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Housing crash slows in 6 cities: What the bottom looks like | CTROB

by Julie Schmit, USA TODAY

Author: Julie Schmit, USA Today

The U.S. housing market looks like a scorched landscape.

Nationwide, home prices are down almost 32% from their 2006 peak. Many economists expect them to fall at least 5% more this year. Some predict even steeper declines.

Even if home prices bottom later this year — a big "if" for many markets — they're not likely to rise much for several years, forecasters predict. "It'll take a long time for markets to recover," says Paul Dales, economist at Capital Economics. That's because millions of homes still face foreclosure. Lending standards are tight. Almost one-quarter of homeowners with mortgages are underwater, which means it will be tough for them to move up into nicer homes because they owe more than their current house is worth.

Yet, even charred terrain sprouts green shoots eventually. And some areas have laid the groundwork for better days, according to an analysis for USA TODAY by real estate website Zillow.com. Of the nation's 100 largest metropolitan areas, Zillow identified six —Las Vegas; Fort Myers, Fla.; Stockton and Vallejo, Calif.; Hartford, Conn.; and Columbus, Ohio— that show best what housing markets look like when they are bottoming out but not yet in recovery mode. To identify them, Zillow considered factors such asthe trajectory of home prices, housing affordability based on a ratio of prices to local incomes, and foreclosure rates.

None of the six is seeing price gains, just lessening declines that are expected to continue. Their foreclosure rates have peaked, so the worst could be behind them. Homes in these markets also are becoming more affordable, relative to local incomes, than they were before the real estate boom and bust of the past decade. Investors in many of the markets say the housing deals won't get much better. "In these markets, you can kind of see a light at the end of the tunnel, and it's been a pretty long, dark tunnel," says Stan Humphries, Zillow.com chief economist.

Las Vegas: Flat: The new up

Investors are betting that the home market here has bottomed — or is about to.

Daniel Callihan, 57, a former mortgage company officer, sees that when he hits foreclosure auctions held in a parking lot near downtown. There are twice as many bidders as a year ago, Callihan says. He's bought and sold 10 Las Vegas homes in the past two years.

Many Las Vegas investors are paying cash. In February, more than half of southern Nevada's existing homes were bought with cash, local agents say. Investors also are turning many homes into rentals, says Paul Bell, president of the Greater Las Vegas Association of Realtors. No wonder: Homes that sell for $60,000 can fetch $800 a month in rent — an investment return almost three times the rate in Manhattan or Los Angeles, says Patrick ONeill, CEO of ONeill Group, which is buying Las Vegas homes. Before softening in recent months, Las Vegas home prices had been largely flat for more than a year. "Flat, for us right now, is very good," Bell says. Whether prices will stay flat is another matter. Moody's Analytics doesn't expect Las Vegas single-family-home prices to bottom until mid-2012. One problem: The city still has thousands of homes headed to foreclosure, says University of Las Vegas economist Stephen Brown. He says it will take at least three years for the market to absorb the excess homes. Perhaps the only sure bet in Vegas? That its housing bottom "will be a long one," Brown says.

Vallejo, Calif.: Bruised but with 'good bones'

Realtor Ramon Torres has a front-row seat on the housing wreckage in this San Francisco suburb. Seated next to a living room window during one of his recent open houses, he saw just one couple coming up the steps in the first hour. They stayed less than five minutes, apparently underwhelmed by the $269,000 five-bedroom house with streaked windows and chipped paint. The owner, who owes $470,000 on the house, wants a short sale. Sixteen similar homes are for sale within a 1-mile radius, and Torres fears that the "worst is yet to come" for Vallejo as more homes are lost to foreclosure. Last year, one in 16 homes here received a foreclosure filing, the nation's 10th-highest rate, RealtyTrac says. Torres also fears that Vallejo's reputation will scare off home buyers, given that the city declared bankruptcy in 2008 and has made deep cuts in city services, including police and fire personnel. But Vallejo, along with Stockton, Las Vegas and Fort Myers, also was hit early and hard by the national housing bust and will be one of the first to recover, Zillow says. Last year, Vallejo's foreclosure filings dropped 12%, while they edged up nationwide almost 2%.

Today's Vallejo buyers are mostly investors who can get good rent for some of the lowest-cost housing in the San Francisco Bay Area, real estate agents say. "There's a very strong investor presence," says David Tipp,owner of Tipp Realty at Glen Cove. Jay Boberg, 52, a Los Angeles-based investor, has bought four Vallejo properties in the past two years. He's rented them all and immediately went cash-flow positive. He sees Vallejo as a city with "good bones," including a waterfront, views of the San Francisco Bay and proximity to San Francisco. "The fact that you can rent an apartment or a house here, with a view of the (San Francisco) Bay, for $800 to $1,300 a month is incredible," Boberg says. "I can't believe real estate here won't be worth much more in 15 years."

