The Housing Bubble

The Sun Sentinel reports from Florida. “Investors pulling back on homebuying is one of the biggest issues facing South Florida’s housing market, an analyst said Friday. ‘There’s still a lot of investor activity, but it is declining,’ said Brad O’Connor, a research economist for the Florida Realtors trade group. ‘As they exit the market, will demand from traditional homebuyers still push prices up?’ So far, the answer is yes, but some industry experts wonder whether that will change. They say investors have played too large of a role in the housing rebound by artificially inflating prices.”

The News and Observer in North Carolina. “Triangle home sales were flat in August compared with the same period a year ago as the market continues to level off after experiencing double-digit gains last year. Jason Graves, an agent with Triangle Real Estate Group, said the Triangle is not creating enough jobs to sustain the level of sales activity that the region experienced last year. ‘I just don’t think we’ve seen the hiring we need to see,’ he said. ‘Fortunately the market has returned – absolutely it’s returned. But it’s like we jumped off to this great start and kind of stopped.’”

The Arizona Republic. “Home building across metro Phoenix fell in August to the slowest pace in more than a year, according to the latest research from RL Brown Housing Reports, down 29 percent from August 2013 and down 18 percent from July of this year. ‘The decline in permits reflects the general malaise affecting the regional economy,’ said housing analyst Brown.”

The Record in New Jersey. “The multifamily residential rental market is one of the hottest commercial real estate segments in North Jersey, with a swell of development planned and existing properties fetching top prices. But some developers and housing experts are wondering when, and where, the bubble will burst. ‘Any market that gets super hot eventually has got to cool off,’ said William Procida, founder and president of Procida Funding & Advisors LLC in Englewood Cliffs. “Construction costs being what they are now make it very difficult to make a multifamily ground-up construction even work anymore, and rents aren’t spiking with them.’”

“There are 12,786 such units set for that Hudson County city, according to Cushman & Wakefield. ‘I would not really want to be a developer in Jersey City at the moment because there are thousands and thousands of units that are planned or are under way,’ said SJP Residential Properties president, Allen Goldman. ‘I’m not saying it’s a bubble, but one has to worry what the saturation point is.’”

The Desert Sun in California. “A stream of new homes entered foreclosure in August as a backlog of delayed bank repossessions trickled into the desert market, a new housing report shows. Jeff Litton, a Palm Springs-based broker, was one of the earliest agents to work with bank-owned listings. ‘Just recently, I’m starting to get assets from Wells Fargo and Fannie Mae,’ Litton said. ‘It’s kind of picking up a little bit.’”

“Banks appear to be liquidating leftover inventory, which have contributed to the slight bump in foreclosures, Litton added. Many bank-owned properties have been vacant for a long time, he said.”

The New York Post. “Thousands of vacant and abandoned eyesores are blighting neighborhoods across New York as the foreclosure crisis expands along a troubling new front: zombie loans. Long Island and Queens are the epicenters of the zombie title problem in Metropolitan area, with roughly 3,700 homes in Suffolk, Nassau and Queens counties as of the second quarter, according to RealtyTrac. In Suffolk County alone, zombie homes cover 266 acres of land or roughly one-third of the size of Central Park.”

“‘Zombie foreclosures are affecting families in the hardest-hit areas,’ said Maria DeGennaro, Long Island regional coordinator for the Empire Justice Center. ‘It’s hurting not just homeowners, but anybody living in the neighborhood, and it’s a terrible spiral.’”

The Indianapolis Star. “For the past eight years, Lisa Hardy, mother of three children, has lived for free in a three-bedroom Eastside house that has belonged to no one — at least no one who’s claimed it. No landlord or out-of-state bank has ever shown up to demand rent from Hardy. And the fact that property taxes went unpaid didn’t seem to matter. Swamped with thousands of homes abandoned by their owners, the city never got around to selling hers at a tax sale. And buying the place was also out of the question. Hardy couldn’t begin to sort out the liens, litigation and past due taxes on her house.”

“So as the years ticked by, Hardy lived in the 1,490-square-foot house in the 800 block of Eastern Avenue as if her name were on the title. Her case seems to be an odd fallout from the mortgage meltdown that hit Indianapolis starting around 2004 and left the city with thousands of abandoned and foreclosed houses, said said Roger Rayburn, director of housing for Neighborhood Christian Legal Clinic. ‘There were so many bad loans out there that ownership really got kind of confusing,’ Rayburn said. ‘A lot of those have been cleaned up. But there are still a lot of properties that are kind of in limbo.’”