Councilman proposes big fines for unmaintained foreclosures

Posted on June 1, 2009 by grim

From the Home News Tribune:

In Middlesex Borough, $500 daily fine possible if foreclosed properties aren’t maintained

A proposed ordinance could ensure foreclosed properties are kept up in the absence of a live-in owner at the threat of a $500 daily fine for noncompliance.

Councilman Michael Class said he began working on the ordinance after residents came to him complaining that foreclosed properties in their neighborhood were not being maintained.

“We’ve had a couple instances in town where the bank forecloses and . . . they don’t take care of the property. The grasses start growing long, the papers start piling up outside the house. Sometimes when people move out they leave behind a lot of garbage, and it never gets cleaned up,” he said. “There’s nothing currently on the books that protects neighbors when this kind of thing happens.”

In order to keep the properties maintained until a new buyer is found, the ordinance would require the new owner after foreclosure — most likely the bank or mortgage company — to register the property with the borough at a proposed registration fee of $50, Class said.
…
If the complaint did reach the court level, Johnson said the judge could either fine the offending party or give them another opportunity to clean it up.

If, at that time, the property wasn’t clean, fines would be imposed.

“It’s up to the judge to say what kind of fine he’s going to impose, but he has the discretion of going up to 500 bucks,” he said. “The fine can be a continuing fine for each day, so . . . they’re not going to let that kind of a thing happen because it’s much too expensive. It’s much cheaper for them to hire someone to clean up the place than to (pay the fines).”

Posted in Foreclosures, New Jersey Real Estate, Politics | 322 Comments

It’s a good time … to rent!

Posted on May 30, 2009 by grim

From the NY Times:

Renters Find Deals Galore

THE rental market in New Jersey, which up to now has only grown stronger as the sales market declined, is finally showing its own signs of weakness.

And what that means, of course, is that renters are now in a stronger position to get deals.

Average monthly rents are dipping around the state, according to market analysts, as well as some of the more candid building owners.

Also, incentives — like a month or two of free rent — are more commonly available, even at some of the nicest and newest buildings, some of them originally designed to be high-priced condominiums.

In Edgewater, where Savanna Partners put $100 million into converting the Peninsula at City Place from rental to condo just two years ago, units are now being offered as rentals again — with two months free on a 14-month lease.
…
At a building in downtown Red Bank called the Metropolitan, which opened last year as a 37-unit condominium and switched to rental in late March after only seven sales, a month-free-rent deal quickly drew 15 tenants.
…
In more suburban Saddle Brook, a rental complex at 140 Mayhill opened in January and is doing well — 90 of 158 units leased (with a month-free-rent option) — but definitely not as well as it would have done even last year, according to the builder, the Value Companies.

“We’ve noticed ‘vacancy creep’ across northern New Jersey,” said Jonathan Moore, a vice president at the Value Companies, which owns 3,500 apartments in four states. “Where it used to always be 99 percent occupancy, now you see 96, 95, 94.”

Value is offering renter incentives at about half its properties, according to Mr. Moore.
…
Statewide, the average rent dipped 1.2 percent in the first three months of the year, according to the real estate investment firm Marcus & Millichap, which found that in 2008, the average rent was up 2.2 percent. The company predicted that for this year, the decline would be 3 percent, to $1,229 per month.

Other estimates of current rental trends vary — some say the average rent decline is more than 1.2 percent so far this year, and the Otteau Valuation Group says it is less — but the overall opinion is that the market is weakening.

Meanwhile, more new units will be added to the market this year than last, according to market analysts — about 2,250 in 2009, versus 1,950 in 2008.

Posted in Economics, New Jersey Real Estate | 153 Comments

Housing rescue plans failing

Posted on May 29, 2009 by grim

From the Philly Inquirer:

In the housing market, still waiting for dust to clear

Volatility in the mortgage markets. Rising foreclosure rates and delinquencies. Increasing existing-home inventories. Weak demand for new and existing homes, and lagging construction. Continued price declines.

Not a good week for housing, which PMI Group Inc. chief economist David Berson says “historically leads the economy out of a recession.”

Berson did not say it would be easy. He and other economists, including Economy.com’s Mark Zandi, caution that the housing market must stop falling before it reverses course, probably by mid-2010.

Not that the road will be smooth. For example, unexpected volatility in the Treasury market yesterday widened the yield gap between 2-year and 10-year bonds to a record 2.76 percentage points.

