July 28, 2014

Bits Bucket for July 28, 2014

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July 27, 2014

They Are Wrong, Just Like They Were Wrong Last Time

It’s Friday desk clearing time for this blogger. “Alec Diacou bought two large houses in Riverdale in 2004 with the plan to restore and sell them. He’d already rehabbed a number of properties, which he ended up selling with relative ease. But when he finished rehabbing the second in 2009, the recession was in full swing, emboldening some buyers to skip the niceties of negotiation. The real estate market bounced back with a vengeance, and now in Manhattan and parts of Brooklyn and Queens, bidding wars and sky-high prices are the norm. But not so in the high-end niche in Riverdale. Mr. Diacou’s aim now is to break even and move on.”

“Perhaps just a victim of timing and the ruthlessness of the market, he never anticipated all the difficulty he’s been up against. Riverdale’s slump doesn’t make any sense to him. His wife, Suzi Arensberg, is also perplexed. ‘Brooklyn and Manhattan are sold out,’ she said. ‘Why don’t they come 15 minutes up the highway?’”

“‘”Foreclosure, foreclosure, foreclosure.’ Real estate broker John Susani drives down a Paterson, N.J., street where every third house seems to be abandoned or boarded up. During the boom years, money flooded into Paterson. In some cases, he says, home prices jumped as much as 50 percent. The homes on these streets aren’t worth nearly that much anymore. ‘The banking industry allowed everyone to be a homeowner; they gave mortgages to people [just because they were] breathing,’ Susani says.”

“According to RealtyTrac data, 33 percent of the nearly 400 homes in foreclosure in Worcester County were identified as abandoned. In the city of Worcester, though, the number of vacant homes in foreclosure is estimated to be much higher by city officials who keep tabs on them. ‘I say they’re cursed,’ said Lee R. Hall, principal sanitary inspector for the city. ‘Two years is not really very long for these properties’ to sit vacant waiting to be foreclosed.”

“Realtor Nilton Lisboa is one of the people charged checking on these zombie properties to ensure they are maintained properly. ‘I want to get these properties sold,’ he said. ‘We know there’s no one living there. We know it’s an eyesore, but there’s nothing we can do about it, because we have to wait for the banks.’”

“Foreclosures in metro Toledo surged in June, according to RealtyTrac, an increase of nearly 100 percent compared with the same month a year ago. Re/Max Masters broker Jon Modene, who specializes in foreclosed properties, said what could be fueling the surge is a huge drop-off in short sales. Prior to Jan. 1, short sales were not subject to sales tax, but now they are. ‘There’s now a disincentive to do a short sale. You do a short sale, you get a tax bill,’ Mr. Modene said. ‘So nobody is doing short sales anymore. People are staying in the house and … giving the banks back the house. The banks are sitting on inventory. So they have the ability to push the [foreclosure] numbers forwards or backwards.’”

“Former Federal Reserve Chairman Alan Greenspan spoke to MarketWatch about the current stance of Fed policy, the economy and what to do about asset bubbles. MarketWatch: ‘Some economists argue that the economy has just been bubble after bubble and that we’re doomed to repeat this cycle.’”

“Greenspan: ‘Well, I agree with that. I have come to the conclusion that bubbles, as I noted, are a function of human nature. We don’t have enough observations, but my tentative hypothesis to what we’re dealing with is that both a necessary and sufficient condition for the emergence of a bubble is a protracted period of stable economic activity at low inflation. So it is a very difficult policy problem. I do believe that central banks that believe they can quell bubbles are living in a state of unrealism.’”

“Singapore’s central bank said Thursday that recent property-sector cooling steps were working but it was too early to ease those measures as real-estate prices remained at elevated levels. Property prices have risen 60% over the last four years and fell just 3.3% over the previous three quarters, said Monetary Authority Of Singapore Managing Director Ravi Menon. Singapore, like China, is worried about potential property bubbles that could destabilize the financial industry and push up inflation. China has taken some steps including credit curbs and restrictions on multiple home purchases.”

