You’d Better Buy Now
The Communicator reports on Arizona. “It’s official! Home prices are starting to rise, houses are selling at a rapid pace, and the housing market is recovering. “Lennar’s Homebuilding Division President for Phoenix and Tucson Alan Jones talked about price disparities where those searching for a home are again willing to drive a distance to purchase a better home. Resale retailers are short on supply, according to Jones, with only a two-month’s supply. The result is that new home sales will continue to rise with more demand competing for the available homes. Jones remarked, ‘Resalers brought customers to Lennar – when (we) raised prices!’”
“There is also a perception with the rise in pricing that ‘You’d better buy now,’ commented Mike Brilz, VP of land for Pulte’s Arizona Division.”
“Jim Belfiore, president of the residential market research firm Belfiore Real Estate Consulting stated, ‘Bad assets are gone; demand is pushing up. (There will be) tremendous growth in the next 36 months.’ He sees the strongest increases in the ’submarkets’ (such as Maricopa), ‘where the most distressed supply was.’”
Inside Tucson Business in Arizona. “According to the Pima County Recorder’s Office, foreclosure notices totaled 797 for the month, bringing the year-to-date total to 6,164. That is 12 percent more than the 5,513 notices issued during the first seven months of 2011. Meanwhile, sales of distressed homes are down about 1,300 for the same comparative months. The 20 percent drop is significant, slowing to 3,252 sales this year from 4,549 last year.”
“‘There are still a lot of distressed homes out there, people who have stopped paying their mortgages but haven’t received notices yet. They are simply not that far into the foreclosure process,’ said Ginger Kneup, owner of Bright Future Real Estate Research.”
The Santa Fe New Mexican. “In 2008, Parade of Homes featured 40 houses; just 16 homes are on the tour this year. Part of the drop is related to a change in federal regulations since the crash, limiting local banks’ ability to finance speculative home projects, which used to make up the majority of the tour. ‘When a builder is building a speculative home,’ said Kim Shanahan, of the Santa Fe Area Home Builders Association, ‘he assumes that they are going to sell it to some high-dollar client who is moving here from somewhere else.’”
The Salt Lake Tribune in Utah. “This year’s Salt Lake Parade of Homes is a long-awaited celebration of the return of the homebuyer. Absent is the array of million dollar-plus mansions popular in past parades. Even though the parade this year is doesn’t feature a bunch of million-dollar properties, Paul Peterson with the Salt Lake Home Builders Association said there is still plenty of luxury for those who enjoy looking at — and dreaming about — expensive homes. ‘You have to remember that what in 2006 would have been a $1 million home is now a $600,000 or $700,000 home. They may have a lower price tag, but they are still luxury homes.’”
Northern Nevada Business Weekly. “Condo sales are reheating in downtown Reno. Since the start of the year, says Samantha Reveley, sales manager of The Montage, 42 condo units have sold and the property will be at 50 percent occupancy the first week of August. The first floor commercial spaces on the north and south corners have been vacant since the property was completed in 2008. The majority of sales at The Montage have occurred after the market correction in pricing — only 33 units were purchased when the building first opened.”
“Studios at the property originally were priced in the mid $250,000 range; today they sell for about $80,000, Reveley says. Those premier penthouse units priced between $1 million and $2.5 million in 2006. The last three penthouse units that sold at the Montage averaged $425,000. Helen Graham, president-elect of the Reno-Sparks Association of Realtors says that the changing face of Reno’s downtown, along with lower pricing and the availability to fund condo loans, is helping spur sales. ‘We are seeing a lot of young people who don’t want to be in suburbia,’ Graham says. ‘They want to walk downtown and be around other things. There has been a change to more urban living.’”
KLAS-TV in Nevada. “Erik Molzen knows the housing market all too well. His previous house he got rid of by short selling it. He then turned around and bought a short sale house that he is living in now. ‘There’s not a lot of steals like there were last year,’ he said. ‘It really is a sellers’ market and it’s making buyers jump a lot faster to try and find the right house at the right price.’”
“He entered the real estate profession four years ago, during the peak of the housing crisis. ‘Prices are slowly creeping up,’ he said.”
“‘Homeowners are bidding in higher than the appraised amount and bringing in cash for the difference,’ broker Dave Tina said. ‘This brings up the appraisal value for the next home and that’s where we see a lot of the increases. Look at the comparable sales that happened with the last 30 days,’ he said. ‘What a lot of them tend to do is look at something that happened three to four months ago.’”
“Realtors report about 3,500 homes sold in July.”
From KTNV in Nevada. “‘There’s approximately 58,000 properties in the valley in some sort of default. So it’s going to take us a little bit of time and challenging days ahead to get through all of that and return to a more normal market,’ said GLVAR President Colleen Kelley.”
“‘I think we’re pretty much done with the downturn,’ said Kelley. ‘Our prices are not going up at the rate they did before the housing market crash. So I don’t think we’re going to see a slide backwards.’”
Las Vegas Business Press in Nevada. “Frank Nason of Residential Resources said he’s getting a barrage of calls from sellers wanting to do a short sale. They now account for 35 percent of home sales in Las Vegas. Nason calls it ‘payment fatigue.’ People are tired of making payments on a home that’s $100,000 upside down, he said. ‘It just doesn’t quit,’ he said. ‘I’ve been working on a short sale in Sunrise Mountain for over a year.’”
Vegas Inc in Nevada. “Nevadans are falling behind on their mortgage payments at a faster rate than homeowners in almost every other state. Nevada had the second-highest mortgage delinquency rate nationwide, at 10.85 percent, in the quarter ending June 30, according to TransUnion. The report comes a few weeks after the Nevada Association of Realtors reported that residents statewide are divided on whether it’s OK to willingly default on a mortgage loan.”
