The Best News We Can Possibly Ask For
9 News reports from Colorado. “The president of the National Association of Realtors says he doesn’t know if we’ve hit the bottom in the housing crisis, but he’s hoping the new stimulus bill will help those trying to buy or sell homes. Charles McMillan spoke to 9NEWS via satellite and said the association is working closely with Congress in hopes of providing a number of aids for homebuyers and owners. Collectively, American homeowners lost more than $2 trillion dollars in home value by the end of 2008 and millions now owe more on their mortgages than their homes are worth.”
“In Colorado, the median home price is $225,000, down 11 percent from last year, according to McMillan. McMillan is very optimistic. He told 9NEWS that now is a great time to buy, since home prices are more affordable than ever. ‘Homes have always led us out of a downturn and housing will lead us through this recovery, as well,’ he said.”
The Rocky Mountain News from Colorado. “Colorado Realtors are getting hit doubly hard. First there’s the recession and second they have to pay twice the normal cost of annual licensing fees because fewer people are expected to get into or stay in the profession this year.”
“The collapsing value of homes and lack of market have hit the real-estate industry so hard that Tupper Briggs, a 35-year Realtor in Jefferson County, has run into cohorts working as checkers at Costco to pay their bills and been told by Evergreen Christian Outreach volunteers that Realtors are coming to them for free food. And those who are scraping by can’t afford increased expenses, he said.”
The Loveland Connection in Colorado. “Mortgage applications surged in early January to the highest level since July 2003 when refinancing activity exploded with the housing boom, according to the Mortgage Bankers Association. More than 80 percent of applications came from borrowers looking to refinance at better rates. The problem is fewer people qualify.”
“‘People who may have qualified for a loan as early as six months ago may not qualify now,’ said Jenifer Saltzman, senior vice president of the Colorado Bankers Association.”
“Homeowners with solid equity in their homes can probably refinance, said David Maus, president and CEO of Public Service Credit Union, ‘but that’s just not the case for Joe Plumber or the average American.’ Property values have dropped so significantly, people don’t have the equity to refinance, he said.”
“‘It may sound good that interest rates have dropped, but many people don’t have the luxury of refinancing because there’s no equity in their home or because they’ve leveraged the equity, and they already have a second mortgage,’ Maus said.”
The Arizona Daily Star. “Reality appears to have set in for local real estate agents, judging by the tone of the Tucson Association of Realtors’ annual forecast seminar. Whereas a year ago there was a sense of denial that the Tucson housing market was busting, most of the talk Friday centered on the idea that it was time to accept current conditions and find a way to adapt to them. ‘Based on the stats, we have a little further down to go,’ said Pam Devine, an agent with Realty Executives Southern Arizona.”
“Tucson’s median home price fell to $167,900 in December, a 20 percent drop from the year before and its lowest point since August 2004. Foreclosures and short sales have fueled the rapid drop, several of Friday’s speakers noted. ‘This is the price reduction that buyers, many of whom have been sitting on the fence, have been waiting for,’ Long Cos. CEO Rosey Koberlein said. ‘This is the best news we can possibly ask for.’”
“Koberlein noted that 500 pending home sales were listed on the region’s MLS Web site in the first two weeks of this year, signaling that the market might already be turning around. ‘Housing shortage’ — we may actually be saying those words in 2009,’ Koberlein said. ‘If not, then certainly in 2010.’”
LaPrensa San Diego. “As soon as he told her they wouldn’t be able to pay the mortgage, Ruben Loera’s wife’s heart clenched. She started packing away the angels and pulling down the paintings. Five months later and one step away from foreclosure, half-empty boxes are piled in a corner of the living room in their home in Maryvale, a suburb of Phoenix, Arizona.”
“Loera had been hearing tales of people losing their houses, but he never thought it would happen to his family. ‘I had to make a decision: I pay the house, or I feed my kids,’ said Loera, who migrated legally to the United States from Mexico almost 30 years ago and has a daughter and a son.”
