They’ve Lost Faith In What They Knew
It’s Friday desk clearing time for this blogger. “The end of federal tax credits may have cooled real estate sales in cities across the nation — but not in the District, at least not when it comes to condos. ‘The demand is just too high and the supply too low. Developers are pursuing deals for conversion,’ said Mark Wellborn, editor-in-chief of an online guide to purchasing homes and condos in the D.C. area. ‘Buyers are prone to think that regardless of how good something is, something better is just around the corner. In the D.C. market, if something good comes along, and you don’t jump on it, it will be gone before you have the chance to reconsider.’”
“Lined up, camping out, thousands of homeowners from accross the nation are looking for relief at this housing fair in Washington. Delvenus Sanders from Bowie, Maryland is one of them. Sanders: ‘We’ve been struggling…we’re juggling other bills around to kind of get that paid. but it’s getting to a point where we can’t continue to do that. And we want to get help now before we get too far behind and end up losing our house.’”
“About one quarter of all real estate transactions in Park City involve distressed properties. The median sale price for a home in Park City proper is now $1,125,000 down 37 percent. The developments near the ski resort saw buyers who put deposits down during the boom years but were reliant on bank financing that didn’t come after the recession started. The area has also seen the worst cases of foreclosure because people bought overvalued property and went ‘underwater’ on the mortgages quickly, said Park City Board of Realtors president Mark Seltenrich.”
“This kind of unwise buying was widespread because Park City real estate was so hot that people bought property simply because they could. ‘At the very height of the market, the value of a property was that it was for sale…people wanted to get in at all costs,’ he said.”
“Home foreclosure activity has skyrocketed in Santa Fe County in the first half of 2010, according to RealtyTrac. Foreclosures are especially affecting higher-end properties as just six $1 million-plus homes have been selling each month in the county. For instance, said Peter Kahn, a broker who last summer predicted a foreclosure wave in Santa Fe, there was a $1.2 million home in Las Campanas that needs about $100,000 of work but now has a price tag of $479,000. ‘Last month, two homes sold in Las Campanas and there are 140 on the market,’ he added.”
“Jason Miller, of Milan Realty, said he thinks the high-end market is in worse shape than many realize, and is not close to recovering. He also said that the many builders, unable to sell their castles, are renting them, instead. This has created a ’shadow market’ that is not being counted, but will soon hit the market, further depressing prices.”
“Miller said that some areas, such as Ravenna and Colorado Country Club, ‘are looking at 60 percent haircuts from their peak. When sellers do come down in price on the higher end, it will compress prices down the food chain. When a $1.3 million home sells for $1 million, the old $1 million homes needs to drop to $800,000 to compensate.’”
“Nearly three years after construction liens brought progress at Hayden’s Lake Village subdivision to an abrupt halt, 72 building lots on the town’s south side are back on the market for a combined $2 million. Outgoing Hayden Town Manager Russ Martin said when the project came apart, it was sudden and bewildering. ‘During a three-week period in the summer of ’07, the town went, ‘What happened?’ and ‘Where did it go?’ Martin said.”
“Nearly one-third of all home sales on the Lane County marketplace this spring were either short sales or foreclosures, according to RealtyTrac. The share of distressed sales is consistent at the state and national levels. ‘We’ve never had this many foreclosures at one time,’ said Fred Chamberlin, mortgage broker at the Alpine Mortgage Planning Eugene office. ‘It’s a whole different ball game. And needless to say it’s skewing the market.’”
“Home foreclosures in Honolulu shot up more than 70 percent during the first half of this year. ‘Those numbers are consistent with what we’re seeing in our office,’ said local foreclosure attorney Chris Goodwin. ‘We’re seeing no signs of stabilization in the number of foreclosure based on our experience.’”
