An Endless Stream Of Choices, And More Every Day
The Gazette reports from Maryland. “During the first quarter of this year, Montgomery County ranked second-highest in the number of foreclosures in Maryland, up nearly 54 percent since the previous quarter, according to the Maryland Department of Housing and Community Development’s research office in April. Prince George’s County ranked highest, according to the data.”
“Arelis A. Perez, a real estate agent for 16 years, said her business is down about 50 percent, but the housing market should pick up since ‘it came crashing down’ in 2007. However, the bad luck for many who have lost their homes due to the subprime lending crisis translates to an opportunity to buy for those who can afford it.”
“‘I had a property that was purchased in January 2007 at $706,000 in Silver Spring. Now it’s being sold at $363,080. That is just phenomenal,’ Perez said.”
“Marilyn Emery, a real estate agent at the North Bethesda Long & Foster office, said while dealing with bank-owned properties was not particularly personal for agents, it can be for potential homebuyers who are hesitant ‘to look at a foreclosed house because they think they’re taking advantage of someone else’s foreclosure.’”
“‘What people need to remember is that once a house is foreclosed, it’s done, it’s now owned by the bank,’ said Emery, who lives in Kensington. ‘Also, people feel that the houses are always in bad neighborhoods, or in bad shape. … But they’re out there in every area of the county, and every price range.’”
The Baltimore Sun from Maryland. “Local home sales continued their plunge in May, dropping 30 percent. It was the ninth straight month that sales fell at least 30 percent in the Baltimore metropolitan area. About 2,100 homes changed hands - half as many as in May 2005, near the peak of the housing boom, according to Rockville-based Metropolitan Regional Information Systems Inc.”
“‘The only inducement to purchasing a house at this point is very low price,’ said Celia Chen, director of housing economics at Moody’s Economy.com. ‘In areas where you do see a price decline, a more substantial price decline, you can probably see a bit better sales activity.’”
“The exception to the trend of better sales results with lower prices was Carroll County, where sales fell 33 percent even as the average price plummeted 11 percent. That’s driven at least in part by a continued lack of sales at the higher end.”
“None of the nearly 80 homes listed for $800,000 or more in Carroll last month changed hands. Sales of homes priced at $500,000-plus dropped by half from a year earlier.”
“Daniel V. Iampieri, a Realtor in Ellicott City, said he’s starting to see buyers who had been on the sidelines get more serious, thanks to price decreases. ‘There’s good deals out there,’ he said. ‘There’s an endless stream of choices, and there’s more coming on the market every day.’”
“Risk-taking helped perpetuate the housing boom. Buyers stretched financially to get their foot in the door as prices skyrocketed. Homeowners pulled out equity, counting on continued increases. Investors bought homes at a fever pitch with visions of big profits from rehabbing.”
“Canton in Baltimore was a popular rehabbing spot. Now a lot of investors are ‘”way upside down’ on their mortgages, said Dominic Cantalupo, associate broker in Pasadena, who works across the region. Average prices in May fell 15 percent in that ZIP code, 21224.”
From WBAL TV in Maryland. “Bail was set on Wednesday for a Maryland man accused of burning down his home to avoid mortgage foreclosure, and experts say that arson as a way out of financial woes is becoming a national trend.”
“An Owings Mills man accused of hiring someone to torch his home in January went before a federal magistrate Wednesday to make a plea for bail. Federal investigators alleged that Keith McMahon paid someone $10,000 to burn his house down to collect insurance money because the bank was about to foreclose on his mortgage.”
“Federal agents said that McMahon allegedly arranged the arson because he was as much as $30,000 in debt and behind on his mortgage payments. The federal complaint says that he planned to collect $800,000 from insurance proceeds.”
“Prosecutors said that as a result of the arson at McMahon’s home, a firefighter battling the blaze was seriously injured after falling 12 feet and landing in a basement.”
“‘Once you unleash that fire, you have no clue where this is going to end up. You’ve got firefighters responding. Depending on the type of structure, you may have other persons involved. There’s just so many things that can happen once a fire gets going,’ Barnard said.”
“Federal prosecutors said that McMahon also threatened to kill the person who cooperated with investigators.”
The Free Lance Star from Virginia. “The Fredericksburg-area housing market continued to struggle last month. The average home sold for 90.3 percent of its list price in May, the best figure this year.”
“But when taking a longer view, the market appears weaker. In addition, some of the improvements this year could be due to seasonal factors, as sales and prices have tended to trend upward as summer approaches. Fewer homes sold in the area last month than in any other May since 1998.”
