The Housing Bubble

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Some housing bubble news from around the world. The Telegraph, “Standard and Poor’s said the housing slump is deepening across large swathes of the eurozone. French declines are ‘gaining momentum’ as the economy buckles. France’s price-to-income ratio rose to a record 180pc of historic levels during the bubble, one of the most stretched levels seen anywhere in the OECD bloc. The property market began to roll over last year, prompting warnings by the French consultants PrimeView that values could tumble by as much as 40pc before excesses are purged.”

“S&P said the deep crisis in the Netherlands would grind on. Dutch home prices will slide another 6.5pc by late next year, bringing the accumulated fall to more than 23pc. Dutch unemployment surged to 8.1pc in March from 5.9pc a year ago. Over 25pc of Dutch mortgages are now ‘onder water’ - as they say in Holland.”

“S&P said Italy, Portugal and Ireland will all see further falls this year but the chief worry is Spain, where a vast glut of unsold property has yet to hit the market. Germany is marching to an entirely different tune from the rest of the eurozone. S&P said prices rose 3.5pc last year, and will rise 3pc this year and again in 2014.”

USA Today on Germany. “Berlin’s property values have jumped 30% to 50% in the past three years, and doubled in the past eight. Greeks, Spaniards and Italians — anxious over the financial future of their cash-strapped economies at home — poured in to buy. ‘Many buyers were feeling so insecure that they would try and buy apartments blindly, without having seen them,’ recalled Ruth Stirati, head of a real estate firm in Berlin that specializes in catering to Italian buyers.”

From Wales Online. “Concerns are growing that measures to kick-start the housing market could lead to the kind of price bubble that burst before the start of the recession. Spokesman for the Royal Institution of Chartered Surveyors (Rics) in Wales Tony Filice says he has seen multiple buyers making bids above and beyond asking prices in an increasingly heated first-time buyer market in Cardiff. Mr Filice said: ‘If you look at the sequence, the Chancellor announced his budget on March 21 and we were high and flying with 95% mortgages. That’s the concern [that we’re heading for a new price bubble].’”

From Irish Central. “Up to 200 ghost estates around Ireland may be demolished under new plans by the Housing Minister. The Evening Herald reports there are around 1,100 unfinished developments around the country since the property bubble burst in 2008. The Labour TD for Limerick City told the newspaper that the majority of the country’s ghost estates ‘can be finished and have to be finished. But in ghost estates where nobody is living but there are still half-built houses, probably the best resolution is to demolish them.’”

From Arabian Business. “According to Deutsche Bank, average property prices in the emirate rose for the sixteenth consecutive month in March. This has led to concerns that Dubai could be entering into a new real estate bubble, similar to the one whose bursting in 2008 led to a collapse in prices of up to 60 percent. For some investors, all of these developments are eerily familiar. Taimur Rana, did not consider himself a serious investor when in 2005 he purchased four properties at the Dubai Lagoon development. The properties he bought were scheduled for delivery in 2007, but he is still waiting more than six years later. He has so far paid AED850,000 — more than 40 percent — in instalments. ‘Nothing is going on. Not a single guy is working on it,’ he claims. ‘We don’t know where that money is going.’”

The Wall Street Journal. “Newland International Properties Corp. on asked a Manhattan bankruptcy judge ‘to limit public access’ to the licensing and other agreements that enable the developer to use the Trump name for the 2.8-acre tower overlooking the Pacific Ocean on Panama City’s Punta Pacifica Peninsula. The developer defaulted on its bond debt in November 2011 as a result of real-estate woes brought on by the global economic downturn. Trump Ocean Club opened in 2011 and features 630 condo units and 369 hotel condo units.”

The Vancouver Sun in Canada. “Vancouver’s real estate market in the next 15 years will actually be two separate markets financed by one chequebook, real estate marketer and ‘condo king’ Bob Rennie told an audience in Vancouver. The purchases will be financed by the baby boomers, who will be selling their fully-paid-for single-family homes, Rennie predicted.”

“Just 4.9 per cent of Metro Vancouver residents make more than $100,000 a year, while 65 per cent earn less than $55,000 a year. Rennie said they’re getting those down payments from their parents and grandparents. ‘The feds, Flaherty and the banks have a really hard time understanding the Vancouver real estate market,’ Rennie said. ‘They’re asking how does a $50,000-a-year income find a $75,000 down payment.’”

