Taking Down The Neighborhood
WWLP reports from Massachusetts. “A new report finds that Massachusetts is listed as the second most expensive state in the nation when it comes to real estate. The Coldwell Banker Home Listing report finds that the average cost of a four bedroom, two bathroom home in the Bay State is just over $489,000. That’s $80,000 more than homes in Connecticut and $60,000 more than the average cost of homes in California. Hawaii is the only state with higher prices at nearly $750,000, on average.”
“Longmeadow resident, Ken White says the real estate market reflects what the state has to offer including jobs and good schools. ‘If you have jobs in the state that are going to give people incomes that are going to support the real estate market, that’s the key right there,’ said White.”
The Republican in Massachusetts. “The city’s unemployment rate rate fell slightly from 10.7 percent to 10.1 percent in October, according to figures released Tuesday, but rising home prices might be a sign of a better economy. Springfield’s unemployment rate was 10.7 percent a year ago in October 2011. ‘It’s a little bit disappointing,’ said Robert A. Nakosteen, a professor of economics and statistics at the University of Massachusetts Isenberg School of Management. ‘It is definitely a sign that the state’s economy is slowing down.’”
“The problem is that households overburdened by debt are still not spending enough money to make employers more willing to hire, Nakosteen said. Without employers hiring, the families don’t feel confident to spend and the cycle gets harder and harder to break. But rising home prices might be part of the cure, Nakosteen said. Nakosteen even started sounding like a real estate broker when said now is a good time to invest in housing. ‘People need to take advantage of these low mortgage rates,’ he said. ‘They are not going to last forever.’”
The Lowell Sun in Massachusetts. “The worst of the foreclosure spike — when Lowell averaged three foreclosures every two days in 2010 — is over, but Lowell and other local communities have either passed or are on pace to pass last year’s total. The cause could be a Massachusetts Supreme Judicial Court decision in June on whether a lender could foreclose on a property without having a promissory note, said Richard Howe, the register of deeds for Middlesex North, which covers the Lowell area. The court ruled that a lender could foreclose if it has a promissory note or is acting on behalf of the note-holder.”
“Another factor could be that foreclosure-modification regulations were clarified during the past year, giving banks a greater ability to know how to engage with homeowners who are underwater on their mortgages, said Christopher Pitt, president of the Real Estate Bar Association for Massachusetts. ‘There are so many factors that affect the whole foreclosure situation that it’s hard to say,’ Pitt said. ‘There still is a glut of mortgages out there that have been nonperforming, and the banks are just getting around to doing the foreclosures.’”
“Jim Wilde, executive director of the Merrimack Valley Housing Partnership in Lowell, said he found it more difficult to find meaning in the trends. A homeowner who hasn’t paid his or her mortgage in many years might still not have received a foreclosure notice yet, for example. ‘There’s not really a direct correlation with that’s going on with the market,’ Wilde said.”
The Connecticut Post. “Unemployment ticked up for Connecticut in October — but so did home sales — sending mixed messages on the economy. State officials announced that the unemployment rate in Connecticut has inched up to 9 percent. Realtor William Raveis said while sales have increased, the amount of money from sales is not increasing because the cost of houses has not increased.”
“Don Klepper-Smith, chief economist for New-Haven based DataCore Partners LLC, said the rise in the state’s unemployment rate to 9 percent from 8.9 percent was surprising. Even more surprising, he said, was the recalculation of the September numbers, which resulted in a net loss of jobs in 2012. Klepper-Smith said the real disposable income measure continues to lag, increasing by 0.4 percent in October. ‘It is really hard to make an argument for legitimate economic recovery when we don’t see any tangible proof that we’re seeing gains in the all-important measure of consumer spending power,’ he said.”
The Connecticut Mirror, “Once considered untouchable, the tax break available to homeowners for the interest they pay on their mortgages is now vulnerable to new limitations that are likely to have an bigger impact in Connecticut than in most of the rest of the nation. Any limitation of the mortgage interest deduction would affect Connecticut homeowners more than most others because the state has high-priced homes compared with the national average. The national median home price is about $182,000. The median home price in Connecticut is $282,000, and many homes in Fairfield County and other areas of the state cost much more than $500,000.”
“In addition, there are many second homes in Connecticut. If the mortgage on those homes are added to the mortgage on a primary residence, it’s likely the total could exceed $500,000. A report by John Burns Real Estate Consulting said only five metropolitan areas — all of them in California — would be impacted more than the Bridgeport-Stamford-Norwalk area by limiting interest deductions to mortgages that are $500,000 or less.”
“The report said the taxpayers in that area of Fairfield County would lose more than 11.1 percent, or about $82 million, each year in if the cap went into effect. Connecticut’s realtors are opposed to all of those proposals. ‘We’ve had this deduction for 100 years and no administration has had to do away with it to balance the budget,’ said Bob Kimball, who is president of the Connecticut Association of Realtors.”