“‘Risk factors have not changed,’ Menon said. ‘It is premature to ease property measures now.’ Global interest rates are still at historical lows and debt levels among highly leveraged households remain high, the MAS said.”

“London property stagnated in July, the first month with no growth since December 2012, as demand plunged and properties took longer to sell, Hometrack Ltd. said. The data add to evidence that measures to cool the market are working after groups including the Organization for Economic Cooperation and Development warned that a bubble could be forming. The Bank of England introduced measures in June to limit riskier mortgages and new rules came into force in April requiring tougher mortgage-affordability tests.”

“‘It is clear that there are bigger forces at work with a pronounced loss of momentum in the London housing market,’ said Richard Donnell, director of research at Hometrack. The slowdown is due ‘in part due to warnings from the Bank of England and others of a possible house-price bubble,’ he said.”

“Many mainstream economists argue that Dublin is not experiencing a house price bubble at present. They are wrong, just like they were wrong last time. Yesterday’s CSO data appears to show that the cost of buying a house has risen by a bubble-like 24pc in the capital over the past 12 months. The reality is there are already enough houses in the capital to put a roof over the heads of everybody currently looking for a home. It is only a matter of time before people begin selling in big numbers. The trend has already begun at the top end of the Dublin market. It will trickle down. It always does.”

“Rising prices are seductive for anybody who either owns a house outright or anybody in or close to negative equity. Most people probably want prices to keep rising for years against their better judgement. History and common sense tell us they won’t.”

“As the price of houses goes up and up, so the debate goes on: does Australia have a house price bubble? Only 20 years ago, household debt stood at about 60 per cent of income. Now, it’s 177 per cent, the highest it’s ever been. The damage is done. For proof, look at the Reserve Bank’s study, released last week, suggesting Australians would be financially better off renting rather than buying.”

“It could just be that this level of debt across the community has simply made a lot of Australians cranky and impatient, even if they do see the value of their homes galloping ahead week after week. Ten years ago, John Howard secured a stunning election win by asking voters ‘who do you trust to keep interest rates low?,’ Interest rates right now are even lower but many of us are so deep in debt we’re reluctant to trust anyone.”

“Given a second trial in Charlotte, former Beazer executive Michael Rand heard the same verdict: guilty. A federal court jury convicted Rand of securities fraud and other charges stemming from what prosecutors describe as a seven-year accounting conspiracy at the Atlanta-based construction giant. Rand was charged with manipulating earning reports to mislead investors and regulators, then lying about it to federal investigators and company auditors.”

“He also was accused of trying to block a federal probe into his company’s illegal home-mortgage practices that led to hundreds of Charlotte-area foreclosures. Rand and Beazer’s former chief accounting officer, faces a maximum penalty of 85 years in prison and a $1.25 million fine. Sentencing will occur at a later date.”

“The federal investigation that led to Rand’s indictment began in 2007. It followed a series of Observer stories focusing on Beazer practices that broke federal lending laws and put hundreds of Charlotte-area residents into homes they couldn’t afford. While the homebuilder amassed $389 million in profits in 2006, more than 13 percent of its Mecklenburg houses resulted in foreclosures, leaving behind wrecked families and ravished neighborhoods.”

“Despite the damage, Rand is one of only two Beazer figures who have faced charges. Janette Parker, the manager of Beazer’s mortgage office in Charlotte, pleaded guilty to three counts of mortgage fraud in 2011.”

Bits Bucket for July 27, 2014

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July 26, 2014

Bits Bucket for July 26, 2014

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July 25, 2014

Bits Bucket for July 25, 2014

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July 24, 2014

Stuck In A Trade

The Press Democrat reports from California. “Sonoma County’s housing market wrapped up the first half of 2014 by once more posting both a drop in sales and a double-digit jump in prices, according to The Press Democrat’s monthly housing report compiled by Pacific Union International VP Rick Laws. While it remains a sellers market, Laws said buyers are cautious and at times have sought concessions. ‘I’ve seen numerous occasions where buyers take a walk,’ he said. ‘And basically it’s that they don’t want to overpay.’”

