It Used To Be So Much Fun
It’s Friday desk clearing time for this blogger. “Just a couple of years ago, Lisa and Laura (names changed for privacy) had moved back to Sarasota, Florida from Nashville, Tennessee at the height of the housing market boom, and rented an apartment just long enough to decide they wanted to own their own home again. They found a home in a community they really liked. It was a fixer upper that needed a lot of work, and the sales price was $365,000, but they jumped at it. ‘At that time there were lines of people waiting to buy, and there were bidding wars,’ Lisa explains.”
“Within a couple of years, though, their home’s value had dropped by more than half. They had also put about $30,000 into repairs using a separate second mortgage, but the punch list just kept getting longer. At that point they decided to cut their losses, and they got lucky. Their lenders allowed them to sell their home for $180,000 in a short sale. The mortgages totaled $435,000, so the banks took a total loss of $255,000.”
“After that harrowing experience, you might think they would never want to buy again. Once burned, twice shy, perhaps? But Lisa and Laura realized what a lot of experts are saying: it can be a great time to buy a home if you qualify. Deciding to jump in again, the couple’s main questions for me were, ‘How long do we have to wait after the short sale to buy?’ and ‘What do we need to do to clean up our credit to qualify for a mortgage?’”
“Eric and Tara Baim have dreamed of owning a home, but for years they couldn’t make it happen. The Baims are one of the 1 in 10 Utahns struggling to own a home. Tara said, ‘We were in an unfortunate house where all of our health was at risk and we were throwing money away.’”
“The Salt Lake City chapter has been helping people just like the Baim family since 1977. Shelby Walker is the office’s loan officer. Walker said, ‘Even if you lose your home now - there is always hope - there is life after foreclosure.’”
“In 2008, it went on the market for $949,000 for a brief period of time. In April of 2009, the owners re-listed it with a new agent and selling price of $799,900. What is known locally as the ‘Makeover House’ finally sold this year for $520,000 after being on the market for 609 days. As has happened with several recipients of reality-TV largess, the Sears found that their property taxes nearly doubled after the rebuild and heating and cooling costs skyrocketed once the home went from 1,200 to 2,977 square feet. The last time the Gazette spoke with Karen Sears, the family was struggling to cover bills, even after she refinanced the house.”
“In September of 2010, Jhyvre wrote that she and her family remained in the home but were staving off foreclosure. ‘We are still in our house … well we have not been kicked out yet. We are hoping to be able to stay in it for a bit longer. We do have a family that wants to buy it, but they cannot buy it until December. So I ask for prayers that we do not go into foreclosure.’”
“When it seemed like the real estate bust couldn’t get much worse, it did. A report last week confirmed a double-dip downturn in housing prices in most of the country, including Dallas-Fort Worth. ohn Baen, who teaches real estate at the University of North Texas, has been trying to sell a rental property on Lake Dallas. It’s listed at $154,000, and he accepted four contracts in recent months. No one closed the deal.”
“‘I feel the pulse of the market, and who do you think is making the decision?’ Baen said. ‘The buyer? The seller? The agent? The appraiser? Hell, no, it’s the bank that determines whether that property gets sold.’”
“The collapse of the real estate bubble has created the ultimate buyer’s market, with extremely high levels of housing inventory and many homes available for many months, if not years. Lisa Glenn is desperate for a short sale of her Egg Harbor Township home so she and her three daughters can reunite with her husband, who’s gone to Massachusetts for a job.”
“‘We have a neighbor who put his house up for sale not too long ago and the developer started building a house in back of his,’ Glenn said. ‘We put ours up for sale and the developer started building near us. I don’t think it’s a coincidence at all.’ She said the new houses sell for less than her 3-year-old home, but they’re smaller. ‘Unfortunately, everybody’s looking at price.’”
“‘We hate to walk away from it. It’s a beautiful house and we love the house, but if we can’t get any bites on it…,’ she said, leaving unspoken the possible loan default the Glenns are trying to avoid.”
“Robert Paolini put his second home in Marmora, Upper Township, up for sale three years ago at $399,000. ‘When I first listed it, I didn’t know the market was going to tank the way it did,’ he said. ‘We just wanted to get rid of it. We weren’t using it enough to justify it.’”
‘For a year and a half the house languished despite price cuts and Paolini experienced frustrations typical for sellers. He gave up trying to sell it and rented it out, but the rent was about $500 a month short of covering the house’s expenses, he said. ‘We ended up selling for $250,000, so we ended up losing about $60,000,’ Paolini said. ‘That’s typical, from what we’ve heard.’”
“Brenda Lawn, a sales associate for Prudential Fox & Roach in Northfield with 17 years in real estate, said the business is still good ‘but it breaks your heart. It used to be so much fun, but now it’s often so tough, with the sellers losing their jobs.’ ‘You’ve got to tell sellers you’re not only losing money on your home but you have to wait. Then they must bring money with them to the settlement table. That’s got to hurt,’ Lawn said.”
“Forty years ago, Lucy Hazelett’s well-kept home wouldn’t have looked any different from others that lined either side of Delaware Street in Gary. Today, her property’s colorful flowers and trimmed grass are a stark contrast to the crumbling structures and empty, overgrown lots surrounding it. More than 43 percent of houses in her Emerson neighborhood are vacant. Home vacancy rates throughout the region are rising in the wake of mortgage foreclosures, job losses and limited economic opportunities.”
“Crown Point resident Ljupco Andonoski rented a home next door to a vacant house with a boarded-up front window and overgrown yard in the Liberty Park subdivision. He said he wishes someone would move in or tear it down. ‘I haven’t had a problem,’ he said. ‘It just sucks that there are so many homeless people out there, and the house is just sitting there.’”
