As part of the settlement announced Tuesday in an antitrust case between the Justice Department and the National Association of Realtors,  non-Internet-based brokers will now be allowed greater use of multiple listing services, according to the New York Times.

Online brokers felt "that the industry’s practices have denied them the chance to make full use of the multiple listing services," the Times said.

It seems that wasn’t the only complaint online brokers had about the industry.

Today–while perusing the Internet for my daily housing news fix–I stumbled across this press release from ForSaleByOwner.com, in which the site offers data "to provide a pricing comparison between homes being sold by its customers and those being sold by real estate agents."

That URL shouldn’t be unfamiliar to anyone in the real estate industry–the site is becoming a growing threat to agents as home prices decline and sellers look for a way to make more money off the sale of their home.

Cutting out an agent commission is becoming a more popular choice, and sites like ForSaleByOwner.com give sellers a way to do it.

Buyers and sellers, of course, lose some things in the process–agents’ regional knowledge, a personal touch–but there’s no disputing it: Do-it-yourself home buying and selling sites are picking up steam.

According to ForSaleByOwner.com, the median price of homes it sold during the first quarter of 2008 was $267,900. The National Association of Realtors–as the release says–estimated traditional agents’ median home selling price to be $196,300 and ForSaleByOwner.com’s to be $180,000.

"For too long, interest groups representing real estate agents have flooded the marketplace with questionable data on ‘for sale by owner‘ homes to discredit this method of selling a home and protect agent
commissions," Greg Healy, the site’s vice president
of operations, said in the release. "The truth is that homes in a wide range of prices are sold ‘for sale by owner‘ because all consumers want opportunities to save on paying commissions."
   

Ouch.

It’s understandable that the NAR wouldn’t want sites like ForSaleByOwner.com to cut into its agents’ client base; and sure, ForSaleByOwner.com is going to stress that the economy is weak, and that the site feels it can save consumers money.

But could the site’s median selling price for the first quarter–in which no housing data we read was really uplifting–be more than $70,000 higher than NAR’s agent-based selling price?

If NAR is wrong and the site actually did sell homes for a median price that was $71,600 higher than real estate agents did, well–that is a big difference.

The ForSaleByOwner.com selling price also significantly higher than the $202,300 median price that NAR said homes were selling for in April.

Who’s right?

Who knows? But one thing was clear from the press
release–there’s a big divide growing between traditional real estate agents,
who are in the midst of a troubled market, and ForSaleByOwner.com,
which is going after that market.

Who do you think will win?

Homeowners, of course, aren’t the only ones who have suffered during the U.S. housing decline; and reports of builders struggling to make ends meet as residential construction dwindle are growing more frequent.

But lower community home prices and reduced sales of local homes aren’t the only factors to blame.

Take, for example, Texas. The state withstood much of the housing decline and actually added construction jobs: 23,000 since the end of 2006.

But in the first three months of the year, builders broke ground on 5,218 homes in the Dallas-Fort Worth area. That’s less than half of the construction starts in the second quarter of 2006, during the housing boom, according to Metrostudy.

As a result, several
homebuilders in North Texas–including Goff Homes and Colonnade Homes–have gone out of business: No more marketing efforts, and the phones are disconnected, according to the Dallas Morning News.

Other builders are reducing jobs.

"Most of the builders I’ve talked to have
reduced their overhead by 30 percent to 50 percent," Ted
Wilson, an analyst with Dallas-based
research and consulting firm Residential Strategies Inc. told the Morning News.

The bottom line: The housing slump’s effect is
widespread–and as it zooms through its second year, even states that
fared decently have been affected.

And the local market isn’t causing all of the problems Texas builders–and building-related industries–are facing. Silver Line Building Products LLC, a window-making unit of Andersen Co., announced recently that it would eliminate 250 jobs at its Garland, Texas plant. The job cuts aren’t a result of the drop in local building; they’re due to a reduced national demand for windows.

Lower building material demand isn’t the only ripple effect coming out of the building sector’s problems. A New York Times
article published today on the auto industry’s woes–which directly tie in to the
housing market’s decline–further illustrates that it’s tough times for
builders.

Vehicle repossessions, the Times said, are increasing in
markets where the housing slump has been most severe, like Florida.

The most recent repossessions, according to Fort Meyers, Fla. repo man Bill Glover? Cars owned by builders.

“Lately what we’re picking up is crew-cab pickup trucks,”
Glover told the Times, “and anything having to do with construction.”

And as repossessions increase, new auto loans are decreasing because of the risk–more of the same vicious cycle.

California and Florida have lost more than 80,000 construction jobs each since 2006, according to Department of Labor statistics; some were due to the housing decline. But others may be directly tied to the housing market’s growth years, according to the San Diego Union-Tribune.

Paul Tryon, chief executive officer of San Diego County’s Building Industry Association, expects fewer than 4,000 home-building permits to
be issued this year.

Yes, home starts are down in the area. And yes, many of the area residential builders are scaling back.

“Centex, KB Home, K. Hovnanian, William Lyon, Richmond American, Pulte–all have closed local offices, and pretty much every other builder
has reduced staff,” real estate analyst Peter Dennehy told the Union-Tribune.

