March 12, 2015

Living In The Twilight Of Uncertainty

The Real Deal reports from New York. “Initial reports suggested that units at the Madison in Long Island City, a new condominium development, were selling like hotcakes. Nevertheless, the building is now going rental. Pre-construction sales launched at the 14-unit building last summer, and roughly 50 percent of the units quickly went into contract. At the time, pricing for the one- and two-bedroom ‘penthouse’ units started at $500,000, according to Brownstoner. But the owners, who occupy at least one unit in the building, have decided to hang on to their debut project, and refund the buyers. Now it’s going rental, according to Brownstoner.”

Bloomberg on Texas. “Houston home sales fell in February for the first time in six months, a sign lower oil prices are spooking buyers. Purchases fell among residences costing less than $150,000 because of tight supply, and among properties selling for more than $500,000 as wealthier buyers paused amid economic uncertainty, said James Gaines, research economist at Texas A&M University’s real estate center. ‘They don’t know what the real impact of falling oil prices is,’ Gaines said in a telephone interview from College Station, Texas. ‘We’re living in the twilight of uncertainty.’”

“Michele Marano, an agent with Champions Real Estate Group, said the housing market has softened because buyers are taking their time. ‘People know right now that time is on the buyers’ side,’ said Marano, who specializes in houses for energy-industry professionals. Marano said she’s in the market for a new home in the Woodlands, and is waiting for prices to drop before buying. ‘There’s a lot of brand new construction, and it’s not like it’s moving fast,’ Marano said. ‘When we look at houses, the selling agent calls me back 10 times asking if we will come in again.’”

Crain’s Chicago Business in Illinois. “The seller of a Gold Coast condominium said he was ‘disturbed’ that the unit sold last week for the same he paid more than 11 years ago. The two-bedroom, three-bath unit on Delaware Place went for $590,000, which Dr. Robert Murphy paid in October 2003. ‘That place went so cheap,’ Murphy said of the March 4 sale.”

“A few distressed sales in the building during the downturn ‘unfortunately set the appraisal below where it should have been,’ said listing agent Anna Robertson of Jameson Sotheby’s International Realty. The home was listed for $625,000 in January.”

The Frederick News Post in Maryland. “Demographics are constantly changing in Frederick County, and trying to meet the development demand for community development requires both short- and long-range planning. Eric Soter, a principal with Rodgers Consulting and former director of the county’s division, said there would be more younger, first-time buyers in the market for homes in the future, but the average 40-50 age group that moves into a larger home is not doing so. ‘What impact will this have on homes? Will prices fall?’ Soter said.”

“Hugh Gordon, a loan officer with FitzGerald Financial, said without the ‘move-up’ buyers, the traditional home-buying system is in trouble. If part of that system is missing, Gordon said, it creates a disjointed system, almost a game of dominoes that could fall. That missing move-up will stall the market for potential first-time buyers, he said. Joe Baldi, a housing counselor with the Frederick Community Action Agency, said he is seeing more people coming in for help facing foreclosures. Those in distress will wait too late to talk with Baldi or their lender or spend money that should have gone to pay their mortgage on other things, he said. ‘It is bad to see it so busy,’ Baldi said, ‘but some people don’t help themselves.’”

The Marin Independent Journal in California. “In Marin, 294 foreclosure filings took place last year, a 43 percent drop compared with 515 in 2013, according to RealtyTrac. While optimistic, RealtyTrac vice president Daren Blomquist said there was a blip on the horizon. ‘In November, December and January we actually saw a year-over-year increase in foreclosure activity in Marin, and that was following 33 consecutive months in which foreclosure activity was down.’”

“A veteran Marin agent described the development, ‘As compared to a red flag, it’s a pink flag. It’s not like things were a few years ago. It’s something to keep an eye on,’ said Peter Richmond, a Pacific Union agent.”

The Orlando Sentinel in Florida. “South Orange County resident Mary McKaig said she had been confused after taking ‘judgment-altering’ weight-loss medication for the first time and mistakenly bid more than $100,000 at a Feb. 19 public auction for a house that — unbeknownst to her — was saddled with more than $400,000 of debt, according to court documents filed by her attorney. The $102,000 that McKaig agreed to pay for the two-story home in Windermere only paid off the homeowner-association debt. Public records show Chase Mortgage has for years had a $400,000 lien on the house, for which tax records show a market value of $290,127.”

“McKaig and her husband ‘basically dumped $100,000 into a property that is $100,000 underwater,’ said Orlando attorney Richard Weinman, who represents McKaig.”

“Mistakenly buying a property enshrouded in debt is more common that most people think, said Orlando attorney Moses DeWitt. He noted that five other bidders on the Windermere house were willing to pay more than the homeowner-association debt on it. But few people, he added, overbid by as much as McKaig did. ‘I’ve seen so many people get themselves into this situation,’ said DeWitt. He said he once had a client who purchased at auction a house that, unbeknownst to the buyer, was deeply underwater. The buyer spent $50,000 on renovations before he realized his mistake and the bank filed to foreclose.”

Bits Bucket for March 12, 2015

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