The U.S. housing slump is creating another negative ripple effect, this one by extension, or by association, if you will, as in condo/co-op association.

Owners in condo associations are having to chip-in to pay for unexpected association maintenance, tax, and related fees when other residents enter foreclosure or are substantially behind in payments, The New York Times reported Thursday.

The Times cited the case of condo owners in a 43-story Miami, Florida condo having to ante up more money after 1 in 6 residents battled foreclosure. The additional charge: an additional $1,000 assessment and $50 more a month for cable and internet fees, on top of the regular $450 monthly maintenance.

Connecticut-based appraiser Lawrence Schmidt, not a realtor but a former 15-year condominium owner with extensive knowledge of the sector, told BloggingStocks Thursday prospective buyers need to fully-research a condo association's membership status, including record of tax payments of individual members, in addition to the standard evaluation of the condo association's maintenance fees, contractor services, and quality-of-life issues, etc. Co-op buyers must do even more research on the co-op's balance sheet, monthly budget, cash flow, outstanding mortgage, and other related financials, he said.

Despite the weak housing market, not everyone is feeling the pain, including Donald Trump who recently made a killing selling a home in Palm Beach for a reported $100 million.

While Trump concedes that the housing market is still weak, he states that he thinks things are about to turn a corner. Trump said that what is most troublesome to him right now is that people are still pretty shy about investing in America, and is what he calls the "saddest part" of all concerning the current economic situation in the country.

Since the American economy is driven so much on oil, Trump admits that there are better investments that you can make by looking abroad.

April saw a 65% increase in foreclosures from the same month a year ago.

The numbers pretty much speak for themselves, with 243,353 receiving notices in April. This is a vast increase from April 2007, when "only" 147,708 homes received the same notice. This was also a 4% increase from March. The numbers are based on a report from RealtyTrac Inc.

Homeowners in California and Florida are among the hardest hit. The two states had 9 metropolitan areas that ranked in the top ten areas of the country in terms of foreclosures.

Could there be better times ahead for the share holders of Developers Diversified Realty (NYSE: DDR)? I took a look at what the analysts are indicating, and to me the chances for an upswing look pretty good. As the nation's largest holder of "strong in trade" shopping centers, the company is holding up quite well. We might even say exceptionally well, when you consider that it's sitting atop the real estate and retail double danger zone.

AOL Money and Finance indicates analyst consensus is to hold this stock. I see it just a bit differently. Out of 20 reported target prices for this stock, only one target is below current share price. To me that signals a reasonable expectation that the stock will move up. That is, unless you choose to believe that 19 of 20 brokerage targets are wrong.

Right now, it appears that DDR could be at the leading edge of it's next growth cycle. It's five-year return is pegged at just over 75.5% and it has returned over 16% YTD after losing more than 31% over the past year. This might be a good long term play if we are ready to claim that real estate and the general economy have stabilized. I'd be tempted to grab some of this company, if even just as a show of confidence.


Gary Sattler is a freelance blogger with no stock picking credentials. He does not knowingly have interest in the companies mentioned in this blog post.

Since 1992, the The Blackstone Group L.P. (NYSE: BX) has been a top real estate investor with 229 transactions for over $132 billion. With lots of firepower remaining, the firm is striking yet more deals.

The latest is for Synergy, a major real estate development and management firm in India.

The investment amount comes to $18 million, relatively low for the folks at Blackstone, but it's a highly strategic deal.

Synergy has developed a variety of projects – spanning 100 million square feet -- for office buildings, hospitals, hotels and so on. In other words, the firm should be a nice way to source lucrative deals in the fast-growing Indian market.

Tom Taulli is the author of various books, including The Complete M&A Handbook (www.mergerbook.com) and is also a principal in Averiware, which provides an ERP system to small and midsize businesses.

A lot of Americans are watching their homes decline in value, and many families are finding themselves upside down on their mortgages -- owing more than the home is worth.

But don't worry: if you were wealthy enough to afford New York City's sky-high real estate in the first place, you're doing quite well. New York apartments hit record highs in the first quarter -- an average of between $1.63 million and $1.72 million, depending on which data source you believe. That's a year-over-year price increase of more than 19%.

Manhattan real estate rose 13% to between $855,000 and $945,276, depending on which source you believe. But some experts say that that number is inflated by a disproportionate number of high-end properties and that prices on lower-end units are flat to negative.

In a related story, Italian businessman Luigi Zunino is looking to sell a Park Avenue apartment he hasn't yet closed on for $100 million.

According to the Wall Street Journal (subscription required), the 1907 Plaza Hotel where the unit is located is also home to Bear Stearns Chairman James Cayne and developer Harry Macklowe -- both of whom are suffering (or rather their investors are suffering) in the wake of the falling housing market.

