Great Expectations With Little Fulfillment
A report from StateImpact Idaho. “After several weeks of reporting on the Idaho housing market, it’s impossible not to notice just how many of the people who have lost their homes in the downturn are real estate agents and builders, or do other kinds of work related to housing. In the midst of the boom, Carmel Crock, a realtor who lives in Boise, made financial decisions that counted on the housing market’s continued strength. She refinanced her home in the expectation that her income would keep rising, allowing her to manage a higher monthly payment.”
“Crock says when her income fell and she found herself in the middle of a financial mess, she wasn’t on her own. Many people she knew professionally were also having to figure out how to negotiate short sales. ‘Unfortunately, I had realtor friends, long-time acquaintances, builders who were going through the same thing,’ she says. ‘None of us were doing this alone.’”
“‘Most of my developer clients have felt a really big hit from the downfall of the real estate market,’ says Terri Pickens, an attorney in private practice in Boise. ‘And as a consequence most of them have lost their personal private residences in addition to their subdivisions, or commercial developments.’”
“As she understands it, not only have people whose work is connected to real estate suffered a direct hit in the downturn. They also may have been more likely to be drawn in by the excitement of the boom. ‘They were more likely to purchase a home that they couldn’t purchase in a down market,’ she says.”
“Andy Enrico, Vice Chair of the Idaho Real Estate Commission, says he watched people get caught in that downturn, too. ‘Builders got in trouble, and real estate agents who wanted to aggressively buy and invest got in trouble, because they thought the market would never quit,’ he said. ‘When you get so busy, you think sometimes, ‘Maybe it won’t end.’”
The Idaho Reporter. “Even though the Tamarack Resort in Valley County is on life support, the Idaho Land Board has an ongoing right to build residential structures on a number of acres near the Osprey Golf Course. The state could, if it wanted, even act as a landlord for homes or condos. Former state lawmaker Bob Forrey, who monitors Land Board policies and transactions, said the state should completely avoid getting into the business of building homes because it doesn’t have the right to do so.”
“Tamarack’s story is one of great expectations with little fulfillment of dreams. The resort opened with limited availability in 2003 and expanded operations in the years following.”
“The former Republican lawmaker also contended that the Idaho Constitution prohibits making investments in which the return is not guaranteed. He says residential properties at Tamarack would not bring in guaranteed money. ‘The risk is just out of bounds,’ he said of the possibility of the state building homes at Tamarack. ‘I think it’s totally wrong. It doesn’t sound like good government to me.’”
The Oregonian. “The nation’s home prices showed signs of good news in August, and this time Portland joined in the party — but without offering too much to celebrate. Prices are still below a August year ago — 7.6 percent lower in Portland and 3.8 percent lower for the 20-city composite — though the year-over-year declines are smaller than those reported in earlier months this year, a sign of market stability.”
“Tim Duy, an economist at the University of Oregon, said the fact that annual price declines are decelerating is encouraging. The lingering problem, Conerly said, is a large inventory of houses amid a dwindling pool of potential buyers. ‘We’re still in a situation of excess supply,’ said Conerly, adding he included houses that aren’t listed for sale. ‘We simply have more housing units than we have households, and its going to be some time before we work that off.’”
From KGW News in Oregon. “President Obama’s revamped ‘Home Affordable Refinance Program’ may help underwater homeowners in Oregon and around the country. Of the 9,100 homes for sale in the Portland Metro area alone, 2,000 are currently short sales and 500 are bank owned – or previous foreclosures.”
“Steve Schwab, a principal broker at Keller Williams Realty, said that it still won’t be soon enough for many homeowners. ‘I believe a lot of people if they could get out of their house all together they would,’ he told KGW.”
The Seattle Times in Washington. “The owner of downtown Seattle’s well-known and well-loved — but mostly empty — Smith Tower has defaulted on the loan it took out when it bought the landmark in 2006. In 2007, less than a year after it bought the Smith Tower, Walton Street Capital received the city’s approval to convert the entire building to condos. When the downtown condo market began to cool later in 2007, Walton Street scaled back its condo-conversion plans to just the top 12 stories.”
