The housing market isn't what the government wants us to think it is...

[debk]

I'm a registered Realtor on a site where lenders look for Realtors to provide services for their REO - foreclosure- properties. These are properties that are at various stages in the system... 2 consecutive months missed payments, pre-foreclosure - more than 3 mos consecutively missed, foreclosure, short sale, "in lieu of deed" (turning the keys over to the lender and walking away from house and any equity in it).

In the last couple of months... I have been getting emails, almost every week, regarding different lenders and what's going on with their holdings, and being asked to sign up to be available to specific lenders.

This is part of one that came today...

Bank of America to release more REOs in the next 2 years!

Bank of America asset managers have made it very clear that a large new flow of REOs will be hitting the market soon, and they'll need an entire new fleet of REO Brokers, Agents and Vendors to service them.  For the past few years, Bank of America began new programs to help home owners stay in their homes, and some of those programs worked, but for the majority of the REOs that were just waiting to get through the system, they are now coming!
 

Last month, I got one regarding HUD loans - not to be confused with Fannie Mae or Freddie Mac. The HUD one said there were 1.5 MILLION HOMES already in the REO pipeline. Granted this was across the country, but that is still a whole lot of houses. These are houses that have already been determined the homeowner is unable to make the up the difference in missed payments and have either already abandoned the properties, or they have yet to be evicted, but it's going to happen.

I have had similar emails regarding CitiMortgage and JPMorgan Chase. Those two, like BofA, did not mention specific orders.

I did over 50 reports last month. Most of them on houses that were still occupied. I've done over 20 already this month, and have 5 more to complete by tomorrow afternoon. Of the 4, one is a short sale, one has already been taken back by the bank, the other 3 are still owner-occupied. 2 are in the upper $300-low 400,000 range.

For reference - the $400,000 one is 3029SF(not counting 3rd flr), all brick, 2.5 stories, 3c garage, .62acre lot, 4br's, 3.5 baths, built in 2006, view of the Smoky Mountains. You can get a realllly nice house here for $400k!
In my county only - none of the surrounding ones - there are 540 houses currently on the market that are $400,000 +. Of those 540, 183 of them are over $700,000. Of those 540, 86 are over ONE MILLION DOLLARS. I recognize, that every area of the country is different, but here in this county, we don't HAVE anywhere near 540 buyers looking in for a house between $400,000 and $1M + !!! It gets even worse, when if you check the entire MLS for this area, there are 1528 houses over $400K, with 190 of them over $1M!!!

Industry reports that I have received - at least once a week, state that 2 out of every 3 homeowners are either behind in their mortgage payments and/or underwater in their mortgage, which means even if they can sell their home, they wouldn't be able to sell it for enough to pay off the mortgage note.

Yes... houses have been selling around here. According to industry reports and the news media... homes are selling everywhere. National Association of Realtors currently has an ad on television, telling buyers to "act now, there is a shortage of available properties". Not sure where, it certainly isn't here, but it has to be somewhere, or they could be cited and sued for false advertising, and the NAR, isn't that stupid!

But how many of those selling are fair market (no distress) compared with distressed properties. I could cite multiple mls designated areas here (certain area of town, small community, etc), where foreclosure sales are 30%+ of the total solds in the last 180 days, some exceed 50%. All it takes is for a few foreclosures to hit one subdivsion and fair market pricing will be affected in that subdivision.

The Feds raised interest rates a week or so ago. This is turn caused home mortgage interest rates to go up one entire point, which is something like the highest one time jomp in close to 30 years. (that doesn't sound right but it's was was reported). Why in the hell, when the housing industry is trying to make any sort of comeback, would the Feds/mortgage lenders raise the interest rate on home mortgages? It makes no sense whatsoever...

Based on the number of reports I am doing, and I am not the only one in the area, I know of at least one other agent doing as many per month or more than I do... there are a whole bunch of houses in trouble here. And this cannot be the only area in Tennessee, let alone the country, with numbers like ours. If Fannie Mae, Freddie Mac, HUD and the major lenders - BofA, Chase, Citi, Wells Fargo - and all the smaller ones, including local community banks - start dumping all their REO properties on the market over the next 6-12 months, this country will be in a world of hurt damn quick. And I don't think they(lenders/banks) will let the government talk them into waiting until after the 2014 elections, to do so, like they were supposedly told to do prior to the 2012 elections.

[Eupher]

I don't think Mrs E and I are "underwater", but it's pretty damned close.

[CG6468]

I don't think Mrs E and I are "underwater", but it's pretty damned close.

I'm so glad I paid ours off with some of the estate I got when my mom died in 2000.

