Nama ‘perks’ for builders add to sense of injustice

Developers enjoying allowances on top of huge salaries — and all at taxpayers’ expense…

DEVELOPERS who work for Nama will be entitled to claim expenses and may even stay in their palatial homes as they draw salaries ranging from €70,000 to €200,000, the Sunday Independent can reveal.

Confirmation of the generous allowances being given by the State’s so-called ‘bad bank’ is sure to provoke fresh anger from a public reeling from the revelation by Nama chief executive Brendan McDonagh last Wednesday that his agency has approved salaries of €200,000 for two of its biggest developers.

Appearing before the Dail’s Public Accounts Committee (PAC), Mr McDonagh also confirmed Nama’s intention to approve salaries ranging from €70,000 to €100,000 a year for between 110 and 120 developers on its books before the end of this year.

Confirmation of the multimillion euro pay bill has unsurprisingly been met with a furious reaction from a public already carrying the massive cost of bailing out the banks that were broken through reckless speculation in the property market.

Asked if it was right that Nama should allow developers to be paid up to €200,000 a year, 89 per cent of those surveyed in the latest Sunday Independent/Quantum Research poll said that they did not. “I think it’s totally unfair. Ordinary people are paying for their [developers] mistakes and they are now making huge wages to work in Nama,” one female respondent to the poll said.

The news that the developers on Nama’s books will also be entitled to claim expenses, and possibly even to stay in the palatial homes they acquired during the boom, is sure to add to this sense of injustice.

Referring to the entitlement of developers to claim expenses, a spokesman for Nama said: “The business plan for their [developers'] business will include resources from the income generated by the business to support the running costs of that business and this will include resources for payments for the key personnel that Nama judges to be necessary for the successful implementation of that plan and other costs including properly vouched for business-related expenses.”

Asked if those developers working with Nama would be obliged to trade down from their present homes to more modest properties, the spokesman pointedly declined to say that this would be required in all cases.

“Typically their present homes will be brought into play as part of the business plan and the loan recovery process and trading down and sales of such homes has already begun,” the spokesman said.

While such an assurance might go some way towards tempering the anger of hard-pressed taxpayers, Nama’s decision to incentivise developers through the payment of a 10 per cent commission on future sales of the assets underpinning their loans will be a harder sell.

Outlining how the commissions will be paid, Mr McDonagh told the PAC that if developers recovered the acquisition price paid by Nama for the loan plus an additional 10 per cent, they would be allowed to keep 10 cent for every euro repaid above that “financial milestone”.

The Nama chief again insisted there was no debt forgiveness for developers on the agency’s books, saying they were obliged to repay the full €74.2bn owed. But Mr McDonagh readily conceded that achieving full repayment of this amount would not be possible in the current market where property values had fallen by 60 per cent.

He said there was “no pot of gold” beyond the properties securing the loans. “Gratuitous” court actions would be a waste of taxpayers’ money if developers had no other money, Mr McDonagh added.

Report by Ronald Quinlan – Sunday Independent

Ireland Property – Daft Property – http://daftproperty.blogspot.com

From what I know, every income property owner has or will have a favorite property, especially once they get quite a few in the portfolio.

Luckily 2 of my favorite properties are right next to each other and they get a ton of love from me: probably because of a lot of factors some of which first attracted me to the properties when I was buying and others just came naturally. 

Why do they get more attention from me? 

Both have in common: interesting mid-century modern architecture which is nice when it’s updated, both are in great locations that attract prime tenants and are overall stable. Part of them being stable is because of my input. Nice properties tend to have nice tenants. It’s really of mutual benefit. I take pride in my properties and they appreciate that fact, by doing the same. 

One recently got a cool remodel. Money and return is always on my mind, so I did not go crazy, but I did not hesitate to put in some extras and some higher end appliances because I know the tenants it would attract would respect and appreciate the place and protect my investment. 

The payoff, if we just do the numbers, will be longer, but I happen to think aggravation and stress has a cost too. I would rather have an apartment empty longer and spend some more money to have it nice then take in tenants what will have issues with the place to which I’ll have to listen and get calls about or they will not be the right fit which will result in my having to think about resolving problems: I really don’t enjoy it and I’ll do a lot to save myself from facing these issues. You would know what I’m talking about if you own rental properties. 

So both of these properties are getting special attention because the momentum is there. If a property does not have this momentum, you need to create it. I had a favorite 4 years ago: it got a lot of attention and care. It’s long not been a favorite, but I rarely have issues with it, the tenants are great and have stayed a long time and I really don’t have to think about this property too much except to cash the checks each month, pay a few bills and once every 2-3 months drive by to see how it’s going. 

