February 7, 2012

The Train Came Back Around

The News Journal reports from Florida. “Deltona, the largest city in Volusia County, also has its biggest foreclosure issue. The city’s eastern part, 32738, holds the Volusia-Flagler area’s second-worse foreclosure filing ratio, the 63rd worst ZIP code in the state. The western area, 32725, is fourth worse in Volusia-Flagler but doesn’t crack the top 100 in the state. ‘32725 is the older part of Deltona,’ said Karen Christopher, a West Volusia-focused real estate agent with Adams, Cameron & Co. ‘That was more established when the boom hit.’”

“The eastern part of the city had gobs of vacant land prior to the housing boom. Before the boom, some lots were selling for $9,000 or $10,000, she said. ‘During the spike builders were going crazy building all these homes,’ she said. ‘Lot prices went up to $75,000 for a regular building lot in Deltona. It was outrageous.’”

“Stephen Braun, a DeLand attorney who works with many foreclosed homeowners in West Volusia, acknowledges that Deltona is the epicenter of foreclosures in Volusia County. But most of his clients trying to save their homes aren’t in Deltona. ‘My experience is those in Deltona have pretty much given up,’ he said. ‘The values have gone so low. I think they’re more likely to walk away.’”

The Sun Sentinel. “Finding a bank-owned home for sale these days is hard enough. Actually buying one is an even bigger problem. Last year the supply of bargain-basement, foreclosure homes shrank, as banks temporarily stopped trying to repossess properties to review possible paperwork errors. In parts of South Florida, including eastern Broward County, it’s a seller’s market for single-family homes $500,000 or less, real estate agents say.”

“‘If I was a purchaser, I definitely wouldn’t go in [offering] less than the asking price,’ said Summer Greene, a Fort Lauderdale real estate manager and the 2012 president of the Florida Realtors trade group.”

Florida Today. “Realtor Jan Alwine hasn’t forgotten the mid-1970s, when the Apollo program ended abruptly. Some residents just left their homes to be reclaimed by the banks. She’s seeing that now. Her job as a Realtor has become harder. She constantly meets bargain hunters from the Northeast who don’t feel prices are low enough. Completing a short sale can be exasperating. ‘I worked on selling a $28,000 condo for a year and a half,’ she said. ‘What do you think I’m going to make on that?’”

“The $28,000 condo originally sold for more than $150,000, and Alwine represents several properties that should be worth $1 million but cannot draw a buyer when listed for half that. ‘Buyers don’t think much of the area,’ Alwine said. ‘Consequently, they sometimes come in and make ridiculous offers.’”

“Alwine believes the real estate market will come back because Titusville is a nice place to live. And she holds the line against buyers who think they can buy prime real estate for a song. ‘They think we’re on the end of the world,’ she said. ‘But this is a haven.’”

The Tampa Tribune. “The excess supply of housing inventory is dwindling in the Tampa-St. Petersburg-Clearwater area, and it now costs about the same to buy as it does to rent a home here, said Chris Lafakis, who follows Florida for Moody’s Economy.com. Miami, for example, hasn’t reached this point: Buying a home there is still 20 percent more expensive than renting one. ‘We finally have good news for Tampa,’ Lafakis said. ‘Housing prices are too cheap compared to the income people have.’”

“So why aren’t more people buying? The answer boils down to fear, Lafakis said. ‘Many consumers experienced very traumatic house price declines, so it’s understandable that many would be apprehensive to buy a home,’ he said.”

“Also, many who might want to buy still are trapped in ‘underwater’ homes. Nearly half of Tampa Bay’s homeowners with mortgages owe more than their homes are worth. President Obama has announced a plan designed to help underwater owners refinance. Shawn Miller, a Tampa mortgage broker, calls it a win-win. The money homeowners save will go back into the fragile economy, Miller said, and these buyers will be less likely to abandon their underwater homes to foreclosure.”

“‘They’re going to be more inclined to stay in the home longer, take better care of it,’ Miller said. ‘At least they won’t be upside down and at a higher rate. They’ll just be upside down.’”

“After months of noisy protests and public-space encampments, South Florida’s Occupy movement has quietly shifted its focus to ‘occupying’ houses to support homeowners caught in the foreclosure crisis. ‘The only thing that works is public outrage and media exposure of bad practices by banks,’ said Lisa Epstein, who became an activist after almost losing her own West Palm Beach home to what she calls fraudulent foreclosure practices.”

