A Bright Side Of The Housing Price Decline
A report from the New York Daily News. “A rundown, half-finished Brooklyn condo untouched since the dog days of the financial crisis has neighbors fuming. The ramshackle site in Homecrest is the shame of the neighborhood - and just one of hundreds of buildings in the city where work has stalled over the past few years. ‘They can’t afford to work on that building anymore,’ said Irving Goldfarb who lives near the unfinished condo. ‘They ran out of money. They just left it. … It’s an eyesore,’ he said. ‘There are abandoned projects and half-finished buildings all over.’”
“As of last week, there were 668 buildings on the stalled-site list - 306 of them in Brooklyn.”
The Boston Globe in Massachusetts. “As the economy plods along, more and more Cape Cod residents are moving out for the summer to live with relatives, lease cheaper apartments, or stay in campers so they can rent their homes. In Harwich alone, the number of properties listed with New England Vacation Rentals Inc. has increased to 400 from 150 in the past few years, said managing director Joanne Logie, who attributes the rise to the economic downturn, even though homeowners don’t always want to acknowledge they are struggling.”
“‘They’re kind of embarrassed,’ Logie said. ‘They’ll say, ‘We’re going to Europe for the summer,’ but you know they’re not going to Europe.’”
The Portland Press Herald in Maine. “Stefan Keenan has been auctioning off foreclosed properties for more than 25 years, and he thinks that right now, there are definitely some bargains out there. But he’s also quick to caution that buying a foreclosed property is not for everyone. It often involves more risk and a lot more research and homework than buying other properties.”
“One important thing to keep in mind, said Chris Pinkham, president of the Maine Bankers Association, is that a foreclosed property may be assessed at a very low value by a town — especially if it’s abandoned or in poor condition — but its selling price at auction will probably be a lot closer to what comparable properties have sold for. ‘And right now, that’s a moving target,’ said Pinkham.”
“Another important aspect of buying a foreclosure is the home inspection. While most home inspections are pretty routine, the inspection of a foreclosed property may find all sorts of problems with the property. ‘One bank had a property where the residents had taken the trim from the home and burned it in the wood stove for heat,’ said Pinkham.”
The Bangor Daily News in Maine. “Home and rental unit vacancy rates buried in data released recently by the U.S. Census Bureau show what real estate agents and property managers are seeing on a day-to-day basis: increasing numbers of empty homes, fewer buyers and renters, and dropping prices. ‘Prices are down, plain and simple,’ said David Caliendo, a broker who specializes in distressed and foreclosed properties. ‘There’s less demand for housing, fewer people who are out there buying, and more people who are holding off buying. Everyone’s looking for a bargain price right now.’”
New Hampshire Public Radio. “The New Hampshire Association of Realtors blames the home buyer tax credits of a year ago for the lackluster numbers today. About 800 properties changed hands this April. That’s one fifth lower than in 2010, and the median price is nearly 9% less. Kevin Bartlett, a resource economist with Real Data, a real estate tracking company, says the deeper problem is the number of homes changing hands due to foreclosure or near-foreclosure situations.”
“Bartlett says overall, distressed property sales account for over a third of all transactions which drives down the price of homes. He says, ‘in some market areas, the only thing selling are the distressed properties that are selling well below what is called assessed value.’”
The Providence Journal in Rhode Island. “Rhode Island had 1.43 percent of its mortgage loans go into foreclosure in the first quarter, which placed the state in the top five for new foreclosure starts. An expert said Rhode Island’s high unemployment is to blame. Rhode Island has had a double-digit unemployment rate for 25 straight months; the rate dropped to 11 percent for March.”
“‘There is a correlation between unemployment and foreclosure,’ said Nicolas P. Retsinas, director emeritus of Harvard University’s Joint Center for Housing Studies and a member of the real-estate faculty at Harvard Business School. ‘The people who lost their jobs yesterday are losing their houses today,’ he said.”
“The percentage of Rhode Island mortgage loans that were at least 90 days past due or in the foreclosure process was 8.45 percent, above the national average of 8.10 percent and New England’s rate of 7.06 percent.”
The Herald News in New Jersey. “The colonial for sale on Stasia Lane in Teaneck has what Realtor Julia Morrill calls ‘picture-perfect curb appeal.’ Listed at $259,000, the three-bedroom, two-bath home looks cheery and smart from the outside. But the interior does need a little work, she admits, including the kitchen, which some would lovingly label ‘vintage,’ and others would call ‘ancient.’”
