Tree of the Week: The fast-growing white alder is a thirsty native

The white alder -- Alnus rhombifolia

The white alder is an inhabitant of "the other California," that small and shrinking part of the state where the streams are always flowing and water is never in short supply. The tree is native to stream beds in Western states, where it is an important contributor to the variety of riparian woodland species and supports abundant local wildlife. The tree grows very fast, sometimes while standing in water. Often it is the pioneer vegetation in denuded soils, and because it is able to manufacture its own nitrogen thanks to helpful bacteria living in its roots, it can grow in very poor soils.

Because it needs a constant supply of water, this alder finds only limited use as a street tree but is excellent for rehabilitating an abandoned stream site.

White alder leaves slightly smell of tannic acid, which is more noticeable on a foggy fall morning. Indians used the white alder to produce a red dye for their baskets, and to create a perspiration-inducing tea. The wood is used for firewood. 

The white alder grows very fast to 40 to 80 feet tall and 40 feet wide. Initially it is pyramidal but later becomes more oval in shape. Slender green twigs turn to red-orange on maturation, and the spreading branches droop at the tip. The pale gray bark on the straight trunk is smooth but breaks into irregular plates near the base of the trunk. The tree is deciduous, but in our mild climate the leaves may cling to it for most of the year.

If it is allowed to grow unpruned, the resulting dense shade would kill most undergrowth. The somewhat leathery, elliptic, 2- to 4-inch-long leaves are simple in shape, placed alternately, and have toothed or double-toothed edges. They are paler green below than on top. The flowers appear before the leaves and show the tree’s relationship to the birch family. Slender male catkins hang down in clusters of two to five, while the short and thick female catkins on the same tree sit upright. These develop into half-inch-long, persistent, woody brown cones, which drop thousands of tiny seeds in fall. The tree tolerates heat and wind but not drought. It will take most soils and wants sun or part shade. Surface roots are usually not a problem. The white alder may be attacked by tent caterpillars and flat-headed borers.

-- Peter Severynen

Thoughts? Comments?

Photo: Peter Severynen

Most expensive home in the U.S. plans to stay that way

The list of the world's most expensive homes was published this week at Forbes.com, and Candy Spelling's Holmby Hills estate, dubbed the Manor, remains the leader among U.S. residential properties at $150 million. At only eight months on the market, it's still a youngster as listings in this price range go, so don't expect a $149-million discount any time soon. More details are included in my story at latimes.com.

One side note not included in the story is that the 56,500-square-foot French chateau was originally called  L'Oiseau (meaning the bird) for it's W or wing shape. Since it came on the market, owner Spelling has published a bestseller entitled "Stories From Candyland" about her life and the house and, for better or worse, Candyland seems to be sticking as its latest nickname.

-- Lauren Beale

Thoughts? Comments?

A second look at those housing starts

It’s Friday and it’s slow, so let’s dig a little deeper into those housing-starts numbers that got investors running scared this week.

If you will recall, the Commerce Department reported that housing starts unexpectedly fell 10.6% to a seasonally adjusted 529,000 annual rate in October compared with the previous month. That was a 30.7% drop from October 2008.

Analysts said the drop probably had to do with trepidation from the building industry in October as uncertainty remained over whether Congress would extend its $8,000 tax credit for first-time buyers beyond its Nov. 30 deadline. Congress this month extended that credit through April and expanded it to include people who already own a home.

Certainly, fear that the popular but controversial subsidy could end had a part to play in the pullback. Starts of single-family homes dropped off 6.8% from September to a seasonally adjusted rate of 476,000, not a pretty statistic by any stretch.

But multi-family units (apartments and other big buildings) saw a much bigger drop, falling 33.3% from September to a seasonally adjusted rate of 48,000.

“When you break it down, actual starts were bad on both sides," said Weiss Research analyst Michael Larson. But clearly multi-family units were hit harder, he said.

Though economists describe those multi-family numbers as highly volatile, the plunge probably reflects the woes of the commercial real estate market as financing for apartments and other such properties has dried up as a result of the credit crunch.

It’s also a bad time for the rental market, with family members doubling up to live with each other and potential renters with good credit and steady jobs now able to purchase an entry-level home at a discount.

-- Alejandro Lazo

Photo: An apartment building under construction in Hollywood. Credit: Reuters

Real estate fix: Foreclosure report spurs housing recovery debate; FHA loans for high-end property

Home prices may be showing signs of stabilization in hard-hit markets such as Southern California but foreclosures will nevertheless likely be a major problem in the near term as the tough economy makes it harder for people to keep up on their payments.

The Mortgage Bankers Assn. said Thursday that the level of delinquencies and foreclosed homes in the U.S. had jumped to their highest levels since 1972, when the Washington-based lenders group began reporting the statistic. Check out our story here.

Combine that news with a report earlier this week from the Commerce Department that builders pulled back their construction of new homes in October, and the housing pessimists are out front and center arguing that residential real estate is headed for more trouble.

From Bloomberg News:

“I don’t think the housing crisis is over,” Mark Zandi, chief economist with Moody’s Economy.com, said in a telephone interview. “I think we’re going to see another leg down.”

