On The Market But Not In The Market
A report from the Bakersfield Californian. “A task force of city staff and City Council members is set to address how to revive the sagging homebuilding industry in Bakersfield. Local developers say they need help, especially in the form of relief from development fees. ‘We have cut our prices to the bone,’ said Matt Towery, president of Bakersfield-based Towery Homes. ‘The profit margins are so small there’s nothing more that we can take. So the only thing that we can address is the fee structure.’”
“Developers need relief now, said Donna Carpenter, interim executive director of the Kern County Homebuilders Association. ‘What’s happening right now is the cost of constructing a new home is more than the appraisals coming in. The numbers aren’t working,’ Carpenter said. ‘The profit margins are so thin, which is why you’re not seeing new homes being built now.’”
The Signal. “October home and condo sales combined were below the 2011 summer numbers, a traditional period when homeowners put their houses on the market. However, using the record low point in January 2008 as a benchmark, Southland Regional Association of Realtors reported home sales are up 77.8 percent, and condo sales are 174.2 percent. Reflective of the still weak market, however, the median price of single-family homes remains lower than a year ago. Home prices were down 6.7 percent from the prior year for a median price of $364,000.”
“The median price of a condominium fell 21.8 percent from a year ago, setting a new low for this cycle. Median condo prices in October were $186,900. ‘Until government does something definitively to help housing, the market will improve only slowly,’ said Jim Link, the association’s CEO. ‘People will sit on the sidelines, which is too bad — because some will miss the best opportunity to buy a home in a generation.’”
The Mountain View Voice. “Washington’s lackluster efforts to represent the interests of America’s poor and middle class inspired the focus of Congresswoman Anna Eshoo’s telephone town hall meeting last week. Eshoo said that stopping the country’s foreclosure crisis was key to an economic recovery. ‘I’ve seen so many people losing their homes who thought they could pay their mortgages,’ said a woman named Adrian from Sunnyvale.”
“‘It is a horrendous and catastrophic situation,’ Eshoo sympathized.”
The Mercury News. “Lake Tahoe area real estate agents, hungry for sales in the aftermath of the housing bubble, are counting on the Bay Area’s booming tech industry to help generate the next crop of million-dollar vacation home buyers. The market for vacation homes costing more than $1 million, though down over the year, turned in a strong third-quarter performance, according to Coldwell Banker. That was partly due to buyers from Silicon Valley, vacation home developers and real estate agents said.”
“Adele Lucas of Chase International said she closed a deal last week for just over $3 million. ‘Right now, I am extremely busy with lakefront sales,’ she said. ‘We’re seeing those affluent buyers coming into the high-end market because they recognize these prices are artificially low and are going to be pumping up in the next few years.’”
The Ventura County Star. “On a recent Sunday afternoon, Realtor Joyce Zangmeister was hosting an open house in central Thousand Oaks. Two other houses just down the street were also on the market, both distressed sales. It’s a scenario not uncommon throughout Ventura County as default notices rise and median home prices drop to the lowest levels in two years.”
“Despite this, Zangmeister says sellers continue to have unrealistic expectations about what their homes are worth. ‘The market will bear what the market will bear,’ she said. ‘So many buyers want to steal the deal and you’ve got to be realistic in your list price. If you’re not, you might be on the market but not in the market.’”
“‘What I am finding at the high end is a really strong indication that prices are going to continue to drop. There are not a lot of people who can qualify for large loans anymore and that’s what’s hurting us,’ said Fred Evans of Re/Max Gold Coast Realtors. ‘Homes in Spanish Hills and hillside areas are almost half the price of what they were in 2007.’”
“Kelly and Megan Goebel popped in to take a look at Zangmeister’s listing. They are in the fortunate position of not having to sell their condo to be able to buy and plan to take their time and make sure they get a good deal. ‘If you can buy, this is absolutely the right time. You can’t lose,’ said Kelly, who’s a contractor.”
