Michigan ranks 7th in foreclosures
by Carol Marshall | Oakland Business Review Friday July 25, 2008, 10:19 AM
Michigan ranked seventh in the country in foreclosures during the second quarter of this year, according to data released July 25 by RealtyTrac.
Detroit was among the metro areas with the highest number of foreclosures, along with Las Vegas, Phoenix, Miami and San Diego.
One in every 137 Michigan households was subject to a foreclosure filing during the second quarter, compared to list leader Nevada, where one in ever 43 homes was the subject of a filing.
One in every 66 homes in the Detroit metro area were subject to a filing, ranking No. 12 in the country. By comparison, one in every 25 Stockton, Calif., households went into foreclosure during the second quarter, earning that city the No. 1 ranking in foreclosures.
RealtyTrac publishes foreclosures data, and reported that Nevada, California and Arizona posted the most foreclosures in the second quarter.
Friday, July 25, 2008
Foreclosures in Mich. continue to increase, are up 11.25 percent over last quarter.
State's housing woes still growing
Foreclosures in Mich. continue to increase, are up 11.25 percent over last quarter.
Nathan Hurst / The Detroit News
The number of Michigan houses in foreclosure rose again in the second quarter, a sign that the region's housing woes won't be over soon.
There were 32,868 properties in foreclosure in the state in the quarter, according to data released today by RealtyTrac, a firm that tracks foreclosures nationwide. That's 11.25 percent more than the number seen in the first three months of this year, and 73.18 percent more than in the second quarter of last year.
The state's foreclosure rate of one filing for every 137 households is the seventh highest. The national rate is one in every 171 households, and represents a 121 percent increase over a year ago.
States with higher foreclosure rates than Michigan include Nevada, California, Arizona, Florida, Colorado and Ohio.
"Although much of the fallout from foreclosures is being driven by rampant activity in a few states ... most areas of the country are seeing at least some increase in foreclosure activity," said James J. Saccacio, chief executive officer of RealtyTrac. "Forty-eight of 50 states and 95 out of the nation's 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter."
Wayne County had the most properties in foreclosures in Metro Detroit during the second quarter, the RealtyTrac data shows. There were 12,825 houses in foreclosure, or one for every 66 households. That's up 3.41 percent from the first quarter of this year and 52.9 percent from the second quarter of 2007.
The foreclosure rate was the 12th highest among U.S. metropolitan areas, ranking under cities such as Las Vegas, Phoenix, Miami and San Diego. At one time, Wayne County's foreclosure rate was the highest in the country.
Other Metro Detroit counties showed increases in the second quarter, as well:
• Oakland County: 4,718 houses in foreclosure, or one for every 111 households; that's an increase of 29.01 percent over the first quarter of this year and 103.63 percent over the second quarter of last year.
• Macomb County: 3,467 properties in foreclosure, or one for every 101 households; that's an increase of 14.69 percent over the first quarter of this year and 75.72 percent over the second quarter of last year.
• Livingston County: 516 properties in foreclosure, or one for every 139 households, that's a decrease of 10.1 percent from the first quarter of this year, but an increase of 719.05 percent over the second quarter of last year.
The volume of foreclosures weighs on the region's overall housing outlook. While sales throughout the region have increased since last year, more foreclosures now means even more cut-rate properties could be coming onto the market just as employers such as Detroit's Big Three automakers begin to shed thousands of jobs.
Dana Johnson, chief economist with Comerica Bank, said that if foreclosures continue to increase, home prices will have difficulty rebounding.
"The sooner they stop," he said, "the sooner recovery can become a reality."
Foreclosures in Mich. continue to increase, are up 11.25 percent over last quarter.
Nathan Hurst / The Detroit News
The number of Michigan houses in foreclosure rose again in the second quarter, a sign that the region's housing woes won't be over soon.
There were 32,868 properties in foreclosure in the state in the quarter, according to data released today by RealtyTrac, a firm that tracks foreclosures nationwide. That's 11.25 percent more than the number seen in the first three months of this year, and 73.18 percent more than in the second quarter of last year.
The state's foreclosure rate of one filing for every 137 households is the seventh highest. The national rate is one in every 171 households, and represents a 121 percent increase over a year ago.
States with higher foreclosure rates than Michigan include Nevada, California, Arizona, Florida, Colorado and Ohio.
"Although much of the fallout from foreclosures is being driven by rampant activity in a few states ... most areas of the country are seeing at least some increase in foreclosure activity," said James J. Saccacio, chief executive officer of RealtyTrac. "Forty-eight of 50 states and 95 out of the nation's 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter."
Wayne County had the most properties in foreclosures in Metro Detroit during the second quarter, the RealtyTrac data shows. There were 12,825 houses in foreclosure, or one for every 66 households. That's up 3.41 percent from the first quarter of this year and 52.9 percent from the second quarter of 2007.
The foreclosure rate was the 12th highest among U.S. metropolitan areas, ranking under cities such as Las Vegas, Phoenix, Miami and San Diego. At one time, Wayne County's foreclosure rate was the highest in the country.
Other Metro Detroit counties showed increases in the second quarter, as well:
• Oakland County: 4,718 houses in foreclosure, or one for every 111 households; that's an increase of 29.01 percent over the first quarter of this year and 103.63 percent over the second quarter of last year.
• Macomb County: 3,467 properties in foreclosure, or one for every 101 households; that's an increase of 14.69 percent over the first quarter of this year and 75.72 percent over the second quarter of last year.
• Livingston County: 516 properties in foreclosure, or one for every 139 households, that's a decrease of 10.1 percent from the first quarter of this year, but an increase of 719.05 percent over the second quarter of last year.
The volume of foreclosures weighs on the region's overall housing outlook. While sales throughout the region have increased since last year, more foreclosures now means even more cut-rate properties could be coming onto the market just as employers such as Detroit's Big Three automakers begin to shed thousands of jobs.
Dana Johnson, chief economist with Comerica Bank, said that if foreclosures continue to increase, home prices will have difficulty rebounding.
"The sooner they stop," he said, "the sooner recovery can become a reality."
U.S. foreclosure filings more than double in 2Q
U.S. foreclosure filings more than double in 2Q
By J.W. ELPHINSTONE • ASSOCIATED PRESS • July 25, 2008
NEW YORK-- The number of households facing the foreclosure process more than doubled in the second quarter compared to a year ago, according to data released today.
Nationwide, 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households, said Irvine, Calif.-based RealtyTrac Inc.
Soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy have left strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.
Foreclosure filings increased year-over-year in all but two states, North Dakota and Alaska.
Nevada, California, Arizona and Florida continued to clock in the highest foreclosure rates. One in every 43 Nevada households received a filing during the quarter.
Cities in California and Florida accounted for 16 of the worst 20 metro foreclosure rates. Stockton, Calif., had the worst rate, with one in every 25 homes in the town receiving a foreclosure filing. That's nearly seven times the national average.
RealtyTrac monitors default notices, auction sale notices and bank repossessions. Banks took back more than 222,000 properties nationwide in the second quarter, the company said. Bank repossessions accounted for 30% of total foreclosure activity, up from 24% in the previous quarter.
Economists estimated 2.5 million homes nationwide will enter the foreclosure process this year, up from about 1.5 million in 2007.
By J.W. ELPHINSTONE • ASSOCIATED PRESS • July 25, 2008
NEW YORK-- The number of households facing the foreclosure process more than doubled in the second quarter compared to a year ago, according to data released today.
Nationwide, 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households, said Irvine, Calif.-based RealtyTrac Inc.
Soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy have left strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.
Foreclosure filings increased year-over-year in all but two states, North Dakota and Alaska.
Nevada, California, Arizona and Florida continued to clock in the highest foreclosure rates. One in every 43 Nevada households received a filing during the quarter.
Cities in California and Florida accounted for 16 of the worst 20 metro foreclosure rates. Stockton, Calif., had the worst rate, with one in every 25 homes in the town receiving a foreclosure filing. That's nearly seven times the national average.
RealtyTrac monitors default notices, auction sale notices and bank repossessions. Banks took back more than 222,000 properties nationwide in the second quarter, the company said. Bank repossessions accounted for 30% of total foreclosure activity, up from 24% in the previous quarter.
Economists estimated 2.5 million homes nationwide will enter the foreclosure process this year, up from about 1.5 million in 2007.
Home sales keep falling; supply at 11.1-month level
Home sales keep falling; supply at 11.1-month level
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • July 25, 2008
Home sales continued to decline nationwide in June while inventory and foreclosures rose, according to reports issued Thursday.
Existing home sales fell by 2.6% in June to a seasonally adjusted annual rate of 4.86 million units from 4.99 million in May, the National Association of Realtors said. The sales pace was off 15.5% from June 2007.
Housing inventory at the end of June rose 0.2% to 4.49 million existing homes for sale, or an 11.1-month supply at the current pace. That's up from a 10.8-month supply in May.
Lawrence Yun, chief economist for NAR, said a first-time home buyer tax credit that the U.S. House passed on Wednesday would have a positive impact on the housing market as four of 10 homes are bought by first-time homebuyers.
In Michigan, sales of existing homes were down by 1.98% in June, according to the Michigan Association of Realtors. And the average price fell 13.23% to $121,611 in the state.
The national median existing home price was $215,000 in June, down 6.1% from a year ago. Foreclosures rose nearly 14% in the second quarter and jumped 121% from the second quarter of 2007, according to figures from RealtyTrac Inc. of Irvine, Calif.
Michigan had the seventh-highest foreclosure rate in the country with one filing for every 137 households. It ranked fifth in the quarter for the number of foreclosure filings with 32,868 including 5,114 notices of default, 12,526 notices of sale, and 15,228 bank repossessions, RealtyTrac said.
Michigan foreclosure filings rose by 11.25% from the first quarter and 73% from the second quarter of 2007, according to RealtyTrac figures.
Nevada, California and Arizona had the highest foreclosure rates in the second quarter.
James Saccacio, CEO of RealtyTrac, said bank repossessions accounted for 30% of the foreclosure activity in the second quarter. That means problem loans are being purged from the system, he said.
"Of course, if another surge in defaults occurs, which could well happen later this year, it would refill the foreclosure pipeline and prolong the recovery," Saccacio said.
Yun said there was a downward distortion in the national sales price data because short sales and foreclosures make up about a third of transactions, creating a drag on prices.
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • July 25, 2008
Home sales continued to decline nationwide in June while inventory and foreclosures rose, according to reports issued Thursday.
Existing home sales fell by 2.6% in June to a seasonally adjusted annual rate of 4.86 million units from 4.99 million in May, the National Association of Realtors said. The sales pace was off 15.5% from June 2007.
Housing inventory at the end of June rose 0.2% to 4.49 million existing homes for sale, or an 11.1-month supply at the current pace. That's up from a 10.8-month supply in May.
Lawrence Yun, chief economist for NAR, said a first-time home buyer tax credit that the U.S. House passed on Wednesday would have a positive impact on the housing market as four of 10 homes are bought by first-time homebuyers.
In Michigan, sales of existing homes were down by 1.98% in June, according to the Michigan Association of Realtors. And the average price fell 13.23% to $121,611 in the state.
The national median existing home price was $215,000 in June, down 6.1% from a year ago. Foreclosures rose nearly 14% in the second quarter and jumped 121% from the second quarter of 2007, according to figures from RealtyTrac Inc. of Irvine, Calif.
Michigan had the seventh-highest foreclosure rate in the country with one filing for every 137 households. It ranked fifth in the quarter for the number of foreclosure filings with 32,868 including 5,114 notices of default, 12,526 notices of sale, and 15,228 bank repossessions, RealtyTrac said.
Michigan foreclosure filings rose by 11.25% from the first quarter and 73% from the second quarter of 2007, according to RealtyTrac figures.
Nevada, California and Arizona had the highest foreclosure rates in the second quarter.
James Saccacio, CEO of RealtyTrac, said bank repossessions accounted for 30% of the foreclosure activity in the second quarter. That means problem loans are being purged from the system, he said.
"Of course, if another surge in defaults occurs, which could well happen later this year, it would refill the foreclosure pipeline and prolong the recovery," Saccacio said.
Yun said there was a downward distortion in the national sales price data because short sales and foreclosures make up about a third of transactions, creating a drag on prices.
Friday, June 13, 2008
U.S. foreclosure filings surge 48%; Michigan up 35%
U.S. foreclosure filings surge 48%; Michigan up 35%
Detroit News staff and wire reports
The number of U.S. homeowners swept up in the housing crisis rose further last month, with foreclosure filings up nearly 50 percent compared with a year earlier, a foreclosure listing company said Friday.
Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48 percent from 176,137 in the same month last year and up 7 percent from April, RealtyTrac Inc. said.
