LOCAL NEWS: FBI says it has identified the thieves in Gardner heist

In a stunning development, federal law enforcement officials said today they had identified the people who stole $500 million worth of masterworks from the Isabella Stewart Gardner Museum in 1990.

The officials also said they had tracked the paintings’ movements after they were sold, but they did not know where they are now and were appealing to the public for their help.

“The FBI believes with a high degree of confidence in the years after the theft the art was transported to Connecticut and the Philadelphia region and some of the art was taken to Philly where it was offered for sale by those responsible for the theft. With that confidence, we have identified the thieves, who are members of a criminal organization with a base in the mid-Atlantic states and New England,” Richard Deslauriers, the special agent in charge of the Boston office of the FBI said in a statement.

Deslauriers said that after the attempted sale of the paintings about a decade ago, the FBI did not know where the paintings had gone.

“Unfortunately, we haven’t identified where they are right now and that’s why we are coming to the public for their help,” Geoff Kelly, the special agent who spearheaded the investigation in the Boston office, said in a statement.

The FBI said that it was continuing its search both in and beyond the Connecticut and Philadelphia areas and launching a public awareness campaign that would include outreach through both billboards and the Internet.

“With this announcement, we want to widen the aperture of awareness of this crime to the reach of the American public and others around the world,” said Deslauriers.

Law enforcement officials have been puzzled for years by the 1990 heist.

The Globe recently reported that investigators, after years of frustration, are focusing on evidence that former museum night watchman Richard Abath may have been in on the crime — or may know more about it than he has admitted.

http://bostonglobe.com/metro/2013/03/18/feds-reveal-investigative-developments-publicity-campaign-gardner-heist-probe/fdplwk1vSL1SPtaTdAZVIJ/story.html

BUYING A HOME: Boston Housing Shortage Daunting For Home Buyers

John and Melissa Smith are eager to sell their three-bedroom home in Waltham and buy something larger now that they have two children. But the starter home the Smiths purchased seven years ago — near the market’s peak — won’t command a high enough price to make a move feasible.

Ashley Krause and her partner, Kerri Scott, are interested in moving from Krause’s family condo in Roslindale to a single-family home, but so far they haven’t found anything enticing enough to justify jumping into the real estate fray.

Those are just two examples of why so many people in the region’s real estate industry — and especially potential home buyers — are asking the same question: Where are all the home sellers?

The number of homes for sale in Massachusetts is at an eight-year low, despite an increasing number of prospective buyers and a housing market that — overall — is on the mend. Some owners can’t afford to sell because they owe more than their properties are worth, while others aren’t yet convinced it’s the right time. The result is the demand for homes far outstrips the meager supply, an equation that threatens to hold back growth in a business crucial to the state’s economy.

“There is nothing on the market for me to want to buy to move into,’’ said Krause, a 31-year-old pharmacist who rents from her sister. “I’m afraid to put her condo up for sale and end up on the street.”

The situation differs dramatically from a few years ago, when the local housing market slowed to a glacial pace following the national subprime mortgage meltdown and tumbling home values. Then, real estate agents were practically begging for people to go house-hunting. Now, potential buyers are out in droves — motivated by low interest rates and renewed confidence in the economy — and it’s homeowners who are on the sidelines.

In Massachusetts, the number of single-family homes for sale fell to 18,329 at the end of January, 27.3 percent fewer than during that month last year and the steepest year-over-year fall in almost a decade, the Massachusetts Association of Realtors reported this week.

The tight market has prompted robust competition in some of the Boston-area’s more popular neighborhoods, prompting bidding wars and price inflation, real estate agents say. Statewide, homes are selling more quickly than a year ago. Single-family homes remained on the market for an average 114 days in January compared with 128 days in January 2012, the realtors group said.

“More buyers are competing for fewer homes and we are shifting to a stronger seller’s market,’’ said Sam Schneiderman, president of the Massachusetts Association of Buyers Agents.

Concerned the lack of properties for sale could hurt the all-important spring selling season, real estate agents are cold-calling potential sellers, penning handwritten notes, and launching seminars to attract new business. Their universal message — demand is high, supply is low; it’s time to list. “Everybody in the world is trying to reach sellers,” said Alex Coon, a Boston-area manager of the online brokerage firm Redfin.com. “Home-buying classes are brimming over. Anywhere we can find a seller, we are trying to reach them.”

It’s not just that sellers are sparse — it’s that buyers are quickly snatching up attractive homes almost as soon as they are put up for sale. Last year, the Massachusetts housing market began to build momentum. Statewide, 46,887 single-family homes were sold, the most since 2006, according to Warren Group, a Boston company that tracks local real estate. The buzz of activity carried over into January, with sales 10 percent higher than the same month in 2012, Warren Group said.

But some worry that if sellers don’t soon start showing up in greater numbers, the upward sales trajectory will falter.

