Monday, November 29, 2010

Sick of the Empty Houses Yet?

The abandoned rowhouse next door to Wendy and Brian Malaney has been a nightmare of a neighbor.

The rowhouse's roofing material blew off, and water seeped through the Malaneys' adjoining walls. Later the pipes burst in the neighboring property, flooding their basement. The air they and their two young daughters breathe is now heavy with the noxious stink of mold.

The Malaneys say they have no way to cover the thousands of dollars needed to repair their own home. The vacant property's owner has not stepped forward to fix the damage. Neither has the bank, which decided against foreclosing on — and taking possession of — the property. The Malaneys say insurance hasn't covered the cost of remediation — and now they are stuck.

"We have nothing without this house," said Wendy Malaney, 42, who lives in Baltimore's Wilson Park neighborhood. She said the damage has left her family with two choices: "living on the streets or waiting to get seriously ill."

After decades of population and job loss, Baltimore had 22 abandoned buildings for every 1,000 people at the end of the 1990s, according to a survey of larger cities done for the Brookings Institution. Only Philadelphia had a higher share at the time. Many of the other cities reported minimal problems.

Now, though, communities across the country are wrestling with mounting abandonment as the foreclosure crisis drags on. More homes are sitting empty. More neighbors are feeling the effects. And they can't necessarily appeal to the mortgage holder for help if the vacant properties deteriorate.

Repair work similar to what the city undertook in Wilson Park would eat up nearly $100 million if crews were sent to all 5,000 vacant properties located in largely occupied areas, and officials warn that the budget doesn't allow it.

"But we do do it on a case-by-case basis," said Michael Braverman, deputy housing commissioner in Baltimore.

Abandoned buildings are a perennial problem in Baltimore — a city where many residents share connecting walls. Nearly one-third of the city's 16,000 uninhabitable properties are near occupied homes, city officials say. And a key part of Mayor Stephanie Rawlings-Blake's new plan to attack vacancies is ratcheting up code enforcement on blocks where many residents still live, issuing fines more quickly.

But as the Malaneys discovered, months of effort by code enforcers and multiple citations sometimes bring no results. The city went one step further on their block this month, spending $18,500 to replace the vacant home's roof and remove its mold-infested drywall, insulation and carpet to try to prevent more damage to the Malaneys' property a year and a half after their woes began.

Last fiscal year, the city spent about $435,000 to stabilize 13 abandoned homes to safeguard neighboring residents, and about $450,000 to partially demolish 137 homes with major structural problems.

Baltimore's count of abandoned buildings has remained fairly stable at 16,000 in recent years, despite rising foreclosures, Braverman said. But a home doesn't get on the list until the city determines that it is not only vacant but also uninhabitable. And it can take time for structural problems to set in.

So the number of abandonments could grow. Lenders started foreclosure proceedings on more than 6,200 Baltimore homes last year, according to the Baltimore Neighborhood Indicators Alliance. Some homes have since been sold. Others are sitting empty, either in foreclosure limbo or in a bank's inventory.

Joe Schilling, professor of urban affairs and planning at Virginia Tech, said some homes in weak markets are stuck in a "foreclosure limbo" — with the owner gone and the bank deciding that it doesn't want to take the property back at auction because it wouldn't be worth it.

"It seems there's an increasing number of what I'd call bank walkaways," Schilling said. "They are making an economic decision by ... not foreclosing on the property."

Abandonment is especially challenging in a city of rowhouses, said Dan Kildee, president of the Center for Community Progress, a "think and do tank" that focuses on vacancy issues.

"The physical damage that can occur when you have shared walls is pretty obvious," he said.

Water that got into the Malaneys' home via the rowhouse next door damaged ceilings and walls. It also made the property a breeding ground for mold. The air filters the Malaneys installed to try to protect their daughters, ages 2 and 4, are pitch-black.

Wendy Malaney thinks it would cost $10,000 to $15,000 to fix their home's structural damage and remove the mold. Her husband, Brian, makes about $19,000 a year as an electrician's helper and chimney sweep, so the expense would be more than they could hope to handle themselves, the couple said.

The Malaneys' problems began in February 2009 when a windstorm ripped off roofing material from the rowhome next door, leaving only exposed plywood, which let in rain. Then in January, they said, the pipes next door burst, breaking a hole in the shared wall and submerging the Malaneys' basement in three and a half feet of water.

