September 1, 2014

After Years Of Booms And Busts: Don’t Panic

The Los Angeles Times reports from California. “Interest rates on an average 30-year fixed-rate mortgage hit 4.1% this week, a low for the year, according to Freddie Mac. It’s helping to ease the pain of home prices that have climbed by one-third in Southern California over the last two years. When rates start to rise, there may well be a flurry of sales as buyers rush to lock in lower payments while they still can, said Mark Goldman, a mortgage broker who teaches real estate at San Diego State University. In the long run, Goldman and other market watchers say, higher rates may help to damp home sales, which are already running well below historical averages. But they’ll be balanced out by clearer lending guidelines and slightly looser credit requirements.”

“And mostly, Goldman said, they’ll be taking place in a market that — after years of booms and busts — appears to be behaving somewhat normally. ‘We’re in a period of extraordinary equilibrium right now,’ he said. ‘Don’t panic.’”

The Marin Independent Journal. “Flips have dropped significantly in Marin, from a high of 7.2 percent of all home sales in the last three months of 2012 to 4.8 percent of all sales in the second three months of 2014, according to RealtyTrac. ‘I’m cautious going into next year,’ said Brett Foley, who makes his living flipping. While Foley has prospered, leaving a job managing construction crews to flip full-time, this house and another he’s remodeling in Mill Valley could be his last hurrah.”

“‘We’ve had an incredible year and a half, almost two years. Nothing lasts forever, so is it going to level off? Absolutely,’ said Bob Ravasio of Coldwell Banker.”

The Independent. “Joe and Debbie have owned their Mission San Jose home for over 20 years. When a neighboring house similar to their 4-bedroom rancher sold recently for $1.4 million, the couple started thinking it might be time to cash in. They have long wanted to live in Livermore, and the sale of their home would make the move easy. But they won’t necessarily buy here. They may decide it’s time to rent.”

“Their daughter already rents here, paying $1,800 a month for a charming 2-bedroom bungalow in Old North Side. She would love to purchase her own home. Something similar to the house she currently lives in would likely sell for about $450,000.”

“‘Home ownership is still important for the country. It’s the most proven way to build equity and it gives families security,’ David Plouffe, former advisor to President Obama and incoming VP of Uber, said in a recent interview with Realtor Magazine. ‘It doesn’t mean it’s right for everybody. We live in an economy where people who are in their 20s are going to have eight or 10 jobs and will move around a lot. It’s different than it was a couple of generations ago, when you bought a home, planted roots, and you were going to be there forever,’ he added.”

From KUSI News. “The average price of a typical home in San Diego is $625,000 while the national average, according to the USD Burnham Moores Center for Real Estate, is $175,000. Many renters who want to take the leap to home-ownership are sitting on the fence right now because they are worried there will be no net to catch them when they make the leap to buy a home. Real estate agent Sean Hillier says it’s hard to find properties to show. ‘Right now market is kinda slow for summer, but a lot of home buyers are kinda hanging back saying I think things are kind of overpriced here,’ says Hillier.”

“Real estate experts say home prices are almost as high as they were at the peak of the market in late 2005. Norm Miller says, ‘There are about 8,000 listings, and less than 250 are in the affordable range.’ If interest rates are so low right now, why can’t people buy homes? With minimum desired credit score of 620 and a down payment of 20%, when wages have not gone up for many, it is just not feasible right now. ‘If you have aspirations for a high quality larger home, I don’t see it in San Diego county,’ says Miller.”

The Union Tribune. “Tens of thousands of San Diego County homeowners continue to owe more on their properties than they are worth. In the second quarter of this year, there were 46,585 county homeowners underwater on their homes, Zillow reported. Those with negative equity make up about 10 percent of property owners in the county who have a mortgage, down from 21 percent in the second quarter of last year. The homeowners were underwater despite an increase in the county’s median home price of more than $100,000 over the last two years.”

