July 30, 2014

Cheering Replaced With Gnawed Fingernails

KSN.com reports from Kansas. “In April the Farm Bill made more Kansas towns eligible for the USDA’s Guaranteed Rural Housing Loan program, now the first recipient of the program in Dodge City has moved into her new home. The loan program used to apply to towns with 20,000 people or less, but now includes towns with up to 35,000 people, making Dodge City, Garden City, and Lansing eligible. ‘It’s about time,’ said Mayor of Dodge City Brian Delzeit. ‘How much more rural can you get than Dodge City, America or Garden City?’”

“With more people now eligible, the office is actually backlogged, with over 100 applications waiting to be reviewed. As more people are able to buy houses, the hope is that rural Kansas will grow. ‘There’s a tremendous demand for housing,’ said Senator Pat Roberts, ‘and if we could solve that, a lot more job growth would occur in the areas where we’re seeing growth.’”

Reuters reports on Illinois. “D.R. Horton Inc, the No.1 U.S. homebuilder, said it had to offer discounts in the third quarter to boost sales in Chicago, a particularly bleak spot in a weak U.S. housing market. Higher U.S. home prices along with rising mortgage rates in 2014 have reduced affordability for many, resulting in an underwhelming spring selling season, which is to homebuilders what the holiday season is to retailers. ‘We (increased) the level of incentives in many communities throughout the spring in an effort to improve sales and maximize returns and profit,’ Chief Financial Officer Bill Wheat said.”

“D.R. Horton said that Chicago in particular was performing below its expectations. The company reported a 15 percent drop in home deliveries in the Midwest, including Chicago, and the Southwest in the quarter.”

From Chicago Magazine in Illinois. “Remember the cheering from homeowners that echoed across Chicagoland last year? It has been replaced with a few gnawed fingernails. The healthy price increases that followed the 2012 bottom of the local housing market have induced more people to list their homes. In part because of that increased inventory, sales prices appear to be leveling off. It’s happening for bungalows—but especially for mansions.”

“Would-be sellers are finally getting real about what their spreads are actually worth. In the wealthy North Shore village of Winnetka, for example, brokerage firm Redfin counted 11 residences for sale at $5 million or more as of early July. Seven of them had been on the market 12 months earlier; five of those have had significant price cuts. ‘We’re beginning to see price cuts a little more often,’ says Svenga Guddell, director of economic research at real-estate research firm Zillow, ‘and [high-end] homes are being sold at below list price.’”

“When price cuts don’t work, some brokers are turning to gimmicks. Another Winnetka mansion, a 27,000-square-footer billed by the agent as the most expensive Chicago-area house ever built, hit the market in April for the sixth time in four years—this time at $18.8 million, down from $32 million in 2011. In June, the agent offered brokers a $250,000 bonus on top of the $375,000 commission. Richardson has heard similar stories in other markets. ‘In D.C., the seller of an $800,000 home offered a Lexus to the broker who found a buyer,’ says Nela Richardson, Redfin’s chief economist.”

The Beacon Journal in Ohio. “Residential and agricultural property values are going down again in Summit County. The latest property reappraisal determined that values fell an average of 2.3 percent this year. The decline — based on home sales over the last three years and site inspections — represents about $500 million in lost value for homeowners and farmers. It also shows that the local housing market is still rebounding from the Great Recession and foreclosure crisis.”

“‘Summit County is not alone,’ said Shelley Wilson, an executive administrator at the Ohio Department of Taxation. ‘Unfortunately, I think the northeastern sector of the state has been a little slower to recover in terms of the housing market.’”

“County Fiscal Officer Kristen Scalise blamed the bigger declines in Sagamore Hills and Twinsburg on condominium sales. ‘Condos are losing value faster than single-family homes,’ she said. Sagamore Hills residents agreed that there are many condos in the community that have lost substantial value. Homeowner Doug Huth also said the overall decline wasn’t surprising. ‘I think you’re still seeing the effects of 2008,’ he said.”

The Oakland Press in Michigan. “Andy Meisner stood in front of a two-story house on Cloister Court in Troy last week, one of 948 properties to be auctioned off in late August for nonpayment of property taxes. The Oakland County treasurer was filming an ad about the upcoming auction, a three-year process that culminates in a sale of tax foreclosed properties each August, with a second auction in October.”

“Starting bid for the home with four bedrooms and three fireplaces? Just over $62,000. Websites like Zillow and Trulia estimate the home’s value at $315,000 to $340,000. ‘There are still a lot of foreclosures in the queue,’ Meisner said. ‘Another dumping of distressed properties on the Oakland County real estate market is something that could happen, and it could point us back in the wrong direction.’”

“On the front lines, lifelong Pontiac resident Mona Hoffmeister — a community activist and vice president of the group Citizens Against Blight — said she doesn’t see the housing market getting better, no matter what the numbers say. She added that not only are abandoned properties an eyesore in the community, but they’re ripe for squatters, which adds another degree of danger to local neighborhoods. ‘It’s still as bad as it has been,’ Hoffmeister said of the real estate market.”

Bits Bucket for July 30, 2014

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