first quarter of 2009.  Then, after the New President takes office and the economic stimulus plans continue to have an effect, the occupancy and the ADR's will stabilize and continue upward.  They should end the year up between 10% and 15%, mainly driven by the drastic drop in energy, increased travel and a stabilizing and expanding economy.

Industrial

There have been stories of "out sourcing", trade issues, potential collapse of companies such as GM, Chrysler etc.  Although there is no direct effect so far from the financial debacle on the industrial market, continued job losses, retail sales declines, recession will ultimately affect manufacturing and industrial sectors of the market.  For purely industrial, the year ahead would appear to be flat with slight declines.  There has not been much new industrial building and some of the existing industrial buildings have been converted to "flex" space or straight office use.  This trend will continue for 2009 albeit for the New President's trade and industrial policy going forward.  Industrial land, operating costs are very high in the New York Metropolitan area, compared to other markets.  But the location, juxtaposition to Manhattan, the major airports lend this area to specialized industrial use. 

 

Consumer Confidence

 Historically for reference sake, The Conference Board reported on December 29th, 2006 that consumer confidence shot up to an eighth month high of 109.0  in December. This is the first December in three years where the consumer confidence level went down.  RBC financial group said, "that its monthly measure of U.S. consumer confidence dropped more than 5 points to 86.9 from 92.4 in November, as consumers expressed concern about current and future economic conditions, as well as investing."

Hurricane Katrina's effects, the attempted rebuilding of the World Trade Center In Lower Manhattan ( New York City ), the continued war in Iraq, issues with Iran, imbalanced world trade, continued to influence consumer confidence both locally, nationally and world wide.

Here is a history of interesting consumer confidence statistics:

 

 

The following Conference Board Consumer Confidence  Index was released 11/17/2007 which indicated that the Index is now 87.3 down from 95.2 in October 2007.  It began the year just above 100.  This decline was based in part due to all the negative news. An index this low does generally not auger well for future positive economic news.

As of December 27, 2007 the Conference Board reports the following: 

The Conference Board Consumer Confidence Index, which had been declining since the summer, posted a slight increase in December. The Index now stands at 88.6 (1985=100), up from 87.8 in November. The Present Situation Index, however, decreased to 108.3 from 115.7 in November. The Expectations Index rose to 75.5 from 69.1.

Consumers' appraisal of present-day conditions continues to paint a dismal picture. Those claiming conditions are "good" decreased to 20.3 percent from 22.5 percent. Those saying conditions are "bad" increased to 20.0 percent from 18.9 percent. Consumers' assessment of the job market was also less positive. Those saying jobs are "hard to get" rose to 23.5 percent from 21.4 percent, while those claiming jobs are "plentiful" declined to 22.7 percent from 23.3 percent in November.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for December's preliminary results was December 18th.

Source: Conference Board- December 2007 as excerpted from publication in the Press

The above graph depicts rapidly falling consumer confidence. The actual effects of the mortgage crisis, residential real estate market and related components won't be fully factored into the market until the first quarter of 2008.

 

As of November, 2008, The Conference Board Consumer Confidence Index™, which had declined to an all-time low in October, improved moderately in November. The Index now stands at 44.9 (1985=100), up from 38.8 in October. The Present Situation Index decreased to 42.2 from 43.5 last month. The Expectations Index increased to 46.7 from 35.7 in October.

The Consumer Confidence Survey™ is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for November's preliminary results was November 18th.

Notice the difference, the substantial drop.

On December 31st,  2008 the Conference Board announced the following about the current consumer confidence reading.  The Conference Board, a New York-based business research group, said Tuesday that its Consumer Confidence Index fell to 38 in December from the downwardly revised 44.7 in November. The Conference Board's outlook for 2009 is dismal. They don't expect unemployment to bottom out until mid 2010.

Why the Economy Feels Bad

CNN Ali Veshi and Erica Fink did a long look at five economic factors about the economy to test the realities of how things really are. It was published on or about October 31, 2008. They were rated on a scale of 0-10 with 0 being the worst and 10 being the best. They used 1980 as a baseline starting point for going further back in time would be like comparing apples and oranges. They looked at the following five factors: jobs, personal income, personal savings, industrial production and home prices.  Here is a aggregate summary of the findings:

 

Regarding unemployment, on December 31st 2008 and article by Julianne Pepitone, CNNMoney reported the following statistics about unemployment.  "The Labor Department said initial filings for state jobless benefits fell to 492,000 for the week ended Dec. 27, a decline of 94,000 from the 26-year high of 586,000 claims a week earlier.  Economists were expecting jobless claims to slip to 575,000, according to a consensus survey by Briefing.com".  However, these were the highest unemployment claims since 1982.

The article went on to say , "The number of people continuing to collect unemployment benefits increased to 4,506,000 in the week ended Dec. 20, the most recent data available. That was a jump of 140,000 from the previous week's revised level. Over the past four weeks, continuing claims averaged 4.422,500, an increase of 103,750 from the previous week's revised average".

Consumer spending makes up about 70% - 75% of the U.S. economy at this point.  The continued, severe but abating credit crunch has dried up Americans' borrowing ability for the immediate term. As such, they're relying on income more than ever for buying power. Why? It is the only source of purchasing power.

"This is a very negative omen for consumer spending in 2009 for until the job market stabilized and improves, buyer spending increases will be limited for the short run , and without increased purchases to drive the economy  2009 is likely to be a very sluggish year in economic terms. The effects of an improving housing market can change the dynamics of this equation for the positive. Besides the effects of the bailout, economic stimulus plans and the to be announced President - Elect's plan, an improving housing market can improved homeowner's equity, stimulate employment in the financial services and banking areas, to a lesser extent, improve business in the housing related industries such as home improvements, furnishings, appliances all which will improve the economic outlook.

The consensus of economists seem to converge on an unemployment number peaking at 8.5%-8.8% during 2009.

Recession

As reported by CNN and other bureaus, a story confirming what many had long believed, the National Bureau of Economic Research announced Dec. 1 that the economy is in a recession - and has been for some time. NBER, the official body that measures economic cycles, said the United States has been in a recession since December 2007.

One of the reasons for this is the collapse of business credit.  Although this forecast is specifically geared towards real estate, an underlying economic problem indirectly affects real estate. Pages could be filled up with negative news about lack of business credit.  It will be summarized in a few lines.

    1.  On December 30th, 2008, an article initially published by Reuters, carried by CnnMoney reports that banks cut lending by 55% in 2008, which refers to business lending, not real estate lending, according to data from Reuters Loan Pricing Corp. Loans for leveraged buyouts, a key source of loan growth was down 80% for 2008. Loan volume was the lowest since 1994.

    2. Much of the reported loan slump came in the second half of 2008 after the collapse of Bear Stearns and Washington Mutual was taken over by regulators.

    3. Loan volume is expected to be anemic for 2009, the loans actually done will have gone through a tighter selection process. The more riskier, less known borrowers with have trouble getting their loans done or not at all.

    4. The major US Automakers got much of the bailout financing they wanted, but not all.

    5. On January 2nd, 2009 in an article by Aaron Smith, CnnMoney.com the following points were made.  The manufacturing index is at a 28 year low.  The Institute for Supply Management, a purchasing management group based in Tempe, Ariz., said its manufacturing index was 32.4 for December. That's the lowest reading since June 1980, when it stood at 30.3. An index reading above 50 indicates growth, while a reading below 50 indicates a slowdown. A reading below 41 is typically associated with recession in the broader economy. New orders have experienced the lengthiest contraction thus far - 13 months - and plunged to 22.7 in December from 27.9 the prior month. Ore said this is the lowest figure since January 1948. Manufacturing in the U.S. Midwest fell to its weakest level in almost 12 years in November as steel and machinery production dropped, the Chicago Federal Reserve Bank said Monday."

In the New York Metropolitan area, we have the loss of Wall Street jobs, bank failures, mergers such as Lehman, Bear Stearns coupled with major layoff announcements such as Citi announcing 53,000 layoff.

