More real estate doom and gloom

dante · Mar 28, 2012

Well, I'd want to see the data (sale price/frequency) for nondistressed homes. Buying a short sale/foreclosure is a bitch and a half, and if nondistressed homes are selling at a premium to last year but banks are finally getting rid of gutted out, ransacked tear-downs, I could honestly care less. That's actually a positive as banks finally sell off empty inventory that's been dragging down the neighborhood values so much.

Out here it's still all local, with established neighborhoods not falling that much (and new houses going up all the time, actually), and any issues are relatively rare.

A big hindrance to the market's recovery remains the lack of so-called move-up buyers, or those people who have gained enough equity in their homes to sell their properties and buy a bigger, pricier property. Mortgages have also been tough to obtain because of tough underwriting criteria by banks, experts, brokers and real estate agents have said.

Screw moving up, I'm perfectly happy where we are, with the size we have (~1250') and you're going to have to pry my 3.875% mortgage out of my cold, dead hands...

mattmatt86 · Mar 29, 2012

I work for a National Homebuilding company and I've definitely noticed the shift of our product line to match the changing economy. My company (used to) specialize in semi-high end 4500-6500 square foot houses that sold for 650k-800k. But with a huge lack of "move-up buyers" we were forced to change our products. About a year ago I built the company's first townhome project in the region, now our 3 top selling communities are all townhomes. They are about 1950 square feet and sell for an average of 250K. The culture of my company seemed really humbled, at first it almost seemed like we were embarressed to be building townhomes but it's proven to be effective and we are on pace to have our first profitable quarter in 2 years.

stevew · Mar 29, 2012

dante said:
Screw moving up, I'm perfectly happy where we are, with the size we have (~1250') and you're going to have to pry my 3.875% mortgage out of my cold, dead hands...

my grandfather lived in the same house since he got out of the army at the end of WWII.

worked for the same steel mill for 30+ years after that and never had to move.

my dad moved six different times because of work.

dante · Mar 29, 2012

stevew said:
my grandfather lived in the same house since he got out of the army at the end of WWII.

worked for the same steel mill for 30+ years after that and never had to move.

my dad moved six different times because of work.

My grandfather is still living in the house that he was born in (literally), and it's been in the family since it was built in the early 1800s. My parents are still living in the (first) house they bought in 1977. I honestly don't know whether I'll last that long or not, but I can tell you that unless we in the lottery we're almost certainly not going to "move up" to a bigger house in the area.

eric strt6 · Mar 29, 2012

just sold my place for full asking price and I'm walking away with a couple of 100k in cash. Of course we bought at a reasonable price in an area that was never overpriced so it didn't see the big big speculative inflation and resultant crash

KavuRider · Mar 30, 2012

I still don't understand why the unit I bought in 2006 went up so much, then crashed down so far. I bought at a reasonable price (at the time) and these units aren't anything special (condo complex). Caught up in the market I guess.

Btw, not sure if you guys remember me posting in this thread about walking away - well I'm still here. Not sure how long I am going to stay here, but I was hoping to try to pay it down enough to sell it...or even just pay it off. We'll see...

And eric strt6, congrats!!

Pesqueeb · Mar 30, 2012

KavuRider said:
I
Btw, not sure if you guys remember me posting in this thread about walking away - well I'm still here. Not sure how long I am going to stay here, but I was hoping to try to pay it down enough to sell it...or even just pay it off. We'll see...

Yea I was wondering about that. Kudos for sticking it out but I certainly wouldn't fault you at this point for saying eff it and walking away.

amishmatt · Mar 30, 2012

dante said:
Screw moving up, I'm perfectly happy where we are, with the size we have (~1250') and you're going to have to pry my 3.875% mortgage out of my cold, dead hands...

Right there with you. We refi'd for 3.75 and our 1400 sq. ft. semi is perfect for us. I don't understand the need to "move up" at all. I love living below my means.

JetTeach · Mar 30, 2012

dante said:
Screw moving up, I'm perfectly happy where we are, with the size we have (~1250') and you're going to have to pry my 3.875% mortgage out of my cold, dead hands...

This. More than anything else in this thread, this. For us it is 2500' and 4.0%.

KavuRider · Mar 31, 2012

Pesqueeb said:
Yea I was wondering about that. Kudos for sticking it out but I certainly wouldn't fault you at this point for saying eff it and walking away.

I've thought about it, quite a few times actually.

