Historic Savannah Homes on Auction Block
SAVANNAH, Ga. – National Auction Group Inc. has penciled May 6 for the sale of 11 condominiums, including seven in the Jones Square historic district.
"Two of the seven at Jones Square will be sold absolute, meaning regardless of price, and their spectacular locations make them all the more desirable," said William Bone, president of the Alabama-based auction group. The other four condominiums are located at East Broad Place, just one block from Broughton, which is convenient to the islands and beaches and within walking distance of the Savannah College of Art and Design.
The units are one-, two- and three-bedroom condos with luxury finish-outs. The Jones Square building features a conference room, concierge and underground gated parking.
"These are truly wonderful condominiums," Bone said. "And being part of these extraordinary communities makes them even more special. This is a remarkable opportunity to bid on spectacular residential fantasies and to purchase an incomparable lifestyle." The auction will be held in the trustees' garden at 10 E. Broad St.
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NLIHC's Crowley Testifies
WASHINGTON, D.C. – National Low-Income Housing Council president Sheila Crowley yesterday called on Congress to fund the National Housing Trust Fund as a component of reform.
The trust was approved in 2008, but has not yet been funded. "We are interested in the topic of today's hearing primarily because the housing finance system in the United States to date has failed miserably in assuring enough housing for all Americans and we want any reform that Congress undertakes to address that serious shortcoming," Crowley testified.
Congress is considering the reform of the housing finance system, including the overhauls of Fannie Mae and Freddie Mac. Other principles promoted by Crowley include putting the most serious housing problems at the top of priority lists for direct federal subsidies and creating policies that incentivize balance in the housing market.
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Village Homes Gains 113 Lots
DENVER – Village Homes has bought 113 residential lots from Compass Bank, the majority of which are located in one of the Denver area's most popular master-planned communities.
The acquisition, with 60 in the Meadows, includes lots in Lowe Enterprises Inc.'s original Village Homes in Idyllwilde, Observatory Village and Granby Ranch. In late December 2009, Los Angeles-based Lowe Enterprises Inc. and Homebuilder Capital Solutions of Denver acquired Village Homes and nearly 1,000 lots and homes. Lowe Enterprises in the managing operating partner of the joint venture.
"We acquired Village Homes with a plan to reestablish the company among the top independent home builders in Denver. Our strategy is geared to position the company to grow by selectively acquiring residential lots, taking advantage of the current distress in the market," said Eric Eckberg, senior vice president of Lowe's real estate group.“
The 2009 takeover included 57 partially completed or completed homes, 506 finished lots, 444 unfinished lots and 3.7 acres of developable land. As part of Village Homes repackaging, the company will focus development efforts on the Meadows, Castle Pines North, Heathstead, Idyllwilde, Observatory Village and Granby Ranch.
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K. Hovnanian Pockets Deed
To Five Acres Near Beach
CARLSBAD, Calif. – K. Hovnanian Homes has taken control of a 5.12-acre tract close to Carlsbad State Beach in a bank-owned sale.
The single-family development site is situated east of the Interstate 5 Freeway. The land will be divvied into 5,000-sf lots, many of which will have ocean views. The development is slated to open in spring 2011.
"We are very excited to develop a new home community that will create a causal seaside lifestyle where residents can walk to their favorite restaurants and stores or take a sunset stroll down to the beach. It's the new home package that people with the goal of moving up have been waiting for in Carlsbad," said Wally Miller, area president for K. Hovnanian Homes, a subsidiary of Red Bank, N.J.-based Hovnanian Enterprises Inc.
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Children's Home To Auction Landmark
WILMINGTON, N.C. – The Methodist Home for Children has placed a 4,100-sf Colonial home, built in 1925, into the hands of an auctioneer.
Tranzon Fox, based in Virginia Beach, Va., has scheduled the auction for 10 a.m. April 15. The landmark home at 2614 Market St. is located in the prestigious Forest Hills subdivision. The opening bid is $300,000. The terms call for a 45-day closing period and as-is condition.
Among the features is a sitting room adjoining the master bedroom, first-floor bedroom that could function as a library or den, and kitchen with a butler's pantry. The seller, founded in 1899, is a community-based agency primarily servicing the central and eastern regions of North Carolina.
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Hillwood, Dal Briar Mark Groundbreaking
ALLEN, Texas – Joint venture partners Hillwood Residential and Dal Briar Corp. today will break ground on one of the last phases in the 2,400-acre Twin Creeks in Collin County.
The Twin Creeks phase adds 40 lots to the development, which is the largest residential community in the city. Twin Creek's development began in 1993, with its population now boasting more than 2,400 families. According to Hillwood's research, about 25 percent of all residential closings in the past decade have occurred in Twin Creeks along Shallowater and Walnut Springs drives.
On hand to mark today's milestone will be Ross Perot Jr., chairman of North Texas-based Hillwood; Fred Balda, president of Hillwood Residential; and Charles Nies, vice president of Dallas-based Dal Briar.
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Third-Party Investors Stepping Up
For D/FW Foreclosure Properties
ADDISON, Texas – Foreclosure Listing Service Inc. has found more than 250 single-family homes hitting the auction block during the first quarter were sold to third-party investors.
In a brand-new study, the North Texas-based watchdog found that the investors accounted for six percent of the foreclosure sales. "Investors buying at these auctions got a great bang for the buck by paying an average of just 56 cents on the dollar (based on appraisal district values) for these properties," reported George Roddy Sr., president of the local firm.
Roddy said the investors and individuals looking for good deals account for the third-party buying mix."I expect this to be a great year for the investor or home purchaser who is in a financial position to be buying distressed properties at any stage in the foreclosure process," he added.
The greatest amount of third-party activity occurred in Collin and Denton counties, where eight and nine percent, respectively, of the posted properties passed to the private market. Collin had 44 of its 543 sales bought by third parties and Denton had 53 of 560 sales go to the sector.
In Dallas County, third-party buyers took 90 of the 1,995 properties sold at auction during the first quarter. Tarrant County had 76 of its 1,478 auctioned properties move into private hands.
Roddy detailed the three windows of opportunity for buying foreclosed homes: before the auction, at the auction and after the courthouse sale date. "It is an ideal time to be shopping for a home to live in or for an investment piece of real estate," he said. "This is the most remarkable period for buy at the foreclosure auctions that I have ever seen."
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Kolter Acquires Unfinished
Seasons on Lake Project
GAINESVILLE, Ga. – The Kolter Group LLC has acquired the partially developed Seasons on Lake Lanier from Wachovia for an undisclosed sum. The acquisition marks Kolter's entry into the Atlanta market.
The development, north of Atlanta, has 14 fully furnished model homes, 45 complete or partially finished homes, 169 developed lots, 147 partially developed lots and 290 approved lots that are still in raw condition. Kolter's new property also includes 30 boat slips on Lake Lanier and plans for a large clubhouse.
According to a press release, the West Palm Beach, Fla.-based private investment firm initially will focus on selling the existing inventory and then continue to market the Seasons as an active adult community, as originally planned.
"The residents have made extraordinary efforts maintaining the beauty of the community," praised Rick Covell, Kolter's senior vice president. "The Kolter Group looks forward to working with the existing residents and the City of Gainesville to complete the vision for this stunning lakeside community."
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127 Homes Being Auctioned This Week
PHOENIX – Hudson & Marshall of Texas Inc. will auction 115 homes in Arizona and 12 in Nevada, beginning Wednesday. The properties range from $35, 000 to $525,000 in value.
According to the Dallas-based auction house, all homes are accompanied by insurable titles, no back taxes or liens and will be sold on an as-is basis. A $5,000 certified check or cash is required for each winning bid. "In today's economic environment, consumers want to get the most out of their dollars and are looking for savings on everything, especially homes. Buyers want to purchase bank-owned homes because they usually can be bought at auction for a 15%-20% discount off the last list price," said Dave Webb of Hudson & Marshall. It is a reserve auction, which means sellers can accept, reject or counter bids.
The auction kicks off Wednesday, with six homes in Reno on the block and wraps up Saturday when 73 homes in Phoenix go up for grabs. Details about the auction properties are at www.hudsonandmarshall.com.
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Auction Set for Waterfront Condos
ENGLEWOOD, Fla. – Eight units of the bay-front Sunrise Pointe Condominiums on Manasota Key will be auctioned Saturday by Great American Home Auctions LLC. The sale will be held at the Gulf View Grill at 2095 N. Beach Rd., which abuts the condo property.
"Buyers will have the opportunity to purchase homes for a substantial discount to the developer's previous pricing due to the distressed real estate market," said Dan Will, president of Great American Home Auctions. "The condos are expected to be auctioned for a fraction of their original list prices and far below their original cost to build." The units, ranging from 1,846 sf to 2,513 sf, were originally priced at $737,200 to slightly more than $1 million. Opening bids will be as low as $124,900.
The two- and three-bedroom condos include two fully furnished models at 2225 and 2245 N. Beach Rd. The condos, all with water views, sit across the street from a public beach.
Details are available at www.GAHomeAuctions.com. There is a 5 percent buyer's premium applied to all winning bids. Great American also will pay a 4 percent co-broker's fee to agents representing a winning buyer.
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$30 Million Plus of Luxury
Real Estate Up for Auction
KONA, Hawaii – Concierge Auctions has set Jan. 18 as the auction date for three dwellings and two home sites in Kona, including an 8,821-sf residence owned and designed by Cher. Cher's home is located in the Hualalai Resort and the other properties are in the Kuki'O Golf & Beach Club & Residences.
The properties are up for grabs on an absolute basis, with no minimum or reserve. Concierge of West Palm Beach, Fla., is the auctioneer, with Hualalai Realty and Kuki'O Properties as participating brokerage firms.
Cher's home at 72-122 Lau'eki St., completed earlier this month, is projected to fetch $8 million to $12 million. The home overlooks the resort's golf course and the Pacific Ocean, with a courtyard flanked by five separate bungalows.
An 8,500-sf home at 72-3209 Ka Nehe Place, previously listed for $8.45 million, was designed and furnished by its owner, Jennifer Day. The 20-room home also has unobstructed ocean views and features seven lanais, a saltwater pool and spa and beach access to Kua Bay. It is selling fully furnished, including art and accessories.
At 72-3205 Punaloa Place, a four-bedroom home with 4.5 baths, previously offered at $8 million, also is selling fully furnished, including its art and accessories. The home features floor-to-ceiling sliding-glass pocket doors and views of the Pacific.
The development sites are lots 26 and 29 in Kuki'O's Maniniowali phase II, previously listed for $2.8 million and $2.4 million, respectively. The entitled land has ocean views, each with building plans for a 6,000-sf home.
"The Kona-Kohala Coast is one of the most sought-after destinations in the world," said Carrie Nicholson, principal broker of Kuki'o Properties. Additional details are featured at www.hawaiiluxuryauction.com.
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Brookwood Gets 242 Florida Lots
APOLLO BEACH, Fla. – In a first-time strategy for the company, Brookwood Value Partners LLC has bought a note secured by 242 finished lots in the single-family development of Harbour Isles. The plan is to take direct title of the finished lots in the first quarter.
The 500-lot Harbour Isles is situated about 17 miles south of downtown Tampa. The development's primary builders are KB Homes and Hovnanian Homes, both North Texas-headquartered companies.
"We believe that the opportunity to acquire quality lots in bulk and at deep discounts from national homebuilders has significantly diminished," Thomas W. Brown, acquisition director for Brookwood Financial LP, said in a press release. "By acquiring the note at a significant discount, our cost basis will allow us to sell the lots in the future to homebuilders at attractive price points."
The Beverly, Mass.-based buyer has been focused on southwest Florida for two years. In 2008, Brookwood bought more than 1,100 finished or entitled lots from DR Horton Inc. of Fort Worth and Atlanta-based Beazer Homes USA Inc.
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NLIHC Seeing $1 Billion
For Affordable Housing
WASHINGTON, D.C. – The National Low Income Housing Coalition is lobbying Congress and the Obama administration to address the increased need for affordable housing units due to the unemployment crisis in the country. The goal is to secure at least $1 billion for the National Housing Trust before December ends.
Sheila Crowley, NLIHC president, pointed out that $1.1 trillion of federal dollars have been expended on the housing sector to mitigate foreclosures, tax credits for homebuyers and support for Fannie Mae and Freddie Mac. "Not one dollar has been devoted just to addressing the shortage of rental housing for extremely low income families," Crowley said. "This is unconscionable neglect. Congress cannot claim that we cannot afford to build more affordable rental housing, when they just this month put another $11.8 billion into subsidizing homebuyers with incomes of up to $250,000."
The NLIHC data shows affordable housing needs climbed 30 percent to 3.1 million in 2008. Continued job losses this year is adding pressure, particularly for households with extremely low incomes, despite increases in supply due to foreclosures and unsold housing inventories.
"Households with extremely low incomes continue to be the only income group facing an absolute shortage of affordable rental housing," the NLIHC reported in a press release. "Many of the homes that extremely low income families could afford are occupied by higher income people."
The NLIHC concluded the shortage will worsen in 2010. The organization said the $1 billion infusion will support the immediate construction of 10,000 rental homes, creating 15,100 construction jobs and 3,800 permanent positions. It's also seeking congressional support to include $15 billion in the new jobs bill for construction and rehabilitation of low-income rental housing through the National Housing Trust Fund. The NLIHC projects the extra $15 billion will translate to another 283,500 jobs.
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Research Discovers Loan Workouts
Skewing 2009 Foreclosure Count
By Connie Gore
DALLAS – Homeowners caught in the dichotomy of foreclosure and loan workouts account for 44 percent of 2009's total postings in 19 counties in North and Central Texas.
George Roddy Sr., president of Foreclosure Listing Service Inc. in Addison, Texas, blamed loan modifications for the high number of repeat properties on monthly auction lists. "It appears that the lenders just keep re-posting these homes for foreclosure until the loan modification review has been concluded. Then, the homeowner is either granted a modification...or the modification is denied and generally the home is foreclosed on," he concluded.
Roddy's special report shows net home postings rose 4 percent this year although the total number of homes under the gun reflected a 30 percent increase in the past year. The 19-county study area had a total of 99,897 homes posted for foreclosure sales, with 44,257 notices classified as repeaters.
Roddy's research, however, still supports record-breaking foreclosure notices in nearly all counties. Hays County represented the highest spike, 68 percent or 1,136 posted homes in all, of which 454 were repeaters.After boring down into 2009 statistics, Roddy discovered that Dallas and Denton counties actually had fewer postings this year. Dallas had 12 percent fewer notices this year in comparison to 2008 and Denton, 5 percent. Dallas County's 26,573 foreclosure postings included 11,782 re-postings. Denton's 6,775 notices included 3,207 re-postings.
Of Tarrant County's 20,170 foreclosure notices, 9,480 were repeaters. Bexar County's 14,833 foreclosure notices included 6,116 repeat notices. All other counties in the study area had less than 9,000 homes posted for foreclosure this year.
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North Texas' Four Top Counties
Battling Foreclosure Challenges
ADDISON, Texas – Residential foreclosure postings in North Texas' most populated counties have set a new all-time annual high, 61,676 homes, a high percentage of which are making repeat performances on courthouse sale dockets.
