Entries Tagged 'Housing' ↓

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The head of Fannie Mae is predicting a slow real estate market spanning through 2009 as indicators such as the Case Shiller report as showing even greater weakness in the market. Daniel Mudd predicts the slowdown lasting longer than many other prognosticators, but interesting enough recognizes that he is guessing as forecasting housing is not an easy job.

This is a great point. We all would love to know the date of the turnaround. But the complex formula of consumer sentiment, finances, macro economics, local economics, and government fiscal policies will make it very hard to determine when and where the bottom will be. Add to that different local and socioeconomic groups may react differently to market conditions you have to remember the classic adage.

All real estate is local.

So before you get all bothered by this report, watch the indicators. The  best example of this are  the charts that are on Doug Quance’s site  for the different towns in Atlanta. Some are showing increases over the past couple of months of 10 percent while others right next door are showing declines. If you did not know any better you never would know all these communities were in one metro region! 

“We think at Fannie Mae that ‘08 is going to be a tough year, kind of a continuation of the end of 2007; ‘09 will be similar,” said Daniel Mudd, the company’s president and chief executive, who spoke at a business journalism conference in Baltimore.

Fannie Mae, which buys and repackages loans to sell to investors, claims about half the market for newly issued securities backed by single-family homes.

Forecasting the bottom of the housing slump is a tricky business, with the many conflicting predictions by economists as proof, he added. He said he has seen recent improvement in the capital markets, which play an important role in the mortgage products and rates that borrowers can get, but a housing-price index released yesterday showed accelerating declines across the largest metro areas. via the baltimoresun.com

In a very controversial decision, the 9^th Circuit Court of Appeals has ruled that Roommates.com has violated the fair housing laws by matching roommates by gender, sexual orientation, and parenthood. By asking prospective roommates to put in their status on these criteria and allowing prospective roommates to judge them on that basis.

Now lets think this through, the 9^th Circuit has said that you will not be able to pre screen prospective roommates. It is one thing to not allow you to pre screen people to live in a property or neighborhood. That is fair and logical.

But the criteria must be much tighter when someone shares a key with you and has immediate access to you and your family. The relationship between people living in a community or apartment complex is completely different than one who lives under the same roof is much different. 

 hope that Roommates.com has the ability to take this decision  to the next level as 5 other appeals courts have ruled against such laws already. A precedent such as this opens many doors to the law of unintended consequences that could severely impede many of the  benefits that the internet offers  consumers.

The judges said a site called Roommates.com may be brought to trial for possibly violating anti-discrimination laws because it requires users to provide information about gender, sexual orientation and whether they have children, and then uses the information to screen people for matches.

“A real estate broker may not inquire as to the race of a prospective buyer, and an employer may not inquire as to the religion of a prospective employee,” Chief Judge Alex Kozinski wrote for the majority. “If such questions are unlawful when posed face-to-face by telephone, they don’t magically become lawful when asked electronically online.”

The ruling dealt a major blow to the immunity shield that federal law has provided to nurture Internet expansion. Lawyers in the case said the trend in federal courts had been to protect websites from liability.

The three judges who dissented called the ruling an “unprecedented expansion of liability” that could chill the Internet’s growth. They said the decision was at odds with rulings by five other federal appeals courts and threatened protections for all interactive sites. via Los Angeles Times.

This is a problem that faces landlords all over the country. How to handle a tenant on the sex offender registry.

The City of New York has an out though, they have a firm rule that housing for those who are on the sexual offender registry. They can not rent.

But as with any large bureaucracy, the slow and laborious process failed to do its job and now their are 112 sexual offenders living subsidized housing in New York City. The failure to catch this situation provides a two fold failure of the system. First, by missing these people you are placing their neighbors in jeopardy of a sexual attack, not to mention the future liability to the city. And you are also denying someone who is worthy of living in the housing from the opportunity.

Screening for these apartments takes months, it is a shame that the city will not do the job it is tasked with doing.

“I was obviously surprised and disappointed when this week we discovered there are over 100 sex offenders living illegally in public housing right now,” Mr. Gioia said in a telephone interview yesterday. “It’s illegal, it’s against federal law, it’s against city policy, and it’s simply wrong to have taxpayers subsidizing pedophiles and rapists in public housing.”
Federal law requires public housing authorities to reject any applicants who are on a lifetime sex offender registry. Residents of the city’s public housing pay a fraction of market rate rents. via The New York Sun.

Engadget has an interesting article on why homeowner associations that sign exclusive contracts for services can have it backfire.

