Thread: U.S. Housing

"Gated Ghettos"

One story among many. Ex-communities built far from commercial centers where the jobs are - or were.

From bucolic bliss to 'gated ghetto'

Hemet's Willowalk tract was family-friendly. Then the recession hit.

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By Alana Semuels March 30, 2010



Reporting from Hemet - The gated community in Hemet doesn't seem like the best place for Eddie and Maria Lopez to raise their family anymore.

Vandals knocked out the streetlight in front of the Lopezes' five-bedroom home and then took advantage of the darkness to try to steal a van. Cars are parked four deep in the driveway next door, where a handful of men rent rooms. And up and down their block of handsome single-family homes are padlocked doors, orange "no trespassing signs" and broken front windows.

It wasn't what the Lopezes pictured when they agreed to pay $440,000 for their 5,000-square-foot house in 2006.

The 427-home Willowalk tract, built by developer D.R. Horton, featured eight distinct "villages" within its block walls. Along with spacious homes, Willowalk boasted four lakes, a community pool and clubhouse. Fanciful street names such as Pink Savory Way and Bee Balm Road added to the bucolic image.

Young families seemed to occupy every house, throwing block parties and holiday get-togethers, and distributing a newsletter about the neighborhood, Eddie Lopez recalled.

"We loved how everything was family-oriented -- all our kids would run around together," said Lopez, a 41-year-old construction supervisor and father of seven. "Now everybody's gone."

Home foreclosures have devastated neighborhoods throughout the country, but the transformation from suburban paradise to blighted community has been especially stark in places like Willowalk -- isolated developments on the far fringes of metropolitan areas that found ready buyers when home prices were soaring but then saw an exodus as values crashed.

Vacant homes are sprinkled throughout Willowalk, betrayed by foot-high grass. Others are rented, including some to families that use government Section 8 vouchers to live in homes with granite countertops and vaulted ceilings.

When the development opened in 2006, buyers were drawn to the area by advertising describing it as a "gated lakeshore community." Now, many in Hemet call Willowalk the "gated ghetto," said John Occhi, a local real estate agent.

There are dozens of places like Willowalk, and they are turning into America's newest slums, says Christopher Leinberger, a visiting fellow at the Brookings Institution. With home values at a fraction of their peak, he said, it no longer makes sense to live so far from the commercial centers where jobs are concentrated.

"We built too much of the wrong product in the wrong locations," Leinberger said.

Thanks to overbuilding, demographic changes and shifts in preferences, by 2030 there could be 25 million more suburban homes on large lots than are needed, said Arthur C. Nelson of the University of Utah. Nelson believes that as baby boomers age and as younger generations buy real estate, the population will abandon remote McMansions for smaller homes closer to shops, jobs and the other necessities of life.

Whatever their number, the presence of unwanted or abandoned homes stands to be a burden on local governments for years to come, as cash-strapped cities and counties have to spend precious resources to patrol the neighborhoods and clean unkempt yards and abandoned houses.

Link & Entire: From bucolic bliss to 'gated ghetto' - latimes.com

Hundreds of thousands of houses sitting idle and unoccupied while hundreds of thousands of families go homeless. There has got to be something wrong with a system like that.

And folks should remain aware that the new wave of foreclosures has begun. It started in February and will last for 2 years.

Foreclosure rates surge, biggest jump in 5 years

‘On pace to see more than 1 million bank repossessions this year’

In this March 11, 2010 file photo, home owners wait inside a meeting room before their names are called so they can meet with housing counselors and representatives from major lenders gathered to help homeowners facing foreclosure.
View related photos
Ross D. Franklin / AP


By Alex Veiga
April 15, 2010

LOS ANGELES - A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.

RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.

More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.

Link & Entire: Foreclosure rates surge, biggest jump in 5 years - Mortgage Mess- msnbc.com

An article about 10 US cities in "free fall." Roughly defined as, having averaging housing prices down about or over 50%.

Ten American cities caught in free fall

Economic indicators in these metros have gone from bad to worse

In Las Vegas, median home prices have fallen 50 percent from their peak. The area was one of several markets where speculation was rampant during the housing boom.

Latest from Forbes.com


By Francesca Levy
updated 12:31 p.m. ET April 18, 2010

Miami boasts a popular South Beach club scene, Art Deco Architecture, and perhaps the best Cuban food in the country. But residents don't have much else to celebrate.

More than three years after the economy started its downward slide, the Miami metro area, like a handful of Sun Belt cities, still hasn't begun to recover. Median home prices in Miami have fallen 38 percent since its market peaked in the second quarter of 2007; the city's 11 percent unemployment rate is above the national average and has grown more than most of the 40 cities we surveyed.

