The Housing Bubble

A report from New Jersey 101.5. “New Jersey’s foreclosure rate nearly doubled from March to April. RealtyTrac Vice President Daren Blomquist said a primary reason is the length of New Jersey’s foreclosure process, which currently averages above 900 days. ‘If you’re looking for a place to not make your mortgage payments, New Jersey might be more favorable,’ Blomquist joked.”

The New York Daily News. “Hurricane Sandy’s helping turn Queens into foreclosure city. The storm-slapped borough saw foreclosure notices spike to 566 in April - a whopping 1,186% increase compared with last April, a new report from RealtyTrac shows. Other factors are adding to Queens’ foreclosure woes. The borough was already the epicenter of the city’s foreclosure crisis before Sandy hit.”

“Queens’ courts had experienced an especially big backlog in foreclosures following the robo-signing scandal. Now, in the wake of the national mortgage settlement that laid down guidelines for the foreclosure process, the wheels are turning again. Overall, New York City saw foreclosures more than double in April, reaching 1,473. Every borough saw an uptick. After Queens, Brooklyn had the second biggest number of notices, 466, up 44.72%.”

The Metrowest Daily News in Massachusetts. “Foreclosure activity dropped dramatically in March, indicating an end to the foreclosure crisis in Massachusetts, The Warren Group said. Warren Group CEO Timothy Warren Jr. said some lenders are proceeding cautiously as they wait for rules about how a new state law dealing with foreclosures will be enforced. ‘Even though people are delinquent, (lenders) are slow to pull the trigger on foreclosures,’ Warren said.”

“Marlborough Code Enforcement Officer Pam Wilderman said city officials continue to feel the effects of the foreclosure crisis ‘There has been a vast reduction (in foreclosure activity),’ Wilderman said. But there has not been a significant reduction in ‘the amount of property empty because banks haven’t done anything (to sell it).’”

The Boston Business Journal in Massachusetts. “Chobee Hoy is among the top brokers in the Bay State’s hottest housing market, the town of Brookline, where buyers are literally lining up for a peak at promising open houses and sales are routinely closing far and above listed asking prices. A two family under agreement for $1.5 million, a single family at $1.72 million — that have seen bidding wars erupt during showings. She said another Brookline condo priced at slightly over $1 million had 67 buyers attend its first open house a few weeks ago. ‘People were literally standing in line,’ said Hoy, who has been a real estate agent here in the Bay State for roughly three decades. ‘It does make you a little nervous.’”

“The situation presents particular chalenges to appraisers tasked with valuing homes during the mortgage-underwriting process. A traditional appraisal relies heavily on past sales and comparable property-valuation data — all historical information that fails to capture volatile, real-time pricing shifts occurring in the market, said Keith Florian, a certified home appraiser and owner of Beyond Appraisers Inc. in Newton.”

“Florian said he recently appraised a Newton home that sold for $81,000 above asking, a situation that required him to consider a variety of factors, not just historical comps, in determining an appraised value for the lender. He said the market’s momentum as well as the number of bidders vying for the property helped justify the value sought. ‘You definitely need to recognize what’s going on right now,’ Florian said. ‘Right now, things are very active. Here in Newton, it’s extremely hot. I haven’t killed a deal yet this year. I’ve killed plenty of deals in years past, but not this year. It makes sense after going through the (valuation) process.’”

The Ridgefield Press in Connecticut. “With approximately a third of the homes on the market under contract, Ridgefield Realtors are confident the positive results from the first quarter will carry over into the rest of the year. Colette Kabasakalian of Coldwell Banker said 62 units were sold at a median sales price of $527,750 in the first quarter of this year, January to March. Compared to the same time last year, 46 units were sold at a median sales price of $606,250. The number of units sold this year is up 26%, while the median sales price is at a 12.9% decrease from last year at this time, she said.”