“Across the state, there were 35,217 foreclosures filed in the first six months of 2010. Olin Davis, chief credit officer for East Carolina Bank that operates in 13 counties in Eastern North Carolina, said he’s seen increases in foreclosure filings across the region that followed ‘exponential growth’ in real estate investment during a five-year period starting in 2000. ‘A lot of people wanted to have second homes on the water, or have an investment property,’ he said. ‘They felt like if I’m on the river, on the sound, on the beach, no matter what happens to the economy, my real estate value would never decline.’”
“But after the housing bubble burst, some investors ‘just didn’t have the wherewithal to continue,’ he said, and they walked away from their investments.”
“Mohammad Valadan’s was the sixth foreclosure suit to hit a unit owner in 1620 S. Michigan this year, Circuit Court of Cook County records show. The seventh foreclosed on a mortgage taken out by Romelia Montoya, a Cicero resident. As was the ninth. Montoya said she closed on two units in 1620 S. Michigan in 2007, hoping to eventually resell them. She soon had them rented out. Even when both were occupied — the tenants were gone by October 2009 — the finances were difficult. The tenants’ combined rent of $2,400 didn’t cover her two mortgages, which ran to approximately $3,600 each month.”
“‘The plan was to refinance and that didn’t happen, and my cash reserves went away,’ Montoya said. The economic crisis and struggles of the housing market blindsided her. ‘For years you figured the bottom’s going to drop, the bottom’s going to drop and it never did … and then it dropped,’ Montoya said.”
“Some owners, court records show, seem to have given up paying their mortgages almost immediately after taking out loans. A man who in September 2007 had taken out a loan valued at $284,800 for a condo in 1720 S. Michigan had paid off less than $300 on the principal by November 2009. Another buyer in the same building had not paid a single cent toward his $326,619 mortgage 13 months after the mortgage was recorded.”
“Valadan, who said he has hired an assistant to bargain with his lender, is still hoping for the best. In spite of the problems he has experienced with his South Loop unit, the property remained, he said, ‘a good investment.’”
“Government cash didn’t help John Foley and Cindy Case sell their house before the federal home buyer’s tax credit expired at the end of April, so the couple…hosted a backyard party with food and an open bar, invited the neighbors and professional contractors — in case potential buyers had questions about remodeling. To top it off, they’re offering their own $8,000 rebate on the $675,000 home. But in the hour and a half that a reporter attended the two-hour party, no prospective buyers showed.”
“Foley, a professional marketer, attributes the pullback on incentives to an all-out surrender. ‘Everybody has had a hard time selling,’ he said. ‘It doesn’t mean you stop. It’s almost as if people, including sellers and Realtors, have given up. They’ve lost faith in what they knew.’”
“How many homeowners have been sitting on the sidelines during the housing downturn, waiting for massive price plunges to pass? Over the past year, there’s been plenty of speculation about if and when banks will begin to list more foreclosed homes for sale. But these sidelined sellers represent another potential source of ’shadow’ inventory.”
“Karen Wiese decided to hold off on selling the six-bedroom home in suburban Sacramento, Calif., that her husband built five years ago after prices first softened. The home wasn’t getting any offers at the $1.1 million asking price, so she and her husband, a homebuilder, took it off the market and decided to live there for two years. They figured the market would recover quickly. Last week, she put the home on the market for $639,000. ‘We don’t even know if we’ll get a looker,’ says Ms. Wiese.”
“Jose Vega of Pittsburg has seen the foreclosure crisis up close from three different perspectives. He gave 7 On Your Side a unique glimpse on the personal toll the housing meltdown is taking. Vega is a Bay Area realtor. He first saw the foreclosure crisis through the eyes of his clients and then his children. One day he found his daughter crying. Many of his children’s friends were moving away in the middle of the night, their parents so embarrassed by foreclosure they could not bear to say goodbye.”
“Vega now finds himself having to prepare his 6-year-old and 9-year-old children to losing their house in Pittsburg. Vega says he no longer fears losing his home because he says they can take his house, but not his home. ‘See, that’s different. That’s mine. I make my home. My wife and my children and me together make a home. They can’t take that from us,’ he says.”
