February 22, 2012

The Way Things Were Meant To Be

The Longmont Times Call reports from Colorado. “What can you buy for $8.5 million? How about a 12,000-square-foot home on Arrowleaf Court in Boulder? It’s listed at $8.5 million. You’d have to come up with $12 million to get into a home for sale on Rozena Court in Hygiene. Get $9 million together and you’ve got yourself a farmhouse that’s currently for sale on Pike Road just west of Longmont. Sounds like a lot of money — until you consider that NewMark Merrill Mountain States came up with $8.5 million and got itself a whole shopping mall.”

“Scott Franklund of Legendary Properties ticked off several homes for sale in the area whose cost approaches what NewMark paid for Twin Peaks Mall. What makes the deal especially surprising is that former owner Panattoni Development Co. paid $33.6 million for the 75-acre, 650,000-square-foot mall in 2007, he said. That’s roughly a 75 percent drop in price. ‘You just don’t see that,’ Franklund said.”

From KJCT in Colorado. “Colorado Springs was recently listed as one of the housing markets where renting is actually cheaper than buying. But here in Grand Junction, some realtors argue just the opposite; saying buying a home is much more affordable in the long run. ‘I don’t know how someone can say it’s less expensive to actually rent. We’re at sixty year lows right now, so that unto itself allows a person to actually buy more or have more purchasing power then they would even last year,’ Brian Donaldson, with Bray Real Estate, said.”

The East Valley Tribune in Arizona. “Agents’ optimism has grown for five months in a row as a result of seeing more buyers and a shrinking number of available homes, said Bob Bemis, CEO of the Arizona Regional Multiple Listing Service. The news is great for sellers who’ve had trouble unloading their homes - but there’s a downside for buyers. ‘They’ll be surprised if they go looking for anything other than a foreclosure,’ Bemis said. ‘If they’re looking for traditional houses, there will be bidding wars. Not two or three, but eight or 10 contracts on the property because we have so few houses in that price range or quality range.’”

“For the first time since the home-buying frenzy that peaked in 2005, agent Christine Loschiavo has been advising clients to bid above the asking price. It’s becoming harder for traditional buyers to compete with investors and also Canadians looking for second homes, she said. ‘Chandler is the worst place to try to buy a house right now for a good price,’ she said. ‘I have to tell my buyers to overbid.’”

The Casa Grande Dispatch in Arizona. “Like a roller coaster ride, Arizona’s housing market reached a peak and then descended over the last decade. And the areas that grew the fastest, like Pinal County, have been hit the hardest. ‘During the housing boom in the mid-2000s, the value of homes in the Casa Grande area increased by almost 50 percent,’ said Debbie Yost, broker of REMAX/Casa Grande Yost Group. But as the housing bubble burst, values plummeted and many homeowners who purchased during that period were stuck with pricey mortgages and high interest rates. During 2011 alone, more than 2,200 homeowners in Pinal County and 325 in Casa Grande went through foreclosure. For many, it has seemed like the only option.”

“‘People have been giving up and walking away,’ said Yost, who has been selling real estate in Casa Grande since 1980, ‘but now there are reasons not to. Each situation is different, but now there is a road map and a number of options.’ The other options for those behind on their payments, as the panel will discuss, are refinancing, modifying their loans, short-selling or deeding-in-lieu of foreclosure. ‘There’s this idea that it’s almost impossible to short-sell,’ Debbie said. ‘That’s not true.’”

The Arizona Republic. “Verrado opened amid a housing rush in 2004 but soon plunged into a downturn of historic proportions. In the years that followed, executives and planners at DMB, the developer that built this community, came to realize that the old approach to master-planned communities would have to change. For them, Verrado was the turning point. Nearly everything there today tells a story about the way things were meant to be before the crash.”

“The changes all come back to the 2,000 homes that encircle Verrado’s Main Street: When the community opened, DMB estimated it would sell at least three times that many homes by 2012. Instead, today, it is a town, but a far smaller town. At least 6,000 vacant acres sit unobtrusively outside the developed area,”

“In 2004 amid a marketing blitz. people flocked to Verrado during the last two weekends of January to try to be one of the community’s first homebuyers. They filled out information cards that were placed in giant fish bowls in hopes their names would be drawn. But by 2006, it was clear something was off-track in the metro Phoenix housing market. By 2007, metro Phoenix builders had begun walking away from deals and giving their lots back to lenders.”

“DMB principal Mark Sklar said people ask him often if this real-estate crash is as bad as the last one. ‘I have to laugh and say it’s about 30 times worse. During the last crash, GM and all the major lenders weren’t failing at the same time,’ he said.”

The Daily Courier in Arizona. “Kathi Dollarhide simply wants her Yavapai Hills property to be somebody’s home. That goal appears within reach for Dollarhide, who expects to sell her former retirement home through the short-sale process. ‘I want to see someone living in the house. That’s what it was built for,’ she said. ‘It was never an investment. It wasn’t meant to sit there until the market turns around and some bank decides, ‘OK, now we can sell it.’”

“The short-sale option makes Dollarhide one of the lucky ones. This past week, state and federal officials announced a $25 billion deal to settle possible state charges over allegations of improper foreclosures. Marshall Vest, director of the Economic and Business Research Center at the Eller College of Management at the University of Arizona, believes the settlement will help some homeowners. Vest said the settlement will help keep people in their homes rather than have to walk away from their properties.”

“But Vest agrees with the ProPublica argument that the settlement won’t help millions of homeowners. ‘There’s still a lot of people who won’t get help,’ he said. ‘The amount of dollars just aren’t big enough to help and, of course, not everybody would qualify.’”

From KTNV in Nevada. “Home values in Southern Nevada have fallen 65 percent in six years. Two out of three homeowners are now underwater. Shauntele Harless is one of them. She’s moving out of her home while she tries to get Bank of America to agree to a short sale of $80,000. Harless says she tried to work with the bank. ‘I even tried to pay $260,000 for it just as long as they would lock my rates and they wouldn’t do it,’ Harless said.”

The Las Vegas Business Press in Nevada. “Economic analyst Jeremy Aguero calls it the ‘three-finger salute,’ hitting the control-alt-delete keys to reset real estate values in Las Vegas to current market conditions. Forget about the peak. ‘Nobody sober would ever suggest we’re going to get back to the peak,’ Aguero said at Preview Las Vegas, an economic forum presented by the Las Vegas Chamber of Commerce.”

“Las Vegas homeowners have lost $91 billion in equity, roughly $112,000 a home, since the market took a dive from 2006, the principal of research firm Applied Analysis estimated. Aguero said legislators need to rethink some of the laws such as Assembly Bill 284, an attempt to stop foreclosures by requiring banks to prove they have proper documentation.”

“‘Why would they do that? At the end of the day, if you’re not paying your mortgage, you do not get to live in the house for free,’ Aguero said. ‘With the robo-signing, the banks probably didn’t handle it well, I’m the first to admit. But how do you take it so far that the bank can’t foreclose if you’re not paying?’”

Bits Bucket for February 22, 2012

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