Foreclosures, Coyotes And Big Foot Sightings!

In his Sunday column for August 17, 2008, St. Petersburg Times business editor Robert Trigaux did a countdown of the worst business news of the week. Number One on his bad news hit parade was real estate.

Why?

Well, let's tick off the reasons ...

• According to Zillow market researchers, if you bought a home in the United States since the beginning of 2003, nearly one buyer in three now has negative home equity.
• If you bought a home in 2006 during the market's peak, you have the highest rate of negative equity in your home. Nationally, some 45-percent of 2006 buyers now have negative equity even if they made a 10-percent down payment.
• If you bought a home in Tampa Bay during 2006, 71.7-percent of those buyers now have a mortgage that is worth more than the home they are paying for.

I think all this stuff is probably true in broad-brush strokes, but I worry about any statistics that come from Zillow. I just don't trust the way they gather data. I've said that before, as regular readers of this blog know.

There was also a story in the St. Petersburg Times about all the vacant homes in the Tampa Bay area and how those homes are putting a strain on area businesses, services and government departments. Apparently phone and cable companies are getting fewer customers signing up for services, utilities are seeing more "low usage" accounts, cities are straining to keep vacant properties safe and free from vandalism, and homes that are near vacant properties are seeing valuation drops approaching 2-percent simply because of proximity to the empty house.

Although it is hard to put an accurate figure on the number of vacancies, the Center For Responsible Lending projects that in Pinellas County 3,675 homes were lost through foreclosure on subprime loans issued in 2005-2006.

The Center For Responsible Lending also reports that 310,826 homes in Pinellas County are losing value due to nearby subprime loan foreclosures and that the average decrease in value due to that proximity is $2,294.

In addition, the Center For Responsible Lending and the St. Pete Times report that Pinellas County has lost $712,899,509 in its tax base from subprime foreclosures during 2005-2006.

I sure hope the Center For Responsible Lending has issued a memo or something to lending officers defining guidelines for responsible lending. Obviously they had not done so during 2005 and 2006. So, this is all their fault.

I mention these things only because Robert Trigaux may want to use them as factoids in his next round-up of crummy news stories for the week. You know, they could be items #1-A or 1-B or something.

One other story caught my eye in Sunday's newspaper. Coyotes. Apparently residents in the Bahama Shores area are saying that wild coyotes are feeding on their pets, especially on cats if they are let loose at night.

For heaven's sake! Coyotes? In an urban area of St. Petersburg, Florida? I think of coyotes in places like the wild west with desert ghost towns -- you know, Arizona and New Mexico. Not St. Petersburg.

Well, wait a minute. It's all starting to make sense now. We have coyotes because of all the vacant houses due to subprime mortgage foreclosures. The vacant houses are like miniature ghost towns from the wild west and they create perfect environs for urban coyotes. So, the urban coyote problem is the direct result of unsound mortgage lending practices from the 2005-2006 housing boom. In typical American finger-pointing fashion today, let's blame today's urban coyote problem on the Center For Responsible Lending. We can then get a $100-million federal taxpayer-funded grant to study the problem, followed by a $200,000 per coyote bounty paid for by the Pinellas County Commission and the St. Petersburg City Council. Of course, they'll create a new department with taxing authority to put yet another tax on property to pay for the bounty and offset any liability resulting from bounty-hunters confusing coyotes with neighborhood dogs. Then ... ah, but this could go on forever.

By the way, I hear people in Old Northeast are reporting Big Foot sightings.

For more information on real estate in the Tampa Bay area, visit my website at http://www.thestpeterealestatesite.com/.

-30-