ESTATE


Foreclosures, Short Sales Weigh Down Prices
2009/05/12, 6:50 pm
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The median home price for U.S. metro areas posted a year-over-year decline in the first quarter of 2009, reflecting a high volume of foreclosures and short sales, which typically sell for 20 percent less than traditional homes, the NATIONAL ASSOCIATION OF REALTORS® reports.

The national median existing single-family price was $169,000, which is 13.8 percent below the first quarter of 2008 when conditions were closer to normal. Foreclosures and short sales accounted for nearly half of transactions in the first quarter.

NAR data shows that 134 out of 152 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the first quarter of 2008, while 18 metros had price gains.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are two levels of pricing in the current market.

“Traditional homes in good condition have held their value much better, so owners shouldn’t be overly concerned about median prices,” he said. “Most sellers can expect a good return if they’ve been in their home for a normal period of home ownership and haven’t excessively tapped their equity.”

Existing-Home Sales Sluggish

Meanwhile, the sales pace remained slow overall. Total state existing-home sales, including single-family homes and condos, were at a seasonally adjusted annual rate of 4.59 million units in the first quarter, down 3.2 percent from 4.74 million units in the fourth quarter, and 6.8 percent below the 4.93 million-unit pace in the first quarter of 2008.

Seventeen states saw a sales increase from the fourth quarter, and six states were higher than a year ago; complete data for one state was not available. Sales in the first quarter do not reflect an impact from the first-time home buyer tax credit.

Lawrence Yun, NAR chief economist, sees the market in a lull before an upturn. “Over the past couple months, contract activity for home sales, buyer traffic and inquiries about the $8,000 tax credit have all increased,” he said. “Housing affordability conditions are at record high levels and we expect a measurable increase in home sales during the second half of the year, which would help stabilize prices in most areas.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage fell to a record low 5.06 percent in the first quarter from 5.86 percent in the fourth quarter; the rate was 5.88 percent in the first quarter of 2008.

Yun said some areas showed dramatic drops in home prices. “In areas with the biggest price declines, we also see much higher levels of distressed sales which are distorting the data,” he said. “We are very much in a bifurcated market with sharp differences between foreclosures and short sales on one hand, and traditional homes on the other. In many cases homes are selling below replacement construction costs, which speaks to great value in the current market.”

State, Local Bright Spots

The largest first-quarter sales gain from a year ago was in Nevada, up 116.8 percent, followed by California which rose 80.6 percent; Arizona, up 50.2 percent; and Florida with a 25.0 percent increase. Virginia and Minnesota also experienced double-digit sales increases.

The largest single-family home price increase in the first quarter was in the Cumberland area of Maryland and West Virginia, where the median price of $114,900 rose 21.1 percent from a year ago.

Next was the Davenport-Moline-Rock Island area of Iowa and Illinois at $100,300, up 13.8 percent from the first quarter of 2008, followed by Columbia, Mo., where the median price increased 6.0 percent to $152,600.

Median first-quarter metro area single-family home prices ranged from a very affordable $30,300 in the Saginaw-Saginaw Township North area of Michigan to $570,000 in Honolulu. The second most expensive area was the San Jose-Sunnyvale-Santa Clara area of California, at $450,000, followed by the Anaheim-Santa Ana-Irvine area of California at $435,800.
Other affordable markets include Akron, Ohio, at $50,100, and the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $51,200.

Condo Trends

In the condo sector, metro area condominium and cooperative prices – covering changes in 56 metro areas – showed the national median existing-condo price was $172,800 in the first quarter, down 20.2 percent from the first quarter of 2008. Five metros showed annual increases in the median condo price and 51 areas had declines.

The strongest condo price increases were in Portland-South Portland-Biddeford, Maine, at $196,900, up 11.2 percent, followed by the Wichita, Kan., area, where the median condo price of $113,900 rose 6.8 percent from the first quarter of 2008, and Bismarck, N.D., at $132,400, up 6.0 percent.