From Bloomberg. “Alexander Philips joined the rush to buy foreclosed U.S. homes four years ago, spending $40 million on houses in California and Nevada to operate as rentals. Now his firm is getting ready to sell. ‘We didn’t want to be the last one standing when the music stopped,’ Philips said. ‘We view this as a trade, not as a business.’”

“Corporate owners with limited capital or deadlines to repay investors are now selling houses in bulk, or one by one, after a 26 percent surge in prices from a March 2012 low. ‘That consolidation phase will be bigger than the original buy phase,’ Tom Barrack, whose Colony American Homes is the third-largest single-family landlord, said at Bloomberg’s Los Angeles bureau. ‘Now we’ll sweep up everybody over the next two years who got stuck, who says I have home price appreciation, which they do. They bought right, but now they are stuck.’”

The Press Enterprise. “The national housing activist group Right to the City Alliance has released a report that claims the $20 billion that private equity firms have spent to acquire REO-to-rental and single-family rentals since 2012 has created a ‘faceless’ landlord-tenant dynamic in communities hit hardest by the housing collapse. The report was based on canvassing and tenant surveys on 1,402 properties in Los Angeles and Riverside that were owned by the world’s largest private equity firm, The Blackstone Group, or its purchasing subsidiary, THR California.”

“The properties, managed by Blackstone subsidiary Invitation Homes, were largely unaffordable for tenants, the report found. The report found that 33 percent of the tenants said their rent consumed at least 50 percent of their take-home pay, 74 percent had not met their landlord in person, and clauses in rental agreements enabled that landlord to terminate a lease and evict a tenant with a modicum of warning.”

“U.S. Reps. Mark Takano, D-Riverside, said the report confirms what his office found earlier in the year. ‘Rental costs are getting further and further out of reach for working families in the Inland region,’ he said.”

All Gov California. “Home prices calculated by the San Francisco Association of Realtors hit $1 million in 2013, but that excluded condos, which were lolling about somewhere around $850,000. But the good times kept rolling, and DataQuick reported this week that the median for condos and homes combined has breached the magic million-dollar mark and continues headed up. The continued influx of tech employees rolling in stock option money and Asian investors offering all-cash deals drove prices up 13.3% compared to a year ago. That is actually a slower pace than a year ago, when prices were up 23.8% over 2012.”

“San Francisco has been undergoing an intensified gentrification of its less desirable areas as well as bidding wars in its nicer neighborhoods. The result is some of the worst income inequality in the world. The San Francisco Human Services Agency crunched data from the U.S. Census Bureau and the World Bank to determine that San Francisco’s income inequality was on a par with Rwanda.”

The Desert Sun. “The largest unpaid property tax bill in the Coachella Valley belongs to a long-stalled project with ambitions so big, it was once called a ‘city within a city.’ The 50-acre plot in Indio along Highway 111 remains empty scrub land, except for a lonely building with a sign announcing the name of its owner: Polo Square. In July, the property received a notice of power to sell, a red flag warning that it is now on track to be sold at a tax sale auction. Polo Square Partners, however, still has many chances to pay off taxes before the county sets an auction date.”

“The backbone of the project, originally estimated to cost a staggering $850 million, included 350,000 square feet of retail, 200,000 square feet of offices, a 120-room extended stay hotel, a 250-room hotel and 516 condos.’

“The city has no plans to buy the property, Indio Councilman Glenn Miller said. ‘The city’s been in a holding pattern trying to figure out first, who’s going to end up with the property, and second, if they have any wherewithal to develop it out,’ said Indio Mayor Michael Wilson. So the land sits vacant, an eyesore to residents who live near Highway 111. The city fined the property a total $53,540 for nuisance abatements from March to May 2013, in response to complaints from neighbors about loitering vagrants and the overgrown brush being a possible fire hazard.”

