Archive for the 'cities' Category

The number of investors who purchased new and previously owned single-family detached houses in Las Vegas increased in June, based on data gathered by housing analysts.

In June, investors comprised 37.5 percent of all buyers of new and previously owned houses in Las Vegas, the highest percentage since February 2006 when the percentage of investors who participated in the market was 37.6 percent and the biggest percentage of investor-bought homes since June 2004 when investor-acquired homes represented 39.4 percent of all new home and pre-owned sales.

Housing analysts in Las Vegas related that most of the investors in June came from Southern California and were not flippers. They were long-term investors who planned to rent out the properties they purchased.

Investors said the rental market in Las Vegas is growing because of the rising number of families who lost their houses to foreclosure and are now looking for rental properties to lease.

Analysts have observed that homeowners are leaving their homes they are paying monthly for around $2,000 and moving to rental properties they will pay monthly for only $1,200.

Most of the investors were looking for single-family houses priced lower than $121,000 and built not earlier than 2003. They said if home prices increase by around $30,000, they will look for other markets as the increased prices would not make rental investments viable.

In the first 6 months of this year, the median price for single-family homes dropped by 34 percent compared to the first 6 months of last year.

Meanwhile, prices for mid-rise condo units fell by 49 percent and prices for high-rise condos dropped by 50 percent. Prices for townhouses and other types of condos declined by 51 percent.

The steepest price declines in Las Vegas occurred in apartment conversions. An example is the Meridian apartment complex which was converted into condo units from 2005 to 2007. When the condo units were first sold, the average unit price was $539,000. In June, the average unit price was a stunning low of $87,611.

With the steep decline in prices, more and more condo units at the Meridian have been becoming foreclosure for sale. As of June, 201 of the 680 condo units were already in foreclosure, and more are expected as many underwater occupants are walking away.

Investors are picking single-family homes over cheaper condo units because potential buyers and renters prefer unattached properties with backyards and picket fences.

The overbuilding of high-rise condo buildings in San Diego has substantially increased the number of San Diego condo units entering bank foreclosure list inventories, according to local real estate data.

During the period from 2001 to 2008, over 8,000 condo units were built in San Diego, two times the number of condo units constructed during the same number of years in Los Angeles, which has a population three times that of San Diego.

During the boom, developers went into a frenzy of building condo complexes as banks easily gave out construction loans and as San Diego was becoming the mecca of many people because of its bayside location and its good climate.

In May 2004, the median sale price for existing condos reached the record level of $647,500, a 56-percent increase in a three-year period.

Flippers during the boom were making nearly $100,000 in just two months of buying and reselling condos. In 2005, many excited buyers bought one-bedroom condo units in the price range of $340,000 to $370,000.

When the housing market collapsed, flippers and other condo buyers could no longer sell. A studio-type unit bought for $340,000 in 2005 entered a bank foreclosure list this year and was later sold for only $162,000, a staggering drop of more than 50 percent from its 2005 price.

Currently, downtown San Diego is now overflowing with condos for sale. Approximately 400 newly-built units and existing units are being offered for sale.

More than 450 condo units are in the foreclosure process and most of these are expected to enter bank foreclosure list inventories in the coming months. About 1,000 units were being built when the market collapsed, and they are now set to get added to the market this year.

Housing analysts contend that it would take years before all the condo units are sold, as more units are expected to enter bank foreclosure list inventories.

While some condo developers are able to hold off their condo units from the market, some developers have left San Diego. Los Angeles developer KB Home has canceled its 184-unit condo project.

In 2004, Bradford Willis signed a contract to buy a one-bedroom condo unit in a luxury condo project called Vantage Pointe for $341,000.

Now, he is thankful the project did not push through, as he was able to cancel his purchase contract and get back his deposit. More importantly, he was able to avoid the likely situation of seeing his condo unit getting added to a bank foreclosure list.

Job losses or significant declines in earnings, and not subprime mortgage loans, were the main causes of foreclosures in Philadelphia, according to Pennsylvania housing analysts.

During the housing boom, while other cities had their home prices soaring by four times their original listing prices, home prices in Philadelphia only doubled. This price level enabled borrowers to buy homes using more conventional loans, without the need of considering subprime loans just to be able to afford higher-priced homes.

According to Steven Adamske, communications director for the House Financial Services Committee, subprime loans drove foreclosures in 2008, especially in the foreclosure-battered states of Florida and California. With these foreclosures came business losses that triggered job losses and high unemployment rates.

Now, unemployment is causing further foreclosures, continuing the cycle of economic difficulties that can only be stopped with the stabilization of the housing sector.

Patricia Hasson, head of the Consumer Credit Counseling Service of Delaware Valley, said almost all distressed homeowners asking for help from her agency are in danger of foreclosure because of unemployment or decline in earnings.

An example is the case of 45-year-old mother Krystyna Buoncristiano who has been paying her home loan in Northeast Philadelphia for 13 years.

Since the time she lost her job, she has been trying her best to prevent her house to go into foreclosure by paying interests and late fees for the missed two months.

In the meantime, she has received differing pieces of advice, such as selling her house through a short sale and stopping all payments to her lender. There are those promising to solve her problem for just $2,000, but without guarantees.

Her lender, CitiMortgage, was primarily interested whether she had already found a job. The bank also told her that her loan cannot be modified until she has become delinquent. In her frustration, Buoncristiano said that the system wants homeowners to fail.

Kevin Gillen of Econsult said that housing has become the cause of recession rather than its effect and that this is the first time this has happened in the U.S.

Other housing analysts also remarked that typically, foreclosures occur at the end portion of an economic downturn, but they said this economic downturn started in the early months of 2006 with record foreclosure filings and low unemployment levels.

According to John Dodds of the Philadelphia Unemployment Project, responding to the problem of foreclosures with loan modifications is not effective for people who have no jobs because they would not be able to pay even reduced monthly payments.

Total home sales soared in the Las Vegas metro area in June, driven by a large percentage of foreclosure for sale, based on real estate sales data in Nevada.

An increase in the number of foreclosed condos in the Chicago suburb of Buffalo Grove is set to occur after Harris Bank sued to foreclose Buffalo Creek Condominiums, a 154-unit condo complex bought for $13.25 million by investor Marcin Malarz in February last year.

Investors and prospective home buyers can take a look at the nearly 300 foreclosed homes for sale in Myrtle Beach, South Carolina.

The city of Chula Vista in California had imposed an ordinance that became a national model for mandating that lending institutions maintain abandoned and vacant bank owned foreclosure to prevent them from becoming blights to neighborhoods.

The real estate market in Chicago, Illinois has generated an increase interest from vulture investors. Industry experts said that most of these vulture investors are real estate developers whose overbuilding activity was cited as one of the factors that pulled down the housing market and the economy.

Canyon Lake in California has issued an ordinance which requires all bank owned homes foreclosures to be registered with the city. Owners of foreclosed properties who failed to comply with the city ordinance will be made to pay a fine.

The increasing number of bank foreclosure homes in Middlesex, New Jersey has caused blight on neighborhoods. Most of these abandoned and vacant foreclosed properties have become eyesores and magnets to vandals and thieves.