The New Zealand Herald. “Househunters are continuing to scramble for property - undeterred by Government promises that property prices will fall in the next three years. Yesterday, young couple Alejo Ramirez and Maria Moran were viewing an Avondale townhouse which promised ‘perfect affordable entry’ at $399,000 and were not prepared to wait for any cooling in the market.”

“‘Our budget is $400,000 and it is impossible to find anything. Three years ago, this house would have been up for $270,000. We were looking to buy two years ago and we’re kicking ourselves we didn’t buy because the houses are so much more expensive so we feel we better buy now because we know it’s going to keep climbing,’ Moran said.”

The Age in Australia. “Melbourne apartment developers are resorting to giveaways of free marina berths, $40,000 furniture packages and stamp duty rebates of up to $45,000 to attract off-the-plan buyers in an increasingly flooded market. Buyers advocate Chris Koren said buyers should be aware that such rebates and giveaways are factored into the end sale price. He said developers were trying to keep prices artificially high despite the competition.”

”’There are so many apartments being built now that the only way developers can offer a point of difference is to offer inducements,’ Mr Koren said. ‘What they don’t like to do is reduce the price because then they have to do it for everyone.”’

Macau Business Daily. “Chief Executive Fernando Chui Sai On has again asked the public to ’stay calm’ before buying homes. ‘The market is overheated and the [home] prices are too high,’ he said, adding there is a growing asset bubble in the estate sector. Mr Chui said more residents planned to buy homes as investment vehicles against inflation and making use of low interest rates. ‘But do they have to hurry up in buying homes when there is a supply of about 30,000 private housing units in the future?’ he questioned.”

The Economic Observer in China. ” For various reasons, many of the Wenjiang’s homes remain empty. In 2008, 29-year-old Zhang Chenguang noticed housing prices were relatively low in Wenjiang, he decided to endure the long commute to work every day and buy a 90-square-meter apartment there. After five years, Zhang certainly isn’t in want of peace and quiet. ‘Even during holidays you hardly see any people on the residential block,’ he said. ‘Only one-third of the apartments have lights on at night.’”

“The large number of empty houses isn’t as big of a danger as the underlying problem, which is that the city has come to over-rely on the real estate industry. As much as 80 percent of its fiscal revenue comes from selling land. ‘Now Wenjiang is really worried,’ a local official said.”

China Economic Review. “Credit can be like steroids for developing countries. But as Francis Cheung, head of China and Hong Kong strategy at brokerage CLSA, points out, China has become addicted to debt to fuel growth. More than half of China’s total debt was added in the past four years, the bulk of which came from shadow banking and bonds. The country’s debt level sits at roughly 205% of GDP as of 2012.”

“‘Since 2009, we just kept on adding more debt. In the first quarter, social financing increased 58% year-on-year’ he said. ‘And the [GDP] growth wasn’t growing. So for investors who are shrewder, they’re saying, ‘Hey, we’re adding more debt but we aren’t seeing more growth. What’s happening here?’ For the more widely read public, they’re saying, ‘Hey, there’s been some big downgrades on China’s debt from Moody’s and Fitch’ because the debt is higher than they anticipated. You keep running harder to stay still now.’”

“‘The world is a strange place now: Adding debt is not a bad thing. Printing money is not a bad thing. Can you keep it going? Yeah, you can print money now. So you can keep it going. In fact, China is not printing money, all this hot money is coming into the country. It is the one place not printing money. China isn’t a rich country. I think that could go to 250% by 2015. At 250% [debt to GDP ratio], you’re actually pushing US kind of levels. I see it as a big anchor [weighing down the country].’”

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Readers suggested a topic on investing. “Can anyone suggest a good reason why gold drops by over 1% a day, ALMOST EVERY DAY? Apparently gold and the stock and housing markets have gone their separate ways. And gold is dangerously close to the 52-week low of $1,322/oz. If it breaches that, what is the next resistance level? Can bonds do terribly if everyone and his dog knows they are going to do terribly? And where would you put your money instead?”

“Good investments: Stocks, Houses, Dollars under the mattress. Bad investments: Bonds, Gold, Bitcoin. Does that about sum up the status quo investing environment?”

A reply, “REITS.”

One said, “They are buying dividend stocks and have run them up. Way up.”

The Toronto Star in Canada. “Adam Frank and his girlfriend MaryAnne, both 29, knew they wouldn’t become homeowners overnight. The two were realistic and grounded in their approach. The couple knew buying a house in Toronto could put them over the edge. When the time came to stop renting and finally buy their first home, the couple opted for a condo.”

