Equity Inmates Trapped In Homes They Cannot Sell
The Star Tribune reports from Wyoming. “For the past few years Rebecca Thomas has struggled to find affordable, quality housing to rent. A single parent to 6-year-old Jordyn, Thomas lived in low-income housing in 2007, but earned too much money during her first year living there to qualify to stay. A small business owner, Thomas has worked two jobs in addition to her massage therapy business just to keep up with bills. Thomas is living with her boyfriend’s family while trying to save enough to buy a house in the next six months. Tired of renting, Thomas said buying a house with her boyfriend seems more sensible than throwing money away on rent.”
“‘We’re trying to save for a house,’ Thomas said. ‘We just think we’ll be financially stable to buy then.’”
“Hoping to take advantage of the tax credit now available to first-time home buyers, Thomas is just one of many Gillette residents helping keep the community’s housing market stable. After a slow second quarter, real estate sales are picking up again, Re/Max broker/owner Ryan Conklin said.”
“Also the owner of three rentals, Conklin said the rental market has loosened up in the last few months compared to the last three years, when the vacancy rate hovered around zero percent. ‘It’s taking a little longer to rent something out, and rents have come down a little,’ Conklin said.”
“The vacancy rate is now 6.1 percent. Gillette Public Information Officer Joe Lunne said new apartments and the first-time home buyer tax credit are helping to ease the rental market that for the past two years has seen a .1 percent vacancy rate.In 2006 there were just 1,351 apartments in the community, and today there are about 1,800. ‘It’s easier for the young people trying to find a place to live,’ Lunne said. ‘It takes some of the stress off.’”
“The lack of affordable housing, often cited as a negative factor in enticing new workers into Campbell County, is now slowly easing. Now, the recruitment efforts are being hampered by other issues, including the difficulty people are having in selling homes in other states so they can relocate to Wyoming. ‘They can’t sell their house in other states,’ Lunne said. ‘That’s really the struggle for us now.’”
“While the Campbell County housing market continues to stay clear of many of the struggles plaguing the rest of the nation, the number of new housing permits issued in 2009 stayed steady. By the end of October, 434 permits had been issued in Gillette, while by the end of November 2008 only 372 permits had been issued. ‘It doesn’t look to me like anyone is slowing up,’ Lunne said.”
The Spokesman Review. “Greenstone’s acquisition of Kendall Yards revives a project expected to model New Urbanism just across the Monroe Street Bridge from the old. In 15 years, its 78 acres will be covered with housing clusters, commercial centers and parks within easy walking distance of downtown. That’s the plan, anyway. But plans go awry, as former owner Marshall Chesrown knows too well.”
“Chesrown envisioned a $1 billion urban version of the luxury developments he was creating in Idaho when be bought the property in 2004. A mini-core of high-end shops and residential towers would fill the space between Monroe and Maple streets. More housing – for a total 2,600 units – would extend the project west of Maple.”
“At a festive groundbreaking, complete with balloons, refreshments and song, officials manned the traditional golden shovels. Chesrown likened the work done and the work ahead to swimming the English Channel. That was May 17, 2007. He did not make it.”
“The financial tides were turning, inundating upscale developments such as the Yellowstone Club in Montana, the Tamarack Resort in Idaho, and Kendall Yards. After a multimillion-dollar environmental cleanup of the former railroad yard, the bulldozers left. The corner of West Ide Avenue and North Monroe Street at the bridge’s north end has become a shabby parking lot, not a showpiece.”
“Greenstone will move forward with a more modest project that is still expected to take a decade-plus. The vision may be less grandiose, but it may be one that better suits the adjacent West Central neighborhood and a city that has difficulty digesting $1 million homes and $500,000 condominiums. It was going to take a horde of ‘equity refugees’ from California to fill those boxes. Many of those potential buyers are now equity inmates trapped in homes they cannot sell.”
“Wheaton says there may eventually be pricey abodes at Kendall Yards. Greenstone has succeeded because its developments in Liberty Lake and Coeur d’Alene offer homes at all price points, he says. But Spokane-area residents can more easily live with, and in, the $175,000 to $250,000 townhouses that will start going up late next year.”