“‘There were a lot of people that got caught at the top (of the housing bubble),’ said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. ‘During the run-up, people were just out at a frenetic frenzy in 2006 and 2007. They didn’t care what price they paid for property.’”

The Record Bee. “The impact of Mortgage Electronic Registration Systems (MERS) on county records was a topic of interest during the Lake County Board of Supervisor meeting on Tuesday. District 3 Supervisor Denise Rushing requested the issue be placed on the agenda after hearing from several local residents during public comment at previous meetings regarding the unlawful foreclosures. According to Larry Anderson, 76, of Kelseyville, Bank of America has been using MERS to foreclose on his house, as well as the houses of his neighbors. ‘It affects a lot of seniors,’ Anderson said. ‘What MERS is doing is proven fraud.’”

The Press Enterprise. “Were it not for the catchy real estate listing, an apocalyptic bunker near Barstow that was built in the Cold War would continue to be relegated to a life of obscurity. Now, in the face of drought, raging fires, earthquakes, super flu and conflicts in Ukraine and the Middle East, Kevin Layne put out there: ‘Here’s that 8,100-square-foot underground bunker in the Mojave Desert … that you’ve always wanted,’ he wrote on Twitter, linking to a $750,000 listing for the 3-story underground abode.”

“Broker James Langley, a co-owner of Kursch Group in Victorville, said his client, Gil Stoffels, bought the desert bunker in 2006 as an investment and put it on the real estate market about a year ago. ‘He’s ready to sell,’ Langley said, and a recent $200,000 price reduction is meant to draw buyers in. Stoffels said he bought the communications center on a ‘total fluke’ when it seemed everyone was flipping homes for profit.”

“The self-described entrepreneur who got his start in the logging business and the ’school of hard knocks,’ and now invests in properties, was taken in by its originality. ‘I don’t need to sell the bunker, but I’d like to,’ Stoffels said. ‘I haven’t, so far, because I’ve gotten a boat-load of ridiculous offers.’”

When The Harmless ­Bubble Becomes A Malevolent Force

A holiday desk clearing post. “For a while in the wake of the housing crash, the answer was pretty clear: If you could swing it, buy now. But things have changed rapidly. Prices in Southern California have climbed by a third in two years. The post-crash bargain bin has been picked clean. Yet doubts linger about the health of the housing recovery, and the broader economy. Cedric Shen and his wife have been ‘aggressively looking’ for a house to buy for about three months, but they’ve yet to put in an offer. ‘We’re fully qualified for a loan. We’ve got good credit and no debt. You’d think it would be easy,’ he said. ‘But you’ve got inventory issues, and you’ve got prices that seem ridiculous.’”

“I’m just going to come right out and say what everything is thinking: What the @#$% is going on with home prices in Orleans Parish? It’s getting crazy out there. I’ve been seeing listings of renovated homes for over $300 per square foot on the edge of Central City. A ‘fixer-upper’ needing a ‘total renovation’ on the edge of City Park recently hit the market for $700,000. These prices can’t be sustainable in the long-term. As of 2012, the median household income for Orleans Parish was $34,361, compared to $44,379 for the metropolitan area and $51,371 for the U.S. as a whole. Those incomes can’t support this housing market.”

“Three years into South Florida’s impressive housing recovery, demand for existing condos is showing signs of sputtering. Michael V. Smith, an agent with Fortune International Realty, said the spate of new condo towers launching one after another has an unreal air, reminiscent of the last boom that turned bust. ‘It looks a lot like 2004 or 2005. I’m Miami’s biggest promoter, but you’ve got to step back and be realistic,’ said Smith, who estimates he attends a fancy condo launch party every couple weeks.”

“House prices have stagnated and sales are stalling as Britain’s residential property market shifts in favour of buyers rather sellers. ‘We’ve reached the usual point where buyers go no thanks,’ said Ed Mead, the managing director of estate agent, Douglas & Gordon. ‘Whenever this happens there’s a three-month hiatus whilst sellers readjust their sights. Asking prices had overshot and a plateau in selling prices to be expected.’”

