January 2, 2014

We Got Into Problems Because Things Were Too Easy

The Michigan Avenue Mag reports on Illinois. “According to the latest stats from the S&P/Case-Shiller Home Price Index, Chicago led the most recent monthly gains with a 3.2 percent increase. This news prompted Michigan Avenue to do a temperature check of Chicago’s luxury market with some of the city’s big-ticket brokers. Where does this price increase leave the luxury housing market for now? Elizabeth Ballis: ‘Building is back, and location can drive up the price of lots, especially in Lincoln Park. We just helped a client buy a potential tear-down in DePaul for $30,000 over list, closing at $1.325 million, and there were six offers that first day. Basic lots cost $1.2 million and up in Lincoln Park now. But in this case, the buyer is going to rehab it. It will probably sell for close to $4 million when it’s done.’”

“Pamela Raia: ‘Luxury buyers are trying to take advantage of those really high-priced homes that languished over the summer. They’re not new anymore, so a buyer will use this as an opportunity to make an offer under ask, and often get it.’”

The Chicago Tribune in Illinois. “Former WFLD-Ch. 32 news anchor Jan Jeffcoat has sold her three-bedroom, single-family house in Roscoe Village for $725,000. Jeffcoat first listed the house in July 2012 for $799,900. She later reduced her asking price four times before finally selling the house. She purchased it in 2007 for $807,500.”

“Listing agent Jennifer Miles of Koenig & Strey, said the buyers, a family from the suburbs, converted a cascading slate waterfall into a rock-climbing wall. ‘It’s a niche-y kind of house, so I think that the sale price was fair market value,’ she told Elite Street.”

The World Herald in Nebraska. “The City of Omaha is dismantling the former WallStreet Tower showroom in north downtown and will put the city-owned land up for sale, expecting a restaurant, retail store or some other use to occupy the prime real estate. City government officials leased the parcel of land to Kansas-based developer Townsend Inc., which in 2005 envisioned building a 32-story condo and commercial building a few blocks away at 14th and Dodge Streets. That project, however, never got off the ground, and the showroom that was used for marketing the condos sat idle for years.”

“City Attorney Paul Kratz said there are ‘always dreams’ but currently no definite vision for the parcel.”

The News Sentinel in Indiana. “The city of Gary has selected the recipients of five homes it will sell for a dollar each and is planning to make more available at the same price next year as it seeks to fill abandoned houses and stanch the exodus of residents from the northwestern Indiana city. Mayor Karen Freeman-Wilson estimates the city about 25 miles from Chicago has about 10,000 abandoned homes, The Times of Munster and the Post-Tribune reported.”

The Kokomo Tribune in Indiana. “Starting at the end of 2008, Kokomo and Howard County went through a period where almost no new homes were built. In September 2007, the average weekly earnings for a private sector job in Howard and Tipton counties was $1,169, according to the U.S. Bureau of Labor Statistics. Last month, the average stood at $590. Unemployment remains above the statewide average.”

“This year, there have been 26 permits issued for new home construction in Kokomo, up from 17 last year. While that’s nowhere near the kind of activity seen in the city in 2005, homebuilders are hoping it’s the start of a return to prosperity. ‘I don’t think we’ll ever get to that point we were at back in the early 2000s,’ said Mike Ullery, president of the Howard County Home Builders Association. ‘The whole reason we got into the problems we had was because things were too easy back then.’”

The St. Louis Dispatch in Missouri. “Mortgages will be more expensive and harder to get next year. You can blame — or thank — Uncle Sam for that. Why would you thank him? Because he’s trying to avoid another housing price crash and big bank bailout far in the future. The bottom line: ‘There are going to be good people that qualify today that won’t qualify a month from now,’ said Ruth Battle, senior VP at Paramount Mortgage in Creve Coeur.”

“Some lenders aren’t happy with that. ‘They’re taking the art away from the business,’ said George DeMare of Midwest Mortgage in west St. Louis County. That art involves judging a person’s character to make a loan to someone who doesn’t quite fit the guidelines.”

The Herald Times Reporter in Wisconsin. “After fighting for nearly two years to keep their more than 110-year-old Wausau home out of foreclosure, Joe and Jennifer Wiater are finally walking away. The couple, who now live in a De Pere duplex, moved in with family for a spell after Joe was laid off in late 2011 from his retail management job. They have worked multiple jobs to stay afloat ever since. But after not receiving a single offer on their home, they’ve stopped paying their mortgage and will soon lose their home in foreclosure.”

“The Wiaters had bought the home in 2006 for $112,000. They tried to sell it for $105,000 before lowering the price to $99,000. ‘We felt like at some point we’ve got to move on,’ said Jennifer Wiater.”

“Recent data released by the U.S. Census Bureau shows that Wisconsin’s home ownership rate continued to inch downward even after the recession ended, dropping 1.4 percentage points from 2010-2012 — compared to the prior three-year period from 2007-2009. During that span, at least half of all Wisconsin counties saw a drop in home ownership in the recession’s aftermath, even as home sales and prices rebounded in much of the state.”

“The census figures come as little surprise to Wisconsin real estate experts, who say the numbers reflect both foreclosures and people who sold their homes under duress during the economic downturn and moved into rentals — or with family — where they’ve remained ever since. ‘It’s been horrendous,’ said Dennis Siem, owner and broker with Coldwell Banker in Marinette. ‘We used to have 16 agents working here, now we have seven, and none of them are making any money.’”

The Stevens Point Journal in Wisconsin. “Recent decisions in Marshfield and Stevens Point have drawn a contrast when it comes to the development of new housing complexes in central Wisconsin. One city is approving projects despite vocal objectives of a few directly affected residents, while the other isn’t. Leaders of both cities say there is a marked increase in the demand for multi-unit housing complexes, from young professionals moving to Marshfield for employment and from students attending UWSP.”

“‘The new generation — the millennials — they don’t have that romantic connotations with houses that we might do,’ said Marshfield Mayor Chris Meyer. ‘They have a different mindset. They saw their parents go upside down on their mortgages, or end up being foreclosed upon. They look at that and say, ‘Why would they want that?’ It’s just a different trend looking forward,’ he said.”

Bits Bucket for January 2, 2014

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