A couple things that are keeping me from actually doing it - rent around here is pretty expensive for a much smaller apartment, we don't really have the income to cover it. Job prospects here are dismal. I am working for a new company, but being paid peanuts. And I'm not sure how long the process would take for the bank to actually foreclose. And I'm also wary of tanking my credit...

Honestly, if this was a nicer neighborhood and I had the money to renovate the house, I'd stay. Its the perfect size for us (just under 1000sqft) and the mortgage is cheap.

Pesqueeb · Apr 11, 2012

Some *gasp* good news?

http://www.npr.org/2012/04/11/150388099/fannie-freddie-weigh-mortgage-write-downs

SkaredShtles · Apr 11, 2012

That's a bunch of bull$hit in my book.

How about they reduce MY principal balance by $20K. Oh, wait - I'm not anywhere near default and likely never will be.

This would amount to a handout. To people who bought houses they couldn't afford.

I will say - it *is* very American.

:disgust1:

Pesqueeb · Apr 11, 2012

SkaredShtles said:
That's a bunch of bull$hit in my book.

How about they reduce MY principal balance by $20K. Oh, wait - I'm not anywhere near default and likely never will be.

This would amount to a handout. To people who bought houses they couldn't afford.

I will say - it *is* very American.

It's worth pointing out that someone gave these people loans. I am still having that argument in my mind though. There is certainly a fairness aspect I find troublesome.

SkaredShtles · Apr 11, 2012

Pesqueeb said:
It's worth pointing out that someone gave these people loans.

Yeah - and we've already handed out to them. To the tune of billions. Seems like it would have made more sense to hand out to the homeowners BEFORE handing out to the banks. But that's too complicated.

dante · Apr 11, 2012

SkaredShtles said:
That's a bunch of bull$hit in my book.

How about they reduce MY principal balance by $20K. Oh, wait - I'm not anywhere near default and likely never will be.

This would amount to a handout. To people who bought houses they couldn't afford.

I will say - it *is* very American.

So, on the one hand I'm definitely annoyed that the more irresponsible buyers get a handout, *but*:

1) I also got an extremely low rate mortgage refi, which will save us ~$37k over 30 years... F&F also made it easy by not requiring an appraisal, which could have scuttled the deal, or at least made us come up with $10-15k to pay down our mortgage at closing. It's not like I didn't get anything...

2) As a homeowner, I'd far rather that the people on either side of my house or on my block get a write down than evicted and watch the house go into foreclosure. If they owe, say, $250k on their house, and it goes into foreclosure and sits on the market at $125k, EVERYBODY loses. The people who were kicked out now don't have a house, my value plummets, US taxpayers lose $125k, and the entire neighborhood starts declining. Basically a reverse-NIMBY, where I only want money to go to *my* neighborhood, not anyone else's.

Dunno what the answer is. Maybe the federal government can just hand everyone in the country a $20,000 platinum coin and be done with it?

$tinkle · Apr 11, 2012

do these (most?) write-downs come with any kind of follow-up (i.e., accountability), or is it a pure hand-out?

yeah, it's not fair to the current residents who care about FMV, so perhaps comps should be weighted as a result. not sure what that would look like.

clarkenstein · Apr 11, 2012

$tinkle said:
do these (most?) write-downs come with any kind of follow-up (i.e., accountability), or is it a pure hand-out?

yeah, it's not fair to the current residents who care about FMV, so perhaps comps should be weighted as a result. not sure what that would look like.

there's supposed to be accountability for it through the regulators. with TARP there was definitely enough oversight but there were still large sums of money that people claim weren't accounted for. i personally know of one small bank in NYC where the TARP funds found their way into an execs pocket.

http://therealdeal.com/blog/2010/03/15/the-park-avenue-bank-tarp-fraud-arrest-of-charles-antonucci-likely-only-first-of-more-to-come-us-attorney-says-1/

i don't like any of these programs to help with the situation. probably because none of them help me and my situation, but i also think they are putting a band aid on a compound fracture. honestly, you want to get the market moving? i think push rates up. hard and fast. people will freak and want to get into a mortgage sooner than later if they are thinking of buying. but that'll be a temporary fix, and could totally backfire and actually push prices down further if it didn't start a mad rush.

but keeping rates this low obviously isn't working, and sometimes what works is counter-intuitive.

dante · Apr 11, 2012

clarkenstein said:
there's supposed to be accountability for it through the regulators. with TARP there was definitely enough oversight but there were still large sums of money that people claim weren't accounted for. i personally know of one small bank in NYC where the TARP funds found their way into an execs pocket.

http://therealdeal.com/blog/2010/03/15/the-park-avenue-bank-tarp-fraud-arrest-of-charles-antonucci-likely-only-first-of-more-to-come-us-attorney-says-1/

i don't like any of these programs to help with the situation. probably because none of them help me and my situation, but i also think they are putting a band aid on a compound fracture. honestly, you want to get the market moving? i think push rates up. hard and fast. people will freak and want to get into a mortgage sooner than later if they are thinking of buying. but that'll be a temporary fix, and could totally backfire and actually push prices down further if it didn't start a mad rush.

but keeping rates this low obviously isn't working, and sometimes what works is counter-intuitive.