The next round of sales is set for Dec. 1, when 5,253 properties will make their way to courthouse steps in Dallas, Tarrant, Denton and Collin counties. Of the total postings, 2,583 homes or 49 percent previously have appeared on 2009 sale dockets. December's postings are 30 percent higher than last December, according to Foreclosure Listing Service Inc.
"When you remove the re-postings, instead of a 30 percent gain in December's residential posting activity, the D/FW market only had a 6 percent increase in net residential postings for the last foreclosure auctions of the year," said George Roddy Sr., president of the Addison, Texas-based market research firm.
Roddy's research shows foreclosure notices went up on 2,284 dwellings in Dallas County for the December sale, pushing its year-to-date total to 26,550 or a 17 percent increase in the past year. The market watcher's re-posting analysis for Dallas County reflects a 48 percent increase or 1,093 homes.
In Tarrant County, 1,746 homes were posted for auction in December, taking its 2009 total to 20,170 postings or up 27 percent since the end of last year. Its repeat performers total 899 or 51 percent of its December postings.
Collin County property owners had 690 dwellings posted for auction next month. Its grand total for the year is 8,193 for all-in increase of 32 percent in 2009. Repeat performers account for 312 homes on the list or 45 percent of the month's postings.
Denton County had 533 homes posted for sale, driving its 2009 total to 6,763 or a 24 percent climb during the year. Its previously posted properties total 279, representing 52 percent of the properties on the December docket.
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Joe Montana Selling Estate for $49 Million
CALISTOGA, Calif. – Hanging a $49 million sale tag on the property, football legend Joe Montana has jump-started a buyer's search for his 500-acre Villa Montana.
The estate includes a 9,700-sf residence, professional-grade equestrian center, skeet shooting range, caretaker's residence, guesthouse, Bocce ball court and olive-producing farm. It also includes an outdoor viewing tower with 360-degree views of Mount Saint Helena and Knights Valley. Montana owns the estate with his wife, Jennifer.
"Villa Montana was designed to feel as if it was handed down through the generations," said Montana's wife. "It's a real celebration of California's food and wine culture." Los Angeles-based Coldwell Banker Previews International has the listing.
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Urbi Expands in Mexico
TOLUCA, Mexico – Urbi, one of the country's leading residential developers, plans to build 3,000 entry- and mid-level houses in the Toluca Valley.
Toluca is the 26th city in the country for Urbi's geographical expansion, relying on city manager and landowner partnerships to advance its plan. In a press release, Jaime Suarez Velazquez, Urbi's city licensee manager partner for Toluca, said the offering is aimed at serving the working population of commercial and business districts in and around Mexico City.
Infonavit Total AG recently scheduled an offering for more than 43,000 mortgages for this year and Fovissste, 14,000 mortgages. "With the recent implementation of Infonavit Total AG, we will widen our offering in this market with a competitive mortgage product in terms of credit rates, mortgage payment per thousand dollars and the lowest valuation charge in the market, which allows us to offer a very affordable option to these segments of the population," said Raul Grajeda, Urbi's Infonavit housing manager.
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Austin-Area Foreclosures
Trekking Toward Record
AUSTIN – Foreclosure postings have tapered this month, but not enough to stave off a record-breaking total for one year.
In Austin's four-county metro, 1,344 single-family homes have been posted for sale on courthouse steps Nov. 3, according to the latest research by Foreclosure Listing Service Inc. Travis County leads the pack with 672 homes in jeopardy, with Williamson County right behind with 473. Hays County postings totaled 127 and Bastrop, 72.
The lineup remained the same for the year-to-date tally. Travis' notices climbed to 6,074, a 59 percent spike in the past year while Williamson's 4,076 represented a 58 percent climb. In Hays County, 1,345 homes have been posted this year, up 53 percent, and Bastrop's 798 foreclosure notices equated to a 42 percent hike.
"At this pace and with only December's postings remaining to be filed, I fully expect austin's foreclosure postings for 2009 to reach around 14,000, which is the highest that I have seen since we began tracing foreclosures in this market in 2001," said George Roddy Sr., president and CEO of the Carrollton, Texas-based company.
Looking ahead to 2010, Roddy predicted that foreclosures postings will remain high. "For the foreseeable future, I just don't see any reason for the foreclosure picture to improve," he added.
In general, about 40 percent of posted properties actually make it to the courthouse auctions. As a result, Roddy said the year will end with roughly 5,000 properties being seized due to mortgage delinquencies in the four Central Texas counties. The projection represents a 100 percent increase in posting activity in the past two years.
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DFW Residential Foreclosures
On Track to Top 60,000 in '09
DALLAS – Bearing down on a record year for residential foreclosures, the four-county Dallas/Fort Worth metro is forecast to top 60,000 posted properties by year's end.
Lenders posted notices on 5,554 single-family houses for the November sales on courthouse steps, according to Foreclosure Listing Service Inc., the Carrollton, Texas-based watchdog that keeps tabs on the central and northern parts of the state. "For the seventh time in eight months, residential foreclosure postings filed in the D/FW metro have climbed above 5,000 for the upcoming auctions," said George Roddy Sr., president and CEO of Foreclosure Listing Service.
To date this year, 56,423 homes have been posted. Dallas County accounts for 24,266 of the total, with Tarrant right behind with 18,424. Collin County notices totaled 7,503 and Denton, 6,230. The year-to-date total is 10,146 higher in comparison to 2008.
"At this pace, home foreclosure postings should easily top 60,000 by the end of the year in the metroplex," Roddy said. He pointed out that only 40 percent of the posted properties make it to the courthouse steps for auction. "Therefore, by year end, I expect that approximately 25,000 D/FW homes will have been seized because of mortgage delinquencies," he concluded.
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Levitt's Residential Tracts Sell in Florida
CLEVELAND – KeyBank has sold 492 ready-to-build residential lots in Fort Myers, Brooksville and Port St. Lucie, Fla. The sales were conducted by Douglas Wilson Cos. of San Diego.
"It's a positive sign to see builders coming back into the marketplace and purchasing properties with unrealized potential," said Tigg Mitchell, director of brokerage services for Douglas Wilson Cos. "Our goal with this portfolio was to minimize the bank’s loss and help them move forward."
In a press release, Mitchell said the receivership sale emanated from the November 2007 bankruptcy of Levitt & Sons. The Fort Myers component constituted 88 lots in the Townhomes of San Simeon gated development. There also were 141 lots in the Cascades at Southern Hills in Brooksville and 263 lots in the Seasons at Traditions in Port St. Lucie.
Mitchell said the sale strategy was based on assuring valuations "were accurate and realistic, then reach out to a targeted audience of single-family developers and land holding companies."
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100 Homes Hit Auction Block
ATLANTA – Starting today, Hudson & Marshall of Texas Inc. will auction 100 bank-owned homes in Alabama, Georgia, Tennessee and North and South Carolina.
The auction house said many homes are ready for move in, some in their cities' most highly sought neighborhoods and all being sold in as-is condition. The weeklong auction will speed sales for properties such as a $500,000 home on 5.5 acres in Atlanta; a $475,000 home built in 2004 in Statham, Ga.; a $449,000 dwelling in Mount Holly, N.C.; and a beachfront home valued at $625,000 in Gulf Shores, Ala. In most cases, foreclosed homes are selling at 15 percent to 20 percent discount from the last list price.
"Rising unemployment across all income groups combined with a toppled housing market has led to higher priced homes going into foreclosures. Today's foreclosures don't look like the distressed inventory of yesterday," said Dave Webb, president of the Dallas-based auction house. "There is an abundance of properties to appeal to a range of buyers both investors and first-time purchasers."
According to a press release, the sellers have paid for guaranteed title insurance for all properties, with closings typically coming within 30 days of the auction date. Cash or certified checks of $2,500 for each property are required for each winning bid.
Today's auction will be held in Nashville, with five homes on the docket. Tuesday's sale in Knoxville features 12 homes and Savannah has six on its roster. On Wednesday, 16 dwellings in Raleigh, N.C. come up for sale and 10 in Greensboro, N.C. Thursday's sale has five homes in Birmingham, Ala., five in Asheville, N.C. and 11 in Charlotte, N.C. Friday's sale features four residences in Decatur, Ala., and five in Greenville, S.C., and Saturday will put 30 homes in Atlanta on the auction block. Additional details are available at the auctioneer's Web site, www.hudsonandmarshall.com.
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Dallas Group Buys Residential
Tracts in 7 Georgia Counties
ATLANTA – Dallas-based Eastern Partners LLC has acquired a real estate-owned portfolio of ready-to-develop single-family lots in seven Georgia counties. The buyer formed a joint venture with an equity partner to complete the unlevered acquisition.
Eastern Partners bought the portfolio from The Bank of North Georgia, which had originated development loans on the tracts during the past three years. Holliday Fenoglio Fowler LP professionals in Dallas and Atlanta raised the JV equity and arranged the transaction.
The buyer, which targets opportunistic investments for private and institutional partners, got development sites in the counties of Fayette, Douglas, Henry, Paulding, Newton, Forsyth and Gwinnett.
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UPI, Reecon Launch Residential Section
WASHINGTON, D.C. – United Press International and Reecon Advisors Inc. have launched a residential real estate section on UPI.com.
Reecon principals David Lereah and Steve Cook, both former senior executives at the National Association of Realtors, will oversee and provide content for UPI Real Estate. The section will include insight into residential real estate trends and advice for buyers, sellers and investors from Reecon's site, Real Estate Economy Watch. Hokenson Group Inc., an international consulting firm based in McLean, Va., initiated the partnership.
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40 Canadian Condos Hit Auction Block
INVERMERE, B.C. – Kennedy Wilson Auction Group has been given the nod to sell 40 luxury condominiums in the Lake Windermere Pointe development in the Columbia Valley. The auction is slated for Oct. 4.
There are 11 floor plans for the one- and two-bedroom condos. The largest units are 1,257 sf of living space. Bidding starts at $85,000 for condos previously priced as much as $580,000 each.
The auction is touted as the first of its type in Canada. "The seller is using our dynamic auction marketing program to stimulate the market, create demand and establish a fair value for each home," said Rhett Winchell, president of the Seattle-based auction group. "Our approach is pro-active which in the past has proven to be very beneficial to both buyers and sellers. It is a win-win situation."
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2009's D/FW Foreclosures
Poised to Surpass 60,000
DALLAS – Residential foreclosures are on track to top 60,000 this year in North Texas, a grim reminder of the recession's impact on daily lives.The next round of sales on courthouse steps is set for Oct. 6.
For the second time in four months, nearly 6,000 homes have been posted for foreclosure in Collin, Dallas, Denton and Tarrant counties, according to Foreclosure Listing Service Inc.
"I am left wondering if perhaps the flood gates have been opened by the lenders," said George Roddy Sr., president and CEO of the Carrollton-based firm. He's been tracking posting activity since the 1960s, but he said he'll be monitoring levels "carefully" in the months ahead.Since 2000, the number of notices on single-family homes has quadrupled. "At this pace, home foreclosure postings should top 60,000 by the end of the year in the metroplex," said the local expert.
Dallas County led the pack with 2,477 notices on doors. Tarrant County had 1,975; Denton, 778; and Collin, 710. The four counties fall in the same order when it comes to the year-to-date count, with new highs being set across the board. Of the 50,869 grand total, Dallas County accounts for 21,889 notices and Tarrant, 16,610.
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Johnson Brings In New Builders
Johnson Development Corp. announced that D.R. Horton will begin constructing houses in the 3,000-acre Woodforest community north of Houston. Horton will build houses priced from $190,000 and up on 55-foot lots. In its Fall Creek community, Johnson Development announced that D.R. Horton, Triumph Homes, Meritage Homes and Centex Homes will begin building there.
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110 Chicago Homes Hit Auction Block
CHICAGO – Zetabid will hold an auction Saturday of 110 foreclosed homes in the Chicago metropolitan area, with the majority priced from $50,000 to $150,000 and some with starting prices as low as $4,000.
More than half of the properties on the docket are located within Chicago's city limits. "The Chicago market offers tremendous home-buying opportunities for both owner-occupants and investors," said Bob Bellack, chairman of Los Angeles-based Zetabid. "Even with the recent increase in home sale activity, many properties are still selling as much as 50% below their price at the peak of the market."
The auction begins at 10 a.m. at the McCormick Place Convention Center at 2301 S. Lake Shore Dr. Property details are available at www.zetabid.com.
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Spotlight Shining on Residential Auctions
DALLAS – National auction houses are gearing up for a full month of heated residential sales in the Northeast, Washington, D.C. and Louisiana.
Hudson & Marshall of Texas Inc. will auction 120 bank-owned homes in New York City/Newark, Cherry Hill, Manchester, Trenton and Hartford. The sales begin Wednesday and wrap up Saturday. Nearly 30 homes have been earmarked for on-site sales in this week's auction round and the balance will be auctioned at staging sites in local hotels.
The sellers will pay title insurance for the as-is properties. Details and requirements are outlined at www.hudsonandmarshall.com."As the nation's economic conditions remain challenging, homebuyers are searching for the best values on the market. Buyers are gravitating to foreclosure auctions like Hudson & Marshall's because they know their dollar will buy them more home for less, even in today's depressed housing market," said Dave Webb, principal of the Dallas-based auction house.
In Gonzales, La., United Country Bonnette Auction Co. has penciled Sept. 24 for the sale of 40 properties in the state. Auctioneer Barbara Bonnette said there will be no reserve for many properties on the list.
"This is the great Louisiana Purchase of 2009," Bonnette said. "We have some outstanding properties in this auction." On the to-go list is a 5,653-sf home on 80 acres at 47367 Laurel Ridge Rd. in St. Amant. The home borders a golf course.
A163-acre equestrian subdivision at 33745 Walker North in the City of Walker also is up for grabs as individual lots or lock, stock and barrel. The auction lot includes more than 755 acres of timberland with river frontage in Avoyelles Parish.The auction will be held in the conference center of Cabela's at 200 W. Cabela Parkway. Property details are available at www.bonnetteauctions.com.
In Washington, D.C., TRAC Auctions will hold the first round of property sales for the DC Habitat for Humanity. The sale is set for Sept. 24, with all on the docket located in southeast Washington, D.C.
Auction proceeds will help to fund DC Habitat for Humanity's mission to expand affordable housing options in the District, according to Dennis Smyth, land acquisition coordinator for the organization."This is a winner for both buyer and seller. The auction buyers will be acquiring these vacant properties at a price they are comfortable with and then improving them and the surrounding areas," said Paul Sobwick, lead auctioneer for the McLean, Va.-based TRAC Auctions.
The auction docket includes land, homes and apartment buildings on an absolute basis, which means they will be sold to the highest bidder regardless of price. Additional information is available at http://TRACauctions.com.
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Texas Closing Fees Lead U.S.
NEW YORK – In a new study, Bankrate Inc. has found Texas has the highest closing fees in the nation. The average fee is $3,855 in the Lone Star State versus a national average of $2,732 on a $200,000 mortgage.
Bankrate's research showed the national average dropped $386 in the past year. Nevada has the lowest closing fees, $2,276.
"Consumers need to keep a look out for the standard fees when figuring out the true cost of their new home," said Holden Lewis, senior reporter for New York-based Bankrate.com. "Even as the average closing costs go down across the nation, some of these surprise costs can make your new home deal more expensive than you initially thought."