“‘We knew what the costs were going to be and we were comfortable with them,’ says Frank. ‘We were renting for three years. We just both knew it was time to invest.’”

Investing in a condo is appealing as these properties generally come with a lower price tag. Royal LePage reports the price of the average condo in Toronto was $356,865. Jennifer Tomic from Toronto knows home ownership is for her. The thirty-seven-year-old is eager stop renting and get into the market. She’s been approved for a mortgage, but doesn’t want a condo. Because of high costs, she’s holding out.”

“‘Trying to find an affordable house on your own is really hard. I’ve tried to recruit my friends to go in on a mortgage with me,’ Tomic says. ‘It’s a business transaction, but trying to find someone willing to invest is hard. I just don’t feel like I have enough money.’”

The Signal in California. “One of my coworkers found himself working for KB Homes during the middle of the residential real estate boom, putting together the analyses or so-called ‘land packages’ for the acquisition of property for the building of tract homes. This amounted to a painstaking and complex process where the analysts would take the price of the land, gross it up for the estimated costs of grading, infrastructure and fees, factor in the costs of tract building based on design, and then add in KB’s desired profit margin to come up with a price for the eventual sale of the proposed homes.”

“The company hit some type of internal crisis in late 2003. Based upon its cost estimates, the analysts found that no family earning the mean income in Los Angeles County could afford one of their homes. So how did KB keep selling homes, in fact hitting a sales record in the first quarter of 2006? Everyone lucid knows the answer.”

“Investors, hungry for yield in an era of what seemed extremely low interest rates, gobbled up subprime, Alt A and other exotic mortgage products, putting families in homes they could not possibly afford when teaser interest rates reset, and leaving them with little choice when the values of these homes would not support conventional mortgages after the coming bust.”

“Add to this rampant speculation the scale of which no one probably captured and the nation cooked up a ticking time bomb. My favorite anecdote relates to a coworker who learned that the lady he hired from time to time to deep clean his second home in Palm Desert once personally owned (and lost) five residences in that area.”

“The subsequent bust and the required de-leveraging caused the Great Recession that began in 2007, and ‘ended’ about two years later.”

“Have we turned the proverbial corner? Recent headlines in the Mighty Signal quote real estate industry folks absolutely giddy and nearly giggly with the state of the market in Santa Clarita, with a dearth of homes available for sale and (again anecdotal) tales of hungry buyers consulting with real estate agents so that homes have multiple offers the minute they hit the MLS.”

“In about 2005 a community columnist/financial planner wrote that houses cost too much in the area, and, indeed, the nation. He based this on something called the ‘rental equilibrium’ rule, explained thusly: Like KB homes, an investor will pay a certain price for a residence if they can expect to collect rental income that covers the cost of carrying that home and allows a reasonable profit. Once the price of homes exceeds this equilibrium, the reasonable people abandon the market, leaving only those driven by emotion, speculation, and hopes for increased values.”

“Perhaps the recent signs of life show that people can finally make a rational economic decision buying rather than renting, and if one can maintain prices within a certain range more sustainable factors can drive the housing market forward, like people moving from rental to home ownership and younger people forming their own households, something also delayed by the Great Recession. After five long years of suffering, anything would seem like a boom!”

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It’s Friday desk clearing time for this blogger. “Central Iowa is one of the fastest growing populations in the Midwest, especially noticeable in suburbs bursting with new comers. ‘The market, right now is crazy,’ says Realtor Jason Stuyvesant, whose last two houses for sale were only on the market for eight and two days. ‘If you see something you like, you have to be ready to buy,’ says Stuyvesant.”

“It’s a side effect from a lot of home buyers trying to take advantage of low mortgage interest rates. ‘They say that term; it’s almost free money with interest rates as low as they are,’ says Stuyvesant. ‘Wow, we are really busy right now, is that going to keep up? All signs point to yes.’”

“In a market with a limited number of properties and plenty of eager buyers, home builders are happy to be in Casper. Naked tracts of land are sprouting subdivisions and high-end homes in the Casper metro area. Small towns like Bar Nunn and emerging areas in the east and west of Casper are seeing a new spree of growth that contractors and real estate agents don’t expect to subside anytime soon.”

“Broker One has more than 100 properties that the company is developing or will build on in the near future, said associate broker Michele Trost-Hall. It is developing a new subdivision on the west side of Casper that has 26 lots under way and a potential for 200 lots, Trost-Hall said. ‘We’re banking on the fact that things won’t slow down,’ she said.”

