A Clogged Pipeline Opening Up
A report from Capital New York. “Condominium sale prices in Manhattan fell 1.4 percent from April to May, but still rose 10.7 percent from a year before, according to StreetEasy. StreetEasy said the declines are attributable to ‘gradual’ increase in inventory, the fifth month in a row that inventory grew. ‘There is no doubt that the condo market is still extremely expensive and in short supply,’ data analyst Alan Lightfeldt said in a statement. ‘Some would-be buyers are still reeling from the extraordinary rally in price appreciation in 2013, which was fueled in part by record-low levels of inventory. More units are coming back to the market, however, and prices responded in May.’”
The Journal News in New York. “In the exclusive Westchester County hamlet of Purchase, multimillion-dollar homes with elegant grounds are commonplace. Former NBA star Latrell Sprewell spent $2.3 million for an impressive brick mansion in 2000. But glory times are gone. The property went into foreclosure in 2010 and Sprewell has long since left town, leaving his Purchase estate basically abandoned. There are at least 1,100 ‘zombie’ properties in the Lower Hudson Valley, according to RealtyTrac. New York is among the top 10 states with ‘zombie’ properties with at least 15,000 statewide, says RealtyTrac, adding that one in five homes in the foreclosure process is vacant.”
“Jim Bergstraser of Remax Classic Realty in Yorktown, familiar with selling homes that have been part of a foreclosure scenario, said distressed properties ultimately sell for less than their neighbors’ well-maintained homes. ‘The asset of the property changes without a doubt,’ he said. ‘And my issue in selling these houses is there is very little financing available for properties that are not in good shape. There are a lot of reasons why people will walk away from these properties before a foreclosure and after one.’”
The Boston Globe in Massachusetts. “Borrowers once again are using their homes as a quick source of cash to pay for kitchen renovations, college educations, and cars — and even to gain a competitive edge when making offers on a new house. One customer, said Jane Lundquist, executive VP at Rockland Trust Bank, tapped the equity from his longtime home to make a cash offer on a new one, an advantage in today’s hypercompetitive housing market. He will pay off the home equity loan when he sells his old house.”
“Local banks say home equity borrowing has jumped as much as 40 percent from a year ago as customers. Massachusetts home values have risen about 17 percent over the past two years to a statewide median of $340,000 in May, just below the $352,00 reached in 2005, at the peak of the boom. ‘It’s a good loan if you borrow responsibly and know what you’re doing,’ said Polyana da Costa, a senior mortgage analyst with Bankrate.com.”
MassLive in Massachusetts. “Foreclosure petitions soared 92 percent in May in Springfield - and 131 percent in the state - compared to May 2013, The Warren Group, publisher of Banker & Tradesman, reported. ‘The increase in foreclosure starts is the result of a clogged pipeline opening up as lenders finally process petitions on homeowners who have been delinquent on their mortgages for months or years,’ the release said.”
“‘Many of these were delayed awaiting clarification on the proper way to proceed from regulators and judges,’ said Timothy M. Warren Jr., CEO of The Warren Group. ‘With the employment picture improving in Massachusetts and real estate values rising, the higher volume of foreclosure starts is not a warning sign of weakness in the market or another crash ahead,’ Warren said.”
The Providence Journal in Rhode Island. “The number of foreclosure deeds recorded in the state jumped by nearly 20 percent in the first quarter, compared with the same period in 2013, according to HousingWorks RI. HousingWorks also noted that Rhode Island is ‘currently first in New England and sixth in the nation for share of ‘underwater’ mortgages.’ The group has estimated that 18.3 percent of the state’s mortgages are still underwater.”
“‘I think what you’re really seeing is the system really flushing out all the bad loans from before,’ said Richard Godfrey, executive director of Rhode Island Housing. HousingWorks noted that the five-year term on many loan modifications completed under HAMP, the federally funded Home Affordable Modification Program established in 2009, is set to expire in 2014. This means that many homeowners enrolled in the program will see an increase in their monthly mortgage costs this year.”
“Jessica Cigna, research and policy director of HousingWorks, a group that advocates for affordable housing, said that 90 percent of the 4,258 Rhode Island homeowners with active HAMP permanent modifications as of Nov. 30, 2013, are scheduled to have mortgage interest rate and payment increases. ‘We know that many mortgaged homeowners are still struggling with high housing cost burdens, and unfortunately, some programs previously available to help these homeowners are expiring.,’ Cigna said.”