The Bonner County Daily Bee in Idaho. “Bonner County’s homeless and hungry come from a cross-section of circumstances. And in many cases, the situation they find themselves in is through no fault of their own, according to Blue Haven program manager Tammie Martison. Many of those who are now in need have not previously needed help. Blue Haven is receiving telephone calls from people ‘who have never found themselves in this position before.’”
“Calls are coming from professional people who want advice because they face losing their homes after a job loss. ‘It’s across the board now, it’s not just low-wage earners,’ Martinson said.”
Oregon Public Broadcasting. “Oregon’s unemployment rate held steady at 11.3 percent in October – one of the highest in the country. And in a report released Monday by the U.S. Department of Agriculture, Oregon ranked as one of the worst states in terms of food security – or, in simple terms, households that go hungry.”
“The stats show that over the past three years, more than 6 percent of Oregonians reported that they ate less for financial reasons. And Oregon State University research says the real number is actually worse. And yet, according to federal officials and the state, Oregon has one of the most-effective food stamp programs in the country. So, why does the state rank second-worst, behind only Mississippi, in terms of ‘very low food security’?”
“Researchers say while unemployment is a factor, the state has had high hunger rates even during boom times. Mark Edwards is a sociology professor at OSU. Edwards: ‘Even ten years ago, we found that Oregon had high hunger rates, even among people who were working – and had full-time, year-round jobs. So there’s something else going on in Oregon that I suspect has to do with the cost of housing compared to the income people are bringing in.’”
The Mail Tribune in Oregon. “A federal program designed to stabilize communities hit hard by foreclosures has left one Medford couple at their wits’ end trying to find a lender so they can buy a house. ‘It is a very unstable program,’ said Jaymi Bowers, a 26-year-old mother of two. ‘I want the public who is trying to use this program to know what they are in for.’”
“The Bowerses discovered that lenders are reluctant to loan through this program because it has changed frequently, it requires more paperwork and the federal government pays a substantial amount of the down payment. Her husband said the program is great for people to get into if they’ve got the patience. He said they will have to come up with $2,800 to qualify with the federal program kicking in about $38,000. ‘It’s a program that’s really good, but it’s not working,’ he said.”
“Karen Cooper, who is a broker for American Pacific Mortgage Banker and represents the Bowerses, said the program is frustrating for her clients and everyone else involved. ‘They’ve felt like they’ve been stuck through a ringer, and so have I,’ she said. ‘There have been so many changes that I don’t think the underwriter knows what is up.’”
‘In February, the program allowed for the paying of repairs on a foreclosed house before the sale was concluded. ‘That’s gone now,’ she said.”
“To qualify for the program, a family of four would have to earn a maximum of 120 percent of the Jackson County median income, or $66,500, she said. Lenders are wary of families that earn about $50,000 because they may be at risk of defaulting on their mortgages if one of the wage earners is laid off.”
“As he drove through downtown Medford this past weekend, Duane Hill saw signs of trouble that were hard to miss. ‘There was a ‘Space for rent’ sign just about every block,’ observed Hill, the former owner of KRWQ radio who now lives in Sunriver, near Bend.”
“For Hill, it was a reminder of his own status as the owner of a half-rented, three-story office building in northeast Medford near Costco. ‘Lots of space and no prospects,’ said Hill, summing up the picture for many Rogue Valley commercial building owners.”
“It doesn’t stop with retail and office space. Manufacturing has fallen off as well, creating vacancies at the industrial level. ‘Without a doubt, orders aren’t what they used to be,’ said Tom Fischer, one of the owners of Coldwell Banker Commercial NW Real Estate. ‘We have an oversupply of manufacturing capacity. The only places I’ve heard where there is increasing business and more employees is in Internet sales and fulfillment offices — bicycle parts, motorcycle parts, things like that.’”