“When the Seattle-based Samis Foundation sold it to Walton Street five years ago it was 100 percent leased, according to William Justen, Samis’ former managing director of real estate. Walton Street missed opportunities to sign or resign office tenants while it was pursuing its condo-conversion plan, said William Justen, Samis’ former managing director of real estate.. Meanwhile, the office market collapsed.”
“‘There’s nothing wrong with the building,’ Justen said. ‘Walton Street just had a business plan that did not work.’”
My Northwest on Washington. “A 71-year-old former foster mother on fixed income has averted losing her home thanks to a grassroots campaign. Dixie Mitchell, who lives in Seattle’s Central District area, had received a foreclosure notice, and her home of four decades was due on the auction block. But a grassroots group called Washington CAN! (Community Action Network) took up her cause.”
“The bank adjusted Mitchell’s previous payment of $2,568 a month, to $1,700, which she says will be a stretch, with a monthly income of $2,300, but she’s pleased for that adjustment and is still in negotiations with the bank. ‘I’m happy that I’m going to stay here,’ said Mitchell in an appearance on 97.3 KIRO FM’s Ross and Burbank Show.”
KOMO News on Washington. “A group of protestors successfully disrupted the weekly real estate auction held in King County. The weekly foreclosure auction at the King County administration building started at 10 a.m. as usual, but then protestors began shouting during the bidding process. The grassroots group ‘Our Washington’ is demanding a moratorium on all foreclosures. ‘We’re protesting the auction,’ said Marliza Melzer. ‘We don’t want the people to be able to buy our homes.’”
“Real estate broker Darin Silva says he can’t help the person who missed payments, but he says he can help their neighbors, fixing up empty, rundown homes to increase property values. ‘The people who have lived in these houses, sometimes for two years without paying their mortgage I think it’s about time to start re-contributing to the economy.’”
The Yakima Herald in Washington. “Bob and Mary Vandegraaf had been looking at The Lofts, but never put in an offer because they felt the prices were too high. But the Granger couple felt they got a good deal Saturday with their winning bid for a nearly 1,800-square-foot, two-bedroom unit during a fast-paced auction of the unsold downtown Yakima condos.”
“Seattle developer Gary Bodenstab and local developer Joe Morrier spent more than $10 million to renovate the former Bon Marche store into condos, a project that was to usher in high-end urban living, which many say is a key component to downtown revitalization. “But more than two years after the project was completed, more than half of the 22 units were still vacant.
“About 50 people showed up for the auction, which was reportedly lower than organizers anticipated. Still, 10 of the 15 vacant condos were successfully auctioned off. Five units were not put up for live auction. Starting prices for the units ranged from $85,000 to $195,000, well below the $318,000 to $618,000 developers asked for when the The Lofts opened in January 2009.”
“The Vandegraafs said they got into a bidding war for their first choice with another prospective buyer who was participating by proxy from Juneau, Alaska. But ultimately they won. The couple did not reveal the price of their winning bid, as all bids are still subject to approval by The Lofts developers. ‘It was a bit higher than we wanted, but it was pretty much in the range,’ Mary Vandegraaf said.”
“After several weeks of reporting on the Idaho housing market, it’s impossible not to notice just how many of the people who have lost their homes in the downturn are real estate agents and builders, or do other kinds of work related to housing.
Isn’t there a “rule” among drug dealers of NEVER using your own product…
This scenario has played out in my own family.
I have a cousin who’s a real estate in MN. Seems that his investment house was in foreclosure. So, Cuz said to the bank, “Take my house! Please!”
Bank said, “We don’t want it back!”
So, the bank and my cousin came to an agreement. The bank wrote down his mortgage balance and he still has the house.
In short, cramdowns are happening.
‘the bank and my cousin came to an agreement. The bank wrote down his mortgage balance’
What you described isn’t a cram down as there is no cram.