The Press Herald in Maine. “While Maine home sales increased in May compared with a year earlier, median prices continued a three-month decline from 2013 prices, the Maine Association of Realtors reported. ‘With summer finally here, and tourists entering the buying market, we are seeing (sales) volume increases,’ said association President Angelia Levesque. ‘High inventory levels in some areas of the state are keeping prices down, and the market is adjusting. When you combine that information with low interest rates, it indicates a great time to buy.’”
“Levesque, of Better Homes and Gardens / The Masiello Group in Bangor, said inventory is up in her area partly because of foreclosure homes coming on the market, which often are purchased by investors for cash. Cumberland County also has seen a boost in housing inventory, which tends to drive down prices, according to Michael Sosnowski, owner of Maine Home Connection in Portland.”
“Homes at all price levels, from starter homes to seaside mansions, were selling for less than they were a year earlier, Sosnowski said. ‘In May, inventory in Cumberland County was at its highest level since May 2010,’ he said. ‘Obviously buyers have a lot of choice in terms of what property they want.’”
25 MILLION excess, empty and defaulted houses CHECK
Housing demand at 19 year lows and falling CHECK
Housing prices inflated by 250% CHECK
Household formation at multi decade lows CHECK
Rampant housing fraud CHECK
Public denial formed and supported by a corrupt media CHECK
Population growth the lowest in US history CHECK
Immigration flat to slightly negative CHECK
Oh my word……
Hyperbole…..CHECK
Jingle Male is a fraudster CHECK
Hundreds of thousands of HELOC principal payments coming due: Check
Further forbearance measures for worthy homeowners: Check.
“Local banks say home equity borrowing has jumped as much as 40 percent from a year ago as customers. Massachusetts home values have risen about 17 percent over the past two years to a statewide median of $340,000 in May, just below the $352,00 reached in 2005, at the peak of the boom.”
(There must be a punch line in there somewhere. Oh, here it is:)
‘It’s a good loan if you borrow responsibly and know what you’re doing,’ said Polyana da Costa, a senior mortgage analyst with Bankrate.com.”
It’s even a good loan for some of us even if you don’t know what you are doing.
Bahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Will this prove to be the first massive asset price bubble in history when prices quickly returned to peak bubble levels after the interruption of a major price correction then remained on a permanently high plateau?
HOW?
The magic of the marketplace of course!
“He will pay off the home equity loan when he sells his old house.”
http://www.youtube.com/watch?v=oShTJ90fC34
“‘I think what you’re really seeing is the system really flushing out all the bad loans from before,’ said Richard Godfrey, executive director of Rhode Island Housing. HousingWorks noted that the five-year term on many loan modifications completed under HAMP, the federally funded Home Affordable Modification Program established in 2009, is set to expire in 2014. This means that many homeowners enrolled in the program will see an increase in their monthly mortgage costs this year.”
HAMP = A holding pattern designed to help the bankers.
“… many homeowners enrolled in the program will see an increase in their monthly mortgage costs this year.”
And no doubt they will become confused and bewildered about the whole matter.
“…the federally funded Home Affordable Modification Program established in 2009, is set to expire in 2014.”
Why wouldn’t the feds extend the program upon expiration? After all, it is homeowners who would be hurt by ending the program, and homeowners are a deserving group of voters.
I think HAMP has probably run its due course. In only applies to loans originated in 2009 or before.
Why can’t it be renewed in order to help deserving homeowners?
And no doubt they will become confused and bewildered about the whole matter.
And don’t forget: NO ONE could have seen it coming!
Capital New York. “Condominium sale prices in Manhattan fell 1.4 percent from April to May, but still rose 10.7 percent from a year before, according to StreetEasy ??
For the ultra-wealthy, New York City is becoming an investment haven, a place to store cash in a stable commodity with the promise of long-term growth and the opportunity for near anonymity, according to a detailed feature in New York …
http://post.inman.com/t/796245/25036117/31854/0/
what will the metrosexuals on million dollar listing do now #%##$^ ???
