The Housing Bubble

The Union Tribune reports from California. “Nationally and locally, home prices are trending downward for the first time in years, as buyers drive tougher bargains and some sellers, desperate to move, accept a cutback in their hoped-for windfall profits. ‘I think it’s safe to say that prices are not going up anymore,’ said Charlie Ahern, president of the Coronado Association of Realtors.”

“DataQuick’s price reports back to January 2004 show that all except three ZIP codes in San Diego County have backed off their all-time high median prices. Among neighborhoods with at least 10 resale-home transactions, Coronado is off the most, down by 63.4 percent – from a high of $3.2 million in February to the most current figure, $1.17 million in September.”

“Ahern said such a steep pullback as reported by DataQuick is not indicative of a sharp across-the-board decline in prices for the bayfront and seaside community. ‘It would take quite a bit more data before we got a 50 percent drop,’ he said.”

“As for sellers, according to Carolyn Crane in Ahern’s Coronado office, attitudes toward pricing can range from the practical to wishful thinking. One of her clients wants to sell her 813-square-foot family home for nearly $1.2 million, but there have been no favorable offers since it was listed Aug. 1.”

“‘I told her it’s not going to happen (at that price),’ Crane said. ‘She’s waiting for one person to stumble in and fall in love with the house. She needs to make an adjustment.’”

“‘People who own homes are devastated, but this is the real world,’ she said. ‘You had to stop somewhere, and this is not a stop – it’s more of a correction of the market. . . . As an agent, I’m glad to see the market correcting itself.’”

“Jeffrey Morelock, who does loans, appraisals and sales, said thousands of condo conversions, coupled with new condo construction and sales of existing condos, has prompted lenders to tighten their underwriting standards and buyers to negotiate hard for lowered prices.”

“‘We’ve seen, generally, a 20 to 30 percent discount,’ he said. ‘If someone’s going to sell, that’s what they are going to get.’ No one should be surprised, he added: ‘Condos are the last to go up and the last to come back up.’”

The North County Times. “A slowing North County housing market could be more than Shelly Trisler can handle. The recent drop in North County housing sales and new housing construction has cost her $850,000 in residential flooring business since January, a 35 percent decline in sales compared to the same period last year.”

“‘We haven’t seen it this bad in 10 years,’ she said. ‘This business is for sale. Shelly is done.’”

“Other, similar business have been hurt financially as customers chose less expensive products to meet their home improvement needs. ‘Everybody is feeling it,’ said Cees Molenaar, executive vice president for the California Professional Association of Specialty Contractors’ San Diego chapter.”

“An Encinitas home decorations store owner, who didn’t want to be named, said store traffic has dropped from about 500 people per day three years ago to 10 today. ‘People are scaling down,’ the owner said. ‘We aren’t the first thing on their list.’”

The Orange County Register. “More stress is on the way for the mortgage industry, said Irvine’s New Century Financial, one of the nation’s largest lenders for people with risky credit profiles. The real estate investment trust, in its third-quarter report, said industry loan volume should decline 10 percent next year.”

“And lenders will continue to sell a chunk of loans at a loss as investors scrutinize loan purchases for problems, New Century said. It said more borrowers are missing early payments, forcing the company to buy back more loans that it sold to investors.”

“Patti Dodge, who is transitioning from chief financial officer to head of investor relations, said the company has kept staff levels flat since 2005. ‘However, we will continue to manage headcount in accordance with our productivity metrics,’ she said in a statement.”

The Sacramento Bee. “To some readers, reporter Jim Wasserman is a home wrecker. That’s what happens when you chronicle the downturn in what was previously the hottest thing going: the go-go residential real estate market.”

“The market has tanked. Prices continue to slide, inventories of homes for sale are at or near record levels and new home construction has stalled. The industry, from real estate agents and developers to home sellers and mortgage lenders, is spooked.”

“‘I’m trying to sell my home and your articles are not helping (us) sellers,’ one woman said in an e-mail. ‘Thanks for eating away a large portion of my equity!!!’”

“One new home builder told Wasserman that buyers have come into his company’s sales offices, newspaper in hand, and cancelled their purchase contracts, pointing to a Wasserman story about the housing slump.”

“Wasserman and editor Wayne Davis find it amusing that at the height of the housing boom, no one called to complain about the coverage. ‘Those people who blame us today,’ said Davis, ‘they didn’t call a year and a half ago to tell us we were driving up the market.’”

