February 3, 2013

Take My Money!

Readers suggested these weekend topics. “How about a blog topic called ‘Take My Money!’ wherein we tell stories about the crazy behavior we’ve seen at open houses?”

Another, “How about the widespread misrepresentation of housing demand? Demand is at 16 year lows while the excess empty inventory is still… well… empty. And there are millions upon millions of them.”

And finally, “Does anyone else (besides me) have documentary evidence that high-end home prices are falling in your area? Here is an example of a high-end La Jolla home that Zillow claims dropped in value by over $1,000,000 over the last month. Check out the price history at the bottom of this post. There is something mighty strange about the way La Jolla properties are priced!”

The State. “The housing market in South Carolina ended 2012 in surefire recovery mode. Buyers, drawn in by a year of historically low interest rates and an improving economy, snapped up homes in the Columbia area at the fastest pace since 2009, when sales were artificially inflated by an $8,000 federal home buyer’s tax credit. ‘Barring any weird stuff coming out of Washington, it looks like we’ve created (a good environment for a real estate recovery),’ said Nick Kremydas, executive director of the S.C. Realtors trade group.”

“With the steady growth in the housing market in 2012, Kremydas upgraded the recovery from ‘weak’ to ‘fragile.’”

The Norwich Bulletin. “Local foreclosures continued to rise last year amid a statewide surge in home sales that one agency called the biggest turnaround in New England. Statewide foreclosure filings were up 48.44 percent last year to 16,747. Filings in New London County and Windham County last year were 1,323 and 721, respectively, RealtyTrac said. Local foreclosure problems are not expected to subside for another year, Eastern Connecticut Association of Realtors CEO John Bolduc said. But that isn’t preventing the sales surge, he noted.”

“Real estate investors and property ‘flippers’ are active in Connecticut, which helped explain the increase in multi-family prices, said Lou Mira, broker/owner of RE/MAX Premier in West Hartford.”

Oregon Public Broadcasting. “New numbers show that Bend’s housing market just had its best year since the collapse of the housing bubble. It’s not just sales that have gone up. Prices, too, are increasing. Michael Warren, president of Central Oregon Association of Realtors, says right now inventory is tight, meaning buyers don’t have a lot to choose from. ‘It wasn’t that long ago where buyers would see a house and it would be on the market for six months, so they’re not too worried about it,’ says Warren. ‘And now, if it was in their price range you’re telling them, ‘Look, you need to make an offer,’ and by the time they do it they’re either in a multiple offer or they’re already pending.’”

From WQOW TV. “Wisconsin’s housing market is mounting a comeback with encouraging signs from 2012’s Annual Realtors Report. Take Eau Claire County for example, the median price of a home was up more than $2,000. Good news for sellers, but buyers might need to get a move on to move in on a good deal. ‘If they’re going to get in with these low interest rates, now is the time to do it before the prices suddenly go back up again,’ says Economics Lecturer at UW-Stout Richard Postlewaite.”

The Mercury News. “According to a recent survey, California sellers are certainly not as optimistic about future home prices as are the state’s home buyers. Findings from the California Association of Realtors’ 2012 California Home Seller Survey show only one in five sellers believe that home prices will rise in 10 years, while 12 percent say home prices will rise in five years, and only 9 percent believe prices will rise in a year.”

“The home seller survey is quite a contrast to the state group’s survey of home buyers that found nearly three-fourths of buyers think home prices will rise in 10 years. In that survey, findings showed 73 percent of buyers believe prices will rise in 10 years; 41 percent say prices will increase in five years; and 25 percent believe prices will rise in a year.”

“‘Momentum on the seller’s side is not as high as on the buyer’s side,’ says Carolyn Miller, president of the Silicon Valley Association of Realtors. ‘Sellers are not yet motivated enough to put their homes on the market.’”

“‘In contrast to record high housing affordability and record low financing rates experienced by home buyers in 2012, the real estate market looked quite different from sellers’ perspectives,’ says Don Faught, the state group president. ‘The last few years have been extremely difficult for many homeowners, which may indicate why more than twice as many sellers (74 percent) considered strategic default in 2012 than last year, reflecting homeowners’ hardships in a difficult economic environment.’”