And Calculated Risk quotes Goldman Sachs chief economist Jan Hatzius in a note to clients: A Renewed Sag in the Housing Market:

"Our current working assumption is a 5%-10% drop in home prices through the middle of 2010. ... house prices and credit quality ... to weigh on the US financial system, the availability of bank credit, and ultimately the pace of the economic recovery."

Plenty of others, of course, argue that the government’s efforts in propping up the market -- including Congress’ extension and expansion of the home-buyer tax credit and the Federal Reserve’s campaign to keep interest rates at rock-bottom levels -- along with the increase in affordability of homes will continue to stabilize the real estate market. But the debate is certainly stirring.

In more news, the (other) Times has an interesting tale of how the Federal Housing Administration is helping to prop up the market. It's a story about how one San Francisco man and a couple of his buddies went from broke to buying a two-unit apartment building that cost nearly a million dollars with a government-backed loan.

-- Alejandro Lazo

California home prices inch up in October

California home prices edged higher last month as first-time buyers took advantage of a federal tax credit and foreclosure properties made up a smaller slice of the market.

The median price paid for a home was $257,000 in October, up 2.4% from September and down 7.6% from October 2008, according to MDA DataQuick of San Diego.

It was the narrowest annual monthly decline for the statewide median home price since September 2007. The median is the point at which half the homes sold for more and half sold for less.

About 41,280 homes were sold statewide last month, a 2.6% increase from September and a 2.4% decrease from October 2008.

Foreclosures made up 41.2% of all previously owned homes on the market, the lowest part of the resale market since May 2008, when it was 39.8%. Foreclosures hit a peak as a percentage of the market in October 2008, when they constituted 52.4% of all previously owned homes sold.

-- Alejandro Lazo

Photo: A Burbank home that found a buyer. Credit: Ken Hively / Los Angeles Times

San Francisco Bay Area home prices inch toward stability with fewer foreclosure sales

Home prices in the San Francisco Bay Area registered year-over-year gains last month for the first time in nearly two years.

The gains marked a move back toward stability for the region’s real estate as fewer distressed properties were sold and homes costing more than $500,000 accounted for a larger portion of sales.

The median price paid for all homes reached $390,000, up 6.8% from $365,000 in September and up 4% from $375,000 in October 2008, according to MDA DataQuick of San Diego. The last time the nine-county area  booked a year-over-year gain was in November 2007.

Last month’s median was the highest since hitting $395,000 in July this year. But the October median was still 41.4% below the $665,000 peak reached during the height of the Bay Area’s boom in June and July of 2007. The median is the point at which half the homes sold for more and half sold for less.

A total of 7,933 homes were sold last month, up 0.7% from 7,879 in September and 4.2% from 7,613 in October 2008. Sales in the region’s pricier areas – Marin, San Francisco, Santa Clara and San Mateo – made up 42.2% of October sales, up from 35.3% in October 2008.

Sales of homes that cost more than $500,000 constituted 36% of sales in October, up from 34.9% in October 2008 and well up from a low of 22.7% in January.

Last month’s increase in the median sales price also came as foreclosure properties made up a smaller portion of the resale market. Sales of homes that had been foreclosed upon in the prior 12 months made up 31.9% of all previously owned homes sold in October, DataQuick said.

That was down from 32.3% in September and 44% in October 2008. Foreclosure sales peaked at 52% of the resale market in February.

The drop in foreclosure sales came as banks and loan servicers increasingly pursued alternatives to the foreclosure process such as loan modifications and short sales -- where a lender agrees to sell a home for less than the value of a mortgage, DataQuick said.

-- Alejandro Lazo

Photo: A house for sale in San Francisco. Credit: Associated Press

Consumer Confidential: AOL, mortgages, cheap flights

Here's your threadbare-Thursday roundup of consumer news from around the Web:

-- Remember when AOL was, well, AOL? Now the former online giant is struggling to find its place in a cyber-world it once dominated. The company, which is being spun off by Time Warner Inc., is offering buyouts to 2,500 employees -- more than a third of its workforce -- and says it wants to trim costs by about $300 million. So what will the leaner-and-meaner AOL look like? The company hopes to be a content-rich destination, like Yahoo. And look how well that's working out for Yahoo.

-- A record number of homeowners are behind on their mortgage payments. That's the word from the Mortgage Bankers Assn., which says about 4.5 million borrowers are now delinquent. "Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP," says Jay Brinkman, the association's chief economist. In other words, things won't improve until the employment picture brightens -- and that probably won't happen any time soon.

-- But we'll always have Paris (or wherever). And our friends at JetBlue are offering a one-day sale on international and domestic fares, with prices running between $29 and $129. Not surprisingly, though, there are a few catches. Tickets will be good only for flights between Dec. 2 and Dec. 16, as well as on Jan. 14, 15, 18 and 19. But if that's when you'll be wanting to travel, get 'em while they're hot.

-- David Lazarus

Photo: Henny RayAbrams/AFP/Getty Images

Mortgage delinquencies, foreclosures, hit a new high

One in seven U.S. home loans were past due or in foreclosure during the third quarter, the Mortgage Bankers Assn. said today – the highest level since the trade group started tracking troubled loans in 1972.

