The Housing Bubble

What’s your housing bubble predictions for 2016? From analysts or economist? “Home values didn’t grow as fast in South Florida this year, but don’t worry about a housing hiccup in 2016. ‘We are not going to regress,’ said John Tuccillo, chief economist for the Florida Realtors trade group. ‘There’s not going to be a slump or a bubble burst. We have a nice, strong foundation.’”

“Jack McCabe, a Deerfield Beach housing consultant, said corporate and individual investors that bought homes after the housing crash and turned them into rentals will be ready to sell. He expects the increase in supply to flatten out prices and make the market more balanced between buyers and sellers. ‘I think 2016 will still be a good year for real estate, but I definitely think we’ll see some changes in the last half of the year,’ he said.”

For markets outside the US? “If 2015 goes down in history as a bad year for the Canadian economy, next year could be far worse. The national housing market watchdog – Canada Housing and Mortgage Corporation – recently determined oil staying in the mid-US$30s for a five-year period would not only end the country’s housing boom, it would actually cause a 26 percent price correction nationwide; with the particularly hot markets of Toronto and Vancouver taking an even more significant hit. Philip Cross, former chief economic analyst for Statistics Canada, considers that estimate to be ‘conservative.’”

“‘Last year we were looking at a sharp drop from which the industry could recover quickly enough,’ he said. ‘But now, we are looking at a sustained decline. …This could be painful.’”

From six months ago. “Denver will continue double digit rent and used house price increases for the next two years. Everybody wants to live in Denver.”

Another said, “I see more of the same in the housing market for the next six months with an eventual flattening in house prices. The longer term problem is the whole food chain issue - plankton (lower income buyers) buy cheaper houses, allowing move up buyers to move up. Right now, it seems like a lot of wealthy players driving the housing market, at least from media reports. And not so many plankton.”

“I think there will be without question a generational change in the attitude towards real estate as a path to riches. Peak debt was reached, the mortgage finance market was nationalized, and this seems to be the system going forward. But it was with the run up in debt that also sparked the runup in house prices. So, in the future, the experience of homeowners will be more ‘meh, it’s a lifestyle choice, better to raise kids in, but wait till you can afford it’ rather than the older generation telling their kids, ‘OMG you have to buy RIGHT NOW and AS MUCH AS YOU CAN because it’s only going to go up in price and inflation’s going to make it affordable eventually’ and that was exactly their experience. Plus they had affordable mortgages, before the evolution of the debt markets to their current go-go form.”

One year ago. “Interest rates stay in a holding pattern even as the fed ends qe. Treasury rates also stay in a holding pattern. Junk bonds fall as oil prices tank and a mini stock market turmoil develops as losses in junk bonds make some investors sell off their stocks. Some pension funds that carry these bonds fail. This might extend to those homes for rent funds but that may just be wishful thinking.”

“More small time flippers get tired of the work for less than the fancy returns they expected, sell their housing stock at a loss and get a real job. Rents stabilize and house prices stay in a holding pattern overall. More apartments built with wooden framing catch fire in California resulting in the government restoring the old requirement for steel framing for multistory buildings.”

“Getting roommates becomes more normal for more people in the Bay Area supporting high rents but allowing individuals to pay less than they had prior to the boom. Los Angeles silicon beach siphons tech workers from the Bay Area but sf continues to be the main draw with both businesses and housing concentrated in the city proper. The overvaluation/ bubble existing in preipo stocks like uber and lyft stay high but wait for 2016 when the need to start showing a profit becomes real.”

One had this, “The world economy is so messed up with excessive debt, the Fed will never raise rates in many many years.”

And another, “If I remember correctly, I predicted last year that little would change economically, at least from a housing standpoint; that we’d have the same stale and failed ideology from the same poor economic and political leadership. I think that’s the same for 2015 and even 2016. We can’t and won’t change voluntarily for the better. Period. We’re totally committed, to the point where I suspect that radical proposals would be seriously considered, or implemented, if the status quo were to be threatened by any event: eliminating paper money, negative interest rates for U.S. savers, and/or bank bail-ins.”

“Just in general, it pains me to see 2% annual inflation being sold by unelected central bankers as a positive thing to a country characterized by stagnant or falling wages for very large majority. I predict that will continue too.”

And finally, “Oil cannot be produced at these prices in sufficient quantity to meet demand. Spiking the dollar may keep oil and gold prices down for a while, the first six months of 2014 both rose until the manipulation began, however, it is going to have a major impact on multinational profits and it is very difficult to see how they can continue to spike the dollar without causing a recession in this country. What Obama is doing is just a little more sophisticated than Mugabe but in the end it is just trying to set prices by fiat. It did not work in the old Soviet Union or in Zimbabwe and it will not work now. We lost 35 rigs just last week, oil production instead of going up one million barrels per day in the US in 2015 may drop. In the end the physical market will prevail over the paper (futures market) despite the manipulation.”

“Prediction: $70 plus oil by the end of 2015 and gold over $1300.”

The News Press reports from Florida. “The south Lee housing market continued its hot streak last month, even as the region moved into its traditional slow season. Several key real estate indicators jumped double-digits in June 2015 over the same period a year ago, according to the Bonita Springs-Estero Association of Realtors. The numbers come as a welcome surprise to local realtors, who in the past have slogged through slow summer months. ‘Traditionally, this is considered the off-season, but buyers are flying down. They shopped during the season and are buying homes now,’ said Judi Gietzen, 2015 president of the realtors association.”

The Tampa Tribune. “Single-family home sales are ‘red hot’ in the Tampa metro area, jumping 28.5 percent in June, compared to the same month in 2014. That is nearly triple the national increase of 9.6 percent and ahead of the state, which experienced a 19.6 percent increase in sales. ‘If you are trying to buy, it is absolutely red hot right now,’ said Barbara Jordan, 2015 president of the Greater Tampa Association of Realtors, Inc. ‘It is not unusual for a house to have multiple offers in 24 to 48 hours if it’s priced right. I’ve been involved in cases where there are eight offers.’”

“Today’s market bears similarities to the real estate market in 2005 and 2006, before the housing bubble burst, Jordan said.”

“With houses selling at warp speed, buyers have to check listings daily and even resort to adding an extra touch, or in some cases, extra cash, said Thomas O’Bryant, Jr., executive director of the Greater Tampa Association of Realtors. O’Bryant said he’s also heard about love letters to sellers from buyers hoping to get that extra edge, some including pictures of the family that wants to move in. ‘Most of the time, you, as a seller, never even meet the people looking to buy your house. So, if you can have some way to put heart into it, more power to ya. I might do that, myself,’ O’Bryant said.”

The Miami Herald. “Nearly 1,400 single-family homes were sold in Miami-Dade County in June, an all-time record monthly high. The previous record was set during the housing bubble in June 2005 when about 1,320 single-family homes were sold, according to the Miami Association of Realtors.”

From Florida Today. “Brevard County’s home sales statistics for June are in, and they are impressive, as both the number of sales and the median sales price jumped significantly. But is the ghost of the torrid housing market of 2004-06 a concern? ‘I’ve kind of heard a little bit about that around town, but I don’t think so,’ said Andy Waterman, broker/owner of Waterman Real Estate in Melbourne.”

The Orlando Sentinel. “Home sales in Metro Orlando and throughout the state rose enough in June to raise questions of the market overheating. Tina Israelson, an agent for Longwood-based Infinity Real Estate, said she has concerns that the market has ramped up too much. She said she would like to see a greater share of home listings under contract and a more vibrant economy. ‘In my opinion, I think things are overheating,’ Israelson said. ‘I think we’re getting to the same point we were in during 2005, but that’s my opinion. A lot of people think it’s just fine.’”

“‘With the continued growth in both sales and prices inFlorida, it raises the question of whether the market is starting to overheat,’ said Florida Realtors Chief Economist Dr.John Tuccillo. Upward pressure on prices across the state may soften somewhat in the months ahead with new condominium projects rolling out in certain markets, Tuccillo said.”

The Herald Tribune. “One of the largest real estate investors in the nation has started to unload its Southwest Florida inventory. The California equity group that has been busy buying up distressed homes in Florida during the recovery and converting those houses into rentals is beginning to slowly cash out. Now that housing values are rebounding, Colony has begun to test the waters as a seller — in what could be the first of many rounds of liquidations.”

“Colony has sold at least 13 of the investment homes it bought in Sarasota and Manatee counties — turning a profit on each one — and grossing a total of $806,200 on those deals, records show. Blackstone has been slower to enter the re-sale market, unloading just of the two of the homes it previously snapped up, both for modest gains.”

The Palm Beach Daily News. “Banking in Palm Beach has always been a little different, starting with the days of the Farmer’s Bank & Trust Co., which opened in 1913. Farmer’s went under in the late 1920s after a crash caused by over-speculation in land and by the Great Miami Hurricane, which also heavily damaged Palm Beach. David Reese still has a stock certificate from the institution for two shares. ‘My father [Claude Reese] always said that was his investment in the bank.’”

“Many Florida banks were already struggling in the early 1920s from the real estate bust. ‘Florida is always the first to be affected by a financial crisis and the first to recover,’ said Debi Murray, chief curator at the Historical Society of Palm Beach County. A July 1926 newspaper story about runs on local banks noted that they looked ‘comparatively mild to those who in other places [that] have seen Old Man Panic smashing banks like a cook would break eggs to make an omelet.’”

“And although Palm Beach financial institutions still strive for concierge treatment of their clients, it’s hard to beat this story from Hazel Sowell, who was with the First National Bank from its earliest days. ‘There were eight of us working for the bank when it opened,’ Sowell, who eventually became a senior vice president, told Palm Beach Life in 1977. ‘There was no stenography service in town. If there was a letter to be written, people would call the bank and say, ‘Send Hazel over. I haven’t paid my bills in six months and I need some letters written.’”

