How to restore home values, save the environment and cut taxes

[ShackledNation]

It beats the hell out of cash for clunkers that destroyed working automobiles. We have far to many dilapidated old buildings sitting vacant. Broken windows theory shows that dilapidated buildings cause crime. Some neighborhoods have as many or more vacant buildings than occupied ones. Most neighborhoods were built around the same time so most of the buildings are in bad shape. It would be far better to level the area & redevelop it with new schools, homes, parks, pools, shopping & business districts all occupied by high income families living closer to work, schools & shopping.

The demolition & recycling creates lots of jobs. It beats the hell out of paying couch potatoes who develop poor health & tax our Medicaid system.

If the buildings are valueless, then it of course makes sense to tear them down. But why should government pay to do that? The land should be sold to private individuals so government actually makes money from it. Then private buyers of the land can choose to demolish the buildings if they are that useless, and then create private sector jobs in doing everything you seem to want government to do. If nobody buys from the government, then you can talk about government demolition.

Yes we want as much private sector participation as possible. The government just needs to maintain strict code enforcement to get the private sector wanting to buy into the nice developing neighborhood. Land prices will skyrocket. The government ownes most of the foreclosed property. I have been to many foreclosure auctions & toured many of these buildings. They bring less than $5k at auction & cost $20k to tear down. In most cases the vacant leveled lots bring far more than one with a building on it. The larger the redevelopment the higher the land prices go.

Right now we are paying people to sit on the couch & get fat as hell. How is that helping anyone?

If government is simply selling this property I have absolutely no problem with the idea. But what I don't like is government demolishing the buildings and then trying to sell the land. If it costs $20 to tear down, in order to make a greater profit government would have to sell the land for at least $26,000. I don't think that is likely. And since government does not operate on profit and loss, there is a greater chance it will fall short most of the time, draining tax payer dollars.

However, if private buyers purchase the land cheap from government, restore the buildings/demolish them, and then create something with it, the losses will fall upon the private buyer if he makes a mistake or wastes resources. There is a greater chance something that serves local demand and consumer preference will be created if government simply sells the land.

 

[waltky]

Uncle Ferd gonna wait till dey payin' $10,000 to take a house - den he gonna move his fat g/f's in with him an' let `em fix up the place...

In Baltimore, homes for $10,000 — and less
August 20, 2011 - Housing prices continue to fall through much of the region, with some of the most striking examples in city neighborhoods

Andrew Wells is hoping to buy a Baltimore home for around the cost of an old car: Less than $10,000. Turns out he's in good company. One of every 10 city homes sold during the first half of the year — about 275 in all — fell in that price range. Twice as many sold for under $20,000. Often foreclosures, these properties are usually in bad shape but seem like deals to real estate investors and the occasional hopeful owner-occupier — such as Wells. "I don't have to worry about trying to get a loan," said Wells, 40, a bill-processing technician who works in Annapolis. "That was the purpose of me searching in that price range. I could buy something, pay cash, and I could live in it and renovate at the same time."

Almost exclusively a city phenomenon — very few homes in Baltimore's suburbs sold for less than $10,000 — it's a market that has expanded rapidly. More city homes sold for less than $10,000 between January and June than in all of 2009 and 2010 combined. Dozens of city neighborhoods had at least one such sale this year. As very cheap homes change hands, average sale prices in Baltimore have plummeted. Seventy city neighborhoods saw average prices drop more than 20 percent versus a year ago, according to a Baltimore Sun analysis of data from Metropolitan Regional Information Systems. That's half of the neighborhoods with enough sales to allow for comparison.

Fewer than 10 percent of suburban communities around Baltimore experienced an average price decline that large. Prices in the region dropped 6 percent on average. But with the city's faster-falling prices have come more buyers. Sales rose in more than half of the city's neighborhoods compared with the first six months of last year. Sales rose in fewer than 40 percent of suburban communities. Still, both the city and suburbs have areas where sales are down sharply since the federal tax credit of up to $8,000 for first-time homebuyers expired last summer. The number of homes sold during the first half of this year fell more than 20 percent in one of every five city neighborhoods and suburban ZIP codes, according to the Sun analysis.

Six years since the peak of the housing bubble, the Baltimore region doesn't look as if it has recovered from the slide that followed. The number of homes sold in the first half of the year is down nearly 50 percent from the level in the first half of 2005. Prices still are dropping in most communities. And at least some of the places where prices rose on average this year are actually seeing values fall — but buyers are using their greater purchasing power to get better homes, pushing the average upward.