Columbus, Ohio: Getting in young and cheap

First-time home buyers are having a hard time in today's market, given tight lending standards and competition from all-cash buyers. In February, 34% of existing-home buyers were first-timers, a National Association of Realtors survey says. In a healthy market, that would be 40%, the NAR says. But Columbus and the five other markets Zillow analyzed for USA TODAY have become so affordable that people who didn't think they could afford to own are finding that they can. Lisa Lee, a 25-year-old business analyst, recently bought a $60,000 three-bedroom home in a suburb here that had gone through foreclosure. Her monthly mortgage, including insurance and property taxes, will run about $140 less per month than the rent she paid on her two-bedroom apartment. She secured an FHA-backed loan. Her down payment and closing costs came to about $2,900. "I couldn't believe the house was so cheap," Lee says. "Why keep wasting money on rent?"

Columbus is also getting a little boost from consumers with stable finances who put off buying homes during the recession, says real estate market analyst Robert Vogt of Vogt Santer Insights. Given signs of a national recovery, people are "getting the confidence to move," Vogt says.

Fort Myers, Fla.: New values 'wow' buyers

Ray Bayer, 59, of Pittsburgh has long planned to retire in Florida, but prices were too high. In January, the postal worker finally bought a $255,000 Fort Myers home that he says would have fetched $400,000 at the market's peak. Bayer and his wife, Kathy, 57, a nurse, expect to retire to it in a few years. Fort Myers, like much of Florida, has been battered by foreclosures. In 2010, one in 12 Fort Myers homes had foreclosure filings, the nation's second-highest rate after Las Vegas.

Even so, Fort Myers' foreclosure pace last year was down 28% from 2009. And recently, banks have slowed the pace at which they put homes on the market. That's driving multiple offers and buyers who have to settle "for their third or fourth choice," says broker Terri Lodge of Century 21 Sunbelt Realty. In February, the number of single-family homes for sale in Fort Myers was down 52% from the same month in 2009 and sales were up 2.4%, says Bob Groves, managing broker of Coldwell Banker Residential Real Estate. Snowbirds and retirees are fueling much of the activity, Realtors say. "They've seen the deals and said, 'Wow,' " says Rob Keller, a Coldwell Banker agent.

Hartford, Conn.: Jobs to help

Adam and Clare Baroncelli have been on the open-house circuit for several months and have seen good homes get snapped up more quickly. The increased activity drove them off the fence. They have made an offer on a $370,000, four-bedroom home in Simsbury, near Hartford. "There's a lot more activity," says Clare, 34. The Baroncellis moved in August from Florida to Connecticut because of Adam's job change. Job growth is expected to help the Hartford region.

Of the four major labor markets in the state, Hartford has the best prospects for job growth, says Steven Lanza, editor of The Connecticut Economy, the University of Connecticut's economic publication. Late last year, just 12% of homeowners with mortgages in the Hartford region owed more on their homes than they were worth, Zillow data show. That's far better than the national average, then 27%. Fewer underwater homeowners means there are more homeowners who can move up into more expensive homes.

Rob Giuffria, president of Prudential Premier Homes in Farmington, Conn., says there are huge differences among Hartford areas in terms of the current housing market. Some upper-scale neighborhoods — fueled by white-collar workers and executives — may be bottoming, while some inner-city areas are worsening, he says.Lanza looks for a broader "recovery" soon. As with the other markets Zillow analyzed, that doesn't necessarily mean improvement. "It means you're not getting worse and maybe you're getting better," he says.

Stockton, Calif.: Pain and opportunity

Few areashave been through a longer and darker tunnel than this central California city.

Since peaking in 2006, Stockton's median home price is down 62%. For three of the past four years, Stockton ranked in the top five nationwide for foreclosures, says market researcher RealtyTrac. In January, six of 10 homes for sale in the city either were bank-owned, in foreclosure or tied to a delinquent mortgage. Yet there are glimmers of change. Last year, Stockton dropped to No. 7 in foreclosures nationwide. Local Realtors say there are more non-distressed homes for sale now than there were a few years ago. More low-ball offers are being refused. And multiple offers are common on lower-end homes. "It's a very competitive market," says Jerry Abbott of Grupe Real Estate in Stockton. He recently got six offers for one home priced at $121,000, a short sale in which the lender agrees to sell a property for less than is owed.

