Archive for the 'cities' Category

A large portion of Las Vegas bank foreclosures were purchased as rental investments in August, based on home sales data collected by two real estate research firms.

Absentee buyers purchased 40.2 percent of total homes for sale in Las Vegas in August, the highest percentage reached in ten years including the 39-percent rate reached during the boom years.

Based on public real estate records for August, 45 percent of all buyers used cash, indicating purchases by investors.

According to Larry Murphy, head of research firm SalesTraq, the high level of cash purchases reflected a high number of investors snapping up properties in Las Vegas. The high number also indicated that there are still bargain-priced homes in the city, including cheap foreclosures.

Murphy also said that Las Vegas residential property is undervalued. In August, the home price index showed that the annual home price growth rate nationwide since January 2000 was more than 4 percent, but Las Vegas only had a 0.22-percent growth rate. Since 1991, the yearly growth rate nationwide was 3.8 percent, but Las Vegas had a growth rate of only 1.31 percent.

Based on reports from the research firms, Las Vegas bank foreclosures contributed substantially to home sales and home price declines in August. The firms reported that 69 percent of all houses and condo units sold in August were foreclosed properties. The percentage was lower than the July share of almost 70 percent, but was still higher than the 63-percent level in August 2008.

The August foreclosure percentage was still close to the 74-percent share in April when foreclosure sales reached their highest level.

Murphy said that investors have calculated their investment money and cash flow projections and decided that Las Vegas homes are profitable. If the resale price is less than the construction cost, investors see value.

Las Vegas housing analysts also observed that the new investors are different from the flippers during the boom years. Whereas before, many investors were using home loans, now they are paying in cash. The change is good for the Las Vegas housing market because the cash investments mean commitment to their properties and to the city.

Additionally, the analysts also said that more investors are looking for lower-priced properties, which are now fast declining in number. Sales of resale homes and newly-built homes and condo units in August dropped by more than 11 percent because of the decline in inventory.

The still-high number of Phoenix bank foreclosures has been getting the attention of various nonprofits, government entities and investors in Arizona and the federal government.

The Phoenix metro area has been among the most clobbered metro areas in the country, being among the ten metro areas with the biggest foreclosure rates throughout the country in the first 6 months of 2009.

In the first half of this year, one in 22 households in the Phoenix metro area was hit with a default or foreclosure filing, marking a substantial increase of more than 51 percent compared to the same 6-month period last year and an increase of almost 11 percent compared to the previous 6-month period.

To help contain the record number of Phoenix bank foreclosures, various entities have been carrying out different ways to help distressed homeowners in Phoenix.

Among these entities helping Phoenix is the Boston-based nonprofit Neighborhood Assistance Corporation of America, which was founded in 1988 to help homeowners restructure their home loans to affordable levels. It has 38 offices across the country and operates two call centers to serve American homeowners.

Phoenix was chosen by NACA as the second stop for its Save the Dream tour, next to Los Angeles. About 40,000 Phoenix homeowners attended the event and met with bank representatives.

NACA has been using its network strength to encourage lenders to reduce interest rates permanently to 4 percent, 3 percent or 2 percent so that the resulting monthly loan payments become really affordable to homeowners.

Another entity offering ways for distressed homeowners to avoid foreclosure is A Keller Williams Realty. It has been holding free sessions to help troubled homeowners understand the process of short sale and other alternatives to foreclosure. The founding owners of the firm claim that they have been operating in the real estate industry for 15 years and have a strong and successful history of negotiating short sales with banks.

The third nonprofit targeting the city of Phoenix is the Consumer Credit Counseling Service of Greater Atlanta.

The nonprofit, headed by Suzanne Boas, has just been awarded $3.5 million to finance its foreclosure counseling and prevention programs in Atlanta and in other major cities including Phoenix.

According to Boas, the nonprofit will provide practical counseling workshops at no cost to distressed homeowners. With its strong achievements, CCCS received the biggest amount given by NeighborWorks America under the National Foreclosure Mitigation Counseling Program.

The still high number of low-priced San Jose bank foreclosures has driven city officials to suspend the city’s affordable housing regulation for housing developers.

Because of slow home sales, residential developers are now in danger of failing to pay their construction loans and seeing the collapse of their affordable housing projects.

Under city housing rules, developers are required to sell one-fifth of new houses built in redevelopment projects to lower-income families at prices below market rates to give more home ownership opportunities for lower-income families.

Now, the city is temporarily suspending the rule so housing developers can sell their units. As home prices declined because of foreclosures, prospective buyers of affordable units have been complaining that the prices are so close to the prices of market-rate properties.

Currently, a one bedroom condo unit sold to market-rate buyers is priced at $375,000 while the affordable unit is priced at $342,000. Buyers qualified to buy affordable units are those that earn $88,000 if single and $126,000 if supporting a four-member family.

Before a housing development pushes through, developers and city officials negotiate the prices for the affordable units. The prices set will not fluctuate regardless of the effects of market factors such as the volume of San Jose bank foreclosures.

Under the rule suspension, developers can now sell their affordable units to any buyer whenever the affordable housing price is within five percent of the market-rate price. Developers can apply for the waiver and re-apply again after six months until the housing market recovers.

Home builders and housing analysts applauded city officials for their progressive thinking. David Gibbons, top executive of Barry Swenson Builder, said the rule change will help his firm sell more units at his condo project.

Jacky Morales-Ferrand, assistant housing director of San Jose, explained that the rule change will give more flexibility to developers who have been struggling because of the sluggish market.

However, some affordable housing advocates have criticized the decision. Kyra Kazantsis, a lawyer for the Law Foundation of Silicon Valley and Public Interest Law Firm, said that the rule suspension will not help low-income families.

In response, John Weis of the Redevelopment Agency, explained that the goal of the rule suspension is to enable developers to sell as many market-rate units as possible. He added that many other cities have suspended their affordable housing rules to help developers survive the downturn and to prevent the collapse of the affordable housing sector.

Stockton bank foreclosures continue to attract public attention nationwide not only because of the image of Stockton as epicenter of the first wave of foreclosures but also because of its continued high ranking in charts of mortgage defaults and foreclosure rates.

The number of homes in bank foreclosure sales scheduled for the coming months in Louisville, Kentucky has been increasing, based on foreclosure data from the Jefferson County Circuit Court.

Bronx bank foreclosures in the area’s multifamily sector have been soaring because of the large number of overleveraged multifamily buildings in the area, based on a report from the Citizens Housing and Planning Council and affordable housing nonprofits Urban Homesteading Assistance Board and Association for Neighborhood and Housing Development.

The increase in the number of Denver bank foreclosures is partly to be blamed for the drop in homeownership in Colorado. Census data showed that incomes in the state have risen steadily from 2000 to 2008. But despite the increase, homeownership in the state dropped significantly.

The Citizens Bank decided to suspend an auction on the office property placed on Boston bank foreclosures after no one top its bid of $1 million.

The number of Atlanta bank foreclosures notices filed in the first 9 months of this year has already surpassed the total figures for last year. Industry experts said that the dramatic increase in the number of foreclosure filings indicated a deepening recession and unemployment problem.

San Antonio bank foreclosures rates were just enough to propel the city to top the Brookings Institution’s study of the economic performance of 100 metropolitan areas across the United States in the second quarter.