Consistent with recent quarterly delinquency surveys from the trade group, today’s report blamed job losses, not tricky adjustable-rate loans, for causing most of the pain. And four Sun Belt states -- California, Florida, Nevada and Arizona -- continued to account for a disproportionate amount of the pain.

Prime loans – those made to the borrowers with the best credit -- continued to make up a growing percentage of troubled mortgages. In terms of sheer numbers, soured prime loans far outpaced troubled sub-prime loans to credit-challenged borrowers.

You can read a news release on the statistic-heavy report for yourself at the Mortgage Bankers Assn. website.  But here's just one fact to consider: In California, 4.62% of fixed-rate prime mortgages, considered the safest home loans of all, were in foreclosure or 90 days delinquent, the Mortgage Bankers Assn. said. That appears to work out to about 157,000 homes in the Golden State.

Overall, 14.41% of all U.S. home loans were in foreclosure or at least 30 days past due – one in seven. To illustrate how things are getting worse, back in the fourth quarter of last year, the number was one in 10.  The mortgage bankers' group's chief economist, Jay Brinkmann, said he expects the delinquencies to keep rising until the unemployment rate peaks in the first or second quarter of next year.

Normally, foreclosures would continue rising for two quarters past the peak in unemployment. However, given the extreme decline in home prices, Brinkmann expects the foreclosure rate to continue going up longer than usual this time.

--E. Scott Reckard

Citigroup strikes deal to sell St. Regis Monarch Beach resort

Citigroup Inc. has agreed to sell the St. Regis Monarch Beach in Dana Point, which earned brief notoriety last year when insurer American International Group chose the resort as the site of a luxury retreat after accepting a huge government bailout.

Citigroup Global Markets Realty Group took over the recession-battered hotel and spa, along with its golf course, in June after its former owners, a joint venture between San Francisco hedge fund Farallon Capital and Newport Beach developer Makar Properties, defaulted on a $70-million Citigroup loan.

The pending sale was first reported by Real Estate Alert, an online newsletter that said the buyers were foreign and would pay a total of about $245 million for the property.

A person briefed on the deal, who was not authorized to speak publicly about it, confirmed to The Times that Citigroup had signed a letter of intent to sell the St. Regis.

The former owners had refinanced the 400-room property with $230 million in senior mortgages in addition to the $70 million owed to Citigroup.

The new buyers, whose identities could not be determined, had agreed to take on the obligation to pay the senior mortgages, leaving about $15 million for Citigroup, Real Estate Alert said.

-- E. Scott Reckard and Roger Vincent

Photo: At the St. Regis Monarch Beach. Credit: Tim Rue / Bloomberg News

Real estate roundup: New construction falls; troubled borrowers fare well with counseling; FDIC selling real estate; commercial real estate slump hits Fannie and Freddie

The big news today in real estate is the unexpected decline in new residential construction. The Commerce Department reported that housing starts in October dropped 10.6% to a seasonally adjusted 529,000 annual rate compared with the prior month and a 30.7% drop from October 2008.

Analysts attributed the drop to builders’ trepidation over whether Congress would extend a popular tax credit for first-time buyers ahead of a Nov. 30 expiration. Just as Southern California home prices and sales received a boost from buyers taking advantage of the credit, builders worried that without an extension the recovery would slow.

Dean Baker, at the Washington-based Center for Economic and Policy Research, has a good analysis this morning that delves a little deeper into the effect the tax credit had on the housing market. His take is that the extension of the credit will not have nearly as big of an effect as the first credit and that the housing market is looking at a sharp drop-off in coming months.

Baker writes:

Given the lead time between contracting and closing, September was the last full month in which homebuyers could have signed a contract and been confident of closing in time to meet the deadline for the tax credit passed in February. While this led to a rush of buyers wanting to get in before the deadline, it also meant that there would be a sharp falloff in sales in subsequent months.

A little more follows here:

The extension and expansion of the homebuyer tax credit by Congress should give a modest boost to sales, but it is unlikely to have nearly as large an impact as the original credit. Most potential first-time buyers will have already purchased their homes. The extension of the credit to existing homeowners will provide some additional incentive for homeowners to buy a new home now (it also provides serious opportunities for gaming), but this will have little net effect on the market. Most current homeowners who opt to take advantage of the tax credit will put their home on the market, leaving no net change in the balance between supply and demand.

In other housing news out of the nation’s capital, the Washington Post had an interesting story based on an Urban Institute study set to be released this morning. The study finds that troubled homeowners who receive housing counseling are 60% more likely to avoid foreclosure and have their mortgage payments lowered significantly than those who try to figure it out themselves.

And the Federal Deposit Insurance Corp., the bank regulator, has gotten into the real estate business big time this year. Bloomberg News reports this morning that the FDIC has sold the most real estate this year since 1994 as it takes over properties on the books of failed banks.

Finally, the Wall Street Journal writes today that the tanking commercial real-estate market is beginning to hit mortgage titans Fannie Mae and Freddie Mac. The firms are facing losses on the loans they made to apartment buildings, according to the Journal.

-- Alejandro Lazo