April 29, 2012

HBB Fundraising Week

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The Exurb Conundrum

Readers suggested a topic on living environments. “I would like to see a topic on the future of the exurbs. The Washington Post had an article recently on how outer exurbs are dwindling. According to the article, somewhere between 30% to 50% of people in the US would like to live in a walkable urban environment. Add that to high gas prices, and the prognosis doesn’t look good for the exurbs.”

“I have noticed that everyone I know who lives in an exurb has ended up with a horrid commute sooner or later. Sooner or later people switch jobs. When that happens it’s rare that people living in exurbs can get another job close to where they live. One of the reasons why I lean toward the walkable urban option even if its in a suburb is because I have seen exurbanites and their commutes. I can tell you that the younger end of generation X and generation Y have noticed it too and want to avoid the exurban commutes if at all possible.”

A reply, “I think what you’re more likely to see is exurban satellite office sprawl, if the industries can stay in business long enough. For example there is an SAIC/Bechtel office building in Frederick, Maryland, an exurb of DC. The SAIC workers can live in a McMansion a 10-minute drive, or even closer, to the office. But they can easily train/metro for an hour only on days when they have meetings with the gov workers downtown. For those who want the walkable urban feel, the housing bubble has already built the walkable urban environments — I’ve seen dozens of work-here-live-here-shop-here condos developments in such towns.”

“With video and telecommuting, we may see a return to the small town supported by one industry, only instead of being a tire factory or a lumber mill, it’s a white-collar office building.”

Another said, “I am currently antagonizing over the walkable/exurb conundrum. In Pinellas County, FL., the best academic school pattern is in a far-flung, car-only exurb. Some of the toughest schools are in gorgeous, walkable parts of St. Pete. In other ‘middle ground’ areas, you have both problems: mediocre schools and unwalkable ‘hoods’.”

“We spend, get this, about 20% of our take-home on motoring: $400 gas, $410 car payment (one is paid for), $200 insurance. This doesn’t even include routine maintenance or big ticket repairs.”

From KTAR. “The rapid population growth that drove Arizona’s economy before the Great Recession could return in large part within several years as things improve elsewhere, experts say. Elliott D. Pollack, CEO of the economic and real estate consulting firm Elliott D. Pollack & Co., said Arizona’s economic growth depended on adding 100,000 people every year. The population boom fueled growth in ‘people-serving’ jobs, such as doctors, real estate agents and salespeople, he said.”

“Pollack said he doesn’t expect Arizona to return to the job growth of 2007, just before the crash, until 2015. ‘It will be almost a lost decade,’ he said.”

“Marshall Vest, an economist with the University of Arizona’s Eller College of Management, said many people across the country can’t move because they owe more on their homes than they’re worth. ‘We’re experiencing the lowest mobility in this country that we’ve seen at least in 60 years,’ he said.”

“Pollack said that Arizona will eventually lure more people because of factors that include climate and relatively inexpensive housing. ‘Have any of those dynamics changed? Not really,’ he said.”

The Modesto Bee. “Stanislaus County homes sold for a median $129,000 last month, which was about the same price as two years ago. The long-predicted housing market recovery just isn’t manifesting itself in higher home values. ‘This is the market. That says it all,’ advised Lorraine Cardoza, who has been selling real estate for more than 30 years. ‘What was going on (during the housing boom) wasn’t normal. It was outrageous.’”

“Cardoza said homeowners and buyers must realize that ‘craziness’ is over, and those high prices are not going to return anytime soon. That’s a tough reality to face for people who purchased houses during the first five years of this century. The market was soaring then, and their homes seemed to gain value every month.”

“Stanislaus home prices peaked at a median $396,000 in late 2005, then fell steadily until leveling off about two years ago, according to DataQuick. Some homes are particularly hot sellers. Oliveira said three-bedroom homes priced at less than $160,000 typically sell within a week. ‘Homes priced to the market are getting multiple offers and selling quickly,’ said Cardoza. But pricing a home ‘to the market’ can be heartbreaking for homeowners who have watched their equity disappear. That’s because all homes now must compete with prices fetched by foreclosures.”

“‘Nobody is adjusting (home valuations) based on whether it’s a traditional sale, bank-owned or a short sale,’ Cardoza said.”

The Charlotte Observer. “The Vue’s new owner has started foreclosure proceedings on the luxury residential high-rise in uptown, according to court documents filed Tuesday. Northwood Investors paid about $100 million to take control of the complex in early April. The 409-unit condominium tower was announced during the real estate boom and was one of the few uptown high-rise projects to be finished despite the recession. Yet, the Vue’s developer struggled to sell units and close sales on contracts signed in better economic times.”

“Real Estate Alert has speculated that the tower, which offers an Olympic-size swimming pool and tennis courts, is ripe to be turned into apartments. Investors have eagerly snapped up multifamily complexes and announced new apartment projects in the Charlotte area. Rents are forecast to rise as more people turn to renting.”

“The Vue has said it had about half the units under contract but it has closed sales on less than two dozen condos. Some buyers have sued to get out of their contracts. Others say they have had trouble getting financing because appraisals for the condos are coming in below contracted sales prices.”

“Also this week, a couple sued the Vue asking for their $90,987 deposit back. Stephanie Rizzo and David Rizzo of Wake County said in court filings they agreed to pay $699,900 for a two-bedroom, two-bathroom condo but that the developer changed the floor plan, eliminating one bedroom, and downgraded the quality of promised appliances. The couple says they informed the developer within the allowed two-year timeframe that they wanted out of the deal, according to documents filed in federal court.”

The Herald Tribune. “A Georgia firm has bought land in downtown Sarasota that had been planned as a 17-story condo tower during the mid-2000s real estate boom. Jebco Ventures Inc.’s $1.5 million purchase represents the latest sign the Sarasota real estate market, long in the doldrums, is recovering. ‘We bought it for the location and because of the price, and because I believe there is a market in downtown Sarasota for either townhomes or apartments,’ Jim Bridges, Jebco Ventures’ CEO said Friday.”

“Jebco could build up to 73 units on the 2.2-acre tract, bounded by Ringling Boulevard and the Laurel Park neighborhood. The land had been planned for Atrium on Ringling, an 88-unit, luxury condo tower. Atrium fell victim to market oversupply in June 2008, when Fifth Third Bank foreclosed, according to county records. Fifth Third sold the land to Jebco. The Jebco deal illustrates just how far the market has sunk: When Atrium developer Leonard Garner bought the property in 2005, it traded for $12.36 million.”

“‘At these prices, we could see new development,’ said John Harshman, president of a Sarasota commercial real estate brokerage. ‘It’s one of the positives regarding banks taking back parcels — that in order get property off their books, they’re selling at prices they can get in the market today.’”

Bits Bucket for April 29, 2012

Post off-topic ideas, links, and Craigslist finds here.