Still Trying To Hold Onto The Prices They Paid
The Montgomery Advertiser reports from Alabama. “Houses priced at $500,000 and higher only make up about 1.5 percent of Montgomery’s — and all of Alabama’s — housing market, said Grayson Glaze, executive director of the Alabama Center for Real Estate at the University of Alabama. Nationwide, they’re 10 percent of the market. ‘Alabama and Montgomery demographics point to a very small and finite segment of the population with the necessary income to qualify for a purchase of $500,000 or more,’ Glaze said in an email. ‘For sellers at these price points in a challenging market, the proverbial ‘needle in the haystack’ comes to mind when identifying qualified buyers.’”
“Jimmy Sellars’ two-story, 4,500-square-foot home with four bedrooms and five bathrooms sits on about 14 acres in south Montgomery County. Sellars’ home has been on the market at its current asking price since April. Real estate agent Jane Albright said they had listed it at a higher one last year. In the past 12 months, only about 14 homes above $500,000 have sold in the Montgomery area, said Albright.”
“In 2008, that number was closer to 50 homes, she said. In 2005, it was about 70. Sellars, who owns two other properties in the area, doesn’t want to take this home off the market again for fear of missing the buyer he’s waiting for. ‘There is always the possibility that someone will come to town looking for a house just like this,’ Sellars said.”
The Huntsville Times in Alabama. “Past the entrance of The Reserve subdivision is one of the local real-estate shrines to BRAC, perhaps the most obvious example of the anticipated impact of the 2005 base realignment and closure on the Huntsville housing market. The development of the area was strongly influenced by BRAC, said Oscar Gonzales, the CEO of the Huntsville Area Association of Realtors.”
“Confidence in the Huntsville real estate market was soaring when the 2005 BRAC was announced. Sales of new and existing homes in Huntsville and Madison were 5,537, a record, in 2004. It was the third consecutive year of record-setting home sales. In a Nov. 27, 2005 story in The Huntsville Times, Dr. Leonard Zumpano, director of the University of Alabama’s Alabama Research and Education Center, said, ‘I think Huntsville’s pretty much bulletproof.’”
“But Gonzales does not believe there was overspeculation about the impact of BRAC. ‘You had the anticipation of influx of people and growth,’ he said. ‘But it came on the heels of (an) economic downturn. It brought so many variables together that caused it to fall. No one predicted the bubble would pop the way it did.’”
“There is little doubt, though, that BRAC could still have an effect in the neighborhood, in Gonzales’ view. ‘We’re still building,’ he said.”
The St Petersburg Times in Florida. “Hit with unexpected funeral bills and escalating payments, Danny and Brenda Berry fell behind on the mortgage on their Clearwater home. Deutsche Bank got a final judgment in January 2010 but canceled two public auctions for reasons that included improperly notarized loan documents. The bank took back the house at an auction last April but quickly got a court order to vacate the sale, claiming it had worked out a loan modification.”
“Berry says nothing was worked out. The house remains his responsibility even though he and his wife moved out a few months ago because they can’t afford to fix the leaky roof. ‘It’s still a burden on me,’ says Berry, who took Friday off to try to find someone to mow the knee-high grass.”
“James Selvey, president of the Greater Tampa Association of Realtors, notes that it typically costs a bank $35,000 to $40,000 to take title to a property. ‘So consequently they’re not taking ownership; (the houses) are just sitting there,’ he says. ‘As the inventory dries up, it does cause demand and prices to rise and then the banks will shove a few more homes into the market.”’
The Herald Tribune in Florida. “Practically every neighborhood has one of those abandoned and increasingly derelict houses that teenagers like to throw stones at or dare each other to spend a night inside of. Even the Landings, that gated and well-manicured, high-end subdivision south of Sarasota, has one. Since the former owners, Deane and Cheryl True, moved out three years ago after defaulting on $790,000 in loans, the Landings Homeowners Association has spent more than $3,000 to keep the bushes trimmed and the lawn mowed.”
“Reached at the credit union he now works for in North Carolina, Deane True said he received several short-sale offers for the house after moving out three years ago. One was for $350,000 from a neighbor, and another higher offer came in from a local real estate agent. But the bank was not tempted, True said. In the meantime, True filed for bankruptcy protection and was eventually absolved of his $790,000 in mortgages and $125,000 in credit-card debt.”
