It’s Not Going To Be Steak And Lobster Anymore
The Courier Journal reports from Kentucky. “Widespread foreclosures and depressed housing sales are dropping the assessed valuations of thousands of Jefferson County homes this year — with western Louisville hit hardest. The county has reduced the assessment values for more than 26,000 homes, dropping them 4 percent to 18 percent, Jefferson Property Valuation Administrator Tony Lindauer said. Most homes with new valuations were last reassessed three or four years ago. Local revenue from property taxes has generally been growing 4 percent to 6 percent in recent years.”
“That lower growth rate could make it tough for some governments, including the city, government officials admit. ‘It’s not going to be steak and lobster anymore,’ said Debbie Linnig Michals, Lindauer’s spokeswoman, referring to government agencies that depend on property taxes. ‘It’s going to be beans and potatoes.’”
“Metro Council President David Tandy, D-4th District, saw the assessment on his home on West Chestnut drop from $167,000 last year to $135,120. Tandy said the widespread devaluation in western Louisville reflects the downside of having ‘a high number of absentee landlords.’ ‘It is what it is,’ Tandy said.”
The News Leader from Virginia. “Home sale numbers in the greater Augusta County region speak volumes — purchases peaked in 2005 at 1,530 homes and slid to just 1,040 in 2008 — but local Realtors remain hopeful that sales will rebound this spring and summer, pointing to several developments such as a housing inventory that has shot up nearly 60 percent, increased interest from prospective buyers, low interest rates and an $8,000 tax credit aimed at first-time home buyers.”
“‘I’m very optimistic about the coming months,’ said Max Miller of Real Estate Plus in Verona. ‘There’s a tremendous amount of properties for sale.’ Miller said the real estate market has always fluctuated between boom and bust, and said the 2009 market is no different. ‘It always comes back, and it will come back,’ he said.”
“But gone are the days of buyers putting a bid on a home, only to find out multiple contracts for the purchase were parked in front of theirs. The median sale price of a home also has slipped from an average of $195,000 in 2007 to $175,000 so far this year, according to the Greater Augusta Association of Realtors. A main stumbling block to increased home sales, according to Miller, is the public’s confidence, or lack thereof, in job security. ‘That has to be the only reason that the floodgates haven’t opened,’ he said.”
“Staunton home inspector Bronson Anderson, of Inspector Home Inc., agreed that business has slowed. ‘This time two years ago was completely crazy in real estate,’ he said.”
The Knoxville News Sentinel from Tennessee. “An East Tennessee waterfront project backed by a prominent Knoxville-area development firm is at a standstill after getting caught up in a Cleveland, Tenn., businessman’s financial turmoil. Located on the shores of Chickamauga Lake, near Dayton, Tenn., Rarity Rivers is one of several luxury residential projects across East Tennessee that was developed by Maryville-based Rarity Communities.”
“In January, GreenBank filed a motion seeking relief from an automatic stay in the case, saying it must give Steve McKenzie, a Cleveland businessman, notice of a foreclosure sale since he is a guarantor of the original $15 million loan. The bank estimated that the liquidation value of the nearly 400 acres owned by Chickamauga Shores is just more than $7 million, and that the liquidation value of approximately 200 acres owned by Hiawassee is $10.2 million.”
“A bank filing said only four lots had been sold, and none since August. Mike Ross, the head of Rarity Communities, said last week that once GreenBank has foreclosed on the Chickamauga Shores portion of the property, the land would be available for sale to a third party so the project can continue.”
“Ross confirmed that only four lots have been sold, but said his firm isn’t planning to walk away from Rarity Rivers. Noting that the economy has slowed down development, Ross said that ‘it will probably be a little while before things get started back’ at Rarity Rivers.”
The Atlanta Journal Constitution in Georgia. “The results of the tax revolution — started by owners who feel their property values have fallen during the foreclosure crisis — becomes clear this month as assessors begin setting values for 2009. Gwinnett has already mailed out 68,000 notices and plans to send another 11,000 next week. Assessors in Cobb, Fulton, DeKalb and Clayton will follow with their own notices over the next few weeks as they settle on how much taxable values will drop due to what experts are calling a real estate depression.”
“‘We’ve seen not so much any one area that’s been hit harder than the others,’ said Rodney McDaniel, chief appraiser for Clayton. ‘It’s been pretty widespread. It’s all over the county.’”
“In Gwinnett, where notices have already been sent, chief appraiser Steve Pruitt says he’s been surprised by the reaction. He expected many folks to complain Gwinnett didn’t lower values enough. Instead, many have called in to complain values went down at all.”
