The Housing Bubble

Seacoast Online reports on New Hampshire. “Lauren Kane, president of the Seacoast Board of Realtors, said intangibles like hope and optimism are evident among customers. ‘I think the message overall is turning more confident,’ said Kane, a Realtor with ReMax Coast to Coast in Portsmouth. ‘On a national level, we’re getting through most of the problems, and affordability has been the best it’s been in years.’ In Exeter, the average price of a house went from $262,586 to $259,026. Average price of a condo went from $166,611 to $147,364. This speaks to Kane’s observation that ‘affordability is phenomenal right now.’”

“Just as surely as the spring sun will shine, so, too, will Realtors be optimistic for the season. ‘I think consumer confidence is starting to change. The uncertainly in the marketplace was one of our biggest challenges,’ Kane said. ‘They realize we’re at the bottom of the market, it won’t decline any further.’”

The Concord Monitor in New Hampshire. “Foreclosures in New Hampshire were up 9.4 percent in February over the same month in 2011, and foreclosures in the state in the first two months of 2012 ran 27.9 percent ahead of the level recorded in the first two months of 2011, according to the New Hampshire Housing Finance Authority. The authority warned in a news release, the year-over-year comparison ‘may be misleading,’ because several large lenders had observed a moratorium on foreclosure proceedings between October 2010 and last February.”

“And the agency noted that between 2007 and 2011, some 54 percent of foreclosures in New Hampshire were on mortgages that had refinanced existing debt, versus foreclosures on initial-purchase mortgages. ‘This suggests that the widely held belief that the ‘foreclosure problem’ was the result of people buying more house than they could afford was a myth,’ the authority said.”

The Hartford Business Journal in Connecticut. “Many central Connecticut builders like Mark Stidsen are confident enough about what they see in today’s housing market to try something they’ve done little of in half a decade — erect a house without a firm buyer. ‘We see things changing,’ said Stidsen, whose Landsen Construction Corp. of Glastonbury is building a 2,500-square-foot, $455,000 ’spec’ dwelling near the center of town. ‘We’ve seen an uptick and we’re jumping in.’”

The Ridgefield Press in Connecticut. “Citing fair weather, low interest rates and low home prices, agents say they’re seeing a lot more activity in recent weeks. ‘We’ve seen in the last three weeks, at least a dozen homes or more have had multiple offer situations, which was something we haven’t seen in five years,’ said John Frey, owner of Century 21. ‘There’s reason for great optimism, so I should explain to people that think ‘Great! Prices are up!’ that prices are not up. This type of activity has to happen first before we see prices rising.’”

“Bob Neumann of Neumann Real Estate said low interest rates and prices make the market attractive, especially for first-time buyers who might be looking at lower priced homes. ‘There’s a good amount of inventory, even if you want to buy a house for under $500,000. There’s over 60 houses on the market.’”

“There is an increased feeling, Laura Freed Ancona of William Pitt said, that the market could be nearing the bottom, but she said real estate, particularly home-buying, should be seen as a long-term investment. She’s seen people who have retreated from home ownership into rentals, but as their leases come due are reluctant to sign again, afraid they might miss low rates and prices. Instead of rushing back into an obligation that could lock them into rentals as prices, interest rates, or both, rise, she said they’re re-examining their options. ‘Typically you don’t know a bottom until after, and I think people are afraid to miss an opportunity,’ she said.”

The Times Herald Record in New York. “Paul Adams, an agent with Keller Williams Realty in Goshen, said he’s seeing buyer interest on the rise. ‘I’ve got to say that over the past six months, activity has been picking up.’ Adams said. ‘I think buyers may be seeing their window of opportunity narrowing.’”

“Prospective sellers sometimes expect to list at unrealistic prices based on a refinancing before the mortgage crisis or an inflated insurance estimate, said Adams of Keller Williams Realty. ‘There are two markets now,’ Adams said, ‘properties priced to sell, and other homes not competing because they’re $10,000, $20,000 more than what they should be listed for.’ He also sees would-be sellers staying out of the market, hoping for an upswing in prices. ‘If they can wait three to five years, the homes will be worth more than they are today,’ Adams said.”

The Journal News in New York. “Housing prices plummeted in the first quarter of 2012 throughout the Lower Hudson Valley. Mike Graessle, an associate broker at Better Homes and Gardens Rand Realty, said the high taxes in the region, coupled with unemployment concerns, have been very discouraging to buyers, forcing sellers to lower their asking prices. ‘A lot of sellers have been sitting with their house during the winter months and are more motivated,’ he said. ‘They’re saying, ‘I need to get rid of it.’”