The example they are using is the contracts homeowners associations have signed to make cable companies exclusive providers to get better rates. The problem is that with if foreclosures happen or homes go empty, the rest of the neighborhood has to pick up the slack. As Engadget notes, it can get pretty painful.

The problem is that the contracts only make sense if everyone in your ‘hood is paying their part, and as you’d expect when a house gets foreclosed on, the last thing the newly homeless people are worried about is paying the HOA fees. So as more houses go vacant, the price per house goes up and in at least one community in Florida, it has gone up about 44 percent. via  Engadget HD.

Has anyone noticed that there has been a surge in alternative power ideas coming to fruition now that energy costs are skyrocketing?

The newest one that I have come across are solar power film cells that can be printed off of an inkjet printer. Like electricity, consumers will gravitate to the least expensive solution. When one form of energy gets too expensive then the research and design costs for new technology become affordable.

The past 30 years or so have had it all backwards. We will have alternative and sustainable energy sources that will fill the void for consumers and homeowners when the costs make sense not when conventional wisdom deems it important for us to partake of it.

Konarka Technologies, the Massachusetts-based company we first recognized with a 2005 Breakthrough Award for its affordable Power Plastic solar film, said this week that it has successfully manufactured those thin solar cells using an inkjet printer. In addition to decreasing production costs because it relies on existing inkjet technology, the printable Power Plastic cells can be applied to a range of small-scale, highly variable power opportunities, from indoor sensors to small RFID installations.

With printers now capable of producing solar cells, other companies might be able to use plastics and other colors in developing new kinds of power-packing film. But the inkjet process is just one of several different manufacturing techniques Konarka has been busy demonstrating for its solar collectors over the last three years. “Compared to current PV technologies, the Power Plastic has an advantage in flexibility, greater sensitivity to low light and versatility,” Konarka president and CEO Rick Hess says of the film cells, which are fused from liquid containing semiconducting polymers. via Popular Mechanics.

Here is a question to the media.

Why is it when residential sales drop it is because of the fault of the housing industry, but when sales of commercial properties fall it is because of the credit crunch?

I know I am seriously generalizing the issue but that is how the media is approaching this.

• All residential problems are reported as based upon upon greed, subprime problems, and fraud.
• All commercial real estate problems are based upon the credit markets falling apart.

Yet both market problems were created by prices soaring too high and money that was too easily given. The dynamics are not that different but the reporting is.

Sales of US hotels are expected to fall as much as 50 per cent this year because the credit squeeze has reshaped investors’ ability to purchase real estate, says a report due for release today.

The value of hotel property sales is expected to fall to $23bn-$26bn, down from a record $45bn in 2007, as deals become more difficult, according to real estate brokers Jones Lang Lasalle. The expected slide in sales would more than undo last year’s 38 per cent rise.

“The credit crunch has halted mega-deals and many portfolio deals,” the report will say. via the Financial Times

After years of rising property values, the British are facing their own housing bubble and it is not going to be pretty. The use of subprime loans as housing prices stripped the ability to pay for a conventional loan became popular in England with the same results as in the United States.

Now that housing prices are coming down and the subprime loans are resetting, homeowners are getting caught in the pinch.

I wonder if the British are watching how the United States is handling the mortgage crisis and if they will try to do something different to alleviate their situation?

After years of watching house prices soar even faster than those in America — modest three-bedroom tract houses in the London suburbs were going for $2.2 million at one point — Britons are now weathering a sharp rise in mortgage defaults.

Moreover, many debt-laden homeowners have no means to salvage their properties because favorable loans are suddenly harder to get. Desperate consumers are increasingly turning to costly and confusing financial rescue plans that often end, later if not sooner, in the loss of their homes.

The Financial Services Authority, which regulates banking in Britain, warned last month that 1.4 million mortgage holders will face interest-rate resets on their loans this year, with payment hikes of up to $420 a month. via the  Los Angeles Times

The city of Farmers Branch, Texas has been trying for 2 years to ban the sale of homes to illegal aliens. Now they have tried a new tactic, banning the rental of homes to people who can not prove citizenship in the United States. While not unique, over 160 towns and cities in the country are attempting to pass similar laws to ban illegal aliens from living in the towns, Farmers Branch has been trying almost any way possible.

Previous attempts have been blocked by a federal judge for trying to regulate immigration which is a federal responsibility. The battle between conservative towns and liberal judges is occurring all across the country and in an interesting glimpse into the national debate over illegal immigration.

The suit, filed on behalf of real estate broker Guillermo Ramos, alleges the Farmers Branch City Council violated the Texas Open Meetings Act when it drafted and approved the new rule late last month.

