From Homescape

As we plod along through the morass of today’s real estate market, the news media has repeatedly come under fire for being “too negative” with our “gloom and doom” reporting about the sad state of housing affairs. The barbs come mainly from industry folks, especially the National Association of Realtors (NAR), who have gone so far as to outright blame us for causing the market downturn and prolonging its misery with negative news stories.

Here’s a diatribe from a frustrated Realtor, whom NAR President Dick Gaylord applauded in his blog:

The Media’s attack on the real estate industry is nothing new. For decades they have practiced doom and gloom tactics, and in some cases have actually caused real estate prices to decline short term. … Sit back and enjoy some of these dire media projections from yesteryear and allow them to mirror the wide variety of “fear factor”- type “media” comments that exist today.

Gaylord then lists a series of “dire media projections” from various news publications, dating as far back as 1947, that reflect the struggling market conditions of their time.

Straight from the horse's mouth
Thanks, Dick. But the truth is, we’re reporting what you’re giving us. (We do the same with other purveyors of key housing stats, including RealtyTrac and S&P Case/Shiller). Month after month, we read NAR press releases riddled with national and regional figures that for a while now have been pretty dismal. These releases are embellished with a good dose of positive spin by NAR Chief Economist Lawrence Yun. But the record numbers tell the real story: The nation’s real estate ship has been sinking, with no quick recovery in sight.

Why the backlash against the media? I realize that Realtors have an easier time putting bread on their tables when buyers are confident, and what gives them confidence is good news. But it’s Gaylord & Co. who dish out the negative numbers, and it is our civic duty as journalists — not as the cynical propagandists we’re accused of being — to report these numbers accurately.

At the National Association of Real Estate Editors (NAREE) conference in Dallas last week, NAR president-elect Charles McMillan reiterated what we’ve been hearing from NAR for a while now: “Real estate is local, like the weather!”

Yeah, it is to a certain extent, but when it’s raining foreclosure cats and dogs in such bellwether states as Nevada, California, Arizona and Florida, and national home prices continue tumbling, especially in top metro areas, then “local” simply isn’t cutting it right now for the nation’s recession-dazed economy.

Fun at the NAREE conference
About 70 real estate journalists from print, online and broadcast news operations gathered at the NAREE conference not to poo-poo the market but to gain new perspectives about it. We toured areas in Dallas-Ft. Worth with booming development and attended panel discussions with economists, policymakers, bankers, developers, architects and urban planners, who shared their insights about market trends, local developments and urban planning. And we shared ideas on covering the many other aspects of homeownership, including design and architecture, and programs that build community cohesiveness.

Every week, I open my newspaper’s real estate section and find some very positive articles on home buying. “The Bright Side of the Housing Bust,” was a recent headline. So it’s not just the gloom-and-doom outlook that Gaylord accuses us of peddling.

As any responsible journalist will tell you, there are two sides to every story, and there’s always a silver lining amid troublesome circumstances.

“This is the longest, deepest housing-market correction in a long time. The market could still be 18-24 months away from recovery,” Debbie Dunn, executive vice president of CTX Mortgage, told NAREE attendees.

Yes, I agree.

While NAR’s McMillan proclaimed: “In today’s housing market, we have pent-up demand throughout the nation. Interest rates are at a historic low. For those who want to buy, the choices are incredible.”

I TOTALLY AGREE!

Got hot local housing tips or a story you want to share? Contact Dean Golemis at openingdoorsblog@homescape.com.

While the national housing market has looked like an endless black hole, signs of a recovery can be seen in scattered metro areas across the country. Officials with the National Association of Realtors (NAR) say that a proportionately larger slowdown in home sales from a year ago in high-cost markets is continuing to drag down the aggregate national median price.

According to a report released this week by NAR, the median existing single-family home price in the first quarter of this year was $196,300, down 7.7 percent from the first quarter of 2007, when the median price was $212,600. But Lawrence Yun, NAR chief economist, said the numbers don’t tell the whole story.

