Better In The Long Run
It’s Friday desk clearing time for this blogger. “From the front porch of her shotgun home in the Portland neighborhood, 73-year-old Patricia Harrell can see three properties that were sold at foreclosure auctions last year. Harrell’s street is part of a swath of western Louisville running through Portland, California and Park Hill, where just 22 investors owned 202 properties that were foreclosed on last year — more than one-third of the total foreclosures in the area.”
“Donald K. Crandall, a licensed mortgage loan officer who lives in Old Louisville, according to state licensing records, lost the most homes to foreclosure sales in Jefferson County last year — 40 overall. Crandall, whose foreclosure problems have triggered a review of his mortgage license by state officials, did not return telephone calls seeking comment.”
“But while he may stand out for the sheer number of foreclosed properties, Crandall is not alone among struggling investors. James Heleringer, a mortgage loan officer who lost 10 homes in foreclosure sales last year, said he bought most of his properties three or four years earlier using adjustable-rate subprime mortgages. Heleringer said lenders weren’t willing to refinance the loans. Efforts to sell the homes didn’t work either, partly because property values had started dropping.”
“‘It’s part bad luck, and part poor business planning on my part,’ said Heleringer. ‘I’m taking my medicine and moving on.’”
“The Obama administration yesterday released new details about its $75 billion plan to help some 9 million homeowners. The Obama plan would extend the refinancing help to borrowers who are underwater, so long as the value of their homes has dropped no more than 5 percent below what they owe on their loans. Some quarter of a million borrowers in Massachusetts fit the federal profile of having not enough equity in their homes to refinance, according to real estate tracker Warren Group.”
“AnnLouise White of Dedham, who is hoping she can refinance under the program, said she was resisting calling her mortgage lender immediately, to first digest the details of the plan. White bought her house in 2007 for $415,000 but hasn’t been able to refinance because her home has since dropped in value. ‘I’m still hoping,’ White said. ‘I’m trying not to jump the gun.’”
“Sharon Price, director of policy for the National Housing Conference, said she believed the administration was being realistic about who it could best help. ‘It will help people who are a little underwater but not truly underwater,’ Price said. ‘Clearly they are trying to reach the broadest population under both of these plans. But they are not reaching people who may be past the point of no return.’”
“The Barack Obama administration’s rescue plan doesn’t offer any lifelines for investor-owned homes –– a big portion of the troubled Phoenix housing market. Tim Mackey, managing partner of the Scottsdale-based Mackey Law Firm, who specializes in real estate and loan modifications, said 10 percent to 20 percent of Phoenix-area homes are investor-owned, and there’s no immediate help for them in President Obama’s mortgage plan.”
“‘They are in the same financial predicament they were a month ago,’ he said.”
“Dan Gonen, a Realtor in Scottsdale, said more than 50,100 homes are for sale in the Valley, and 25,600 of them are vacant. He said more than 11,400 of the vacant properties are bank-owned, and he presumes a large number of the others are owned by investors. Stan Van Dyk, Tempe branch manager at America One Finance, is skeptical of the plan’s effectiveness. He is concerned that it bypasses many homeowners who are extremely upside-down in their mortgages.”
“Many investors pulled up stakes walked away from their Arizona investments when the market turned 18 months ago. ‘Most of them have already up and left the market and left the houses to waste and … foreclosure,’ Van Dyk said.”
“California homeowners who could access the federal mortgage modification are few because their loan-to-value ratio exceeds the plan’s limits, analysts said. About one-third of California homeowners are underwater but the majority of them owe more than 105 percent, the Los Angeles Times reported Friday.”
“‘They’re underwater by six figures in many cases,’ Greg McBride, a Bankrate.com senior analyst, told the Times. ‘Many homeowners in Southern California are left to twist in the wind.’”
“Two new foreclosure prevention programs may do little to help Northern San Joaquin Valley homeowners because housing values here have fallen too far. ‘They don’t address the problem we have here in the valley,’ lamented Martha Lucey, who runs ByDesign Financial Solutions in Fresno. ‘This will only apply to a very small percentage of homeowners in the Central Valley.’”
“Home values have plunged 64 percent or more in Stanislaus, San Joaquin and Merced counties since peaking in 2005. ‘That’s not going to help 50 percent of the people in our area. We’re almost all underwater,’ said Edward Parcaut of Lighthouse Residential Mortgage in Modesto. ‘Even those people who put 50 percent down on a home four years ago owe more than their home is worth now.’”
“More than 30 percent of mortgage holders in the sunshine state are living a dark reality: they owe more on their homes than what they’re even worth. Tampa Bay Realtor Nathan Bangs says the major depreciation of home values is partly to blame. ‘We’re down 40 percent. We’re back to 2002 pricing so any homeowner who bought after 2003 that didn’t re-fi outside of their home, they’re upside down,’ he said.”
“‘Any of these subprime ARM mortgages or exotic mortgages that people may have gotten into are not backed by Freddie Mac and Fannie Mae. Those will not be eligible with the new program,’ said Scott Strepina, mortgage broker in Tampa.”
“Woven in among the many aspects of the Federal government’s economic stimulus plan is a new tax credit of up to $8,000 for qualifying first-time home buyers. But area experts are split on whether the credit actually will have the intended impact of spurring on-the-fence prospective buyers to purchase homes. ‘I think the credits are too confusing for people; (they) can’t keep up with it,’ said Barbara Pearce, president of North Haven-based H. Pearce Real Estate. ‘Nobody really knows what the story is.’”
