February 23, 2010

If You Were Breathing You Could Get A Home Loan

The Press Register reports from Alabama. “In the aftermath of Hurricane Ivan, the owners of the Sapphire Beach condominium complex were nearly unanimous in their decision to halt repairs and sell their Gulf-front property to a developer. Some sold their stake for a shade under $1 million — in many cases, more than three times their investments in the four-story complex. Others passed on the instant cash and signed up for new condos in a proposed high-rise that never materialized. Each of them lost six figures. A few, those who bought into the complex at the height of the real estate boom, wound up $500,000 in the red.”

“Today, the property sits flecked with bits of concrete, ceramic tile and conduit. And because no one paid the $61,000 ad valorem tax bill, and there were no bidders at a tax sale last summer, it has joined the Alabama Department of Revenue’s vast land holdings.”

“‘All I wanted was my condo,’ Stephen Paul Farmer, a Mississippi man who owned a third-story unit, said in a February 2008 deposition given during a two-year legal battle over the property. ‘And if I didn’t get the condo, then I knew I had land for collateral. If I would have ever thought that we would be sitting in here today, I wouldn’t have held out for the big condo. I would have just, you know, took the money when I could have took it.’”

The Sun Herald in Mississippi. “At the Harrison County Courthouse, an extra display case was added recently to post the foreclosure notices. Now there are eight glass cases nearly full of foreclosure listings and the Sun Herald classified pages have dozens of listings each week. ‘We thought we had seen the bottom of foreclosures,’ said Carlene Alfonso, owner of Coldwell Banker Alfonso Real Estate, ‘But that’s not what the numbers say. We still just have too many listings.’

“Depending on the price range, there is up to 20 months of inventory on the local market. ‘A lot of people getting foreclosed on are investors,’ said attorney Mark Orgler in Gulfport. They often are from out of the local area and purchased property on the Coast when it was worth more than it is today.”

The Clarion Ledger in Mississippi. “The topsy-turvy economy caused new homes in Rankin County to dip by 38 percent. The county issued 246 permits for single-family homes in 2009, a big drop from the 397 in 2008. ‘Given the economic conditions of the country and state, the number of new houses being down is a reflection of the economy,’ said Tom Troxler, executive director of the county’s economic development authority. ‘You have a lot of people staying in their houses who in the past would be moving into larger homes.’”

“Madison County saw similar decline in home building with about 300 permits issued last year, a drop from the nearly 500 in 2008, said Brad Sellers, Madison’s zoning administrator. ‘That’s the lowest it’s been in a long time,’ Sellers said.”

The News Star in Louisiana. “For Southern Delta Homes owner Ronnie Savage, the residential home building business in the Ouachita Parish area has been lean over last two years. The company is the region’s highest volume home builder according to the Home Builders Association of Northeast Louisiana. But Savage is quick to point out that business just hasn’t been what it used to be. ‘It’s been real slow the last couple of years,’ said Savage, whose company primarily builds specification homes.”

“And recent data compiled by University of Louisiana at Monroe economist Robert Eisenstadt confirmed what Savage has been seeing in the industry. According to Eisenstadt, new housing starts last year in the Monroe area reached the lowest level in five years. Since 2005, residential building permits issued in the Monroe metropolitan statistical area have decreased 81 percent, according to Eisenstadt.”

“‘Basically, what we’ve seen is because of the tightening of the banking credit industry,’ said Home Builders Association Director Paul Stephenson. ‘Several years ago, if you were breathing you could get a home loan, which is what caused the bubble to eventually burst. Now, banks are requiring people to have a modest investment in their homes.’”

The Times Picayune in Louisiana. “With home prices declining throughout the metropolitan area, sellers have no shortage of things to blame for their unsold properties: too many homes, not enough people, and lending requirements that have gotten tougher at exactly the wrong time. But some are beginning to wonder whether there’s another culprit in the mix: apartments. ”

“In the next two years, about 5,000 brand-new units are expected to open for residents. ‘Your rent is less than a monthly note. And you don’t have to do a down payment. For first-time buyers, you have a decision of, do I buy now or do I stay a renter?’ said Wade Ragas, president of a firm that analyzes real estate sales for the New Orleans Metropolitan Association of Realtors.”

“The desirability of apartments could be a reflection of broader queasiness about the economy or challenges of the local housing market. ‘You potentially have a situation where you have an oversupply of single-family homes. We don’t have the migration of people into this city, and the job picture is pretty fuzzy, and that’s not a good combination,’ said apartment broker Larry Schedle, who notes that the apartment rental market is also flat.”

The Town Talk in Louisiana. “Roz Allemond hasn’t seen the type of foreclosure activity in the Alexandria area one might expect, given the recession and downward trends in the national housing market. But that doesn’t mean she isn’t preparing for it. The Alexandria Realtor is involved in several aspects of the foreclosure business. She has as good a read as anyone on the local foreclosure forecast. Though Rapides Parish has had relatively low foreclosure activity in the past two years, she sees an increase coming.”

