Swimming in tax foreclosures, Michigan’s Wayne County treasury office is planning to bundle hundreds of dilapidated tax foreclosure properties into one package at its fall auctions, reported Crain’s Detroit Business.
In the past, the treasurer’s office has experimented with bundling for cases such as subdivision projects that fell apart. This would be the first time the county has bundled so many properties, however.
The bundling is part of a strategy to best position the properties for the future. The idea is to make the bundle appear so unappealing that the properties don’t sell. Many of the properties have dilapidated structures that should be demolished, said the chief deputy treasurer, Dave Szymanski.
The number of bundled properties could be as little as 400 or as high as 1,000. Solitary dilapidated structures that sit in an otherwise solid block of residents would be at the top of the list, as opposed to several dilapidated structures in a largely vacant block.
Builders’ sales offices are being filled on weekends by homebuyers looking to purchase a house before prices and interest rates climb higher in the Phoenix metro area. While more homes are being built than in 2012, the pace of the recovery is not accelerating as fast as had been anticipated, according to AZ Central.
Industry experts claim that new-home construction will climb at less than half the rate expected earlier this year. However, a combination of factors is creating headwinds for the homebuilding industry, including a shortage of workers, subcontractors unable to ramp up their operations quickly enough, and a shrinking inventory of prime building lots.
Now, some Phoenix builders are putting a limit on the number of homes they offer for sales as they watch prices continue to rise, the report says. Analysts with RL Brown Housing Reports claim that, while the homebuilding market is still in a recovery, the number of houses that can be built will remain limited for the next few years.
In January, 16,000 new houses were projected to be constructed across the region in 2013, up from 2012’s 11,500. However, only about 13,000 new houses will likely be built in metro Phoenix in 2013.
According to a recent article from Forbes, there have been some troubling signs in the housing recovery that have been easily swept under the rug as the basic numbers of sales and prices have been so impressive.
A sustainable housing recovery has always needed real homebuyers who intent to live in the homes, and particularly a healthy percentage of first-time homebuyers. That is something this recovery has lacked, with institutional investors a driving force behind the housing rebound.
In fact, much of the reported “increases” in new home construction have been for multi-family housing for renters. As of June 30, single-unit housing starts were 67.6% lower than their January, 2006 pre-recession level.
“And now we’re seeing the first indications of the mini-bubble potentially beginning to deflate,” writes Forbes.
“New housing starts plunged 9.9% in June, to their lowest level in 10 months. Permits for future starts fell 7.5%. Existing home sales declined 1.2% versus the consensus forecast for a 1.5% increase. Pending Home Sales fell 0.4% in June. Construction Spending unexpectedly fell 0.6% in June, well below the consensus forecast for an increase of 0.5% (and the largest monthly decline in five months). And these reports are mostly from housing activity in the period prior to the spike in mortgage rates of the last six weeks,” the article claimed.
Read the full breakdown of the bubble deflation by clicking here.
Since filing for bankruptcy in July, Detroit’s housing market has garnered international attention, writes Zillow. Even Chinese investors are betting on a comeback, while economists research whether recovery is in sight.
Zillow (Z) Senior Economist Svenja Gudell believes if the city continues to hollow out, it’s unlikely the housing market will continue seeing a recovery. “There’s no doubt Detroit is already an ailing city, and the population decline that is both a symptom and a cause of economic problems there is a troubling trend for the housing market, which had recently seen signs of life,” said Gudell.
An estimated 30% of Detroit’s housing units already lie vacant, according to Gudell, and without job growth and a healthy economy attracting new workers, any demand that exists now will inevitably dry up.
“And when demand goes slack, home values will most likely fall further. Those homes currently vacant will remain so, blighting the cityscape and creating a double whammy of downward price pressure in the city’s neighborhoods,” said Gudell.
Today on Zillow, more than 400 homes are for sale in Detroit for less than $5,000. Of those, more than 75 are listed for less than $1,000.
The Federal Deposit Insurance Corp. shut down one bank at the end of last week.
First Community Bank of Southwest Florida, located in Fort Myers, Fla., was closed by the Florida Office of Financial Regulation, which named the FDIC as the receiver. To ensure the depositors have a place to access their accounts, all deposit accounts have been transferred to C1 Bank, located in Saint Petersburg, Fla., and will be available immediately.
The former First Community Bank of Southwest Florida locations will reopen as branches of C1 Bank during regular business hours.
Click here to read the full statement.