The study surveyed fees for a 30-year, fixed-rate mortgage for $200,000 with a 20 percent down payment and a good credit rating for the borrower. The team included lenders' origination fees, title and settlement fees and excluded taxes and prepaid expenditures.New York City fell from first place in 2008 to second place this year. Its closing fees are pegged at $3,408 or $447 less than Texas. Florida placed third, $3,368 followed by California-San Francisco at $3,117 and Oregon with $3,059.
At the bottom of the list besides Nevada are Kansas, $2,361; Indiana, $2,417; Maine, $2,419; and Vermont, $2,426.
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Residential Resort Rising
On World Heritage Land
ST. LUCIA - With work now underway, Jalousie Enclave Ltd. is jump-starting its campaign to sell 22 villas and 51 estates in an exclusive 196-acre development in St. Lucia's World Heritage site. The residences are being nestled in the Val des Pitons at the edge of a rainforest and overlooking the Caribbean Sea.
The Chagrin Falls, Ohio-based developer expects to deliver the first units in December 2010. Ground broke in late December 2008. The Jalousie Enclave's amenities will include a world-class spa, seven PGA golf clubs and courses and a $7 million clubhouse with two restaurants.Pascal Mahvi, developer of the Jalousie Plantation Resort & Spa, is teaming with hospitality expert Monty Zullo for the "green" development, being touted as a first for a designated World Heritage site.
"The Jalousie Enclave will fuse the natural splendor of St. Lucia with first-class amenities to create a truly unique residential resort experience," said Mahvi. "This unprecedented opportunity to own a home in a World Heritage Site is extraordinary."
The development team said all structures will be built to LEED standards, with residences outfitted with solar-powered water heaters and some with green roofs. Jalousie's developer said the property manager will provide turnkey maintenance and staffing of trained butlers, maids and cooks for each estate, all being sold freehold with no restrictions on renting or resale.
Affiniti Architecture Bahamas Ltd., the Bahamas affiliate of Boca Raton, Fla.-based Affiniti Architecture, is the designer of the estate homes while edge Architects, an international eco-design firm, has crafted the two- and three-bedroom villas for the developer. Two-bedroom units total 2,975 sf and the three-bedroom floor plans are 3,775 sf.
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Reports: Multifamily, Single-Family
Housing Gaining Some Ground
By Connie Gore
DALLAS – The S&P/Case-Shiller Indices offered a glimmer of hope for single-family home sales and pricing, but the verdict's still out for some market watchers.
The National Multifamily Housing Council found recent movers are more likely to switch from owning to renting. In its recent report, "Who's Moving into Apartments," the NMHC found the number of movers who ended up renting increased two percent, accounting for 63 percent of those in transition.
The NMHC report analyzed information from the 2007 American Housing Survey of recent movers, the most current available statistics. "They find that all recent movers, except those in the 30-44 age group, are more likely to rent after their move," the NMHC said in its overview. The fastest-growing population shifting from ownership to tenant for the next 15 years will be the 65 year old and over crowd.
Richard F. Moody, chief economist for Austin-based Forward Capital LLC, also discovered new home sales rose from April through June, but the median new home price fell by 11.5 percent on a year-over-year basis. Sales rose sharply in the Northeast and South, ticked up marginally in the West and retreated in the Midwest. "While the tone of the new home sales data is clearly better over the past few months, there are reasons for caution in drawing too many conclusions from this," he said. Foremost is the Nov. 30 expiration of the tax credit for first-time buyers and those who haven't bought property in the past three years.
"Given the considerable headwinds still facing the housing market, we retain a measure of skepticism as to the durability of the recent increases in home sales," Moody asserted, "but then again, we fully expect the tax credit to be extended, if not expanded, so we may not know the answer to this question for some time to come."
The S&P Case-Shiller Home Pricing Index, airing two days ago, showed increased pricing and sales for the first time in this recession for all but two – Las Vegas and Detroit – of the 20 metropolitan markets that it surveys each month. However, prices are back to their 2003 levels.
On a strong note, Dallas and Denver stats reflected four consecutive months of positive returns. Researchers found 13 of the 20 markets posted positive returns greater than 1 percent in June.
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Historic Mansion Primed for Auction
FAR HILLS, N.J. - In a no-reserve, no-minimum auction, the 11-acre historic Froh Heim mansion moves to the sales block Sept. 26.
Concierge Auctions LLC and Basking Ridge, N.J.-based Prominent Properties Sotheby's International Realty are overseeing the sale of the newly restored estate, boasting 16 rooms, seven bedrooms, 8.5 baths and eight fireplaces. The great banquet hall has a 47-foot ceiling, limestone fireplace, four crystal chandeliers and French doors leading to a courtyard garden with fountain.
Peabody, Wilson & Brown, noted New York City architects, designed the home for Evander B. Schley, a mining industrialist. Architect F. Burrall Hoffman Jr. made some alterations in the 1930s. Among the rare period details are intricately-laid hardwood floors, with flooring from a Spanish Galleon and French chalet, imported French tile, 19th century European crystal chandeliers and hand-hewn beamed wood ceilings.
The grounds, designed by E.B. Shipman, include a "Gentlemen's Retreat" with a wine cellar, restored swimming pool with cabana and fireplace, eight-stall barn and two caretaker apartments."Froh Heim is a truly exceptional property, boasting old world elegance alongside modern features including spacious rooms and state-of-the-art amenities," said Laura Brady of the Sarasota, Fla.-based Concierge Auctions.
Open houses are set for Aug. 29 and 30 and Sept. 12, 13, 19 and 20. The auction is limited to bidders and agents. A $100,000 deposit is required for bidding.
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Shareholders Bless Pulte, Centex Merger
BLOOMFIELD HILLS, Mich. – Shareholders on both sides of the fence have declared support for the largest merger of the homebuilding industry – Pulte Homes Inc. and Centex Corp.
In a press release, Pulte reported 80 percent of its shareholders voted, with Centex drawing 72 percent to the ballot box. More than 99 percent of the votes were cast in favor of the merger.
The merging companies project they realize $350 million in savings and synergies. The deal allows Centex to retire up to $1.5 billion of debt that is on the verge of maturing. The merger terms call for Pulte Homes to acquire all outstanding shares of Centex Corp. in a stock-for-stock transaction. The exchange rate will put 68 percent of the new company into Pulte shareholders' hands.
The new company will trade as PHM on the NYSE, maintaining the public trading status due to revenues of $11.6 billion and 2008 pro forma closings for 39,000 homes. The new company, keeping a grip on its Bloomfield Hills, Mich. Headquarters, will have a portfolio of more than 900 residential communities in 29 states and the District of Columbia. The family of brands is Pulte Homes, Centex and Del Webb. As previously announced, Richard Dugas is chairman, president and CEO, effective today. Timothy Eller, chairman and CEO of Dallas-based Centex, was named vice chairman of the board of directors and given a two-year consulting contract.
"Combining these two industry leaders creates tremendous opportunities for our customers, employees and shareholders," Dugas said. "Having already invested thousands of hours in planning, we can begin integration of our organizations immediately and start capturing the cost savings and business benefits that make this merger so compelling."
The company is in the market to reconfigure $1.5 billion in debt. When the transaction comes to fruition, Dugas estimates it will save about $100 million in annual interest costs. Leaders also have found ways to shave $250 million in corporate and field overhead expense through the merger.
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Hillwood Expanding Heritage's Bluffs
By Connie Gore
FORT WORTH – Eyeing the market appreciation in North Fort Worth, Hillwood Residential is breaking ground today on the third phase of the Bluffs, prepping the ground for another 78 single-family lots in its Heritage community. Roughly 350 of the Bluffs' 500 lots have been developed.
"Heritage is an upper-tier price point and it's the No. 2 selling community in the entire metroplex and No. 1 in the Fort Worth market," said Fred Balda, president of Hillwood Residential. Since 2001, Hillwood has developed 2,500 to 3,000 homes in Heritage, where 2,300 acres were earmarked for residential and support development in the 17,000-acre AllianceTexas corridor.
The Bluffs' third phase is one of the largest starts for single-family lots in the past 18 months, according to Hillwood. Balda said the price appreciation in Heritage is underwriting the decision to plow the earth once again.
On average, a new home in Heritage is selling for $300,000 versus last year's $270,000 to $280,000 median price, according to Balda. The Dallas/Fort Worth average is $208,000. "Even in this down market, we've experienced price appreciation," he stressed.
Balda explained that Hillwood Residential has been weathering the slow times by developing much smaller phases in its 10 single-family developments in North Texas. "We've got good demand right now and we're just happy to be developing," he said. "Things aren't perfect, but they are better in Heritage than most places."Hillwood has held onto the same developers for the first two phases of the Bluffs – the Horsham, Pa.-based Toll Brothers and Standard Pacific Corp. of Irvine, Calif., both of which have model homes on the ground. The 30-acre third-phase is situated between Beach Street and Ray White Road in Heritage's northeastern quadrant, off Interstate 35W. The homes will start at $280,000.
Headlining today's groundbreaking will be Ross Perot Jr., chairman of Hillwood. Also on the dais will be Brian Carlock, senior vice president of Hillwood Residential; Rob Paul, president of Toll Brothers Inc.'s DFW division; Mike Brady, president of the DFW division for Standard Pacific; and Balda.
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Rock'n S Ranch Up for Auction
TETON VALLEY, Idaho – The 57-acre Rock'n S Ranch will hit the auction block Sept. 12. The previously listed property is up for grabs on a no-reserve basis and no minimum bid.
Concierge Auctions LLC of West Palm Beach, Fla. will conduct the sale in conjunction with the Lewis, Lewis & Kleiman team at Sotheby's International Realty in Jackson Hole, Wyo. The 57-acre tract, running a half-mile along the banks of the Teton River, houses a 6,400-sf main residence, guest house, horse barn, angler's house and caretaker's cottage. The holding previously was marketed for $8.9 million.
The 10-bedroom main house was constructed of hand-peeled logs, native river rock and reclaimed trestles from the Southern Pacific Railroad. The horse barn has seven stalls, a veterinary and breeding area, tack room and second-story residence. The grounds include a lighted and fenced sports court for tennis, volleyball, basketball and shuffle board.
"With its stunning mountain views and ideal location along the Teton River, this expansive ranch is without a doubt the finest property in the area," said Richard Lewis, founder of the Lewis, Lewis & Kleiman team.
The auction gavel sounds at 11 a.m. at the Rock'n S Ranch. Prospective bidders must provide a $100,000 advance deposit.
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Hudson & Marshall Readies
Stage for Arizona Auction
PHOENIX – Hudson & Marshall of Texas Inc. will bring 36 bank-owned properties to the auction block in mid-August.
On Aug. 13, the auctioneer will put six homes in the Lake Havasu/Kingman area on the block. The next day, 30 in Phoenix come up for grabs. The homes are being offered as-is and on a reserve basis.
"Buyers are responding to rock bottom prices and sales of homes are starting to inch up slightly across the country. In the Sun Belt states like Arizona, it's really never been a better time to purchase property at such steep discounts," said Dave Webb, principal of Dallas-based Hudson & Marshall. Phoenix, as the industry's well aware, is the weakest housing market in the nation.
According to S&P/Case-Shiller Home Price Index for data through May, Phoenix's residential market posted a 54.5% decline from its peak in 2006. The Hudson & Marshall auction will feature homes valued at $42,000 to $400,000. Sellers are in line to pay the title insurance. Winning bids must be accompanied by $2,500 in cash or certified check for each deed.
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Auction Process Ends for 11 Properties
LOS ANGELES – Sperry Van Ness/Guardian and MarketMaker have checked off 11 of 24 residential properties on their auction docket.
The lion's share of the sold properties is located in California: 115 finished lots in Victorville; 20 acres for single-family homes in Rancho Cucamonga; three-story, partially built condo building sold as a rental property. In Washington state, the team sold a 67-acre site for single-family homes in Granite Falls; 65 finished lots, totaling 11.4 acres in Everett; and nine single-family lots in Renton. Also sold were a 48-unit multifamily asset in Donnelly, Idaho, and 3.24 acres in Boise.
"Our goal for this auction was to clear our client's REO inventory and we achieved that," said Tom Brenneke, president of Guardian Real Estate Services. The auction partners have an auction planned for Sept. 30 of Northwest properties.
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Hudson & Marshall Kicks Off
Auction of 200 Florida Homes
MIAMI – Hudson & Marshall will auction nearly 200 bank-owned homes in Florida from Tuesday through Sunday. The auction docket's largest concentrations are in Miami and Tampa, where 57 homes will hit the block in each city.
In a press release, the Dallas-based auction house promised that each property will trade with seller-paid title insurance. Prospective buyers can register on the day of the auction. Winning bids must be accompanies by cash or certified check deposits of $3,000 per property. A 5 percent buyer's premium is being added to the sales prices.
"Over the past three months, there has been an uptick in home sales nationwide because of historically low prices and interest rates and the government's tax credit. Certainly, in the Sun Belt states like Florida, drenched in foreclosures, sales of bank-owned homes are contributing to the sales gains nationwide," remarked Dave Webb, principal of Hudson & Marshall of Texas Inc.According to RealtyTrac, cities in California, Florida, Nevada and Arizona accounted for 35 of the 50 highest foreclosure rates for metro areas with populations of 200,000 or more in the first six months of this year. All homes being auctioned are sold "as-is" and on a reserve basis. Additional information is available at www.hudsonandmarshall.com.
Seven homes in Fort Walton Beach kick off the auction schedule Tuesday. On Wednesday, the docket will feature 14 homes in Jacksonville and 13 in Fort Myers. Thursday's schedule offers 19 homes in Tampa/St. Petersburg and six in Melbourne. Orlando's auction is set for Saturday and Miami/Fort Lauderdale's will be held Sunday.
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Florida Home, Condo Sales Up;
Median Prices Remain Down
ORLANDO, Fla. – In a new report, the Florida Association of Realtors (FAR) found condo sales climbed 39 percent statewide in June and existing home sales were up 28 percent.
For the second consecutive month, the statewide median sales price for existing homes was higher than the previous month, FAR reported. In all, 16 of the state's metropolitan statistical areas reported an increase in existing home sales and 14 showed gains in condo sales.FAR puts the current median home price at $148,000, down 28 percent in the past year. The new data does reflect a slight uptick, though, with the median price edging up 2.49 percent from May to June.
Citing the National Association of Realtors, FAR pointed out foreclosure and distressed sales are keeping pressure on prices due to their discounted rates. In comparison, the national median sales price was $172,900 for an existing single-family home, a decrease of 16.1 percent since June 2008. The median price in Massachusetts was $284,000; California, $267,570; Maryland, $265,724; and New York, $189,000.According to NAR, the stimulus package's $8,000 tax credit for first-time homebuyers is lifting sales.
"Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade," said NAR chief economist Lawrence Yun. "However, the increase in sales is less than expected because poor appraisals are stalling transactions. The big question is how much the appraisal issue will impact the ability of contracts to go to closing."
In Florida, 15,850 single-family homes sold last month while 5,241 condos changes hands. The condo market reflected a 39 percent increase in sales in the past year, with the median price $112,900 versus $180,400 a year ago. As of May, the national median condo price was $173,800.