When 10-year yields rise, so do fixed mortgage rates, and those numbers gyrated wildly for most of the day, sometimes gaining and losing as much as three-quarters of a percentage point in an hour, brokers and analysts say.

When the dust cleared, unnerved investors had driven the Dow down 173.47 points. Thirty-year fixed mortgage rates then settled in at 5.375 percent, with no points, up half a percentage point from 4.875 percent a few days ago.
…
About 10.6 percent of the mortgages in Florida are in the foreclosure process. Pennsylvania’s rate is 2.39 percent; New Jersey’s is 4.32 percent.

Many of the moratoriums that delayed foreclosure proceedings expired when President Obama debuted his rescue plan for nine million bad mortgages – effects of which Zandi maintains will not be evident until the second or third quarter.

“Sadly, it validates that none of the current foreclosure-prevention programs is working at all,” said Rick Sharga, chief economist of RealtyTrac Inc. “Any program that doesn’t include some sort of forgiveness or long-term deferral of principal balance simply isn’t going to be effective.”

There also has been a major shift in the bad-loan category from subprime to prime, which “points to the impact of the recession and drops in employment on mortgage defaults,” Brinkmann said.

From Bloomberg:

Bernanke Bid to Lift Housing Scuttled by Rising Rates, Defaults

Kyle McGee went to his mortgage broker’s office yesterday hoping to refinance and save about $200 a month. He walked away empty-handed.

McGee was expecting a rate of 4.7 percent; the broker offered him 5.375 percent. The average 30-year fixed-mortgage rose to 5.08 percent May 27, according to Bankrate.com.

“We feel like we might have missed the boat,” said McGee, 37, an adjunct professor of social work at Hunter College School of Social Work in Manhattan.

Federal Reserve Chairman Ben S. Bernanke’s efforts to bring down borrowing costs to revive the housing market and help the economy are stalling. Mortgage rates are almost back to where they were in March before the 30-year rate fell to a record and sparked a refinancing boom. Mortgage delinquencies rose to a record 9.12 percent of U.S. home loans and house prices dropped the most on record in the first quarter, industry reports show.

“Housing is not going to be the engine to get us out of this recession,” said Robert Eisenbeis, chief monetary economist for Vineland, New Jersey-based Cumberland Advisors Inc., and former research director at the Federal Reserve Bank in Atlanta. “They’ve squeezed a lemon and now they’re trying to squeeze some more, but you can only get so much juice out of a lemon.”

From the AP:

Mortgage delinquencies hit record high in Q1

A record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit. And the wave of foreclosures isn’t expected to crest until the end of next year, the Mortgage Bankers Association said Thursday.

The foreclosure rate on prime fixed-rate loans doubled in the last year, and now represents the largest share of new foreclosures. Nearly 6 percent of fixed-rate mortgages to borrowers with good credit were past due or in foreclosure.

At the same time, almost half of all adjustable-rate loans made to borrowers with shaky credit were past due or in foreclosure.
…
President Barack Obama’s recent loan modification and refinancing plan might stem some foreclosures, but not enough to significantly alter the crisis.

“It may be too much to say that numbers will fall because of the plan. It’s more correct to say that the numbers won’t be as high,” said Jay Brinkmann, chief economist for the Mortgage Bankers Association.

From the Boston Globe:

Late mortgage payments hit highest level since ’72

Mortgage delinquencies and foreclosures rose to records in the first quarter and home-loan rates jumped to the highest since March this week as the government’s effort to fix the housing slump lost momentum.

The US delinquency rate jumped to a seasonally adjusted 9.12 percent from 7.88 percent, the biggest-ever increase, and the share of loans entering foreclosure rose to 1.37 percent, the Mortgage Bankers Association said yesterday. Both figures are the highest since 1972.

The housing decline is proving resistant to efforts by the Federal Reserve and the Obama administration to keep owners current on mortgages by allowing them to refinance or sell. Prime fixed-rate home loans to the most creditworthy borrowers accounted for the biggest share of new foreclosures at 29 percent, MBA said, a sign job losses are hurting homeowners.

One in every eight Americans is now late on a payment or in foreclosure, the MBA said.

