DAILY REAL ESTATE NEWS
Produced by Inman News
January 23, 2012
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When it makes sense to keep an underwater home
REThink Real Estate
By Tara-Nicholle Nelson
Inman News®
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Editor's note: This is the first of a two-part series.
Q: At the top of the market, I owned three properties: my first home (in a marginal neighborhood, now about 100 percent upside down), my own residence (a big fixer in a great neighborhood), and a triplex I bought as an investment (an OK neighborhood, needed some work, fully rented, but now upside-down by about 30 percent).
When the market turned, I had a couple of bad tenants in my first home and the triplex that set me way back financially, and I was unable to borrow the money I needed to fix the house I lived in. I did a short sale on the fixer, got temporary loan mods on the other two, and moved back into my first home.
Problem is, they're both so upside-down and don't seem likely to come back up anything soon. I'm 45 years old and have a great job, but I don't like the neighborhood I live in now and I can barely ever save anything because these properties -- which I thought would help fund my retirement -- eat me alive.
Also, I just got word that my loan mod on the triplex is going to expire in January. Should I just sell everything and start over?
A: First, know this: You are not alone. More than 25 percent of home mortgages nationwide are upside-down.
While the majority of Americans have held onto homes with declining and stagnant values in the hopes that the market will recover to avoid locking in their losses, the data is clear on the fact that those who own homes worth less than they owe are the borrowers most likely to fold, short-selling, strategically defaulting or negotiating a "deed in lieu of foreclosure" with the bank.
I don't think data exists on this point, but I suspect these are the borrowers most prone to give up on the excruciating and prolonged path of home retention efforts the most easily. "Why throw good money, time, energy and emotions after bad?" they wonder.
A few years ago, I would probably have fallen into the cheerleader camp, exhorting "Hang on! Hang in there!" Now, though, going into the fifth or sixth year of this real estate recession, depending on whom you talk to, I'm more jaded and realistic.
As I see it, you have two different scenarios that make up your dilemma, and there are a couple of different ways to think about them. First, let's limit the scope of our conversation to the situation on the home you actually live in. Next week, we'll look at the broader constellation of issues you have, including both your residence and the investment property.
My advice to people in your situation is to always go through the preliminary step of getting clear on whether their personal residence still works for their lives as a personal residence.
If you own a home that works well for your life, is affordable and seems like it will continue to be a good fit for your life and your finances in the foreseeable future, I'm generally inclined to advise homeowners to avoid making market-based decisions about whether to continue to hold on to it, whether or not it happens to be upside down.
On the flip side, I've seen numerous situations in which families have expanded or shrunk or need to relocate, rendering the upside-down home a serious mismatch. In these cases, it makes sense to more seriously consider whether to divest.
I'd encourage you to ask yourself that question -- "Does this home 'fit'?" -- regarding your personal residence. You mention the neighborhood weighs against that finding of fit; you might also be thinking that the neighborhood could prolong the "value recovery" timeline.
Take a more holistic viewpoint and make a decision about whether the home overall still works for your life or not -- outside of the context of it being underwater. Whether it does or does not, this knowledge will get you started down the path of cultivating the clarity you'll need to put a full action plan and decision-making process in place. We'll discuss what the rest of that plan looks like next week.
Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.
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Copyright 2012 Tara-Nicholle Nelson
Monday, January 23, 2012
Thursday, January 19, 2012
Moving from/to in 2011
This chart shows people moving from state to state in 2011:
http://www.atlasvanlines.com/migration-patterns/
http://www.atlasvanlines.com/migration-patterns/
Wednesday, January 18, 2012
Fannie Mae Raises Cost of Mortgages
| Here's mortgage giant Fannie Mae's sobering New Year's greeting for homebuyers in 2011: Give me more money! If you want a loan this year, you're going to have to pay more — thousands of dollars more in some cases — even if you've got stellar credit scores and bundles of cash handy for a down payment. Things could get much worse if your scores have been sagging with the economy and you don't have much money upfront. In a Dec. 23 memo to lenders in its network, Fannie announced that it has decided to impose a new schedule of higher add-on fees, similar to what Freddie Mac — the other huge congressionally chartered mortgage investor — rolled out to jeers from the real-estate industry just before Thanksgiving. Both corporations have required massive federal financial infusions — estimated at close to $150 billion — since the housing market began deteriorating, and now operate under a federal "conservatorship" arrangement. The Obama administration plans to submit long-promised proposals to Congress this month on what to do with the two — phasing them out, restructuring them, privatizing one or both of them, or other solutions. But meanwhile, Fannie and Freddie continue to fund or guarantee upward of two-thirds of new mortgage originations. Because of their sheer size and market dominance, they play pivotal roles in determining whether — and how fast — the housing market can rebound. Their new fees scheduled to start this spring, however, don't appear likely to make financing a home any easier. In fact, some potential buyers who have high credit scores and hefty down payments may be surprised that even they are being targeted for higher "risk-based" fees. Consider these examples of how Fannie's revised list of loan add-ons will affect borrowers. Say you want to buy a house that requires a $300,000 first mortgage. You have impressive FICO scores — above 800 — and cash for a down payment just under 25 percent. Purely on the basis of your credit score and loan-to-value (LTV) ratio, Fannie now plans to charge an extra quarter of a percentage point of the loan amount — $750 — to do the deal. During 2010, by contrast, your substantial down payment combined with your FICO score — signifying virtually no risk of default — would have cost you zero. Now take the same loan amount, but substitute a lower score and smaller down payment. Say your FICO score is 679, and you have down-payment money just under 20 percent, Fannie will soon begin hitting you for 2 ¾ percent in add-on fees — a staggering $8,250 extra solely attributable to your FICO and LTV. |
Friday, January 13, 2012
AZ Republic Article re 800 New Homes Planned
DMB pursues Mesa subdivision project
800 homes planned for former General Motors Desert Proving Ground
8 comments by Gary Nelson - Jan. 11, 2012 07:00 PM
The Republic | azcentral.com
.