“Almost half — 45 percent — said there is nothing wrong with ’strategic default,’ in which homeowners who are financially capable of paying a mortgage choose not to make payments instead, according to the realtors group. An equal number disagreed, saying homeowners have a legal and ethical obligation to pay their mortgage if they can.”
The Times Union on Colorado. “David Duval told the Times-Union that his $12.35 million home in a posh Denver, Colo., suburb is not in foreclosure, contrary to reports that originated with the tabloid web site TMZ. Duval told the Times-Union Tuesday that he and his family will be moving out of their house in Cherry Hills Village and it will be sold. There is a foreclosure notice on the home on the Arapahoe County public records but Duval said the agreement with the bank will resolve the situation without a final judgement of foreclosure.”
“‘Like a lot of people in the past few years, I made a real estate investment that didn’t go well,’ Duval said.”
“Duval has made $18,839,933 in on-course money during his career. Since the 2002 season, Duval has earned only $3,527,380.”
The Post Independent in Colorado. “Lawrence Yun, chief economist of the National Association of Realtors, addressed the Glenwood Springs Association of Realtors at the organization’s annual election. Yun said roughly 15 percent of mortgage holders nationally are ‘underwater,’ meaning they owe more on their mortgages than they could get by selling the house. He said some experts put the number at around 30 percent. Local real estate experts have said that in Garfield County, that number may be 40 percent or higher, and Zillow shows that 49 percent of Garfield County homeowners are in that predicament.”
“Because houses are still cheap, and interest rates are at a 50-year low, he said, ‘There has never been a better time to buy.’ As the room went quiet, he quipped, ‘Now, I know that Realtors use that phrase every year,’ drawing laughter and applause from the crowd.”
“While his message mainly was upbeat, Yun did note that the housing market may be in for a crisis of an entirely different nature. He said there are 2.5 million homes on the market today, but fewer than 500,000 of them are newly built, and the housing construction market remains severely depressed. Plus, there is a ’shadow inventory’ of homeowners who either are seriously delinquent on their mortgage payments, or are in the early stages of foreclosure.”
“Finding a home or apartment to rent in the Roaring Fork Valley is getting more difficult, according to local leasing agents. While the March vacancy rate for Glenwood Springs was 10.8 percent, Colorado Division of Housing spokesman Ryan McMaken said that number may be artificially high. Including single-family homes in the survey would make a difference. ‘If you did an overall vacancy rate, it would probably be lower,’ McMaken said.”
“Local real estate broker Paula Derevensky agrees. ‘There aren’t a lot of single family homes on the market right now, and when there are, they get snapped up quickly,’ Derevensky said. ‘We’ve had a lot of foreclosures. Houses have been emptied and they’re not getting filled until they get sold.’”
“Garfield County had the second highest foreclosure rate in the state at the end of 2011. Jeff Chapman, a broker with Fleisher Land and Homes in Carbondale also points to the economic downturn as a factor in the high demand for rentals. ‘There’s a lot of people unable to buy,’ Chapman said. ‘People are not able to stay in their homes and not able to buy new homes.’”
I’m looking at moving to Boulder, CO for work and it’s like the bubble never popped there. Average household income, $50K, average house price $438,000. All the usual drivel about “not making anymore land” and Boulder is sooo special. I was hoping to leave the madness forever when I left San Diego.
I’m thinking the ready availability of federally guaranteed financing for low-income (99%) buyers who qualify, coupled with the fake inventory squeeze and open encouragement of the buy-to-let investors has resulted in a market where anything decent for under $300K has been snapped up. The logical consequence of this is a liquidity shut-down, where more expensive homes don’t sell and buyers looking for affordable housing can’t find any. No matches between what buyers can afford and what the market can offer results in a dearth of transaction volume dead ahead.
Boulder is surrounded by a “no construction” green belt, which for years has artificially constricted supply. To be honest, I don’t understand Boulder’s appeal or the associated snob factor. It doesn’t look any different than its neighboring and less expensive communities.
’surrounded by a “no construction” green belt’
So it’s landlocked, like Flagstaff.
I can see the appeal if you like bicycling everywhere and you like to be near lots of college students and the businesses that cater to them. And there are a lot of tech jobs.
you like to be near lots of college students
Ugh! Why would I want that? And CU Boulder students have a reputation for being rowdy, with an occasional riot.
Lots of Boulder locals also went to CU and seem to have a soft spot for the student antics.
Cantankerous, you’ve whacked the nail right-smack on the head.
Slim ventures out on limb: I predict a dearth of transaction volume within the next six months.
Why? Because current times remind me very much of late 2004/early 2005. House prices were still rocketing up and sales were brisk. But six months later, “for sale” signs everywhere and where did the buyers go?
By the fall of ‘05, it was clear that the housing bubble was hissing some serious air.
This time I expect collapse at the top end. 20% of homes for sale on the San Diego County MLS are priced at $1M+. Something tells me 20% of prospective buyers aren’t qualified to buy in that price range.
A colleague at work and her husband have been trying to sell for well over $1M since last summer. After lopping $400K off the initial asking price, they seem to have decided to stand pat for now. Unfortunately, even though Zilldo says the price is $100K below estimated, it is nearly double the eppraisal.com estimate, which makes me think they are not going to find a buyer unless they further reduce the Dutch auction asking price. Since the luke warm fall sales season and the ice cold winter sales season are dead ahead, with no evidence they are about to cut that list price anymore, I suspect they will try again in the red hot spring 2013 sales season. Maybe some Chinese buyer with a bucket of money and a box of stupid will show up next year to take it off their hands for their asking price.
On a side note, Slim, I tried the couty assessors trick and, sure enough, got the same result you did.
Hey, sometimes you’ve gotta do what you gotta do. And if that means using the county assessor database to check the marital status of potential romantic interests, well, that is what you do.
I look at it this way. If you don’t wear a ring, don’t complain if you’re stalked.
I look at it this way: If you want to be stalked, don’t wear a ring.