The Orange County Register. “Responding to a report that Realtors at an Anaheim conference almost universally blamed lenders for stalling the recovery, California Mortgage Bankers Association spokesman Dustin Hobbs said high unemployment and economic instability – not banks – are to blame. Laguna Niguel mortgage broker Jeff Lazerson, president of Mortgage Grader, said the real culprit is the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.”
“‘The marching orders they provide to Fannie and Freddie are entirely too restrictive,’ Lazerson said. ‘The banks must abide by these rules as the only loan buyers in town for conventional financing are Fannie and Freddie.’”
“Stephen Gordon, CEO of Orange County-based Opus Bank, said the problem is that most of the banking industry still is hamstrung by the non-performing loans issued during the housing bubble, leaving them without capital and trying to fix their own messes. Because of the ‘legacy’ debt, older banks are internally focused, rather than focused on helping the economy, Gordon added. ‘Banks have significantly cut back,’ he said. ‘They’ve tightened up credit. They’re afraid of their own shadows. They’re afraid of the next bad loan.’”
The North County Times. “Mary Smith’s house in Wildomar has been on the foreclosure auction block more than 21 times in the last two years, she said. Every time, at the last minute, Bank of America, who is servicing her loan, puts it off, while her case is placed ‘under review.’ Again. Smith and her husband at the time bought their new, five-bedroom home in Wildomar for their three kids in 2005 —- just as house prices peaked. They paid Heritage Pacific Homes $431,000, with a $100,000 down payment and a 5 percent, 30-year-fixed mortgage. In 2007, they took out a second loan for $57,000, in the hopes of installing a swimming pool. The combined payments come to $2,408 a month.”
“Smith was a stay-at-home mom for 17 years, which meant the family had no income when her ex-husband, a construction project manager, was laid off in 2008. The couple ended up spending the money from their second loan, and they drained retirement and savings accounts to stay afloat, but by 2009, they were missing mortgage payments.”
“That year, Smith’s husband left her. The divorce took two years, and Smith got full ownership of the house and child support payments. She launched a business as an in-home child care provider. If she loses her home, her business goes with it. Early this year, a Bank of America customer service official told Smith she had no choice, and she’d have to sell or be foreclosed. She opted for a short sale and accepted an offer on her house for $186,000. Now she’s trying to get the deal killed.”
“‘My case was under review, I didn’t have to short sell,’ she said.”
The Chico Enterprise Record. “Homeowners in trouble with their mortgages probably need to adopt a different mindset about the roofs over their heads, according to a certified housing counselor. It might even require submitting to foreclosure. Dan Beveridge, who counsels struggling homeowners about their mortgages for Community Housing Improvement Program, recently spoke to about 30 people at the Southside Oroville Community Center.”
“First, their situation may not be their fault, and it doesn’t mean they’re irresponsible. ‘If you’re struggling, it has less to do with you, as with the timing’ of the mortgage loan, he said.”
“The nuggets of advice were a surprise to many, but provided some insight into the lending industry. As a counselor, he frequently hears homeowners frustrated with what’s happening to them. ‘You are not entitled to fairness,’ said Beveridge, pointing out the borrower agreed to repay the loan.”
“He noted it makes less sense to struggle with an unaffordable house payment that can’t be changed than to accept foreclosure and start anew. He said he doesn’t recommend foreclosure lightly, but as an option to consider thoughtfully. While foreclosure does impact an individual’s financial scores, that negative rating may only last a few years, Beveridge noted, and can give homeowners a chance to regain their financial status.”
“In some cases, foreclosure shouldn’t be avoided, he said. ‘Sometimes foreclosure isn’t the worst thing.’”
US News & World Report. “Despite lingering unemployment and a still sluggish economy, many Americans are finding reasons to be thankful this time of year. In fact, for some, unexpected layoffs, financial setbacks, or simply a desire to spend more time with family have served as a reality check, a wake-up call for consumers to rethink their idea of wealth and prosperity.”
“Shelly Cone of Santa Maria, Calif., and her husband are serial entrepreneurs who once owned a successful real estate business. The housing bust took their business down with it, but Cone has made her peace with that. ‘We’ve learned that money can come and go, but life’s experiences remain with you,’ she says.”