“Whether retail or industrial, Fischer said, falling consumer demand is draining cash flow and forcing business owners to make tough calls. ‘The reality is that people are not going out to lunch and dinner like they used to and not buying consumer goods — from radios to cars. Go down Riverside Avenue and you will see a half-dozen restaurants with two or three cars in the parking lot instead of a dozen at dinner time.’”
The World in Oregon. “A visitor’s comment while passing down Central Avenue last month epitomizes the challenge that Melvin Lesher says face business owners in downtown Coos Bay. The 73-year-old owner of Little Coyote Cafe watched as the woman pointed to the plywood-covered windows on the Chandler Hotel across the street. She told her companion they must be in the bad part of town.”
“He quickly corralled her and invited her into his cafe. He wanted to explain. Yes, the building is in need of structural repairs, but the area is generally good, he told her. She left satisfied with her meal and a better appreciation for downtown, Lesher said. But some business owners feel like the cards are stacked against them, when they have to woo customers in the shadow of empty buildings and deteriorating exteriors.”
“‘This business cannot survive without investing money into the appearance of the general area,’ Lesher said.”
The Gresham Outlook in Oregon. “The ‘Come Home to Gresham’ home loan program, implemented by Community Vision Inc., helps qualified buyers purchase foreclosed homes in certain parts of the city, said Michael Parkhurst, an associate planner with the city of Gresham. Gresham’s program gives out $10,000 loans instead of $50,000 loans to get more families into more foreclosed houses, said Mayor Shane Bemis. With roughly $400,000 available for the Gresham program, the city could award 40 loans, versus about eight if the cap was $50,000.”
“But not all foreclosed houses in Gresham are the byproduct of lost jobs, questionable loans or household budgets being stretched to the breaking point. ‘Many are new townhouses that were built right before the bubble burst,’ Parkhurst said.”
The News Review in Oregon. “Home sales in Douglas County increased slightly in September, with the 102 pending sales during the month representing 14 percent of the total for the year. ‘Obviously, the $8,000 tax credit for first-time home buyers and low interest rates have helped considerably,’ said Neil Hummel, owner of Century 21-The Neil Company Real Estate in Roseburg.”
“The average price for a home sold in September was $147,000, down $32,000 from a year earlier. The decrease was even more dramatic compared with August, when the average sales price was $195,900. The median price, where half sold for more and half sold for less, was $130,000 in September. For the same month a year earlier, it was $170,000. The median price was $162,500 in August.”
“‘I advise my sellers to take a look at the comparable sales in their neighborhood and price their home 15 percent to 20 percent below the competition and they will more than likely generate an offer sooner than if they price it with the competition,’ Hummel said.”
“New listings fell nearly 14 percent in September. However, the total was 12 more than what was added to the market in September 2008. At September’s rate of sales, the 1,240 active residential listings would last about 15.3 months. That’s down nearly 50 percent from the 30.3-month inventory in January.”
“‘That is good news: Either sellers are deciding to rent their properties or they are taking them off the market waiting for things to improve,’ Hummel said.”
The Juneau Empire in Alaska. “Local builders say their business is in a downturn, but not the depression that has hit their counterparts in the building industry elsewhere in the nation. ‘We’re on the way up out of the bottom of the recession, but we didn’t hit rock bottom like they did elsewhere,’ said Russ McDougal, past president of the Alaska State Home Building Association.”
“Builder Alan Wilson said in contrast to some other places, Southeast’s bankers have been lending responsibly and have money available. ‘If you are a solid borrower, you aren’t having any problems,’ he said.”
“Wilson said the only people he’s heard of having difficulty are those seeking second mortgages and 100-percent equity mortgages. ‘We can use our homes as credit cards any more, but that may not be a bad thing,’ he said.”
The Vancouver Sun in Canada. “In aggregate, British Columbians racked up the highest number of home sales for the month of October since 2003, the B.C. Real Estate Association reported Tuesday, but in the details it still looks more like a South Coast story. ‘Certainly the recession is impacting the resource-oriented communities much harder than the large urban centres that have a much larger service component [to their economies],’ Cameron Muir, the B.C. Real Estate Association’s chief economist, said in an interview.”
