February 20, 2012

An Unrealistic Expectation

The Record Journal reports from Connecticut. “Statistics released this week by the Warren Group show sales of single-family homes dropped to their lowest level since the group began tracking sales in 1987, a 12-percent tumble from totals in 2010. Last year marked the seventh straight year in which sales declined. Mark Lovely, owner of Lovely Development, said that new homenumbers in the state are at their lowest since they were first reported. Lovely has been able to weather the tough times by buying land when the price is right and building a large customer base off of referrals. His goal, he said, is to mark new homes affordable when compared to homes already for sale on the market.”

“‘We try to beat their price by about $5,000,’ he said.”

“‘The market in Connecticut is very slow,’ said Timothy M. Warren Jr., CEO of The Warren Group. ‘I think it’s fair to say we are bumping along the bottom and can only go up from here.’”

The Conway Daily Sun in New Hampshire. “In an end-of-year interview, veteran local Realtor Dick Badger said home prices remain depressed, and are well below the replacement value that it would take to build a new home — not good for builders, certainly, but good for qualified buyers. The inventory of unsold homes is still excessive, he agreed, but added that again, it allows buyers ‘a multitude of choices.’ ‘These are the facts of life,’ said Badger. ‘If someone is in the market to buy a home, they would be foolish not to do it now.’”

“He remains bullish about Mount Washington Valley as a second-home market and as a destination resort. ‘I am a great believer that we are the foremost four-season resort — OK, three-season, with mud season being our fourth — in the Northeast. Look at what we have to offer,’ said Badger.”

The Nashua Telegraph in New Hampshire. “Despite signs of improvement in 2011, foreclosures in Nashua and most area communities remained at historically high levels that are almost unchanged from 2008, the first full year of the recession. ‘Before, if you lost a job, got a divorce, had a medical catastrophe so you couldn’t keep up with your mortgage, prices were going up, so you could sell and get out from under your mortgage, oftentimes get out with a profit,’ said Jane Law, director of communications for the New Hampshire Housing Authority. ‘Today, you can’t do that.’”

“‘The old heady days of the early 2000s are definitely a thing of the past,’ said Law. ‘During the early 2000s … up to 2007, people were treating their houses like cash cows. Nothing can sustain that, no market can sustain that. It was an unrealistic expectation to think that was going to go on forever,’ Law said. ‘It’ll never go back to the way it was. Lenders are never going to lend like that again.’”

The Woonsocket Call in Rhode Island. “Two Republican lawmakers, Cumberland Sen. Bethany Moura and Portsmouth Rep. Dan Gordon, attacked the 49-state settlement agreement with the nation’s five largest mortgage service providers that Democratic Attorney General Peter Kilmartin signed onto last week, calling the $25 billion the financial institutions agreed to pay ‘a drop in the bucket.’ ‘What an insult to the American people,’ Gordon declared at a Statehouse press conference. ‘What an insult to the people of Rhode Island. The people should be inflamed.’”

“Moura, who works as a loss mitigation specialist in the office of one of the leading Rhode Island attorneys in the recent spate of foreclosure cases, struck a similar tone, telling reporters, ‘This settlement values the American Dream at $2,000,’ the amount she estimates an aggrieved homeowner will receive. She said the principal reduction the lending institutions are offering consists of the fees and other amounts they added to the homeowners’ balance during the default process. ‘I’ve seen doctors, dentists, educated people who can not apply for a loan modification that has been promised to them,’ she said. ‘When you are promised principal reduction in this deal, get over it, it’s not going to happen.’”

The Worchester Telegram & Gazette in Massachusetts. “In Massachusetts, the attorney general and others are pushing lenders to avoid unnecessary foreclosures by offering more loan modifications. ‘This crisis has frozen the entire market,’ said Massachusetts Attorney General Martha Coakley. ‘It is affecting the entire economy. Until we stabilize it and allow for people again to build equity in their homes, we’re not going to have the kind of growth in individual consumer wealth that we need.’”

“In Massachusetts, foreclosures took 544 days on average, RealtyTrac said. A detailed study by researchers at Harvard University and the Massachusetts Institute of Technology found that foreclosures predict lower prices for houses less than a quarter-mile away, and particularly for homes less than one-tenth of a mile away. Data like this has observers saying the glut of foreclosures is slowing the nation’s economic recovery.”

“Edward A. Hjerpe III, CEO of the Federal Home Loan Bank of Boston, said the housing market can’t recover until lenders work through the foreclosure backlog. ‘It won’t be fully back to normal until much of that supply is absorbed,’ he said.”

“Timothy M. Warren Jr., CEO of the Warren Group, said foreclosures have a psychological effect on home buyers. ‘It has an effect on consumer thinking,’ he said. ‘They hear foreclosure, they hear these sad stories. It just makes people say, ‘Oh, gee. I don’t want to buy a house and end up like that.’”

The New York Post. “On Dec. 6, nearly 300 members of the Occupy Wall Street movement flooded into East New York to begin what they considered phase two of their efforts. ‘Occupy Our Homes’ was that idea. The group would take over an empty house, foreclosed on by a bank, fix it up and provide shelter to a homeless family.”

“Last week, Wise Ahadzi opened the door to the house he still owns, 702 Vermont Street in East New York. Inside is a war zone. The walls are torn down, the plumbing is ripped out and the carpeting has been plucked from the floor. It’s like walking through a ribcage. Garbage, open food containers and Ahadzi’s possessions are tossed haphazardly around the house. ‘This is where my kitchen was,’ Ahadzi says. There is no sink, no refrigerator and no counter space. Instead there are dirty dishes piled high.’”

“Ahadzi owned the house but was forced to leave in 2009 when he couldn’t make the mortgage payments to Bank of America. In January, The Post found squatters in the house instead of the family. ‘They only stay here sometimes,’ a protester explained. ‘There’s not enough room for the kids.’”

“‘I’m pissed off,’ Ahadzi said. ‘I’m trying to get my house back, and they’re trying to take it from me.’”

The New York Observer. “The luxurious condo building in Williamsburg, The Jardin, has called off all sales and is converting the building into rentals. More than half of the building has been sold, but the developers decided to cancel all contracts. Tough luck for the buyers, waiting patiently to move in, The Journal reports: ‘We felt like we hit the jackpot,’ said Beat Kaestli, a freelance musician, of his experience of finding an ideal one-bedroom apartment in the building. ‘Now we feel violated.’”

“It’s dirty play, but it could also be a blessing in disguise, saving them from years of living in Williamsburg.”

Bits Bucket for February 20, 2012

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