One in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second-straight monthly record.
In Michigan, May foreclosures climbed 35 percent from a year ago. The state's foreclosure rate of 1 foreclosure filing for ever 353 households ranked in fifth in the country, up from ninth in April.
Foreclosed properties in May numbered 12,792, up 25 percent from April and 35 percent from the same month a year ago.
In Metro Detroit in May, Wayne County had 4,992 properties in foreclosure, up 21 from April and 15 percent from a year ago. The rate of one foreclosure for every 169 households ranked the county 14th among metropolitan areas. Oakland: 1,664 properties, up 13 percent from April and 43 percent from May 2007; Macomb: 1,413 properties, up 24 percent from April, 49 percent from May 2007; Livingston: 176 properties, up 3 percent from April, 329 percent from May 2007. Nationally, foreclosures were up 48 percent from a year ago.
Nationally, foreclosure filings increased from a year earlier in all but 10 states. Nevada, California, Arizona and Florida had the highest statewide foreclosure rates, followed by Michigan.
Metropolitan areas in California and Florida accounted for nine of the top 10 areas with the highest rate of foreclosure. That list was led by Stockton, Calif. and the Cape Coral-Fort Myers area in Florida.
Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. Nearly 74,000 properties were repossessed by lenders nationwide in May, while more than 58,000 received default notices, the company said.
In Nevada, one in every 118 households received a foreclosure-related notice last month, more than four times the national rate. In California, one in every 183 households faced foreclosure.
The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't get refinanced into an affordable loan.
Making matters worse, mortgage rates have been rising, reflecting increased concerns about what the Federal Reserve might do to battle inflation. Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.32 percent this week, the highest level in nearly eight months and up sharply from 6.09 percent last week.
Efforts by government and the mortgage industry to stem the tide of foreclosures aren't keeping up with the rising number of troubled homeowners, and critics say a Bush administration-backed mortgage industry coalition, dubbed Hope Now, is falling far short.
Rick Sharga, RealtyTrac's vice president of marketing, said foreclosures are unlikely to peak until sometime this fall, as more loans made to borrowers with poor credit records reset at higher levels. "I don't think we've seen the high point," he said.
About 50 to 60 percent of borrowers who receive foreclosure filings are likely to lose their homes, Sharga said. The rest are likely to be able to sell or refinance.
A new government report released Wednesday found that among mortgages held by Bank of America, Citigroup Inc. and seven other large banks, foreclosures climbed to 1.23 percent of all loans in March from 0.9 percent in October.
As foreclosed properties pile up, they add to the inventory of homes on the market and drag down home prices. The trend is most dramatic in many parts of California, Florida, Nevada and Arizona, where prices skyrocketed during the housing boom and are now falling precipitously.
Sales of foreclosures, vacant new homes and other distressed properties now dominate some markets, causing grief for individual homeowners who need to sell for other reasons, like a job in a new city.
Nationwide, one out of every four sales between January and March was a distressed sale, and that figure jumps to more than 50 percent in the hardest-hit areas like Las Vegas, Detroit and distant suburbs of Los Angeles, according to Moody's Economy.com.
In some neighborhoods, lenders are slashing prices dramatically to rid themselves of an unprecedented number of foreclosed properties, sparking bidding wars and multiple offers.
While that's a positive for the real estate market, buyers in other parts of the country are still holding back.
"I think a lot of people are waiting to see if we really have hit the bottom," Sharga said.
Lehman Brothers economist Michelle Meyer said in a report Thursday that U.S. home sales are likely to hit bottom at the end of this summer, but said a recovery in sales is likely to be "feeble." Home prices, she wrote, are still expected to fall another 10 percent by the end of 2009.
Detroit News staff and wire reports
The number of U.S. homeowners swept up in the housing crisis rose further last month, with foreclosure filings up nearly 50 percent compared with a year earlier, a foreclosure listing company said Friday.
Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48 percent from 176,137 in the same month last year and up 7 percent from April, RealtyTrac Inc. said.
One in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second-straight monthly record.
In Michigan, May foreclosures climbed 35 percent from a year ago. The state's foreclosure rate of 1 foreclosure filing for ever 353 households ranked in fifth in the country, up from ninth in April.
Foreclosed properties in May numbered 12,792, up 25 percent from April and 35 percent from the same month a year ago.
In Metro Detroit in May, Wayne County had 4,992 properties in foreclosure, up 21 from April and 15 percent from a year ago. The rate of one foreclosure for every 169 households ranked the county 14th among metropolitan areas. Oakland: 1,664 properties, up 13 percent from April and 43 percent from May 2007; Macomb: 1,413 properties, up 24 percent from April, 49 percent from May 2007; Livingston: 176 properties, up 3 percent from April, 329 percent from May 2007. Nationally, foreclosures were up 48 percent from a year ago.
Nationally, foreclosure filings increased from a year earlier in all but 10 states. Nevada, California, Arizona and Florida had the highest statewide foreclosure rates, followed by Michigan.
Metropolitan areas in California and Florida accounted for nine of the top 10 areas with the highest rate of foreclosure. That list was led by Stockton, Calif. and the Cape Coral-Fort Myers area in Florida.
Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. Nearly 74,000 properties were repossessed by lenders nationwide in May, while more than 58,000 received default notices, the company said.
In Nevada, one in every 118 households received a foreclosure-related notice last month, more than four times the national rate. In California, one in every 183 households faced foreclosure.
The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't get refinanced into an affordable loan.
Making matters worse, mortgage rates have been rising, reflecting increased concerns about what the Federal Reserve might do to battle inflation. Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.32 percent this week, the highest level in nearly eight months and up sharply from 6.09 percent last week.
Efforts by government and the mortgage industry to stem the tide of foreclosures aren't keeping up with the rising number of troubled homeowners, and critics say a Bush administration-backed mortgage industry coalition, dubbed Hope Now, is falling far short.
Rick Sharga, RealtyTrac's vice president of marketing, said foreclosures are unlikely to peak until sometime this fall, as more loans made to borrowers with poor credit records reset at higher levels. "I don't think we've seen the high point," he said.
About 50 to 60 percent of borrowers who receive foreclosure filings are likely to lose their homes, Sharga said. The rest are likely to be able to sell or refinance.
A new government report released Wednesday found that among mortgages held by Bank of America, Citigroup Inc. and seven other large banks, foreclosures climbed to 1.23 percent of all loans in March from 0.9 percent in October.
As foreclosed properties pile up, they add to the inventory of homes on the market and drag down home prices. The trend is most dramatic in many parts of California, Florida, Nevada and Arizona, where prices skyrocketed during the housing boom and are now falling precipitously.
Sales of foreclosures, vacant new homes and other distressed properties now dominate some markets, causing grief for individual homeowners who need to sell for other reasons, like a job in a new city.
Nationwide, one out of every four sales between January and March was a distressed sale, and that figure jumps to more than 50 percent in the hardest-hit areas like Las Vegas, Detroit and distant suburbs of Los Angeles, according to Moody's Economy.com.
In some neighborhoods, lenders are slashing prices dramatically to rid themselves of an unprecedented number of foreclosed properties, sparking bidding wars and multiple offers.
While that's a positive for the real estate market, buyers in other parts of the country are still holding back.
"I think a lot of people are waiting to see if we really have hit the bottom," Sharga said.
Lehman Brothers economist Michelle Meyer said in a report Thursday that U.S. home sales are likely to hit bottom at the end of this summer, but said a recovery in sales is likely to be "feeble." Home prices, she wrote, are still expected to fall another 10 percent by the end of 2009.
Friday, June 6, 2008
Michigan foreclosures on rise again
Foreclosures on rise again
Mich. rate is 2nd highest in quarter
FREE PRESS STAFF, NEWS REPORTS • June 6, 2008
The foreclosure hammer is hitting ever harder. People lost their homes at the highest rate on record in the first three months of the year, and late payments soared to a new high, too -- an alarming sign that the housing crisis and its damage to the national economy may only get worse.
Dumping more empty homes on an already glutted market also is likely to put a further drag on home prices -- extending a vicious cycle.
Nearly 1%, or roughly 447,723 loans, fell into foreclosure during the January-to-March period, the Mortgage Bankers Association said Thursday in its quarterly snapshot of the mortgage market. That surpassed the previous high of 0.83% over the last three months in 2007.
The report also found that more homeowners slipped behind on their monthly payments. The delinquency rate jumped to 6.35% -- or 2.87 million loans -- compared with 5.82% for the previous three months. Payments are considered delinquent if they are 30 or more days past due.
Both the rate of new foreclosures and late payments were the highest on record going back to 1979.
Michigan had the second-highest delinquency rate for all loans with 7.84% delinquent in the first quarter. Mississippi was first with 9.41% and Georgia was third with 7.36%. Michigan's foreclosure inventory was 3.61% in the first quarter.
Nearly 8.5 million homeowners now have negative or no equity in their homes representing 16% of all homeowners with mortgages, according to Mark Zandi, chief economist at Moody's Economy.com. He estimates that will increase to 12.2 million, or almost one out of every four homeowners, by the end of June.
Mich. rate is 2nd highest in quarter
FREE PRESS STAFF, NEWS REPORTS • June 6, 2008
The foreclosure hammer is hitting ever harder. People lost their homes at the highest rate on record in the first three months of the year, and late payments soared to a new high, too -- an alarming sign that the housing crisis and its damage to the national economy may only get worse.
Dumping more empty homes on an already glutted market also is likely to put a further drag on home prices -- extending a vicious cycle.
Nearly 1%, or roughly 447,723 loans, fell into foreclosure during the January-to-March period, the Mortgage Bankers Association said Thursday in its quarterly snapshot of the mortgage market. That surpassed the previous high of 0.83% over the last three months in 2007.
The report also found that more homeowners slipped behind on their monthly payments. The delinquency rate jumped to 6.35% -- or 2.87 million loans -- compared with 5.82% for the previous three months. Payments are considered delinquent if they are 30 or more days past due.
Both the rate of new foreclosures and late payments were the highest on record going back to 1979.
Michigan had the second-highest delinquency rate for all loans with 7.84% delinquent in the first quarter. Mississippi was first with 9.41% and Georgia was third with 7.36%. Michigan's foreclosure inventory was 3.61% in the first quarter.
Nearly 8.5 million homeowners now have negative or no equity in their homes representing 16% of all homeowners with mortgages, according to Mark Zandi, chief economist at Moody's Economy.com. He estimates that will increase to 12.2 million, or almost one out of every four homeowners, by the end of June.
Thursday, June 5, 2008
Home foreclosures set record in first quarter
Home foreclosures set record in first quarter
By JEANNINE AVERSA, AP Economics Writer
WASHINGTON - Home foreclosures and late payments set records over the first three months of the year and are expected to keep rising, stark signs of the housing crisis' mounting damage to homeowners and the economy.
The latest snapshot of the mortgage market, released Thursday, showed that the proportion of mortgages that fell into foreclosure soared to 0.99 percent in the January-through-March period. That surpassed the previous high of 0.83 percent over the last three months in 2007.
The report by the Mortgage Bankers Association also found that more homeowners slipped behind on their monthly payments.
The delinquency rate jumped to 6.35 percent in the first quarter, compared with 5.82 percent for the three months earlier. Payments are considered delinquent if they are 30 or more days past due.
Both the rate of new foreclosures and late payments were the highest on record going back to 1979.
Jay Brinkmann, the association's vice president of research and economics, told The Associated Press that the slump in house prices was the biggest factor for rising foreclosures and late payments.
With prices expected to keep dropping, foreclosures and late payments "are going to continue to go up" in the months ahead, he said.
Homeowners with tarnished credit who have subprime adjustable-rate loans took the hardest hits. Foreclosures and late payments for these borrowers also swelled to all-time highs in the first quarter.
The percentage of subprime adjustable-rate mortgages that started the foreclosure process climbed to 6.35 percent. The rate was 5.29 percent in fourth quarter, the previous high. Late payments rose to 22.07 percent from 20.02 percent, the previous high.
The association's survey covers just over 45 million home loans.
More problems also cropped up with loans to more creditworthy borrowers.
The percentage of such loans falling into foreclosure was 0.54 percent, compared with 0.41 percent at the end of last year. Late payment rose to 3.71 percent, compared with 3.24 percent.
The numbers were higher for prime borrowers with adjustable rate mortgages. The proportion of those loans falling into foreclosures jumped to 1.55 percent from 1.06 percent. The delinquency rate rose to 6.78 percent, compared with 5.51 percent.
"The number one problem is the drop in home prices," Brinkmann said. Declining prices, especially in newer built areas, "are hurting people's ability to recover when they run into trouble — a divorce or loss of job," he said. "In other days, you could sell the home. But because home prices have fallen so much, in many of those cases, the homes are going into foreclosure."