“The area’s median sales price in May was 16 percent lower than the same month a year before. Seventeen percent fewer homes sold, and total sales volume dropped 30 percent to $92.9 million.”
“The trend was the same on a locality-specific basis. Other than Fredericksburg and King George County, median prices dropped in every area locality between May 2007 and last month.”
“Prices continued to dip in Stafford County, where last month’s median sales price of $281,100 was the lowest since April 2004. Median prices have dipped 30 percent in Stafford since May 2006.”
“The county has more foreclosed properties listed on RealtyTrac.com than any other in the Fredericksburg area, although its total, 1,068, pales in comparison to Prince William’s 6,936.”
The Cascade Connection in Virginia. “A plan to get people who work in Loudoun into foreclosed Loudoun homes has even longtime political adversaries Chairman Scott York and Supervisor Eugene Delgaudio working together.”
“Both live in Sterling, where the foreclosure rate is highest, and York had planned the initiative to apply only to the Sterling and Sugarland Run areas, but a close vote on an amendment by Supervisor Lori Waters opened the proposed program up to the entire county.”
“If adopted, the initiative, similar to one recently adopted in Prince William County, would direct money from the county’s $6 million housing trust funds toward grants of up to $25,000 or low-interest loans for people who work in the county but live elsewhere to buy houses that are currently in foreclosure.”
“Originally, the plan was to apply only to county employees and teachers, but York accepted an amendment from Delgaudio to open it up to anyone who works in the county. Currently, almost 45 percent of county employees live outside the county, often as a result of Loudoun’s cost of living.”
“About 42 percent of the county’s 2,000 foreclosures between October 2007 and last March were in the 20164, 20165 and 20166 ZIP codes, which include the Sterling and Sugarland Run areas.”
“In Sterling Park, York said, ‘we had a lot of purchasing of housing for investment by folks who don’t live there.’ This resulted in a neighborhood where most residents were temporary renters, he said, adding, ‘Many of these landlords haven’t taken care of [their houses].’”
“Anyone buying a home through the program would be required to live there for a certain time or repay the county. ‘They would definitely have to live in the house, too. They can’t rent it out,’ York said.”
“If grants of $25,000 were given out and $1 million were spent on the program, that would mean 40 houses filled, he said. ‘It’s not much, but it’s something.’”
“‘I think it’s a great idea. When does an opportunity come along like this?’ said Kevin Chroninger, chairman of the Sterling Foundation, noting the already low housing prices. ‘It seems like the time is right to take advantage of that.’”
“Chroninger lives in Dominion Station, just west of Sterling Park, and owns a condominium off Sterling Boulevard in Rolling Ridge, which he rents out. He said widespread foreclosures had not only dragged down home values but had also changed the atmosphere of Sterling Park, with unkempt lawns, vandalism and empty streets.”
“‘I’ve seen a huge downturn in the number of people you see out and about in the community,’ he said.”
From WAVY TV in Virginia. “According to Realtytrac, Virginia has the 15th highest foreclosure rate in the country — for the first quarter of the year. That’s up 526% from last year. WAVY.com took a trip to the Newport News Courthouse Thursday, where a foreclosure sale was underway.”
“‘I’m here to offer a number of properties,’ says Trustee Holly Fisher, who conducts the auction and sees the stark reality of home foreclosure. ‘Banks have stopped lending as much money people can’t borrow. It’s like robbing Peter to pay Paul.’”
“Banks and mortgage companies are in trouble too. During the auction, no one paid the minimum for 2500 Roanoke Ave, or 950 Ivy Avenue. ‘The banks are stuck with them. They will fix them up, and sell them on the open market,’ Fisher says.”
“Housing Opportunities Made Equal is a free, private, non-profit organiztion in Portsmouth. Their Mission is to save people’s homes from foreclosure. Home Director Denise Goode says, ‘As soon as you know you’re in trouble call your lender.’”
“You’ve got to call and communicate with the mortgage company. And you’ve got to act quickly, don’t bury your head in the sand. ‘In Virginia, you don’t have time on your side. We have one of the fastest foreclosure processes in the nation,’ Goode.”
“The exception to the trend of better sales results with lower prices was Carroll County, where sales fell 33 percent even as the average price plummeted 11 percent. That’s driven at least in part by a continued lack of sales at the higher end. . . .None of the nearly 80 homes listed for $800,000 or more in Carroll last month changed hands. Sales of homes priced at $500,000-plus dropped by half from a year earlier.”
