The in-laws own a gas station in Miami that they've wanted to sell for years. But they dithered when the market was hot and ended up being stuck with it when interest evaporated in 2009.
Lately, though, the phone has begun to ring again. It's not exactly a feeding frenzy but real offers are coming from legitimate buyers for the first time in three years.
That's actually a pretty good description of real estate in general, where low interest rates have convinced a growing number of people that it's time to buy. See this upbeat story on the home builders:
Pulte, Lennar jump as survey shows housing rebound
NEW YORK (MarketWatch) -- Shares of U.S. homebuilders rallied on Wednesday after a Wells Fargo analyst's research report said data from 20 select markets nationwide are showing strength across the board.
"For the third consecutive month, our survey points to an improvement in orders suggesting 2012 may be the long-awaited recovery year for housing," the note said.
PulteGroup PHM -1.39% added more than 8%, Lennar Corp. LEN -1.47% gained 5%, D.R. Horton DHI -2.44% rose 4.2% and Toll Bros. TOL -0.86% gained 3.8%.
The bellwether industry ETF, the iShares Dow Jones U.S. Home Construction Index Fund ITB rose 3.4%.
Wells Fargo's monthly Neighborhood Watch Survey, which tracks 150 sales managers at housing tracts in 20 markets, showed that March results were strong across all measured metrics. In particular, the survey noted that March's numbers surpassed poll participants' expectations by the widest margin since the survey started, in 2001.
Wells said that pricing in the 20 markets also improved, both month-to-month and over year-ago figures. Sales managers' commentary on market activity indicated that buyer confidence seems to be improving as inventory shrinks.
"Sales managers suggested there is a sense of urgency in the marketplace as buyers anticipate higher home prices and/or mortgage rates," the report said.
Bidding wars are even returning to some markets:
Home shopper Dian Schneider was four houses in on a whirlwind tour of local homes for sale Friday when her real estate agent issued her a warning.
"Now if you like this one you'll need to move today because there are already two offers on it, and they're both above list price," said Anna Hernandez of McKinzie Nielsen Real Estate. "They're not crazy high, but you'll have to go in high, too, if you're serious about it."
Schneider nodded knowingly as she peeked inside closets, flushed toilets and opened cabinet doors.
The 50-year-old single mom had already missed out on two homes she'd made offers on. She was outbid on one, and pulled out of a second over concerns about its dated electrical system.
"In hindsight, I probably should have taken that one," Schneider said.
Almost all the available inventory in her price range is badly in need of repairs, and upgrading the electrical on the home she passed up wouldn't have cost as much as she'd assumed, she later learned. But back then, she didn't fully appreciate how lucky she'd been to find something.
The Bakersfield area had only 583 single-family homes for sale in March, about a third fewer than in March of last year.
Bidding war return
The result has been fierce bidding wars and almost immediate turnover for anything of quality that's priced reasonably, whether it's a modest starter home or a mansion.
"Everybody's pretty much in the same boat right now, regardless of price," said Robert Morris, who sells for Watson Realty ERA. "The supply keeps dropping and dropping and there's nothing replacing it."
Broker Nancy Harper of Nancy Harper Realty recalled listing a home the day before Easter. By Easter Sunday, it had six offers on it, and when she called the losing agents to tell them their offers had been rejected, two of them burst into tears.
"They told me they'd written something like 14 offers for clients and just couldn't get one accepted," Harper said. "When you have agents bursting into tears, boy, that's low inventory."
So is the housing bubble back?
There's an inflationary argument for this being the case. The Fed has lowered interest rates dramatically and handed banks a ton of newly created dollars, which in the past has produced asset inflation, as everyone decides that real things are a better bet than a rapidly-inflating currency and begins to act on this assumption with borrowed money.
Creating a new generation of overleveraged "homeowners" is of course a bad idea for society as a whole, but quite good in the short run for house prices, economic growth, and incumbent electoral prospects.
On the other hand, it might all be a mirage, since real estate has gotten some recent help from a couple of unsustainable sources. First, this past winter was warmer than usual, so presumably a lot of deals that would have been done in April and May have already happened. Second and much more ominous, the robo-signing mess that prevented banks from foreclosing on homes they otherwise might have (because they couldn't be sure their paperwork would check out) is over, freeing banks to go after all the squatters who have been living rent-free for the past few years:
Flood of foreclosures to hit the housing market
NEW YORK (CNNMoney) -- The golden age for foreclosure squatters may soon be coming to an end now that the $26 billion mortgage settlement has been approved.
The settlement, agreed to by the nation's five largest mortgage lenders, is expected to speed up the foreclosure process by providing stricter guidelines for the banks to follow when repossessing homes.
The banks involved include Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citibank (C, Fortune 500), Wells Fargo (WFC, Fortune 500) and Ally Financial.
Many foreclosures have been in limbo since fall 2010 following the so-called robo-signing scandal, when banks allowed employees to sign off on thousands of foreclosure documents a month with little verification.
Lenders hit the pause button on foreclosures because they "were afraid that anything they did would be under a microscope," said Eric Higgins, a professor of business at Kansas State University.
As a result, borrowers who were seriously delinquent on their loans have been able to stay in their homes for months or even years without making a single payment. Nationwide, the average time it takes to foreclose on a home -- from the first missed payment to the final bank repossession -- stretched to 370 days during the first quarter, almost twice as long as it took five years ago, according to Daren Blomquist, the marketing director at RealtyTrac.
Foreclosure free ride: 3 years, no mortgage payment
In some states, delinquent borrowers have been squatting in their homes much longer. In Florida, the average time was 861 days, and in New York it was 1,056 days -- close to three years.
"Perhaps a million foreclosures could have been pursued last year but weren't," said Rick Sharga, executive vice president for real estate investment company, Carrington Holdings.
But that's all about to change, he said. "We're going to see an increase in the speed of foreclosures and a higher number of foreclosure starts."
In fact, there are indications that the pace of foreclosures are already starting to pick up.
While overall foreclosure activity was down during the first quarter, filings were up 10% in the 26 states where foreclosures must undergo court scrutiny, according to RealtyTrac.
In the judicial state of Indiana, for example, foreclosure filings were up 45% year-over year. And in Florida, they were up by almost 26%, according to RealtyTrac.
So where does this leave housing? Perched, like the rest of the economy, between two very powerful forces -- one inflationary, one deflationary. In housing's case, mortgage rates are low, pent-up demand is massive and supply, at the moment, is minimal. But there's also a tsunami of foreclosures about to hit the market, along with the usual eurozone and Middle East wild cards waiting to traumatize the financial markets.
So who knows? I just hope the gas station sells soon.
