JonLowder.com

Glass Half Empty or Half Full?

I love positive thinking, especially the variety that goes something like this: "Yes, you lost your foot in that freak bicycle accident but on the positive side you still have your leg!"  Thus you'll understand why I really like this story from the Winston-Salem Journal titled Existing-Home Sales Up for Fourth Month and this excerpt in particular:

The Winston-Salem Regional Association of Realtors said yesterday that 324 homes were sold last month, up 3.8 percent from the 312 sold in March.

"While it is not uncommon for sales to increase month over month for the first half of the year, it is encouraging in this climate that we are returning to more normal home-buying patterns in our community," said Phillip Rector with Mundy Realty and the president of the association.

Still, April home sales were down 34.8 percent from April 2008, when 497 homes were sold. The average sales price was $157,000 last month, down 11.3 percent from $177,000 for the same period a year ago

I think a better gauge of how good this news is (or isn't) would be to compare the growth from March-April in 2008 with March-April of this year. While this story tells us that home sales were up 3.8% from March to April of 2009 we don't know what the increase from March to April of 2008 was, which means we don't know if we have better or worse growth than last year.  If housing sales actually declined this time last year then it makes the fact that April sales this year were down 35% from last year not so bad, because last year sales were sliding from month-to-month and this year they're on the rise.  But if March-April sales last year were actually an increase of 7% then that means that not only are the year-to-year comparisons bad, but the seasonal growth in sales this year is also worse than last year, which makes the news really bad.

Long story short: I really hope the news is good, but the data given in this story doesn't really tell us if it is or not.

Glad We're Not Selling

Let's just say I continue to be glad that we're not trying to sell our house, nor do we plan to in the next few years. Triad home sales down 25% in April.

More Pie-Eyed Optimism

A couple of days ago I wrote about my hope that due to a decrease in foreclosure rates here in North Carolina we are actually a leading indicator that the nation's economy has hit bottom.  My friend Dan called me a pie-eyed optimist as a result.  I did temper my post with the news that home sales in Greensboro were down 38% in February from same month sales the year before, so I wasn't real shocked when I read today that Winston-Salem's home sales in February were down 30% from the year before.  Average home prices were also down, but given the number of foreclosures on the market that's not exactly a shock either.

So, am I still standing with my pie-eyed optimism?  Why yes I am.  My hope is that:

• Foreclosures have peaked 
• Our glutted housing inventory will start to clear 
• House prices will stabilize (normalize)   
• By some miracle the government's plan for the banks works (longest shot of all) and even if it doesn't that the "free markets" actually work the way they're supposed to and that we get through the painful period sooner rather than later.  
• By some miracle the financial industry learns its lesson and starts acting like, well, like what we used to think bankers acted like. 
• Americans continue with their newly-found frugality, but at the same time begin to emerge from their monastic existence of the last six months and begin to buy things within reason (and their budgets).
• American companies begin hiring people once their businesses have stabilized and that the companies subsequently treat their employees well and perhaps think about spending a little less on executive "talent" and a little more on employee and customer satisfaction.
• By some miracle I can retire before the age of 97 and live in a society where my grandchildren at least have the same standard of living that their great-grandparents and grandparents enjoyed.  Asking for them to have a better standard might be a bit much at this point.

Foreclosures from the Feed Reader

One of the Google Alerts I have set up is "forsyth county nc" and it regularly sends some interesting items to my Google Reader.  For instance I get lots of links from a site called bankforeclosuressale.com that include the addresses of houses listed in their database as being in foreclosure. Here's this morning's sampling:

3529 Meadow Glen Drive, Clemmons

2631 Reid Street, Winston-Salem

3741 Coral Garden Lane, Winston-Salem

6680 Riverton Road, Walkertown 

You'll notice when you visit the different pages that the addresses don't show up on the pages unless you register for the site.  I don't want to register for the site so luckily for me the addresses show up in the feed so I don't have to.  The glum part of this is that these are houses that people have lost, but on the brighter side I'm seeing fewer of these in my reader these days than I was a while back.  Hopefully that's a trend that will continue.

One in Nine Homes Empty. Eternal Optimists. The Bottom Near?

According to this story in USA Today one in nine American homes is vacant.  10.1% of rental units are vacant and 2.9% of homeowner units are sitting empty, and the total number is over 14 million units nation wide.  Housing units worth over $500,000 are just as likely to be empty as those under $100,000.  9% of units built after 2000 are empty compared to 2% of older homes.  In other words the units sitting empty aren't just squats in crumbling industrial cities, and in fact they are more likely to be developments that promised a piece of the American dream in the newly landscaped suburbs and exurbs.