MORE

See also:

Homeowners at risk of foreclosure increasing
8/22/2011 - Number who have missed mortgage payments is back up, likely due to unemployment

The number of Americans at risk of foreclosure is rising, reflecting the U.S. economy's continued struggles. The Mortgage Bankers Association said Monday that 8.44 percent of homeowners missed at least one mortgage payment in the April-June quarter. That figure, which is adjusted for seasonal factors, rose 0.12 percentage point from the January-March period.

In a normal market, the percentage of delinquent borrowers is about 1.1 percent, according to the trade group. Delinquent mortgages have plummeted from a record high of more than 10 percent of residential mortgages a year ago. But the decline is due partly to delays in foreclosure filings that are backlogged in several state courts, including Florida, New Jersey, Illinois and New York.

The end of a state and federal investigation into faulty foreclosure paperwork will likely lead to increased foreclosures later this year. Analysts say the increase is especially worrisome because it's due mainly to high unemployment, which tends to raise the number of missed payments and foreclosures over time. And once delayed foreclosures are re-started, the economy could suffer a hit.

"The current processing delays mean this will not happen quickly, underlining our view that both the housing market and the economy will remain weak for a few years," said Paul Dales, senior U.S. economist at Capital Economics. The quarterly survey covers nearly 88 percent of primary residential mortgages totaling nearly 44 million loans.

Source

 

[waltky]

Will lower mortgage rates spur the housing market?...

When will home prices spring back?
September 15, 2011: It was with some trepidation that Stephanie Kim and her husband, Brendan, 40 and 42, put their Chicago townhouse on the market in June. While the place was in great shape, prices in their city were off 8% from 2010 -- and of the 30 similar homes in the area listed the previous year, only nine had sold.

And yet there was an offer on the house almost immediately; the sale closed two months later at just $15,000 under the $650,000 asking price. "We thought it would take a lot longer to sell," says Stephanie. Nationwide, the U.S. housing market remains deep in the doldrums and economists expect prices to fall another 5% to 10% in many places. And yet some sellers, like the Kims, are seeing signs of a turnaround. In a few of the hardest-hit areas, such as Detroit, homes have become so cheap that it no longer makes sense to rent.

In other places, like Los Angeles, price drops haven't stopped, but they've slowed, and homes are selling faster. Plus, even if your area is still hurting, your neighborhood might be on its way back. When the rebound arrives, desirable zip codes will see price jumps first, says David Stiff, chief economist for housing research firm Fiserv Case-Shiller. "Real estate is always local, but these days it's hyperlocal," says Chicago broker Scott Berg. To estimate where your own house lies on the recovery spectrum, answer the following questions.

HOW FAST ARE NEARBY HOMES SELLING?

While it's a good sign when price drops slow down, inventory levels are actually a better gauge of where your market is headed, says David Crowe, chief economist for the National Association of Home Builders. That's because monthly home-value numbers are skewed by seasonal fluctuations, and prices are usually the last thing to budge when a market turns the corner.

What to do: Ask a realtor to tell you the number of listings now on the market in your area and the number of homes sold over the past year. Let's say there are 100 listings and there were 240 sales last year, or an average of 20 per month. That equals a five-month supply, which is considered stable. More than six months and it's a buyer's market, says Crowe; less than three and sellers probably have the upper hand.

IS BUYING CHEAPER THAN RENTING?

See also:

Mortgage rates hit record low: 30-year fixed nears 4%
September 15, 2011: Mortgage rates hit yet another record low this week amid ongoing economic concerns both at home and in Europe.

The average rate for a 30-year, fixed-rate loan fell to 4.09% this week, it's lowest level in 60 years, according to mortgage giant Freddie Mac. Last week, the 30-year fixed averaged 4.12%. The average rate for a 15-year fixed mortgage -- a popular option among those who wish to refinance -- sunk to 3.30%, down from 3.33% last week, the mortgage giant said. "Continued investor concerns over the state of the European debt markets kept U.S. Treasury bond yields low and allowed mortgage rates to ease once more this week," said Frank Nothaft, vice president and chief economist, Freddie Mac in a statement.

The news is good not only for those looking to buy a home, but also for homeowners with existing mortgages carrying higher rates. There are more than 8 million homeowners with mortgage issued by Fannie Mae and Freddie Mac who have loans carrying interest rates of 6% or more, according to the Federal Housing Finance Agency. The average interest rate of mortgages outstanding in the second quarter was 5.28 percent, according to Nothaft. By refinancing into today's 30-year fixed mortgage, homeowners with a $200,000 loan could shave almost $1,715 a year in interest payments. However, not every homeowner or buyer would qualify. Many lenders require borrowers to have stellar credit and large down payments before they will give them mortgages with favorable rates.