A girl I dated in high school bought a 850k 6,000 sq ft McMansion out there in 2006 despite my warning. Last time I spoke to her she said that 5 homes in the neighborhood were in foreclosure, and that there were several properties for sale at less than 100k less than the original sales price (neighborhood is three years old) and none had even received an offer after being on the market for more than 6 months.
Sold my Carroll County house in early 2006 and have been renting in Montgomery County since. My buyer was a young (inexperienced) guy who worked in DC (100 miles roundtrip daily). He was thrilled to buy a house on several acres at a cost that could not be matched closer in. The house, like many in Carroll, was older with oil heat (about $6k to heat a year at current prices). Who would be looking for a property like this today? Just the gas to mow the yard is not insignificant.
Other than the 1950s-1970s housing stock in Carroll, there are also a lot of newer mcmansion type homes on large (multi-acre) properties. People who live in them commute to either DC or Baltimore because there is little employment in rural Carroll County. (The local paper regularly runs help wanted ads for people to box eggs.) Many homes (new and old) are on wells and septic, and in south Carroll, home to most of the growth in the county, there has been water rationing in recent years, as well as building restrictions based on a lack of water availability.
Carroll is a beautiful county, but I don’t think its future as a bedroom community for either DC or Balto looks too bright.
OK, I had to check. Our very first house was in Carroll Co, near the junction of the Old Manchester and Hampstead roads. It was truly a “starter home”, i.e. 800 sq ft. finished when we bought it. Paid $64,900 in 1982, paying 4 points to get an interest rate of 13.5%. Sold in 1988 for $107k, into what was then (locally) a very hot market.
Zillow has that it sold for $149K in 2000, Zestimate says that it peaked at $325K in 2006 and now is at $296K. And they have it as a 1 bath, when it’s 1.5. Maybe they would estimate higher with that adjustment? Sheesh.
Beautiful country, but it’s an unremarkable house, I couldn’t see paying a penny more than the 2000 sale price for it. Westminster isn’t a bad commute to the the Owings Mills and Hunt Valley areas of Ballmer, about 20-25 miles each way and lots of jobs there. That’s what I did. My wife was lucky enough to get a good job at Random House 3 miles from where we lived. But it’s a bedroom community for sure. People commuting to downtown Ballmer or DC with these gas prices are fooked.
“The Cascade Connection in Virginia. “A plan to get people who work in Loudoun into foreclosed Loudoun homes has even longtime political adversaries Chairman Scott York and Supervisor Eugene Delgaudio working together. . . . Both live in Sterling, where the foreclosure rate is highest, and York had planned the initiative to apply only to the Sterling and Sugarland Run areas, but a close vote on an amendment by Supervisor Lori Waters opened the proposed program up to the entire county. . . . If adopted, the initiative, similar to one recently adopted in Prince William County, would direct money from the county’s $6 million housing trust funds toward grants of up to $25,000 or low-interest loans for people who work in the county but live elsewhere to buy houses that are currently in foreclosure.”
Why is a 25k grant for some better than letting prices drop 25k or more for all? Another example of bigotry and ignorance leading to market perversions funded by the average joe. These bastards need to be kicked out.
Grants on 40 foreclosed houses when they have a couple thousand isn’t going to do anything but waste money. BTW, this is where the Bethesda troll can chime in about how great the market is there. Or is he in jail for burning down his house?
Ben, This is a great post about areas that can never go down in prices(as perceived by residents there) especially montgomery county areas like Bethesda and Kensington. I’ve a colleague who says his 1M dollar house in Kensington would never go down as there is a big demand and 20K new jobs are coming at the Naval center in Bethesda.
Here in Martinsburg, WV, I see some families in our community moving back to DC area as the commute with these gas prices are killing them. The irony is that they don’t want to reduce prices and moreover these realtors are drinking some thing special. They tell their sellers that 360K in Martinsburg is cheap. I’m just waiting for this summer to get over and this so called DC suburb become affordable to local folks here. Most high prices in this area have been driven by commuters to DC.
I think one can get a nice Mcmansion for 360K in Leesburg, Ashburn and Manassas. Then why live 50 miles away.
True. That is why it really irks me. I realize they are just doing it for votes from those that might think they are at least trying to keep prices artifically high or on the other hand great guys supporting the county’s workers. It is true, however, that this will do nothing. I only think it is ethical to assist those with serious physical or mental health problems, or for temp help to get ppl back on their feet. Handouts for healthy ppl that are capable of moving, working harder, getting a better education, etc. is offensive and unjust and harms those that are trying to advance themselves by earning it.