Just to digress, and to put things in perspective, an article by T.R. Wicher, Las Vegas, December 29, 2008,from the Business and Tech portion on Time on Cnn which basically said that the good times have stopped rolling in Las Vegas.  Some of the excerpts:

    1. Gaming revenue is down 8.5% for the year to $8.3 Billion ( this is on the strip). Buy the revenue for October is down 24.3% from October 2007.

    2. Construction was stopped on Boyd's Gaming$4.8 Billion Echelon Resort in August, just at the three towers reached 12 out of 55 floors.

    3.  Construction in the area dropped 92% in October.

    4. Nevada's unemployment rate went from 0.4% to 8% in November and is expected to rise to 10% in 2009.

The numbers for the year will probably show job losses in excess of 1,000,000.  Despite that, the nation's unemployment rate is a relatively low 6.5%.  To put that into perspective, consider that during the Great Depression, unemployment reached 24%. During the last oil-fueled recession, in April 1976, unemployment hit 9%.  To put things in perspective, when things are good, like they were in the tech boom, unemployment is low. Indeed, the lowest unemployment rate seen since 1980 was in April of 2000, when it stood at 3.8%.  Following is a chart of job losses up to the 3rd Quarter.

 

 

Below is a chart indicating recessions of the past as well as the duration of such recessions.

  

 

How long will this recession last. Given the nature of what has happened ( sub-prime mortgage crisis, collapse of the residential real estate market, back firing of financial "gimmicks",  financial bailout of the banking system, the unbelievable drop in energy prices, economic stimulus packages as well as the yet undefined economic recovery plan of the New President, the recession will last longer than any one of the past but it will not turn into the "Great Depression". It is forecast that the recession will last between 18-24 months from December 2007.

Stock Market

The stock market went from a high of over 14,000 just before the end of 2007 to about 8,500 sometimes with 1,000 point swings during the day of trading.  On Jan. 2, 2008,  the Dow opened at 13,261, but the index twice closed below 8,000 this year and now stands at around 8,500. It had almost 1,000 point gains or losses on a few days in October. All of the past statistics yearly statistics  really don't mean much. On December 31, 2008 is closed at 8,776.39 down (33.68%) for the year. The other markets moved mostly in tandem.   2008  will be remembered as the worst market since the Great Depression (1931). As the economy improves, and it will, the stock market will bounce back.  In the stock market crash of 1987, the market was around 2,500 and the big down day was -508 points,  and just before this downturn, it was about  13,930.01 in October 2008 according to Stockcharts.com  Historically, with population growth the stock market resurgence  will happen again on the next up cycle.  But in the immediate interim, there was financial carnage.  Ironically, for 2009, I forecast an upward growth of 10%-15% by the end of 2009. I expect there to be volatility but not as severe. I also expect new regulations, oversight which will try and prevent a future occurrence of this debacle.

         Biggest % loss since 1987

Oct. 13 - Biggest gain ever stops 2,400-point slide

Dow closed at: 9,387.61

Gain in points: 936.42

Percentage gain: 11.1%

 

Sep. 29 - Dow's biggest point loss ever

Dow closed at: 10,365.45

Change in points: -777.68

Percentage change: -6.98%

 

In the addenda, there is a chart showing the Dow Jones Industrial Average going back to 1925.

Energy - Oil

 

 

 

 

 

Fossil fuel is going to run out.  The only question is when. The question is what will the predominant energy source of US be when this happens.  If the US has zero dependency on it, that would be ideal. Any type of dependency would present a continuing problem.

Historically, It was forecast that if energy prices ( as measured by oil prices ) rise and stay over $125 per barrel, this would create an energy shock to the economy similar to the 1973 Arab oil embargo.  Historical note: Japan started its attack on the United States at Pearl Harbor, among other places , as a direct result of the United States placing and "embargo" on oil to Japan.  As of this writing, there is no, known, clear United States energy plan to get the US completely off fossil fuel ( oil, gasoline) within a definable period of time.

Oil hit $147 per barrel during the summer.  It is now flirting with $40 per barrel. Did demand fall ?  Yes, somewhat.  How did it reach the $147 per barrel and now just a few months later it is close to $40 per barrel? These are excellent questions but are well beyond the scope of this forecast. The story will come out in detail during 2009. Let it suffice to say that the forecast of gas for the car hitting and staying at $4.00 per gallon, which is almost did in 2008 is a very real and distinct possibility. It almost did it in 2008 and there is a clear and present possibility of it doing it again absent a full scale, national, energy plan.

The sooner the US economy devised and implements a new source or sources of energy, this will take the US and World economy into a new age of peace and prosperity.  It will also drastically reduce vulnerability to war situations.

 

Interest Rates

We are all aware of the impact of interest rates on economic decisions, including housing affordability. A recanting of the past history over the course of 2008 is meaningless.  Due to the economic calamity, the FED has reduced the FED funds rate to almost zero and has begun increasing the money supply to provide liquidity. It is expected that interest rates, increased liquidity will be "policy" until long after the economic recovery has begun.  Here is a chart showing a few year historical look back at interest rates. Currently this rate is almost 0%, .0025.

                Mortgage Interest Rates 

Historically, the Fed had lowered interest rates successively through most of 2008 .   In fact it recently lowered its rate to almost zero and it would also purchase more mortgage backed securities from Freddy Mac and Fannie Mae.  Mortgage interest rates have been declining.   On December 24th, 2008, Cnn Money reports that there has been a wave of mortgage applications to take advantage of falling mortgage interest rates.  But most of the applications are for refinance, not purchases at this poing. Freddie Mac's survey of mortgage rates showed more than a quarter-percentage-point drop to the lowest level in the 37-year history of the survey. The 30-year fixed rate mortgage fell last week to 5.19% from 5.47% the week before. 15 Year mortgages and ARM's are lower but the 30-year fixed is the standard that is widely used for comparison purposes.

As of December 29, 2008 according to bankrate.com here are national mortgage rates:

NATIONAL OVERNIGHT AVERAGES

TODAY

+/-

LAST WEEK

 

30 yr fixed mtg		5.32%		5.29%
15 yr fixed mtg		5.20%		5.22%
5/1 ARM		5.83%		5.86%
30 yr fixed jumbo mtg		6.81%		6.93%
5/1 jumbo ARM		5.89%		5.95%

 

However, bank lending is not at "normal" circumstances.  As 2009 unfolds it is anticipated that these circumstances will start to normalize again.  This, in combination with continued low mortgage interest rates, will help the March - September 2009 selling season and should re-start the residential real estate market back to normal.

 

 

                    Prime Rate

 

Historically the prime rate appears as follows:

 Historical Graph

 

 

Historical Chart

 

Prime Rate
Month	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007
Jan 1	8.25%	8.50%	7.75%	8.50%	9.50%	4.75%	4.25%	4.00%	5.25%	7.25%	8.25%
Feb 1	8.25%	8.50%	7.75%	8.50%	8.50%	4.75%	4.25%	4.00%	5.25%	7.50%	8.25%
Mar 1	8.25%	8.50%	7.75%	8.75%	8.50%	4.75%	4.25%	4.00%	5.50%	7.50%	8.25%
Apr 1	8.50%	8.50%	7.75%	9.00%	8.00%	4.75%	4.25%	4.00%	5.75%	7.75%	8.25%
May 1	8.50%	8.50%	7.75%	9.00%	7.50%	4.75%	4.25%	4.00%	5.75%	7.75%	8.25%
Jun 1	8.50%	8.50%	7.75%	9.50%	7.00%	4.75%	4.25%	4.00%	6.00%	8.00%	8.25%
Jul 1	8.50%	8.50%	8.00%	9.50%	6.75%	4.75%	4.00%	4.25%	6.25%	8.25%	8.25%
Aug 1	8.50%	8.50%	8.00%	9.50%	6.75%	4.75%	4.00%	4.25%	6.25%	8.25%	8.25%
Sep 1	8.50%	8.50%	8.25%	9.50%	6.50%	4.75%	4.00%	4.50%	6.50%	8.25%	8.25%
Oct 1	8.50%	8.25%	8.25%	9.50%	6.00%	4.75%	4.00%	4.75%	6.75%	8.25%	7.75%
Nov 1	8.50%	8.00%	8.25%	9.50%	5.50%	4.75%	4.00%	4.75%	7.00%	8.25%	7.50%
Dec 1	8.50%	7.75%	8.50%	9.50%	5.00%	4.25%	4.00%	5.00%	7.00%	8.25%	7.50%
Copyright 2007 MoneyCafe.com