It’s Friday desk clearing time for this blogger. “The 114 homes sold in Delaware County in June is a 23.9% increase from the same month last year according to the Monthly Indiana Real Estate Markets Report. The median sales price increased 17.1% to $105,000. The average sales price increased 21% to $124,424. ‘It’s been years since we have seen activity and pricing at these levels,’ said Bruce Bright, 2015 President of the Indiana Association of Realtors. ‘Despite a continued lack of inventory and increasing prices, consumers across the state see the opportunities that low interest rates present and are confident about housing as an investment.’”

“Brooklyn’s real-estate bubble is inflating to astronomical new heights with the listing of a shoebox-sized Windsor Terrace bungalow for an astounding $1.25 million. Neighbors were stunned by the sky-high price. ‘I’m shocked. It’s pretty crazy,’ said one longtime resident who said she attended the bungalow’s open house last week. ‘The floors are slanted. It’s going to need some repairs. If you have somebody who’s thinking small with vision, maybe that would work.’”

“Homebuyers ramped up their activity in South Florida this summer as both sales volume and prices grew in June, according to the Florida Realtors. ‘With the continued growth in both sales and prices in Florida, it raises the question of whether the market is starting to overheat,’ said Florida Realtors Chief Economist John Tuccillo. ‘The decline in inventories to seller-market levels, and the decline in days on market, tend to suggest that possibility as well. But there are mitigating factors here.’”

“The Miami Association of Realtors is troubled that only 29 of the 8,523 condominium buildings are approved for FHA loans. Nationwide, 30 percent of condo buildings can quality for FHA loans with low down payments.”

“Imagine buying a home in Fitzroy for a fraction of its market price; or gaining priority access to a semi in Bondi because you worked in the area. It seems ludicrous amid Australia’s overheated property market but it’s the reality for ordinary people in the UK priced out of exclusive suburbs, who are able to buy property in prime spots through the notion of shared ownership. ‘Right now my lowest value one bedroom, full value is £160,000 (A$337,550). So you could buy the minimum shared value at 40 per cent and raise a mortgage on £64,000, (A$135,020)’ said Notting Hill Housing’s sales manager for shared ownership, Wendy Gordon.”

“Ray White Drummoyne director Chris Wilkins said he can’t see it happening here anytime soon. Instead of a change in policy, he said people need to adjust their expectations about what buying a first home might mean. ‘I see us following down the path of a New York or a London where we’re more aligned to a rental city or culture than we are of an ownership city or culture. People forget history really quickly. It’s a little bit like at the moment people are saying ‘we’re going to wait, it’s going to crash’ but without being disrespectful to those people, what planet do they live on? It can’t be planet Earth because when has that ever happened?’”

“Auckland house prices could hit $1 million within 18 months if interest rates continue falling, experts predict. Hugh Paveltich, the co-author of the annual Demographia international housing affordability survey, predicted the million mark would be hit by March 2017. ‘It is sitting at about the $750,000 mark now and [rising] at about $3000 a week, or $150,000 a year, so it should be at about $900,000 12 months down the track. So you are looking at about a year and a half from now,’ he said. ‘The whole thing is a complete circus and I curse the politicians for failing to articulate these serious issues with clarity.’”

“Regina’s housing market has benefited enormously from soaring prices for oil, potash and other commodities, sailing through the global financial crisis comparatively unscathed. Prices leapt more than 50 per cent between October, 2006, and June, 2008, alone. Real-estate speculators moved in, snapping up derelict buildings in the city’s impoverished North Central neighbourhood by the dozen, often leaving them vacant while waiting for prices to keep on soaring. That fuelled a spike in new construction, particularly among condos aimed at first-time buyers, many of which were originally planned during the boom years but came onto the market just as prices began slowing.”

“For rental landlord Boardwalk Real Estate Investment Trust, first-quarter results in Regina ‘weren’t pretty,’ said president Rob Geremia. ‘We’re now seeing pretty major corrections in Regina.’”

“Realtor James Wruth figures buyers have been scared off by the swift change in the market from bidding wars to a surplus of unsold listings. ‘The fact that buyers have plenty of homes to choose from, lower interest rates and lower prices, but still aren’t making an offer, makes me scratch my head sometimes,’ he says.”

“Agreeing with the view that property prices are slated to come down, Orbit Corporation MD Pujit Aggarwal said that though there was little room to cut prices due to high costs, builders were now willing to reduce prices and sell units even at a loss. ‘They will sell in order to meet cash flow requirements such as interest payments, overhead costs or further construction,’ he told CNBC-TV18. According to Aggarwal, prices in some pockets of Mumbai could fall about 20-25 percent. ‘Till now, builders had been reducing prices through indirect means such as the 80:20 schemes and interest free EMIs, but a direct price reduction is absolutely on the table now,’ he said.”

“Several institutional investors said the recent plunge in Chinese shares has had the biggest impact on China’s middle class, the 21st Century Business Herald reported. ‘The stock market has a greater impact on the middle class. It has millions of yuan in equities, and some of them suffered heavy losses because of margin trading,’ a general manager of a private equity fund in Shenzhen said.”

“A broker in Guangzhou said some investors have turned their attention to commodities since late June, while a private equity fund manager said he moved his money into gold, silver and private equity funds. A real estate broker in Guangzhou said, however, that investors do not have enough money to put into the housing market because of the losses they sustained in the stock market.”

“So far, the impact of dramatically lower oil revenues has been limited to the oil patch, but the potential for contagion is still present. Back in the 1980s oil bust, the drop in gasoline prices helped consumer spending and the mass entry of Baby Boomers into the housing market provided a source of broad-based economic stimulus. But what’s different this time is the $550 billion that has been loaned to energy producers.”

“What’s also different is a looming global recession, a $900 billion subprime auto-loan bubble that’s about to burst and an echo-bubble in housing that’s threatening to follow the first housing bubble’s trajectory of crash and burn. The row of dominoes swaying unsteadily in these stiff winds won’t take much to topple.”

“So after the housing bubble burst seven years ago, what now? The BIS warns low interest rates could spell ‘entrenched instability’ published by GMA news online, June 28, 2015. The BIS is the Bank of International Settlements. It is the Central Bank of the world comprised of 58 central banks. It has a core of 31 chiefs of central banks of the most economically powerful countries of course. The BIS is not controlled by any government, pays no taxes, and has its own police force.”

“What did the BIS warn about in the article? It warned about the persistently low interest rates. In fact, some countries such as Switzerland, Sweden and Denmark have negative interest rates. Japan, in recent years, also approximated negative interest rates. In fact, interest rates are even lower now than at the height of the 2007-2008 financial crisis. This monetary policy of lowering interest rates is, the BIS warned, ‘overburdened in an attempt to reinvigorate growth.’ This, the BIS said, resulted in ‘too much debt, too little growth and too low interest rates.’”

“And yet, governments still rely on the same monetary and fiscal policies that have so far been ineffective while retaining the same neoliberal framework and policies that caused the economic crisis in the first place.”

The Orlando Sentinel reports from Florida. “Orlando-area home prices dropped in January from a month earlier and the inventory of listings increased, edging the area closer to becoming a buyer’s market. The median sales price during January for homes in the core Orlando market, which includes mostly Orange and Seminole counties, was $149,950 – down from $160,000 in December, according to a report by Orlando Regional Realtor Association. A year ago, median prices for the Orlando market were $127,000.”

“Sales were down from a year earlier too. In January, members of the association closed on 1,800 sales – an 11 percent decrease from a year earlier. The market had a 5.5-month inventory of listings during January – the highest level since February 2011.”

The Tampa Tribune. “It may feel like the region’s once-hot housing market has hit the brakes, but an economist for the state’s leading Realtors group insists a recent month-to-month drop in existing-home sales isn’t cause for alarm. Realtors are feeling the effects from a slowdown in buying by the likes of Blackstone Group’s Invitation Homes. They slowed their buying dramatically recently, though, because housing prices rose so much that the investors couldn’t get the financial returns they wanted. ‘I think what you’re seeing there is investors retreating from this market,’ said Florida Realtors chief economist John Tuccillo.”

“Short sales — sales in which the home sells for less than what’s owed on the mortgage — also were down by 46 percent statewide in January when compared with this time last year. They’re dropping in tandem with the overall rising prices for houses, Tuccillo said. Tampa Realtor Mary Diaz wonders if many of the short sales never went through and the banks took the houses back. She said she’s noticing more bank-owned properties hit the market in Brandon, especially.”

“An early report card on how rental-home powerhouse Invitation Homes from Morningstar gives some clues on how some of Invitation Homes’ rental homes are performing. The company started with a pool of 3,207 homes in October, all of which were occupied and generated monthly rental payments of $4.2 million. By January the company had 252 vacancies and its monthly rent collections had fallen to $3.9 million, Morningstar’s report says. That’s a vacancy rate of 7.9 percent.”

“Morningstar had expected a vacancy rate of 8 percent all along, but the issuer of the bonds, technically called Invitation Homes 2013-SFR1 Trust, expected a lower vacancy rate of 6 percent, Morningstar said.”

The Tampa Tribune. “As development hot spots such as Miami overheat, market watchers say foreign investors are increasingly spending their yen, yuan and loonies in Tampa Bay — even as the source of their spending remains largely hidden from view. One in four foreign buyers of American homes, townhomes or condos last year chose Florida, spending more than $6 billion, Realtors’ data show. About $370 million of that was spent in Tampa Bay.”