The big concern is when banks will begin to list for sale more of the distressed homes they've kept off the market, which could hurt prices. Banks slowed their foreclosure processes last fall after a public outcry over thousands of improperly documented foreclosure cases. The other issue is when Stockton will regain jobs. The unemployment rate in the local county — 17.6% in February — is one of the nation's highest. Moody's Analytics predicts Stockton-area home prices won't return to their 2006 peak for more than 20 years.

Still, some people say it's time to buy, including Cary Fopiano, 41. Since 1996, she and her husband, Steve, 50, have made money on two of the Stockton homes they've owned. They lost money on one but are still far ahead. The stay-at-home mom and manufacturing manager bought their fourth home last year, on a lake in an upscale neighborhood. They're shopping for another to turn into a rental investment.

"Prices are about as low as they can go," Fopiano says.

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#1 Connecticut Realtor Recommends Top 3 Real Estate Websites|CTROB

by LORETTA WALDMAN Special to The Courant

Area Realtors Swear By Realtor, Zillow, and Bing

March 28, 2010

For people looking to buy homes, the Internet has become the first stop of choice. A 2008 profile of home buyers and sellers conducted by the National Association of Realtors found cyberspace was the top source of home-search information 87 percent of the time. That's 2 percent more than real estate agents ranked in the survey, more than 20 percent more than yard signs and better than 40 percent more than open houses and newspaper ads.

Consumers are the big winners in this technology-driven paradigm shift. With hundreds of real estate sites to choose from, there's more information available than ever, some of it once accessible to agents only. With pictures, videos and satellite-generated bird's-eye views, buyers can compare homes without leaving their homes or offices, and that leaves more time and energy for the most promising properties when the comes time to do the legwork.

The sites have been a boon for agents, too. The ones surviving, and even thriving, in this tenuous real estate market are those that are tapping into technology to enhance their services and connect with would-be clients. Which sites they recommend to house hunters depends on the agent.

Rob Giuffria, vice president and broker with Premier Prudential Homes, named Realtor.com, Zillow.com and Bing.com as his top three picks.

Realtor.com, the official site of the National Association of Realtors, has listings for millions of homes in regions across the United States and Canada. The site is also "broker agnostic," Giuffria says, meaning no broker gets better placement than any other. Information includes the type of house, pictures and listing agent. But the home-value feature is not as accurate as others, he said.

Zillow.com is a Seattle-based website that, among other information, provides estimated home values. The company pulls data for a variety of pools and, using algorithms, determines the approximate value, or Zestimate, of the house. Giuffria maintains that the Hartford-area data is accurate within plus or minus 8 percent. While he said the majority of agents might disagree, "it's very defensible data."

Bing.com, a search engine powered by Microsoft, takes Zillow's trademark satellite images of homes a step further, giving users a closer bird's-eye view roughly 200 feet from above the property. The images also can be manipulated and viewed from four sides, a handy feature for assessing surrounding terrain or determining whether the house borders a commercial site, busy road or a house in disrepair.

"So, when a [client] says, 'I want to see this house,' they already know what's around it and how the land is situated," says Giuffria. "Is it on the side of a mountain or is it next to a river? It does not replace seeing the house, but if you can exclude this or that home, you can spend more time on the houses that meet your criteria."

Margaret Wilcox, an agent and broker with Coldwell Banker Real Estate, ranks Realtor.com as her second-favorite website. She said the time lag in posting information to the site can render information about the status of a particular property inaccurate. First choice for Wilcox and her team of top-selling Glastonbury-area associates is their company's site CBMoves.com, which connects users to more than 200,000 listings in the tri-state area and links to everything from school-district data and agent bios to support with financing and getting the phone and electricity connected. Other major real estate companies and agencies also have sites.

Wilcox said Zillow.com can be valuable but must be used with caution. Property values on the site rely on town assessment information and recent sales, which led to a mistake in the value of a property she was involved with.

"The property was located on the town line and [the site] didn't differentiate from the house in one town and a house a street over in the other town," Wilcox said. "It can just be very misleading."

Mobile Technology

Driving the rise in reliance on the Internet is the evolution of smart phone and other mobile technology, experts say. The Internet consumer "inhales information, often works on their own and demands timely responses," Spencer Raskoff, Zillow.com's chief operating officer, told attendees at a Pacific Northwest Housing Summit last week. There is no such thing as too much information for these users, who routinely want data on historical asking prices, days on the market, seller's mortgage amount, what the seller paid for the property, the value of nearby homes, he said.

"In the last six months, there has been a revolution of these devices," said Raskoff, whose company recently unveiled a GPS-enabled Zillow app for Google's Android smart phone. Using it, prospective buyers can call up information on a given property by tapping in the street address as they drive by.