“Loera bought his home in 2002. He had a perfectly good loan with a fixed interest rate until 2006, when he got a phone call from Countrywide Financial promising a great deal on a refinance. He was trustful, since it was the same company that gave him his first loan. ‘They told me it was money I earned that I wouldn’t have to pay,’ he recalled.”
“He used the money to pay for his daughter’s quinceañera party, a truck, and a sound system for the family’s alabanzas, a band of inspirational songs for the music ministry at their Catholic church. It took only two months for him to realize he had made a big mistake. His monthly payment jumped from $1,000 to $2,000.”
“The family started eating up their savings and then began using their credit cards. When the housing bubble burst, Loera’s $230,000 home depreciated to $180,000. At the end of 2007, he lost his job of 12 years driving a concrete mixer truck. He found another job as a painter with a commercial construction business but was laid off, along with 50 coworkers, last April. His wife’s occasional work in children’s daycare came to a halt, too.”
“When Loera got behind on his mortgage payments to Countrywide, he called the bank to get help, but they turned him down. ‘It didn’t make any sense. I was trying to prevent my credit from getting ruined. But now it’s too late,’ he said.”
“Loera’s hopes now rest with the Association of Community Organizations for Reform Now, which is working with people of color to have financial institutions modify mortgage loans. ‘Banks almost have to listen. It’s either that or we keep the foreclosure rates going up,’ said José Velásquez, a housing counselor for ACORN.”
The Red Rock News from Arizona. “At the current rate of sale, it might take almost four years to sell all the $1 million homes currently on the local market, just one indicator that 2008 was a bad year for real estate throughout Sedona and the Verde Valley. Every measure of real estate activity in the Sedona area fell in 2008.”
“The number of foreclosure actions in 2008 topped out at 2,860, up 500 percent from a low of 525 in 2005, according to Randy Crewse, broker with Prudential Northern Arizona Real Estate. All these foreclosed homes could become ‘inventory for the late spring and early summer 2009,’ Crewse said. About 65 percent of the homes being foreclosed on are nonowner occupied. ‘These homes will just have to move through the foreclosure system,’ Crewse said, adding to inventories and depressing prices.”
“Median sale prices for single family homes in the Sedona area fell nearly 20 percent, from a high of $590,000 in 2006 to a low of $480,000 in 2008. Cumulative days on market for single family homes in the Sedona area are up 87 percent from their low in 2005. The number of transactions for homes over $1 million is down 52 percent from the high in 2006. Vacant land sales are in a basic free fall with the number of transactions off 86 percent from their high in 2005 and median sales prices are off 42 percent from the high in 2006. Things aren’t much better in the Cottonwood, Clarkdale, Jerome and Cornville areas.”
“Crewse urged real estate brokers to renew their relationships with past clients, target a small productive area and put real estate energy into it. ‘The compound effect of doing small activities over time creates magic,’ he said.”
The Review Journal from Nevada. “For the fourth straight month, Greater Las Vegas Association of Realtors statistics showed a dramatic increase in the number of local homes sold last month compared to one year ago. The total number of local single-family homes sold in December was 2,498, up 14.4 percent from 2,183 in November, and up 184.2 percent from 879 sales in December of 2007.”
“GLVAR reported that the median price of homes sold in Southern Nevada continued to decline in December, dropping to levels not seen since 2003. The median price of a single-family home sold in the Las Vegas area decreased by 5.9 percent during the month, from $186,000 in November to $175,000 in December. That’s down 32.7 percent from December of 2007.”
“For condos and townhomes, the median sales price decreased 0.9 percent from $90,750 in November to $89,900 in December. That’s down 51.4 percent from December of 2007.”
“GLVAR Presiden Sue Naumann stopped short of predicting when local home prices may rebound, but she continued to emphasize that this buyer’s market presents historic opportunities that ‘can’t last much longer.’”
“According to Prudential Americana Group CEO Mark Stark, the statistics on home sales throughout the year, and particularly in December, signify a healthy unit growth and ‘we look forward to the stabilization of sales prices.’”