“‘I guess it’s the realization of the loss of value,’ Pruitt said.”
The Orlando Sentinel in Florida. “The number of residential properties listed for purchase through the Orlando Realtors’ MLS, which covers mainly Orange and Seminole counties, peaked in late 2007 at more than 26,000. Last month, the local inventory stood at 21,448 homes, down by 720 from February and 15.8 percent lower than in March 2008. The last time the inventory was lower: January 2007.”
“Combined with the improvement in monthly sales, that means the inventory, as measured by ‘months of supply,’ is shrinking even faster: It fell from 16.77 months in February to 12.98 months in March — far below its peak of 31.64 in January 2008 and the lowest it has been since December 2006.”
“For the first time, the Orlando Regional Realtor Association examined ‘distress sales’ in detail and found that 49 percent of the homes sold by its members last month were either owned by banks already or had been sold under financial pressure of some kind. Bank-owned homes — those already through foreclosure — sold for a median price of $95,000.”
“Homes for which lenders had agreed to take less than the amount owed on the mortgage — known as pre-foreclosure or ’short’ sales — sold for a median of $143,500. Homes marketed by owners not under financial duress sold for a median of $174,995.”
“Jeffri Moore and her husband, Alex, are among a growing number of local house hunters trying to snap up properties for deep discounts of 50 percent or more — sometimes, substantially more. For example, the east Orange County couple just submitted an offer for a condo unit in a former apartment complex near their home that was listed through a discount brokerage for $21,500. It had once been appraised for $131,000.”
“‘It does need some work,’ Jeffri Moore said.”
“The March median sale price of $137,000 in the Orlando Realtors’ core market is the lowest for that measure since January 2003. ‘Orlando home buyers are getting back into the market and taking advantage of improved affordability,’ Les Simmonds, president of the Orlando Realtors group, said in Monday’s report.”
WINK News from Florida. “Southwest Florida real estate is selling at record rates. While the trends are good for the region, one of the reasons why is not - if you’re a seller. Bank owned and short sale properties are influencing prices. ‘To sellers, be aware of what’s in your neighborhood,’ said Realtor Toni Schoemaker. ‘Don’t get greedy, get real.’”
“Experts say interested buyers should act quickly. ‘If you find the property you like write the contract, because it doesn’t matter what the market is,’ said Schoemaker. ‘The good ones sell right away so if you find something you love write the contract. And don’t think on a short sale or foreclosure you can go in and write it at 50-percent of the list price. That is not going to happen. These properties are getting full price or close to full price offers.’”
“Many buyers are investors, leading some to worry about the potential for another disastrous housing bubble. Will history repeat itself? ‘In my opinion no. There are some investors who are out buying those Cape Coral and Lehigh distressed properties. They want to use them as rentals,’ explains Schoemaker.”
The Herald Tribune in Florida. “The city is sitting on $838,000 in unpaid water and sewer bills from residents who, in many cases, have skipped town or lost their homes to bank foreclosure. In an effort to recover some of the money, North Port will soon begin putting liens on property owned by people who have not paid their utility bill in 120 days. In the case of Armando and Anneli Cristiani, a tenant in their North Port home ran up utility bills of more than $550 and then skipped town. Because the Cristianis were the primary holders of the utility account, the Sarasota couple is left to either pay the tab or let the home go without water.”
“They say that North Port refused to shut off the utility service in a timely fashion as they watched the bills grow. North Port says the couple never asked to stop the service. The bill will likely have to be paid before the house can be rented again. ‘This is unjust to all North Port homeowners that have a rental. Not fair at all,’ wrote Anneli Cristiani in an e-mail to the Herald-Tribune.”
The Naples News in Florida. “Lee County homeowners could see their property values diminish by 30 percent from last year’s appraisals, a decrease that may lead the state, county appraiser Ken Wilkinson predicted in a town hall meeting in Bonita Springs. ‘I’m talking about market value,’ Wilkinson said. ‘If you wrote one check, bought the whole county, from last year to this I think it could be a 30 percent decrease.’”
“Wilkinson said housing gluts in Cape Coral and Lehigh Acres, where many homes now sit in foreclosure, inform his prediction that Lee will lead the state.”
“‘If you think of it, Cape Coral is the second largest incorporated land mass in the state of Florida…In Lehigh, you’re talking about 68,000 acres that were subdivided into quarter and half acre lots and sold off all over the world. So there’s a lot of property in those two places, and they’ve seemed to have set the model for going up, and the one coming down,’ he said.”
“Bonita Springs resident Tom Gibbons, 69, attended the town hall meeting. A retiree from New York, Gibbons said he’s seen the value of his home, in the Village Walk community, decline considerably since his purchase four years ago. From a taxpayer perspective, the decrease offers some relief, he said. Yet it still translates to a diminished investment.”
