A new book outlines serious problems with community associations, which have suffered major financial problems during the recession.
Among the groups that have suffered during the foreclosure crisis are condo and homeowners associations.
Owners who aren't making their mortgage payments often don't make their HOA and condo dues payments, either. At least in some states, lenders don't have to make up all the missed payments when they take over the properties. That has created significant financial problems for some associations.
"Beyond Privatopia: Rethinking Residential Private Government," the second book about associations by Evan McKenzie, a political science professor at the University of Illinois at Chicago, argues that the entities have serious problems. His previous book was "Privatopia: Homeowner Associations and the Rise of Residential Private Government."
"Residents often contend with intrusions an elected government would not be able to make, like a ban on pets or yard decorations," McKenzie said in a news release. "If things go wrong, the contracts residents must sign to purchase within the community give them little legal recourse."
Many of us have heard a story of homeowners association outrage, such as this one about a soldier who lost his home over $800 in unpaid dues while he was deployed in Iraq.
Builders can't compete with cheaper distressed homes. The decline in construction is dragging down the economy.
To no one's surprise, sales of new homes fell again in May.
The 2.1% drop in sales from April to May means a seasonally adjusted annual rate of 319,000, the U.S. Department of Commerce reported. That's less than half the number sold in a healthy market.
"It's sort of status quo," Jane Caron, chief economic strategist for Dwight Asset Management, was quoted as saying in a Reuters roundup of economic commentary. "U.S. home sales have been trending sideways at an extremely low rate for a very long time, and until the existing overhang in home sales is cleared there's not going to be much of a change in that rate."
Building of new homes has nearly halted, except for some multifamily projects. The median sale price of a new home rose 2.6%, bringing the median price of a new home to $222,600, about 30% above the price of an existing home.
With the glut of used homes on the market, far more than there are buyers, builders of new homes can't compete.
How about a 550-square-foot cottage for $1.23 million? Small homes in great locations don't come cheap.
I'm a sucker for beautiful small spaces, so a recent blog post from Zillow caught my eye.
Unlike the small homes I have owned, these don't come with small prices. But it's always instructive to see how people make the best use of their small spaces.
I've owned several houses that were just under 1,000 square feet, but none as small as these featured homes, which are closer to 550 square feet. They're all for sale, in case you're looking.
"People are trying to downsize their lives, get rid of debt," Griswold told Zillow's Erika Riggs. "Your cost of living is lower, your utilities don’t cost nearly as much. It changes your whole attitude — you’re in a small space, you only have room for so many items. It’s a lifestyle change."
Another blog that celebrates small-space living – plus offers practical suggestions – is Apartment Therapy. For example, it has a post on creating small home offices on a small budget. Architect Sarah Susanka wrote a whole series of books extolling "The Not So Big House."
New York property manager mixes 'psychic credit checks' with people skills to determine who would make a good tenant.
Landlords do all kinds of screening to determine whether someone will be a good tenant, pay the rent on time and treat the property well.
Several landlords in New York have a special tool: Their property manager is a psychic.
In addition to pulling tenants' credit reports for the traditional screening, Joan Baker subjects the tenants to "psychic credit checks."
"It’s more than just a hunch about somebody," she told The New York Times. "It’s a physical reaction you get, where you can almost see what’s going to happen once they move in."
You may laugh, but Baruch Herzfeld, who contracts with Baker to manage buildings and screen tenants – particularly the artistic types -- finds her services invaluable.
"I’ve never had a problem with anyone she’s checked into," Herzfeld said. "I don’t know what part is psychic, what part is luck and what part is interpersonal skill. But I know she’s effective."
U.S. Gypsum closed the company town, which was founded in 1923 as a mining tent camp, after demand for Sheetrock dried up.
Yesterday there was a town called Empire, Nev. Today, the town has ceased to exist.
The town that began in 1923 as a tent camp for miners was sealed off June 20, the victim not of a natural disaster but of the economy. Its ZIP code, 89405, is no more.
In May, sales of existing homes were down 3.8% from April and 13.3% below last May, when the tax credit was in effect. But the picture isn't the same in all cities.
Sales of existing homes fell in May, hitting a low point for the year.
The National Association of Realtors reported that home sales were down 3.8% from April, leading to an annualized rate of 4.81 million, far below the 6 million sales a year considered normal. The median sale price was $166,500, down 4.6% from May 2010.
Anyone who was surprised by the report has been living in a cave. Most forecasters don't see a significant improvement in the housing market this year.
"This one report does not change our long-term view in that we still believe the housing market will remain a drag on overall economic activity in 2011 and likely into 2012. We expect stabilization in 2012," Tom Porcelli, chief economist for RBC Capital Markets, said in a Reuters article, which quoted a number of economists. "I do not think this report sheds any new light, and the housing market effectively remains in a state of depression."
The number of sales was 15.3% below the 5.68 million rate of May 2010, but it's difficult to draw any conclusion from those numbers because last year's buyers were likely timing their purchases to take advantage of a federal tax credit. The numbers include single-family homes, condos, townhouses and co-ops.
Even without the tax credit, sales were up over last May in four of the 20 metro markets covered in a separate report by the Realtors group: 24.4% in Miami-Fort Lauderdale, 8.1% in Phoenix, 5.9% in New York-New Jersey and 1.1% in Atlanta.
Cities that didn't experience a big run-up in values also didn't suffer a big decline. Jobless rates and foreclosures are key indicators.
Some days it seems as if we're just writing about one depressing real-estate statistic after another. I'm running out of ways to say "home values fall again."
When the grim statistics get trotted out, it's important to remember that old adage: All real estate is local.
Just because the national average value of real estate is down doesn't mean your home has lost value. The situation is much better in some cities than others. Even in hard-hit areas such as Florida and California, not every house has lost the same amount of value.
Perhaps we should have all bought in Pittsburgh. Monday's Wall Street Journal reminds us that the Pennsylvania city experienced no real-estate boom and no real-estate bust. Home values in Pittsburgh are up 42% since 2000. Check out the WSJ chart comparing Pittsburgh with Las Vegas.
Editors' group honors the best journalism and books published by those who chronicle the real-estate market's ups and downs.
Every group of people has an association, and that includes us real-estate journalists.
I spent last week at the annual conference of the National Association of Real Estate Editors in San Antonio, Texas, and got a lot of ideas for future blog posts.
Part of the conference is the annual presentation of awards for the best real-estate journalism and books. I thought you might want to read some of the work of the award-winning journalists.
The top prize, for best overall entry by an individual, went to Shannon Behnken of The Tampa Tribune for a story about how the David J. Stern law firm in Florida, accused of numerous lapses in bringing foreclosures against homeowners, inflated fees by serving nonexistent people in foreclosure lawsuits. You can read Behnken's latest real-estate stories here.