But an additional reason for the decline may surprise you. According to the Union-Tribune, lower home sales are only partly to blame.

The other issue: The county used up much of its residential development-designated land during the boom years.

And the outcome? An industry shift from single-family, suburban tract homes to vertical, mixed-use projects, says real estate economist Gary London.

The recent Commerce Department results that showed multifamily units helped push new home construction up 8.2 percent in April would seem to support that–but is it feasible that buyers who once favored single-family homes, will embrace multifamily options?

Maybe. After two years (and possibly more, if the slump keeps going) of watching home equity decline, it’s entirely possible that buyers may be a bit gun shy about spending. Multifamily units are likely–depending on the market, of course–to be priced lower than single-family homes, and they require less upkeep.

But what do you think about the proposed shift London predicted? Do you think builders–and buyers–in markets like San Diego are going to decrease single-family starts and gear up to build more multifamily properties? Tell us what you think by posting below.

The Office of Federal Housing Enterprise
Oversight released data today that showed home prices had yet again dropped in the biggest quarterly decline since the OFHEO started keeping records 17 years ago.

A few highlights:

• Home prices dropped 3.1 percent in the first quarter compared to
  2007.

• Prices declined in 43 states.

• California (-10.6 percent), Nevada (-10.3 percent), Florida (-8.1 percent) and Arizona (-5.5 percent) showed the most severe depreciations, according to USA Today.

The culprit? That pesky housing supply of unsold homes.

"The large overhang of real estate inventory awaiting sale continues
to force price declines in many areas, but particularly in places that
had seen very sharp appreciation," Patrick Lawler, the agency’s chief
economist, said in a prepared statement, according to the New York Times.

By now, we’re used to bad housing reports: And we’re used to speculation that the decline isn’t over.

And we’re also used to groups like the National Association of Realtors putting a positive spin on things to make the even most negative news.

But OFHEO is a government agency–and unlike NAR has no reason to want consumers to believe that the market is improving. Yet OFHEO Director James Lockhart was quick to point out that lower prices do benefit one group–buyers.

"For homeowners and financial market observers, these declines
spell further erosion in home equity levels and potentially more
trouble for mortgage markets," Lockhart said. "To
prospective home buyers who have been shut out of homeownership because
of affordability constraints, these declines may be welcome news, as
are continued low mortgage rates."

But, given that the markets that showed the greatest depreciations–California, Nevada and Arizona–in the past quarter are the ones that have seen some of the biggest, most consistent drops during the slump, it’s not necessarily true that declining prices mean buyers are jumping up and down in joy.

Consider also that PMI–the country’s second-largest mortgage insurer–recently released its Spring 2008 Risk Index, which said Vegas home prices have a 91 percent chance of declining in the next two years.

That’s an increase from the 89 percent the company predicted in its Winter 2008 Risk Index, according to the Las Vegas Review-Journal–and something that’s likely to make borrowing much, much more difficult in the Vegas market.

Cheaper homes are great; but if buyers can’t get financing, the market is unlikely to see a lot of action.

And Vegas isn’t alone in its risk-related financing troubles. The PMI index ranked other locations–like Riverside-San Bernardino-Ontario, Calif., which received a 93 percent rating–as being extremely prone to further price declines in the next two years.

If prices keep falling in the hardest-hit areas, financing will keep tightening up: And how are we ever going to get out of this seemingly eternal housing slump?

It’s a never-ending cycle, but it’s one that needs to stop. The question remains, however, who needs to step up and make the first move.

It’s highly unlikely that buyers and sellers will unite to start offering and accepting higher home prices. Which leaves lenders–and it might be time for them to take a role in turning the market around.

Lenders are understandably hesitant. And they’ve done a good deal of work to ensure mortgage loans given out now are more realistic: More proof of income and assets is required, and many of the no-equity/no money down programs of years past are no longer available. Lenders have learned that squeezing borrowers into homes–and loans–that they can’t really afford in the near future doesn’t help anybody.

But for the market to rise from its ashes, it really seems that lenders need to now loosen up a bit. We’re not saying loans should be given out indiscriminately–but working closely on an individual basis with borrowers to get a loan–the right loan–should be a priority for lenders in high-risk markets.

If it isn’t, this cycle of higher risk leading to lower prices leading to a stagnant or declining market is sure to continue–fueling the nationwide housing slump along with it. And that’s something no one–including lenders, the OFHEO, buyers and sellers–want to see happen.

On Sunday, the New York Times ran an article about neighborhood-based social networking Web sites and their impact on the rental/multifamily community.

This isn’t a new phenomenon–shortly after moving into my condo building nearly three years ago, I was told we had a message board-based Web site for unit owners, which I promptly joined–but the article got me wondering about the long-term success and potential impact of such sites.

One of the online communities listed in the article–LifeAt–currently only has five Chicago properties on its roster. I don’t live in any of them.

So I checked out another one of the sites mentioned in the article, MeetTheNeighbors.org. My area has added a number of large rental and condo buildings to its roster in the past two years, but I was surprised to find my neighborhood was not only low on members–it didn’t exist.