Posted in Economics, Housing Bubble, National Real Estate | 329 Comments

New Jersey Home Price Tracker – May

Posted on May 27, 2009 by grim

The New Jersey Home Price Index Tracker has been updated to include:
* March S&P Case Shiller (Aggregate, Tiered, Condo)


(click to enlarge)


(click to enlarge)

S&P Case Shiller NY Metro Commutable Area Home Price Index

Low Tier (Under $290k) – Peaked in October 2006 and is down 22.66% from peak

Mid Tier ($290k-$428k) – Peaked in September 2006 and is down 21.0% from peak

High Tier (Over $428k) – Peaked in June 2006 and is down 16.11% from peak

Aggregate (Overall Market) – Peaked in June 2006 and is down 19.68% from peak

Condo-Only Index – Peaked in February 2006 and is down 10.83% from peak

NY Metro Area Aggregate Year over Year Changes
Mar 08 -7.48%
Apr 08 -7.98%
May 08 -7.74%
Jun 08-7.04%
Jul 08 -7.04%
Aug 08-6.61%
Sep 08 -7.13%
Oct 08 -7.71%
Nov 08 -8.71%
Dec 08 -9.15%
Jan 09 -9.74%
Feb 09 -10.33%
Mar 09 – 11.79%

Unlike the broader market, which showed a slowing pace of price declines in March, the NY Metro Area saw price declines continue to accelerate to the fastest pace yet this cycle.

Bonus Graphs!
Courtesy of Veto and Kettle


(click to enlarge)


(click to enlarge)

Posted in General | 251 Comments

Memorial Day Weekend Open Discussion

Posted on May 22, 2009 by grim

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

Posted in General | 346 Comments

Fed: Green shoots not convincing

Posted on May 21, 2009 by grim

From Bloomberg:

Fed Officials Unconvinced Economy’s ‘Stabilization’ to Persist

Federal Reserve officials, who see possible signs of “stabilization” in the U.S. economy, signaled they’re not convinced those improvements will persist.

Policy makers, meeting April 28-29 in Washington, saw “significant downside risks” to the outlook for the economy, with the global financial system still “vulnerable to further shocks,” minutes of the session released yesterday said.

The report indicates that Fed officials may be ready to build on their plan in March to buy $300 billion of Treasuries should the economy or financial markets deteriorate further. Some policy makers said an increase “might well be warranted at some point to spur a more rapid pace of recovery” from the worst recession in five decades, the minutes showed.
…
Yesterday’s minutes also updated economic projections from the 17 Fed policy makers, who forecast a deeper U.S. contraction than they foresaw in January, with a 9 percent unemployment rate lasting through the end of 2010.

Central bankers made their biggest cut yet to next year’s growth forecast, indicating the economy won’t rebound as quickly as previously anticipated. The jobless rate may remain as high as 8.5 percent in late 2011. The weaker forecasts are in line with changes to projections by private economists over the past few months.
…
“Participants generally expected that strains in credit markets and in the banking system would ebb slowly, and hence the pace of recovery would continue to be damped in 2010,” the Fed said in the minutes. Economic growth will pick up in 2011 as financial conditions improve, the Fed said.

Posted in Economics, Housing Bubble, National Real Estate | 303 Comments

NJ unemployment rises to 8.4%, 14k jobs lost in April

Posted on May 20, 2009 by grim

From the NJ Department of Labor and Workforce Development:

Employment in NJ Fell by 14,400 in April; Unemployment Rate Rose Slightly to 8.4 Percent

New Jersey’s labor market continued to contract in April as employment fell for the 15th consecutive month. The state’s unemployment rate moved slightly higher by 0.1 percentage point from March’s 8.3 percent to 8.4 percent in April, remaining below the U.S. rate of 8.9 percent.

According to preliminary estimates from the New Jersey Department of Labor and Workforce Development’s monthly survey of employers, nonfarm wage and salary employment in the Garden State decreased by 14,400 jobs in April, to a total of 3,945,600. All of the loss occurred in the private sector (-15,600) as public sector employment rose by 1,200, entirely due to hiring by the federal government as it ramps up for the decennial census in 2010. Based on more complete reporting, the previously released March estimate was revised higher by 3,900 to reflect a February-to-March loss of 13,300.

“The serious impact of this global recession continues to be felt by New Jersey’s working families and their employers,” said New Jersey Labor Commissioner David J. Socolow. “Now more than ever, the services and programs of the Department of Labor and Workforce Development are crucial to workers who are most affected by the economic downturn and who require unemployment benefits assistance, training for new careers or reemployment assistance.”