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Apthorp Sales Under Way
NEW YORK – With a $30 million restoration under way, Broadwall Management of Apthorp LLC has jump-started sales on 32 of the 163 condominiums in an architectural landmark from New York's Golden Age.
The Feil Organization affiliate has set the starting price at $1.53 million at the Apthorp at 390 West End Ave. in the Upper West Side. Closings are expected to start in the fall.
Howard Lorber, chairman of Prudential Douglas Elliman, said prices are sure to rise after September's conversion goal is met. "This is a once-in-a-lifetime opportunity to own a part of New York's history at below-market prices that will never be seen again," he said. "When people talk about the deal that got away, or say 'if only I had bought there then,' this is the property you will always hear lamented."
The Apthorp sits on a full city block in the heart, stretching from West End Avenue to Broadway and 78th to 79th streets. It opened in 1908 as the world's largest residential building. William Waldorf Astor and his architects Clinton & Russell modeled The Apthorp after the Pitti Palace in Florence in the Italian Renaissance style. The diversity of architectural detailing includes Elizabethan, Colonial and Louis XIV styles.
The original building sported 10-room apartments with six bedrooms. The conversion has resulted in condos of four to 12 rooms from 1,100 sf to 6,000 sf. The units feature 11- and 12-foot ceilings, windows up to 8 feet tall and 48-inch hallways. Most units have grand entry foyers with signature stone mosaic tile floors, ceiling medallions and up to three fireplaces, many with hand-carved mantels.
The Feil Organization hired Ingrid Birkhofer and Fernando Papale of BP Architects to oversee the landmark's restoration and preservation. The mission is to modernize the building without disturbing the historic architectural integrity. Areas that can't be restored to their original condition will be replicated.
"At times, the artisans are scraping through 15 layers of paint to reveal long forgotten plaster ornaments, or probing the existing structural elements to discover a thick chestnut hand-carved door buried for 70 years in a tile wall which is then reinstalled in the unit in which it was found," Papale said.
Common areas also are being "brought back to life by carefully reproducing, restoring, painting and glazing to reinstate the original grandeur," the team said in a press release. The 12,000-sf courtyard garden will be rejuvenated and a gate house added on the building's West End Avenue side to allow residents and visitors to enter and exit on both Broadway and the West End. The amenity package includes a garage with valet service, gatekeeper and 24-hour doorman.
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Houston Home Builder Expands into D/FW
LGI Homes closed on 210 finished lots in south Ft. Worth, Texas marking the Houston-based builder’s expansion into the DFW housing market. The lots were purchased from Sovereign Bank in a seller-funded structure that included a construction financing line of credit in addition to acquisition financing for the lots.
Though banks are foreclosing on more properties, very few transactions are taking place with the builders and investors that are hoping to acquire assets. That’s because, in most cases, the seller is not willing to value these projects at the distressed prices that buyers are willing to pay, LGI reported.
“This is the type of structure that works in the industry today,” said Eric Lipar, CEO of LGI Homes. “We have a clean record with our banks and a successful track record of generating sales. We’re a profitable operation and that’s where banks want to lend. We don’t have to pay .30 cents on the dollar here and it’s still a great deal because the bank is giving us financing. We’re able to pay Sovereign a price that’s palatable for them and we still make our margins. It’s a real win-win.”
According to Carl Fite, senior vice president at Sovereign Bank, this type of structure should, and probably will, become more prevalent in the future. “It’s a real opportunity for a bank to work with a company like LGI. They’re experienced and have the wherewithal to make us comfortable.” Fite also stressed that in a declining market environment, doing deals like this have benefits that reach beyond the bank’s ability to move REO off the books. “It re-activates the community, it maximizes the value of the lots, it creates a tax base for the city. It even creates jobs.”
LGI is scheduled to begin operations in the DFW market immediately. The company will start construction in July and will open sales August 15th. Lipar anticipates closing on homes in the community by September 15th. Homes in the Deer Creek subdivision will be priced from $130,000 to $190,000.
LGI Homes has found success in the first-time home buyer market by focusing on converting apartment renters into homeowners. The company appeals to the basic entry-level buyer with a sales and marketing program that focuses on the monthly payment. Homes sell in the $110,000 to $190,000 price range.
Tthe company just recorded its best month of 2009 in June with 40 closings. LGI annual sales have increased consistently through the slow-down. Recently, LGI Homes received the Fastest Growth Award from Builder Magazine for being the only builder among the Top 200 to report closings and growth revenue in each of the past three years.
LGI Homes active communities are located in Rosenberg, Texas, at Sunrise Meadow; at Creekside Village, in Spring, Texas, and in San Antonio at Canyon Crossing.
LGI Development started with its first home site community in Magnolia, Texas in 1995. Since then, LGI Development has grown from a local land developer, into a nationally recognized corporation that includes affordable new home construction and mortgage lending services. LGI Homes started their first community in 2003. In 2004, 2006, 2007 and 2008, LGI Homes was listed by Builder Magazine as one of the top 200 builders in the country.
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Toolkit Details Renters'
Foreclosure Rights
WASHINGTON, D.C. – The National Low Income Housing Coalition and National Housing Law Project have launched an online toolkit for renters facing foreclosure-related evictions.
The toolkit includes copies of recently passed legislations establishing new rights to tenants of foreclosed properties. It also includes sample letters that tenants can use to send to landlords, judges and public housing agencies as well as a webinar for an in-depth explanation of the new law.
"Under the law, these blameless victims of the foreclosure crisis are now protected,” said Sheila Crowley, NLIHC president. "The toolkit provides tenants and their advocates with the information necessary to protect families from being evicted unlawfully."
The revisions are part of SB 896, adopted in mid-May. The gist of the law allows renters to stay in the home for 90 days after the foreclosure or through the term of their lease unless the property has been sold to an intended occupier. Housing voucher holders also got additional protection with the new law.
According to NLIHC, 40 percent of foreclosures involve renters. Prior to the legislation, renters in most states got little or no notice to vacate.
"This law constitutes a key piece of the neighborhood stabilization puzzle. It will help protect the market value of foreclosed properties while it mitigates the trauma of forced relocation on families," said Dave Rammler, NHLP attorney and director of government relations. "These materials will help ensure that tenants, courts and the real estate community are aware of the law and that tenants' rights are upheld."
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Housing Expert Rolling Out
Advisory, Investment Group
ATLANTA – With socially responsible investing as its mantra, APD Solutions LLC is being rolled out by Asset Property Disposition Inc. and Waterfall Asset Management. At the helm is the former Freddie Mac national director of expanding markets.
Vaughn D. Irons will act as APDS' CEO. Headquartered in Atlanta, APDS is rolling out offices in Chicago, Dallas, Jacksonville, Fla., and San Francisco. The New York-based Waterfall's billion-dollar investment portfolio and its acumen in affordable housing finance are underwriting capital market support to provide resources to penetrate key markets and seed the client base. APDS' role is to provide neighborhood planning and strategic guidance for collaboration on offerings.
APDS is being rolled out to address needs of local governments and housing community activists in their efforts to jump-start and revitalize communities hardest hit by massive foreclosures and the depressed economy. "The current housing industry crisis has created the residual negative effect of eroding support for housing programs in targeted markets and under-served households," Irons said. "There needs to be an ongoing commitment to providing working families a safe path to responsible housing choices."
Among the new group's goals is providing strategic counsel and real estate expertise to governments and groups with allocations from the federally funded Neighborhood Stabilization Program. APDS' turn-key platform targets institutional investors, banks and community stakeholders too.
Jesse Wiles, president of the Jacksonville-based APD, likened the present scenario to the savings and loan crisis of the 1990s. "We are seeing similar actions taken by the federal government now, as we did by the FDIC and RTC during that time," Wiles said, adding the new team is "uniquely positioned to navigate those communities and investors with the greatest need to stabilize communities and grow."
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Zetabid Returns to Phoenix
To Auction 155 Properties
PHOENIX – A portfolio of 155 bank-owned single-family homes, condos, townhouses and multifamily properties will be auctioned June 27 at the Sheraton Phoenix Downtown Hotel.
The auction house is Zetabid, which has hung sale tags of $25,000 to $500,000 on the mix. The auction includes 58 homes in Phoenix, six in Buckeye, five in Casa Grande, four in Chandler, five in Gilbert, 20 in Glendale, nine in Mesa, four in Queen Creek, eight in Scottsdale and five in Tolleson. The package does include properties in other cities in the metro.
"The Phoenix market for residential properties is very active because prices appear to have bottomed," said Bob Bellack, Zetabid's chairman. "Many investors and owner-occupants realize that the great bargains in the marketplace will not last indefinitely."
The auction is Zetabid's second in Phoenix. Since the February auction, Bellack said "the local market for bank-owned properties has strengthened significantly." He said the highest demand is homes under $100,000, with many deals closing at or over the asking price. "The emerging recovery in the lower end of the residential market is a trend Zetabid is seeing consistently across the country," he said.
Property tours are being held Saturday and again June 20 from noon to 4 p.m. Appointments also are available.
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$500 Million Fund Circling
Distressed Residential
RANCHO SANTA MARGARITA, Calif. – Redwood Real Estate Partners LLC, armed with a acquisition goal of $500 million, has launched Occasio Distress Residential Fund to seize opportunities coast to coast and border to border in the U.S.
To lead the initiative, Redwood Real Estate Partners has hired 20-year veteran John Duden. Occasio ResCap's business model is to manage the acquisition process and handle the risk analysis, pricing, underwriting and liquidation of distressed assets.
"We are in the midst of a very challenging market and recognize that liquidity is scarce," said Carl Chang, founder and CEO of the privately owned investment firm based in Rancho Santa Margarita, Calif. "We launched Occasio ResCap to provide an effective exit strategy to sellers of residential real estate assets looking for liquidity while offering the certainty, integrity and experience for which Redwood is known."
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Fifield Brings In Finish-Up
Crew for Vegas High Rise
LAS VEGAS – In a new strategic alliance, the Fifield Cos. and Valley Residential Services are teaming on the sales and marketing of the Allure Las Vegas, a 41-story condominium high rise.
"As a leading closer in the luxury high-rise market, we're seeing continued interest in Allure,” said Alan Schachtman, Fifield's senior vice president and principal. "VRS will continue to build upon our momentum as well as introduce some exciting new initiatives to our potential buyers."
The Allure, located at 200 W. Sahara Ave., has 427 units with 15 floor plans in a mix of studios, one-, two- and three-bedroom condos. Units range from 671 sf to 4,400 sf, with pricing starting below $200,000. The amenity package includes a signature concierge service.
Chicago-based Fifield Cos. developed the Allure in a joint venture with CB Richard Ellis Strategic Partners, ASF Realty and ADF Inc. Fifield has 10 more projects, valued at $1.4 billion, under development in the U.S.
Serving as CEO for Valley Residential Services, Marty Burger also is the president and CEO of Artisan Real Estate Ventures, which he founded in 2006 after a 20-year career in real estate. John Tippins a well-known investment sale broker in the Las Vegas market, has closed more than $1 billion in real estate transactions throughout his career and $400 million of acquisitions since 2005. The marketing team includes Sarah Prinsloo as sales director and Brittany Morse as leasing director.
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Realtor.com Signs Deal with The Realty Alliance
LOS ANGELES – The Realty Alliance (TRA) has reached a major marketing agreement with Realtor.com, the largest homes for sale web site.
“The Realty Alliance members using Realtor.com now have an easier, more integrated method to successfully increase the number of potential clients viewing their listings and offer greater opportunities to engage with local sales associates,” said Craig Cheatham, president and chief executive officer of The Realty Alliance.
Based on the new agreement, TRA and Realtor.com have developed a marketing program offering participating brokers a Showcase Listing Enhancements package that displays a photo gallery of up to 25 photos, detailed neighborhood information, open house alerts, full-motion videos and virtual tours where available, multiple lead forms, and reports on consumer traffic related to each listing. This new program also offers two pilot initiatives promoting home warranty and mortgage services along-side participating brokers’ listings on Realtor.com that will help consumers learn about the full-range of services and one-stop real estate shopping benefits offered by TRA members.
“The Realty Alliance was originally created to give top brokers an opportunity to pool their resources and knowledge in a manner that creates a competitive advantage not available to other organizations,” said Dan Elsea, broker/owner of Real Estate One and long-standing member of The Realty Alliance. “As an early adopter of the Realtor.com broker marketing program, we have always known of the advantages it gives our agents and felt the time was right to share this tremendous resource in these challenging times.”
With 87 percent of all real estate consumers now searching online], TRA members and their more than 100,000 agents will now be better positioned to effectively reach the largest and most engaged online audience of potential clients on Realtor.com. In March 2009, visitors on Realtor.com spent a total of 184 million minutes on the site searching for real estate and related information.
“Realtor.com is very excited to extend our long and successful relationship with The Realty Alliance companies,” said Matthew Moore, head of Realtor.com sales and marketing. “With so many consumers searching online for homes and real estate information, we’re confident this newest program will greatly assist consumers connect with a local sales associate from a member firm of The Realty Alliance in a more substantial and meaningful way than before.”
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C-21 Getting Super Listings
On Realtor.com
Century 21 Real Estate LLC, the franchisor of the world’s largest residential real estate sales organization, and REALTOR.com, the #1 homes-for-sale site, announced an alliance to showcase every CENTURY 21 listed property on Realtor.com. The CENTURY 21 program, aptly named the “Gold Standard Partnership,” provides every CENTURY 21 broker with visibility for their listings on the nation’s most visited real estate Web site 365 days a year. The CENTURY 21 System is the only national real estate franchise to provide this significant online exposure to its System members.
The Gold Standard Partnership provides tremendous value to both buyers and sellers who work with CENTURY 21 brokers and agents. Century 21 Real Estate LLC has subsidized the cost of the program for every CENTURY 21 franchise owner. The Showcase Listing Enhancement offering includes:
· a photo gallery of up to 25 high-quality jumbo photos,
· detailed neighborhood information,
· open house alerts,
· full-motion videos and virtual tours where available,
· multiple lead forms, and
· reports on consumer traffic related to each listing.
“Through this powerful alliance with REALTOR.com, we are demonstrating our commitment to deliver enhanced value to consumers through our brokers and agents and online advertising,” said Bev Thorne, senior vice president of marketing, Century 21 Real Estate LLC. “This underscores our transition from national television advertising to national online advertising. Our business results confirm that we are generating 20 percent more leads for our agents via online advertising. The Gold Standard Partnership is part of our ongoing efforts to position our System members with a competitive advantage that enables them to deliver unparalleled value to consumers.”
According to the National Association of Realtors, 87% of buyers begin their home search on the Internet while only 3% of home buyers found their home through other forms of advertising.
As a result of this online marketing alliance, CENTURY 21 brokers and agents now have ongoing access to the many marketing benefits offered by Realtor.com to generate buyer interest and provide maximum exposure for home sellers.
“Realtor.com delivers maximum listing exposure to potential buyers and sellers at all stages of the homeownership cycle,” said, Matthew Moore, head of sales and marketing at Realtor.com. “Through this new marketing program, we enable more opportunities for local CENTURY 21 professionals to get in front of the largest audience of prospective clients, increase their pipeline of inquiries, and ultimately help more satisfied home buyers and sellers.”