Metro area median existing-condo prices in the first quarter ranged from $75,200 in Las Vegas-Paradise, Nev., to $345,900 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was Honolulu at $300,000, followed by the New York-Wayne-White Plains area of New York and New Jersey at $282,300.

Other affordable condo markets include the Palm Bay-Melbourne-Titusville area of Florida at $90,600 in the first quarter, and the Sacramento-Arden-Arcade-Roseville area of California at $93,800.

Regional Sales Volume, Prices

Regionally, existing-home sales in the Northeast fell 10.3 percent in the first quarter to a pace of 693,000 units and are 20.1 percent below a year ago.

The median existing single-family home price in the Northeast declined 15.9 percent to $235,500 in the first quarter from the same period in 2008. The best gain in the region was in Syracuse, N.Y., where the median price of $113,700 rose 3.1 percent from the first quarter of 2008, followed by Buffalo-Niagara Falls, N.Y., at $99,200, up 2.7 percent, and Binghamton, N.Y., where the median rose 0.5 percent to $110,300.

In the Midwest, existing-home sales slipped 2.2 percent in the first quarter to a pace of 1.04 million and are 13.1 percent below a year ago.

The median existing single-family home price in the Midwest was down 6.8 percent to $132,400 in the first quarter from the same period in 2008. After Davenport-Moline-Rock Island and Columbia, the next strongest metro price increase in the region was in Springfield, Ill., where the median price of $111,400 was 3.9 percent higher than a year ago, followed by Topeka, Kan., at $106,500, up 3.1 percent, and Bloomington-Normal, Ill., at $153,800, up 1.9 percent.

In the South, existing-home sales declined 2.5 percent in the first quarter to an annual rate of 1.70 million and are 12.7 percent lower than the same period in 2008.

The median existing single-family home price in the South was $146,600 in the first quarter, down 10.8 percent from a year earlier. After Cumberland, the strongest price increase in the region was in Beaumont-Port Arthur, Texas, with a 5.0 percent gain to $129,100, followed by Oklahoma City, at $129,900, up 4.0 percent, and Shreveport-Bossier City, La., at $136,000, up 3.4 percent.

Existing-home sales in the West slipped 0.9 percent in the first quarter to an annual rate of 1.16 million but are 24.3 percent above a year ago.

The median existing single-family home price in the West was $237,600 in the first quarter, which is 19.8 percent below the first quarter of 2008. The strongest price gain in the West was in the Salt Lake City area, where the median price of $230,100 rose 1.9 percent from a year earlier, followed by Farmington, N.M., at $191,200, up 0.7 percent.

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Settlement reached with Columbia MLS
2009/05/05, 2:21 pm
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COLUMBIA – A settlement has been reached in a lawsuit in which the U.S. Department of Justice claimed Columbia’s Consolidated Multiple Listing Service’s rules for allowing brokers to use the listing service caused consumers to pay more for residential real estate brokerage services in the Columbia area.

The Department’s Antitrust Division filed its proposed settlement in U.S. District Court in South Carolina on Monday. If approved by the court, the proposed settlement would resolve the Department’s antitrust concerns.

“Today’s settlement will remove unlawful impediments to competition for real estate brokerage services in the Columbia area and will lead to more choices and lower brokerage fees for South Carolina consumers,” said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. “For most Americans, purchasing a home is the most significant purchase of their life. This settlement demonstrates the Department of Justice’s continuing commitment to preserve competition in the real estate brokerage industry.”

The CMLS said in a statement the settlement allows it to maintain its position on several issues that are meant to protect the consumers’ interest, safety, security and trust of professionals in the industry. Among them, it will continue to require background checks for its member companies; only do businesses with real estate companies with Errors and Omissions Insurance; and continue to require electronic key boxes that record and immediately notify the listing agent about who is trying to access a listed property.

“In conclusion, with this settlement we can get back to the focus of helping take care of the Midlands current and would-be homeowners with the same level of service and professionalism that they have come to expect,” the CMLS said.

