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sHoly cow! This renovation of an existing loft apartment and sprinkler tank house in downtown New York, gets full marks for ingenuity: ‘The tank house was conceived as the quintessential retreat, a place for reading, relaxing and listening to music’, explains architect, Brian Messana. 
Last week, we reported on the National Association of Realtors’ (NAR) Economic Outlook and gave you a map showing the percentage of overall sales that distressed properties represented in each state. Today we want to show you another map from the same NAR outlook. This one shows the number of months shadow inventory by state:
NAR explained their methodology:
The map shows the number of months it would take to clear the shadow inventory by state. The months’ supply is estimated by dividing the shadow inventory and the monthly number of distressed sales. The numbers range broadly from 51 months in New Jersey to 7 months in Nevada. When looking at months’ supply it is important to keep in mind that this estimate highly depends on saturation of distressed sales. Given that New Jersey over the past year on average reported about 20 percent of existing home sales to be distressed sales, it will take a longer period for the shadow inventory to clear. In contrast, Nevada’s distressed sales averaged a considerable 70 percent share of the existing sales and at that rate the current shadow inventory would clear in 7 months.
Appreciation of residential real estate will not take place until a region works their way through the shadow inventory that exists. This map gives you an indication of when that will occur in your state.
The Stair Porn website, devoted to photos of, errr, stairs, takes a healthy peek at remarkable staircase architecture, which makes the experience of going up just as amazing as coming down. 
Sunny, vibrant home in Dewey is a gem. There's lots of room, tons of updates & it's close to transportation. Big eat-in kitchen flows to bright family room, overlooking fenced yard. Separate dining & living rooms with hardwood floors are perfect for entertaining. Full, mostly finished basement for laundry, storage, exercise equipment. Three upstairs bedrooms have newer carpet. 4th bed/office is on 1st floor next to a full bath. Newer windows & super quiet inside!
I love the phrase Patience Equity!
Most buyers want to make sure they get a ‘good deal’ when they purchase something. Purchasers of real estate are no different. That is why many decide to buy a distressed property (a foreclosure or a short sale). The National Association of Realtors (NAR) last week reported foreclosures, on average, sell at a 22% discount and short sales at a 17% discount. It sounds like a pretty good decision to buy a property at those levels of discount.
However, the purchaser must realize that there are added obstacles in these type of transactions. Many foreclosures are left in less than pristine condition by the previous owner and some have title issues that must be corrected before they can change hands. Many short sales have multiple loans that must be negotiated before an offer is accepted by all parties to the transaction. This can take months in many cases. Purchasing a non-distressed property will probably have a lot fewer pitfalls.
Does that mean that you shouldn’t consider a distressed property? Not necessarily. Just understand that there is an additional cost to purchasing a foreclosure or a short sale: the cost of time. For some, the 17 or 22 percent discount is well worth the extra time they must spend on the transaction. We like to call that savings your ‘patience equity’. Patience equity will require you to be patient however. Realize going into the deal that there will be obstacles to overcome and make sure you give your real estate professional time to overcome these challenges. Again, patience equity will require your patience.
Buying a distressed property could make sense for you as long as you realize you will need to be VERY patient with your real estate agent throughout the process. If you are, you will own a home that has considerable equity the day you move in.
We have often written on the impact foreclosures and short sales have on the value of the house next door. The Center for Responsible Lending has done greatreporting on the subject. It seems distressed properties will be a challenge we will need to deal with for some time. The National Association of Realtors (NAR) released their Existing Sales Report. The report said:
Distressed homes – sold at discount – accounted for a 39 percent market share in February, up from 37 percent in January and 35 percent in February 2010.
This week, NAR released an Economic Outlook. In the report, they covered the percentage of overall sales that distressed properties represented in each state. Here is a map that accompanied the report:
Distressed properties have a major impact on house values in a marketplace. Where there is a large percentage of distressed properties, home prices will continue to soften until we work our way through this inventory.
The government decided early on that the market would not be able to absorb the number of foreclosures that the financial crisis was creating without crushing house values. This was one reason that they funded the Troubled Asset Relief Program (TARP). This past week, the Congressional Oversight Panel (COP) weighed in with their opinion on TARP’s success.
