Posts Tagged ‘foreclosed properties’

Yield on Investment in Single-family Homes Unknown

October 14th, 2013 Comments off

Single-family home real estate investment trusts (REITs) are a new player in the real estate market, with the outcome yet to be realized. One of them, Silver Bay Realty Trust says there are 41 million rental units in the U. S., equal to 30 percent of the housing market. Roughly 25 million are apartment units, nearly 14 million are single-family home rentals, and another two million are manufactured homes. The single-family homes, often bought out of foreclosure, generally need repairs, which will forestall return on the investment, especially when combined with property taxes. If renovations cost around $10,000 and the unit rents for $1,150 a month, the repairs and taxes will eat up the first years’ rent, according to At the low end, it is estimated nine percent of revenues will go towards costs, and that number will likely be higher in some cases. Comparatively, manufactured home community owner Sun Communities, Inc. (SUI) estimates it spends only 3.5 percent of revenues for ongoing maintenance because homeowners are responsible for the up keep of their homes. While apartment buildings may need an entire roof, single-family home REIT properties are generally scattered about and not connected, ruling out the buying of anything in bulk as a means to save money. As MHProNews knows, Sun owns and operates 185 communities with over 67,000 home sites.

(Image credit: housingwire)

Home Prices Surge in June over Last Year

August 7th, 2013 Comments off

Despite gains in the last year, home prices remain 19 percent below their peak in 2006, according to CoreLogic, although U. S. home prices swelled 11.9 percent in June over June of 2012. That is why many homeowners are waiting to put their homes on the market, which keeps the for sale inventory low, potentially leading to more price increases. The National Association of Realtors (NAR) reports previously-owned homes sold in June, 2013 at a seasonally annual-adjusted rate (SAAR) of 5.08 million, 15.2 percent above the level reached last June, and close to a 3 1/2 high achieved in May. Home prices rose in 48 states, falling only in Mississippi and Delaware, as newsobserver informs MHProNews, and rose in all but one of the largest American cities. Additionally, sales of foreclosed properties, which typically sell at a discount, now make up a smaller proportion of transactions and have less effect in pulling down overall home prices.

(Photo credit: Paul J. Richards/Getty Images)

Inventory Drop will Add to Housing Values

January 7th, 2013 Comments off

Economist Joseph Brusuelas, writing in a Bloomberg Brief on the 2012 housing review and outlook for 2013, says, “Rising purchases of homes from cash buyers and investors reduced the monthly supply of existing homes on the market to 4.8 months in November from 6.4 months in January of 2012. Careful management of foreclosed properties by Fannie Mae and Freddie Mac and the large banks contributed to the improved supply picture in the housing market.” As MHProNews has learned, despite the continuing threat of underwater mortgages, Brusuelas points to turnarounds in the housing markets of metro areas and the strength of housing starts that will drive the appreciation of housing values.

(Image credit: HousingWire)

Long Strides in Short Sales

September 14th, 2012 Comments off

nationalmortgagenews says, according to a new government report, servicers that work on delinquent FHA (Federal Housing Administration)-insured mortgages are shoring up the agency’s losses on insurance claims because they are becoming more adept at dealing with short sales. The FHA says its servicers completed 27,150 short sales for the first three quarters of fiscal year 2012 ending June 30, a 65 percent spike from the same period last year. The loss rate on the sale of foreclosed properties or REOs (real estate owned) is 71 percent versus 47 percent on short sales. FHA completed 75,550 REO sales in the first three fiscal quarters of 2012, an increase of 11 percent over the same period last year. MHProNews has learned the year-to-date net loss rate declined by 1.5 percent from last quarter due to the increase in short sales.

(Image credit: Washington Post/istock)

Ignored Foreclosed Homes: Who’s Responsible?

August 29th, 2012 Comments off

CNNmoney says in a complaint filed last month, the Los Angeles city attorney’s office accused U.S. Bank of contributing to crime, blighting neighborhoods, and harming property values by failing to maintain 170 foreclosed properties. With 3,000 branches in 25 states, the nation’s fifth largest bank is being called the largest slumlord in LA. The bank says the mortgage servicer that’s been collecting payments is responsible for maintenance, that the bank is merely the trustee. In some instances banks have the mortgages on their books. In the case of securitized loans, a trustee will distribute payments from servicers to the bondholders who own the mortgages, thereby complicating the responsibility for the property. As MHProNews has learned, according to LA City Assistant Attorney Tina Hess, trustees need to assume responsibility if the servicer fails to maintain the property. RealtyTrac says the number of foreclosed homes owned by lenders has dropped from one million in January 2011 to approximately 620,000. Daren Blomquist, vice president of RealtyTrac, says the longer they sit, the more likely they fall into disrepair, causing neighborhood values to plummet.