In May 2008, the Department’s Antitrust Division filed a civil antitrust lawsuit against CMLS in U.S. District Court in South Carolina, challenging policies and rules that restrained competition among brokers in Columbia in several ways.

According to the Justice Department, CMLS imposed prerequisites to membership that prevented some real estate brokers, such as those who would likely compete aggressively on price, from listing homes for sale in the MLS’s database, ensuring that those brokers could not compete in the Columbia area.

CMLS required applicants for membership to discuss the nature of their businesses with a committee of incumbent members and reserved the power to deny membership to brokers who they feared would compete too aggressively. CMLS also stabilized the price of brokerage services by forcing its broker members to provide a full set of brokerage services regardless of whether a client wanted the required services. The Department said that those rules prevented consumers from receiving the full benefits of competition, discouraged discounting, and threatened to lock in outmoded business models.

The proposed settlement with CMLS requires it to change those rules and prohibits it from adopting new rules that exclude real estate brokers from membership based on their business models or price structures.

The settlement also said:

–CMLS must allow any broker holding the appropriate license under South Carolina law to become a member and cannot continue to exclude brokers based on their business models.

–CMLS will repeal rules that denied Columbia-area home sellers the ability to hire a real estate broker to perform only the specific services the seller desired, at a lower cost than the seller would pay a traditional, full-service broker.

–CMLS also will repeal its requirement that its member brokers use only the single contract approved by CMLS, which blocked home sellers from alternative arrangements that allowed them to avoid paying any commission to their broker if the sellers found buyers for their homes.



Bank of America posts 1Q profit but stocks fall
2009/04/21, 4:38 pm
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Business Update: BofA sparks slump Play Video Reuters  – Business Update: BofA sparks slump

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CHARLOTTE, N.C. – Bank of America Corp. warned of worsening loan default problems Monday even as it posted a first-quarter profit of $2.81 billion. Investors concerned about the banking industry’s health sent financial stocks and the overall market sharply lower.

Although Bank of America said higher revenue from the purchase of Merrill Lynch & Co. helped offset a surge in credit costs, it took a $13.4 billion provision for credit losses during the first three months of the year. The amount of its problem loans more than tripled to $25.7 billion and CEO Ken Lewis said he couldn’t predict when the bank’s credit morass would end.

The bank’s stock fell $2.58, or 24.3 percent, to $8.02 as the overall stock market plunged. Last week Wall Street was happy with better-than-expected results from JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc., but investors have been rethinking that initial upbeat response. Banking companies generally benefited during the quarter from unusually strong bond trading, a trend not expected to continue, while recession-driven loan problems persist and are expected to worsen this year.

Also weighing on investors is uncertainty about the government’s “stress tests,” analyses of bank finances to determine if they’ll need more bailout funds if the economy worsens.

Over the weekend there were statements from administration officials that banks may need more government capital,” and “the markets are reacting,” said Gary Townsend, chief executive officer of Hill-Townsend Capital LLC.

Stress test results are due in the coming weeks.

“The economy hasn’t hit bottom, the credit cycle hasn’t run its course,” said banking industry consultant Bert Ely. “We have a few more quarters of touch and go on profitability because of all the credit losses that are being taken.”

Charlotte, N.C.-based Bank of America earned $2.81 billion after paying preferred dividends, or 44 cents per share, compared with a profit of $1.02 billion, 23 cents per share, in the year ago period. Analysts surveyed by Thomson Reuters expected profit of 4 cents per share.

Bank of America, as other banks have done, attributed its profit to trading activities on markets including bonds.

“Like it or not, capital markets is now a core business for Bank of America, and that has more volatile returns than other businesses,” said Celent banking analyst Bart Narter. “Bank of America is no longer exclusively a retail bank and there can be more fluctuations.”

But troubled loans, also known as nonperforming assets, increased to $25.7 billion from $7.8 billion a year ago. The bank also lost $1.8 billion on credit card services, after posting a profit a year ago.

“Credit is bad and we believe credit is going to get worse before it will eventually stabilize and improve,” Lewis said during a conference call with analysts. “Whether that turn is later this year or in the first half of 2010, I’m not going to hazard a guess.”

