The November 6 U.S. presidential election between President Barack Obama and presumptive Republican challenger Mitt Romney may be decided by a small number of “swing” states – those that could go to either man – where the health of the housing market looms large for voters as they weigh their choice.
A Reuters examination of the latest housing data in 10 states that may determine the election’s outcome shows signs of hope in even the most battered real estate markets, notably Florida, with some other key battlegrounds doing much better.
In addition to Florida, the other states were: Arizona, Colorado, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania and Virginia.
The recovery in home prices in battleground states is good news for the Democratic president as he stays barely ahead of Romney in national opinion polls.
“The housing market is in the news and that will certainly weigh (on voters),” said Mark Rom, an associate professor at Georgetown University’s Department of Government.
Corporate relocation companies are faced with the same trouble as REO clerks – trying to accurately price a home from hundreds of miles away. In this case, they just happened to pick about the same price as paid in July, 2009:
The shift from foreclosing to short-selling is having its challenges.
The banks and servicers are not foreclosing at the same pace, presumably to give defaulters a chance to work their way through the loan-mod waterfall.
Once a loan modification has been attempted and failed, the servicers can recommend that a borrower should short sell their home – but they can’t make them sell it, or even list it. All they can do is keep applying foreclosure pressure, so the borrower has no other choice.
But by letting their foot off the foreclosure gas pedal, it appears that the banks and servicers, with help from government intervention, have created a defaulter purgatory, and free-rent bonanza.
Both foreclosures and short sales are declining in San Diego County:
(Senatobia, MS) Terry Jordan, of Tate County Mississippi, quickly fell in love with a home in Senatobia. It was a foreclosure and needed a lot of work. Her husband had just lost his job. He was going to fix it up and sell it for a profit to help them while they got through a tough time.
Jordan says she visited the home three times, her realtor taking the keys out of the lockbox on the door, and she went through an act of sale. She says she immediately got to work, spending thousands of dollars.
“I have had a new roof put on, new electrical in it, I have had plumbing done to it,” said Jordan.
She had the property surveyed, after seeing records at City Hall that didn’t look quite right. After the survey she learned the bad news from her realtor.
“She’s like I don’t know how to tell you this but we might have sold you the wrong house,” said Jordan. Just to the right of the home she thought she bought was another one, it’s seems that’s the one that was supposed to be sold, the one she legally bought.
The home was listed by Bob Leigh Realtors. A representative told us the mortgage company gave them misinformation. We contacted the company’s namesake with no luck.
Ms. Jordan says she’s been waiting for a solution for months, and she’s spent money fixing a house she doesn’t even own.
Mike B., a friend of the blog (and the guy who was cruising the Pt. Loma homes in the flight path a couple of months back) is one of the volunteers who is building homes for disabled veterans. He had put me in contact with Juan Dominguez, and we thought we had a good opportunity for him in Vista – but he opted for Temecula instead.
Here is the story about Gary Sinise’s involvement with Juan and others:
About half of the $410 million flowing into California’s coffers from the national mortgage settlement with major banks will be pumped into the state’s housing counselors and legal services agencies that help struggling homeowners.
The funding is part of the plans disclosed Friday by state Atty. Gen. Kamala D. Harris for distributing the cash.
Harris, who helped negotiate the agreement with the nation’s five biggest banks, said she also plans to spend the rest of the money on reaching out to and educating homeowners stuck in the hardest-hit parts of the state; on further investigations and oversight of the settlement funds; and on helping borrowers who can’t stay in their homes.
“Homeowners who receive meaningful counseling are far more likely to avoid foreclosure,” said Shum Preston, a spokesman for Harris.
The cash the state received is part of $3.5 billion in total cash payments made to 49 states in the overall settlement with five of the nation’s biggest banks. The global settlement of accusations that the banks improperly or fraudulently foreclosed on homeowners provides $25 billion in aid to struggling borrowers.
“There are over half a million California households currently in the foreclosure pipeline, so we understand the importance of getting these funds into the communities where they’re needed and to the homeowners most affected by this crisis,” Preston said.
Community organizer Peggy Mears at the Alliance of Californians for Community Empowerment said funds need to go to African American and Latino families first because they were the hardest hit by the foreclosure crisis.
Mears said the money needed to go toward helping homeowners, not to filling the state’s budget deficit, as it has in other states.
“We need the highest levels of accountability for this money,” she said. “This settlement was for homeowners who were dealing with the foreclosure crisis.”
Housing counseling agencies across the U.S. have struggled in the face of the crisis, just as demand for their services has gone up.
The tough economy and a more competitive environment for nonprofits have hit counselors who provide foreclosure counseling, said Anna Lisa Biason, director of fund development for Neighborhood Housing Services of Orange County.