“Despite inventory being down, Bob Neumann of Neumann Real Estate believes now might not be the time to sell, with prices still being down. He added that consumers’ increased faith in the market has been integral in the upturn in number of houses sold. ‘There’s a more positive view of the whole economy, not just in the real estate market,’ Mr. Neumann said. ‘With better and better forecasts coming in, there’s more belief in the market and everyone wants to keep that momentum going.’”

The Concord Monitor on New Hampshire. “Mary Skoby Cowan of Cowan and Zellers in Concord said she’s noticed buyers on the whole are more optimistic. ‘There’s a boldness on Main Street,’ she said. ‘I think you’re seeing some people go back to work, people working more hours – just a more positive energy in many industries. And more importantly, it feels organic,’ she added. ‘It’s not because of some stimulus package or other factor.’”

“Low interest rates have helped, said George Helwig, director of education and counseling at CATCH Neighborhood Housing in Concord, which helps new buyers navigate the home-buying process. By giving them greater purchasing power, they’ve drawn more potential buyers to the market. ‘Right now you get a lot more value for the property than you would have (a few years ago),’ Helwig said. ‘For the same amount, someone who could buy a home that in 2006 was priced at $150,000 can now buy a $180,000 home that was previously priced at $200,000.’”

The New Hampshire Business Review. “There’s no way around it: Today’s homebuilding statistics, especially when compared to the boom years, are depressing. New Hampshire is ‘really struggling right now,’ said Elliott Eisenberg, former longtime economist for the National Association of Home Builders. ‘Your permits are anemic. You were on the top of the world, but you haven’t regained your mojo.’”

“Kendall Buck, executive VP of the Home Builders & Remodelers Association of New Hampshire, notes that his organization’s home show in March recorded its largest attendance in a decade, and the association’s membership, after shrinking for six years, is beginning to grow again. ‘My sense is there is a great deal of optimism,’ Buck said. ‘We’d like to see that optimism turn into a reality.’”

“While some homebuilders have noticed the improvement, or see it coming, others are less hopeful. ‘Pretty minimal to be honest,’ said Kim Moore, president of Madison Lumber Mill, of his business in New Hampshire. ‘Kind of a dud. I send more wood to Pakistan now than I do to New Hampshire. We are all smothering ourselves with lumber.’”

The Montpelier Bridge in Vermont. “Washington County single-family home sales (both primary and vacation) through the Multiple Listing Service (MLS) in 2012 were almost 13 percent higher than in 2011. Put another way, there were 35 homes sales per month last year in the county, up from 27 per month in 2011, according to local real estate appraiser Guy Andrews, SRA. Condo sales were even stronger, up 24 percent. One of the biggest drivers of today’s market is the historically low level of mortgage rates, Andrews said. ‘Right now, my desk is covered with refinance work,’ he said. ‘But I am also seeing more purchase contracts. While that is typical in the spring, this is a good indicator for the market.’”

“Sellers shouldn’t get their hopes too high, though. Last year, the median sale price of a single-family home in Washington County fell 4.25 percent, to $191,500, according to MLS statistics. While demand is up, banks are cautious about who they will lend to. Lenders are also fussier about the condition of the house they are financing, said broker Lori Pinard of C21 Jack Associates. ‘They really read over all the appraiser’s notes very carefully,’ she said recently. ‘They are having appraisers measure isolation distances between the well and septic; things they didn’t used to do.’”

“Stronger demand is giving sellers a slightly stronger hand. But a gap remains. Andrews pointed out that the median asking price for a house in the U-32 towns now is about $245,000—close to the peak median sale price of $255,000 in 2008 to 2009 but considerably higher than the median of $196,000 last year. Why? Some sellers are sitting on big loans taken out at the market’s peak, and can’t lower their asking prices without taking a loss, Heney explained.”

“Nevertheless, more sellers appear eager to jump in. Pinard wrote in an April 26 e-mail: ‘I’ve been swamped with requests from prospective sellers who want to list by May 1.’”