I'm pretty sure that would usher in The Great Depression v2.0 almost instantaneously.

SkaredShtles · Apr 11, 2012

dante said:
<snip>
Dunno what the answer is. Maybe the federal government can just hand everyone in the country a $20,000 platinum coin and be done with it?

It sure would be a whole lot more efficient than all this fvcking around they're doing.

"Here - have $20K cash. Use it to pay down your mortgage. Oh, what's that you say? You're going to buy a new car and some Cheetos and $hitty beer? Ahhh... OK. It's your money."

:disgust1:

$tinkle · Apr 20, 2012

http://www.nationaljournal.com/features/restoration-calls/in-nothing-we-trust-20120419?mrefid=mostViewed

ugh

dante · Apr 20, 2012

So.....

Mitch Daniels (Republican) forced massive and unpopular cutbacks in which his wife was laid off, the banks fvcked him over on the loan modification, and he...

He feels betrayed—not just by Obama, who won his vote in 2008, but by the institutions that were supposed to protect him: his state, which laid off his wife; his government in Washington, which couldn’t rescue homeowners who had played by the rules; his bank, which failed to walk him through the correct paperwork or warn him about a potential mortgage hike; his city, which penalized him for somebody else’s error; and even his employer, a construction company he likes even though he got laid off.

Let me guess, he's voting Tea Party this time around.

Also

Sitting behind an elevated polished-wood dais, Quirk and two other board members look down on Whitmire when his turn comes. Quirk tells Whitmire that the house at 1900 W. 10th is still in Whitmore’s name. “It’s a fairly common practice,” he says. “Citi doesn’t want any liability should anybody get hurt on the property.”

If it's still in his name, he has a right to live there. I'd have moved back in till the bank physically kicked me out...

dante · Apr 20, 2012

Aaaaand just as I would have suspected from the National Journal's comment section:

No kidding Mr Whitmire! So how is "tolerance" working out! The USA was created BY and FOR White Christians. Everything worked just fine, before White Christians allowed The Other to run amock. How's it working out, Mr Whitmire? Race IS Nation. Nation IS Race. NOTING replaces White, Mr. Whitemire. NOTHING. Learn this truth, this eternal verity - and you will get "your country" BACK. Refuse this TRUTH - and the USA becomes South Africa.

$tinkle · Apr 20, 2012

you're missing the bigger picture: it's his fault he got a $40K mortgage, which is an order of magnitude short of being a full american.

that's the very embodiment of fiscal irresponsibility

dante · Apr 20, 2012

Looks like homes in my area were down ~3%, for a total of ~6.5% since '09.

What's interesting is what dropped, and how it all does come back to geography and where your house is located:

Houses farther away from downtown dropped the most, including quite a bit of new-construction in the past 5-7 years or so, and housing prices in downtown actually *rose*... The area with the biggest decrease is both farther away from downtown and kind of a crummy neighborhood, so that's really not a surprise. It looks like with prices coming down people are able to be more choosy about where they want to buy a house, and they're not just throwing money at houses in bad neighborhoods or farther away from where they want to be (or by a major highway).

No clue on how our neighborhood did since we're not technically in Madison, we're in that little peninsula that juts out into the lake that's to the South-East of the isthmus.

Pesqueeb · May 9, 2012

Now with 50% less doom and gloom!

http://www.bloomberg.com/news/2012-05-09/home-prices-rise-in-half-of-u-s-cities-as-markets-stabilize.html

mattmatt86 · May 9, 2012

Things are definitely starting to improve in my small microcosm of the housing market. My company (national homebuilder) just had our first profitable Pre-tax quarter in at least 4 or 5 years. In my division, We are also on pace to beat last year's sales sometime in the middle of June. One of the subdivisions I oversee has the next 16 lots sold and we would probably have more sold if the county permit office could keep up with our pace.