I told a story of friends.
3.5 years ago they stopped making payments on their house. They owed $500K and it was worth less than $250K. He went from working 60-80 hours a week in the construction industry (installing sprinkler systems in commercial buildings) down to about 30.
After living rent free for a year, with him working under the table and them stashing as much money in cash and hidden assets as possible, they lost the house. They then got divorced, and wrote up an agreement that she payed him like half her income as alimony for 2 years. With that alimony in place, and him still working under the table, they were both under the max for full debt wipeout style bankruptcy.
As soon as the bankruptcy was complete, they remarried.
Well, 2 years after bankruptcy and foreclosure, they were able to buy again. They got a home similar to what they had in 2010, for $190K and were able to put almost $50K down on it.
This is not the only story I’ve heard of people with bankruptcies in the past 4-5 years buying houses. Demand is back.
This is not the only story I’ve heard of people with bankruptcies in the past 4-5 years buying houses. Demand is back.
In his book, Underwater Home, University of Arizona law professor Brent White makes the same point. Foreclosure is not something that scars you for life. Neither does bankruptcy.
Demand is back? How can that be when Housing Demand is at 15 year lows and falling?
“As soon as the bankruptcy was complete, they remarried.”
Sounds like they defrauded their creditors.
In self defense perhaps?
“Demand is back.”
Fraud never left.
I’m thinking the ready availability of federally guaranteed financing for low-income (99%) buyers who qualify
Alas, the financing is not as easy to get as everyone thinks.
Apparently, as we are personally about to find out, all of these programs (VA, FHA, and many conventional loans) require that everything in pest report (section 1) be cleared before they will lend.
The house we are in escrow for has a ridiculously high pest report (18K). Tagging along during the inspection last week it was clear that I could do all the work myself for under 4K.
This may kill the deal.
The fact that the pest co. that does the initial report is the one that must provide the clearance for the lender is such an obvious conflict of interest.
As your wise child says, it’s not fair that life is unfair. I hope you can get things worked out. Does ‘pest report’ mean actual pests, like termites?
“…actual pests…”
Like Realtors©?
Maybe those fairies in the yard weren’t imaginary after all.
I was hoping to leave the madness forever when I left San Diego.
Uh … don’t buy in Boulder? For instance, you could live in nearby Longmont for half the price.
I’m looking at moving to Boulder, CO for work and it’s like the bubble never popped there.
I’ve been singing that song here for years. Over a year ago I changed jobs to work in Longmont, and if there were no other factors I might even consider buying in Longmont right now and being able to walk to work again. But my son really likes his friends and the Boulder school system (and there are some good things about it) so I continue to live in Boulder…in a trailer park…with a Mercedes and BMW parked out front.
You’ve got balls dude……..
:cheers:
But my son really likes his friends and the Boulder school system
Uprooting yourself is one thing, but it does change when you have a family.
” I continue to live in Boulder…in a trailer park…with a Mercedes and BMW parked out front.”
Damn, dude. That’s some HBB Hall of Fame business right there.
The problem with Boulder is that it is very difficult to get new projects approved for construction. As such, there is simply less supply. And that problem isn’t going away until the City allows more construction.
All TPTB in Boulder (including a big chunk of the citizenry) like it just the way it is. You might as well drop the “until” and just say “that problem isn’t going away”. For the people already there it’s a feature, not a bug.
Ahhhh, NIMBYism. Living in CA, I know it well…
Sounds similar to Boston.
“‘There are still a lot of distressed homes out there, people who have stopped paying their mortgages but haven’t received notices yet. They are simply not that far into the foreclosure process,’ said Ginger Kneup, owner of Bright Future Real Estate Research.”
Bright Future?
BwaHahAhHAhaHHAHAHoHOHEhEHEHEHEHEHHEEEEEEEEEEEEEEEEE!!!
Dumb question of the day: Is it possible for central bankers and other players in the Real Estate Industrial Complex to engineer a fake housing recovery so effectively that it actually works, and real estate always goes up again, forever?
Here in Salinas I’ve talked to quite a few home owners who thought that housing prices bottomed in 2010 because of big drops in pricing. One bought when the house went from 1.5M peak to 850K and can now only sell for 500K. It is greed, pure and simple. They’ve lost everything and it shows in her demeaned. People see things in other’s that they don’t see in themselves or it’s in my case it’s different.
I’ve been wondering this myself.
I wondered for a quite a while, but lately I’ve stopped caring. It appears that they’ve already reached the threshold that means the house I wanted when this started isn’t the house I’ll want when it’s over. We’ll be empty nesters in 7 more years. And I’ll probably be retired (voluntarily or involuntarily) in 25 unless I buy a business I can run until I die. Gotta start looking toward that instead of suburban bliss with kids.
I wondered for a quite a while, but lately I’ve stopped caring. It appears that they’ve already reached the threshold that means the house I wanted when this started isn’t the house I’ll want when it’s over. We’ll be empty nesters in 7 more years. And I’ll probably be retired (voluntarily or involuntarily) in 25 unless I buy a business I can run until I die. Gotta start looking toward that instead of suburban bliss with kids.
YEEEEEEEEEEEEEEEEEEEEEEAUP!
“It appears that they’ve already reached the threshold that means the house I wanted when this started isn’t the house I’ll want when it’s over. We’ll be empty nesters in 7 more years. And I’ll probably be retired (voluntarily or involuntarily) in 25 unless I buy a business I can run until I die. Gotta start looking toward that instead of suburban bliss with kids.”
An acquaintance of mine is shopping for a 5 bedroom house for himself, his 3 daughters, and his girlfriend and her daughter. The funny thing is his daughters are 19, 17, and 14, and the older two have already expressed an interest in moving out. He is the type who never does housework or yardwork. The guy has lost his mind.