A review of new home and resale home sales in Greater Phoenix from 2003 to September 2011. It’s really hard for new home builders to compete with the low prices of resale homes, thus the deep dip in sales of new home and the brisk sales of resale homes.

Since June 2010 new home sales have been hovering at a maximum of about 450 with some dips into the mid 300 units per month. The last few months have been different with sales perking up over the long term low trend. Still they are below what they were the previous decade, but a rise in sales of over 100% over earlier this year is significant, although it is important to mention that just like the resale home sales, new home sales have a cycle with is evident in the chart above, with a slump in sales in the beginning of the year and a rise in sales as the year progresses.

September 2011 = 640

August 2011 = 550

May 2011 = 439

February 2011 = 347

The zip code charts have been updated to include current data for active properties for each zip code in Greater Phoenix as well as sales per month, including September – the last full month and price per square foot all set in a one year chart for easy year on year comparison.

Additionally the chart includes notices of trustee sale, this is the number of notices of a pending foreclosure sale going out to owners in default and also the actual number of trustee sales or homes that sold at the auction, i.e. went into foreclosure. The Phoenix zip code charts are updated monthly and easily available via the market data section of this website.

Redfin just posted an article explicating which day is best to ‘list’ your home, but don’t stop there.

What day of the week should  you release your home into the market is probably a better headline than ‘list’ because listing is one thing and putting it into the open market is another and they rarely happen at the same time. Let me explain.

When you list a home, you sign an agreement between you and the broker to sell the home: that’s what I call listing. Often, a good agent, will give you a list of things to do before the home is put on the MLS. These can include staging, cleaning, repairs in addition to taking and processing photo, videos and/or virtual tours as well as creating copy, all of which should be done before the home is put into wild, into the grips of the free market. I guess list could mean putting into the Phoenix MLS list, or what used to be an book of properties for sale, a list. Now it’s more complicated. With the advent of the internet the world has changed. You can’t just ‘list’ your home: you need to market it before it goes live. 

…and here’s what we found:

Homes listed on Sunday get marginally more online views.

Homes listed on Friday are toured 19% more.

Homes listed on Friday or Thursday sell for slightly closer to original list price.

Homes listed on Friday are 12% more likely to sell in 90 days.

→ Redfin

Of all the things you can and need to do to sell a home, this is low on the priority list. That means if you set the wrong price, have a messy home, bad photos, not so easy access, no staging, obvious deferred maintenance than listing on a Friday will not help you, but considering these findings by Redfin it’s worth considering if you have done all the other things first.

All per square foot numbers are up as recorded by the Cromford Report with ARMLS numbers.  Actives are at 7.59 vs 4.21 last quarter and 8.25 last year. Pending is up to .41 which is down from last year, but up over the last few months. Sold price per square foot is .86 which is about level from last months .06 and down from last year.

Two interesting articles you should read: both from NPR

Housing Market Stuck Despite Low Prices, Rates

Housing Market At Various Stages Around The U.S.

The first article is very relevant to Phoenix. Demand is up and supply is down compared to last year. Total supply is about 3.5 months, which is very low, but prices are still being held down. Some of this has to do with continued distress in the market with 64% of sales still comprised of short sale and bank owned properties. 

The second article, I like, because it points out something missed in many national reports, that each market is at different stages of recovery and even within a metor area, price point, housing type and even individual streets the recovery is different. You can start looking at a big picture, but when you are buying or selling you need to drill and drill and drill until you have a very good understanding of what is going on at street level.

Building slowdown stalls attempt to complete 2,000 ‘ghost’ estates…

WORK TO complete the State’s 2,000 unfinished housing developments has stalled due to a 40 per cent drop in on-site construction activity this year, according to the latest figures from the Department of the Environment.

However, the vacancy rate of completed houses on “ghost” estates has fallen by one-fifth since the department published its survey on the extent of the problem last year.

In addition, demolition has begun on estates were there is no prospect of completion, the department said.

Last October the department published its first national survey of the extent of the ghost estate problem, where developments are left unfinished and only a fraction of homes are occupied. It identified more than 2,800 unfinished or vacant housing estates.

A year on, some 700 estates have been completed and a further 100 on which no substantial work had started have been taken out of development, leaving a total of 2,066 “ghost” estates.

The 12-month period has seen a reduction in the vacancy rate of completed houses in these estates. Last year 23,250 houses were recorded as complete but vacant. This has now fallen to 18,638, a drop of about 20 per cent.

