Commissioners in Jefferson County, Alabama voted today to file the largest U.S. municipal bankruptcy after failing to reach a deal with bondholders. JPMorgan Chase & Co. financed most of the debt to fund a sewer renovation will probably take the biggest loss. Around $3.14 billion of bonds are outstanding.
The commissioners stood up for their constituents when they bucked the banks by not imposing as much as an 8.2% increase in sewer-rates. Alabama's most populous county passes the notorious record formerly held by California's Orange County in 1994. Fears will likely rise in Wall Street over the $2.9 trillion of U.S. municipal bonds that are outstanding.
This pending bankruptcy has cast a shadow over the county and Alabama's largest city, Birmingham. The allegedly corrupt sewer project would have meant residents would pay for the skyrocketing fees for the outstanding debt. The Jefferson bankruptcy will be the eleventh municipal bankruptcy this year.
The corruption stems from two JPMorgan bankers who allegedly made $8 million in undisclosed payments to friends of commissioners to secure the bank's role in the financing of the project. In 2009, JPMorgan settled with the Securities and Exchange Commission for $722 million.
2430 N Cannon Dr
Chicago, IL 60614
Neighborhood: Lincoln Park
(773) 880-1266
Alabamadirectory.org provides relevent links information to Alabama arts, real estate, university, health, culture, finance, investment, travel, business and more.
Friday, January 6, 2012
Can a bankruptcy stop my house from being foreclosed on in Alabama? Review
Yes. You may be able to save your house from foreclosure by filing a Chapter 13 bankruptcy. A Chapter 13 bankruptcy allows you to put your arrearage (the payments you have missed) in your Chapter 13 plan and pay them back over the term of your plan (usually 5 years). You will have to pay the entire amount of your arrearage back over this period of time. This in effect “catches up” your mortgage payments, keeping the mortgage company from foreclosing.
Other than allowing you to catch up your back payments the bankruptcy court cannot affect the terms of your mortgage. Therefore, beginning the month after you file for bankruptcy you will have to begin making your regular monthly mortgage payments. This can be difficult since you were already missing payments and now you are to begin making your mortgage payments again plus a payment to the bankruptcy court. This will require some serious budgeting and discipline, but it will be very important for you to make both of these payments. While there may be some ways to prevent foreclosure if you miss payments post-petition (i.e. after your bankruptcy has been filed), it will be difficult. You will also have to maintain your homeowner’s insurance coverage.
To stop the foreclosure your bankruptcy will need to be filed prior to the foreclosure sale. The 2005 amendments to the bankruptcy laws have made the preparation of bankruptcy petitions much more time consuming. I would recommend you see an attorney immediately and not later than 1 week prior to the foreclosure sale.
The bottom line is while it may take some cutting back on other expenses, a Chapter 13 bankruptcy can save your house in Alabama from foreclosure.
Armitage Ave & Orchard St
Chicago, IL 60614
Neighborhood: Lincoln Park
Wednesday, January 4, 2012
Alabama, Birmingham, and Huntsville Real Estate Market in 2012-Forecast Review
While the Real Estate market adage is “Location, Location, Location” I submit that based on this study that maybe it should be “Jobs, Jobs, Jobs”
Over the years, I have often been asked to predict what will happen in the future in the residential real estate market. I have generally resisted providing answers to this, pointing out that the current data which I provide gives some pretty strong hints.
However, in doing some consulting work I have come across some useful correlative data that holds promise for quantifiable, accurate, projections of future real estate sales.
While it is important to keep the adage “correlation is not causation” in mind, correlations can be useful and dependable if they pass the “common sense” test.
I have found that for a given area, the Bureau of Labor Statistics Unemployment Statistics can reasonably and reliably predict future sales. This makes sense in that buying homes is not a spur of the moment decision, but rather influenced by consumer future expectation, which is nicely captured and influenced by the unemployment rate.