California, Florida, Nevada and Arizona accounted for 89 percent of the total increase in new home foreclosures, he said. Those are places where prices have fallen sharply and there was a lot of home building, creating too much supply, Brinkmann said.
After a five-year boom, the housing market fell into a deep slump two years ago. That dragged down sales, and prices with it. As the value of homes plummeted, many newer homeowners found themselves owing more on their mortgages than their homes were worth.
Homeowners with adjustable-rate mortgages were clobbered when their initially low rates reset to much higher ones. That made it difficult, if not impossible, to keep up with monthly mortgage payments.
As foreclosures and late payments climbed, financial companies took multibillion losses when their investments in mortgage-backed securities soured. A credit crisis erupted and spread, crimping other types of financing. The fallout plunged Wall Street in turmoil, disrupting the normal functioning of markets.
All those troubles have pushed the economy to the brink of a recession, if the country isn't already in one. Consumers and business have tightened their spending. Employers have cut more than a quarter-million jobs in the first four months of this year.
To bolster the economy, the Federal Reserve made aggressive interest rate cuts. That has helped homeowners facing rate resets on their adjustable-rate mortgages. But with inflation on the rise, Fed Chairman Ben Bernanke this week sent his strongest signal yet that the central bank's rate-cutting campaign started that started in September is coming to an end.
The Bush administration has taken steps to help distressed homeowners. It has urged lenders to freeze rates for some homeowners and encouraged lenders to rework mortgage terms so troubled borrowers can stay in their homes.
A congressional plan that includes a foreclosure prevention program has stalled as lawmakers figure out how to pay for it.
The government would back as much as $300 billion in new loans to help certain borrowers refinance into cheaper, fixed-rate loans. Mortgage holders would have to agree to take a substantial loss on the existing loans; borrowers would have to show they could afford the new mortgage and share future proceeds with the government.
The House passed its version last month. Senate leaders say they want to vote by July.
Groups representing builders and real estate agents want incentives, such as a $7,500 temporary tax credit for first-time home buyers, to support the market.
"Policies that stimulate home purchases in the immediate future can pay huge dividends and a temporary home buyer tax credit provides the most bang for the buck," Joe Robson, a home builder from Tulsa, Okla., said in prepared remarks at a House hearing.
By JEANNINE AVERSA, AP Economics Writer
WASHINGTON - Home foreclosures and late payments set records over the first three months of the year and are expected to keep rising, stark signs of the housing crisis' mounting damage to homeowners and the economy.
The latest snapshot of the mortgage market, released Thursday, showed that the proportion of mortgages that fell into foreclosure soared to 0.99 percent in the January-through-March period. That surpassed the previous high of 0.83 percent over the last three months in 2007.
The report by the Mortgage Bankers Association also found that more homeowners slipped behind on their monthly payments.
The delinquency rate jumped to 6.35 percent in the first quarter, compared with 5.82 percent for the three months earlier. Payments are considered delinquent if they are 30 or more days past due.
Both the rate of new foreclosures and late payments were the highest on record going back to 1979.
Jay Brinkmann, the association's vice president of research and economics, told The Associated Press that the slump in house prices was the biggest factor for rising foreclosures and late payments.
With prices expected to keep dropping, foreclosures and late payments "are going to continue to go up" in the months ahead, he said.
Homeowners with tarnished credit who have subprime adjustable-rate loans took the hardest hits. Foreclosures and late payments for these borrowers also swelled to all-time highs in the first quarter.
The percentage of subprime adjustable-rate mortgages that started the foreclosure process climbed to 6.35 percent. The rate was 5.29 percent in fourth quarter, the previous high. Late payments rose to 22.07 percent from 20.02 percent, the previous high.
The association's survey covers just over 45 million home loans.
More problems also cropped up with loans to more creditworthy borrowers.
The percentage of such loans falling into foreclosure was 0.54 percent, compared with 0.41 percent at the end of last year. Late payment rose to 3.71 percent, compared with 3.24 percent.
The numbers were higher for prime borrowers with adjustable rate mortgages. The proportion of those loans falling into foreclosures jumped to 1.55 percent from 1.06 percent. The delinquency rate rose to 6.78 percent, compared with 5.51 percent.
"The number one problem is the drop in home prices," Brinkmann said. Declining prices, especially in newer built areas, "are hurting people's ability to recover when they run into trouble — a divorce or loss of job," he said. "In other days, you could sell the home. But because home prices have fallen so much, in many of those cases, the homes are going into foreclosure."
California, Florida, Nevada and Arizona accounted for 89 percent of the total increase in new home foreclosures, he said. Those are places where prices have fallen sharply and there was a lot of home building, creating too much supply, Brinkmann said.
After a five-year boom, the housing market fell into a deep slump two years ago. That dragged down sales, and prices with it. As the value of homes plummeted, many newer homeowners found themselves owing more on their mortgages than their homes were worth.
Homeowners with adjustable-rate mortgages were clobbered when their initially low rates reset to much higher ones. That made it difficult, if not impossible, to keep up with monthly mortgage payments.
As foreclosures and late payments climbed, financial companies took multibillion losses when their investments in mortgage-backed securities soured. A credit crisis erupted and spread, crimping other types of financing. The fallout plunged Wall Street in turmoil, disrupting the normal functioning of markets.
All those troubles have pushed the economy to the brink of a recession, if the country isn't already in one. Consumers and business have tightened their spending. Employers have cut more than a quarter-million jobs in the first four months of this year.
To bolster the economy, the Federal Reserve made aggressive interest rate cuts. That has helped homeowners facing rate resets on their adjustable-rate mortgages. But with inflation on the rise, Fed Chairman Ben Bernanke this week sent his strongest signal yet that the central bank's rate-cutting campaign started that started in September is coming to an end.
The Bush administration has taken steps to help distressed homeowners. It has urged lenders to freeze rates for some homeowners and encouraged lenders to rework mortgage terms so troubled borrowers can stay in their homes.
A congressional plan that includes a foreclosure prevention program has stalled as lawmakers figure out how to pay for it.
The government would back as much as $300 billion in new loans to help certain borrowers refinance into cheaper, fixed-rate loans. Mortgage holders would have to agree to take a substantial loss on the existing loans; borrowers would have to show they could afford the new mortgage and share future proceeds with the government.
The House passed its version last month. Senate leaders say they want to vote by July.
Groups representing builders and real estate agents want incentives, such as a $7,500 temporary tax credit for first-time home buyers, to support the market.
"Policies that stimulate home purchases in the immediate future can pay huge dividends and a temporary home buyer tax credit provides the most bang for the buck," Joe Robson, a home builder from Tulsa, Okla., said in prepared remarks at a House hearing.
Monday, April 14, 2008
There's roulette and there's skydiving. Then there's investing in Detroit and Cleveland real estate.
America's Riskiest Real Estate Markets
Matt Woolsey, Forbes.com
Apr 10th, 2008
There's roulette and there's skydiving. Then there's investing in Detroit and Cleveland real estate.
That's especially risky because those markets are in freefall. Lenders have fled, foreclosures are on the rise, homes aren't selling and local economies have stalled
The riskiest were those that had the highest foreclosure rates, slow job growth (or job loss) and a rash of listed homes. By these measures, Orlando has everything working against it. Other spots, Denver, for example, exhibit negative characteristics like foreclosures, lending problems and vacancies, but are adding jobs, a sign that the local economy can better handle these difficulties.
Risky Business
Before "write-down" entered the national lexicon, the biggest risk facing real estate markets was the prevalence of subprime loans and adjustable rate mortgages. Last year, before the shoe-drop of the credit crunch and the dropping value of banks' loans and debt, we identified ARM-heavy Miami, Fla., Orlando, Fla., and Sacramento, Calif., as the markets most at risk of further fall.
Subprime still matters, as do the concentration of adjustable rate mortgages. Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July.
In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy.
San Diego's present conditions suggest that over the next half-year, prices may start to rise. That's because "there's usually a three- to six-month lag between when transactions go up and prices go up," says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firm.
Another good sign for the coming year? Increased credit availability.
We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.
Not as fortunate are hard-hit foreclosure markets such as Denver, which saw 50,000 foreclosure filings last year, according to RealtyTrac, which comes out to a 2.6% foreclosure rate, ninth in the nation behind the likes of Las Vegas and Detroit. Here, GSE loan limits won't change to boost liquidity, though at the beginning of this year the local economy had added jobs at a rate of 2%, which is triple the national average, according to the Bureau of Labor Statistics.
The availability of jobs gets at the critical question of how much money is available within a market. A market with money on the sidelines has better recovery prospects because it means potential buyers are out there. A market without economic activity to generate buyers is simply sinking.
"People aren't pulling the trigger right now," says Steve Cesinger, vice-chairman at Dewberry Holdings, an Atlanta-based real estate investment group. "But it's a big difference if they're not pulling the trigger because the prices haven't declined enough or because they're waiting to catch the bottom."
Matt Woolsey, Forbes.com
Apr 10th, 2008
There's roulette and there's skydiving. Then there's investing in Detroit and Cleveland real estate.
That's especially risky because those markets are in freefall. Lenders have fled, foreclosures are on the rise, homes aren't selling and local economies have stalled
The riskiest were those that had the highest foreclosure rates, slow job growth (or job loss) and a rash of listed homes. By these measures, Orlando has everything working against it. Other spots, Denver, for example, exhibit negative characteristics like foreclosures, lending problems and vacancies, but are adding jobs, a sign that the local economy can better handle these difficulties.
Risky Business
Before "write-down" entered the national lexicon, the biggest risk facing real estate markets was the prevalence of subprime loans and adjustable rate mortgages. Last year, before the shoe-drop of the credit crunch and the dropping value of banks' loans and debt, we identified ARM-heavy Miami, Fla., Orlando, Fla., and Sacramento, Calif., as the markets most at risk of further fall.
Subprime still matters, as do the concentration of adjustable rate mortgages. Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July.
In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy.
San Diego's present conditions suggest that over the next half-year, prices may start to rise. That's because "there's usually a three- to six-month lag between when transactions go up and prices go up," says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firm.
Another good sign for the coming year? Increased credit availability.
We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.
Not as fortunate are hard-hit foreclosure markets such as Denver, which saw 50,000 foreclosure filings last year, according to RealtyTrac, which comes out to a 2.6% foreclosure rate, ninth in the nation behind the likes of Las Vegas and Detroit. Here, GSE loan limits won't change to boost liquidity, though at the beginning of this year the local economy had added jobs at a rate of 2%, which is triple the national average, according to the Bureau of Labor Statistics.
The availability of jobs gets at the critical question of how much money is available within a market. A market with money on the sidelines has better recovery prospects because it means potential buyers are out there. A market without economic activity to generate buyers is simply sinking.
"People aren't pulling the trigger right now," says Steve Cesinger, vice-chairman at Dewberry Holdings, an Atlanta-based real estate investment group. "But it's a big difference if they're not pulling the trigger because the prices haven't declined enough or because they're waiting to catch the bottom."
Sunday, April 13, 2008
Housing market is flooded
Housing market is flooded
April 13, 2008
Here is a look at metro Detroit's housing supply as of Dec. 31, 2007, according to Real Estate One in Southfield. The sales figures are for October 2007 through December 2007.