Carlow has the highest proportion of ghost estates, at 59 vacant units per 1,000 houses in the county, followed by 44 in Leitrim, 42 in Longford and 35 in Cavan. This compares with just three vacant houses for every 1,000 in Limerick city.

The highest number of vacant houses is in Cork with 2,363, or 19 for every 1,000 houses. Although there has been progress regarding selling or renting out properties, Minister of State for Housing Willie Penrose yesterday said he was concerned about the slowdown in construction. As a result, “many estates have been left in an incomplete and unsatisfactory state”, he said.

Of the 2,066 ghost estates, completion work was taking place on just 1,822.

Ensuring public safety on unfinished developments was a priority, Mr Penrose said. Some 247 estates were categorised as unsafe because of issues such as dangerous structures, uncovered manholes or unguarded building materials.

Of these, 20 are under the control of the National Asset Management Agency and a further 36 are being fixed by the developer or site owner.

Local authorities have applied to the department for funding to ensure the safety of 164 of these estates. A €5 million fund has been established for this work. To date, €2.10 million has been allocated to local authorities.

In a small number of cases, local authorities have decided to demolish estates where there is no hope of the developments being completed or where half-built structures have been exposed to the elements for so long that they would no longer be sound.

The department has granted Wexford County Council funding to demolish houses at the Coill na Giuise estate in Gorey, and has also approved funding to Laois County Council to demolish a three-storey apartment block at Corrig Glen, Portarlington.

Demolition work not funded by the department has also taken place in Westmeath, where three almost complete houses at Ballinagore were razed, and in Ballina, where six apartments at Quignalecka on the Sligo Road were torn down.

North Tipperary County Council is also planning to demolish the Terrace estate at Ardan, Nenagh Road, Borrisokane. Demolition would always be a “last resort”, Mr Penrose said, but it was likely that further estates would have to be razed on the guidance of local authorities.

Report by OLIVIA KELLY – Irish Times

Ireland Property – Daft Property – http://daftproperty.blogspot.com

Building slowdown stalls attempt to complete 2,000 ‘ghost’ estates…

WORK TO complete the State’s 2,000 unfinished housing developments has stalled due to a 40 per cent drop in on-site construction activity this year, according to the latest figures from the Department of the Environment.

However, the vacancy rate of completed houses on “ghost” estates has fallen by one-fifth since the department published its survey on the extent of the problem last year.

In addition, demolition has begun on estates were there is no prospect of completion, the department said.

Last October the department published its first national survey of the extent of the ghost estate problem, where developments are left unfinished and only a fraction of homes are occupied. It identified more than 2,800 unfinished or vacant housing estates.

A year on, some 700 estates have been completed and a further 100 on which no substantial work had started have been taken out of development, leaving a total of 2,066 “ghost” estates.

The 12-month period has seen a reduction in the vacancy rate of completed houses in these estates. Last year 23,250 houses were recorded as complete but vacant. This has now fallen to 18,638, a drop of about 20 per cent.

Carlow has the highest proportion of ghost estates, at 59 vacant units per 1,000 houses in the county, followed by 44 in Leitrim, 42 in Longford and 35 in Cavan. This compares with just three vacant houses for every 1,000 in Limerick city.

The highest number of vacant houses is in Cork with 2,363, or 19 for every 1,000 houses. Although there has been progress regarding selling or renting out properties, Minister of State for Housing Willie Penrose yesterday said he was concerned about the slowdown in construction. As a result, “many estates have been left in an incomplete and unsatisfactory state”, he said.

Of the 2,066 ghost estates, completion work was taking place on just 1,822.

Ensuring public safety on unfinished developments was a priority, Mr Penrose said. Some 247 estates were categorised as unsafe because of issues such as dangerous structures, uncovered manholes or unguarded building materials.

Of these, 20 are under the control of the National Asset Management Agency and a further 36 are being fixed by the developer or site owner.

Local authorities have applied to the department for funding to ensure the safety of 164 of these estates. A €5 million fund has been established for this work. To date, €2.10 million has been allocated to local authorities.

In a small number of cases, local authorities have decided to demolish estates where there is no hope of the developments being completed or where half-built structures have been exposed to the elements for so long that they would no longer be sound.

The department has granted Wexford County Council funding to demolish houses at the Coill na Giuise estate in Gorey, and has also approved funding to Laois County Council to demolish a three-storey apartment block at Corrig Glen, Portarlington.

Demolition work not funded by the department has also taken place in Westmeath, where three almost complete houses at Ballinagore were razed, and in Ballina, where six apartments at Quignalecka on the Sligo Road were torn down.