To date, I have tested this concept in multiple markets with similar results. I expect that additional implementation will show similar predictive capabilities.
Since both the real estate and labor market have large seasonal swings, I chose to use the January unemployment rate to project the entire year’s transaction volume. I then spread the volume over the individual months, based on the historical percentage of sales that a given month has in a year. The percentage sales in a month holds steady in “normal” years. I have currently used 2004-2011 to arrive at the percentage sales per month. I suspect that some inaccuracy comes from including 2010 when we had the really abnormal melt-down followed by the extraordinary tax credit. Rather than continue adjusting numbers, I have chosen to publish these preliminary findings in the hope that others can help with the methodology.
Summarizing the findings:
How Unemployment correlates to Real Estate Sales from 2004-2010:
Correlation rate:
Statewide 80%
Birmingham 83%
Huntsville 73%
I have also tested a few other areas, outside Alabama, with similar results.
Interestingly, when I included years before 2004, correlation rates went down. I suspect that this is due to the way financing changed in 2004. I also suspect that years before 2004 will show strong correlation, and that years post 2004 will continue to show even more correlation just not across the 2004 “divide”. This remains for more research. By the way I attempted to find some correlation based on mortgage interest rates. In short, there was none. There may be some very short term impact from interest rates, but nothing close to the jobs market.
Based on the initial correlations a linear regression can predict sales for 2011, and preliminarily for 2012 (based on the estimated January 2012 unemployment rate) for the same three markets.
Market 2010 (actual) 2011 (proj) 2012 (proj)
Statewide 36,234 37,407 39,429
Birmingham 12,235 12,736 13,430
Huntsville 8,543 8,321 8,507
The statewide totals are via the Alabama Center for Real Estate
The monthly projected results compared to the actuals for 2011for Birmingham are as follows:
2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
proj 755 877 1135 1137 1239 1314 1180 1191 1090 933 914
actual 683 773 1072 1022 1106 1255 1237 1224 1145 983 944
%error -10.5 -14.9 -5.9 -11 -12 -4 4 2.7 4.8 5 3
Cumulative error 2.9
As you can see this is quite encouraging. The cumulative error for 2011 projections is under 3% for 2011. I believe that excluding 2010, to calculate the monthly changes, due to the tax credit impact will improve the monthly accuracy.
Why might this be useful?
If the results during the year do not unfold as projected one should be looking for the reasons such as the tax stimulus or similar government action. It is also likely that other impacts and shocks to consumer expectations will cause the market to react in ways that are not accounted for in the projections. One can think of major disasters such as the coastal oil spill and multiple weather events. I have not yet tried to see how the coastal markets can be projected.
San Francisco, CA 94114
(415) 424-8912
Over the years, I have often been asked to predict what will happen in the future in the residential real estate market. I have generally resisted providing answers to this, pointing out that the current data which I provide gives some pretty strong hints.
However, in doing some consulting work I have come across some useful correlative data that holds promise for quantifiable, accurate, projections of future real estate sales.
While it is important to keep the adage “correlation is not causation” in mind, correlations can be useful and dependable if they pass the “common sense” test.
I have found that for a given area, the Bureau of Labor Statistics Unemployment Statistics can reasonably and reliably predict future sales. This makes sense in that buying homes is not a spur of the moment decision, but rather influenced by consumer future expectation, which is nicely captured and influenced by the unemployment rate.
To date, I have tested this concept in multiple markets with similar results. I expect that additional implementation will show similar predictive capabilities.
Since both the real estate and labor market have large seasonal swings, I chose to use the January unemployment rate to project the entire year’s transaction volume. I then spread the volume over the individual months, based on the historical percentage of sales that a given month has in a year. The percentage sales in a month holds steady in “normal” years. I have currently used 2004-2011 to arrive at the percentage sales per month. I suspect that some inaccuracy comes from including 2010 when we had the really abnormal melt-down followed by the extraordinary tax credit. Rather than continue adjusting numbers, I have chosen to publish these preliminary findings in the hope that others can help with the methodology.