Here is a recent summary:

 

Date of Rate Change	Rate (%)
September 18, 2007	7.75
October 31, 2007	7.50
December 11, 2007	7.25
January 22, 2008	6.50
January 30, 2008	6.00
March 18, 2008	5.25
April 30, 2008	5.00
October 8, 2008	4.50
October 29, 2008	4.00
December 16, 2008	3.25 (The Current U.S. Prime Rate)

Source: Wall Street Journal - Excerpts - US Prime Rate History

More likely than not, this rate will stay at this level until the FED is confident that the current recession is over and the economic indicators point to consistent economic growth going forward. I don't expect any upward movement on this rate probably for almost the entire year.  Actually when the FED does raise rates, we will all be experiencing much better economic times.

            Capitalization Rates: Due to the mortgage crisis the amount of equity required has gone up substantially. The NY Times reports ( 12/19/2007) that sale price of office buildings continued upward as a dizzying pace, with sales prices approaching $2,000 per square foot. Record sale price per square foot after record price per square foot continued.  Now, for example, a major real estate owner talks about the credit squeeze this way. The company Stellar Management, the building "Milk Studios", agreed to buy the building for $160 Million, still a handsome profit from the price the prior owners paid in 2004 ( $55 Million plus $15 Million in upgrades).  But the broker at Eastdil said that: " the buyer ( Stellar ) would have to contribute $90 million of  equity ( prior to the mortgage crisis just $10 million of equity).  This requirement has also had an effect on the sales prices.  There hasn't been any $1,000 per square foot price sale since the summer when Larry Silverstein bought 1177 Avenue of the Americas from CALPERS . I have heard of many other situations throughout 2008. This is a temporary situation but one that is adversely affecting the investment sales end of the real estate market. Left unabated, this can cause financial damage. It could cause a decline in property values for commercial properties.

Here is an example of what I'm talking about.  Here is a common method of developing a capitalization rate, a bit sophisticated, but please notice the inputs on the left, the mortgage and equity.  Each represents a certain percentage of the total investment with certain rates associated with each position.  Notice the equity position, the 2nd position has a higher compensation to the equity position.  I'm going to present a "normal" financing capitalization rate development and the "current" one, hopefully temporary, in which the banks require larger equity.  I'm keeping all other variables the same.  In reality, there would be some differences.

THE (NORMAL) MORTGAGE SITUATION

M = Mortgage Ratio	65.00%	0.65	M   x	0.094845	K  =			0.061649
E = Equity Ratio	35.00%	0.35	E   x	0.110000	Y  =			0.038500
I = Mortgage Interest Rate	7.25%	Weighted Rate						0.100149
T = Mortgage Term/year	20
E = Equity Yield Rate	11.00%	Less: Credit For Equity Build-up
N = # Payments per period	12	0.65	M    x	0.326773	% PD x	0.059801	SFF =	0.012702
K = Mortgage Constant	0.094845
HP = Holding Period (Years)	10	Less: Appreciation
Annual % Appreciation in Value	1.00%	0.10	APP  x	0.059801	SFF		=	0.005980
App = % Appr. over HP	10.00%
SFF = Sinking Fund Factor	0.059801	Equals: Overall Rate						0.081467
@ Y(Rate) & HP(Period)
% PD = % Mtg. Paid Off Over HP	0.326773					Rounded to		8.10%

THE NEW MORTGAGE SITUATION REQUIRING LARGER EQUITY

M = Mortgage Ratio	50.00%	0.50	M   x	0.094845	K  =			0.047423
E = Equity Ratio	50.00%	0.50	E   x	0.110000	Y  =			0.055000
I = Mortgage Interest Rate	7.25%	Weighted Rate						0.102423
T = Mortgage Term/year	20
E = Equity Yield Rate	11.00%	Less: Credit For Equity Build-up
N = # Payments per period	12	0.50	M    x	0.326773	% PD x	0.059801	SFF =	0.009771
K = Mortgage Constant	0.094845
HP = Holding Period (Years)	10	Less: Appreciation
Annual % Appreciation in Value	1.00%	0.10	APP  x	0.059801	SFF		=	0.005980
App = % Appr. over HP	10.00%
SFF = Sinking Fund Factor	0.059801	Equals: Overall Rate						0.086672
@ Y(Rate) & HP(Period)
% PD = % Mtg. Paid Off Over HP	0.326773					Rounded to		8.70%

Notice the difference in capitalization rates with a 15% change upward in equity requirements. It is about 60 basis points higher. Yes, arguments could be make about the other factors in the capitalization rate that could or should also change along with the equity requirements. For example, (depreciation- future value of the property forecast to be lower) would result an even higher capitalization rate. The mortgage term could be lowered which also would result in a higher capitalization rate.  As of the writing of this forecast, the probabilities of changing the other factors in tandem are not fully known or quantifiable.  This example is for illustrative purposes.  Please note in many real estate tax appeal cases, a simpler capitalization rate formula is utilized.   Similar results would be produced.

                WHEN MARKET STABILIZES                                                            UNDER MORTGAGE CRISIS CIRCUMSTANCES

Industrial                       9.750% - 12.00%                                                                                        10.5%- 15%

Office                           7.75% - 10.5                                                                                                   9.5% - 12%

Retail                           7.50% - 10.75%                                                                                              9.00% - 12%

Hotel                            8.75% - 10.75%                                                                                               9.25% - 12.25%

Assisted Living          9.00%  - 11.00%                                                                                              10.00% - 13.00%

Multi-Family               7.25% - 10.00%                                                                                                  8.00% - 11.25%

 

Property Appreciation Rates:

     WHEN MARKET STABILIZES                                                            UNDER MORTGAGE CRISIS CIRCUMSTANCES

Retail                            1%-1-1/2%                                                                                    FLAT TO SLIGHT DECLINE

Office                           1%-2%                                                                                            FLAT TO SLIGHT DECLINE     

Industrial                      2% -4%                                                                                           FLAT TO SLIGHT DECLINE

Multi-family                  2%-3%                                                                                             FLAT TO SLIGHT DECLINE

Hotel                            2%-4%                                                                                              FLAT TO SLIGHT DECLINE

Assisted Living          1% - 2%                                                                                             FLAT TO SLIGHT DECLINE

 

Stagflation

Stagflation is often most feared for it brings about the worst in two economic terms instead of one.  A stagnant economy and inflation.  Usually inflation is associated with a rapidly inflating economy.  Just a few months ago, oil hit a record high of about $147 per barrel while continued job losses month over month continued for the last year continuously.  Stagflation usually hits when there is an outside shock such as this oil price increase without an increase in demand.  But over the last month, oil has dropped to under $45 dollars a barrel.  As I result, I forecast the risk of stagflation in 2009 to be minimal. However, unless the US and the world find another source of energy, the oil (energy) issue will crop up again, perhaps as early as when the economy returns to normal. Initial reports reveal the President -Elect Obama's speech will address these issues head on.