I’m also feeling priced out of and unmotivated to buy anymore in the size range that would have made sense while our family was all living at home. Downsizing starts in two weeks and continues for the next six years, and then we are empty nesters, with housing housing options that don’t currently meet our needs.
I can’t help but wonder how many other middle-aged would-be current buyers have decided to avoid catching themselves a falling knife at artificially inflated current price levels, since they feel no compulsion to do so?
no
” Is it possible for central bankers and other players in the Real Estate Industrial Complex to engineer a fake housing recovery so effectively that it actually works, and real estate always goes up again, forever?”
They are definitely pulling out all of the stops. I actually have no idea how this ends…Japan? Canada? Or something we’ve never seen before. I do know one thing, housing never had a chance to correct and prices are still too high when you compare home PRICES to local incomes.
“I do know one thing, housing never had a chance to correct and prices are still too high when you compare home PRICES to local incomes.”
Spot on, Nick! Anyone who buys into the bottom call bullshit at this point is a dupe.
I don’t think they can do it. There are too many houses.
“There is also a perception with the rise in pricing that ‘You’d better buy now,’ commented Mike Brilz, VP of land for Pulte’s Arizona Division.”
Do these guys see visions of flying pigs when they lie down to sleep at night?
Now show some respect. We’re listening to Lennar’s Homebuilding Division President for Phoenix and Tucson, and the vice president of land for Pulte’s Arizona Division. Division President! The Arizona Division; the whole state!
Where have you boys been? The HBB missed you. Why they’ve toiled away, shuttering joint ventures and undercutting their own buyers, sitting in those dusty little trailers, just waiting to come out and say, you better buy now!
‘Jones talked about price disparities where those searching for a home are again willing to drive a distance to purchase a better home…Belfiore sees the strongest increases in the ’submarkets’ (such as Maricopa)’
Drive til you qualify is back!
Here’s the genius at work from another ‘big’ builder:
‘Hovnanian Enterprises Inc., New Jersey’s largest homebuilder, bought 490 lots near Phoenix for $31.5 million, a sign of the new-home revival in one of the U.S. markets hit hardest by the housing collapse. Hovnanian closed the purchase on the finished and unfinished lots in two tracts northwest of Phoenix yesterday, according to Mark Weber, Arizona division president of the Red Bank, New Jersey-based company.’
‘We have been aggressively pursuing finished lot and platted lot opportunities in the Phoenix market,’ Weber said’
Wait, it gets better:
‘Blackstone Group LP’s credit arm agreed last month to acquire a group of development sites from Hovnanian, with plans to sell them back to the homebuilder under a $125 million deal. Hovnanian has been depleting cash to replenish its land portfolio and take advantage of distressed prices to boost profit margins.’
http://www.bloomberg.com/news/2012-08-02/hovnanian-buys-housing-lots-in-phoenix-for-31-5-million.html
‘Hovnanian has been depleting cash to replenish its land portfolio and take advantage of distressed prices to boost profit margins.’
If these guys blow enough cash on stoopid real estate investments, they are gonna end up living in their parents’ basements.
There are way too many houses already. This is beyond stupid. I predict more builder failures in the not-too-distant future.
“According to the Pima County Recorder’s Office, foreclosure notices totaled 797 for the month, bringing the year-to-date total to 6,164. That is 12 percent more than the 5,513 notices issued during the first seven months of 2011. Meanwhile, sales of distressed homes are down about 1,300 for the same comparative months. The 20 percent drop is significant, slowing to 3,252 sales this year from 4,549 last year.”
If they don’t start pushing those foreclosure homes back onto the market more quickly, all the pigs in the python’s intestine are gonna make it explode.
NOD than reassigned, and a while later, another NOD and finally a NTS, only to have the Trustee Sale postponed or cancelled (modification). The volume of Trustee Sale properties is way down in Ventura County.
The short sales kick the auction date 30 days in the future, until the short sale closes.When a home we’re interested in finally goes to auction, the beneficiary kicks up the bid to a retail price. The 900-1,200 sq ft stuff to investors are the better deals. The opening bids and the 1st loan amts are getting tighter. The Loss Mitigation Depts are not being so forgiving.
I’m right here in Tucson, the seat of Pima County.
And I can tell you that those distressed houses are just sitting there, rotting away in our latest heat wave. Matter of fact, I can point to half a dozen of them within easy walking distance of the Arizona Slim Ranch.
“Those premier penthouse units priced between $1 million and $2.5 million in 2006. The last three penthouse units that sold at the Montage averaged $425,000.”
Were those last three units originally $1 million units or $2.5 million units?
Even if they were low-end, they have dropped in “value” by 57.5% — nice haircut!
“Erik Molzen knows the housing market all too well. His previous house he got rid of by short selling it. He then turned around and bought a short sale house that he is living in now. ‘There’s not a lot of steals like there were last year,’ he said. ‘It really is a sellers’ market and it’s making buyers jump a lot faster to try and find the right house at the right price.’”
Is there any way to tell who the bagholder is for these guys who dump their current home at a loss to the lender, then turn around and buy another one at a loss to another lender?
My friend just did that here in San Diego. His last 3 houses were short sales. The last one sold in December. (Divorce situation.) He just purchased a short sale condo.
Less than a year after a short sale he can get a loan? (I’m not sure of the details, but his down payment was likely around 20%.)
SDJen
FHA is pretty lax on their credit worthiness, and that might be his way in. Even with a 20% down, he could still have gone FHA.
I read in a periodical, they were thinking of a 6 mo re-entry for short sale sellers. I mean, if anything, they are encouraging irresponsibility.I have a moral compass, so joining that party isn’t even a thought. Yeah, it is a business decision (I get that) but it is also a moral one as well.
Wow, just wow. They certainly are encouraging irresponsibility. Rewarding it actually.
