Assessment Woes

The City of New Haven has just released its new assessment figures, and there is a lot of talk in the media (see particularly the last couple of articles in the New Haven Independent) about tax increases by neighborhood.  As I've blogged about before, East Rock is the neighborhood in New Haven that stands out as having held its value over the past years of decline (Spring Glen in Hamden is the other one that really distinguishes itself).  Because so many areas in our region, let alone the core city, have gone down in value since the peak of the market, East Rock stands to have higher tax increases in the upcoming revaluation.

While one could look at that from a negative point of view, the real key here is that values have held up in that neighborhood, despite plenty of bad economic news and job loss around the region and the country.  Although that may cause taxes for people there to rise, they are not going to be underwater in value, as so many others are.  And that's certainly good news.

Listings Flying Off the Shelf

After a long, long, long winter, we're seeing signs of spring! And that includes the spring market. I'm starting to get lots of calls from people connected to Yale, who've gotten their job offers and are beginning to look for housing here. We are entering lots of new listings into the system--several dozen in New Haven alone last month. And, at long last, some of the suburban inventory is moving. I heard last week that a spate of sales in Pine Orchard has reduced the available inventory drastically. Even things that have been for sale for a very long time have gone on deposit. That's good news for sellers, who have been consoling themselves with the thought that nothing was selling, while they sat with their houses unsold. If they aren't going now, it's time to re-examine the price, because we're experiencing a boost that should help everyone. And it's about time!

Our Annual Day of Caring

For the past eight years, we have closed all of our offices for one fall day, and volunteered in non-profit settings around Greater New Haven. Tomorrow is this year's day, and we will be at Saint Martin de Porres Academy in the Hill section of New Haven. Some of us do hard physical labor, while others do office work. It's great to work as a team across offices, with coworkers that we don't get to see all the time.

Day of Caring was created by United Way after 9/11. I remember the first year, and how good it felt to be doing something positive on such a mournful day. Agents came up to me and commented on their gratitude, to be able to commemorate sorrow and do good at the same time. Over the ensuing years, it became part of the H. Pearce calendar, that demonstrated our values as a company, and gave back to the communities that nourish us.

This year seems a little different. While we still believe in giving back, and we still support United Way, many agents are hurting economically themselves. They may have taken a second job, or given up luxuries (and maybe necessities), as they struggle to cope with a flailing real estate market. We all have uncertainty and worry about the future.

Ironically, this is the time when we should be helping others the most. It's when you reach out to give a boost to someone needier that you feel best about your own life, your own good fortune, and the future of all of us. We all need a helping hand every once in a while, and it's nice to have given one ourselves.

Underwater Mortgages and Short Sales

Recently, I read that 47% of mortgages in the City of New Haven are "underwater", which means that the home is worth less than the amount of the mortgage on it. If you can afford the monthly payments, and you are not planning to move, that may not be an issue. However, for those who cannot pay, it's important to understand that there are ways to handle the situation that are better than others.

A "short sale" is one where the sellers cannot pay off the mortgage or mortgages and liens with the proceeds of the sale. In some cases, they are able to bring money to the closing and settle the difference. In many cases, however, they cannot afford to do so. It's almost always better to tell the bank earlier rather than later. Many banks are currently offering "forbearance periods", where they are suspending foreclosure actions. When those periods expire, they will have to decide whether or not to foreclose on delinquent borrowers.

Generally, if you have the ability to pay in full with other assets, the bank will expect you to do so. If you have no ability to pay, they will usually foreclose. If you fall in the middle, and it will be a short sale, they can work with you (if you can find someone to whom you can speak) to make the process as bearable as possible. You can also give permission for your Realtor or your attorney to speak to the bank about your property. In some cases, you may be offered money to move out. In others, the bank may offer to pay the closing expenses and/or the shortfall. Their position may have more to do with the amount they are carrying on their books for your mortgage repayment (in other words, if you are delinquent they may already have written down the value of the loan on their books) and their particular capital situation than with your circumstances. If you cooperate and are reasonable, you may even be able to negotiate to some extent about how your transaction will appear on your credit record. Like many things in life, it's an art and not a science.