The Ledger. “Are we there yet? It’s been a nagging question for years as Polk County’s housing market struggles to find a bottom and begin its recovery in earnest. ‘I think the most interesting story is nothing seems to be changing — how stubbornly resistant the real estate market is to recovery at this point,’ said Peter Murphy, a real estate consultant and president of Tampa-based Home Encounter. ‘Every month we see small pickups in sales but we also see declines in prices. From the looks of things, that shouldn’t change that much this year.’”

“Steve Holland once bought an investment home on Spinnaker Drive in Lakeland with the intent of fixing it up for a resell. That was about eight years ago. By the time the house was renovated, Polk’s housing market had started to sputter and Holland opted to rent the property instead. He finally put the yellow, three-bedroom house on the market about two years ago for roughly $120,000, and has since dropped it to $103,000. Still, no bites.”

“‘I had mixed emotions about trying to sell it with the housing market being so depressed around here,’ said Holland. ‘We were going to wait for things to level out, but that may be 18 months, two years … who knows?’”

“‘Right now I think prices are being driven more by foreclosures than market rate transactions,’ said Tim Becker, director of the Bergstrom Center for Real Estate Studies at the University of Florida. ‘As we start growing jobs — and high-quality jobs — we’ll have an impact on prices. But I think we all have to be realistic that when we get back to increasing prices, it’s not going to be what we saw in 2005 and 2006.’”

“A longtime building contractor and trim carpenter, Al Brock, decided to get out of the business a couple of years ago and now works as a home inspector. He recalls working 80-hour weeks and foregoing weekends during the height of the building boom, but says he knew it wouldn’t last as home prices reached unsustainable highs. ‘Personally I don’t want to ever see it that way again. But I would like to see it busy — people getting back to work and making money,’ Brock said.”

“‘You’re seeing general conditions in the overall economy improving, and that helps,’ said Gordon Kettle, an economics professor at Polk State College. ‘People are getting back to work, but job growth is occurring at a very slow pace. Price corrections are making homes a lot more affordable,’ which in turn helps to reduce Polk’s housing inventory, Kettle said.”

The Herald Tribune. “When it comes to stories in the media about real estate, readers have developed a level of mistrust. This is understandable, particularly when the people quoted in those articles are real estate brokers or economists employed by the National Association of Realtors, the National Association of Home Builders or companies that make money from the transfer of real property from one party to another.”

“Exhibit ‘A’ is the ‘Time2Buy’ launched by the Sarasota Association of Realtors. That was in 2007. As it turned out, it was the time to not buy.”

“Now it is 2012, six years after real estate went into the tank hereabouts, and I am hearing encouraging reports from brokers and other realty pros about market activity, if not home values. Last week’s column, ‘Agents say buyers are pouring in’, brought nods of agreement from real estate agents. ‘Insanity’ is how a real estate exec described the market last week. ‘We are in the eye of the storm,’ said another agent.”

“But it also generated howls of derision from some readers, who thought I was announcing the start of a new property ‘boom,’ a word that was not used in the column. ‘You, sir, are a disgrace to your profession,’ one reader, claiming than my sources were ‘friends,’ wrote in an email. ‘Everyone in real estate knows there is no boom, and that 95 percent of agents are struggling.’”

“Will this last? Were those agents lying about market activity now? We shall find out in April, when the the property appraiser’s website will have the March transaction number for sales contracts being written as we speak. Is the market ‘good’? It is what it is, and that appears to be ‘busier,’ even for the agents — 95 percent or otherwise — who have been struggling.”

News 4 Jax. “Two of the nation’s top 50 best-selling neighborhoods are in the Jacksonville area. One year ago at this time, we reported that new home sales were at a 10-year low in Northeast Florida, now they’re on the way back up. Realtor Howard Flaschem is noticing a steady upswing in home construction. The first real up-tick since the housing market unraveled. Two of the countries top selling neighborhoods, are right in our backyard, Nocatee and Durbin Crossing.”

“‘Prices are back to before bubble prices, a lot of people thought they’d missed the train but the train came back around, and now people can get into a new home and community with a lot of amenities,’ Flaschem said.”

Bits Bucket for February 7, 2012

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