SDJen
“Them” and “Us” isn’t just a Pink Floyd song. You should see what I do retail and wholesale (auction) shopping for a cash & close primary home in Ventura County (So Ca). Our competition should be in jail, not buying another home. Short Sale littered histories, live free for years, etc… They pump up the price in a bidding war, get it, and default to live free. Meanwhile, we have a medical black swan and just want a simple home, and can’t pay a bubblicious price. No fan of the TBTF banks, but these homemoaners are playing housing monopoly.
“…playing housing monopoly.”
The scandalous aspect is that people like that can get away with it again and again, rather than going to prison for defrauding their lenders.
“I read in a periodical, they were thinking of a 6 mo re-entry for short sale sellers.”
That and 520 fico qualification. Why do I bother to maintain good credit and live below my means. Not to get all political, but is this not some kind of perverted Social Justice for housing “victims” and the credit challenged?
Credit score means nothing. Too many people have bad credit now.
Hey you know how it goes. If you can’t come up with the cash yourself, steal it. If you can’t steal it, borrow it. Painting the walls whatever color you want is all that matters.
“Yun said roughly 15 percent of mortgage holders nationally are ‘underwater,’ meaning they owe more on their mortgages than they could get by selling the house. He said some experts put the number at around 30 percent. Local real estate experts have said that in Garfield County, that number may be 40 percent or higher, and Zillow shows that 49 percent of Garfield County homeowners are in that predicament.”
I guess it’s different there in Garfield County?
And btw, for the terminally math-challenged, 11M/44M = 25%.
US homeowners deep underwater
The ranks of underwater borrowers nationwide dropped by 700,000 in the first quarter of the year
Bloomberg
Published: 17:27 August 10, 2012
Gulf News
Washington: Shaun Donovan, secretary of the US Department of Housing and Urban Development, stood in the beating sun amid the scrapyards and vacant lots of Cleveland’s East Side and noted that rising home prices have begun to reduce the number of families whose mortgages exceed the value of their homes.
The ranks of underwater borrowers nationwide dropped by 700,000 in the first quarter of the year, Donovan told a crowd gathered for a news conference last week in a parking lot outside a housing-counselling centre. Still, he acknowledged, the problem remains severe in regions like greater Cleveland, where a third of homeowners have negative equity, according to data provider CoreLogic Inc.
“There is still a ways to go to make sure that hard-hit communities like Cleveland can fully recover, but we are on the right path,” Donovan said. “We have to do more.”
Even as home prices begin to stabilize in many areas of the US and mortgage delinquencies drop to the lowest level in three years, the administration of President Barack Obama faces an uphill battle to find solutions for keeping the nation’s 11.4 million underwater homes from turning into foreclosures.
The situation is particularly difficult in Cleveland, which saw 14 straight years of rising foreclosures before levelling off in 2010. Home values have dropped by 30 percent on the East Side since 2009 alone, according to the county assessor.
Anthony Brancatelli, a Cleveland city councilman who represents some of the neighbourhoods wiped out by home seizures, said he worries about the many “ghost” owners who have simply given up and disappeared.
“We’ve got to figure out a way to keep people in their homes no matter what,” Brancatelli said as he watched the HUD secretary speak July 30.
…
“…15 percent of mortgage holders nationally are ‘underwater,’… some experts put the number at around 30 percent… that number may be 40 percent or higher… 49 percent of Garfield County…”
15 percent, 30 percent, 40 percent, 49 percent underwater?
Something tells me the Titanic is going to sink.
We all live in the stucco submarine, stucco submarine …
LOL….. just LOL.
‘When a builder is building a speculative home,’ said Kim Shanahan, of the Santa Fe Area Home Builders Association, ‘he assumes that they are going to sell it to some high-dollar client who is moving here from somewhere else.’
Well, I have to give Obama credit.
He made housing prices RISE in Arizona.
All it took was trillions of dollars of taxpayer money and the Stimulus, HARP, HAMP, Fannie/Freddie stuck with billions of toxic mortgages, etc.
But he did it.
All democrats should be proud of this accomplishment.
Hopefully, we can get four more years. Think of what could be done for housing prices by 2016!
—————————-
The Communicator reports on Arizona. “It’s official! Home prices are starting to rise, houses are selling at a rapid pace, and the housing market is recovering. “Lennar’s Homebuilding Division President for Phoenix and Tucson Alan Jones talked about price disparities where those searching for a home are again willing to drive a distance to purchase a better home. Resale retailers are short on supply, according to Jones, with only a two-month’s supply. The result is that new home sales will continue to rise with more demand competing for the available homes. Jones remarked, ‘Resalers brought customers to Lennar – when (we) raised prices!’”
You really think R & R will stop that?
It’s time to elect someone not beholden to the Banksters.
I know they are NOT obama.
He had his chance.
You really think R & R will stop that?
And they are R & R as well
Correction:
And they are NOT R & R as well.
… and they’re white?
At least Ryan is one politician that openly says that we should get the government out of the mortgage market. Too bad his chances of getting that done is close to 0%, since he seems to be a lonely voice on that topic.
Politicians say lots of things. I like to watch what they do. Ryan voted for the bailouts (as did politicos on both sides of the aisle).
Since there is no chance of getting someone else elected … we’re doomed.
I guess you could give Obama credit for allowing house prices in Phoenix to fall upwards of 40%-50%. Because that’s why they’re rising.
” Because that’s why they’re rising.”
Not really, but the fall accounts for cash investor activity. Prices are rising because of Government programs that allow 3.5% down and 520 fico scores, not to mention relaxed requirements on the foreclosure and short sale time penalty.
Wall street got their butts handed to them when they passed out the free candy, what penalty will assigned to the US Government? Will the FED ever be able to tighten? I mean ever…like ever. If they do, housing will immediately become unaffordable to the howmuchamonth buyers.
2banana,
I will state outright that I would vote for R&R if they provided a reasonable alternative to Obiwan’s and Little Timmy’s housing hall of horrors.