“Richard Kurland, an immigration lawyer who works with wealthy investors from mainland China, has looked at July real estate figures and suggests they may offer a glimpse at an important shift in Vancouver’s housing market. He says listings are up in certain segments while sales are looking stagnant. The figures for single detached homes on Vancouver’s west side in the $3-million to $3.5-million price bracket show 106 active listings and just nine sales, compared with 73 listed homes and 7 sales during July, 2013. ‘Right now, these numbers are showing blood in the water – and the sharks haven’t sniffed yet,’ Mr. Kurland said.”

“At the same time, Mr. Kurland adds, there is a serious corruption crackdown in China, as well as signs that Canada and China may upgrade a tax treaty some time in the fall – which could lead to more information-sharing between Canadian and Chinese tax officials. ‘Those things taken together, I think, are forcing the rich to dispose of high end Canadian residential property,’ Mr. Kurland says.”

“Property launches China are set to surge in the latter half of the year with developers sticking to their schedules despite mounting inventories, spelling double trouble for a market hammered by months of falling prices. Among the four top-tier cities, the overhang for Beijing and Shenzhen stands at 19.8 months and 20.4 months, respectively, up 129 percent and 122 percent from a year earlier. ‘Our industry has been spoiled. Why does it expect inventory to appreciate after sitting there for one, two years? If it’s a piece of electronics it will become very cheap,’ said Yu Liang, president of China Vanke, the country’s largest residential developer.”

“Housing sales dropped by 37 per cent in Delhi-NCR during the first six months of this year, according to Knight Frank. Knight Frank said nearly 1.67 lakh units remained unsold in the NCR market in June and it would take more than two years to sell these unsold inventories. Executive Director Rajeev Bairathi said there is no effective increase in residential prices after taking into account the benefits offered to buyers under subvention scheme and freebies. ‘No developers want to reduce basic selling price (BSP). If they will do that, it will start downward spiral. Builders come up with interest subvention scheme and freebies to boost sales,’ Knight Frank India national director-residential Mudassir Zaidi said.”

“Lindsay David may sound crazy ­comparing Australia’s banks to Lehman Brothers and Bernie Madoff. But in his mind, it’s everyone else who is living in a ‘Disneyland’ delusion by failing to spot a bank-led property bubble that shows no sign of deflating. It’s ‘the sheer size of the loans relative to the incomes here’ that troubles Mr David. ‘No one in the Western world has ever done what we are doing.’”

“The median house price to income of Sydney is nine times, compared to 6.2 times in New York and 7.3 times in London. Even Adelaide is more expensive than New York on price-to-income basis. He is particularly troubled by the surge in asset values in his Sutherland Shire neighbourhood, where land is changing hands for more than $1 million. ‘I have never seen so many Range Rovers in the Shire. It’s a small world out there and you know they haven’t become millionaires overnight. It’s eerily similar to Miami [in 2005 before the sub-prime crisis]. It feels like Groundhog Day,’ he said.”

“Cash sales continue dominate the recovering Las Vegas housing market—but many realtors in Sin City say it’s a dwindling trend. ‘The time to buy was a year ago,’ Brent Dana, owner of Dana Realty Group said. ‘It’s gotten too expensive for investors; now they’ve moved on to New Mexico and Texas and they’re buying cheap there.’”

“Ask any parent: kids love bubbles. The heaven-sent air-filled soapy wonders provide hours of cheap entertainment and nobody ever gets hurt. Put the word ‘asset’ or ‘financial’ before it, however, and the harmless ­bubble becomes a malevolent force. And these ferocious froth balls appear to be everywhere. Years of cheap credit explain the latest bonanza, most agree, while the hunt for yield is pushing investors and asset prices into uncharted waters. But are these ­bubbles? And would you recognise a bubble if you were caught inside one?”

