Market analysts, eager to see silver linings after years of dark news, perceive a recovery in the housing industry as inventories decline. The market, however, belongs to those who can pay cash up front; those seeking mortgage loans are still crippled by a general reluctance of bankers to invest.
For a pdf version of the full articles, plus contextual stories in social, environmental and legal areas, contact Bo McCarver at firstname.lastname@example.org
California asks for Fannie Mae, Freddie Mac foreclosure hiatus
By Alejandro Lazo Los Angeles Times February 27, 2012
Atty. Gen. Kamala D. Harris in a letter asked the regulator of the government-controlled mortgage titans to halt foreclosures in California until the agency has completed a “thorough, transparent analysis of whether principal reduction is in the best interests of struggling homeowners as well as taxpayers.”
It is not the first time that Harris has tangled with the giants — last year she sued the two mortgage giants after they refused to answer subpoenas regarding their mortgage and foreclosure practices. That case remains pending.
Full story at: http://www.latimes.com/business/money/la-fi-mo-fannie-freddie-foreclosure-20120227,0,2545582.story
Housing, confidence data bolster growth outlook
By Lucia Mutikani Reuters February 24, 2012
WASHINGTON – New U.S. home sales fell in January but upward revisions to the prior months’ data and a drop in the supply of properties on the market added to signs of a budding housing recovery.
In a further boost to the economy, a separate report on Friday showed U.S. consumer confidence hit its highest point in a year this month despite a strong rise in gasoline prices.
“We are guardedly optimistic that we may be at an important turning point for both the economy and the housing sector,” said Millan Mulraine, a senior macro Strategist at TD Securities in New York.
The Commerce Department said sales of new single-family homes slipped 0.9 percent last month to a seasonally adjusted 321,000-unit annual rate.
However data for October, November and December were revised to show a much higher sales pace than previously reported, giving the report a stronger tone and putting January’s figure above economists’ expectations
Sales last month rose briskly in the Northeast and South but fell sharply in the Midwest and the West.
Full story at: http://www.reuters.com/article/2012/02/24/us-usa-economy-idUSTRE7BM0AB20120224
Home Sales Dip But Revisions Show Stronger Market
Associated Press February 25, 2012
Sales of new U.S. homes dipped in January but the final quarter of 2011 was stronger than first estimated.
The Commerce Department said Friday that new-home sales fell 0.9 percent last month to a seasonally adjusted annual rate of 321,000 homes. That followed four straight months of gains in which home sales rose 10 percent.
The gains came after the government upwardly revised October, November and December’s figures. December’s annual sales pace of 324,000 was the highest in a year.
Even with more sales, only 304,000 new homes were sold in 2011 — the fewest on record dating back to 1963. And new homes are selling well below the 700,000-per-year rate that economists equate with healthy markets.
Still, the pickup in sales at the end of last year should bolster the view that the housing market is starting to revive.
Cash Buyers Squeezing Out Traditional Home Seekers
By Anne Baxter NPR February 27, 2012
Not everyone wants to buy a mold-infested foreclosure, but Dan Grohs does.
He and his Realtor are walking through a three-bedroom house in Minneapolis. The copper pipes have been stolen by vandals and the heat doesn’t work, but Grohs recently bid on the house — and he sees potential.
“It’s got a nice flow to it,” Grohs says as he moves through the home. “You walk in — living room, dining room, kitchen. Good spacious rooms.”
The bank that owns this foreclosure wants about $48,000 for it, but Grohs has offered $40,000 in cash. If the deal goes through, he plans to renovate the house and resell it. That’s how he and his brothers make a living, and Grohs says they’ve probably made more than 500 cash deals over three decades.
In the past two years, many more investors have been doing the same. Thirty-four percent of completed home sales in January were paid for with cash, according to Campbell Surveys and Inside Mortgage Finance. That share has picked up from just a couple of years ago, and is far above the 10 percent range typical in a more normal market.