The technical phrase is “pissing in the wind”.
You kind of wet yourself doing that.
It depends upon the wind direction, I guess!
I met a woman in DC in 07 who was pitching me on her anti-development campaign for Loudoun county. I finally told her that I really doubted that she would have any problems within a year, because the stars were aligning for a housing meltdown. Then her face changed and she said, “God I hope not because my husband and I just bought a place.”
I don’t know what the truly appropriate response was supposed to be. Mine was to excuse myself and get another glass of wine.
Why would potential buyers avoid looking at foreclosed houses because they “don’t want to take advantage” of someone else’s misfortune? I don’t get that at all. Is it some sort of superstition or do they really think that the person who got foreclosed on is going to hold a personal grudge against the random people who buy that house? If so, why would they care? What am I missing here?
I think it’s just another wishful thinking excuse by the used house salesforce to explain why nobody is buying anything.
They simply refuse to accept the reality that prices have to fall a lot more.
I view it the other way around. The foreclosure increase is not linked to some new disease like the plague taking over the nation. Rather it is caused by ppl trying to live beyond their means who failed to pay the amount they contractually agreed to pay. There are many, many stories of misfortune relating to this housing bubble like renters seeing their standard of living go down while those of homeowners went up despite the fact the renters were making all the right financial decisions and the homeowners were not. The lose of a home by someone that couldnt afford to buy it in the first place but was hoping to make a fast buck for performing very little work has nothing to do with misfortune.
I also note regardless of the reason you shouldnt feel bad since it is just the market at work, but I can understand bad karma.
Perhaps they think the house is cursed and they’ll end up like the family in Poltergeist? I’ve had that thought a few times while touring houses in the DC area.
“Why is this wall here? What would they do that for?”
“‘I had a property that was purchased in January 2007 at $706,000 in Silver Spring. Now it’s being sold at $363,080. That is just phenomenal,’ Perez said.”
Yes, that it sold for $706,000 is phenomenal, not that it’s dropped to $363,080. It probably needs to drop another 200K to be fairly priced. These realtors who pretend that a reduction on a massively overinflated price is a bargain should be slapped. A bargain is when something sells for less than it’s worth.
We see this same nonsense day after day, and the Press never calls these hucksters on it. “Yes, Mr. Smith, this house was filled to the rafters with poison, but now it’s only half-filled with poison, isn’t that a phenomenal deal?”
No.
There’s been a massive amount of fraud in the DC area.
http://www.baltimoresun.com/business/realestate/bal-te.md.mortgage13jun13,0,2174506.story
What nobody in the press is talking about is what’s become of all these homes that had their values fraudulently ran up with bogus appraisals and mortgage fraud?
How many are being marketed at the fraud price?
“‘What people need to remember is that once a house is foreclosed, it’s done, it’s now owned by the bank,’ said Emery, who lives in Kensington. ‘Also, people feel that the houses are always in bad neighborhoods, or in bad shape. … But they’re out there in every area of the county, and every price range.’”
Apparently, this statement “once a house is foreclosed, it’s done, it’s now owned by the banks” is not true out in California at least for elected officials.
““‘I had a property that was purchased in January 2007 at $706,000 in Silver Spring. Now it’s being sold at $363,080. That is just phenomenal,’ Perez said.”
Get used to it. Even in smug Marin county, California–where many a Realtor (TM) assured me that nothing ever goes down–high-end condos that sold for $650K in the bubble are now being offered as REOs for $475K–and that’s just the offer price, not the sale price.
Reality is hitting this country hard:
- Consumer debt is at a record high relative to income. What’s more, the home equity extraction game is over, and credit is tighter for auto loans and credit cards
- Consumers are saving almost nothing
- Real wages are declining as companies hire offshore rather than in US
The party is over, folks. American consumers are maxed out–they can’t borrow any more, they can’t save any less, and their wages are dropping in real terms. You can’t get blood from a stone.
In the next few years, American consumers are going to get a taste of what the Great Depression was like as a second depression unfolds. If you don’t believe me, we can meet back on this blog four years from now in June 2012 and compare notes on how things are going.
Keep the popcorn popping,
Red Baron
I believe you.
My credit union is still offering 120% LTV auto loans. Amazing.
“In the next few years, American consumers are going to get a taste of what the Great Depression was like as a second depression unfolds. If you don’t believe me, we can meet back on this blog four years from now in June 2012 and compare notes on how things are going.”