The San Francisco Chronicle. “Cory Tschogl was priced out of the San Francisco housing market, so she bought a one-bedroom condo in a gated Palm Springs community 18 months ago. She visits it often and her father lives nearby. She’s rented it occasionally through Airbnb and Flipkey for about a year. The income from guests who paid around $450 a week helped meet her expenses for the mortgage, taxes and insurance. But her current tenant’s stay had issues from the beginning.”

“Tschogl says she has an Airbnb squatter - a guest who rented her vacation condominium, then stopped paying rent, refused to leave and threatened her with legal action. Tschogl realized that she couldn’t legally cut off the electricity, although her SoCal Edison account showed daily usage was triple to quadruple normal. Her father went by the unit several times and photographed it with the sliding glass doors and windows wide open, presumably while the air conditioning was going full blast to combat the 114-degree heat. ‘It’s a horror story,’ said Tschogl, who lives in San Francisco.”

Bits Bucket for July 24, 2014

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July 23, 2014

The Hedge Funds And Cash Buyers Have Gone

The Miami News Times reports from Florida. “It’s not exactly a secret that Miami’s latest unhinged condo boom is being fueled by foreign money, but the exact number of new residential units being bought in downtown by those from abroad is eye-popping. According to a not-yet-released report from consulting firm Integra Realty Resources for the Miami Downtown Development Authority that was obtained early by the Wall Street Journal, ‘90 percent of the buyers of new residential units are from abroad.’”

The Miami Herald. “Sales of existing condos have slumped for three months in a row in Miami-Dade, and prices have moderated in 2014 after years of torrid gains, according to the Miami Association of Realtors. Cash purchases — which often signal investor deals — have been on the decline. ‘We’ve seen a real slowdown in buyer activity in the past few months,’ said Mark Zilbert,CEO of Zilbert International Realty in Miami Beach, whose firm focuses on higher-end coastal properties.”

“The median period of time to sell a condo has increased to 61 days from 44 a year ago, and listings are fetching 94.5 percent of original asking price on average, down from 96.9 percent a year ago, the Miami Realtors said. ‘I don’t think there is anything to worry about at the moment,” said Francisco Angulo, who is residential president of Miami Realtors. ‘Wall Street [similarly] goes up and down. We shouldn’t be panicky.” A bit of stabilization after the protracted run-up in prices is ‘healthy,’ said Angulo.”

“The spurt in condo construction is providing stiff competition for the existing inventory, Realtors say. And a lot more unit owners have put their condos on the market to take advantage of the price increases. The supply of existing condos swelled 34.4 percent to 10,967 units — a 7.8-month supply. Zilbert said among higher-end coastal condos, there is 12 to 14 months’ supply of inventory.”

The Tampa Bay Tribune. “The June housing report released Tuesday by Florida Realtors paints a fairly bright picture of the market here with more closed sales and better median housing prices than the Tampa metro area saw a year ago. And for buyers, there is slightly less pressure, since the cash buyers and the hedge fund companies that were snapping up properties for rental have backed away from the area, one consultant said.”

“‘The institutional buyers — the hedge funds buying everything to turn them in to rentals — and the cash buyers have gone,’ said Tony Gonzalez, a Tampa residential real estate consultant and Realtor for Keller Williams.”

“The area’s residential real estate market is a bit more stable now and buyers have some breathing room to decide what is the best property for them, instead of having to race to the table with an offer, Gonzalez said. Statewide, inventory is up 21.7 percent, with 108,046 single family homes on the market in June, compared to 88,746 in June 2013, Florida Realtors reports.”