Lewis has been under intense pressure this year over the Merrill purchase, which closed Jan. 1. Shareholders approved the deal before learning of big losses at the New York-based investment bank and reports surfaced that Merrill paid billions of dollars in bonuses to employees before the deal was completed, even as Bank of America was begging the government for aid to complete the acquisition.

With the company’s acquisition last year of mortgage lender Countrywide Financial Corp. and its expansion into credit cards after buying MBNA Corp. in 2005, Bank of America is mired in two businesses that are suffering. Consumers are spending less and defaulting more often as they worry over declining home values and rising unemployment.

“Bank of America is more exposed than their competitors in these areas, and it hurts them on the consumer side of the business,” Narter said.

Bank of America recorded a $13.4 billion provision for credit losses in the first quarter and set aside $6.4 billion as additional reserves to cover future losses.

The first-quarter results include revenue from the company’s acquisitions of Merrill and Countrywide. Revenue more than doubled to $35.76 billion, mainly from the addition of Merrill. It was also helped by a $1.9 billion pre-tax gain from selling shares Bank of America owned in China Construction Bank. Bank of America continues to own about 17 percent of the common shares of the Chinese bank, it said. Analysts expected revenue of $27.13 billion.

Bank of America has received $45 billion in government funds as part of the Treasury Department’s $700 billion financial rescue package. Lewis has made remarks of his intentions to repay the government as soon as possible.

Townsend said he isn’t certain that Bank of America is able to come up with the money, unlike Goldman Sachs, which has already raised capital.

“Bank of America is not yet positioned to repay the TARP (Troubled Asset Relief Program) and move itself away from the rather uncomfortable embrace of the United States government,” he said.

In the investor conference call, Lewis said his bank won’t need more capital from the government, reiterating a theme he’s touched on often in recent weeks. Asked about the government converting its preferred shares in the bank into common, Lewis replied, “We think we’re fine but it’s out of our hands … This is in the hands of the regulators at the moment.”

An analyst at Standard & Poor’s equity research division, however, said Monday that “a capital raise can’t be ruled out.”

While Bank of America benefited from stronger-than-expected trading and refinancing revenue, “we don’t think revenue is sustainable,” wrote Stuart Plesser in a research note. Plesser maintained a “hold” rating on Bank of America’s shares.

 

http://news.yahoo.com/s/ap/20090420/ap_on_bi_ge/earns_bank_of_america



Columbia’s Tax Day Tea Party
2009/04/16, 1:57 pm
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NYT: Squatters call foreclosures home
2009/04/10, 12:38 pm
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Advocacy groups screen potential residents, move them into vacant homes
MIAMI – When the woman who calls herself Queen Omega moved into a three-bedroom house here last December, she introduced herself to the neighbors, signed contracts for electricity and water and ordered an Internet connection.

What she did not tell anyone was that she had no legal right to be in the home.

Ms. Omega, 48, is one of the beneficiaries of the foreclosure crisis. Through a small advocacy group of local volunteers called Take Back the Land, she moved from a friend’s couch into a newly empty house that sold just a few years ago for more than $400,000.

Michael Stoops, executive director of the National Coalition for the Homeless, said about a dozen advocacy groups around the country were actively moving homeless people into vacant homes — some working in secret, others, like Take Back the Land, operating openly.

In addition to squatting, some advocacy groups have organized civil disobedience actions in which borrowers or renters refuse to leave homes after foreclosure.

The groups say that they have sometimes received support from neighbors and that beleaguered police departments have not aggressively gone after squatters.

“We’re seeing sheriffs’ departments who are reluctant to move fast on foreclosures or evictions,” said Bill Faith, director of the Coalition on Homelessness and Housing in Ohio, which is not engaged in squatting. “They’re up to their eyeballs in this stuff. Everyone’s overwhelmed.”

On a recent afternoon, Ms. Omega sat on the tiled floor of her unfurnished living room and described plans to use the space to tie-dye clothing and sell it on the Internet, hoping to save some money before she is inevitably forced to leave.