“The median sale price of a Westchester single-family house was $505,500 — an 8.5 percent drop from last year’s price of $552,750. That’s the lowest price since the county first passed the $500,000 threshold in 2002.”

The Fairfield County Business Journal. “A new associate at a leading Westchester bankruptcy firm, attorney Seohee Kong was not prepared for the volume and complexity of work she has done for New York clients, who come to Rattet Pasternak L.L.P. in Harrison seek legal help in holding on to their mortgaged properties. ‘I work with four or five people a day’ who are struggling with mortgage payments or facing foreclosure. In Westchester, she is seeing ‘very well-educated’ homeowners, many with masters and doctoral degrees, including professors and financial services professionals. Some are real estate investors who bought multifamily houses at the peak of the housing market and have seen their values plummet.”

“Partner Dawn K. Arnold, who oversees the firm’s new loan modification department, said she has been surprised at the number of mortgages of more than $1 million in the county, At ‘the very beginning’ of the mortgage crisis, she said, a client came in who had been sold a house in Westchester for $750,000. He was trying to keep up the mortgage payments on a caddy’s income at Sleepy Hollow Country Club.”

“In Westchester, though, it is not low-income people saddled with ballooning subprime mortgages who account for Rattet Pasternak’s surge in business. ‘There are a ton of middle-income families here,’ said Attorney Julie Cvek. Cvek said the firms’ typical client for a mortgage modification is a married couple earning $250,000 a year, ‘but they can’t pay their bills. And they’re not overspending. That’s the cost of living in Westchester. It’s your average middle-income households.’”

“The volume still is low compared with other parts of the country, but short sales by Westchester homeowners unable to keep up payments on mortgages that exceed their home’s market value have risen notably. Broker Mark Boyland and others involved in real estate closings in the county foresee a greater increase in those sales as higher-income homeowners drain financial reserves used for mortgage payments in recent years and lenders step up foreclosure actions on distressed properties in Westchester, spurring delinquent homeowners to abandon their do-nothing approach to their case of the mortgage blues.”

“‘It’s not the norm,’ said Boyland, ‘but there’s a fair amount of people’ in the county that have not paid the mortgage on their distressed property in three or four years.”

“‘We have well over 10 years of distressed inventory in New York state,’ he said. Following the federal and state governments’ recent mortgage settlement with five major lenders, ‘You’re going to see that bankers really push through their inventory over the next two years,’ he predicted. In the lull of foreclosure actions by lenders, ‘There are a lot of people who have this false sense of security,’ Boyland said. ‘Now they’re going to have a serious wake-up call over the next 18 months.’”

The Real Deal in New York. “Over the past several years, attorneys and building managers say they’ve seen a noticeable uptick in the number of disputes between neighbors in New York City buildings. Experts point to a number of reasons for the increase in disputes. The first is financial; people who purchased or refinanced at the peak of the market are sitting on assets that are not worth what they originally paid, noted Aaron Shmulewitz, an attorney at Manhattan law firm Belkin Burden Wenig & Goldman.”

“Many owners have seen the value of their homes decline over the past few years, and disagreements with neighbors can feel like pouring salt in the wound. Other factors include shoddy boom-time construction. Shoddy or rushed work by developers during the real estate boom lead to ill-conceived floor plans and units that allow noise and smell to travel easily from one apartment to another.”

“Noise troubleshooter Alan Fierstein, founder and president of Acoustilog, said his workload has steadily increased since 2006 — the height of the building boom — when new developments were constructed quickly, often at the expense of proper structural design. ‘I don’t know if people are getting more sensitive,’ Fierstein said. ‘But they have more things to complain about.’”

The New York Daily News. “Home sales rose in the double digits in Queens and the Bronx during the first quarter of the year, as competitive prices and low interest rates brought buyers back to the table, according to a report from the Real Estate Board of New York. Queens witnessed the biggest number of sales in the quarter, 2,919, a 13% jump from a year ago. The average price of a home in the borough dipped 2% to $391,000. ‘These are areas with a lot of middle-income housing where low interest rates really make a difference,’ REBNY senior VP Mike Slattery said.”

“Among the condos enjoying strong demand are The View, which is commanding a hefty $950 per square foot, and The Industry, said Eric Benaim, CEO of Modern Spaces, which handles sales for both buildings. ‘The market is extremely busy. We are getting 25 to 40 groups of people at our open houses,’ Benaim said. ‘Almost every few weeks we raise the prices. We’ve had three to four bidding wars.’”