by Roberta Murphy

Insuring luxury homes can be a real challenge, especially when trying to calculate replacement value for things like architectural artifacts, beloved creaking stairs or even elephant hide wallpaper.

Luxury home insurance wasn’t of that much interest to me–until I read of an appraiser who tried to figure out the replacement value of elephant skin wall coverings in a Seattle manse. That appraiser, James King with the Chubb Group, makes it a practice to thoroughly investigate the luxe and unusual features in Chubb’s insured luxury homes to make sure a realistic replacement value can be assessed.

And sometimes that challenge requires more than a little research.

In the case of the elephant hide wall coverings, King was unable to determine replacement value, especially since the wall covering had been installed at the turn of the century, before elephant hunting restrictions were in existence.

His solution? Read the rest of this entry »

by Roberta Murphy

Bradenton Florida Luxury Home

Once upon a time, we whispered about the “F” word creeping into luxury real estate. These days, it is common real estate talk.

The Wall Street Journal quotes Realty Trac reporting that the number of $1-plus million homes in some stage of foreclosure has ballooned to 7,968 between January and August this year. This compares to 4,214 during the same months last year.

Within these numbers, it is interesting to note the relative surge in the $2-plus million home market. This luxury group has grown the fastest: How about 499 in foreclosure process, compared to 201 for the same period last year.

These luxury foreclosures aren’t just the McMansions that proliferated in many upscale suburban communities. These homes are waterfront, behind exclusive gated communities, and in tony towns where these financial embarrassments rarely occur.

The bargains abound. The luxurious Bradenton, FL home pictured above (and listed by Patricia Tan with Prudential Palms Realty), for example, was originally listed at $3.78 million and is now under contract for $1.1 million. There again, and according to DataQuick, more than 64,300 homes priced at $1million or more were sold in 2007–which is more than triple the number for 2002.

In our local San Diego luxury real estate market, we are seeing our own casualties. According to our stats, there are 34 homes in some state of the foreclosure process in exclusive Rancho Santa Fe–with one on Via De Santa Fe valued at over $12 million. In La Jolla real estate, where prices are equally high, but with more condos and a greater population, there are 118 properties in the throes of foreclosure.

What will be the consequences to the highest end of the luxury market? There will be some fallout–and perhaps a more robust luxury home rental market, but most of these owners are well-entrenched and funded–and can afford to wait out this market crisis.

And for luxury home buyers, the market hasn’t looked this good–or offered so many choices– in several decades.

For more, read:

The Finest Foreclosures – WSJ.com

The Luxury of Frugality

Rise in Luxury Home Foreclosures, REO’s and Short Sales?

California Luxury Home Foreclosures

7 Bargaining Secrets for Luxury Home Buyers

Luxury Home Foreclosures More Common

by Roberta Murphy

A pair of $53.5 million New York Plaza penthouses were sold to Russian hedge-fund manager Andrei Vavilov–which would have made it the second-highest residential sale in New York City history.

Andrei Vavilov, though, is one very upset buyer. He and his wife, Russian actress Maryana Tsaregradskaya, are outraged with low 9 foot ceilings, an unexpected and massive column in the living room, and an exterior drainage grate that blocks the view of Central Park from the middle floor.

He had been promised the epitome of luxury, but was instead, he says, was given an “attic-like space.”

Attorneys for the buyer have reportedly filed a $31 million lawsuit against the developer and its selling agent Stribling.

It is unclear to me whether the transaction has actually closed. The story (see link below) does not make that clear. There is a $10.6 million deposit from the buyer at stake, and real estate attorneys handle closings in New York. Unlike most California real estate transactions, I am told it can be very difficult for New York buyers to reclaim their deposits.

Which leads me to wonder: Is the lawsuit and resultant publicity about the buyer’s recovery of a $10.6 million deposit–or actual defects in the real estate delivered?

MY SUITE AT PLAZA IS SOUR DEAL – New York Post

by Eve Sieminski

As summer hurls to a close, I had to review one of the best white wines I have ever sipped. I stumbled upon the Zolo Torrontes one day at our local Costco. What caught my eye was the markdown. The week prior this wine was $8.99 a bottle–and now was only $4.97!

Even at that price I was sceptical, because I am not a fan of South American Wines– and I had never had or heard of a “Torrontes” white. Throwing caution and my own prejudices into the wind, I grabbed 3 bottles–and later wished it had been 3 cases.

Doing some research, I discovered that Torrontes grape is cultivated in Argentina–and that wine that made from this grape is considered to be the best of its kind in the world.

I now understand why!

The evening after my purchase, I opened this bottle of wine and immediately knew I was going to love it. The citrusy scent of this wine immediately escaped when the cork was popped. The glass I poured was pale yellow–and it looked like tiny bubbles were dancing around.

