February 6, 2014

The Game Of Choice

The Gazette reports from Colorado. “Colorado Springs-area home sales fell in January for the third consecutive month, although prices continued to climb, according to a report by the Pikes Peak Association of Realtors. Bruce Betts, broker-owner of Re/Max Advantage, a Springs residential brokerage, said that January’s decline continues a trend that started late last year. A report from Pikes Peak Regional Building Department showed home construction also softening in January compared with the same month a year ago - a drop also blamed, in part, on rising mortgage rates.”

“The slowdowns might signal the local economy hasn’t rebounded quite as well as some people think, Betts said. ‘With all this talk about the economy getting better, I just don’t think it’s really true,’ he said. ‘People are still unemployed and underemployed.’”

“Colorado Springs-area foreclosure activity was unexpectedly high last month after having slowed in 2013, a report from the El Paso County Public Trustee’s Office shows. Not only did local filings reverse course in January, but they exceeded the totals in several Denver metro-area counties, said Public Trustee Tom Mowle.”

“Mowle said he doesn’t expect a dramatic worsening in local foreclosure activity. January’s figure still is far below totals recorded between 2007 and 2012. ‘It’s not like we’re back in the bad days,’ Mowle said.”

The Santa Fe New Mexican. “A year or two ago, many brokers said their clients were waiting for the market to hit the bottom, not wanting to buy if prices were going to sink more. That refrain is much less common today. ‘That’s right. Nobody’s talking about it anymore; everybody’s talking about the improvement in numbers,’ said Cate Adams in the Santa Fe office of Sotheby’s International Realty. ‘Sales are up, prices are not. Everybody’s saying that across the board. Why is Santa Fe so slow to recover? I don’t know. We were obviously very much affected by the real-estate bubble, if there was such a thing.’”

“The lookie-loo phenomenon — people going out to look at houses with no real intention of buying, basically making a hobby out of it — appears to be subsiding. ‘I do think the lookers got a little spoiled in 2009, 2010 and 2011 in that they would go out to look at houses thinking the market was still going down so they weren’t that serious. I do think we’ve reached the bottom, but some potential buyers aren’t convinced. They’re still thinking, ‘It’s overpriced. I’ll wait a while for it to come down.’ But I think those days are gone,’ said David Dougherty, Dougherty Real Estate.”

“The Globe and Mail on Arizona. “Calgary retirees Peter and Debra Jennings, in their early 60s, were familiar with a lot of warm-weather destinations in the United States but had never visited Arizona. But with so many friends headed to Arizona, a mecca for golf keeners like the Jennings, the couple paid their first visit in 2006. They fell in love with Tucson, a two-hour drive south of Phoenix and one hour north of Mexico. ‘It was the same as Calgary and had the same sort of feel, laid back and easygoing,’ Mr. Jennings, formerly in the financial services sector, says. ‘Phoenix had a rush-rush big city feel.’”

“Initially they built a 2,100-square-foot, three-bedroom ranch for $375,000 on a golf course in a gated residential community in Oro Valley in north Tucson. Then, as now, they dealt with fluctuating currency exchange. ‘When we wrote up the deal the Canadian dollar was 82 cents U.S.,’ Mr. Jennings recalls. ‘By the time we had to come up with the money, the dollar had gone up to 95 cents.’”

“Last year, the couple sold their house at a loss of $100,000 to relocate to a new upscale residential community on the edge of the posh Ritz Carleton golf course in Dove Mountain. But they gained in the end, by buying a larger home with 2,400 square feet for $348,000, well below asking prices prior to the housing meltdown.”

The Arizona Republic. “Many Arizona homeowners who were able to get federal loan modifications during the housing crash will begin to see their monthly payments rise this year. Borrowers, who had their interest rates reduced through the Home Affordable Modification Program in 2009, are hitting the five-year mark. That’s the point when their interest rates will begin to climb again, pushing up their monthly payments, according to a federal report.”

“In Arizona, about 88 percent of the 33,556 homeowners who lowered their payments through HAMP will see their interest rates begin to climb again during 2014-15. The typical borrower in the state will see their monthly payment climb by $185 a month, according to a Special Inspector Report for the Troubled Asset Relief Program. The biggest payment increase on an Arizona HAMP loan will jump by more than $1,200 a month.”

8 News Now in Nevada. “A new report by Realty Trac shows more homes were bought, fixed up, and quickly sold last year than the year before. There are people all over Las Vegas gambling in a high stakes way, but the game of choice may surprise you. John Bohnet buys foreclosed homes at auction, cleans them up, puts some paint on the walls, and sells them for a profit. ‘You’re bidding against other people, and you have to put the money up that day. There’s no going back and saying you don’t want the thing,’ said Bohnet.”

“‘It’s a little bit of fun to see what you can get it at. You think you know what you’re doing and you get tested on it every project,’ he said.”

“‘Suddenly we saw all the appreciation. You bought it undervalued and then all this appreciation happened. So there were a lot of profits to be made,’ said Fafie Moore, the owner of Realty Executives of Nevada. She says flippers can add value to the housing market. ‘That one sale will help, and will show increased value.’”

“Moore says home values have come up high enough that flippers won’t be able to buy as low in 2014 which will slow down the amount of house flipping. She says it is a sign of a stabilizing housing market.”

Fox 5 in Nevada. “Imagine being taxed on money you didn’t earn. That could be reality for Valley residents trying to short-sell their homes, because of an act Congress didn’t extend at the end of 2013. The Greater Las Vegas Association of Realtors says about 16 percent of homes in the area are currently listed as short sales. If any of these homes sell, because Congress didn’t extend the Mortgage Debt Relief Act, cancelled debt would be regarded as income on taxes.”

“Michael Allen decided to cut his losses and sold his house just in time. His house was more than $50,000 underwater. He put it up for short sale, hoping the bank would settle the difference of what his home was worth, because he didn’t want to face foreclosure. ‘I wanted to start fresh, and I tried refinancing in the past and it wasn’t working. I wasn’t allowed to do it,’ Allen said.”

Bits Bucket for February 6, 2014

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