$tinkle · May 30, 2012

http://online.wsj.com/video/202CFC67-86BC-4451-885D-2E788A463051.html

looks like we've rounded the corner

Pesqueeb · Jun 14, 2012

Amid all the economic uncertainty over the credit crisis in Europe and slow job growth in the U.S., one sector may be looking up. The U.S. housing market is finally showing more signs of recovery, according to a report being released Thursday by Harvard University.

Harvard comes out with this study once a year, and this time around, it's painting a much brighter picture.

Eric Belsky, the managing director of the Harvard Joint Center for Housing Studies, says a few years ago, in order to get people to buy houses, the government had to entice them with a big homebuyer tax credit.

"If you think about what life was like, jobs were being lost at 700,000 per month, the stock market was still falling, and yet people came out of their bunkers to buy homes because they thought it was a good deal to get cash from the federal government," he says.

Now, the economy is gaining at least some jobs every month. Home prices in many areas have stopped falling. In some places, they've started to rise. So more Americans are deciding — all on their own — that it's a good time to buy.

'Beginning To Turn A Page'

"We're seeing existing home sales have been up for 10 months in a row," Belsky says. "We've seen prices bottom out. All of this suggests that housing is beginning to turn a page, and the only thing that would cut back on that is if the broader economy went off the rails."

But so far, Belsky says, people are slowly getting more confident.

"Think about how careful people are moving back into the market when prices have fallen this much," he says. "You know, the opportunity to potentially buy at or near the bottom of a cycle is great. And I think people are beginning to appreciate that."

Prices by one measure are down 35 percent nationally. Interest rates are at record lows. Meanwhile, the cost of renting a house or apartment has been rising. In fact, when you compare the cost of owning versus the cost of renting, "it hasn't looked this good in 40 to 50 years," Belsky says.

Recent surveys show that despite the housing crash, the vast majority of Americans still aspire to own a home if they don't already.

But many people don't have the resources to buy a home. Unemployment is still above 8 percent. Millions more Americans are underemployed.

Are Lenders Too Cautious?

"We have this tantalizing [notion] out there about how affordable homeownership is," says Chris Herbert, a Harvard research director who worked on the housing report. "But you still have to have sufficient income, sufficient credit, sufficient savings."

And many in the industry feel that after all the crazy lending during the housing bubble, credit now has gotten too tight.

"I am extremely concerned today about an overcorrection in the credit markets — the avoidance of risk by the lenders across the country that we depend on to extend credit to American families," says David Stevens, president of the Mortgage Bankers Association. He'll be speaking Thursday at a news conference when the Harvard study is officially released.

Stevens represents those lenders. But he's still concerned that they're being too cautious. And that could mean that this slow and painful trudge out of recession will be longer and more painful than it needs to be.

"We shouldn't create a blockade that eliminates well-qualified families who want to own a home to raise a family from gaining access to homeownership, and I think that's the tipping point we're facing right now," Stevens says.

Stevens says that with new regulations still taking shape in Washington, banks face a lot of uncertainty about what will happen if a loan they make today goes bad five years down the road. So he's hoping regulators come up with smart and clear rules that will encourage lending.
http://www.npr.org/2012/06/14/154957213/housing-recovery-seen-will-credit-be-the-spoiler

Versus:

LOS ANGELES (AP) — Lenders initiated foreclosure proceedings against more U.S. homeowners in May, setting the stage for increases in home repossessions and short sales — scenarios that could further weigh down home values in coming months.

Default or scheduled-home-auction notices were filed for the first time against 109,051 homes last month. That's an increase of 12 percent from April and up 16 percent versus May last year, foreclosure listing firm RealtyTrac Inc. said Thursday.

The firm monitors documents filed on properties with mortgages that have gone unpaid. Once that process begins, homes can end up foreclosed-upon, sold at auction or via a short sale. A short sale is when the bank agrees to accept less than what the borrower owes on their mortgage.

May was the first month since January 2010 that the number of homes starting on the foreclosure path rose on an annual basis. But the trend has been visible in the monthly numbers, with four out of the first five months of this year recording increases over the preceding month.

The data reflects how banks and mortgage servicers have been stepping up efforts this year to address unpaid mortgages.

Foreclosure activity, as measured by the number of homes receiving foreclosure-related notices, slowed sharply last year as banks grappled with allegations that they had been processing foreclosures without verifying documents.

A $25 billion settlement reached in February between the nation's biggest mortgage lenders and state officials has since cleared the way for banks to move against homeowners who have fallen behind on their mortgage payments.

"Lenders are starting to catch up with the delayed foreclosures of the past year and a half," said Daren Blomquist, a vice president at RealtyTrac.

