The U.S. Conference of Mayors assembled to discuss the impending foreclosure crisis.
The Sun-Sentinel reports:“A mortgage industry group agreed Tuesday to help the nation's mayors raise public awareness about ways to avoid falling into foreclosure as part of an effort to address the nation's housing crisis.”
“The agreement was announced following a meeting in Detroit organized by the U.S. Conference of Mayors and attended by mayors from across the country. The Mortgage Bankers Association also plans to help cities get access to information on homes in foreclosure to ensure those properties don't blight neighborhoods.”
“‘The foreclosure crisis has the potential to break the backbone of our economy,’ Douglas Palmer, mayor of Trenton, N.J., and president of the mayors group, said after the meeting at the MGM Grand Detroit hotel.”
“Meanwhile, mortgage foreclosures remained a major concern for South Florida homeowners in October. There were 2,122 Broward County residents last month who were behind on their mortgages and face losing their homes to lenders, almost triple the 732 a year ago, according to Realestat.com of Plantation. Broward had 710 foreclosure sales last month, more than double the 344 a year ago.”
“In Palm Beach County, 1,291 residents in October were behind on their home loans and face foreclosure, up from 478 a year ago. The county's foreclosure sales were up 69 percent over the same period, from 166 to 281.”
The Palm Beach Post expanded on this story:
“Home foreclosures from West Palm Beach to Miami will reduce the region's economic growth by nearly $2.1 billion next year, according to a report released Tuesday by the U.S. Conference of Mayors.”
“Meanwhile, more bad housing news came from Standard & Poor's Case-Shiller Home Price Indices, a closely watched survey that showed home prices in 20 major markets declining 4.9 percent in September from a year ago.”
“That study showed the largest declines over the past year were in Tampa, where prices fell 11.1 percent compared with last year, and in the Miami metropolitan area, including Palm Beach County, where prices dropped 10 percent.”
“‘There is no real positive news’ in the statistics, economist Robert Shiller said in a statement. ‘Most of the metro areas continue to show declining or decelerating returns on both an annual and monthly basis.’”
“The mayors' report was based on economists' assumption that another 1.4 million homeowners will face foreclosure next year, forcing them to walk away from houses worth a total of $316 billion.”
“The resulting turmoil in the housing sector will reduce economic growth by $166 billion nationwide, according to the study, conducted for the mayors by forecasting firm Global Insight Inc.”
“‘The foreclosure crisis has the potential to break the back of our economy, as well as the backs of millions of American families, if we don't do something soon,’ Trenton, N.J., Mayor Douglas Palmer said in statement on the report, released at a meeting in Detroit of mayors, mortgage industry officials and community advocacy groups. Palmer is president of the mayors group.”
The Miami Herald reports on how the foreclosures will affect the local economy:
“In the ranking of regions by projected amount of economic growth lost, Florida's cities hold up relatively well, probably because strong performances in tourism and international trade are helping offset the housing slump. The state's tourism agency said Monday that visitors to the Sunshine State this summer increased nearly 5 percent over last year.”
“Miami-Dade and Broward counties ranked 111th on the list of 361 areas, and the two counties' combined economy is expected to grow by 2.2 percent next year -- down from the recent boom years but above the national average of 1.9 percent forecast. The report did not disclose its methodology.”
“The mayors, who begin meeting Tuesday in Detroit, hope to call attention to the cascading problems arising from falling home prices, an expected 1.4 million foreclosures and the pending reset of millions of adjustable-rate mortgages.”
“Lauderhill Mayor Richard J. Kaplan, who is in Detroit for the meeting, said city governments could help soften the blow out of the real estate market in several ways.”
“Options the mayors will discuss include changing state laws to allow cities to better maintain abandoned homes and working with lenders to help keep borrowers out of foreclosure.”
“‘Florida law limits us significantly in trying to prevent one house from destroying an entire neighborhood,'' Kaplan said. In many cases cities have no authority to repair windows or pick up trash strewn across the lawns of unoccupied property, Kaplan said.”
“Miami Mayor Manny Diaz pointed out that the city of Miami had already implemented a number of foreclosure prevention programs. He said nation's mayors had the bully pulpit and would use it to further enlist the participation of lenders, and the U.S. Congress, to help homeowners to work their way out of mortgage problems.”
“‘It was the lending industry, the mortgage industry and financial institutions that created this situation; they should come to the table to offer solutions. And Congress needs to step up and regulate and make sure this kind of thing doesn't happen again,’ Diaz said.”
The Miami Herald reports on housing price declines in South Florida:
“Home prices in Miami fell 10 percent in the past year, the second most in the nation, according to data released Tuesday.”
“Nationwide, home prices fell 4.5 percent in the third quarter from a year earlier, the sharpest drop since Standard & Poor's began its nationwide housing index in 1987 and another sign that the housing slump is far from over, the research group said Tuesday.”