North Tipperary County Council is also planning to demolish the Terrace estate at Ardan, Nenagh Road, Borrisokane. Demolition would always be a “last resort”, Mr Penrose said, but it was likely that further estates would have to be razed on the guidance of local authorities.

Report by OLIVIA KELLY – Irish Times

Ireland Property – Daft Property – http://daftproperty.blogspot.com

Building slowdown stalls attempt to complete 2,000 ‘ghost’ estates…

WORK TO complete the State’s 2,000 unfinished housing developments has stalled due to a 40 per cent drop in on-site construction activity this year, according to the latest figures from the Department of the Environment.

However, the vacancy rate of completed houses on “ghost” estates has fallen by one-fifth since the department published its survey on the extent of the problem last year.

In addition, demolition has begun on estates were there is no prospect of completion, the department said.

Last October the department published its first national survey of the extent of the ghost estate problem, where developments are left unfinished and only a fraction of homes are occupied. It identified more than 2,800 unfinished or vacant housing estates.

A year on, some 700 estates have been completed and a further 100 on which no substantial work had started have been taken out of development, leaving a total of 2,066 “ghost” estates.

The 12-month period has seen a reduction in the vacancy rate of completed houses in these estates. Last year 23,250 houses were recorded as complete but vacant. This has now fallen to 18,638, a drop of about 20 per cent.

Carlow has the highest proportion of ghost estates, at 59 vacant units per 1,000 houses in the county, followed by 44 in Leitrim, 42 in Longford and 35 in Cavan. This compares with just three vacant houses for every 1,000 in Limerick city.

The highest number of vacant houses is in Cork with 2,363, or 19 for every 1,000 houses. Although there has been progress regarding selling or renting out properties, Minister of State for Housing Willie Penrose yesterday said he was concerned about the slowdown in construction. As a result, “many estates have been left in an incomplete and unsatisfactory state”, he said.

Of the 2,066 ghost estates, completion work was taking place on just 1,822.

Ensuring public safety on unfinished developments was a priority, Mr Penrose said. Some 247 estates were categorised as unsafe because of issues such as dangerous structures, uncovered manholes or unguarded building materials.

Of these, 20 are under the control of the National Asset Management Agency and a further 36 are being fixed by the developer or site owner.

Local authorities have applied to the department for funding to ensure the safety of 164 of these estates. A €5 million fund has been established for this work. To date, €2.10 million has been allocated to local authorities.

In a small number of cases, local authorities have decided to demolish estates where there is no hope of the developments being completed or where half-built structures have been exposed to the elements for so long that they would no longer be sound.

The department has granted Wexford County Council funding to demolish houses at the Coill na Giuise estate in Gorey, and has also approved funding to Laois County Council to demolish a three-storey apartment block at Corrig Glen, Portarlington.

Demolition work not funded by the department has also taken place in Westmeath, where three almost complete houses at Ballinagore were razed, and in Ballina, where six apartments at Quignalecka on the Sligo Road were torn down.

North Tipperary County Council is also planning to demolish the Terrace estate at Ardan, Nenagh Road, Borrisokane. Demolition would always be a “last resort”, Mr Penrose said, but it was likely that further estates would have to be razed on the guidance of local authorities.

Report by OLIVIA KELLY – Irish Times

Ireland Property – Daft Property – http://daftproperty.blogspot.com

The Phoenix homes search detailed listing panel allows you to gather further information besides the basics and the birds’ eye view we mentioned recently.

Below the primary listings box is a section that starts of, ‘next steps’, which allows you to do up to 6 additional things with the listing.

You can quickly inquire about more information, though I would recommend stating what else you would like to know since most of the mls provides is here and more. Even better you can request a showing. That is the best way to see what a property has to offer. Photos and tours are good, but real life is better.

The share button allows you to easily share this home via e-mail or 3 social networks like Facebook, Twitter or Google Buzz. 

In addition you can do the old fashioned print to take notes on when you go see the home.

If there is a virtual tour that the listing agent uploaded to the MLS you can view it via the V. TOUR button. The quality of virtual tours varies.

And lastly for some it’s important to have a walkable neighborhood. That’s what the Walkscore is for. It provides a score from 1-100 based on a complex algorithm: that score, the closer to 100 the better, tells you if you can get places like grocery stores, coffee shops on foot rather than having to take the care everywhere. It also show you the near by stores, restaurants and bus stops. It’s pretty cool, even if you don’t need or want to walk you can see what is near by.