Livingston
County
Sales For
sale Months
supply
Brighton 55 388 20.7
Cohoctah 6 41 20.0
Conway 4 50 36.6
Deerfield 1 40 117.1
Fowlerville/Handy 21 109 15.2
Genoa 32 339 31.0
Green Oak Twp. 38 219 16.9
Hamburg 47 306 19.1
Hartland 31 194 18.3
Howell 36 215 17.5
Iosco 10 60 17.6
Marion 27 177 19.2
Oceola 29 181 18.3
Pinckney/Putnam 25 150 17.6
Tyrone 17 120 20.7
Unadilla 6 32 15.6
Total 385 2,621 19.9
Previous year 371 2,645 21.4
Macomb
County
Sales For
sale Months
supply
Armada 7 39 16.3
Bruce 5 48 28.1
Center Line 3 44 42.9
Chesterfield/
N. Baltimore 91 514 16.5
Clinton/Mt. Clemens 104 701 19.7
Eastpointe/Fraser/Roseville/St. Clair Shores 156 962 18.1
Harrison 29 252 25.4
Lenox/New Haven 8 57 20.9
Macomb Twp. 119 651 16.0
Memphis/Richmond 9 125 40.7
Ray 1 23 67.3
Romeo 2 26 38.1
Shelby/Utica 88 503 16.7
Sterling Heights 167 630 11.0
Warren 89 586 19.3
Washington 23 206 26.2
Total
901 5,367 17.4
Previous year
1,416 7,005 14.8
Oakland
County
Sales For
sale Months
supply
Addison/Leonard 12 69 16.8
Auburn Hills 15 175 34.2
Berkley 40 170 12.4
Beverly Hills 16 137 25.1
Birmingham 64 576 26.3
Bloomfield Hills 14 134 28.0
Bloomfield Twp. 80 713 26.1
Brandon/Ortonville 36 167 13.6
Clarkston/
Independence Twp. 76 439 16.9
Clawson 28 102 10.7
Commerce Twp./
Walled-Wolverine Lake 78 601 22.6
Farmington/
Farmington Hills 140 931 19.5
Ferndale 34 233 20.1
Franklin/Bingham 5 76 44.5
Groveland 9 75 24.4
Hazel Park 6 91 44.4
Highland 27 233 25.3
Holly 25 159 18.6
Huntington Woods 5 78 45.7
Keego Harbor/
Orchard Lake 7 117 48.9
Lake Orion/Orion 50 399 23.4
Lathrup Village 13 61 13.7
Lyon Twp./
South Lyon 38 286 22.0
Madison Heights 37 195 15.4
Milford 38 256 19.7
Novi 98 663 19.8
Oak Park 19 211 32.5
Oakland Twp. 51 281 16.1
Oxford 37 271 21.4
Pleasant Ridge 9 27 8.8
Pontiac 20 272 39.8
Rochester/
Rochester Hills 157 810 15.1
Rose 7 67 28.0
Royal Oak 136 769 16.6
Southfield 91 872 28.1
Springfield/
Davisburg 18 167 27.2
Troy 139 620 13.1
W. Bloomfield/
W. Bloomfield Twp. 135 897 19.5
Waterford/Sylvan Twp. 118 895 22.2
White Lake 49 357 21.3
Wixom 19 89 13.7
Total
1,996 13,741 20.2
Previous year
2,388 13,974 17.6
Washtenaw
County
Sales For
sale Months
supply
Ann Arbor 218 662 8.9
Chelsea 25 174 20.4
Dexter 52 220 12.4
Lincoln 89 401 13.2
Manchester 11 115 30.6
Milan 18 112 18.2
Saline 57 294 15.1
Van Buren 88 486 16.2
Whitmore Lake 19 83 12.8
Willow Run 13 170 38.3
Ypsilanti 29 204 20.6
Total 619 2,921 13.8
Previous year 589 3,210 16.4
Wayne
County
Sales For
sale Months
supply
Allen Park/Ecorse/River Rouge/Wyan/Melvin/Southgate 111 635 16.7
Belleville/Van Buren 66 422 18.7
Brownstown/
Flatrock/Woodhaven 60 475 23.2
Canton 195 847 12.7
Dearborn/
Dearborn Heights 316 1501 13.9
Detroit 158 2757 51.1
Garden City 49 265 15.8
Gibraltar/Grosse Ile/Riverview/
Rockwood/Trenton 47 346 21.6
Grosse Pointe 113 517 13.4
Harper Woods 20 164 24.0
Huron 16 137 25.1
Inkster 7 139 58.1
Livonia 208 837 11.8
Northville 78 443 16.6
Plymouth 100 447 13.1
Redford 106 678 18.7
Romulus 31 267 25.2
Sumpter 9 80 26.0
Taylor 49 424 25.3
Wayne 19 158 24.3
Westland 128 753 17.2
Total
1,886 12,292 19.1
Previous year
2,390 13,464 16.9
Downriver
Sales For
sale Months
supply
Allen Park 42 172 12.0
Brownstown 34 276 23.8
Ecorse 1 19 55.6
Flat Rock 8 92 33.7
Gibraltar 6 59 28.8
Grosse Ile 15 181 35.3
Huron Township 9 70 22.8
Lincoln Park 34 222 19.1
Melvindale 12 62 15.1
River Rouge 1 11 32.2
Riverview 15 77 15.0
Rockwood 7 20 8.4
Southgate 31 189 17.9
Trenton 36 170 13.8
Woodhaven 18 124 20.2
Wyandotte 38 197 15.2
Total 307 1,941 19.5*
Previous year 520* 2,645* 15.3*
* Includes alternate counts for Taylor and Romulus.
April 13, 2008
Here is a look at metro Detroit's housing supply as of Dec. 31, 2007, according to Real Estate One in Southfield. The sales figures are for October 2007 through December 2007.
Livingston
County
Sales For
sale Months
supply
Brighton 55 388 20.7
Cohoctah 6 41 20.0
Conway 4 50 36.6
Deerfield 1 40 117.1
Fowlerville/Handy 21 109 15.2
Genoa 32 339 31.0
Green Oak Twp. 38 219 16.9
Hamburg 47 306 19.1
Hartland 31 194 18.3
Howell 36 215 17.5
Iosco 10 60 17.6
Marion 27 177 19.2
Oceola 29 181 18.3
Pinckney/Putnam 25 150 17.6
Tyrone 17 120 20.7
Unadilla 6 32 15.6
Total 385 2,621 19.9
Previous year 371 2,645 21.4
Macomb
County
Sales For
sale Months
supply
Armada 7 39 16.3
Bruce 5 48 28.1
Center Line 3 44 42.9
Chesterfield/
N. Baltimore 91 514 16.5
Clinton/Mt. Clemens 104 701 19.7
Eastpointe/Fraser/Roseville/St. Clair Shores 156 962 18.1
Harrison 29 252 25.4
Lenox/New Haven 8 57 20.9
Macomb Twp. 119 651 16.0
Memphis/Richmond 9 125 40.7
Ray 1 23 67.3
Romeo 2 26 38.1
Shelby/Utica 88 503 16.7
Sterling Heights 167 630 11.0
Warren 89 586 19.3
Washington 23 206 26.2
Total
901 5,367 17.4
Previous year
1,416 7,005 14.8
Oakland
County
Sales For
sale Months
supply
Addison/Leonard 12 69 16.8
Auburn Hills 15 175 34.2
Berkley 40 170 12.4
Beverly Hills 16 137 25.1
Birmingham 64 576 26.3
Bloomfield Hills 14 134 28.0
Bloomfield Twp. 80 713 26.1
Brandon/Ortonville 36 167 13.6
Clarkston/
Independence Twp. 76 439 16.9
Clawson 28 102 10.7
Commerce Twp./
Walled-Wolverine Lake 78 601 22.6
Farmington/
Farmington Hills 140 931 19.5
Ferndale 34 233 20.1
Franklin/Bingham 5 76 44.5
Groveland 9 75 24.4
Hazel Park 6 91 44.4
Highland 27 233 25.3
Holly 25 159 18.6
Huntington Woods 5 78 45.7
Keego Harbor/
Orchard Lake 7 117 48.9
Lake Orion/Orion 50 399 23.4
Lathrup Village 13 61 13.7
Lyon Twp./
South Lyon 38 286 22.0
Madison Heights 37 195 15.4
Milford 38 256 19.7
Novi 98 663 19.8
Oak Park 19 211 32.5
Oakland Twp. 51 281 16.1
Oxford 37 271 21.4
Pleasant Ridge 9 27 8.8
Pontiac 20 272 39.8
Rochester/
Rochester Hills 157 810 15.1
Rose 7 67 28.0
Royal Oak 136 769 16.6
Southfield 91 872 28.1
Springfield/
Davisburg 18 167 27.2
Troy 139 620 13.1
W. Bloomfield/
W. Bloomfield Twp. 135 897 19.5
Waterford/Sylvan Twp. 118 895 22.2
White Lake 49 357 21.3
Wixom 19 89 13.7
Total
1,996 13,741 20.2
Previous year
2,388 13,974 17.6
Washtenaw
County
Sales For
sale Months
supply
Ann Arbor 218 662 8.9
Chelsea 25 174 20.4
Dexter 52 220 12.4
Lincoln 89 401 13.2
Manchester 11 115 30.6
Milan 18 112 18.2
Saline 57 294 15.1
Van Buren 88 486 16.2
Whitmore Lake 19 83 12.8
Willow Run 13 170 38.3
Ypsilanti 29 204 20.6
Total 619 2,921 13.8
Previous year 589 3,210 16.4
Wayne
County
Sales For
sale Months
supply
Allen Park/Ecorse/River Rouge/Wyan/Melvin/Southgate 111 635 16.7
Belleville/Van Buren 66 422 18.7
Brownstown/
Flatrock/Woodhaven 60 475 23.2
Canton 195 847 12.7
Dearborn/
Dearborn Heights 316 1501 13.9
Detroit 158 2757 51.1
Garden City 49 265 15.8
Gibraltar/Grosse Ile/Riverview/
Rockwood/Trenton 47 346 21.6
Grosse Pointe 113 517 13.4
Harper Woods 20 164 24.0
Huron 16 137 25.1
Inkster 7 139 58.1
Livonia 208 837 11.8
Northville 78 443 16.6
Plymouth 100 447 13.1
Redford 106 678 18.7
Romulus 31 267 25.2
Sumpter 9 80 26.0
Taylor 49 424 25.3
Wayne 19 158 24.3
Westland 128 753 17.2
Total
1,886 12,292 19.1
Previous year
2,390 13,464 16.9
Downriver
Sales For
sale Months
supply
Allen Park 42 172 12.0
Brownstown 34 276 23.8
Ecorse 1 19 55.6
Flat Rock 8 92 33.7
Gibraltar 6 59 28.8
Grosse Ile 15 181 35.3
Huron Township 9 70 22.8
Lincoln Park 34 222 19.1
Melvindale 12 62 15.1
River Rouge 1 11 32.2
Riverview 15 77 15.0
Rockwood 7 20 8.4
Southgate 31 189 17.9
Trenton 36 170 13.8
Woodhaven 18 124 20.2
Wyandotte 38 197 15.2
Total 307 1,941 19.5*
Previous year 520* 2,645* 15.3*
* Includes alternate counts for Taylor and Romulus.
Race heats up for $1 homes
Race heats up for $1 homes
Both county, cities want property
BY KATHLEEN GRAY • FREE PRESS STAFF WRITER • April 13, 2008
Wayne County's plan to buy more than 700 federally subsidized and foreclosed homes in Detroit and another 500 elsewhere in the county for $1 each has hit a snag.
Competition.
The cities where the homes -- mostly abandoned and in disrepair -- are say the county is trying to poach what belongs to the cities.
Many of the cities had applied or were planning to request the $1 homes when they learned Wayne County was doing the same thing. Many had plans to rehabilitate the homes, sell them to the public or employees or demolish those in the worst shape.
The cities took their cases to the county, U.S. Rep. John Dingell and the U.S. Department of Housing and Urban Development, saying they knew better what was best for their neighborhoods. Twenty western Wayne communities signed a resolution last month saying they wanted first dibs on the houses.
The homes -- which are among 11,000 foreclosed HUD homes in Michigan and Ohio -- are another sign of the nation's mortgage foreclosure crisis. The $1 program began in 2003 to help communities fight blight. City officials know that one deteriorating vacant home on a block can begin to bring property values down for entire neighborhoods.
"We know what's best for our community, and we're very interested in partnering with the county on counseling programs to help residents save their homes," said Riverview Mayor Tim Durand. "But at the end of the day, we want the houses."
Bulk sales on hold
Since the complaints, HUD has put a hold on the bulk sales of $1 homes in Michigan and Ohio, which has affected the Wayne County Land Bank's inventory. The bank obtains and resells vacant properties, as well as foreclosed and criminally seized homes. Many of the $1 homes would have been turned over to community groups like Blight Busters or churches to be resold to residents within six months.
Any revenues generated from the land bank would go into a foreclosure prevention program for county residents. The county said it was ready to deal with the large inventory of homes. It had contracts with landscaping companies, had purchased 50 lawn mowers and had 22 inmates serving alternative sentences available to keep up the properties.
"We have a very vested interest in putting these properties back into productive use," said Deputy County Executive Turkia Mullin. "We need to make sure we nip this problem in the bud."
Difference of who knows best
Cities across Wayne County agreed but still thought they could do the job better.
In Dearborn Heights, for example, two homes the county bid on were along the Ecorse Creek, which floods every spring. The city was putting together an application for the homes and several other HUD properties in the city when it caught wind of Wayne County's competing request.
"We think it's ... wise to purchase those parcels now while we fix the problems with the creek," said Dearborn Heights Mayor Daniel Paletko. "Some of the other homes, we hope to use to encourage our employees to move into the city."
Program under review
Last week, HUD sent a memo to Wayne County, saying it was suspending sales of more than 10 of the $1 homes to any one community until the entire program could be reviewed.