“If we don’t have the inventory to sell, we won’t be able to continue” improving, said Kimberly Allard-Moccia, the president of the Massachusetts Association of Realtors and broker-owner of Century 21 Professionals in Braintree.

Currently, there is a 4.7-month supply of single-family homes for sale, according to the Massachusetts Association of Realtors. A balanced market has about 6 months worth of supply according to the Washington, D.C.-based, National Association of Realtors. Anything less tips the market in favor of sellers.

Eric Belsky, managing director of the Joint Center for Housing Studies at Harvard University, said the relative lack of homes for sale suggests many interested home buyers are coming from outside the area, or are local first-time home buyers or investors. Otherwise, he said, buyers would be selling their existing properties — leaving local inventory relatively unaffected. Thin inventory puts upward pressure on prices, Belsky said, but it’s still unclear whether the increases are enough to get more people into the market. “It’s an open question,” he said.

John Ranco, a senior sales associate for Hammond Residential Real Estate in Boston’s South End, said many homeowners who couldn’t sell their properties during the recession turned to renting, which currently can be a lucrative source of income in the city. In addition, he said, more Boston residents also have decided to stay in their current homes, lessening the opportunities for newcomers.

Also, thousands of homeowners are still plagued by a recession hangover. Despite the recent upturn, Boston-area home values are down nearly 16 percent since their peak in 2005. So many homeowners owe more to lenders than their properties could fetch for sale.

Other potential sellers are simply doing what some do every year — waiting for the snow to clear. “No one likes muddy boots tramping through their houses,’’ Ranco said.

Meanwhile, real estate agents are becoming more aggressive about targeting sellers.

Steve Mehigan, manager of the Coldwell Banker Residential Brokerage office in Waltham, said his agents are reaching out to homeowners who unsuccessfully tried to sell their properties with other real estate offices. Sometimes his agents will show up at a homeowner’s door to let them know multiple buyers are interested in their property.

“Our buyer appetite is absolutely voracious,” Mehigan said.

Brian Montgomery, a buyer’s agent with Charlesgate Realty Group in Boston, was so frustrated by his inability to find suitable homes for his clients that he recently published a blog post titled: “Desperately seeking sellers.” It included a wish list of nearly two dozen Boston-area homes his clients would like to buy.

Montgomery listed properties in Brookline, Boston, and Cambridge. “We’re hoping that by publishing this list, an owner may wake up from their amnesia,” he wrote, “and realize they actually want to sell their property!”

For Emily Glass, 33, of Arlington, it’s not amnesia that is keeping her in her Arlington condominium. She just doesn’t see any place better. “There is really nothing available,” Glass said.

Krause, the Roslindale condo dweller, said properties she’s toured over the last few months are either too small or lack a yard. But she also gets the irony of her situation — while she searches for the perfect home, her family’s condo remains off the market and out of play for some other prospective buyer.

“Right now, I need some people like me to let their places go,” she said.

LOCAL HOUSING NEWS: Residence tower at TD Garden is OK’d

The Boston Redevelopment Authority has approved construction of 38-story residential tower behind the TD Garden that will include more than 500 apartments, restaurants, and stores.

AvalonBay Communities Inc. will build the tower on Nashua Street, filling empty space between the Garden and the Charles River. The $200 million project, approved by the BRA board Thursday night, also includes construction of a two-story retail arcade that will connect the new tower to Causeway Street and North Station.


Executives with AvalonBay have said they hope to start construction this fall.

“We believe the West End neighborhood and, in particular, North Station, has tremendous potential to become a true nexus within the city for residents, commuters, and others,” said Scott Dale, AvalonBay’s senior vice president of development.


The project is one of several large developments expected to transform the area around the Garden in coming years with more than 1,800 new residences, hotels, office buildings, stores, and restaurants.

Converse Inc. recently committed to move its corporate offices into a large new development at nearby Lovejoy Wharf, and Stop & Shop and Target are considering new stores in a pair of towers being planned in front of the Garden by Boston Properties and Delaware North Cos.

The AvalonBay project, called the Nashua Street Residences, will include a mix of studios, one-bedrooms, two-bedrooms, and 32 three-bedroom units. The development also includes 219 parking spaces and a terrace on the 35th floor with views of Boston Harbor and the downtown skyline.

In other business Thursday, the BRA also approved plans for a 177-room hotel in East Boston and construction of a 10-story academic building in Government Center by Suffolk University.

The hotel, to be constructed at the corner of William F. McClellan Highway and Boardman Street, will rise to five stories with an adjacent 346-space parking lot. The project also includes

BOSTON HOUSING NEWS: Residential tower pitched for the Fenway

For years, the gritty retail building at Brookline Avenue and Boylston Street has remained a bystander in the Fenway’s revitalization.

Not anymore.

Developer Samuels & Associates proposes building a 22-story residential tower on the property that would contain 320 residences and a two-story retail base with several new shops and restaurants.