 

Bailout and Financial Stimulus

The big question is should there have been a bailout at all or let the free market do its job and regulate success and failure with objective and sometimes ruthless logic.  Let risk and reward be the messengers of efficiency and innovation. In a perfect world, the short answer is "yes". But, I know , there is always a but.  Everything us a substantial nature doesn't work in a straight line.  So, once in a while there has to be "divine intervention". Take the case of the Great Depression. One major reason it continue so long was the lack of investment.  Long story short, when Roosevelt took office after Hoover, the President during the Great Depression, Roosevelt enacted major infrastructure and other types of "programs" which got the economy "quick started".  It major financial debacles like this, I strongly support this type of intervention as long as it is intelligently done, more than adequate in scope and with safeguards. 

In this case, some of the largest, renowned financial institutions were going to collapse. If let to collapse, it would have paralyzed the entire world's financial system.  It could have turned very quickly into another Great Depression. 

Regarding GM, Chrysler, although it is apparent that the direction, management were not "competitive" for years, letting the entire automotive industry to fail would have had dire economic consequences well above and beyond just a simple auto industry. This includes the related industries, suppliers and key manufacturing technology.

I believe the current bailout and financial stimulus, which retrospectively might not have been the optimum choices, were very prudent, thought out and appropriate for this, unique financial debacle. It not only provided timely, targeted liquidity but also went a long way to claming and ultimately restoring the world financial markets and economic systems. This plan (series of actions) also became coordinated with the other major, world economic powers which will insure its ultimate but quick success.

Global Competitiveness 

The United States tops the overall ranking in The Global Competitiveness Report 2008-2009. Switzerland is in second position followed by Denmark, Sweden and Singapore. European economies continue to prevail in the top 10 with Finland, Germany and the Netherlands following suit. The United Kingdom, while remaining very competitive, has dropped by three places and out of the top 10, mainly attributable to a weakening of its financial markets.

The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the report.

 

 

Rankings 2008-2009 Top Ten

Full rankings (PDF)  Full rankings (Excel) Rank  1 2 3 4 5 6 7 8 9 10 Country  US  Switzerland  Denmark  Sweden  Singapore  Finland  Germany  Netherlands  Japan  Canada Score  5.74 5.61 5.58 5.53 5.53 5.50 5.46 5.41 5.38 5.37

 

Rankings 2007-2008 Top Ten

>>Rankings in full Rank 1 2 3 4 5 6 7 8 9 10 Country US Switzerland Denmark Sweden Germany Finland Singapore Japan UK Netherlands Score 5.67 5.62 5.55 5.54 5.51 5.49 5.45 5.43 5.41 5.40

You may download a full report by going to this site: http://www.weforum.org/pdf/gcr/2008/rankings.pdf

For further information on the Global Competitiveness Network, please contactgcp@weforum.org. 

Real Estate Taxes

Real estate taxes continue to be an issue on Long Island.  They have continued to rise.  People’s first reaction is to blame the assessor.  However, the assessor’s role is to “allocate” the tax burden based upon the Fair Market Value of the properties in the assessor’s jurisdiction.  Real estate taxes are set by the operating budget of the County, Town and School.  School taxes are a major issue and unless that is gotten under control, real estate taxes will continue to rise. Increased State aid would be beneficial.  Unfunded mandates contribute to this. 

Budget Deficits

The National Debt is $10.6 Trillion! Updated 23 December 2008.

Check the debt yourself at the Treasury Department web site, it changes daily. And more details.

Your money is spent through Appropriations Bills passed by Congress and signed by the President. This chart is based on the Appropriations Bills. The Government does not have any money, it takes your money from you and, and borrows more, then spends that! Press Release on Tax Code and the IRS.

--- "Budget Deficit" vs. "National Debt"--- Suppose you want to spend more money this month than your income. This situation is called a "budget deficit". So you borrow. The amount you borrowed (and now owe) is called your debt. You have to pay interest on your debt. If next month you don't have enough money to cover your spending (another deficit), you must borrow some more, and you'll still have to pay the interest on the loan. If you have a deficit every month, you keep borrowing and your debt grows. Soon the interest payment on your loan is bigger than any other item in your budget. Eventually, all you can do is pay the interest payment, and you don't have any money left over for anything else. This situation is known as bankruptcy. Each year since 1969, Congress has spent more money than its income. The Treasury Department has to borrow money to meet Congress's appropriations. The total borrowed is more than $10,000,000,000,000 and growing. Even when government officials claim to have a surplus, they still spend more than they get in. We pay interest on that huge debt.

In Fiscal Year 2008, the U. S. Government spent $412 Billion of your money on interest payments* to the holders of the National Debt. Compare that to NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion.  The National Debt was $9.1 Trillion!  Updated 21 October 2007.

 

 

2009 REAL ESTATE MARKET FORECAST-

OVERALL CONCLUSIONS AND OBSERVATIONS

 

The residential real estate market was the trigger in this economic and financial debacle.  It has to be the driving force to get the overall economy back on track. It appears that all the requisites are in or being put in place.  The March-2009 residential selling season will be "the" benchmark to determine if the residential real estate market is in fact on the road to recovery and normal appreciation. For those who remember the stock market crash of 1987 and the resultant decline in the real estate market, including residential.  Within a few years the market came back and the losses were recovered.  The market continued increasing beyond the highs prior to the crash.  The same will happen here.  Everyone has 20-20 hindsight.  We will look back at this time and say " That was the buying opportunity of a lifetime".

These conclusions are preliminary since the market is still in a state of flux.  The inauguration of the New President on January 20, 2009 and the selling season from about March to August 2009 will also be factors.  Added to that are the effects of the bailout, the financial stimulus plan, Iraq War and the re-awakening of the most powerful economy in the world, the US economy.  Right now it is impossible to forecast anything with any degree of confidence.  But what was presented above are “keys” to watch out for.  It is the change in those key factors which will portent change in the residential housing market, either positive or negative. The recovery of the residential real estate market is the key to overall recovery. It represents a unique blend of “consumer confidence” and “effective demand” and the quicker the recover is, the shorter the economic disintermediation, pain and the other negative things associated with it.

The other related issues like the financial bailout, economic stimulus plans, the New President's plans, bank lending, credit, keeping jobs in the US, investing in conservation, etc also are part and parcel of the overall recovery. 

For the near term you will continue to hear "bad news". This is inevitable.  The good news is that the bad news won't last much longer and the bad news came relatively quickly.  You will start to hear good news; sustainable good news immediately after the inauguration of President - Elect  Obama. It will start slowly and then during the residential "selling season" is will start to pick up momentum.

If the following can happen, this economic, world crisis can be quickly resolved and place the US and the world economies back on the road to prosperity.  Here is the Howard Jackson  Economic Growth Blueprint ©®™ plan of action:

             1.      A world wide “coordinated” effort to provide economic stimulus. Notice the word coordinated.

2.      Stop and reverse the foreclosure process to stop further homes coming into an already over supplied market. Enact other auxiliary plans to encourage buying such as making the down payment tax deductable.

3.      Continue to “put out any economic fires”. Do whatever it takes and do it quickly.

4.      The New President will surely have economic plans as well. Implement as many key, plans as quickly as possible.  Some of them have been reactionary to crisis situations.  In a classical sense , those actions might be interpreted as "nationalization".  In reality, they aren't.  I major, intellectual discussion is possible here but it won't be entertained due to brevity considerations and also it would be beyond the scope of this forecast.

5.      With all of the economic stimulus plans in effect, continue to make sure employment is increased and unemployment is decreased.

6.      Protect and increase our manufacturing base. The loss of manufacturing jobs has been astounding.  The economic "law of comparative advantage" has its place, but this loss of manufacturing jobs simply doesn't correlate. Much more attention has to be placed on the ability of the US manufacturers to sell their products abroad.  The simplest thing would be to look at our trade deficits and carefully look at each country and determine how easy it is for the US to sell there.

7.      Increase global exports. This too has to be coordinated.  For too long, everyone can sell their products into the US but for some reason there always seems to be road blocks to our products being sold abroad.  I’m not advocating a trade war or anything like that.  But I think a priority has to be retention and expansion of high quality US jobs here.  Our manufacturing sector of the economy must be given a high priority but also an intelligent selection. There may be industries that no longer are competitive and others that are very competitive that have trouble selling goods abroad.