HUD spokesman Lemar Wooley wrote in an e-mail to the Free Press that "we need to determine that there is a responsible plan and the capacity to implement the plan so that houses don't continue to sit vacant."
After evaluating about a dozen homes in Lincoln Park, the city wants to buy about 10 of the foreclosed homes and has set aside about $30,000 in federal Community Development Block Grant money to fix them up.
"Those homes are more in our face, and we can take more prompt action when problems arise," said city manager Steve Duchane.
In Redford, the township has set aside up to $400,000 for redevelopment of about a dozen HUD homes and will try to lure the city's police and firefighters into some of the homes at a discounted sale price.
"We'll purchase every one we can for $1," said Supervisor R. Miles Handy. "The way we look at it, if we demolish the property, then we can sell the lot. If we fix the home up ... put $40,000 into making it a nice attractive home site, we get a resident in our community and get rid of a potential eyesore."
County officials, however, aren't giving up. They are working with HUD on a pilot program to prove they can turn vacant foreclosed homes into family domiciles.
"When you get pummeled with 30 foreclosed houses, there's not a single community that has the resources to manage those properties," Mullin said. "We're certainly willing to back off, but we hope that the elected officials in those communities have the common sense to see how well we can do with these properties."
Both county, cities want property
BY KATHLEEN GRAY • FREE PRESS STAFF WRITER • April 13, 2008
Wayne County's plan to buy more than 700 federally subsidized and foreclosed homes in Detroit and another 500 elsewhere in the county for $1 each has hit a snag.
Competition.
The cities where the homes -- mostly abandoned and in disrepair -- are say the county is trying to poach what belongs to the cities.
Many of the cities had applied or were planning to request the $1 homes when they learned Wayne County was doing the same thing. Many had plans to rehabilitate the homes, sell them to the public or employees or demolish those in the worst shape.
The cities took their cases to the county, U.S. Rep. John Dingell and the U.S. Department of Housing and Urban Development, saying they knew better what was best for their neighborhoods. Twenty western Wayne communities signed a resolution last month saying they wanted first dibs on the houses.
The homes -- which are among 11,000 foreclosed HUD homes in Michigan and Ohio -- are another sign of the nation's mortgage foreclosure crisis. The $1 program began in 2003 to help communities fight blight. City officials know that one deteriorating vacant home on a block can begin to bring property values down for entire neighborhoods.
"We know what's best for our community, and we're very interested in partnering with the county on counseling programs to help residents save their homes," said Riverview Mayor Tim Durand. "But at the end of the day, we want the houses."
Bulk sales on hold
Since the complaints, HUD has put a hold on the bulk sales of $1 homes in Michigan and Ohio, which has affected the Wayne County Land Bank's inventory. The bank obtains and resells vacant properties, as well as foreclosed and criminally seized homes. Many of the $1 homes would have been turned over to community groups like Blight Busters or churches to be resold to residents within six months.
Any revenues generated from the land bank would go into a foreclosure prevention program for county residents. The county said it was ready to deal with the large inventory of homes. It had contracts with landscaping companies, had purchased 50 lawn mowers and had 22 inmates serving alternative sentences available to keep up the properties.
"We have a very vested interest in putting these properties back into productive use," said Deputy County Executive Turkia Mullin. "We need to make sure we nip this problem in the bud."
Difference of who knows best
Cities across Wayne County agreed but still thought they could do the job better.
In Dearborn Heights, for example, two homes the county bid on were along the Ecorse Creek, which floods every spring. The city was putting together an application for the homes and several other HUD properties in the city when it caught wind of Wayne County's competing request.
"We think it's ... wise to purchase those parcels now while we fix the problems with the creek," said Dearborn Heights Mayor Daniel Paletko. "Some of the other homes, we hope to use to encourage our employees to move into the city."
Program under review
Last week, HUD sent a memo to Wayne County, saying it was suspending sales of more than 10 of the $1 homes to any one community until the entire program could be reviewed.
HUD spokesman Lemar Wooley wrote in an e-mail to the Free Press that "we need to determine that there is a responsible plan and the capacity to implement the plan so that houses don't continue to sit vacant."
After evaluating about a dozen homes in Lincoln Park, the city wants to buy about 10 of the foreclosed homes and has set aside about $30,000 in federal Community Development Block Grant money to fix them up.
"Those homes are more in our face, and we can take more prompt action when problems arise," said city manager Steve Duchane.
In Redford, the township has set aside up to $400,000 for redevelopment of about a dozen HUD homes and will try to lure the city's police and firefighters into some of the homes at a discounted sale price.
"We'll purchase every one we can for $1," said Supervisor R. Miles Handy. "The way we look at it, if we demolish the property, then we can sell the lot. If we fix the home up ... put $40,000 into making it a nice attractive home site, we get a resident in our community and get rid of a potential eyesore."
County officials, however, aren't giving up. They are working with HUD on a pilot program to prove they can turn vacant foreclosed homes into family domiciles.
"When you get pummeled with 30 foreclosed houses, there's not a single community that has the resources to manage those properties," Mullin said. "We're certainly willing to back off, but we hope that the elected officials in those communities have the common sense to see how well we can do with these properties."
Crisis yields 18.9-month supply of homes for sale
Crisis yields 18.9-month supply of homes for sale
Inventory hurts owners but great news for buyers
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • April 13, 2008
Metro Detroit had a staggering 18.9-month supply of homes for sale at the end of 2007, and some cities were swamped with four years or more worth of housing inventory that people are desperately trying to sell.
That's almost double the national average of 9.6 months of existing home inventory at the current sales pace, itself a sign of trouble in the U.S. housing market where a three- to six-month inventory is considered normal.
The vast oversupply of houses could depress prices further as Michigan struggles to remake its economy, said Caroline Sallee, a consultant for Anderson Economic Group in East Lansing, and others said the phenomenon is crimping retirement plans or the ability to move for jobs.
Sales prospects in many spots are grim. Huntington Woods had a 45.7-month home supply, and Oakland County had a 20.2-month inventory overall, according to listing data released last week by Real Estate One in Southfield.
Detroit had a 51.1-month inventory of homes listed.
Home sellers in some spots had better prospects, such as in Pleasant Ridge, with an 8.8-month supply on the market. But most places were well above the national average.
The 18.9-month combined inventory for Wayne, Oakland, Macomb, Washtenaw and Livingston counties marks an 11.8% rise from the end of 2006 and a 60% climb from 2005.
High unemployment and continued cutbacks for Detroit's automakers has hit Michigan's real estate market harder than most around the country. And while speculators drove prices sky-high in Florida, California and Nevada, metro Detroit did not ride the price bubble up as far.
Still, metro Detroit led the nation last year in the rate of foreclosures, pushing up inventory, and home prices have fallen 15%. Even with prices down, prospects for droves of home buyers are darkened by such factors as the state's net outmigration of 90,000 people for the 12 months ending in June 2007.
And the inability to sell a home is affecting lifestyles and the ability to seize opportunities.
Home becomes a burden
Many people can't move to take better jobs in other cities, can't downsize their housing or retire because their biggest asset -- their home -- can't be sold, said Dana Johnson, chief economist at Comerica Bank. Some who took buyouts from the auto companies are staying put because they don't want to take a beating on their home sales price, he said.
"I think it is creating less mobility for people who for career reasons or life changes may want to move. You are stuck to a greater degree than normal," Johnson said.
Don Grimes, a University of Michigan economist, said buyers are here but they are waiting for prices to hit rock-bottom before they buy. Family formation is still going on. Once they start buying, inventories will fall to normal levels, he predicted.
"From what I am able to tell, it may be getting down to the bottom in the Detroit area," Grimes said. "People need to see that prices have hit bottom so they won't be kicking themselves six months from now."
One of the biggest reasons for the oversupply is that sellers overpriced their homes, Grimes said.
That seems to be the issue in Huntington Woods, said Greg Barnas, an agent with Sine & Monaghan in Royal Oak.
"A lot of what is still out there in Huntington Woods is still overpriced. The houses that are priced well and in good condition are still showing well and selling," Barnas said.
Other agents in Huntington Woods say that sales have picked up this year.
On Friday, there were more children playing in yards and riding bicycles along the city's tree-lined streets than real estate signs. A few signs had "sold" on them while others advertised a reduced price.
Betsey Rubel isn't worried about selling her 2,086-square-foot home on LaSalle Boulevard. The four-bedroom, two-bath home has been listed since January for $299,900. The Rubels, who want to move to Bloomfield Township to be closer to their daughter's school, paid $220,000 in 2001.
"We're not in a time crunch," said Rubel, 33. "When our house is ready to sell, it will."
Rubel said she has seen houses linger on the market in the city over the past several months, but she said she believes some of them have been overpriced -- like one down the street that sat for about a year, listed at more than $800,000. The Rubel house has drawn interest, with about 10 showings.
Money matters
Charlie Lutz, a realty agent with Re/Max Acclaim in Roseville, said it's all about price. He has had a Macomb Township home listed for six months that's gotten two offers in the past three months.
But the home has been on the market for more than two years with different agents and had no offers until this year. Seller Jackie Odbert won't budge off the current price of $249,900. That's down from the original price of $329,000 for the four-bedroom, 2,600-square-foot home.
"After over 40 showings, Jackie is one of many sellers who are in shock when they understand the market controls the price, not the seller or the Realtor," Lutz said. "The buyer is the market and they don't negotiate on an overpriced property."
Odbert, 52, a nurse at St. John Macomb, built a new house in St. Clair County just before putting her home on the market in August 2005, just when the market started to slow. She's working overtime to take care of both homes.
"As we keep going down with the price, it's disappointing," Odbert said. "The people come in, and it seems they want everything for nothing. They want you to pay closing costs, they want a finished basement, a three-car garage. They don't seem to realize how much the owner put into it, and we won't get it back.
"I just might have to let it go to the next person who makes an offer of $220,000," she said. "Who knows if it's going to get better in Michigan?"
Buyer's paradise
Although sellers find anguish and frustration in the market, realty agents and builders say there won't be another buyer's market like this for a decade or more.
Herb Lawson, president of Windham Development in Bloomfield Hills and past president of the Building Industry Association of Southeastern Michigan, said pent-up demand in the area will be unleashed soon.
"At the end of 1983, they claimed there was a 12-year supply of homes. It was a matter of 36 months when they were all gone," Lawson said. "There hasn't been new development in the last two to three years. People buying today are going to say how smart they are for having bought a home or condominium."
He noted that in the new home market, the supplies are smaller. For example, when looking at single-family detached housing in the five counties, there is a four- to 10-month supply, according to Housing Consultants Inc. in Clarkston.
The Real Estate One report compiles closely guarded multiple listing services data usually available only to Realtors and is the first comprehensive look at metro Detroit's housing supply. Real Estate One started compiling the reports two years ago for its agents, but decided to issue them to the public late last year, said Dan Elsea, president of brokerage services.
The report, issued quarterly, pulls listing information from several sources including RealComp Inc., a multiple listing service in Farmington Hills.
The report predicts that as a recovery starts in early 2009, this year will be remembered as the "best buying point over the next 10 years or more."
Richard Komer, president of homebuilder Wineman & Komer Building Co. in Southfield, couldn't agree more.
"Something like this only happens once every 25 years or something. This is a real drop," Komer said. "I don't know if the buying public really understands that."
Inventory hurts owners but great news for buyers
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • April 13, 2008
Metro Detroit had a staggering 18.9-month supply of homes for sale at the end of 2007, and some cities were swamped with four years or more worth of housing inventory that people are desperately trying to sell.
That's almost double the national average of 9.6 months of existing home inventory at the current sales pace, itself a sign of trouble in the U.S. housing market where a three- to six-month inventory is considered normal.
The vast oversupply of houses could depress prices further as Michigan struggles to remake its economy, said Caroline Sallee, a consultant for Anderson Economic Group in East Lansing, and others said the phenomenon is crimping retirement plans or the ability to move for jobs.
Sales prospects in many spots are grim. Huntington Woods had a 45.7-month home supply, and Oakland County had a 20.2-month inventory overall, according to listing data released last week by Real Estate One in Southfield.
Detroit had a 51.1-month inventory of homes listed.
Home sellers in some spots had better prospects, such as in Pleasant Ridge, with an 8.8-month supply on the market. But most places were well above the national average.
The 18.9-month combined inventory for Wayne, Oakland, Macomb, Washtenaw and Livingston counties marks an 11.8% rise from the end of 2006 and a 60% climb from 2005.
High unemployment and continued cutbacks for Detroit's automakers has hit Michigan's real estate market harder than most around the country. And while speculators drove prices sky-high in Florida, California and Nevada, metro Detroit did not ride the price bubble up as far.