“These are highly unusual results, because there were very few jumbo loan originations in the latest quarter, so sales are much slower in high-cost areas, and at the same time foreclosures related to subprime mortgages rose,” Yun said in a press release. “Neighborhoods with little subprime exposure are holding on very well, while prices have fallen in neighborhoods with a wide prevalence of subprime loans, because more foreclosed properties are being sold at discounted prices.”

Yun pointed out that homeowners with subprime loans account for less than 10 percent of all homeowners. “Sharp price declines are principally in neighborhoods where subprime lending has been widely prevalent,” he said.

Market turnaround
The typical seller in the first quarter, who purchased their home six years ago, saw a sizable equity gain despite a price drop from a year ago, according to the NAR data. The median increase in value for sellers who purchased their home in the first quarter of 2002 is 23.8 percent, and the median home equity accumulation is $37,700.

NAR officials say the typical home buyer today plans to own their property for 10 years, and with a long-term view, real estate will continue to remain a safe investment.

“Inventories have stabilized and mortgage availability is beginning to improve, so we expect overall prices to go positive during the second half of the year,” said Richard Gaylord, NAR president.

In the first quarter, the largest single-family home price increase was in the Binghamton, NY, where the median price of $109,700, rose 11.8 percent from a year ago. Next was Peoria, IL, at $119,000, up 10.4 percent from the first quarter of 2007, followed by Spartanburg, SC, where the first-quarter median price increased 10.1 percent to $130,300.

Existing home sales
In all states, total existing-home sales, including single-family houses and condominiums, were at a seasonally adjusted annual rate of 4.95 million units in the first quarter, down 0.9 percent from the fourth quarter, and are 22.2 percent below a 6.36 million-unit pace in the first quarter of 2007.

In the South, the median existing single-family home price was $164,200 in the first quarter, down 7.5 percent from a year earlier. After Spartanburg, the strongest price increases in the South were three areas in Texas: El Paso at $134,600, up 8.5 percent from a year ago, followed by the Amarillo with an 8.2 percent gain to $122,200 and Beaumont-Port Arthur at $122,900, up 6.1 percent.

The median existing single-family home price in the Midwest declined 7.9 percent to $142,700 in the first quarter from the same period in 2007. After Peoria, the strongest metro price increases in the Midwest were in the Decatur, IL, area, where the median price of $79,400 was 4.2 percent higher than a year ago, and Springfield, IL, at $172,200, also up 4.2 percent. Next was the Wichita, KS, area, at $112,700, up 4.0 percent from the first quarter of 2007.

In the West, the median existing single-family home price was $296,300 in the first quarter, which is 12.3 percent below a year ago. “This is the area hardest hit by the slowdown in jumbo mortgage loan origination, which is just now starting to improve,” Yun noted.

The strongest metro price increase in the West was in the Yakima, WA, at $148,400, up 9.0 percent from a year ago, followed by Farmington, NM, at $190,000, up 6.3 percent, and the Salt Lake City area, at $225,700, up 3.5 percent from the first quarter of 2007.

To see how your local housing market is faring go to Realtor.org.

View homes for sale

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.

Nevada, California and Arizona top state foreclosure rates, according to a foreclosure market report released by RealtyTrac this week. The report, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 243,353 properties, a 4 percent increase from the previous month and a nearly 65 percent increase from April 2007. The data also shows one in every 519 U.S. households received a foreclosure filing during the month.

“The total number of U.S. properties with foreclosure activity in April was the highest monthly total we’ve seen since we began issuing the report in January 2005,” said James J. Saccacio, chief executive officer of RealtyTrac. “Although only about 2 percent of households nationwide are in foreclosure, these properties contribute to already bloated inventories of homes for sale, and put downward pressure on home values. Areas of California, Florida, Nevada and Arizona continue to be particularly hard-hit.”