8.      Energy – The US must have an energy independence plan.  Ironically, in July the price of a barrel of oil was about $147 a barrel and now they are predicting it could hit a low of $25 a barrel less than 6 months later.  This is just a lull.  Like a ticking time bomb, it will ultimately explode. The sooner the US shifts to alternate sources, implements green buildings, wind etc, the less impact it will have. Developing a new, national energy policy harnessing the various, existing sources of energy, developing a new source with the intensity of the "man to the moon project",  will take a potential "war motive" and an "economic crippler" out of the economic equation.  This will foster stable, consistent, long term economic growth both nationally and globally.

9. Capitalization Rates:  2009 will have a volatile year for investment grade properties which are usually very stable.  The reason will be about the "perception" of capitalization rates both by mortgage lender and prospective investors.  Real estate is a long term investment.  As long as mortgage lenders view it that way, the "normal" mortgage situation should stabilize in 2009 and investment grade properties should start normal trading.  This will be somewhat complicated by the Wall Street financial institutions collapses ( Lehman, for example), bank failures adding much office space to Downtown Manhattan as well as the recession producing lackluster sales adversely affecting retailers.  This will result in increased vacancies, lower rents and greater perceived risk.

10. Psychological factors: Many  of the factors enabling the turnaround of the economy (including the perceptions of risk vs. reward), real estate market and general financial well being of the world economy have a lot to do with psychological factors.  Going back a few years, no one really thought anything bad could happen to the residential real estate market.  In late 2005, in one area on Long Island, the median sales price of a house went up 38% for the year.  But yet, when this forecast warned of a potential problem back in 2006, most didn't listen. Ironically, when everything is going very well, and even a janitor is a "real estate" expert, the seeds for a downturn have already been sewn and are in play.  And the reverse is also true, when bad news in on almost everyone's lips, the conditions for an up turn seem to have taken place.  Here is the reverse situation.  We have the worst economic and residential real estate conditions since the Great Depression but yet the opportunity for extraordinary growth, opportunity are around the corner; not "directly" visible but yet many of the economic and market factors necessary for this are in place.  One of the things that will make it visible is psychological - confidence. As confidence is consistently restored and starts to permeate throughout the market, that will also drive a rebound in the residential real estate market, retail and in the employment market.

 Historically and in economic terms,  the hardest two things to "engineer" in an  economy is to slow it down or recede it to curtail inflationary trends or to start and economy that has halted.  We are in the latter situation.  The residential market led us into this debacle and it will be the major factor leading us out. I believe all of the key, necessary steps have been are are in the process of being enacted although some a little late and not quite on target ( preventing foreclosures for example). When houses are buying and selling normally, the economic crisis is probably long over and we will enjoy a upward cycle of prosperity globally that we have ever known. There will be clear, demonstrable evidence of this. The true test of the start of this will be the 2009 “selling season” from March 2009 to August 2009.  If we have a reasonable selling season, I think that the worst of this debacle will be behind us psychologically. Confidence will be returning in all key aspects of the economy and real estate market from that point going forward and it will be like a snowball running down hill, garnering momentum.    If the financial safeguards are put in place to prevent what happened in this current debacle, then we could have even a longer, positive, economic cycle. I think the odds of this happening are very good in the near term. What this means it that by this time next year, most all of the key indicators, economic factors such as: unemployment, GDP growth, residential property values etc. will be noticeably better and poised for an even better year for 2010.

 

ABOUT THE AUTHOR

 

Integrated Real Estate Services, Inc.

www.integratedreal.com

hjackson@integratedreal.com 

119 Second Street, Suite I-2

Garden City, NY   11530

516-294-1177

516-294-1191 (fax)

 

 

QUALIFICATIONS OF	HOWARD JACKSON, MAI, ASA, CHAIRMAN   I
EXPERIENCE	Howard F. Jackson Jr. is a descendant of a 4-generation Jackson real estate and appraisal family.  His great-grandfather was the first real estate appraiser in the family circa 1890. 6/15/67 - Howard's Graduation at LaSalle Military Academy. His Grandmother, Anne Longworth Jackson,  is the lady on the right. Howard's father, Howard Sr. is on the left.  He "officially" started his career as an appraiser at Associated Appraisers, 3 days later. His grandmother, Anne Longworth Jackson, the first licensed woman real estate broker in New York, who suddenly took over the family real estate appraisal business ( Joseph Jackson, Inc.) with the sudden passing of Howard's grandfather circa 1939.  Howard Jackson began appraising as an apprentice at 8 years old by assisting his father, Howard, Sr. while he was doing appraisals.  This included measuring and describing buildings, data collection and analysis, photographing property, map reading and field work. He began his appraisal career formally in 1967 ( just a few days after graduating from LaSalle Military Academy) at Associated Appraisers whose major assignment was the reassessment of the Town of Islip consisting of 96,000 parcels. He has been appraising all types of real property around the United States subsequent to the reassessment assignment.  These properties include all forms of commercial and residential properties, shopping centers, nursing homes, office buildings, hospitals, hotels, industrial buildings, banks and land projects.  In addition to appraisal assignments, he has prepared other reports for clients as feasibility analysis, environmental damage valuation, highest and best use determination, economic analysis, market forecast, asset management, property acquisition and disposition and debt placement.
PROFESSIONAL DESIGNATIONS	He holds the following designations: MAI, SRPA, ASA, and is a  New York State Licensed commercial real estate appraiser as well as real estate broker. He is an honor graduate of LaSalle Military Academy and a graduate of Long Island University majoring in business and economics.
EXPERT WITNESS TESTIMONY	He has qualified as a real estate appraiser expert witness in various supreme courts since 1972. This includes bench and jury trials in both Federal and State Courts. The subjects of these proceedings typically are tax certiorari, condemnation, matrimonial and equitable distribution, legal and architectural malpractice, land use, environmental damage valuation, bankruptcy and other forms of litigation. He was the lead appraisal expert witness in the largest real estate securities fraud case called Madison Plaza, a large group of buildings in New York City.  His most recent court cases were on  December  2005, a jury trial in State Court, Suffolk County, in October 2008,  a bench trial in State Court, Manhattan and in October 2008,  a bench trial in Nassau County Supreme Court as well as a jury trial in Manhattan Supreme Court.
AUTHORSHIP	Howard Jackson has written five books:   "Key Writings in Real Estate©"(1981) "Real Estate Values and You©" (1986) and "Understanding Real Estate Values for Successful Investing©" (1987) and " The Real Estate Appraiser and The Law©" (2001) www.upublish.com/books/jackson-h.htm and“The Secrets of Power Politicking©(2000) www.upublish.com/books/jackson.htm.  These books are also available at Borders , Amazon.com etc.  Additionally, he has written many articles and monograms published both nationally and locally. A representative sample of these are: 1. How To Determine If A Property Is Over-assessed©®™, 2. The Realities of Rent Control©®™, 3. How Tax Rates and Equalization Rates Affect Real Estate Values©®™ , 4. Rules of Thumb for Investing In Real Estate ©®™, 5. The Ten Commandments of Investing in Real Estate©®™, 6. What is the Market in Market Value? ©®™, 7. The A-B-C’s of Mortgages©®™, 8. How Millionaires are Made in Real Estate©®™, 9. Internal Rate of Return©®™, 10. How a Property can Have Different Market Values Simultaneously ©®™. 11. Environmentally Impaired Real Estate – From Stigma to Saving the Deal ©®™ 12. How to Compare Two Residential Appraisals on the Same Property©®™  13. How to Compare Two Commercial Appraisals on The Same Property©®™ 14. Evaluating Real Estate Asset Performance©®™. 15. What is the difference between microcomputers, minicomputers and mainframe computers ©®™.  He prepares The Howard Jackson Real Estate Market Forecast©®™ on a semi-annual basis.  This forecast is widely subscribed to by banks, financial institutions, Wall Street investment companies, real estate appraisers, brokers, developers, law firms and the general public.  Additionally, there will be periodic commentary and analysis on major issues effecting the real estate market, the economy and public policy. He had also co-published the Environmental Damage Valuation Newsletter.©®™. He has also published extensively in the computer field.  Please see below.
KEY NOTE ASSIGNMENTS	Some of these assignments begin with large scale reassessment projects including the Town of Islip in 1967 consisting of 96,000 parcels of land. Other keynote assignments include a 500,000 + square foot office building, major hotel properties and large scale subdivisions. He has also been retained as an expert witness for plaintiff in the largest real estate limited partnership fraud case and has been retained by defendant in a large environmental damage claim against a large oil company as well as by plaintiffs in major cases. He has also appraised unique properties and situations such as timber farms, liquor manufacturing and distributing facilities, NIKE missile sites, aircraft testing sites and research laboratory facilities. He has been retained as exclusive advisor to Reckson Associates Realty Corp., an REIT In their $20,000,000 +/- acquisition of the first mortgage position on Garden City Plaza, a 400,000 square foot office building located on the westerly edge of Roosevelt Field, Garden City, L.I., New York. He has testified in front of the Blue Ribbon Commission on the reassessment of Nassau County. His largest appraisal assignment concerned an equitable distribution case involving two hotels in New York City.  The appraised amount was in excess of $220,000,00.