The Desert Sun. “With real estate prices leveling off, it’s unfortunate that the tax code does not provide relief in the event you have to sell your home at a loss. In this current market, we are beginning to see people selling for less than they originally paid for their property.”

“These are mostly the people who used variable-interest rate mortgages or mortgages with very low initial interest rates - known as teasers, to get into a home they could not otherwise afford. Now their monthly mortgage payments have increased substantially and they find they cannot meet the added financial burden.”

“One of the sad truths about our tax system is that…a loss on the sale of your principal residence is never deductible!”

My San Antonio reports from Texas. “Canyon Lake’s billboards have evolved from advertising backwoods businesses to high-end developments. And it can mean only one thing: Canyon Lake has been discovered. Lots that a few years ago were choked with cedar are being cleared, with ‘for sale’ replacing ‘no trespassing’ signs.’”

“Everywhere, there are subdivisions. What was once a quiet, rural retreat for folks looking for isolation still boasts million-dollar views, but increasingly, the views come with a price tag to match. In the last five years, the median home price has increased 25 percent from $145,000 to $180,000, according to the Canyon Lake Board of Realtors. It’s the largest percentage increase in Comal County, outpacing New Braunfels, Bulverde and Spring Branch.”

“But it’s the land itself that is seeing the biggest price increases.”

“Area real estate agents say the rapid growth and appreciation have been the result of a kind of perfect storm in real estate: developers eager to cash in on the high-dollar hunger for lake views; out-of-state investors cashing out of waning markets on the East and West coasts and desperate to find a place to park their money to avoid capital gains taxes; and San Antonio families willing to commute to find affordable housing in the area.”

“Virtually all of these new developments market themselves as upper-end communities. These new subdivisions are attracting plenty of non-Texas interest. ‘We are seeing people from California, Florida, Colorado,’ said Ed Mullins, a Canyon Lake real estate agent. ‘I even had someone in from Turkey.’”

“Anthony Faleyn, assistant sales manager for Mystic Shores agrees. Out-of-state interest in Canyon Lake used to be unusual. Now he’s amazed when a Texan walks through the door.”

“Tom and Diane Purdy sold their home on Mercer Island outside Seattle and moved to Texas in 2004. ‘We decided we wanted to live in the San Antonio area. We’d lived here and Austin before and we looked at Lakeway, but it’s gotten too expensive. So we went online and found Canyon Lake,’ said Tom.”

“The Purdys settled on the then-brand-new Ensenada Shores, building a 2,200-square-foot home with views of the Hill Country and the lake. The development is now sold out, and Ensenada Shores is releasing lots in its next phase.”

The Dallas News. “Back during the Cold War, we all worried that the communists would take over. And as it turned out we should have been watching the folks from California. It’s true: Californians are taking over the Dallas real estate market.”

“Some brokers who handle retail and apartment purchases say that more than half their sales are going to California buyers.”

“In new neighborhoods up in Collin County, investors from California are purchasing new single-family homes, hoping to flip them and get rich. Downtown and Uptown condos are also being acquired by speculators from the West Coast.”

“At some point it will all end. During the late 1970s and early 1980s, a flood of Canadian investors and builders came to town to bid up prices and acquire choice assets. Later, it was Japanese buyers who had Dallas on their shopping list.”

“With our low real estate prices and low barriers to building and investing, North Texas is a favorite for out-of-towners looking to make some property deals. Eventually the money from California will stop flowing this way, probably when it’s needed to bail out problems at home.”

“So far this year, out-of-town investors have bought billions in Dallas-area property, and they’re still shopping for deals. So how could savvy investors get it so wrong?”

“That’s what the latest report on the U.S. property market suggests. In the collaborative effort of the Urban Land Institute and PricewaterhouseCoopers LLP, researchers conclude that ‘wide-open Texas markets favor developers, but they are never good places to invest.’”

“The Emerging Trends report says that Dallas ’sits in a flat, treeless plain’ (maybe they mixed us up with Tucson). The same report says that Austin is No. 5 among the best markets. I thought they said Texas markets are never good place to invest? Maybe they forgot Austin is in the Lone Star State.”

The Missoulian reports from Montana. “The DeArments put their Jackson Street home in the Rattlesnake up for sale a couple of months ago, and got exactly one offer. Last week, that offer fell through. Now, depressed by their inability to sell the house, combined with the difficulty of finding another one that suits their needs, they’re taking the house off the market. They’re also getting out of the buying market for now.”