“‘Bubbles have their own momentum,’ Harry Dent, best-selling author says. ‘The more prices go up, the more people say: ‘Gosh, how am I going to miss out on this?’ Therein lies the conundrum. As millions of would-be property ­owners around the world can attest, the only thing worse than being trapped inside a bubble when it bursts is not being in it while it’s expanding. But be warned: bubbles are not kids’ play. ‘Every bubble bursts,’ Dent says. ‘There are no exceptions in history.’”

Bits Bucket for September 1, 2014

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August 31, 2014

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August 30, 2014

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August 29, 2014

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August 28, 2014

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August 27, 2014

Paranoia About Buying At The Top

The Marin Independent Journal reports from California. “Marin home prices edged up 5 percent in July. The median price of a single-family home was $960,000 in the county, and 276 homes sold this July, compared with 325 in July 2013, according to CoreLogic DataQuick. Sales were down in most Bay Area counties, plummeting 7 percent in the area overall and 33 percent in San Francisco. ‘There’s a whole range of thinking’ as to why so few homes are on the market, said Jeff Sterley, a Pacific Union agent. One reason, he said, is that ‘people want to see their price come back to at least the amount it was at the former peak.’ Prices peaked around 2006 and then plunged, coming back around 2012. Sterley believes these would-be sellers are watching and waiting to make a move, and many will make that move in 2015.”

“‘People who want to retire and move out of Marin and are ready to downsize will feel more comfortable once the nest egg has been restored. There are people who will get strong appreciation in 2015. They are going to feel they are in a position to make a move once they have gotten their equity back plus,’ Sterley said.”

The Union Tribune. “The yearly growth in home prices continued to slow in real-estate markets across the United States in June, and San Diego’s was no exception. Michelle Silverman, a La Jolla based Realtor with Berkshire Hathaway, said she’s seen the market slow as higher inventory has made buyers more sensitive to price. ‘I think the move-up buyer isn’t moving up right now,’ she said. ‘They’re looking at what I have, and what is out there, and do I want to make that stretch right this moment?’”

The Los Angeles Daily News. “Housing inventory surged again in July in the San Fernando Valley from a year earlier. Last month, the Valley’s supply of properties for sale jumped 27.5 percent — from 1,470 in July 2013 to 1,874 — said the Van Nuys-based Southland Regional Association of Realtors, noting a two-and-a-half-month supply at the current sales pace. The year-over-year inventory increases began in July 2013, and they have been more than 20 percent each month since October, the association said.”

“Prices continued moderating last month. In July, the median home price increased 3 percent, from $505,000 a year ago to $520,000, but a drop of 3 percent from June. Sellers are becoming more realistic about setting prices, buyers are becoming more selective, and multiple offers, common a year ago, are rare now, association CEO Jim Link said. ‘They have a choice for the first time in a while, and they will not overpay. There are still a lot of people in the market who are sensitive to the last (price) run-up, and there is also some paranoia (about) buying at the top,’ Link said.”

“In the smaller Santa Clarita Valley market, home sales fell 4 percent — from 221 a year ago to 212 in July, an increase of 12 percent from June. The median house price there increased 8 percent, from $430,000 a year ago to $465,000 in July, but declined 3 percent from June. Inventory in the market, though, soared 48 percent, from 492 to 726 properties. ‘The rapid price rise had to moderate,’ Nancy Starczyk, president of the association’s Santa Clarita Valley Division, said in a statement. ‘Each tick up in prices locked more prospective buyers out of the market. Some owners still mistakenly expect prices to keep going up, up and up, yet that’s not realistic.’”

The Orange County Register. “What’s up with mortgage rates? Jeff Lazerson of Mortgage Grader in Laguna Niguel gives us his take. ‘From rate sheets hitting my desk that are not part of Freddie Mac’s survey: Locally, well qualified borrowers can get a 5-year ARM at 2.875 percent with 1 point, borrowing all the way up to 1 million dollars in loan amount or add 1/4 percent to 3.125 percent in rate and get a loan amount to 2 million dollars. I have a confession to make. Today’s flat prices are going to start falling pretty hard after the first of the year – when the Fed starts raising short-term interest rates. Uncle Sam is the leading suspect behind the crisis of home affordability.”

