Housing Bubble Bursting?

[Pamela Crowley (Florida)]

Denver area, slumpped for years, now declining?

http://www.greeleytrib.com/article/20060721/BUSINESS/107210096/-1/REALESTATE

Weld sees 1,086 foreclosures so far
Sharon Dunn
July 21, 2006

Last fall, Weld County was coming off its worst foreclosure year ever.

It's getting worse, and those in the industry expect the number of foreclosures to continue to climb as a variety of factors converge in the next two to three years.

"I don't see this thing slowing down anytime soon," said Matt Revitte, a broker with Pro Realty Inc., who specializes in foreclosures. "We haven't seen anything this ugly in easily 15 years in the sheer anemic nature of this market."

As of this week, there were 1,086 foreclosures in Weld County, a 42 percent jump from the same time last year. In all, 2005 registered 1,500 foreclosures.

Though that's hardly as high as the volume of four of Colorado's other large counties, Weld's foreclosure rate, based on the number of residences, dwarfs the big boys on the block.

Looking at real-time numbers, there is one foreclosure for every 71 residences in Weld. In terms of severity, it's not quite the highest in the state. Adams County, with 2,450 foreclosures as of June 30, may hold the title with a foreclosure for every 50 homes. Arapahoe County tops the heap in volume with 2,570 foreclosures as of Thursday, but it comes out to one foreclosure per 77 residences.

Previous reports had Weld at top of the foreclosure rates, surpassing Adams, but those were based on residential numbers from the year 2000 and do not reflect the phenomenal growth the counties have seen in that time.

For the last year, the culprits to the problem have been the creative financing loans requiring no down payments, zero interest mortgages or adjustable rate mortgages. Weld may just be seeing the beginning of a foreclosure spike, as more ARM loans adjust to their higher rates in the next few years.

But the economy hasn't helped, either.

"There are a number of factors that are converging. It basically started with low interest rates and making more-risky-than-necessary loans, and people beginning to be squeezed by higher energy prices and not being able to sell their houses and walking away from their loans," said northern Colorado economist John Green.

Sara Allen, director of Consumer Credit Counseling Service of Northern Colorado and Southern Wyoming, said she's noticed another interesting trend in her offices where many residents on the brink of foreclosure visit.

The number of Weld residents seeking financial counseling in Larimer and Boulder counties has increased in the last year by 11 percent.

"What this told me is that these people work (there) and live in Weld County where home are less expensive," Allen said. "They're barely making it as gas prices go up."

Revitte said the Weld market is in a major correction at present. Home appreciation rates are flat and there's an oversupply on the market. At present, homes sit on the market for an average for 12 months before they sell.

It also doesn't help that the foreclosed homes are competing with homes that are on the regular market. Green agreed after looking at RealtyTrac.com's listings of homes owned by banks. The Web site states that at present, banks own 547 foreclosed properties in Weld and that there were 798 homes up for auction.

"The number of properties up for auction competes with those people trying to sell their homes and typically a home would go through auction cheaper than through a broker," Green said.

He added that such competition may keep sellers in limbo longer, making them walk way from loans they can't service. "It becomes a self-fulfilling prophecy."

Revitte agreed, adding, "This could be a house of cards that continues to implode."

 

[Randolph Kinney]

Weld market is in a major correction at present

It is a good thing that this article did NOT use the word "bubble" or "bursting". Otherwise Brad might step in and tell us that this market is "correcting". :happy:

It also doesn't help that the foreclosed homes are competing with homes that are on the regular market.

Ah, this tells me that there is a negative feedback loop developing that will join forces with that "correction" to cause ... dare I say the words? Declining prices of homes. There, I said it. Oh but NAR will tell us that it is a minor price decline, just a few months worth.

 

[Steve Owen]

If you really want to worry...

http://www.economyincrisis.org/?content=eicad1

...look at the bigger picture.

 

[moh malekpour]

Mass foreclosed-home auction in Michigan

http://money.cnn.com/2006/09/11/rea...home_auction/index.htm?postversion=2006091210

Michigan Appraisers, get ready for some foreclosure appraisals. It is coming
I remember in 1994-95 when HUD was auctinoing their foreclosures, they appraised them first. I appraised some of them. I don't know if the appraising prior to auctioning was the rule or the policy.

Mass foreclosed-home auction in Michigan
Homeowners in so-called 'auto-wreck' states have trouble keeping up with payments; region leads nation in foreclosures.
By Les Christie, CNNMoney.com staff writer
September 12 2006: 10:01 AM EDT


NEW YORK (CNNMoney.com) -- More than 250 bank-owned single-family homes, condos and duplexes in Michigan are going to hit the auction block en masse in late September, according to Hudson & Marshall, the company handling the auction.

