What We Saw Was A Bubble
The Missoulian reports from Montana. “Today’s McMansions may become tomorrow’s affordable homes – when multiple generations nestle into different wings. Arthur Nelson, presidential professor and director of the Metropolitan Research Center at the University of Utah, talked about the way households are changing. Baby boomers begin turning 65 in 2011, and they will live longer than their parents lived. The population of people 65 and older will double in the next couple of decades. As the boomers age, they will move. Already, some 20 percent of seniors rent before they move. After they move, 60 percent of seniors rent. Some 24 percent live in an attached home, but after moving, 54 percent of seniors live in an attached home. ‘They will reshape our housing markets in every corner. … It’s going to be what I call the great senior sell-off,’ Nelson said.”
“A different population mix means a different housing market, and Nelson warned against placing too much emphasis on home ownership. ‘I worry that we might have pushed home ownership a bit too much, especially in the early to middle 2000s,’ he said. ‘We’re paying the price now.’”
“No one has done it yet, he said. But multigenerational households have been on the rise, and more people per home will decrease the demand for housing and change it as well. Thus, the new use for the old McMansion. ‘On the main floor, ladies and gentleman, we have the grandmother, grandfather suite,’ Nelson said, taking on the persona of an announcer or real estate agent as he pointed out the home layout.”
“When he had finished going through the 5,000-square-foot home, he had showed people a place for 15 people to live. ‘How many McMansions are there in Missoula County? Couple hundred, probably,’ Nelson said.”
The Billings Gazette in Montana. “An empty nest has prompted the owners of a Billings ‘Extreme Makeover: Home Edition’ home to put their house on the market. The elegant five-bedroom, four-bathroom house just off of U.S. Highway 87 North is on the market for $495,000. Now that all three daughters have grown up and gone off on their own, Julie Carter said the 3,800-square-foot house is too much for two people.”
“‘An empty nest is proving to be as lonely as we expected, and we feel it’s time to move on,’ Carter said in a written message to The Gazette. ‘It’s been a privilege and an honor to live in such an enchanting house.’”
The Jackson Hole News & Guide in Wyoming. “Wells Fargo made the first steps toward taking over a Love Ridge Resort Lodges condominium. The bank submitted the only bid for the unit during a foreclosure auction. According to the sheriff’s office, the owners of the condo owed the bank about $777,484.”
“The condo is the second to revert to a bank so far this month, said Civil Processes Supervisor Cheryl Chidester, who oversees foreclosure auctions for the sheriff’s office. There are 19 Teton County properties slated to go to the auction block this month, although nine already have been canceled, Chidester said. In April, Chidester’s office scheduled auctions for 16 residences, whose owners owed a total of about $5.56 million. Of those, five reverted to banks and 11 were either postponed or canceled.”
The Idaho Mountain Express. “Daryl Fauth, president of Blaine County Title, said the foreclosure pace of 2010 has been one new defaulted home every business day. That’s no different from 2009, which saw 277 defaults, or a little bit more than one default every business day. ‘We’re on pace to beat the number of defaults of last year,’ Fauth said.”
“Real estate agent Debra Hall said that even though homes are selling, new foreclosures prevent prices from recovering. It’s simple. When one home has a foreclosure-sale sign on the lawn, the neighbors’ market values dwindle. ‘We haven’t seen the bottom yet,’ said Hall. Sawtooth Board President Mike Murphy agreed, saying buyers still have all the power. He recently sold a Hulen Meadows home for $595,000. It had been listed for three times that at $1.7 million.”
“‘If the price comes down far enough, there’s a buyer,’ he said. ‘People are looking for a hell of a deal.’”
“Sandra Pastrana owns a home in Hailey’s Woodside area, and is stuck with an ‘underwater mortgage. She doesn’t qualify for a mortgage modification and is therefore relying on a short sale to dig her out. Since putting her house on the market in August, she’s worked through two short sales with Bank of America. She said the first fell through because of the buyer’s bad credit. She said it took five months of working with the bank to get through the short-sale process that first time. ‘It was a really slow process,’ Pastrana said.”
“She said the second time around has been easier, with the process streamlined into a month. But she hasn’t completed the sale yet. Pastrana’s waiting for the bank to say it will forgive her debt. She would be selling the house for about $85,000 less than what she owes.”
The Register Guard in Oregon. “‘There’s no place like home.’ In case you were driving down North Terry Street in west Eugene on Sunday and spotted a woman standing out in front of the Woodland Park Estates in pigtails and ruby red slippers, that’s what her sign was supposed to say. Dorothy (aka Janet Dewey) meant to get the whole phrase on the front of the placard, so she could devote the back of it to the pertinent details: ‘Open House, No. 154.’ Alas, Dorothy ran out of room, so the front of the sign read merely ‘There’s no place like.’”