COMPUTER EXPERTISE

The above picture is Howard giving a live computer demonstration of his new real estate appraisal software on the Hewlett Packard Series 3000 computer.  The audience is the real estate and tax assessor division of a large, local county on Long Island. He has been a pioneer in developing computer programs for the industry for the past 30 years and has written programs for handheld calculators, PC's and minicomputers. Howard's first real estate appraisal program written on punch cards for the main frame computer in the 1970's.  That is when computer programs were a few hundred lines long. You never saw a computer screen.  You would type your cards, hand them through a window to a computer operator.  If the program functioned correctly, later in the day you would get your punch cards back wrapped by the output of your program on a computer printout.  Today, the graphical, analytical types of programs are 100,000's of thousands of lines long.  Imagine trying to use punch cards today!  Please note the actual size of the punch card was about 7-1/2 inch wide by 3- 1/4 inch. He wrote a comprehensive software application called "The Real Estate Appraisal Data Management System (TM) 1981 which revolutionized data management and computer technique applications in the field. It received acclaim in a June 9, 1982 newsletter by the Society of Real Estate Appraisers which said "...appeared to be the most futuristic minded and to have the most complete and advanced computer system of anyone at the seminar.". He has also written modules and templates for the PC. These are incorporated and used by popular programs such as 123, Quatropro, Wordperfect, O2, PROJECT, ARGUS, Excel, Microsoft Word, Frontpage, DBASE and other popular programs. He also has expertise in Web sites and the INTERNET. On 9/5/1985 he was a workshop discussion leader for The Conference Board in their unique hands-on conference " Using Micro-Computers for Executive Leverage". On 11/6/1981 he participated in the Fifth Colloquium on Real Estate Models and Computer Applications sponsored by the Center for Professional Education, College of Business Administration, Georgia State University. The presentation focused on specific aspects of "The Real Estate Appraisal Data Management System ©®™" and illustrated capabilities of financial analysis models designed for the Hewlett Packard System. The Real Estate Appraisal Data Management System ©®™, the complete real estate appraisal, related software programs and the educational seminar and computer demonstrations at Hewlett Packard facilities.  Following is the original announcement brochure sent in 1981.                                                                                             Historical photographs of Howard's computer seminars and the detailed software demonstrations to real estate appraisers, brokers, attorneys and other interested parties.   Howard making sure seminar arrangements at Hewlett Packard are in order for the first major computer seminar and demonstration in 1981. This is at Hewlett Packard's New York City office. Howard is teaching the "Ellwood" theory to appraisers using his new computer software as the demonstration platform at Hewlett Packard offices in Denver, Colorado in June of 1981. Notice what Howard's computer assistant, Jason, is typing is being mirrored to all the student's terminals at their desks.   Below: A follow up computer brochure articulating the computer seminar and software demonstrations at Hewlett Packard facilities. ABOVE: An example of literary material highlighting his computer software developments.  Also photographs of Howard doing computer demonstrations and speeches to other appraisers around the United States.     BELOW: Literary material ( circa 1985 ) highlighting Howard Jackson's commitment to the continued development, refinement and adaptation of his real estate computer software to the real estate profession as well as related professions going forward. A pictorial representation of the initial computer screen on Howard's Computer Software for the real estate appraisal and related industries circa 1985/1986 which ran on the Hewlett Package Series 3000 and various personal computers just starting to come into prominence at that time.   New Software Development Tax Certiorari - Small Income Property Appraisal Program: This is designed to prepare a Uniform Standards of Professional Appraisal Practice (USPAP)  conforming "trial" appraisal for the small income producing property for real estate tax certiorari proceedings. It meets with judiciary standards.  With Howard Jackson's patented and copyrighted computer algorithms and inter-program routines, the amount of time it takes the appraiser to cull through, coordinate, computer, assemble, print and or deliver the appraisal is drastically reduced and thus the time and cost saved and be translated to the client in terms of reduced appraisal fees.   Small Income Property Appraisal Program: This is designed to prepare a Uniform Standards of Professional Appraisal Practice (USPAP) conforming appraisal for the small income producing property.  With Howard Jackson's patented and copyrighted computer algorithms and inter-program routines, the amount of time it takes the appraiser to cull through, coordinate, computer, assemble, print and or deliver the appraisal is drastically reduced and thus the time and cost saved and be translated to the client in terms of reduced appraisal fees. Howard Jackson's Past Computer Writings ( articles), Seminars, Modules, Speeches - a compilation of titles Following represents a compilation of titles taken from historical records, speech notes and files over the years since 1978.  Some have subsequently been merged into other writings, publications. Should time, resources allow, systematically, these will be reconstituted, as best as possible, and then placed on the internet.  There is no time schedule set for this at this moment. Since 1980, he had given seminars, speeches, modules regarding the following computer subjects.   1.      Fundamentals of Computer Science and Programming 2.      General and Advanced Computer Programming Techniques- in BASIC, COBOL, FORTRAN, SPL, C++, JAVA, MACHINE LANGUAGE 3.      Computer Modeling Applications and Techniques 4.      Futuristic Computer Applications 5.      Artificial Intelligence – Basic To Advanced Concepts and Applications 6.      Hand Held Financial Calculators: Basic and Advanced Techniques and Programs 7.      Basic Math for Real Estate and Computer Applications 8.      Data Linking Technology: From Micros to Mainframes 9.      Data Bases: Structures, Theories and Information Sharing Techniques for Appraisers, Attorneys and Economists 10. Forms Design and Data Capture: Basic and Advanced Concepts and Techniques 11. Remote Data Sensing and Acquisition for real estate, economic, scientific and military applications 12. Word Processing Techniques 13. Computer Sabotage – The Unending Wave of Computer Problems, Diseases, Viruses – What They Are, How to Stop Them, Why you can never be 100% sure they aren't effecting you in some way.  Incredible examples will be presented. 14. Data Linking – The Basics to Advanced Concepts and Techniques 15. Artificial Intelligence: Can It Replace The Appraiser, Judge, Lawyer,  Jury. Other possible replacements also discussed. 16. Advanced Real Estate, Business and Scientific Applications 17. How To Write Computer Programs For Applications Such As: Income Approach to Value, Sales Approach to Value, Cost Approach to Value, Tax Certiorari, J-51 Analysis, Lease vs. Buy, Equity Yield, Internal Rate of Return, Graphical Analysis, Discounted Cash Flow, Photography, Remote Data Acquisition. The source codes, data structures and data acquisition from forms will be demonstrated. 18. Voice Recognition 19. Basic and Advance Statistical Applications 20. How To Talk To The Computer.  How To Ask The Computer The Right Questions To Get The Right Answers 21. Artificial Intelligence: Using a Natural Language Front End Processor to Interface With The Computer, Programs, Data To Create A Finished, Re-Useable, Constantly Refined Computer Program To Solve Any Problem You Define. 22. Data Storage Management: From Remote Databases, Database Designing, Access, Security, Dissemination, To Creating The Right Data Base Queries To Generate Timely, Accurate and Relevant Reports 23. Database Management Systems – From Basics to Current, Cutting Edge Technology. What Do The Experts Know?  What Don’t They Know? 24. Computer Forecast in 1980 – What Will Computer Technology and Applications Be in 1990? 25. Computer Forecast in 1990 – What Will Computer Technology and Applications Be in 2000? 26. Computer Forecast in 2000 – What Will Computer Technology and Applications Be in 2010? 27. What is the Value of Property In Outer Space?  A Discussion and Simulation Engaging Computer Technology, Remote Data Sensing and Acquisition, Real Estate Appraisal Techniques, Economic Modeling Interfaces To Forecast The Value of Real Estate In Outer Space.  A Detailed, Open Discussion Will Be Encouraged To Highlight The Extreme, Possible Economic, Social and Military Advantages Will Be Highlighted.

