The Housing Bubble

The Sun Sentinel reports from Florida. “In Palm Beach County, the median price of $272,000 was 16 percent higher than a year earlier, according to the Realtors Association of the Palm Beaches. There were 1,020 homes trading hands, up about 1 percent from last February. Meanwhile, more owners are starting to list their homes for sale. Broward had 5,565 active listings at the end of February, up 25 percent from a year ago. Palm Beach County had 7,522 homes for sale, up 12 percent. Many investors now are pulling out as the bargains diminish.”

“‘Call it the return to the old normal,’ Jonathan Smoke, chief economist for Hanley Wood in Washington, D.C., said in a statement. Smoke added that ‘no one should fear this is a harbinger of housing deteriorating — it’s actually a reflection of the existing home market getting better.’”

The Miami Herald. “The slowing pace of existing sales is widely expected to continue this year, despite substantial increases in the selection of homes and condos listed on the market. In February in Miami-Dade, listings for existing condos ballooned to 10,723 units. That was a 32.2 percent increase from a year earlier and the highest level in more than two and a half years. Miami-Dade single-family home listings increased 18.3 percent to 6,113 from a year earlier.”

“Michael Davalos, office manager of Engel & Völkers in Miami Beach, said some properties have been priced ambitiously high and as a result are sitting on the market without takers. ‘Some agents taking on listings drank too much of the Kool-Aid on prices,’ said Davalos, whose office sees a lot of business in the South Beach and the Brickell/downtown areas. ‘Prices haven’t come down, but it’s taking longer to find buyers. We overstepped ourselves and prices got over what the market would pay.’”

The Palm Beach Post. “In August 2012, The Palm Beach Post wrote about the home at 8072 Burlington Court, learning it had gone into foreclosure in September 2010. More than three years later, it’s still sitting there decaying. The lender, JPMorgan Chase hasn’t gotten a final judgment yet against the home, so it remains in the name of homeowner Vernon Campbell. Campbell appears to be long gone.”

“The house has a hole in its roof, shingles falling off, and neighbors fear another looming hurricane season will finish it off, as well as taking out neighboring houses. ‘This whole situation has gone on beyond a reasonable time for remedy and is now well beyond the point of an eye sore,’ said neighbor Mike Herndon. ‘It has reached the point that this property has become a hazard to the public and surrounding homes.’”

The Ocala Star Banner. “For almost two years Jo Ann and Larry Vach have lived next to a home that is in foreclosure. An apparent squatter has allowed refuse to accumulate, causing a stench and a rat infestation in the otherwise tidy neighborhood. The eyesore house and yard, which has junk furniture and trash piled in front, has been in the foreclosure process since May 2010.”

“A man standing on the property declined to identify himself when recently approached by a reporter. He said he had a lease on the house. ‘Technically, I guess I’m a squatter. I collect rainwater but I do have electric power,’ he said. When asked about the refuse last week, the unidentified man said, ‘I’ve seen worse.’”

The Bradenton Herald. “Kerry Ward, the Manatee-Sarasota market leader for Bank of the Ozarks, said he was shocked at the number of homes that are still in pre-foreclosed status, meaning the properties remain in the name of the homeowner, not the bank. That’s if the bank is in a rush to do so, which may not be the case. The opportunity is there to deliberately slow the foreclosure process in order to delay paying overdue property taxes, as well as bringing the properties up to code. ‘Foreclosures got so backlogged that the banks are keeping them in the property owners’ names as long as possible,’ said Amara Nash, president of the board of directors for the Artists Guild of Manatee, the guiding nonprofit organization within the Village of the Arts.”

From Florida Today. “The number of bank-owned properties is still significant in Brevard, and elsewhere, but that situation so far is having a negligible effect on the local market. A housing roundtable discussion held at FLORIDA TODAY noted the properties are not being allowed to flood the market and drag down the sector, while at the same time many foreclosures are being priced at market rates so they’re not depressing overall prices.”

“‘The banking industry tried to stagger putting the foreclosures on the market,’ said John Hilston, associate professor of economics at Eastern Florida State College. ‘I have some concerns as to how much of those are still out there. I know that staggering slowed down the rate (of foreclosures) because they didn’t want to crash the market. Because of that, I think foreclosures are going to continue to be a bit of a drag.’”

“Fannie Mae is purposefully ‘trickling’ foreclosed homes into the market, said Mitch Ribak, broker/owner of Tropical Realty Suntree and president of the Space Coast Association of Realtors. Tropical Realty is a Fannie Mae broker and the mortgage association recently added six more brokers to Brevard to help push more of those properties through the market. There are lots of foreclosed properties — no one knows what the exact number is but it’s likely in the thousands. If all of those properties flooded the market, it would be devastating, Ribak said, so the trickling strategy makes sense.”