“Gary resident Arthur Clark said he does the best he can to protect his home and street from deteriorating further. The 59-year-old retired construction worker cut the grass of the vacant home next door to his one recent sunny afternoon. Three other vacant homes are easily seen from his front stoop. Some of the properties are boarded up, while others have broken windows, shards of glass clinging to the window panes.”
“‘I can’t stand it,’ Clark said, gesturing toward a dilapidated vacant home across the street. ‘They’re eyesores. Sometimes I feel like going over there and just pushing it down.’”
“The house at 24 Dartmoor Drive in Crystal Lake is rotting from the inside out. This beige two-story house with a brown roof is one of more than 8,500 properties in McHenry County that have fallen into foreclosure since 2008. David and Sherri Modrzejewski – who live next to the dilapidated Crystal Lake home with their children – want it cleaned up. They worry the mold will make their boys sick. They have called the bank that owns the property, the listing agent, and the city of Crystal Lake. So far, little has been done.”
“‘It’s been really frustrating,’ Sherri Modrzejewski said. ‘Everyone says their hands are tied.’”
“For Leslie Stiles, his backyard was his sanctuary. It was the one place he could go after a long day of work, enjoy his view of Juanita Beach Park and escape civilization for a little while. Neighbors say the unfinished and vacant condo building is an eyesore for the lakeside community to the point that Bel Lago has devalued the neighborhood.”
” ‘It is an atrocity for the neighborhood,’ said Stiles of the luxury Bel Lago condominiums that were built across the street from his home near the base of Goat Hill. ‘It is one of the biggest blights on a neighborhood I have ever seen.’”
“The economy is still struggling. And Americans are in for a long and painful adjustment period. One major reason: their own household debt. Following a real estate bust that hit Japan in the 1990s, the economy fell into a prolonged period of economic stagnation that lasted for years and became known as the country’s ‘Lost Decade.’”
“In the U.S., the situation is shaping up to be similarly stubborn. ‘I think we’re in for a lot of disappointment,’ said Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics and a leading expert on financial crises. ‘If historic norms hold, deleveraging isn’t pretty, and it is not a smooth process. We’re already four years into this. I don’t think the next six years look great.’”
“Average home equity plunged from more than 61 percent at the start of 2001 to 38 percent in the January-March quarter this year, the Federal Reserve said in a report. The Fed report showed that household debt declined in the January-March period at an annual rate of 2 percent from the previous quarter. That drop was due entirely to a decline in mortgages.”
“‘A lot of this debt reduction is not voluntary,’ said Dana Saporta, director of U.S. economics at Credit Suisse. ‘It’s due to foreclosure activity.’”
“Marion County commissioners on Tuesday lent full support to the concept of the ‘ownership society’ — as former President George W. Bush once labeled it — in championing the idea that owning a home was the cornerstone of communal stability and families’ financial security. The board on Tuesday, at the behest of the Marion County Building Industry Association, unanimously approved a proclamation declaring the month of June to be National Homeownership Month.”
“Moments later, however, commissioners quashed a bid by a legal aid group to help keep people facing foreclosure in their own homes. In an April letter to county Budget Director Michael Tomich, Community Legal Services requested about $57,000 that would specifically target this crisis locally. ‘We’re trying to salvage things,’ said Larry Glinzman, spokesman for the Daytona Beach-based group. ‘These people were taxpaying citizens for years and years. If we do nothing, they lose everything. You don’t want them sitting in downtown Ocala in a box.’”
“Fannie Mae and Freddie Mac, the private mortgage lending entities under government conservatorship, are set to reduce their maximum conforming loan limit from the current $729,750 to $625,500 on October 1st. Bay Area mortgage broker Eric Leithliter of California Mortgage Advisors says this may adversely affect the Bay Area real estate market.”
“‘If you have been sitting on the fence, thinking that rates are going to continue to go down, they may want to consider making a move soon. Waiting until later may limit your ability to get a low rate on a single mortgage loan, making it more expensive and time-consuming to buy,’ says Leithliter. ‘Buyers who continue to wait around may come to wish they had acted sooner.’”
“In Vancouver, Canada’s hottest real estate market, one marketer is targeting Chinese buyers with a new get-a-deal spin on condos. Its target market is Chinese investors, who have already driven up prices for multimillion dollar homes in a few Vancouver neighborhoods. Sales and marketing firm The Key launches an online real estate venture later this month, offering week-by-week discounts. The first one promises savings of C$200,000 ($206,000) if a buyer snaps up two condos rather than one.”
“‘They’ll do whatever they have to do to get a deal,’ said The Key President Cam Good.”
“One of Australia’s most senior bankers has taken aim at the negative gearing millions of property owners use, claiming the tax break is leading to an unhealthy focus on housing as a way to get rich, while pushing property prices to unaffordable levels. ANZ Australian chief executive Phil Chronican also cast doubt on property as an investment class, saying housing looked ‘weak’ compared with other forms of investment and that the substantial gains in property prices over the past two decades were unlikely to be repeated.”
“He also highlighted housing as an ”excessive concentration risk” for the economy, as Australians had up to 60 per cent of their total wealth tied up in real estate. This is one of the world’s highest rates - more than double the US rate.”
“‘Governments might want to look at whether the current extent of negative-gearing tax breaks are fostering an unhealthy focus on housing as an investment vehicle, thereby compounding affordability issues,’ he told a business lunch in Sydney.’
“Real estate should not be regarded as a speculative investment vehicle to get rich, but as ‘a place to live in, sleep, eat and raise your family.’”
