The Anna Maria Island Sun Newspaper

Vol. 12 No. 17 - February 8, 2012

REAL ESTATE

What are we going to do about the housing market?

Just about everyone from the upper reaches of the White House to television and newspaper pun dents to top national economists have an opinion on how to cure the housing crisis. The problem is there is no empirical knowledge of exactly what to do, since the country has never been in this predicament before.

Let's start with the government. In November there was a program announced called Harp 2 which would help underwater homeowners refinance a property through a lending institution for lower fees and no appraisal process. The banks were not mandated to offer this program and were naturally very leery of providing new mortgages on properties with negative equity. The program was scheduled to start in December, but I haven't heard or read anything about it since the first announcement.

In the president's State of the Union address a few weeks ago, he announced another new plan to help "responsible homeowners." This plan would save underwater homeowners $3,000 a year on mortgage payments and charge banks a small fee to help fund the program. The plan, however, would need congressional approval which pretty much means it's never going to happen especially in an election year.

Basically neither one of these government sponsored programs looks like they're going to do anything for beleaguered homeowners. The only other rabbit in the government's hat is the possibility of converting some of the Fannie and Freddie foreclosures into rentals, which is being studied.

What about the economists? Do they have any viable suggestions? Economists are big on local investors; that is individuals buying up the foreclosures, converting them to rentals and holding long term. The only problem with this is that Fannie and Freddie, who fund mortgages will not provide approval for more than 10 loans to investors keeping the big boys with the real money out of the market.

Economists also want to see pending regulations for lending institutions clarified. The banks are working in a fog of regulations, forcing them to do business with only the lowest risk customers.

And surprisingly, economists agree in part with the government that banks should consider reducing debt for troubled homeowners in an effort to keep them in their homes and stop the flood of foreclosures. Naturally, lenders are concerned that this will encourage more borrowers to default.

But my all time favorite suggestion was written by James Wilcox, an economist at the University of California at Berkeley, in the New York Times in January. Wilcox suggested the federal government start a down payment protection program providing buyers protection against future loss of equity and thus bring buyers into the market. His suggestion is that homebuyers purchase protection from the government for a one-time fee and at the end of three years the government would automatically mail checks to protected homeowners if average house prices in their area declined.

OK, so tell me I'm crazy, but this sounds an awful lot like a derivative, which is essentially a promise about a future transaction. Remember those? That's what brought down the Wall Street banks and AIG requiring the American taxpayer to bail them out.

The unfortunate conclusion is that no one really knows what's going to work. It's all just a little knowledge sprinkled with a lot of speculation. Your guess is as good as mine and could possibly be even better than the folks who are supposed to get us out of this mess. Have any ideas?

Real Estate Transactions
Real Estate Transfers from Jan. 1 to 31, 2011
Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

Sold Date List Price Sold Price Property Address SFUA Lot Size Property Description
01/24/2012 115,000 115,000 512 Spring Ave # 9 456 1 Br/1Ba Condo, short sale
01/09/2012 2,490,000 2,200,000 703 North Shore Dr. 962 2 Br/ 1.5 Ba SFR
01/19/2012 499,000 445,900 801 Jacaranda Rd. 1972 50x121 3 Br/2 Ba SFR
01/25/2012 899,000 790,000 402 South Bay Blvd. 1953 3 Br/2 Ba SFR
01/30/2012 549,900 538,000 111 Peppertree Lane 1680 83x106 2 Br/2.5 Ba SFR
01/30/2012 659,000 590,000 247 Willow Ave. 1405 Irreg. 3 Br/2 a SFR
01/05/2012 795,000 650,000 60 North Shore Dr. 4172 215x134 4 Br/2 Ba Vac
01/27/2012 399,000 340,000 117 North Bay Blvd. 56x110 Vac

Bradenton Beach

01/11/2012 94,500 87,000 107 Eighth St. S. # 3 420 1 Br/1.5 Ba Condo, bank owned
01/13/2012 424,900 390,000 1906 Gulf Dr. N. # 205 1096 2 Br/2 Ba Condo
01/24/2012 150,000 150,000 1603 Gulf Dr. N. # 2 540 1 Br/1 Ba Condo
01/25/2012 280,000 250,000 1000 Gulf Dr. N. # 8 450 1 Br/1 Ba Condo
01/26/2012 124,900 110,000 117 Seventh St. N. # 35 594 1 Br/1 Ba Condo
01/27/2012 285,000 270,000 1325 Gulf Dr. N. # 168 1120 2 Br/2 Ba Condo, short sale
01/27/2012 149,000 135,000 2312 Avenue C # 5 651 2 Br/1 Ba Condo
01/27/2012 125,000 102,000 107 Eighth St. S. # 5 440 1 Br/1 Ba Condo
01/12/2012 329,000 293,500 113 Eighth St. S. 1008 50x100 2 Br/1.5 Ba SFR
01/30/2012 399,500 376,500 307 Gulf Dr. N. 2158 50x100 4 Br/4 Ba Inc
01/31/2012 424,900 410,000 106 Seventh St. S. 3004 100x100 8 Br/7 Ba Inc

Cortez

01/09/2012 579,000 540,000 3840 Mariners Wy. # 516c 2227 3 Br/2.5 Ba

Holmes Beach

01/09/2012 249,000 215,000 4001 Gulf Drive # 111 1106 2 Br/2.5 Ba Condo
01/12/2012 399,000 370,000 213 67th S.t # 5 936 2 Br/2 Ba Condo
01/13/2012 645,000 617,500 610 Foxworth Lane 2081 3 Br/2 Ba SFR
01/18/2012 699,000 515,000 525 75th St. 2994 90x123 3 Br/4 Ba SFR, short sale
01/27/2012 1,950,000 1,800,000 104 Sunset Lane 2577 80x326 3 Br/2 Ba SFR
01/30/2012 574,000 550,000 307 63rd St. # A 1766 3 Br/3 Ba SFR
01/31/2012 2,649,000 2,100,000 2808 Avenue E 2350 4 Br/3 Ba SFR
01/06/2012 365,000 335,000 6250 Holmes Blvd. # 67 1536 3 Br/2.5 Ba TH
01/27/2012 325,000 301,000 6250 Holmes Blvd. # 27 1536 3 Br/2.5 Ba TH

Source: Manatee County Property Appraiser’s Office


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