Headed For A Less Than Soft Landing
A report from the Manteca Bulletin in California. “Housing affordability in Manteca along with Stockton and Lodi is sinking back to pre-Great Recession levels. Data for the three cities puts the median household income at $63,000 with the median resale home costing $365,000. Based on those statistics only 28 percent of the households can afford to buy the median-resale home. Housing sales for both new and existing homes reflect that reality with a solid majority of buyers coming from the Bay Area. Re/Max Executive broker pointed out as housing demand and prices have increased in San Joaquin and Stanislaus counties wages have been essentially stagnant.”
“Costa noted at the same time banks are returning to 100 percent loans — the same mortgages that fueled much of the housing collapse when many borrowers without ’skin in the game’ walked away from homes that dropped in value even though they could still afford the payments. Agents are also seeing sellers who are pushing for prices that are significantly above nearby comparable of similar properties used to determine appraised values. Costa indicated that in many cases bank appraisals are coming in that justify the higher selling prices.”
“Costa said the resale market reflects a growing trend that is being seen in new home sales of multiple families buying a home together and sharing living space.”
The Marin Independent Journal in California. “Marin’s median home price jumped to $1.165 million in June, up 8.4 percent over the $1.075 million median price in June 2017, CoreLogic said. Recent reports about people leaving the Bay Area because of the high cost of housing haven’t appeared to directly influence the June numbers — but they could gradually have an impact on the Marin market. ‘Lower priced homes are still selling briskly,’ said Kathy Schlegel, of Golden Gate Sotheby’s International Realty in San Rafael. ‘However, the upper end homes in various areas of Marin are presently sitting on the market longer.’”
“‘An example is the $1.5 million to $2.5 million home market in Novato,’ she said. ‘As of July 4, there were 27 homes listed as active in this category. As of July 24, three of these homes went into escrow, while five new listings came on the market.’”
The Herald Net in Washington. “A dusty school bus sits in front of a two-story house on the edge of a Bothell-area neighborhood. In the back yard, a rundown sedan is parked with another like it hidden behind piles of black, overflowing trash bags. Since 2013, the sheriff’s office has partnered with the county health district, code enforcement and human services to combat nuisance properties like the Bothell house. The team is dealing with 45 nuisance properties, with possibly 10 more on the way. The majority of these homes are in the north end of the county. Nine months ago, they were concentrated in the south.”
“The owners are usually banks or people who are out of state, elderly or deceased. Some are in prison or hospitals. This makes it easier for squatters to move in and the house to deteriorate. The bank is set to take the house in Bothell. A bank spokesman said state and federal laws prohibit the bank from cleaning the property until the home is foreclosed. Anders Olin, a county code enforcement officer, has his doubts. The bank originally set a June 29 auction date for the property, but canceled the sale in May, Olin said.”
“The rise and decline of nuisance properties is partially tied to the housing market, said Snohomish County sheriff’s deputy Dave Chitwood said. ‘If some houses go into foreclosure and they’re just sitting there, we might get a spike,’ the deputy said.”
“Ryan Weber moved into his Delta Neighborhood home in November with his wife and baby. He noticed a house next to his was foreclosed on, but not vacant. No one was living in the house full time, but people came and went at all hours of the day. Now, all there is to do is wait for the bank to list the house for sale. When that day comes, Weber said he’d be interested in putting down an offer and renting the house out. That way he can avoid any future nuisances, he said. Weber said he sees houses like this one throughout the city. ‘A lot of people don’t know what to do,’ he said.”
From WTOP on Maryland. “Distressed home sales, including foreclosures and short sales, hit an 11-year low nationwide in the second quarter, but two Maryland cities are among those left behind. In Baltimore, 20.7 percent of home sales in the second quarter were distressed sales, the highest percentage in the nation among cities with a metropolitan area population of 1 million or more. Philadelphia, New York, Cleveland and Providence, Rhode Island, all had distressed sales of between 19 percent and 20 percent.”
“Among all 148 metropolitan areas Attom Data Solutions analyzed for distressed sales, Hagerstown, Maryland, ranks in the top five, at 22.1 percent.”
