May 22, 2014

This Glut Is Going To Exist Indefinitely reports on Arizona. “The Fed’s unprecedented mortgage subsidy has helped the market make a dead-cat bounce since the crash of 2008. However, while low rates have propped up prices, sales of existing homes have fallen in seven of the last eight months. In Phoenix, where home prices have bounced back and Wall Street money has vacuumed up thousands of distressed properties, the market has gone flat. In Belfiore Real Estates’ April market report, Jim Belfiore wrote, ‘The bad news for home builders is they have created a glut of supply in previously hot market areas… Potential buyers, as might be expected, feel no sense of urgency to buy because they believe this glut is going to exist indefinitely.’”

Phoenix Business Journal in Arizona. “Metro Phoenix saw its rate of underwater homes plunge to 22.7 percent during the first quarter, according to Zillow Inc. That rate means there still are 175,811 Valley homeowners that owe more on their mortgages than their home is worth — essentially leaving them stuck and unable to move — and accounts for $14.8 billion in total negative equity. The Valley once again posted among the highest rates of negative equity in the nation.”

“‘The unfortunate reality is that housing markets look to be swimming with underwater borrowers for years to come,’ Zillow Chief Economist Stan Humphries said in a statement.”

From Vegas Inc in Nevada. “U.S. officials hope to fetch at least $19 million by selling 120 acres of southern Las Vegas Valley land. The BLM says the fair market value of the parcels is $19.19 million combined — almost $160,000 per acre — and it won’t sell them for anything less.”

“The BLM’s first local auction this year, on Jan. 16, was for 440 acres that the agency said was worth $25.3 million combined, or $57,420 an acre. The agency wound up selling 24 of the 28 parcels for $23.8 million, with four parcels left on the table.”

“BLM land sales roared during the boom years but plunged when the housing market collapsed. In 2006, the agency sold at least 2,924 acres locally for $777 million, an average of $266,000 per acre. From 2007 to 2012, it sold just 107 acres.”

“Las Vegas’ new-home market continues to slump this year, with sharp drops in sales and development plans. Las Vegas’ broader economy seems to be improving, but the housing market is apparently ’stuck in neutral,’ Home Builders Research President Dennis Smith said in his report.”

“‘Is there a recovery taking place in the Las Vegas housing market or not?’ he asked. ‘In our opinion, the word ‘recovery’ is now one of those overused terms by pundits, economists, realtors, politicians and reporters.’”

The Rio Rancho Observer in New Mexico. “With an increasing supply and signs of decreasing demand, the Rio Rancho housing market could officially become a buyers’ market. Pending sales fell 41 percent, from 278 in April 2013 to 164 in April 2014. Over the last six years, local Realtor Mark Fiedler said the local inventory of homes for sale in Rio Rancho has gone down fairly consistently. In the last year, he has seen that figure level off and start going back up again.”

“Since the summer of 2007, prices are down 17 percent in Albuquerque and 22 percent in Rio Rancho. ‘We haven’t hit the bottom on prices yet,’ Fiedler added.”

The Albuquerque Journal in New Mexico. “Foreclosure filings in Rio Rancho rose significantly last month, up from almost 45 in April 2013 to about 120 in April 2014, and the number of local homes in foreclosure is approaching state and national rates. Local Realtor Mark Fiedler cautioned against reading too much into one month’s fluctuation. He noted last month’s new filings, or when banks file court actions to start the foreclosure process, are only about 25 percent higher than the average for the last 12 months.”

“According to Trulia, almost 140 homes are in foreclosure in Rio Rancho Centra, which includes North Hills and Northern Meadows. The average sale price in that region has fallen 26 percent, from $176,728 in 2007 to $131,225 in 2014, according to GAAR data. Banks and other government agencies offer many programs, Fiedler said, to assist people at risk of losing their homes. Those homeowners should seek that assistance as soon as possible. In some cases, they can obtain lower interest rates or a deferment of payments.”

Eyewitness News 4 in New Mexico. “A 4 On Your Side investigation found the Albuquerque metro still has more than 100,000 undeveloped residential lots. Like other southwest states, New Mexico is home to ‘zombie subdivisions’ – modern-day ghost communities that were platted, in some cases paved with streets, but lack houses after the housing market collapsed in 2008. ‘Yeah, the market really dropped,’ Connie Bornschein said. She’s lived in a home in southwest Albuquerque for the last three years. She said she’s about to move out and try to lease it to renters.”

“The home is in a part of Albuquerque that experienced explosive growth roughly 10 years ago. Across the street from Bornschein’s home, more than a dozen lots remain undeveloped and encompassed by a metal fence. ‘It makes it kind of depressing … You can look and see the beautiful mountain and stuff like that, but then you look down and there’s not much to look at,’ she said.”

“A recent study by the Lincoln Institute of Land Policy found millions of vacant lots across eight southwestern states — Arizona, Colorado, Idaho, Montana, Nevada, Utah, Wyoming, and New Mexico. Families in Albuquerque’s so-called ‘zombie subdivisions’ hope to have new neighbors that will buy a home and stay for the long-term. ‘I just don’t like all the dirt flying over here,’ said homeowner Stephanie Lucero.”

Bits Bucket for May 22, 2014

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