“If you need to sell between now and the next two years, sell now. List your home at fair market value. There’s too much competition in the market to do otherwise. According to Steven Thomas of, the number of Orange County property listings now is 8,000, compared to 5,869 one year ago. He observed, ‘Buyers are second-guessing purchasing altogether.’”

“The U.S. government controls 90 percent of the U.S. mortgage market. In one form or another, a tremendous amount of unnecessary and unaffordable rate and points are added to your mortgage with no change to this thinking in sight. Housing is sinking, for one, because of this expensive anchor around every borrower’s neck.”

The Desert Sun. “Trying to sell a home in the Coachella Valley? Soon, fewer agents outside of the desert may see it. The desert’s largest group of real estate agents plans to remove its property database from a giant pool of regional listings across Southern California. The split goes live Wednesday, eliminating access from agents in the Inland Empire and Los Angeles, Ventura and Orange counties.”

“But the move concerns outside agents, who say making data more exclusive will hurt home prices and hinder their ability to sell a desert home. Laura Steelman, a La Quinta homeowner, wants to eventually sell her 3,000-square-foot house in a gated community. She’s now concerned that fewer buyers will see her property, leading to fewer bids and offers. ‘It’s a disservice for the homeowners in the valley,’ said Steelman, an assistant to an Orange County broker. ‘A lot of owners here come from not only out of the state, but out of the country, so how does that work?’”

“‘We want those prices to go up,’ said John Stewart, an individual investor from Orange County who flipped two desert homes in the last two years. ‘By having this kind of closed system where you exclude other agents, the 100,000 agents from the rest of Southern California from seeing your properties, how can it not affect sales?’”

Bits Bucket for August 27, 2014

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August 26, 2014

Snapshot: The Romance Only Works In A Rising Market

The Daily Mail reports from the UK. “One in five of the 171,000 loans taken out in the second quarter of this year had a term of 30 years or longer, according to the Council of Mortgage Lenders. Among first-time buyers the figure was even higher, at 28 per cent. Ray Boulger, of mortgage broker John Charcol, said: ‘Is there anything inherently wrong with 30-year mortgages? No, it depends on individual circumstances. The idea that a mortgage has to last 25 years is outmoded. Most people will be better off with a long-term loan, if the only alternative is renting.’”

This is Money UK. “Falling temperatures have put summer on hold — and our overheated housing market is following suit, cooling so rapidly that thousands of sellers are slashing prices. Rightmove says the average asking price of a home on sale in England or Wales has plummeted £7,750 in four weeks. That’s a 2.9 per cent fall, the biggest ever in August. London was the worst-hit region with prices collapsing 5.9 per cent in one month. In July alone, there was a 20 per cent surge in homes on the market, meaning supply now significantly outstrips demand in certain areas.”

“‘This is evidence of a summer sales mentality. We expect more price falls next month,’ says Rightmove’s market analyst, Miles Shipside, who believes the sharp price decrease is down to the public realising ‘a five-year holiday of low interest rates is coming to an end.’”

The Khaleej Times. “Johan and Alejandra are the kind of Swedes the IMF has been warning about - piling up debt to keep up with an ever-rising property market and fund a lifestyle of travel, maids and nights out. The couple plan to buy a flat in Stockholm for five to six million Swedish crowns (724,000 to 869,000), initially with an interest-only bank loan, among other spending plans. ‘I may travel, I may want to invest in a new business,’ said Alejandra, who runs a cafe in the city centre.”

“Four in 10 mortgage borrowers in Sweden are not paying off their debt, and those that are repaying the principal do so at a rate that would on average take nearly a century. Swedish property prices have nearly tripled in just two decades. In July, home prices rose at a double-digit pace from a year ago - the first time in more than four years.”

