The Morning Report
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I heard this morning from John Kline, the real estate agent trying to sell that short sale house in Nantucket. He sounded a bit weary.
Kline told me he spoke to the Encinitas City Council last night and asked them to release the certificate of occupancy on the house so that he could sell it to the people who’ve already agreed to buy it.
The city’s been withholding that permit because of an agreement it had with the developer of the project, Barratt American, by which the developer would build a price-restricted “affordable” unit on a lot adjacent to the multi-million dollar homes in coastal Leucadia. The developer filed for bankruptcy in December before it built that unit.
(For more on the situation with this development, read this post or my full story about it.)
He said he told the council if they don’t release the certificate of occupancy, the short sale won’t be able to go through, and the house will eventually go to foreclosure.
That, he said, will make the house a “blight on the community” and make it more difficult for Bank of America — which is handling the bankruptcy proceedings for Barratt — to sell the second phase of the project next door to an investor.
This short sale appears to me a quadruple-fold example of housing market trouble: a reduced price in an upper-end neighborhood, a sign of the damage sustained by one of the region’s most prominent homebuilders, the potential complications of price-restricted “affordable” housing programs and the frustration inherent to the short sale process.
The council agreed to consider releasing the certificate, Kline said. We’ll keep you posted with their decision.