The city of Detroit has been losing it’s population regularly over the past couple of decades. The result has been a glut of housing that has been left behind; empty and abandoned eyesores dotting the city.

Mayor David Bing is now acting on his pledge to clean up these eyesores by tearing them down. The city tried to sell some of the homes for a dollar but that plan did not make an impact. Like most things, without a supply of people to live in these homes, they become worthless.

So the city of Detroit is going to demolish 10,000 of these homes across the city. Good for them. It may allow others homes in the city to stop losing value and stabilize the neighborhoods.

Mayor Dave Bing has pledged to knock down 10,000 structures in his first term as part of a nascent plan to “right-size” Detroit, or reconfigure the city to reflect its shrinking population.

When it’s all over, said Karla Henderson, director of the Detroit Building Department, “There’s going to be a lot of empty space.”

Mr. Bing hasn’t yet fully articulated his ultimate vision for what comes after demolition, but he has said entire areas will have to be rebuilt from the ground up. For now, his plan calls for the tracts to be converted to other uses, such as parks or farms. via the WSJ

Realestatebloggers.com

WASHINGTON — The Senate voted to roll back efforts to give states more consumer powers yesterday, in a partial victory for federally chartered banks that don’t want state regulators meddling in their business.

Like a House bill passed in December, a sweeping Senate financial regulations bill backed by President Obama would permit states to write and execute tougher consumer financial laws and let state attorneys general enforce federal laws. Essentially, banks would face more regulations and more cops on the beat.

The Senate yesterday rejected one amendment to weaken the proposed law, but voted 80 to 18 for a compromise measure that still curtailed the state powers that had been in the underlying regulatory bill.

Banks and their allies argue that the Obama administration and Senate Banking Committee chairman Christopher Dodd, Democrat of Connecticut, would create an overly complex system of regulation. States devising disparate rules would result in increased costs to consumers and an avalanche of lawsuits.

“It is not only going to be confusing for the banks themselves, as they try to comply with this patchwork quilt of 50 different rules and regulations, in addition to the national rules and regulation, it’s going to be confusing for consumers, too,’’ said Senator Tom Carper, Democrat of Delaware, who offered the successful compromise amendment to limit state power.

Under current law, federal regulators have been able to issue a blanket rule overriding state laws concerning licensing, credit terms, and loan disclosures. The result has been an inability by state regulators to impose those rules on national banks and a rash of dismissed lawsuits brought by homeowners asserting national banks or their subsidiaries violated state consumer rules.

Carper, in a deal with Dodd, agreed to allow federal regulators to override state law on a case-by-case basis and permit attorneys general to enforce federal regulations passed by a proposed consumer financial protection bureau. Senator Bob Corker, Republican of Tennessee, offered an amendment that would prohibit attorneys general from enforcing federal rules altogether. It failed 55 to 43.

The Obama administration encouraged Dodd to compromise with Carper to provide an alternative to Corker’s proposal, which had gathered Democratic support. After the vote, Treasury spokesman Andrew Williams said Carper’s amendment “represents a significant improvement over the status quo.’’

Bankers cheered the vote.

“Without the Carper amendment, consumers and their banks could have been subject to potentially hundreds of different and confusing state and local laws covering their loans, checking accounts, credit and debit cards, or ATM usage,’’ said Edward Yingling, the American Bankers Association’s president and chief executive. Consumer advocates were more conflicted.

“The deal compromises a bill further that is already full of concessions to the banks and the bank regulators who failed us, but it does not give in to the bank demands to remove the states entirely from their responsibility to protect their residents,’’ said Lauren K. Saunders, a managing attorney at the National Consumer Law Center.

Boston.com

Helen has been invited to attend a private dinner with the North Shore – Barrington Association of Realtors  Chairman and a select group of influential REALTOR members. This is a great honor and we are thrilled to be invited to this event.

NEW YORK (CNNMoney.com) — Bipolar is what comes to mind when diagnosing the post-homebuyer tax credit market. There are two separate forces pulling it in opposite directions, and experts aren’t yet sure which path the market will take.

On one hand, sales and prices are rising, indicating recovery. On the other hand, so are interest rates and repossessions, which most certainly do not. And then there are the millions of foreclosures that need to be sold but haven’t yet been listed — so-called shadow inventory — that could derail a real recovery if they hit the market in floods.

The prognosis? Negative short term but turning positive by the end of 2010.

“In the short run, I see a mini-collapse,” said Richard DeKaser, an independent housing market analyst and founder of Woodley Park Research who correctly predicted a downturn back in 2005 when he was chief economist for National City Corp.
How to buy a foreclosure

One of market’s biggest hurdles is getting beyond the lapse of the $8,000 homebuyer tax credit. Thanks to the incentive, buyers scrambled to beat the April 30 deadline, pushing new home sales up nearly 30% in March.

But that just borrowed buyers from later months. And now we face the hangover effect.

“In the months immediately following the expiration of the tax credit, we expect measurably lower sales,” said Lawrence Yun, chief economist for the National Association of Realtors (NAR).

Industry insiders believe the hangover is worthwhile, however, because the credit helped stabilize housing when it most needed help. Home prices have been steadier in recent months, recently experiencing their first year-over-year rise in more than three years.

Still, there are some strong negatives dragging on the market.

1. Interest rates have been intermittently creeping up. Although nobody expects 6% until at least 2011, the days of 4.5% mortgages are behind us.

2. Bank repossessions are on track to surpass a million homes in 2010. But at least foreclosure filings fell in April, the first time since RealtyTrac began reporting.

3. More than a quarter of borrowers are “underwater,” meaning they owe more than their homes are worth.

4. “Strategic defaults” — where underwater homeowners walkway even when they can still afford to pay — accounted for 31% of all foreclosures in March, according to a recent study.
0:00 /3:10Detroit to demolish neighborhoods

But there is one factor that has experts really scared: homes that are ready to be sold but haven’t been put on the market. Right now, there could be more than 4.5 million homes in “shadow inventory,” according to a recent report by Barclays Capital.

This so-called shadow inventory is a recent phenomenon. In the past, inventory was either tight or it wasn’t. But now, with home prices so low and so many foreclosures on the market, both homeowners and banks have been waiting to put properties on the market.

“These sidelined sellers closely watch the market for signs of a possible turnaround and rush in if there’s a hint of good news,” said Leslie Appleton-Young, chief economist for the California Association of Realtors.

But as more sellers put their homes up for sale, supplies increase, which will depress prices again. Rinse and repeat ad infinitum.

That vicious cycle could cause prices to bounce up and down for years. “I see a saw tooth bottom,” Humphries said. “Prices go up; inventory rises, which sends prices down again. That plays out for three to five years of no appreciation. … Without price appreciation, it leaves more homeowners in negative equity. That’s toxic. Any setback, like a job loss, they go into foreclosure.”

By Les Christie
Cnnmoney.com

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