Info and Tips about Ky Master Commissioner Sales

3Q Banking Reports

Third Quarter Reports are hitting the news from various banks and the ones I’ve seen are showing that banks are staying afloat, albeit, they are showing little to no profit.  Here is one sample from Farmers Bank, based in Frankfort, Kentucky.  It is a good example showing what’s going on across the board.

Here’s an excerpt: “Other real estate owned, which represents properties acquired through foreclosure, declined $255 thousand or 1.3% to $19.7 million. The Company’s level of nonperforming assets continues to be high as it and most of the banking industry struggles to cope with one of the most severe recessions in many decades. The deterioration in the overall economy and real estate markets in particular has negatively impacted the Company’s lending portfolio. Loans to real estate developers and related businesses have shown the most signs of stress within the Company’s customer base.”

Jefferson County Master Commissioner Sales on Track to Break Record

The high unemployment rate is still affecting many areas of the economy.  The Courier-Journal reports that the Jefferson County Master Commissioner sales are on pace to break a record.  For the year, there were 4,377 master commissioner sales set.  The Jefferson County Master Commissioner only expects about half of them to take place, which means about 2,142 pieces of property have been or will be sold.  The record number of foreclosure sales was set in 2007 at 2,093.

With the unemployment rate hovering around 10%+, there does not seem to be any relief in sight.  So next year could be and most likely will be even worse as people begin running out on their unemployment benefits.  The article points out that many banks are much more willing to work out a deal with the homeowners to try and keep them in the home.  Even with banks being more flexible than they have been in the past, I would expect that we have not seen the last of the foreclosure crisid.

Demand for Rentals Boosted

Not only are there a multitude of homes on the market for the investor to choose from, but the credit crisis has really squeezed many individuals to the point that they cannot get credit nor do they have the 20% down it takes to get a loan.  Thus, as we’ve already discussed, many would be homeowners are now forced back into renting.  Little to no money down along with somewhat reasonable rental prices and rental demands are on the rise.

As is reporting, home ownership nationally is at its lowest level in six years.  According to the article, increased rental rates will be seen in neighborhoods where the median value of the homes is $100,000.00 or less.  If you begin finding potential properties to own in those areas, it will be worth consideration, since you have a fairly large pool of potential renters to choose from. Foreclosed Home Auction

As reported earlier, in an effort to move some inventory off the books, some banks are adding homes to be sold in blocks on  Check it out, they have an auction coming up for several cities in Kentucky.  Online bidding is allowed and pictures of the homes are listed on the website.

Budget Year Forecasts Shortfall

General Fund revenues are forecasted to shortfall by between $150 – 200 million.  That’s on top of an already lean year where most state agencies and other government entities have cut as much out as possible.  With unemployment very high throughout the Commonwealth and no signs of new jobs being created, the forecasts are extremely bleak.

As reported at, State Deputy Budget Director Greg Harkenrider said the September declines were worse than expected.

“We knew it was going to be a bad quarter. Did we know that it was going to be this bad? No,” Harkenrider said. “The recent uptick in national retail sales has not manifested itself in Kentucky.”

Governor Steve Beshear states he is taking steps to address the shortfall.  Indeed, the House of Representatives and the Senate are sure to be looking at ways to cut further into the budget.  However, with very little clamor to raise taxes, or to modernize taxes, either from the Legislature or from the general public, it appears that some services are going to have to be severely cut.

The question is, would you rather have your taxes raised and retain the level of services you have now, or see some services lost to budget cuts?

Kentucky’s Future Depends on Collaboration

As discussed previously, see here, future industries will depend on small businesses that can collaborate, innovate, and build on a creative class of entrepreneurs.  Kentucky is no different, we must be able to bring in new talent for new information-based business.  We’ve been through the agricultural revolution, the industrial revolution, and now we need to adjust and innovate for the information revolution.

Tom Eblen has a great article at that addresses just these issues.  Since we have to compete with global companies that can be based anywhere, people can choose to live wherever the most amenities are offered.  “Economic development strategies that focus on tax breaks, cheap labor and low-cost energy will no longer work. That’s because industries that depend on those things have either moved work offshore or eventually will.”

Regionalism, where communities collaborate together to lure new industries and assist one another with building the needed infrastructures, is the norm, not a new idea fad.  The regions that have reaped the most rewards are Northern Kentucky and Louisville.  They have attracted strong new industries, creative class individuals, and built up great infrastructure.  All on the basis of collaborating and combining resources, not competition and dilution of resources.

The article also talks about the clustering effect.  I’ll take it one step further.  We all like to go over to the area in town that has the most restaurants to pick from.  If one is busy or we don’t like it, we can easily go to another one.  The clustering of restaurants benefits all of the restaurants in that area, not just one or two.  Sure, competition is greater, but by clustering all of the restaurants together, more people are attracted, than just one restaurant alone would have.

The same can be said for building infrastructures and the clustering of small businesses that can feed off of and help one another.  Regionalism is about how communities, governments, universities, and businesses can work together to attract more and diverse businesses.  Not about each city, county, or economic development group getting credit or a business to relocate by itself.  If we all work together, then we all come out ahead.

Let me know what you think and how you can make an impact in your community.

Secondary Foreclosure Auction

Lots of homes that were returned to banks at the Master Commissioner sale are starting to pop back up on the auction block.  This time though, it is not an absolute auction.  Here’s how it works.  Banks are starting to pool their inventories together to try and get things moving and off their books.  It’s a smart idea.  Put a lot of homes upon the auction block, promote the heck out of it, and then bring in as many investors as possible.

The advertisements promote that there are low starting bids.  But these are not absolute auctions, so the banks who own the properties can reject any bid that does not meet their ultimate price.  But we will try to keep an eye on these auctions and see how they are going.

Overall Foreclosures Up 12%

Even though home sales are up in Central Kentucky, overall foreclosures continue to climb.  According to the Courier-Journal, foreclosures are up 12% for the third quarter of 2009, as compared to the third quarter of 2008.  The article goes on to forecast that the unemployment rate is still the biggest contributor to the foreclosure rate and that it is not likely to peak until sometime next year.  Even it is does peak next year, that is certainly no guarantee that employment will increase, because we are most likely going to have a jobless recovery.  In Kentucky, we are losing coal in the east, tobacco all over the state, and our car industry is down.  If we don’t find new industries or at least try to attract some new businesses, we will be in for a very long and slow recovery to say the least.

Central KY Home Sales Up is reporting that home sales are up 11.5% for this September compared to the same time period last year.  39.4% of the homes sold during September were to first-time home buyers.  Clearly the Federal tax incentive of $8,000.00 is driving much of the increase in home buying.  Along with home sales being up, the median home price has dropped though as well by 11.5% from last September.  This appears to be a much needed correction to the inflated home prices from the housing bubble.  Even in Central Kentucky, home prices went up too much, too quickly.

Finally, home inventory is going down.  Do consumers see light at the end of the tunnel?  Or are frustrated home owners, just buckling down and are willing to stay in their house longer?  Any thoughts?

New Home Permits Increase

The Cincinnati Enquirer is reporting that new home building permits are on the rise.  A good sign that the market is finally easing up a bit.  While the total number of new home permits has increased, the overall value of new homes has decreased.  In Norther Kentucky the average permit value has dropped by about 22 percent.  Not surprising as builders are scaling back on size and amenities.  But a good sign nonetheless.