The project, to be called The Point, would result in a modern masonry and glass tower on the triangular lot currently occupied by a D’Angelo sub shop and other businesses. Samuels filed plans for the project Friday with the Boston Redevelopment Authority, kicking off a monthslong review.


The building’s construction would continue a decadelong remake of the Fenway portion of Boylston Street, where Samuels and other developers have already built hundreds of new residences, restaurants, and retail shops.

“This counts as among the most exciting of our projects in the Fenway,” said Peter Sougarides, a Samuels & Associates executive. “In the almost 15 years that we have been working with the neighborhood, this property has always been thought of as a gateway into the Fenway and a key element of the redevelopment of Boylston Street.”

Samuels is currently building the nearby Fenway Triangle project at the corner of Boylston and Kilmarnock streets. That $325 million project will result in new offices, 172 residences, a Target, and several smaller retail shops and restaurants.

Designed by the architecture firm Arquitectonica, The Point would be the most visually striking of the buildings Samuels has developed so far. A rendering shows a wedge-shaped glass tower rising above a two-story base with restaurants and stores.

The windows on its north face would be layered so it looks like a series of glass doors are sliding into one another. In its filing with the city, Samuels said the building is meant to shake up

THE ECONOMY: Tech sector spurs Mass. growth as US economy contracts

No one is calling it a return to boom times, but the state’s economy grew modestly in the ­final three months of 2012, even as the US economy unexpectedly contracted slightly, the University of Massachusetts reported Wednesday.

The contrast offered further evidence the state is rebounding from the recession at a more robust pace than the nation as a whole, largely on the strength of its technology industries.

“This appears to be a slow quarter, but the Massachusetts economy is growing still,” said Alan Clayton-Matthews, a Northeastern University economist and author of the report. “And growth is going to pick up.”

The state’s economy grew at a 1 percent annual rate in the fourth quarter, while the Commerce Department said the US economy shrunk at an annual rate of one-tenth of a percent, largely because of a pullback in government spending.

The state growth rates were reported in MassBenchmarks, an economic journal published by UMass and the Federal Reserve Bank of Boston. The decline in US economic growth was the first contraction since the first half of 2009, according to the Commerce Department.Over all of 2012, the Massachusetts economy grew 2.1 percent, compared with 1.5 percent nationally, according to UMass. The state also put people back to work at a faster rate — employment grew by 1.6 percent last year, compared with 1.4 percent nationally. Those figures could change, however, as revisions to the data are made in coming weeks by statistical agencies.

The report put a damper on the recent rally in US stocks, which retreated from five-year highs. The Dow Jones industrial average fell 44 points, or 0.32 percent, to 13,910.42, while the broader Standard & Poor’s 500 index fell 5.88 points, or 0.39 percent, to 1,501.96. The technology heavy Nasdaq lost 11.35 points, or 0.36 percent, to close at 3,142.31.

Economists said the contraction was not the harbinger of another US recession. But Federal Reserve policy makers, meeting in Washington on Wednesday, acknowledged in a statement that the economy had slowed in recent months as a result of Hurricane Sandy and other temporary factors. The Fed said it would maintain its policies to stimulate the economy and keep long- and short-term interest rates low.

Still, the decline surprised many analysts, who had forecast that the national economy grew at the end of last year, albeit weakly. Uncertainty about whether Congress would avoid a scheduled combination of tax increases and deep spending cuts — and potential recession

NEIGHBORHOOD NEWS: Panera opens nonprofit Hub cafe

Customers pay what they can afford here

Jonathan Diotalevi wasn’t sure what to expect when he walked into Panera Cares near Government Center on Wednesday, the restaurant’s first day of business. The recent UMass Dartmouth graduate said he doesn’t have a lot of cash and was just looking for a cheap lunch.

A smiling employee greeted Diotalevi at the door, he waited in line, ­ordered a tomato- mozzarella panini, and then asked the clerk, “So, can I, like, just give you two bucks?”

Yes, he could. And he did, dropping the money into a nearby donation bin.

The restaurant at 3 Center Plaza may have been as busy at lunch time as any of the chains’s other cafes nationwide — more than 1,600 of them — but there’s a reason cochief executive Ron Shaich calls this one “a test of human nature.”

The nonprofit outpost of Panera Bread Co. doesn’t have any cash registers, or set prices. Instead, it depends on donations from customers who pay whatever they can afford. The Government Center shop is the fifth of its kind for the St. Louis-based company — the first in this region.

“I think it’s awesome because it’s obviously beneficial for people who are a little less fortunate,” said customer Yanick Belzile of Lowell. “We can ­afford to, so we put in a little bit extra. If we can help someone else who can’t pay for a meal, why not?”

Belzile said he donated about $3 more than the suggested donation, or regular retail price,

NEIGHBORHOODS: Press is on for more hotels in South Boston

1,000-room facility sought next year for Convention Center

State officials want to start construction on a pair of midpriced hotels across from the Boston Convention & Exhibition Center this year, and follow in 2014 with a larger 1,000-room hotel on one of two sites off Summer Street.