The Malaneys' own insurer paid $1,300 after the initial problem with the roof but declined further claims, they said. A claims representative suggested in a letter that they seek city help to get the neighboring property fixed.

Wendy Malaney said she's grateful the city stepped in. The work that was done should cut down on additional water damage, she said. But it doesn't solve her family's problem.

"The bottom line is, who's going to fix my house?" she said.

(c) 2010, The Baltimore Sun.

Tuesday, November 23, 2010

HUD Launches New One-Stop Website for Economic and Housing Data

The U.S. Department of Housing and Urban Development has unveiled a new website ( that consolidates a wide variety of economic and housing market data at the regional, state, metropolitan area and county levels. 

Using data from the Census Bureau, Labor Department, state and local governments, housing industry sources, as well as HUD’s own field economists, the new website employs interactive maps that allow visitors to access a variety of reports—from a region-wide look at employment and housing activity to individual county-level figures on population trends, rental activity and vacancy rates. 

“This is a powerful new tool that’s easy to use and offers the public a remarkable look at their local economic and housing markets,” said Dr. Raphael Bostic, HUD’s Assistant Secretary for Policy Development and Research. “Current and reliable data shouldn’t be hard to come by. This is precisely why this site will be so helpful to state and local leaders, developers, the real estate industry, and the general public who need the latest available data on their markets.”

HUD’s new website displays an interactive map of the U.S. allowing visitors an intuitive way to seek data in a number of areas of geography – from an entire region down to a particular county. In particular, the portal offers the following reports:

“Market at a Glance” reports contain economic and housing market data trends for every metropolitan area and county nationwide with employment data updated on a monthly basis. Employment data is provided from the Bureau of Labor Statistics and housing data is derived from the Census Bureau’s American Community Survey. Some adjustments are made by HUD field economists based on regional information. The data are expected to be released on a monthly basis for most of the metropolitan areas and counties. Eventually these reports will become “live” documents enabling field economists to include analysis as they complete more in-depth research for specific areas and monitor local conditions. 

“Regional Housing Market Profiles” are based on the quarterly U.S. Housing Market Conditions report and include non-farm employment, population changes, and building activity. These regional profiles also focus on the most recent housing rental and sales activity for the past two years. In addition, approximately 10-12 individual metropolitan areas are specifically profiled each quarter to provide these same data down to the metro area level.

“Regional Narratives” are broad overviews of economic and housing market trends within 10 regions of the U.S. These narratives are based on information obtained by HUD economists from state and local governments, from housing industry sources, and from their ongoing investigations of housing market conditions 

“Comprehensive Housing Market Analysis” – Periodically, HUD field economists focus on particular metropolitan housing markets to produce counts and estimates of employment, population, households, and housing inventory. Each housing market analysis considers changes in the economic, demographic, and housing inventory characteristics during three periods: from 1990 to 2000; from 2000 to the as-of date of the analysis; and from the as-of date to up three years in the future.


Saturday, November 20, 2010

From Coast to Coast, Home Buyers Bid Above Asking Price

Some homes across the country at various price points are selling above asking price, according to the Q3 2010 Home Hunter Report released by ZipRealty. The report reveals that in Q3 2010, California was home to five out of the country’s ten “hottest” zip codes, defined as those zip codes where the average home sale price is most above the average list price by percentage. This is down from California having seven of the top ten hottest zip codes last quarter.

Similarly, the report found that five out of ten zip codes nationwide where homes were selling most below asking price for the same time period were located in Florida. Florida is also down from seven of the markets selling most below asking price in the previous quarter, pointing to a diversification in both the highest and lowest sales-to-list price ratios across the country.

Highlights from the ZipRealty Q3 2010 Home Hunter Report:

-The Chicago area’s Greater Grand Crossing neighborhood (60619) is the country’s “hottest” zip code, with homes selling on average for almost 9% above the asking price. Another Chicago neighborhood, downtown’s Loop (60603), also tops the list, with condos in this high-end zip code selling for an average of more than $1 million, or an average of more than 5% above the asking price in Q3.

-A San Francisco proper neighborhood, the Excelsior, made the country’s top ten list for the first time, with homes selling for an average of more than $14,000 above asking price in Q3. While California no longer entirely dominates the country’s “hottest” markets list, three of the ten zip codes selling most above asking price nationwide were located in the Bay Area, including two in Oakland and one in Berkeley.

