The Housing Bubble

A report from the Tennessean. “There are thousands of homes for sale in the Nashville region — 8,904 in August, according to the Greater Nashville Association of Realtors. But there are fewer than last year, when 10,106 homes were on the market. Meanwhile, sales are up. With more buyers chasing fewer properties, the homebuying process has changed. There often isn’t time to walk through a house and think overnight about making an offer. ‘Buyers have to make hourly decisions on the market. We see a lot of offers sight unseen,’ said Allen Huggins, a Realtor with Neal Clayton Realtors.”

From MarketWatch. “Washington and the Mid-Atlantic region’s real estate markets are giving buyers in the area an easy-to-understand lesson in supply and demand. One of my clients recently bid on a house in the Chevy Chase section of D.C. The house had nice bones but was only 1,488 square feet, 3 bedrooms, 2 .5 baths (one bath in the attic and the half bath in the basement), needed a new kitchen, new baths and a new HVAC system. The air conditioning consisted of two broken-down room air conditioners.”

“The list price was $799,000. My client escalated to $853,000 with no home inspection, no appraisal and no financing contingency. We came in third out of four bidders.”

From Reston Now in Virginia. “In my Just Sold blog on Monday, I talked about the large amount of housing inventory we’re carrying in Reston. My oft-repeated caution to sellers is that to be successful in a crowded market it is critical that you do everything you can to separate your property from the crowd. The way to do that is to be the very best-priced and best-presented home in your category.”

“Sellers who come on to the market with ‘room to negotiate’ built into their price will usually sit on the market. One of the listings included in the ‘Just Sold’ group on Monday was a condo in ‘Nantucket At Reston. This was a 2- bedroom, 2-bath unit that was on the market for 390 days. It originally listed for $385,000. When it sold over a year later it went for $267,000 with $3,500 in closing costs, or a net of $263,500. The seller also had to pay the carrying costs of about $9,300 for condo fees, Reston Association dues, taxes, and insurance while the property sat vacant.”

The Baltimore Sun in Maryland. “Home sales boomed in Baltimore in September, but the homes’ prices appear to be slowing across the region, according to a report. The median sales price for the region — $235,000 — fell $15,000 from the month before and was also down $9,700 compared to the same month last year, according to RealEstate Business Intelligence. The report’s authors blamed the price drop on a large and growing percentage of sales of distressed properties. In September, short sales and bank-owned properties were about 23 percent of the total number of sales, up from 21 percent in September 2014 and 17.1 percent in September 2013.”

“Foreclosure notices are only now starting to noticeably slow down, so the high share of distressed sales will continue into the future, said Ross Mackesey, the president of the Greater Baltimore Board of Realtor. John L. Heithaus, the VP of sales for RealEstate Business Intelligence, said the high level of distressed sales was mostly driven by foreclosures and not short sales. ‘I think it’s a good sign,’ he said. ‘The market strength is such that the banks are finally putting these properties up on the market.’”

True Jersey in New Jersey. “Atlantic City has the dubious distinction of having one of the highest foreclosure rates in the nation. One in every 307 homes in the area was in foreclosure as of August, according to RealtyTrac.com. That’s nearly four times the national average. One of the results of high foreclosure activity is an increase in abandoned properties. In an attempt to battle this problem and hold someone accountable for maintaining these locations, Atlantic County is pursuing a countywide registration program for abandoned properties.”

“Many homeowners facing foreclosure simply walk away, leaving a property without anyone to care for it. These homes, dubbed ‘zombie foreclosures,’ haven’t actually been foreclosed on and, therefore, are not in a lender’s possession. Others that have been foreclosed on and are owned by lending institutions sometimes remain off the market for years and sit unoccupied.”

“Meanwhile, towns are left to deal with the resulting problems. Municipal officials hear from residents when grass is not mowed, when properties are vandalized and, in some cases, when they become havens for criminal activity. ‘We’re seeing break-ins. We’re seeing vandalism. We’re even seeing squatters in some of these properties,’ said County Executive Dennis Levinson. ‘Not to mention they are eyesores when a property is left to deteriorate. The neighborhood is affected by it. The values of other homes go down because they are not as desirable.’”

The Fayetteville Observer in North Carolina. “This is one in a series of interviews with Hope Mills municipal candidates. Bob Gorman has served as town commissioner since 2003 and was appointed mayor pro tem from 2003 to 2011 and again from 2014 to 2015. Q: In looking around the town of Hope Mills, I see a lot of residential construction. Along with this growth, I see many homes for sale and many homeowners who have given up selling their homes and now are trying to rent. Hope Mills appears to be moving toward a rental town. What are your concerns regarding the glut of housing? - Submitted by a Hope Mills resident in Steeplechase.”

“A: ‘It is important to continue to grow, but we must do so wisely. As a town and a board, we have to weigh in on the pros and cons of the large number of annexations requesting to come into Hope Mills. We must ensure that when we make decisions, there is a balance between the revenue generated and the burden it places on current homeowners and property owners,’ Gorman said.”