Primed by optimism over the region's future, DMB Associates is aggressively pursuing its development of the former General Motors Desert Proving Ground in Mesa.
DMB, based in Scottsdale, said it would break ground early next year on about 800 homes in nine subdivisions adjoining the first phase of a mile-long "great park" that will run through the center of the project.
DMB planned to roll out a new name for the project during this morning's East Valley Partnership breakfast with Gov. Jan Brewer in Mesa.
The name: Eastmark. It replaces Mesa Proving Ground, which was DMB's previous tag for its property.
"We didn't want to come up with a contrived name, a foreign-sounding name, a flowery name," said Karrin Taylor, a DMB vice president. "It needed to create an identity both geographically and as to importance."
The idea, she said, was to find a name that would resonate outside Arizona as the Gateway area grows in importance.
Eastmark is expected to evolve over the next three or four decades into a dense urban center closely tied to the Phoenix-Mesa Gateway Airport. Eventually, there could be high-rise business districts fronting the airport along Ellsworth Road.
"Eastmark aspires to be the heart and hub for homes and families, the connector for great neighborhoods, education and active centers of commerce, and a vibrant economic engine impacting the entire region," DMB board Chairman Drew Brown said in a news release.
A zoning plan approved by Mesa for the property in 2008 allows up to 15,000 dwelling units of various kinds. Dea McDonald, DMB's vice president for development, said the time had arrived to start building them.
Builders have been signaling for months that they're ready to turn dirt, McDonald said.
"The lights are back on," McDonald said.
He expects DMB and "multiple" developers to close escrow in June, and that Mesa also will approve plans for their subdivisions about that time. McDonald said he cannot reveal the builders' names until deals are finalized.
Taylor said the Gateway area is rapidly making good on the potential that was described in a 2006 Urban Land Institute study that identified the region as a likely future business hub.
Gateway is becoming a hotbed of education, health care and aerospace, she said. Roc Arnett, president of the East Valley Partnership, noted that the airport currently supports about 5,000 jobs -- more than were there during its previous life as an Air Force base.
Taylor cited other indications of southeast Valley prosperity, including Intel Corp.'s growing presence in Chandler and the enhanced tourism expected after Mesa builds a complex for the Chicago Cubs in its northwest corner.
Although the recession hit Arizona hard, she said, "The southeast Valley has weathered this storm better than most."
Because of that, she said, DMB doesn't have to start from scratch with Eastmark.
"A lot of the big master-planned communities that have developed in the last two decades -- ours and others -- you had to create something from nothing," Taylor said. "And here we don't have to create something. It's there -- the components of a great place."
Trevor Barger, who leads DMB's design team, said Eastmark is not going to be a cookie-cutter subdivision.
"Typically, it's much easier to announce that the design is going to be Spanish or Tuscan, and then everybody knows what to design," he said. "This has been taking us back a bit and saying the theme is, not a theme. It doesn't exactly fit a perfect stereotypical category. At the same time it can't be chaos. You have to hold it together."
Narrow streets, distinctive hardware such as streetlights and monument entries to subdivisions will help with that, Barger said. He calls them "memory points."
Neighborhoods will be designed to almost force people to mingle, Barger said.
"If you're moving here, you're not moving here to be alone," he said.
DMB will build and maintain a 10-acre park just west of the new homes and donate it to Mesa. It will have an "event lawn" capable of hosting 15,000 people for community events, DMB's community center and riparian wildlife habitats.
Eventually, the park will stretch north to Warner Road, encompassing 106 acres and in some places providing a direct line of sight to the towers of the still-hoped-for Gaylord resort that is on hold because of the economy.
Although the homes may stay for generations, McDonald said early phases of Eastmark's design will signal that it will always be a work in progress.
"It's difficult to understand a vision that's got a 30- or 40-year runway to it, and that evolves over time," McDonald said.