But there are always the optimists.  Real estate licensing exams in New York still have plenty of takers. I like optimists because they're the engines that keep the country going.  I figure if these folks can make a go of it now then they deserve every success that comes their way.

Optimists also look at the glass as half full.  Just look at the recent foreclosure news here in the Triad.  One article in the Greensboro News & Record focuses on the fact that foreclosures in the Greensboro/High Point markets rose 28% from 2007 to 2008.  Yet in the Business Journal we find this article that tells us that foreclosures in the Triad are down 62% from January 2008 to January 2009, and that follows on the heels of a 23% drop from December 2007 to December 2008.  In other words we could finally be finding the bottom of the housing decline.  Guess which article the optimists will focus on?

As for commercial real estate. Ugh, let's just stop here and have a nice Valentines Day.

And Now for Some Good News, Kind Of

After that depressing jobs post, here's a little good news: nationwide sales of previously owned homes rose from November 08 to December 08.  Of course the story does say that foreclosure rates continue to rise and home prices continue to fall, so even the good news is tempered.

The City's Eyesore is a Man's Treasure

The city leader's of Winston-Salem would like to have the ability to use eminent domain to take at "fair market value" properties that they consider eyesores and then either raze it or rehab it as affordable housing.  I have real problems with eminent domain being used in this way because there have been cases in some cities where people have lost homes that they were living in because the city took them using eminent domain because they wanted the land for an office building or some other use.  To me this is plain un-American.

Another problem is that city governments are made up of people, civil servants, who are as apt to make mistakes as any other group of people.  When they have the power to tear property down, well, at some point they might tear down the wrong property as highlighted in this story from Detroit.  

Sure there are eyesores and negligent owners out there, but they should be dealt with using the already existing channels that the city government has at its disposal, like fines or condemnation.  I don't think we should punish owners who keep their properties in a habitable state, but that we or our government finds not so attractive state.  Remember, one man's trash is another man's treasure.

North Carolina Gets $52.3 Million from HUD. Good News for Winston-Salem Officials' Eminent Domain Dreams?

Today I received a press release from Senator Burr's office announcing that North Carolina had received $52,303,004 from the federal Department of Housing and Urban Development's Neighborhood Stabilization Program.  According to the release "North Carolina may use this grant to assist individuals in purchasing foreclosed homes, acquiring and rehabilitating abandoned homes, establishing land banks for foreclosed homes, demolition of blighted properties, or redevelopment of vacant or demolished structures.  All NSP funds are required to benefit individuals or families at or below 120 percent of area median income (AMI) and at least 25 percent must be targeted at those living below 50 percent of AMI.  Funds awarded under this grant must be used within 18 months." 

You may recall that Winston-Salem officials recently met with our local delegates to the statehouse because they want to be able to use eminent domain to buy blighted properties and refurbish them to provide affordable housing, and they are asking our delegates to push for laws that will allow the city to do just that.  Now that the state has this grant money in hand I'm wondering if that push for a new law will gain even more traction? 

Disappearing Realtors

Back when the real estate bubble was in full swing I had some pretty strong feelings about the real estate business, in particular the idea that realtors were getting paid a 3% commission when they had to do next to nothing because the houses were literally selling themselves.  Of course I ticked off some friends (and strangers) in the real estate business, but even if we disagreed about the merits of the payment structure we did agree that when times got tough a lot of the realtors would disappear because it's tough to make a living when you're getting paid 3% of nothing.

I thought of this when I was speaking with a friend who's a realtor and she was telling me how tough times have been.  She mentioned that this is the time of year for renewing with the realtor association and that the rates had been raised, so she thinks that a LOT of realtors are going to disappear in the next month or so.  I fear she's right.

Predictable News: Group Moving Homeless People Into Empty Foreclosed Houses

It was only a matter of time before something like this happened:

But in nearly every other respect, he is unlike any real estate agent you've ever met. He is unshaven, drives a beat-up car and wears grungy cut-off sweat pants. He also breaks into the homes he shows. And his clients don't have a dime for a down payment.

Rameau is an activist who has been executing a bailout plan of his own around Miami's empty streets: He is helping homeless people illegally move into foreclosed homes.

“We're matching homeless people with peopleless homes,” he said with a grin.

Rameau and a group of like-minded advocates formed Take Back the Land, which also helps the new “tenants” with secondhand furniture, cleaning supplies and yard upkeep. So far, he has moved six families into foreclosed homes and has nine on a waiting list.

Later in the article Rameau says he's not afraid of being arrested and that he's doing the homeowners a service by helping prevent vandalism and destruction of property.  I guess that's why he has to break in.