Didn’t We Hear That Last Year?
The Tooele Transcript Bulletin reports from Utah. “Home prices are down drastically from the same period a year ago. The median sales price fell from $169,000 in the second quarter of 2010 to $135,956 in the second quarter of 2011, a 19.5 percent drop. Chris Sloan, broker for Group1 Real Estate Tooele, is not surprised by the increase in foreclosures. ‘It is a natural function of the economy. Tooele is following the national trend,’ said Sloan. ‘Most of the sales I have seen have had a bank involved.’”
“‘I believe that home values have stabilized,’ said Toni Goodsell, president of the Tooele County Board of Realtors. ‘But foreclosures brought the median price down. I don’t know when we will see the end of short sales and foreclosures. It may take two years before the market gets back to the levels it was before the recession.’”
The Salt Lake Tribune in Utah. “The Salt Lake Board of Realtors released its second-quarter report Tuesday, and home values and sales still aren’t headed in the right direction.’The housing market is just fragile and extremely weak,’ said James Wood, director of University of Utah’s Bureau of Economic and Business Research, who reviewed the data.”
“Wood and other forecasters had thought that enough jobs would have been created by now to jump-start the housing market and help compensate for the large volume of foreclosures and other distressed properties. But that hasn’t happened. About one-third or more of home sales along the Wasatch Front involve properties that are distressed in one way or another, Wood said. ‘People who don’t need to buy or sell right now are waiting on the sidelines,’ Wood said. ‘We’re just not used to houses being a depreciating asset.’”
“In addition to weak job growth and the large volume of distressed properties, another factor putting downward pressure on home prices is buyers who want to drive a hard bargain as a hedge against future price declines. ‘Consumers are still buying,’ said DeAnna Dipo, president of the Board of Realtors. ‘But when they do buy, they want the bargain of the century.’”
My Fox Phoenix in Arizona. “While the foreclosure rate has slowed, home values are still in the dumps and that’s forcing a lot of people to re-think their retirements. ‘At what age were you thinking you would be able to retire before the housing market crisis..we were thinking five years ago we would be able to retire in 10, now it’s gonna be 20, 25,’ said Martin Huber.”
“Huber pictured an exotic destination, maybe Costa Rica for his retirement, but instead, the 57-year-old is about to begin a new job as a chemistry teacher. ‘When you’re just treading water, every little thing hurts.’”
“Huber and his wife are paying two mortgages, though they were close to paying off their house five years ago. Instead they invested in three rental properties and now they’re having a tough time finding solid renters. ‘The disappointment is in putting your nest egg into a losing investment that is really disappointing we have to work really hard to keep them above ground,’ said Martin.”
“Experts say Huber is part of a growing trend - baby boomers upside down on their mortgages - some have even spent their retirement money just to stay in their homes. ‘The house was supposed to be the nice stable investment that always went up in value..rarely came down..one of the investments you can live in and enjoy - that went away,’ said Arizona State University real estate professor Dr. Jay Butler.”
The Arizona Daily Star. “With residential construction having slowed to a crawl, no job is too small for Tucson homebuilders nowadays. This year it’s likely that no more than 1,700 permits for new-home construction will be issued in the Tucson area, experts who track the residential market say. By contrast, in 2005, when homebuilding peaked, builders took out more than 11,000 such permits.”
“‘It’s certainly a sign of the times when homebuilders are looking for continuing opportunities’ outside their core business, said David Godlewski, president of the Southern Arizona Home Builders Association.”
The Yuma Sun in Arizona. “Just under half of all Arizona mortgages were ‘underwater’ in spring of this year, the second-highest percentage in the nation, according to a report from CoreLogic. Derek Egeberg, branch manager of Yuma’s Academy Mortgage, pointed out that if homeowners bought their homes between 2006 and 2009, ‘then there’s a good chance they’re underwater.’ ‘When they say half of the home mortgages are underwater, you have to keep in mind that half of Arizonans are not selling their homes today,’ he explained.”
