The Housing Bubble

A report from the New York Times. “In New York, teens and preteens are becoming savvy connoisseurs of real estate. Perhaps it’s because they’re so utterly at home on the Internet. Perhaps it’s because they’re lured by online images of condo amenities like an indoor pool or a children’s playroom or because they’re fans of ‘Million Dollar Listing New York’ on Bravo. Or maybe it’s because it’s become business as usual for children in certain precincts of Manhattan to participate in family decisions. ‘They choose where they and their parents are going to have dinner or where they’re going to go on vacation,’ said Stuart Moss, an associate broker at Corcoran. ‘So why shouldn’t it extend to where they’re going to spend several million dollars for a residence?’”

“A year and a half ago, Skye van Merkensteijn was shooting hoops with a friend who lives at a condominium-rental hybrid on Riverside Boulevard with its own indoor basketball court, climbing wall and bowling alley. Thirteen-year-old Skye was impressed — and envious. Well, his worldly pal told him, he just happened to know of an apartment for sale on the 21st floor. ‘When my husband came home’, Skye announced: ‘We’re moving and this is the place we’re moving to,’ said Skye’s mother, Elizabeth van Merkensteijn, ‘They hear the numbers. We talk about everything in front of everyone. I get it that the air is thin and that it’s rarefied. But it’s the reality of New York City.’”

The Marin Independent Journal in California. “Marin home prices dropped just a tad in February, the first decline in two and a half years, though experts shrugged off the reported 1 percent decrease as an anomaly. ‘Sales are basically flat? I’m surprised to hear it,’ said Bernard Link, an agent with Alain Pinel in Mill Valley, of the CoreLogic report. ‘It seems like multiple offers for any desirable property are the norm now.’ In February, Link said, the average price in southern and central Marin was 102 percent of asking, while in northern Marin, it was 98 percent of asking.”

The Sun Sentinel in Florida. “After two years of wading through picked-over listings, South Florida buyers are celebrating a new batch of well-maintained homes for sale. Palm Beach County had 27,714 new listings last year, up 16 percent from 2013, according to the Realtors Association of the Palm Beaches. Broward County had 27,940 new listings, up 14 percent from 2013, the Greater Fort Lauderdale Realtors said. Listings also were up in both counties during January.”

“‘Every time we turn around, we’re getting inundated with new listings,’ said Jason Tornatore, who recently signed a contract on a Fort Lauderdale house. ‘Just within the last two weeks, stuff is flying onto the market. Getting what you want is a lot easier these days.’”

“But with listings on the rise, so too is sellers’ optimism. Sellers always tend to think their homes are more valuable than they really are, and that’s especially true now in a recovering market, said Cathy Prenner, a South Florida agent for Campbell & Rosemurgy. In some cases, the higher prices are turning off buyers, who don’t feel the need to rush into deals as they did in the past. ‘It’s definitely a challenge to get sellers to realize what the real, winning price is,’ Prenner said. ‘Some of these homes aren’t really priced where the market is. They’re priced where the seller wants it to be.’”

The Arizona Republic. “Metro Phoenix’s housing market didn’t start the year with a bang. January was a slow or even dismal month for home sales and prices. The Valley’s median home sales price fell to $208,000 in January from $215,000 in December, according to a report from the W. P. Carey School of Business at Arizona State University. Home sales dropped 26 percent. ‘January is always a quiet month, but we believe this was a lull before the storm,’ said Mike Orr, director of the Center for Real Estate Theory and Practice at W. P. Carey.”

“Home sales fell in January despite the many visitors to the Valley for everything from the Waste Management Phoenix Open golf tournament to the Super Bowl. In January, 4,965 Valley houses changed hand, compared with 6,764 in December.”

The Washington Post. “Despite an overall housing recovery, it’s suddenly becoming more common in several of the nation’s largest cities for homeowners to owe more on their home than it’s worth. The national negative equity rate, which had declined for 2 1/2 years, stalled in the fourth quarter of 2014 at 16.9 percent, according to Zillow. In the fourth quarter, the rate worsened in 21 of the nation’s top 50 housing markets, including Philadelphia, Boston and Houston.”

“Zillow estimated that more than a quarter of homeowners are underwater in the metropolitan areas of Virginia Beach, Jacksonville, Las Vegas, Atlanta, Chicago and Memphis. Many lower-value homes are losing value again, Zillow reported, and that’s what’s behind the rising rates of negative equity. Zillow reported that the underwater rate for top value homes was only about 9 percent, compared to almost 16 percent for middle value homes, and for the bottom tier of home values more than 27 percent.”

“In places like Kansas City, Cleveland, Atlanta and Chicago, more than 40 percent of bottom tier homeowners were underwater, but 10 percent or less for the top.”

Fox 5 Vegas in Nevada. “According to RealtyTrac, foreclosures in our state are again on the rise. While experts say Nevada is better off than it was three or four years ago, there are still a lot of people living in homes they have been making payments on for months, even years. According to FOX5 legal analyst Bob Massi, the clock is ticking on people who haven’t been making mortgage payments.”

“‘If they’re getting these default notices they better understand that probably, usually it’s 120 days before a foreclosure takes place from when you get the actual notice of default. They better start making plans to move,’ Massi said. Massi said he believes banks have been manipulating the market, waiting for property values to rise before proceeding with foreclosures. They’re now making their move. ‘Now, with the foreclosures and the defaults being filed, they’ll probably get a better bid on their foreclosure sales,’ Massi said.”

“Scott Beaudry, president-elect of the Greater Las Vegas Association of Realtors, agrees with Massi. He said there is a backlog of foreclosures that banks need to process. Still, he said, the situation is not dire, like it was just a few years ago. ‘It’s a great opportunity to purchase a home right now. There is great inventory and great properties to choose from,’ he said.”