[obumazombie]

We are within a year or 2 of paying off our house, depending on how much we overpay our monthly mortgage. Not having that mortgage payment will be a big relief, and make us totally debt free.

[debk]

I don't think Mrs E and I are "underwater", but it's pretty damned close.

I hope not, for your sake. But if you can stay there a few more years, and hope for the best....


The house I'm doing that's the 3029SF? It was new construction and sold in early 2006 for $405,000.

I've already pulled the comps on it. All have views of the Smokies.

All 3 lists are in the subdivision. All 3 are all brick, 3 car garage, 2.5 story, 2 have 3.5 baths, the other one has 4.5. List 1 is 3226SF listed for $399,900 - 85 days on market. List 2 is 3072SF, (it's next door to list 1!) is also $399,900 and on market for 85 days, it has an IG pool, corian countertops, mahogany cabinets, hardwoods throughout first floor, projection tv in media room conveys. Same list agent(how dumb is that!), both were built in 2006, both have SS appls and ref conveys.  List 3 is 3079SF & built in 2007,  listed for $317,500, 108 DoM. (different list agent/company), new trek deck, SS appls - ref not included.

There are 4 other current lists in the subdivision... but the above ones are closest in SF to my subject.

Only one sold in the subdivision in last 180 days. 3176 SF, 3 c garage, built in 2007, 3.5 baths, al brick, SS appls, "beautifully appointed". Original list price - $364,000. On market for 244 days. Sold for $286,500. That's 78.5% of original list price! They paid for $349,900 in Dec'09, it was first sale after being on market for 2 years.

There wasn't another sold until May, 2012. Again, it was brick, 3c gar. 3029SF, corian and cherry cabinets, 3.5 baths, listed for $329,900, 9 DoM, sold for $315,000. They paid $348,000 , when it was built in 2007.

Both solds were fair market, no distress.

Based on the sold comps I am using - list comps are only for comparable properties currently on the market - I end up with between $292,000 to $307,000. I can only go back 180 days, so I will use the one in the subject's subdivision, and 2 from outside but within 3 miles, same community, moutain views. Both built in 2007, all brick, 3 c garages. Lots are a bit bigger, but construction quality is quite similar. One has a finished basement giving a total of 4735SF, it sold for $338,500, last month.

Basically... house comps out $100,000 LESS than what the homeowner paid for it 7 years ago. And there is nothing to make the numbers any better!

For this particular client, it's safe to assume homeowner is either late on payments or need to get out - also house has not been listed either as fair market or a short sale... homeowner is very limited in their choices. They will either have to get caught up - or with a whole lot of luck, be able to refinance - or they will be foreclosed or they may have a choice of turning in their deed and walking away. Lender may opt to let them try to short sale, because if it goes on market as a foreclosure, it will probably be somewhere between $235,000-$250,000, though more likely to be on the lower end, if it's undamaged.

[Eupher]

Yeah, we'll be here for a few more years. The housing market's been shit, as far as I'm concerned, for 9 years now, so I have no expectation that the sun will break through the clouds anytime soon, if ever.

We're just gonna slog through and continue paying our mortgage, on time and to the penny.

With this market and in my set of circumstances, it makes no sense to pay down on the mortgage. We will be unassing this place, but I have roughly 5 years left till final retirement. And even after retirement, there's nobody holding a gun to my head to move (therefore we won't) until the numbers start looking at least a little favorable.

Right now, fuggedaboudit. 

[J P Sousa]

debk,

Can you give a "ball park" figure for real estate taxes on the above ?
.

[NHSparky]

I bought at the peak in 2006, so I'm pretty sure I'm under, but thankfully not TOO much.

That being said, houses are selling, but 1--not the higher end stuff, 2--mostly cash sales (retirees) and 3--not anywhere NEAR what the owners think they deserve.

Bottom line, you can sell your house, but you're not going to get nearly what you think it's worth.  My place when I bought it was assessed for $255K.  It's now assessed at $208K.  It's worth more, but by the time I pay for all the inspections, get anything fixed, broker commissions, transaction taxes, etc., I might as well just sit on the place for a while.

[obumazombie]

I bought at the peak in 2006, so I'm pretty sure I'm under, but thankfully not TOO much.

That being said, houses are selling, but 1--not the higher end stuff, 2--mostly cash sales (retirees) and 3--not anywhere NEAR what the owners think they deserve.

Bottom line, you can sell your house, but you're not going to get nearly what you think it's worth.  My place when I bought it was assessed for $255K.  It's now assessed at $208K.  It's worth more, but by the time I pay for all the inspections, get anything fixed, broker commissions, transaction taxes, etc., I might as well just sit on the place for a while.

A lot of bailed out owebuma voters and bundlers got the money you should be getting.