“A Clogged Pipeline Opening Up”
Got Ex-Lax?
Did using home equity as a source off cash for kitchen renovations, college educations, cars, vacations and newer, bigger houses occur in the pre-Housing Bubble era (say before 1997), or is this strictly a Bubble-era phenomenon?
It was a big component to the 1990 bubble.
I heard it also occurred in the Dutch Tulip bubble, but I was not around. Stories are told of people borrowing against assets to buy tulips, then losing all their assets after the tulip bubble popped.
And its the reason your so far in hoc to the banks.
“When you combine that information with [INSERT WHATEVER REASON COMES TO MIND HERE], it indicates a great time to buy.”
‘Located at 14 Rouse Rd., the waterfront home on Gloucester’s Eastern Point had lingered on the market for more than two years before selling at auction last weekend for $1.15 million. The Cobbs listed the nine-room, four-bedroom home with Landvest in April 2012 for $1.8 million. A year later, the price was dropped to $1.6 million — but still no buyers. Last month, Manning was awarded the contract to auction the home. The house, which is assessed at $1.9 million, was not in foreclosure.’
‘Situated on more than 1.5-acres, the four-bedroom Colonial oceanfront home features large open living spaces. It offers panoramic ocean views and is located near Brace Cove Beach and Eastern Point Yacht Club.’
‘In 30 Massachusetts communities, median single-family home sales prices have risen higher than they were in 2005, the peak before the economic recession, according to information released by the Warren Group, which publishes Banker & Tradesman. The prices in most cities and town, however, are still well below the 2005 peak, despite making significant gains over the past few years.’
‘In Fall River, the median price dropped from $263,000 in 2005 to $165,500 in the first quarter of 2014. Decreases also occurred in towns across the Fall River area, with the largest gap existing in Freetown, where median prices fell from $351,750 to $286,000. Somerset’s median price dropped $290,000 to $234,250. Swansea saw a drop from $280,000 to $216,000. Westport’s median price declined from $370,000 to $278,000.’
Swansea has mosquitoes the size of bats !
‘New foreclosure actions surged in Worcester County during May, according to data released Tuesday. Lenders filed 96 petitions to foreclose on homes, more than double the foreclosures started during the same month last year, said The Warren Group. Worcester County led all Massachusetts counties in new foreclosure filings, and the increase in Central Massachusetts activity paralleled a statewide spike in foreclosures, Warren Group data showed.’
‘During the first five months of 2014, lenders started 455 foreclosures in Worcester County, according to Warren Group data. That was down 9 percent from the same period a year ago but still more than all other Massachusetts counties over the same period.’
“Local banks say home equity borrowing has jumped as much as 40 percent from a year ago.”
Which is the only reason employment is rising. Paychecks certainly aren’t, so people have to get money to spend somewhere.
Will those of us who are not participating in the current home equity spending binge be once again forced against our wills to help bail these people out when the Echo Bubble goes to bust?
most msm claim new highs
statewide median of $340,000 in May, just below the $352,00 reached in 2005, at the peak of the boom.”
w/o ever adjusting for inflation of course
With demand at 19 year lows.
Remember, I can ask $50k for my 10 year old Chevy truck but where are the buyers at that price?
Remember, I can ask $50k for my 10 year old Chevy truck but where are the buyers at that price?
And remember: listing your 10-year-old Chevy truck at $50K tells you NOTHING about what the actual market price is for 10-year-old Chevy trucks.
And remember: listing your used _____ at prices ____ greater than any known metric is a guarantee it will never sell.
Bay area housing prices have inflated some 25% Y/O/Y due to severely constricted inventory:
http://www.californiahome.me/2014/02/dramatic-inventory-shortages-driving-bay-area-home-prices-higher/
“There’s a dramatic shortage of homes for sale all around the Bay. This mirrors a national trend, which has seen inventory drop from a 12-month supply at the low-point of the recession to a 4.6-month supply today, according to the National Association of Realtors. But the lack of available inventory may be even more acute here in the Bay Area.
Homes for sale in the Bay Area markets we serve were down sharply last year, and so far this year things have only gotten worse (or better for sellers). Inventory stands at just over a third of where it was two years ago at this time!