“When Trent and Clara Ping decided to start shopping for a house in La Crosse last month, the couple lined up a Realtor and sent him a list of about a dozen homes they’d found listed online. But by the end of the week, as they were preparing to drive down from Minneapolis, word came back that almost everything on the list was sold – or had an offer pending. Ping sent him several more only to find that those had offers, too.”

“There is a new sense of urgency for buyers. ‘You’ve got to change your sense of thinking,’ said Dave Snyder of Gerrard-Hoeschler. ‘It used to be, ‘Let’s go out and look.’ Now it’s, ‘Can you see it tonight?’ If it’s priced right, it’s getting sold in days.’”

“Home prices in Southern California popped to their highest level in 58 months during April while sales hit their highest level for that month in seven years, market tracker DataQuick said. ‘This is definitely good news,’ said Robert Kleinhenz, chief economist at the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp. ‘The people who are getting loans now are very high-value borrowers. We are not sowing the seeds of a future housing market bust like the one that led up to the great recession.’”

“In some of the hottest markets, appraisals are coming in well above the selling price. Agent Eric Tan said one appraiser did a ‘drive-by’ of a West Covina, Calif., home he was selling in April. ‘He didn’t ask for any comps, to see the inside of the house, or even schedule a time to meet with me. He wrote up the appraisal right at the purchase price,’ he said. ‘I was able to sell the client’s home for about $40,000 more than I thought the appraiser would value it.’”

“Over the 12 months ended March 2013, Texas had 53,359 completed foreclosures, according to CoreLogic. Three states completed more foreclosures than Texas over the past 12 months — Florida with 102,847 foreclosures; California with 83,310 foreclosures; and Michigan with 70,315 foreclosures. On the national front, a total of 55,000 foreclosures were completed during the month of March. The market still has a ways to go. Between the years 2000 to 2006, the country was averaging 21,000 completed foreclosures a month.”

“Benton County ranked first in Arkansas foreclosure filings for April with 48 homes slated for auction and another 70 going back to lenders to put the homes up for sale in the coming days. The county processed 118 new filings, up 22.92% from the same month last year. Residents in the Raleigh Hills neighborhood of Bella Vista are anxious to see what happens to a home they have been watching since in July 2010, when the homeowners walked away. It has languished in the foreclosure pipeline since that time. In February the home went from lender Chase Bank back to investor Freddie Mac and has recently been assigned to Coldwell Banker agent Connie Turner.”

“‘There is a home in my Bentonville neighborhood that has been vacant for nearly two years and a ‘For Sale’ just went up,’ said Jim Long, an agent with Crye-Leike Realty in Bentonville. ‘We took turns mowing the yard to keep the place presentable while it languished in limbo.’”

“Just when the local housing market is looking stronger, red flags are emerging in Maryland, with foreclosure activity up triple-digits last month. Some families, like the Hoovers, are finding it tough to get by. Randy Hoover and wife Ann have enjoyed owning their home in Frederick since 2001. They received their first foreclosure notification in January, as Ann’s unemployment benefits ran out. Randy and Ann have equity in the home but they haven’t been able to pursade their lender to lower their 7.5 percent mortgage rate. ‘Every time I call the mortgage company they say they can’t work with me,’ says Randy, adding ‘I’m not asking for them to forgive my principal balance. I just want a cheaper rate so I can have a cheaper balance to keep my home.’”

“The Hoovers were able to get current on the mortgage by taking money out of Randy’s 401k. Come August, that money will run out. RealtyTrak’s Daren Blomquist tells WUSA*9 ‘the other shoe is dropping in Maryland when it comes to foreclosure activity as foreclosures slowed down by the state’s foreclosure mediation law and faulty foreclosure paperwork are finally working their way through the foreclosure pipeline.’”

“A new study finds that new construction and foreclosure activity are running neck-and-neck, with building permits and foreclosure both up in the first quarter from a year ago. Combine foreclosures and new home construction and the result in many communities could be a large stock of available properties. If it turns out that housing supply is greater than generally believed that the rise in home prices could slow, especially in overbuilt areas.”

“‘We are currently experiencing a feeding frenzy in the Reno area for inventory. While the increase of foreclosures and building permits will bring some much-needed relief in the future it will unfortunately be far from a feast,’ said Craig King, COO of Chase International brokerage covering the Lake Tahoe and Reno, Nevada markets. ‘We are particularly feeling the heat for properties under $350,000. Those properties are receiving multiple offers within days of hitting the market so the builder and foreclosure inventory will be a blessing but far from an answer to the inventory shortage here.’”

