Supply, Demand And Homes Unspoken For
Readers suggested a topic on inventory. “Shadow inventory: How big? How bad? Deferred maintenance? Is it all legal? Collusion? What can we do? How many houses in your hood? Who’s responsible? Perhaps this is the game the banks are playing: pay the taxes, but don’t take title and let the ‘owner’ shoulder the liability. This let’s them, ‘wait to see what happens.’”
A reply, “Certainly not paying property taxes WILL get a property seized. Governments being what they are, it is my understanding that property tax liens ARE superior to mortgages. It used to be considered a slow process, but compared to the current foreclosure speed it it could seem pretty rapid.”
To which was said, “Not true of the property abutting us on Cape Cod. It was abandoned by a developer after putting in the foundation. People used it to dump their electronics instead there of paying a fee at dumps. It had been abandoned for years and the town said there was nothing they could do about it. I know there were years of accumulated back taxes involved and the town claimed they couldn’t find the owner. Yet for some reason, they wouldn’t/couldn’t seize. 10 years later, it’s still just an abandoned junk yard.”
One had this, “I’d like to see an updating of adverse possession laws. Basically, if the owner does not maintain a building and pay property taxes, it should be taken by someone who will. For properties in small town and rural locations which had aging boomers as the potential market, perhaps the aging boomers — now with retirement plans downsized to a subsistence lifestyle.”
“Free housing. No need to commute. A vegetable garden. Perhaps do it your self solar panels from Home Depot. Just need a few Social Security bucks for heat, property taxes, and internet service, and you’re good to go.”
A reply, “So, you are going to set up a town commission to take applications, decide who is ‘worthy’ to receive a free house and pass them out? Might work in a place so small that everyone knows everyone else and the people who most need/deserve the free housing are obvious and could sort of be picked by consensus. What if there are more empty houses than worthy recipients?”
“What about bigger places where that sort of work would be too overwhelming for volunteers, where people don’t know everyone? So, set us some sort of government office. Accept applications. Hire people to investigate the applicants. Let the neighbors interview the possible new person, maybe? And who pays when someone comes forward and sues the town.”
Another added, “You are making this way too complicated. See ‘Oklahoma Land Run of 1889.’ The government could make a fortune by selling the TV rights.”
The Commercial Appeal. “The AIA Stalled Projects Database is somewhat like an online dating service. But it matches developers and architects with investors to rejuvenate projects needing financing. ‘I think most architects will tell you they have stalled projects,’ said Lisa Namie, principal with the prominent Memphis firm, Fleming Associates Architects.”
The Daily Inter Lake. “After two years of development, it’s open house time for the Northwest Montana Community Land Trust and its 16 houses, all former foreclosures, up for sale in Kalispell. All of the houses were empty, bank-owned foreclosures before they were bought and renovated and placed in the land trust. ‘We have one [house] closing at the end of December and another one that will be closing probably in the first quarter of 2012,’ said Marney McCleary, the acting executive director of the land trust. ‘So we still have 14 homes unspoken for.’”
From Bloomberg. “Owners of more than 14 million homes are in foreclosure, are delinquent on their mortgages or owe more than their houses are worth, creating a shadow inventory that is holding down sales and prices, RealtyTrac CEO James Saccacio said.”
“Moody’s Analytics Inc. expects home prices to drop about 3 percent in 2012 as more foreclosed homes go on sale, Celia Chen, one of the firm’s housing analysts, said in an interview. By midyear, the distressed share of the market — foreclosures and short sales, in which the lender agrees to a price below the mortgage balance — will begin to shrink and average prices will start to rebound, perhaps as much as 5 percent in 2013, she said.”
“‘By the end of next year, prices will begin to appreciate,’ Chen said. ‘The fundamental driver of normal home sales is going to improve because we expect the economy will start generating jobs by the end of next year.’”
The San Bernardino County Sun. “The so-called ’shadow inventory’ of future foreclosures may be about to fall on Southern California’s real estate markets. In San Bernardino County, foreclosure filings jumped nearly 30 percent from October to November, new numbers show. Los Angeles County’s foreclosure activity jumped 15 percent.”
“In November, the number of San Bernardino filings for notices of trustee sales rocketed 80 percent to affect 2,253 homes. Those filings signal a new influx of distressed properties, said Kat Hegg, a real estate agent at Hegg Team Realty in Fontana. ‘That means they’re getting ready for a busy January,’ she said.”
“Adam Sands, program manager of the Housing Opportunities Collaborative of the Inland Empire, said various bureaucratic delays in the oft-confusing interactions between banks and homeowners may mean a glut of foreclosures is about to be released. The Housing Opportunities Collaborative of the Inland Empire is a nonprofit that essentially exists to create events where homeowners can have face-to-face meetings with lenders, counselors and others who may be able to struggling homeowners stay in their houses, Sands said.”
“In his interactions with homeowners, Sands said he has seen much ‘foreclosure fatigue’ among those dealing with paper barriers to loan modifications.”
