It’s Over-Inflated Prices That Aren’t Selling
The Duluth News Tribune reports from Minnesota. “Mortgage foreclosures in Duluth and St. Louis County are on pace to hit their highest point in the past five years, according to data provided to and analyzed by the News Tribune. The rising foreclosures are another indicator that the Duluth housing market may be in the worst condition it’s been in years, with the number of sales at the lowest point since 2007.”
“When Ryan Kern put his Lincoln Park home on the market in March 2010, for example, he said he listed it at about $220,000 following an appraisal by his real estate agent. But the home sat on the market for a year and a half. It wasn’t until Kern lowered the price a third time to $149,500 last week that he got an offer he could accept.”
“‘We’re going to take a loss on it,’ said Kern. ‘But with the housing market the way it is, we have to do what we have to do.’”
“‘People used to count on equity in homes,’ said Jim Skurla, the director of the University of Minnesota Duluth Bureau of Business and Economic Research. ‘With housing prices not going up, people feel they can’t buy anything else. And with high unemployment, people aren’t wanting to get stuck buying a house and later have a mortgage they can’t afford.’”
“For those wanting to sell a home, Pagel Guerndt said some sellers may have to face taking a loss. ‘It depends on what the seller is willing to do with the pricing,’ Pagel Guerndt said. ‘It’s housing that has over-inflated prices that aren’t selling. That’s rough for people.’”
The Star Tribune in Minnesota. “About six years ago, when Jennifer Bryden was single and housing prices were rising like a helium balloon, she bought a condo in Uptown. She negotiated hard and thought she got a bargain. Then Bryden got married, moved into her husband’s house, and the real-estate market deflated, leaving her with a condo she can’t sell for even close to what she paid. Now a busy working mom with two preschoolers, Bryden is stuck in a role she never wanted: being a landlord.”
“‘Every time I sink money into the condo, I feel so stressed,’ she said. ‘My house needs repairs, too. I dread the condo board calling to say I need to contribute to a major repair.’”
“Anne Healy’s year as a landlord was so frustrating that she put her St. Paul house back on the market and recently sold it — for $50,000 less than an offer she turned down last year. She and her husband moved out of the house after buying one in Plymouth that her grandfather had built. ‘We were confident we could sell this one,’ she said. But after turning down two offers, they decided to rent it out instead. ‘We were in denial; we’ve learned the hard way.’”
“Jennifer Strangis Lundquist has thought about letting her lender take over the townhouse she bought in 2004. ‘But I’m not going to do it,’ she said. ‘I have a sense of pride.’ Instead, the Zimmerman newlywed rents out the Woodbury townhouse at a loss of several hundred dollars each month. Finding good tenants and dealing with repairs are ‘kind of a headache,’ she said. She’d rather sell the townhouse than be a landlord. ‘But I’d have to come to the closing with 30 grand.’”
The Grand Rapids Press in Michigan. “August was a mixed bag to the local housing market as sales volume continued to trend upward while prices slid 4 percent lower than a year ago, according to the latest data from the Grand Rapids Association of Realtors. The toughest part for Diane Ebbers, of Greenridge Realty Eastbrook, is working with frustrated sellers dealing with low-ball offers.”
“On all my listings that I was offering people were lowballing like crazy,’ she said. ‘Some people take it. Others won’t. They just stick to their guns. The buyers are thinking they can low-ball some of these offers and they do it because, sometimes, it works.’”
“Ebbers said banks that may have been holding off on foreclosures in recent months seem to have increased their activity recently. Banks also are being far more selective about whom they prequalify for mortgages. ‘It’s bad in the short run because Realtors lose a potential client,’ Ebbers said. ‘But it’s good in the long run when you only have buyers who can afford to buy houses.’”
The Journal Sentinel in Wisconsin. “Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, said buyers have been taking advantage of big discounts in the market, with prices down about 30% from the peak. He said that of sales in August, almost 63%, or 830 units, were $199,999 or less in the four-county area. In Milwaukee County, almost 44% of sales in the month were for homes costing less than $100,000.”
“‘Another drag on the recovery of the real estate market is the artificial suppression of demand due to federal lending regulations. In many cases deals are falling apart because creditworthy buyers cannot get a loan,’ Ruzicka said.”
From Cincinnati.com in Ohio. “The government wants to unload 677 foreclosed single-family homes in the 15-county Greater Cincinnati region that it or government-sponsored Fannie Mae and Freddie Mac now own. The Cincinnati region has more government-owned foreclosures on the list than any market in Ohio, Kentucky or Indiana. In fact, the region’s total is higher than those for 19 states, including Kentucky.”