“The real estate market in Washington continues to improve according to a University of Washington report. One thing preventing more sales is that there aren’t enough homes for sale, says said Glenn Crellin, the associate director for research at the university’s Runstad Center for Real Estate Studies. ‘Construction activity is improving, but builders cannot improve availability overnight. Lenders need to release properties which have been foreclosed, but are still owned by the lender to allow the market to stabilize and prevent renewed bubble conditions.’”

“Welcome to the 2006 economy, where stocks are booming, the art market is setting records, and home prices are soaring all over the country. In fact— not to rush things along too much— it’s already time for you to start worrying about the collapse of the next housing bubble. ‘Aw gee, we just had a collapse of a housing bubble!’ you exclaim, kicking the dirt in frustration. ‘I still have three partially constructed condos in Bed-Stuy to flip and IT’S NOT FAIR.’ We know, we know. But what can you do? These things happen. It’s been, like, five years since the last housing collapse— plenty of time for Americans to put it out of their minds entirely.”

“I wouldn’t worry, though: if there’s anyone smart enough to get in and out before the whole thing collapses, it’s you. You’re smarter than the others.”

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A report from New Jersey 101.5. “New Jersey’s foreclosure rate nearly doubled from March to April. RealtyTrac Vice President Daren Blomquist said a primary reason is the length of New Jersey’s foreclosure process, which currently averages above 900 days. ‘If you’re looking for a place to not make your mortgage payments, New Jersey might be more favorable,’ Blomquist joked.”

The New York Daily News. “Hurricane Sandy’s helping turn Queens into foreclosure city. The storm-slapped borough saw foreclosure notices spike to 566 in April - a whopping 1,186% increase compared with last April, a new report from RealtyTrac shows. Other factors are adding to Queens’ foreclosure woes. The borough was already the epicenter of the city’s foreclosure crisis before Sandy hit.”

“Queens’ courts had experienced an especially big backlog in foreclosures following the robo-signing scandal. Now, in the wake of the national mortgage settlement that laid down guidelines for the foreclosure process, the wheels are turning again. Overall, New York City saw foreclosures more than double in April, reaching 1,473. Every borough saw an uptick. After Queens, Brooklyn had the second biggest number of notices, 466, up 44.72%.”

The Metrowest Daily News in Massachusetts. “Foreclosure activity dropped dramatically in March, indicating an end to the foreclosure crisis in Massachusetts, The Warren Group said. Warren Group CEO Timothy Warren Jr. said some lenders are proceeding cautiously as they wait for rules about how a new state law dealing with foreclosures will be enforced. ‘Even though people are delinquent, (lenders) are slow to pull the trigger on foreclosures,’ Warren said.”

“Marlborough Code Enforcement Officer Pam Wilderman said city officials continue to feel the effects of the foreclosure crisis ‘There has been a vast reduction (in foreclosure activity),’ Wilderman said. But there has not been a significant reduction in ‘the amount of property empty because banks haven’t done anything (to sell it).’”

The Boston Business Journal in Massachusetts. “Chobee Hoy is among the top brokers in the Bay State’s hottest housing market, the town of Brookline, where buyers are literally lining up for a peak at promising open houses and sales are routinely closing far and above listed asking prices. A two family under agreement for $1.5 million, a single family at $1.72 million — that have seen bidding wars erupt during showings. She said another Brookline condo priced at slightly over $1 million had 67 buyers attend its first open house a few weeks ago. ‘People were literally standing in line,’ said Hoy, who has been a real estate agent here in the Bay State for roughly three decades. ‘It does make you a little nervous.’”

“The situation presents particular chalenges to appraisers tasked with valuing homes during the mortgage-underwriting process. A traditional appraisal relies heavily on past sales and comparable property-valuation data — all historical information that fails to capture volatile, real-time pricing shifts occurring in the market, said Keith Florian, a certified home appraiser and owner of Beyond Appraisers Inc. in Newton.”

“Florian said he recently appraised a Newton home that sold for $81,000 above asking, a situation that required him to consider a variety of factors, not just historical comps, in determining an appraised value for the lender. He said the market’s momentum as well as the number of bidders vying for the property helped justify the value sought. ‘You definitely need to recognize what’s going on right now,’ Florian said. ‘Right now, things are very active. Here in Newton, it’s extremely hot. I haven’t killed a deal yet this year. I’ve killed plenty of deals in years past, but not this year. It makes sense after going through the (valuation) process.’”