[debk]

debk,

Can you give a "ball park" figure for real estate taxes on the above ?
.

The taxes on the house I was doing the report on? Not ballpark, but specific - 2012 tax yr - $1558. Current tax assessment for it is $382,500. House is located in Sevier County TN (home to Dollywood).

It's in the Seymour community where Knox, Blount and Sevier Counties all meet, so a house/subdivision could be in any one of the counties, and some subdivisions overlap into another county. It's not in the "country", but people like it down there, cause it "feels like the country", without being in "Outer Bumf'k Egypt"! Most houses in the subdivision have a view of Smokies. 15 minutes to downtown Knoxville and Univ of TN. 20 minutes (depending on traffic) to mountains, Douglas Lake. 20-30 minutes to Lake Loudon. Watts Bar, Norris Lake, and Tellico Lake are not too far away either. You want lakes, or mountains covered in trees, we gots them! 

East TN also is the worst place in the country for meth makers/dealers/users... so going out into the country, may not be the best idea... 

When I got the report done... using current market and within the last 180 days, pricing was right around $300K. $105,000 LESS than they paid for it. Sad... 

[J P Sousa]

The taxes on the house I was doing the report on? Not ballpark, but specific - 2012 tax yr - $1558. Current tax assessment for it is $382,500. House is located in Sevier County TN (home to Dollywood).

It's in the Seymour community where Knox, Blount and Sevier Counties all meet, so a house/subdivision could be in any one of the counties, and some subdivisions overlap into another county. It's not in the "country", but people like it down there, cause it "feels like the country", without being in "Outer Bumf'k Egypt"! Most houses in the subdivision have a view of Smokies. 15 minutes to downtown Knoxville and Univ of TN. 20 minutes (depending on traffic) to mountains, Douglas Lake. 20-30 minutes to Lake Loudon. Watts Bar, Norris Lake, and Tellico Lake are not too far away either. You want lakes, or mountains covered in trees, we gots them! 

East TN also is the worst place in the country for meth makers/dealers/users... so going out into the country, may not be the best idea... 

When I got the report done... using current market and within the last 180 days, pricing was right around $300K. $105,000 LESS than they paid for it. Sad... 

THANKS !

My house is now going for about $280,000 - 2600sf, but just before the collapse one neighbor sold for $348,000. My taxes are just south of $9,000/yr, so 2012 tax yr - $1558 sounds like a real bargain. 

I did a search for Knoxville area and it looks great but I don't know if I could convince my wife. 

Thanks again.
.

[Eupher]

Deb, I'd really like for you to be my realtor.

But with things this way, we ain't movin' nowhere for a very, very long time. If you were to run comps for me, I'd most likely have to sell below the current value of the note, and that puts me under water for sure.

Ain't gonna do it. I'll just continue wearing scuba gear. 

[debk]

THANKS !

My house is now going for about $280,000 - 2600sf, but just before the collapse one neighbor sold for $348,000. My taxes are just south of $9,000/yr, so 2012 tax yr - $1558 sounds like a real bargain. 

I did a search for Knoxville area and it looks great but I don't know if I could convince my wife. 

Thanks again.
.

Almost 9k a year? Ouch!!!

We also don't have state income tax.... ;.

[J P Sousa]

Almost 9k a year? Ouch!!!

We also don't have state income tax.... ;.

  I'm trapped in Dummy land. 
.

[NHSparky]

Almost 9k a year? Ouch!!!

We also don't have state income tax.... ;.

My property taxes are just above $5K/year.

But not only do I have no income tax, there's no sales tax here either.

[vesta111]

My property taxes are just above $5K/year.

But not only do I have no income tax, there's no sales tax here either.

A wonderful friend of mine bought a double wide home for $ 95,000 back 15 years ago.   Beautiful home all new everything, 3 bedrooms, 2 full baths, family room, You name it has it.

She was on leased land as I am, and a few years ago her part of the our Village began to explode with teenagers as the darling little kids grew up to become Monsters.

She got fed up and one day came to say Good By, she was moving.   I asked who she had sold her home to and she blew my mind.      She had not sold her home, she had bought land up in NY state, and was bringing her home with her.   "  My home came in, in 2 pieces and will go out in 2 pieces."

Cost to transport her home from the NH sea coast to western NY  $10,000.     No one knew we could do this, we assumed once our homes were in place they could not be moved.

It is good to know that if one loves their home it can be moved when the neighborhood changes and is the major reason I do not want to buy a standing home.   

[Wineslob]

So, just like here in Cali, buying a home at an inflated price just because the loan rates are good..............


I'm glad I bought our place at a low point.   

[CG6468]

My property taxes are just above $5K/year.