The Orlando Sentinel. “In Metropolitan Orlando, foreclosure legal filings increased 20 percent in June from a year ago and the region ranked second nationally for its foreclosure rate in June, according to RealtyTrac. And the amount of activity also increased for nearby Volusia and Polk counties last month from a year earlier. Orlando’s deeper dive into foreclosure during the last year may reflect lenders’ increasing impatience with holding onto the properties. They may be less interested in sitting on vacant residential asset pools at a time when homes are no longer increasing in value as much as they did in the past, said Daren Blomquist, VP of RealtyTrac.”

“‘It’s a reflection that even while the foreclosure starts are down, more people who have been in foreclosure are now going to the auction block and losing their homes,’ Blomquist said. “Certainly the slower home-price appreciation means that banks have less to gain by holding onto foreclosures for a longer period of time.’”

“One thing that is certain for Orlando is that its mounting volume of foreclosures does not indicate that homebuyers who purchased in recent years are the ones getting into trouble now. RealtyTrac analyzed the recent foreclosures in the metro area and found that 60 percent of houses that received a notice during June were saddled with mortgages originated in the boom years of 2005, 2006 and 2007. Of the Orlando-area properties that got foreclosure notices in June, only 6 percent had been financed with mortgages approved during the past three years.”

The Herald Tribune. “Southwest Florida continued to distance itself from the foreclosure crisis in the second quarter, with defaults lower than in the first three months of 2014 and in the same period last year. But because there are more defaults stuck in the local court system that will soon be scheduled for auction, the housing market could see another wave of discounted bank inventory — at a time when tight supply has lifted prices to post-recession highs.”

“‘We had the biggest mess of all of the states, and we still have more foreclosures than anyone else, but the numbers are trending down,’ said Jack McCabe, a Florida real estate consultant. ‘The amount of housing assets the banks are sitting on is amazing.’”

From Florida Today. “‘Zombie’ swimming pools at homes in foreclosure soon morph to algae-caked cesspools, inviting habitats for the species of mosquitoes that spread agonizing and sometimes fatal viral diseases such as dengue fever and chikungunya. Both diseases have been inching in on east Central Florida. This past week, state health officials reported the first cases of chikungunya contracted in the United States: one in Miami-Dade County, the other in Palm Beach County.”

“‘It’s just sitting there, festering,’ said Mary Ellen Maciejczyk, who lives next to a ‘zombie’ pool in Suntree. ‘It’s turning into mud right now. It’s black as tar, and there’s mold on top of that.’ The zombie house next to Maciejczyk’s home is set to go on the auction block in August. But that’s happened before, only to have the sale canceled at the last minute.”

“Zombie houses — abandoned by the owners, but still not reclaimed by banks — pose a daunting challenge to mosquito control, code enforcement and other local government agencies. The problem may have grown worse, county officials say, as some foreclosures dragged on for years. More than 8,100 properties in Brevard are in some form of foreclosure, according to county Clerk of Court estimates.”

“‘It’s a huge problem since the recession started,’ said Chris Richmond, operations manager for Brevard County Mosquito Control. ‘The increase in foreclosures just compounded the problem. They’re everywhere, even in the nice neighborhoods,’ Richmond said of the zombie pools.”

Bits Bucket for July 23, 2014

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July 22, 2014

Investors Thought There Was No Risk In Real Estate

A report from Want China Times. “May has always been a prelude to hot property sales in China’s real estate market for the second quarter, but this year its sales have been unusually stagnant. The various sales promotions and sales tactics of developers have failed to stir up excitement and the number of cities seeing property price fall has instead increased sharply, triggering anxiety over whether May is instead heralding a property bubble or the omen of a price collapse, reports our Chinese-language sister newspaper China Times.”

“China’s property market has failed to upgrade the production efficiency of its labor force and is now tethered to many speculative financial products. Oversupply is evident as domestic property developers are halting the construction of new projects. The current supply will take four and a half years to be fully digested.”

The Beijing Review. “The new round of price declines in two years have crystallized worries of a grisly end to the housing boom, but analysts say fears of an American-style sub-mortgage crisis or Japanese-style collapse are overblown. Lu Ting, an economist at Bank of America-Merrill Lynch, ruled out the possibility of a large-scale crash in China’s housing market. Instead, he said the biggest problem in the property sector is a misallocation of resources.”