Some 33 states saw annual increases in homes entering the foreclosure process last month, with New Jersey, Pennsylvania and Florida posting the biggest gains.

Many of the homes now entering the foreclosure process could end up repossessed by banks. Going by the last five years, it could be as many as half.

Some 8.7 million U.S. homes entered the foreclosure process between January 2007 and last month, RealtyTrac said. Out of those, 4.3 million properties ended up foreclosed-upon.

Still, the pace of home repossessions has been easing overall of late, with May being an exception.

Banks took back 54,844 properties last month, up 7 percent from April, the firm said.

That represents the first monthly increase after three consecutive monthly declines. Repossessions were still down 18 percent from May last year, although 17 states saw increases, including North Carolina, Florida and Georgia.

Notably, states that have been foreclosure hotbeds throughout the housing downturn — California, Nevada and Arizona — each recorded sharp annual declines in home repossessions last month.

One factor: Banks are increasingly opting to resolve foreclosure cases via short sale, rather than completing the foreclosure process by taking back properties.

In the first three months of the year, short sales grew 25 percent from a year earlier, hitting a three-year high. In contrast, sales of bank-owned properties declined 15 percent versus the first quarter of last year, according to RealtyTrac.

"The trend we're seeing is actually short sales are becoming the preferred method for many lenders, rather than bank repossession," Blomquist said.

Foreclosure sales can spell trouble for nearby homeowners, who could see the value of their homes erode further as neighboring foreclosures sell. But short sales typically sell at a smaller discount than bank-owned homes, so they have less of a negative impact on home prices.

All told, foreclosure-related notices were reported on 205,990 U.S. properties last month, an increase of 9 percent from April and down 4 percent versus May last year, RealtyTrac said.

On a state level, foreclosure activity in Georgia jumped 33 percent between April and May, and vaulted 30 percent from May last year. That translates to one in every 300 households receiving a foreclosure-related warning, the nation's highest foreclosure rate last month.

Rounding out the top 10 states with the highest foreclosure rate in May are Arizona, Nevada, California, Illinois, Florida, Ohio, Michigan, South Carolina and Utah.
http://www.npr.org/templates/story/story.php?storyId=154982120

dante · Jun 14, 2012

^^^To me they both sound like they're saying the same thing: The market is improving, so banks are trying to improve their balance sheets by proceeding with foreclosures and short-sales. There's no reason to foreclose on someone (who's cutting the grass, maintaining the appearance, performing upkeep, etc) when the market's tanking and you can't sell the house. Only when the market's turning around do you have the possibility of mitigating some of your losses by forcing the current occupant out.

jimmydean · Jun 14, 2012

The job market is getting better, so banks are now hiring more foreclosure processors to work on the stack that has been growing. The new foreclosures create cheap housing for low income families and everybody wins!

dante · Jun 14, 2012

I wonder if this had anything to do with the housing market getting better all of a sudden: My credit union is offering a 3.625% 30y fixed mortgage...

Pesqueeb · Jun 14, 2012

dante said:
I wonder if this had anything to do with the housing market getting better all of a sudden: My credit union is offering a 3.625% 30y fixed mortgage...

Good lord! They are offering a 15 year under 3%! How do I join your credit union? Effing USBank has been holding firm for over two weeks now @ 3.199 and the local Credit Union is even higher.

dante · Jun 15, 2012

Have you checked lately? WF is even at 3.75% for the 30y and 2.875% for the 15. That requires upfront points, though, unless you get that waved (which they sometimes do for new customers).

Pesqueeb · Jun 15, 2012

dante said:
Have you checked lately? WF is even at 3.75% for the 30y and 2.875% for the 15. That requires upfront points, though, unless you get that waved (which they sometimes do for new customers).

Yea, I literally checked not even 5 minutes before I posted because I had just read your post.

*edit. I think were having a communication issue. I'm talking APR, not just interest rate.

Pesqueeb · Sep 2, 2012

http://www.boston.com/business/personal-finance/2012/08/29/why-you-shouldn-pay-down-your-mortgage-faster/rropAbiZpztKdCq4Cdwc2L/story.html?p1=Well_MostPop_Emailed1

Pesqueeb · Sep 2, 2012

Were paying our mortgage down with extra every month, but we also have the other things covered. The only exception were making, and it's possibly not smart, is skipping the college savings plan. Unless things go pear shaped, not having a mortgage is how we're paying for the woman-childs college.

Pesqueeb · Apr 4, 2013

As you were:
http://www.npr.org/2013/03/29/175690983/as-housing-industry-builds-up-other-sectors-follow

More real estate doom and gloom

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