But so far I haven’t heard squat. Will R&R put up on housing, shut up, or neither?
I’m dropping in very infrequently here, but it always good to read the HBB.
A few months ago I mentioned that the owners of the house we had been renting for years gave us notice to move because they were going to move back into the house. They had been living in a nicer, more expensive house. They had to do a short sale on that. They offered us another rental they had, very nice and new, but not what we wanted. The nice new rental is now severely underwater, bought in ‘08 for $310K, the builder is selling brand new homes in that subdivision with more square footage for $230k-$260k. These previous LLs had like 5 or 6 houses. People were buying houses like designer shoes on a closeout sale. There are so many empty homes on the market around here. Big homes, empty. Homes on 5 acres, empty. Prices are falling, but in my opinion, still have a ways to go to meet up with incomes.
Met a couple who had moved to Arizona (Phoenix area - out quite a bit) because the hubby is fed up with this awful weather. They bought a house fore $80K stayed for 9 months and the wife couldn’t stand living away from the grown children still up here. Put the Phoenix house on the market, but no takers, so now they have a house sitting down there vacant and meanwhile they purchased another house here.
The bubble saga goes on.
I hate renting, but more than I hate renting, I would hate for us to lose a lot of money on over priced real estate. Met lots of accidental landlords out there while looking for a rental. Lots of folks sitting it out, waiting for the market to turn around. Even had one LL say that when prices started to drop they decided not to sell because they weren’t going to “give it away” (they had paid $150k in 1999 and she was talking about missing the boat on selling for $550k in 2006 by a year or so, and believe me prices were still very high here in ‘07 and ‘08 and beyond). Not a stable situation for “owners” or renters. I’d like to go for the luxury apartment idea, but a backyard is pretty much an essential for us.
Thank or the reality post WA Renter….
And the money quote:
And guess what folks? Contractors have miles of room to go lower on the price. MILES of room.
My pleasure. I love on the ground reports on this blog.
Question to long time posters: Did you guys ever, in your wildest imagination, think the housing bubble was going to last this long?
Do you remember the guy from the Netherlands that used to post here years ago. He described how the gov’t there artificially kept housing prices high. Makes me wonder sometimes if we will ever again in this country have a stable housing market that is based on incomes.
There was an article on here a week or so ago about a low income, single mom who was working three jobs earning $25k in a small town in Minnesota. She got a gov’t loan for a house and was thrilled. Her house pmt. was $675 IIRC. That is too high for someone with that income and 3 dependents.
‘think the housing bubble was going to last this long’
15 years to the bottom in Texas in the 80-90’s. And no one was trying to keep prices up or inventory off the market. Of course, it was (still is) longer in Japan.
2006 + 15 = 2021 for the bottom, at the soonest.
Meanwhile, be sure to shed lots of tears for all the foreclosure victims who pass your way.
The bubble alive and well in San Francisco. This from my neighborhood blog:
First listed in mid-July for $549,000, 120 Eugenia in Bernal Heights sold today for $671,132, or$122,132 over asking. It would appear this Bernal Heights property had a bit of a bidding war, and we’re curious if it’ll spark the trend that’s happening in other hot neighborhoods like Eureka Valley and Noe Valley. The 2-bed, 1-bath, 1,000 square foot single-family home was owned by the same person for over 40 years and needs a little TLC to “make it amazing.”
Wow. That’s a big bump in price for a modest fixer-upper.
I’ve been seeing the technique here, under pricing a modest house to get a bidding war going. But it doesn’t seem to be getting out of control.
Question to long time posters: Did you guys ever, in your wildest imagination, think the housing bubble was going to last this long?
No, but in hindsight I can see how naive I was. Now I understand why old people would go on political rants when talking about the Great Depression. I’m sure the history books will gloss over a lot of things about this one 50 years from now, too.
15 years to the bottom is a lot of rent payments.
15 years of rental payments that are half the monthly carrying costs of a SFR is alot of savings.
“15 years to the bottom is a lot of rent payments.”
The price of freedom. If interest rates ever rise, those 300k and up homes are toast. But, you can never under estimate the lengths that pandering politicians will go to create the all powerful wealth effect.
“15 years to the bottom is a lot of rent payments.”
I’m fine with it. My landlord has already incurred a capital loss plus PITI that equate to fifteen or so years of our rent, and we have only been around for seven years.
“15 years to the bottom is a lot of rent payments.”
“I’m fine with it. My landlord has already incurred a capital loss plus PITI that equate to fifteen or so years of our rent, and we have only been around for seven years.”
That’s ok, they can always make it up by renting the place out for another 22 years or so. What’s that, they’ll be dead by then? Oh, snap!
Met a couple who had moved to Arizona (Phoenix area - out quite a bit) because the hubby is fed up with this awful weather. They bought a house fore $80K stayed for 9 months and the wife couldn’t stand living away from the grown children still up here. Put the Phoenix house on the market, but no takers, so now they have a house sitting down there vacant and meanwhile they purchased another house here.
This is a huge problem in AZ. People move here, realize that they’re far away from family and friends, and guess what, the Phoenix area is a transient place. So’s Tucson. Which means that it’s hard to make new friendships of the lasting variety.
So, a lot of people come and go.
I hate renting, but more than I hate renting, I would hate for us to lose a lot of money on over priced real estate.
You said it. But how much longer are you planning to wait it out? 2 years? 5 years? 10 more years?
If you are in your 20’s or 30’s, waiting another 10 years for sanity to return may be an option.
Anyone here in their 40’s or 50’s, with a family, willing to rent another 5-10 years?
Why buy when rent is a small fraction of the cost?
Anyone here in their 40’s or 50’s, with a family, willing to rent another 5-10 years?
That’s me, and yes, I’ll live in the trailer park another 10 years if I need to. I may end up going straight from here to the 55+ community.