“Realtors here have done everything from hosting social outings for Russian prospects to chartering tour buses for Chinese buyers hoping to scout out suburban homes. It’s hard to quantify just how much money flies into local development or transactions from spenders outside our borders. Investment advisers here say foreign money is typically tucked inside shell companies or equity funds. ‘Foreign capital is oftentimes very secretive,’ said John Stone, the director of multifamily housing and foreign investment for commercial real estate brokerage Colliers International. ‘They don’t trust easily.’”

“Brokers say that spending has boosted South Florida’s skyline, fueled a new boom for waterfront condo skyscrapers — and led prices there to soar. By last month in South Florida, developers had proposed or begun building more than 25,000 condos across 187 towers from Jupiter to Key Biscayne.”

The Buenos Aires Herald. “Economically speaking, over the last 20 years, when the kettle has started to whistle in Argentina, fast-talking Miami salesmen have flocked to Buenos Aires to draw in real estate investors. The pattern is repeating itself now, but profits are often exaggerated. Even if people manage to licitly send money abroad to buy and let out an apartment, long-distance investors usually have to face management costs and are obliged to front maintenance expenses, which chip away at profits.”

“A high-end apartment in central Miami goes for about US$700,000, while in the suburbs, an average one sells at US$400,000. Mcafka developer Fernando Levy Hara says that for a two-bedroom apartment in the booming central Miami, maintenance and tax expenses rise to between US$200-400 per month each, meaning that from rent of ‘US$1,800 per month, you are left with an income of US$1,000, or between four and five percent of the initial investment.’ When administration fees are deducted, the figure drops to US$880 a month — not a mouthwatering number.”

“Such returns are chipped away further by the commission charged by local banks to receive money from abroad, which is obviously exchanged at the official rate. All this assumes business is conducted in adherence to Argentine law. When asked if Mcafka offers guidance to potential investors seeking to send money to Miami for real estate projects, Levy Hara said that developers don’t look into the source of cash.”

“Those who already have offshore, often undeclared bank accounts, are the target clients for real estate development and investment companies such as Key International for their Brickel 1010 luxury tower development, although some do have rent transferred directly to Argentina. Asked how relevant Argentine clients were to the company, Sales and Marketing Director Liliana Paez told the Herald: ‘They’re very important; people from countries that are having problems are some of our biggest clients, they’re in the top 10 buyers, for the world.’”

“Levy Hara said the US tributary system ‘makes no distinction between foreigners and locals’ when it comes to real estate except for the inheritance tax, ‘which is fairly high.’ ‘There are zero restrictions for foreigners, it’s an open market,’ Key International Vice-President Inigo Ardid agreed.”

The Palm Beach Post. “Federal mortgage backer Freddie Mac issued its monthly housing market outlook yesterday and it’s not looking good for homebuyers in South Florida. According to the report, homes in Palm Beach, Broward and Miami-Dade counties are ‘not affordable’ for most families under current underwriting standards. ‘We’ve gone from talking about how cheap housing was to how expensive it is in a very short period of time,’ said Jack McCabe, chief executive of McCabe Consulting and Research in Deerfield Beach. ‘Flat incomes, no job creation and higher housing costs are the elements that break markets.’”

The News Press. “Home prices were rising, credit was easing, speculators were losing their fear of failure and greed was just starting to be fashionable again. Yes, all that was true last week, but it was also true last decade: 2004 fits the bill just about as well as the present. Now presenters at The News-Press Market Watch are wrestling with what to say about the year just gone by and what’s coming next — and thinking about how things turned out last time around.”

“‘In 2004 and 2005 there was optimism, and I have to admit that I joined with everyone else and drank the Kool-Aid and thought and hoped the increase in the market at 50 and 60 percent a year would never stop,’ said Randy Thibaut, who handles sales and development of large tracts of land. ‘But I realized, deep down, that it couldn’t last forever.’ Now, he said, ‘It’s starting to feel a little like déjà vu all over again. The difference is this time I’m not drinking the Kool-Aid.’”

“Residential real estate broker Denny Grimes said one difference between then and now is the increased availability of market data that would show the risk of a bust. But in the end that likely won’t be enough because the lure of easy money is just too hard for some to resist, he said. ‘Not long ago there was a helicopter picture of a black SUV going down the highway throwing money out the window,’ Grimes said. ‘You can yell at the people on the road, ‘Don’t take it’ all you want. They’re going to take it. But when the music stops, you better have a chair.’”

WMFE reports on Florida. “The rebound of Orlando’s housing market is expected to continue in 2014 but at a slower rate. Florida realtors say that’s a good thing. Florida Realtors Chief Economist John Tuccillo estimates nearly half of sales are cash sales, about the same as the rest of the state. He says that indicates strong investor presence but not another bubble. ‘I think we should purge the word bubble from our vocabulary at the moment. This is a very different world from what we had just before the crash. Just before the crash the market was operating on a herd mentality. People felt they had to get into the market or else they would really lose out on something,’ he said.”

The Orlando Sentinel. “Home prices edged up slightly in the core Orlando area from November to December, but the market showed other signs of softening, according to a report by the Orlando Regional Realtor Association. ‘We’re seeing fewer investor and institutional buyers in the Orlando market due to the dramatic gains in median prices we’ve experienced,’ said Steve Merchant, chairman of the association.”

“Starting next month, about 130,000 Orlando-area homeowners with ‘underwater’ mortgages are likely to face a new tax bill if they sell their house, modify their mortgage or lose their home in foreclosure. A 2007 federal law that waived income taxes on unpaid mortgage debt is almost certain to expire Dec. 31. In Metro Orlando, more than a third of the houses with mortgages — about 130,000 — were financially underwater in the third quarter, according to Zillow.”

“Orlando homeowner Julius Ludwin, 82, is a few months behind on mortgage payments and trying to work out a mortgage modification with Wells Fargo. Dependent mainly on Social Security for income, Ludwin said he would be unable to pay any taxes on unpaid debt if he gets the loan modification he’s seeking. ‘We can’t pay any taxes. We have no money,’ he said. ‘They’ll have to try to do something about that. I thought it was supposed to be easier now to get by.’”

From Bloomberg. “Isabel Santamaria thought she finally caught a break in her effort to save her Florida home from foreclosure after nine frustrating months: She reached Bank of America Corp.’s Office of the CEO and President. What the mother of two autistic children didn’t know is that her case would find its way to contractors, including Urban Lending Solutions in Broomfield, Colorado. Bank of America hired the firm to clear a backlog of complaints about a federal program designed to prevent foreclosures.”

“Santamaria and her husband bought their four-bedroom Palm Bay home in 2008 for $167,000 and spent $60,000 to renovate it, she said. They applied for HAMP in October 2009 after Echeverria’s hours as a driver fell. The bank rejected the application because their mortgage costs were too low in relation to their income to qualify for the program. The couple applied again in January 2010, sending their application to an Urban Lending office in Pittsburgh, after their children were diagnosed with autism, Santamaria said. Last month, Bank of America sent her a foreclosure warning, Santamaria said. ‘They tell the outsiders a completely different story from what’s really going on,’ said Santamaria.”

“To soothe homeowners frustrated by delays, employees had a monthly allotment of $25 and $50 gift cards they could give customers, said three of the former workers. The joke among staff: It was just enough money to buy moving boxes. ”

The Florida Times Union. “While Northeast Florida Association of Realtors’ monthly report shows some continued improvement in the housing market, there are mixed signals as well. The number of closed sales in November was lower than November 2012. That’s the first year-to-year drop in several years. And while prices have also dropped since summer, homes are selling faster and for more than they were a year ago.”

“‘Perhaps people are being more flexible in what they’re selling their property for,’ said Carol Zingone, president of NEFAR. ‘I’ve got people who are already in Seattle, so they had to make a concession on the selling price. They have to move on.’”

“Zingone said she was told by one lender that, starting Jan. 1, there will be a maximum borrower’s debt-to-income ratio of 43 percent. In other words, on an income of $50,000 a year, a borrower’s debt can’t exceed $21,500. ‘People used to slide through with 46, 47, 48 percent,’ she said. ‘That could really have an effect on some of the marginal buyers.’”

From WJHG. “For another month, Florida ranks number one for foreclosure rates. Eight of the top 10 cities with the highest foreclosure rates are in Florida, legislation that took effect in July has slowed the process. Upwards of 20,000 foreclosures a month but there are still around 275,000 that need to be processed. Anthony DiMarco with The Florida Bankers Association says the court process delays a foreclosure from beginning to end. ‘Here it’s taking 800, 900 days when you go through the court system,’ said DiMarco.”

“‘It doesn’t surprise me just because again the number of foreclosures that still need to get through the system, they’ve just been sitting there,’ said John Sebree with Florida Realtors Association.”

The Sun News reports from South Carolina. “Single-family home sales along the Grand Strand in May clipped along at a level not seen since before the Great Recession, but area Realtors said there are enough brakes on the local market that they’re not worried about Bubble, the sequel. Marvin Heyd, CEO of Prudential Myrtle Beach Real Estate, said there are still 12 months inventory left for short sales and foreclosures, which will hold down price pressures in the traditional market.”

“In 2014, he sees a buyers’ market emerging from the dregs of the recession, and in 2015, he believes that activity will pick up more speed and that prices will return to what they were in 2004 to 2005. But while he’s got an eye to the future, he’s enjoying the present. ‘Right now,’ he said, ‘all the Realtors are smiling.’”

The Atlanta Journal Constitution in Georgia. “Recently, an Atlanta couple became frustrated with their search to purchase a home. They made several offers on homes they liked but kept losing out to higher bidders. One day, they found a home that had hit the market that very day. They were so determined to win that bid, they immediately submitted an offer — and then asked if they could see the house for the first time the next day. They just wanted to jump in line and be considered as a buyer early.”