Maybe we could call it re-gifting or Yankee Swap.
Ben, without knowing too many of the specifics about what happened with my cousin, I suspect that what happened was a writedown.
As for this cousin, I just got back from visiting his mother (my aunt) and his older brother. The family seemed very reluctant to talk about him, which leads me to believe that he’s back on drugs or abusing alcohol again. Or both. He’s been kind of a headache for the rest of us for many years.
“Man without relatives is man without trouble.” Charlie Chan
LMAO.
That MUST include in-laws.
“in-laws”
Q. What is the difference between an outlaw and a mother-in-law?
A. Outlaws are wanted.
(In case you are somebody’s mother- or father-in-law, substitute “son-” or “daughter-” for “mother” in the above as applicable.)
My Northwest on Washington. “A 71-year-old former foster mother on fixed income has averted losing her home thanks to a grassroots campaign. Dixie Mitchell, who lives in Seattle’s Central District area, had received a foreclosure notice, and her home of four decades was due on the auction block. But a grassroots group called Washington CAN! (Community Action Network) took up her cause.”
A 71-year-old former foster mother on fixed income who owns her home outright walks into a bank for home equity loan…(stop me if you have heard this one before).
‘The grassroots group “Our Washington” is demanding a moratorium on all foreclosures. “We’re protesting the auction,” said Marliza Melzer. “We don’t want the people to be able to buy our homes.”
‘Some members of Occupy Seattle - protestors of corporate greed - joined in to clash with bidders and sheriff’s deputies.’
This is all very interesting. Remember when S&P downgraded the US debt? How dare they, said nearly everyone.
Now people are even protesting sheriff sales! The President was talking yesterday about ‘helping’ with student loans. How could anyone think people in this country are gonna pay the $500k govt obligation owed by every man/woman/child? These people don’t even want to pay back their home equity loan.
If this is what ‘the people’ want, fine, I can see that. Let’s ditch all the debt. But don’t expect to wake up to the same world tomorrow:
‘Following the lead of the Federal Reserve two weeks ago both the Bank of England and the European Central Bank added more wood to the fire by expanding their issuance of money and credit. As we have previously pointed out the system cannot function without perpetual quantitative easing or stimulus. That is because no attempt has been made to solve the problems of the economy and unemployment. In the US, UK and Europe only the financial sectors and governments have been recapitalized. That is ongoing. This is the solution offered by the Fed and all others should follow such dictates.’
‘Central banks are accommodators to keep their system going, because if the elitists lose control of the financial systems they lose their power and wealth.’
Folow this to its logical conclusion and it is not pretty. If the elitists will not recognize that they’ve had a good run and relinquish the strangle hold on the rest, they will get torn down. I’m not looking forward to that mess, but they seem determined to take us there.
‘relinquish the strangle hold on the rest’
If history is any guide, they will try to use the OWS movement to further strengthen their power. Look at how it is being framed as a call for even more taxation. Who do you think is going to get that money people? Do you think it’ll be you?
I’m sympathetic, but it is drifting toward even more power for the current system, and an abdication of personal responsibility. See how people use this trend to justify, ‘I shouldn’t have to pay my student loans, my mortgage.’ What about credit cards or social security, govt bonds?
Every ‘dollar’ the central bank creates is someones debt. Maybe debt is the root issue here. If that’s what people want to challenge as a society, I’m all for it. Why do people have to take on so much debt to ‘own’ a house?
But that’s how our society has been conditioned. Everything has a dollar value affixed to it, and leveraging debt should be used to further someone’s financial position.
A house used to be a home – a place where you celebrated holidays and birthdays and grew up as a family. Now it is an investment vehicle that will create instant wealth. I don’t recall growing up that ROI and housing was ever related.
Same thing for education: There was a time when we sought education for an end unto itself. Now we think nothing of leveraging debt to acquire more wealth down the road with a degree from a better school with the primary objective of landing a good job.