LOL, we may have to join you in that 55+ community by the time it is sane to buy.
Now that I think about it the trailer park already kind of IS the 55+ community.
Guess what honey? We’re HOME!!!!
Oh the irony.
I just got off the phone after a long conversation with one of my closest friends who is a pastor and a rocket scientist(seriously. He’s a rocket scientist)….. He said “I want a simpler life and out of DC. I really don’t want a trailer but a short double wide on a slab is my idea of simplicity.”
And oddly, some of the best years of my life were in a single wide. Simple, economical and peaceful.
I’m not a big fan of McMansions on wheels, but for a low low 40k down my housing expenses other than utilities have averaged about $250/mo for the last three years in a very high cost of living area (I reduced my expenses by over $1000/mo doing this). Given the same choice I’d do it again. I never could have gotten an equivalent rate of return on that 40k anywhere else and I should be able to get at least 80% of it back if I go back to suburban life.
Pretty soon my intro deal will be over and I’ll be paying market price for lot rent which is about $500/mo. At that point if I could find a nice piece of land to put it on for less than $100k it would start to get tempting. Pay that off and then build a toe-tag house.
Problem is, I like being mobile if something goes wrong. And nothing that’s happened in the last three years has given me a warm fuzzy that I’m at any less risk of something going wrong than I was before. The beast is still out there just past the treeline…and he’s hungrier than ever.
” I may end up going straight from here to the 55+ community.”
There’s a huge price difference here in 55+ and free-for-all 3/2s. The 55+ places are dirt, dirt cheap.
No family, but I’ll rent till it becomes at least as cheap to buy. If that means the rest of my life, so be it.
Same here.
‘a lot of rent payments’
‘willing to rent another 5-10 years’
I don’t think people remember past bubbles. Do you think after 10+ years of recession/depression those of us in Texas gave a da** about house prices? Or rents? Most were moving to find work. Out of state if necessary. I’ve gone over this before; there were so many suicides it was buried on back pages. Families split up, generations of wealth wiped out. Walking away from a house was nothing compared to what else was going on.
These are reasons I don’t bother with the housing obsessed. This global bubble is a million times larger than the one in the oil states. I don’t know what’s going to happen, but this ‘rent vs buy’ stuff isn’t very important, IMO.
It appears you have a good point Ben:
Adjusted to 2000 dollars
Median Home Values
United States
2000 $119,600
1990 $101,100
1980 $93,400
1970 $65,300
1960 $58,600
1950 $44,600
1940 $30,600
Texas
2000 $82,500
1990 $76,100
1980 $77,400
1970 $46,100
1960 $43,400
1950 $35,200
1940 $17,600
http://www.census.gov/hhes/www/housing/census/historic/values dot html
From 1980 to 1990 housing values in Texas dropped! And I can’t say much for the next decade either!
The RE bubble in the oil states probably peaked in 1983. But I’ve never heard anyone call it a housing bubble. Most of the price increase was in commercial property. Houses did go up, but there was no interest only stuff, and I doubt people flipped them. They did flip office towers; once it was 10 times in a day.
This was in the LV Business Press article above:
‘Office vacancy in Las Vegas climbed for the fifth consecutive quarter and reached an all-time high of 25.6 percent in the second quarter, up from 25.2 percent in the previous quarter and from 24.3 percent a year ago, Applied Analysis, a business advisory firm, reported.’
‘The market saw 126,800 square feet of negative absorption during the quarter, or more space vacated than leased. That offset 199,000 square feet of positive absorption in the first quarter.’
And Vermont cratered in the 1990’s
Vermont
2000 $111,500
1990 $122,000
1980 $83,500
1970 $63,000
And Mass? It cratered in the 1990’s
Massachussetts
2000 $185,700
1990 $208,000
1980 $95,800
Oh and NY? It cratered in the 1990’s
New York
2000 $148,700
1990 $168,100
1980 $90,300
New Hampshire in the 1990’s? CRATERED
New Hampshire
2000 $133,300
1990 $165,300
1980 $95,000
New Jersey CRATERED too
2000 $170,800
1990 $207,400
1980 $119,200
These declines will look like a tea and crumpets at aunt Mildreds when compared to the 2020 numbers.
“Do you think after 10+ years of recession/depression those of us in Texas gave a da** about house prices?”
Based on the widespread ongoing obsession with house prices, we’re not there yet.
Residential construction continues to progress in Quebec under the Canada Mortgage and Housing Corporation.
The seasonally adjusted annual rate of housing starts rose to 44,300 in July, compared to 43,000 in June.
For the whole country, the pace is slowing. In seasonally adjusted annual rates, housing starts fell from 221 100 to 208 500 between June and July.
Actual housing starts in Quebec have argued for a year. They have slipped from 3667 to 3 983 over a period of 12 months.
“Just as the beginning of the year, rising pace of residential construction recorded in Quebec in July was mainly attributed to multiple starts,” says Francis Cortellino, Senior Market Analyst at CMHC.
For Montreal, the seasonally adjusted annual rate jumped from June (18,300) and July (23,600).
A week and a half ago I put i bid on a place that needed a lot of work, for $40K. We walked when the seller countered at $45K. It went under contract later that day at $44,500. Comps were probably like $37-39K.
Well, on Friday a new unit in the same complex went on the market for $38K. Monday at noon, when I went to look at it, it was already under contract.
That is the Phoenix, under $50K, condo market at this time.
Anything that hits the market is under contract in 2 days.
Right, because they cash flow, and investors are as thick as flies in those markets.
This past weekend we visited my college roommate who just built a house in northern lower peninsula of Michigan on Grand Traverse Bay. Lovely area but secluded, as in 12 miles to the nearest town, and a very small town at that. While taking a walk, we happened upon a lakefront lot for sale with 150 ft of sandy beach frontage on the bay. Now I am getting pressure to call the listing agent. Hubby says he could gladly live on a private lane 12 miles from anywhere in a log home (yet to be built, it’s a vacant lot) with propane or wood stove heat, well water and septic system.
