Friday Diversion: Moby Buys in L.A., Conrad Black’s Palm Beach House on Market

Blake Marvin/HKS

The price of this ranch near Aspen, Colo., has been cut by 33%. Photos.

Here’s a look at some high-end homes making news this week:

George Stephanopoulos, the new anchor for ABC’s “Good Morning America,” sells a five-bedroom home in Washington’s Georgetown neighborhood for $5.45 million, about 14% less than the $6.35 million asking price in January. Mr. Stephanopoulos bought the four-story brick home in 2006 with his wife, actress Alexandra Wentworth, for $5.2 million. It measures about 5,600 square feet and has a terrace and a private elevator. The couple recently bought a 4,500-square-foot shingled home in the resort town of East Hampton, N.Y., for $3.5 million. Photos. (WSJ)

DJ Richard Melville Hall, better known as Moby, buys an estate in the Hollywood Hills of Los Angeles for $3.925 million. Built in 1927 by developer L. Milton Wolf and known as Wolf’s Lair, the home has views of downtown, Griffith Park, the Hollywood sign and the ocean. The main house has eight bedrooms and five-and-a-half bathrooms. Mr. Hall bought the property from Jay Faires, the president of music at Lionsgate Entertainment, and Debbie Matenopoulos, a former co-host of the “The View.” (Los Angeles Times)

Conrad Black’s weekend home in Palm Beach, Fla., hits the market for an undisclosed price. Mr. Black is currently in jail in Orlando for using funds of company Hollinger International for personal expenditures. The waterfront home in Palm Beach has five bedrooms and six bathrooms, and the Palm Beach County Property Appraiser assessed it at $32.6 million. Mr. Black defaulted on the mortgage and transferred ownership to a Connecticut corporation in January. (The Real Deal South Florida)

The 11,000-square-foot Las Vegas home of retired NFL quarterback and ordained pastor Randall Cunningham goes into contract. It’s slated to sell for slightly less than its listed price of $4.89 million. Located in the gated community of Spanish Hills, the six-bedroom house has a screening room and views of the Las Vegas Strip. Photos. (WSJ)

Comic actor Kevin Nealon sells a two-story house in the Manhattan Beach area of Los Angeles for $2.75 million. Built in 1936, the three-bedroom, two-bathroom home has an upgraded kitchen with a wine refrigerator. The property also includes a one-bedroom, one-bathroom guesthouse. Mr. Nealon purchased the home in 1999 for $1.1 million and listed it in May for $2.995 million. (Los Angeles Times)

The developers of an 813-acre ranch property in Woody Creek, outside Aspen, Colo., have cut its price by 33% for a new asking price of $59 million. It is still one of the priciest listings in the area. The property has a 5,750-square-foot home built last year. The home has a great room with a maroon leather floor, ceilings of more than 30 feet and mountain views. The property also has a restored ranch manager’s home and a 10-stall barn. A creek runs through the property, which has several ponds and can be further developed; the sellers anticipate the main home eventually being used as a guest house. Photos. (WSJ)

FHA Mortgage Insurance Premiums Set to Increase

Friday is the last day to get a mortgage backed by the Federal Housing Administration before insurance premiums rise.

Mortgage insurance premiums on FHA-backed loans will increase to 2.25% of the total loan amount on Monday, from 1.75%. That amounts to an additional $500 for every $100,000 in borrowing. On a $300,000 loan, a borrower will pay $6,750 upfront in insurance costs, compared to $5,250 at current levels. Those insurance premiums can be rolled into the new loan.

Earlier this year, the FHA announced that it would take this step, and several others, to boost its reserves, which are dropping as it takes on big losses from loans it has backed over the past three years. The FHA has been under pressure to take even more dramatic steps, particularly to raise minimum down payments from their current level of 3.5%, but instead opted for a package of tweaks that officials say will be less costly to the housing market.

The insurance premium increase takes effect for completed applications on or after Monday. In the summer, the FHA will also reduce the amount of cash that sellers can kick in for closing costs to 3% of the purchase price, from the current level of 6%.

The changes come one month before the $8,000 tax credit for first-time home buyers expires. During the April-to-June period last year, the FHA accounted for nearly half of all mortgages to first-time buyers, and the FHA and other government-backed loans accounted for 47% of all mortgage applications last week, according to the Mortgage Bankers Association.

In addition to the upfront insurance premium, borrowers with 30-year fixed-rate loans must also pay mortgage insurance annually, which is currently set at .5% of the loan amount for loans with loan-to-value ratios up to 95%, and .55% of the loan amount for loans above that. Borrowers with 15-year loans pay .25% annually on loans with a 90% loan-to-value ratio or higher, and no annual insurance premium with loan-to-value ratios below 90%.

The FHA has asked Congress for authority to raise those levels to .85% and .90%, respectively. If that happens, the agency says it will reduce the upfront insurance premium to 1%. For a $300,000 loan with a minimum 3.5% down payment, a borrower would pay $137.50 a month for the insurance today, versus $225 a month once the new changes go into effect.