"It's an information bonanza for home buyers," he said.

Such developments, of course, have radically transformed the way agents and brokers conduct business and their relationship with the buying and selling public. Cynthia Burke, an agent with Keller Williams Real Estate, pays for an upgraded version of Realtor.com that feeds any new listings she gets to dozens of real estate and social-networking sites, including Zillow.com, Trulia.com, Facebook, Twitter and even Craigslist.

"It's crucial to get information everywhere possible," she said.

Michael Marsden, an agent and broker with the River To Shore Group of Page Taft GMAC Real Estate, says he invests from $1,200 to $1,500 a month to maintain his presence on the Internet, which includes websites he created to reach home buyers (CTHomesByEmail.com) and sellers (ValueMyCThome.com) and an iPhone app.

"You have to spend a lot of money to get a bigger piece of a smaller pie," Marsden said.

CTReal.com is another option for consumers looking to purchase property in Connecticut, Marsden said. The site of the statewide multiple listing service, CTReal.com is essentially a free, public portal to the same database he as a Realtor uses, Marsden said.

Burke, of Keller Williams, notes that traditional means of marketing real estate, particularly newspapers, still play an important role.

"Not only for people not online but because people like to carry the paper with them when they go to open houses," she said. "It's nice to have the information all on one piece of paper and be able to look at the pictures."

Agents also remain an important part of the process, said Susan Brine, an agent with Coldwell Banker. "There is still a lot of hand-holding," Brine said. "Even with all the information on the Internet, buyers still need that personal touch they get with an agent."

• Contact Loretta Waldman at lorettafwaldman@gmail.com.


Copyright © 2010, The Hartford Courant

Physician Relocates to Devonwood

by Rob Giuffria, GMS

Hartford Courant | July 5, 2009

Dr. Shabnam Lainwala knew little about Connecticut when she and her husband, Vijay Murthy, began hunting for homes in June 2008. The neonatologist and her IT-executive spouse were relocating from the Boston area and wanted a community with a cosmopolitan feel, good schools and close proximity to Connecticut Children's Medical Center, where Lainwala, 43, would work.

West Hartford seemed a good fit, but the available homes then had small yards, needed too much work or exceeded the couple's $800,000 price cap.

Eventually, to their surprise, Lainwala and Murthy, 47, found the right house and neighborhood in Devonwood, a wooded subdivision in Farmington known for its million-dollar homes.

"Vijay saw it first and said, 'OK, you've got to see this house,'" Lainwala said of the 3,303-square-foot colonial.

Built in 1986, the home had the convenient location the couple wanted. It also featured an open floor plan they liked, updated fixtures, hardwood flooring and a redesigned kitchen. But with the $750,000 list price at the upper end of their budget, Lainwala and Murthy decided to keep looking.

Months later, when they looked at the house again and found the price had been reduced, they pounced. Their offer of $707,500 was accepted, plus a $1,500 credit.

"It was a phenomenal deal," said Rob Giuffria, a broker with Prudential Premier Homes and director of the firm's Farmington-based relocation service. "The median price in Devonwood is $950,000, and the range is $850,000 to $1 million. …This was exceptional."

The house is well suited for entertaining and can comfortably accommodate their parents, who visit annually from India, Lainwala said. Murthy's 10-year-old son also has plenty of room to grow, and subdivision regulations limit the number of trees owners can cut down.

"We like that," said Lainwala. "That was really a plus for us. It preserves the natural appearance."

There is traffic on Route 4, but coming from Boston, they are used to that, she said. Grocery stores are close, West Hartford isn't far and the commute to Hartford is 35 minutes in the morning and about 15 minutes on the return trip at night.

The house could easily fetch $800,000 or more once the market improves, Giuffria said. But Lainwala said she and her husband have no plans to sell any time soon. "We wanted to kind of settle," she said. "We hope to stay here for a long time."