From Todays Zaman. “Sales of new houses fell for the sixth straight month in July, the Turkish Statistics Institute announced. In July, the number of houses sold was down by 20.2 percent compared to the same period of the previous year. In the same period, mortgage house sales also dropped by 32.9 percent year-on-year. July’s drop in house sales is a remarkable one, pundits argue, adding that upcoming months could see even sharper declines in sales.”

“‘It is not hard to predict further declines in house sales through the end of this year amid increased debts, low demand and high prices. … The housing markets face bigger risks,’ Yeliz Karabulut from securities company ALB Menkul Değerler told Today’s Zaman. She recalls that the Turkish construction companies had TL 95 billion ($43.6 billion) in unpaid debts in June, adding that this was an astounding 61 percent rise over the end of 2012, when the figure was TL 59 billion.”

“Cemal Gökçe, president of the İstanbul branch of the Chamber of Civil Engineers, told Today’s Zaman that housing sales would drop more than 20 percent during the last five months of this year. ‘The current picture reveals serious structural problems in the Turkish housing industry… there are not enough affordable units for the lower class,’ Gökçe said. He also referred to the growing risk of a housing bubble in Turkey markets. ‘The number of housing units on sale has exceeded the 1 million mark in Turkey; prices are high and this is not a sustainable situation.’”

The Business Recorder. “Many of Brazil’s biggest retailers, homebuilders and carmakers are cutting jobs as Latin America’s largest economy teeters on the edge of recession. Now jobs are disappearing in retail, construction and food processing, which had been reliable engines for growth and new employment over the last decade. In Bahia and Pernambuco, construction companies have cut over 14,000 jobs this year. New project launches by homebuilders in the second quarter, a leading indicator for construction jobs, fell 25 percent from a year earlier, according to J.P. Morgan Securities analysts. ‘There is no outlook for improved hiring among builders by the end of the year,’ said economist Danilo Garcia.”

The Sun Daily in Malaysia. “As part of an effort to curb speculative buying of properties by investor clubs, which is one of the causes of runaway prices of properties in the Klang Valley, Local Government Minister Abdul Rahman said developers who intend to sell more than four units to a purchaser must obtain prior approval from the Controller of Housing. According to him, the market has slowed down considerably with developers’ sales falling 50% so far this year. In Sabah, the Sabah Housing and Real Estate Developers Association (Shareda) announced a 65% drop in sales.”

“‘The romance has left the group buying clubs because it only works in a rising market…the lure of group purchase is not so much there anymore,’ he said.”

“‘Between 2011 and 2013, the market rose too high, too fast and too quickly. Now the market is screeching to a halt,’ said Malaysian Institute of Estate Agents president Siva Shanker. He said talk of a property bubble, property prices rising and responsible lending guidelines have created a negative market perception, which has slowed down the market but values are still ‘grossly inflated.’ ‘The market is in a tailspin and it has yet to recover,’ he told SunBiz.”

Want China Times. “China’s authorities have taken anti-corruption measures up a notch by mandating all government officials register their real estate on a digital platform. Officials with multiple properties have already begun dumping onto the market, reports our Chinese-language sister newspaper China Times. Zhang Xu, a real estate analyst said that the information platform might cause multiple house owners to undersell their properties. Zhou Feng, a manager at real estate firm Man Tang Hong, said that the demand for houses has been declining in the past few months, but that owners began underselling their properties several years ago when the war of corruption was first declared.”

The Globe and Mail in Canada. “One of the largest real estate companies in British Columbia says that more than one-third of all the single-family detached homes it sold last year went to people with ties to mainland China. Those buyers, the company added, tended to spend more money, too, with the average cost of a house sold to these clients topping $2-million, compared to $1.4-million on average overall. Richard Kurland, a Vancouver immigration lawyer who works with wealthy Chinese immigrants, believes Vancouver may see a slowdown in foreign investment. He said some wealthy Chinese buyers might get anxious and sell off second properties because of the current crackdown on corruption in China.”

