Hopefully the housing market is correcting.

http://blogs.wsj.com/developments/2010/03/01/buffett-predicts-housing-problems-behind-us-within-the-year/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20wsj/developments/feed%20(WSJ.com:%20Developments%20Blog)&mod=WSJ_Real%20Estate_BLOGSDEVELOPMENTSFEED

Utah's Premier Resorts bankruptcy still unresolved

Here's How:

1. Disassociate Yourself With Your Home.
   • Say to yourself, "This is not my home; it is a house -- a product to be sold much like a box of cereal on the grocery store shelf.
   • Make the mental decision to "let go" of your emotions and focus on the fact that soon this house will no longer be yours.
   • Picture yourself handing over the keys and envelopes containing appliance warranties to the new owners!
   • Say goodbye to every room.
   • Don't look backwards -- look toward the future.
2. De-Personalize.
   Pack up those personal photographs and family heirlooms. Buyers can't see past personal artifacts, and you don't want them to be distracted. You want buyers to imagine their own photos on the walls, and they can't do that if yours are there! You don't want to make any buyer ask, "I wonder what kind of people live in this home?" You want buyers to say, "I can see myself living here."
3. De-Clutter!
   People collect an amazing quantity of junk. Consider this: if you haven't used it in over a year, you probably don't need it.
   • If you don't need it, why not donate it or throw it away?
   • Remove all books from bookcases.
   • Pack up those knickknacks.
   • Clean off everything on kitchen counters.
   • Put essential items used daily in a small box that can be stored in a closet when not in use.
   • Think of this process as a head-start on the packing you will eventually need to do anyway.
4. Rearrange Bedroom Closets and Kitchen Cabinets.
   Buyers love to snoop and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means:
   • Alphabetize spice jars.
   • Neatly stack dishes.
   • Turn coffee cup handles facing the same way.
   • Hang shirts together, buttoned and facing the same direction.
   • Line up shoes.
5. Rent a Storage Unit.
   Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room's purpose and plenty of room to move around. You don't want buyers scratching their heads and saying, "What is this room used for?"
6. Remove/Replace Favorite Items.
   If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won't want it. Once you tell a buyer she can't have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.
7. Make Minor Repairs.
   
   • Replace cracked floor or counter tiles.
   • Patch holes in walls.
   • Fix leaky faucets.
   • Fix doors that don't close properly and kitchen drawers that jam.
   • Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls.
     (Don't give buyers any reason to remember your home as "the house with the orange bathroom.")
   • Replace burned-out light bulbs.
   • If you've considered replacing a worn bedspread, do so now!
8. Make the House Sparkle!
   
   • Wash windows inside and out.
   • Rent a pressure washer and spray down sidewalks and exterior.
   • Clean out cobwebs.
   • Re-caulk tubs, showers and sinks.
   • Polish chrome faucets and mirrors.
   • Clean out the refrigerator.
   • Vacuum daily.
   • Wax floors.
   • Dust furniture, ceiling fan blades and light fixtures.
   • Bleach dingy grout.
   • Replace worn rugs.
   • Hang up fresh towels.
   • Bathroom towels look great fastened with ribbon and bows.
   • Clean and air out any musty smelling areas. Odors are a no-no.
9. Scrutinize.
   
   • Go outside and open your front door. Stand there. Do you want to go inside? Does the house welcome you?
   • Linger in the doorway of every single room and imagine how your house will look to a buyer.
   • Examine carefully how furniture is arranged and move pieces around until it makes sense.
   • Make sure window coverings hang level.
   • Tune in to the room's statement and its emotional pull. Does it have impact and pizzazz?
   • Does it look like nobody lives in this house? You're almost finished.
10. Check Curb Appeal.
    If a buyer won't get out of her agent's car because she doesn't like the exterior of your home, you'll never get her inside.
    • Keep the sidewalks cleared.
    • Mow the lawn.
    • Paint faded window trim.
    • Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion. Marigolds are inexpensive.
    • Trim your bushes.
    • Make sure visitors can clearly read your house number.