Boosted by a major increase in apartment construction, statewide housing starts continued on an upward path during February and March, according to the California Building Industry Association.
The statistics are the last building permit data to be compiled by the Construction Industry Research Board, which after more than 35 years in operation is being taken over this month by the California Homebuilding Foundation.
San Diego County housing starts, as measured by permits issued, totaled 756 in March, up 293.8 percent from February when there were 192 permits issued, and up 107.7 percent from March 2011, when there were 364 permits issued.
Single-family permits totaled 114 in March, up 6.5 percent from February but down 47.9 percent from March 2011, when there were 219 permits issued.
There were 642 multifamily permits in March, a jump of 655.3 percent from February when there were 85 permits issued, and up 342.8 percent from March 2011 when there were 142 permits issued.
Statewide housing starts totaled 6,092 in March, up 73 percent from February and up 32 percent from March 2011. Single-family permits totaled 1,922 in March, up 26 percent from February and 5 percent more than March 2011. And multifamily permits shot up to 4,170 in March, more than double February’s total and up 50 percent from the same month a year ago. It was the largest monthly multifamily total since November 2002.
On a quarterly basis, single-family construction during the first three months of 2012 was 3 percent greater than the same period a year ago, multifamily permits were up 37 percent and total housing production climbed by almost 21 percent.
During the first quarter, single-family construction was highest in the Inland Empire counties of Riverside and San Bernardino; Los Angeles County; and the Sacramento region. By far the most multifamily production was in Los Angeles County, followed by San Diego and Orange counties.
CIRB projects that total production in 2012 will be 57,000 homes and apartments compared to the estimated 47,100 units built last year. That would still be the fourth-lowest annual production in the past 30 years and the second-lowest level in single-family construction.
Now the the market has tightened up with very little selection available, (more pendings than active listings in San Diego), who are the people that benefit, and who gets hurt?
The environment is full of anxiety, bidding wars, and shenanigans, and not much hope of it changing much. Those who can adapt will benefit greatly, because most will struggle to be nimble enough.
The winners:
1. Cash buyers. As long as everything else is equal or close, cash buyers will win a bidding war. Being able to buy without an appraisal in an era where comps are thin, and there is mounting pressure on prices, is a big plus to the seller.
2. Those with ample time on their hands. To make good decisions quickly, you have to know the market, which means investing time in looking at the comparables constantly. Yes, you can be a master of the internet, but listing agents disguise the negatives that can only be seen in person – yapping dogs nearby, garage band next door, smelly carpet, etc.
3. Big egos with big money. You’ve seen these guys, they just want to buy so they have bragging rights around the BBQ this summer. They will overpay just to win the race.
4. Easy money. Buyers who inherited their dough, or have otherwise come across their down payment somewhat easily won’t be as discerning when it comes time to invest it. They have heard that is is safe to go back in the water, so they will trust that the money will be secure.
5. Sellers with great agents. A listing agent who can properly handle a bidding war (where all buyers feel they are treated fairly and have ample opportunity to overpay) can run up the sales price another 5% to 10% above list. many sellers are deprived of this chance because their agent doesn’t know how to handle a bidding war, or tilts the table.
6. Sellers with minor imperfections. Buyers are going to live with a few dings now, rather than blow out and have to find another. The veteran home-lookers know that every house has dings.
The losers:
1. The deal-seekers. There is so much competition in every category that the only deals are the major fixers (which are only deals for the great rehabbers) and the shady short sales. If you would only buy if you got a great deal, you should probably evalute how you can work those two angles.
2. Low-down-payment buyers. Listing agents are putting you at the end of the line, and the only houses you’ll have a clean shot at are those that nobody else wants.
3. Out-of-town buyers. You can have everything else going for you, but if you aren’t here in person, it is very difficult to keep up, and be able to strike quickly. Being nimble is the name of the game.
4. The Over-Priced Turkeys. The OPTs are exposed more now than ever, and with lucky sales in short supply, their only hope is that appreciation kicks in – which could happen. The OPTs will eventually be priced right, we just don’t know how many years it will take.
5. Inexperienced agents. Sorry, you get the leftovers. I’d encourage you to work as an assistant to a more powerful agent so you can learn the ropes for a year or two, then get back in the game.
This is the hot time of year, so it’s wouldn’t be a bad idea to hope for things to cool off at the end of summer or beyond – because it did last year. But the selections then were some of the worst ever, and it doesn’t matter when you are looking if you can’t find a house worth buying.
The November 6 U.S. presidential election between President Barack Obama and presumptive Republican challenger Mitt Romney may be decided by a small number of “swing” states – those that could go to either man – where the health of the housing market looms large for voters as they weigh their choice.
