Does The Hype Match What’s Really Happening?
A report from Las Vegas Now on Nevada. “Experts in real estate describe the downtown Las Vegas housing market in these words: The demand is high, and the inventory is low. The Fremont 9 is a major new housing complex that is expected to open later this year. The complex will add several hundred homes to a part of the city that’s waited a long time for more housing. But realtors say the demand still outweighs the supply. ‘If you see residential, the price on it is sky high,’ said Robin Camacho, a broker. Camacho says it’s the land that’s worth so much, which is a sign of the demand. ‘Downtown is hot right now. It’s the heartbeat of Las Vegas. Everybody wants to be downtown,’ Camacho said.”
“But does the hype match what’s really happening? Vacant hotels nearby remain relatively untouched, years after being bought by downtown developers. Ashley Ayala’s Sisterhouse Collective is starting its 4th year on Fremont East. But, the lack of homes is a major reason the business isn’t sustainable. Ayala says she’s closing her business at the end of the month. ‘I wish we could stay,’ Ayala said.”
The Omaha World-Herald in Nebraska. “Jerry Cunningham knows he got a steal on the four-bedroom, three-bathroom home he bought last year in Sidney, Nebraska. The 62-year-old retired California Highway Patrol trooper moved to Nebraska to be closer to his family. He purchased his house, a 2,200-square-foot home with a newly remodeled kitchen, for $180,000. Cunningham said he would have spent $500,000 on a similar home in Nevada, where he moved from.”
“He bought it from a former Cabela’s employee, who bought the house in 2012 for $189,000. Unbeknownst to him, Cunningham benefited from a recent upheaval that has flooded Sidney’s housing market with properties. Uncertainty has been high ever since Bass Pro Shops announced plans to buy Cabela’s, the Panhandle town’s top employer. Home prices in the town are falling fast as former neighbors, colleagues and friends put their homes on the market and leave town for new jobs. Among the homes for sale are high-end ones owned by former Cabela’s executives who also have moved on.”
“Residents say some houses are selling — just not for nearly what they would have three or four years ago. In October 2014, 10 homes on the market had reduced prices. In October of last year, 20 had. In December, 32 homes for sale had reduced prices from their original listing amounts. ‘There’s just going to be fewer people than houses, and some of them are going to be empty,’ said Charles Nathanson, a professor at Northwestern University’s Kellogg School of Management who focuses on real estate.”
The Braintree Forum in Massachusetts. “A concerning recent trend in the local housing market is beginning to impact some in Braintree, according to new numbers released by Norfolk County Register of Deeds William P. O’Donnell. It was last month that The Forum first reported about O’Donnell’s concerns regarding notices to foreclose being issued across Norfolk County. While the total number of notices to foreclose actually dropped over 15 percent from 2016 to 2017, O’Donnell pointed to a disturbing trend at the end of 2017.”
“‘The numbers of Notice to Foreclose Mortgage recordings actually increased a sobering 57 percent in the fourth quarter of 2017 compared to the fourth quarter of 2016,’ O’Donnell said. ‘We will need to closely watch this number to see if a trend develops.’”
“It now appears that trend is showing up in Braintree. There were 12 Notice to Foreclose Mortgages filed in December, which is the first step in the foreclosure process,” O’Donnell said. That number represents a sharp uptick in notices to foreclose. Only four notices to foreclose mortgages were filed in Braintree between August and November, according to O’Donnell.”
From Richmond Confidential in California. “Residents on this stretch of Fourth Street say the fire on September 28 was not a surprise: It was inevitable. Squatters lived in the vacant home next door, at 662 Fourth St., for years. Records show that the tax assessor’s office informed a code enforcement officer of plans to auction off the lot in 2014. The house was never sold and, in late 2016, the city began to discuss demolishing it. Code enforcement case details show that a warrant was received on the house in 2016 and a notice was sent to the owner. According to Tim Higares, director of infrastructure and maintenance operations for the city, demolition was again discussed this year, but the process never began. A list of calls for service obtained from the Richmond Police Department for the three homes involved in the September fire shows at least seven calls regarding the vacant home since 2010.”
