Consumers May Be Experiencing Sticker Shock
The Salt Lake Tribune reports from Utah. “A top Utah economist predicts Salt Lake County’s real estate markets will see a healthy 2015, even as the U.S. Federal Reserve is signaling a possible hike in interest rates. Residential sales in the county are projected to rise by 7 percent this year and home prices by 4 percent, says James Wood, director of the University of Utah’s Bureau of Economic and Business Research. The U. economist and others unveiled forecasts to a gathering of thousands of the state’s real-estate professionals. With the potential of earning nearly $250 million in total sales commissions this year, Realtors welcomed the positive outlook. ‘How can you not help but dance with the way the markets are moving?’ beamed Dave Robison, president of the Salt Lake Board of Realtors.”
“In 2014, Utah’s housing markets lost momentum from their rebound out of the Great Recession, Wood said. A surge in home prices slowed significantly from double-digit levels the year before, leading Salt Lake County’s median home sales price to end 4 percent ahead where it started in January. Prices even fell in five cities in the county during 2014: South Salt Lake, Holladay, Cottonwood Heights, Murray and Riverton.”
From ABC 13 in Texas. “In the shadow of Houston’s still bustling economy, John Chen, is looking for a job. ‘I got laid off January 14,’ recalls the seven year Slumberger veteran. ‘They basically walked me into HR and said sorry due to the economic situation, we’re going to have to let you go.’ Chen is not planning on selling his house. The computer developer is looking for another job in Houston. ‘I can always move out of town, or do my other business, which is being a DJ.’”
The Flathead Beacon in Montana. “A family from Alberta visiting Montana this week would need to exchange $131.22 Canadian for $100 U.S. dollars. Plagued primarily by plummeting oil prices, the Canadian dollar — the loonie — reached its lowest value in six years in recent days, trading on the global market for barely 79 cents U.S. The declining Canadian dollar could also impact the local construction and real estate industries, which have been aided by second-home buyers or retirees from up north. ‘Canadian investments have really helped us. I’m a little concerned about the Canadian influence now,’ said Chuck Stearns, city manager in Whitefish. ‘We may see a lot of Canadian investment that helped us in the past years dry up a little bit.’”
The Press Enterprise in California. “Rapid home-price gains in 2014 have consumers biting their nails over whether they can afford new homes. Medians – nowhere near as high as they are in Orange County but still relatively high for middle-income buyers in the Inland region – may be at the tipping point. Steve Johnson of Steve Johnson Real Estate Advisory estimates there are now 370 model homes in about 120 projects across the Inland region. It’s an interesting time in the Inland area, primarily because homebuilders did not have enough product on the market to bring excitement into the marketplace in 2014, Johnson said. Now, they do.”
“Analysts concede Inland consumers may be experiencing sticker shock. Prices on new homes are in the $450,000 range near job centers and high-travel corridors, Johnson said. ‘I don’t think everyone has a firm grasp of where this market is really at,’ Bill Blankenship, CEO of the Building Industry Association of Southern California’s chapter in Riverside, said. ‘Communities are opening up all over, but we’ve not seen great results come from that as of yet. The number of sales in Orange County have shrunk because their price points have gotten so high, but we haven’t seen the wave come this way,’ Blankenship said, referring to an all-time median high on a new Orange County home of $867,760 in December.”
“For 2014, western Riverside County is expected to close out the year with 4,300 single-family home building permits – about the same as 2013. The permit count has been highest in the Coachella Valley.”
News 13 in Florida. “A couple was arrested earlier this month and charged with child neglect after police found them living in squalor in a home they didn’t own or rent. Eboni Tucker-Smith and Daquan Smith were squatting in a home in a nice Ocoee neighborhood for months, and they could have continued living there if they weren’t living in filth. Because six children were also living in the home, Ocoee police were forced to come in and arrest the couple.”
“According to police, the couple drew up a fake lease and had the electricity turned on in a number of names. If the couple kept the home in decent condition, they likely could have continued squatting there for years. In fact, once they post bail, they could go back to the house. ‘In Eboni’s situation, we have a bank that’s basically saying we are not going to foreclose on this house,’ said Lt. Mike Bryant, of the Ocoee Police Department. ‘Then we have the owners, and the owners are saying, ‘I don’t want this,’ so she picked the right house at the right time.’”
The News Journal in Delaware. “When word came that Chrysler was closing its Newark auto plant in 2009, it seemed plain to many employees that financial trouble could be on the horizon. So Jeff and Robbin Brown went to their mortgage company – CitiMortgage – in early 2010 to see if they could make different arrangements until Jeff, a millwright, found new work. A series of frustrating attempts to renegotiate terms went nowhere. Soon they got notice they would have to leave the $325,000 five-bedroom dream house they built on Old Baltimore Pike.”
“These kinds of stories inspired attorneys general nationwide to investigate the nation’s largest banks. As a result, Former Delaware Attorney General Beau Biden secured multiple settlements totaling $185 million – $100 million of which went directly to Delawareans either as a check in the mail or mortgage modifications, refinancing or loan forgiveness.”
“The Brown family got a $500 check from the settlement with Citi, they said. But it was nothing compared to the $125,000 they expected after reading a remediation framework published in 2012 by the Office of the Comptroller of the Currency. Families like the Browns also feel angry that the money has been doled out to other causes. They say a victim’s compensation fund or services could help replenish their depleted retirement savings account and send their two youngest children to college.”
“The Browns are quick to say they feel blessed to have found a home they could manage in Dunleith, where they moved in October. But, nothing can be done to reverse the emotional impact, Robbin Brown said. ‘We will never recover from the disbelief that they let the banks get away with what they did,’ she said. ‘The people who ratted on each other are getting more money than the people who it affected.’”
