The Next Thing We’re Going To See Will Be Bell-Bottoms
The Sun Times reports from Illinois. “Foreclosure is not a pretty word. And the process can be downright ugly. But some hope was available for the taking when the Mortgage Relief Project came to town. ‘Aurora is one of the hard-hit areas,’ said Brent Adams, secretary of the Illinois Department of Financial and Professional Regulation. ‘To come here today shows courage on your part. We’ll do everything we can to make things right,’ he told the group sitting before him.”
“Evelyn and Barry Walker said their mortgage is also becoming unmanageable. Evelyn, a home day care provider, and Barry, a restaurant manager, said they aren’t bringing in as much money lately and their house payment keeps going up. Evelyn’s brother, David Sanders, joined them. Sanders is in the same boat and was told he needs to leave his home by Dec. 22.”
“The Walkers, of Yorkville, said their experience dealing with two banks so far has been unpleasant. Their current mortgage holder is either unresponsive or says they don’t qualify for current programs that might help them. ‘There is always some criteria we didn’t meet,’ Barry Walker said. ‘If we don’t qualify, who does?’ he wondered.”
From WKYC. “The housing slump has hit Northeast Ohio harder then many places throughout the country. If you’re about to be foreclosed on, there are ways to ease the pain. If you’re looking for a deal, there are places to find it. Laura Fulton makes a living buying, rehabbing and flipping houses. ‘It’s a great time to buy right now. We have never seen these prices or these interest rates,’ Fulton said.”
“Sheriff sales are usually sight unseen. Fulton once got burned. ‘They sawed off the mantel of the fireplace. They tore off cabinet doors, trashed the yard and turfed it. Then left dogs in the house for a long time, unattended,’ Fulton said.”
“In a short sale, the seller can also benefit, so personal trainer Kathy Scharam discovered. Despite working two jobs, Kathy could not keep up with her house payments. She chose a short sale over foreclosure and was forgiven a good chunk of what she owed. ‘Their credit is damaged but not to the degree a sheriff’s sale would be,’ Schram said.”
“Kathy is starting over. She is feeling better about herself and her future. ‘Somebody is going to be very happy with this house, that it was left in good condition. The relief was not making the mortgage payment and wondering how to make ends meet,’ Schram said.”
The News Journal in Ohio. “When city officials explained plans to speed up demolition of blighted housing in Mansfield with $1.6 million in grant funds, few questions were asked. But there was a quiet buzz of frustration from several people as Thursday night’s meeting ended and they filed out of council chambers.”
“Police Chief Phil Messer said his department has worked closely with building and codes inspectors to ensure vacant houses are secured, then repaired or razed. If a house sits empty for two or three years, can’t be permanently secured and hasn’t been restored, ‘then at some point I think you have to let it go,’ he said.”
The Columbus Dispatch in Ohio. “Central Ohio home values appreciated nearly 2 percent in the past year, but not in the areas that residents might expect, a national report released this week indicates. Although home values rose in some out-of-the-way places such as Groveport, Hebron and Johnstown, they dropped in traditionally affluent communities such as Dublin, Upper Arlington and Worthington, according to Zillow.”
“The Federal Housing Finance Agency found that central Ohio home prices dropped 1.4 percent from the second quarter of last year to the second quarter of this year. (Third-quarter figures are not yet available.) Because of those figures, some central Ohio real-estate agents said they were surprised that Zillow found any price gains in the area.”
“‘I don’t know how they can say they’ve seen an increase because I haven’t seen it anywhere,’ said Jerry White, executive vice president of Coldwell Banker King Thompson. ‘I would not feel confident telling anyone that home prices are appreciating. I don’t think we’ve bottomed out yet.’”
“The market is very weak for expensive homes, which are especially abundant in Upper Arlington and Dublin. ‘We have years and years of supply in that million-and-above range,’ said Chris Pedon, who with a partner runs the Bexley Real Living HER office.”
“Ohio might be heading into a new round of foreclosures. Foreclosure filings in the state rose 6.5 percent from September to October, according to RealtyTrac. During the month, 11,646 foreclosure notices were filed in the state. But that figure includes a more ominous one: a big leap in lawsuits filed by lenders against homeowners, the first step in the foreclosure process. During October, 4,628 suits were filed against homeowners, 16 percent more than during September.”
“‘My overall take on this is that no matter what the monthly foreclosure filing is, we’re still not at the peak of this mess,’ said Paul Bellamy, director of the Cuyahoga County Foreclosure Prevention Program.”
