They Want To Purchase As Much As They Can
It’s Friday desk clearing time for this blogger. “Real estate sales activity in Garfield County through mid-summer continued ahead of last year. For the three-county area extending from Parachute to Aspen, though mid-year, real estate transactions were about one-third each bank sales, short sales and traditional sales, said Mike Dunn, who owns the Roaring Fork Property real estate company in Glenwood Springs. ‘So, you’re still basically looking at two-thirds of the activity being distress sales,’ said Dunn, who specializes in short sales.”
“It’s not difficult to find homes for buyers, but they are going fast and oftentimes have multiple offers,” he said. ‘And the prices are being held lower because of the distressed properties still coming onto the market.’ That could change quickly once the distressed properties clear the market, Dunn also said. ‘We will likely see a big price jump after that. And, we could even see another housing bubble, because there hasn’t been any new construction,’ he said.”
“Veronica Roberson, VP for sales and marketing at home builder Taylor Morrison, said the company sold all its homes in a 70-unit project in Elk Grove. The houses ranged from 2,400 to 3,600 square feet with options that could boost the biggest model to 4,000 square feet. Prices ran from $350,000 to $450,000, she said. ‘We had about 30 (homes available) at the beginning of the year,’ Roberson said, ‘We went through them pretty quickly.’”
“Buyers were mostly families who were looking for ‘lots of room,’ she said. With prices and interest rates near record lows, ‘they want to purchase as much as they can,’ she said.”
“Older Americans are struggling to make ends meet on nest eggs earning paltry returns, but the underlying factors of the mortgage crisis began long before the recession. As housing prices soared, older homeowners took home equity loans and second mortgages on their houses, just as their younger counterparts did - but with less time to weather the financial storm if the monthly payment became unaffordable.”
“Marta L. Carreno, 70, managed to rent an apartment in June after the bank started foreclosure proceedings on her condo in Pembroke Pines, Fla. Her dream retirement has turned into a nightmare, she added. The two-bedroom condo she bought in 2005 for $230,000 is worth less than half that now. Even before her husband died in 2010, the couple had asked for a loan modification. Now without his pension or Social Security, there’s no way she can afford to keep it. Instead of fighting the foreclosure, she has decided to let the bank take over her property.”
“‘I live one day at a time,’ she said, her voice wavering with emotion. ‘I never thought I would end up this way. I’ve lost everything.’”
“Bank of America offered Ronni and George Mandell a chance to modify the loan on the house they’ve owned for 10 years in order to make payments more manageable, but only with conditions that include essentially agreeing to a gag-order when it comes to the deal and the financial institution. That means keeping quiet about opinions of the bank on Facebook, blogs, websites and in the media, and taking down any existing postings.”
“The Mandells said they fell behind on payments starting in 2010 after George Mandell was laid off and out of work for a few years,. Because they fell behind, they tried to adjust their monthly payments with Bank of America, but didn’t qualify for certain modifications. Mortgage documents say they owe $229,000 and bought the home for around $108,000 in 2000. They haven’t sent in a mortgage payment since 2010. The Mandells rejected the settlement. ‘I cherish my rights to free speech,’ George Mandell said.”
“Jumana Bauwens, a media relations representative of Bank of America Home Loans, said such non-disparagement clauses are not part of loan modifications for ‘customers in need of assistance’ and that more than 1 million Bank of America clients have been helped by loan modifications. The Mandells have too much income to qualify for assistance under that type of program, she added. ‘The bank has provided them several opportunities for home retention and they have defaulted on every modification.’”
“In writing about the new book recently released by former Federal Deposit Insurance Corp. chief Sheila Bair, a Wall Street Journal columnist notes some of Bair’s assertions about housing policy in the U.S. during her tenure at FDIC. ‘To require every borrower to essentially prove that he or she could qualify for a new loan was stupid—the loan had already been made,’ Ms. Bair writes. The program, she writes, was ‘designed to look good in a press release, not to fix the housing market.’”
“As Southern Arizona’s economy slowly climbs out of a horrific recession, hard cash is the new king that reigns over the land empire business. Once the housing bubble burst in 2007, the industry entered a ‘gray market’ of uncertainty. Many speculated and hoped the federal government would step in with a rescue program like the Resolution Trust Corporation (RTC) of the early 1990s. The RTC was formed by the federal government to liquidate troubled real estate assets from failed savings and loan institutions.”
“Expecting a recovery in 2011, builders acquired about 1,900 lots from mid-2009 through 2010. However, the renewed demand for housing didn’t materialize as hoped and just over 1,425 new home permits were issued in 2011. That was the lowest volume since 1,307 permits in 1967.”
“Absent the pressure of an RTC-like mandate, some land experts believe the current down cycle has lasted longer than it should have. ‘Last time, many people thought the RTC was destroying the market. Dumping assets was killing prices. This time, some felt that an RTC-type program would have healed, reset the market quicker. But that’s something we’ll never know now,’ said Jim Marian, a principal at Chapman Lindsey Commercial Real Estate.”
“Jackie Zhang didn’t stay up late crunching the numbers before he decided that China’s Xinyuan Real Estate Co. Ltd. should pay $7.4 million for a portfolio of residential properties in northern Nevada. Zhang believes that residential development in northern Nevada potentially could draw big investments — maybe $100 million at a time — from Chinese investors. And he expects to be in the forefront of that deal-making. ‘I want to be the first Chinese mayor of Reno,’ he laughs.”
“Gu Yunchang, deputy head of the China Real Estate and Housing Research Association, said there is little chance for the price to rebound substantially as major customers in the market now have changed. Compared with 2007 or 2010, self-use buyers now dominate the market because of the policy to restrict the amount of homes a family can purchase. ‘They are more sensitive to price changes and their purchasing power is not as strong as investment-oriented buyers. Therefore a big rebound will definitely restrain their demand,’ said Gu.”
“The price rebound did change some buyers’ plans. Liu Gang, who failed to buy an apartment in May because of a three-month business trip overseas, has now postponed his home purchase plans. ‘Since the price has rebounded, I am not in a hurry to catch up. The price has exceeded my affordability so I have had to give up,’ said Liu, who had planned to buy an apartment ahead of marrying.”
“If younger property prospectors do not act fast they could miss out entirely on the chance of ever getting a foot in the property market, according to the accounting and wealth advisory group Chan & Naylor. The group said Gen Y’s ‘popular blind faith in the property bubble popping soon’ served as a major hindrance to investing, adding now was the time for the hesitant ones to make their move. Chan & Naylor director Ken Raiss pointed to projections by the Australian Bureau of Statistics which show the demand for housing would rise by 15 per cent on the previous generation. Raiss said potential investors, especially first-time buyers, sitting tight for a bubble to pop could be waiting a long time.”
“Raiss recommended first-time buyers adopt a more strategic approach to property investment, like using their purchase for rental purposes rather than personal occupancy. ‘Property acquisition should be treated as a business process as opposed to an act of the heart, and realise that it can be a stepping-stone towards acquiring the perfect home later in life,’ Raiss added.”
“Michael and Sarah Moy, 31 and 30, built their family home in The Ponds, on the city’s northwest fringe, where more than 64 per cent of households are making mortgage repayments in excess of $1800 a month. ‘I do consider having to pay more than that stressful, that’s a big chunk out of anyone’s wages,’ Mr Moy said. ‘I know it (only) leaves near half our money for the month, so it’s a big chunk.’”
“These are the people most affected by the tiny percentage point fluctuations of the Reserve Bank of Australia. The Moys have two children. ‘We have to think about what’s coming in and what’s going out before we do it, most of the time,’ Mrs Moy said.”
