Trying To Figure Out What Normal Looks Like

A report from the Idaho Statesman. “About 8,000 pages of personal financial information about Tamarack Resort partner Alfredo Miguel Afif have been sent to Bank of America, which is seeking $4.9 million to pay off a lease on two chair lifts. The submission should satisfy attorneys for Bank of America and end a judge’s plan to issue a civil warrant for Miguel’s arrest, said Miguel’s personal accountant, Leonard De Los Prados. The Valley County ski resort fell on hard times in 2008 and defaulted on a $250 million note. Tamarack owes money to Credit Suisse, its biggest lender, and a variety of other creditors.”

“Miguel invested $29.2 million of his personal money in Tamarack Resort, including $6 million spent in 1996 to repay all debts to local vendors left by a previous developer of the resort, which was then called Valbois, De Los Prados said. Miguel’s investment is now ‘all gone’ following the resort’s 2008 declaration of bankruptcy and default of a Credit Suisse Bank loan of $250 million, said De Los Prados, who is also treasurer of Tamarack Resort.”

The Oregonian. “Nearly one in five Oregon and Portland-area homeowners with a mortgage owe more on the loan than their home is worth CoreLogic reported. In the Portland area, 19.6 percent of homes were underwater in the fourth quarter of 2011, representing an increase of 10,000 homes from the previous three months. In all, the firm says, more than 93,000 Portland-area homeowners posted negative equity in their home for the quarter, and another 29,000 — 6 percent — were near negative equity.”

KGW in Oregon. “A bill dealing with homeowners in foreclosure in the Oregon Senate passed with strong bipartisan support. ‘If the laws had passed last year, we would have still been in this house today,’ Ex-Salem Homeowner Ginny Real said.”

“Speaking outside the home her and her husband owned for 24 years Real is angry at the way her bank foreclosed on their home. Real said her husband got seriously ill and it was tough making the $700-a month house payment. So when she heard about the new Home Modification program she contacted her bank and began the process to lower her payment to just under $400 a month.”

“‘I ended up applying three times. They (the bank) lost the paperwork twice. Third time they told me everything was going through and we got a knock on the door saying somebody bought the house and we were out in ten days.’ Now, Real and her husband live with their daughter and son-in-law and grandchildren. Her daughter Jami Real blames the bank for the foreclosure.”

“‘They didn’t play fair at all, they’re crooked. Something needs to be in place to protect the homeowner not just the bank,’ Real said.”

Komo News on Washington. “A local woman who’s been very vocal about her foreclosure fight with Bank of America is about to head to the other Washington, where she’ll be meeting with several groups, including the Obama task force. As Vera Johnson gets ready for her trip, she’s asking people here in the Puget Sound area to share their tales about how their lives have turned upside-down because of the mortgage crisis.”

“After a very public outcry, Johnson got a modification, helping her keep her home and business open. But she fears it may not help her in the long run. ‘My house is under water. It’s under water by 30 percent. They gave me a modification. They didn’t give me a principal reduction. I’m gonna be in the same situation in four years,’ she says.”

Seattle PI in Washington. “Seattle’s median house price in February posted its first year-to-year gain since October 2010, according to a report. The median price in February was $365,000, up 2.8 percent from February 2011 and 4.1 percent from January 2012, the Northwest Multiple Listing Service reported. King County’s median, $308,125, was down 7.75 percent from a year earlier and 2.2 percent from the prior month.”

“What can one read into Seattle’s increase, seeing as prices were down by 10.1 percent year-over-year in January? ‘I think it really is a market that’s trying to figure out exactly where it belongs, what normal looks like,’ said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.”

The Columbian in Washington. “Homebuilders will showcase two concepts at this year’s 2012 Parade of Homes, a September showcase of spacious models overlooking the Columbia River and smaller abodes built with eco-friendly practices. Evergreen Pointe, the Vancouver subdivision includes seven lots ranging from 0.5 acre to 1.5 acres in size that were sold for $825,000 apiece in November. By contrast, the same lots were selling for $1.1 million each in 2005, 25 percent higher, during the height of the homebuilding and real estate boom.”

“Jim Beriault, a promoter of the annual event, organized by the 800-member Building Industry Association of Clark County, said all of the houses will be pre-sold before the show, as homebuilders continue to shy away from the risk of building houses ‘on spec’ during the still somewhat stagnant market for new homes. Spec, or speculative, houses are constructed by a builder with the belief that a buyer will eventually come along.”