The timetable was laid out Monday night during a public hearing on the Massachusetts Convention Center Authority’s plans to expand the massive convention complex. The authority’s director of capital projects, Howard Davis, said the hotel rooms are badly needed to support the South Boston hall and that officials must take steps to get them developed.

“If we continue to wait for these hotels to happen on their own, they are probably not going to happen,” he said, noting that the facility has about 1,700 rooms within a half mile, compared to competing cities that average about 7,600 within that distance.

Private developers have not stepped up to build new hotels in recent years, so the authority is seeking to entice them by purchasing land for their development on D Street and committing to build a 1,350-space parking garage to serve their guests.

The authority paid about $33 million to buy the property last year, and two bidders recently submitted proposals to build 450 and 500 hotel rooms, respectively.

‘If we continue to wait for these hotels to happen on their own, they are probably not going to happen.’

Commonwealth Ventures, which is the developer of the nearby Channel Center complex, wants to build a 275-room Aloft Hotel and a 175-room Element Hotel, which would feature extended-stay rooms. Both would be operated by Starwood Hotels & Resorts Worldwide Inc.

Carpenter & Co. is proposing a 300-room Hyatt Place hotel and a Hyatt House with 200 extended-stay rooms. A winning bidder is expected to be selected by the end of February.

Development of the D Street hotels is the first step in a broader $2 billion expansion that would include a 1,000-room headquarters hotels, a doubling of the convention center’s exhibit space, and construction of public parks and retail stores. Davis said the goal is to start construction of hotels in the next two years, and follow with the new exhibit space in 2015.

During last night’s meeting, a couple of residents expressed concerns that the development of additional hotels would encroach on South Boston neighbors and worsen traffic problems.

But Davis said the hotels on D Street will help provide more business to the convention

NEIGHBORHOODS: Ariad to add HQ, jobs in Kendall Square

Drug maker consolidating after winning approval to market leukemia treatment

Ariad Pharmaceuticals Inc. will build a new corporate headquarters and laboratory complex in Kendall Square, adding to a biotech building boom that is rapidly filling that part of Cambridge with jobs and modern buildings.

The company, which recently won federal approval for its first major drug, will occupy most of two five-story buildings to be built on Binney Street by Alexandria Real Estate Equities Inc.

The new offices will allow Ariad to consolidate its operations and usher in an era of expansion following the launch of Iclusig, which won Food and Drug Administration approval last month as a treatment for chronic myeloid leukemia. The company is awaiting approval in Europe, too.

Ariad’s workforce has more than doubled to about 300 employees since the start of 2012, and the company expects to add at least 100 jobs in Cambridge over the next two years.


Ariad’s buildings will be part of a larger complex called Alexandria Center at Kendall Square , a 1.9-million-square-foot development that will eventually include four office and lab buildings, residences, stores, and restaurants.

Tom Andrews, an Alexandria Real Estate executive, said the project will bring new life to vacant lots along the eastern end of Binney Street and upgrade the area with bike paths, a public park, and fresher landscaping.

“These improvements will really transform that corner of Kendall Square,” Andrews said, adding that the Ariad buildings, to include at least one restaurant or retail shop, are scheduled to be completed in early 2015. The company has signed a 15-year lease to occupy about 60 percent of the 386,000-square-foot buildings at 75 and 125 Binney St.; much of the remainder will be available for lease by other technology or life sciences companies.

Several biotechnology companies are also moving forward with new office and laboratory complexes, including Novartis AG, Pfizer Inc., Millennium Pharmaceuticals Inc., and Biogen Idec, which will occupy another building under construction at Alexandria Center.

The rush of building activity is being fueled by the discovery of drugs to treat neurological

MARKET TRENDS: Home Prices Could Jump 9.7% in 2013, J.P. Morgan Says

Home-price forecasts for 2013 are on the rise.

J.P. Morgan Chase & Co. expects U.S. home prices to rise 3.4% in its base-case estimate and up to 9.7% in its most bullish scenario of economic growth. Standard & Poor’s, which rates private-issue mortgage bonds, on Friday said it expects a 5% rise in 2013.

The J.P. Morgan analysts boosted their base-case estimate from 1.5% after a convincing rise in the “net demand” for housing this year has surpassed 2 million homes for the first time since 2006, said John Sim, a strategist at the investment bank. Net demand is the pace of existing home sales minus the inventory of homes available for sale.

“Net demand has picked up a lot in 2012,” said Mr. Sim. “Once you get north of the 2 million territory, you are in the positive growth area unless you get a lot of distressed inventory, which this year hit a low point” since at least 2008, he added. J.P. Morgan predicts that net demand to rise from 2.7 million next year from 2.3 million this year.

