The Housing Bubble

The Press Democrat reports from California. “The state’s 4-year-old drought may still be with us, but an even-longer dry spell for Sonoma County homebuilders appears to be ending. Sonoma County builders this fall are moving forward with more than 20 projects from Petaluma to Windsor. Together they add up to more than 1,400 units, by far the most new homes on the horizon in years. Aaron Matz, president of APM Homes, said in 2009 he had great difficulty selling 1,200-square-foot homes for $329,000 off Kawana Springs Road in southeast Santa Rosa. He recalled the difficulty in order to point out how times have changed. The county median sales price in October stood at $529,275, an increase of 74 percent from the bottom of the market.”

“And near Kawana Springs, the 10-lot Kawana Terrace project is about to offer similar homes to the ones Matz sold, but now they will be priced in the mid- to high $400,000s, according to a project representative. ‘The price appreciation makes it worthwhile to build,’ Matz said. Of homebuilders, he quipped, ‘Believe me, they’re not nonprofits.’”

“In the starter home segment, builders are applying to build more ‘row houses,’ said Mark Setterland, chief building official for the city of Santa Rosa. The homes are technically single-family with their own lot lines, but they have a gap of just inches between one another. Some of the projects that won approval years ago now may need dramatic overhauls in order to be feasible in today’s market, said Tennis Wick, director of the county’s Permit and Resource Management Department. For example, the county’s workforce in the coming years may not see much growth in the number of high-tech workers who can afford homes selling for $500,000 to $600,000.”

“The challenge, he said, will be to revise subdivisions that were approved for residents ‘who are no longer a part of our economy.’”

The Denver Post in Colorado. “Metro Denver home sales dropped last month at a pace not seen since the financial crisis hit back in 2008. REColorado, which runs the region’s multiple listing service, reported a big 27 percent drop in closings between the two months. Sales fell from 4,644 in October to 3,378 in November. The Denver Metro Association of Realtors (DMAR) recorded an even bigger 29.4 percent drop in homes sold in November. But existing home sales nationally remained flat in November versus October and continued a stall pattern in play since May, said Rick Sharga, executive VP of Auction.com. ‘Some of the stronger numbers we saw earlier in the year were a little bit of a mirage,’ he said. ‘It is slowing down and resetting.’”

“Denver’s drop is unmatched, he said. Fewer new listings, the equivalent of engine oil for a market, and sellers who got a little too greedy may be creating friction, he added. ‘People who were coming on the market in September or October were pricing like May or June. That is something that sellers and listing agents need to be aware of,’ said Anthony Rael, chairman of the DMAR Denver Real Estate Market Trends Committee.”

The Oklahoman. “Like many small towns in northwestern Oklahoma, Laverne relies on two things for its economy, agriculture and the oil and gas industry. Dwight Freeman, owner of Laverne oil pumping service General Inc., said over the past year his business has declined by more than 60 percent due to plummeting oil and gas prices. Lower gas prices have led to fewer companies using General to pump wells, forcing Freeman to lay off more than 15 percent of his workers. ‘It affects everyone’s bottom line. There’s just not as much income in this community as there was before,’ Freeman said.”

“The downturn in oil and gas prices has also taken a toll on small businesses and the housing market. More of the town’s roughly 1,400 residents are losing jobs, spending less money and in some cases leaving town, Laverne Mayor Susan Davis said. ‘Business traffic has declined a lot,’ Davis said. And when it comes to real estate, more and more houses in Laverne are up for sale with fewer buyers, she said. Nearby Woodward is in the same situation. Over the past nine years, home sales have risen and fallen due to varying oil and gas prices. Since reaching the highest sales of the past decade in 2008, home sales have declined by more than 30 percent, local Realtor Brian Cook said.”

Newsday in New York. “More than 4,000 homes were scheduled to be sold at foreclosure auctions this year, double last year’s number, according to data from LI Profiles, a Nesconset-based real estate information company. As on Long Island, the number of scheduled foreclosure sales in New York State has doubled this year — from 4,623 last year to 9,873 this year, RealtyTrac reported. In New York and other states where banks need a judge’s approval to foreclose, many homes are only now starting to emerge from the foreclosure process after years of delays. It took 995 days to foreclose on a home in New York in the July-to-September period, up 93 days from a year earlier, according to RealtyTrac.”

“‘New York took a very proactive position towards trying to prevent foreclosures as early as 2008 and 2009, so there were laws passed to try to give homeowners more time,’ said Daren Blomquist, VP of RealtyTrac. Now, he said, ‘the pig is moving through the python.’”

The Saint Mary’s County Times in Maryland. “The numbers of homes that have gone to foreclosure nation wide shows that there has been a significant spike in those kinds of properties in St. Mary’s and Calvert counties up to the end of October. What’s more is that in both counties—as in most of the state of Maryland for the month of October—there was a massive increase in foreclosure filings from one month to the next.”

“Jan Barnes, a local realestate agent with Century 21, said that despite claims every year that the economy was making a comeback, the evidence was less positive. ‘The market is not what it used to be,’ Barnes told The County Times. ‘I remember when foreclosures were unusual now they’re an everyday thing.’”

“Many of those homes are sold at far less than what they were originally paid for, she said, even eight years after the crash of 2007. She said the spikes in foreclosures, often seen month to month, had become part of the new normal in the real estate market. ‘It comes in waves, we just had another wave this last year,’ Barnes said. ‘And I know there are properties that are going to foreclosure than haven’t been advertised yet.’”

KING 5 News in Washington. “When Sgt. David Chitwood knocks on the door of the one level home 20th Drive NE in Marysville he knows it won’t be the homeowner that answers. They’re long gone. The family walked away from the property five years ago and the house went into foreclosure. In the years since, transients took over. Neighbors watched as the property filled with trash, criminals and drug addicts moved in, and cars along the street were getting broken into. The empty house became a revolving door for squatters.”

“Chitwood is with the Snohomish County Sheriff’s Office and joined by a little known team called Project 99. Their patrol cars attract neighbors who’ve seen the people inside shooed away time and time again. This is just one of many houses Project 99 will visit in a single day. ‘We just tell them or remind them, you’re on borrowed time and you need to make other arrangements,’ he said.”

“That’s just about all law enforcement can do when a house like this one remains in the legal gray area after a homeowner forecloses and the bank takes over, often letting the property sit for years before doing anything about it. ‘These people just keep coming back here, because I can’t stop them from coming back here yet,’ Chitwood said.”