May 9, 2013

Returning To The Bad Habits Of The Boom Era

The Denver Post reports from Colorado. “The price of previously occupied homes sold in the metro area shot up in April as buyers battled over a limited number of homes available for sale. An analysis done by Jim Smith, owner of Golden Real Estate, found that homes listed for sale since April 1 spent a median four days on the market before going under contract. ‘Sellers, be prepared for multiple offers and informed enough to capitalize on creative offers,’ said Gary Bauer, an independent real estate research analyst who prepared the report.”

“Metrostudy, in a quarterly survey, found that builders started 1,596 homes in the first quarter in metro Denver, a 52 percent increase from the 1,050 in the same period a year earlier. They closed on 1,425 homes, a 39 percent jump from the first quarter of 2012.”

The Aspen Times in Colorado. “Many property owners in the mid-Roaring Fork Valley likely are to find another significant decrease in the value of their homes or commercial real estate when Eagle County’s new notices of valuation arrive by the end of this week. This reappraisal is based on real estate sales from Jan. 1, 2011, through June 30, 2012. The midvalley real estate market was slumping throughout that 18-month period. The dive comes on the heels of a bigger decrease in property values in May 2011.”

“‘There were quite a few foreclosures,’ said Eagle County Assessor Mark Chapin. ‘The market got really soft.’”

The Salt Lake Tribune in Utah. “The inventory shortage is hindering sales of new homes almost as much as existing homes. Rene Oehlerking, marketing director for Garbett Homes in Salt Lake City, said all builders have started ramping up efforts in the market. Competition for undeveloped land is fierce, and inventories are low because it usually takes a year before homes can be built and prepared for sale, he said. ‘We are just very low on inventory,’ he said. ‘We have sold out of every single unit that we have. If you are a buyer, you are going to have to wait until the third quarter until you have a [house] that you can move into.’”

“‘Sales are going to be flat, if not down, because there is nothing to buy,’ said Dave Frederickson, president of the Salt Lake Board of Realtors. Multiple buyer offers on homes for sale are fast becoming the norm in almost all prices ranges, he added.”

From in Utah. “Brad Wilson, president of Destination Homes, plans to develop about 80 acres of farmland into a new neighborhood on the west side of Kaysville. The homes in Hill Farms will be priced between $200,000 and $600,000, comparable to Daybreak in South Jordan. Destination Homes said they already have hundreds of people on the waiting list for the Hill Farms development. ‘The housing market has been terrific for the last year or so, and continues to get stronger,’ Wilson said. ‘We’re very excited. The housing market does go in cycles. We’re just sort of catching the wave of this next cycle right now.’”

“Doris Giede-Stevenson, chair of Weber State University’s economics department, points out that housing prices are still 30 percent below the peak nationwide, and the current demand and rising prices may be reminiscent of the housing bubble that led into the recession. She believes the increased building, buying and selling are positive signs. ‘I think that you want to differentiate who’s buying the homes,’ Giede-Stevenson said. ‘And it seems that mortgage applications are up, and so traditional homebuyers are back in the market.’”

AZ Family in Arizona. “It is no surprise housing prices are going up, up, up here in the Valley, which is news we’ve all been waiting to hear. But are we preparing ourselves for another housing bubble? The short answer is: No. Real estate analysts say our recovery is steady, in large part, because right now there are far more buyers than houses available. ‘I’ve been doing this for 28 years, I would say this is the busiest I have ever been,’ said real estate agent Robert Joffe. ‘Some sellers getting multiple offers on properties; it definitely has changed very quickly. I think if someone is on the fence they should get off of it because next year they are going to be saying, ‘Why didn’t I buy this year.’”

“Vermaland is one of the largest landowners in the Phoenix area and Kuldip Verma said that housing shortage has home builders on the hunt for land. ‘And we anticipate the sales this year in raw land should exceed all the sales during 2008, 2009, 2010, 2011 and 2012,’ he said. ‘During the distressed time from 2008 to 2012, the land prices tumbled down to as low as 5 cents to 10 cents to the dollar. Now in the last three months, we are seeing land prices jump to 10 to 15 cents to the dollar.’”

