May 11, 2015

Reminders Of The Real Estate Bust

The Kirkland Reporter in Washington. “A rise in the number of people looking to buy homes and a historically low inventory has led to an all-out bidding war in Kirkland. This competition has led to a 11.7 percent jump in single family home prices in Kirkland from last year, according to Redfin, with the median price at $620,000. A buyer using a lender can still compete by agreeing to financially cover any difference between the appraisal and the asking price, according to RE/MAX Northwest realtor/broker Debbie Walter. But in order to match, buyers with lenders may have to waive all contingencies, which concern the conditions under which a prospective home buyer can withdraw a deposit made at the beginning of the transaction.”

“‘You have to go in a bit naked in regard to your protection,’ Brants said. ‘It becomes a battleground of sorts, where you’re competing in a multiple offer situation against cash buyers where the only way to beat them is to waive all contingencies. It becomes who wants it the most, essentially.’”

KENS 5 in Texas. “New data shows overvalued home prices could put San Antonio at risk for another housing bubble. According to Fitch Ratings, home prices in San Antonio are 15% overvalued. That’s third worst in the state of Texas, which already has one of the most overvalued housing markets in the country at 11%. That’s something that Kelley Guerrero, a homeowner who’s selling her family’s home in Alamo Heights, says she’s seeing first hand. ‘The price per square foot tends to be somewhere between $200-$300, which I think is a bit high but the buyers are willing to pay that,’ said Guerrero.”

“Average home prices city-wide are now $225,100, nearly one-third more than 2006, right before the recession.”

The Bozeman Daily Chronicle in Montana. “The cost of building homes is always on the rise. But never is the increase more apparent than during a strong rebound and growth period like parts of Montana — and the rest of the country — are experiencing now. Statistics from the U.S. Census Bureau show Montana building permits for single- and multi-family homes in March were up 75 percent over last year. Lot prices in and around Bozeman are still cheaper than they were in 2007, but they’ve nearly doubled from three years ago, said Brian Popiel, chairman of the Southwest Montana Building Industry Association.”

“Though Bozeman hardly has a glut of houses overall, the current boom in the larger homes market may lead to a time when there are too many homes that Bozemanites can’t afford, Popiel said. ‘Everything I’m seeing points me to (the notion) that we would get a glut of houses in the $350,000-$450,000 range,’ he said. ‘That takes a pretty sizable paycheck to get there. And Bozeman doesn’t have that many of those jobs.’”

The Tampa Bay Times in Florida. “All over Tampa Bay they lurk — deserted, decaying, scary reminders of the real estate bust. Zombie houses. Abandoned by their owners and stuck in the foreclosure process, they are a blight on neighborhoods rich and poor. Some have been vacant for years, so long that people like Lee Randall can’t even remember the last time they saw the normal signs of life. ‘It’s been like that for years,’ Randall said. ‘There’s some nasty stuff in there. You’d need a mask and bulldozer.’”

“George W. Bush was still president when the cute white house on Nevada Avenue NE began its transformation into rotting zombie. In 2008, CitiMortgage started to foreclose on the loan, which Michael R. Cole assumed when he bought the house in 1995. The foreclosure dragged on with little action until it was finally dismissed on July 18, 2012, for lack of prosecution. The bank quickly filed a motion to reopen the case, but nothing has happened in the almost three years since then.”

“Asked for an explanation, a CitiMortgage spokesperson said that Cole’s loan is now ‘investor-owned’ — he would not identify the investor — and that Citi’s involvement with the house ended last year. There is nothing in public records that shows Citi ever sold or transferred the loan. Cole did not return calls seeking comment. In 2006, according to records, he and his wife moved to Brooksville and bought a much larger home with a $265,000 loan from another bank.”

The Columbus Dispatch. “Ohio is spending the final portion of more than half a billion dollars in federal funds aimed at providing mortgage ‘relief’ for struggling homeowners. But several years after the original fanfare and promises that the funds would bolster the housing market, it appears that all that money didn’t end up helping nearly as many people as expected and ultimately just delayed, not helped, the market to right itself.”

“For example, Alesia Butcher, a 53-year-old home health-care worker whose $976 monthly mortgage payment on her West Side home has been covered by the fund since late last year, is still looking for full-time work and isn’t sure how she will manage after the payments stop in early 2016. David Evans resumed paying his $725 monthly payment in the past few months from his Social Security disability income following two heart attacks and high medical bills from his wife’s cancer battle, but concedes that he is struggling.”

“About 6,000 Ohioans still are receiving mortgage help. It may be several more years before it is known how many people end up slipping into foreclosure even after getting thousands of dollars in relief payments. So far, nearly 500 homeowners who received assistance have faced foreclosure, and the number continues to grow.”

The Record in New Jersey. “Andrea and Joe Buccino bought their first home, a Cape Cod in Wallington, for $385,000 in 2005. A decade later, they put it on the market for $299,000. For sellers at the lower end, accepting the idea that their homes are still not worth anywhere near what they paid can be a stressful experience. The Buccinos have reluctantly accepted that reality, a decade after they bought their Wallington home. They cut their asking price repeatedly before bringing it to $299,000 at the end of March. After that cut, they got an offer quickly, and the sale is pending. ‘We’ve gotten to the point where we’re ready to move,’ Buccino said. ‘It’s hard to let it go for what’s going to be a rock-bottom price. But sometimes it’s better to move on and get what we want.’”

“Zalika Etienne, a teacher, bought a six-bedroom home on Paterson’s Eastside neighborhood with her husband, brother-in-law and sister-in-law in 2006. They paid $576,000. When they bought the house, Etienne said, they were ‘very, very excited, very proud first-time buyers’ and viewed the property as ‘our own lifetime investment.’”

“But then the recession hit, and Etienne lost her job and her sister-in-law’s salary was cut after a company merger. ‘It ended up being too difficult for us to pay the mortgage,’ she said. They decided to move out of state, and the home was sold in a short sale last fall for $245,000. Now, after losing the house she was once so excited about, Etienne wonders if her family paid too much. ‘Hindsight is always 20/20,’ she said, ‘but I question whether it was ever worth what we paid for it.’”

Bits Bucket for May 11, 2015

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