October 22, 2013

Dip Suggests Price Spikes May Slow Down

The Sun Sentinel reports from Florida. “Palm Beach County home prices increased in September from a year ago, but the most recent six-month trend shows the single-family market clearly is cooling, analysts say. The county’s median price for existing homes last month was $250,000, up 11 percent from a year earlier, the Realtors Association of the Palm Beaches said Monday. But the median as far back as March was $248,894, practically unchanged today. Last month, there were 2,189 new single-family listings, up 32 percent from a year ago.”

“Broward County’s median home price of $270,000 jumped 32 percent in September from a year ago, the Greater Fort Lauderdale Realtors said Monday. The large annual increase continued a recent trend. Broward’s median now has risen year over year by more than 20 percent for 10 consecutive months. But since hitting $275,000 in July, its highest point this year, Broward’s median has dipped in August and September, suggesting the recent price spikes may start to slow down. Another encouraging sign: more homes are hitting the market.”

The Tampa Bay Times. “Flipping has slipped out of fashion in the Tampa Bay area, new RealtyTrac data show. Flippers here grabbed and quickly resold 575 homes between July and September, about half as many as during the same time period last year. It marked the fourth straight quarter of declining local flips, and the period of lowest activity since early 2012, RealtyTrac said. Other flipping hot spots, including Phoenix and Orlando, have also seen flips fall off since last year.”

“After an $800 million binge on Tampa Bay homes, big investors are finally catching their breath, pulling back on buying due to rising prices and market doubts, a Tampa Bay Times analysis has found. The seven biggest investment groups buying homes here spent half as much cash in August as they did in March or April, when their shopping sprees peaked at about 500 homes a month. As buying ramped up, rising home prices carved into investors’ expected yields. When Blackstone made its first deals here in August 2012, it paid an average of $125,000 per home, the Times analysis found. Within eight months, that jumped to $175,000.”

“At the peak of their buying, investors weren’t above overspending to get what they wanted. Invitation Homes, for instance, bought a $205,000 New Port Richey home in March for nearly double what it had sold for two months earlier, property records show. And Progress Residential, which owns more than 400 local homes, bought a Lutz home in April for $72,000 more than it sold for just two weeks earlier.”

“The slowdown after months of frenzied buys has not gone unnoticed. Local investors who compete with the firms for homes say investors have become less cavalier with their spending during foreclosure auctions and bidding wars. Some local investors suggest the big seven firms have grown wiser to the dangers that lurk in the volatile market. Investor agents, they said, have been burned by overpaying at auctions or by snatching up troublesome homes sight unseen.”

The Tampa Tribune. “RealtyTrac estimates that 83,238 homes in Florida currently are classified as ‘real estate owned,’ which means they’ve been returned to the lender’s possession. That’s up from roughly 73,000 homes a year ago and about 62,000 homes in September 2011. RealtyTrac estimates lenders own 9,214 homes in the Tampa Bay area. Two years ago, they owned about 5,100, the company said.”

“Realtors say there are many reasons for the continued climb in bank-owned homes, including that people are still defaulting on their loans and many banks are unwilling to dump their homes for a steep loss. The fact that lenders aren’t rushing to sell off all their homes isn’t such a bad thing, said John Lum, a Tampa developer who owns a south Tampa new homes gallery. ‘It’s helping to not flood the market with excess inventory,’ Lum said.”

“RealtyTrac estimates that the previous owners still live in 46 percent of bank-repossessed properties in the Tampa Bay area.”

My Suncoast. “A vampire foreclosure is a home that has gone through foreclosure, but one from which the bank has not evicted the former owner, perhaps on purpose. ‘One of the reasons is they can see a home being maintained, not falling into a state of disrepair,’ says David Hicks, a foreclosure attorney in Sarasota. ‘It’s clear from the numbers and the people we speak to on a regular basis that there’s a lot of people, in our state especially, that are still in trouble.’”

“Roughly 40% of people who carry mortgages owe more than the homes are worth. Three-hundred thousand homeowners who have stopped paying their mortgages have not even heard from their lenders yet. Never mind reports that foreclosures have declined in the wake of the state’s new foreclosure law. ‘Somebody would see that and they’d say, ‘well, things must be getting better,’ Hicks says. ‘That’s not the case at all. The banks and their attorneys still don’t understand the new law, so they pull back on filings.’”

The South Florida Business Journal. “The owner of the W South Beach is trying to refinancing its debt to resolve a recent foreclosure lawsuit. The 216 unsold condo hotel units and the common areas of the 20-story hotel are targeted by a foreclosure lawsuit brought on Oct. 11 . The developer sold 207 units from mid-2009 to January 2013, but it hasn’t recorded a sale since.”

“‘W South Beach is among the most successful W’s in the world,’ said W South Beach developer David Edelstein. ‘Recent residential sales at the hotel have been in excess of $3,000 per square foot and the plan remains to, over time, take advantage of the extraordinarily strong residential market by optimizing pricing in a strategic way.’”

“Miami-based Condo Vultures reports that the average price per square foot for closed units in the W South Beach was $1,832.”

The News Press. “Habitat for Humanity homes in Lee sell for the appraised value, meaning many of the people who donated 250 hours of labor, saved up a $1,200 deposit, and attended hours of homeownership classes in order to qualify, ended up getting a home with a purchase price of as much as $250,000. And in many cases, those people lost their homes when Habitat for Humanity foreclosed.”

“Although the mortgage payments were only 30 percent of the buyers income, because the home value appraised at the sale price, the taxes and insurance increased the first year of home ownership, sometimes increasing mortgage payments by 50 percent.”

“Habitat sold Neila D’Amico a four-bedroom, two-bath house in North Fort Myers for $171,300 in 2006. She paid $550 a month on the first mortgage of $150,877 and paid nothing on the $20,348 second mortgage. D’Amico knew the house was overpriced. But, she said, ‘They get you with, ‘It’s yours.’”

“Now it’s not hers. D’Amico is sad about losing her home but resigned to having made a prudent financial move. ‘I didn’t need the debt,’ she said. ‘The house wasn’t worth it.’”

“It was not. Habitat won a $126,790.15 judgment against D’Amico in October 2012. The property was put up for auction and Habitat got it back in January. The group put on a new roof, replaced the air conditioning system and in September Habitat sold it for $80,000.”

The Palm Beach Post. “John Lebeau of North Palm Beach doesn’t mince words in a distressing YouTube video he posted over the weekend about his pending eviction. The story is a stark reminder that Florida’s foreclosure crisis is not yet over. Nearly 300,000 foreclosures are still in the court system, and, like Lebeau, those families may also find themselves with eviction notices as the courts work to clear their dockets.”

“Lebeau, a father of two, lost his banking job during the mortgage meltdown and quickly fell into foreclosure. But in trying to do the right thing and work with the bank on a loan modification or other foreclosure alternative, he said his loan was transferred from servicer to servicer with one approving a loan modification and the next rejecting him on the very same paperwork he got approved with initially. Documents were lost. Calls went unanswered and ignored.”

“An investor, likely unaware of Lebeau’s foreclosure fight or situation, has since purchased his home and offered to rent it out to him. But Lebeau can’t afford the rental price, which he said included legal fees. Lebeau said the eviction notice was posted Tuesday. ‘It could literally happen at any minute,’ Lebeau said.”

Bits Bucket for October 22, 2013

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