Will rates continue to drop? "It would be hard to continue to forecast record lows week after week," said Keith Gumbinger of HSH Associates, a publisher of mortgage information. "But there is some expectation that the Federal Reserve will pull something out of its hat next week to make interest rates go down."

Source

 

[Moonglow]

banks are destroying unmarketable houses.

 

[waltky]

Moon wrote: banks are destroying unmarketable houses.

That will reduce inventory somewhat, but I doubt if they can do it fast enough to make a difference.

Also, the homes they are destroying for the most part are either those condemned due to age and structural issues, or those in parts of town that people aren't interested in living.

That kind of home destruction has always been going on to clear unlivable houses off the tax rolls.

There are neighborhood projects that renovate older homes to bring them up to code, in some instances where they can be acquired for next to nothing and then families placed in them who would otherwise be homeless. More of this needs to be done.

 

[waltky]

Housing prices still falling...

US Housing Sees Annual Decline in Value
September 27, 2011 - U.S. housing prices fell more than 4 percent during the 12-month period ending in July.

Tuesday's report from a business research group shows declines in most of the 20 cities where it tracks prices. Comparing July with the previous month, home prices rose slightly, but analysts say the annual figures give a clearer picture of this troubled market.

Housing is a key reason that the U.S. economy is still struggling two years after the recession officially ended. A separate report from a business group says a measure of consumer confidence increased very slightly in September, after falling sharply the previous month.

Worries about jobs were a key reason for consumers' continued bleak view of the economy. Economists track consumer confidence for clues about the consumer spending that drives most U.S. economic activity.

Source

 

[Toro]

We are building fewer new homes. We are building 400k-500k new homes a year compare to 2 million a few years ago. Household formation is 1.1-1.2 million a year, so we are absorbing excess supply.

 

[KissMy]

Large areas of older major cities are loaded with unsafe buildings that are owned by banks & government. If large areas could be cleared of these it would slow urban sprawl, lower energy use, increase tax base, lower unemployment, save city services, spur large planned developments, reduce excess housing inventory & shore up home values.

 

[editec]

Census numbers show:

• More than 14 million housing units are vacant. That number does not include an estimated 4.8 million seasonal or vacation homes, most of which are occupied part of the year. The combined vacancy rate of almost 15% is higher than during previous recessions: 11% in 1991 and 9.4% in 1984.

• About 3% of owned homes are vacant. In normal times, "maybe 1% should be vacant," Myers says.

• More than 9% of homes built since 2000 are vacant compared with about 2% for older homes.

• Homes priced at $500,000 or more are just as likely to be empty as homes that cost less than $100,000.

Fourth-quarter 2008 vacancy rates for all types of housing:
Rental
2000: 7.8%
2001: 8.8%
2002: 9.4%
2003: 10.2%
2004: 10.0%
2005: 9.6%
2006: 9.8%
2007: 9.6%
2008: 10.1%
Homeowner
2000: 1.6%
2001: 1.8%
2002: 1.7%
2003: 1.8%
2004: 1.8%
2005: 2.0%
2006: 2.7%
2007: 2.8%
2008: 2.9%
Note: Does not include vacation homes
Source: U.S. Census Bureau

source

Between houses going on the market because people are fearful, because people are evicted, and because people can no longer afford to maintain their cost to heat and cool, the number of abandoned homes is rising alarmingly.

Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%).

source

Now, Maine probably has always had the higher percentage of vacant homes, but the number one sees now is obviously higher than ever.

A LOT of that has to do with the fact that people leave Maine to find work but they just cannot bring themselves to give up their Maine homestead.

People PLAN on coming back.

Many of them never do.

The houses sit empty, fall into disrepair as generation after generation refuse to give up their return to Maine dream, and their family home (anddreams) slowly falls apart.

 

[Douger]

Home prices are driven by whatever amount your Jew masters will loan you. Right now, that aint much.

 

[editec]

Home prices are driven by whatever amount your Jew masters will loan you. Right now, that aint much.

FWIW, most of the MASTER CLASS I've known were not Jews, they were WASPS.

That said, you are right about the housing market.

As long as banks won't loan to folks whose credit is flawless, and who have at least 20% down, the housing market is going to have an enormous overhang of housing on the market.

And I really and truly cannot blame the banks for refusing to put themselves out on a limb for potential buyers.

The solution to most of our economic woes involved getting the working class working again, and working at income levels equal to their needs.

There truly no good way to do that fast that does not include eliminating free trade (which can bring its own problems, I'll readily admit that) and re-enpowering collective bargaining.

And since the MASTERS have convinced enough Americans to hate unions and convinced enough Ameircans with influence (read the rich) that it doesn't matter if the USA is going broke because the working class is going broke, neither of those things is going to happen.