Lufkin experiencing growth in housing market
By Nick Wade Lufkin News February 26, 2012
According to the Real Estate Center at Texas A&M University, Lufkin’s home sales were up by close to 20 percent this January as compared to last — a trend that local Realtors say is telling of the area, and the future.
“We’re in the best possible place,” said Michael Bryan, owner of Century 21 Bryan Realty. “The state population is increasing substantially, and people are moving east of (Interstate) 35, not west, and unless they are wanting one of the metroplexes, we’re in a good spot.”
Bryan listed the attractiveness of area lakes and forests as a major contributor in bringing people to Lufkin, as well as the fact that the state did not have to weather the housing market decline that has been rampant for the past five years.
While the most of the nation dealt with a housing bubble that burst and sent the market spiraling, Texas saw minimal damage; and within the state, Lufkin fared even better, relative to the 46 cities tracked by the Real Estate Center.
Full story at: http://lufkindailynews.com/news/local/article_6ec6929e-6015-11e1-8d5d-0019bb2963f4.html
The overblown threat of strategic defaults
There’s no firm evidence that mass walkaways by underwater homeowners during the housing crisis ever happened. But maybe they should have.
By Michael Hiltzik Los Angeles Times February 24, 2012
Walkaways. Jingle mail. Strategic defaults.
Those of you already experiencing nostalgia for the cliffhanger days of the housing crisis will remember those terms. They were applied to homeowners who were supposedly so distressed at the collapse of the homes’ values that they were abandoning the properties to foreclosure, even though they still had the wherewithal to keep up their mortgage payments.
These borrowers were just “walking away” from their homes; “jingle mail” was a fanciful way of describing the sound made when they mailed their keys back to the bank; “strategic default” was the sober, nonjudgmental way of describing the phenomenon in financial journals.
The alarm was sounded mostly by banks and other lenders, who suggested that this outburst of moral turpitude by previously obedient homeowners threatened to make the housing crisis indescribably worse.
As the panicky talk of jingle mail picked up volume in May 2008, I wrote an article pointing out that there was no hard evidence that it was actually happening. Sure, millions of Americans entered foreclosure — but the notion that any of them did so even though they could afford to pay the mortgage was unproved.
Full story at: http://www.latimes.com/business/realestate/la-fi-hiltzik-20120224,0,115088.column
New Orleans’ razing craze aims to clear way for post-Katrina recovery
New Orleans is on a mission to raze thousands of properties abandoned after hurricane Katrina. Many are in neighborhoods, such as the Lower Ninth Ward, where poor and minority residents were concentrated.
By Patrik Jonsson Christian Science Monitor February 25, 2012
Mayor Mitch Landrieu has made razing and cleaning up 40,000 abandoned homes and properties – the biggest such inventory in the nation, besting Detroit – a cornerstone of his administration. His aim: to piece back together the racial and social mosaic that for centuries defined the gritty, buoyant city along the Mississippi River‘s crescent bend.
The 2010 Census, conducted five years after Katrina, found that 25 percent of New Orleans residential addresses were vacant, and Mr. Landrieu’s administration is now moving aggressively to tear down homes that are abandoned or deemed uninhabitable. Last year the city razed 1,589 decrepit buildings, up from 154 two years earlier, in an attempt to clear the way for redevelopment in neighborhoods previously filled (and still partially filled) with poor and minority residents.
Highest income-inequality tract in America is gentrifying
By Tony Pugh McClatchy Newspapers February 24, 2012
CINCINNATI — The nation’s newfound concern for income inequality and economic justice is old hat on the streets of Cincinnati’s Over-the-Rhine neighborhood. For the last 40 years, crime, resident flight, unemployment and inadequate housing have made this poverty-stricken area the city’s most downtrodden and feared neighborhood.
So when a new Census Bureau report found that from 2005 to 2009, a segment of Over-the-Rhine — Census Tract 17 — had the highest income inequality of more than 61,000 communities nationwide, it seemed to make perfect sense.