“‘We left in the summer of 2008,’ said True, who lost his job as a lender at Fifth Third Bank in Sarasota that same year. ‘The music stopped and there were no chairs left. I needed to find another job to take care of my family, so I bailed.’”
“Since 2008 Lisa Cece has gone through a divorce, taken two pay cuts in her job as an administrative specialist, and filed for bankruptcy to deal with her marital debt. As part of the bankruptcy proceedings, Cece reaffirmed her commitment to her first and second mortgages. Now Cece is upside-down in a home she can no longer afford, having engaged in months — no, years — of difficult negotiations with the holders of the two loans on the property. She’s about to give up.”
“‘I don’t want to walk away and leave the house empty. I want to do the responsible thing, but I’m not getting anywhere,’ said Cece. In spring 2010, she consulted a real estate attorney, who advised her to stop paying both mortgages. Cece said she made payments throughout the summer until finally it dawned on her that ‘there was no way I was going to make it long-term and be able to provide for my child.’”
“The house that cost $235,000 seven years ago is now worth $145,000. The good news is that Cece has a willing short-sale buyer (an investor), and GMAC appears ready to sign the deal. The bad news is that, so far, USAA is unresponsive. Her real estate agent, Frank St. Pierre of Coldwell Banker, understands Cece’s plight but is not without sympathy for USAA. ‘They’re negotiating very hard, it’s true, but I’d be hard-pressed to say that’s inappropriate,’ said St. Pierre, referring to the short sale. ‘I’d like for it to go as smooth as silk, but the reality is they’re owed money and they want it.’”
The News Press in Florida. “Southwest Florida’s high-end home-building industry is gradually coming back to life - buoyed by cautious buyers drawn to the golf courses and tennis courts of luxury communities at today’s bargain construction costs. In large part, the industry’s new-found health is due to the low land, labor and materials costs that come with lean times, said Stephen Wilson, CFO of Naples-based London Bay Homes.. ‘Our prices are as competitive as they’ve ever been, 60-65 percent for the price of materials - and labor has come down enormously.’”
“Now, Wilson said, ‘The problem we’re running into is that people aren’t able to sell their home up North’ to pay for the new one.”
The Citizen Times in North Carolina. “This is a great time to be buying a home in Henderson County and a tough time to try to sell one. Statistics and some local experts say the local market is still heavily tilted in buyers’ favor, with the result that sellers often have to cut their prices dramatically in order to make a sale.”
“Steve Dozier is a broker in the Hendersonville office of Prudential Lifestyle Realty who analyzes market trends for the company. Dozier found that even homes that sold in three months or less from July 2010 to June 2011 sold for only 94 percent of their original list price. The ‘original list to sale’ ratio for homes that took longer to sell ranged from 92.6 percent from homes on the market for three to six months to 71.1 percent for those listed more than a year before their sale.”
“Those selling a home ‘are still trying to hold onto the prices they paid in 2006, 2005,’ Dozier said. But as time passes without a sale, they are realizing that, ‘If you don’t price it right, you might as well plan on sitting on it for a while.’”
“In fact, for potential sellers who bought at the peak of the market, ‘I’m telling them to ride it out for another year’ if they can afford to wait to sell their home, he said. Buyers, Dozier said, are ‘bottom feeding. … They’re thinking that everything should be selling for the same thing that a bank-owned property or a foreclosure would sell for.’”
“Glenn Compton, an owner-broker at the Hendersonville office of Century 21 Mountain Lifestyles Realty, acknowledged that the relatively large number of homes on the market does allow buyers to be picky. When larger manufacturers shut down, top managers who could afford more expensive homes have to move and ‘most of the retirees, they don’t want to clean those big homes,’ he said.”
“Compton said brokers at his agency have contact with ‘two or three dozen buyers from out of the area that can’t sell their homes but would like to have one here.’”
“Retirees have traditionally made up a large percentage of homebuyers in Henderson County. Renewed strength in the stock market during the first half of 2011 encouraged some retirees to jump back into the housing market, Compton said, but that is not a uniform trend. ‘The retirees that are coming are coming in from the Northeast mainly. There are not a lot of Florida people, really,’ he said.”