Job loss in April was felt across most industries as declines were recorded in eight of ten supersectors. The largest contractions occurred in trade, transportation and utilities (-5,900 jobs), leisure and hospitality (-5,700), professional and business services (-2,300), manufacturing (-2,000), and construction (-1,700).

As the national recession has deepened, reduced spending by budget-conscious consumers has affected payrolls in trade, and leisure and hospitality in New Jersey and throughout the nation. In April, both retail (-1,600) and wholesale (-1,700) trade employment moved lower, while both components of leisure and hospitality — arts, entertainment and recreation (-3,500) and accommodations and food services (-2,200) —also recorded significant losses. Payroll contraction in professional and business services was concentrated in the professional, scientific and technical services (-4,600).

Modest gains were recorded in the information (+1,400) and education and health services (+900) supersectors.

Posted in Economics, National Real Estate | 373 Comments

Fitch: New Jersey home prices to fall an additional 20%

Posted on May 18, 2009 by grim

From BusinessWire:

Fitch: California, Arizona, Florida Home Price Declines in Line with U.S. RMBS Forecast

Fitch expects that California will lead the way with an additional 36% decline in home prices from current levels over the next 12 to 18 months. Florida and Arizona are forecast to see declines of over 20% from today’s levels in the same period. Not surprisingly, these states saw the largest run up in prices, with them more than doubling in the 2002-2006 period. To date, home prices in these three states have already fallen by 40% on average.

“Though substantial further home price declines are still to occur, it does appear that the new data is not indicating declines beyond those already anticipated,” said Group Managing Director and U.S. RMBS group head Huxley Somerville. “Fitch expects that declines will continue for at least a year before home prices reach bottom.”

California, Arizona and Florida account for approximately 50% of the overall non-agency mortgage origination volume by dollar over the past four years. New York has averaged approximately five percent of the dollar volume with New Jersey, Texas and Illinois accounting for three to five percent on average.

Home price declines in the higher volume states outside of California, Arizona and Florida have fared substantially better and are expected to see more moderate further declines. Among these, Texas and Illinois are anticipated to see further declines of 1% and 9% respectively and New York and New Jersey are expected to see further declines of 11% and 20% respectively.

Fitch believes that most of the home price correction will occur in the next eighteen months, with prices exhibiting more stability beginning in late 2010. Fitch’s forecast analysis assumes a 1.5% inflation rate for 2009 and 2010 and 3% for the following three years. Nationally, Fitch expects home prices to fall a further 12.5% on average.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 282 Comments

Sunshine on a cloudy day

Posted on May 18, 2009 by grim

From the Home News Tribune:

First-time buyers drive housing market

Simultaneous falling home prices and mortgage rates have made 2009 an historic year, according to real estate experts.

For people who have a sufficient down payment and a secure job, it’s an excellent time to buy a home. But fears about job security and higher interest rates on jumbo mortgages are holding many buyers back throughout Central Jersey, according to Jeffrey Otteau, president of Otteau Evaluation Group in East Brunswick.

Quantifying the drop in home prices in any market is difficult because they are a result of several factors. The homes that are selling now are often the smaller, less expensive homes, whereas a few years ago, when credit was easier to get and more people were confident about their jobs, they were buying larger homes. The average price of a home in any given community probably reflects not only a price decline, but that more smaller homes are selling while the largest homes languish on the market.
…
Otteau said comparing average prices from one year to the next does not always give a completely accurate picture of the market. But he shared some statistics for the first quarters of 2008 and 2009 as a tool to begin to understand what is happening.

In Middlesex County, he said, the average price of a home fell from $370,508 in 2008 to $305,297 in 2009, a drop of 18 percent.

In Union County, the average price in 2008 was $445,685 in 2008, but fell to $384,188 this year, down 14 percent.

In Somerset County, the average price of a home fell from $449,683 in 2008 to $408,337 this year, down 9 percent.
…
Otteau pointed out that in 2006, the affordability index in New Jersey was 81 percent. That meant that a person making the median income in New Jersey could only afford 81 percent of the median-priced home. Today, the affordability index is at 111 percent, meaning someone making the median income can afford to buy a home worth 111 percent of the median-priced home.

“New Jersey will likely be one of the first states to emerge from the housing recession,” Otteau said, “because of our high income and our high-density population. As fears of job loss reduce and credit for mortgage money loosens, we will see more buyers. Also, our state has fewer foreclosures than many other states. I see us beginning to pull out of the housing recession within the next 12 months.”