An expected increase in home prices in 2012 triggered a run into some of the riskiest real estate assets, such as subprime mortgage-backed securities from the real estate boom, and analysts including Mr. Sim expect that trend to continue. Rising home prices and the quest for yield has also given a tailwind to new mortgage bond issuance that has been mired in the fallout of the housing crisis and regulatory uncertainty for the past four years.

U.S. home prices nationwide increased on a year-over-year basis by 6.3% in October, the biggest increase since June 2006, according to CoreLogic. Investors zoning in on the increases bought subprime mortgage bonds, which have posted returns of more than 40% since December.

Home price increases could exceed J.P. Morgan’s base forecast if investors seeking yield push deeper into real estate, according to Mr. Sim’s home price report.

That may already be happening, considering recent comments by Luke Scolastico, a vice president at Credit Suisse, one of two issuers of mortgage bonds without government backing since the financial crisis. Credit Suisse is increasing its purchases of jumbo loans to meet demand for securities it sees from investors, he said on an American Securitization Forum panel this week.

“We’re buying loans, every day…and (on the month,) more than the month before,” Mr. Scolastico said. Part of the reason is because of home price appreciation, but also because of the “technical demand” for relatively higher yielding assets as Federal Reserve policies depress interest rates, he said.

New mortgage bond sales from other issuers, including investment banks, could boost

LOCAL NEWS: Western Mass. viewed as territory for fracking

The possibility that Western Massachusetts may hold limited deposits of shale gas is catapulting the contentious issue of hydraulic fracturing, commonly called fracking, into the state.

An industry-supported group plans to hold a daylong session Thursday at the University of Massachusetts Amherst to tell landowners and the public about gas extraction, six months after a federal study mentioned the likelihood of gas deposits in the Pioneer Valley.

While the state probably does not have expansive reserves, American Ground Water Trust executive director Andrew Stone said that small-scale gas development could begin in several years, and landowners need to be given “calm, objective facts.”

“The facts are, [a study] drew a circle around the middle of Massachusetts” where shale gas could be found, said Stone, whose New Hampshire group includes representatives from engineering and chemical companies on its board.


“We want landowners, individuals, and the community to understand there could be drilling, and they need to be ready for it,” Stone said.

‘I can’t say if there is a lot of gas or little gas. We really won’t know unless industry becomes interested.’


Geologists say it is unlikely the deposits will be extracted anytime soon, because they are probably too small, scattered, and of questionable quality.

No companies have expressed interest in exploring for shale gas, state officials say, and the type of wells needed to get to the gas is prohibited in the state.


Still, a group opposed to fracking has formed through the Pioneer Valley Green-Rainbow Party and the Western Massachusetts chapter of Progressive Democrats of America, with the goal of banning the process.

“We know that it is probably not going to happen in Massachusetts now, but the technology advances so rapidly it is best to take precautions,’’ said Peter Vickery, a lawyer and cochairman of the Pioneer Valley Green-Rainbow Party. He is speaking at the conference to give the Sierra Club’s perspective on fracking.

Hydraulic fracking is a controversial technology that involves injecting pressurized water mixed with chemicals and sand deep into the earth to free large reserves of natural gas trapped in rock.

As its use increases, so have concerns over gas or chemicals seeping into drinking water and

ENERGY EFFICIENCY: Even higher heating bills in new forecast for winter

Figures exceed predictions made in October

Despite recent mild temperatures, colder days — and higher heating bills — are still on their way, according to a forecast released Tuesday by the federal government.

Heating oil consumers can expect to pay a record high average of $2,544 to warm their homes this winter, about $450 more than last year, according to an analysis by the Energy Information Administration.

Tuesday’s estimates were slightly higher than those released earlier in the season. In October, the agency predicted an average cost of $2,494 for the winter. Even a small increase, however, can have a significant effect in the Northeast, where 32 percent of households depend on oil heat, a considerably bigger proportion than elsewhere in the country.

Those who rely on natural gas — about 51 percent of Northeasterners — will pay an average of $1,031, close to $200 higher than last year. That estimate is about $20 higher than predicted in October, but overall prices have been falling as new sources of natural gas have become available in the ­United States.

Heating bills are expected to be that much higher because the government forecasts a more typical winter. Last year’s unusually warm weather kept thermostats lower, but this year the government expects consumption for heating oil and natural gas customers to increase by about 18 percent.

The rising cost of oil heat is of particular concern for low-income households that depend on federal fuel assistance to warm their homes. Applications are flooding in to the offices of Action for Boston Community Development Inc., an agency that administers heating aid in Boston and surrounding municipalities, said its president, John Drew. Last year, the group processed 18,000 applications; this year he expects to see as many as 24,000.

“We have an awful lot of people in need,” he said. “They’re more desperate than last year.”

And the aid they get may not be enough, he said. The maximum heating oil benefit this year will

TAXES: Loss of mortgage deduction would be hard hit in Mass.