“However, Muir said many of B.C.’s interior markets rely heavily on the activity of recreational-property purchasers, most of whom stayed out of the market during last winter’s collapse in sales and have yet to return.”
“Muir said he expects that South Coast markets will not maintain the pace of sales they’ve seen over the past several months. Sales in those markets — Metro Vancouver, the Fraser Valley and Victoria — are largely driven by the ‘pent-up’ demand of buyers who sat out last fall and are now being drawn in by current low interest rates. Muir said that demand that built up is quickly being satisfied, and as prices in the Lower Mainland and Victoria rise, that will help to squeeze more buyers out of the market later in 2010 and act to slow sales.”
“On a provincial basis, the average MLS home price was $493,328 in October, up 17 per cent from the same month a year ago. In Metro Vancouver, the average MLS home price was up 15 per cent to $638,948 compared with October 2008. In the Fraser Valley, average prices are up almost eight per cent to $445,637 compared with the same month a year ago.”
“‘If you look at sales-to-active-listing ratios we see in the Fraser Valley, Greater Vancouver and Victoria, they’re all over 20 per cent,’ Muir said. That is typically ‘buyer’s-market’ territory, ‘which indicates some upward pressure on prices.’”
The Vancouver Observer. “Everyone in Vancouver is by now aware that the real estate market has bounced back. We can see it in the hard, cold numbers produced by the REBGV every month. Prices are up, sales are up and inventory is down. We can also see evidence of the rebound in the media. It’s hard to find a newspaper article that is pessimistic about the future of Vancouver real estate these days.”
“One more sign indicating that Vancouver real estate is once again hot is the return of the Vancouver condo development presale. As the real estate market spiraled downwards in early 2008, one Vancouver condo development after another was put on hold. Now that the market, and public confidence has returned these projects (Cosmo, V6A, Richards) and many new ones (The Mark, District, Social) have been coming back online.”
The Georgia Straight in Canada. “Even though he had never purchased real estate before, Alym Abdulla could sense that the market was heating up as he began looking at downtown condos last spring. The 24-year-old pharmacist started seeing suites in late March, and before long he realized that some of the units were receiving multiple offers from prospective buyers.”
“‘I must have looked at close to 50 places,’ Abdulla told the Georgia Straight in a recent interview in his living room. ‘I put in offers on two other places that didn’t go through because the market started to pick up.’”
“He said he was getting discouraged and was ready to quit when his real-estate agent, Stu Bell, recommended that he check out a home in a Bosa-developed building near the corner of Hornby and Smithe streets. When Abdulla entered the suite in the middle of May, he was immediately impressed by the layout, which featured two full bedrooms, each with an en suite bathroom, on either side of the living room. ‘The thing that really sold me on this place was the balcony,’ he said. ‘It’s quite large. It makes you feel like you’re not trapped in your little shoebox downtown.’”
“Bob Rennie’s company Rennie Marketing Systems has sold billions of dollars of real estate in Vancouver. Rennie also told the Straight by phone that he always thought the effect of the Games would be felt in future years. ‘It’s after the Olympics that we’re going to see the impact on real estate,’ he said, noting that Vancouver has a much higher profile than other recent Winter Games host cities. ‘I don’t believe that anyone ran back to Turin or Lillehammer or Salt Lake City…to buy a secondary residence or to move the family to safety or to move some money to safety. Vancouver is on the map. We’re a world city. We’re a brand.’”
“Abdulla ended up paying the $508,000 list price. He said he bought then because he wanted to take advantage of the low interest rates. With a smile, he acknowledged that some of his friends look at him differently now that he’s a homeowner: ‘One of my friends who I used to live with in university, he’s like, ‘I feel since you bought your place, you’ve matured. You’ve completely changed in the way that you are. Before, we used to live the student lifestyle. Now, you’re always cleaning your place. You have plants. You look after them. You’ve even got a cat now. It’s like you’re an adult.’”