“‘Definitely it’s a scary thing to watch the value of your house go down,’ he said. ‘Basically there’s nothing you can do with it.’”
The Palm Beach Post in Florida. “Thirty buyers who signed contracts for units at the Peninsula Boynton Beach condo will get back a combined $1.5 million under a class action suit settled last week. Coral Springs attorney Scott Gelfand says the settlement calls for developer Waterbrook Peninsula LLC of Deerfield Beach to return 80 percent of buyers’ 10 percent deposits, which were held in escrow. Buyers will get between $37,800 and $65,500 each, he says.”
“Most buyers put down 20 percent, Gelfand says.”
“Units at Peninsula Boynton Beach were priced at $400,000 to $800,000. A description of the 70-unit project on the Boynton Beach Community Redevelopment Agency’s site uses breathless terms: ‘Boynton Beach’s new residential opportunity will wrap you in luxury living and spectacular intracoastal [sic] views, but only if you hurry.’”
The Daily Business Review in Florida. “Ebenezer Boakyee’s condo board should be collecting nearly $11,000 in maintenance fees every month. Instead, it barely banks $3,000 because many of the units are owned by investors who have stopped paying their association fees.”
“Because of the short-fall, Opa-locka’s The Oaks at Miami Gardens condo association is struggling to survive even as absentee unit owners collect rent from tenants. ‘It has been a rough ride for the association in the last year and a half,’ said Boakyee.”
“Built in 2005, The Oaks is the product of a housing boom gone bust. Investors bought about 95 percent of the 61 units, said Boakyee, who owns two condos that he rents out. Now, almost half the condos are facing foreclosure either by lenders or the association, according to Miami-Dade County property records.”
“In a final bid to get some money out of their property, owners often quit paying condo fees when they face lender foreclosure, even if they have a tenant in place. By seeking the appointment of a receiver, the association hopes to collect maintenance fees for as long as a tenant lives in the unit facing foreclosure by the association, Boakyee said.”
“Yet, it‘s unclear how successful a receiver can be collecting from tenants, said attorney Karl Klein, of Miami’s Klein Law Group. Klein does not work for The Oaks but helps other condominium associations who are having trouble collecting maintenance fees. ‘There is a high likelihood the tenant may move out,’ he said. ‘A lot of tenants, when they find out that there are legal proceedings going on regarding their units, they become uncomfortable and want to leave.’”
“Some community association advocates aren’t sure that negotiating with delinquent owners is a good idea. They urge associations to foreclose the units and take title as quickly as possible. That way, the association would own the condo and could continue to rent it out until the unit’s lender forecloses on it, said Donna Berger, executive director of the Community Advocacy Network.”
“Owners who stopped paying their condo dues have most likely stopped paying their mortgages, too. They know they will lose the condo and may not care what type of tenant they put in their units, she said. If the association takes title to the unit, it will have more control over who becomes their new neighbor. ‘If you don’t have control, you can’t control the maintenance of it and can’t secure the property.’”
The Times Daily in Alabama. “U.S. Sen. Richard Shelby criticized the Federal Reserve System on Monday for its role in the nation’s economic woes. Speaking at a Shoals Chamber of Commerce luncheon, Shelby, a Republican from Tuscaloosa, also expressed concern about the United States’ mounting debt.”
“‘We are at $12.5 trillion as a debtor nation,’ he said. ‘We’ll probably add seven to eight trillion more in the next several years. That doesn’t bode well for our future. The Federal Reserve is printing money like I’ve never seen.’”
“Shelby, the ranking member of the U.S. Senate’s Banking, Housing and Urban Affairs Committee, said printing more money won’t solve the crisis. ‘They’re in unchartered waters,’ said Shelby, who served on the banking committee for 23 years. ‘They’ve printed too much money.’”
“Loaning institutions have gotten in trouble to the point where they rely on federal bailouts. Shelby points out that Federal Reserve officials are the regulators of the holding companies. ‘They were basically letting the banks regulate themselves,’ he said.”
“Shelby was asked about the Community Reinvestment Act. The 1977 federal law encourages lending institutions to provide loans in all neighborhoods, including low- and moderate-income areas. ‘Bank loans should be based on ability to repay the loan, not on some social experiment,’ Shelby responded.”
“Shelby blamed banking problems that arose during his tenure on the committee to former Fed Chairman Alan Greenspan, who told him everything was OK. ‘I used to be in awe of the Federal Reserve,’ he said. The senator said that perspective has changed.”