But as long as executives who destroy value still reap large paydays, high end real estate will probably continue to do fine.

Given the headlines that have been streaming across every media outlet, most people wouldn't guess that real estate investment trusts (REITs) were relatively strong performers for the first quarter of 2008.

But that's exactly what happened. According (subscription required) to the Wall Street Journal, "a Dow Jones index of U.S. equity REITs posted a 1.4% gain in total return for quarter, out pacing the 9.4% decline in the Standard & Poor's 500-stock index."

Self-storage REITs were up 20% for the quarter. Huh? Who would have thought that self-storage would get hot!

The point is that it is impossible to beat the market based on following the news. Everyone knew real estate was going to be lousy -- and it was. But markets are a discounting mechanism, and the stocks had already been sold off to reflect the predicted weakness.

What will REITs do in the second quarter? I couldn't tell you. But for what it's worth, Ben Stein thinks they're a buy, telling investors in a speech that "I'm buying all [the REIT units] I can get my little paws on. These are God's gift to retirees."

Since 1992, Blackstone (NYSE: BX) has been a big player in the real estate business, striking over 200 deals amounting to about $103 billion. Some of its transactions include Hilton ($26.9 billion), Equity Office Properties Trust ($38.6 billion) and Trizec Properties, Inc. ($9.2 billion).

Well, it looks like Blackstone is ready for more dealmaking as the firm has raised $10.9 billion for its next fund (Blackstone Real Estate Partners VI).

But isn't there a credit crunch? That's true. What's more, there are signs of problems in the commercial real estate sector.

However, it looks like Blackstone is going to focus on global markets. Something else: with the dislocations in the U.S. financial markets, there may be some good valuations.

A key advantage with Blackstone is that it has leverage across a large portfolio of existing real estate, as well as operating companies. In other words, I suspect the firm will have little trouble putting the billions to work.

In today's trading, Blackstone's stock is up 2.58% to $16.29.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Alphonso Jackson resigned today as Secretary of Housing and Urban Development, becoming the latest Bush administration official to leave under a cloud. No word on a replacement.

Jackson, who most Americans couldn't name in a bar bet, is under investigation by the FBI. He allegedly helped a friend who was paid $392,000 by HUD in New Orleans after Hurricane Katrina and allegedly punished the Philadelphia Housing Authority (PHA) for nixing a deal with another friend, the record producer/developer Kenny Gamble, according to The Associated Press. The PHA filed a lawsuit.

"At a congressional hearing this month, Jackson repeatedly refused to answer questions about the Philadelphia redevelopment deal," the story said. "Last year, the inspector general at Jackson's department found what it called 'some problematic instances' involving HUD contracts and grants, including Jackson's opposition to money for a contractor whose executives donated exclusively to Democratic candidates."

After a recent run-up in mid-March, many stocks in large money center banks and brokerages are back near multi-year lows. A great deal of news about mortgage-backed paper write-downs and poor first quarter forecasts is already in the market. So, what's wrong? It would seem like most of the trouble is already known to the market.

There may be several things which could hurt that financial sector nearly as badly as the housing crisis. One is related to the current problem. There are $1.2 trillion in home equity loans on bank books. With many houses valued at below mortgage value, this could be a real problem. Home equity holders could block home sales if consumers do not get the money to pay-off both the primary mortgage and secondary mortgage at a closing. The could further gridlock the housing market.

Perhaps more troubling is that large pools of credit card and auto debt have not hurt financial company earnings. These are sliced into pieces and sold as derivative paper just as mortgages were. A lot of this paper is still sitting on balance sheets.

According to The New York Times: "what investors fear is that financial companies' pain will not end with the troubled mortgages, which by some estimates have already resulted in more than $200 billion of losses." And, they are right to. Housing is not the only big sector of the US economy. There is a reason that a company like Merrill Lynch (NYSE: MER) fell another 14% last week. A lot of the bad loans and bad derivatives are not washed out of the markets yet.. That means that shares in banks and brokerages could make new lows.

Douglas A. McIntyre is an editor at 247wallst.com.

Yesterday I received a great comment from long-time reader Dr. Michael Schneider of barrelomoney.com. He wrote:

Every market has buyers and sellers-- so far it seems the remedies for the housing mess have been directed at helping the banks and homeowners (sellers) and, rightly or wrongly, propping up housing prices. This has the effect of helping those who created the mess or who profited from it while possibly hurting potential buyers-- including 1st time home-buyers who may have to pay higher prices for homes that may still be overpriced.

This may seem like fairly obvious point but it has profound ramifications: it's been completely missed by the people who are supposedly working to solve these problems. Propping up home prices delays the inevitable reversion to something resembling intrinsic value, and prices first time home buyers out of the market.