PUBLIC SPEAKING

He is approved as a lecturer by the New York State Department of Licensing to teach real estate courses for license recertification as well as continuing legal education courses.  His courses and lectures are also accepted for recertification credits by the Appraisal Institute and other real estate organizations nationally.  He has been an adjunct associate professor of Real Estate at the New York Institute of Technology, C.W. Post College, New York University, Nassau College, and Hofstra University.  He is an instructor of Real Estate courses for the Long Island Board of Realtors, New School for Social Research, The Learning Annex, Real Estate Training Center and The American School of Real Estate.   His course, “The Real Estate Appraiser and the Law” is being taught live and on-line at the Appraisal Academy in Chicago (www.appraisalacademy.com) He also appears as a guest lecturer at various real estate functions. He has participated in mock trials as a real estate appraisal expert for the Nassau County Bar Association at Hofstra University. He also gave a continuing education seminar in 1994 at the Nassau County Bar Association called “What Every Attorney Should Know about Real Estate Appraising”. In 2001 he also gave a seminar about Environmental Damage Appraising and Stigma to the New York City Bar Association. He spoke at the Apartment House Council (1983) regarding the Emergency Tenant Protection Act on Long Island.  He has spoken for the Suffolk County Real Estate Board on various real estate issues. He has also spoken for the American Institute of Real Estate Appraisers, the Society of Real Estate Appraisers and the Long Island Society of Real Estate Appraisers and the National Association of Corporate Real Estate Executives (NACORE). In March of 2004, he was a seminar leader for his course entitled “The Real Estate Appraiser - from the Appraiser to the Court Room” - How to become an outstanding expert witness.  It is approved for CLE for Law in NY, CT and NJ and approved for Continuing Education in Real Estate in NY. He has a proposed course called Environmentally Impaired Real Estate - From Valuation, Stigma to Saving the Deal ©®™   being finalized for a 4th quarter date.  It will have CEU and CLE credits for attorneys, real estate appraisers and real estate brokers/salespersons.  It will be given in conjunction with Willis, a major insurance agency with a vast background in environmental insurance.   Howard giving one of his many public speeches nationally.

PROFESSIONAL AWARDS

He is also the recipient of a literary award presented by the board of directors of the National Association of Review Appraisers. The subject of that award was his article entitled "Component Depreciation - What Every Review Appraisers Concern Should Be". He has also received a Certificate of Appreciation from The Society of Real Estate Appraisers. The theme of this certificate was "in recognition of service to the profession rendered as a contributing author to The Real Estate Appraiser and Analyst. The National Association of Corporate Real Estate Executives (NACORE) awarded him a Certificate of Appreciation "In recognition of outstanding service to the association".

OTHER PROFESSIONAL AND PERSONAL ACHIEVEMENTS

He is also the author/developer of a continuing education seminar entitled Practical Tips For The Modern Appraiser©®™. This seminar has been approved for two hours of continuing education credits by The Appraisal Institute. He was also a co-developer of "The Jackson-Kogelman Series of Real Estate Math and Computers" in 1984 with Dr. Stanley Kogelman, former chairman of the math department at SUNY Purchase and author of "Mind Over Math" and "The Math Solution" which was approved for continuing education credits. He developed the seminar " Using a Real Estate Appraiser - From the Appraisal to the Courtroom ©®™" in 2003 which was approved for CEU credits for real estate and CLE for attorneys.   He has developed a course and seminar for CEU and CLE entitled " Expert Witness Testimony From "A" to "Z" , Basic Concepts to Advanced Applications" ©®™ in 2004. He was elected as an active member of the New York State Academy of Sciences on October 1st, 1980. Personal Special Achievements: 1. He played a Chopin piece in  a piano recital at Carnegie Hall at 7 years old. 2. He ran and completed the New York City Marathon. 3. He has flown aircraft in solo flight (VFR) and by reference only to instruments  (IFR). 4. In 2007, in his part time military capacity, he commands a unit that provides full, military honor funerals as well as being directed to utilize his computer skills to develop a web site articulating these services and related software to ultimately boost the moral of the combat troops, families, support staff and the public at large as well as (through his own initiative) breaking the psychological will of the Al-Qaeda.

FOR MORE INFORMATION

Call 516-294-1177 to receive a color brochure or more information. Or visit the website: www.integratedreal.com or www.howardjackson.com

Present and Historical Clients of Howard Jackson

 

Partial List - Historical

 

Financial Institutions

Advanta

Amerasia Bank

American Savings Bank

AmeriFederal Savings Bank

Alliance

Apple Bank

Asia Bank

Association Southold Savings Bank

Astoria Federal Savings & Loan Association

BA Mortgage

Bank of East Asia

Bank of Great Neck

Bank of Ireland

Bank of New York

Bank of California Facility, San Francisco, California

Bank Central Asia

Bank Leumi

Bank of North Carolina

Bank of Virginia

Bank of China

Bankers Trust

Barclays Bank, Ltd.

Bayridge Federal

Bayside Federal Savings & Loan

Beacon Federal

Bear Stearns

Brokers Funding

Brookside Savings & Loan

Broward National Bank of Florida

Cardinal Federal Savings

Central Federal Savings

Centerbank Mortgage

Central National Bank of Cleveland

Chang Hwa Commercial Bank, Ltd.

Chase Manhattan Bank

Chemical Bank

Chinatrust Bank (U.S.A.)