“‘With only about one third of the 1.3-billion Chinese population living in urban centers, too many homes that will never be filled have been built in small cities. This will likely see a sharp spike in bankruptcies among small developers,’ Lu said. ‘But it will not cause a big crash.’”

From China Daily. “Mao Daqing, Executive VP of real estate developer China Vanke Co Ltd discusses the ‘chilly winter’ sweeping over China’s real estate market and its future on Beijing TV’s talk show. Yang Lan: ‘In May We saw housing prices decline in some cities such as Shanghai and Shenzhen. How do you interpret this?’ Mao Daqing: ‘I would describe it as an indigestive condition. In other big cities that had hot real estate markets, such as Beijing, investors thought that there was no risk in real estate investments. No mater how high the prices were, a ‘rigid demand’ will always be there.’”

“‘But some people still claim it is ‘rigid demand’ even when prices reach 80,000 yuan ($12,890) per square meter. What is this ‘rigid demand’? This demand doesn’t represent those in low middle income; it means real estate in big cities can be easily acquired at any price.’”

From MarketWatch. “You can take your pick of evidence that China’s growth has relied on overindulging on unhealthy levels of debt. But one new statistic that caught my eye — and puts China’s size and debt in perspective — comes in author Joe Zhang’s new book on China’s state capitalism. Zhang calculates that despite having an economy about half the size of the U.S. at current exchange rates, money supply (on a broad measure) is already about 61% bigger. And there is little sign of belt-tightening, with China’s credit balance still compounding at an annual rate of 13%-14%.”

“This credit path might seem self-destructive, but it also comes with a salutary side effect: an enormous property boom. This did not just inflate GDP numbers, but also brought feel-good asset wealth through rocketing land values.”

From NTD TV. “The Chinese real estate bubble is in an extremely perilous situation. Therefore, the Chinese Communist Party (CCP) has implemented a series of real estate control policies, from the Central Government’s micro-stimulation to the local governments’ cancelling the purchase ban order, and the zero down payment measures. There are many ever-changing bailout patterns.”

“Mainland financial commentator Niu Dao: ‘The current situation is that the governments now do everything to maintain the (real estate) bubble does not break, but we all know that the main problem of China’s real estate is the funds rather than other problems. It is about why the collapse of the CCP now takes place? It is impossible for them to solve all conflicts. They are only seeking to protect their own interests to move forward?’”

The New York Times. “Ou Chengbi, a butcher at a sweltering open-air market on the outskirts of Guangzhou in south-eastern China, can scarcely see signs of recovery in her country’s economy. She described how as recently as last winter she could still chop up an entire cow each day and sell it all. ‘Now I can only sell half a cow a day.’”

“Millions of Chinese merchants like Ou seem to be struggling, even as data suggests growth is stabilising. Independent surveys of businesses across China show that in sector after sector, sales and confidence are still deteriorating. ‘All of them are pointing in the opposite direction from this supposed GDP number,’ said Leland Miller, the president of China Beige Book International.”

The Sydney Morning Herald. “The role of Australian banks in helping to fund foreign investment in real estate is coming under scrutiny, as politicians investigate overseas buyers’ activity in the housing market. The trend highlights the global pressure on banks to know more about their customers’ financial dealings, amid allegations wealthy Chinese citizens are secretly transferring money into overseas property markets, including Australia’s.”

“The questions come amid allegations wealthy Chinese residents are using back-channels to move money out of the country, including into Australian property. Chinese media have cited estimates 20 billion yuan ($3.4 billion) has been moved out of China illegally since 2011 via banks. Macquarie analysts referred to this figure in a report last week, alongside estimates Australian lending to non-residents had surged 27 per cent in the year to March.”