“In meetings with top real estate agents earlier this year, Mr. Kurland predicted that luxury residential real estate could drop in value by as much as 25 per cent as foreign investment dips. As evidence, he points to July real estate figures that showed 106 homes for sale on the west side in the $3-million to $3.5-million price bracket, and just nine sales, compared to 73 active listings and seven sales during July of 2013.”

Bits Bucket for August 26, 2014

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August 25, 2014

HBB Snapshot

I’ve been running into a problem due to my schedule and the news flow. It’s that I find many interesting housing bubble related articles, but not enough to create a typical HHB post. Then time goes on and I end up putting 40 or more links into the desk clearing post, even while I may not have weekday posts. So I’ve decided to try a snapshot of what I find most interesting on any particular day. I’ll keep it around 6 links, and call it the HBB Snapshot.

The Credit Union Times. “Investors may be pouring less cash into houses, according to RealtyTrac. Matt Kershaw, VP for sales and mortgage lending for the $531 million Clark County Credit Union, said his Las Vegas institution has booked about $15 million in purchase money loans so far in 2014 and that this is about 30% less than last year. CCCU has seen investor activity peak and then retreat, Kershaw said. ‘It was a more substantial problem during 2012 and 2013, but during 2014 the cash investor has backed out of the market,’ he said.”

“Don Genevie, SVP for real estate and business lending at the $2 billion Grow Financial Federal Credit Union, reported the Tampa, Fla., institution had seen cash investors have an impact on the home aspirations of some of its 174,000 members in 2013, but the pressure had diminished somewhat. ‘I’ve been doing this 38 years, and I have never seen a market quite like this one,’ Genevie said, noting that cash investor pressure had been felt across the state and that the credit union had adopted things like commitment-to-buy letters to help a credit union member compete in bidding battles.”

“Genevie said investors had purchased so much of the existing housing stock in Tampa, the credit union worried about what might happen if the rental market began to fail, adding that he worried about whether many of the investors might conclude they need to liquidate the investment and put all their homes on the market at once. Genevie acknowledged such mass marketing would be against the investors’ own interest by driving prices down further, but there was no way of knowing what legal or organizational structures underpinned some of the investor groups that had purchased so much housing. ‘If a partnership fails or if something else happens, they could wind up selling quickly,’ he said.”

“‘The smart thing to do would be for them to release their housing a little bit at a time,’ Genevie said. ‘If they did that and released enough to move increase our housing stock to a six months’ supply, they would still make money.’”

The Arizona Republic. “New-home prices across metro Phoenix soared too high and too fast in 2012 and 2013 for many buyers to handle, leading to a slump in sales that has builders worried. Home prices have dropped slightly this summer, and builders are trying to lure buyers by offering incentives that include lower mortgage rates and free upgrades on appliances, countertops, lighting and flooring. Norm Nicholls, president of Fulton Homes, said builders have learned a tough economic lesson over the past several months. The generous incentives are one approach to attracting buyers again.”

“‘Builders are being much more aggressive with incentives to bring in buyers who have been holding off,’ he said. ‘We brought new-home prices up so hard and fast in the Valley. The past 11 months have been pretty desperate for the area’s new-home market.’”

“‘Everyone in Valley homebuilding got excited 24 months ago when the market started to show the first signs of a recovery,’ said Matthew Cody, president of Scottsdale-based Cachet Homes. ‘Big investors bought land, and prices climbed. It was all premature.’”

The Portland Business Journal in Oregon. “Data from real estate buyer Gorilla Capital suggested that the Oregon housing market will be slower to recover due to a large number of foreclosure filings that have yet to be resolved. Changes to Oregon’s mediation law prompted a flood of requests for face-to-face meetings between lenders and homeowners with delinquent mortgages, slowing down foreclosures. ‘When you’re behind on your mortgage payments by 20 to 30 months, it’s really hard to catch up,’ said John Helmick, the CEO of Gorilla Capital. ‘I wonder if people would have been better of having the foreclosure and a fresh start.’”