Posted in Economics, Housing Bubble, New Jersey Real Estate | 259 Comments

We got the “Real Story” right here.

Posted on May 17, 2009 by grim

Nice jab at the NJAR from journalist Kevin Post. I’ve been waiting for someone to call out this propaganda in a public forum. You want to know who has the “Real Story”? We do, right here, on this blog.

From the Press of Atlantic City:

N.J. realtors need to get real about their market

The New Jersey Association of Realtors about a year ago started offering online what it calls “the real story on real estate” – as opposed to what the group feels are the overly pessimistic stories about the industry in the media.

On the association’s site www.realstorynj.com, a headline cheerfully asserts that “New Jersey continues to offer tremendous opportunities for buyers and sellers.” A happy buyer says, “It’s an investment,” oblivious to the consensus among economists that thinking of houses as investments instead of places to live is a big part of what got us into this severe recession.

The association and many Realtors believe that if people were given a more upbeat view of real estate, they would be more likely to buy houses and get the economy growing again. Agents call me and strongly urge me to find something positive to say about real estate.

Unfortunately, anyone who bought a house a year ago based on such optimism almost certainly would have seen its value decline significantly.

That’s why it’s good to focus on sales and price data. But data is a bit cold and doesn’t give a robust view of what’s going on in the market.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 99 Comments

Pent-up Supply

Posted on May 14, 2009 by grim

First, hat tip to Calculated Risk for posting the information and drawing attention to the shadow inventory issue:

Zillow: High Percentage of Homeowners Waiting for a Market Turnaround

From Zillow:

Homeowner Confidence Shrinks; Most Americans Now Believe Their Home’s Value Has Declined

As for selling activity, it’s clear a significant number of potential sellers are holding back due to the current market. When asked about future plans to sell, 31 percent of homeowners said they would be at least “somewhat likely” to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround(3).
…
Humphries continued, “Also interesting is the information we have for the first time this quarter on the levels of ‘shadow inventory’ – homes that people would like to sell but that aren’t currently on the market, and thus aren’t captured in the official number of homes on the market. With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices.”

We’ve heard plenty of talking heads mention the loads of fence sitters, pent-up demand, and sideline buyers just waiting to jump into the market, but what about pent-up supply? Sellers on the sidelines, waiting for a better market to sell their homes? While pent-up demand creates a price floor, because buyers move in to the market when prices fall, pent-up supply causes a pricing ceiling, as sellers list homes when they see signs of price improvement. In the current market, the pent-up supply will do worse than cause a price ceiling, it’ll cause further downward pressure on prices.

According to the Zillow data, some 20% of homeowners surveyed in the Northeast would be very likely to list their home for sale, a percentage significantly higher than in any other area. Roughly 40% of those surveyed indicated some interest in selling? If even a half of those surveyed follow through, the amount of shadow inventory is staggering.

And yet another reason why we’re not at the bottom yet, and why home prices will not rebound quickly after the crash.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 49 Comments

Northern NJ April 2009 Home Sales

Posted on May 13, 2009 by grim

Preliminary April sales and inventory data for Northern New Jersey (GSMLS) is in. Please note that this data is subject to revision.

The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 500, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.


(click to enlarge)

The second graph is another view at the sales data for the full year. Please note that this graph does cross at zero.


(click to enlarge)

The third graph displays only April sales, 2001 to 2009 YOY.


(click to enlarge)

The fourth graph displays an overlay of Sales and Inventory from 2003 to 2009.


(click to enlarge)

The fifth graph displays the year over year change in inventory on a month by month basis.


(click to enlarge)

The sixth graph displays the year over year change in sales on a month by month basis.


(click to enlarge)

The last graph displays the absorption rate (not seasonally adjusted), in months:


(click to enlarge)

Bonus Graphs!

March Sales By County (log scale):


(click to enlarge)

Posted in Economics, Housing Bubble, New Jersey Real Estate | 320 Comments

Widespread price declines across NJ, no recovery in sight.