“‘In an ideal world, a stimulus package is aimed at getting people off the fence, or getting people who are not able to buy,’ she said. ‘I haven’t heard anyone say, ‘I wasn’t able to buy, but now I can because of this stimulus package.’”
“The U.S. is producing too many vehicles, according to a new report from CIBC World Markets, and sales already at a 34-year low will likely drop another 30 to 40 per cent and may never recover to previous levels.”
“The report projects that American consumers will only buy about eight to nine million vehicles a year over the next five years, roughly half of what was purchased in the last five years. ‘Detroit’s biggest problem isn’t that it’s producing the wrong type of vehicles, but rather, that it’s producing too many vehicles, far too many,’ said chief economist Jeff Rubin. ‘Just as two million housing starts proved to be a bubble, so was the average 16 million unit auto sales of the last five years.’”
“New housing construction has ground to a standstill in Chandler and the city faces budget deficits of up to $40 million in coming years. In 2007, the city issued 935 home building permits. Last year, the number was down to 366, said Mayor Boyd Dunn.”
“And last month, Chandler issued only one building permit, Dunn said.”
“‘There are no new houses being built right now in the city of Chandler,’ he said. ‘It’s something we’re not used to.’”
“The condo market across the valley, including downtown, is hurting badly. As of a few months ago, buyers at four of the five condo projects recently completed or under construction in Las Vegas — Newport Lofts, Juhl, Allure and Streamline Tower — were finding it difficult, if not impossible, to get financing to close on their units. On the other hand, there appear to be few if any apartments downtown like the ones downtown developer Sam Cherry plans to build.”
“‘We went from flophouse motels and government-subsidized housing to half-million-dollar condos — with nothing in between,’ said Michael Cornthwaite, owner of the Downtown Cocktail Room.”
“North Dakota’s real estate market has also held up better than those in many other states, a trend that experts say is likely to continue. America’s Home Loans owner Darin Ketterling adds, ‘We’re talking builders, realtors, lenders, appraisers have always taken the client’s best interest into consideration, and that’s really helped the most.’”
“‘It’s down a little bit now, but we’re in a buyer’s market right now, and it’s slowly changing to a seller’s market, which basically means that the housing prices, I believe, are going to start increasing a little bit,’ says realtor Greg Mayer.”
“For sale: 4,000-square-foot Cocoa Beach canal-front home near the Banana River; pool, Jacuzzi, private dock included. Sold for $800,000 in 2006. Now available for $320,000. Glen Simser couldn’t pass up the bargain when he saw it last year. ‘It was a killer deal,’ he said.”
“Of course, there was a catch. The home was a fixer-upper, in need of major TLC. But the potential savings found in that deal and many others across the Space Coast makes them one of the few bright spots in the current housing landscape. Organizers of the Space Coast Home Show this weekend at the Cocoa Expo are expecting a stream of visitors who will, as the HGTV slogan puts it, ‘dream big, start at home.’”
“When co-owners Sue Lavallee and Eva Basile opened their one-stop remodeling shop in Rockledge two years ago, their market base was different. ‘We were first dealing with new homeowners, but six months later it shifted to people redoing their homes,’ Lavallee said. ‘Now it’s people buying fixer uppers. We’re seeing some flippers again. That’s promising.’”
“A few months ago, America Harris was marketing real estate with the promise that Dubai would continue to prosper. The North Lauderdale native would show prospective clients articles from the local English-language newspaper that claimed Dubai was still a good investment even as most of the world’s real estate markets were faltering. ‘Dubai was going to be unfazed by the financial crisis. It was resilient,’ Harris said.”
“Young professionals from Europe and America, lured to the Gulf by high salaries and Dubai’s mystique as a new land of opportunity, are now out of work and scrambling to sell their property, including condos and cars, before their residency visas expire - typically one month after losing a job. ‘Dubai in the fall was such a vibrant city,’ Harris said. ‘Now, it’s almost like a shell of its former self. All the shops are empty. The restaurants are empty.’”
“Nick Hadous, from Dearborn, Mich., who arrived in December to take a job as a corporate lawyer, says he can now afford to live at Jumeirah Beach Residence, a tony development near the marina, which was out of reach when he arrived. ‘I think it may turn out to be better in the long run,’ Hadous said. ‘The market here was way out of whack. They needed a correction.’”
“Real estate agents going into this new sales season without a BlackBerry, iPhone or other personal digital assistant better get with it. A new survey of homebuyers says when people call a real estate agent, they want to hear back right now, not tomorrow or later. And they’ll judge an agent’s ability and savvy by the speed of that response.”
“‘More than half want to hear back from you in 30 minutes,’ said Leslie Appleton-Young, economist for the California Association of Realtors, briefing a few hundred Sacramento Association of Realtors members.”
“Many home sellers are still out of touch with the changing housing market, a new survey shows. Almost half of homeowners polled by HomeGain Inc. said they think their houses should be priced 10 to 20 percent higher than their sales agent recommended.”
“Almost 60 percent of potential buyers said that they considered home asking prices too high, HomeGain found in its nationwide poll. More than half of real estate agents surveyed predicted that home prices would fall further during the next six months. Only 11 percent of agents expect prices to rise.”
“Also, most real estate agents – 60 percent of those surveyed – said that the latest government economic stimulus programs will not help home prices. Just 3 percent of those polled were optimistic that the government programs would cause home prices to rise.”
“‘Our survey shows that the market and Realtors are telling homeowners their homes are worth considerably less than homeowners think they are,’ Louis Cammarosano, general manager of HomeGain, said in the report.”