(Photo credit: Jillian Berman/Getty Images)

Low Inventory of For Sale Homes Raises Prices

July 30th, 2012 Comments off

azstar reports home sellers are benefiting from the reduced inventory of homes for sale. The drastic drop in availability has reached 50 percent in some areas of California since last year, and has dropped 53 percent in San Diego since last summer. Los Angeles has seen a decrease of 49 percent since a year ago, and Seattle is down 41 percent. Realtor reports of 146 large markets, 144 had a lower inventory of homes last month than a year ago. Analysts suspect the reason is homeowners with negative equity see prices finally starting to slowly rise, and not wanting to take a big hit, they have decided to wait until prices come back up. MHProNews has learned banks with foreclosed properties are doing the same thing.

(Photo credit: Greg Vote/Getty Images)

Boston Market Rents are Cooking!

January 26th, 2012 Comments off has learned the housing downturn pushed rents to record highs in the metropolitan Boston area in the last quarter of 2011, while the vacancy rate dropped to four percent, a nine year low. Average monthly rents went from $1,600 in 2009 to $1,686 Dec. 2011. TheBostonGlobe reports economists expect rental rates to continue increasing for several years, even though developers broke ground for 1,912 units last year, the highest number since 2006. Of those, 418 are considered affordable. Eric S. Belsky, managing director of Harvard University’s Joint Center for Housing Studies, says the demand for rental housing does show strength in the housing market, and that Boston is a desirable city to live in. Linda Patton, assistant director of off-campus housing at Massachusetts Institute of Technology (MIT) says her listing of available rentals is a third of what it was two years ago, as the city’s graduate school population keeps expanding, further increasing demand. According to Eric Rosengren, president of the Federal Reserve Bank of Boston, there are large tracts of foreclosed properties that could be converted into rental properties, which would lower rents and clean up blighted neighborhoods. Reis Inc., a company that tracks commercial real estate, says Boston is the fifth most expensive rental market in the nation behind New York City, San Francisco, New York’s Westchester County, and Connecticut’s Fairfield County.

(Graphic credit: Reis Inc. graph of Boston rental market)

Home Builder Confidence Inches Up

December 20th, 2011 Comments off

MHProNews has learned from the National Association of Home Builders (NAHB) that builder confidence in the market for new, single-family homes rose for the third month in a row. This marks the first time that has happened since mid-2009, bringing the NAHB/Wells Fargo Housing Market Index (HMI) to 21, its highest point since May of 2010. Said NAHB Chief Economist David Crowe, “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months.” The index is a compilation of current sales of single-family homes, sales expectations for the next six months, and traffic of prospective buyers. Builders see conditions as good rather than poor if the number is over 50. Regionally, the South registered a four-point gain to 25, the highest in that region in 3 1/2 years. The West had a one point gain to 16, the Midwest held steady at 24, and the Northeast slid one point to 15.

(Graphic credit: NAHB)

Developer Eager to Replace Old Mobile Homes with New Manufactured Homes

September 19th, 2011 Comments off

The Rapid City Journal reports from South Dakota that while a veteran developer’s plan to replace aging factory-built homes with new manufactured homes is a noble idea, the project falls short of meeting city codes. Bob Akers bought Deluxe Mobile Home Park and other MHCs from a bank after the properties had been foreclosed. He wants to replace 75 of the units at Deluxe with 100 two-story manufactured homes to sell to low-income residents through a government housing program. The previous owner had incurred several code violations for neglecting the property. “These old mobile home parks are just junk. We’ve got people falling through the floors. It’s sad,” said Akers, whose most recent project was building a Hilton Hotel. But Brett Limbaugh, director of the city’s Growth Management Department, said the plan Akers submitted does not allow enough room for parking, sidewalks, and drainage, and would present a utility right-of-way problem. While praising the developers’ intentions, Limbaugh noted many cities encounter obstacles in redeveloping older MHCs. Responding to the city’s suggestion that he build multiunit housing, Akers said that would be too expensive. His intention is to bring in several new manufactured homes at a time from his manufacturing facility in Hot Springs, South Dakota. “We’re trying to do it in a way to satisfy (the city) and me both,” he said.

photo credit: Rapid City Journal