In areas hit hardest by the housing crisis, property tax bases are eroding, putting municipal budgets in peril. The city council in Vallejo, California — part of a metropolitan area with a foreclosure rate that ranked sixth highest in the nation in April — last week voted to have the city file for bankruptcy. The San Francisco suburb of 117,000 people is expected to generate $5 million less in revenue than projected, because retail sales and property values are down amid an economic slowdown and slumping real estate market, according to a report issued by city manager Joseph Tanner.

Topping state foreclosure rates
Despite a 5 percent month-over-month decrease in foreclosure activity in April, Nevada continued to document the nation’s highest state foreclosure rate. One in every 146 Nevada households received a foreclosure filing in April, 3.6 times the national average, and the state’s foreclosure activity was up 95 percent from April 2007.

California posted the second highest state foreclosure rate in April, with one in every 204 households receiving a foreclosure filing during the month. Foreclosure filings were reported on 64,683 California properties in April, down less than 1 percent from the previous month, but still the most of any state, and an increase of 112 percent from April 2007.

Arizona foreclosure activity in April increased 26 percent from the previous month and 181 percent from April 2007, helping to bump the state’s foreclosure rate up to third-highest among the states. Foreclosure filings were reported on 11,620 Arizona properties in March, one in every 224 total households.

Florida had one in every 242 households receiving a foreclosure filing in April. The Sunshine State documented the nation’s fourth-highest state foreclosure rate. Foreclosure filings were reported on 35,264 Florida properties during the month, the nation’s second-highest total. Florida foreclosure activity increased nearly 17 percent on a month-to-month basis and 146 percent on a year-over-year basis.

Colorado foreclosure activity in April was down nearly 3 percent from the previous month and up just 3 percent from April 2007, but the state’s rate still registered fifth-highest among the states. One in every 349 Colorado households received a foreclosure filing in April, nearly 1.5 times the national average.

Other states with foreclosure rates ranking among the top 10 were Maryland, Georgia, Ohio, Michigan and Massachusetts.

California and Florida cities on the hot list
Six California cities documented foreclosure rates that ranked in the top 10 among the 230 metropolitan areas tracked in the report. Merced took the top spot, with one in every 66 households receiving a foreclosure filing during the month, followed by Stockton at No. 2, Modesto at No. 3 and Riverside-San Bernardino at No. 4. Other California cities on the list were Vallejo-Fairfield at No. 6 and Bakersfield at No. 8.

Three Florida cities registered foreclosure rates among the top 10: Cape Coral-Fort Myers at No. 5, Port Lucie-Fort Pierce at No. 9 and Fort Lauderdale at No. 10.

With one in every 116 households receiving foreclosure filings in April, the Las Vegas metro area documented the nation’s seventh-highest metro rate.

Check out other state rates among foreclosures at Informationbuilders.com/realtytrac/ActiveReport

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.

Last week I attended the National Association of Real Estate Editors conference in Dallas. While there was much discussion on what has been deemed “the worst housing crisis since the Depression,” real estate and financial trade groups appeared to be optimistic about the fate of the market. It appears that all eyes are currently locked on the federal government to see how they will help soften the blow.

Federal Housing Authority Commissioner Brian Montgomery, who spoke at the conference, gave a roaring endorsement for FHA modernization. He said there are affordable FHA-backed loans that are not subprime. Montgomery believes that FHA loans should become the first option and not just a last resort for new homebuyers.

“People need to realize that there are alternatives, that they don’t have to walk away from homes because of foreclosure,” Montgomery said. “FHA modernization has bipartisan support, but delay of FHA modernization due to partisan politics is hurting consumers,”

FHASecure program
The new FHASecure program, rolled out by the Bush administration in August, was originally designed to help borrowers who had fallen behind on payments on adjustable-rate mortgage (ARM) loans after an interest-rate reset. On April 9, the administration said it would expand the FHASecure program by creating two new categories of eligible borrowers:

1. Those with ARM loans who were late on two consecutive monthly mortgage payments or at two different times over the previous 12 months. FHA will require a 97 percent loan-to-value (LTV) ratio for these borrowers to refinance into a government-backed loan — which in many cases would require lenders to write down some principal.