“It’s a beautiful castle, and it’s temporary for me,” she said, “and if I can be here 24 hours, I’m thankful.” In the meantime, she said, she has instructed her adult son not to make noise, to be a good neighbor.

‘A modern-day underground railroad’
In Minnesota, a group called the Poor People’s Economic Human Rights Campaign recently moved families into 13 empty homes; in Philadelphia, the Kensington Welfare Rights Union maintains seven “human rights houses” shared by 13 families. Cheri Honkala, who is the national organizer for the Minnesota group and was homeless herself once, likened the group’s work to “a modern-day underground railroad,” and said squatters could last up to a year in a house before eviction.

Other groups, including Women in Transition in Louisville, Ky., are looking for properties to occupy, especially as they become frustrated with the lack of affordable housing and the oversupply of empty homes.

Anita Beaty, executive director of the Metro Atlanta Task Force for the Homeless, said her group had been looking into asking banks to give it abandoned buildings to renovate and occupy legally. Ms. Honkala, who was a squatter in the 1980s, said the biggest difference now was that the neighbors were often more supportive. “People who used to say, ‘That’s breaking the law,’ now that they’re living on a block with three or four empty houses, they’re very interested in helping out, bringing over mattresses or food for the families,” she said.

 

Ben Burton, executive director of the Miami Coalition for the Homeless, said squatting was still relatively rare in the city.

But Take Back the Land has had to compete with less organized squatters, said Max Rameau, the group’s director.

“We had a move-in that we were going to do one day at noon,” he said. “At 10 o’clock in the morning, I went over to the house just to make sure everything was O.K., and squatters took over our squat. Then we went to another place nearby, and squatters were in that place also.”

 

Mr. Rameau said his group differed from ad hoc squatters by operating openly, screening potential residents for mental illness and drug addiction, and requiring that they earn “sweat equity” by cleaning or doing repairs around the house and that they keep up with the utility bills.

“We change the locks,” he said. “We pull up with a truck and move in through the front door. The families get a key to the front door.” Most of the houses are in poor neighborhoods, where the neighbors are less likely to object.

Kelly Penton, director of communications for the City of Miami, said police officers needed a signed affidavit from a property’s owner — usually a bank — to evict squatters. Representatives from the city’s homeless assistance program then help the squatters find shelter.

To find properties, Mr. Rameau and his colleagues check foreclosure listings, then scout out the houses for damage. On a recent afternoon, Mr. Rameau walked around to the unlocked metal gate of an abandoned bungalow in the Liberty City neighborhood.

“Let the record reflect that there was no lock on the door,” Mr. Rameau said. “I’m not breaking in.”

Inside, the wiring and sinks had been stripped out, and there was a pile of ashes on the linoleum floor where someone had burned a telephone book — probably during a cold spell the previous week, Mr. Rameau said.

“Two or three weeks ago, this house was in good condition,” Mr. Rameau said. “Now we wouldn’t move a family in here.”

So far the group has moved 10 families into empty houses, and Mr. Rameau said the group could not afford to help any more people. “It costs us $200 per move-in,” he said.

Moving back home
Mary Trody hopes not to leave again. On Feb. 20, Ms. Trody and her family of 12 — including her mother, siblings and children — were evicted from their modest blue house northwest of the city, which the family had lived in for 22 years, because her mother had not paid the mortgage.

After a weekend of sleeping in a paneled truck, however, the family, with the help of Take Back the Land, moved back in.

“This home is what you call a real home,” Ms. Trody said. “We had all family events — Christmas parties, deaths, funerals, weddings — all in this house.”

On a splendid Florida afternoon, Ms. Trody’s dog played in the water from a hose on the front lawn. The house had mattresses on the floors, but most belongings were in storage, in case they had to leave again.

“I don’t think it’s fair living in a house and not paying,” Ms. Trody said.

