Beating With The Proverbial Stick
A report from the Central Penn Business Journal. “As I travel around our branch offices throughout Central Pennsylvania, I am noticing a new mood: enthusiasm. Seems as though the real estate community is tired of being beaten with the proverbial stick — endless media reports of doom, frontpage stories about foreclosures, a string of statistical analyses that attempt to … what? Discourage home buyers?”
“No one’s denying that the local markets have adjusted. Come on now, though, who didn’t expect that after the crazy run-up? Buyer activity is up and consistent. Well-priced homes are moving (hint, hint to the rest). There’s a sense that 2012 will be the last year of the ‘psychological downturn,’ and in this, I hope, they are right.”
The Philadelphia Inquirer in Pennsylvania. “February foreclosure filings in the Philadelphia metropolitan area rose almost 50 percent from the same month a year ago, while mortgage defaults in Pennsylvania increased 35 percent during the same period, RealtyTrac said. RealtyTrac VP Daren Blomquist cited the example of one house in the 2800 block of South Seventh Street in Philadelphia scheduled for sheriff’s auction Monday. The first notice of intent to foreclose against the borrowers was filed in June 2007. ‘This is probably one of the more extreme examples, but there are plenty that have been sitting in the foreclosure pipeline for a year or two,’ Blomquist said.”
The Express Times in Pennsylvania. “Easton officials are looking for answers to stem an ongoing tide of properties becoming vacant through foreclosure. As foreclosures increase, Councilman Roger Ruggles said his attention is increasingly falling on banks as much as absentee landlords. ‘What we find is many times banks are holding onto (foreclosed properties) because real estate prices are down now,’ Ruggles said.”
The Herald Mail on Pennsylvania. “Home building continued to plummet in Franklin County, Pa., in 2011. The county issued 179 permits in 2011, compared with 1,257 in 2006. Franklin County experienced a housing boom about five years ago, with some calling it the ‘Mason-Dixon Challenge’ as people who work in the Washington, D.C., and Baltimore areas moved north.”
“About 4,000 lots remain in limbo in various stages of Washington Township’s approval process, ranging from sketch plans to preliminary and final approval. Ronnie Martin, a Waynesboro-based Realtor and developer, said short sales and foreclosures are driving down the costs of all homes for sale. The average buyer, he said, is looking to spend no more than $1,000 a month for principal, interest, taxes and insurance. That means the typical buyer is looking to spend $130,000 to $170,000 on the home, Martin said.”
“The popularity of town houses in Franklin County declined when the Uniform Construction Code in Pennsylvania started requiring sprinkler systems in buildings with three or more units, Martin said. ‘The problem is we’re not doing very well with the new law requiring sprinkler systems, which cost $5,000 a unit. That’s all the profit,’ Martin said. ‘You can’t absorb the cost, so we shut down and aren’t building anything,’ he said.”
DFM News in Delaware. “There are more homes available in Middletown than there are buyers. Deb Sullivan, a Middletown native and a RE/Max agent, says the home market was hit especially hard because so many buyers came in at the height of the housing boom, then parked two SUVs the driveway and built a pool in the backyard. ‘It might have been their first home and it cost $400,000,’ she says. ‘The debt-to-income ratio was simply too high for many people.’”
“Higher energy costs also are hurting home sales as prospective buyers weigh the cost of commuting to Wilmington or Dover. ‘People aren’t looking for 5,000 square feet any more,’ Sullivan says. ‘They don’t want two-story family rooms because they worry about utilities.’”
“McMansions will not be in reach for most of the new employees at Amazon. The company says more than 700 of the 849 workers will earn $11 an hour. Still, Sullivan believes new jobs will give both the home buying and rental markets a boost. ‘These jobs will help us to sell less expensive homes, which means those owners will be able to move up,’ she says.”
The Frederick News Post in Maryland. “Frederick County had 55 foreclosures in February, according to RealtyTrac, down nearly 7 percent from January and down 15 percent from February 2011. ‘It appears that foreclosures are coming on the market in small spurts and will not have a heavy flood anytime this year as the election is upon us,’ said Darren Ahearn, an agent with Real Estate Teams in Frederick. ‘They (lenders) do not want to have things get worse off than it has been overall.’”
“Buzz Mackintosh of Mackintosh Inc. Realtors in Frederick said Maryland has roughly 23 months of ’shadow inventory,’ homes that are near foreclosure or going through the distressed property process by lenders but will add to the market inventory eventually.”