“‘What I foresee — and this is just from my personal opinion and guidance from people I work with — is to be ready for the floodgates to open,’ Allemond said. ‘I think we’re going to have tons of stuff coming up.’”

The City Wire in Arkansas. “January homes sales activity in Crawford and Sebastian counties did not help continue regional housing sector gains made in the fourth quarter of 2009, according to the King Realty Group report authored by Realtor Ernie Schimmelman. Sales continue to be dominated by homes priced below $200,000. Homes priced below $200,000 in Crawford County and Sebastian County are 77.8% and 72.6% of the inventory of homes on the market, respectively.”

“‘Sellers continue to maintain an advantage on properties under $150,000, and buyers continue to have the stronger position above that. As long as this imbalance above $150,000 continues, the primary topic of discussion Realtors must have with their sellers will be market pricing,’ Schimmelman noted in his January report. ‘If sellers want their homes purchased in less than 12 months, they will have to seriously consider aggressive pricing within the comparable market for their property.’”

From KSPR. “New information tonight about two men charged with promoting prostitution in Branson. Investigators say they caught Thomas A. D’Alessandro and David L. House in an undercover sting. The two men are also known for bringing luxury condos to the tourist town. Celebration Cove Condos website lists D’Alessandro as the principal. ‘Tom has built hundreds of homes and a handful of subdivisions in the Ozarks since 1985,’ the website reads.”

“Undercover investigators say D’Alessandro also paid to bring three prostitutes from Arkansas to a Branson condo in Falls Creek Resort. KSPR also stopped by the address House listed as his home and business, Elite Realty, no one answered the door. His listed phone number was disconnected. Condo models are open and ready but no one at the site was willing to comment either. If KSPR would not leave the property, one employee threatened to break the camera.”

The OK Gazette in Oklahoma. “If it’s hard to find love in the ‘city that never sleeps,’ what’s it like to fly solo in a city that catches its Zs? After all, New York City took the top spot for 2009 Best Cities for Singles on Forbes.com’s annual list. While Oklahoma City didn’t make the list of top 40 cities, Howard Kurtz, a sociologist at Oklahoma City University, thinks the metro is fast becoming a contender.”

“Travis Caperton, a single dad of two children, believes the improvements, such as the downtown lofts, are nice, but really only benefit the independently wealthy without school-aged children. ‘Don’t most of us live where we live because of our job situation and the circumstances of our family ties? Leaving OKC is not an option for me. But I do appreciate the good-looking condos going up near Bricktown that I drive by every day,’ said Caperton.”

“Holley Mangham, a public relations practitioner with Oklahoma Housing Finance Agency, echoed Caperton’s sentiments. ‘I would like to see more housing that is affordable for single, middle-income professionals in the downtown/Midtown area,’ she said. ‘I see all of these really cool-looking new condos and homes in that area that I can’t afford on only my own income.’”

The Dallas Morning News in Texas. “More than one in 10 Texas homeowners with loans are behind in their payments. That’s up by about a percentage point from a year earlier. Texas’ mortgage delinquency rate is now just slightly behind the national average of 10.44 percent.”

“The number of homes going through foreclosure slowed in 2009 because of the large number of home mortgage modification programs designed to help troubled borrowers. But foreclosure filings remain high – reaching a record of almost 61,000 in North Texas last year.”

“The Mortgage Bankers Association said that 31 percent of home mortgage holders in Texas are considered ‘non-prime’ borrowers, compared with 22 percent of these loans nationwide. These non-prime mortgages were provided with the help of the government backed Federal Housing Administration or are subprime loans.”

The Austin Business Journal in Texas. “A large, mixed-use condo development in Northwest Austin is trying to dig out of $12 million in debt and restructure after unsuccessful management by Nebraska-based investors. Pecan Park Professional Plaza, a 32,000-square-foot office condo, and the neighboring Pecan Place Park Condominiums, a residential plan made up of more than 100 lots, are part of a Chapter 11 bankruptcy filed late last month by Pecan Park LLC.”

“The company is claiming $12.4 million in debts, mostly to Wells Fargo, against $17,000 of assets. It’s not known whether the bank will attempt to force project owners into Chapter 7, which can occur when a large mismatch of debt and equity is involved.”

“In November, the bank and debtors picked Vito Rotunno to salvage the project, Rotunno said. About 25 single-unit, attached residential condos are already built on the site, with about 17 sold, and more than $15 million has already been invested in the tract of land, Rotunno said.”

“Beyond available housing units, the development has about 17,000 square feet of empty office condos, said real estate dealer Steve Turner, who has the listing. Turner said he has not done a deal on the site since taking it three months ago. Out-of-state owners like Pecan Park’s are common, and experts said it is not characteristic for out-of-town-run projects to fall into shambles. But when projects such as this do get into trouble, it is often more reflective of an owner’s operational health than the health of the Austin market, said Charles Heimsath, president and founder of Capitol Market Research.”




Bits Bucket For February 23, 2010

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