The generous mortgage-interest tax deduction that homeowners have long enjoyed could be diminished or eliminated as part of efforts to reduce the federal deficit, disproportionately hurting Massachusetts and other regions where real estate is especially costly.

Proposals to change the deduction include limiting it to the 28 percent tax bracket and lower; converting the deduction to a less generous tax credit; reducing the maximum allowed mortgage balance from $1.1 million to $500,000; and eliminating the benefit for second homes and equity loans, according to the Brookings Institution, a Washington, D.C., nonpartisan think tank.

More broadly, there is talk of placing a cap of between $25,000 and $50,000 on all annual deductions, which would force higher-earning taxpayers to prioritize what to itemize on federal returns.

Mark Muro, policy director of Brookings’ Metropolitan Policy Program, said changes to the century-old tax break are probably on the way — either as part of ongoing talks in Washington, D.C., between congressional leaders and President Obama to avoid the so-called fiscal cliff, or sometime next year.

“This is moving rapidly from the unthinkable to the inevitable,” Muro said.

But he does not believe it will have a devastating effect on most homeowners. The costs of minimizing or dropping the deduction, he said, “are largely going to be borne by those who can afford it.”

Taxpayers in expensive areas such as Boston and San Francisco reap the greatest benefit because they tend to carry higher mortgage debt and are more likely to file itemized returns.

Only about 25 percent of US taxpayers claim the deduction, which is projected to cost the federal government $100.9 billion in uncollected revenue for fiscal year 2013, according to the Brookings Institution.

About 31.4 percent of Massachusetts taxpayers write off mortgage interest, according to the Tax Foundation, a Washington, D.C, nonprofit. On average, Massachusetts homeowners are able to lop $11,366 from their income, compared with $10,640 nationwide, according to the

NEWS: Obama: Housing on the Mend, But Fragile

Home prices are continuing to rebound, and more home owners are taking advantage of refinancing to lower their monthly mortgage payments, according to the Obama Administration’s November Housing Scorecard report. 

The scorecard highlights the housing market's big strides, a marked improvement that has not been seen since before the housing crisis.

“Six consecutive months of rising home prices have bolstered home owners' equity,” said Erika Poethig, HUD acting assistant secretary for Policy Development and Research. Nationwide home owner equity is now $1.5 trillion higher than in April 2009.  

“But with so many households still struggling to make ends meet, we have important work ahead,” Poethig added.

The report notes that the housing market has shown a rise in home values and stronger buyer demand, but the recovery remains fragile with challenges ahead. 

"The administration remains focused on continuing to improve standards for the mortgage industry to help families avoid foreclosure," said Tim Massad, Treasury assistant secretary for financial stability. "We continue to push the industry to provide better service to home owners

THE ECONOMY: Fed Survey Shows Economy Improving in Most Regions

WASHINGTON — A pickup in consumer spending and steady home sales helped lift economic growth in October and early November in most parts of the United States, according to a Federal Reservesurvey released Wednesday. The one exception was the Northeast, which was slowed by Hurricane Sandy.

The New York Times

Growth improved in nine of the Fed’s 12 regional banking districts, the survey said. Growth was weaker in New York, Philadelphia and Boston — areas where the storm caused widespread disruptions.

The survey noted that growth improved despite nervousness about the automatic tax increases and spending cuts that could kick in next year if Congress and the Obama administration cannot reach a budget deal before then.

Hiring increased in more than half of the districts. But manufacturing shrank or slowed in seven regions and was mixed in two others.

The report, called the Beige Book, provides anecdotal information on economic conditions around the country from October through Nov. 14. The information collected by the regional banks will be used as the basis for the Fed’s policy discussion at the Dec. 11-12 meeting.

Many economists say they believe that the Fed could announce plans to buy more Treasury bonds at that meeting to replace a program set to expire at the end of the year. The goal of the program is to lower long-term interest rates and encourage more borrowing and spending.

In another economic report Wednesday, the Commerce Department said sales of new homes fell slightly in October, and September sales were slower than initially thought. The October sales pace was dragged lower by steep declines on the East Coast, partly related to the storm.

New-home sales dipped 0.3 percent in October to a seasonally adjusted annual rate of

THE ECONOMY: U.S. construction spending climbs on housing rebound

Dec 3 (Reuters) - U.S. construction spending rose in October by the most in five months, with stronger spending on homes outpacing tepid gains in business and government projects.

Construction spending climbed 1.4 percent to an annual rate of $872.1 billion, the highest level in over three years, the Commerce Department said on Monday. Analysts polled by Reuters had expected a 0.5 percent gain.

The department also said superstorm Sandy, which hit the East Coast at the end of October, likely had a minimal effect on the data.

Home building is expected to add to economic growth this year for the first time since 2005, although the housing sector remains a shadow of what it was before the 2007-09 recession.

Spending on private residential projects rose 3 percent in October, a reflection of this year's improving housing market.

