At The Same Time, There’s A Shortage And Overabundance
A report from Mortgage Orb. “There’s been a lot of speculation in the mortgage industry lately about how hurricanes Harvey and Irma might effect delinquencies and defaults in Texas and Florida – not to mention mortgage originations and home sales. A high percentage of the homes in the area were already underwater in terms of loan-to-value. A report from ATTOM Data Solutions shows that the rate of foreclosure was on the rise in the Houston area before Harvey even hit. According to the firm’s Foreclosure Market Report, foreclosure starts in the Houston area had increased 28%, year over year, as of August. During that period, nearly 5,000 Houston-area homes started the foreclosure process, according to the report.”
“States that saw year-over-year increases in foreclosure activity in August included Alaska (up 100%); Wyoming (up 79%); DC (up 67%); Louisiana (up 59%); Vermont (up 12%); and Mississippi (up 9%). ‘The 14 percent month-over-month increase nationwide this August is more than twice the average six percent seasonal increase in August over the previous 10 years – the highest in fact since a 37 percent month-over-month increase in August 2007,’ says Daren Blomquist, senior vice president at ATTOM Data Solutions. ‘While this seasonal increase is certainly not enough to set off alarm bells nationwide, especially given that foreclosure activity was down annually for the 23rd consecutive month in August, there is cause for concern in a few local markets where foreclosure activity has consistently been trending higher on an annual basis this year.’”
The Star Tribune in Minnesota. “The market always slows at the end of summer, but there are some complications this year. The most important is the ongoing shortage of entry-level priced houses to satisfy demand. At the same time, there’s an overabundance of upper-bracket houses on the market. ‘The well-priced and staged homes may sell in days while homes that are not may languish on the market for 100-plus days,’ said Kath Hammerseng, president-elect of MAAR. She said that, despite some indications that sellers are in the driver’s seat, the market feels more balanced than the numbers suggest. ’Neither buyers nor sellers are getting everything they want.’”
From Fox 40 in California. “An economic slowdown could be on the horizon for the Sacramento region, according to a new economic report from Sacramento State. The report’s author, Sacramento State economy professor Sanjay Varshney, said the post-recession recovery could be entering its later stages. ‘If the data stays persistent, what I mean by that is if truly the weakness sets in, this might be the first signs of a recession down the road,’ Varshney said.”
“The most recent midyear report showed one critical industry slowing down in the Central Valley. ‘We saw the goods producing sector, the non-service sector, actually go negative,’ Varshney said. Also troubling, Varshney said construction jobs, one of the biggest drivers of the labor market in the region, for the first time in 7 years went negative. ‘When the construction sector goes negative for the first time in 7 years, it does get our attention,’ the professor said.”
The New York Post. “While a disgraced Nigerian oil-trading billionaire is on the run from authorities, his posh West 57th Street pad is back on the market — at the wholesale price of $39 million. Kola Aluko bought the sprawling 79th floor penthouse for $51.9 million in 2014 — but owed taxes and lenders. ‘The home was in foreclosure, but it is now being sold by a third party as an alternative to foreclosure,” said a source close to the property.”
“‘MOTIVATED SELLER!!!’ notes the listing. ‘A once in a lifetime investment opportunity to purchase the last remaining full floor residence at Manhattan’s New Crown Jewel, One 57 Condominium, for a great value!’”
“Aluko, who is under investigation for alleged money-laundering crimes in Nigeria and Europe, couldn’t be reached for comment. A Nigerian court tried to freeze his assets, including the penthouse, in 2014 — but couldn’t find him to serve papers. While One57 is home to the city’s first and only $100 million condo sale, it never sold out.”
“This is the second financially troubled unit in the building to have been slated for foreclosure. As global law enforcement catches up with more folks from foreign countries who allegedly laundered their ill-gotten gains by scooping up homes for cash in New York City trophy buildings, more foreclosures may be on the way, real-estate experts tell the Post.”
From 6sqft in New York. “New Yorkers know that taking on a mortgage in the city is no easy feat. But a recent map shows that, compared to the rest of the country, we’ll spend many more years than most everyone else (except San Franciscans) in our attempts to pay it off. This map, which measures ‘mortgage magnitude,’ looked at the median local income and median local home value to show the relative affordability of property in each US county. The value of the average property was then expressed in the number of years salary it costs.”
“In some counties, a house will only set you back a total of one year’s pay. But as you move out toward coastal cities like New York, that number gets dramatically higher. The income to housing ratio starts to get pricer in Hawaii, much of California, the scenic portions of Colorado, and some metropolitan counties in the east. Buying here will take between six and eight years.”
“Now we’re hitting the ten year mark—homes that will take a full decade of income to pull off. Many areas of coastal California, including Los Angeles, as well as the island of Nantucket are included here. And New York City makes its first appearance, with the inclusion of Queens County. ‘Many of the scattered counties are characterized by costly vacation homes far out of reach of the resident population,’ according to the mapper.”
“Here’s the moment New Yorkers on the hunt for an affordable home have dreaded—we have now surpassed the 1:10 ratio of mortgage magnitude, the end of the line. The median home in these counties costs up to 13 solid years of income, and the counties that comprise New York City make this list. New York is joined by its expensive west coast counterpart, San Francisco County. The other places that these two insanely expensive cities? San Juan, Washington, Teton County, Wyoming (comprised of Jackson Hole and much of Yellowstone), and Dukes County, Massachusetts, aka the island of Martha’s Vineyard.”
