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April 25, 2009

A week's roundup of interesting real estate numbers

First interesting number: 11.9 percent. That was the "national mover rate" in the United States last year, a record low. The Census Bureau has tracked the rate since 1948. (The actual number of people moving was 35.2 million, down 3.5 million from the year before "and the smallest number of residents to move since 1962.")

Second interesting number: 34.1 percent. That's the share of people defaulting on Fannie Mae or Freddie Mac loans in January who gave "curtailment of income" as the reason, according to the Federal Housing Finance Agency. "Excessive obligations" came in next at 19.8 percent, followed by unemployment (8.1 percent), illness (6.5 percent) and marital problems (3.5 percent). (Those were the most common reasons, but there were others.)

Third interesting number: $16.3 million. That's how much K Bank, an Owings Mills company that a number of rehabbers turned to for loans, lost during the fourth quarter. The Federal Deposit Insurance Corp. said Friday that it has required the bank to "stop issuing construction and development loans and raise more capital," Andrea K. Walker reports today.

Fourth interesting number -- OK, numbers: $360,000, $360,000 and $420,000. That's how much Scots Glen condos sold for at auction yesterday after a lender foreclosed on builder Dale Thompson, according to Realtor Pat Hiban. Hiban says on his blog:

The 420k was the former model with 4 finished levels and an elevator. The model was last listed at 740k and the other two were in the mid 600's. ...

The lots in Highland drew even more bidders. Out of the 7 lots for sale, 4 sold at prices acceptable to the bank. The sale prices on the lots were 250k,255k,290k and 295k. The other 3 got bids of 150-180k and Columbia Bank chose not to accept those. It was quite an experience and it was good to see so many serious buyers there in earnest.

At one point the auctioneer yelled out "These are going for way less than the market!!!" and the guy next to me yelled back "Your looking at the market buddy!!! This is your market, right here right now!!!"

Thanks to David Hobby for pointing out Hiban's post -- I would have missed it otherwise.

Have other interesting housing-related numbers to share? Comment away.

Posted by Jamie Smith Hopkins at 10:33 AM | | Comments (4)
Categories: Housing stats, New developments, The foreclosure mess
        

Comments

"Your looking at the market buddy!!! This is your market, right here right now!!!"

That is the quote of the year. Most real estate professionals and many economists still can't get the fallacies learned during the bubble years out of their heads. It's like people have become conditioned to think real estate can only go up and the value of housing is higher than what it's going for now.

Unfortunately, it's very hard to break people of these misguided principles. Today's situation is no different from when people thought the world was flat, the earth was the center of the universe, and that there were no American continents. The herd seems to get stuck in paradigms that eventually get broken and trampled upon once people wake up to reality.

I'm starting to think that the upper end of the market still thinks its immune to the bubble. They won't reduce prices and therefore get foreclosed upon. When the upper end realizes they can't sell they'll come crashing down on the middle which will in turn crash onto the lower end. I don't think we've seen the worst of things yet.

Has anyone followed houses priced $500K & up in the city? Have they been moving as swiftly as the $250K ones ... ? What kind of income do you need to get financing for $500K ... What will happen when someone asking $500K really can't wait 20 years to sell? What will that do to the value of houses being purchased right now for $250K ?

Upper end has not been moving at all in the city. Remember the jumbo limit is 417k. Most lenders have been requesting 25% down for jumbo loans. The jumbo rate is also around 6%, much higher than the conforming loans. I have no idea how the upper end is going to shake out.

So perhaps incomes match houses that are in the $250,000 range - the ones that are selling - but above that price point is where the issue lies ... Buyers with the income needed to support a higher end market do not exist in large enough quantities to support a back-log of properties that have been over-valued during the last several years when the real estate heyday was in full swing ...

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie
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