-In addition to California and Chicago, rounding out the “hot” list in Q3 are Covington, Wash., outside of Seattle, Fort Lauderdale, FL,—both new to the “hot” list—and North Las Vegas.

-Overall, the hot markets are selling for significantly less above asking price than they were at the same time last year. Homes in the country’s ten hottest zip codes sold for an average of 5% above asking price in Q3 of this year, as compared to an average of 13% above asking price in Q3 2009.

-In the country’s “coldest” zip code, 27708 in Durham, N.C., homes sold for an average of only 81% of the list price in Q3.

-The spread of the sales-to-list price ratio lessened significantly from one quarter previous, with homes in Q2’s coldest market—Winchester, Conn., —fetching only 72% of asking price on average last quarter.

-High-end housing markets continue to offer relative bargains for buyers
, with homes in the 34102 zip code of Naples, Fla., selling on average for $370,000 below an asking price of almost $2.3 million, and homes in the 33480 zip code of Palm Beach, Fla., selling on average for $212,000 below an asking price of more than $1.2 million.

“While we’ve seen California top the list of the country’s ‘hottest’ home sale markets for some time, we’re now seeing signs that buyers in other markets across the country—including hard-hit regions like Florida and Las Vegas—may be taking advantage of the historically low pricing and interest rates characterizing today’s market,” said John Oldham, director of marketing for ZipRealty. “The gap between homes selling most above and below asking price appears to be decreasing, an encouraging sign that prices may be stabilizing and both buyers and sellers could be adjusting to the new market reality.”

Phoenix is Nation’s Most Popular City for Home Hunters
According to the total number of home searches on throughout Q3, the Phoenix area remains the most popular city searched for the second straight year, or eight consecutive quarters. Phoenix proper and its suburbs claimed eight of the top 25 most searched cities, while the Las Vegas area took ten of the spots on that list. Florida had a stronger representation in the top 10 most searched list than in quarters before, with Kissimee and Ft. Lauderdale joining Orlando in the top searches list.


Friday, November 19, 2010

Mortgage Rates Rise Significantly

Mortgage rates increased again this week, with the average conforming 30-year fixed mortgage rate now 4.62 percent, according to's weekly national survey. The average 30-year fixed mortgage has an average of 0.37 discount and origination points. 

To see mortgage rates in your area, go to

The average 15-year fixed mortgage increased to 4.02 percent, and the larger jumbo 30-year fixed rate soared as well to 5.24 percent. Adjustable rate mortgages also climbed higher, with the average 5-year ARM inching higher to 3.71 percent and the average 7-year ARM rising to 4.01 percent. 

Mortgage rates jumped significantly this week, posting a second consecutive weekly increase since the Federal Reserve announced renewed measures to boost the economy. Worries that the Fed's quantitative easing program will spark higher inflation, coupled with stronger economic data on retail sales and weekly unemployment filings fueled the latest increase. Although mortgage rates have increased, they remain extremely low in a historical context and will not be an impediment to well-qualified borrowers for the foreseeable future. 

The last time mortgage rates were above 6 percent was November 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.62 percent, the monthly payment for the same size loan would be $1,027.68, a savings of $214 per month for a homeowner refinancing now.

Thursday, November 11, 2010

October 2010 Market Report for Albuquerque Areas

• Pending sales for detached single-family homes in the month of October were at 655, down less than 1 percent from the previous month.
• The median sale price for single-family detached homes saw a year-over-year increase for the 2nd consecutive month.
• New homes entering the market for sale saw a 6.72 percent decrease from the previous year, while the current inventory of homes for sale rose 11 percent from the same period.

Monday, November 8, 2010

Avoiding Foreclosure

Few things are as devastating as losing your home. Sadly, it's not always inevitable. In many cases the foreclosure could've been avoided with some outside help.

Here are some of the hidden difficulties that will arise if foreclosure occurs.

Finding a new home. Don't believe that it will be better to let the foreclosure happen, because after you lose your home, you will still need to find a new place to live. All too often, the price you will need to pay in rent will be almost as high if not higher than your current mortgage payment. Remember: The owner of the property needs to make his mortgage payment, too, so he's going to charge a rental payment that's higher than his mortgage costs.

Deficiency judgment. It's not uncommon that the sale of the home is insufficient to cover the remainder of the mortgage. When the property has been damaged, or market values have dropped, the owner may end up with a bill in the tens of thousands for the difference.