“The couple who recently bid on the house before they ever saw it didn’t win the bidding; they are still out there looking. They are persistent, and they will eventually be the highest bidder and be back in the housing game. That story and others like it illustrate what is happening in Atlanta’s residential real estate market today. We are witnessing the beginning of a new boom in real estate.”

From Northfulton.com in Georgia. “Rhonda Duffy, owner of Duffy Realty, recalls a period in 2007 before the crash when the metro Atlanta market experienced a record high of 110,000 homes for sale, a level that even forced Metro Brokers to switch their sign on Interstate 75 and I-85 from an analog system to digital because the number surpassed the five digit limit. ‘Ever since then we’ve slowly gone down to where we’ve been for the last two or three years which is 36,000 homes,’ Duffy said. ‘When interest rates go down like that and then they start to pick up again, it starts to freak buyers out.’”

“The averages sales price for Harry Norman Realtors is now about $350,000, Aiken said. One year ago, it was about $250,000. ‘Before you had so much inventory that you couldn’t get what they were worth, then people were underwater. Now they’re not underwater, now they can sell them, but they want more for them than they’re worth,’ Aiken said.”

“James Stephens, property and real estate appraiser, says the home appraisal problem relates to a large influx of investors that feel like the time is right for buying. ‘I think what you’re seeing in a lot of different markets in the metro Atlanta area is a shortage of available homes compared to years past,’ Stephens said. ‘Prices are appreciating rapidly and previous homes sales that have happened earlier this year don’t really reflect the current pricing.’”

AAP on Florida. “The open house on a leafy street near South Miami featured a snack wagon with cupcakes and chilled beverages, but the real draw was the newly-listed house for sale for $435,000. Over a two-hour stretch on a Sunday afternoon, 44 groups of couples and families streamed through the well-kept two-bedroom, one-and-a-half-bathroom house on a large block. They didn’t come to eat cupcakes. Five purchase offers came sailing in - three that day, two the next.”

“Mortgage rates are at historic lows, thanks to the Federal Reserve’s unprecedented manoeuvres to stimulate economic growth. Banks have begun to ease terms on mortgages, with down payments of 10 per cent and less increasingly available, widening the options for prospective buyers to jump in. ‘Interest rates are so low, people are crazy not to buy,’ said Philip Vias, a broker associate with Prudential Florida Realty in Fort Lauderdale.”

“And, with housing prices marching higher in many areas, many buyers are feeling a sense of urgency to act now or miss out. ‘We have a chance to grab something. We want to take advantage of this great market. Interest rates are low,’ said Leonard Bridgnauth, a 36-year-old courier who, with his wife Kimmy, has been scouring the Miramar, Florida, area for a house in the $US250,000 range since December, so far without luck.”

“‘Because inventory is so low, it’s creating some kind of a frenzy,’ said Chuck Bonfiglio, president of the Greater Fort Lauderdale Realtors. ‘People are pricing their homes over what the market is … Buyers know inventory is low and are willing to pay over appraisal to get the deal done.’”

The Tampa Tribune in Florida. “An investor buying spree has the Tampa Bay area’s home prices soaring, the latest housing figures show, leaving some to wonder how much longer it will continue before the investors back down. Around Florida, some Realtors are whispering about a bubble in the housing market.”

“John Tuccillo, chief economist for Florida Realtors, challenged that assumption. Investors today have sophisticated financial models that tell them how much they can pay for a house and still get a decent return from renting it out. Once prices rise too high, they’ll stop buying. That should keep investor buying from getting out of control, he said. Already, a shortage of inexpensive houses is forcing investors to move upscale and buy pricier homes, he said.”

“‘There aren’t as many unsophisticated investors out there as there was back in 2004 and 2005,’ Tuccillo said.”

The Brevard Times in Florida. “‘The numbers continue to move in the right direction,’ said Florida Realtors Chief Economist Dr. John Tuccillo. ‘We remain concerned about the rise in the percentage of sales accounted for by all cash buyers. These numbers understate the true condition of the market in that a great many sales are conducted directly with the financial institution holding the property, and thus do not appear in the Multiple Listing Service (MLS).’”

“‘But those crying doom-and-gloom who read this growth in investor activity as the sign of a new bubble are far off-base and simply don’t understand the texture of the current market,’ Tuccillo added.”

The St. Augustine Record in Florida. “A return to health of the lower end of the housing market in St. Johns County is adding to consumer confidence and to the overall economy. But those same increases in home values could also keep some middle-class families from getting into the market. One thing that has kept some lower-income families optimistic about buying a home is the continuation of low interest rates. Dirk Schroeder of Century 21 said banks have been making money available to more buyers recently. He said people with credit ratings around 580 are often getting approval.”

“Lenders are certainly reviewing files of perspective buyers more carefully (than during the housing bubble),’ he said. ‘You can have damaged credit and still be able to make purchases.’”

A reader in Florida asks this question. “Should I buy a house, stop paying the mortgage, pay the taxes and… wait?”

The Jacksonville Business Journal. “There are still bank-owned properties coming on to the market, mostly at the same rate they’re being absorbed, Florida Realtors chief economist John Tuccillo said. One-third of the nation’s shadow inventory — homes owned by banks that haven’t yet been put on the market — is in Florida, but the fear that the banks will flood the market with those properties is unfounded. ‘This is not a knockout blow,’ he said. ‘This is a death of a thousand cuts. But this is a market that will be us for a long period of time.’”

“But the investor-fueled home price increases — which are occuring much more dramatically in other parts of the state — have led to speculation that the state’s headed for another real estate bubble. ‘History never repeats itself,’ Tuccillo said. ‘We might pass the same way, but it will look different. We’ll make a new mistake by 2017 or 2018.’”

CBS Sacramento. “Home prices in the state are on the rise, but some experts argue it could be an indication of the beginning of a new bubble forming. Holly Brickner, who works for Lyon Real Estate in Natomas, is benefiting from the market bump. But she’s concerned about how quickly prices are rising. She says buyers are now willing to pay tens of thousands of dollars above appraisal or asking price because inventory has plummeted.”

“Last March, there were 551 homes listed in Sacramento County. That number has dropped to just 95 listed in May. She believes government foreclosure assistance programs are shrinking inventory, forcing buyers to become desperate. ‘I do believe there are government programs that are allowing the banks and incenting the banks to hold on to their homes that would have been foreclosed on already,’ she said. ‘I would say there’s a bubble risk right now. Inventory is rising too quickly, so it has to cool off a little bit.’”

From ABC 15. “On February 9, 2012, Attorney General Tom Horne held a news conference boasting that Arizona was part of a $25 billion national settlement with five of the nation’s largest banks. At the time Horne announced they had put a stop to the robo-signing and forgery of foreclosure documents. And the Attorney General announced Arizona’s share of the settlement would be $110 million. Horne said that money would be used to compensate the victims. But more than a year later, the ABC15 Investigators have found Arizona victims are still waiting for help.”

“Attorneys Dan McCauley and Beth Findsen are two of a small handful of lawyers who go to court to fight for the victims of illegal foreclosure. Dan McCauley said, ‘I’ve seen nothing go to the victims, nothing from the state of Arizona at all.’ Beth Findsen told us, ‘I have yet to see one dollar awarded to a homeowner. The banks are getting away with murder.’”

“Mike Brosnahan is a husband and father of two. He is fighting to stay in the home he built in Sedona. He has fought all the way up to the Arizona Supreme Court. Brosnahan told ABC15 Investigators, ‘All they’re doing is breaking up the American dream and leaving it in shambles.’”

“Rocky Coronado served in the U.S. Air Force. The veteran and his wife have been fighting for their home for three years while raising a teenage son. Rocky said, ‘I think it demoralizes him.’ His wife Brenda said, ‘It consumes your waking life.’”

“Both the Coronados and the Brosnahans insist they are not deadbeats and are not seeking a free house–they just want a fair deal. They say they paid their mortgages until they were told to stop so they could get a modification. And now their lawyers say their banks are using fraudulent documents to foreclose and take their homes.”

“Horne admitted it’s too late for victims who have already lost their homes. Nobody who has already been foreclosed on and evicted is going to get their house back. And who gets help may depend on how much money is left because last year the legislature swept $50 million of the $110 million settlement into the state budget—a budget that already had $400 million in reserves. Horne told ABC15 he fought against the sweep but in the end he had to abide by what the legislature decided. He points out they could have taken the entire amount of the settlement. Horne also said he plans to spend another $30 million of the settlement on outreach and marketing. He said he is also setting aside $4 million to provide legal assistance to homeowners fighting foreclosure.”

“The victims of illegal foreclosures we spoke to say every penny of the $110 million settlement should have been used to compensate them. Rocky Coronado said, ‘It just blows my mind that they could have the nerve to take that money that should have gone to homeowners like us.’”

The Sun Sentinel reports from Florida. “When GL Homes opened its eighth Valencia community last weekend, the Sunrise-based builder ended up with 72 contracts at Valencia Cove. The 823 homes are selling from the high $300,000s to low $600,000s. GL held a lottery so buyers could select their lots in the 55-and-over community. Earlier this month, the builder had another lottery for 11 model homes at Valencia Reserve, the 1,043-home Boynton development that now is sold out. And buyers camped out overnight for 18 lots at The Bridges near Boca Raton. ‘The market is really exploding,’ said Marcie DePlaza, division president for GL. ‘Between the lotteries and the camp-out, it’s been crazy.’”

“South Florida’s housing recovery is sneaking up on some sellers. Their homes are flying off the market in days or weeks, and the severe shortage of inventory is keeping them from quickly finding a new place. It took only a few weeks to find a buyer for Tracy Sachs’ five-bedroom Parkland home, but she immediately grew disillusioned when she started looking for homes to buy. ”We started panicking that we had nowhere to go,’ said Sachs.”