The state's housing markets have been crushed by lay-offs in the auto industry. On Monday, Ford (Charts) was reported to be eyeing another round of cuts in its workforce. It has left many homeowners unable to keep up their house payments and lenders have built a big inventory of repossessed properties.


Detroit foreclosure being auctioned this month. Estimate: $79,900

More than 92,000 homes entered into some stage of foreclosure nationwide this July - up about 5 percent from June and 18 percent higher than in July 2005, according to RealtyTrac, an on-line marketplace for foreclosed properties.

Michigan was one of the hardest hit of all the states, with a 25 percent spike from a year earlier.

Dave Webb, owner of the Hudson & Marshall, reports that the majority of the 250 Michigan properties primed for auction, about 150 in all, lie within 60 miles of Detroit. The rest are scattered throughout the state, including in the relatively rural Upper Peninsula.

Sellers are providing and paying for title insurance on all the properties, so winning bidders can be confident that the property should come to them free of back taxes, liens or other encumbrances.

The estimated prices run the gamut, from $15,000 to $450,000, and bidders will be able to see the homes and place bids online at www.hudsonandmarshall.com.

The troubles of Michigan's flagship industry have pounded real estate markets all over the state, as well as other Midwestern locales that have auto-dependent businesses.

According to the Office of Federal Housing Enterprise Oversight (OFHEO), of the bottom performing 20 metropolitan area housing markets in the United States, eight are in Michigan, and 17 are in the Midwest in other so-called "auto-wreck states."

Ann Arbor brings up the rear with a loss of 1.28 percent during the past 12 months. Detroit is fourth from the bottom with a loss of 0.61 percent.

Kokomo, Indiana, the third worst performing market, was one of the cradles of the auto industry (inventor Elwood Haynes first tested a horseless carriage there in 1894) and Daimler Chrysler is still a major employer.

Another Indiana auto and tire manufacturing center, Anderson, recorded a 1.1 percent decline in home prices in the 12 months ended June 30, the second worst performance in the nation.

 

[Dee Dee]

For the last year, the culprits to the problem have been the creative financing loans requiring no down payments, zero interest mortgages or adjustable rate mortgages. Weld may just be seeing the beginning of a foreclosure spike, as more ARM loans adjust to their higher rates in the next few years.

So I guess that means the historical argument that foreclosures are predominantly due to illness and job loss has become obsolete, eh?

 

[Ultraviolet]

Seven foreclosure orders today from one client.

Another client said they had several foreclosures that nobody even wanted to bid on ...

 

[Dee Dee]

Rae,
Six months from now methinks you'll be seeing the fees for REO's dropping because so many appraisers will be running to that niche. Happened here!

 

[Dee Dee]

Lawmakers to Probe Housing "Bubble" Mortgages

This should be a good one to follow:

http://today.reuters.com/news/articlebusiness.aspx?type=ousiv&storyID=2006-09-12T191303Z_01_N12323829_RTRIDST_0_BUSINESSPRO-ECONOMY-HOUSING-SENATE-DC.XML&from=business

WASHINGTON (Reuters) - U.S. lawmakers will question some leading government and industry economists about the perils of a possible 'housing bubble' in a Wednesday hearing.

Lawmakers wanted the session "because we've heard a great deal about the possibility of a housing bubble for several years now," said Sen. Wayne Allard, a Republican from Colorado.

Lawmakers behind Wednesday's hearing said that they were concerned that a steady flow of soft housing data could put the nation's economy in peril.

 

[murray stroupe]

RE; recycling center

More bad news. Existing Home Sales Drop to Lowest Level in 2 1/2 Years. It appears isolated pockets in flyover country are still immune because I just flipped a junk lot that I thought would take a year to sell. Thank you California. http://www.foxnews.com/story/0,2933,209979,00.html

=============================
Sounds like you took that one mans trash is another mans treasure to a whole new level and with the price of scrap steel, no wonder some call them recycling centers.

 

[Randolph Kinney]

The Next Wave Of Foreclosures

Ford to seek 30% cut in salaried, other costs

By Gabriel Madway
Last Update: 6:38 PM ET Sep 12, 2006

SAN FRANCISCO (MarketWatch) -- Ford Motor Co. will try to cut white-collar staffing, benefits and other costs by 30% as part of a larger restructuring plan, according to a media report late Tuesday. The Detroit-based automaker's board is expected to begin reviewing the restructuring effort tomorrow, the Wall Street Journal reported in its Web site, citing sources. Ford will aim to cut back mostly on managers and supervisors, and the cuts will take place through the rest of this year and into 2007, the report said. The company has about 35,000 salaried workers in the U.S. Details of the cost-cutting efforts could be disclosed as soon as Friday. Ford's board is also expected to hear details about a new vehicle pricing strategy, the Journal reported.