What the Jobs Report Means for Housing

Friday’s jobs report is important to the housing market for two main reasons: Folks aren’t buying homes if they’re worried about losing their job. And, more importantly, more borrowers fall behind as they lose their jobs, especially when they owe more than their homes are worth. Indeed, the surest way to stem foreclosures at this point is to reverse job losses, something the administration likely knows all too well.

A report from Freddie Mac last week shows that job losses drove the vast majority of missed payments last year among prime borrowers, or those who have good credit. Freddie Mac said that 58% of its borrowers who went delinquent last year cited unemployment or reduced income for missing payments, while another 16% said payments had become excessive. Illness or death were responsible for another 11% of delinquencies, while marital problems resulted in 5% of delinquencies. Other top reasons: inability to sell a property (3%), job transfer (2%) and property defects (1%).

Freddie Mac reported that the number of its loans that are 90 days or more past due grew to 4.08% in February, up slightly from 4.03% in January. That’s the slowest rate of increase in more than a year, though seasonal factors (delinquencies typically do better in February than in January) and an uptick in recently modified loans that are re-performing could help explain the easing deterioration.

Fannie Mae said that 5.52% of its loans were seriously delinquent in January, up from 5.38% in December, the second smallest monthly jump in at last one year.

Early-stage mortgage delinquencies are expected to peak this year, and housing analysts have been looking to see when that might happen because it would represent a significant green shoot for the market. The Mortgage Bankers Association quarterly survey suggests that may have begun to happen during the fourth quarter, as the pace of job loss eased. But formally hitting a peak in early-stage delinquencies may be a Pyrrhic victory at this point because the pool of loans that are seriously delinquent continues to grow larger.

A more important metric to monitor are roll rates, which measure the share of loans that transition every month from 30 days delinquent to 60 days delinquent, or from 60 days to 90 days late. Those show no signs of improvement right now, according to data from LPS Applied Analytics.

Freddie Mac Chief Economist Frank Nothaft notes that there are some positives that could help ease new delinquencies: housing markets are showing signs of stabilization and government efforts to stimulate home sales with a tax credit and low mortgage rates have helped to soak up excess inventories.

But he cautions, “There are many reasons to be cautious about what could happen in coming months. Because of foreclosure moratoria, judicial backlogs and [modification] trial periods, many loans are languishing either in late-stage delinquency or in the foreclosure process and could add to [bank-owned] inventories in the coming year.”

In Manhattan, the Real Estate Brokers Can ‘Breathe Again’

The first-quarter market reports are in and Manhattan’s real-estate brokers are positively giddy.

Sales nearly doubled from last year, according to Prudential Douglas Elliman and Miller Samuel Inc.’s first-quarter data. Buyers were clearly drawn by the “bargains”–price-per-square foot was down nearly 20% from a year earlier and median prices fell 11% to $868,000. Median prices climbed 7.2% from the prior quarter.

Five reports released Friday by local brokerages reveal a city that appears to have moved on from the trauma of the September 2008 Lehman collapse, which froze a booming market.

“We’re firmly on track with the recovery,” said Diane M. Ramirez, president of Halstead Property, who expects the second quarter’s sales could top the first. “I’m breathing again. It’s great.”

Of course, broker optimism isn’t that reassuring. The recovery could be short-lived as unemployment remains elevated and interest rates may rise now that the Fed has stopped buying up mortgages. Credit requirements remain tight for buyers in all price ranges, particularly jumbo mortgage borrowers. The looming April 30 expiration of the first-time buyer credit, offering first-timers up to $8,000, could weaken sales of studios and one-bedrooms, which commanded 37% of the quarter’s sales.

“If it’s a rebound, it’s a rebound on shaky ground,” said Sofia Song, local real estate Web site StreetEasy.com’s vice president of research. “I think we’re actually in a precarious state.”

For now, traffic is buzzing on StreetEasy, with clicks coming from around the world, according to Ms. Song. And open houses are crowded, according to Pamela Liebman, Corcoran’s chief executive.  It’s also taking fewer price cuts to sell homes, indicating sellers’ confidence is increasing as prices stabilize. StreetEasy reports that 28% of listings saw price cuts, a total of 3,996, 29.2% fewer than a year ago.

Bidding wars, not seen in the market since the housing bust, may have returned, too: The Corcoran Group says that it saw nearly 200 listings receive multiple offers in the quarter.  Meanwhile, there isn’t much to choose from. Inventory is down 26% from the March 2009 peak, whittled by the sales boom and sellers watching for the official rebound.

“The biggest complaint we’re hearing from buyers right now is, ‘I can’t believe this is all you have to show me,’” said Ms. Liebman.

Downtown Manhattan, below 34th Street, earned 34% of sales, while the Upper East Side saw 25%, according to Corcoran. Marketwide, three-or-more bedroom units took the biggest price hit from a year earlier, falling 19% to a median $2.85 million. Studios took an 11% hit, coming in at $390,000.