Moore said that the new agreement is significant because it showcases CENTURY 21 listings on Realtor.com by prominently featuring them on a highly visible “virtual store shelf,” giving local CENTURY 21 brokers and agents a powerful online marketing presence.
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Houston Strong in New Home Sales
Houston is home to five of the nation’s top 10 communities for new-home sales in 2008, according to a new study just released by RCLCO, a leading independent real estate advisory firm which has compiled the annual list since 1994. In addition to having more top-selling communities than any other city on the list, Houston also has the only communities on the list – all developments of Newland Communities – to report positive sales gains for 2008 over 2007.
In Houston, Newland Communities’ Cinco Ranch development ranked No. 2 on the list, with 775 new-home sales for 2008, representing a 7% increase over 2007. Telfair, also by Newland Communities, had the highest percentage gain on the list – 13% – with 412 new-home sales. A third Newland Communities development, Eagle Springs, ranked No. 10 on the list with 274 new-home sales, a 2% increase.
“When we create communities, we closely consider the changing needs of homebuyers today and into the future, the impact of different family formations, and new generations moving into home ownership. I think these results show this means vibrant, sustainable communities thrive even in tough times,” said Bob McLeod, President and CEO of Newland Communities.
“Another highly positive trend for Houston – not reflected on the RCLCO report – is the fact that 2009 new-home sales for the three Newland communities on the top 10 list are on par with, or even ahead of, 2008,” said Ted Nelson, President of Newland's Central Region, which includes Texas.
In 2009 at Cinco Ranch, a 7,600-acre community located near West Houston’s thriving “Energy Corridor”, a total of 254 new homes had been sold through April 19, a 4.5% increase over the 243 homes sold in the same period in 2008. At Telfair, a 2,018-acre community southwest of downtown Houston, 2009 sales are running neck-and-neck with last year’s sales, which represented the largest percentage gain on the RCLCO list. (Telfair reported 117 new-home sales for 2009 through April 19, compared to 119 for the same period in 2008.)
"Continued strong new-home sales in Cinco Ranch, Telfair and Eagle Springs prove that during uncertain economic times, homebuyers are choosing quality homes in well-planned, well-located communities with great amenities and lifestyle built in," Nelson said. “Homebuyers seem to be viewing large-scale master-planned communities as strong investments, especially those communities with strong track records, such as Cinco Ranch, now in its 18th year of development.”
All three Newland Communities developments on the list also posted increases in the average sales price of new homes in 2008. The average sales price was up 11% in Cinco Ranch, 6% in Eagle Springs and 3% in Telfair.
TOP 10 SELLERS OF NEW HOMES
1 Mountain's Edge Focus Property Group Las Vegas 879 net sales
2 Cinco Ranch Newland Communities Houston 775
3 The Woodlands The Woodlands Development Co. Houston 750
4 Providence Focus Property Group Las Vegas 514
5 - Rancho Sahuarita Rancho Sahuarita Company Tucson 506
6 - Telfair Newland Communities Houston 412
7 Vistancia Shea Homes/Sunbelt Holdings Phoenix 399
8 Sienna Plantation The Johnson Development Corp. Houston 369
9 - Sun City Festival Pulte Homes/Del Webb Phoenix 288
10 - Eagle Springs Newland Communities Houston 274
SOURCE: RCLCO
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U.S. Housing Vacancy Continues to Climb
AUSTIN – The U.S. housing market, shouldering a record inventory overhang, ended the first quarter with owner vacancy falling to 2.7 percent and the rental pool holding firm at 10.1 percent vacancy.
The rental pool stats, though, are sure to change in the coming months as the impact from expired foreclosure moratoria works its way into the market, according to Richard F. Moody, chief economist for Austin-based Forward Capital Group. Meanwhile, the recession's impact is, as is historically the case, driving a slowdown in household formations due as families double up, younger wage earners move back with parents and immigration flows reduce.
Homeownership fell to 67.5 percent on a seasonally adjusted basis in the first quarter. Forward Capital's Moody reported an increase in the number of vacant year-round housing units – 14.1 million versus 13.8 million just four months ago. There was a decline in the number of for-sale and for-rent vacant units, but "the level remains well above the historical norm as is also the case for the homeowner vacancy rate," he said in the report.
Other noteworthy stats showed houses were staying on the market longer despite federal incentives to buy. Fifty-five percent of the for-sale units have been empty six months or more and 29 percent vacant at least one year. "It is also worth noting that at least some of the growth in the number of vacant units for rent over recent quarters has resulted from homes formerly for sale being shifted into the rental pool," Moody pointed out, citing condominiums as a prime example.
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Pulte, Centex Unveil $3.1 Billion Merger
By Connie Gore
BLOOMFIELD HILLS, Mich. – The street's buzzing this morning about a $3.1 billion merger proposal by Pulte Homes Inc. to take over Dallas-based Centex Corp. to create the nation's largest homebuilding company.
In a joint announcement, the firms' executive teams reported that boards of directors on both sides have unanimously approved the merger agreement. The stock-for-stock transaction is valued at $3.1 billion, including $1.8 billion of net debt.Merger backers said the combined company will have the strongest liquidity position in its industry -- $3.4 billion of cash based on March 31 tabulations.
Last year, the homebuilding giants delivered more than 39,000 closings, resulting in $11.6 billion of combined pro forma revenues, according to the press release. The combined company, based on today's stock performance, would boast an equity market capitalization of $4.1 billion and an enterprise value of $7.2 billion, company leaders said.
The plan puts Pulte shareholders in control of roughly 68 percent of the new company. Centex shareholders are in line to get 0.975 shares of Pulte common stock for each share of Centex. Pulte's stock closed yesterday at $10.50 per share and opened today at $13.50 per share.
"Combining these two industry leaders with proud legacies into one company puts us in an excellent position to navigate through the current housing downturn, poised to accelerate our return to profitability," said Richard J. Dugas Jr., president and CEO of the Bloomington Hills, Mich.-based Pulte.
The merger creates a 29-state, 59-market portfolio of product at all levels, including the active adult marketplace.Centex's land positions, particularly in Texas and the Carolinas, held strong appeal for Pulte. "The combination will also allow us to capitalize on the opportunities presented by the addition of Centex's land positions," Dugas added.
"We believe this is the right combination at the right time in the business cycle. By acting decisively now, we're creating unrivaled firepower to capitalize on the opportunities in homebuilding that are now becoming visible on the horizon," said Timothy Eller, chairman and CEO of Dallas-based Centex. "Moreover, our shareholders will receive an immediate premium for their shares as well as participate in the upside potential of the combined company."
Pulte and Centex held a conference call this morning for shareholders and analysts. In the release, Pulte projected the merger will yield cost reductions of nearly $250 million in overhead and $100 million of debt relief by retiring maturities of more than $1 billion before the year ends.
The post-merger executive team puts Dugas at the head as chairman, president and CEO of Pulte Inc. Eller will join the board of directors as vice chairman and act as a company consultant for two years. Pulte's eight-member board will be expanded to include four Centex members. The headquarters decision goes to Bloomington Hills, but "plans to maintain a significant presence in Dallas," the release said.
In Dallas, rumors came and went over the past two years that Centex was shopping for a buyer for all or part of the homebuilding business. Goldman, Sachs & Co. is Centex's adviser and Wachtell, Lipton, Rosen & Katz is its legal adviser. Pulte's lead financial adviser was Citi, with Banc of America Securities, Merrill Lynch and J.P. Morgan Securities Inc. rounding out the financial advisory team. Sidley Austin LLP is the legal adviser.
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Americans Planning To Buy Homes
Despite Economic Conditions
LOS ANGELES – The threat of foreclosure is a topic of concern in more than half of American households, according to a new survey by Move Inc. But the downturn and today's low mortgage rates are attracting attention from first-time homebuyers who view the current conditions as an opportunity.
While half (52%) of all Americans are concerned they or someone they know will face foreclosure in the next six to 12 months, 23% of adults plan to purchase a home in the next five years, and more than half of them (53.5%) are first time homebuyers, according to a new survey commissioned by online real estate firm Move Inc. operator of Realtor.com, the largest homes-for-sale website.
Unemployment is a driving factor causing many Americans to fear foreclosure, according to the survey. More than a quarter (27.1%) of adults feel they or someone they know may default on their mortgage due to recent unemployment (27.1%), future unemployment (29.3%) or because they owe more on their home than it’s worth (25.6%). One out of eight (15.4%) is having a hard time making mortgage payments because they’ve recently increased or because they have too much debt (18.8%).
Determined to remain in their homes, nearly three-quarters (72%) of adults reduced spending in the past year in order to make monthly mortgage or rent payments, mostly by cutting discretionary spending such as vacations, entertainment and eating out (75%), personal items such as clothing, personal care and personal luxuries (72%) and energy costs such as gasoline and utilities (71.6%). Regardless of age, most Americans are cutting spending back from some aspect of their life to pay housing costs.
Despite today’s challenging market conditions, 18.1% of adults plan to buy a home this year in order to take advantage of the $8,000 tax credit recently passed by Congress in the administration’s economic stimulus package.
“It’s not all doom and gloom. We found Americans are optimistic about homeownership despite concerns,” said Move, Inc., CEO Steve Berkowitz. “They’re doing everything they can, from reducing discretionary spending to pay their mortgages, to planning to take advantage of the administration’s new program to stop foreclosures. They’re also working with lenders to modify loans. Even more impactful are numbers that show interest in home ownership is strong as nearly a quarter of all adults plan to buy a home in the next five years.”
The Move survey found the housing downturn, now entering its third year, has created significant demand for homeownership especially among first-time homebuyers. While 5.8% plan to purchase a home in the next 12 months, 12.8% of Americans say they plan to buy a home in the next two years and 11% plan to purchase a home in two to five years.
Over half of those planning to buy in 2009 are first-time homebuyers (53.5%). By comparison, 41% of homebuyers in 2008 were first-time homebuyers, according to the National Association of Realtors[1] .
While 18.1% of homebuyers do plan to buy this year to take advantage of the $8,000 tax credit, nearly half (47.6%) said they didn’t know about the credit and 29.3% said it wasn’t large enough for them to act right now. Potential homebuyers with higher incomes are more interested in the tax credit than those in lower income brackets, as 43.4% of first-time buyers earning $50,000 or more say they plan to use the tax credit.
Potential buyers are watching real estate prices more closely today than 12 months ago. Half of all Americans (49.6%) are paying more attention to home values today than they were a year ago, especially those aged 25 to 34 (61.9%). The median age of first-time homebuyers is 30 years old[1].
“Having the wealth of information on home values available on Realtor.com makes it easy for potential buyers to research and plan their real estate purchase as they begin their search. In fact, the average buyer researches properties online for 10 months[1] before contacting a Realtor®. So quick and convenient access to information is critical, especially in today’s highly competitive environment,” said Errol Samuelson, president of Realtor.com.
"If you're basing a real estate decision on old or out-of-date information, you risk making a poor decision with potentially significant financial consequences," explains Samuelson. "Providing current and detailed information drawn directly from a local MLS, in conjunction with our 15-minute update program, educates buyers and sellers on market conditions and results in more productive conversations with Realtors.”
The Move survey uncovered changing attitudes towards owning a home. About two-thirds (62.5%) now consider their home primarily a place to live as opposed to an investment. Adults earning up to $20,000 and between $30,000 and $39,900 annually are significantly more likely to feel most strongly that a home is more of a place to live than an investment as compared to those earning $50,000 or more.
In light of the fact that homes are more affordable today, Americans said that if they could purchase more home for their dollar, bigger is definitely better. Survey results found today’s homeowners value more space by a slight margin (10%) over a list of other options, including, energy saving features (6.8%), bigger or nicer yard (6.1%), a better location (4.2%) or updated amenities (3.4%).
The overall economy is by far the most pressing issue on the domestic agenda in the opinion of Americans (51.8%) and it was the first choice of survey participants to be the top priority for both the President and Congress.
Americans believe that cracking down on mortgage fraud (56.9%), lower interest rates (51.6%) and giving first time homebuyers tax breaks as incentives to buy (43.5%) are the top three solutions that would have the most impact in stabilizing the housing market. Opinion is split over whether the government is doing enough to stabilize the housing market, with 46.2% indicating “yes” and 43.8% indicating “no.”
Texas Realtors Caution About Pending Bills
AUSTIN, Texas – The Texas Association of Realtors has unleashed a campaign to alert homeowners that several tax-impacting bills are circulating in the capitol.
"I don't think you have to tell any homeowner that now is not the time to increase the costs associated with real estate so we're very surprised to see these proposals this legislative session," said Brooke Hunt, TAR's chairwoman. "Legislation that shuts out even more Texas families from the American dream of homeownership would be incredibly short-sighted."
TAR's release, issued this morning, cites the proposed Senate bills 950 and 934 and claims "perhaps the most dangerous" is SB 942, a measure that would enable counties to enact new taxes to increase revenue for local transportation projects. Among TAR's concerns is the real estate transfer tax, which would be paid to the county within 30 days of a property transfer. Under the measure, counties can set the rate of the transfer tax.
A study by the Real Estate Center at Texas A&M University concluded the transfer tax "may create more problems than it solves," according to TAR. It cites the possible loss of $955 million in economic activity and elimination of 11,575 jobs if the transfer tax is enacted.
"Texas' resilient real estate market has helped insulate us from the worst of the economic recession," Hunt said. "To make sure that doesn't change, we need to remove obstacles to homeownership, not create even more impediments. Real estate transfer taxes are regressive, hurting low-income Texans the most, and could provide the tipping point to send our Texas economy in the direction of other, less-fortunate states."
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Home Building Topped Out
By Ralph Bivins
LAS VEGAS - The nation's housing starts hit 1.7 million annually a couple of years ago when the home building market was at its utmost. Now annual starts are trickling in at a pace of less than 500,000 per year. The nation's market may never get back to the high-octane pace of 1.7 million starts, according to the chief economist of the National Association of Home Builders.
However, despite the dark clouds over housing, the bottom may be in sight for the national housing market and the upswing could be surprising in2010. Housing starts for the nation are projected to increase 34 percent next year, says David Crowe, chief economist for the NAHB.
Crowe was among the economists speaking at the NAHB’s annual IBS convention in Las Vegas earlier this year. Attendance was down significantly at the International Builders Show – only 60,000 attendees, down from 90,000 last year.
Housing starts will decline about 30 percent in 2009 overall, Crowe predicts. But there are several reasons to expect a turnaround.
For one thing, home prices are softer. And mortgage rates are lower than they have been in 50 years.
Demographics are also lining up for builders. The huge youthful “Echo Boomer” generations, which are the children of the massive Baby Boomer generation, are now in their 20s – the prime age for first-time home buyers.
Another economist at the convention, David Berson of PMI Group, agreed: the housing market is near the bottom. In other words, brighter days are ahead.
Frank Nothaft, chief economist for Freddie Mac, said mortgage delinquencies will continue to rise this year as more people lose their jobs. "The single most important trigger event in delinquency is unemployment," he said.
The nation has lost over 3 million jobs since 2006.
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New Houston Toll Road
Delivers Optimism to Northeast Side
The expansion of the Sam Houston Tollway will open up development opportunities in northeast Houston.