The Ridgefield Press in Connecticut. “With approximately a third of the homes on the market under contract, Ridgefield Realtors are confident the positive results from the first quarter will carry over into the rest of the year. Colette Kabasakalian of Coldwell Banker said 62 units were sold at a median sales price of $527,750 in the first quarter of this year, January to March. Compared to the same time last year, 46 units were sold at a median sales price of $606,250. The number of units sold this year is up 26%, while the median sales price is at a 12.9% decrease from last year at this time, she said.”

“Despite inventory being down, Bob Neumann of Neumann Real Estate believes now might not be the time to sell, with prices still being down. He added that consumers’ increased faith in the market has been integral in the upturn in number of houses sold. ‘There’s a more positive view of the whole economy, not just in the real estate market,’ Mr. Neumann said. ‘With better and better forecasts coming in, there’s more belief in the market and everyone wants to keep that momentum going.’”

The Concord Monitor on New Hampshire. “Mary Skoby Cowan of Cowan and Zellers in Concord said she’s noticed buyers on the whole are more optimistic. ‘There’s a boldness on Main Street,’ she said. ‘I think you’re seeing some people go back to work, people working more hours – just a more positive energy in many industries. And more importantly, it feels organic,’ she added. ‘It’s not because of some stimulus package or other factor.’”

“Low interest rates have helped, said George Helwig, director of education and counseling at CATCH Neighborhood Housing in Concord, which helps new buyers navigate the home-buying process. By giving them greater purchasing power, they’ve drawn more potential buyers to the market. ‘Right now you get a lot more value for the property than you would have (a few years ago),’ Helwig said. ‘For the same amount, someone who could buy a home that in 2006 was priced at $150,000 can now buy a $180,000 home that was previously priced at $200,000.’”

The New Hampshire Business Review. “There’s no way around it: Today’s homebuilding statistics, especially when compared to the boom years, are depressing. New Hampshire is ‘really struggling right now,’ said Elliott Eisenberg, former longtime economist for the National Association of Home Builders. ‘Your permits are anemic. You were on the top of the world, but you haven’t regained your mojo.’”

“Kendall Buck, executive VP of the Home Builders & Remodelers Association of New Hampshire, notes that his organization’s home show in March recorded its largest attendance in a decade, and the association’s membership, after shrinking for six years, is beginning to grow again. ‘My sense is there is a great deal of optimism,’ Buck said. ‘We’d like to see that optimism turn into a reality.’”

“While some homebuilders have noticed the improvement, or see it coming, others are less hopeful. ‘Pretty minimal to be honest,’ said Kim Moore, president of Madison Lumber Mill, of his business in New Hampshire. ‘Kind of a dud. I send more wood to Pakistan now than I do to New Hampshire. We are all smothering ourselves with lumber.’”

The Montpelier Bridge in Vermont. “Washington County single-family home sales (both primary and vacation) through the Multiple Listing Service (MLS) in 2012 were almost 13 percent higher than in 2011. Put another way, there were 35 homes sales per month last year in the county, up from 27 per month in 2011, according to local real estate appraiser Guy Andrews, SRA. Condo sales were even stronger, up 24 percent. One of the biggest drivers of today’s market is the historically low level of mortgage rates, Andrews said. ‘Right now, my desk is covered with refinance work,’ he said. ‘But I am also seeing more purchase contracts. While that is typical in the spring, this is a good indicator for the market.’”

“Sellers shouldn’t get their hopes too high, though. Last year, the median sale price of a single-family home in Washington County fell 4.25 percent, to $191,500, according to MLS statistics. While demand is up, banks are cautious about who they will lend to. Lenders are also fussier about the condition of the house they are financing, said broker Lori Pinard of C21 Jack Associates. ‘They really read over all the appraiser’s notes very carefully,’ she said recently. ‘They are having appraisers measure isolation distances between the well and septic; things they didn’t used to do.’”

“Stronger demand is giving sellers a slightly stronger hand. But a gap remains. Andrews pointed out that the median asking price for a house in the U-32 towns now is about $245,000—close to the peak median sale price of $255,000 in 2008 to 2009 but considerably higher than the median of $196,000 last year. Why? Some sellers are sitting on big loans taken out at the market’s peak, and can’t lower their asking prices without taking a loss, Heney explained.”

“Nevertheless, more sellers appear eager to jump in. Pinard wrote in an April 26 e-mail: ‘I’ve been swamped with requests from prospective sellers who want to list by May 1.’”

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