THE WASHINGTON POST (AP)

Real estate agents, home stagers and decorators strongly recommend painting a home in neutral colors to help it sell faster. Why? "Today's buyer doesn't want any work," says home stager Carol Buckalew of Frederick, Md. You don't want buyers to walk into a house and immediately think about the extra costs of repainting because they have a strong reaction to a color, she says.

Neutral colors also help a property look best in photographs online, which is where potential buyers first make the decision to look at a house or condo in person, says Long & Foster real estate agent Deb Gorham.

There are only a few situations in which they'll bend these unwritten rules. Gorham says it's OK to not repaint children's rooms, because it could be upsetting to a child who already is facing a big change when the family moves. Plus, she says, "sometimes you have families moving in, and perhaps those colors even entice the new family."

Another exception is in powder rooms, where home stager Monica Murphy feels it's easier to add personality: "Bathrooms, since they are private rooms and often have the door closed, can have more whimsical colors, like pumpkin, or a deeper green, or a silver gray - colors I would never suggest for a public room like the living room or dining room," she writes in an e-mail.

Here are some recommended colors and the best places to use them:

• Ground Ginger from Behr. Murphy, of Preferred Staging in Loudoun County, Va., likes this pale olive because it "isn't overwhelming."

• Kilim Beige from Sherwin-Williams. Lynn Chevalier, a home stager with Falls Church, Va.-based Staged Right, says this khaki color "makes the house more useful-looking. It covers up flaws nicely, and it has a very crisp look." Chevalier also recommends a near-white shade, Marshmallow from Sherwin-Williams, for the trim.

• Pale Smoke from Benjamin Moore. "The master bedroom is the perfect room to impart color," says Leigh Newport of Staged by Design in Leesburg, Va. This paint "is a soothing pale blue-gray that reflects well in photos," she says.

• Rain from Sherwin-Williams. Lyric Turner, of D.C.-based Red House Staging and Interiors, says this smoky blue is on her bathroom walls. She says the bathroom is one place where she recommends color, because most homes have white bathroom fixtures. "A lot of times people have the white sink and the white bathtub and beige tile, or they might have a beige granite countertop, and to do beige in there is kind of boring," she says.

• Rice Paddy from Duron. Gorham, who is based in Clifton, Va., says, "We like to use it as accent walls, especially (in kitchens) above the sink area." She says this celery-green goes well with the popular granite countertop color uba tuba, which is a shade of green.

• Wickham Gray from Benjamin Moore. Buckalew of Omni Home Staging likes using this solid gray to cover up bright colors. "All the red dining rooms need to be neutralized," she says. "If you don't like red, then you don't like the house."

• Woodmont Cream from Benjamin Moore. Cindy Fortin of Cynthia Anne Interiors in Loudoun County, Va., says this pale neutral color helps rooms look brighter and more airy, even in small spaces lacking natural light. "A lot of times when you have the oak-colored cabinets, it just goes really well with that," she says.

Due to the lifting of the foreclosure moratorium at the end of March, the downward slide in housing prices is gaining speed.

The moratorium was initiated in January to give Obama’s anti-foreclosure program—which is a combination of mortgage modifications and refinancing—a chance to succeed. The goal of the plan was to keep up to 9 million struggling homeowners in their homes, but it’s clear now that the program will fall well-short of its objective.

In March, housing prices accelerated on the downside indicating bigger adjustments dead-ahead. Trend-lines are steeper now than ever before–nearly perpendicular. Housing prices are not falling, they’re crashing and crashing hard. Now that the foreclosure moratorium has ended, Notices of Default (NOD) have spiked to an all-time high.

These Notices will turn into foreclosures in 4 to 5 months time creating another cascade of foreclosures. Market analysts predict there will be 5 MILLION MORE FORECLOSURES BETWEEN NOW AND 2011. It’s a disaster bigger than Katrina. Soaring unemployment and rising foreclosures ensure that hundreds of banks and financial institutions will be forced into bankruptcy. 40 percent of delinquent homeowners have already vacated their homes.