The increasing concentration of wealth among the nation’s highest earners while most Americans tread water financially has become a rallying point for Occupy Wall Street protests nationwide and a potent talking point for cable news commentators.
A recent report by the Congressional Budget Office found that incomes for the top 1 percent of earners grew 275 percent from 1979 to 2007, while earnings for the 60 percent of Americans in the middle of the income scale grew only 40 percent.
The picture becomes muddier, however, when the problem is studied at the community or census-tract level.
Full story at: http://www.mcclatchydc.com/2011/11/21/130921/highest-income-inequality-tract.html?storylink=MI_emailed
Where the 1 percent live [Photo Essay of the Houston Rich]
Houston Chronicle February 24, 2012
Housing authority chairman to be replaced
By Mike Morris Houston Chronicle February 28, 2012
Harris County Commissioners Court on Tuesday is poised to replace the board chairman of the county’s embattled housing authority amid accusations of imprudent spending and lax oversight at the agency.
CEO Guy Rankin and the authority board have been criticized for paying large salaries and bonuses, spending $8.4 million on a defunct waterfront development and pouring hundreds of thousands of dollars into statues, grand opening parties and other questionable expenditures.
Wallace has been a staunch defender of Rankin and the agency’s compensation policies, its investment in the waterfront project called Patriots by the Lake, and its spending decisions.
Precinct 3 Commissioner Steve Radack, who proposed replacing Wallace, said his decision was not spurred by scrutiny of the agency, adding Wallace did not ask to be replaced. Radack said he wanted to name a veteran to the board to emphasize the importance of veterans housing.
Full story at: http://www.chron.com/news/houston-texas/article/Housing-authority-chairman-to-be-replaced-3365424.php
GHA votes to hire Lowe as its new leader
By Amanda Casanova Galveston County Daily News February 28, 2012
GALVESTON — The Galveston Housing Authority Board approved the hiring of Stanley Lowe, a former chief of public housing in Pittsburgh, Pa., on Monday. The board voted, 4-1, for the hire, with Chairwoman Betty Massey and commissioners Dr. Jeff Temple, Tom LaRue and James Dennis in favor of Lowe. Commissioner Teresa Banuelos voted against. “There are a lot of federal rules (he has to learn),” Banuelos said. “These are people’s lives we’re talking about. If you’ve been gone, out of this business for 10 to 11 years, it’s going to take some time to get up to speed on all those rules. “I love what he does and what he’s going to do, but he’s a preservationist,” she said. Lowe served as executive director of the Pittsburgh Housing Authority from 1994 to 2001. He managed 450 employees and was responsible for a budget of more than $85 million. In the past 10 years, he worked as a consultant and is president and chief executive officer of Pittsburgh Neighborhood Preservation Services He said it would take him between 30 to 60 days to become familiar with the current Department of Housing and Urban Development laws. His first day at the Galveston Housing Authority will be March 19.
Full story at: http://galvestondailynews.com/story/296386
The Human Right to Housing
Housing and homelessness are human rights issues—and that can be an organizing strength.
By Maria Foscarinis Shelterforce Fall 2011
Anyone working on homelessness and affordable housing issues is familiar with the statistics and the human suffering behind them. We know homelessness has been a national crisis for 30 years and we know the recession and dramatic increases in foreclosures have made things much worse.
Just look at the most recent Annual Homelessness Assessment Report from HUD: family homelessness increased by 20 percent between January 2007 and January 2010. In December 2010, the U.S. Conference of Mayors’ annual survey of cities across the country reported a 9 percent increase in family homelessness in 2010 alone. And in addition to people who are in shelters or on the streets, over 6 million are doubled up due to economic necessity. In many communities tent cities are going up.
We know we suffer from affordable housing and homelessness crises—but how often do we think of them as human rights crises? As it happens, more and more local advocates are using a human rights framework to address issues of homelessness and housing—and they’re gaining ground.
Full story at: http://www.shelterforce.org/article/2485/the_human_right_to_housing/