“Just as she and her husband, Mark, were seriously considering offering money to the buyer to let them out of the contract, they got a call from Jon Klein, their real estate agent. He told them the buyer’s financing had fallen through, and the deal was off. The couple immediately took the home off the market. They’re redoing the floors, painting inside and out and making other improvements. They want to wait at least a couple years for the housing market to settle down. ‘I was truly relieved,’ Sachs said.”

“Klein said he tells sellers they have to start looking the minute they sign a contract on their existing residence. ‘I had one client say to me that she had to go to the gym first,’ Klein said. ‘I had to tell her, ‘What’s more important? The gym or buying a house? You’re going to be homeless.’”

From WFTV. “Florida realtor figures show 51 percent of single-family home sales are all cash. WFTV learned cash buyers are moving quickly to grab deals and out-negotiate buyers who need a mortgage. When an Apopka house sold last December, the seller had few fears the financing would fall through, because buyer Rob Arnold offered $62,500 in cash. ‘Somebody like me, I buy ‘em and resell ‘em. At some point, I buy ‘em. Once they’re sold, I can buy some more,’ Arnold said.”

The Tampa Tribune. “Rising prices and bidding wars are back in the Tampa Bay area. Dale Hunter, who owns a Tampa real estate firm called Vanguard Real Estate, said he sometimes gets offers on homes within hours of listing them for sale. The sales go through quickly, he said, because the investment firms pay with cash and don’t have to wait for financing to come through. One problem emerging from the hot real estate market is a tie-up in some home appraisals. Appraisals may not be able to keep up with the change in home prices.”

“For example, a home that sold for $100,000 in January might fetch a price of $110,000 today. But an appraiser might value the home at only $105,000 based on the best available statistics, said David Donaldson, a senior loan originator at VanDyk Mortgage. That mismatch between appraisal and sale price can hold up a sale, he said. Nevertheless, Donaldson was bullish on real estate. ‘It’s a fantastic time, and anybody that does not own a home, should be trying to buy one,’ he said.”

The Tampa Bay Times. “After shrinking 10 percent during the bust, the typical new American home built last year grew to an unprecedented 2,300 square feet, U.S. census data show. Homes in the South ballooned even bigger, to nearly 2,400 square feet. Buyers are ‘able to purchase a little more home for their dollar,’ Tampa Bay Builders Association executive VP Jennifer Doerfel said, ‘and they’re trying to get into those homes quickly before the prices increase.’”

“When looking for a new home, Jolyn and Mike Schweitzer were open to townhouses or condos of any size. Instead, they upgraded, buying a 3,500-square-foot home off Clearwater’s Lake Chautauqua, with lofty ceilings, an office and an exercise room. ‘We felt this was a good investment, so we went to the top of our budget,’ said Jolyn Schweitzer, 58. Except for when their four adult children stay over, ‘I will never have to go upstairs.’”

The Herald Tribune. “If the housing market continues at its current rate of appreciation — a combination of strong demand from buyers and dwindling supply of homes for sale — prices could be back to their boom-time peak within seven years, according to a new analysis of data by the Herald-Tribune. ‘Prices are definitely going up everywhere right now,’ said Shannon Moore, broker and owner of Green Lion Realty in North Port, who represents foreclosure investors. ‘I see that continuing for at least the next three years.’”

“Several speed bumps stand in the way. The first is an estimated shadow inventory of 11,102 foreclosures expected to hit Southwest Florida’s housing market during the next few years, according to RealtyTrac. ‘We still have a lot of distressed inventory, and furthermore, at some point the national economy has to begin wresting with the debt service,’ said Dennis Black, a real estate consultant in Port Charlotte. ‘The price increase we have been seeing, particularly from the Wall Street funds, is speculation at its highest level.’”

“By far the biggest driver of Southwest Florida’s recent real estate appreciation has been institutional investors which have been buying foreclosures by the score for use as rentals. Because those companies are paying as much as 45 percent more for their purchases than the homes are worth — as determined by appraisers through comparable properties in those neighborhoods — these recent foreclosure-buying sprees are forcing some smaller investors and other homeowners to overpay for their purchases.”

“Those inflated purchases will now become the new standard for real estate ‘comparables’ used by appraisers — leaving values that are much higher than market conditions would otherwise merit, said Jack McCabe, a real estate consultant in Deerfield Beach. ‘We’re going to go through the whole thing we did last decade all over again,’ McCabe said. ‘Except, while last time it was the flippers and speculators pushing the market up, now it’s these hedge funds.’”

The Orlando Sentinel. “A while back, a Brevard County builder of luxury homes told me he had no choice but to go the cash-only route because appraisals were coming in so low, lenders wouldn’t give his potential buyers mortgages. University of Central Florida economist Sean Snaith calls the rate of cash transactions ‘unsustainably high’ and worries that average buyers are still having trouble getting mortgages. ‘We’re not going to get a healthy housing market with 50 percent of the transactions being cash,’ Snaith said recently. ‘The financing system has to allow the average buyer to get a mortgage.’”

“A rational housing market provides a sense of economic stability. It encourages owners to spend on home-improvement projects – which, in turn, creates jobs and pumps oxygen into the larger economy. But it thrives only if there’s enough credit available to keep the gears turning for average buyers. It’s unreasonable to expect middle-class Floridians to come to the closing table with enough cash to purchase a house. After all, they’re buying into homeownership, not a high-stakes poker game.”

The Jacksonville Business Journal. “There’s limited inventory, and real estate agents say any decent home put on the market draws multiple offers. So it might be a good time to sell — unless you’re one of the 54,000 folks who bought a home in Northeast Florida at the height of the real estate market. If you bought at the peak — mid-2006, with a median price of $210,000 — you’re likely underwater on your mortgage. That’s part of what’s creating the inventory crunch — so many folks can’t sell.”

“‘Unfortunately, it’s a long, hard slog for those folks,’ said John Tuccillo, chief economist for Florida Realtors. ‘It’s a matter of timing. If you bought your house in 2000 and sold it in 2009, the bottom, you still made money. If you bought in 2006, you may never make the money back. So it’s a matter of timing, but I think the market is moving in a positive direction. The folks in the market now will be benefitting over the next couple years.’”

The News Press. “The battle over a pricey Cape Coral home bought on the cheap at a foreclosure auction by two south Fort Myers men may not be over. After a Friday morning court hearing held shortly after Bob Mosher and Stan Garczynski took possession of the home, the lawyer for the former owners said the banks might fight to claim the waterfront property that was in the process of being foreclosed.”

“Nickie and Jim Haggart were evicted from the home Friday. They bought the property for $599,000 in 2004 and put more than $250,000 into it, but Nickie Haggart said they stopped making mortgage payments five years ago after being hit hard by the economic downturn.”

“The banks filed to foreclose on the home and, while that was pending, Chase Bank, the lender, continued paying the property taxes and home insurance but ignored a water assessment impact fee, Cohen said. As a result, the city placed a lien on the property that totaled $619.58 plus unspecified interest, penalties and attorney fees. It then foreclosed on the lien and the home went to auction in January, where Mosher and Garczynski snapped it up for $4,350.”

“Before the real estate market crashed, the 2,991-square-foot house was listed for $1.2 million. It is now assessed at $387,906.”

It’s Friday desk clearing time for this blogger. “Is New York in the midst of a new real-estate bubble? It can appear that way. In early March, my friend Ellen asked me to come with her to see a co-op she was hoping to buy. She’d already lost one bidding war, and we met the broker at a two-bedroom in the West 100s. The kitchen needed a redo, the walls a once-over. The asking price was $1.2 million, the kind of number buyers used to go past 100th Street to avoid. Ellen and her husband offered $25,000 over the asking and pledged to cover the difference if the apartment didn’t appraise for the sale price. They lost to bidders willing to pay more than $150,000 over the asking price.”

“In late March in Windsor Terrace, more than 60 house-hunters converged on a showing of a sweet little house—two stories, nothing grand—priced at nearly $1.5 million. Within days, six buyers had put in offers. A week earlier in Park Slope, 90 people converged on a duplex asking over $1.5 million, double what it sold for in 2011. And on a recent Sunday, at least a dozen people passed through a $795,000 Morningside Heights two-bedroom fixer-upper, its walls gutted to the studs, within the first ten minutes of its open house. Daniel, a banker looking in the West Village, told me he’s lost five bidding wars in the past year. ‘The last apartment, every person who saw it made a bid,’ he said.”

“Jon Maddux, a San Diego-based house flipper, found luck in Atlanta, Georgia. Last year, Maddux and a business partner bought two single-family homes. The first they bought for $62,900, put in about $28,000 of renovations, and sold for $139,000. The second house they purchased for $79,000, chipped in $25,000 to rehab, and sold for $149,000.”

“‘In some ways, this is a dream environment,’ says Andy Heller, author of ‘Buy Low, Rent Smart, Sell High: Real Estate Investing for the Long Run’. ‘You would be crazy to be on the sidelines.’”

“In Westminster, Colo., broker Chris George reports listing prices that seem ‘almost egotistical.’ In Denver, Andrea Lard says homes are selling within a few days, and ‘I have heard of two listings selling within hours.’ In Grand Haven, Mich., ‘We list them and they’re gone,’ says Realtor Lisa Franklin. In San Francisco, Coldwell Banker Real Estate agent Herb Alston said every agent in his office is worried that the market’s in a mini-bubble. One home in San Francisco’s Marina District that Alston recently wrote an offer on for clients received 15 offers and closed for $2.02 million, about 20 percent over asking, Alston said.”