There’s nothing Obama can do to make them stay. Worse still, only 30 percent of foreclosures have been relisted for sale suggesting more hanky-panky at the banks. Where have the houses gone? Have they simply vanished?

600,000 “DISAPPEARED HOMES?”

Here’s a excerpt from the SF Gate explaining the mystery:

“Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.

“We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market,” said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. “California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.”

In a recent study, RealtyTrac compared its database of bank-repossessed homes to MLS listings of for-sale homes in four states, including California. It found a significant disparity - only 30 percent of the foreclosures were listed for sale in the Multiple Listing Service. The remainder is known in the industry as “shadow inventory.” (”Banks aren’t Selling Many Foreclosed Homes” SF Gate)

If regulators were deployed to the banks that are keeping foreclosed homes off the market, they would probably find that the banks are actually servicing the mortgages on a monthly basis to conceal the extent of their losses. They’d also find that the banks are trying to keep housing prices artificially high to avoid heftier losses that would put them out of business. One thing is certain, 600,000 “disappeared” homes means that housing prices have a lot farther to fall and that an even larger segment of the banking system is underwater.

Here is more on the story from Mr. Mortgage “California Foreclosures About to Soar…Again”

“Are you ready to see the future? Ten’s of thousands of foreclosures are only 1-5 months away from hitting that will take total foreclosure counts back to all-time highs. This will flood an already beaten-bloody real estate market with even more supply just in time for the Spring/Summer home selling season…Foreclosure start (NOD) and Trustee Sale (NTS) notices are going out at levels not seen since mid 2008. Once an NTS goes out, the property is taken to the courthouse and auctioned within 21-45 days….The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium.”

JP Morgan Chase, Wells Fargo and Fannie Mae have all stepped up their foreclosure activity in recent weeks. Delinquencies have skyrocketed foreshadowing more price-slashing into the foreseeable future. According to the Wall Street Journal:

“Ronald Temple, co-director of research at Lazard Asset Management, expects home prices to fall 22% to 27% from their January levels. More than 2.1 million homes will be lost this year because borrowers can’t meet their loan payments, up from about 1.7 million in 2008.” (Ruth Simon, “The housing crisis is about to take center stage once again” Wall Street Journal)

Another 20 percent carved off the aggregate value of US housing means another $4 trillion loss to homeowners. That means smaller retirement savings, less discretionary spending, and lower living standards. The next leg down in housing will be excruciating; every sector will feel the pain. Obama’s $75 billion mortgage rescue plan is a mere pittance; it won’t reduce the principle on mortgages and it won’t stop the bleeding. Policymakers have decided they’ve done enough and are refusing to help. They don’t see the tsunami looming in front of them plain as day. The housing market is going under.

Taken from the Deseret News.

-Laura Hancock

Utah's first open air "lifestyle center," The Shops at Riverwoods in Provo, is in foreclosure after the owners defaulted on mortgage payments in November, December and January.

Bank of America NA, which now holds the split mortgage loans after a succession of loan acquisitions, seeks the entire outstanding principal, plus interest — $30.6 million, according to documents filed March 17 in 4th District Court in Provo.

On March 25, both the bank and the mall's owners, Terranet Investments LC — comprised of investor partnerships in Utah and California — asked the court to appoint Salt Lake real estate firm Commerce CRG as a receiver. Commerce CRG now collects rents from retailers, manages the mall, and is selling the property. The Shops, located at 4801 N. University Ave., are only about 65 percent occupied.

The foreclosure most likely will not affect shoppers to the upscale development, which opened in 1998 and added housing and an office complex in phases. The housing and office portions of the development are not in foreclosure. "As far as operations of the center, it's continuing to operate as it had previously," said Kevin Flanagan, chief financial officer for Provo-based Esnet Corp., a member of mall-owner Terranet Investments.