The Arizona Republic. “Some housing market watchers are concerned that home-sales prices are climbing too fast. The Valley’s rising housing prices have deterred some investors, who can now find better bargains in other parts of the country. About 27 percent of all houses purchased in March went to investors, the lowest level in several years, according to Mike Orr’s report. ‘Higher prices would normally encourage more ordinary home sellers into the market, but many are either locked into their homes because of negative equity, or they’re simply waiting for prices to go up more,’ he said.”

“New-home sales have climbed 37 percent in the past year, but Orr said that’s not enough to meet the demand for housing. ‘Builders are scratching their heads, trying to figure out what to do. They don’t want to overbuild like they did during the peak, and they don’t want to build a bunch of new homes for people who can’t secure the mortgages needed to buy them.’”

From Vegas Inc. in Nevada. “Las Vegans are buying more cars, clothes and other consumer goods. That sounds like a good thing. But Nevadans also have some of the worst personal finances in the country. And the local mini-spending boom is raising fears that people once again are taking on too much debt and returning to the bad habits of the boom era — buying stuff they can’t afford.”

“Many people, because of bankruptcies and foreclosure processing delays, have stopped paying their mortgages and now are spending that money on vacations, clothing and furniture instead. Processing delays, caused in part by Nevada’s October 2011 ‘robosigning’ law, inadvertently let some people live for free – sometimes for months or years – while banks gather the paperwork they need to foreclose on the homes.”

“That doesn’t stop some residents from shopping. Too many local families are spending housing money on consumer goods, said Las Vegas’ Financial Guidance Center CEO Michele Johnson. She has noticed a troubling trend: clients have more credit card debt than in recent years and are creating dangerous spending habits. She had hoped the recession would teach people to be more careful. ‘I’m not sure that’s going to hold true,’ she said.”

The Associated Press on Nevada. “Struggling Nevada homeowners facing foreclosure would be given added protections and advised of ways to keep their homes under a bill known as the Homeowner’s Bill of Rights. ‘This bill will allow our residents to take the necessary steps to do everything they can to stay in their homes,’ said Assemblyman James Healey, D-Las Vegas, a co-sponsor of the bill who told the Assembly Judiciary Committee of his own frustrations trying to dig out from an under a home that lost considerable value during the recession.”

“While trying to refinance, ‘I got the run-around,’ he said. ‘Every time I tried to call, I had to explain it to a different person … again,’ he said. ‘This went on for more than year … before they finally said, ‘Sorry, you don’t qualify to refinance.’”

“Healey said on the advice of his lender, he stopped paying his mortgage, then opted for a short sale, a process that took nine months. ‘These are the types of stories we as legislators should not stand for,’ he said.”

“George Ross, representing Bank of America, cautioned that the bill, if enacted, would likely help only a fraction of distressed homeowners. He said around half of borrowers who are able to renegotiate their loans still default. ‘This is not going to keep everybody in their homes,’ he said. ‘An awful lot of folks know they cannot make their payments.’ It’s a point conceded by bill sponsors.”

From Fox 5 Vegas in Nevada. “There are fears shadow inventory could flood the market and burst the latest price bubble, but that’s unlikely to happen, according to Dave Tina, president of the Greater Las Vegas Association of Realtors. ‘They are going to release those strategically to keep prices as high as they can,’ he said.”

The Las Vegas Sun in Nevada. “My husband and I have been offered career opportunities in Nevada. We spent weeks looking for housing. We found nothing. Look on any real estate site and you’ll see thousands of homes for sale in Nevada. When you try to see the homes, it seems like 99 percent are unavailable because of the lenders. Most are vacant, and they cause a blight in every neighborhood.”

“Thousands of homes have sat in foreclosure for years and will continue to sit unless your Legislature acts to force lenders to release homes. The lenders now let a fraction on the market. The Legislature can establish reasonable guidelines for the foreclosure process and force lenders to release homes so that they can generate tax revenue.”

“I realize this may cause prices to drop at first, but it would generate income for the state in unpaid taxes and also bring people like us to Nevada. In the long run, it would raise prices and help neighborhoods — the vacant homes would be purchased and cleaned up, and the value of the entire area would increase. State officials should open Nevada for business again. ‘Home means Nevada’ to us, as well.”

Bits Bucket for May 9, 2013

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