Great Expectations With Little Fulfillment
A report from StateImpact Idaho. “After several weeks of reporting on the Idaho housing market, it’s impossible not to notice just how many of the people who have lost their homes in the downturn are real estate agents and builders, or do other kinds of work related to housing. In the midst of the boom, Carmel Crock, a realtor who lives in Boise, made financial decisions that counted on the housing market’s continued strength. She refinanced her home in the expectation that her income would keep rising, allowing her to manage a higher monthly payment.”
“Crock says when her income fell and she found herself in the middle of a financial mess, she wasn’t on her own. Many people she knew professionally were also having to figure out how to negotiate short sales. ‘Unfortunately, I had realtor friends, long-time acquaintances, builders who were going through the same thing,’ she says. ‘None of us were doing this alone.’”
“‘Most of my developer clients have felt a really big hit from the downfall of the real estate market,’ says Terri Pickens, an attorney in private practice in Boise. ‘And as a consequence most of them have lost their personal private residences in addition to their subdivisions, or commercial developments.’”
“As she understands it, not only have people whose work is connected to real estate suffered a direct hit in the downturn. They also may have been more likely to be drawn in by the excitement of the boom. ‘They were more likely to purchase a home that they couldn’t purchase in a down market,’ she says.”
“Andy Enrico, Vice Chair of the Idaho Real Estate Commission, says he watched people get caught in that downturn, too. ‘Builders got in trouble, and real estate agents who wanted to aggressively buy and invest got in trouble, because they thought the market would never quit,’ he said. ‘When you get so busy, you think sometimes, ‘Maybe it won’t end.’”
The Idaho Reporter. “Even though the Tamarack Resort in Valley County is on life support, the Idaho Land Board has an ongoing right to build residential structures on a number of acres near the Osprey Golf Course. The state could, if it wanted, even act as a landlord for homes or condos. Former state lawmaker Bob Forrey, who monitors Land Board policies and transactions, said the state should completely avoid getting into the business of building homes because it doesn’t have the right to do so.”
“Tamarack’s story is one of great expectations with little fulfillment of dreams. The resort opened with limited availability in 2003 and expanded operations in the years following.”
“The former Republican lawmaker also contended that the Idaho Constitution prohibits making investments in which the return is not guaranteed. He says residential properties at Tamarack would not bring in guaranteed money. ‘The risk is just out of bounds,’ he said of the possibility of the state building homes at Tamarack. ‘I think it’s totally wrong. It doesn’t sound like good government to me.’”
The Oregonian. “The nation’s home prices showed signs of good news in August, and this time Portland joined in the party — but without offering too much to celebrate. Prices are still below a August year ago — 7.6 percent lower in Portland and 3.8 percent lower for the 20-city composite — though the year-over-year declines are smaller than those reported in earlier months this year, a sign of market stability.”
“Tim Duy, an economist at the University of Oregon, said the fact that annual price declines are decelerating is encouraging. The lingering problem, Conerly said, is a large inventory of houses amid a dwindling pool of potential buyers. ‘We’re still in a situation of excess supply,’ said Conerly, adding he included houses that aren’t listed for sale. ‘We simply have more housing units than we have households, and its going to be some time before we work that off.’”
From KGW News in Oregon. “President Obama’s revamped ‘Home Affordable Refinance Program’ may help underwater homeowners in Oregon and around the country. Of the 9,100 homes for sale in the Portland Metro area alone, 2,000 are currently short sales and 500 are bank owned – or previous foreclosures.”
“Steve Schwab, a principal broker at Keller Williams Realty, said that it still won’t be soon enough for many homeowners. ‘I believe a lot of people if they could get out of their house all together they would,’ he told KGW.”
The Seattle Times in Washington. “The owner of downtown Seattle’s well-known and well-loved — but mostly empty — Smith Tower has defaulted on the loan it took out when it bought the landmark in 2006. In 2007, less than a year after it bought the Smith Tower, Walton Street Capital received the city’s approval to convert the entire building to condos. When the downtown condo market began to cool later in 2007, Walton Street scaled back its condo-conversion plans to just the top 12 stories.”
“When the Seattle-based Samis Foundation sold it to Walton Street five years ago it was 100 percent leased, according to William Justen, Samis’ former managing director of real estate. Walton Street missed opportunities to sign or resign office tenants while it was pursuing its condo-conversion plan, said William Justen, Samis’ former managing director of real estate.. Meanwhile, the office market collapsed.”
“‘There’s nothing wrong with the building,’ Justen said. ‘Walton Street just had a business plan that did not work.’”
My Northwest on Washington. “A 71-year-old former foster mother on fixed income has averted losing her home thanks to a grassroots campaign. Dixie Mitchell, who lives in Seattle’s Central District area, had received a foreclosure notice, and her home of four decades was due on the auction block. But a grassroots group called Washington CAN! (Community Action Network) took up her cause.”
“The bank adjusted Mitchell’s previous payment of $2,568 a month, to $1,700, which she says will be a stretch, with a monthly income of $2,300, but she’s pleased for that adjustment and is still in negotiations with the bank. ‘I’m happy that I’m going to stay here,’ said Mitchell in an appearance on 97.3 KIRO FM’s Ross and Burbank Show.”
KOMO News on Washington. “A group of protestors successfully disrupted the weekly real estate auction held in King County. The weekly foreclosure auction at the King County administration building started at 10 a.m. as usual, but then protestors began shouting during the bidding process. The grassroots group ‘Our Washington’ is demanding a moratorium on all foreclosures. ‘We’re protesting the auction,’ said Marliza Melzer. ‘We don’t want the people to be able to buy our homes.’”
“Real estate broker Darin Silva says he can’t help the person who missed payments, but he says he can help their neighbors, fixing up empty, rundown homes to increase property values. ‘The people who have lived in these houses, sometimes for two years without paying their mortgage I think it’s about time to start re-contributing to the economy.’”
The Yakima Herald in Washington. “Bob and Mary Vandegraaf had been looking at The Lofts, but never put in an offer because they felt the prices were too high. But the Granger couple felt they got a good deal Saturday with their winning bid for a nearly 1,800-square-foot, two-bedroom unit during a fast-paced auction of the unsold downtown Yakima condos.”
“Seattle developer Gary Bodenstab and local developer Joe Morrier spent more than $10 million to renovate the former Bon Marche store into condos, a project that was to usher in high-end urban living, which many say is a key component to downtown revitalization. “But more than two years after the project was completed, more than half of the 22 units were still vacant.
“About 50 people showed up for the auction, which was reportedly lower than organizers anticipated. Still, 10 of the 15 vacant condos were successfully auctioned off. Five units were not put up for live auction. Starting prices for the units ranged from $85,000 to $195,000, well below the $318,000 to $618,000 developers asked for when the The Lofts opened in January 2009.”
“The Vandegraafs said they got into a bidding war for their first choice with another prospective buyer who was participating by proxy from Juneau, Alaska. But ultimately they won. The couple did not reveal the price of their winning bid, as all bids are still subject to approval by The Lofts developers. ‘It was a bit higher than we wanted, but it was pretty much in the range,’ Mary Vandegraaf said.”