Still, metro Detroit led the nation last year in the rate of foreclosures, pushing up inventory, and home prices have fallen 15%. Even with prices down, prospects for droves of home buyers are darkened by such factors as the state's net outmigration of 90,000 people for the 12 months ending in June 2007.
And the inability to sell a home is affecting lifestyles and the ability to seize opportunities.
Home becomes a burden
Many people can't move to take better jobs in other cities, can't downsize their housing or retire because their biggest asset -- their home -- can't be sold, said Dana Johnson, chief economist at Comerica Bank. Some who took buyouts from the auto companies are staying put because they don't want to take a beating on their home sales price, he said.
"I think it is creating less mobility for people who for career reasons or life changes may want to move. You are stuck to a greater degree than normal," Johnson said.
Don Grimes, a University of Michigan economist, said buyers are here but they are waiting for prices to hit rock-bottom before they buy. Family formation is still going on. Once they start buying, inventories will fall to normal levels, he predicted.
"From what I am able to tell, it may be getting down to the bottom in the Detroit area," Grimes said. "People need to see that prices have hit bottom so they won't be kicking themselves six months from now."
One of the biggest reasons for the oversupply is that sellers overpriced their homes, Grimes said.
That seems to be the issue in Huntington Woods, said Greg Barnas, an agent with Sine & Monaghan in Royal Oak.
"A lot of what is still out there in Huntington Woods is still overpriced. The houses that are priced well and in good condition are still showing well and selling," Barnas said.
Other agents in Huntington Woods say that sales have picked up this year.
On Friday, there were more children playing in yards and riding bicycles along the city's tree-lined streets than real estate signs. A few signs had "sold" on them while others advertised a reduced price.
Betsey Rubel isn't worried about selling her 2,086-square-foot home on LaSalle Boulevard. The four-bedroom, two-bath home has been listed since January for $299,900. The Rubels, who want to move to Bloomfield Township to be closer to their daughter's school, paid $220,000 in 2001.
"We're not in a time crunch," said Rubel, 33. "When our house is ready to sell, it will."
Rubel said she has seen houses linger on the market in the city over the past several months, but she said she believes some of them have been overpriced -- like one down the street that sat for about a year, listed at more than $800,000. The Rubel house has drawn interest, with about 10 showings.
Money matters
Charlie Lutz, a realty agent with Re/Max Acclaim in Roseville, said it's all about price. He has had a Macomb Township home listed for six months that's gotten two offers in the past three months.
But the home has been on the market for more than two years with different agents and had no offers until this year. Seller Jackie Odbert won't budge off the current price of $249,900. That's down from the original price of $329,000 for the four-bedroom, 2,600-square-foot home.
"After over 40 showings, Jackie is one of many sellers who are in shock when they understand the market controls the price, not the seller or the Realtor," Lutz said. "The buyer is the market and they don't negotiate on an overpriced property."
Odbert, 52, a nurse at St. John Macomb, built a new house in St. Clair County just before putting her home on the market in August 2005, just when the market started to slow. She's working overtime to take care of both homes.
"As we keep going down with the price, it's disappointing," Odbert said. "The people come in, and it seems they want everything for nothing. They want you to pay closing costs, they want a finished basement, a three-car garage. They don't seem to realize how much the owner put into it, and we won't get it back.
"I just might have to let it go to the next person who makes an offer of $220,000," she said. "Who knows if it's going to get better in Michigan?"
Buyer's paradise
Although sellers find anguish and frustration in the market, realty agents and builders say there won't be another buyer's market like this for a decade or more.
Herb Lawson, president of Windham Development in Bloomfield Hills and past president of the Building Industry Association of Southeastern Michigan, said pent-up demand in the area will be unleashed soon.
"At the end of 1983, they claimed there was a 12-year supply of homes. It was a matter of 36 months when they were all gone," Lawson said. "There hasn't been new development in the last two to three years. People buying today are going to say how smart they are for having bought a home or condominium."
He noted that in the new home market, the supplies are smaller. For example, when looking at single-family detached housing in the five counties, there is a four- to 10-month supply, according to Housing Consultants Inc. in Clarkston.
The Real Estate One report compiles closely guarded multiple listing services data usually available only to Realtors and is the first comprehensive look at metro Detroit's housing supply. Real Estate One started compiling the reports two years ago for its agents, but decided to issue them to the public late last year, said Dan Elsea, president of brokerage services.
The report, issued quarterly, pulls listing information from several sources including RealComp Inc., a multiple listing service in Farmington Hills.
The report predicts that as a recovery starts in early 2009, this year will be remembered as the "best buying point over the next 10 years or more."
Richard Komer, president of homebuilder Wineman & Komer Building Co. in Southfield, couldn't agree more.
"Something like this only happens once every 25 years or something. This is a real drop," Komer said. "I don't know if the buying public really understands that."
Saturday, April 5, 2008
10 skills every homeowner should learn
Fix it, patch it, replace it
BY ALLEN NORWOOD • MCCLATCHY NEWSPAPERS • April 5, 2008
There are 10 skills every homeowner should master. No excuses.
You don't need to run out and learn them all immediately, of course. But you'll appreciate them -- and save yourself lots of money.
You can tackle most with simple hand tools that cost $10 or less. The only power tool is a variable speed drill.
Let's start at the front door.
1. Replace a door lock. Especially if you buy an existing house, with lots of old keys floating around, you might want to replace the exterior locks. On the inside of the door, remove the two long bolts holding the front and back of the lock together; remove the front and back of the lock. On edge of door, remove screws holding latch in place, and pull latch out.
To replace, just add new hardware in reverse order.
Door hardware needs tightening and lubricating over the years, so understanding how it works will pay off in more than extra security.
• Before buying new hardware, check the "backset," or the distance from the edge of the door to the center of the hole for the deadbolt or doorknob. Replacement hardware will need to match; some locksets are adjustable, and accommodate the two standard backsets. Also, the helpful guy at the home center can key all locks alike.
2. Change furnace and air conditioning filters. Be sure you know where all the filters are -- on air returns or at the air handler -- and how to change them.
• Make a note of filter sizes and keep the information handy. (You want to be sure you have the right size BEFORE you climb the tall stepladder.) Also, learn how to clear the pipe that carries condensation from the air handler during the cooling season. The pipes can get clogged with mold and algae -- and the water usually backs up and starts dripping from your ceiling when you have a house full of company in July. If your air handler is in the attic or a utility room, it should have two drains: one from the unit, and the other from the safety pan under the unit.
3. Learn the location of the main water cutoff. It's probably in a utility room or closet, but could be at a water tank or near the meter. You don't want to go looking for it after a pipe bursts.
• Familiarize yourself with other cutoffs, too; the dishwasher and icemaker, for instance. Learn how to turn off the gas in an emergency: Gas valves, indoors or at the meter, are open when parallel to the line and closed when perpendicular.
4. Find a stud in a wall. Locate studs anytime you're hanging a heavy object, or installing molding or cabinets. Most homeowners know the tap-tap-tap routine; you'll usually get a hollow sound between studs, a solid thunk on the stud. The centers of the studs are 16 inches apart -- so if you find one, you can usually locate the others pretty easily.
• Look for the heads of finishing nails near the top edge of the baseboard. Those nails will be in studs. Or, hold a flashlight against the wall, shining the light parallel to the wall. Turn the flashlight slowly to sweep the wall with light. You'll be able to spot the patches over drywall nail heads or screw heads that aren't visible otherwise.
5. For spaces between studs, use hollow-wall anchors. Use these to mount towel bars, drapery rods and the like on walls. The most important rule is to match the anchor to the weight of the item you're mounting. From weakest to strongest, anchors include plastic expansion anchors, threaded drywall anchors (Zip-It), winged plastic anchors, molly bolts or sleeve-type anchors, and toggle bolts.
When installing anchors, you can make small holes in drywall with an awl or sharp nail, but you should use a drill for larger holes.
• You'll be more accurate if you make small starter holes even for those anchors that screw in. And, if you're not going to mount something in the same spot, it's easier to patch over anchors such as mollys than it is to remove them. Here's how: Remove the bolt or screw; tap the anchor lightly with a hammer until it's below the face of the drywall; cover with spackling; sand.
6. Hang a ceiling fan. This is a popular upgrade and involves skills that you'll use to replace light fixtures and receptacles.
The first step, any time you're dealing with electricity: Turn off the power at the breaker box.
A ceiling fan must be anchored properly or it can fall. If you can move the electrical box with one finger, it won't support a fan. It's best to anchor the fan directly to the ceiling joist.
This can be a time-consuming job; give yourself a couple of hours.
Assemble the fan, minus blades. Then attach the fan's ceiling bracket. Hang fan in the bracket. Connect wires -- black to black and white to white -- according to the directions. Attach blades. Fans work best if blades are at least 10 inches from the ceiling, and fans should be no lower than 7 feet from the floor.
• Your first electrical project is a good time to make sure the breakers are labeled clearly and correctly. When hanging fans -- or light fixtures or dimmer switches -- make sure wires are securely fastened, and avoid jamming wires into crowded boxes. If you try to force wires, you could pull them apart and create a dangerous short.
7. Learn to drive drywall screws with a variable speed drill. You'll repair drywall nail pops that way, of course. Pull nail, drive screw into the stud or joist a few inches away from nail hole. The screw head should dimple the surface, with the screw head just below the face of the drywall. Cover screw head and nail hole with spackling, let dry and sand.
With screws and drywall clips, you can make larger wall repairs. U.S. Gypsum, the maker of Sheetrock drywall, offers a handy explainer at www.usg.com, search for repair clips, click on "Install Guide."
You use the same screw-driving skills to repair loose boards on your deck. Pull any loose nails and replace with decking screws. Be sure you use coated or galvanized screws in treated lumber.
• To drive screws with a drill, practice on a scrap of 2-by-4. Also, buy extra No. 2 Phillips screw bits. You'll tear them up, especially when working on decks.
8. Master a caulking gun. Some say squeeze tubes are easier for do-it-yourselfers to master. We think they're wrong: A gun's trigger gives you more control.
There are some tricks. Cut the tip of the tube at an angle, but with a smaller hole than you think you might need; you can always trim the tip again if the hole needs to be larger. Break the inner seal.
Quit squeezing before you get to the end of the area you're caulking. The caulk will continue to come out. When you reach the end, lift the gun from the surface and immediately remove the tension on the push rod.
• It's important to choose the right caulk for the job. Use mildew-resistant bath and kitchen caulk for tub or shower; use paintable acrylic latex for that gap between wall and baseboard. Read labels carefully. Also, when smoothing caulk with your finger, resist the temptation to overwork it. Smooth it with two passes -- because the third will make a mess.
9. Learn to seal stains. Here's another lesson from Homeowner 101: You can't paint over crayon, ball-point pen, grease splatters on the kitchen wall or water stains on the ceiling without the stains coming through.
There are lots of good sealers and primers these days, but one old standby is pigmented shellac. A familiar brand is B-I-N from Zinsser, and the company's Web site is a good place to learn about the wide array of specialty primers. Visit www.zinsser.com.
• Remember that you can tint primers to make them easier to cover with the finish paint. Ask your paint pro.
10. Replace the flapper ball in a toilet. Every homeowner deals with a toilet that leaks water from the tank to the bowl (and mysteriously flushes in the middle of the night). The problem is usually a bad flapper ball, the valve that opens when you press the handle to flush. Buy a replacement, read the directions on the back of the package, install it.
• Be sure to pay attention to proper chain length. A chain that's too short or too long can interfere with proper operation. Also, clean the opening at the bottom of the tank thoroughly before installing the new flapper ball. Grit and minerals build up and keep the ball from seating properly.
BY ALLEN NORWOOD • MCCLATCHY NEWSPAPERS • April 5, 2008
There are 10 skills every homeowner should master. No excuses.
You don't need to run out and learn them all immediately, of course. But you'll appreciate them -- and save yourself lots of money.
You can tackle most with simple hand tools that cost $10 or less. The only power tool is a variable speed drill.
Let's start at the front door.
1. Replace a door lock. Especially if you buy an existing house, with lots of old keys floating around, you might want to replace the exterior locks. On the inside of the door, remove the two long bolts holding the front and back of the lock together; remove the front and back of the lock. On edge of door, remove screws holding latch in place, and pull latch out.
To replace, just add new hardware in reverse order.
Door hardware needs tightening and lubricating over the years, so understanding how it works will pay off in more than extra security.
• Before buying new hardware, check the "backset," or the distance from the edge of the door to the center of the hole for the deadbolt or doorknob. Replacement hardware will need to match; some locksets are adjustable, and accommodate the two standard backsets. Also, the helpful guy at the home center can key all locks alike.
