The Housing Bubble

It’s Friday desk clearing time for this blogger. “UCLA economists are predicting a steady climb in the median price of existing California homes. The UCLA Anderson Forecast anticipates an 11.5 percent price jump next year. The forecast calls for another 10 percent increase in 2013 and a median price of nearly $440,000 by 2017 — that would represent a 52 and a half percent increase over today’s prices. Jean Haneke is looking to sell her home in Morgan Hill. ‘There are houses that are closing in our area, there are good sales, we’ve seen statistics on it, and we’re looking for that sort of thing as a seller,’ said Haneke.”

“During the first nine months of this year, more than 3,500 homes were foreclosed on here in the Coachella Valley, according to DataQuick. Like many, George and Christine Smith have a number of those homes in their Cathedral City neighborhood. ‘It is not very good at the moment is it?’ said George while talking about the number of distressed properties. ‘When you see all the foreclosures, and the prices they are going for, it is very worrying,’ said Christine Smith.”

“The head of the Desert Association of California Realtors, Greg Berkemer, calls it ‘a painful part’ of the market recovery. But the recovery will be delayed as long as there is a glut of foreclosed homes. ‘A market in recovery doesn’t mean that things are good, it means things are getting less bad,’ said Berkemer.”

“A Bayview woman who broke back into her foreclosed home is now admitting mistakes were made, but Carolyn Gage still blames the company that refinanced her home. ‘I did take out several loans to keep on top of my bills and keep my home upgraded,’ Gage said.”

“Documents show the last refinance was in November 2006, with the first payment due in January 2007, but court records show she never made a single payment. ‘That’s not entirely true,’ Gage said. ‘When I went to rescind the loan, I could not get in contact with anyone.’”

“Gage said she called to cancel the loan, but there’s no documentation of that. Those faxes were not included in the documents she filed in her lawsuit that was thrown out of court. Gage said later she’s not sure that she can find them. In her defense, the loan she agreed to was extraordinarily expensive: $525,000 at 11.99 percent variable interest, which includes $23,000 in fees along with a monthly payment of $5,245.63. When asked if she thought she could make the payment, Gage said: ‘At that particular time, yes.’”

“In hindsight, Gage admits the loan was a mistake, but it’s not just hers.”

“In New York and New Jersey, where courts imposed new rules last fall, it would take lenders more than 50 years at their current pace to clear pipelines of homes that are seriously delinquent or already in the foreclosure process, according to LPS Applied Analytics. In New Jersey, foreclosure activity was curbed after a court requirement that leading companies prove that their foreclosure processes were sound. The companies received clearance in August and September to resume foreclosures.”

“‘This is like having water backed up behind a dam. We hope it’ll be let out easy and not all at once,’ says Allan Dechert, president of the New Jersey Association of Realtors.”

“A credit reporting agency says Arizona’s home loan delinquency rates have seen the best overall improvement in the nation, but a local mortgage expert calls the numbers ‘misleading.’ John Capp, an owner at Sunstreet Mortgage in Tucson says says delinquencies are back on the rise. Capp says Tucson doesn’t have the demand for all the homes built here during the housing bubble. ‘For people who have negative equity there is little incentive for them to keep making their mortgage payment,’ Capp said. ‘It’s easier for them to throw their keys at the bank and start over.’”

“Real Estate Insider’s Alert! Buy Now or Pay More Later! Banks are now withholding more property than in the past, which should affect prices to go up: at least it appears to be their hope. Nation wide supplies are down 20% over 1 year ago and lowest since 2007. Many sellers are now seeing the trend and are removing their homes off the market, rather than sell them at today’s discounted prices.”

“If I were a home buyer right now, I would be buying property within the next 6 months in our market area, which I feel, has bottomed out in many areas. This should be done before the prices start creeping higher. Homes, by and large, are now available at wholesale prices, which we know will not last forever. It’s my opinion that they have only one to go and that’s up.”

“Foreclosure filings in Pueblo and the rest of the state are rising again, housing experts say. Just in the last two weeks, 74 foreclosures were filed, the office says. ‘I think it’s going to probably be a pretty big bump,’ deputy public trustee Doug Naylon said.”

“Sales for Richmond’s Parc Riviera launched Oct. 22, and the project’s first phase is being marketed as the best riverfront value in the city. There will also be views of the Olympic Mountains and Mount Baker, especially from condos above the third floor. And in a bid to give the community some strong early ‘momentum,’ says Parc Riviera sales director Greg Lowe, current pre-sale pricing has been set at less than what future pricing is anticipated to be.”

“‘In a couple years, when it’s all here, these will not be the prices,’ Lowe says. ‘The prices will be waterfront prices as an established community. Right now, you’re probably saving somewhere between $25,000 to $50,000 off where the prices will be in the subsequent buildings when we bring them on because it’s the initial phase. It’s discounted right now. We want to get a good start. We want to get a good momentum. We’re asking people to have some faith, and we have to reward them for that with the pricing. But it’s a very limited time offer.’”

“Since the installation of a giant LED screen at B.C. Place, Douglas Coupland’s memorial to Terry Fox has taken on a weird twilight vibe. Downtown resident David Cookson has been petitioning for the removal or relocation of the screen (one of three on the site) for weeks. Cookson feels that the official attitude is that residents of the downtown core are ‘open game,’ having freely ‘invited this kind of harassment because we live downtown.’”

“It’s impossible to get used to the bombardment of a ‘flashing electric lighting bolt’ into his home every 30 to 40 seconds, he says. ‘The flashing in the house is very different from the constant light that stays on when you have a hue or glow coming off the top during a game.’”

“Cookson claims that before buying his condo in November 2010, he looked into what kinds of zoning changes were being planned for the area. There was no public record of the giant screen’s introduction, ‘because they snuck it up and ambushed residents of this neighbourhood, and ambushed city hall.’ The 40-year-old environmental consultant and his wife have postponed having a baby, because he says they no longer have the proper conditions at home for a sleeping infant.”

“The world-renowned Spanish architect Santiago Calatrava was paid 15.2 million euros (£13 million) for a building project in Valencia that will never be built, it has emerged. The architect drew up plans for a project that would include three skyscrapers and eight residential blocks. Architectural models for the skyscraper project were unveiled at the regional parliament in 2004 and a contract sighed a year later. But the project was shelved shortly after when the Spanish property bubble burst.”

“Ignacio Blanco, a regional MP from the left wing EUPV, the party which originally called for an investigation, said the figure was astounding. ‘The investigation revealed that 15 million euros was paid for a project that has not been carried out,’ he said. ‘Calatrava has enjoyed a free bar with public money from the Popular Party.’”

“The Chinese regime has restricted bank lending and has put limits on the number of homes people can buy. It’s an effort to cool what many believe is a property bubble. But there are fears prices could fall too fast, hitting economic growth. State media reported broker Centaline Property Agency Limited said last week it would close 60 outlets and lay off 1000 workers, while Century21 Real Estate closed 34 outlets in the first two quarters of the year.”

“Mr. He, Shanghai Real Estate Broker: ‘In Shanghai’s Jiading district, only a month after buying an apartment, the price could fall [about 50 to 60-thousand dollars]. Recently in the market as a whole, buyers may be slowing down to see which way the wind blows.’”

“[Liu Kaiming, Head of The Institute of Contemporary Observation: 'The income of many people in Shenzhen is only about [300 dollars] a month. If they don’t eat or drink, it will take them a year’s income to buy [10 square feet] of an apartment. It will take them 100 years to buy a set of rooms. The average person can’t afford to buy an apartment even after working for a lifetime.’”