This was one of the effects of the subprime bubble as well: lax lending prices that made homes available to people with brand new SUVs and double-digit FICO scores made it difficult for people who wanted to do it the right way: work hard, save money, and make a 20% down payment on an affordable home with a 30-year fixed mortgage.

When you think about it like that, you have to wonder why there is so much resistance by supposedly reasonable politicians to just letting the darn prices come back down to earth: it's a zero-sum game, and lower home prices will help just as many people as they hurt.

In an article I wrote yesterday, entitled Hitting the skids in Florida, I examined the fallout of depressed real estate prices and how folks are coping with a new reality. Today, the FT has an article about how the changes in global real estate are affecting places like Spain.

In Spain's Property Market Headed for a Fall, the FT examines financial conditions in Spain that are leading to a perfect storm. The story cites tightening credit conditions (ie, it's harder to borrow money), the oversupply of houses, and rampant price inflation as leading to a precarious present for Spanish residents. Spanish prices have dropped almost 30% from where they were at this time last year.

Sound familiar?

We're suffering from some of the same malaise but I have to say, that after a slow going, our Federal Reserve has moved quickly and decisively to address some of the same issues on American soil.

The difference between the Spanish situation and our own appears to be government intervention. Where our Federal Reserve has added a lot of liquidity into ailing banks, lowered interest rates, and even orchestrated a bailout, Spain's Socialist government seems focused on job retraining and stepping up public works projects.

We'll see where this all pans out.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

We have all heard of bus tours showcasing the homes of the rich and famous ... but the recent credit crunch that has spread across America has led to another sort of bus tour: the Foreclosure Bus Tour. That's right, potential home buyers looking to grab up a piece of Orlando, Florida real estate can now take a six-hour bus tour featuring various homes that have been foreclosed in the area.

It's no secret that foreclosures have been on the rise over the past year to alarming levels, but the Foreclosure Bus Tour is a symbol of just how bad things have become. The cost of the tour was $45 per person ($65 per couple) and included a continental breakfast and lunch at Applebee's. In addition to the food, the potential buyers were also given information on the homes, as well as some important teaching lessons that any potential home buyer could benefit from.

All in all, it seems like a decent way to go out and look at a whole bunch of properties all at once (the tour featured seven different available properties). At each stop the potential buyers got first hand access to a home inspector who walked them through the house, and between stops they were able to chat with a mortgage broker. The tour also had lawyers on hand to discuss any legal questions that came up during the trip. Not too bad for $45.

I grew up in Miami. Yes, I was born and raised there and am under 40-years-old. One of the few. I love the city. I love the people. I love the Latin flavor of the town, its food and nightlife. I also enjoyed owning and selling a home there in the early 2000s.

Things are different now. Homeowners have been hit with the downside of a strong housing market and have seen prices snapback much greater than some other parts of the country. After seeing a pullback in net worth, Floridians have been tightening their belts this year in some creative and not-so-creative ways.

Today's Bloomberg has an article about how the changes in the Florida housing market are being dealt with by Dolphins fans. Floridians, and Miami residents in particular, are dining out less, seeing fewer movies, foregoing on travel plans, and in some extreme cases, drinking less expensive beer.

According to Bloomberg, Miami real estate prices fell 19.3% year-over-year in January, tied with Las Vegas for the largest drop among 20 metro areas. Some homeowners feeling the pinch are no longer drinking Guinness and Royal Extra beers, but instead buy something domestic and cheaper.

This change in net worth is real and is affecting consumption decisions. While it hurts everyone involved, the process of (trying!) to realign the split between assets and debts is ultimately a healthy one for our country and something, I believe, will help strengthen the U.S. dollar and regain respect for American ingenuity, strength and democratic values around the globe.

Zack Miller is the managing editor of IsraelNewsletter.com ,a former equity analyst for a leading multinational hedge fund, and a proud former Floridian.

Although they might have messed up Bear Stearns (NYSE: BSC) far worse than anyone could have imagined such a venerable institution could be messed up, you'll happy to know that current CEO Alan Schwartz and chairman and former CEO James Cayne are staying on top of their real estate holdings.

Back in February -- while his company was in the midst of imploding -- James Cayne spent $27.4 million on two adjacent apartments at New York City's Plaza.

Something is badly wrong with corporate governance/executive compensation when a guy can sit by -- or in Cayne's case, play bridge and smoke doobies -- while one of the financial world's most revered institutions collapses under his watch -- and still have enough left to spend $27 million on two condos.

Meanwhile, Mr. Schwartz had pulled his $4.5 million property off the market and is renting it out.

Thankfully, these guys aren't out of the woods yet. They'll likely spend years dealing with a slew of class-action lawsuits stemming from the collapse of the company they destroyed. As Gary Weiss recently reported, Bear Stearns is no stranger to lawsuits.