The Harris County Toll Road Authority expects crews to begin work this summer on a 13-mile extension of Beltway 8 from just east of U.S 59 North to south of U.S. 90A East.
The current project timeline shows an estimated spring 2011 completion date. The $550 million project will provide three lanes in each direction when finished.
Travel from Fall Creek to major employment centers such as downtown Houston, Greenspoint and the Galleria will be enhanced due to new commuter ramps and main lanes, said Fall Creek general manager Steve Pierce.
The expansion will include entrance and exit ramps at Mesa Road and Wilson Road, both major Fall Creek thoroughfares.
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Smarter Agent Strikes
Alliance with Keller Williams Realty
Keller Williams real estate professionals now have inside access to a popular home search tool. Smarter Agent, the company that invented and patented the mobile location-aware real estate search, announced that they have become an Approved Vendor with Keller Williams.
“We are thrilled to have the reputable Keller Williams name behind us and look forward to showing the company’s brokers and agents how our technology can not only give them a competitive edge over other brokers and agents, but how we can help them provide a valuabl e search tool to existing clients while using Smarter Agent to find new clients,” said Brad Blumberg, CEO of Smarter Agent.
Homes for Sale, Smarter Agent’s flagship product, delivers accurate and up-to-the-minute property information to a prospective homebuyer’s personal cell phone. Either using GPS technology or by entering in specific search criteria such as city, community, address or zip code, consumers can instantly learn the sales price, see the number of beds and baths, read property descriptions, plot properties on an interactive map and even see photos for all of the publicly allowable properties within the MLS.
Where Homes for Sale becomes beneficial to Keller Williams brokers and agents is that Smarter Agent allows agents to privately brand the Homes for Sale mobile application. The branded application is then downloadable from an individual realtor’s personal website. With the branded version, brokers and agents can provide the application to their clients where their name, company colors and logo will appear on the home screen. Once the search is initiated, all branding is maintained throughout the search. Best of all, if a consumer is ready to tour the property the “Call to See” button will route all calls directly to the agent who branded the application, regardless of who has the listing.
The download is currently available on hundreds of cell phone models on AT&T and Sprint. The application is also available for all Blackberries (Curve, World, Pearl, Pearl Flip and Bold) and iPhones, where the download is FREE! The Storm, Windows Mobile versions and other carriers and devices, will be added in the coming months making the application available to all consumers regardless of their cell phon e carrier or device.
For more information, please contact Carrie Johnson at carrie@smarteragent.com or (856) 614-5525 or to learn more about the branded application, please visit www.SmarterAgent.com/brandinhand.
About Smarter Agent (www.smarteragent.com)
Smarter Agent combines mobile location technology, such as GPS, with information about real estate and neighborhoods around you. Smarter Agent is the inventor of the mobile location-triggered real estate search -- and has been granted four patents. By delivering location-relevant content to mobile devices, consumers can learn, interact and transact with the world around them as never before possible. Smarter Agent was named BEST GPS Application by the CTIA (Cellular Telecom Industry Association), BEST COMMERCE Application at Navteq Global GPS Challenges in the US and Europe, and has been featured as a leader in mobile innovation at Dow Jones and DEMO conferences.
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New Home Sales Up In
Newland Houston Projects
In a market where new-home sales have been generally down, Newland Communities has reported increased new-home sales in three Houston area communities for 2008.
The largest increase was seen in Telfair, a 2,018-acre community in Sugar Land, where new-home sales were up 10.7 percent for 2008, compared to 2007. A total of 412 new homes were sold in Telfair last year, compared to 372 sold in 2007. Located at U.S. 59 South and University Blvd., in the Fort Bend Independent School District, Telfair offers new homes priced from the $250,000s to over $1 million.
At Cinco Ranch, a 7,600-acre community in Katy, new-home sales were up 6 percent for 2008, with 779 new homes sold last year, compared to 732 sold in 2007. Cinco Ranch is located at Grand Parkway and Cinco Ranch Blvd., between I-10 West and the Westpark Tollway. New homes are priced from the $160,000s to over $1 million.
Eagle Springs, a 1,360-acre community in northeast Houston, reported a 1 percent sales gain. A total of 274 new homes were sold in Eagle Springs in 2008, compared to 271 sold in 2007. Located along Will Clayton Parkway, approximately 5 miles east of U.S. 59 North,
Eagle Springs features new homes priced from the $130,000s to $500,000s.
New-home prices also increased in these same Newland Communities developments in 2008, by 3 percent in Telfair, 6 percent in Eagle Springs, and 11 percent in Cinco Ranch.
In most communities, sales also remained strong in the fourth quarter, a positive portent for 2009, said Jennifer Taylor, vice president of marketing for Newland Communities.
Taylor added that several factors helped Telfair, Cinco Ranch and Eagle Springs post positive sales gains in contrast to the general market trend. “Home buyers seem to be viewing large, established master-planned communities as safe havens for their investment during these economic times, and several of our Newland communities in Houston have strong track records, such as 18 years for Cinco Ranch and eight years for Eagle Springs,” she said.
“All of these communities saw continued strong relocation sales in 2008, especially Cinco Ranch, which is located near the west Houston ‘Energy Corridor,’” Taylor said. “In addition, our communities continue to attract a healthy share local first-time and move-up buyers seeking the lifestyle offered in master-planned communities. With over 10,000 households in Cinco Ranch and nearly 2,400 in Eagle Springs, existing residents have also become major sources of new-home sales as they move up or scale down.”
Taylor added that Newland Communities expanded new-home product variety and added new amenities in all of its Houston area communities in 2008.
At Cinco Ranch, a new 2,400-acre phase was opened in mid-2008 and will ultimately provide over 5,000 new homesites through 2012. In 2008, new additions to Cinco Ranch included a Model Home Village with 31 decorated models by 13 homebuilders, and a new 70-acre recreation center featuring a 30-acre lake.
At Telfair, new products included low-maintenance patio homes, along with new neighborhoods in all price ranges, and the start of construction on a new branch of the Houston Museum of Natural Science in the community.
Eagle Springs added new neighborhoods featuring low-maintenance patio homes and luxury estate homes, along with a number of new parks.
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Smarter Agent
Smarter Agent’s Homes for Sale mobile search has launched, accessible to over 50 million AT&T and Sprint customers on 80 different cell phone models.
Over 99 percent of all mobile location-aware real estate activity is now powered by Smarter Agent. Smarter Agent is the only carrier approved, on-deck mobile search – meaning it has gone through significant security and usability testing to be chosen to be on the carrier (AT&T, Sprint) deck.
Smarter Agent delivers accurate and up-to-the-minute home sale information to a consumer’s cell phone.
If GPS is available on the consumer’s cell phone, Smarter Agent instantly turns the cell phone into a GPS-triggered real estate finder. This means with just one click, all of the local listings are immediately returned—no typing required! Should the consumer’s cell phone not contain inherent GPS, Smarter Agent also works on all non-GPS enabled devices with a simple to use interface that initiates the search.
About Smarter Agent (www.smarteragent.com)
Smarter Agent combines mobile location technology, such as GPS, with information about real estate and neighborhoods around you. Smarter Agent is the inventor of the mobile location-triggered real estate search -- and has been granted four patents. By delivering location-relevant content to mobile devices, consumers can learn, interact and transact with the world around them as never before possible. Smarter Agent was named BEST GPS Application by the CTIA (Cellular Telecom Industry Association), BEST COMMERCE Application at Navteq Global GPS Challenges in the US and Europe, and has been featured as a leader in mobile innovation at Dow Jones and DEMO conferences.
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HomeAway Buys EscapeHomes
Austin -- HomeAway, Inc., a large international network of vacation rental websites, has announced its acquisition of EscapeHomes.com, a 10-year-old online marketplace that connects buyers and sellers of second homes and resort real estate.
The acquisition means HomeAway now provides comprehensive services for second home owners for the lifecycle of their properties.
Through its vacation rental sites, including HomeAway.com, VRBO.com, Holiday-Rentals.co.uk, Abritel.fr and FeWo-direkt.de, HomeAway has already streamlined the process for homeowners to easily and affordably advertise their vacation rental properties. With EscapeHomes, HomeAway significantly expands its offerings, providing owners the tools to research and find real estate professionals who specialize in second homes and their dream vacation, investment or retirement home.
“The purchase of EscapeHomes was a natural next step for our business, making HomeAway the only company specializing in second homes throughout the entire ownership process,” says Brian Sharples, CEO of HomeAway.
Second home sales accounted for a third of existing and new home sales in 2007, according to the National Association of Realtors.
“HomeAway is excited to apply our expertise in and commitment to providing owners the best and most trusted resources to the second home real estate market,” says Sharples.
A redesign of EscapeHomes.com is currently underway. However, the site will continue to feature the popular profiles of real estate agents, detail-rich descriptions of locations, second home lifestyle advice and decision support tools.
As part of its relaunch, EscapeHomes invites real estate agents to participate in its “Open House” program to receive a free subscription to the site and immediately benefit from its exceptional search engine rankings. This limited-time offer allows agents to create a personalized agent profile and feature unlimited vacation property listings.
EscapeHomes was founded by highly-respected real estate veteran Clark Thompson. Recognizing the Internet could streamline the time-consuming and costly process of finding a second home and locating qualified agents in remote destinations, Thompson founded the company to make the search for a second home easier.
EscapeHomes is led by a team of second home and vacation rental industry veterans from HomeAway’s Austin, TX headquarters. The terms of the acquisition were not disclosed.
The HomeAway, Inc. websites connect homeowners and property managers with travelers who seek the space, value and amenities of vacation rental homes as an alternative to hotels. With more than 284,000 global listings across the sites, travelers may easily search for budget to luxury-priced vacation rentals on HomeAway.com, VRBO.com, VacationRentals.com, CyberRentals.com, A1Vacations.com, GreatRentals.com, TripHomes.com, Holiday-Rentals.co.uk, OwnersDirect.co.uk, FeWo-direkt.de and Abritel.fr. The sites also feature Reviews and the HomeAway Rent with Confidence Guarantee, which help ensure a memorable HomeAway from home® experience. HomeAway is headquartered in Austin and funded by Austin Ventures, Redpoint Ventures, American Capital, Institutional Venture Partners and Trident Capital.
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A Texas Solution:
Affordable Shelter After Natural Disasters
A design competition for Texas architects has yielded designs for affordable
homes that can be erected quickly after a natural disaster.
The idea for an affordable housing design competition grew out of the
Housing Texas meeting held in San Antonio in 2005. In the wake of
the devastation of Hurricane Rita on low income Texas communities the
design competition was directed at homes that are affordable to
low-income hurricane survivors seeking to rebuild. Housing Texas
member Tom Hatch took the lead in coordinating the design competition
with the Texas Society of Architects.
"The 'Texas Grow Home' concept represents an entirely new approach to
disaster recovery. More than two years after Hurricane Rita, tens of
thousands of Texans are still living in severely damaged homes. Their
situation proves that we need a new approach to rebuilding homes,"
said John Henneberger, co-director of the Texas Low Income Housing
Information Service. "Rather than spend up to $70,000 to house people
for months in a temporary FEMA trailer, we should use those funds to
get devastated families into a quality, permanent home."
Eighty-one teams of Texas Architects submitted designs. This
represents thousands of hours of Texas architects' time donated to
improving the way government helps low-income victims of natural
disasters. The winning designs offer disaster survivors a range of
choices from traditional to modern to straightforward to innovative,
all with attention to affordability, sustainability, and efficient
delivery following a natural disaster. Housing Texas, the Texas Low
Income Housing Information Service (TxLIHIS), Texas Society of
Architects, Texas Department of Housing & Community Affairs, Covenant
Community Capital, Chase Bank, Marquette Financial Services, the
Houston Endowment and the Foundation for Expanding Horizons sponsored
the competition and exhibition of the designs.
"TDHCA congratulates the award-winning home designs, and we applaud
the creativity these architects have shown." said Michael Gerber,
TDHCA Executive Director. "We are proud to finance the building of
these three homes, which will help several Southeast Texas families
with their recovery. We are also proud to partner with the Texas Low
Income Housing Information Service and their team to develop new
housing ideas for when a hurricane or other natural disaster
strikes."
The winning designs will be constructed in Southeast Texas by
Covenant Community Capital as prototypes, and sold with state-funded,
zero-interest mortgages to three low-income families whose homes were
destroyed by Hurricane Rita.
"Chase salutes the Texas Low Income Housing Service, the State of Texas
and these ommitted professionals for their role in this
forward-thinking project," said Linda McMahon, Chase Bank's Southwest
Region Manager for Community Development. "Grow Home will ensure that
when disaster strikes, Texas will be prepared to house families
quickly in a high-quality, affordable home."
Each home will be a total of 1,100 sf. The homes will consist
of two modules: the core module will be a minimum of 700 square feet
and contain a living area, bath and two bedrooms. The 400 square-foot
second module will contain an additional bedroom and bath. The first
module will be erected in the days immediately following a disaster
instead of a FEMA trailer, providing a new, permanent home for
families who lost their homes. The second module will give families
the opportunity to expand their post-disaster core home into
something larger as time and their finances permit. The two-bedroom
core module is designed to cost $54,000. The one-bedroom, one-bath
addition would cost $23,000.
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| Archives |
- Q&A with Thomas M. Stevens click here
- Minority Homebuyer Program click here
- Katrina to Impact Mortgage Rates, Construction Costs & Apartment Vacancy click here
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Q&A with Thomas M. Stevens
Tom Stevens of Virginia was
installed as the 2006 president
of the National Association of
Realtors at the NAR's annual
Conference and Expo in San
Francisco.
RealtyNewsReport.com Editor
Ralph Bivins interviewed him
there.
Q: Mr. Stevens, what's in store for the real estate market in 2006?
A: For the most part the real estate market around the country is still very strong. We started to see certain areas where there is a little softening. But we couldn't continue to keep at that pace we'd been going with home appreciation at 15 and 20 and 25 percent. We need to be in a little more steady market. I think we are going to be in a little bit of a correction and I think that's going to be good. It will be a steadier market with the prices not jumping as high. More people will be able to afford housing.
Q: So there will be fewer homes sold in 2006 than in the record-setting 2005?
A: If 2006 is the second best year we've had, it will still be a great real estate market.
Q: President Bush's panel on tax reform has introduced the possibility of altering the mortgage interest rate deduction. What is your opinion?
A: We are waiting to see what the White House comes out with as far as a proposal. But we think even discussion of tinkering with the deductibility of mortgage interest can really hurt the real estate market and the consumer. Some of the things we are hearing about is taking away the mortgage deduction and turning it into a tax credit. For the typical consumer out there it could be about a $30,000 difference in the value of their home. We think it is going to drive prices down.
Q: So if the mortgage deductibility were changed it would have a direct impact on housing values?
A: No question about it.
Q: A lawsuit has been filed by the U.S. Department of Justice regarding NAR policies on home listings being displayed on the Internet. Can you comment on that and what the suit could mean to the real estate industry?
A: This is a major decision that will occur as a result of the Justice Department action. It's basically going to say who owns that real estate data. Our brokers go out and work hard to create that business. We feel very good about our position.