Muting the gain in overall construction, however, private spending on nonresidential projects edged up just 0.3 percent.

Businesses have shown signs they are holding back on investments because federal austerity plans could trigger a recession next year, and the construction data could be another sign of

BOSTON HOUSING NEWS: Mass. home sales up 22% in first 10 months

Buy­ers snapped up more than 4,000 sin­gle-fam­ily homes in Mas­sachusetts last month, push­ing the num­ber of statewide sales for the first 10 months of 2012 above the to­tal for all of last year.

War­ren Group, a Bos­ton real es­tate track­ing com­pany, re­ported Tues­day that home sales in Oc­to­ber in­creased by 21 per­cent, to 4,044, com­pared with the same month last year, re­flect­ing in­creased op­ti­mism about the state’s hous­ing mar­ket.

Sales be­tween Jan­uary and Oc­to­ber rose to 39,491, a 22 per­cent in­crease com­pared with those months in 2011.

“Record low mort­gage rates, an im­proved econ­omy, and grow­ing con­sumer con­fi­dence are boost­ing the hous­ing mar­ket in Mas­sachusetts and around the coun­try,” said Ti­mothy M. War­ren Jr., War­ren Group’s chief ex­ec­u­tive.

The me­dian home price re­mained rel­a­tively flat, how­ever. For a sin­gle­fam­ily home, it held at $270,000 in Oc­to­ber, sim­i­lar to 12 months ear­lier, War­ren Group said.

Between Jan­uary and Oc­to­ber, the me­dian value slipped to $287,500, down nearly 1 per­cent com­pared with Oc­to­ber 2011. That means half the prop­er­ties sold above that price and half sold for less.

The state’s con­do­minium mar­ket fared slightly bet­ter.

Condo sales were up 48.8 per­cent in Oc­to­ber, com­pared with the same time last year. The me­dian price rose to $255,000, less than 1 per­cent higher than Oc­to­ber 2011.

Between Jan­uary and Oc­to­ber, the me­dian price for con­dos went up

slightly to $275,000, less than 1 per­cent higher than a year ear­lier.

The Mas­sachusetts As­so­ci­a­tion of Real­tors, which also re­leased data on Tues­day, of­fered slightly bet­ter hous­ing num­bers.

The as­so­ci­a­tion said that the me­dian value of a sin­gle-fam­ily home in­creased mod­estly in Oc­to­ber to $287,000, 4.4 per­cent above the Oc­to­ber 2011 me­dian.

The me­dian condo price rose to $265,000, up 2 per­cent com­pared with that month last year.

The as­so­ci­a­tion tracks data from three af­fil­i­ated list­ing ser­vices, while War­ren Group bases its

ECONOMIC NEWS: Spain's banks see bad debts hit new high

Problem loans at Spain's banks hit a new all-time high in September, as the collapse of the country's property bubble continued to hurt the economy.

Bad debts, mostly loans to home buyers and property developers, reached 182bn euros ($233bn; £146bn) or 10.7% of bank assets, according to central bank data.

Spain's government announced a two-year suspension of evictions for the most vulnerable people last week.

Meanwhile, industrial orders fell sharply in Italy, separate data showed.

Total orders in September fell 12.8% from a year ago, and a seasonally-adjusted 4% from August, according to the Italian statistical office.

The data suggests that Italy's recession may be deepening again, after appearing to stabilise over the summer.

Repossession victims The latest Spanish bank data continues a trend that set in during 2008, with the bursting of the country's property bubble.

The banking system's questionable loans were equivalent to 17.4% of Spain's annual economic output in September, up from 17.0% in August, and 1.5% at the end of 2007.

An estimated 350,000 families have been evicted from their homes since Spain's property

NEWS: Fleeing Taxes, France's Rich Are Putting Their Homes on the Market

PARIS — The tax changes slated for the 2013 budget by President François Hollande’s Socialist government are having an effect on the Paris luxury property market before they have even passed into law.

Quite a few of France’s most wealthy already have moved abroad to avoid the country’s stiff inheritance and wealth taxes. Now, real estate agents say, the younger, working wealthy also are on the move, unhappy at the prospect of being taxed at 75 percent on income of more than €1 million, or $1.27 million, and a capital gains tax of more than 60 percent on stocks, bonds and company sales, although protests have produced exceptions for investors and new business start ups.

“In the last eight months since the measures were revealed, over 400 new residences, each worth above €1 million, have come on the market as French entrepreneurs and investors leave France,” said Charles-Marie Gottras, president of Daniel Féau, a high-end French real estate broker.

“We are seeing the kind of luxurious, high-quality properties that one used to see once a year or every six months now arrive on the market every week,” he said.

The increased selection has altered the dynamics in a market that has long been characterized by high demand but little supply. Buyers now know they can negotiate, Mr. Gottras said, adding: “Prices have stabilized and even gone down a little.” Some agents say there has been a 3 to 5 percent decline in top-end values.

