The Boston Globe from Boston, Massachusetts • 30

D4 D7 Deaths Classifieds The Boston Globe Tuesday, January 17, 2006 Steven Syre Boston Capital Suburbs flush with homes for sale Housing inventories up Percent change 54 11306 4,077 11305 2,640 Number of single-family houses on the market An unlikely friend for a flagging firm snap up bargains and shrink bloated inventories. Many first-time buyers or renters have indicated they will continue to watch the market, hoping prices fall further, he said. Many sellers reduced their asking prices sharply at the end of last year to large supply of housing to be compounded by new sellers entering the market for the first time in February and March, which typically begins the busiest season for sales. "We are going to be overstocked, because we have a lot more coming," said Gil Campos, an agent for ReMax Real Estate 93 84 11 Average days on market $822,321 $815,787 0.80 Average asking price NOTE: Includes all suburbs inside 128 but excludes city of Boston. SOURCE: MLS Property Information Network Inventory rises 54, but effect on prices unclear By Kimberly Blanton GLOBE STAFF A decline in house sales last fall has left a January glut of unsold properties in suburban Boston as the big spring selling season approaches, according to data released yesterday.

The number of single-family homes for sale jumped 54 percent to 4,077 as of Friday, compared with a year earlier, said MLS Property Information Network of Shrewsbury. The data include all the suburbs surrounding Boston, extending out to Route 128; the city of Boston was excluded. Some real estate agents expect this sell their homes. Yet, the globe staff median price of single-family homes sold in November, $354,000, was still slightly higher than a year earlier, according to the Massachusetts Association of Realtors. From January through November, statewide home sales were about 3 percent below 2004 sales.

There are various explanations for the sharp run-up in the number of January properties for sale. For one, unsold HOMES, Page D2 Center in Foxborough. Real estate agents are split over what the sizable jump in inventory will do to buyers and sellers and the impact it will have on sales and prices. Campos is banking on a lowering of price expectations among buyers and sellers, who have witnessed years of rapidly rising prices amid a feeling housing supply was limited. But now prices have softened, he said, and if sellers drop asking prices to more realistic levels, buyers are poised to move in.

"Last year was a real awakening," he said. Now, "buyers and sellers know the market's changed. Last year, nobody knew." But Bill Wendel, a broker who represents only buyers as owner of Real Estate Cafe in Cambridge, does not see buyers coming out of the woodwork to First Marblehead a local stock market darling just last spring, had turned into a business basket case by the fall. The president quit when it was discovered he had sent expensive gifts to an executive working for a big client. Investors fretted that First Marblehead, a Boston company that writes and manages student loans, might lose key corporate customers.

Short-sellers moved into First Marblehead's stock and the shares plunged 70 percent, from their March peak to a horrible autumnal trough. Among First Marblehead's few friends left in the stock market, one stood out. Tom Brown, a hedge fund manager famous for his scalding criticism of the people running some of the nation's biggest banks, demonstrated very publicly he could fall in love, too. Brown, already a big First Marblehead stockholder, became a highly visible supporter of the company's busi- Mini-city would be an antidote to sprawl Westwood Station development Yields on CDs at highest since '01 Staggered dates for purchases can boost returns i i Construction could begin late ness and its beaten-down stock. "I'm a big fan of the company," he wrote early in December.

In fact, Brown wrote often that month about First Marblehead on his website, bankstocks.com, which he says attracts about 10,000 visitors daily. He articulated the bullish case for First Marblehead stock and took on short-sellers this year on a transit-c -f il vlivi ir-vivi Hpvolnnmonf that uill ii ifiir win j. i t. '1. fAiQ 1 1 1 transform this industrial area into a mixed-use mini-city.

4,4 Amtrak Tom Brown is a big backer of First Marblehead. -'C "ate) CANTON ft 4r i ft BySashaTakott GLOBE STAFF With CDs paying the highest returns since 200 1 now may be the time to buy. In Boston, the average one-year certificate of deposit currently yields 3.07 percent in interest, up from 2.02 percent a year ago, according to data from Bankrate.com. Countrywide Bank, which has six offices in Massachusetts, offers 4.75 percent. "Now is a good time to buy shorter maturities three-month, six-month, and one-year 9 (19 Headquarters JL f' 2 MILES StlL I 1 111 Residential atiii BOSTON Westwood Station 4 in boston, interest rates on certificates of deposit range up to 4.75 CDs," said Greg McBride, senior financial analyst at Bankrate.com.

He recommended people buy short-term CDs, but hold off on long-term CDs temporarily, with the hope that in WESTWOOD NORWOOD .1 OP i ''V' SOURCE: Cabot, Cabot Forbes; MassGIS JOAN McLAUGHLINGLOBE STAFF Homes, shops, offices planned at rail station attacking the company. He posted uplifting summaries of conversations with First Marblehead customers and others at a trade conference. Brown's firm, Second Curve Capital, counted First Marblehead as its largest individual stock investment on Sept. 30, according to its most recent public portfolio report. Second Curve owned $109 million of First Marblehead shares in its two hedge funds, representing about 20 percent of the firm's stock holdings.

Second Curve began buying First Marblehead stock last March and purchased more than 2 million shares in the third quarter alone. It owned 6.6 percent of the company on Sept. 30, the second-largest outside investor, behind only Baron Capital Management. Long before Brown ran a hedge fund, he was a highly regarded but controversial brokerage analyst covering banks. His style rubbed some people the wrong way, and he had a habit of picking on very big targets.