2. Change furnace and air conditioning filters. Be sure you know where all the filters are -- on air returns or at the air handler -- and how to change them.
• Make a note of filter sizes and keep the information handy. (You want to be sure you have the right size BEFORE you climb the tall stepladder.) Also, learn how to clear the pipe that carries condensation from the air handler during the cooling season. The pipes can get clogged with mold and algae -- and the water usually backs up and starts dripping from your ceiling when you have a house full of company in July. If your air handler is in the attic or a utility room, it should have two drains: one from the unit, and the other from the safety pan under the unit.
3. Learn the location of the main water cutoff. It's probably in a utility room or closet, but could be at a water tank or near the meter. You don't want to go looking for it after a pipe bursts.
• Familiarize yourself with other cutoffs, too; the dishwasher and icemaker, for instance. Learn how to turn off the gas in an emergency: Gas valves, indoors or at the meter, are open when parallel to the line and closed when perpendicular.
4. Find a stud in a wall. Locate studs anytime you're hanging a heavy object, or installing molding or cabinets. Most homeowners know the tap-tap-tap routine; you'll usually get a hollow sound between studs, a solid thunk on the stud. The centers of the studs are 16 inches apart -- so if you find one, you can usually locate the others pretty easily.
• Look for the heads of finishing nails near the top edge of the baseboard. Those nails will be in studs. Or, hold a flashlight against the wall, shining the light parallel to the wall. Turn the flashlight slowly to sweep the wall with light. You'll be able to spot the patches over drywall nail heads or screw heads that aren't visible otherwise.
5. For spaces between studs, use hollow-wall anchors. Use these to mount towel bars, drapery rods and the like on walls. The most important rule is to match the anchor to the weight of the item you're mounting. From weakest to strongest, anchors include plastic expansion anchors, threaded drywall anchors (Zip-It), winged plastic anchors, molly bolts or sleeve-type anchors, and toggle bolts.
When installing anchors, you can make small holes in drywall with an awl or sharp nail, but you should use a drill for larger holes.
• You'll be more accurate if you make small starter holes even for those anchors that screw in. And, if you're not going to mount something in the same spot, it's easier to patch over anchors such as mollys than it is to remove them. Here's how: Remove the bolt or screw; tap the anchor lightly with a hammer until it's below the face of the drywall; cover with spackling; sand.
6. Hang a ceiling fan. This is a popular upgrade and involves skills that you'll use to replace light fixtures and receptacles.
The first step, any time you're dealing with electricity: Turn off the power at the breaker box.
A ceiling fan must be anchored properly or it can fall. If you can move the electrical box with one finger, it won't support a fan. It's best to anchor the fan directly to the ceiling joist.
This can be a time-consuming job; give yourself a couple of hours.
Assemble the fan, minus blades. Then attach the fan's ceiling bracket. Hang fan in the bracket. Connect wires -- black to black and white to white -- according to the directions. Attach blades. Fans work best if blades are at least 10 inches from the ceiling, and fans should be no lower than 7 feet from the floor.
• Your first electrical project is a good time to make sure the breakers are labeled clearly and correctly. When hanging fans -- or light fixtures or dimmer switches -- make sure wires are securely fastened, and avoid jamming wires into crowded boxes. If you try to force wires, you could pull them apart and create a dangerous short.
7. Learn to drive drywall screws with a variable speed drill. You'll repair drywall nail pops that way, of course. Pull nail, drive screw into the stud or joist a few inches away from nail hole. The screw head should dimple the surface, with the screw head just below the face of the drywall. Cover screw head and nail hole with spackling, let dry and sand.
With screws and drywall clips, you can make larger wall repairs. U.S. Gypsum, the maker of Sheetrock drywall, offers a handy explainer at www.usg.com, search for repair clips, click on "Install Guide."
You use the same screw-driving skills to repair loose boards on your deck. Pull any loose nails and replace with decking screws. Be sure you use coated or galvanized screws in treated lumber.
• To drive screws with a drill, practice on a scrap of 2-by-4. Also, buy extra No. 2 Phillips screw bits. You'll tear them up, especially when working on decks.
8. Master a caulking gun. Some say squeeze tubes are easier for do-it-yourselfers to master. We think they're wrong: A gun's trigger gives you more control.
There are some tricks. Cut the tip of the tube at an angle, but with a smaller hole than you think you might need; you can always trim the tip again if the hole needs to be larger. Break the inner seal.
Quit squeezing before you get to the end of the area you're caulking. The caulk will continue to come out. When you reach the end, lift the gun from the surface and immediately remove the tension on the push rod.
• It's important to choose the right caulk for the job. Use mildew-resistant bath and kitchen caulk for tub or shower; use paintable acrylic latex for that gap between wall and baseboard. Read labels carefully. Also, when smoothing caulk with your finger, resist the temptation to overwork it. Smooth it with two passes -- because the third will make a mess.
9. Learn to seal stains. Here's another lesson from Homeowner 101: You can't paint over crayon, ball-point pen, grease splatters on the kitchen wall or water stains on the ceiling without the stains coming through.
There are lots of good sealers and primers these days, but one old standby is pigmented shellac. A familiar brand is B-I-N from Zinsser, and the company's Web site is a good place to learn about the wide array of specialty primers. Visit www.zinsser.com.
• Remember that you can tint primers to make them easier to cover with the finish paint. Ask your paint pro.
10. Replace the flapper ball in a toilet. Every homeowner deals with a toilet that leaks water from the tank to the bowl (and mysteriously flushes in the middle of the night). The problem is usually a bad flapper ball, the valve that opens when you press the handle to flush. Buy a replacement, read the directions on the back of the package, install it.
• Be sure to pay attention to proper chain length. A chain that's too short or too long can interfere with proper operation. Also, clean the opening at the bottom of the tank thoroughly before installing the new flapper ball. Grit and minerals build up and keep the ball from seating properly.
Monday, March 24, 2008
State swamped by homeowner appeals of taxes, assessments
State swamped by homeowner appeals of taxes, assessments
Catherine Jun / The Detroit News
LIVONIA -- Seeing empty houses and "For Sale" signs around his neighborhood, Jaroslaw Siemieniak swears the assessment on his home -- and his property taxes -- were too high last year.
Last spring, he convinced a three-member tax board at Livonia City Hall to lower his assessment, but not enough to reduce his taxes. So the 48-year-old engineer decided to appeal to the next higher power: the Michigan Tax Tribunal.
That was eight months ago. Siemieniak is still waiting.
"I haven't heard anything yet," he said Friday.
Siemieniak is not alone. The Michigan Tax Tribunal is still chipping away at an overwhelming backlog of appeals from last year, and now it's bracing for another flood of appeals this summer from this spring's round of disgruntled homeowners who failed to get their property assessments changed at their local boards of review. With many cities reporting record numbers of assessment challenges, the tribunal has tried to reduce the overflow. It has hired extra workers and encourages homeowners to appeal by phone, but the backlog continues to grow. An expected record number of appeals means property owners who appeal this year will likely not get a hearing until fall 2009.
"We'd like it to be shorter, but with the volume and everything it's just not possible," said Judge Patricia Halm, chairwoman of the tribunal.
In this slumping housing market, homeowners have been turning out in droves to formally protest their assessments, many baffled about why their assessments are not falling as fast as home prices.
And many grumblers are perplexed by taxes that go up as assessments come down, a paradoxical effect of a 1994 state law, Proposal A.
"Either they don't understand that, but even when they do understand it, they don't like it and want to talk to somebody about it," said Philip Mastin III, assessor for the city of Warren, which is fielding an 80 percent increase in property tax challenges this year over last.
Last year, Lansing received nearly 10,000 appeals, almost double the number in previous years, and that doesn't include appeals on commercial or industrial properties. That's the most since 1994.
With about 6,000 cases pending, what was once a six- to nine-month wait for a hearing has now lengthened to well over a year. Then there's another two- to three-month wait for a decision.
"We pretty much had our heads above the water until last year," Halm said.
In an attempt to manage this year's expected deluge, the state is requesting additional judges to hear cases and will likely hire extra summer staff to process requests and mail notices.
State officials warn that property owners awaiting a scheduled hearing or decision should still pay their taxes according to their bills, or face late fees, accrued interest payments and, if nonpayment continues, foreclosure.
Once the tribunal renders a decision that revises the taxes, the property owner gets a refund with interest.
But that is little consolation for Willard Lindley.
An attorney from Livonia, Lindley is still waiting for a hearing date on his two appeals -- from 2006 and 2007 -- on what he says is a bloated assessment on his two-story home.
"It is frustrating because I expect that I'm going to get a substantial refund and this is like a free loan to the state or to the city," he said. "I would just like my money back."
Proposal A was designed to protect homeowners from dramatic property tax hikes in robust housing markets by pegging tax increases to a more modest rate of inflation. This year, that is 2.3 percent.
But depending on when the home was purchased, in a declining market like this one, even dropping home values can call for a tax increase.
"It seems counterintuitive," said Paul Turner, 43, who believes the assessment on his home in Beverly Hills should have plunged more than it did, leading to a tax break.
"There's a huge chasm between reality and what they're willing to assess my property."
He made his case before the local board at the Southfield Township office on Thursday and vowed that if his assessment wasn't lowered, he would appeal to the state this year.
"It's getting to the point that I'll have to make the next step."
Catherine Jun / The Detroit News
LIVONIA -- Seeing empty houses and "For Sale" signs around his neighborhood, Jaroslaw Siemieniak swears the assessment on his home -- and his property taxes -- were too high last year.
Last spring, he convinced a three-member tax board at Livonia City Hall to lower his assessment, but not enough to reduce his taxes. So the 48-year-old engineer decided to appeal to the next higher power: the Michigan Tax Tribunal.
That was eight months ago. Siemieniak is still waiting.
"I haven't heard anything yet," he said Friday.
Siemieniak is not alone. The Michigan Tax Tribunal is still chipping away at an overwhelming backlog of appeals from last year, and now it's bracing for another flood of appeals this summer from this spring's round of disgruntled homeowners who failed to get their property assessments changed at their local boards of review. With many cities reporting record numbers of assessment challenges, the tribunal has tried to reduce the overflow. It has hired extra workers and encourages homeowners to appeal by phone, but the backlog continues to grow. An expected record number of appeals means property owners who appeal this year will likely not get a hearing until fall 2009.
"We'd like it to be shorter, but with the volume and everything it's just not possible," said Judge Patricia Halm, chairwoman of the tribunal.
In this slumping housing market, homeowners have been turning out in droves to formally protest their assessments, many baffled about why their assessments are not falling as fast as home prices.
And many grumblers are perplexed by taxes that go up as assessments come down, a paradoxical effect of a 1994 state law, Proposal A.
"Either they don't understand that, but even when they do understand it, they don't like it and want to talk to somebody about it," said Philip Mastin III, assessor for the city of Warren, which is fielding an 80 percent increase in property tax challenges this year over last.
Last year, Lansing received nearly 10,000 appeals, almost double the number in previous years, and that doesn't include appeals on commercial or industrial properties. That's the most since 1994.
With about 6,000 cases pending, what was once a six- to nine-month wait for a hearing has now lengthened to well over a year. Then there's another two- to three-month wait for a decision.
"We pretty much had our heads above the water until last year," Halm said.
In an attempt to manage this year's expected deluge, the state is requesting additional judges to hear cases and will likely hire extra summer staff to process requests and mail notices.
State officials warn that property owners awaiting a scheduled hearing or decision should still pay their taxes according to their bills, or face late fees, accrued interest payments and, if nonpayment continues, foreclosure.
Once the tribunal renders a decision that revises the taxes, the property owner gets a refund with interest.
But that is little consolation for Willard Lindley.
An attorney from Livonia, Lindley is still waiting for a hearing date on his two appeals -- from 2006 and 2007 -- on what he says is a bloated assessment on his two-story home.
"It is frustrating because I expect that I'm going to get a substantial refund and this is like a free loan to the state or to the city," he said. "I would just like my money back."
Proposal A was designed to protect homeowners from dramatic property tax hikes in robust housing markets by pegging tax increases to a more modest rate of inflation. This year, that is 2.3 percent.
But depending on when the home was purchased, in a declining market like this one, even dropping home values can call for a tax increase.
"It seems counterintuitive," said Paul Turner, 43, who believes the assessment on his home in Beverly Hills should have plunged more than it did, leading to a tax break.
"There's a huge chasm between reality and what they're willing to assess my property."
He made his case before the local board at the Southfield Township office on Thursday and vowed that if his assessment wasn't lowered, he would appeal to the state this year.
"It's getting to the point that I'll have to make the next step."
