February 16, 2015

Renting Was Never The Long-Term Goal

The Denver Post reports from Colorado. “Z Davis Robison and his wife, Mary, tried and failed for eight months to buy a house near their shop in Old Town Lafayette, before literally stumbling on the one they snapped up in January. ‘The time for thinking about what your needs are is before you start looking,’ said the Oklahoma transplant. ‘Whenever you see something, you have to be ready to pounce in this market.’ Mary was driving from their shop, Curating the Cool, and saw the landlord of a neighboring rental had just posted a ‘For Sale By Owner’ sign. Z raced across the street to look at the place. The owner was still there, and Robison wrote a $5,000 check on the spot to seal the deal.”

“The inventory is now so low, some in the industry argue, that it is causing the market to distort and contort in unexpected ways. ‘We have never seen it this low,’ said Kelly Moye, a Realtor with Re/Max Alliance in Broomfield. ‘It is a bit panicked. We are all in a race.’”

Bloomberg on New York. “One Tuesday last month, a buyer at Manhattan’s Stella Tower completed the $5.35 million purchase of a two-bedroom condominium on the 14th floor. That Friday, the home was listed for rent at a rate that makes it one of the costliest apartments in the midtown west neighborhood. The buyer, a shell corporation, is seeking $19,500 a month for the 1,787-square-foot apartment, according to StreetEasy. It’s one of three homes that have already been put on the rental market at the recently completed building, where owners began closing on their units at the end of December.”

“The high-end additions to the leasing market have curbed rent growth for luxury apartments in the last year, said Jonathan Miller, president of New York-appraiser Miller Samuel Inc. ‘What is being built on the condo side tends to be larger — not studios or one-bedrooms,’ Miller said. ‘They’re adding more supply to the part of the rental market where arguably less new supply is needed.’”

The Sun Sentinel in Florida. “If you want to rent a condo or townhome, your options in South Florida are disappearing. Many developers and investors who rented out units after the housing collapse are putting them back on the market now that home prices are rising. That means you’ll have a harder time finding one to rent, but you’ll have more places to look at to buy. You’ll see even more in 2015 and beyond, analysts say.”

“Over the past several years, Miami-based Mattoni Holdings bought about 150 condos and townhomes across Miami-Dade and Broward counties. The investment firm spruced up the units with fresh paint and new carpeting, found willing renters and enjoyed a strong cash flow before finally deciding the market had rebounded enough to sell. ‘Renting for us was actually very easy, but it was never the long-term goal,’ said Ricardo Caporal, owner of Mattoni. ‘Selling is almost like a cleanup — it’s closure.’”

LA Weekly in California. “Los Angeles has been called one of the least affordable housing markets in the United States. The California Association of Realtors this week had a little good news for us, though. Buying a home in L.A. was a little less unaffordable in the quarter of 2014. But it’s still unaffordable. The association says that 28 percent of Angelenos can now afford a median-priced home in this city, compared to 25 percent, or one in four of us, during the previous quarter. Hey, that’s progress.”

“Statewide affordability was up, too. Now 31 percent of Golden State residents can afford a median home, compared to 30 percent the previous quarter, according the association’s report. Los Angeles was one of the counties that ’saw the greatest quarter-to-quarter improvement in housing affordability due to price declines,’ the California Association of Realtors states.”

The Killeen Daily Herald in Texas. “If no more homes came on the market in Killeen and surrounding cities, it would take almost a year at the current pace to sell the more than 500 homes listed. A big contributor to monthly inventory is the rate at which cities such as Killeen and Harker Heights have been building new homes. According to Killeen’s permit reports, the city built between 40 and 100 single-family homes each month of 2014. Johnny Frederick, chairman of Killeen’s planning and zoning commission, admitted new home sales are essentially keeping older homes on the market longer by offering almost no money down for qualified military and nonmilitary new homebuyers. ‘With the new home builders, because money is so cheap on the credit side right now, they can borrow money so cheaply, they can afford to do that,’ Frederick said.”

CBS 5 in Arizona. “Experts anticipated a slight increase in foreclosures from December to January since fewer people foreclose during the holidays. But new numbers have some wondering whether the housing market is a long way from recovery. According to a new RealtyTrac study, foreclosures more than doubled from December to January, and are up 45 percent over this time last year. Christopher Smith with Neighborhood Housing Services said interest rates that were lowered with the Home Affordable Modification Program are now increasing, while household incomes are not.”

“Douglas McKeldey is losing his home to foreclosure after going into early retirement because of his health. He sends in what money he can, but said can no longer afford his monthly mortgage payments. ‘It’s really utterly embarrassing to have people like us in that shape,’ McKeldey said. He visited Neighborhood Housing Services in Phoenix to figure out how to keep the home he’s lived in for 14 years. ‘We have no idea at this point, I don’t know where we’re going to go,’ McKeldey said.”

Bits Bucket for February 16, 2015

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