“The problems with 662 Fourth St., like so many other blighted homes in the Bay Area and around the country, started during the subprime mortgage crisis. A search of the address brings up a picture of the house from 2007. In this image, the home has a clean coat of light blue paint and a front lawn filled with thick, green grass and shrubs. At this time, the home was owned by an individual who had purchased it in 2005 for $360,000. In 2008, the title to the property was transferred to Deutsche Bank National Trust Company in a trustee’s deed after the individual defaulted on his mortgage. The individual had also accrued more than $30,000 in unpaid property taxes, according to tax assessor records.”
“The home was subsequently transferred between two obscure Wall Street companies, before Aafiyah Muhammad bought it at auction in July 2010. By October 2010, Muhammad and his associates had sold 662 Fourth St. and two other Richmond properties to Texas-based Brother’s Realty. However, that company quickly discovered that Muhammad didn’t actually own the two additional homes, and 662 Fourth St. had already been boarded up by the city and declared uninhabitable.”
“Federal court documents indicate that Muhammad was ordered to pay a $200,000 settlement in January 2013, after being sued by Brother’s Realty. The documents also reveal that Muhammad was in fact an alias of a man named Jamall Joseph Robinson, a former associate of Your Black Muslim Bakery, the group that orchestrated the 2007 murder of Oakland Post editor Chauncey Bailey. According to Higares, his staff doesn’t have the time to determine if a home owner listed by the tax assessor is in fact fake. ‘It’s a very long process, and in the meantime what you have is a piece of property that’s continually being breached,’ he said, ‘that’s catching on fire.’”
From Reason Magazine. “The rent is too damn high—so each year Congress appropriates billions of dollars to address the nation’s collective housing needs. The programs vary from loans to tax credits to straight-up subsidies, but a common feature is that federal taxpayers pony up the dough and then a motley collection of state-level politicians, financing agencies, and housing authorities decide how it’s spent. Can you guess where things go wrong?”
“In theory, oversight is provided by bureaucrats in Washington tracking every dollar and by local leaders increasing their re-election prospects by providing housing assistance to their constituents as effectively as possible. In practice, the feds turn a blind eye to inefficient uses of the funds while local officials gleefully engage in politically advantageous graft.”
“Take California Treasurer John Chiang. By virtue of his position on the three-member California Tax Credit Allocation Committee, Chiang exercises enormous influence over who gets $94.9 million each year in federal tax credits intended for developers of low-income housing. He has used this position to great effect, steering millions to major campaign donors.”
“If California-style corruption isn’t your bag, perhaps you’ll appreciate the sheer incompetence of the Atlanta Housing Authority (AHA), which is currently struggling to get out of an expensive subsidy deal it literally forgot it made with local developer Integral. Over the past two decades, the AHA has awarded $114 million in federally funded loans to the company, which has yet to pay them back, and which now owes about $29 million in interest to the agency.”
“That did not stop former AHA chief Renee Glover from unilaterally agreeing to sell Integral $137 million worth of AHA-owned land for the bargain price of $20 million. Glover resigned in 2013, and the current leadership can’t recall this deal ever being made. They’re now suing to stop it from happening.”
“In Michigan, the state’s housing finance agency was given $761 million in Troubled Asset Relief Program funds to protect distressed homeowners from foreclosure during the Great Recession. Instead of using the money as intended, officials sat on it while thousands in Detroit had their homes seized for failure to pay property taxes. When the state did start spending its bailout funds, half the total went toward demolishing the homes left vacant by those tax foreclosures.”
“But all of this pales in comparison to the misdeeds of the Navajo Housing Authority (NHA), which is supposed to provide housing on the Navajo Indian reservation. In the past decade, the NHA has received some $803 million in federal funding while building slightly over 1,000 homes. That works out to $723,000 per home, or about 10 times the median home price in the Navajo community of Kayenta, Arizona. Much of the money was spent on structures that were either never finished or never occupied, including a women’s shelter that stood completed but empty for nearly 18 years while homeless people slept outside it.”
