Some banks are not only too big to fail but they’re too big for cities to serve code violations on their run-down, repossessed houses. For neighborhoods plagued with multiple foreclosures, the blight further deepens the social consequences of the housing bust.
Meanwhile, renting has become the norm for many US families who cannot qualify for historically low interest rates.
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U.S. cities struggle with blighted bank-owned homes
By Tim Reid Reuters June 10, 2012
The smell of rotting food and decay inside 10956 South Wilmington Avenue, Los Angeles, was overwhelming.
A burst pipe in the kitchen ceiling leaked water onto a floor littered with half empty cans, razor blades, odd shoes, stained clothing and an upturned, mold-ridden sofa. Windows were smashed and boarded up.
The vacant home was foreclosed on in August 2011 by Bank of America, which has done nothing to repair it.
And in a cruel twist that underscores the connection between the housing meltdown and the fiscal crisis afflicting many local governments, the city of Los Angeles lacks the wherewithal to force the property owner to clean up the mess.
Across America, bank-owned, blighted houses sit untouched, sometimes for years, disfiguring what in many cases are already troubled neighborhoods. Activists say the problem is particularly acute in minority areas. And many cities do not have the resources, the will or the power to force banks to maintain their properties.
Shortage of homes for sale creates fierce competition
With housing inventory at a low, would-be buyers are scrambling to bid on homes before they’re even listed, and real estate agents are vying to represent the few sellers that do exist.
By Alejandro Lazo Los Angeles Times June 10, 2012
The newest problem for the slowly improving housing market isn’t a shortage of serious buyers, it’s a shortage of good homes.
Would-be buyers are packing open houses and scrambling to make offers on properties before they are even listed. Bidding wars are erupting. And real estate agents are vying fiercely to represent the few sellers that do exist.
Housing inventory has sunk to levels not seen since the bubble years. The number of American homes with a “for sale” sign hit 2.5 million in April, the lowest number for an April since 2006, according to the National Assn. of Realtors.
David Dennick, who lives in Echo Park and works as a television editor, has been searching for a home with his wife, Denise, for about two months. The couple have already bid on three properties. They are hoping to find a home for less than $525,000, which is $25,000 more than they originally had hoped to spend.
“It is much more competitive than we thought,” said Dennick, standing in the entrance of an Eagle Rock open house on a recent Sunday. “It is just frustrating because we thought we would really be able to buy a house; we are a middle-class family.”
US 30-year mortgage drops to record-low 3.67 pct
Lubbock Avalanche-Journal June 7, 2012
WASHINGTON – Average U.S. rates on 30-year and 15-year fixed mortgages this week fell to fresh record lows for the sixth straight week. Cheap mortgages continue to help boost prospects for home sales this year.
Mortgage buyer Freddie Mac says the average rate on the 30-year loan dropped to 3.67 percent. That’s down sharply from 3.75 percent last week and the lowest since long-term mortgages began in the 1950s.
The 15-year mortgage, a popular refinancing option, declined to 2.94 percent. That’s down from 2.97 percent last week.
Rates on the 30-year loan have been below 4 percent since early December. The low rates are a key reason the housing industry is showing modest signs of a recovery this year.
A drop in rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.
Full story at: http://lubbockonline.com/filed-online/2012-06-07/us-30-year-mortgage-drops-record-low-367-pct#.T9FCLI7N5Hg
Home rentals — the new American Dream?
By Julie Schmitt USA Today June 7, 2012
GILBERT, Ariz. – Steve and Jodi Jacobson bought their Phoenix-area “dream home” in 2005. They built flagstone steps to the front door. They tiled the kitchen and bathroom. They entertained often, enjoying their mountain views.
“We put our soul into that house,” says Steve Jacobson, 37.
Then, home prices tanked more than 50%. Steve, a software quality assurance engineer, suffered pay cuts. In 2010, foreclosure claimed the home and their $100,000 down payment.
The Jacobsons didn’t lose their desire to live in a single-family home, however. They now rent one, like many other former homeowners displaced by foreclosure.
But unlike traditional apartment renters, this breed of American tenants are older and have kids, U.S. Census Bureau data indicate. As they move from homes they owned to ones they rent, they’re changing neighborhoods for better and for worse. They’re fueling a land-rush as investors snap up homes, mostly in markets hard-hit by foreclosure, to rent to them. And their growth — in cities from Florida to California — has implications for home builders, school districts and companies that will jockey for the dollars they used to invest in homes, predict Wall Street analysts and demographic researchers.
“We’ve never seen anything like this,” says John Burns, CEO of John Burns Real Estate Consulting.
Full story at: http://www.usatoday.com/money/economy/housing/story/2012-06-05/are-home-rentals-the-new-american-dream/55402648/1
Generation Rent: Slamming Door Of Homeownership
By Scott Neuman NPR June 7, 2012
Kristi Taylor can pinpoint the precise moment she let go of the dream of homeownership. It was a few months ago, as she and her husband and infant son were driving through a neighborhood of homes near their apartment in Athens, Ga.
