Economist's Commentary: July 10, 2008

Anecdotal Stories from REALTORS^®

By Lawrence Yun, Chief Economist

I am a fan of reading and hearing the anecdotal stories available from the market place. The stories help me to gain some insight and understanding of the frustrations, excitement, and just plain "goings-on" that our members face on a daily basis out in the field. This column further expands upon last week's article. Please note that these anecdotal stories should not be inferred to be statistically valid measures, but I do believe that some of the stories provide a unique perspective not thought of before.  These stories make for an interesting reading - even if it is just one anecdote. Here are few more:

• We have a heavy concentration of Military, many of which have to relocate every two years. Two years ago our market was like most - a sellers' paradise - and most paid top-market dollar. Now those Military who are forced to sell are taking significant losses, foreclosing or renting out their homes.
• Deployments tend to affect our area
• Short sales are not worth it. I have spent up to 120 days on 2 different short sales in the last 5 months and neither one of them went anywhere. I could have sold 4 houses in the time I spent on those 2 properties.
• Many buyers don't want to deal with the hassles and long waiting periods associated with short sales and foreclosures.
• Listing agents report that their short sale owners have not received a Notice of Default, even after a year of no house payments. This is most common with Countrywide loans. Bank of America is going to be surprised, big time.
• Most of the foreclosures are on homes that are less than 3 years old.
• We see multiple offers on under market-priced short sales and REO. Inventories have been declining in the past 60 days.
• Foreclosures that surface each year in the immediate market area usually reveal excessive damage in the interior, with drug related loss, leaving great amounts of work behind to consummate an acceptable offer and have the home comply to state and county standards.
• New FHA lender requirements are killing my once qualified first time buyers.
• Consumers are overstretched for sure. I have seen way too many BIG houses with no furniture.
• I have property listed for sale on an all sports lake. We have lowered the price more than average due to the driving distance and the lake is less of a draw due to the price of gasoline for power boats.
• The RV market is hurting because of gas prices and this is a RV manufacturing area.
• I see a number of seniors returning home to family.
• The recent tax assessment done by our county has given homeowners a false opinion of the value of their properties.
• Non-Homestead taxes on foreclosed properties are making it hard to get buyers approved - taxes are more than their principal and interest payment per month. This is a huge problem.
• The negative factors that I feel are impacting us are sellers who want to market a home that is dated, has deferred maintenance or is in an area that is not maintained overall.
• There are many foreclosed, abandoned, vacant and other forms of homes that investors would buy, hold, repair where necessary and rent, but they cannot have a positive cash flow with the ill-appropriated tax situation. A perfect example is one home listed for $ 29,000.00 with property taxes in excess of $5,000.00 with no offers. How do you explain to a first time home buyer that their monthly house payment is smaller than their monthly property tax payment?
• Our local MLS requires short sale listings that have ratified offers to be put in pending status. However, many are either not aware of this requirement or are not complying. Many short sales that my clients ask to see are still listed as active even though it may already have multiple offers. This is artificially inflating the number of active listings.
• REO agents are too busy to update the MLS or answer calls.
• Sellers are simply walking away from their homes and hoping to sell in a short sale, but do not care if they get foreclosed on.
• The lenders are slowing the sales process and tack on daily per diem charges of $50 or $100 per day for every day exceeding the closing date. They basically leave us in the dark for months at a time with absolutely no communication. When they do accept an offer they do not perform their end of the agreement, which usually results in extending closing dates.
• Our market is seriously impacted by the Los Alamos National Labs when their budget renewal is in process.
• People are walking away from homes that they bought too high, they can afford the payment but the loss in value seems to be an emotional factor. A neighbor buys the same home for $325K that they paid $720K. They buy another cheaper home and walk away from the other.
• Our resort bedroom community for Charlotte, NC is a desired destination for many buyers from NY, FL and CA. They really want to buy here, but are waiting on the sale of their home.
• I have 23 client/buyers trying to move to Raleigh but they are renting instead of buying or not taking new jobs here because they still cannot sell their homes where they are coming from.
• We currently have a shortage of homes available on the market, so it's a seller's market here. We never overbuilt.
• Vandalism is very prevalent in houses under $60,000. Good homes are being destroyed for copper.

Keep those stories coming, please. Make it short and to the point. Send to data@realtors.org.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

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