“Helmick said that of the homes his company researched, 87 percent were vacant when they were foreclosed upon. In most cases, the owners had long ago moved on with their lives. ‘These zombie homes are sucking the values out of neighborhoods,’ said Helmick. ‘Having a process that takes two or three years is nuts. We need to have a fast-track system for homes that are vacant. They are a blight on neighborhoods.’”

The Herald Mail in Maryland. “More than five years since the nation’s recession ended, the number of Washington County properties being hit by some sort of new foreclosure action — mortgage default notice, scheduled auction or bank repossession — has increased again. In the Tri-State, 12 percent were in such trouble in Franklin County, Pa., and 10 percent were ’seriously underwater’ in Jefferson County, RealtyTrac said. Maryland posted the nation’s second-highest state foreclosure rate in July, for the sixth straight month, RealtyTrac said.”

“Of those homeowners who meet with counselors, there are new clients ‘and we also have repeat ones,’ said Hagerstown Home Store Director Vicki Bender. The repeats ‘may have gotten a (loan) modification three years ago and even though our counselors went over that with them and did a budget with them, (such clients) are coming back to try to go get another modification,’ she said.”

“‘Usually, they don’t get another one’ because their lender has already tried to give them a break, by lowering their mortgage’s interest rate so their monthly payments are more affordable, Bender said. It’s frustrating ‘because we really shouldn’t have any repeats,’ she said. The loan is modified and a personal budget plan is worked out so that the homeowner can keep his or her home, she said. While working with the counselors, the borrowers are saying ‘like, ‘Yeah, we’ll do that,’ Bender said. ‘Yet (when they come back as a repeat client), we go over their finances and you see they haven’t curbed any of their expenses.’”

From CNET. “As tensions in San Francisco between the tech haves and the resident have-nots erupt in public disputes, entrepreneurs are realizing a lean startup can grow anywhere. The added incentive for nabbing talent outside the main tech hubs: Companies can get top smarts on the cheap. And lower salaries mean lower overhead, which eases the pressure to raise money. For Robbie Allen, CEO of Automated Insights, a house hunt in Silicon Valley, a region between San Francisco and San Jose, changed his thinking about California.”

“‘We kept driving and driving, and the neighborhood became seedier and seedier. It was a million-dollar home and we wouldn’t get out of that car,’ he said. ‘That did it. With that kind of money in North Carolina, you can live in style.’”

“The added incentive for nabbing talent outside the main tech hubs: Companies can get top smarts on the cheap. And lower salaries mean lower overhead, which eases the pressure to raise money. ‘We can pay them half to a third as much as you have to pay in New York,’ Allen said.”

The Associated Press. “Bank of America’s record $16.65 billion settlement for its role in selling shoddy mortgage bonds — $7 billion of it geared for consumer relief — offers a glint of hope for desperate homeowners. But consumer advocates say relatively few people will be helped relative to the devastation triggered by the mortgage bonds. Only a fraction of homeowners would be eligible for refinancing under the settlement. And the process by which people would qualify and receive aid could drag on for years, with payouts set to be completed as late as 2018.”

“Monnette Holland had been anxiously waiting the settlement, wondering if it might save her four-bedroom home in Franklin, Virginia. Holland had refinanced her house in 2006 with Countrywide, a firm that was later bought by Bank of America. Holland used the proceeds from the refinancing to pay off auto loans and install a new roof and windows. But then her husband was forced into an early retirement at a paper mill. And Holland had to go on disability. The couple tried and failed several times to modify their mortgage, only to learn that its owner kept changing.”

“As an alternative to foreclosure, Holland listed her house — worth $270,000 at its peak — for less than $90,000 in a short sale. A buyer made an offer just days before the Justice Department settlement was announced Thursday. ‘It has been a nightmare,’ she said. ‘I was hoping that we could keep our home.”