2. Those with ARM loans who were late on three consecutive monthly mortgage payments or at three different times over the past 12 months. FHA will require a 90 percent LTV ratio for these borrowers to refinance.

HUD said the expanded FHASecure guidelines are set to be implemented on July 14 in conjunction with risk-based premium pricing.

Political gridlock
Montgomery said FHA has already helped some 200,000 American home owners with troubled loans refinance and expects to help another 500,000 homeowners by the end of the year. FHASecure accounted for $28.5 billion of the $68 billion in loans FHA has helped facilitate since September.

Democrats are pushing for an even bigger, $300 billion expansion of FHA loan guarantee programs to enable up to 2 million FHA-backed refinance loans in cases where lenders agree to accept no more than 85 percent of a property’s current appraised value. That plan, which is opposed by the Bush administration, is apart of the American Housing Rescue and Foreclosure Prevention Act. The bill was approved last week but fell short of the margin that would be needed to override President Bush’s threat to veto it.

The Bush administration opposes the expansion of FHA loan guarantees put forward in March by Rep. Barney Frank (D-Mass.) and has called it a “bailout” of lenders and speculators.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.

To say that midcentury architects were more practical is an understatement. Yes, we’ve seen a sudden green movement taking over, and NO, I don’t think this is bad — on the contrary, it’s something everyone should be aware of. But looking at Miami’s architecture, I have to admit that I have a soft spot for those buildings of the 1950s and 1960s. I have a special soft spot for certain architects such as Wahl Snyder, Marion Manley and Alfred Browning Parker.

When I walk into a house designed by either three, I feel it! My heart starts racing and there’s an unquestionable passion that can be felt through the construction and details of the space. I walked into a small Alfred Browning Parker home with a client not long ago, and I instantly knew it was his work. I asked the agent if the home was designed by BP, and to my disappointment the agent looked at me and said, “Who?”

Signature style

Browning Parker was the master of utilizing space, wide overhangs, clerestory windows and massing to take advantage of warm climates without air conditioning. Frank Lloyd Wright’s influence is obvious in his work, because of the organic nature and use of local materials. Snyder’s signature was to bring exterior spaces into the living areas. He would work with cross ventilation and create seamless transitions between the inside and outside of his spaces. Materials were key and clerestory lighting was a must. Take a look at his Miami Shores Residence. Manley was Florida’s first licensed woman architect, and at 75 she was still busy designing good quality homes. She used local materials, high ceilings, cross ventilation and never ignored our tropical climate.

The next generation
These three architects are the epitome of the green movement, and they created their masterpieces without today’s technology and media hype. Browning Parker, who’s about 90-years-old, continues to pass on his guiding principals to a new generation of architects when he gives special lectures at universities across the country. His five guiding principals till this day are: “Build simply. Build as directly as possible with no complications. Use the materials at hand and keep these sparse. Let your building love its site and glorify its climate. Design for use and make it beautiful.”

To read more on these wonderful architects, check out Georgia Tasker’s article published in The Miami Herald about two homes designed in the 1960s by Manley and Browning Parker. Both homes are open to their surroundings, and both are models for green living today.

Here’s a quote by Janet McIlvane, a research analyst with the Florida Solar Energy Center, that I think really defines the shift in housing and design that is evident in current times.

“After World War II, there was a move away from individually crafted homes....We began to produce homes with a subdivision production mindset. We were going to build 30 houses, not one, and build them all alike. And in that transition, we started looking at how to make things easier, how to build more easily and quickly.

“That’s how the industrial revolution transitioned into the housing market. So we jettisoned the front porch, made the windows smaller and sealed up our houses. In Florida, those were the very components that allowed us to survive in the hot, humid climate.”

Ines Hegedus-Garcia