“As we were passing through, I realized that I don’t really look at houses like I used to, when we would point out homes and say, ‘That can be ours someday,’ ” says Taylor, who is 28. Now, she says, “the idea of homeownership is so vague, it doesn’t even strike me as something that’s in our future.”
Taylor says she and her husband, Zach, 25, have lived in nine different places in the past five years, including stints back home with the parents — both his and hers — as they moved from place to place “chasing after jobs.”
The Taylors aren’t alone. The economic hammer has fallen especially hard on 20somethings — part of the so-called Millennial Generation or Gen Y born roughly between 1975 and 1995. Plagued by high unemployment, many have had to delay careers, marriage and having children. And the idea of owning a home is more often being put off or written off entirely.
In a nation where homeownership is part of the American dream, a generation of renters could alter communities where they live and redefine the idea of middle-class success.
Full story at: http://www.npr.org/2012/06/07/154504195/generation-rent-slamming-door-of-homeownership
GHA plan comes with recommendation for denial
By Michael A. Smith Galveston County Daily News June 9, 2012
GALVESTON — Galveston Housing Authority’s application to build mixed-income developments on the sites of two projects destroyed by Hurricane Ike will go to the city council with a recommendation for denial. A majority of the city’s seven-member planning commission voted Tuesday against the application, said Councilwoman Elizabeth Beeton, an ex officio commission member. The city council likely would consider the application at a meeting sometime after a June 23 runoff election for mayor and one council district seat. There probably are only two votes in favor of the plan among the seven members now on the council — Mayor Joe Jaworski and District 4 Councilwoman Dianna Puccetti, both of whom are in the runoff. The housing authority would continue working on the mixed-income plan despite the commission’s vote, Executive Director Stanley Lowe said.
Full story at: http://galvestondailynews.com/story/320666
Homeless veterans battle to use housing vouchers
By Heather Knight San Francisco Chronicle June 7, 2012
Brett Smith’s buddies don’t visit him in his new apartment, three blocks from Ocean Beach and a world away from his old stomping grounds in the Tenderloin. And Smith couldn’t be more pleased about the solitude.
“If they come out here, they have to really want to come out here,” he said. “Trouble cannot walk up on me.”
Smith is a 54-year-old Army veteran whose failing eyesight and migraines meant he had to give up his job as a limousine driver. He was homeless and struggling with substance abuse before scoring a coveted federal housing voucher for homeless veterans in April.
But turning a housing voucher into a real apartment can be next to impossible for homeless veterans in San Francisco, where a scorching market sent rents up 15.8 percent in the first quarter of this year compared with the same time last year. The average apartment in the city rents for $2,663 – a record, according to RealFacts, a company that compiles rent data.
A homeless vet like Smith usually can’t compete with young tech workers who are snappily dressed, can chat up a landlord with ease, have good credit scores and who can quickly come up with a security deposit.
Full story at: http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2012/06/07/MNL91OTQQO.DTL
Sacramento, California homeless file claims over seized property
By Cynthia Hubert Sacramento Bee June 8, 2012
Nearly 900 homeless men and women have filed claims for reimbursement for bicycles, tents and other items seized by city police during raids of illegal campsites in recent years.
The claims are part of an unusual process to resolve a federal class-action lawsuit charging that police stomped on the constitutional rights of homeless people by grabbing their belongings and throwing them away without giving the owners a chance to get them back.
As of Wednesday, 864 people had filed claims for property seized by Sacramento police since 2005, said Mark Merin, a Sacramento attorney representing the homeless. Merin said he expects more claims to be filed before the deadline at the end of the day today.
Plaintiffs whose claims are approved will receive payments of either $400 or $750, depending upon the value of the property.
Full story at; http://www.mcclatchydc.com/2012/06/08/151589/sacramento-california-homeless.html
Homeless uncertain of next steps
By Russell Anglin Amarillo Globe-News June 7, 2012
Sherry Martin, 51, made her home for two years beneath the Pierce Street overpass. On Wednesday, she was part of a group of homeless people packing their belongings, unsure of where they were bound.
“This was our community,” she said. “This was our safety net. Everybody knew where we were, what we were up to.”
That included Amarillo officials and the Texas Department of Transportation. The agency asked the city to order homeless off the property, and a day after city commissioners banned overnight camping on public property in city limits, the ragtag group who’d formed a tent city under the Pierce bridge was on the move.
Homeless feeding bans: Well-meaning policy or war on the poor?
By Matt Pearce Los Angeles Times June 12, 2012
You can’t just feed the homeless outdoors in Philadelphia anymore; you now need a permit.
In Dallas, you can give away food only with official permission first.
Laws tightening regulations on aid to the homeless are popping up across the country, according to a recent USA Today report: “Atlanta, Phoenix, San Diego, Los Angeles, Miami, Oklahoma City and more than 50 other cities have previously adopted some kind of anti-camping or anti-food-sharing laws, according to the National Law Center on Homelessness & Poverty.”
Full story at: http://www.latimes.com/news/nation/nationnow/la-na-nn-homeless-feeding-bans-20120611,0,1038192.story