The Real Estate Bloggers

The American Dream was to grow up, buy your own home in the suburbs with the white picket fence, and live happily ever after. But the dream and the modern reality are heading further and further apart. 16 percent of the population is now living in multigenerational households and that number is rising quickly.

Foreclosures, short sales, layoffs, baby boomers retiring, health issues, traditional immigrant living patterns, the list goes on and on why the housing demographics are changing, but the reality is that multigenerational housing is making a comeback.

As real estate professionals, are you selling into this market, because it is one. Mortgage professionals, are you targeting these folks? People talk about the excesses of a “McMansion” but if multiple generations are living in the house it makes perfect sense.

And 16 percent of the housing market living this way is not joke.

The trend to bring extended families together in one home has been growing since 1980, driven by an influx of new immigrants as well as other social and cultural changes, according to the report. But the trend accelerated as the economic crisis sent many families reeling.
Now 49 million Americans — 16.1 percent of the population — live in homes with multiple generations. Many include adult children in their 20s.
Young adults are less likely to be married than they once were. The typical age of first marriage is five years later than it was in 1970 — 28 for men and 26 for women.
In a tough job market, many still live with their parents. Pew’s analysis showed that 37 percent of 18-to-29-year-olds in 2009 were either out of the workforce or unemployed, a nearly four-decade high. The figure includes some college students. via the Washington Post

February was not a good month for new home sales. The weak economy and brutal weather contributed to the moribund numbers on new housing starts. The numbers are expected to drop from last years terrible February and this years weak January.

Expectation that housing development will improve in March are far fetched looking at how bad the weather has been, the weak housing market, and the lack of movement in the marketplace.

Mounting foreclosures are making it harder to clear inventories, keeping pressure on prices and discouraging new construction. The economy has yet to create the sustained job growth that could invigorate housing demand and is one reason Federal Reserve policy makers will probably keep interest rates near zero after their meeting today.
The report definitely reflects the severe weather effect, said Ellen Zentner, senior U.S. macroeconomist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. Housing has now got enough support that it has stabilized. With or without support, the housing recovery will be slow going.
Starts on dwellings were projected to fall after a previously reported 591,000 in January, according to the median forecast of 71 economists surveyed by Bloomberg. Estimates ranged from 510,000 to 610,000.

The government officials remind me of the parade scene in Animal House where the Kevin Bacon character is trying to do crowd control? “Remain Calm, All is Well!” Washington and the NAHB are trying to put the best spin possible on the housing market yet is keeps slipping further and further into disarray.

The building permit numbers are looking weak which is a sign on future development. If the snow was keeping everyone from building and the builders were confident they could sell their houses this number would be zooming up. Instead it is drifting down from historic lows.

Yet all we hear is “Remain Calm, All is Well!”

Just tell that to the 64,000 construction workers that were laid off in February.

Building permits, a sign of future construction, decreased 1.6 percent to a 612,000 annual rate after a 4.7 percent drop in January. Permits were forecast to decrease to a 601,000 annual pace, according to the survey median.
Construction of single-family houses dropped 0.6 percent to a 499,000 rate in February.
Work on multifamily homes, such as townhouses and apartment buildings, slumped 30 percent to an annual rate of 76,000, the lowest in four months.

If you thought the scams being run on Craigslist were just on ripping off prospective tenants as we talked about before here, you are missing the other side of the coin. Landlords are in just as much danger.

The new scam involves renters sending fake cashiers checks and money orders. The landlord is thrilled to receive the money, deposits it, and then something happens to blow up the deal. It is not until the landlord has refunded the money do they find out that the cashiers check was fake and they are on the hook to return the money.

The scam artist is long gone before the landlord finds this out.

The ICC continues to receive complaints about potential renters who have written counterfeit checks to cover deposits only to back out of the agreements and ask for refunds, investigators say.

In another common ruse, scammers duplicate legitimate real estate postings, often using the brokers’ real names, but re-post the ads using fake e-mail addresses.

When potential renters or buyers request information via e-mail, the owner asks them to send money. Sometimes, the scammers claim they are doing missionary work and the money is sent to destinations in foreign countries, investigators say.

More at  Mlive.com.

If you are a landlord and have come across one of these scams, put the email in the comments. The previous post for tenants has saved many families thousands of dollars and many headaches by helping each other out.

And if you have been ripped off, file a complaint here with the IC3.

Thanks

If you are working in the real estate business this sentence should scare the hell out of you.

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale.

It scares me. This overhang is so big the rounding error is 2 million homes.

Think about it, the Washington Post where I got this quote from can only pinpoint it to an approximation of 2 million homes.

I hope you are saying phrases in the back of your head you would not want your minister to hear.

This is why I and so many others who follow the industry are scared. We have created an environment where the government, the banking industry, and the real estate cartel have all tried to ignore this problem to stabilize the market.

YET THE PROBLEM HAS NOT GONE AWAY.

It has gotten worse. Much worse.

Until the overhang of potential foreclosures is fixed the real estate market will not fully recover.

We are all blowing smoke until then if we tell people that the recovery is right around the corner.

We need to clean up the mess first, not shove it into a closet where we think no one will see it, and then we can invite people in to look at the house.

That will be the day the real estate industry gets it’s credibility back.

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can’t obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.

As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market. via The Washington Post

A sign that the big banks are focusing on core fundamentals and not esoteric investments happened today. Citigroup is selling their Citi Property Investors division to Apollo Management. The reasons for the sale are 2 fold. One, these investments are tanking. They are not performing and are a drag to the company. Better to divest them while the company is underwater and still has government investments in it.

The other reason is that big pappy, the federal government and 27% owner of the company, told them to get rid of assets. And when big pappy speaks, you listen. Of course, this subverts our whole economic system when the political arm directly injects itself into the business of business. But, who cares anymore, right?

All I do know is the timing was right for Apollo to buy. Even if the market still goes down, all the factors in the deal point to a bad deal being made by Citigroup. They were told to sell an asset, they did, and they have cover if the deal is bad.

Such is life in the new America…

The inclusion of Citi Property Investors to Apollo’s portfolio will more than triple the private equity firm’s real estate assets, the agency said. City Property Investors’ portfolio includes 65 investments in 26 countries with a net asset value of $3.5 billion, according to the agency. Apollo signed a letter of intent and the deal may take as long as three months to close, the agency said.

The U.S. government stepped in to prop up Citigroup at the height of the financial crisis in October 2008 when officials at the U.S. Treasury feared the bank’s crumbling financial condition could destabilize financial markets worldwide.

On March 4, Citigroup Chief Executive Vikram Pandit told a congressional panel that he had sold off many proprietary trading businesses, including the Phibro energy trading unit, and was focused on trading services for clients. via Reuters