The law requires prospective tenants to get a city license to rent houses and apartments.

The suit alleges that while the council was supposed to be discussing legal challenges against a previous ordinance, it actually was drafting this new, more sweeping anti-illegal-immigration measure behind closed doors. via The Associated Press

When housing prices were running up, present homeowners started counting their chickens and planning their retirement. But what is forgotten once the bloom is off the rose as it is now, that these high housing costs also have their costs.

When looking around Long Island as a young man in my early 20’s the though of moving out was enticing, but the reality was grim. The dearth of rental properties meant that an illegal basement apartment was my only choice besides staying with Mom and Dad. This situation was replicated for many of my peers and the result was a mass exodus across the country and a generation lost.

Now after the present run up in housing costs, their is a new generation that could be lost from the New York suburbs. With the terrific education that is offered and the expectations of success, the cost of living in the tri-state area is burdensome compared to lesser cost cities where the paychecks are fairly comparable.

Long Island’s Newsday ran an editorial on the failure to have reasonable housing available for the next generation of Long Island’s youth.

Towns and villages that have not yet done their fair share of next-generation housing have to get off their duffs. The major institutions pushing for change, such as the Long Island Association, Suffolk County government, and the Long Island Regional Planning Board, must harmonize their strategies and avoid working at cross-purposes.

The people who need this housing most, young workers, have to become more informed and more active in pushing for solutions. They should emulate the spirit of the young families of 60 years ago, who showed up in droves at 1947 hearings leading to a change in a Hempstead town ordinance. That made possible the postwar generation’s affordable housing triumph: Levittown.

We have to get past the deeply held fear that more dense patterns of development will urbanize all of Long Island. That fear is rooted too often in racism and fertilized too eagerly by politicians. But increased density, especially in our downtowns, is the economic incentive we need to get developers to build affordable homes and rental units. via Newsday

The same issue was raised in New Jersey in an editorial. The youth of the communities are leaving in droves.

The most common reasons cited for the mass exodus are our state’s highest-in-the-nation property taxes and the crisis of affordable housing — two issues Gov. Corzine and our state legislative leaders promised to tackle in 2007. They promised to address taxes through property tax reform and an overhaul of our unfair school funding system. They promised to address the housing crisis by creating more affordable units and reforming our fair housing rules, including confronting the shameful practice of regional contribution agreements (RCAs), the loophole that allows wealthy towns to pay poor communities to take more than their fair share of affordable housing. via APP.COM

This issue is close to my heart. I still remember the conversations close friends and I had about how the choices seemed to be on Long Island in the mid eighties that you could buy a house or have a child with the newly wed couples. Now these same friends live all across the country, very few staying on Long Island. My fear is that another generation will be in the same predicament.

San Jose is worried that the rush to build new homes is taking away from job production. Undeveloped land is quickly being converted to housing inventory and the locals are getting restless. By building up housing at the expense of commercial land, job prospects are being hurt in the region.

But whether the revisions - which seek to combat the potential loss of jobs - would have any practical effect remains a question. That’s mostly because the guidelines, or “framework,” as the city calls them, are merely advisory. The revisions were proposed, in part, because the council was already routinely ignoring the existing guidelines.
The controversy over the widespread rezoning is focused on two issues: Critics of the new rules argue that if the city actually adhered to them, then production of affordable housing - a city priority - would fall by the wayside. But opponents of the conversions, including city planners, argue that adding housing saps San Jose’s business tax base while costing the city money to serve demands created by new residents, like police and park maintenance. via the San Jose MercuryNews

Meanwhile on Long Island, New York the mentality is that new homes and greater density are bad, so the taxpayers keep voting on local land purchase measures to stop new growth. For an area that is so highly taxed and with property values so high to stop new growth will continue to cause young families to flee the island.

For the most glaring local illustration, all we have to do is look at the use of taxpayer dollars to buy land to stop the building of homes and businesses. Long Islanders will weigh in on the topic directly through four measures placed on the Nov. 6 ballot.
Voters in the Town of Oyster Bay will decide on a total of $60 million in bonds to purchase and maintain such land. Suffolk residents will dictate whether the county can borrow up to $322 million to accelerate land buys over the next four years and extend a one-quarter percent sales tax from the end of 2013 to 2030 to pay for it. via Newsday

As suburban areas run out of green space local governments and residents are going to have a tough choice. Do you preserve the land for recreation and face higher property values and taxes or do you have a land management plan that tries to manage the needs of residents, businesses, and the local government? These are difficult questions and probably will be very subjective to the region one lives in. However, the reprecussions will have a long term impact on the local economies and housing markets.