The Housing Bubble

The Tri-Town News reports from New Jersey. “New Jersey Realtors believe in the value of owning a piece of the American Dream, according to results from a survey commissioned by the New Jersey Association of Realtors. The 2012 New Jersey Member Profile revealed that 90 percent of Realtors in New Jersey own their primary house. The survey also found that 46 percent of Realtors own an investment residence. ‘This report demonstrates that Garden State Realtors truly believe in the value of being homeowners,’ said NJAR 2012 President Gary Large. ‘Despite various market fluctuations, New Jersey Realtors not only help facilitate the American Dream, but they contribute to the housing market and overall economy.’”

The Record in New Jersey. “The stone house has small rooms, an overgrown yard and a roof that begs to be replaced. But investor Frank Oliveri of Rochelle Park and his business partner, Al Best, see the potential in its Wyckoff address and the $125,000 in renovations they’ve got planned. The house fell into foreclosure after selling for $522,000 in 2006, when the housing market was at its frothiest. Oliveri and his brother, Mel, bought it recently for $315,000, even less than its 1999 sale price ($339,000).”

“After extensive renovations - including the addition of a master suite - the investors hope to sell the property for more than $600,000. ‘The flipping market is back,’ said Antoinette Gangi, a Re/Max agent in Woodcliff Lake.”

“Ming Tilley of Paramus has been trying to sell a Paramus investment property since March. Tilley, a real estate agent with Realtyline in Teaneck, extensively renovated the home, and put it on the market for $1.1 million. She’s gotten some interest from potential buyers, but so far, no sale. She thinks a house in a lower price range might have sold more quickly. But she also thinks that Bergen County real estate values are likely to rebound because the area’s so close to New York. ‘I took a risk,’ she said.”

The Press of Atlantic City in New Jersey. “When Kate Gatto received a new listing in Mays Landing that was perfect for a first-time homebuyer, she immediately put a new rider on top of the sign. It reads ‘100 percent financing.’”

“Gatto is taking advantage of a program under the New Jersey Housing and Mortgage Finance Agency that provides 5 percent of the sale price of the home toward closing costs and in some cases is allowing people to buy a home with no or a nominal down payment. The money, which does not have to be repaid, can be as much as $10,000 for a first-time buyer purchasing a $200,000 home. A first-time homebuyer is defined under the state’s program as someone who has not owned a home in three years. ‘Everyone has decent jobs. The cost of living is so high they can’t save enough money for closing costs,’ she said. ‘The (money from the program) would get them in.’”

“Single-family home prices in Atlantic, Cape May and Cumberland counties dropped almost 8 percent in the second quarter from the same period in 2011, the National Association of Realtors reported.The value of median home resales in the region had grown steadily from 2001 to 2007. In 2001, the median home sold for $126,100 in the Atlantic City metropolitan area, which includes Atlantic, Cape May and Cumberland counties. By 2007, it had more than doubled to $269,700, Realtor data show. Prices then plummeted 6 percent and 13 percent in the next two years, and have bounced along the low to mid $220,000 range since.”

“Jane Jannarone, owner and broker at Exit Uptown Realty in Vineland, said establishing confidence is tough as potential buyers worry whether prices have indeed hit bottom, especially while prices bounce around. ‘They are leery of buying now because they think if they buy now there could be a better purchase price six months or a year from now,’ she said. ‘It’s so hard in this market to say, but if we’re not at the bottom, we’re certainly close to the bottom.’”

The New York Times. “The Cerezos were among the hundreds of people who filtered through a three-day homeowner assistance program held by Bank of America at the Hilton Hotel here in early August. A second Bank of America event was scheduled for the following week at the Atlantic City Convention Center. Preparing for the Newark session, the bank contacted 6,000 customers who lived within a 30-mile radius of the city and were more than 60 days in arrears on their mortgage payments, urging them to attend. By the start of the event, 375 people had registered for meetings with one of 50 bank officers on site.”

“Luis Cerezo bought it in 1996 for $82,500, but now, after twice refinancing the loan, owes $320,000. The house is in Elizabeth City Gardens; it was once assessed at $470,000, which the couple borrowed against to remodel, according to their son. The Cerezos had been hoping to get an answer before leaving the Bank of America workshop in Newark, but were told the wait would be a bit longer, because the Federal Housing Administration holds their mortgage. ‘I couldn’t sleep last night knowing that today we’ve got to make the decision, do we stay in the house or not,’ said Mr. Cerezo.”

“Nair Corbo came to the Newark workshop after becoming frustrated by her previous dealings with the bank. Ms. Corbo said she was up to date on the $1,193 monthly mortgage payments on her Roselle condominium, but was carrying close to $50,000 in credit card debt to cover those payments. Ms. Corbo bought her condo five years ago for $148,000. She still owes $139,000, though she said the home was now valued at $80,000. With her hours at her law firm having been cut back, she was hoping to reduce her monthly payments to Bank of America.”

“‘I’m not looking for a freebie,’ Ms. Corbo said. ‘I’m looking for something I can be comfortable with, being able to pay my bills and not have to use the credit cards.’”

“There was a time, not long ago, when some Hamptons residents were flipping homes here for obscene returns. The volume of sales of prime Hamptons properties is down more than 20 percent from when the market peaked in mid-2007, brokers said. The Hamptons have become a solid buyer’s market, where listings at all price ranges are plentiful and huge price reductions are common.”

“Last year there were two sales over $30 million — one for $32.5 million in Southampton and another for $36 million in North Haven. And this year there have been six sales of $20 million or more, all closing before May. As of Wednesday, there were 62 active listings over $20 million, 133 between $10 million and $20 million, and 302 from $5 million to $10 million, according to Miller Samuel. ‘I think the market is flooded in the middle,’ said Susan Breitenbach, a broker at Corcoran. ‘If a customer is looking for something between $5 million and $10 million you could send them 60 to 100 listings.’”

“‘Five years ago people would think something was wrong with a ‘reduced’ property,’ she said. Now ‘people don’t want to look at it unless it is reduced.’ ‘The worst thing that could happen is you are at a cocktail party and somebody could say, ‘Oh, you paid that for that?’ Ms. Breitenbach said. ‘They are more concerned about that than anything else.’”

The Journal News. “Another jaw-dropping mansion will be auctioned off this month in Westchester this one as part of a bankruptcy proceeding. The county’s fourth event of this kind over the past year, the house ups the ante having previously been on the market for more than $6 million. The owner’s financial troubles though mean the house could go for far less. The estate, located in Lewisboro with a Pound Ridge ZIP code, covers 6.5 sprawling acres of prime real estate near the Greenwich, Conn., border, and the home itself is loaded with luxurious amenities.”

“Unlike the last few local mansion auctions, which were held in Purchase and Chappaqua with opening minimum bids around $1 million, this Lewisboro auction won’t have a minimum bid. The rules for this auction are relatively loose because the owner, Carl Capezza, has less control than a typical seller. The bank has a lien on the property going back to 2006, around the time when Capezza failed to get $6 million for it, according to records filed with the Westchester County Clerk’s Office.”

“‘The auction represents a unique opportunity to purchase a high-caliber property in a sought-after location at a value price,’ said Jeff Hubbard, president of Madison Hawk, the company hired to market the auction. That ‘value’ price, though, is something of a mystery.”