“Charles Roberts, co-owner of Your Castle Real Estate, said that, given ’skyrocketing prices,’ he’s starting to get questions from buyers about whether there’s a bubble. Roberts tells them yes, Denver is in a bubble, but he thinks it will be at least two years before prices start to go down again. ‘In Denver, we’re four years past our bottom. We’re almost certainly going to surpass our highs from 2006-2007 this year,’ Roberts said. ‘Clearly the market’s going up, but given the record low inventory, we think we’re at least a couple years away’ from price declines.”

“Florida Realtors Chief Economist John Tuccillo told a gathering of Gainesville Realtors that the opportunity to sell a home in Florida real estate is now. Tuccillo joked that new Realtors are required to learn to say ‘it’s a great time to buy.’ ‘Once you can say that with a straight face, you can get your license,’ he said.”

“Unlike the investor flipping with fast-paced buying and selling at the height of the market, today’s investors are fixing up the properties and renting them out so they can sell them when the market value returns in five to 10 years, Tuccillo said. ‘This is a sort of sleeping issue,’ he said. ‘Ultimately the investors are going to go away, even if they last 10 years. If by that time we haven’t restored the access to financing to owner-occupants, there is going to be a problem in the marketplace.’”

“Foreclosure activity in Fairfield County jumped 52 percent in a single month in March and was up 40 percent from 2013. Foreclosure activity was high throughout the state and was up 48 percent in New Haven County in March. It’s affecting ‘people with jobs, people with homes that are underwater: Some people who have been struggling for years and just realize they’re not going to make it,’ said Tim McLaughlin, VP of Weichert Financial Services.”

“Daren Blomquist, VP at RealtyTrac, said there is something jarring in the Connecticut and Fairfield County numbers. Blomquist said the bulk of home reposession is centered on mortgages originated between 2003 and 2008, during the real estate boom. Only about 14 percent of all foreclosures nationally, were for loans originated after 2008, he said. In Connecticut, 22 percent of the foreclosures are on loans originated after 2008. ‘That’s a little bit scary, because presumably, the lending industry and lending standards were much improved,’ he said. ‘Seeing that high of a percentage is a little scary.’”

“The number of people in the Seattle-Tacoma-Bellevue metro area who lost their homes to foreclosure in March jumped 67 percent from a year ago. Statewide, the number was even higher – 88 percent, according to RealtyTrac. Even as the economy gets better, people who have slipped behind on their mortgages may have a hard time saving their homes, says Marc Cote, who heads the Washington Homeownership Resource Center, which runs the statewide foreclosure hotline.”

“‘If you can’t afford to reinstate the loan, you still have to be able to work out some solution with the lender,’ Cote said. ‘Even though the economy is picking up, (if) you’re already behind on your mortgage, how do you fix that problem?’”

“Analysts say the number of Nevada properties entering the foreclosure process has almost doubled compared with a year earlier. And while we often think of foreclosures leaving families on the street, realtors say this glut is more with homes sitting vacant. ‘But the reality of it is that we have a very transient workforce in Reno. We always have. And a lot of people have had to leave for legitimate reasons - a death in the family or a move to another state or a job transfer, they’ve stopped paying their mortgages and what that’s done is leave us with vacant houses all over town,’ says Marc Sykes.”

“According to a report from the Federal Housing Finance Agency, the northwest state is experiencing a boom in underwater homeowner refinances, as the average borrower from Oregon is saving more than $4,000 per year following the implementation of the revised HARP 2.0 program last year. According to Portland, Ore.’s Capital Hill Mortgage Branch Manager Douglas Jacobson, HARP has other advantages aside from helping families get out from under debt.”

“‘(HARP) also provides a financial incentive toward items like college funds, a new pool, or a family vacation, things that previously seemed like luxuries,’ said Jacobson, regarding the program’s other benefits for homeowners.”

“In a reckless gambit, FHA is asking lenders to relax lending standards, while assuring them it will back home loans down to a 580 FICO score with a minimal down payment and high debt-to-income ratio. In fact, loans purchased, insured or guaranteed by either Fannie Mae or Freddie Mac, as well as FHA, are automatically designated ‘qualified mortgages’ under new mortgage rules issued by the Consumer Financial Protection Bureau. The new rule offers some legal protection to lenders pressured to make junk mortgages. Although FHA is the government’s new anchor subprime program, Fannie and Freddie are still backing subprime mortgages.”

“What’s more, the biggest mortgage lenders in the country, including Wells Fargo and Bank of America, are under federal mandates to advertise in minority media and offer loans to people on ‘public assistance.’ The government is actually forcing them to target high-risk borrowers for 30-year debt under threat of prosecution. They have to adopt minority-friendly loan programs over the next several years or face investigation for discrimination.”

“Some of these programs include setting aside millions in prime mortgages for minorities who, according to government documents IBD has reviewed, would ordinarily not qualify for reasons including ‘the lack of required credit quality, income or down payment’. ‘The obligation that I have is to ensure lenders using the FHA program are lending to as full a spectrum of the credit box as possible,’ FHA Commissioner Carol Galante recently said.”

“The Wall Street Journal had an interesting story Thursday about signs of life in the housing market, applauding the good news that ‘the very long housing recession is finally over, and that prices in most of the country are rising again.’ But the Journal warns there is also ‘a less desirable side to this new boom’: ‘It is fueled by the same kind of government super-subsidy for housing that drove the boom and bust a decade ago. Through Fannie, Freddie and the Federal Housing Administration, the feds now underwrite some 90% of all mortgages. Meanwhile, the Fed’s rock-bottom interest rates and its QE policies are both intended to reflate the housing market. The Fed’s goal is also to keep rates so low that investors will dive back into real estate in a search for yield they can’t get from savings accounts or financial investments.”

“The current Administration seems to think a housing boom brings prosperity, rather than being a result of wealth creation. A large home (assuming the occupant can afford it) is a manifestation of wealth, not a creator of it. Every dollar of capital that policy makers drive into housing is a dollar that won’t be spent creating the next great innovation in software or medicine or something else. Housing does fine when people are employed and wages are rising. In other words, sustainable growth in real-estate values is a symptom of a vibrant economy, not a cause.”

“It really is the 2008 bubble all over again: loose, cheap money flooding the market – and not just for low-income housing or starter homes, because Fannie and Freddie are still dishing out mortgages of $600,000 and more. This is the ‘cargo cult’ approach to economics – build the symbols of prosperity, and prosperity will swoop down to take up residence. Are we really going to learn nothing from the last time this all happened?”

It’s Friday desk clearing time for this blogger. “Starts of new houses in the Dallas-Fort Worth area were up almost 48 percent from the fourth quarter of 2011. The number of new homes on the market in North Texas is at its lowest point in 14 years. Where have all the doubters gone? Until recently, whenever I’d write about signs of a turnaround in the troubled housing market, there were always a few magpies squawking about how things were really getting no better. Of course, the gains are not across the board. They never are. I recently heard from a Frisco homeowner who says his house is still worth about $40,000 less than what he paid for it in 2007, just before the recession hit.”

“‘We are upside down in our mortgage and really do not see our value going up anytime soon,’ he wrote. ‘We also have a house that is abandoned right down the street, so I think things are not as optimistic as you see it.’ Certainly they aren’t for this guy. And about 11 percent of North Texans with a home loan still owe more than their house is worth.”

“Real estate agent Alan Castillo recently listed a client’s fixer-upper in Granada Hills for $278,250. It was only 1,600 square feet — but it drew 128 offers, most of them in cash. The final selling price, after all of 10 days on the market? $377,872. ‘I was very surprised,’ said Castillo.”

“While that particular transaction may be an extreme example, it reflects a Southern California housing market that is emerging from the late 2000s crash. For 2013, real estate experts say it’s time to get ready for a new normal, or, perhaps more accurately, a new abnormal.”

“Florida led the nation in foreclosure activity last year, and Orlando had the second-biggest increase in foreclosure filings among the state’s major metro areas, according to a new report. The Orlando area had a 64 percent increase in filings during a year. The news comes as Orlando homeowners and real-estate professionals were celebrating a year that had ended with a small increase in the number of existing-home sales and double-digit percentage increase in prices. ‘The [foreclosure] filings that we see now are really not connected to the market, because they’re not going to get on the market for two years,’ said John Tuccillo, chief economist for Florida Realtors.”

“Francisco Molina, a struggling south Orange County homeowner, said Central Florida would not be besieged by foreclosures if lenders were more willing to modify their mortgages. Molina put $180,000 down on his four-bedroom home when he bought it in 2005 at the height of the homebuying frenzy. But since 2009 he has been trying unsuccessfully to get the lender to reconfigure his monthly loan payments so he can better afford them. ‘I have waited and waited and waited for them to approve it,’ the rental-car employee said.”

“A sagging economy and a lousy housing market have made leaving Arizona more popular than moving to it in recent years, a leading moving company’s statistics show. Here’s a Q&A on the migration issue with Marshall Vest, a University of Arizona economist who has tracked population data for many years.: Q. Why are more people moving out of Arizona than moving in? A. If you go back to 2003-05, there were several hundred more in-moves than out-moves in Arizona. In 2004, the difference was 845, which was the peak. What has changed since then is that the number of in-movers has dropped off significantly - the number of people who moved into Arizona for 2012 was only 53.5 percent of what it was in 2004. Out-movers have also declined, but only by 26 percent.”

“Q. Why are they both declining? A. It’s due to the decline in mobility that we’ve seen nationwide - it has to do with economics. People typically don’t move during recession periods because of the uncertainty about jobs. But on top of that you have negative equity positions for many peoples’ homes. Their homes are underwater because they owe more on the mortgages than the homes are worth. As many as half of mortgage holders in this and surrounding states that send us the preponderance of our immigrants - they have not been able to sell their homes. Therefore, they are unable to move.”