“Such is the state of real estate in Eugene. Dewey decided to dust off her old Dorothy costume on Sunday and see if her sparkling slippers wouldn’t lure some new potential buyers. No matter how many times Dewey clicked her heels since putting her 1,458-square-foot double-wide on the market in March, she hasn’t magically appeared back on the porch with an offer from a buyer in hand. Not even at $39,700.”
“By the time Dewey retired her wig and blue dress Sunday afternoon, only two people had made it all the way to House No. 154. The wizard apparently decided to stay behind the curtain, at least for now.”
The Mail Tribune in Oregon. “During the three-month period that ended Monday, 503 homes sold, up 19.2 percent over the corresponding period in 2009, when 422 houses changed hands. Federal tax credits for buyers that expired at the end of April played a role in the surge. The median sales price for the period was $162,000, down 14.7 percent from $190,000 during the same period in 2009. May’s median sales price for homes excluding new construction was $157,500, down from $194,500 in 2009.”
“Keller Williams Real Estate agent Ron Galbreath said there was a drop-off in early May as agents prepared paperwork to get the deals they made in April closed by June 30 in order to get the tax credits. Galbreath said recent buyers should plan on holding on to their houses until the market begins pushing uphill. ‘We’re telling buyers to hold for three to five years in order to recoup closing costs and actually see good equity,’ Galbreath said. ‘We’re near the bottom and we’ll only know when we come out of it.’”
The Bellingham Herald in Washington. “Whatcom County had an uptick in residential sales last month, but it’s also apparent the post-tax credit hangover has set in. In May local real estate agents sold 229 homes and condominium units, according to the Northwest Multiple Listing Service. That’s up from 203 in April and the highest monthly total since November. However, the number of pending sales - agreed-upon sales that haven’t closed - was at 184 last month, the lowest total since December and way down from April’s total of 372.”
“‘Leading up to its expiration, the tax credit caused a surge of home sales, but a surge can only be sustained for so long,’ said Lennox Scott, CEO of John L. Scott Real Estate, in a press release accompanying the data. ‘What we’re seeing now is a natural adjustment.’”
The Olympian in Washington. “Pending sales in Thurston County fell more than 30 percent in the year-over-year period ending in May. In addition to Thurston County, pending sales fell throughout Western Washington in the year-over-year May period. They were down 22 percent in King County, 32 percent in Snohomish County, 28 percent in Pierce County and nearly 40 percent in Lewis County, the combined data show.”
“South Sound real estate professionals acknowledged that pending sales here were affected by the end of the tax-credit programs; still, some argue that falling prices have had a larger effect on the market than the tax-incentive programs. ‘The bigger driver is affordability,’ said Ken Anderson, broker and owner of Coldwell Banker Evergreen Olympic Realty.”
“Thurston County median prices fell 7.2 percent last month to $229,000 from $247,000 in May 2009. Although prices fell on a year-over-year basis, median prices since January have climbed to $229,000 from $225,000. The median price of a Thurston County home in May 2008 was $264,000, the data show.”
“Anderson said there will be more room for price appreciation once higher-priced homes start selling again. ‘The $300,000-to-$500,000 market is starting to move again, albeit more slowly than we would like to see,’ he said.”
The Herald Net in Washington. “When John Degroot refinanced his Lake Stevens home, it was so he could afford to fix the place up. A few years later, the hardwood floors have been installed. The yard is like a page out of Better Homes and Gardens. And the mortgage payments are unaffordable.”
“A loss of income put the monthly payments out of reach for Degroot, a disabled structural engineer who is not yet old enough to receive full retirement benefits. Now, he’s trying to modify his Bank of America loan, applying for help under the federally-backed Making Home Affordable program. He’s been told he qualifies, but he can’t get answers about when — or if — he’ll see relief. ‘If I qualify for the program, what’s the hang up?’ he said one afternoon last week, shifting through loan documents at his dining room table.”
“He estimates that more than 55 percent of his monthly income goes to paying for his home loan. Even before his income dropped, things were tight. ‘They should never have given me that loan,’ he said.”
“Foreclosures are on the rise in Snohomish County, according to data from the auditor’s office. Before a bank repossesses a property, it must file a notice of trustee sale, acknowledging the property will be foreclosed on in 90 days. About 590 homeowners received notices in May, roughly twice as many as in the same month two years ago. County records show 640 households received the warning notices in April, compared with 450 in January.”
The Whidbey News Times in Washington. “The total assessed value of Island County plummeted by 12.3 percent for the tax year 2011, county Assessor Dave Mattens announced. Mattens said the results showed that the total assessed value fell from $14.6 billion for the 2010 tax year to $12.8 billion for next year. Mattens said he sees the drop in value as a correction after the 35 percent increase from 2006 to 2007.”
“‘What we saw was a bubble,’ he said. ‘When you graph it, it’s amazing the spike that occurred.’”