“Tampa and Miami led the index with the lowest year-over-year declines at 11.1 percent and 10 percent, respectively. It also showed drops in San Diego of 9.6 percent; Detroit, 9.6 percent; Las Vegas, 9 percent; Phoenix, 8.8 percent; and Los Angeles, 7 percent.”
“The S&P's 10-area index decreased 5.5 percent in September from the previous year.”
Last week, the National Association of Realtors said that sales of existing homes fell in 46 states in the third quarter. However, the trade group said home prices rose in 93 of the 150 metropolitan areas surveyed.”
In the face of all this, Miami-Dade Commission, Marc Sarnoff came up with an absolutely ridiculous proposal, which is really just a thinly-veiled attempt to bail out troubled developers and under-water flippers.
The Miami Herald reports:
“Miami's former building boom -- nowadays beset by sluggish condo sales, panicked investors and worries that market conditions may get worse before they get better -- has become Miami's building bargain, one city commissioner says.”
“And Commissioner Marc Sarnoff says the best thing for government to do is just what any savvy shopper would: buy, buy, buy.”
“The commissioner says if prices dip as low as $175 per square foot, government should purchase condo units and partially subsidize them for teachers, police officers and the like.”
“Sarnoff says a wide range of condo units are currently available in the $225 to $250 per square foot range, and he expects prices to drop in coming months.”
“Under Sarnoff's plan, condo buyers who qualify for government incentives -- likely workers earning between roughly $28,000 and $65,000 -- could receive down payment assistance or help with paying their condo maintenance fees.”
“‘If the marketplace presents an opportunity -- the city, the county, the state should react to that opportunity,’ Sarnoff said.”
The Sun-Sentinel reports on bankruptcy proceedings with Levitt & Sons:
“Levitt and Sons of Fort Lauderdale, the iconic builder of suburban homes, is on the verge of ending its 78-year run.”
“A bankruptcy judge on Tuesday allowed the builder to hand back property and unfinished homes to two of its lenders, which are also among its biggest creditors, a sign that Levitt and Sons is winding down its operations.”
“Negotiations continue with other lenders, and that could permit the company to complete construction in some communities. Levitt and Sons halted building in October.”
“Angelo and Paula Palermo are renting an apartment in Pembroke Pines while waiting for their $380,000 house in Port St. Lucie to be finished. They said they haven't heard a word about their $38,000 deposit or the status of their home.”
“‘I can't stand living out of these boxes,’ Paula Palermo said Tuesday. ‘I don't know what to do. I have no answers.’”
“Bob Oblas of New York was scheduled to close on his Port St. Lucie retirement home at the end of October. But he wrote a letter to the builder, demanding his money back.”
“‘I find this horrific,’ Oblas said. ‘I can't see closing at this point.’”
The Sun-Sentinel printed the following opinion advocating Save our Homes portability:
“I am a Realtor and, therefore, I do have a bias. However, my customers are both permanent residents and snowbirds and I worked as a commercial broker, so I might have at least some perspective.”
“The proposed portability of the Save Our Homes provision will unleash a desperately needed floodgate of prospects into a stagnant housing market. Growing families will be able to buy a larger home without an impossibly disproportional increase in their property taxes, and empty nesters will be able to downsize to lower their housing costs without seeing much of the needed savings wiped out by an actual tax increase.”
“How does that help solve the problem for other disadvantaged groups? Each sale of property generates large taxes in the form of documentary stamps and the intangible property tax. Sale of homes will increase because of the large pent-up demand of those previously thwarted in their desire to move. Since the sick housing market has been waiting for a "bottom," this increased activity will kick start home sales, further generating more closings tax revenue.”
“The bleeding in the home construction industry and all the other professions adversely affected by the housing slump will abate. The loss of jobs will subside and, in time, be reversed.”
“Voila! With the sharply increased tax revenue from the closing of home sales, the Legislature will have the funds to do something for the snowbirds, business property owners and first-time home buyers. If the lawmakers could just figure out a way to keep local governments (and themselves) from overspending!”
But, all is not lost. If homebuilding slows during this housing slump, there are always other alternatives.
The Palm Beach Post reports:
“A small Port St. Lucie home builder appears to be at the center of an investigation into a ring of marijuana grow houses that sprawled across St. Lucie County, where authorities on Tuesday raided 18 homes and seized 420 pounds of pot, officials said.”
“Authorities said they arrested 10 people, including the owner of Global Home Builders of the Treasure Coast, and uncovered 10 indoor marijuana farms during pre-dawn raids.”
“Although authorities said Global Home Builders and some of its employees had an interest in several of the homes raided Tuesday morning, they would not elaborate on the involvement.”
“‘People connected to (Global Homes Builders of the Treasure Coast) have been brought into custody,’ said St. Lucie sheriff's Chief Deputy Garry Wilson; he declined to say more.”
“Global Home Builders' Web site boasts of doing more than 40 years of business on the Treasure Coast and in South Florida.”
“The company obtained permits to build six single-family homes in 2006, the first year it received a city permit, Port St. Lucie building officials said. This year, the company received three permits.”
Stumble It!