As Alexander Kraft, chairman and chief executive of Sotheby’s International Realty France, pointed out, “The fiscal changes are geared toward the seriously wealthy. The increase in numbers of residences for sale is not that significant, about 10 percent up, but in value it is very big. We are talking about exceptional properties starting at €10 million to more than 20 to €25 million.”

“To give you an example, in the past six weeks alone, we have sold three properties for €20 million each,” Mr. Kraft said. “Even we don’t usually sell those in a matter of weeks.”

Some of these trophy holdings normally would not even appear on the open market, he said: “They would instead be carefully sold to friends or family members.”

In the Sotheby’s portfolio, a Haussmann-style, 19th-century mansion in the 16th arrondissement reflects the kind of rarefied home now on the market. “The 1,000-square-meter living space has been completely restored in exquisite taste with beautiful

BOSTON HOUSING NEWS: State may not qualify for post-Sandy federal aid

Massachusetts homes and businesses were probably not hit hard enough by Hurricane Sandy to qualify for additional federal disaster aid, a state official said Friday.

Though many Bay State homes sustained damage from falling trees and flooding — and hundreds of thousands temporarily lost power — the uninsured damage total probably fell short of federal requirements for President Obama to sign a “major disaster declaration” for the state. There is no precise damage threshold for states to qualify for such a declaration, but they must paint a picture of extensive damage.

“We literally would have to come up with hundreds of homes that were uninhabitable,” said Peter Judge, spokesman for the Massachusetts Emergency Management Agency.

It’s still possible, Judge said, that the state could qualify for federal assistance to repave roads and repair other storm-ravaged government property. State government agencies would need to identify at least $9 million in damage to public infrastructure from the storm.


The Massachusetts Emergency Management Agency has received preliminary reports of significant damage on Nantucket and Martha’s Vineyard, but state inspectors are still surveying it.

The federal government has issued “major disaster declarations” for parts of New Jersey, New York, Rhode Island, and Connecticut.

Eqecat, a California firm that creates computer models to calculate the risk from storms, estimated that 84 percent of the $10 billion to $20 billion in insured losses from Sandy occurred

NEWS: Right away, housing challenges for Obama

Now that Congress remains divided after the election -- Republicans retained control of the U.S. House of Representatives and Democrats retained control of the U.S. Senate -- whether lawmakers can come to an agreement over the coming weeks remains a question.

1. The "fiscal cliff": The fiscal cliff is a series of tax increases and spending cuts that will go into effect unless U.S. lawmakers come up with an alternative plan to reduce the federal deficit by $1.2 trillion as required by the Budget Control Act of 2011. The spending cuts, known as "sequestrations," would automatically go into effect on Jan. 2 and be split evenly between defense spending and domestic spending.
The credit rating agency Standard & Poor's has said there's a 20 to 25 percent chance the U.S. economy will go into a double-dip recession should Congress fail to reach an agreement avoiding the fiscal cliff. S&P's deputy chief economist, Beth Ann Bovino, warned that such a scenario would cause home prices, currently at a bottom of 31 percent below their mid-2006 peak, to tumble to a record low of 40 percent below peak.
In a report released in September, the Obama administration called sequestration "bad policy" that "would be deeply destructive to national security, domestic investments, and core government functions." The president has put forward two deficit reduction proposals that included both spending cuts and revenue increases, but has run into opposition from some members of Congress who oppose tax increases and want to reduce the deficit solely through spending cuts, the report said. 

Given that Congress remains divided after the election -- Republicans retained control of the U.S. House of Representatives and Democrats retained control of the U.S. Senate -- whether lawmakers can come to an agreement over the coming weeks remains a question.

2. The mortgage interest deduction (MID): Revamping the mortgage interest deduction is one of the solutions proposed to head off the fiscal cliff and could be part of a broader plan to streamline the tax code by eliminating some loopholes and deductions. Some experts have said the MID, which costs the government about $90 billion a year, is unlikely to survive in its present form, though what would take its place, if anything, is unclear.
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Two years ago, a bipartisan deficit reduction commission recommended scaling back the MID, which is currently capped at mortgages worth up to $1 million for both principal and second homes and home equity debt up to $100,000. The deduction is available only to taxpayers who itemize.

The commission, often referred to as Simpson-Bowles, proposed turning the deduction into a 12 percent nonrefundable tax credit available to all taxpayers, capping eligibility to mortgages worth up to $500,000, and eliminating the deduction on interest from second homes and home equity debt.

The National Association of Realtors, which has consistently defended the mortgage interest deduction in its current form, was highly critical of the recommendation, claiming any changes to the MID could depreciate home prices by up to 15 percent, and promising to "remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest."

3. Mortgage debt forgiveness: Another homeowner tax break may be on the table in fiscal negotiations: the Mortgage Debt Relief Act of 2007, which is set to expire at the end of this