“Figures provided to the inquiry by Treasury show approvals of overseas purchases were $24.8 billion in the first nine months of 2013-14, a jump of 93 per cent on the previous year. Australian Bankers’ Association chief Steven Munchenberg said in a submission that when banks were lending to developers, they did not have direct contact with the foreign buyers and could therefore not investigate their funds.”

“‘Basically, a bank will seek to ensure that the pre-sales contracts represent genuine sales,’ he said. ‘The source of funding for foreign purchasers, however, is generally not investigated.’”

“China’s brewing housing bubble and a slowing economy have led to a growing number of Chinese buying real estate abroad, according to China News Service’s real estate web portal. During the 12-month period ending in March, Chinese buyers spent a combined US$22 billion on housing in the United States, up by 72%, compared with the same period a year ago, and taking up 24% of the total housing purchases made by foreigners in the United States, according to the US-based National Association of Realtors.”

“Lu Heren, president of Meritros Investment Group, said the return rate for investing in the housing market in the United States could touch 8% after fees such as property tax are deducted. The relatively higher price of rent will also allow housing owners to recover the cost in six to seven years, according to the report. In comparison, it may take a homeowner a century to recover from buying a residential property in Beijing, Lu added.”

“Not everyone can profit from their investment abroad, Lu said. Some Chinese buyers bought housing in Detroit after the US city went bankrupt. But poor public security made it difficult to lease the houses. Yan Yuejin, a researcher at the Shanghai Yiju Real Estate Research Institute, also said that some real estate agencies hide the possible dangers involved and exaggerate the high returns on such investments in order to boost their sales performance.”

Bits Bucket for July 22, 2014

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July 21, 2014

It Feels Like Groundhog Day

The Denver Business Journal reports from Colorado. “Home values in the Denver metro area have gone above and beyond their highest pre-recession levels, and are predicted to keep rising, according to Zillow. In addition to exceeding their previous peak, home values are expected to continue their upward trend. Meanwhile, 18.8 percent of the country remained in negative equity, according to Zillow, compared with 10.8 percent in the Denver area.”

“‘In dozens of markets, homeowners that bought at the peak of the market in 2006 or 2007 will have to wait until 2017 or later to get back to the breakeven point on their home, a lost decade in which they will have built up no home equity,’ said Zillow Chief Economist Stan Humphries. ‘This is reflected in stubbornly high negative equity and effective negative equity rates, with more than a third of Americans with a mortgage lacking enough equity to realistically list their home for sale and buy another.’”

The Post Independent in Colorado. “Last week a client in the under $150,000 range in Fruita said he is giving up on looking, that there is just ‘nothing’ for sale that excites or even satisfies him. In our market, there are only a small fraction of bank-owned (REO) and government-owned (HUD) properties for sale compared to last year. And among private owners, they are hoping for price increases; our market has simply not seen significant appreciation in home values over the past year. So, if they do not need to sell right now, many owners are opting to wait for what they hope will be improved prices in the future.”

“Our local job market is likely impacting home sales, too. Since we are not seeing wage increases and in some cases even seeing a decline in wage-earning jobs in Mesa County, many people cannot afford to move up; so, they are not in a position to sell their current home. My advice: If you need to buy, pick a home that is not at the top of the price range in a neighborhood you like; then take the plunge. If you need to buy, as Nike says, ‘just do it.’”

The Taos News in New Mexico. “When compared with wages, Taos County has the largest gap between weekly wages and median home price of any county in the state. The data from the BLS shows the average worker in Taos County made $586 per week. According to Census Reporter, which used data from 2012, the median home price in Taos County was $208,900. This means a home with a median value in Taos County costs a worker earning an average wage in Taos County 356 weeks’ wages.”

“Taos could see its average weekly wages decline now that Chevron’s Questa Mine is set to close next month. James Howard with the Bureau of Labor Statistics told The Taos News that Taos County’s jobs were concentrated in the natural resources and mining sector at twice the national average at the end of 2013. The vast majority of those jobs were no doubt at the Questa Mine.”