There’s little shame in a business failure, so if we treat housing, education, etc. like a business, why should there be shame in walking away from your debt because you didn’t land the killer job upon graduation, or make a comfy windfall on a real property transaction?
And it is interesting the a dollar is indeed a note. I read somewhere that hypothetically if there was no debt in our society, there would be no money.
The “elitists” banks and private federal reserve make up money out of thin air and loan it to the debt serfs. What a system.Lower the balances on mortgages and student loans, not a chance. More time to pay of loans with lower interest ok. Keep paying. Thats the game plan unless of course your Iceland and tell them to go to hell.
“We’re protesting the auction,” said Marliza Melzer. “We don’t want the people to be able to buy our homes.”
If they are at auction, these people have already gone through many months, if not years, of not paying their mortgages. Is there ever any point where they acknowledge these aren’t their homes anymore?
“The bank adjusted Mitchell’s previous payment of $2,568 a month, to $1,700, which she says will be a stretch, with a monthly income of $2,300, but she’s pleased for that adjustment and is still in negotiations with the bank.”
Stay tuned for grass roots campaign 2.0 coming next year when Dixie says she can only pay $50/month. Her records in the Seattle Registry of Deeds shows this has been dragging on for years.
http://146.129.54.93:8193/results.asp
” They also may have been more likely to be drawn in by the excitement of the boom. ‘They were more likely to purchase a home that they couldn’t purchase in a down market,’ she says.”
That right there show just how illogical the mania was.
Pictures of the building mentioned in the Seattle article:
http://www.nytimes.com/2010/10/21/garden/21who.html?pagewanted=1
And this building is “well-loved” WHY???
That top floor is a travesty. The paint is peeling, and the whole thing reminds me a great deal of those $100-250K high-end playhouses for the kids, you know, the “bling for the yard” with the juiceboxes in the little fridge.
The Problem is nothing can change until the Job situation changes.
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The Problem is nothing can change until the Job situation changes.
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‘The people who have lived in these houses, sometimes for two years without paying their mortgage I think it’s about time to start re-contributing to the economy.’
Preach it brother! I am REALLY fed up with the characterization that these people are losing their hoooomes, and that somehow they have a right to live in a house for free while the rest of us pay rent.
I’m really sick of that. Really. What about us renters who don’t ‘own’ a hoooome?
A year ago, I went to a plant sale at a nearby rental house. Lady said she had to sell her plant collection — and it was quite a collection — because she had to move to an apartment.
And she was outta there by the end of last November.
House sat there. And sat there.
This past spring, I noticed a flyer tucked into the kitchen door. Being the curious type that I am, I bicycled into the carport next to the door and read the flyer.
It was one of those “we’ll pay you to leave this foreclosed house” notices. And it was addressed to the owner of the house. Who had never lived there.
His failure to the pay the mortgage adversely affected the tenant I spoke to. I got the distinct impression that she wasn’t happy about having to downsize the plant collection before moving to an apartment.
Luv that venom WPHREditor. Luv it. MORE. LOUDER.
Banks and Gov’t are in colulusion, keep prices inflated by offering loans to losers and the banks refuse to toss high end homes onto the market. Of course their are many buyers waiting but they may never get the home they want at a reduce cost because of this ponzy scheme.
Without question if the banks and gov’t let homes go to foreclosure and most of these jerks are thrown out people would fix these places and in 1 to 3 years we have a stable housing market.
“Banks and Gov’t are in colulusion…”
I believe you are absolutely right, but let’s not exclude foolish or downright stupid. The gov’t folks, if they get a twinge, still have no clue how to naviagte out of the mess. Just guessing here.
When the bubble popped a lot of money was lost. Nobody is willing to admit that they’ve lost money unless they are forced to, and the Government isn’t going to force anyone to do so. It’s that simple.
‘Unfortunately, I had realtor friends, long-time acquaintances, builders who were going through the same thing,’ she says. ‘None of us were doing this alone.’
Misery loves company!