WPRI in Rhode Island. “Rhode Island home prices declined 3.5% in September from a year earlier, the largest drop in any state, according to CoreLogic Inc. Housing prices doubled in Rhode Island between the summer of 2000 and the winter of 2006, according to the Federal Housing Finance Agency index. Prices have dropped 35% over the last six years and are now back to about the same level where they were in the summer of 2003.”
“There was a 9.9-month supply of distressed homes in the state. Rhode Island continues to have more homeowners in trouble than most other states. CoreLogic said 7.5% of all mortgages in Rhode Island were at least 90 days delinquent in September, tied with Connecticut and topped only by Florida, Nevada, New Jersey, Illinois, Maryland, and New York. Corelogic said 22.7% of Rhode Island homeowners had negative equity in September.”
The Portland Press Herald in Maine. “Residents of Mary Avenue have been watching a vacant house deteriorate for the past four years. Thieves have stolen a roof vent, causing water to leak into the house and create mold. Vandals have spray-painted graffiti on the windows, knocked over cans of paint, destroyed a back deck and removed the metal railing at the front entrance.”
“‘This is taking down the neighborhood,’ said Earl Jamieson, 74, who is trying to sell his house next door. He said the previous residents bought the house at the top of the real estate market and later abandoned it. The bank now owns the house, but has yet to put it on the market. And so it languishes.”
“In October alone, 131 properties in Maine had received a foreclosure filing and been repossessed by the bank, according to RealtyTrac. The number of new foreclosures, which was 479 last November, has been holding steady at an average of 114 a month for the past nine months. The statistics, however, don’t count ’shadow’ inventory, the number of bank-owned homes that are not yet on the market, as well as the homes with delinquent mortgages, but on which the foreclosure process has not been completed.”
“In Maine, it takes a bank an average of 570 days to complete the legal work to foreclose on a house, according to a study by the Federal National Mortgage Association. That’s why people see vacant homes in their neighborhoods with no ‘for sale’ signs on them, said Peter Judkins, chairman of the Maine Bankers Association.”
“When people owe more money to the bank than their house is worth, their behavior changes, said said William Fogel, a Portland attorney whose practice includes bankruptcy law. They no longer act like owners because they no longer view their property as an investment. ‘They have no money or savings,’ he said. ‘They live in the house until the house falls apart or they go bankrupt.’”
DNAInfo in New York. “The number of stalled construction projects in the city has increased by 17 percent since February, according to an analysis of Buildings Department records by the New York Building Congress. The report identified an average of 691 sites stalled in November, up from 592 in February, and 180 of those were added to the list in 2012, erasing the gains made by an influx of new development in the last 15 months, according to NYBC President Richard T. Anderson.”
“All together, the sites have a market value of $883 million, which is down from $1.3 billion one year ago, according to the NYBC. ‘It is interesting to note that while the raw number of stalled sites has increased, the estimated market value has dropped by nearly half a billion dollars,’ Anderson said. ‘This suggests that the luxury residential market was home to an outsized percentage of the projects that have resumed in 2012.’”
The New York Times. “Rising demand and a scarcity of new apartments are creating something of a rush on new luxury condominiums in choice New York neighborhoods, with buyers increasingly signing contracts for spaces even before they are built. Buying in early can have significant upside in a rising market. Prices at Chelsea Green, a nearly sold-out 51-unit condominium going up at 151 West 21st Street, were raised four times since sales began in May. Now the two remaining two-bedroom two-baths are $2.7 million and $2.8 million, up $200,000 from their initial asking prices. ”
“And with some sales offices opening to long lists of potential buyers, there is even more pressure to get in early. In Brooklyn, 20 Henry Street, a 38-unit condo, started selling in February to 800 prospective buyers who had put their names on a waiting list. More than 85 percent of the building has since sold.”
The Journal News in New York. “White Plains developer Louis Cappelli has sold five units at the Ritz Carlton in downtown White Plains to the Royal Bank of Scotland for $22 million, according to state records. This would be Cappelli’s second sell out of his holding in downtown White Plains in the last couple of months. At the Ritz, the deed transfer log shows that the transaction was made in lieu of foreclosure with Cappelli’s LC MAIN LLC selling the deeds to the Bank of Scotland’s BOS PB LLC in October.”
“The deal — which sent five units of the luxury condo/hotel building to the Royal Bank of Scotland — followed a similar unwinding of Cappelli’s interest in the City Center, located just across Main Street. Technically, it stood to be the biggest residential real estate transaction of the year for the area, but it’s far from a typical deal where a buyer is selling his or her property to a new owner or occupant.”
