While there’s been a lot of attention paid to the mortgage interest tax deduction, which is safe for now, and interest rates, which have inched higher, there are a few other pieces of notable real estate news as of late. Consider this the real estate version of a holiday appetizer platter — some of it tasty, some of it hard to stomach.
In blighted neighborhoods in Chicago and elsewhere, community groups frequently blame mortgage lenders and loan servicers for abandoning large numbers of foreclosed homes because they don’t want to shoulder the costs associated with completing the foreclosure and maintaining the property standards once the home becomes bank-owned.
A new study by the federal Government Accountability Office pours a little cold water on that theory nationally, but it’s still got a few chilling figures for the Chicago area.
From January 2008 to March 2010, banks abandoned 499 foreclosures in metropolitan Chicago, ranking Chicago second behind Detroit for metropolitan areas with the most abandoned foreclosures. The good news is the size of Chicago’s overall housing stock is significantly larger than Detroit’s, so on a percentage basis, the Chicago area looks far less bad.
Nationally, the study, which used data representing 80 percent of mortgages, found that abandoned foreclosures account for less than 1 percent of vacant homes in the 12 cities it studied.
The report specifically cites a 2005 report by the Minneapolis-based Homeownership Preservation Foundation that pegged the direct municipal costs of one abandoned foreclosure in Illinois at more than $19,000 and could be more than $34,000 in the case of a fire at the building.
Latest read on home prices. While there’s a bit of optimism out there about the overall U.S. economy in 2011, there’s still a lot of realism when it comes to home prices. But according to at least one local scholar, that might not be such a bad thing.
Erik Hurst, an economics professor at the University of Chicago Booth School of Business, predicts that nominal home prices, or home prices not adjusted for inflation, will remain relatively stable in 2011. “Some months they’re going to decline a little bit, and some months they’re going to go up a little bit,” he said. “Are we going to see anything like we saw in 2008 and 2009? No. Are we going to have months where prices are going to dip? Yes.”
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The hiccup continues to be that there’s a significant amount of slack in the housing market that continues to exert downward pressure on prices, and Hurst pointed out that altruistic home sellers could do their part for the overall market by being more willing to sell their homes cheaper and, therefore, faster. “But that’s against human nature,” Hurst said. “People always want to hold out for a little more.”
Maybe that’s why a majority of consumers don’t think the housing market will recover for another two years, according to a survey by real estate Web sites Trulia and RealtyTrac. In a Harris Interactive poll conducted for the companies in early November, 58 percent of respondents said they didn’t expect a healthy housing market to return until after 2012, and 22 percent of those people said the recovery wouldn’t happen until 2015 or later.
The season for promo codes. Online holiday shoppers are being inundated with promotional codes they can apply at checkout to save money in the purchase process, and now a national real estate Web site is bringing the promo code to home listings in an effort to snare some new business.
HomeGain, a site owned by several news organizations, including baiduhai parent Tribune Co., allows consumers to shop for homes as well as for agents. Through June 30, it’s offering a rebate of up to $150 if an agent referred by HomeGain helps facilitate a home transaction.
But just like in retail, there is a fair amount of fine print. A home can’t sell for less than $75,000 and receive a rebate. Homes that sell for $75,000 to $149,999 will receive $75, and the maximum allowable rebate is $150.
Is $75 or $150 enough to steer a homebuyer or seller from one real estate agent to another?