Posted on May 12, 2009 by grim

From the National Association of Realtors:

2009 Q1 Metropolitan Area Single Family Prices

Year over Year Single Family Price Changes (By MSA)
United States -13.8% (for reference)
Northeastern US -15.9% (for reference)
Allentown-Bethlehem-Easton, PA-NJ -8.0%
Atlantic City, NJ -21.0%
New York-Northern New Jersey-Long Island, NY-NJ-PA -16.0%
New York-Wayne-White Plains, NY-NJ -12.8%
NY: Edison, NJ -11.3%
NY: Nassau-Suffolk, NY -18.6%
NY: Newark-Union, NJ-PA -12.5%
Philadelphia-Camden-Wilmington, PA-NJ-DE-ME -6.7%
Trenton-Ewing, NJ -12.4%

2009 Q1 Metropolitan Area Condo Prices

Year over Year Condo Price Changes (By MSA)
United States -20.2% (for reference)
Northeastern US -11.9% (for reference)
New York-Wayne-White Plains, NY-NJ -15.4%
NY: Edison, NJ -11.4%
NY: Nassau-Suffolk, NY -8.1%
NY: Newark-Union, NJ-PA -14.7%
Philadelphia-Camden-Wilmington, PA-NJ-DE-ME -2.8%
Trenton-Ewing, NJ -7.9%

2009 Q1 Total Sales: Single-Family, Condos, Co-ops

Year over Year Total Sales (By State)
United States -6.8% (for reference)
Northeastern US -20.1% (for reference)
New Jersey -18.7%
New York -23.1%
Pennsylvania -18.8%

From the Record:

Home prices drop in North Jersey in 1Q

Home prices dropped almost 13 percent in the New York metropolitan area, which includes North Jersey, in the first quarter of 2009 from the same period a year ago, the National Association of Realtors said today.

According to the real estate trade group, home prices in the area that includes Bergen, Passaic and Hudson counties, as well as New York City, fell to $429,900, down from $492,800 a year earlier.

And the volume of home sales in New Jersey plummeted 18.7 percent from the first quarter of 2008. Sales were running at a a seasonally adjusted annual rate of 93,400 in the first quarter of 2009 — about half the 180,000-plus annual sales during the housing boom in 2004 and 2005.

From Reuters:

US 1st qtr median home prices slide from year ago

The National Association of realtors said on Tuesday that home prices dropped in 134 out of 152 metro areas on a year-over-year basis during the first quarter of this year.

The national median price for an existing single-family home was $169,000, some 13.8 percent below the price in the first quarter of 2008. The median is the half-way point, with half the prices above and half below this level.

The realtors’ lobby group said foreclosures and short sales were keeping prices down.

“Many buyers sought deeply discounted distressed sales — foreclosures and short sales — which accounted for nearly half of transactions in the first quarter and weighed down median prices in most markets,” the realtors said.

From Bloomberg:

Home Prices in U.S. Drop Most on Record in Quarter

Home prices in the U.S. dropped the most on record in the first quarter from a year earlier, led by California and Florida, as banks sold foreclosed properties.

The median price fell 14 percent to $169,000, the National Association of Realtors said today. Prices dropped in 134 of 152 metropolitan areas, with the deepest declines in Cape Coral and Ft. Myers, Florida, followed by San Francisco and San Jose.
…
“There are a lot of forces pushing the market in different directions,” said Brian Bethune, economist at IHS Global Insight in Lexington, Massachusetts. “We’ve seen huge improvements in affordability, not only in prices but also in terms of mortgage rates below 5 percent, but what’s pushing down those prices is foreclosures and job losses.”

From the Wall Street Journal:

U.S. Median House Price Declines 14%

The median price for a single-family house fell 14% to $169,000 in the first quarter from a year earlier, the National Association of Realtors reported.

The trade group said first-time home buyers accounted for half of all purchases in the quarter, and many of them zeroed in on foreclosed homes. That dragged down the median, the Realtors said.

The median price for the latest quarter is down 26% from a peak of $227,600 in the third quarter of 2005. The latest median price was down from a year earlier in 134 of the 152 metro areas included in the survey.
…
Sales of single-family homes and condominiums declined 6.8% from a year earlier to a seasonally adjusted annual rate of 4.6 million units. But sales were up sharply in some areas hardest hit by the housing bust, largely because bargain hunters were out in force. States with big sales increases from the depressed levels of a year before included Nevada (up 117%), California (81%) and Arizona (50%) and Florida (25%).

