Foreclosures: Location, Location, Location

Once again we see headlines about foreclosures and once again the MSM just glosses over the topic. Foreclosures in NY are approximately 0.19 while in Nevada it's 21 times higher at 4.35. One simply cannot broad brush a topic as important as this -- unless your sole concern is selling copy and gloom-and-doom is what helps sells your paper.

An interesting article from Milwaukee

So why do so many of our leaders seem indifferent to the success of landlords?

The latest affront is a bill by state Rep. Marlin Schneider (D-Wisconsin Rapids) to limit access to CCAP, the Web site detailing court cases. Schneider tinkered with the bill last week, but he didn't fix the part that worries landlords. Under the bill, the system won't show cases until a court finds a defendant guilty or makes an eviction final.

Here's the problem: Landlords use CCAP to screen tenants. It's perfectly legal, says Tristan Pettit, a Milwaukee lawyer who heads the Apartment Association of Southeastern Wisconsin. It's a splendid way of learning that a prospective tenant is getting evicted for stiffing his current landlord.

While the bill makes the cases public eventually, the trick is that most evictions settle first, says Pettit. Landlords find that cheaper than months of legal process, and courts press for it. But under Schneider's bill, settlements leave no public record.

Worse, Schneider's bill would keep landlords from spotting troublemakers. Say a tenant is pushing drugs but, because there are witness problems, prosecutors make a deal on a lesser charge. The public record would no longer show the very real drug trouble, which can and should make a landlord wary.

"Basically, you're renting blind," said Tim Ballering, who owns 400 units in Milwaukee. Landlords, he feels, were collateral damage in Schneider's ongoing crusade to give criminals a second (or third or fourth) chance. Still, the lawmaker keeps trying to purge public records, landlords keep complaining, and all that happens is that more lawmakers sign on. Milwaukee Democratic Reps. Fred Kessler and Polly Williams co-sponsored Schneider's bill.

It's not just Schneider. Milwaukee city officials, too, don't make it easy for landlords. The city's an expensive place to own apartments, many say. Taxes are high, and "there are just so many regulations against us," said Pettit. Don't get him started about the nuisance property law, by which landlords can get in trouble if a tenant calls 911 needlessly.

The Department of Neighborhood Services until lately was a particular cross. "There was a real culture of hatred in the city towards property owners," said Ballering. "Starting with DNS."

Ballering, Pettit and others said things are improving under DNS's new commissioner. Others credit police with cleaning up prostitution and gang trouble.

Still, for every step forward, there are another couple steps toward proposals such as landlord licensing. A study done for DNS found that idea had "very uncertain benefits" elsewhere, while for landlords it's pure cost. Yet it seems to be moving forward.

Why? Why do Milwaukee lawmakers co-sponsor Schneider's regrettable lunacy? Why did our city, in which 55% of residents rent, ever come to make those who offer rentals feel as if they were at best merely tolerated?

"It doesn't seem that the city sees what we offer and that it's necessary," said Pettit.

The Public Policy Forum a few months back said Milwaukee's really short of low-cost rentals. If more people went into the business, researchers said, it could help. Yet Ballering, who's owned for 32 years, told his son to find another occupation: "It's such a difficult business," said Ballering.

"There's better things to do with your life."

Not what a city in need of rental housing wants to hear from entrepreneurs who provide it.
http://www.jsonline.com/news/opinion/59534347.html

Sounds like NYC is not as bad as it could be.

Home Sales Going Up or Going Down?

Newspaper articles such as the BBCs blare: Surprise dip in US home building.

Construction of new US homes posted a surprise fall in July, ending three straight months of increases, Commerce Department figures have shown.

Suggesting the housing market recovery remains weak, the number of new properties built last month fell 1% to an annual rate of 581,000 properties.

And yet July single-family starts were strongest since October, and have risen 5 months in a row. What accounts for this? Well maybe that multi-family starts are considerably more volatile than single-family?I still think that things are getting better. We'll see how multi-family starts go in the next few months. NY has definately not climbed out of its doldrums but the moment it the national economy is and is perceived to be growing than NY real estate will do just fine.

Forecast : Upturn in US Home Values: Leading Indicators are Bullish on Real Estate

ECRI's U.S. Leading Home Price Index (USLHPI)which was "designed to predict cyclical turns in real home prices, has now been rising for five months." ECRI's data is made available only to clients and as MHN is not a privileged client we are not privi to the data behind the ECRI graphs. However they are a trusted source and their conclusions are quite promising.

The implication is clear: this is a genuine cyclical upturn in the level of the USLHPI. Such an upturn in the USLHPI amounts to a forecast of a cyclical upturn in the level of home prices this year…"

ECRI’s apparent optimism about the economy is very much at odds with a stubbornly downbeat consensus. When almost every seasoned analyst is so pessimistic, doubts about the likelihood of an upturn are entirely understandable.

But we also know that this is precisely the phase of the business cycle when, in the wake of a major crisis, a “giant error of pessimism” runs rampant. It is therefore especially important to remember at this juncture that the opinions we express are based not on our gut feel, but on a system of objective leading indicators with a stronger theoretical foundation and a more rigorously tried and tested record that any others in existence. Its real-time track record is also unrivaled. Our confidence in their predictive power is based on long experience with these indicators.

While more analysts are coming around to our view about the economic recovery, there are plenty that remain doubtful. Only the reality of the recovery will convince such skeptics, but by then it will be much too late for decision makers to take timely steps to stay ahead of the curve.

We understand that some will be incredulous about our home price upturn call, coming on the heels of our business cycle recovery forecast… it is worth remembering that our apparent boldness is merely a reflection of what our objective leading indexes are telling us today."

As stated earlier ECRI is a trusted source. It is unfortunate that I don't have the data from which they derived this conclusion. If this is true it will have a substantial impact on NYC real estate. Real Estate prices is based upon demand and people are here because of the jobs.

Now before it sounds as if I have nothing but praise for ECRI let me say that they are professional contrarians and make their money by having people buy their data and their analysis. They spend a lot of time upselling their products. I read one of their books, "Beating the Business Cycle," and too much of the book was spent praising ECRI and upselling their data.

Toll Brothers

Toll Brothers showed their first annual increase in signed contracts in four years. A 3 percent year over year increase, mostly in the luxury end. And, what I find most promising are that cancellation rates, now at 8.5 percent, are returning to historical levels of 7 percent and that incentives are being removed and margins are increasing.