But not only do I have no income tax, there's no sales tax here either.

Our property tax is about $47K/year for 3/4 acre, with no sewers or water supply, just the Barney Fife county cops (if and when they get here) and a volunteer fire department; and we also have a state income tax; and one of the highest sales taxes in the country. We don't use Chicago, but it has the HIGHEST sals tax in the country.

[Eupher]

Our property tax is about $47K/year for 3/4 acre, with no sewers or water supply, just the Barney Fife county cops (if and when they get here) and a volunteer fire department; and we also have a state income tax; and one of the highest sales taxes in the country. We don't use Chicago, but it has the HIGHEST sals tax in the country.

You can't be serious.

Property tax of $47,000? That's beyond obscene. I'm wondering if that's a typo?

[CG6468]

You can't be serious.

Property tax of $47,000? That's beyond obscene. I'm wondering if that's a typo?

I blew it.  I forgot the period......................... 

$4.7K/year, or $4700/year.

[debk]

Example for comparison... the property taxes on this place are $7100 for this year. This is in the county.

Built in 1998, it has 7323SF, 13 rms, 4 brs, 5 baths, 2 half baths, boat dock, IG pool, hot tub, finished basement with billard room and bar, 3c garage,  all on 1.3 acres.  Extremely nice subdivision, 5 minutes to interstate access, 5 minutes to shopping, elementary school, 15 min to middle and high schools. 20-30 minutes to University and downtown depending on traffic.
List price - $1,890,000.

[debk]

Taxes on this one are $4657 for this year. Also in the county, but near county line. Further out than the one above, but 1/2 mile to marina one way, 1/2 mile to waterfront park another. Schoolsm, shopping, interstate are 15 minutes.

List price $995,000. 6096SF, no basement, 3 c gar, .83ac, 12r/5br/5ba/2hba. built in 2006.

[Chris_]

My parents used to live in Wilson County, TN.  Taxes on their $350k home were around $5000 a year.

[Lacarnut]

I have a 1k sq. ft. brick home recently appraised at $140k in Baton Rouge, and my taxes are $74 per year. Seniors can get their taxes frozen at 65 years of age. Sales tax is 9% and income tax is very low. My brother's tax on his 2500 Sq. ft. house is around $500. Louisiana has low overall taxes. Taxes on a beach condo run me almost $2k.

The housing market is booming once again on beach condos from Gulf Shores, AL to Destin, FL. and so are the prices.     

[vesta111]

Example for comparison... the property taxes on this place are $7100 for this year. This is in the county.

Built in 1998, it has 7323SF, 13 rms, 4 brs, 5 baths, 2 half baths, boat dock, IG pool, hot tub, finished basement with billard room and bar, 3c garage,  all on 1.3 acres.  Extremely nice subdivision, 5 minutes to interstate access, 5 minutes to shopping, elementary school, 15 min to middle and high schools. 20-30 minutes to University and downtown depending on traffic.
List price - $1,890,000.

debk, all I can think of after seeing this listing is, who on earth would want to live in something like that.     Unless one has 2 sets of triplets this is more of a fancy resort hotel then a HOME.

Really, some of the wealthiest people I know spend as little money as possible.   They drive 5 year old cars, sell their boats when the docking fees get to $20,000 a year and live in homes that do not need an intercom system to find family members.   

A acquaintance of mine decided to sell her home and had to fill in the back yard pool to keep taxes and insurance reasonable.   She a widow sold out , moved into a senior building to a owned apartment with 2 bedrooms.   She has access to the community pool down town transportation and 2 parking spaces. 

She is so much happier when family comes to visit, she no longer has to wander about a large house wondering where everyone else has gone to.

We are down sizing for convenience up here, Some are turning their boat houses into homes, along the lines of the Japanese mini apartments.

Only makes sense that with today's life style, kids in school, parents both working, just how much time do we spend in our homes ?   

$1,890,000 + taxes + maintenance + cost of maids and garners, pool cleaners and child care after say 5 years one is paying up the snoot at close to $3,000 per night if not more just to have a place to eat, sleep and spend 2 hours a day with the kids.   Hell the help raises the kids not the parents.

Was it not said that Princess Diana became jealous that her boys were closer to their Nanny then to her.

So we, hubby and I have a full guest bath , 2 back bedrooms used for storage of JUNK a family room we never use-------We live in the living room, the dining room, kitchen and back bed room with a large attached bathroom.

Now we are never that far from a call out from each other.   I would love to sell out to buy a much smaller home, perhaps a Geodesic Dome or log cabin on a lake. 

One even if giving me a tax free gift of this home would not want it,   no way could we clean the top windows in a place like that and I would have to put in 8 hours a day just vaccumming up cat hair.