“Howard said Taos County’s jobs were concentrated in the leisure and hospitality sector at 2.5 times the national average, and those jobs tend to pay less than those in the professional business and services industry, for example. Furthermore, jobs in the professional and business services industry, which includes architecture, management, engineering and consulting, have significantly declined in Taos County recently, Howard said.”

The Credit Union Times on Nevada. “Credit union executives in Las Vegas, the site of NAFCU’s annual conference this week, said while the local economy is gradually improving, credit unions in the area still face challenges. ‘We’re certainly on the upswing in Las Vegas but we’re not where any of us want to be,’ Rick Schmidt, president/CEO of the $138.6 million WestStar Credit Union said. ‘The housing market is rebounding. In 2010, seven out of 10 homes were upside down – had negative equity – and now seven out of 10 homes are either at or below 100% LTV. But that still leaves a huge number of homes that have negative equity and folks struggling to make payments.’”

“Bradley Beal, president/CEO of the $719.7 million One Nevada Credit Union, pointed out that as of January, 38% of Nevada homeowners still owed more on their home than the value of the property. He called this estimate an improvement over the two-thirds figure Nevada saw a few years ago. ‘We’re gradually working our way out of it,’ Beal said.”

“The peak unemployment rate in Nevada was 13.9% in 2010, according to Dwight Johnston, chief economist at the California and Nevada Credit Union Leagues. ‘Nevada lost roughly 200,000 jobs in the recession and has recovered more than half of those lost jobs. The sector that created the deepest hole in the job market is also the slowest to recover. Total nonfarm payrolls in Nevada are still roughly 85,000 short of pre-recession levels. Of that total, the construction sector is short 83,000,’ he said.”

CBS on Arizona. “Phoenix is a lesson in housing abuse. From boom to bust, to recovery to relapse, Phoenix housing is forever rising and falling, and now it is falling again. The rest of the nation should take notice. Home prices fell 56 percent from their peak in the summer of 2006, bottoming out in 2011, according to the S&P/Case-Shiller Home Price Index. Foreclosures skyrocketed, and a new set of investors moved in to take advantage of the distress. They bought not to flip, but to rent, and they drove prices back up 45 percent from the bottom.”

“The trouble now is they priced themselves out of the market and left Phoenix housing to regular, mortgage-dependent buyers. These buyers are faced with tighter credit standards and a still recovering economy. Julia and Mike Lersch put their north Phoenix home on the market, listing it at $300,000. ‘Our real estate agent said it’s like fishing. You throw it in, and it’s like how deep do you need to get before it hits the fish?’ said Julia.”

“After 107 days and several price drops, they still had no bites, so they pulled it off the market. ‘We thought, ‘well I don’t want to sell it for a song,’ said Julia.”

“Affordability may be better than it was during the height of the housing boom, but the buyer mindset has clearly changed. ‘They’re still looking at it from a distressed property mindset, that they should be getting this great deal, whereas a lot of the folks like us that have been maintaining our properties well, we’re not just willing to give them away,’ said Mike Lersch.”

“‘The Phoenix market has been cold for a long time,’ said John Burns of John Burns Real Estate Consulting. ‘Fifty percent of builders last month dropped prices, including incentives. Demand is weak and weakening. Supply and affordability though is fine.’”

“Meanwhile builders are slowly coming back into play in Phoenix. The new homes are getting more attention than even recent builds, at least according to the Lersch’s. ‘We have a lot of new builds finally going in,’ said Mike Lersch. ‘So we’re really getting competition.’ His wife, Julia is concerned that there is not enough demand to support these new homes, as well as existing homes like hers that are slowly coming on to the market. There is also concern that investors in single-family rentals will begin to sell their properties, now that prices are higher.”

‘”I feel like Groundhog Day. We were overbuilding. Now I feel like they are overexpanding for what there is out there,’ worried Julia.”