So I went through the site’s brief registration process, created an entry for the area and waited. Surely, I thought, two days after a mention in a major newspaper, people would–as I had–be flocking to the site to check it out. Right?

Not really. As of today, the neighborhood has just one registered member–me.

In fact, the only residents I could find anywhere close didn’t seem to be interacting as much for general neighborhood betterment but for other purposes. Two posted what looked like online dating ads. One woman’s profile contained little information except for a plug for her sister’s dogwalking service.

Where were the events I was told the site listed? Or the community action it was supposed to incite?

At the end of the day, these sites will live or die based on resident involvement–and it appears no one in my community is aware they even exist.

Which, for our building may be a relief. One thing that struck me as particularly odd about the Times article was how upbeat it was: Most of the sources cited social networking sites’ ability to help managers address problems early and give residents a way to offer painter and insurance recommendations.

But surely (which the article does touch on briefly) many are using such sites as a way to semi-anonymously complain? Or could?

Remember that Web site that I accessed after moving in–the one where I posed questions about our satellite service and others questioned building rules? It disappeared suddenly and has yet to be replaced with anything similar.

Maybe the site was phased out–or maybe it just got too critical for comfort. Who knows? But it sure would be useful now, as the building gears up for a major hallway renovation. They’ve laid out samples in the lobby and on one floor of the building and distributed paper ballots. I can’t help but think a Web site would make the process so much easier.

It would, of course, also give people a chance to complain about the fact the hallways have been so outdated for so long (the ’80s were a great decade, but I really don’t need them to start right outside my doorframe) and ponder what this is going to cost us. And that’s a real risk property managers should consider.

Which brings me to my big question about building-based networking
sites: It’s clear from the Times article that if enough join one, residents love building- and community-based social networking sites.

But do property managers feel that they’re a good idea, or a bad one? What do you think?

Today’s New York Times article about the problems condo owners are facing as the economy slows sheds light on a growing issue: Defaults and foreclosures and the multifamily market.

For months, we’ve heard about how bad foreclosures can be for a neighborhood of single-family homes: Unprepared to deal with property maintenance, banks sometimes let foreclosed properties fall into disrepair.

A foreclosed home drags the value of areas homes down and can hurt the neighborhood–for every one
foreclosure out of 100 properties, the violent crime rate grows by
2.33 percent, according to a 2005 study by Dan Immergluck of the Georgia Institute of Technology
and Geoff Smith of the Woodstock Institute, the Tuscon Citizen reported recently.

But little has been said about how such issues are affecting buildings with several units or more–until now.

Part of the appeal of living in a condo involves the fact you don’t have to handle some of the general maintenance: Somebody else vacuums your hallway. Somebody else mows any lawn out front. And somebody else tackles tough decisions about getting a new roof, repainting a foyer or hiring a contractor.

That’s one reason they’re selling big to young, urban dwellers and older, retired residents who don’t have the time or just don’t want the responsibility.

But, as more and more owners face financial troubles because of the weakening economy–just today, the Labor Department said that initial jobless benefit claims grew by 6,000 to 371,000 in the week ended May 10–buildings are feeling the burn.

Some of the resulting issues include:

• Extra fees. One source quoted in the article–Barbara Sanz–lives in a Miami building where almost one in six residents are facing foreclosure, and as their monthly condo assessment payments slow or stop altogether, the remaining owners’ have gone up. Sanz is one of the residents who not only had to kick in an extra $1,000 but has to also pay an additional $50 a month for cable and Internet, the Times said.

• Reduced maintenance. Because some buildings now lack the capital they used to have as a result of the reduced assessments, common areas like pools and laundry rooms may become dirty or broken.

• Bargaining with the bank. Banks don’t want to mow lawns, and banks don’t want to assume condo maintenance fees–even if that’s part of the deal with owning a foreclosed-upon unit. In some cases, banks are just overwhelmed because they’re foreclosing more properties than they’re used to assuming responsibility for. But some buildings live or die by condo maintenance fees–especially smaller buildings that don’t have large reserves to buffer a loss. Just ask Doris Wilson, who owns a one-bedroom apartment in Chicago. Wilson had to fight to get a lender to pay
  $2,500 in assessments after it foreclosed on one of her building’s seven
  units, which was needed to clean its sewer system.

In some buildings, things are so tough that residents are signing up for front door duties, according to the Times; and it’s likely to get worse.

Existing condo sales are down in the U.S.; and although buyers are becoming more excited about the deals they can get on foreclosed homes, condos just aren’t packing the same punch because of the potential extra costs and maintenance issues, the Times said.

Which is too bad. Condos are an important housing market component. For one, there are a lot of them–one in eight homes in the U.S. is a condo; and during the slump, they’ve held on to their value better than single-family homes have. Since early 2007, median condo prices have fallen just 3 percent, CNNMoney.com says.

But make condos seem like a high-risk investment, and that trend is unlikely to continue.

Exciting amenities, reduced responsibility and an urban location (location, location) are all great selling points–but if a unit comes with the potential for extra fees and the possibility that the water will be shut off, it’s not really going to be an easy sell, is it?