“So far it’s looking like a soft landing for Canada’s housing market, analysts, economists and realtors generally agree, despite the fact home sales were down 17.4 per cent in December over a year earlier. According to the CREA figures, almost every major Canadian city saw double-digit sales declines. With a typical house in Toronto now costing about seven times median income, and a staggering 10 times median income in Vancouver, the cooling of the market should allow wages to start to catch up, says Bank of Montreal economist Sal Guatieri.”

“‘If we do see the spring market roaring back, in some ways we would be comforted, but I think we’d be more worried about the possibility of a bubble and that could trigger a further tightening of mortgage rules which could hit as interest rates do start to move up over the next few years,’ he said.”

“Housing analyst Ben Rabidoux thinks it’s too early to know if Vancouver and Toronto can avoid hard landings and substantial price declines, given baby boomers aren’t driving sales in big numbers anymore and the new mortgage rules have knocked buyers out of the market. ‘It’s a soft landing at this point, but if we continue to see sales trends (downward) like this, it will impact prices. A soft landing and a crash both start the same way.’”

“Britain’s biggest house builder is in rude health. In a trading update on Wednesday Barratt Developments said pre-tax profits in the first six months should more than double to £45m. Contrast this with 2008 when the company almost went bust. But through the goodwill and economic sense of the taxpayer, via Gordon Brown’s office in the Treasury, Barratt was saved. The government told the banks to lay off indebted businesses, especially property firms (to save the housing market). It also came up with a £1bn lending scheme and grants for the building industry.”

“It wasn’t the only one. Hundreds of building firms eased their way back to health with government cash. The banks are doing the same, namely rescuing their old business models and executive bonuses with profits built on taxpayer support and overcharging customers. It seems governments of all colours believe the only way to kickstart the economy is to allow the institutions that made most of the profits in the boom – the banks and property developers – to get back on their feet with free money from the taxpayer so they can rip off their customers again.”

“It’s the same old problem and probably means another property/banking crash is coming down the track sooner than we think.”

“According to figures from the Beijing Municipal Commission of Housing and Urban-Rural Development, 260,000 flats (excluding government-subsidized ones) were sold in 2012, surging 67 percent compared to 2011. Figures from the Shanghai Urban Construction and Communications Commission showed that in December 2012, 1.1 million square meters of commercial apartments were sold, the highest number in 23 months. As transaction volume expands, property and land prices were also growing. Property developers are increasingly enthusiastic about bidding for land. For example, in land auctions held in Beijing in December 2012, land prices hit a new record high.”

“Independent economist Xie Guozhong thinks a recent recovery in the real estate market is not a true rebound, but the beginning of another bubble. ‘Sell your empty houses as soon as possible,’ he writes in his blog.”

“The re-emerging frenzy in the housing market indicates the housing regulations, which have been in place for years, have failed to achieve the expected results. It also shows there has been no fundamental change in the housing market’s speculative nature. Recent reports of the monetary authorities and the Chinese Academy of Social Sciences both say high housing prices have already seriously affected ordinary people’s livelihood and undermined their capability to buy a house. The excessively high proportion of income that ordinary people have to set aside to buy a house forces them to drastically cut their consumption in other fields, which is not good for the overall economy.”

“Skyrocketing housing prices have yielded considerable profits to developers, speculators and local governments. No wonder, some people’s wealth has increased at an astonishing pace within a few years. But the drastic rise in some people’s wealth and local governments’ fiscal revenues that a booming housing market has caused mean others, especially lower-income homebuyers, have to dig deeper into their pockets.”

“The pursuit of higher profits has prompted some people to channel various kinds of social resources into the housing market over the past decade, which is tantamount to hijacking the national economy to benefit the housing sector. The realty-dependent economic model has seriously hampered China’s efforts to change its industrial structure and transform its economic development strategy. It has also resulted in a series of social issues, ranging from serious uneven income distribution to corruption and hatred for the rich.”

“If the housing bubble continues to expand with the same momentum it has done in the past decade, the consequences will be devastating when it bursts. It would cause banking and financial crises - even economic and social crises cannot be ruled out. And if such a thing happens, it will push China into a decades-long economic recession, akin to what happened to Japan after its housing bubble burst in the 1980s.”

“In an article published in Your Investment Property’s sister publication Australian Broker last week, it was noted that the decline in home prices has already showed signs of slowing down, with some industry commentators pointing to recent RBA rate cuts as likely to ‘continue to feed through to the economy and have an impact, particularly on housing.’ But the Herald Sun’s National Economics editor, Jessica Irvine, says investors shouldn’t be swayed by trend.”

“‘To claim housing affordability has dramatically improved is kind of like saying today is stinking hot, so winter will never happen again. Interest rates move in cycles and the historical average for mortgage rates is about 7.5%,’ Irvine said. Irvine says housing in Australia remains expensive and says we ‘only have ourselves to blame.’ ‘A lucky generation of older Australians grew wealthier as house prices rose. But they did so at the expense of their children.’”

The Sun Sentinel reports from Florida. “Florida has the nation’s highest foreclosure rate for the third month in a row, according to RealtyTrac. Florida had 29,612 filings last month, up 20 percent from a year ago. Still, the number was less than half of the state’s peak: 64,588 filings in April 2009. Deerfield Beach housing analyst Jack McCabe said banks will step up efforts to complete short sales with distressed homeowners and unload foreclosed homes and non-performing mortgages to investors in bulk. What’s more, McCabe said, there are 550,000 Florida homeowners who haven’t received default notices even though they’re at least 90 days delinquent.”

“‘It’s not that the foreclosure problem has gone away,’ he said.”

The Star Banner. “The Ocala area had the dubious distinction in November of having the second highest foreclosure rate among metropolitan areas throughout the United States. The rate was the highest it has been in the past 28 months, according to RealtyTrac. Judy Ray, president of the Ocala/Marion County Association of Realtors, said the area’s foreclosures are linked to the community’s unemployment rate. ‘There are people who can’t find jobs, companies closing,’ Ray said. ‘I know people who haven’t made a (mortgage payment) in two or three years.’”

“In addition, Ray thinks that following the problems with robo-signing, banks held off foreclosing, until now. ‘There are limits for the banks. They put up with it, but that’s changing,’ Ray said. ‘And you had to be five, six months behind before the banks even took notice.’ As for the future, Ray said, ‘It’s going to stay the same. They’re not going to go away. I see more bank foreclosure filings.’”

The Tampa Bay Times. “Tampa Bay foreclosure filings jumped 40 percent over November 2011, with more than 2,000 new foreclosures and 1,000 repossessions. And in the three circuit courts governing Hillsborough, Pinellas, Pasco and Hernando counties, court data show that the number of open foreclosure cases dropped less than 1 percent between July and November, evidence of a backlog 70,000 cases deep.”

“Hillsborough Circuit Judge Herbert Baumann said case managers there are actively digging up stalled foreclosures, including some more than four years old, to push to resolution. ‘We need to go case by case and give everyone a chance to come in and explain what’s going on,’ Baumann said. ‘It’s not something we’re going to be able to dramatically reduce in a short period of time.’”

From Florida Today. “Merritt Island bankruptcy attorney Carole Bess said people involved in the housing industry have known that the waves of foreclosures weren’t done because mortgage companies were spacing out the process. ‘I think the market may have bottomed out, but we’re going to see some foreclosures of homes where the decision to abandon them was made a long time ago,’ Bess said. ‘It’s just taken a longer time to have the fallout.’”

“Banks, which have foreclosure backlogs of up to two years, are finally moving on defaulted properties and arranging short sales, said Cocoa Beach Realtor Tim Harber, 2012 president of Space Coast Realtors. ‘It’s people who have had a short sale that has been pending forever that are finally moving forward,’ Harber said. ‘I’m not seeing an increase in the number of homeless people.’”

“John Tuccillo, chief economist for the state association, Florida Realtors, said Florida has suffered more than the rest of the nation during the housing collapse and that suffering will continue. ‘We were overextended more than other places, and because of that our numbers are up and high. We are in fact still struggling with the issues that were created during the market downturn. It’s updating, but it’s not going to go away,’ Tuccillo said.”

The Florida Courier. “The tough housing market is expected to continue to be a drag on the state’s tax collections even after the economy begins to pick up in future years, according to forecasters. And forecasters also anticipate slow growth in property values over the next two or three years, with things picking up to somewhere around 3 percent a year. The lag is caused by a surge in foreclosure filings that have swamped the courts; properties that go into foreclosure now take as much as two and a half years to go from filing to the market.”

“Many of the foreclosures that happened as the housing crisis was roiling Florida still aren’t showing up in the numbers. ‘The worst years are really ahead of us in terms of hitting the marketplace,’ said Amy Baker, coordinator for the Legislature’s Office of Economic and Demographic Research.”

“She suggested during the meeting that foreclosures could still be putting pressure on property tax revenues as late as the 2016-17 budget year. After the meeting, Baker told reporters that more homeowners could also use short sales to try to get rid of homes instead of going through foreclosure. ‘At some point we think short-sales in Florida are going to pick up,’ she said. ‘They haven’t yet.’”

“Since 2007, distressed homeowners have dodged massive bills due to a tax-time saving grace: The debts they were ‘forgiven’ in foreclosures, short sales or principal reductions were also scrubbed from their dues to Uncle Sam. But that tax break is set to expire Dec. 31. Brad Bates and his wife are racing to sell their Meadowlawn home for $100,000 less than the couple owes the bank. Sell by the end of the month, and the couple could see their mortgage debt erased. Any later, and the Bates would face a different kind of debt: a tax bill soaring more than $25,000.”

“‘We’re not wealthy people,’ said Bates, 58, a retired Air Force air traffic controller. ‘That would probably force us … to file for bankruptcy.’”