Flanagan confirmed media reports that the center suffered with the 2003 closure of Eddie Bauer and 2007 closure of Copeland Sports. The owners of Eddie Bauer and Copeland closed the Provo stores as part of bankruptcies. The stores were among the largest tenants at the Riverwoods. The Gap and Banana Republic, which were among original tenants at The Shops, also closed doors. More recently, Abercrombie & Fitch Co. and Ann Taylor have closed.

With a rental shortfall in some years up to $1 million a year, Esnet had been subsidizing the difference in mortgage payments. "We tried to hold onto it for a period of time, but this economic downturn" made it impossible for a turn-around in the near term, said Dan Campbell, an Esnet managing general partner.

With new owners, the Riverwoods could become an outlet mall, or could be owned by a group that specializes in community retail, "or have enough retail malls across the country that they can leverage (retailers) into that site (by saying), 'If you want five locations, you have to put one into The Shops,'" Campbell said.

Wow, when they called today’s real estate market a “shifting market,” they were right on target. It keeps shifting, and shifting, and shifting … Every time we turn on the news there’s a new development that affects our economy and therefore the ability of buyers to “buy” and the sellers to “sell.”

SHIFT, the most recent book by Gary Keller, co-founder and Chairman of Keller Williams Realty Inc., begins with the following paragraph: “The Real Estate Market has shifted drastically and dramatically. Sales volume and the number of transactions have dropped significantly. Inventory has reached an all-time high. Buyers have never been more reluctant. Fear is rampant, anxiety is high, and people are getting out of the business left and right. Sounds familiar? Sure it does. The year was 1979!”

Does it make us feel better to know that this has happened before? What did we learn from it in 1979? Fast forward to 1987 and it happened again. Changing tax laws this time had a disastrous affect again. Well guess what? History repeats itself. Now we are faced with this again, in 2009 but this time there are real differences.

In 1979 mortgage interest rates topped 18 percent. Last week buyers were still getting approved at under 6 percent through local lenders. That is a huge difference! Today’s sellers, with the help of their real estate agents, are becoming realistic with today’s pricing, bringing our market back on track.

The real estate business is “cyclical.” An experienced real estate agent and a mortgage broker will understand this and be prepared to give counsel that is in tune with the current market. Remember though, the news you heard last week is “old news,” so stay in touch with your local, trusted real estate agent for updates on this ever changing market.

Real estate remains your single most valuable asset if handled correctly.

When I first heard about this hotel in Dalat, (in Vietnam - for the non-geography buffs), all I could picture were cobwebs floating across my face as I slept and hobos or other terrifying eight-legged creatures scampering about my room in the dark.

Me and my imagination. Actually the “Spider Web Chalet” is a uniquely built structure also known as the The Hang Nga Tree House Hotel, Hang Nga Guesthouse & Art Gallery, and The Crazy House (depending upon who you ask).

Dang Viet Nga, daughter of Truong Chinh, former president of the Socialist Republic of Vietnam designed this hotel so that guests would feel as if they were staying in a really great fantasy world.

The building itself may look like a real tree but it’s actually made out of cement. There are all kinds of unique touches; a spider web hanging over the pond, a giraffe sculpture in the garden, guest rooms that look as if the seven dwarfs decorated them, and not one window in the place is traditionally round or square.

The best place I’ve found on the web to learn more about this “crazy” house is Travelogues.net.

Click here for many amazingly neat pictures of this funky hotel.

Finally, there might be some good news for struggling homeowners. Thousands of mortgage loans that were supposed to reset at a higher rate this spring won’t be changing, putting off the grim threat of foreclosure or bankruptcy for many Americans by as much as a year. Unfortunately, the reprieve will only be a temporary one.

A year ago, real estate forecasters were warning that spring 2009 would be the start of a whole new wave of foreclosures. Across the country option adjustable-rate mortgages (ARMs), an especially scary loan type often compared to a ticking time bomb, were set to detonate at an accelerating pace.

