The Housing Bubble

The Bradenton Herald reports from Florida. “Sales of existing homes rose in May along with prices, according to figures released Thursday by the Manatee Association of Realtors. ‘What I have really noticed is the inventory of waterfront homes,’ said Sherry Flathman, a residential and commercial Realtor for Wagner Realty. ‘These homes are selling as soon as they come up — several have sold overnight.’”

The Sun Sentinel. “At the end of May, there were 5,313 single-family homes on the market in Broward, 49 percent less than a year ago. The number of condos is down 46 percent. Chip Rowand, a real estate agent for the Keyes Co. in Weston, said the market now is ’shades of 2005,’ the peak of the housing bubble. ‘The first words out of the agent’s mouth when they call me about a property is, ‘Is it still available?’ Rowand said.”

“South Florida broker Douglas Rill said he recently showed a client a three-bedroom home in good condition listed for $105,000. When they arrived, they had trouble finding parking spaces on the street because there were about 30 other buyers waiting to see the home as well. Rill said they hopped the front gate and toured the home, angering the other buyers. The property likely will fetch $130,000 or more — but not from his client. ‘He wanted to under-bid the $105,000,’ Rill said. ‘I think that’s being silly.’”

From Ocala.com. “Judy Ray, president of the Ocala/ Marion County Association of Realtors, said the increased sale prices and declining inventory were spurred by consumers’ desire to buy while prices are low. ‘People are getting tired of waiting … and from my seat, it’s not just an investor market,’ she said. ‘People are recognizing prices are not going to get any better.’”

“Homes sold for 88.5 percent of the original asking price during May 2012, the highest for the past 12 months and 3.5 percent higher than the same month a year ago. ‘People who are thinking, ‘I can get 2006 prices,’ no they can’t. If you bought your home during the boom, you’re still going to be upside down,’Ray said.”

“Florida remains No. 1 for mortgage fraud. The state had $260 million worth of fraud under investigation at the end of the first quarter of the year, up from $117 million in the fourth period of 2011, MortgageDaily.com said. The big increase is a result of law enforcement officials formally charging more suspects, the website said. North Carolina was second, with $226 million in fraud. California was third with $208 million.”

“Florida has held the top spot in four of the past five quarters and has been a regular among the top five states since the index began in early 2006.”

Tampa Bay News. “Frank Gregoire, a former chairman of the Florida Real Estate Appraisal Board and the appraisal committee for the National Association of Realtors, will testify before a congressional committee on Thursday about the impact of appraisal oversight brought about after the collapse of the housing market. Lenders are suspicious if they see that home prices and values are going up, because national numbers still show the opposite, he said. ‘As long as the appraiser can demonstrate that his data is supported and correct, the lender should just lay off,’ Gregoire said.”

“The original Home Affordable Refinance Program reduced fees and loosened eligibility requirements starting in January, but a revised government program was not fully available until March. Borrowers must be current on their payments and the loans have to be originated by May 31, 2009, and backed by Fannie Mae or Freddie Mac, the government-run companies that own about half of all home loans nationwide.”

“Nearly one-third of mortgages are underwater, according to first-quarter data from Zillow. Nearly 5 percent of mortgages carry a balance that’s twice the home’s value, Zillow said. Those homeowners now can qualify for the revised program, which eliminates a provision that required mortgages be within 125 percent of the value of the home. ‘If someone owes $300,000 on a $100,000 home, we could still look at refinancing that,’ said Doug Leever, mortgage sales manager for Miramar, Fla.-based Tropical Financial Credit Union.”

The Miami Herald. “Home prices in greater Miami rose 3.2 percent in April from a year earlier, according to S&P’s Case-Shiller Home Price Indices. While the Miami foreclosure rate has been declining steadily for more than a year, the foreclosure rate in the Miami area remained more than five times the national rate of 3.41 percent in April. The percentage of homes that are delinquent for 90 days or more dropped to 24.35 percent in April in Miami from 26.43 percent a year earlier.”

“‘Miami is still sitting on a large overhang of delinquent loans, but the slow foreclosure process is only allowing a gradual flow of these homes into the market,’ Michelle Meyer, an economist with BankofAmerica Merrill Lynch, said in a report.”

The Palm Beach Post. “Since 2007, homeowners whose banks have forgiven unpaid mortgage debt after a short sale, principal reduction or foreclosure have not had to count that money as income on their tax returns. Not everyone can benefit from the debt relief act. It only covers forgiven debt on principal residences and up to $2 million, or $1 million if married but filing separately. The act also does not apply to second mortgages where the money was used for non-household expenses.”

“Jupiter resident Michael Schoenewolff, who hopes to benefit from the debt relief act this year, said he believes Congress will vote to extend the tax break. Schoenewolff has a short sale contract on his home that would leave him with $95,000 in forgiven debt. ‘The average person can’t handle another $100,000 in income to be taxed,’ he said. ‘I think they have to vote to extend it in order to allow the housing market and economy to recover.’”

The Naples News. “After operating a successful Canadian nursing home for 18 years, Helen Valent sold it for about $2 million and moved to Naples a decade ago. But her dreams were shattered after a banker introduced her to a real estate agent and she got involved in land deals that court papers allege were set up by the agent, the loan officer and bank vice president. From September 2004 to June 2005, court papers say, more than $1.3 million in Valent’s bank account dwindled to nothing after it was debited 15 times.”

“The loan officer and vice president left the bank, the real estate agent was indicted in 2009 on charges that still are pending, the multimillion dollar projects Valent invested in were foreclosed on — and last summer, the bank tried to foreclose on her roughly $1 million North Naples home. Financially drained, Valent turned the tables on Fifth Third Bank a few weeks ago. She countersued. ‘I lost everything,’ Valent said. ‘I trusted him because he said, ‘Don’t worry, don’t worry,’ she said of the loan officer. ‘You’re like a sister to me. You can trust me.’”

“Although the bank has dismissed the foreclosure and lien, that doesn’t affect her pending counterclaim, which seeks compensation for her losses, damages and debt forgiveness on $14.69 million in judgments. Valent’s six-bedroom home, once filled with furniture for five elderly residents of her future business, A Paradise Retirement Inn, is nearly vacant because she feared imminent eviction and sold most it.’

“‘I lived with the stress. I developed diabetes and had a heart attack on Christmas Eve. I’ll never forget that,’ Valent said in a recent interview, sobbing in her kitchen. ‘No one was listening, no one.’”