She said the mortgage lender had offered the family $1,500 to leave but was unwilling to negotiate minimal payments that would allow them to stay. She said she and her husband had been looking for work since he lost his delivery job with The Miami Herald.

In the meantime, she said, “I still got knots in my stomach, because I don’t know when they’re going to come yank it back from me, when they’re going to put me back on the streets.”

The block was dotted with foreclosed homes.

Three of her neighbors said they knew she was squatting and supported her. One is Joanna Jean Pierre, 32, who affectionately refers to Ms. Trody as Momma.

Ms. Pierre said Ms. Trody was a good neighbor and should be let alone. “That’s her house,” Ms. Pierre said. “She should be here.”

Ms. Trody said that living here before, “I felt secure; I felt this is my home.”

“This is where I know I’m safe,” she added. “Now it’s like, this is a stranger. What’s going to happen?”

 

Even without furniture or homey touches, she talked about the house as if it were a member of her family.

“I know it’s not permanently, but we still have these couple days left,” she said. “It’s like a person that you’re losing, and you know you still have a few more days with them.”

This story, “More Squatters Are Calling Foreclosures Home“, originally appeared in The New York Times.

www.nytimes.com



10 Happiest states in the US
2009/04/07, 8:16 pm
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Money can’t buy happiness, but it can make life a whole lot easier.

MainStreet.com’s Happiness Index examined household income, debt, employment, and foreclosures to choose the states that are surviving the current economic crisis with the most panache.

The analysis discovered that despite disastrous conditions in parts of Michigan and Ohio, overall, the Midwest is navigating the financial meltdown with the highest average salaries, lowest unemployment, and fewest foreclosures. In fact, Nebraska, in the center of the corn belt, scores highest on MainStreet’s Happiness Index.

Here are the rest of the top-10 happiest states:

  1. Nebraska
  2. Iowa
  3. Kansas
  4. Hawaii
  5. Louisiana
  6. Oklahoma
  7. Wyoming
  8. South Dakota
  9. West Virginia
  10. Wisconsin

Source: MainStreet.com, Stephen Dalton (04/06/2009)

http://www.realtor.org/RMODaily.nsf/pages/News2009040703?OpenDocument



Twitpic creator || entrepreneur Noah Everett moving to Charleston, Sc
2009/04/07, 6:22 pm
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Noah Everett launched TwitPic, an application that allows users to upload photos to their Twitter accounts, in February of 2008 as a way for him and “maybe a few friends” to share photos, he said.

The application is now the No. 1 Twitter application and is adding 20,000 new users a day, he said. Everett expects the number of users to hit 1 million this month.
Awkward Introduction from Noah Everett on Vimeo

One of the first images from the US Airways plane crash into the Hudson River in February was released by one of his users, who uploaded the photo from his cell phone to TwitPic.

The TwitPic application started out self-funded, about $100 a month for the first four or five months. He absorbed that cost from his full-time job as a Web developer in Tulsa, Okla.

Venture capital offers started coming in, but Everett declined. He started putting ads on the site in August, and, by December, the site had exploded. He had to build a new platform for the program as volume grew from a few pictures a day to tens of thousands.

Ad revenue growth was so steep, he quit his job last month to work full time on the site. And now, he is looking to hire two people — one to help manage the hardware and another to work on development.

With no strong ties to Oklahoma, he started to revisit the idea of moving to Charleston, which he first hatched while watching The Patriot in November.

Noah Everett“It started out as an imaginary idea, then I started researching it, looking at cost of living. Then it just turned into reality,” Everett said.

He brought his family on vacation here and says he liked the area a lot. He found an apartment on Daniel Island the first day he started looking and plans to move in 12 days.

Although he’s gotten two offers to be bought out — he said the last one was in the $3 million to $5 million range —he wants to grow the site himself for a while before selling it.

“The technology is available now where you are able to create these apps much easier. There’s a much lower barrier than in the dot-com boom,” he said. “It only takes one idea — something that fills a need.”

http://charlestonbusiness.com/news/27119-twitpic-creator-entrepreneur-plans-move-to-charleston