Cities in the "Sand States" of Florida, California, Arizona and Nevada, where overbuilding was rampant, are also in trouble, claiming nine of the top 10 spots in our list of cities in free fall. In Las Vegas, Riverside, Calif., and Phoenix, median home prices have fallen 50 percent, 44 percent and 37 percent from their respective peaks. Jobs are vanishing. Though country-wide, employers added 162,00 jobs last month, Riverside gained 13 percent fewer jobs in February 2010 (the latest numbers available by metro) than it did the same month three years earlier. Tampa, Fla., saw a 10 percent drop, and Los Angeles added 9 percent fewer jobs over the same time period.

Link & Entire: http://www.msnbc.msn.com/id/36563247...ess-forbescom/

Still continuing and will increase.

Why is this happening if there is a recovery? Because there is no recovery.

High-End Homeowners Falling Into Foreclosure Trap


Published: Friday, 7 May 2010 | 9:32 AM ET





CNBC News Associated





Heated pools, ocean views and media rooms are not what most people would expect to find in a foreclosed property, but more high-end homes—priced over a million dollars—have been falling into the hands of banks this year.

Photo credit: Stephen Scott

This foreclosed home in Fort Mill, S.C. is currently listed at $1.148 million.
Foreclosures of homes worth over $1 million began increasing at the end of 2009, according to exclusive data provided by foreclosure tracking website RealtyTrac. Foreclosures reached a high in February 2010, the last month data is available, when 4,169 homes were somewhere in the foreclosure process; either having received a foreclosure notice, had an auction scheduled or the lender took ownership of the property. That’s a 121 percent increase from a year ago.
The deterioration comes just as housing experts say that foreclosures in the low- and mid- ends of the housing market are showing signs of stabilization.



“They were able to stave off foreclosure longer,” says independent real estate analyst Jack McCabe, CEO of McCabe Research and Consulting in South Florida. “Lower-end homeowners were the first ones to see the escalating foreclosures because they generally do not have the cash reserves or credit available that the luxury homeowners do. They had the ability to take their credit cards and pull out thousands of dollars while the lower end buyers were already tapped out.”



McCabe expects to see foreclosures in the high-end market to increase into 2011.

Link & Entire: News Headlines

Recovery?

Not in housing. It's getting worse.

Mortgage Holders Owing More Than Homes Are Worth Rise to 23%

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By Brian Louis


May 10 (Bloomberg) -- More than a fifth of U.S. mortgage holders owed more than their homes were worth in the first quarter as repossessions climbed to a record, according to Zillow.com.
Twenty-three percent of owners of mortgaged homes were underwater during the period, up from 21 percent in the previous three months, the Seattle-based property data provider said today in a report. More than one in 1,000 homes were repossessed by lenders in March, the highest rate in Zillow data dating back to 2000.

LInk & Entire: Mortgage Holders Owing More Than Homes Are Worth Rise to 23% - Bloomberg.com

Housing is getting worse. Yes, worse.

It has been predicted for a couple of years. The next wave of foreclosures has begun.

Alt-A and Option Arms.....

Mortgage delinquencies hit 10%

By Les Christie, staff writerMay 19, 2010: 10:51 AM ET


NEW YORK (CNNMoney.com) -- A dubious distinction was reached during the first three months of 2010: More than 10% of all mortgage borrowers are now behind on their payments.



The delinquency rate hit a record of 10.06% in the first quarter, according to the Mortgage Bankers Association. The seasonally adjusted rate accounts for all mortgages on properties that have up to four units and that are at least one payment late.


The rate has been inching steadily toward this record. In the previous quarter, 9.47% of borrowers were behind on payments; and one year ago, 9.12% were late.

Link & Entire: Mortgage delinquencies hit 10% - May. 19, 2010

^ Sure. The folks who should never have thought about buying a home on their temporary census wages.


May 12, 2010
NEW YORK (CNNMoney.com)
...Giving people free money to cover their home loans is just one of the radical ways that four states -- Florida, Michigan, California and Arizona -- plan to use $1.4 billion the Obama administration is sending their way to help the unemployed and underwater avoid foreclosure.
...
Despite the administration's best efforts to stabilize the market, home prices are still sliding and foreclosure filings are at record highs.The federal governmentis doling out a total of $2.1 billion to 10 states, which also include Nevada, North Carolina, South Carolina, Rhode Island, Ohio and Oregon. The others have not yet submitted their plans to Treasury for approval or have not made them public.
States propose using federal funds to pay down mortgages - May. 12, 2010

Its up to the banks to foreclose on people who are hopelessly behind in their payments. But if they get tough and flood the market with repossessed houses for auction it drives the price of all houses in the area down. That means the real asset value of properties on the banks books goes down. Especially when the places get vandalized. Lower values means more people walking away from their mortgage. Bit of a vicious cycle. At least while the houses remain under a mortgage (rather than being forfeited to the banks) the banks can claim they own the paper asset value of these places when the mortgage was written.

It may not be in some banks interests to foreclose on bad mortgages.

For cash buyers in USA right now there are some serious deals on houses bought at auction or directly from banks.

I'm tempted .

1 out of 5 homeowners in trouble = 20%.

The specifics of those in "trouble" are detailed below. Housing, and the greater US macro-economy has a long, long, way to go.

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