But something happened that few could have predicted. Interest rates dropped to historically low levels and the wave of resets could now be delayed until well into 2010. As a result, many borrowers—who have the option of making payments so low that they don’t even cover the interest, which is then added to the original loan balance—now have some breathing room.

Third of Loans Deeply Delinquent

Credit Suisse (CS) estimates (click here to see the chart) that the resets will begin to accelerate next spring, rising from about $4 billion resetting in March 2010 to a peak of $14 billion in September 2011. The current level is about $1 billion. About $500 billion of option ARM loans are outstanding, according to the bank. “Things have gotten pushed out,” says Chandrajit Bhattacharya, director in U.S. Mortgage Strategy for Credit Suisse. “Right now it looks like the big increase is probably going to be somewhere toward the middle of next year.”

Option ARMs typically reset after five years, at which point the monthly bill increases 65% or more. About 37.5% of option ARMs originated in 2005 are still outstanding, 63% of the 2006 vintage are outstanding, and 82% of the 2007 loans remain, according to Barclays Capital (BCS). And about a third of the outstanding loans in these years are deeply delinquent.

In a given month, between 4% and 5% of borrowers who are current on their option ARMs taken out in 2006 and 2007 default in the following month, says Sandeep Bordia, Barclays’ head of residential credit strategy, who also expects resets to be delayed until next year. “These things have been performing horrendously,” Bordia said. “I don’t know how much of it will last into the recast.”

Moving Out of Option ARMs

But real estate analysts were predicting that many option ARMs would reset sooner as loan balances hit specified principal caps, typically 110% to 125% of the original principal. The decline in interest rates means that it would take much longer to hit the principal cap and many borrowers will instead face a reset only at the five-year mark.

The Mortgage Bankers Assn. is also estimating that the lower interest rates will delay the resets. But the group also expects that lenders will help borrowers move out of the option ARM products before they reset. Many of the investors who can’t easily qualify for modifications and the borrowers beyond help have already lost their homes, says Michael Fratantoni, vice-president of single family research and policy development for the Mortgage Bankers Assn.

And the homeowners who are holding option ARMs when the wave of resets hits won’t face as big a shock because interest rates have fallen, adds Fratantoni. “Interest rates have come down to the point where the resets that are going to occur are going to be a bit of a non-event,” he says. “Very few borrowers will experience the recast.” But Nicholas Chavarela, managing attorney for Orange (Calif.)-based America’s Law Group, which represents borrowers negotiating modifications, says banks remain reluctant to reduce principal for underwater borrowers.

Cutting Debt-to-Income Ratios

The Obama Administration’s loan modification plan, which only applies to owner-occupied homes, is a step in the right direction, Chavarela said. But lenders won’t do what’s needed unless they’re forced to, he said.

Under the plan, taxpayers and participating lenders would share the cost of cutting borrowers’ debt-to-income ratio to 31%. Loans terms could be extended to 40 years and interest rates dropped to as low as 2%. But option ARM borrowers would likely have to pay more each month, even with a modification, because they’d suddenly be required to pay both interest and principal. “The Obama plan needs to be built upon,” Chavarela said.

But even if they can refinance many borrowers can’t afford the higher payments. Philip Tirone, president of the Mortgage Equity Group in Los Angeles, said he reached out to borrowers with option ARMs, offering to help them refinance into a fixed-rate mortgage with a low interest rate. “For them, it’s all about the payments,” Tirone said.

Time to Work with Lenders

Keith Gumbinger, vice-president of HSH.com, a publisher of loan information in Pompton Plains, N.J., said the lower interest rates have helped to diminish the option ARM problem. But it remains unclear how many option ARMs are left to reset and how many borrowers will be able to get out of the loans before it’s too late. Moreover, by the time they do reset it is unclear whether the economy will be better off. If home values and unemployment continue to weaken, it will become even harder to refinance. But the delay in resets gives some motivated borrowers time to work with lenders and negotiate a solution.

“I don’t think this is going to be the tsunami that was forecasted a few years ago,” Gumbinger said. “But it’s probably bigger than a ripple in a pond.”