The Housing Bubble

Fox 12 reports from Colorado. “According to the Pikes Peak Realtor Services Corporation 784 homes were sold in Colorado Springs last month. That is a nearly five percent increase from last year. ‘Now is a great time to buy, you’ve got the high 3’s on the rate, you still have good prices,’ said Joe Clement, Broker/Owner of RE/MAX properties. ‘The thing that’s happening though is the inventory is going down, so the selection is depleting, and what that means then is that the prices are gonna start going up. I think if there ever was a time, get out there now buyers because it’s gonna start going the other direction, and you may miss an opportunity.’”

The Aspen Times in Colorado. “Calling the move a ‘giant step’ toward enhancing the character of Aspen’s neighborhoods, directors of the Aspen Board of Realtors voted unanimously to ask its members to remove all outdoor signs advertising residential properties and services by June 15. Some members argued that numerous ‘for sale’ signs in a single area send the wrong message of a city that has an oversupply or a depressed market.”

The Summit Daily News in Colorado. “Marc Hogan of BHH Partners in Breckenridge is seeing an uptick in activity at his planning and architecture company — in remodels, and some new construction. Which is good, because business had been ‘pretty rough’ since the downturn, forcing the company to cut half its staff. ‘It’s a great time to build because everything’s still on sale,’ Hogan said.”

“‘The general consensus is that building is up this year, but I think if you look at the nature of the business, a lot of it is production homes (like the Valley Brook development),” said Craig Campbell, general contractor at J&E Development in Breckenridge. The custom home market still seems to be lagging a little, he said. Now, it’s all people who pay in cash. The shift is a dramatic one considering that before, nearly all of his clients had a bank loan. ‘From my perspective, the availability of financing is an issue,’ Campbell said. ‘Over the last three years, I have not had one bank-loan customer.’”

CBS Denver in Colorado. “A family that had been living inside a million dollar home with lavish furnishings has been evicted by the Douglas County Sheriff’s department following a court order. Their action appears to be a part of a scheme involving the occupation of many homes under foreclosure in Colorado, uncovered by CBS4 Investigator Rick Sallinger.”

“In the most recent case, homeowner Joyce Carroll became ill and went into the hospital. Carroll’s home in the Bell Mountain Ranch subdivision near Castle Rock was put on the market for a short sale, then sold in foreclosure to a bank. When Carroll was released from the hospital she found strangers living in her house, who claim they have the right to move into empty homes under foreclosure.”

“In March, CBS4 was at the home when Sergio Hernandez, the man who moved his family into Carroll’s home, was served with the eviction order. Deputies knocked on the door, but initially no one answered. But when a locksmith started to drill the lock, a woman appeared opening the door. A parade of movers then started hauling all the contents out of the house, straight to the curb. Pulling up in a late model Jaguar with Colorado plates, CBS4 spoke with Hernandez as he rushed up the driveway. ‘The bank doesn’t own it.’ Hernandez said, ‘It has to prove it.’”

“The eviction scene in Castle Rock may be about to play out near Larkspur as well. A person believed to be related to Hernandez, Gonzolo Perez, has also been arrested and charged in connection with occupying a home under foreclosure. Sallinger caught up with Perez in court and asked him why he feels he has the right to be in the house. Perez said, ‘Which part don’t you understand, homeboy? Get the (expletive) away from me!’”

“The housing crisis upended many lives. Including a life of luxury enjoyed by Joyce Carroll, who deputies say had $80,000 in fine furniture and other items inside the home. Items that ended up on the curb.”

AZFamily in Arizona. “The housing inventory is low in Arizona, which means houses aren’t on the market for very long, sometimes a matter of hours. Oftentimes, people are making offers on properties, sight unseen. Real-estate agent Marge Peck sat down with 3TV’s Kaley O’Kelley to talk about bidding wars from both sides of the transaction. Buyers: How to win a bidding war. 2. Be prepared to make an offer (Have cash ready to go). 3. Don’t offer below the list price.”