For years, he took swings at First Union Corp. (now called Wachovia Corp.) and its chief executive at the time, Edward Crutchfield Jr. First Union barred him from visiting the bank's headquarters and Crutchfield famously referred to Brown as a "little red-haired boy." Brown's criticism was not good for business, and he eventually left the brokerage industry. He joined Julian Robertson's Tiger Management to run a bank stock portfolio inside the giant hedge fund firm and then launched his own business six years ago. Brown's favorite target these days is another giant bank and its CEO.

He regularly hammers Bank of America Corp. for decisions he considers bad for shareholders. His take on chief executive Ken Lewis: "A four-flushing, double-dealing, no-account blowhard." Bank of America didn't care to talk with me about Brown. There are plenty of stocks Brown likes, as well. But only one other has been showered with the kind of praise and optimism aimed more recently at First Marblehead.

Brown says he was equally strenuous in his si ipport for Capital One Financial Corp. as an unappreciated gem when the stock languished around $30 per share three years ago. It cIok last week at $86.64. "We try to focus on where wt make a difference," Brown says. "That's we wrote on Capital One.

I felt that was such an attractive investment opportunity and that's why we're writing so much on First Marblehead. We've done our best work here." Brown sees First Marblehead as an undervalued company operating in a very attractive market. Bears who see it another way had shorted nearly 11 million shares last month, betting more than a third of all First Marblehead stock available for trading against the company. Tom Brown has been right and he's been wrong on companies before. But he's put his money and his mouth on the line with First Marblehead.

By Thomas C. Palmer Jr. GLOBE STAFF -ESTWOOD-Two familiar names in Massachusetts commercial real estate arejoiningupto terest rates will go higher. Yields on five-year CDs have increased only slightly in Boston, to 3.72 percent, up from 3.54 percent a year ago, according to Bankrate.com. Explanations vary as to why long-term CD rates have not risen substantially.

Customers who would rather lock in rates can hedge their bets by purchasing several CDs with different maturities, and staggering the dates they purchase them, said John Bitner, chief economist at Eastern Bank. (For example, they could buy a one-year CD this month, a two-year CD next month, and a three-year CD the month after.) The staggered purchase dates let customers take advantage of any possible future rate increases by the Federal Reserve. "If rates drift a little higher, you can take advantage of that," said Bitner, who predicted that the Fed will raise rates at least once more, and maybe twice. He recommends that investors lock in longer-term CDs now, using the staggered approach. "You'll probably come close to hitting the high point for the cycle," he said.

"No one knows exactly when it'll be, but we're getting close." -x C' i BILL OHttNtAiLOBt blAFF Proposals call for University Avenue in Westwood to be massaged into a more pedestrian-friendly street as part of a mixed-use project. replace a worn-out industrial park with a .5 billion city in the suburbs, where people would live, eat, shop, work, work out, and hang out, right at one of region's busiest transportation hubs. Cabot, Cabot Forbes of New England Inc. and New England Development of Newton are busy drawing up plans for Westwood Station, a 4.5-million-square-foot development that would transform 130 underused acres into homes for 1 ,000 families, and offices or shopping destinations for thousands more. Thirty or more new buildings would occupy a wide strip along almost a mile of University Avenue next to busy Route 128 and the Massachusetts Bay Transportation Authority's Route 128 Station, which feeds passengers to both commuter and Amtrak trains.

"The main attraction here is the transit station," said John J. "Jay" Doherty, president of Cabot, Cabot Forbes. Residents could walk to the train to take a 20-minute trip into Boston or to go to Providence or New York. "Any time you see large-scale, mixed-use development happening near or on top of a train station, it's a good thing," said Douglas I. Foy, secretary of commonwealth development for the state.

"People of all ages are Sasha Talcott can be reached at stakottglobe.com. Short-term CD rates climb, long-term not so much Percent yield Six months ago plan for the area, which would see a dozen old, one-story buildings containing more than a million square feet come tumbling down. University Avenue, now as straight as the railroad tracks that it parallels, would be massaged into a pedestrian-friendly town-center street. In its first phase, the developers would build about 2 million square feet, including up to 400 apartments or condominiums in modest-size towers near the 128 Station, and in four- or five-story buildings along the main street, with shops and restaurants at ground level. Stephen R.

Karp, chief executive of New England Development, is negotiating with local, regional, and large national retail firms that would lease 1.2 million square feet of shopping space. The plan is for smaller stores to dominate the complex, but department and home furnishings stores, or WESTWOOD, PageD3 increasingly fed up with the amount of time they're sort of imprisoned in their cars, and are increasingly interested in going to community neighborhoods." Foy has championed so-called smart growth, a concept promoted by planners and politicians as an antidote to the sprawl of the last half-century. Westwood town officials and the developers caution that it is early. The general plan for the area changes daily, and final town approval of a specific proposal including the names of retailers and a precise number of housing units won't come until spring. But the ambitious effort to create a new community from the ground up cleared its first hurdle last year, when the town approved a zoning change that would permit residential and large-scale retail uses.

ElkusManfredi Architects of Boston is doing a master 1 year ago ago Current 3.54 3.63 3 72 3.07 l.bb 1.1V rt Steven Syre is a Globe columnist. He can be reached at syreglobe.com. 2.45 1.74 1 1 11 su Li 5-year CD i 6 1 I I 4 1-year CD Markets closed US financial markets were closed yesterday in observance of the Martin Luther King holiday. 6-month CD SOURCE: BdiikiMoconi.