The Housing Bubble

KTAR reports from Arizona. “The Valley housing market is hitting a point of stagnation because of a lack of demand, an Arizona State University professor said. W.P. Carey School of Business professor Michael Orr said weak demand is causing potential sellers to cancel their listings. ‘We’ve really got low demand from people who would normally be buying their first home.’”

“Demand is down 20 percent from a year ago, while single-family new home construction and sales are 65 percent below normal in the Phoenix area. Sales of townhomes are down 20 percent from May 2013. Sellers also appear to be waiting to list their homes until buyers have a greater sense of urgency. Despite the lack of demand, the median single-family home sale price is up to $205,000, an ASU housing report said. ‘Exactly a year ago, it was $185,000, so it’s actually gone up 11 percent since then but that’s actually falling quite fast,’ said Orr, who expects the tide to start turning in the spring.”

In Maricopa from Arizona. “New-home construction is down compared to last year, reflecting a trend occurring across the Valley. The city of Maricopa issued 54 single family home permits in April of 2013 compared to 36 this April, according to the Home Builders Association of Central Arizona. ‘We’re hoping home construction will pick up, but we’re not seeing it this year as compared to last,’ said Robert Mathias, development manager for the city of Maricopa.”

“Derek Anglin, designated broker for Elliott Homes, said his company does not expect to sell as many homes this year as it had projected. ‘Our aspirations were greater for this year — we’re probably hitting 60 percent of what we expected,’ Anglin said ‘Employment numbers have not improved enough for people to feel comfortable.’”

“Vito Simplicio, sales manager for LGI Homes at Glennwilde, said his company markets to buyers coming out of the rental market. ‘Honestly, we have to see a lot of people to get to qualified people,’ Simplicio said, citing potential buyers’ low income and credit scores. ‘There is a lot of poverty in Phoenix,’ he said.”

The Clovis News Journal in New Mexico. “Uncertainty has potential Clovis home buyers rethinking their options and looking into alternatives, according to industry officials. Curry County housing sales for May were down 25.6 percent compared to May 2012 and 37 percent compared to May 2013, according to data from the Realtors Association of New Mexico. Carolyn Spence, a broker with Weichart Realtors, attributed the dip in housing sales to tougher loan requirements, military assignment policies, and overall uncertainty. ‘Every where is unsettled and it is making people uneasy about buying,’ Spence said.”

“Gayla Brumfield with Coldwell Banker Colonial Real Estate said a rise in mortgage rates and less demand have resulted in less real estate closings. ‘Nationally the housing market is down,’ said Brumfield. According to Brumfield, there has been more supply than demand in Curry County, resulting in less real estate sold.”

KTVN in Nevada. “It wasn’t that long ago, the Reno-Sparks real estate market was populated by hundreds of lifeless empty houses abandoned by owners, foreclosed and waiting for offers that were slow to come. For real estate agent Megan Lowe, it really was the Night of the Living Dead. The house she was showing us in Somersett was one of them. The builder bailed out during the dark years. Lowe said, ‘It went into foreclosure and the bank took it back and the bank sold it.’”

“After its second owners, it’s on the market again as a winner. Bought in 2010 for $808,000, today it’s priced at $1.5 million…almost double what it sold for 4 years ago. As Lowe explains, ‘The market, it’s crazy, its coming back strong right now. People are realizing the potential up here at Somersett.’”

“In Reno-Sparks, the recovery is dramatic. Today, foreclosures and short sales make up only one third of the home sales they did 2 and a half years ago…from 59% of homes in 2011 to just 19% of homes sold so far this year. Short sales are becoming more rare…banks see the increasing values too. As Lowe said, ‘They aren’t willing to take less anymore, and it’s more and more difficult to get those short sales approved.’”

“And fewer distressed homes have done a number on the Reno-Sparks median sold price…a big number. Look at what’s happened in just a few years: from a $154,000 median in 2011, to $305,677 today. Yes prices have gone up…but enough buyers today see homes like these, as still a good deal.”

Vegas Inc. in Nevada. “Las Vegas home prices continue to rise as investors, lured here by the recession’s bargains, keep backing out. Locally, buyers paid cash for 34.7 percent of the used homes that sold last month. That’s down from a peak of almost 60 percent in February 2013 and the lowest share in almost five years, indicating a drop in investor spending. ‘While real estate investors have played a key role in helping our housing market recover in recent years, it’s also good to see more traditional buyers entering the market,’ GLVAR President Heidi Kasama said.”

“Meanwhile, the market still has plenty of weak spots. The pace of used-home sales is down 13 percent year-over-year, even though the number of single-family homes listed for sale without offers has almost doubled from a year earlier, to about 7,100 by the end of June, according to the GLVAR.”

8 News NOW in Nevada. “Overall foreclosures in Nevada last month hit their lowest point since August 2006 but default notices increased in the Las Vegas metropolitan area from a year ago following seven months of decreases, RealtyTrac reported. The mixed findings from the real estate analytics company mean that the ‘foreclosure crisis’ is still not over for Las Vegas, RealtyTrac spokeswoman Jennifer von Pohlmann wrote in an email to 8 News NOW.”

“‘Foreclosure starts in Las Vegas increased 56 percent from a year ago following seven consecutive months of decreases, indicating that unfortunately the never-ending saga of the foreclosure crisis is still not over for the city,’ she wrote. ‘Ever-changing state legislation in the state is causing confusion for the foreclosure industry, resulting in a backlog of delayed foreclosures that will eventually push through the pipeline. Evidence of that backlog is the increasing average time it takes to foreclose in Nevada, at 494 days, up from 420 days a year ago and up from about 140 days before the housing crisis.’”

“Nevada was one of 10 states that saw total foreclosure activity fall in June to its lowest point since the housing market bubble burst. The state had 1,349 filings last month, including default notices, notices of pending trustee sales and repossessions by lenders. There were 8,504 Nevada properties that had foreclosure filings in the first half of the year, 48 percent less than the same period a year ago. But Nevada still finished the first half of 2014 with one foreclosure filing for every 138 housing units, the nation’s fifth highest rate.”