“The seller recently accepted an offer from a family looking to purchase their first home, and the deal is in attorney review. The home is a prime example of what Realtors say is a trend toward homes in the $200,000 to $250,000 range. It’s a bright side of the housing price decline, especially for first-time buyers. Not only are there more options at that price point, there are sometimes diamonds in the rough or homes in a real gem of a town or neighborhood.”
“In 2010, there were about 800 sales in the $200,000 to $250,000 price range. Compare that to when the market was hot, say in 2007, when there were about 570 sales at that price. Last week on the New Jersey MLS website, there were 304 single-family homes listed in Bergen and Passaic counties in that ballpark.”
“In addition to the increased numbers, Realtor Bob Clarke with Re/Max in Tenafly said it’s interesting to note the kind of homes that are up for sale. ‘To find something a few years ago in that price range, it would have pretty much had to be a train wreck,’ Clarke said. Nowadays, he said, homes might need some work, but it’s not quite as bad as it once was. Clarke said he is showing a four-bedroom Cape Cod in Prospect Park, listed for $225,000. ‘You really wouldn’t have to do a lot of work on it,’ he said. ‘You could move right in.’”
“Many of the homes in that price range are short sales, or homes that are on the market for less than the mortgage amount, a deal that must be done with the bank’s consent. Realtor Ronald Aiosa in Pompton Plains, has two listings that are short sales, both at $200,000 and both on the market for about a month. Both homes are under contract. In Pompton Lakes, he has a four-bedroom, two-bath Cape Cod and in Ringwood he has a three-bedroom, one-bath colonial.”
“‘They both need a little bit of renovation work but it’s not ridiculous,’ he said. ‘You could probably go in there, and if you’re handy and do the work yourself, you could get away with about $25,000 in repairs and the house is great.’”
“In Teaneck the median sales price for 2010 was $360,000. According to New Jersey MLS, there are now 15 active listings between $200,000 and $250,000. In Closter the median sales price for 2010 was $535,000, but Realtor Maria Castro-Aversano has a short sale listing for $265,000. The home has two bedrooms and one bathroom on half an acre.”
“Realtors are convinced that the $200,000 home can be a sweet spot. Leo Pflieger, broker owner of Bergenfield Realty, referred to a listing he had at $233,900. The Colonial, which is not a short sale, has three bedrooms, two baths and first went on the market with a $25,000 higher price tag. Pflieger said the home had two offers in the first two weeks on the market, but those deals fell through due to problems with the prospective buyers’ financing.”
“‘If you can qualify for a mortgage,’ he said. ‘this is the perfect home to live the American dream of owning your own home’”
The Record in New Jersey. “Garage sales, which surged when the economy tanked in 2008, continue to boom. One measure of garage sale activity is Craigslist. A spokeswoman for the online network of free classifieds said the garage sale category has ‘doubled overall year to year’ during the economic downturn. The category remains strong for The Record and Herald News, too — nearly an entire page of garage sale ads this weekend, more than 200 in all.”
“Trying to stave off foreclosure, single mom Karen Simmons-Braswell of Teaneck held a series of well-publicized garage sales last summer. She put ‘every penny’ of the $8,831 in earnings toward her mortgage. Nine months later, Simmons-Braswell is still in her house and still trying to work out a loan modification with her lender. The money from the garage sales bought her valuable time.”
“‘It wasn’t the final answer but it did help,’ said Simmons-Braswell, who had received many items donated from well-wishers. ‘Some people might find it not really worth the effort. You’re sitting out there, it’s hot, you have to advertise and put up signs. But $8,800 was a good amount. It meant a lot.’”
“Average Bay State foreclosure: 463 days and counting. That is the average length of time it takes for banks to seize your home if you live here in Massachusetts, according to RealtyTrac. Back in more normal times, the bank would get wrest back the title to your home in a matter of six months or so if you fell behind on your payments. That is still the case in many small states, but it is not so anymore in big government states like Massachusetts, New York and New Jersey, which have thrown up an array of regulations designed to slow the process down.”
“In fact, in states where the courts have power to intercede, homeowners who fall behind on their mortgages or simply stop paying can spend years living in their home, albeit under the constant threat of foreclosure. In both New York and New Jersey, the average foreclosure now takes more than 2 ½ years from start to finish.”
“At current sales rate, it would take three years to find buyers for the estimated 872,000 empty homes banks across the country are sitting on right now, the The New York Times reports.”