“Bellamy noted that there’s been no decline in the first warning sign of foreclosure: the number of loans that are more than 90 days delinquent. ‘That 90-day bucket is really growing, and it has been since the middle of 2008,’ Bellamy said.”
The Green Bay Press Gazette in Wisconsin. “Green Bay-area homebuilder Scott Puyleart says the potential benefits of tax credits for first-time homebuyers and those looking to move on from their current house go beyond just the builder. ‘We’re going to see that second- and third-time homebuyer market take off,’ said Puyleart who is vice president of the Brown County Home Builders Association. ‘There are a lot of people that are in the position where they want to do something and this is going to help … them.’”
“He said there are only so many first-time homebuyers. ‘When you have five to 15 guys on a job site, that’s a paycheck and that’s groceries, that’s entertainment and that’s a car payment and it’s going to trickle down through the economy two or three times over,’ Pulyeart said.”
“Christine Shaefer, executive vice president of the Valley Home Builders Association in Appleton, said the realistic expectation is the credit will help stem the decline and then stabilize the number of new-home starts in 2010, with the hope of seeing a 5 percent increase.”
“‘Realistic is the key because housing starts were at a very unsustainable level in 2004 and 2005,’ she said.”
The Liberty Tribune. “Facing a continued wobbly housing market, local developers and real estate professionals are lobbying Congress to help prop up sales by extending and expanding a homebuyers tax credit. Jason Klindt, a spokesman for Congressman Sam Graves, who represents Northwest Missouri, including Clay and Platte counties, said by e-mail: ‘Sam is talking with realtors, builders and home buyers to determine if the current tax credit is working and to determine whether to extend or expand it.’”
“Craig Porter, a real estate developer from Kansas City North, said he is among those who had spoken to Graves about the matter. Porter said any hopes for an economic recovery were tied to success of the housing industry. ‘There’s never been an economic recovery that didn’t coincide with a robust housing market,’ Porter said. ‘The tax credit needs to be extended and expanded to include not only the first-time home buyers.’”
“Porter said builders in Lake Meadows, a subdivision he is developing in Smithville, had witnessed the success of the $8,000 tax credit for first-time buyers. ‘We’ve sold five out of eight houses we started,’ Porter said. ‘We’re going to start four more and I think we have buyers for two of them.’”
“Porter said the houses ranged in price from approximately $140,000 to $180,000, lower than they might be in a better market. ‘This is a great time to buy,’ Porter said. ‘Interest rates are low and the cost of building has gone down. People are getting good deals.’”
The DesMoines Register. “Experts say it will boost prices and will not benefit the economy. Congress’ decision 10 days ago to extend and expand the first-time homebuyers’ tax credit is one of the worst economic policy decisions since President Jimmy Carter decided to embargo U.S. grain sales to the Soviet Union, several specialists say. Carter’s 1980 embargo had absolutely no effect on the Soviet decision to invade Afghanistan, although it hurt a lot of Iowa farmers for a long time.”
“Extending and expanding the homebuyers’ tax credit now will help a handful of homebuyers, most of whom, experts say, would have bought without the credit, while prolonging the real estate downturn. ‘It’s a gimmick,’ said Iowa State University economist David Swenson. ‘It’s really not changing the demand for housing at a time when we have an excess of supply. It’s interfering with the need to get prices down to where people could afford them.’”
“Most economists agree that the extension and expansion will do two things: It will increase housing prices, and it will move future sales into the present, thereby extending the pain. Neither of those things benefit the long-term economy. The logic is similar to what put two of the big three automakers in bankruptcy. Remember zero percent financing and car loans that lasted longer than cars?”
“It didn’t make sense that the car companies could make money on those terms. And they didn’t.”
“Des Moines accountant Joe Kristan said, ‘A lot of people are just capturing that money by being able to raise their prices’ on homes they want to sell. The credit is ‘temporarily inflating home prices,’ he said.”
“Lower prices will do more to get rid of excess supply than anything the government can do, Swenson said. The credit is ‘artificially propping up prices,’ he said, and encouraging people to buy more house than they can afford.”
“That’s what got us into this mess.”
“The problem now, said Kristan, is that once the homebuyers’ tax credit has been extended, ‘there’s going to be pressure every time it expires to extend it, just like they did this time.’”
“‘We’re living in strange times,’ Kristan said. ‘It reminds me of the 1970s; there’s so much lunacy. The next thing we’re going to see will be bell-bottoms.’”
