Market Watch – Week of April 20, 2009
Both mortgage and interest rates were for the most part unchanged last week. Most of the economic news confirmed that the economy is mired in a recession, but as Fed Chairman Bernanke stated last week, there are “tentative signs that the sharp decline in economic activity might be slowing.” This is potentially good news for the economy in the long term, but the fact remains that as long as the employment market is soft it will be extremely difficult for a sustained economic recovery to occur. The tone for the mortgage market remains extremely positive, as it is no secret that another key component of a recovery must come from the housing sector. Thus, the U.S. Treasury will continue to buy mortgage-backed securities, which will tend to help rates stay low throughout the year. In addition, the Fed has acknowledged that credit conditions are still tight and that there continues to be a strong push for banks to lend. Also, it is still apparent that the jumbo mortgage market is still having liquidity problems–and so there must be an ongoing emphasis on solving the problem. This can only occur if the banks will allocate a significant amount of funds to qualified borrowers.
And the Rich Get Richer!
The 1920s-era Beverly Hills mansion of William Randolph Hearst and Marion Davies was put on the market Monday for $165 million, making it the nation’s most expensive residential listing.
The pink stucco, H-shaped estate, dubbed Beverly House by the late newspaper magnate, is spread across 6.5 acres north of Sunset Boulevard. It has just about everything a billionaire could want — including three swimming pools, 29 bedrooms, a state-of-the-art movie theater and even a disco.
The compound boasts six separate residences — four houses, an apartment and a cottage for the security staff.
The seller, attorney-investor Leonard M. Ross, bought the property in 1976 and is now seeking “a lifestyle change,” said his real estate broker, Stephen Shapiro.
The asking price surpasses the $155 million being sought by developers of an estate in Montana’s Big Sky country, and the $135-million price of an Aspen, Colo., compound being sold by Prince Bandar bin Sultan of Saudi Arabia.
In the last two years, six U.S. residences have come on the market with nine-digit price tags, according to Rick Goodwin, publisher of Ultimate Homes magazine, an annual compendium of the world’s hottest properties.
Yet, so far, no U.S. home sale has broken the $100-million mark. The record remains the $94 million paid by former telecom mogul Gary Winnick for a Bel-Air estate in 2001.
With its breathtaking asking price, the latest Beverly Hills listing adds more luster to the region’s Platinum Triangle, the neighborhoods of Beverly Hills, Bel-Air and Holmby Hills, where the pace of multimillion-dollar sales has outshone the rest of Southern California’s slumping housing market.
From January to May, the number of homes in the Platinum Triangle that sold for at least $10 million more than doubled compared with the year-earlier period. In contrast, Los Angeles County overall saw a 19% decline in sales for the same period.
New homeowners in the Platinum Triangle include actor Tom Cruise and his actress wife, Katie Holmes, Amazon.com Chief Executive Jeff Bezos and soccer star David Beckham and his wife, Spice Girl Victoria Beckham.