October 29, 2015

Sellers Were Getting Overconfident On Pricing

The Denver Post reports from Colorado. “It has been a long, hard slog, but Colorado’s economy finally has reached unemployment rates last seen during the dot-com and housing booms. But for a variety of reasons, full employment this time around just doesn’t seem to feel quite so full. Rising real wages and stock values in the late 1990s and rising homeownership and home equity a decade ago contributed to a sense of upward mobility now lacking for many. Opportunities drew more people into the job market. This time around, workers continue to disengage, pushing down the unemployment rate and denting household incomes. ‘There are a substantial number of people who are voluntarily unemployed,’ said Tucker Hart Adams, an economist with Summit Economics in Colorado Springs. ‘At the same time, there are help-wanted signs up everywhere.’”

“Living costs along the Front Range, especially for housing, have far outstripped pay increases, contributing to a sense among low- and middle-wage workers that they are losing ground. Wage growth has averaged around 3 percent a year, but housing costs have been rising closer to 10 percent in metro Denver, said Patricia Silverstein, chief economist with Development Research Partners in Jefferson County. For some workers, it can make more financial sense to drop out of the workforce than foot the day care bill for multiple children.”

“After getting laid off from a good-paying job in hospitality management in 2013, Tameaka Johnston, 35, a Denver mother of three, dipped into retirement savings to make ends meet. ‘Most everything I was able to get was a server or restaurant manager, but I didn’t want to go back to the service industry,’ Johnston said. ‘Having three kids and a mortgage, I can’t live on ‘Maybe today’s going to be a good day.’”

This Garden Island in Hawaii. “Movement in the Kauai housing market in general is fairly static right now, said Realtor Tom Austin. ‘If you look at Kauai market statistics, the number of opened escrows and the number of closings in the last two or three months has leveled off,’ Austin said. Last year, the most expensive single-family homes were selling for an average of $940,000 in Hanalei, while the cheapest houses were still in Waimea. Austin said what happened to the market in Hanalei, and throughout the island, was that sellers were getting overconfident on pricing.”

“‘Sellers got very optimistic and they started pricing properties higher and higher,’ he said. When those properties didn’t sell, Austin explained, homeowners would lower the price. ‘Then buyers see that it’s been on the market for a long time and the price went down and they’re wondering what’s wrong with it,’ Austin said. ‘You price yourself out.’”

The Midland Reporter Telegram in Texas. “A drop in the average sales price of houses sold continued in September, but according to the director of the multiple listings service (MLS), that drop is bringing the market where it needs to be. Instead, Carroll Nall told the Reporter-Telegram that the Midland housing market ‘remains strong and consistent’ while providing more choices for potential buyers. ‘There are 250 more houses to choose from (compared to September 2014),’ Nall said. ‘The days of having four or five contracts on a house are over. People have more choices and are taking a little more time (when selecting a house).’”

WTNH on Connecticut. “While Alison Schneider is still trying to figure out what all of the keys go to in her new West Hartford home, it didn’t take her long to figure out that Connecticut is a buyers market. ‘I guess I was surprised there were so many out there and the pricing didn’t seem all that bad truly,’ she said.”

“Matt Miale, a realtor at Keller Williams, says the latest census numbers show that about 15,000 more people are leaving the state then moving in. That has been continuing for the past five years. ‘And that’s noticeable to. You do see him a lot more relocation opportunities in our business on people leaving the state than coming in, and that’s the first time we really started to feel that.’ said Miale.”

From Lillie News in Minnesota. “In its third attempt at shedding vacant lots from its inventory, St. Paul’s Housing and Redevelopment Authority have listed 27 vacant parcels around the city for sale. Most parcels are single-family residential lots, and priced under $10,000 — they’ve all been reduced in price by 20 percent, after they didn’t sell the first two times around, as per city policy. These 27 lots represent the majority of buildable vacant lots the HRA still owns, aside from some commercial parcels and some plots currently housing community gardens. Most of the lots for sale are residential, but a few are zoned for commercial uses.”

“Though the first rounds of vacant lot sales saw some decent response from buyers, this one has not yielded any applications as of yet — applications will be accepted through Friday, Nov. 6. Any individual can buy a lot; it’s not limited to developers.”

The Buffalo News in New York. “Larry Lamb, an East Side real estate investor, got into the business on the cheap – via the Buffalo and Erie County foreclosure auctions. Since 1995, he has amassed 12 homes, some for as little as $1,500. More than 2,100 Buffalo properties will be auctioned off this week, after their owners failed to pay city taxes, water bills or user fees. But you won’t see Lamb with a bidder’s paddle at the annual three-day auction.”

“A Buffalo News survey found that winning bids have skyrocketed by as much as tenfold in some city neighborhoods. In 2009, nine properties on Fillmore Avenue sold for an average price of $4,300. Four years later, the average spiked to $11,575 for eight properties on the same street. ‘The prices have become outrageous, outrageous, outrageous,’ he said. ‘I’ll be there just to see how high the bids will go, but I won’t be paying $20,000 for a house at the auction. It doesn’t make sense to pay $20,000 for a house that’s really worth $10,000.’”

The Patterson Press in New Jersey. “John Gomez, an emigrant from Colombia, said he works about 75 hours a week at three different jobs but can’t keep up with the mortgage on his Wabash Avenue home. Jose Duarte, meanwhile, has received an eviction notice because he is way behind on the payments on the Putnam Avenue house he owns. Another city resident, who only gave her name as Lydia, said she had just a decade left on her mortgage when she lost her job five years ago. ‘Don’t ask me how much I owe, because I don’t know,’ said Lydia.”

“They were among 30 people who attended a forum organized by the mayor last week to help Patersonians facing foreclosure. Gomez said he has paid $6,000 in legal fees trying to resolve his mortgage problems. ‘But nothing happened,’ he said. ‘I found out today that the advice is free. I regret paying for this. I filled out the form today. I’m going to set up an appointment to see if I can get a loan modification for my house.’”

“But Lydia said she has already sought help to no avail. ‘I have talked to the banks many times,’ she said. ‘Whenever I talk to someone, they take my name and hear my situation. I received a 28-page packet of forms in the mail that I filled out. I sent them back, but whoever I talk to they tell me to wait. When I hear back it is always another representative, so I have to start all over again. I really think they purposely let time go by so you get more in debt,’ she said. ‘I stopped making payments five years ago. I’ve told them my problems but they keep on giving me different reps.’”

Bits Bucket for October 29, 2015

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