Chinese American Bank

Citibank

Citizens Mortgage Corporation

City and Suburban

College Point Savings

Columbia Savings & Loan, Columbia, Georgia

Columbia Equities

Commercial Bank of Kuwait

Commonwealth Eastern Mortgage Corporation

Community National Bank and Trust

Connecticut Bank

Continental Bank

Coreast

County Attorney's Office, Nassau County

Citizens Savings Bank, San Francisco

Credit Suisse

Suburbia Federal Savings & Loan

Countrywide Funding

Dade County Federal Savings & Loan Association

Dale Mortgage

Dime Savings Bank

Dollar Dry Dock

Dollar Savings Bank

Dormitory Authority, State of New York

EAB

East River Savings Bank

Eastbank

Empire of America

EquiCredit

Erie County Savings Bank

Executive Mortgage Bankers, Ltd

Fairmont Funding

Far West Savings, California

Federal Deposit Insurance Corporation

FHA

FHB

Financial Equities

First Federal Savings and Loan

First Nationwide

First National, Massachusetts

First National Bank of Hollywood, Florida

First NH Bank

First Lincoln Bank, Rochester, New York

First Union Mortgage

First West Mortgage

Flagstar Bank

Fourth Federal

FNMA

Franklin Savings, Kansas City, Kansas

FreddyMac

GE Mortgage

General American Corporation

Genesis Mortgage

Girard Bank

Glenby Mortgage

Globe Mortgage

GMAC Commercial Mortgage

GMAC Residential Mortgage

Great Western Bank & Trust, Phoenix, Arizona

Greenwich Capital Markets

GSL Savings

Guardian Life Insurance

Hansen Savings

Heller Financial

Hempstead Bank

Home Owners Federal Savings & Loan, Boston, Massachusetts

Home Federal

Hongkong Bank

Hua Nan Bank

Industrial National Bank of Rhode Island

International Commercial Bank of China

Island Federal Savings and Loan

Irving Trust Company

ITT Small Business Finance

Ivy Mortgage

Jersey Mortgage

Korea First Bank

Lehman Brothers, Conduit Program

Lyons Savings & Loan, Chicago, Illinois

Marine Midland

Maspeth Federal Savings

MetLife Real Estate Investments

Midlantic

Mission savings, Mission, Kansas

Mitsubishi

Moody's Investor Services

Morsemere Federal Savings

Nara Bank

National Bank of North America

National Westminister Bank

New Jersey Business Finance

New York Life Insurance

North Conway Loan and Banking Company, New Hampshire

North Fork Bank

Norstar Bank

Norwest

NVR Mortgage Bank

NYS Housing Finance Agency

Palm Beach Federal

Pan American National Bank, New Jersey

Peoples Trust Company, New Jersey

PHH Mortgage

Ponce de Leon Savings & Loan, Puerto Rico

Prudential Mortgagee

Raritan Valley Savings & Loan Association

Reliance Federal Savings Bank

Residential Mortgage

Richmond Hill Savings

Seamans Bank for Savings

Security Pacific

Smith Barney Conduit Program

Stamford Federal

State Bank

Sun Bank, Fort Lauderdale, FL

The Bowery Savings Bank

The New York Bank for Savings

Travelers Mortgage Services

Troy Savings

Ulster Savings

Union Savings Bank

United Orient Bank

Village Savings Bank, Rye, N.Y.

Wachovia

Westwood Savings & Loan Association

Whitestone Federal Savings and Loan

Private Lenders and Mortgage Bankers

AFC Realty Capital

Apex Credit Corporation

Avco Finance

Boston Capital Partners

Bridge Capital

Carnegie Capital

Carold Corporation

Colonial Mortgagee

Dartmouth Plan

Delaware Valley Mortgage & Trust Company

Esses & Union Mortgage Company

Evans Financial Corporation

Goldome Credit Corporation

HMC Funding Corporation

Lakeshore Financial

Marschall Associates

Mutual Credit Corporation

Oxford Mortgage

PMC Capital, Inc.

Public Equities

Rockwell Equities

The Money Store

Today Funding Corporation

U.S. Money Center

U.S. Capital

Union Capital

Real Estate Companies, Business and Industry

ADEMCO

Ascot Management

Agree Development Company

Algonquin Property Consultants

Allen Cymrot & Associates

Allstate Insurance

American Property Investors

American Realty Trust

American Equities

American Title Insurance

American United Life Insurance

Amurcon Equities Corporation

Angeles Corporation

Arthur Young & Company

Arundel Corporation

Ascot Management

Aspen Capital Corporation

Associated Property Management

Bankers Life Insurance Company

Benenson Equities

Berkeley Square Realty

Best Products, Inc.

Blue Cross-Blue Shield

Borden Company

Boston Capital Partners

Bremar Holdings Corporation

Breslin Realty Development Corp

Brown Williamson Tobacco Corporation, Kentucky

Chicago Investment Corporation

Chrysler Company

CIGNA

Citicorp Realty Consultants

CMP Publications

Collins Food International

Commonwealth Pacific

Community Program Centers

Coney Island Resorts, Inc.

Continental Mortgage Insurance Company

Control Data Corporation

Cooper Horowitz, Inc.

Coordinated Financial

CRI, Inc.

Cross & Brown

Crownpoint Securities

DeAnza Corporation

DeMatteis Construction

Diversified Equities, Inc.

Diversified Realty Group

DRW Investments, Ltd.

East Coast Capital

East River Management Company

Equidyne Properties, Inc.

F.D. Rich Construction company

First American Title

Ford Motor Company

Ford Motor Credit

Gardner Capital Corporation

General Electric Company

General Motors Corporation

General Electric Pension Fund

Goodyear Tire Company, Kentucky

Grand Union Company

Grayside Realty

Gregg & Associates

Grubb & Ellis

Grumman Aerospace, N.Y.

Guardian Mortgage Investors, Jacksonville, Florida

Hall Real Estate Broup

Hamilton Investors, Inc.

Hemsley-Spear

Houlihan-Parnes

Huntington Hartford Enterprises

Inflight Magazines

Insurance Company of North America, Chicago, Illinois

Integrated Resources, Inc.

Intercontinental Pacific Group, Inc.

International Electronics

Investment Management Associates

J.D. Branmaur, Inc.

JMB Realty

Johnstown American Companies

JRD Management Company

Josepthal & Co.

Kalmon Dolgin

Kenbee Management

Krupp Realty & Development

Landauer

Landmarks Restoration Corp.

Laventhol-Horwath, N.Y., Chicago

Lennar Partners

Lenoir Industries

Lieberman companies

Lionel Corporation, Pennsylvania

Magnetic Coil, Inc.

MAQ, Inc.

McDonald's

Medico Industries

Milex Industries, Inc.

Murdock & Coll

National Diversified Industries, Pennsylvania

National Property Analysts

National Development Council

Oneonta Investors Associates

Oppenheim, Appel, Dixon

Oppenheimer Properties, Inc.

Park Forest Associates

Parkview Associates

Pearce, Mayer & Greer

Polimeni Enterprises

Prime Sites

Prudential Property Casualty Group

R.A.J. Development Company

Radice

Radio Corporation of America - RCA

Realco

Reckson Associates Realty Corp.

Resource Investments, Inc.

Rexford National Corporation, California

Robert Corso Real Estate

Robert A. McNeil Corp.

Rubin Wachtel Baum & Levin

Rudin Management

Samson Management

Schenley Distillers, Inc. - Nationwide

Sequoyah Equities

Shearson-American Express

Shearson Real Estate

Sonnenblick Goldman

Sotheby Parke Bernet Galleries, N.Y., California

Southern Airways Facility, Atlanta, Georgia

Southmark

Southwestern Life Insurance Company, Dallas, Texas

Stonehenge Capital Corporation

Summit Insured Equity, Inc.

SYMS

T.B.S. Enterprises

T.I. Home Transfer

The Garden City Company

The Related Companies

The Terlene Group, Inc.

The Investment Group

The Patrician Group

The Mortgage Corporation of America, Inc.

The March Company

Triton Capital Corporation

U.S. Life Insurance Realty Company

U.S. Plywood Corporation

Union Mutual Insurance Company, Maine

United Artists Theatres, Inc.

United Realty

United Southern Realty

VMS Realty, Inc.

Volume Shoes

Western Union Telstar Tracking Systems, California, New Jersey

Winnebago Corporation

Attorneys-at-Law

Albanese & Albanese

Arthur Nadel

Barbara L. DeMare

Bardey, Miller & Arnow

Bondy & Schloss

Birbower & Montalbano

Bronstein, Summer & Ansell

Carro, Spanbock, Fass, Geller, Kaster & Cuiffo

Andrew Grunebaum

Casey, Haythe & Krugman

Certilman, Balin, Hyman & Adler

Certilman, Haft & Lebow

Checkow & Kisner

Costigan, Hyman, Hyman & Martone

Cullen & Dykman

Dawson & Schwartz

DaSilva & Keidel

Dreyer & Traub

D'Amato & Lynch

D'Errico & Caputo

Farrell, Fritz

Field, Lomenzo & Turret

Finley, Kumble, Wagner

Flower & Plotka

Forman & Kingston

Frenkel & Lomas