Rising unemployment and fears of more job losses are deterring many potential buyers. But others are encouraged by the lowest mortgage rates since the 1950s. In addition, the U.S. government is offering tax credits for certain home buyers before Dec. 1.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 272 Comments

“Here’s the reality: the Gotti’s gotta go.”

Posted on May 12, 2009 by grim

From Newsday:

Moving out Gotti? LI mansion again in foreclosure

Victoria Gotti is boiling mad.

The daughter of the late mob boss John Gotti may lose her sprawling Old Westbury mansion after all, according to a state Appellate Division ruling.

The four-judge panel ruled last week that JPMorgan Chase bank can proceed with foreclosure on the home often featured on the television reality series “Growing Up Gotti.”

The show gave Gotti enthusiasts a glimpse into the daily lives of Victoria Gotti and her sons – Carmine Jr., John and Frank Agnello – in the five-bedroom, 5 1/2-bath white brick house they call home. “I’m bitter,” she said. “The house, all the marital assets, are part of a divorce package (settlement) I have never seen yet.”
…
Gotti, who is also a former New York Post columnist and author, wasn’t sure what legal move she would make next. She said her ex-husband, Carmine Agnello, took out a loan secured by the property for about $700,000 without her knowledge. She said that although she had the right to bring charges against him for taking out the loan, he agreed to payments.

Gotti said he made about three payments before stopping and she thought that the family had lived in the house 15 years without any mortgage.

A Century 21 Laffey Associates listing agent, Anthony Piscopio, said the home is available. It’s been on the market before. Victoria Gotti tried to sell it in 2002 for $4.7 million, but lowered that a year later. In 2004, when “Growing Up Gotti” was broadcast on A&E, she relisted the house for $4.8 million. From 2005 to 2006, she asked $3.995 million; in 2008, the asking price was $3.899 million.

Victoria Gotti relisted the property in December, asking between $3.2 million and $3.5 million. Earlier this year, Piscopio said Gotti wanted to move to a smaller property within Old Westbury. “The boys are getting older now,” he said. “She’s not going to stay there forever.”

From the Post:

BANK FORECLOSES ON VICTORIA GOTTI’S ESTATE

Here’s the reality: the Gotti’s gotta go.

The bank has been given the go-ahead to foreclose on Victoria Gotti’s palatial estate on Long Island — the same used in the TV reality show “Growing Up Gotti” — saying she owes a whopping $650,000 in mortgage payments, according to court paper made public today.

Gotti’s lender, JP Morgan Chase, claims the daughter of the late Gambino crime family boss John “Dapper Don” Gotti — owes them the staggering amount after she failed to make payments for two years starting in September 2006, court records reveal.
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The bank said in court records that the mafia princess owed them $25,000 a month — and that she never made all the payments.

Posted in Economics, Housing Bubble, Humor | 279 Comments

Shore homes hit by foreclosures

Posted on May 11, 2009 by grim

From the Press of Atlantic City:

Data show many shore foreclosures on second homes

Southern New Jersey hasn’t been spared from the wave of foreclosures in the U.S.

But the character of foreclosures might be a little different here compared with those elsewhere because a significant number of properties are second homes.

Anecdotal evidence suggests second homes make up a significant part of the foreclosures along the shore, where barrier islands are mostly covered with housing that’s not occupied year-round.

In a way, a foreclosure on second home is less distressing, since it usually means someone well-off is losing an investment, vacation or retirement property, rather than someone losing their primary residence. But there was no way to put a number on how many foreclosures might be in that non-primary market.
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Sure enough, RealtyTrac’s figures show an unusually large percentage of owner-absent properties among shore homes with a foreclosure filing.

In Atlantic and Cape May counties, 36 percent of properties in foreclosure last month were owned by people living elsewhere.
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31 percent, and Ocean County, with 20 percent, fit the national pattern of about 30 percent of owners of foreclosed homes living elsewhere, RealtyTrac said.

Given the dominance of second homes, and the paucity of year-round rentals, my guess is that one-fifth to one-third of the foreclosures in Atlantic and Cape May counties are second homes.

RealtyTrac began delving into the number of foreclosures of rental properties because renters can be caught off guard and dispossessed by a foreclosure in many states, according to Daren Blomquist, spokesman for RealtyTrac.

“They could get an eviction without much notice. … They possibly could lose their security deposit,” Blomquist said. “They may have no knowledge of the foreclosure until they get a knock on the door.”

Posted in Economics, Housing Bubble, Shore Real Estate | 242 Comments