Archive for the 'General' Category

It seems that bank foreclosure sale spares no one. Not even manufactured homes owned by seniors with fixed incomes.

For several years the market for single family homes has taken a beating from the foreclosure crisis. The problem has spread uncontrollably across the country that almost all sectors of the housing market, including luxury homes, were affected.

Foreclosure is now threatening homeowners of pre-fabricated homes in Brevard County, Florida. Historically, manufactured homes were more likely to be listed as for sale by their owners and were less likely to be foreclosed. However, times have changed and the manufactured home communities are seeing a growing number of foreclosures and short sales in their midst.

Manufactured homes are built by parts in a factory and then assembled at land sites. They cost less than traditional single family homes. In 2008, the average market price for a manufactured house was $64,900 compared with the $292,600 average price for a typically single-family home.

Manufactured homes are intended as entry-level purchase and ideal for people who do not have the money for large down payments. And because pre-fabricated houses were untouched by the housing bubble, only few units went into bank foreclosure sale.

Generally, manufactured homes are owned by older people who did not take out subprime loans to finance the purchase. And they are less likely to allow their properties to be foreclosed.

But the increasing insurance rates and maintenance costs are changing all that and the number of foreclosed manufactured homes is starting to creep up.

At the start of this year, about 98 manufactured houses were sold in a 5,500-home community in Brevard County. Industry experts said that mitigating circumstances rather than bad loans or overextended credit are the most likely reason for manufactured home foreclosure.

Some owners of foreclosed manufactured homes have just lost their jobs or spouses. And those who have fixed incomes have difficulty keeping up with increasing taxes and insurance.

In July, the number of foreclosed houses in Brevard County rose by 11 percent to 862. So far, manufactured houses accounted for only a fraction of the total foreclosure number.

Industry experts said that because manufactured homes are cheap, they sell quickly, thus preventing short sales or foreclosures. But with the flood of cheap single-family homes on the market, owners of manufactured homes are finding it difficult to sell their properties, leaving some of them to bank foreclosure sale.

A recent market report showed that homeownership continues to become affordable, especially in areas with a high number of bank foreclosed home. The quarterly report released by Wells Fargo and National Association of Home Builders showed that residential properties are more affordable than they were 20 years ago.

The report said that a family with an annual median income of about $64,000 could afford to purchase 72.3 percent of all houses sold in the country in the second quarter of 2009. In the first quarter of this year, the same family could afford to purchase 72.5 percent of all houses sold in the country. In the second quarter of last year, home affordability was 55 percent.

Industry analysts said that the demand for houses is increasing stimulated by the rise in affordability and the federal tax credit of $8,000 given to first-time homebuyers. Analysts explained that a home can be called affordable if a family who earns a median income could allot equal or not more than 28 percent of their earnings toward the housing costs.

The report noted that the dramatic improvement in home affordability this year was due to the declining prices and low interest rates. According to market data, the average home price in the country today declined by over 32 percent compared with the peak market price in 2006.

And for three months, interest rates for 30-year fixed-rate loans were below 5 percent, which was a historic low.

The improved home affordability may benefit buyers but it becomes a bane to sellers. Data showed that over 30 percent of all houses sold in the second quarter went below the price originally paid for by sellers.

In a typical real estate market, the value of the property increases over the years. But homeowners who purchased their properties and sold them within the last five years lost more money on the deals.

Compounding the problem of most home sellers is the foreclosure crisis. Many home sellers were forced to sell their properties at a lost because they know that they could not keep up with their mortgage payments and selling their houses was one of their options to avoid foreclosure.

But the abundance of foreclosure homes on the market pushed down prices of properties, leaving sellers no choice but to lower further their sale price in order to compete with bargain-priced distressed properties.

The real estate markets in Colorado and Wyoming are in a slump. Industry experts said that many offers to buy have been made on existing properties and bank foreclosures for sale but most of them are 40 percent less than the discounted prices.

In Park City, industry analysts are expecting sales volume that are less than 50 percent of figures posted three years ago. A panel discussion on the state of the real estate market in Vail Valley showed that there are areas that are stirring from a sales slump but the overall market is still reeling from the impact of the financial collapse and the economic crisis.

In Telluride, industry analysts said that there are many stalled transactions. Many sellers are willing to trim off as much as 20 percent from their sale price but buyers want properties that are 40 percent less from their original sale price.

The resort areas have been experiencing a jump in the number of foreclosure properties for several years now. However, only a few properties that received foreclosure filings were auctioned off. In Eagle County, there were 236 foreclosures in the first half of this year, while Park City posted 191 for the same period.

According to industry analysts, Telluride’s area listings have eight short sales, properties sold at reduced prices to satisfy lenders. Meanwhile, there were more short sales in Park City this year compared with previous years. Experts said that there is always a daily increase in mountain resort areas, adding that so far, there are about 3,500 listings and about 10 percent of these are short sales.

From January to June, Colorado posted foreclosure filings on 26,565 properties, earning it the 10th position in states across the country with highest foreclosure rates. This means that one in 34 housing units or 1.25 received at least one foreclosure filing.

On the other hand, Wyoming ranked 44th in states with the highest foreclosure rates for the first half of this year. For the period, foreclosure filings were made on 413 properties, representing one out of 587 housing units or 0.17 receiving filings of foreclosures.

State industry experts said that preventing the increase in the number of foreclosed houses is a critical component towards the goal of stabilizing the real estate market.

The foreclosure crisis in Massachusetts took another victim as the Stone Hotel Motel is scheduled for Bank Owned Foreclosures auction on July 2. The over 40-room property located in South Harwich is assessed at $1,233,900, with annual taxes of $7,771.

Members of the Marin Association of Realtors received a fair warning from California Association of Realtors chief economist Leslie Appleton-Young who told them to expect for a second wave of Bank Owned Foreclosures.

The dominance of two law firms on handling proceedings for properties on bank foreclosure listings has not escaped the attention of Connecticut Attorney General Richard Blumenthal.

It is the spring home selling season, and many sellers are encouraged by the rising number of prospective home buyers browsing foreclosed homes listings and looking at houses.

Republicans in the Senate are being urged by American homeowners and housing advocates to help the government foreclosure homes program by passing the bankruptcy reform law.

Senator Dianne Feinstein of California has been linked by The Washington Times to a possible conflict of interest case involving foreclosure property for sale.

There has been an increase in litigation over short sales and efforts by homeowners to avoid foreclosure listings, according to Shannon Jones, main speaker at the meeting of the San Diego Association of Realtors in April. She also said the rise in loan modification efforts could also result in the filings of lawsuits in the future.