Q: If the outcome of the lawsuit is not favorable, the NAR general counsel contends that it could lead to major real estate brokers withdrawing from the MLS. Do you view that as a possibility?
A: I think large brokers would be pulling out. They wouldn't want what they've worked for -- their inventory -- to be given away. I kind of look at it just as a grocery store. The grocery store has its inventory on its shelves and basically they are saying someone can take it and sell it themselves. That's not the way, I don't think, businesses should operate.
Q: What impact have the recent hurricanes had on the real estate market?
A: So far in those coastal areas, Baton Rouge and those nearby areas, the immediate impact has been they have sold a lot of houses. People are buying houses sight unseen because they know they are not moving back.Their homes are gone. So there has been an increase in housing sales in the coastal areas. But overall, it's going to put a squeeze on the building materials and it is going to start driving some of the prices up because building material prices will go up.
Q: We have heard about the bubble bursting in the housing markets, particularly in cities that have been vastly overheated. Are there some markets around the nation that are in for a real slowdown?
A: There will be market corrections. There always are. But there's still demand and there's not a huge inventory in most markets. There is still a shortage of inventory in certain price ranges. So we don't see a major correction. We certainly don't see a bubble bursting. We might see a little softening or a little air coming out of the balloon. Some of the markets that have had the greater appreciation they will probably correct a little more than markets that haven't seen that great appreciation. But again, it's going to get us back to a steadier market and I think that is good for the consumer.
Q: Longtime Federal Reserve Chairman Alan Greenspan will be stepping down at the end of the January and Ben Bernanke is expected to move into that position. Will this have an impact on mortgage interest rates and the real estate market?
A: Bernanke is a kind of a protege of Alan Greenspan. He has been there and he has served as one of the Federal Reserve officers. We are pretty familiar with him. His thinking is along the lines of Alan Greenspan. So we don't see a lot change there, he's very conservative. We think he is good choice.
NAR President Tom Stevens and
RealtyNewsReport Editor Ralph
Bivins meet at NAR Convention
in San Francisco for an interview.
Stevens is a Realtor in Vienna, Va.
A Realtor since 1972, Stevens is
senior vice president of NRT Inc.,
a full-service firm specializing in
residential sales and brokerage
with offices in Vienna, Va. Stevens
is a past president of the Virginia
Association of Realtors.
Stevens was installed as 2006
president of NAR at the NAR
convention in San Francisco.
........................................................
Minority Homebuyer Program
First American Title Insurance
Company announced the launch of a new diversity marketing program in Houston
designed to help increase homeownership opportunities among Houston’s
Latino, Asian American and African American
communities. This program will address the specific needs of minority
homebuyers by assisting real estate practitioners in better serving these
traditionally under-served communities.
The Houston kickoff marks the extension of First American’s Emerging Markets
Program—a comprehensive plan helping to increase home sales to Hispanic,
African-American, Asian-American and other traditionally under-served
consumer segments—into Texas. The First American Title Launches Diversity
Program in Houston Page 2-2-2 program has been highly successful in California
and has begun to take root in other key regions across the United States.
According to the U.S. Census, Hispanics, African-Americans and Asian-Americans
are the fastest growing segment of homebuyers in the nation. First American
has set the goal of
becoming the leading provider of title insurance and real estate information
services to this growth segment.
First American’s Houston diversity program will help breakdown the cultural
and financial education barriers that often arise when members of minority
communities enter the homebuying process. It is comprised of consumer-focused
outreach and educational events, specialized programs for real estate
professionals and the hiring and training of key First American staff
to better service ethnically diverse communities.
The Houston program will operate in conjunction with The First American
Corporation’s broader Emerging Markets Program, a corporate-wide commitment
launched in 2003 to promote
an increase in home sales to traditionally under-served consumer segments.
Combining multicultural sales and marketing strategies with industry alliances,
philanthropic
giving/investment and an increased commitment to management and workforce
diversity at First
American, the multiyear, multimillion dollar program is designed to help
First American capture additional market share by offering innovative
solutions to common barriers to homebuying.
Katrina to Impact Mortgage Rates,
Construction Costs & Apartment Vacancy
WASHINGTON – The direct housing
needs for evacuees of Hurricane Katrina and lower interest rates that
will soften its economic hit mean there will be long-term consequences
for housing as well as the overall economy, according to the National
Association of Realtors ® .
David Lereah, NAR’s chief economist, said shortages of building
materials, made worse by the need to rebuild in areas hit by
Katrina, will increase construction costs. “Given the
general tight inventory of homes available for sale across the country,
rebuilding in the region of the Gulf Coast will place additional pressure
on overall home prices,” Lereah said. “As displaced residents try to get
back on their feet in new locations, home sales have spiked – along with
rental demand – in regions surrounding the disaster zone.”
Existing-home sales are expected to increase 3.4 percent to 7.02 million
this year, while new-home sales are forecast to rise 6.7 percent to 1.28
million for 2005 – both would be records. Last month, the totals were
projected to be 6.98 million and 1.26 million respectively. Total housing
starts – single-family and multifamily – should grow by 4.8 percent
to 2.04 million units this year, the highest since 1973;
single-family starts are expected at a record of 1.69 million.
“Mortgage interest rates will rise more slowly as a result
of post-storm economic conditions to accommodate the losses of homes,
jobs and businesses,” Lereah said. “The lower level of borrowing costs
will provide additional lift to home sales in other regions. Demand will
continue to outstrip supply in most areas, which will keep pressure on
home prices.” Total housing, commercial and public property losses by
Katrina are in the range of $100 billion.
The 30-year fixed-rate mortgage is forecast to rise more slowly, reaching
5.9 percent in the fourth quarter, and 6.7 percent by the end of 2006.
The national median existing-home price for all housing types is projected
to rise 10.8 percent in 2005 to $205,100. With a greater concentration
of construction in lower cost areas, the median new-home price should
increase 3.8 percent to $229,300 this year before rising at a faster clip
of 6.2 percent in 2006.
It is estimated that most of the flooded homes will have to be rebuilt,
including about 80 percent of the homes in the city of New Orleans. Along
with homes that will have to be replaced along the Mississippi and Alabama
coastline, a minimum of 200,000 homes have been lost.
However, the level of new housing construction will be only 130,000 higher
than pre-Katrina projections.
“Housing construction will be insufficient to replace the number of homes
destroyed or that will have to be demolished,” NAR President Al Mansell
said. “Apartment vacancies are dwindling, and mobile homes will
help to address the jump in housing needs.”
The Louisiana Realtors ® Association has launched www.HurricaneHousing.net
. Realtor ® members and property owners alike can submit data on available
shelter in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi
and Texas, and people displaced by the hurricane can search the database
directly.
The storm’s impact will cause the economy to grow more slowly than in
earlier projections, but the economy will get a lift once rebuilding gets
under way. The U.S. gross domestic product is forecast to grow at a pace
of 2.3 percent in the third quarter and 2.7 percent in the fourth quarter,
with GDP for all of 2006 pegged at 3.8 percent.
The unemployment rate is seen to peak at 5.3 percent during the first
half of next year before declining in the second half. The Consumer Price
Index is expected to increase 3.5 percent this year, while inflation-adjusted
disposable personal income should grow by 1.4 percent. The consumer confidence
index is likely to dip to 100 early next year, and then rise to 107 by
the end of 2006.
..............................................................................................
Property flipping is sport in some markets
Three Part Condo Series
Part 1: Condo craze: Flippers, converters and first-time buyers grab a slice
The condo market is on fire across the country, with prices appreciating faster than single-family homes in some cases. Buyers are scrambling to be the first in line, and amateur real estate investing is akin to sports and hobbies in the hottest markets. In this three-part series from Inman News , we examine the trend from the trenches, catching up with part-time investors and first-time buyers, along with an example of the type of unique conversion projects taking place.
By Glenn Roberts Jr.
Inman News
Rajpal "R.J." Singh is selling a "super luxury Trump condo" in Manhattan's Upper West Side for $1.7 million. He's also selling a West Side condo for $699,000 and renting out another condo in the Hudson Heights neighborhood. That's not his day job. Singh works in the software industry. Real estate investment is something he does on the side - he is not a licensed real estate agent.
"I happen to like new construction lately," he said. He focuses on Manhattan and Queens, and believes those markets are generally still a safe bet. The condo market has sizzled in many markets across the country, with condo-price appreciation in some cases exceeding home-price increases.
Murmurs of bubbles and busts haven't scared away condo developers from low-rise, high-rise and condo-conversion projects, though. And buyers in some markets are still scrambling to be the first in line for a condo unit in a pending project - even when that project is little more than a hole in the ground. Singh said he has seen a lot of amateur investors getting into the real estate market, a trend that seemed to catch fire in 2003.
He said the percentage of condo owners who live in their condos appears to be shrinking while the number of owners who rent out the condos is growing, which may be an indicator of this growing push by investors in the real estate market.
"I think it used to be roughly 90 percent owners, 10 percent renters - today I've seen 70 percent owners and 30 percent renters. If it goes to 60-40 or - God forbid - 50-50" he said. "Because of the stock market and mutual funds not producing much return, people are shifting that money to real estate. A lot of people need an investment vehicle and they are finding real estate as the investment vehicle for right now," he added.
And then there is the demand from those people who are simply looking for housing - "There seems to be a steady flow of people that are in need of housing, hence they are willing to pay top dollar," Singh said. Some New York markets may already be overpriced, such as the Brooklyn waterfront, he also said. Robert Holtz, of Hoboken, N.J., is selling a condo that he bought two years ago for about $419,000. He has already purchased another condo, a unit in a new development that is under construction. He's still fixing up the condo he's living in, he said, though he said he's willing to move out now if someone will give him the right price.
Then again, he said, he might consider selling the new condo instead - if he can get the right price for that one. "If I can get $559,000 without having to move into it - I don't have to sell where I'm living at now. I can put the other one on the market." Decisions, decisions.
Condo sales, as a percentage of total real estate sales, have grown from 8.8 percent in 1994 to 12.1 percent in 2004, the National Association of Realtors reported. And the rate of condo and co-op price increases has eclipsed that of single-family homes for the past several years.
The average U.S. condo price increased 16.5 percent from 2001 to 2002, 13.7 percent from 2002 to 2003 and 16.4 percent from 2003 to 2004, the association reported, while single-family home prices increased 8.8 percent from 2001 to 2002, 7.2 percent from 2002 to 2003 and 9.3 percent from 2003 to 2004.
Also, the total number of existing condo sales grew 9.7 percent in 2002, 11.3 percent in 2003 and 12.2 percent in 2004; while homes sales rose 5.1 percent in 2002, 9.6 percent, and 9.4 percent in 2004.
Holtz said he knows that the real estate market can be cyclical, and there is always some cause for alarm when prices inflate very rapidly. He cited the example of a $609,000 "pile of dirt" in Florida that ended up selling as a $740,000 real estate deal just 90 days later. That was a deal he worked on with his family.
"It's always a worry when you start talking about one-half million dollars like it's nothing," he said. "But we're not talking about a (dot-com) or an Enron or something like that." Real estate is a tangible thing, he said. "People need to live some place. They need four walls and a roof." So far, the local real estate market continues to thrive, he said. "If you price it right it sells in one day."
A first-quarter 2005 report released by Prudential Real Estate Investors, a part of Prudential Financial, though, expresses some serious caution about the condo boom. "The potential fallout from a meltdown in the condo market is unquestionably one of the biggest risks facing the real estate industry," the report states. "While we believe the excesses are fairly concentrated within a few markets, the effects of a shock would reverberate throughout the industry."
The report also states, "As housing prices soar, comparisons between the housing market today and the dot-com bubble during the late '90s tech bull market grow more frequent by the week. Although condo fever is more of a coastal phenomenon than a national epidemic and is more bubble-like in some markets than others, the warning signs are getting harder to ignore."
The report mentions media reports of properties that are sold and resold in a short period of time - in some cases in the same day. "If a condo bubble develops (or already exists) and bursts as interest rates rise, loan delinquencies could increase sharply and liquidity in the debt markets could dry up very quickly, at least until lenders can assess the impact of falling property values."
On the other hand, the report notes that a downturn in the condo market could benefit the apartment rental industry, as condo rentals are typically more expensive than apartment rentals.
Philip Conner, vice president in the Investment Research department of Prudential Real Estate Investors, said, "There are a lot of factors driving the condo market that aren't necessarily symptomatic of a bubble," such as the higher cost of single-family homes and the "urban renaissance" phenomenon of residents moving into denser housing developments in downtown areas.
But some markets, particularly in Florida, have been named as exhibiting some bubble-like characteristics, Conner said. Some warning signs of a condo slowdown are an oversupply in condo inventory and a growing gap between the ownership costs of a condo unit versus the cost of rental housing in a given market area, he added
. Michael Gasior, president and founder of American Financial Services, an investment training company, titled his March newsletter "Real Estate is Over." Gasior said that last month he saw an e-mail notice about an East Florida condo that was selling for about $850,000. "I went back through my e-mail box and saw that same condo about 90 days prior and it was $779,000. Now it's $940,000." The listing price kept escalating even though the property hadn't sold, he said. "When you see speculators enter the residential real estate market that's often a sign of the top. There's no way borrowing money is going to be easier or cheaper than it's been," he added, and condos may feel the brunt of a market slide.
Gasior noted in his newsletter that if the 30-year fixed interest rate rises about 8 percent, "the market will need to give back nearly all the gains enjoyed between 1999 and 2005 in order to stabilize the marketplace.
"The decline that would result would be more severe than the one experienced in the Northeast and Southern California between 1989 and 1994 when homes depreciated between 20 percent to 25 percent in those markets and condo prices dropped between 40 percent and 60 percent. No region of the U.S. would be immune although each area could look to 1999 market values for an idea where their respective bottom might be."
To capitalize on the frenzy for pre-construction condos in Florida, Realtor Steve Dalia of Exit Team Realty in Coral Springs, Fla., launched a Web site this year, PreConstructionProfits.com. Dalia said some condo markets in Florida "seem to be absolutely on fire" in terms of buyer demand, and most of the visitors to his Web site are from outside the area.
On the other side of the country, Mike Machado, a Realtor for Pacific Union GMAC Real Estate in San Francisco, is selling a one-bedroom, one-bathroom condo unit in a high-rise development for $689,000.
Machado said that as with other cycles, it may be too late when real estate investors and speculators realize the market is turning - people may not realize what's happening "until we all get burned." He added, "It's just like the stock market in the late 1990s. Now, we're all in real estate. Real estate's the new stock market. Which we all know can't last forever."
Visit http://www.inman.com/ for more real estate articles
...................................................................................
Converting
hospital to condos
Part 2: Condo craze
By Janis Mara
Inman News
Editor's note: The condo market is on fire across the country, with prices
appreciating faster than single-family homes in some cases. Buyers are
scrambling to be the first in line, and amateur real estate investing
is akin to sports and hobbies in the hottest markets. In this three-part
series, we examine the trend from the trenches, catching up with part-time
investors and first-time buyers, along with an example of the type of
unique conversion projects taking place.
In tiny Adams , Mass. , developers are converting a former hospital into
condominiums, in a sign that the national condo conversion craze is hitting
New England .
Halfway through construction, 11 of the 16 units already have sold, according
to Dave Carver, managing partner of Scarafoni Associates of North Adams.