Today we want to concentrate on the parts of the report that pertain to real estate. TARP funds were to be used:
…in a manner that protects home values, college funds, retirement accounts, and life savings;preserves homeownership and promotes jobs and economic growth; maximizes overall returns to the taxpayers of the United States.
One way TARP was to accomplish ‘protecting home values and preserving homeownership’ was through theHome Affordable Modification Program (HAMP). According to the COP report:
…when the President announced the Home Affordable Modification Program in early 2009, he asserted that it would prevent three to four million foreclosures. The program now appears on track to help only 700,000 to 800,000 homeowners.
We want to say that, if hundreds of thousands of families averted the devastation foreclosure can bring, we consider the program as worthwhile. Successful? That’s a different story.
Another program initiated to help was HOPE for Homeowners. It was established by Congress in July 2008 to permit the FHA to insure refinanced distressed mortgages. However, as the report explains:
HOPE for Homeowners was initially expected to help 400,000 homeowners, but it managed to refinance only a handful of loans. This was likely due to the program‘s poor initial design, lack of flexibility, and its reliance on voluntary principal write-downs, which lenders were very reluctant to make.
The only silver lining is that TARP didn’t cost the taxpayer as much as was originally estimated. At what expense to troubled homeowners? In discussing the falling cost of the program COP stated:
… a separate reason for the TARP‘s falling cost is that Treasury‘s foreclosure prevention programs, which could have cost $50 billion, have largely failed to get off the ground. Viewed from this perspective, the TARP will cost less than expected in part because it will accomplish far less than envisioned for American homeowners.
TARP was set up to avoid home values being crushed under the weight of foreclosures. To that regard, it seems to have done nothing but delay the inevitable.
By Eoin O'Carroll, CSMonitor.com / March 16, 2011
At least three people have been victims of unprovoked attacks by a gray squirrel on a street in Bennington, Vt., over the past few weeks, leaving many residents of the formerly placid southeastern Vermont town wondering if they might be next.
Bennington Banner reporter Keith Whitcomb, Jr.,interviewed East St. resident and squirrel-mauling victim Kevin McDonald, who said he was shoveling snow outside of his house, when he felt the animal's razor-sharp claws tearing into his back and shoulders. McDonald managed fend off the squirrel and flee into his house, but not before the the ill-tempered rodent lunged at him twice more.
The following day, McDonald saw his neighbor across the street battling the squirrel with a metal pole and a blanket. Later that day, he learned of another woman on his street that, like he, had been attacked from behind. That woman is being treated for rabies.
The Associated Press quotes Vermont Public Health Veterinarian Robert Johnson, who said that there has never been a case of a squirrel passing rabies to a human. Instead, Johnson speculates that the squirrel was tamed by humans.
"They've lost their fear of people and they go ballistic (when they encounter a person) because it's not their human," Johnson told the AP.
Naples, FL Realtor® Don Breen recently was asked a question about mortgage insurance and shares his answer here.
“If I pay mortgage insurance and default on my loan, why wouldn’t that cover the deficiency amount? ”
Here is my answer: Yes, the mortgage insurance should pay your lender for any loss. So that reduces the amount that your lender will lose on the short sale.
There are a couple of problems. Many mortgage insurance companies have gone bankrupt. They can’t pay on their claims.
In 60-75 percent of all short sales, you won’t owe a deficiency. (Beth's note: I don't know where the 60-75% statistic comes from. Plus bear in mind the author is in FL not IL) The other problem is that many mortgage insurance companies have terms written into the mortgage that they can pursue you for the loss.
They are more aggressive with trying to be repaid. In the few short sales we have negotiated and the lender asked for a promissory note, the person requesting it usually was the mortgage insurance company.
But, they only ask for a promissory note about half the time. In addition, the promissory notes are usually for an amount lower than the loss.
For example on one short sale, the loss was around $59,000. The seller agreed to a promissory note of $10,000 to be repaid over the next 10 years with zero interest. Their monthly payment was $83.33.
We won’t know if they will ask for a promissory note until the short sale is in progress. If you know you have mortgage insurance, then you need to find and aggressive short sale agent.
They will work to get an promissory note or deficiency waived…”
Click here to read more blog posts by Don Breen.
Read more: Doesn't Mortgage Insurance Cover Default? | REALTOR.com® Blogs