“However, Egeberg also agrees being underwater is good or bad depending on the homeowner’s perspective. ‘Being underwater only hurts if you’re looking to refinance or sell. For the person trying to sell a home, it’s pretty horrible,’ he said. ‘If a homeowner is looking to refinance and they bought the house three to five years ago, that could be very difficult.’”
“In addition, ‘for the investor who bought a home as speculation and thought he could sell it quickly, being underwater is more of a concern,’ Egeberg said. ‘I personally am underwater, but my family and I are not planning to leave anytime soon,’ he said. ‘If you’re not planning to move, then you have nothing to worry about. Do I like being underwater? Absolutely not. But I have the same payment and the same debt I took out when I bought the home.’”
Northern Nevada Business Weekly. “The recent sales of the Waterford Apartments and Waterstone condominiums in Sparks don’t necessarily point to a full-fledged return to strong markets for real estate investment, but they do represent a significant stirring in what’s been an extremely weak market the past few years. Prior to those sales, the last significant apartment transaction to occur in northern Nevada was the $56 million sale of the 450-unit Montebello apartments on Summit Ridge in Reno in late 2008.”
“Ken Blomsterberg, a first VP of investments with Marcus and Millichap’s Roseville, Calif., office who brokers deals in Reno, says apartment properties that aren’t distressed have begun to surface as well. Sellers have refrained from listing big apartments or condo projects for sale because of the negative perception that the property must be distressed, he says, but a crop of recent listings from private parties, such as a large complex in northwest Reno, point to a shift in the market.”
“Floyd Rowley, senior VP of investments with Johnson Group, agrees that Reno might be on more investors’ radar screens due to high pricing in coastal markets. However, Rowley notes, the majority of broker price opinions he’s done the past few years have been on properties purchased during the peak of the real estate boom, and many of those owners are still licking their wounds.”
“Most sales that are forthcoming still will be lender-owned properties, Rowley says. ‘The traditional owner-sellers are not in the market. It is still the lenders who are compelled or want to sell for some internal reason.’”
KTVN Reno in Nevada. “At the corner of South D’Andrea Parkway and Lessini Drive sits the ’stonehedge’ of Reno’s housing bubble. Built years ago for a neighborhood never built, it’s just one of many mini ghost towns scattered around town. After six years, is this finally the bottom? Rob Dunbar of Ryder Homes told us, ‘The general mood is we’re close to the bottom.’ Didn’t we hear that last year? ‘We keep hearing it every year.’”
“The industry is still fighting the foreclosure fight. In the June 2011 Reno/Sparks Association of Realtors Market Report, ‘bank-owned’ sales held the dominant share of the market with 41% of closings. Short sales and bank-owned homes took a towering 60% of new listings in June. And notices of default in June are also up over May.”
From Vegas Inc in Nevada. “You’re doing a disservice to your readers, the caller tells me. I’m confused at first because the reader references a survey I wrote about that stated Nevada real estate agents predict prices will decline over the next six months. It’s not about that, the caller says. It’s about how I’ve quoted local housing analysts who were wrong about the housing market’s price decline of more than 60 percent. ”
“The criticism began July 2006 when I took over as real estate reporter for In Business Las Vegas, the former incarnation of VEGAS INC. Initially, the complaints about my reporting came from Realtors, housing executives and others because, according to them, I was being overly negative when the Las Vegas housing market was booming.”
“It didn’t get much better in December 2006 when I wrote my 2007 preview saying the housing outlook was grim because of foreclosures. In early 2007, I wrote several stories about foreclosures and predictions of major price declines, including some national analysts saying it would be 30 to 40 percent over time. Prices didn’t start dropping in large measure until 2008.”
“That’s not the 60 percent that ultimately happened in the Great Recession, but at least people who were thinking of buying and selling had an idea of what might happen. Only readers of the print version of In Business Las Vegas would have known the full picture I covered about the housing market. So when someone calls me today and says I did a disservice to the reader, it makes me think back to when people were saying the same thing about how overly negative my coverage was.”
“I covered the housing market exactly the way the housing market should’ve been covered. I simply shed light on what was to come. I can only give readers accurate information and leave it to them to make decisions based on it. I don’t think that’s a disservice. Quite the opposite, actually.”