“Pre-selling the houses ‘is really the only way you can make it work these days,’ Beriault said.”

The Kitsap Sun in Washington. “Home prices in Kitsap County continued to tumble in February, down 11 percent from a year ago, and close to where the price stood in 2005. The price jetted downward most steeply for condos. February’s price of $215,550 was a 39 percent free fall from February 2011. For single-family homes, the price fell 10 percent to $225,900.”

“The median home price stood at $218,944 for the entire Western Washington region, down 9 percent from last year. The median closing price for homes in Mason County in February was $95,800, down 40 percent from a year ago. In Jefferson County, the price was $203,500, down 34 percent.”

“Frank Wilson, managing broker at John L. Scott Real Estate in Poulsbo and a member of the Multiple Listing Service’s board, said the shrinking inventory of homes for sale in Kitsap County now has tipped the scales to a seller’s market. ‘We continue to see more multiple offer situations on homes that come on the market correctly priced,’ he said.”

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Comment of the Day: "I'm trying really, really, really hard...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, September 6, 2011, by Sally Kuchar

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Trying To Avoid The Inherent Contradiction

Readers suggested a topic on buying a house. “Do you really need a re-al-TOR to buy a house? I’m going to start to look seriously in about six months, and I’m a first-time buyer.* I’m pretty sure I’ll need a buyers’ agent, but I’m also trying to avoid the inherent contradiction of buyer’s agents. I want to pay as low a price as possible, but they want me to buy at as high a price as possible for high commission. How do I get around that? (ps I intend to engage a RL lawyer too to help with the documents.)”

“In the DC area, rents are so high that buying is a better deal. Job is stable and will be more stable in a few months, especially if we can get past the fiscal year budget hump. I won’t even look up “realtor” in the phone book at least until the end of this year, and I intend to be very open-ended even after that. If I close within a year I’ll be surprised.”

“Also, I have no intention of paying $280K for a house. That was just a comparison of equivalents. I’m looking between $200-220K, which would be about $920 a month. That’s $1000 a month, which is real money.”

A reply, “Same boat here. Currently in a 3/2 rental for $2100 a month. Similar housing at 300-340k w/ 20% downpayment has $1400/mo cost. Assume piti - deduction = 1400 , net savings of $700/mo + equity build or about $8400/yr. Downpayment of 60k @10% only equals $6k/yr .. Still, I seem to be factoring in another 15-25% price drop I feel is coming in the next 1-2 years and it is making me shy. 15% of 300k is $45k or about 5 years of the savings I would get(more counting income on downpayment). I’m thinking I wait until similar houses are at 270-310 , or about a 10% drop, then if there is a further 10-15% drop my lost saving window is only a year or two… Not too bad.. Plus, it seems more like I am only getting 4-5% out of my downpayment money rather than anything close to 10%.”

One said, “Treat them like used car salesmen. They are not your friend. I recently talked with a Realt-Liar and I was floored when he asked ‘what is your price range.’ WTF?!! I simply said I’m not going to disclose that and to proceed with his work. Silence.”

A reply, “Assuming you are working with one, how are they going to know what to show you if they don’t have a price range? Should they be walking you around 800k houses or around 150k condos? I would avoid the ‘what is the maximum you will pay for this property’ question, but giving a realtor a price range to work with isn’t ridiculous.”

Another added, “They act like they run the show when in fact they are just a coordinator and another piece of the puzzle. Most will bring up interest rates, but they are not my mortgage broker.
They will bring up how well the house is built, but they are not my builder. They will say ‘You can fix that for $100,’ but they are not my contractor.”

“If the house is over my budget they will say ‘Well, you can afford another xxx a month,’ but they are not my accountant or financial adviser. It reminds me of my wedding: The limo guy gave us advice on the Tuxedos, the cake lady gave us advice on the flowers, the lady at the court house gave us advice on our honeymoon….. We figured they were just being nice, but realized they wanted to have their opinion heard. Since they were in the ‘Wedding Industry’ they felt like they could give advice on anything and everything dealing with weddings, but their job title said otherwise.”

“You could find one with your best interests in mind, but they are few and far between. By disregarding their advice on interest rates, builds, tax advantages, and anything else not in their realm you’ll have a better experience.”