Housing woes cut into small builders
Housing woes cut into small builders
Companies struggle in sluggish home market as government scrambles to contain the damage.
Michael Corkery / Wall Street Journal
TWINSBURG, Ohio -- In the first wave of the housing crisis, homeowners across the U.S. lost their properties to foreclosure. Now, many of the nation's small and midsize home builders are on the ropes.
Bill Whitlatch, longtime owner of one of the leading home builders here in northeast Ohio, is among the casualties. Three years ago, he borrowed from regional banks to start six developments in the Cleveland area. Soon the region's home market turned cold. Buyers vanished. Whitlatch drained his personal savings of $2 million to keep his company going.
It wasn't enough. In September, the company filed for bankruptcy protection. Now owing about $1 million to dozens of subcontractors, and $8 million in debt to his banks, Whitlatch is selling the family home he designed.
"I couldn't come up with any more money, and I couldn't generate any more sales," says Mr. Whitlatch, 68, who says he had planned on selling his company and retiring.
Though he and other local builders didn't know it at the time, Cleveland's housing slump was one of the first manifestations of a national slowdown. Now, plummeting home sales across the U.S. have left many builders with unsold inventory and land. Some are falling behind on interest payments, beginning to face foreclosures on developments and, like Whitlatch, sometimes reaching into their own pocket to keep operations going.
Many smaller builders financed their developments with recourse debt, which means that if they default, banks could seize homes, cars and other personal assets.
The U.S. government is now scrambling to contain the damage from the housing market's unraveling. Last week, federal regulators cleared the way for mortgage finance giants Fannie Mae and Freddie Mac to inject as much as $200 billion into the mortgage market, a credit-boosting move that could help builders' sales.
The relief may come too late for those like Whitlatch. "There are a lot of companies on the brink" of bankruptcy, says Ricardo Chance, a managing director at KPMG Corporate Finance LLC, who is helping troubled builders in the Midwest, Northeast and Arizona restructure their businesses
Companies struggle in sluggish home market as government scrambles to contain the damage.
Michael Corkery / Wall Street Journal
TWINSBURG, Ohio -- In the first wave of the housing crisis, homeowners across the U.S. lost their properties to foreclosure. Now, many of the nation's small and midsize home builders are on the ropes.
Bill Whitlatch, longtime owner of one of the leading home builders here in northeast Ohio, is among the casualties. Three years ago, he borrowed from regional banks to start six developments in the Cleveland area. Soon the region's home market turned cold. Buyers vanished. Whitlatch drained his personal savings of $2 million to keep his company going.
It wasn't enough. In September, the company filed for bankruptcy protection. Now owing about $1 million to dozens of subcontractors, and $8 million in debt to his banks, Whitlatch is selling the family home he designed.
"I couldn't come up with any more money, and I couldn't generate any more sales," says Mr. Whitlatch, 68, who says he had planned on selling his company and retiring.
Though he and other local builders didn't know it at the time, Cleveland's housing slump was one of the first manifestations of a national slowdown. Now, plummeting home sales across the U.S. have left many builders with unsold inventory and land. Some are falling behind on interest payments, beginning to face foreclosures on developments and, like Whitlatch, sometimes reaching into their own pocket to keep operations going.
Many smaller builders financed their developments with recourse debt, which means that if they default, banks could seize homes, cars and other personal assets.
The U.S. government is now scrambling to contain the damage from the housing market's unraveling. Last week, federal regulators cleared the way for mortgage finance giants Fannie Mae and Freddie Mac to inject as much as $200 billion into the mortgage market, a credit-boosting move that could help builders' sales.
The relief may come too late for those like Whitlatch. "There are a lot of companies on the brink" of bankruptcy, says Ricardo Chance, a managing director at KPMG Corporate Finance LLC, who is helping troubled builders in the Midwest, Northeast and Arizona restructure their businesses
Up north dream homes a nightmare to unload
Up north dream homes a nightmare to unload
As economy slumps, second homes lose value as they sit unsold for months
Joel J. Smith / Special to the Detroit News
When Paul Bucci hung the "For Sale" sign on his Higgins Lake vacation home, he never dreamed he'd still be looking for a buyer 16 months later.
But in all that time Bucci, who built the house six years ago, has received only a single offer of $99,000.
That's $30,000 less than he had in mind for the three-bedroom chalet near a golf course.
"This isn't a shack. This is a beautiful year-round home," said the frustrated Bucci, a Chrysler worker from Grosse Pointe Farms. "I'm keeping the 'For Sale' sign up. I'll just sit on it if I have to. But I'm not giving it away."
Bucci, like thousands of other property owners, is learning the hard way that the fallout from a troubled economy has rippled out to the lakes, rivers and swimming pools of Michigan's venerable northern vacation home market.
Many homeowners are stuck paying the mortgage on an up north cottage they can't unload because other families, who might once have ventured into the vacation-home market, are cutting back in light of job-security fears, stricter lending standards, the high cost of gasoline burned on weekend drives north or other economic concerns.
Unfortunately for sellers, this "buyers" market has come when many second-home owners are facing layoffs, lost overtime, cuts in pay or simply want to move out of Michigan and seek work elsewhere.
They are desperate for the money they have tied up in their vacation property but can't get their hands on it -- at least not very quickly.
"There are a lot more homes for sale and they are on the market for a longer period of time," said Rick Stein, co-owner of RE/MAX Bayshore Properties in Traverse City. "In some cases the market time has doubled or tripled in just a year or two.
"There is a price that every property will sell for. It's just a matter of if you're willing to accept that price and how long you'll wait to get it."
For many, it'll be a long wait.
For example, there are 3,568 properties listed for sale with real estate agents in the Traverse City area.
Not all are cottages, of course, but competition for buyers will jump dramatically in four to six weeks as the summer selling season approaches.
"Part of the problem we're seeing is there is no sense of urgency on the part of the buyers," said Stein, who has been a real estate agent for 30 years.
"Buyers are looking, looking and looking. Everybody is waiting for the bottom of the market whenever that comes. They all want a deal."
Selling first home instead Joyce Adams-Pranion of Grosse Pointe Park has become so frustrated with trying to sell her two-bedroom log cabin on Saddleback Lake in Oscoda County that she has torn down the real estate sign and listed her downstate residence for sale instead.
She said that if she and her husband, Doug, who is disabled, can sell their Metro Detroit home, they will move up north, where the cost of living is cheaper.
"I've had that property listed for three years," Adams-Pranion said. "People wanted to give me half of what I paid. We've cut the price from $129,000 to $104,000. But buyers are so ridiculous they want us to give it away for free."
Jeffrey Mansell built a house near Sugar Loaf ski resort in the mitten's northwest corner. He built it to sell it for profit, but his dream never materialized. For two years, as the house sits empty, Mansell has been paying $1,100 a month on that $175,000 loan, and better than $250 a month more in property taxes and maintenance costs.
"I haven't got a single offer on the property," said Mansell, a highway light engineer from Salem Township. "Right now, I'm just stuck with it. I hope with mortgage rates dropping, I'll be able to sell it. I never dreamed it would take this long."
Shoppers are savvier
Northern Michigan real estate agents say they are selling about the same number of homes as in the past, but for lower prices and after a lot more time and effort.
Daniella M. Bell is a member of the $4 million club for 2007 as an associate broker with Coldwell Banker Schmidt Realtors in Cadillac.
She said the high inventory has made it a buyers' market and buyers today are more savvy and educated than before.
"Buyers won't buy property unless they think they are getting a good deal," Bell said. "The sellers are beginning to see that they have to be more realistic in their pricing if they are going to sell their property. If a home has been on the market for some time, generally it's because it's priced too high."
She said northern Michigan long has been southeast Michigan's prime target area for vacation homes, second homes and retirement living. But Bell said that with financing tight, people who are interested in moving north to live or retire are dependent on selling their Metro Detroit property first.
"That just isn't easy to do these days," she said.
At Michaywe, a 900-unit development with a golf course in Gaylord, 65 properties are for sale. Real estate agents expect that number to climb to about 100 as the summer approaches.
"I know people who have two homes for sale -- one here and one downstate," said Fred Smith, the Coldwell Banker agent at Michaywe. "Whichever one sells first, they will move into the other one. It's tough selling a home today.
"There is nothing written in stone that thou shall make money on real estate. People have to bite the bullet sometimes and take the loss."
As economy slumps, second homes lose value as they sit unsold for months
Joel J. Smith / Special to the Detroit News
When Paul Bucci hung the "For Sale" sign on his Higgins Lake vacation home, he never dreamed he'd still be looking for a buyer 16 months later.
But in all that time Bucci, who built the house six years ago, has received only a single offer of $99,000.
That's $30,000 less than he had in mind for the three-bedroom chalet near a golf course.
"This isn't a shack. This is a beautiful year-round home," said the frustrated Bucci, a Chrysler worker from Grosse Pointe Farms. "I'm keeping the 'For Sale' sign up. I'll just sit on it if I have to. But I'm not giving it away."
Bucci, like thousands of other property owners, is learning the hard way that the fallout from a troubled economy has rippled out to the lakes, rivers and swimming pools of Michigan's venerable northern vacation home market.
Many homeowners are stuck paying the mortgage on an up north cottage they can't unload because other families, who might once have ventured into the vacation-home market, are cutting back in light of job-security fears, stricter lending standards, the high cost of gasoline burned on weekend drives north or other economic concerns.
Unfortunately for sellers, this "buyers" market has come when many second-home owners are facing layoffs, lost overtime, cuts in pay or simply want to move out of Michigan and seek work elsewhere.
They are desperate for the money they have tied up in their vacation property but can't get their hands on it -- at least not very quickly.
"There are a lot more homes for sale and they are on the market for a longer period of time," said Rick Stein, co-owner of RE/MAX Bayshore Properties in Traverse City. "In some cases the market time has doubled or tripled in just a year or two.
"There is a price that every property will sell for. It's just a matter of if you're willing to accept that price and how long you'll wait to get it."
For many, it'll be a long wait.
For example, there are 3,568 properties listed for sale with real estate agents in the Traverse City area.
Not all are cottages, of course, but competition for buyers will jump dramatically in four to six weeks as the summer selling season approaches.
"Part of the problem we're seeing is there is no sense of urgency on the part of the buyers," said Stein, who has been a real estate agent for 30 years.
"Buyers are looking, looking and looking. Everybody is waiting for the bottom of the market whenever that comes. They all want a deal."
Selling first home instead Joyce Adams-Pranion of Grosse Pointe Park has become so frustrated with trying to sell her two-bedroom log cabin on Saddleback Lake in Oscoda County that she has torn down the real estate sign and listed her downstate residence for sale instead.
She said that if she and her husband, Doug, who is disabled, can sell their Metro Detroit home, they will move up north, where the cost of living is cheaper.
"I've had that property listed for three years," Adams-Pranion said. "People wanted to give me half of what I paid. We've cut the price from $129,000 to $104,000. But buyers are so ridiculous they want us to give it away for free."
Jeffrey Mansell built a house near Sugar Loaf ski resort in the mitten's northwest corner. He built it to sell it for profit, but his dream never materialized. For two years, as the house sits empty, Mansell has been paying $1,100 a month on that $175,000 loan, and better than $250 a month more in property taxes and maintenance costs.
"I haven't got a single offer on the property," said Mansell, a highway light engineer from Salem Township. "Right now, I'm just stuck with it. I hope with mortgage rates dropping, I'll be able to sell it. I never dreamed it would take this long."
Shoppers are savvier
Northern Michigan real estate agents say they are selling about the same number of homes as in the past, but for lower prices and after a lot more time and effort.
Daniella M. Bell is a member of the $4 million club for 2007 as an associate broker with Coldwell Banker Schmidt Realtors in Cadillac.
She said the high inventory has made it a buyers' market and buyers today are more savvy and educated than before.
"Buyers won't buy property unless they think they are getting a good deal," Bell said. "The sellers are beginning to see that they have to be more realistic in their pricing if they are going to sell their property. If a home has been on the market for some time, generally it's because it's priced too high."
She said northern Michigan long has been southeast Michigan's prime target area for vacation homes, second homes and retirement living. But Bell said that with financing tight, people who are interested in moving north to live or retire are dependent on selling their Metro Detroit property first.
"That just isn't easy to do these days," she said.
At Michaywe, a 900-unit development with a golf course in Gaylord, 65 properties are for sale. Real estate agents expect that number to climb to about 100 as the summer approaches.
"I know people who have two homes for sale -- one here and one downstate," said Fred Smith, the Coldwell Banker agent at Michaywe. "Whichever one sells first, they will move into the other one. It's tough selling a home today.
"There is nothing written in stone that thou shall make money on real estate. People have to bite the bullet sometimes and take the loss."
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