The Miami Herald on Florida. “A web of former Venezuelan officials and businessmen was charged in Miami Wednesday with operating a massive $1.2 billion international money-laundering racket funded with stolen government money that was invested in South Florida real estate and other assets. The defendants are accused of embezzling funds from Venezuela’s vast oil income and exploiting its foreign-currency exchange system to amass illegal fortunes in the United States and other countries, according to a federal criminal complaint.”
“‘Venezuela’s state of social, political and economic crisis, in which multibillion-dollar corrupt and criminal ecosystems thrive, drives rivers of criminal proceeds through South Florida,’ says a Homeland Security Investigations affidavit filed with the complaint in Miami federal court. ‘[It] has become an international money-laundering hub and a desirable destination for well-to-do foreign criminals and kleptocrats.’”
“The federal probe, called Operation Money Flight, was launched with the initial focus on the defendants’ efforts to launder a portion of the $78 million. ‘Two years and over one hundred recordings later, Operation Money Flight revealed an international conspiracy to launder the PDVSA funds through Miami and several large-scale international money-laundering organizations,’ the complaint says. ‘More specifically, the investigation revealed the use of Miami real estate and sophisticated false-investment schemes to launder hundreds of millions of U.S. dollars.’”
“The Miami Herald and el Nuevo Herald reported in March that Alejandro Andrade, a former bodyguard to Chávez who rose to the rank of national treasurer between 2007 and 2010, is suspected of laundering millions of dollars stolen from the Venezuelan government to invest in real estate, show horses and other assets in South Florida and elsewhere, according to sources in Miami and former Venezuelan government officials familiar with the investigation.”
“Andrade’s acquisitions in South Florida and other parts of the United States don’t show up in public records because the purchases were made through shell companies that allow him to keep his ownership hidden, sources said.”
From 27 East on New York. “At first glance, the South Fork real estate market statistics for the second quarter of 2018 look grim: Key metrics by Miller Samuel Inc., a real estate appraisers and consultant firm for Douglas Elliman, indicate the median sales price declining by 5.3 percent, and the number of sales reduced by 12.8 percent when compared to last year’s second quarter. But the declines are nothing to lose sleep over, and there are other metrics to be happy about, including significant growth in the $5 million to $8 million range.”
“‘There is a downward correction in Hamptons market,’ said Carl Benincasa, a Douglas Elliman regional vice president of sales. ‘Buyers are always aware of it before sellers. But now the sellers are finally figuring out where buyers are and they are making the adjustments they need to meet them. That’s why you are seeing prices drop; that’s why you are seeing houses are being sold faster; that’s why you are seeing listing discounts go down: because sellers are pricing their homes more reasonably.’”
“‘One of the characteristics of the high-end housing markets around the region, whether we are talking about New York City or the outlying suburbs, is a sales decline,’ said Jonathan Miller, the president and CEO of Miller Samuel, ‘and the Hamptons is no different.’ Mr. Miller said one of the key observations was the decline in sales activity of homes in the $1 million to $5 million price range—or a ’soft middle’—which made up a bulk of the quarter’s loss.”
“After 37 years selling real estate on the South Fork, Judi Desiderio, the CEO of Town & Country, said she has never seen a time that has had the high-end market this strained, ‘except maybe after 9/11.’”
The Williston Herald in North Dakota. “Northstar Center was proposed as a large, mixed-use development on U.S. Highway 2, just across the road from another proposed large, mixed-use development called Williston Crossings. Neither of the projects made it off the ground before oil took a dive in prices, spooking investors, and putting a number of projects in Williston on hold. Stropiq, which had proposed Williston Crossing, shelved its project, citing the downturn in oil, as well as changes to the retail landscape nationwide. They have since shifted their attention to a subdivision called The Meadows.”
“North Star, meanwhile, appears headed for a less than soft landing. The development is to be sold at auction to the highest bidder Aug. 14. The sale follows a foreclosure initiated by YAM Capital LLC. YAM Capital, in court documents, said it is owed $9.031 million dollars from the development. The master plan for Northstar Center showed more than 2,000 dwelling units and more than 2.7 million square feet of commercial space. City officials at the time had promoted Northstar Center as a gateway to Williston, which was, at the time, one of America’s fastest-growing micropolitans.