The nose of this wine is incredible. Not only is there crisp citrus–but hits of lush tropical fruit as well. This is unlike any white wine you have ever had! Once you take a sip, you will understand my gushing. This wine is nothing like any Chardonnay, Pinot Gris, or Sauvignon Blanc you’ve tasted. The Zolo Torrontes is refreshing, crisp, light, and bursting with amazing flavor–without any cloying sweetness.

I am a red wine gal. Usually I only drink white wine when either it is hot outside or there is no red wine. This wine has me singing (and sipping) to a different tune.

Unfortunately there are not many stores that carry this gem. You can find it online, but the best price (besides the Costco close-out) I have found was at BevMo. Right now it is priced at $9.99 and if you buy 6 you get $1 off per bottle, bringing it down to $8.99 each. This is a bargain for such a delicious wine……you will thank me!

White wine tip: If you serve white wine too cold it will not open up and will numb your palate and you will not be able to fully enjoy your wine. If it feels almost too cold to hold it is too cold to serve. Best temperature should be between 45 to 58 degrees.

Other Wine Articles and Reading:

Wine Storage for Oenophiles

by Roberta Murphy

Luxury Home Digest is neutral politically and generally focuses on luxury homes and real estate issues.

But with a journalism background, there are several things I abhor–including mean-spirited personal attacks, hackers, shoddy reporting, and abuse of publishing power.

Not that we expect great things from grocery store rags like US Weekly, National Enquirer and Star Magazines, but I think we expect more from the glossy mags than the cheapie newsrags. 

It turns out that Jann Wenner, who also publishes Rolling Stone Magazine and has a decided political bent, approves of misleading headlines and the yellowest of journalism–as long as it targets those with whom he disagrees.

And US Weekly appears to be his latest yellow convertible.

Sure, Sarah Palin has a pregnant daughter–and had some issue with a former brother-in-law and his dismassal from Alaska law enforcement.–or some such thing.  

But lies and scandals?

After intense questioning, the editor of US Weekly acknowledged today that the “Lies” they had headlined dealt with the lies being spread by Sarah Palin’s political opponents–not prevarications being spread by Palin, McCain or anyone close to her.

Shame on US Weekly.

And shame Wenner and Rolling Stone Magazine–a former favorite.

Better to protray the truth, that twist your own lies and purposes into attention-grabbing headline$.

This is a continuation of last week’s discussion with real estate and luxury home legend Bob Dyson, who has a radical proposal that is being quickly embraced by Realtors, lenders and local Real Estate Boards.

Why resort to radical resolutions?

Because, says Dyson “This is a real estate depression–a serious, serious issue.”

He sees an immediate need to stabilize real estate markets and neighborhood values. He also believes the motgage lending industry needs to get out of the “asset management” business, and instead focus attention on new loan originations.

So what to do with all those defaulted loans and pre-foreclosures?

That’s where Dyson’s proposed “American Incentive Resolution” saves the day.

How would it work?

1. The American Incentive Resolution Corporation (as a government entity) would buy defaulted loans from lenders at 50 percent of face value.

2. Re-market these homes through Realtors at retail market value.

3. Offer these homes to first time buyers and those whose credit and FICO scores have been damaged by short sales and foreclosures the last couple of years. The initial terms would be a 12-month lease-purchase, with all payments accruing to a down payment as long as payments are made on time. Lease payments would equal what loan principle, interest, taxes and insurance would be under normal loan terms at 5 percent interest. Initial move-in would entail first and last months’ payments.

4. At the end of 12 months, the lease would become a purchase with all payments made under terms of the lease being applied to the full down payment.

The first video below details Bob Dyson’s assessment of the real estate market bottom, while the second deals with the American Incentive Resolution:

HT: http://www.SanDiegoPreviews.com

by Roberta Murphy

Last Thursday, I had the opportunity to sit across from Bob Dyson at his office in Del Mar and listen to this real estate legend discuss today’s real estate market. We were also fortunate to have Chris Dyson videotaping much of the discussion, which we have divided into four segments.

At the start of our interview, Bob Dyson said these are the worst conditions he has seen during his 40 years in the real estate business–citing symptoms such as lack of buyer confidence and the drastic deflation in certain real estate markets–including California, Nevada, Arizona and Florida.

The causes stem from irresponsible mortgage lending practices from 2003 to 2007 and the resultant and reactionary tightening of mortgage funds. Dyson simply calls it a “lending debacle.”

At the same time,he says, there is a large and growing backlog of buyers who want to buy–and are just waiting for reassurance that the real estate market has really bottomed, or is at least close to that point.

See below (and stay tuned for a radical solution):