Phoenix Business Journal in Arizona. “Real estate investors and short-term flippers are back in town — for better or worse — and once again they’re dominating the housing market for sales of less than $250,000. Investors are buying those homes with cash, which is pushing up prices in the long-downtrodden local market, tightening inventories and squeezing out traditional home buyers.’

“‘It’s very much like 2005 all over again at the entry-level segment,’said Justin Lombard, owner of Stone House Realty of Arizona in Phoenix.”

KSL in Utah. “Residents of an upscale Southern Utah subdivision are upset over the pitch of roofs on some of the new homes being built there. Homeowners in the Quail Cove subdivision have been frustrated since learning the developer has opened four lots to families who have received a federally subsidized loan to build homes in their neighborhood.”

“Kent Sundberg, the principal broker at St. George Homes said due to the weakness of the market, many of the subdivision’s current homeowners purchased short sales or foreclosed homes at prices lower than the market value. Now, contractors cannot build the same home for similar prices. ‘I haven’t seen this before,’ he said. ‘It’s interesting because people become proprietary. They are very defensive of their castle that they built. It’s also a function of the market, because, unfortunately, we’ve gone through a period of everyone buying homes that were short sales, or foreclosures … you can’t build the same house you’ve got, or the contractor is going to take a $40,000-$50,000 hit.’”

“‘Our concern has all along been the fact that the homes being built were not consistent with the CCNRs that were in place when we purchased our homes,’ said homeowner Ward Gubler. ‘I think there’s a pride of ownership that goes with anyone who owns a nice home,’ he continued. ‘You try to make it nice and keep it nice, and that adds to home value. So it’s an equity issue.’”

“Sundberg said the issue has blown up because of media attention, but that he thinks it is really all about communication. ‘A lot of the publicity for this has been erroneous,’ he said. ‘These are really nice people. They’re just concerned and don’t want their values to diminish any more than they already have.’”

The Reno News & Review in Nevada. “According to city of Reno statistics, Reno grew 34.5 percent between 1990 and 2000. It grew a further 21.7 percent between 2000 and 2009. Positively bubblicious. Now, according to a 2010 estimate from the state demographer, Nevada lost about 2.6 percent of its population in 2010, with more losses in 2011 and continued shrinkage likely until at least 2013. Nevada has the highest unemployment rate in the United States, and the state is a leader in the nation for foreclosures. Nobody, it seems, came through the housing crunch in worse condition than us.”

“I recently returned to Reno after spending two years abroad. My sister and I drove by Sierra Marketplace shopping center on the corner of Moana and Virginia. Empty storefront after empty storefront created the illusion of wide eyes, unseeing glass facades broken only by “Prime Property Available” signs. Where there had been grocery stores, launderers and clock repairmen, the large shopping center is now just five or six businesses away from total abandonment. ‘God, Reno looks empty,’ I said. ‘It kind of is,’ responded my sister.”

“As recently as 2007, the average house sold at around $340,000, this in a county where the average household annual income was only $47,856. Now the average home goes for just over $150,000. Mike Inskeep lives on a 10-acre plot in the far northern reaches of Red Rock, a few miles east of the California border. It was not long ago the average home in this area commanded $350,000. ‘In Rancho Haven, some of the properties have recently been going for around $40,000 at auction,’ Inskeep said. ‘Some people lost their jobs, went to the bank to refinance and got told no. I know several people who’ve just walked away.’”

“Neal Cobb has served on just about every historical society in Reno’s history. He says that Reno was similar to boomtowns like Virginia City, Goldfield and Pioche. ‘Look at how many people from foreign countries ended up being 49ers,’ Cobb said. ‘It’s the same thing now. It was devastating. We overbuilt. Years back when you had people who could afford to buy houses they were in the trades. The developers were much more conservative during earlier builds you were making it possible for people who couldn’t afford it to buy houses. Anytime there’s a boom there’s also a bust.’”