Sort Of Like Japan
The Santa Maria Times reports from California. “Santa Barbara County government agencies issued the second fewest new home building permits since 1990, according to the Construction Industry Research Board. In San Luis Obispo County, the number of new residential building permits was the lowest in more than 22 years, according to the data compiled from local building departments’ statistics. Local home builders don’t expect any improvement this year and don’t see any end to the construction slump for several years, an industry spokesman said. Jerry Bunin, government affairs director for the Home Builders Association, said foreclosed homes have been selling for $50,000 and $100,000 less than it would cost to build them today.”
“‘There are still a number of foreclosed units to come into the market,’ he said. ‘As long as they’re out there, we can’t compete. It’s going to be two or three years or even longer before they’re all out there. There’s just no end in sight.’”
The Press Enterprise. “Economists at Chapman University are predicting employers will add about 20,000 new jobs for Inland workers this year. Esmael Adibi, Chapman University’s chief economist, said it could take two more years of job creation at the current pace to eat into the thousands of Inland houses either in foreclosure or facing the process. ‘We need about 70,000 more jobs to absorb those empty homes, and that’s the best-case scenario,’ he said.”
The Bay Citizen. “The housing crisis that began in 2008 could have a crippling effect on California’s ability to provide government services for a generation, according to a new report released by the Silicon Valley Communtiy Foundation and Joint Venture Silicon Valley. The problem: Proposition 13, passed by voters in 1978, essentially freezes property taxes on homes or businesses unless they change hands — meaning that today’s low property values could mean reduced government revenues for years to come even after the recession ends and property values begin to rise.”
“Making matters worse, the groups said, is a provision in state law that allows property owners to petition to have their property reassessed if they think it has lost value. In the 2011-2012 tax year, the report shows, Santa Clara County reduced the assessed value of more than 124,000 properties by a total of $25.9 billion.”
From KFSN. “If you are looking to buy a home, or refinance yours, there’s finally some good news even if you are upside down in your loan. The average interest rate on a 30-year mortgage has dropped to 3.75 percent, and a new Federal program is easing requirements to buy. For first time homebuyers, the climate can’t get much better to buy.”
“With the help of mortgage insurers, prospective buyers with credit scores of 660 may be allowed to put as little as 3.5 percent down. Even those with scores as low as 580 may be qualified to own a home. ‘Unlike the last time they dipped, not quite this low, more people actually qualify because of some of the loosening of the guidelines as far as credit scores and debt ratios are concerned,’ California Funding Loan Officer Marc Navarro said. ”
“Starting March 15th, a Federal program called the Home Affordable Refinance Program, or HARP, will allow some borrowers who are upside down or have little equity to refinance. The goal is to stabilize the housing market and boost the economy. In many cases, some home builders say buyers can realize the dream of home ownership for about the same price they were paying to rent.”
“‘There’s a lot of people who could buy that aren’t aware. And with 3 1/2 percent down, right now you are getting your income tax back you can actually take that money and purchase a home and a lot of times for not much more than you would pay in a deposit,’ Granville sales manager Michelle Brunn said.”
From KCRA. “California, as well as several other states, is considering a settlement with banks involved in foreclosures. The deal would give $20,000 to underwater homeowners and offer $2,000 to those who have had their homes foreclosed on. Real estate broker Elizabeth Weintraub said the deal that banks are offering is not beneficial for a lot of homeowners, because the amount owed on their mortgage far exceeds what banks are offering.”
“‘People are under water too far,’ Weintraub said. ‘If you got a $500,00 home that is now worth $200,000, you don’t want a $20,000 principle reduction — you want a $300,000 principal reduction.’”
The Santa Barbara Independent. “The biggest concentration of foreclosures is in the North County. According to ForeclosureRadar, there were 808 bank-owned properties in the county as of December 31, with 340 in Santa Maria alone and 234 in all of the South Coast. One homeowner, who did not want to reveal her name, works in Santa Barbara but bought a home in Lompoc. A series of crises that occurred in domino-like fashion made it hard for her to keep up with her payments.”
“After much hassle, she was eventually offered loan modifications by both the federal government and her servicer, Bank of America. Without a reduction in her principal, though, neither modification made sense. Her Mediterranean-style stucco house, which she bought for $385,000 in 2004 — and which peaked in value at $450,000 — is now worth less than $200,000. Last March, she stopped making payments and has since moved into her parents’ home. She is currently arranging a short sale.”
The Mercury News. “The housing crisis, which first devastated borrowers who purchased lower-cost homes with subprime loans, has caught up with people whose wealth helped them hang onto their houses longer. Throughout affluent communities in the Bay Area, million-dollar-and-up homes are increasingly being lost to foreclosure, or sold as a last resort for far less than their mortgages.”
“‘About a year and half ago, we started receiving listings of foreclosures from Blackhawk. Prior to that, it was unheard of,’ said Bryce Ellsworth of Windermere Ellsworth & Associates of Brentwood. ‘I sold a home in Blackhawk last year, on three-quarters of an acre, a beautiful pool and backyard and nicely done kitchen. It was $4 million on the previous sale. This time it sold for $1 million cash.’”
“Short-sale specialist Joe Reichert, of Keller Williams in Danville, said some homeowners simply are giving up on the idea that home values are going to increase to anything close to what they were when they bought their home. A business consultant, who asked not to be named, sold the five-bedroom home in Danville that he bought for $1.6 million in 2005 for $900,000 about a year ago in a short sale and moved to Texas.”
“‘The home was probably too expensive for us, but the main reason (we sold it) was the loss of equity,’ the consultant said. ‘It will never go back to that in the near future. We’re sort of like Japan. The prices never recovered over there, and I don’t see that home going back to $1.6 million for 10 years. It was better to short sell it and get rid of it.’”