DMB, founded in 1984, is a real-estate and investment firm with an array of developments in its portfolio.
Copyright: AZ Republic
Read more: http://www.azcentral.com/arizonarepublic/business/articles/2012/01/11/20120111dmb-pursues-mesa-subdivision-project.html#ixzz1jO2zZ1KJ
800 homes planned for former General Motors Desert Proving Ground
8 comments by Gary Nelson - Jan. 11, 2012 07:00 PM
The Republic | azcentral.com
.
Primed by optimism over the region's future, DMB Associates is aggressively pursuing its development of the former General Motors Desert Proving Ground in Mesa.
DMB, based in Scottsdale, said it would break ground early next year on about 800 homes in nine subdivisions adjoining the first phase of a mile-long "great park" that will run through the center of the project.
DMB planned to roll out a new name for the project during this morning's East Valley Partnership breakfast with Gov. Jan Brewer in Mesa.
The name: Eastmark. It replaces Mesa Proving Ground, which was DMB's previous tag for its property.
"We didn't want to come up with a contrived name, a foreign-sounding name, a flowery name," said Karrin Taylor, a DMB vice president. "It needed to create an identity both geographically and as to importance."
The idea, she said, was to find a name that would resonate outside Arizona as the Gateway area grows in importance.
Eastmark is expected to evolve over the next three or four decades into a dense urban center closely tied to the Phoenix-Mesa Gateway Airport. Eventually, there could be high-rise business districts fronting the airport along Ellsworth Road.
"Eastmark aspires to be the heart and hub for homes and families, the connector for great neighborhoods, education and active centers of commerce, and a vibrant economic engine impacting the entire region," DMB board Chairman Drew Brown said in a news release.
A zoning plan approved by Mesa for the property in 2008 allows up to 15,000 dwelling units of various kinds. Dea McDonald, DMB's vice president for development, said the time had arrived to start building them.
Builders have been signaling for months that they're ready to turn dirt, McDonald said.
"The lights are back on," McDonald said.
He expects DMB and "multiple" developers to close escrow in June, and that Mesa also will approve plans for their subdivisions about that time. McDonald said he cannot reveal the builders' names until deals are finalized.
Taylor said the Gateway area is rapidly making good on the potential that was described in a 2006 Urban Land Institute study that identified the region as a likely future business hub.
Gateway is becoming a hotbed of education, health care and aerospace, she said. Roc Arnett, president of the East Valley Partnership, noted that the airport currently supports about 5,000 jobs -- more than were there during its previous life as an Air Force base.
Taylor cited other indications of southeast Valley prosperity, including Intel Corp.'s growing presence in Chandler and the enhanced tourism expected after Mesa builds a complex for the Chicago Cubs in its northwest corner.
Although the recession hit Arizona hard, she said, "The southeast Valley has weathered this storm better than most."
Because of that, she said, DMB doesn't have to start from scratch with Eastmark.
"A lot of the big master-planned communities that have developed in the last two decades -- ours and others -- you had to create something from nothing," Taylor said. "And here we don't have to create something. It's there -- the components of a great place."
Trevor Barger, who leads DMB's design team, said Eastmark is not going to be a cookie-cutter subdivision.
"Typically, it's much easier to announce that the design is going to be Spanish or Tuscan, and then everybody knows what to design," he said. "This has been taking us back a bit and saying the theme is, not a theme. It doesn't exactly fit a perfect stereotypical category. At the same time it can't be chaos. You have to hold it together."
Narrow streets, distinctive hardware such as streetlights and monument entries to subdivisions will help with that, Barger said. He calls them "memory points."
Neighborhoods will be designed to almost force people to mingle, Barger said.
"If you're moving here, you're not moving here to be alone," he said.
DMB will build and maintain a 10-acre park just west of the new homes and donate it to Mesa. It will have an "event lawn" capable of hosting 15,000 people for community events, DMB's community center and riparian wildlife habitats.
Eventually, the park will stretch north to Warner Road, encompassing 106 acres and in some places providing a direct line of sight to the towers of the still-hoped-for Gaylord resort that is on hold because of the economy.
Although the homes may stay for generations, McDonald said early phases of Eastmark's design will signal that it will always be a work in progress.
"It's difficult to understand a vision that's got a 30- or 40-year runway to it, and that evolves over time," McDonald said.
DMB, founded in 1984, is a real-estate and investment firm with an array of developments in its portfolio.
Copyright: AZ Republic
Read more: http://www.azcentral.com/arizonarepublic/business/articles/2012/01/11/20120111dmb-pursues-mesa-subdivision-project.html#ixzz1jO2zZ1KJ
New Listing
We have released a new listing today.
Details may be seen at http://1511.dmarq.info/
You will find 45+ pictures of the home at that address.
Denis Marque
denis@denismarque.com
Details may be seen at http://1511.dmarq.info/
You will find 45+ pictures of the home at that address.
Denis Marque
denis@denismarque.com
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