Americans will get a “taste”, all right - just like around 1800 people on the Titanic got a taste of cold Atlantic.
The Titanic was supposed to be unsinkable.
So there were not enough life boats on the Titanic for everybody on board. That was then.
Now, people have grown up with the notion that America is too special to fail, and that the government will bail us out of any difficulty. However -
There’s not enough FDIC money to protect all the bank deposits.
There’s not enough gold in Ft. Knox or other vaults to protect the currency.
There’s not enough Social Security money to pay all the future obligations.
There’s not enough growth in real wages to offset the effects of inflation on consumers.
There’s not enough food and water stored to keep most Americans alive during a protracted supply disruption.
Perhaps most worrisome to me, there are nearly no political voices addressing the realities appearing on the horizon. The ship is taking on water fast, and the passengers seem to think that electing a new Captain is the solution.
I don’t think this will end well at all. An economic depression is unfolding and most of our citizens are completely unprepared for the consequences.
Mormon-tea,
you called it exactly the way I see it. And if Lost is right,that folks in her neck of the woods are realizing that trouble is afoot, I would like to point out that here in Manhattan whatever misgivings folks have tend to be kept quiet, at least so far. Most people here don’t have to drive…so the gas issue is a little remote. Yeah, food is skyrocketing, and the lines at the local church’s food bank are pretty long, but those folks get here by car and subway. Foreclosures are happening in the boroughs and maybe Long Island, but about Manhattan the Times is silent. I hear via a friend who’s trying to sell that sales are stalling, but how to really know…co-op’s do not post for sale signs.
Yeah, BS has been absorbed and JPM has let go of several thousand, but the total numbers of job losses on Wall Street is not fully reported. The mayor is suggesting property taxes may have to be raised, but so far, it’s just a suggestion.
The big news is Russert’s death, and Bush’s farewell tour of Europe.
It’s a little eerie here, and considering we are supposed to be the information center of the country, very silent.
“‘I’m here to offer a number of properties,’ says Trustee Holly Fisher, who conducts the auction and sees the stark reality of home foreclosure. ‘Banks have stopped lending as much money people can’t borrow. It’s like robbing Peter to pay Paul.’”
More like robbing an investor to make an unrepayable loan to a FB.
“‘The only inducement to purchasing a house at this point is very low price,’ said Celia Chen, director of housing economics at Moody’s Economy.com. ‘In areas where you do see a price decline, a more substantial price decline, you can probably see a bit better sales activity.’”
This is the kind of thinking that should strike terror in the hearts of the real estate industry and FBs everywhere. Finally, someone admits that amenities, location, etc. don’t matter.
There’s no use in me a-cryin’
I’ve done everything
And now I’m sick of trying…
And it don’t matter any more.
Buddy Holly
Arelis A. Perez, realtor: “I had a house which sold for $706,000 and now it’s for sale as $363,000 . That’s phenomenal.”
Um, a little history lesson. Back in the tulip bulb bubble mania a few hundred years ago, a tulip bulb merchant (the realtors of the day) might just as well have said, “I bought tulip bulbs 2 years ago which cost $2,000 each. Now you can buy them for 50 cents each.”
Arelis A. Perez is making typical idiot realtor statements. Btw, tulip bulbs are still only 50 cents each 200 years later. People, don’t buy into the NAR and realtor b.s. We are STILL 2 years away (at least) before the bottom with many more price drops.
However, the bad luck for many who have lost their homes due to the subprime lending crisis translates to an opportunity to buy for those who can afford it.”
I wonder if all the ex-Soviet propagandists, and Baghdad Bob the Iraqi Propaganda Minister (remember him?) are now under contract to the NAR’s “perception management” propaganda arm. Note the dogmatic insistence that this is ONLY a “subprime lending crisis” which, we’ve been assured, is “contained.”
Um, yeah. No spread into Alt-A or prime, no sirree Bob!
Oh, and it wasn’t “bad luck” that caused people to lose their houses, it was getting in over their heads financially through bad decisions aided and abetted by - you guessed it - their local NAR “professionals” and their “research.”
“Federal agents said that McMahon allegedly arranged the arson because he was as much as $30,000 in debt and behind on his mortgage payments. The federal complaint says that he planned to collect $800,000 from insurance proceeds.”
Since he won’t be collecting the insurance, I guess he’ll be eligible for the Frank/Dodd bailout!
I know Keith personally. He’s a mess. He is a major drug addict and fell behind b/c of that. I don’t think that it had anything to do w/ the housing bubble.