October 5, 2015

The Decks Were Stacked With Aces

A report from the Idaho Press Tribune. “We all knew the housing market was going to rebound at some point, and now that it has, developers are ramping up plans to start building more large subdivisions. So now the question city leaders in Nampa and the Treasure Valley’s other cities have to ask themselves is, are we prepared to handle it? Remember the subdivision boom of the mid-2000s? It was a time when home values were rising at astonishing rates. Some properties saw their values double within a year or two. People were buying and selling homes, making tens of thousands of dollars in profits — it was Las Vegas and the decks were stacked with aces; the slot machines were rigged to come up triple cherries with every spin. Only instead of cards or cherries, it was houses.”

“Farmers were selling their fields for astronomical sums to developers eager to take their turn at the casino table. Remember all those tracts of agricultural land that were being prepped for new homes here in Canyon County? You know what happened. It was an artificial bubble. Nobody’s income was doubling, so there was no way buyers could afford houses of those spiraling values. The bubble eventually burst, and everything came crashing down.”

“Now that values are back up to where developers believe they can make a profit on new homes, there are five monster subdivisions planned in Nampa alone — 381 homes, 385 homes, 216 homes, 178 homes and 254 homes.”

The Bend Bulletin in Oregon. “New plans for apartment complexes in Bend submitted this year bring the total number of proposed units in a rental-starved market to more than 1,500. However, most of those applications remain on the drawing board, or in some phase of plan review at the city. The surge in applications is still lagging behind the demand for new rental housing. The numbers still apply for units of about 1,000 square feet, said Kevin Restine, general manager of Plus Property Management and an association board member. Above that size, and above rents of $2,000 a month, the market has ‘gone quiet,’ he said.”

“Properties that rent for more than $2,000 are less in demand for an obvious reason, Restine said: ‘Folks that can afford those things have probably moved into the purchase market.’ The leasing slowdown in properties priced at $2,000 a month and more may indicate the start of an overall market slowdown, he said.

From Leesburg Today in Virginia. “When Tim Nuhfer and Natasha Schuh-Nuhfer began their hunt for their first home, they jotted down a list of priorities. The husband and wife wanted at least 2,000 square feet of space, two to three bedrooms and a garage with space for their outdoor gear, and they didn’t want to pay much more than $450,000. Their search led them to a neighborhood that’s considered one of Loudoun’s real estate hot spots. They found their new abode, a four-bedroom, 2,100-square-foot house with a two-car garage, on the far east end of Sterling.”

“‘With the Silver Line coming, now is the time to buy here,’ said Schuh-Nuhfer. ‘People are on to it now, and the prices are really going to go up.’”

“If there’s any part of the market real estate agents might call a ‘cold spot’ in Loudoun, it’s the houses priced at seven figures. There are 200 homes for sale at $1 million or more, and just 16 are under contract, according to Pamela Jones of Long & Foster Realtors. So far this year, 67 at that price range have sold—just 1.5 percent of the county’s overall home sales. ‘So we currently have a 21-month supply of homes over $1,000,000,’ Jones said in an email. ‘Yikes!’”

The Tampa Bay Times in Florida. “Even for Tampa Bay homeowners who plan to stay put, steadily climbing home prices are a reason to cheer. After all, rising water floats all boats, right? Not exactly. Despite the continuing recovery of the housing market, 18 percent of all Tampa Bay homes lost value between August 2014 and August 2015, according to Zillow. In some areas, including Dade City and eastern Hillsborough County, more than 30 percent of homes were worth less this summer than they were a year ago.”

“Among the four bay area counties, Zillow found that Hillsborough had the most ZIP codes in which at least 18 percent of the homes declined in value over the past year. That’s a roughly accurate reflection of how values are faring in Hillsborough even though its property appraiser’s office, like that in Pinellas, examines sales in much smaller geographic areas. ‘We have 300 neighborhoods and looking at the overall change in price, the data suggest that approximately 25 percent dropped in price, while 75 percent increased,’ said Tim Wilmath, Hillsborough’s director of valuation.”

The Houston Chronicle in Texas. “Weeks after buying his first house, Anthony Escobedo got word that his company planned to close the California oil equipment plant where he works as a mechanical design engineer and ship him and his co-workers to headquarters in Houston. Escobedo, 26, wasn’t surprised. With domestic crude fetching less than $50 per barrel, fewer oil companies are clamoring for the products churned out of the Bakersfield factory, forcing his employer to cut costs and pare back operations.”

“But he’s not upset either. While the move across the country may come at an inconvenient time, the Golden State native says he’s looking forward to putting down roots in Houston, where the cost of living is cheap, the people are nice and opportunities abound to advance his career. ‘I’ll do the whole house search again, meet new people and work with new people in the company,’ said Escobedo, who has listed his Bakersfield home for sale and plans to move to Houston soon.”

“The global crude slump battering oil towns across the country has created a paradoxical effect in Houston, home to more than 3,700 energy companies, including some of the world’s largest. While the city has lost thousands of oil and gas jobs since oil prices collapsed by half over the past year, its energy capital status makes it a logical place for companies to consolidate operations as they shutter far-flung plants and offices to save money.”

WGRZ in New York. “For a couple of months now, Assemblyman Michael Kearns has been doing his ’shame campaign,’ calling out banks for holding onto foreclosed vacant homes. He goes to those homes and puts a sign on the property letting everyone know that he thinks it’s the bank’s fault that a home sitting for up to several years has fallen into disrepair. Now he’s taking that effort a step farther by trying to get the banks to work with local developers.”

“You can see how widespread the problem is online, where his ’shame campaign’ map of foreclosed homes shows more than 500 vacant properties throughout Western New York. While the house on Franklin Street is a success story, Matt Fisher who works in the Old First Ward on housing issues, is all too familiar with a different outcome.”

“‘There’s a big wall the banks put up. You know, there’s one [in South Buffalo] for example, the owner has been dead for seven years, and the house is still vacant. I reached out to the bank and they said they can’t talk because of privacy concerns. Well, the owner’s dead,’ Fisher said.”

Bits Bucket for October 5, 2015

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