“‘In December, approximately 77 percent of all homes sold were bank-owned properties, or foreclosures,’ he said. ‘And another 3 percent were short sales…I see no material change in the first two quarters of 2009 as foreclosed homes will continue to hit the marketplace.’”
“Among the bright spots in the Las Vegas real estate market last year was the shift in the types of loans that were processed as well as the reduction in overall interest rates. ‘In December, approximately 27 percent of Prudential’s home closings were cash buyers,’ said Forrest Barbee, corporate broker. ‘That indicates that the market is undervalued, because cash buyers are typically investors. Investors have begun to snap up the foreclosure homes and will wait for them to regain some value before selling them again.’”
“One other bright spot Stark saw was the overall affordability of homes. ‘People who thought in the past that home ownership was out of reach have now come to understand that they have a golden opportunity to not only purchase a home, but look forward to long-term appreciation,’ he said.”
In Business Las Vegas from Nevada. “Combined with declines in 2007, the median home price has fallen 45 percent since February 2007 when it was $288,000. Dennis Smith, the president of Home Builders Research, predicted the existing home market won’t see many more sales in 2009 and 2010 than in 2008 and that the new-home market will have fewer sales over the next three years than it did in 2008.”
“‘There is not much good news to talk about,” said Smith, who spoke Jan. 16 at the annual housing conference day sponsored by the Southern Nevada Home Builders Association. ‘I think we are at the bottom of this cycle, but it is going to be a long bottom.’”
“Foreclosures continued to drive down home prices with no end in sight. In December 2,173 homes were repossessed to bring the year’s total to 25,227, a 234 percent increase from the 9,246 homes repossessed in 2007. The number of foreclosures has exceeded 2,000 a month since April. Sixty-five percent of the resale homes sold in December, 2,031, were owned by banks, with a median closing price of $150,000.”
“The remaining 35 percent of homes sold had a median closing price of $183,000, according to SalesTraq. At the end of the year, banks had possession of 15,376 homes - the most since the housing crisis began - which means they are likely to keep cutting prices to generate sales.”
“With the condo-hotel market hard hit and many prospective owners unable to close on their units, Donald Trump has an innovative solution. The real estate developer has decided to lease units at the Trump Tower up to one year as upscale furnished apartments.”
“Realtors are hailing it as a trendsetter that may catch on with other developers such as MGM Mirage with its condo-hotel Vdara, whose sales are stagnant. Since it opened last year, Trump has closed on nearly 400 of the 1,282 units despite having contracts for nearly all of them, Realtors say. The problem has been the credit crunch, and investors’ inability to obtain the financing they need to close the sale. Many signed contracts when the condo market was hot and financing readily available.”
“High-rise Realtor Bruce Hiatt says it’s a brilliant strategy for Trump to generate more operating revenue and help establish the hotel. With the troubled economy, competition has been tight and Trump was competing with Steve Wynn’s Encore. Some staff members were let go and that reduced services, Realtors say. By bringing in more people as tenants, that will enhance services and increase jobs, they say.”
“‘I think they are on the right track to reduce inventory that is not being closed because people are walking away from their units,’ Hiatt says. ‘I think it is going to be the trend for the next couple of years.’”
The Las Vegas Sun from Nevada. “Apartment rental rates are declining along with home prices in much of Southern Nevada, reports issued in recent days show. RealFacts Inc. issued reports showing apartment rental rates and occupancy rates declined in the fourth quarter both nationwide and in the Henderson and Las Vegas markets. RealFacts said rents declined in nearly every metropolitan area in the country between September and December.”
“This is good news for renters, but overall is a negative sign for the economy by reflecting job losses and corporate cutbacks that have left fewer people looking to rent apartments. The numbers also indicate investors may be less likely to build or buy multifamily residential projects until the economy turns around.”
“‘This data for 2008 indicates that the year’s widespread economic problems have finally affected the rental market by the end of the year,’ RealFacts said. ‘The choice to invest in income property for the last several decades has been based on the assumption that rents would continue to grow. In 2009, investors are likely to evaluate rental properties based on current income alone.’”