“The difficult loan modification process may not be for everyone, he added. A short sale, in which a home is sold for less than the amount owed on its mortgage, may be a better option for some. Short sales are also notorious for being subject to prolonged and complicated proceedings. Any homeowner faced with foreclosure needs help from several specialists to endure any attempt to stay in their home, Hegg said.”
“‘They need a professional lawyer. They need a professional IRS consultant. They need a professional real estate agent,’ she said. ‘They want their agent to be all three of these, and they are not.’”
From Reuters. “Shirley Burnell, a community activist from Oakland, California, has been trying to get her subprime loan restructured since 2007. She never missed a payment, but the adjustable rate mortgage she got in 2004 shot up to a monthly payment she could no longer afford. First she provided documents without getting any response, then she was denied in April by her servicer, Bank of America, for not providing documents it never actually asked for.”
“When asked about Burnell’s case, a bank spokesman said she was unable to qualify under ‘imminent default provisions,’ a third reason that Burnell said she had never been given. At one point, Burnell even received notice the bank would accelerate foreclosure proceedings, despite her perfect payment record and the letter itself saying the bank owed her $281.01. ‘They gave you a funky loan in the first place, and now they’re refusing to work with people to get it worked out,’ Burnell said. ‘It just keeps you upset all the time.’”
The Savannah Morning News. “When the final numbers for the year are available, we’re going to see that single family home sales in the Savannah metro area climbed by about 15 percent in 2011 compared to 2010. But we still need to see total sales increase by about 40 percent just to get back to the historical norms for the annual turnover of existing homes. And, despite a decline in listed inventory over the past year, we still need to see the number of active listings fall by about a quarter to return to historical norms.”
“The process will be hampered by a large shadow inventory. Many bank-owned properties are sitting empty but aren’t listed for sale. Many homeowners would love to sell but are waiting till the market improves. I don’t have a clear handle on the exact size of the shadow inventory, but it is substantial. Chatham County had 158 single-family home sales in November out of 2,395 listings, according to MLS data. That works out to more than 15 months of inventory at the November pace of sales.”
“Lower priced areas such as the Southside and West Chatham typically have less inventory than more expensive areas downtown and on the islands. But current inventory for the Southside and West Chatham is more than 12 months. Yes, November is a slow month for sales, but it should also be a slow month for new listings and for overall inventory. Worrisomely, November’s new listings outpaced sales in Chatham County by two to one.”
“The good news is that some homes listed for sale in the Savannah area seem fairly valued right now. Some of those homes are in desirable neighborhoods that are not overburdened with listings. Some would have positive cash flow for new buyers if they were turned into rental units. But a significant number of residential properties don’t meet any logical pricing criterion. With supply and demand so far out of whack in so many neighborhoods, we’ll continue to see widespread declines in home values.”
“Georgia generally and Savannah specifically benefited greatly from new home construction during the boom years. But now we are stuck with an excess supply of homes and other buildings. We need to figure out how to grow the local and regional economy in the absence of a construction boom.”
The Green Bay Press Gazette. “On Wednesday, belatedly, the National Association of Realtors is scheduled to issue revised numbers that show the nation’s housing bust was worse than the big real estate trade group has reported all along. The public needs to keep in mind that the Realtors group represents Realtors, not real estate buyers or sellers, and not homeowners. Realtors get paid when transactions occur. So the members of NAR have a financial interest in promoting activity.”
“This isn’t the only realm in which the trade group’s priorities haven’t jibed with the public’s. One lesson of the housing bust is that federal subsidies for residential real estate must be reduced. The housing lobby, which includes NAR, is accustomed to fighting for these subsidies. Consider the recent dust-up over government guarantees for the loans on personal McMansions.”
“Taxpayers have lost an estimated $150 billion guaranteeing mortgage loans so far — and they’re on the hook for tens of billions more. Reducing the size of federally backed loans from gigantic to only slightly less gigantic was a first step toward unwinding these costly obligations and returning the marketplace to private lenders who would price their loans according to the risks involved.”
“But what’s good for taxpayers would have been bad for Realtors — at least in the short run. So, under strong lobbying, Congress rescinded the modest cut in FHA loan guarantees through at least 2013. As a result, federal dollars still will be used to back enormous loans.”
The Knoxville News Sentinel. “I’ve often joked that the National Association of Realtors (NAR) will twist, manipulate or interpret any data series to prove that now is a great time to buy a house. Or sell a house. Or they could simply report phony data.”
“It seems that the NAR has been reporting inflated house sales figures at least since 2007. CoreLogic, an independent real estate analysis firm, accused the NAR of releasing inflated sales data. NAR spokesman Walter Malony fessed up. ‘We’re capturing some new home data that should have been filtered out. All of the data since 2007 is being revised down. Sales were weaker than people thought.’”
“‘Sales were weaker than people thought?’ That makes it sound like it was the people’s fault, not the NAR.”
“The NAR expects the adjustments to be ‘relatively minor.’ However, CoreLogic says that just the California sales data alone could have been overstated by as much as 20 percent.”