“‘Until we work through this mass of houses on the market under foreclosure, we’re not going to see a revival in home sales or prices of any substantial amount,’ acting U.S. Secretary of Commerce Rebecca Blank said during a recent visit to Cincinnati. ‘People estimate everything from one to two years before we get through all of this. There is no short answer to it. I wish there was.’”
The Wichita Eagle in Kansas. “Sedgwick County should get tougher on people who don’t pay their property taxes on time. That’s the take of Commissioner Jim Skelton, who said constituents are asking him why they see some of the same people on the delinquent tax lists published in The Eagle time after time. Skelton has asked Treasurer Linda Kizzire for more information about what the county can — and can’t — do to get taxes collected.”
“Some of the properties owing back taxes are developers’ lots that haven’t sold, Kizzire said. ‘In all fairness to them, with this economy, I’m sure they’re not selling the lots like they had intended. It’s very unfortunate. I’m hoping before they go to tax foreclosure, the economy will pick back up.’”
The Lawrence Journal World in Kansas. “A multi-million dollar west Lawrence condominium development now is in the hands of an area bank that said it will begin searching for a new owner for the complex. Developers had fallen behind on a mortgage for the property and owed M&I a little more than $13 million on the project. The bank won the sheriff’s auction with a $2.075 million bid, which was the only bid made during the auction.”
“The property includes about 38 unfinished condominiums, a vacant parcel of land adjacent to the development, and several common areas such as a swimming pool, lobby, outdoor kitchen and bar area. Cassie Writz, an attorney with the Kansas City-based law firm Bryan Cave, said her bank clients now would begin marketing the property to potential buyers. About 13 units in the 50 unit complex are occupied. Writz said maintenance of the property’s common areas will continue under the bank’s ownership and that the development would operate in a ‘business as usual’ mode during the transition.”
The Chicago Tribune in Illinois. “The house at the end of our alley has been vacant for almost four years and we — the neighbors and I — figure it’s a matter of time before something bad happens. A fire? Metal thieves? A child abduction? Bad things happen when a house is allowed to sit empty month after month, season after season.”
“Cook County Circuit Court records show Charter One Bank filed for foreclosure in February 2008. The case has kicked around the docket month after month, motion after motion. A second lender, AmTrust Bank, also was involved, but went insolvent in 2009 and turned over its assets to a third bank, so it gets complicated.”
“Somebody still owns the house, though, because records show somebody still is paying property taxes on what was — and could again be — a handsome two-story, four-bedroom, red brick on Wesley Avenue in Evanston. That’s right, Evanston. Not some have-not city neighborhood like Chicago’s Englewood or Austin, but on the ‘leafy’ North Shore, an easy walk from Northwestern University and Lighthouse Beach. Fact is, there now are 534 Evanston homes in some stage of mortgage foreclosure according to Realtytrac.”
“We’re in vicious downward spiral. What began in 2005-06 as a rash of families who overreached or got hornswoggled by shady mortgage brokers has blown into a wider epidemic in which otherwise respectable middle-class folks are walking away from houses on which they owe more than the places are worth.”
The Rockford Register Star in Illinois. “In September 2001, according to economists, the national economy was in the tail end of the recession created when the dot-com bubble burst. Today, the economy has been recovering from the Great Recession, after the housing bubble burst, for more than two years.”
“The real estate bubble inflated so much that when it exploded, it wiped out investors and banks large and small. Even here, long one of the country’s cheapest real estate markets, average home prices soared. In September 2001, the three-month rolling average price, according to Rockford Area Realtors, was $113,301. By July 2006, the average price jumped to $147,106.”
“By this July, though, the average had shrunk to $102,761 — a decade of gains wiped out. Hundreds of banks and mortgage lenders across the country have gone out of business or been seized by banking regulators. That includes the Rock River Bank in 2009 and AMCORE Bank in 2010.”
“Most people, no doubt, only wish for the economic conditions of 2001: The local unemployment rate in September 2001 was 6.1 percent. In July, the latest available data, it was 12.1 percent. Through the first seven months of 2001, builders started 768 new homes. This year, through July, they’d started just 68.”
“In the first seven months of 2001 Realtors sold 3,050 homes in Boone, Winnebago and Ogle counties. So far this year they have sold just 1,734. In all of 2001, lenders started foreclosures on 1,500 houses. Through this July, they’ve already started 1,603.”