I frequently joke about living on a mountaintop far from civilization. But faced with the current prospect, I find I would miss my citified amenities and any kind of store I could possibly need within 5 miles of the house. I also profess to love winter…but maybe not 6 months of it. Told my husband that he is welcome to call the realtor if he wants. I’m having nothin’ to do with it!
I grew up that way and could live that way if I needed to and it was close to family. But there are many things I would miss about civilization. If I didn’t know people I really liked there, no way.
I’ve seen the pictures of the beaches up there and I must say it does look very nice…in the summer.
It looks nice in the winter, too. As long as you have a 4-wheel drive vehicle, snowmobile and plenty of supplies on hand.
Buy today, underwater tomorrow.
I lasted all of six weeks in a small Wisconsin town. Actually, a room in a house on a lake a few miles outside of town. The social isolation got to me in a hurry.
Looks like I’m a city girl at heart.
Looks like I’m a city girl at heart.
Me too, Slim. I’ve tried living rural and suburban and it just doesn’t suit me.
I feel like I have the best of both worlds. My suburb of Chicago feels like a small town. And the big city is just a commuter rail ride away.
I live 17 miles from the nearest tiny town. Amazon covers the stores for me. It’s nice living away from the swarming moron hordes.
What part of the country?
Pacific northwest.
Let’s see. Check the calendar. August 14th. This is the last hurrah of the Summer buying season. Cramer was frothing about Home Depot this morning. Republicans and Democrats are at the height of campaign season. I don’t care if Op Twist is over, everything financial is still being artificially juiced. Find a way to short housing and the market the day after the election.
It’s so easy to make money.
New data source (I didn’t know Transunion reported delinquency stats).
http://newsroom.transunion.com/press-releases/transunion-national-mortgage-loan-delinquency-rat-0917498
Especially interesting how CC delinquency rates are a fraction of mortgage delinquency rates.
That actually makes sense to me.
1. Not everyone has a mortgage, nearly everyone has a credit card. Those who own without a mortgage are generally in better shape financially.
2. The most financially well-off (who pay their credit card balance down to $0 each month) are given credit cards like candy. Want a Gap card for 20% off this purchase? Why not.
For every struggling debtor making payments on their one credit card, there is a person who has 5 cards (perhaps one Visa, and 4 retailer cards) which they either pay to $0 each month, or don’t use.
I’m always surprised on my credit report how many credit cards still report me when I’ve long-since shredded the card.
Yes. Trans Union does a wonderful job of documenting falling rental rates in some off the larges cities in the country.
The largest year-over-year percent declines in rental prices were observed in
Denver (-8.8%)
Chicago (-4.8%)
Los Angeles (-2.6%)
http://newsroom.transunion.com/MediaLibraries/TransUnion/Documents/graphics/1Q12/Q1-2012_SolutionsReport.pdf
Down we go….
Enjoy
Went and saw a townhouse this afternoon.
Bank owned. Last sold 2006 for $132K. Previous sell was $105K as apartment to townhouse conversion in 2005.
Was on the market for $27K late last year but wouldn’t sell in whatever condition it was in. Had a full remodel done since then. I put in a full asking price bid of $49.9K. Hope, but doubt I’ll get it.
Darrell
Don’t you just hate the emotional rollercoaster of an offer! We’ve done it numerous times, and are now numb. If it is meant to be, it will. Wish you a deal.
The lower prices usually have multipul bids and someone willing to pay a higher cash price. It’s sort of nuts here in Phx.
$15 million dollar asking price! It’s nice up here (except for the 10 mos. of rain), but … It does have a far view of the water.
http://www.estately.com/listings/info/3940-isaacson-rd
CO foreclosures UP UP UP! CO housing prices DOWN DOWN DOWN!
Colorado foreclosure filings up in July
http://www.denverpost.com/breakingnews/ci_21308521/colorado-foreclosure-filings-up-july
CO isn’t the only state where foreclosure filings are up.
And I’m talking about UP BY A SH!TLOAD IN SOCAL.
Meanwhile, why not invest in a lovely Richmond, CA foreclosure home with mold-covered walls?
California foreclosure activity creeps up in July
Mold covers the walls of a foreclosed home as seen during a bus tour of foreclosed and blighted properties in Richmond, Calif. (Photo by Justin Sullivan/Getty Images)
By Alejandro Lazo
August 14, 2012, 12:03 p.m.
The number of California homes entering foreclosure creeped up in July, a new report shows, but in Southern California they were up sharply in the Inland Empire counties of San Bernardino and Riverside.
…
The number of default notices ramped up in San Bernardino County last month. Notices of default were up … 31.2% from July 2011 in San Bernardino County.
In neighborhing Riverside County, default notices … increased 21.7% from the same month a year earlier.
In Los Angeles County, the number of default notices increased … 18.1% from July 2011.
In Orange County, default notices were…up 10.5% from July 2011.
In San Diego County, default notices were up…21.3% from the same month a year earlier.
In Ventura County, default notices were up … 21.5% from the same month a year earlier.
…
It almost seems like there is a foreclosure epidemic across the U.S. Foreclosure homes for everybody!!!
Bloomberg News
Foreclosure Filings Increase in 60% of Large U.S. Cities
By Dan Levy on July 26, 2012
Foreclosure filings rose in almost 60 percent of large U.S. cities in the first half of 2012, indicating many areas will have more distressed homes on the market later this year, RealtyTrac Inc. reported.
More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction or repossession, up 1.5 percent from the last six months of 2011, the Irvine, California-based data provider said today in a statement. Among the 20 largest markets, Tampa, Florida; Philadelphia; Chicago and New York City had the biggest percentage increases in filings.
…