— Loretta Waldman, Special to The Courant

FARMINGTON FACTS:

• Population (2008): 25,227

• Median single-family home sales price (Jan.-May 2009): $281,000

• Median condo sales price (Jan.-May 2009): $210,000

• Number of single-family home sales (2007): 235

Less than $100,000: 0

$100,000 - $199,999: 14

$200,000 - $299,999: 60

$300,000 - $399,999: 61

$400,000 or more: 100

• Number of new housing permits in:

2008: 28

2007: 48

2006: 103

2005: 104

2004: 126

• Housing stock (2007): 10,568 units; 74 percent single-family

• Owner-occupied dwellings: 73 percent

• Housing stock age, pre-1950: 15 percent

SOURCES: Connecticut Department of Economic and Community Development; Connecticut Economic Resource Center; The Warren Group

 

Why Has A Home Been On The Market A Long, Long Time? The Price (West Hartford, CT)

by Robin Stansbury | Hartford Courant

COVER STORY - Hartford Courant, Real Estate Section

Why Has A Home Been On The Market A Long, Long Time? The Price

By ROBIN STANSBURY | Hartford Courant | March 29, 2009                  

It's taking longer for homes to sell in the Greater Hartford area, an average of more than two months. But some homes seem to sit - and sit and sit and sit - on the market much longer than others.

Like the historic home on North Main Street in Suffield that has been listed for sale for nearly 1,100 days, or the house on Avalon Drive in Middletown that has been for sale for more than 1,300 days, according to the Multiple Listing Service.

In both cases, that's more than three years. Yes, three years.

With no obvious flaws, agents say the most likely reason these homes and others linger comes down to one factor: price.

Local real estate agents insist that even in this economic downturn, homes are selling - sometimes within just a week or two of being listed, and occasionally with multiple offers - if they are in good condition and, most importantly, priced right.

"Any house that is on the market that long and hasn't sold, it is the price," said Susie Hatch, an agent with William Raveis Real Estate in West Hartford. "I don't care what town it is in, I don't care where it's located. I don't care if it is in Las Vegas, where there are literally thousands of houses on the market. It is price. If it is the right price, someone will buy it. Always."

But determining that magic asking price - not too high to detract buyers, not too low so sellers feel like they are giving it away- is especially difficult in this market, when fewer houses are selling. Without comparable home sales nearby - homes with similar size, style and condition - it is sometimes difficult to pinpoint the ideal asking price.

"It's much harder in this type of a market. If a home has a negative about it, no matter what it may be, you're not sure how buyers are going to react to that negative," said Charlie Kaylor, owner/broker of RE/MAX Communities, based in Simsbury.

"Say you have a slightly awkward floor plan. How much of an adjustment do you make for that?" he said. "Pricing is just more difficult now and buyers are pickier. A few years ago, you used to look down the street at the neighbor's house that sold, add $10,000 and that's what you'd get. That's not how it is working right now."

But even steep price reductions sometimes aren't the answer.

A home in Westbrook, for instance, has been listed for sale for more than 1,100 days, first with an asking price of $999,000. The four-bedroom home, which is part of a private beach association, is now listed for sale for $695,000 and a buyer has yet to be found.

Location doesn't seem to be a problem in that case, but sometimes a bad location can stop a home from selling. Busy streets and sloping yards can derail a deal.

"Location definitely makes a difference," Hatch said, "but in this market it still comes back to price."

She said a home in West Hartford recently sold despite its bad location - the backyard backed up to Interstate 84 - and in horrible condition.

"Without a doubt, it was about the worst condition I've ever seen in a house," she said. "It was a foreclosure and the people walked out the door. There were open food containers in the kitchen. Clothes and shoes all over the floor. But it came on the market at $106,000, and they had 12 offers because you can't find anything in West Hartford at that price. People said, 'I can deal with the condition for that price.'"

Local agents said certain styles of homes, such as an historic home, and homes priced higher than $1 million naturally can take longer to sell because the pool of potential buyers is smaller than in the mainstream marketplace. In those cases, the agents said, sellers need more patience.

According to the Greater Hartford Association of Realtors, single-family homes in the region took an average of 67 days to sell in 2008, an 8 percent increase from 2007. In February 2009, the average days on market was 81, about 4 percent higher than in February a year ago.

So what's the best plan for sellers heading into the spring market?

Rob Giuffria, a broker with Prudential Premier Homes who specializes in high-end homes in Greater Hartford, said all homeowners need to take a hard look at their homes, identify any flaws and make price adjustments for things that can't be fixed.

"When a home hasn't sold, what I tell sellers is there is almost always a limiting factor impeding the home's ability to sell," Giuffria said. "There is always one factor that will stick out in a buyer's mind the most: a bad location because it's on a busy street, no bathtub on the second floor, no eat-in area off the kitchen.

"As a seller, you have to understand the factor that will most adversely affect the sale of your home," he said. "Once you figure out what that factor is, adjust your price to address it."

Giuffria said he recently sold a four-bedroom, three-bathroom home in West Hartford with a new kitchen and hardwood floors for $364,000. The price suffered, he said, because it was by far the most expensive home on the street. "In another neighborhood, that home was worth $400,000," he said, "but not in the neighborhood where it was located."

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