Summarizing the findings:
How Unemployment correlates to Real Estate Sales from 2004-2010:
Correlation rate:
Statewide 80%
Birmingham 83%
Huntsville 73%
I have also tested a few other areas, outside Alabama, with similar results.
Interestingly, when I included years before 2004, correlation rates went down. I suspect that this is due to the way financing changed in 2004. I also suspect that years before 2004 will show strong correlation, and that years post 2004 will continue to show even more correlation just not across the 2004 “divide”. This remains for more research. By the way I attempted to find some correlation based on mortgage interest rates. In short, there was none. There may be some very short term impact from interest rates, but nothing close to the jobs market.
Based on the initial correlations a linear regression can predict sales for 2011, and preliminarily for 2012 (based on the estimated January 2012 unemployment rate) for the same three markets.
Market 2010 (actual) 2011 (proj) 2012 (proj)
Statewide 36,234 37,407 39,429
Birmingham 12,235 12,736 13,430
Huntsville 8,543 8,321 8,507
The statewide totals are via the Alabama Center for Real Estate
The monthly projected results compared to the actuals for 2011for Birmingham are as follows:
2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
proj 755 877 1135 1137 1239 1314 1180 1191 1090 933 914
actual 683 773 1072 1022 1106 1255 1237 1224 1145 983 944
%error -10.5 -14.9 -5.9 -11 -12 -4 4 2.7 4.8 5 3
Cumulative error 2.9
As you can see this is quite encouraging. The cumulative error for 2011 projections is under 3% for 2011. I believe that excluding 2010, to calculate the monthly changes, due to the tax credit impact will improve the monthly accuracy.
Why might this be useful?
If the results during the year do not unfold as projected one should be looking for the reasons such as the tax stimulus or similar government action. It is also likely that other impacts and shocks to consumer expectations will cause the market to react in ways that are not accounted for in the projections. One can think of major disasters such as the coastal oil spill and multiple weather events. I have not yet tried to see how the coastal markets can be projected.
San Francisco, CA 94114
(415) 424-8912
Commuting Helena Review
The Birmingham Business Journal reported that the Business Journal "On Numbers" said that Helena Alabama (for it size) has the worst (longest) commute. Also to rank poorly in the study was Alabaster, Pleasant Grove, Center Point, Moody, Pelham, Trussville, Hueytown and Fairfield all ranked in the bottom 10 in Alabama".
The original article said their numbers were based on the "2009 American Community Survey, which was conducted by the U.S. Census Bureau". In case you are wondering which is the best city ...Altus Okla. I goggled Altus to find out why it has the shortest commute. "Altus is home to Altus Air Force Base and world class companies including Bar-S Foods Co., and Altus Athletic Manufacturing". Which means all their jobs are within 15 minutes of their homes (Unless you live on base then it is closer).
So it looks like most of us drive a decent distance to work. It would be nice to work in Helena instead of driving to Jefferson County. You could have lunch with your children or just run home to watch tv.
Alabama St and 25th St
San Francisco, CA 94110
Neighborhood: Mission
(987) 267-3892
The original article said their numbers were based on the "2009 American Community Survey, which was conducted by the U.S. Census Bureau". In case you are wondering which is the best city ...Altus Okla. I goggled Altus to find out why it has the shortest commute. "Altus is home to Altus Air Force Base and world class companies including Bar-S Foods Co., and Altus Athletic Manufacturing". Which means all their jobs are within 15 minutes of their homes (Unless you live on base then it is closer).
So it looks like most of us drive a decent distance to work. It would be nice to work in Helena instead of driving to Jefferson County. You could have lunch with your children or just run home to watch tv.
Alabama St and 25th St
San Francisco, CA 94110
Neighborhood: Mission
(987) 267-3892
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