May 16, 2012

Buyers Want To Pay More

The Union Tribune reports from California. “Median home prices may be down nearly 40 percent from their 2005 highs, but most residents still feel affordability needs attention. An online poll of 31,000 residents showed that 76 percent of participants said making housing more affordable is an important or very important priority for the region’s future. Only 9 percent said the issue is not important and 15 percent were neutral. However, Lori Holt Pfeiler, the San Diego Foundation’s associate VP and a former Escondido mayor, said housing concerns some groups more than others. For example, 80 percent of young people aged 18-34 rank affordability as important. But only 66 percent of people aged 55 and over agree.”

“‘Seniors didn’t really care,’ she said, ‘because they already have a house.’”

The Daily Breeze. “The Southern California economy is on the mend with positive annual job growth for the first time since 2007, but the lag in the housing and government sectors continues to slow recovery, local economists said. One positive factor is the rise in rental rates, causing consumers to return to consider owning a home instead of renting, said economics professor Lisa Grobar. ‘That will push us to a recovery, but it may still take another year because of a backlog of foreclosures that still haven’t come onto the market that have been held up in courts,’ Grobar said.”

The LA Times. “A nation still struggling to clear up one housing debacle has run smack into another – soaring rents. Rob Magnotta, a real estate agent, recently listed his two-bedroom Irvine, Calif., condominium for rent on Craigslist for $2,300. He had six applicants within 24 hours, including one who wrote a poignant letter about losing a home to foreclosure. ‘It was almost too easy,’ said Magnotta, who chose another renter.”

“Rising rents have converted some renters into buyers. Scott Matulis recently purchased a townhome in Oak Park, Calif., after enduring two consecutive years of rental increases. His mortgage, taxes and homeowner association fees now total $2,200, just $100 more than what he was paying his former landlord. ‘I finally just pulled the trigger and figured I’d be throwing money away on rent,’ Matulis said.”

“Even for those with better jobs, paying rent can be difficult. Virginia Villa of Brea, Calif., a single mother of four who works as a manager at Disneyland, has doubled up with her adult daughter, who contributes $400 to the monthly household budget. Still, Villa said, about half her take-home pay goes toward rent and utilities. ‘I have a decent job and I would love to buy a house, but I don’t think that’s possible to do,’ Villa said.”

The Record Searchlight. “Home sales in Shasta County are up roughly 35 percent this year — nearly 50 percent over two years ago. Sales in March fell one shy of a five-year high. Inventory is tight: the number of houses for sale is down to levels not seen in years. Yet prices continue to fall. March’s median sales price of $135,000 hit a 10-year low.”

“‘In some cases, banks won’t take offers over list price if they involve a loan because they fear the property will not appraise for what the buyer wishes to pay,’ emailed Brad Garbutt, of Real Living Real Estate Professionals in Redding. ‘So in a way, the market prices are being kept artificially low by lenders unwilling to accept the fact the buyers want to pay more.’”

The Mercury News. “Foreclosure activity dropped across the Bay Area in April, as lenders apparently turned to government programs aimed at keeping struggling homeowners in their homes, ForeclosureRadar reported. But while the decline in distressed sales was good news for underwater homeowners, it also kept the number of homes for sale frustratingly low during the onset of the peak home-buying season. With so few homes on the market, bidding wars have broken out in some communities.”

“New government programs may also be cutting into short sales — the sale of a home for less than is owed on it, said Joe Reichert of Keller Williams Realty in Danville. ‘Some short sellers are holding back,’ Reichert said. ‘They’re getting hope that there’s some help coming.’”

“But there are still plenty of distressed homeowners facing eviction. Ruth Woods, 83, is about to lose her Oakland home of 40 years because she was talked into a Wachovia ‘pick-a-pay’ loan in 2007 that has become impossible to pay. She took about $60,000 out in a refinancing, but says much of it went back to the lender in the form of mortgage payments and the remainder she spent on maintenance, taxes and insurance. ‘The money I got I was giving it right back to them,’ she said.’

From KTVU. “Attorney General Kamala Harris is pushing to change the way foreclosures are carried out in California and some San Francisco residents took up the issue Saturday in the streets of one neighborhood that has the highest numbers of foreclosures. ‘I lost my job in early 2010,’ said Monica Kenney. She said the bank worked out an agreement to keep her home. ‘The following day the left hand didn’t know what the right hand was doing and now I’m struggling to have them rescind this foreclosure,’ she said. ‘You know, I want my piece of the American dream.’”

The San Gabriel Valley Tribune. “Rep. Linda T. Sanchez, D-Cerritos, released a statement this week regarding the decision by Fannie Mae and Freddie Mac to participate in the ‘Keep Your Home California,’ state-run program which helps homeowners at-risk of foreclosure. Currently, Fannie Mae and Freddie Mac own roughly 62 percent of outstanding mortgages in California.”

“‘It is a positive first step in helping more homeowners stay in their homes,’ Sanchez said. ‘Principal reduction is an important tool in foreclosure prevention because it means lower monthly mortgage payments for underwater homeowners.’”

“An idea that would force banks to register every city of San Diego home that’s in the foreclosure process is gaining traction. And according to one poll, it appears a number of San Diegans support the proposal, which aims to fight blight in neighborhoods and hold banks accountable for the maintenance of distressed homes. In 2011 alone, close to 19,000 default notices were filed in San Diego County.”

The Bakersfield Californian. “The median sale price of an existing single family home in the Bakersfield area rose to $145,000 in April, a 9.5 percent increase from March and up 14.3 percent from a year ago. That’s according to The Preliminary Crabtree Report, a monthly gauge of the local housing market produced by Gary Crabtree of Affiliated Appraisers.”

“Bakersfield ranked second among the top 10 metro areas nationwide with the largest annual drop in homes listed for sale in March, according to ‘The current conditions are causing multiple offers on properties and the emergence of cash buyers and buyers who have cash to increase the down payment if the appraisal does not meet the sale price,’ Crabtree said.”

“Although banks still own a tremendous number of homes foreclosed upon during the economic downturn, they’ve been careful to release them to the market slowly to keep from depressing prices. Crabtree said he wonders why banks aren’t releasing more of their inventory, and warned that government manipulation of the housing market could potentially create another real estate bubble.”

Bits Bucket for May 16, 2012

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