Needless to say, the law of supply and demand is having a huge impact on home prices. The overall median sale price in the Bay Area finished last year up nearly 24 percent from the previous December, according to a recent report by DataQuick, the La Jolla research firm.
According to our Berkeley manager, houses in that area are being bumped into the $1 million-plus price points just by the over bidding alone. Homes that in a normal market would sell in the $600-700K range are getting $800-900K. And the $800,000 to $1 million homes are “headed to the stratosphere.””
With25 million excess empty and defaultedouses in the US, 4.4 million of which are in California, theres an inventory problem for certain.
Yes but those are not going on the market in the bay area.
I’ve been monitoring listings on zillow for a few months and at any one time there’s never more than one bank-owned foreclosure at any given time in any given community.
It makes me want to don a tinfoil hat
Give it time. 4.4 million excess empty houses can’t be hidden forever in CA.
Stock market sure seems to be on a roll, almost unreal.
This could be the blow-off top in the history of Western civilization, which is now based on debt rather than democracy, rights, capitalism, or investment.
There are enormous storm clouds on the horizon. It’s sad. We could have, and should have, done so much better.
Keep yer cash and stay out of debt!
I heard on Bloomberg radio this morning that an apartment in NY that sells for $1.3 million will rent out for about $4,000 a month, those numbers really work (not).
used to be price was 120 x rent
in some midwest cites it still is.
And always will be…. Just consider it a brief deviation in areas where it isn’t.
“‘It’s a good loan if you borrow responsibly and know what you’re doing,’ said Polyana da Costa, a senior mortgage analyst with Bankrate.com.”
I thinks it’s terribly IRONIC that her name is Polyana even though it’s not spelled the same!!
‘The two great cornerstones of the Manhattan real estate market are fading. Midtown, the city’s largest office market, is losing tenants to midtown south and downtown, according to data from Cushman & Wakefield. “The epicenter of Manhattan is moving west, south and downtown,” said Bruce Mosler, Cushman’s chairman of global brokerage.’
‘Despite the shifts, Cushman officials noted that the market for midtown office buildings has hit new highs in the first half of the year with the average price per square foot for Class A properties rising to $1,300, up from the prerecession peak of $948 in 2008. There pricing is being driven by heavy buying from overseas. Foreign buyers were also credited with a resurgence all across Manhattan of mega-deals, those with 10-digit price tags.’
“When this capital lands here they don’t want to invest $100 million or $200 million; they want to invest billions,” said Janice Stanton, a senior managing director in Cushman’s capital markets division. She also noted that nearly half of all cross-border deals involve buyers in the Asia Pacific region.’
‘Rising residential rents are pushing tenants ever further out from the center of the city, and at the same time fanning the interest of investors in buying properties in those emerging areas. Buyers will now have such an opportunity in Washington Heights, a fast-gentrifying section of upper Manhattan. There, a portfolio of five apartment buildings has hit the market with an asking price of around $32 million, nearly double what its owners paid for the properties during the recession just four years ago.’
‘Robert Shapiro, a broker with Massey Knakal who is handling the sale of the package, said the dramatic hike in value reflects the growing belief that the neighborhood will net higher rents in the coming years as gentrification continues there. “This is the best market in upper Manhattan that I have seen in 13 years, even better than the boom in 2007,” Mr. Shapiro said. “People are paying the highest prices ever here because they believe this area has a lot more upside.”
Heck of a job Janet…
Just saw this
The one-bedroom the Italian was looking at, on the 27th floor, had a view of the Woolworth Building, sleek finishes, a bachelor-size kitchen, and access to an exclusive terrace reserved for upper-floor residents. It was first purchased by an investment banker in early 2008 for $1.3 million, was resold in 2011 for $850,000, and was now back on the market for close to its prerecession price. Rosabianca told the Italian it would rent for more than $4,000 a month, enough to assure a healthy cash flow while its value appreciated. ‘There’s really no safer way to get that kind of return,’ he said, ‘than in New York City real estate.’”
Interesting considering cash flow is negative at current asking prices of resale housing.
“When the housing correction proceeds without interference and housing bottoms, it will be time to buy. Until then, the losses associated with buying a house at current prices are tremendious.”
Indeed. Housing prices have a long way to fall before they bottom.