Despite what many people think, most lending institutions are not anxious to foreclose. It's a last-ditch effort to recover their money and minimize their losses, and it's an incredible hassle. Most lenders would rather avoid it, if possible. There are multiple sources for help that you should be aware of, and most lenders will be happy to hear that you are going to try to keep your home rather than just await a foreclosure.

Housing Counseling Agency. The US Department of Housing and Urban Development maintains a list of HUD-approved counseling agencies. Call (800) 569-4287 to find the agency nearest you.

FHA-Insurance fund. FHA borrowers may qualify to have HUD make a one-time payment to bring their mortgage current. See for more information on the requirements to qualify.

Different mortgage program. Talk to a loan officer about the possibility of refinancing your mortgage to a more affordable program.

Special Forbearance. Many borrowers can qualify for a new payment structure if they've had an increase in their cost-of-living, such as unexpected medical expenses, or a decrease in wages. This payment structure will allow the owner to repay the lender in a given time frame.

Sunday, November 7, 2010

One Reason for Housing Glut: Fewer New Households

U.S. household formations are at their lowest since 1947, data from the Census Bureau show. And that's helping to keep the supply of unsold homes at near-record levels nationwide, even though relatively few houses are being added to the inventory.

Between March 2009 and March 2010, the number of households rose just 357,000, according to the census data. In the previous 12 months, the number increased only 398,000, the third-smallest increase on record since World War II.

Between 2002 and 2007, before the economy started on its downward trajectory, household formations averaged 1.3 million a year, U.S. census data show.

"That's the consequence of the consumer fear of what's happening with the economy and with the job market," said Lucien Salvant, a spokesman for the National Association of Realtors.

"When people are afraid of losing their jobs or not being able to get into the job market, they are not thinking about buying a home," Salvant said. "Many opt to stay at home with parents, or to share rentals with friends."

The nation's gross vacancy rate — the proportion of housing units that are vacant — stood at 14.5 percent at the end of the second quarter of 2010, census data show.

In a well-functioning economy, household formations "would be closer to 1.25 million," said Mark Zandi, chief economist of Moody's Analytics in West Chester, Pa.

During normal times, builders need to add about 1.7 million houses a year to meet underlying demand stemming from, among other things, the need for replacement homes and the desire for second homes, as well as conversions from nonresidential to residential uses and increases in the number of households.

For example, about 250,000 new homes are needed per year to replace houses that are destroyed by fires and natural disasters or that wear out from neglect or old age. Demand for second homes combined with other miscellaneous factors accounts for 50,000 to 100,000 new houses a year.

Household growth typically requires 1.3 million to 1.4 million units.

"The sharp drop in household formation largely explains why the housing glut remains stubbornly high, despite the plunge in housing starts in recent years," said housing economist Patrick Newport, of IHS Global Insight in Lexington, Mass.

Two major sources of household formation — immigration and marriage — remain well below the averages of recent years.

The National Center for Health Statistics reports that the number of marriages per thousand population fell from 8.2 in 2000 to 6.8 in 2009. Divorces per thousand population fell from 4.0 in 2000 to 3.4 in 2009.

There are no hard data on "doubling up" — young people sharing rentals or moving in with their parents in a tight job market — though anecdotal evidence indicates the latter has become more commonplace in recent years.

During the late 1990s and in the first years of this decade, the housing industry banked on immigration for a good part of its growth.

Between 1990 and 2000, the U.S. population grew by nearly 33 million, with almost half of that gain attributable to immigration, according to data provided in 2003 by James Johnson Jr., a professor at the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill.

In the 1990s, census data show, immigrants accounted for 250,000 household formations a year. Immigrants typically rent for their first few years in this country, housing economists say. Then, after becoming established, they become a major factor in the for-sale marketplace.

Newport believes that a drop in immigration might have played a greater role early in the recession than it did later on. In 2009, census data show, households headed by the native-born under age 35 fell by 338,000, indicating that doubling up was the larger contributor.

The number of households headed by those ages 15 to 24 fell 124,000 (students moving back in with parents), while households with six or more people rose 355,000, an 8 percent increase.

A common misconception, Newport said, is that foreclosures account for the oversupply of houses.

"A foreclosure or a bank taking possession of a home," he said, "does not by itself add to the housing glut."

If a household vacates a home and moves into a rental unit, the housing supply is unchanged. Supply increases, however, if one household moves in with another, Newport said, or if its members become homeless.

(c) 2010, The Philadelphia Inquirer.