“Consistent with recent U.S. Census data, sellers moved out of California in record numbers in 2012. Forty-four percent of sellers moved out of state, the highest in the survey’s history. Leading destination states include Florida, Texas and North Carolina. Only 30 percent of transactions closed escrow on time, down from 40 percent in 2011 and the lowest level since 2004, with buyer financing issues as the main reasons for the delay. Homes fell out of escrow an average of nearly three times (2.9) before closing, with 61 percent of sellers reporting their home fell out of escrow at least three times.”

The Miami Herald. “‘Among all US metropolitan areas, Florida had seven areas that were in the top 10 in the country,’ for foreclosures, said Amy Baker, chief economist for the Legislature.”

“The number of foreclosure filings rose by more than 53 percent in Florida last year, giving the Sunshine State the highest foreclosure rate in the nation. On average, it takes about 850 days for a foreclosure to run its course in Florida, according to a report released by Baker’s office A high rate of long-term unemployment, a tight credit market and off-peak home values are contributing to state’s mortgage delinquency problem, Baker said.”

“A ‘faster foreclosures’ bill filed earlier this month aims to speed up the state’s sluggish home-repossession process. Currently, there are more than 300,000 homes in foreclosure and at least 285,000 foreclosure filings are expected in fiscal year 2013-2014, according to the Office of Economic and Demographic Research.”

Go Local Worchester. “Over 17,000 foreclosure petitions, the first step in the foreclosure process in Massachusetts, were filed in 2012, an increase of more than 35 percent from the 12,634 filed in 2011, according to a new report from real estate publisher The Warren Group. Despite the sizable increase in foreclosure starts, however, the number of completed foreclosures decreased by nearly 13 percent last year to 7,424, compared to 8,531 in 2011. The Warren Group said that petition levels were decreased dramatically for much of 2011 as banks slowed down foreclosure processes.”

“‘As the amount of available inventory continues to shrink, watch for a gradual appreciation in median home prices in the second half of 2013 as the market begins to shift from a buyer’s market to a balanced market which favors both the buyer and the seller,’ said Dan Breault, Executive VP of RE/MAX of New England.”

The Vancouver Sun. “There is no real estate bubble in Vancouver and markets will remain stable in 2013 — as long as interest rates remain low, immigration targets are met and Europe’s economy doesn’t melt down, a panel of real estate developers told more than 1,100 real estate professionals, business leaders and B.C. politicians. Colin Bosa, CEO of Bosa Properties, said he believes people — and their money — from China will continue to flow into B.C. because they want to invest outside China and they want their children to grow up in North America.”

“Two things that could stop the flow of people from China in to British Columbia would be a recession or a change to Canadian immigration policy, Bosa said. ‘If you buy good real estate at fair prices, you can’t go wrong,’ Bosa said.”

“‘I think this is the year that the fear factor goes away,’ said Eric Carlson, CEO of Anthem Properties. ‘U.S. unemployment will go down to 6.5 per cent this year, while U.S. gross domestic product will be trending towards three per cent by the end of the year,’ Carlson said, adding that he thinks 2013 is a good time to buy real estate. ‘I don’t think there is a bubble at all.’”

The Standard. “China Vanke chairman Wang Shi said mainland home prices are high and he sees bubbles forming. ‘The bubble must be controlled, or both the real estate market and domestic economy will be jeopardized,’ the boss of the world’s largest developer by turnover warned.”

“He stressed that prices now are a ‘bit extraordinary and high,’ likely due to speculative activities. Vanke set a global record last year, selling new homes worth 141.2 billion yuan (HK$175.9 billion). Mainland new home prices rose for the seventh month in a row in December, according to Soufun. Wang blamed limited investment channels for increased speculative activities in the mainland property market. On whether continued urbanization would prove lucrative for the property sector, a cautious Wang said: ‘There won’t be another investment boom in real estate.’”

Bits Bucket for February 3, 2013

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