‘My realtor here is a nice guy. My age, young kids, good person. He knows I am searching for REO houses and I’m not gonna get suckered into a dump because it has granite counter tops. I’m working with him because I am an easy client and I know what I want. He knows I am planning on low balling REO properties and wont talk me out of it. If I went with some old lady who did this part time she would give me the same old lines of ‘Well, REO really isn’t that good of a deal’ BS.”

“Times are slow in RE, and realtors will take any client they can. If you were one, do you want to waste your Saturday driving all over the place with some dingbat clueless buyer or do you want someone who is very clear on what area/price they want. Like the Syms Department store slogan: ‘An educated consumer is our best customer.’”

One had this, “They are keyholders, nothing more, nothing less. They’re the people who can let you in the door, literally, of the property you want to see. You’ll want to get your own, because otherwise you have to schedule every property viewing with a different realturd, which is logistically difficult, and all of them will try like hell to become your realtor when they find out you don’t have one already. Ask around, and you can probably find a somewhat tolerable one.”

“Tell them your price range overall, but act like every offer you make is final. Never tell them you’ll go higher if need be. Never tell them you’re head-over-heels in love with a property. Always act like you’ll walk if your current offer isn’t met. Remember- they’re all salesmen, and they want you to pay the highest price possible. But they have one good use: they can let you in the door. Act accordingly.”

And finally, “In your business transaction you have to take ownership of the deal. Dictate the terms upfront, spell out the conditions, negotiate the commission and then don’t be afraid to lowball. Please remember don’t ask don’t get. Have fun doing the deal.”

The Spectrum. “Washington County’s residential real estate market has changed dramatically in recent years, creating opportunities for prospective homebuyers and additional obstacles for many sellers. Carl and Lacy Franke said they understand the nature of Washington County’s housing market and have adjusted their outlook accordingly as they attempt to sell their St. George home. Carl said his family’s five-bedroom, 4,040 square-foot home was appraised at about $575,000 in 2007, but he recognizes that the inflated pre-recession value has little significance in 2011.”

“The home is now listed for sale at $389,900, Carl said, representing a steep decline from its prior value. While the value of Carl and Lacy’s home has fallen significantly, Carl said his family would not sustain financial losses if the property were to sell at its current asking price. ‘Everything was so inflated at the time,’ he said, adding that the home’s basement was unfinished in 2007 despite the sizable estimated value. ‘We would have loved to have sold it for $500,000, but you have to be realistic.’”

“Rand McCullough, president of the Washington County Board of Realtors, also serves as a real estate agent for Carl and Lacy Franke. Although the family’s home has been on the market since April without attracting a buyer, McCullough said an average home in Washington is expected to remain on the market for slightly more than 10 months. In late 2009, local homes spent an average of about 20 months on the market, he said.”

“McCullough said homes priced at $250,000 or less have experienced a slight increase in value during the past year while home prices at the higher end of the market continue to fall. ‘These lower-end properties are inching their way up,’ he said.”

“McCullough said approximately 2,300 homes are listed for sale in Washington County, representing an 8 percent decline from last year. ‘This is an excellent sign,’ he said. ‘It does mean our market is heating up a little bit.’”

“While the inventory is declining, McCullough said the 2,300 homes on the market represent a continued ‘glut of inventory,’ leaving prospective buyers with a wealth of options in terms of housing selection. In addition to lower prices and a vast selection of properties, buyers are now receiving more favorable interest rates on their mortgage loans, he said. He said many buyers are obtaining interest rates of about 4.25 percent. ‘During the boom time, 6-and-a-half to 7 percent was a good rate,’ he said.”

“A number of residents with no plans to buy or sell are feeling the emotional impact of watching their home values diminish, McCullough said. While most homeowners who plan to retain their properties have not experienced the difficulties sellers face while trying to sell their homes in a market rife with competition, McCullough said many remain troubled by recent price fluctuations.”

“‘It still bothers the heck out of them,’ he said. ‘It affects everybody emotionally.’”

“Austin Somerville, an 80-year-old retiree, and his wife Connie have lived in their St. George home for four years, and while the market has shifted dramatically since 2007, Somerville said he has not experienced the full force of the housing market’s collapse. After purchasing his current home within the SunRiver St. George retirement community for about $300,000, Somerville said the home’s value has dropped by about 30 percent in recent years, but he has no plans to sell his property in the near or distant future.”

“‘It won’t affect me until I try to sell, and I don’t plan to sell,’ he said. ‘I plan to stay here until they cremate me.’”

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