Scarafoni is the real estate management and development company converting
the hospital.
"This is the first condo project in the town," said Carver.
Adams, which has 8,000 residents, is a sleepy community, a former mill
town in the Berkshire Hills . But apparently even Adams - and the Plunkett
Hospital , erected in 1918 - can't escape the inexorable condo conversion
trend.
"The condo craze is penetrating into Massachusetts ," Carver
acknowledged.
The news should come as no surprise. Condo converters accounted for 22
percent of apartment sales in 2004, and 45 percent of total volume in
January 2005, according to Prudential Real Estate Investors' U.S. Market
Outlook for the first quarter of 2005.
The condo market has sizzled in many markets across the country, with
condo-price appreciation in some cases exceeding home-price increases.
Murmurs of bubbles and busts haven't scared away condo developers from
low-rise, high-rise and condo-conversion projects, though. And buyers
in some markets are still scrambling to be the first in line for a condo
unit.
The former hospital in Adams has two classic red brick New England buildings,
one of which boasts a cupola and a 6-foot gold leaf weathervane. It stands
on "the best parcel of land in Adams ," according to Ronald
King, Scarafoni's project manager. Perched high on the hill, the buildings,
which total around 40,000 feet, have a striking view of downtown and the
surrounding area.
Though the exterior has been preserved, the insides have been gutted,
King said. "No remnants of the hospital remain inside," he said.
"Hospitals and houses don't have much in common." He acknowledged,
"It's somewhat difficult to fit these things into what was a hospital
and make it work properly." Overall, the "medium-difficult"
job is going well, he said.
Deemed a historic resource by Historic Massachusetts, a state advocate
for historical preservation, the hospital sat empty for nearly 20 years.
Proposals for the town-owned property went nowhere.
During that period, thieves plundered the boarded-up hospital's copper
piping and downspouts. Some even considered the neglected property to
be haunted, according to Carver and ghost spotting Web sites that reported,
"Screams can be heard along with sightings of ghosts that usually
resemble patients that may have died there." Carver, however, said,
"If there are ghosts there, they are friendly ghosts."
In 2003, Scarafoni proposed to bring the "haunted" hospital
back from the dead, with a plan to create condominiums selling for $150,000
to $250,000, targeting the "empty-nest" market of local retirees.
City officials were ecstatic. "We are quite pleased this is a positive
proposal and believe it is a realistic proposal," Faith Yando of
the Massachusetts Development Finance Agency, which handled the proposal
process, told the local paper, the Berkshire Eagle. "I'm glad it's
a local developer and one with a good reputation," Edward Driscoll,
vice chairman of the Selectmen, told the Eagle.
Work began in late 2003. Scarafoni expects to complete the job in 2006.
The hospital's 200-odd windows have been replaced with windows that, while
modern, are mullioned and resemble the old windows. The old gutters and
ironwork have been replaced, and now the interior is being rebuilt.
"We are trying to direct this to the older market," said Carver.
"A lot of the houses in town are occupied with people who raised
their families and now want to downsize.
"This keeps those people in the community and also frees up the larger
houses for young couples who plan to have families," Carver said.
The unit mix ranges from a 1,222-square-foot, one-bedroom, one-bath unit
with a deck, to a 2,823-square-foot, two-bedroom-plus-den with two baths.
All the units have garages. Unlike many condo complexes, the 16-unit property
doesn't have a common area.
The condos are priced from $150,000 to $250,000. According to King, new
houses in Adams , "which is what these essentially are," sell
for around $200,000. The smallest unit is 1,129 square feet, with one
bedroom and one bath. The largest is 2,823 square feet, with two bedrooms,
a den and a deck.
It appears that Adams residents aren't scared of the hospital's "haunted"
reputation, with 11 of the 16 units selling before construction was completed.
Indeed, King anticipates that the brick buildings crowning the hill in
the center of town will radiate a sense of community.
"Some of the people who are moving in already know each other,"
King said. "I'm sure it will become a close-knit group."
Visit www.inman.com for more real estate articles
##############################
First-time buyers flood condo market
Part 3: Condo craze
By Jessica Swesey and Glenn Roberts Jr.
Inman News
Editor's note: The condo market is on fire across the country, with prices
appreciating faster than single-family homes in some cases. Buyers are
scrambling to be the first in line, and amateur real estate investing
is akin to sports and hobbies in the hottest markets. In this three-part
series, we examine the trend from the trenches, catching up with part-time
investors and first-time buyers, along with an example of the type of
unique conversion projects taking place.
Ryan Sankey dropped the first moving box on the floor of his first-floor
condo about a month and a half ago. At 27, he's feeling good about his
decision to buy a condo in a Seattle suburb.
Sankey viewed the purchase as a way he could own real estate without having
to worry about the exterior headaches that come with owning a single-family
home. And the price was still within reach at $121,000. Houses in his
area of Everett , Wash. , sell for about $200,000 to $250,000 on average,
he said.
The condo market has sizzled in many markets across the country, with
condo-price appreciation in some cases exceeding home-price increases.
Murmurs of bubbles and busts haven't scared away condo developers from
low-rise, high-rise and condo-conversion projects, though. And buyers
in some markets are still scrambling to be first in line for a condo unit.
"The primary motivation was being able to find something decent for
less money since houses are still expensive in my market," Sankey
said.
Also, he's still within reasonable distance of his technical support job
at Microsoft in nearby Redmond . If he'd bought a house, he'd most likely
be further from his job.
Sankey figures that by keeping the interior nice, he'll build some attractive
equity by the time he's ready to move again. "I figured if I do this,
I will live here maybe two years, three. I may turn this into an investment,"
he said.
Sankey's two-bedroom condo is part of a former apartment complex that's
been converted. He said a conversion group is now finishing converting
the second to last complex.
"They basically took all the carpet out, all the detailing out, repainted
everything - all the fixtures - and basically updated it so it looked
like a brand-new interior," he said.
The Everett area is in high demand because of its proximity to Seattle
- about 30 miles, Sankey said. Many of Sankey's friends have bought condos
or are looking to buy condos. "Everyone is recognizing the fact that
its just easier to purchase...it's not that much harder than renting,
and its yours," he said.
Sankey said he's been hearing chatter that the housing market in his region
is set to cool down. "The condo market, however, seems to be more
on the rise than on the fall," he said.
Condo markets are booming nationwide, with sales and prices in this market
segment rising steadily for eight consecutive years. The median price
of condos and co-ops has increased roughly twice as fast as that of existing
single-family homes, according to Harvard's Joint Center for Housing report
for 2004.
"The market in general favors single-family, detached homes, and
when they become unaffordable, condos are the preferred alternative,"
said Leslie Appleton-Young, chief economist for the California Association
of Realtors.
The median price for condos in California rose by 24.2 percent year-over-year
from $303,060 in January 2004, to $376,300 in January 2005, according
to a recent report from the state Realtors association.
And annual price appreciation of condos surpassed that of detached homes
in all but one of the last five years in California .
Nationwide, sales of condos and co-ops went from 657,000 units sold in
2002, to 731,000 in 2003, to 820,000 units sold in 2004, according to
the National Association of Realtors. And the average U.S. condo price
increased 16.4 percent from 2003 to 2004, while single-family home prices
increased 9.3 percent during that same period.
Appleton-Young said condos are a welcomed addition to the California housing
stock, particularly in the coastal areas where the supply of homes for
sale is low.
"We really do see condominiums come to life when the single-family,
detached alternative is too expensive," she said. The median price
of a single-family home in California reached $485,700 in January.
Indeed, price and location were among the top reasons recent condo buyers
gave Inman News for buying this type of housing rather than a single-family
home.
Simon Horwith, chief information officer for AboutWeb, recently purchased
a condo in the Logan Circle area of Washington , D.C. Horwith and his
wife are first-time buyers.
"The deciding factor in purchasing a condo versus a house was the
fact that my wife and I wanted to live in the city as opposed to the suburbs,"
Horwith said. "We like to go out to bars and clubs, little shops
and coffee shops, and we like to walk."
Horwith said the condo market was competitive. The seller of the condo
he eventually purchased received many bids - including Horwith's - in
the first weekend of the sale. "Without an escalation clause and
willingness to pay above the asking price, we wouldn't have got the condo,"
he said.
The Horwiths also had to compromise a little on location to get in on
the condo market. The couple started looking for condos in the Dupont
Circle area of D.C., but opted for a larger unit for about the same price
at the nearby Logan Circle neighborhood. Horwith said they were able to
purchase a two-bedroom, two-bathroom condo for the same price they would've
paid for a small one-bedroom just a few blocks away.
Iris Garica, a Bronx , N.Y., resident, turned to the condo market because
she is priced out of the single-family market. Garcia said condo prices
in the area have been a wake-up call for her, and she has expanded her
search to a four-state area that includes Connecticut , New Jersey , New
York and Pennsylvania .
"You can't find a two-bedroom condo for $92,000. They all start at
$120,000 and up. Some of them are about $300,000," she said. "The
prices are ridiculous. I figured I would be able to buy something and
I really haven't been able to."
Visit www.inman.com for more real estate articles
........................................
Houston Home Builders Hit
Record Sales in 2004
Houston builders sold almost
40,000 new homes in 2004, up 11 percent from 2003. With strong job growth
in play, the city's housing industry is poised for an impressive 2005,
says economist and housing expert Mike Inselmann of Metrostudy.
For the first time in years, Houston rang in the new year with some momentum,
said Inselmann. “The local economy is expanding at a sustainable rate
and the labor force is showing signs of significant growth. Local business
owners are reaping the benefits of productivity and technological gains,
energy prices are high and rig counts are at the highest level in 18 years.
These factors combine to form what should be a very exciting 2005.”
Houston’s job market set the groundwork for a solid recovery and is now
growing at a healthy rate, said Inselmann. “With a gain of 34,900 jobs
in 2004, Houston has come full circle — from booming employment in the
mid- to late 1990s, to a recession in 2002 and 2003, and then back to
healthy job growth in 2004. Total employment reached 2.143 million, a
new high-water mark for the Houston labor force.”
This increased productivity should translate into higher wages and greater
worker demand in 2005. For the housing industry, that means greater employment
combined with Houston’s burgeoning population, which should offset the
initial measured increased in interest rates, ensuring the potential of
another solid year, said Inselmann.
Continuing to thrive, the Houston housing market set a year-end record
of 40,599 new home starts during 2004. “However, it appears the meteoric
growth of the past few years is reaching a plateau,” said Inselmann. Signs
of the market peaking are in the numbers: The annual growth rate for 2004
was 7.0 percent, the lowest percentage growth rate since 1999. Metrostudy
recorded 8,473 starts during the fourth quarter of 2004, a 4.1 percent
decrease compared to the fourth quarter of 2003. The fourth quarter of
2004 was only the fifth quarter in the past 10 years in which quarterly
starts declined.
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HUD's Jackson Aims
at RESPA Reform
WASHINGTON - Housing and Urban Development Secretary Alphonso Jackson has outlined HUD's timetable to develop modern mortgage rules that regulate how American consumers buy and refinance homes. The Department's roadmap for reforming the regulatory requirements of the Real Estate Settlement Procedures Act (RESPA) will include three informal meetings in July and August with consumer organizations and industry representatives. To read HUD's formal announcement of these roundtables, visit HUD's website .
In addition to these Washington roundtable discussions, the Small Business Administration and HUD will co-sponsor meetings in Los Angeles, Chicago and Fort Worth to listen to the unique concerns of smaller real estate and settlement service providers with an interest in RESPA reform.
"Simplifying and improving the way consumers buy and refinance homes in this country will drive our campaign along this road to reform," said Jackson. "There is universal agreement that current regulations can and should be improved to allow even more families to share in the American Dream."
Beginning next month, the Department will host three roundtables with members of industry and consumer organizations (July 14, July 28, and August 18). Participation in these sessions is by invitation and is focused on those individuals and groups that offered an analysis of HUD's 2002 RESPA reform proposals or offered alternative reforms for HUD's consideration. The purpose of these sessions is to stimulate a meaningful exchange of ideas among participants over the substance of new RESPA reform proposals, not to reach consensus through negotiation.
Jackson added, "I understand that with so many competing interests, it will be difficult to make everyone happy. But I promise that before we put pen to paper, we will carefully consider the input from consumers and industry alike. I want to repeat my cardinal rule for RESPA reform: I am more concerned with doing this right, than doing it fast."
Today, buying a home is too complicated, confusing and costly. Each year, Americans spend approximately $55 billion on closing costs they don't fully understand. For most other purchases a consumer makes, the bottom line price is clear and firm. Over the last three decades the mortgage industry has experienced substantial and dynamic change while HUD's disclosure requirements have remained essentially the same.
RESPA became law in 1974 to provide consumers with advance disclosures of settlement charges and to prohibit illegal kickbacks and excessive fees in the homebuying process. Nevertheless, consumers complain that when they reach the closing table, they don't understand the charges and often pay more than they anticipated. In addition, homebuyers are severely limited in shopping for settlement services that could significantly lower the cost of homeownership.
Homeownership is at record levels with increasing numbers of families either purchasing their first home or taking advantage of low interest rates to refinance their existing home mortgages. Yet downpayments and closing costs remain the greatest obstacles confronting potential homebuyers. Creating a simpler, more transparent and less expensive homebuying process will allow even more families to purchase a home or refinance their existing mortgage terms. For more information about reforming the mortgage settlement process, visit HUD's new website devoted to providing the latest information on RESPA reform .
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov .
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Houston's Existing Home Sales Hit
Annual Record
Houston's existing home sales were up 10 percent in 2004 with 72,015 homes
sold, compared to 65,423 sales in 2003, according to the Houston
Association of Realtors.
It represented the best year
ever for Houston real estate. New annual records were set for total dollar
volume of transactions, number of properties sold and average sales price.
More than 72,000 properties, or an average of 6,000 per month, changed
hands through the MLS during 2004, which was an increase of 10.1 percent
versus last year. The Houston housing market outpaced the overall 2004
national average increase in existing home sales of 8.9 percent, according
to estimates by the National Association of REALTORS. Additionally, more
than $12 billion worth of property, or an average of $1 billion per month,
was transacted in the Houston area in 2004, which was an increase of 7.6
percent from 2003 levels.
“This has been the best year in Houston that residential real estate has
ever seen and current economic indicators project 2005 to be just as strong,”
said Toni Nelson, HAR Chair and a Division Vice President
for Coldwell Banker United, REALTORS. "We are fortunate to live in a city
that has experienced stable growth over a number of years with no economic
indicators that point to either a boom or a bust, as in some areas of
the country. We can have confidence in the retention of our homes’ values.”
While the overall median price of single-family homes reached $138,000
in December, which was an increase of 1.5 percent compared to the prior
year, the median price for existing homes in 2004 was up 4.5 percent versus
the previous 12 months. These figures signal sustained pricing strength
in Houston, particularly in the home resale market. The median is a typical
market price where half of the homes sold for more and half sold for less
that that figure.
Houston’s current median price of $138,000 is 26.7 percent less than the
national median price, which reached $188,200 in November, according to
statistics released by the National Association of REALTORS®. These data
continue to show the tremendous value and lower cost of living afforded
to Houstonians.
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