News About Properties

`Shadow market’ clouds housing recovery

A new study of homes likely to be put on the market for sale suggests S. Florida’s housing market will see more price declines just as values have been appearing to stabilize.

The number of properties on the market may be much larger than anyone thought and appears likely to swamp South Florida with more deeply discounted homes, clouding the prospects for a housing recovery.

Figures from the Florida Association of Realtors released Friday show that South Florida’s median home prices have stabilized over the past several months and sales are up year-over-year as the number of properties on the market shrinks.

Feared flood of foreclosures in California may be averted

Signs are emerging that a much-feared escalation of California home foreclosures may not happen, as banks respond to government pressure and scale back their repossessions of troubled properties.

Statewide, the number of homes taken back by lenders dropped sharply in the three months ended Sept. 30, falling 37% over the same period a year earlier, when foreclosures were at an all-time high.

If the trend continues, it will give momentum to the fledgling recovery in the housing market. Although home prices appear to have bottomed out in much of the state, industry analysts have cautioned that a glut of foreclosed properties coming on the market could send values plunging again.

“I certainly don’t think there’s going to be a deluge, or second wave of foreclosures,” said UC Berkeley economist Kenneth Rosen, who believes federal officials will do whatever it takes to see the backlog of foreclosures clear gradually. “There’s now an appetite to make sure we get this right.”

Note Deals Take Off in South Florida

When Robert Lechter heard Banco Popular North America was selling a note secured by a recently completed condo tower in Miami’s Brickell area, he knew it was no time to be timid. Lechter says he won the bidding with a $10.2-million offer for an $18-million note secured by the 62-unit Brickell Station Village.

Besides offering $1 million more than the second-highest bidder, he agreed to pay cash and to put down $2 million soon after Banco Popular accepted his offer. “I pursued it very hard,” says Lechter, principal of REMS. Group, a Hollywood-based developer. “In these transactions, you have to be aggressive.”

The condo’s developer, Royal Explore Development, signed the project over to Lechter’s company at the same time REMS closed on the purchase of the note in mid-August. The total cost per unit was about $164,500.

“It was almost like a short sale,” Lechter says, adding that he plans to rent out the units for three years and sell them when the market improves. Lechter is among a growing number of investors who are buying distressed notes at big discounts as lenders step up efforts to shed bad assets and cut the cost of carrying unwanted projects.

Foreclosure crisis far from over for South Florida

If you think the torrent of foreclosures affecting every city and nearly every neighborhood and street in South Florida is as bad as it can get, here is a harsh new reality:

There’s a new wave of foreclosures making its way through the courts that has nothing to do with exotic subprime loans, real-estate flippers out to make a quick buck or people who bought way more house than they could afford.

Now, double-digit unemployment, sagging home prices and a lingering recession are to blame.

“The second tsunami of foreclosures is coming,” said Miami Beach-based John Tur, who teaches people how to invest in real estate.

Detroit real estate: A bargain home or a money pit?

Detroit’s four-figure home prices are unusual, but investors around the country think foreclosed houses are too cheap to pass up. How to tell a great deal from a money pit.

For a foreclosure, the house at 15461 Kentfield St. in Detroit needed surprisingly little work. The new owner, an investor from the Chicago area named Kevin Holmes, slapped on a coat of paint, pulled up the dirty carpets, and replaced the stolen water heater. The car stashed out back, he learned soon enough, belonged to a neighbor, not a thief using the three-bedroom as a makeshift chop shop.

The simple brick home really wouldn’t look out of place in any middle-income Midwestern neighborhood. But in distressed Detroit, the Kentfield house sold for less than half the sticker price on a new Chevy coupe: $6,900.

Tips for Buying a Condo at a Bargain

These days it’s not easy owning a condo, or any house located in a community that requires homeowners to pay fees. As more owners in these communities feel financially pinched, many aren’t paying dues. That means residents who keep up with the bills have to pay a bigger share of the burden—and if there aren’t enough reserves to pay to replace worn-out roofs or fix a cracked sidewalk, they face the possibility of bumped-up dues or an unexpected special assessment.

On the flipside, prices are low. And for the brave home buyer, there are bargains out there. The trick is looking closely at the homeowner association’s health. As I’ve written before, buyers need to question the association board about dues payments, and have their inspectors examine common elements before committing to a purchase. It’s also important to review the financial documents that every buyer has a right to inspect before closing.