The Virginian Pilot. “Dotty Acampora is a foreclosure-prevention counselor at the nonprofit Virginia Beach Community Development Corp. She sat down with The Pilot recently to talk about where the region stands at this juncture. Q: Last year the number of foreclosures across the region fell from a high during 2010. Do you think Hampton Roads has seen the worst of the foreclosure crisis?”
“A: Honestly, I don’t think we’ve gotten over the hill yet. Far from it. I think this year is probably the top of the hill. Now that the mortgage settlement has come to fruition - I got the recent issue of Inside Business, and I saw that the local foreclosure listings page had doubled at least in the number of sales posted.”
The Daily Press in Virginia. “Hampton Roads home sales climbed nearly 21 percent in February, compared to February 2011, but about one in three of those sales, or 36 percent, were foreclosed homes or short sales. For months, there has been an oversupply of homes on the market, but that number’s coming down. Sheila Dann, president of the Virginia Peninsula Association of Realtors attributes the drawdown of the oversupply to people who are deciding not to sell if they can’t get as much as they want. Her advice for those sellers? ‘If you don’t need to sell, don’t do it.’”
The Gaston Gazette in North Carolina. “Gaston County had more new home sales this January than during any January since 2008. People who know the industry would caution us not to stake too much on the improvement, however. The gain was slight, about four homes more than in the previous year. And the number remains far lower than the five-year peak, which totaled 80 homes in January 2008. ‘The market for new construction is not there,’ said Moises Miranda, a Gastonia Realtor and, in more robust times, housing developer who serves as president of the Gaston Association of Realtors.”
“Miranda was a partner in building 29 houses in 2003, in addition to around six townhouses. ‘But there was a market back then,’ he says.”
“Say it will cost you $15,000 for a piece of land and $70,000 to build a home on it. With so many foreclosures and short sales pulling down prices, you can probably buy that same house, or the 2005-built equivalent, for $70,000, ac-cording to Miranda. Miranda himself has a few lots just waiting for new houses. ‘But if I build,’ he says, ‘I have no one to buy.’”
The Chapel Hill News in North Carolina. “Greenbridge, the 10-story condominium project heralded as the beacon of downtown Chapel Hill’s higher-rise future, was foreclosed, its managing partner said. Sales of units in the energy-efficient building were halted after the $60 million project ran $1.6 million over budget in 2010 and Bank of America wouldn’t pay the bills, partner Tim Toben said. Thirty-seven of 97 units had been sold.”
“Bank of America loaned the developers $43.25 million in 2008, Toben said. The developers, their friends and family members invested $17 million, which has all been lost, he said. ‘It’s been incredibly painful to see a great project standing idle, while the world moves on,’ Toben said in an email.”
The Brunswick Beacon in North Carolina. “The fate of trees remains up in the air after a roomful of residents bombarded the manager of Carolina Shores Golf Course with questions. A resident asked whether the golf course is ‘bankrupt or not?’ Mayor Walter Goodenough banged the gavel and said it was not an appropriate question at this time. ‘What the golf course owes in taxes has nothing to do with what we are doing or whether or not they’re going to get a permit to take trees down,’ Goodenough said.”
“If the golf course’s tree-removal request is approved, another resident asked if that meant, ‘in the future, if we want trees taken down simply to grow grass, we can do it?’ ‘You don’t want that golf course to fail,’ Goodenough responded. ‘And if it means taking down 1,000 trees or 500 trees or 10 trees, it’s beneficial to everybody over there that has homes that are valued at $200,000, $300,000 and $400,000. We as a town can’t let it fail. ‘”
“At the end of the two-hour meeting, residents continued to question how removal of trees would affect water absorption and flooding. ‘Trusting in the golf course is definitely a difficult problem,’ Teddy Altreuter said. ‘We all know they’re in foreclosure.’”
The High Point Enterprise in North Carolina. “Although the economy is looking up and the housing market is following it, Guilford County is still behind. According to a report from the N.C. Housing Coalition, the average hourly wage in High Point is $12.56, about $1 less than the North Carolina average of $13.68. The average wage of a renter in the Triad is $11.71. With nearly 85,000 renters in the area, about 50 percent of them in and around the Triad do not earn enough to afford a two-bedroom unit at the Fair Market Rent.”