“To avoid the tax, homeowners can file bankruptcy or prove to the IRS they are insolvent, with debts outweighing all they own. St. Petersburg tax problems and bankruptcy attorney Larry Heinkel said, ‘Almost everyone who is facing a short sale or foreclosure is also insolvent, so it isn’t the end of the world if the short sale doesn’t occur by month’s end.’”

“But the Florida Realtors say the expiration would discourage homeowners from selling in the first place, crimping buyers’ options and bringing ’short sales to a standstill,’ said VP of public policy John Sebree. The Realtors have called for lawmakers to extend the break, saying, ‘Homeowners shouldn’t be forced to pay tax on money they’ve already lost with cash they never received.’”

“Karen Kirchmann said she knows that agony well. After 14 months of trying to sell her and her husband’s Clearwater home, the bank finally agreed to a price $40,000 less than they owe. The couple found a buyer and wrangled a Dec. 28 closing date, but Kirchmann hears the clock ticking. Selling by the end of the year will save the couple the hardship of a $10,000 tax bill. ‘I’m beside myself. I’m exhausted,’ she said. ‘I’m expecting they’re going to screw me once and for all, at the finish line, when there’s nothing I can do.’”

From AOL Real Estate. “Although there’s no hard data on the rate of violent incidents between process servers who deliver foreclosure notices and homeowners who receive them, some who represent the servers say there’s a strong consensus that the housing crisis has aggravated the situation. Foreclosure filings more than quadrupled between 2006 and 2010, skyrocketing from 718,000 to 2.88 million nationwide, according to RealtyTrac.”

“One process server who’s observed an increase is William Greenberg, who’s delivered foreclosure paperwork for 25 years. He reports being physically attacked by an angry homeowner this year — in Florida. The property owner, an attorney, knocked him to the ground, grabbed his neck and ripped off his server badge after he tried to present him with foreclosure documents, Greenberg said. ‘It scared the hell out of me,’ the 60-year-old added. ‘I didn’t know what he was going to do. It was like he had rabies.’”

“Greenberg, who serves documents in the counties of Palm Beach, Broward and Miami-Dade, said that because of the foreclosure epidemic such incidents are much more common than they used to be. He said that he serves ‘10 times’ as much foreclosure paperwork now than he used to. But Greenburg said that the sky-high number of foreclosures isn’t the sole reason behind the rising aggression that he sees toward process servers. He thinks that borrowers are also generally more hostile than they used to be.”

“‘Now it’s different. Now they are pissed off,’ he said. ‘They’re looking at us as if we’re the ones that are the problem.’”

A report from the Northwest Florida Daily News. “The number of homes sold in Okaloosa and Santa Rosa counties last month was lower than it was in April 2011, but there were positive signs in the local housing market. In April, Okaloosa County had a 6.7-month inventory of single-family homes on the market. That’s a reduction of more than 40 percent from last April, when the county had an 11.3 months’ inventory. Santa Rosa County went from an 11.5-month inventory in April 2011 to a 7.1-month inventory last month, while Walton County’s dropped from 17.6 months last year to 10.1 months last month. Those are decreases of 38.3 percent and 42.6 percent, respectively.”

“‘Buyers are seeing that finally the market has hit (bottom) and now it’s starting to bounce and they’ve got to get in if they’re going to get in at the bottom,’ said Judi Rutland, president of the Emerald Coast Association of Realtors.”

From TC Palm. “Like many Treasure Coast residents looking to buy a house, Mike Musitano isn’t sure when to jump in. Musitano said his biggest concern is housing values will fall further because of the so-called ’shadow inventory,’ homes in foreclosure that have yet to come onto the market. Concerns about the shadow inventory flooding Florida’s real estate market are ‘greatly overrated,’ Florida Realtors Chief Economist John Tuccillo said in a report. Tuccillo said lenders have no reason to flood the state’s real estate market with more homes if doing so would drive prices down and reduce the lender’s profit.”

“Veteran appraiser Bill Pittinger said the housing market has hit a bottom in the sense that the free fall in prices is over. ‘Still, we can expect at least another 18 months of erratic behavior where prices rise or fall by 2 to 5 percent,’ Pittinger said. Even once that happens, Pittinger said, a quick rise in prices in not likely.”

“‘We are more likely to bounce along bottom for quite some time,’ he said, noting that it took 19 years after the Great Depression of the 1930s for prices to regain pre-Depression levels. Pittinger said anecdotal evidence of rising prices is the result of declining inventory, not necessarily an increase in overall values.”

“Jack McCabe, CEO of McCabe Research & Consulting LLC in Deerfield Beach, said nearly 800,000 of Florida’s 11.1 million homes are in distress and will be have to be sold in foreclosure or short sales. ‘Until they’re sold or taken off the market, we’re not going to see prices bottom out,’ McCabe said. McCabe said 70 percent of Florida home sales are for cash to foreign investors. ‘That’s not an indication of a healthy market,’ he said.”

From Marco News. “The median price increased 22 percent overall from $185,000 in April 2011 to $226,000 in April 2012, according to a prepared statement that Naples Area Board of Realtors released. ‘While Naples’ total inventory is down to 7,130 units, the number of open foreclosure cases and mortgage loans that are 90 days or more past due dwarfs the Realtors’ listed inventory,’ McCabe said. ‘It’s my opinion that over the next year we are going to see fewer foreign buyers and an increasing number of distressed properties for sale that will have a negative impact in housing prices.’”

The Herald Tribune. “Since 1992, when he became Manatee County’s Property Appraiser, Charles Hackney has run unopposed in elections. In addition to overseeing a staff of 50 appraisers and IT specialists, he sits on the board of three non-profit foundations. Correspondent Chris Angermann interviewed him at his office in Bradenton. Q: How did the housing bubble affect you? A: They don’t tell you in the books for appraisals what to do when values are declining. With far fewer sales than in a typical market, it has been a real challenge. We’ve had neighborhoods where there weren’t any sales for two or three years.”

From Jacksonville.com. “Homebuilders pulled more permits in St. Johns for the first time in 2011. In the first four months of 2012, the gap widened with St. Johns racking up 566 permits while Duval had 345. Julington Creek homeowner Chuck Forcier said as long as the county stays ahead of the growth curve for its schools and recreational areas, he thinks families will keep moving in. He said what the county needs is more businesses to match the increase in residents.”

“‘The one thing I worry about,’ he said, ‘is where are all the people going to work?’”

The Tampa Bay Tribune. “Wells Fargo senior economist Mark Vitner likes what he sees in coastal southwest Florida. When the housing bubble sent area home prices soaring, Midwesterners who had served as prime buyers for that part of the state got priced out of the market. Not anymore. ‘Some people recognize Florida is a bargain again,’ Vitner says. People are buying housing here and can even do so now without the need to sell their own homes.”

“So what is Florida’s biggest change ahead? Responds Vitner: ‘We will be less dependent on growth itself.’”

“If Florida can grow more internally, the state may one day be able to shuck its unfortunate nickname: the Ponzi State. The state was so dubbed for its historical dependence on the wealth of newly arriving people to sustain the costs of the ones already here. ‘Ponzi State’ headlined a 2009 New Yorker magazine story by George Packer (who credits USF history professor Gary Mormino for the Ponzi reference).”

The Sun Sentinel. “More than 18,000 Canadians own homes — many of them beachfront condominiums — in Broward County as of last year, according to an analysis of Florida Department of Revenue tax data. That’s nearly triple the number from 2006. Less than two weeks ago, Toronto resident Mario D’Orazio bought a condo in Playa Del Mar on Galt Ocean Mile in Fort Lauderdale for $335,000. The two-bedroom unit needs major renovations — ‘It still looks like 1975 when you walk in,’ said D’Orazio, but it has a spectacular water view. He plans to vacation there three or four times a year.”

“The big price declines have eased and values are starting to climb. Canadians have noticed the recent price increases, said D’Orazio’s real estate agent, Michelle Farber Ross. About three-quarters of her business is Canadian buyers. ‘If they’re going to buy a piece of the South Florida lifestyle, now is the time to do it,’ she said.”

“Despite the recent rise in home prices, four in 10 Palm Beach County mortgage holders owe more than the properties are worth, Zillow says. For now, an underwater mortgage ‘is only a paper loss,’ Stan Humphries, chief economist for Zillow, said in a statement. Values will continue to rise in the months and years ahead, he said.”

“The figure, 43 percent, is up slightly from a year ago, and the lost value totals $11.1 billion. Nearly a third of the 107,482 ‘underwater’ homes are worth only half of what’s owed, Zillow said.”

The News Press. “A recent settlement marks the end of a three-year legal standoff between the loneliest condominium dweller in Fort Myers and a one-time billionaire developer. Weehawken, N.J.-based firefighter Victor Vangelakos, closed on his unit in the 32-story, waterfront Oasis I condo on the east edge of downtown for $430,000 in November 2008. Of the few who hung in, all but Vangelakos agreed to swap their units for similar ones in Oasis II next door.”

‘But Vangelakos, unable to persuade his lender to accept the swap, chose to stay in the otherwise deserted Oasis I. He sued Related to get his down payment back. He still owns the two-bedroom, two-bath unit, but it’s now worth only $108,300, less than a fourth of the original price, according to the Lee County Property Appraiser’s office.”

“Vangelakos and his family had the run of the place when they came to vacation, but the place was creepy: The silence of the tomb settled in when there was a pause in a conversation.”

“Vangelakos’ attorney, John Ewing, said that under a confidentiality agreement in a settlement of the lawsuit, neither side is allowed to comment. But he said the case was one of a rash of similar lawsuits filed after the real estate bubble burst at the beginning of 2006. ‘There’s no condo recovery litigation that’s new,’ Ewing said. ‘There’s a lot that’s been going on for two, three, four years.’”