“‘It’s a little bit harder to sell right now, so we’re just going to sit back, enjoy the low house payment we have now and wait for the time to be right,’ John DeArment said. ‘It’s sort of depressing.’”

“‘In 2004 and 2005, we had three buyers for every house,’ said Diane Beck, a Missoula Realtor. ‘You couldn’t not sell a house in those days.’ These days, however, houses are sitting on the market for considerably longer periods.”

“Missoula developed something of a housing frenzy in the past few years, where the prices of some homes were appreciating as much as 20 percent a year. Some of those folks are looking to sell now because they fear they’ll miss the top. ‘I think that accounts for some of the houses in the market right now,’ said Judy Wahlberg, president of the Missoula Organization of Realtors.”

“Tack on a slight rise in interest rates from the low 5 percents of two years ago, and you have the recipe for a glut of homes for sale, said (broker) Betsy Milyard. ‘Inventory is definitely up, particularly in the last month or so,’ Milyard said. ‘I think maybe some people on the buying side are waiting right now to see if prices come in a little bit further.’”

“‘Missoula is a market that is going to be in demand,’ (broker) Bruno Friia said. ‘There’s no way I can see any real depression in this market.’”

The Great Falls Tribune from Montana. “Paul Polzin, director of the Bureau of Business and Economic Research at the University of Montana, says there is evidence that the real estate market statewide is slowing.”

“Polzin notes that increases in real estate prices in several cities, including Missoula and Bozeman, along with parts of the Flathead Valley, have kept pace with a national run-up in recent years. Those markets may be vulnerable to a softening market.”

“‘I don’t see any reason why we shouldn’t be part of what’s going on in the rest of the nation,’ he said. ‘I think there was some kind of bubble in Montana.’”

“‘Things have slowed down in comparison with a year ago,’ said Donna Kostelecky, president of the Gallatin Valley Association of Realtors. ‘But the market is still very good. Buyers have a larger selection today than they had a year ago.’”

“In the Flathead, there are more homes on the market than in recent years, a sign of a changing market. ‘I think (the market) has done some adjusting, there’s no question about that,’ said Doug Gawe, a Realtor in Whitefish,. ‘Maybe even correcting. It has sort of leveled out a bit, but it’s certainly still moving.’”

“‘There may be some slowing down in the higher-priced stuff,’ said David Munroe, president of the Great Falls Association of Realtors, noting he has a listing that includes a home and 20 acres near Manchester priced at about $600,000 that has had ‘very few lookers.’”

The Jackson Hole Star Tribune. “‘Slump’ is not a word that applies to Wyoming’s housing markets. Moderation of price, perhaps, or modest cooling. But not slump.”

“Bo Short, president of the Cheyenne Board of Realtors, says its worth remembering that real estate locally is coming off a string record years. ‘Our market is still good,’ he says. ‘The difference is that our inventory is really high.’”

“Cheyenne has over 1,000 houses on the market, where 350 to 400 would be more typical.”

“As a result, there’s more dealing going on, in the form of modest price reductions, offers to pay some closing costs and other concessions, as sellers compete for the attention of buyers. Sellers might also have to wait longer to sell their homes.”

“‘Their house really needs to be in grade A condition when someone looks at it,’ Short says. ‘For buyers, it’s a great place because you’ve got lots of houses to look at,’ he adds.”

“In Sweetwater County, the energy boom continues to create labor shortages and a need for additional housing. ‘We’re finally getting more construction in,’ says Mary Manatos, a real estate agent in Rock Springs. ‘What I see is housing sitting a little longer on the market, and the prices either maintaining or starting to drop.’”

The Greeley Tribune from Colorado. “Tom Muniz and his wife weren’t worried when they decided to sell their Greeley house 18 months ago. They were so confident the process would just take a couple of months that they moved into their new place. Now they’re on their second Realtor, asking less than they expected and making two mortgage payments.”

“‘We didn’t anticipate it would take as long as it has to sell,’ Muniz said. ‘We thought we would be able to get out of that house within a few months. It’s just not going to happen. We’re kind of struggling.’”

“Muniz is living proof that a high number of foreclosures in an area doesn’t just affect the people who are defaulting on their loans. For two months, Weld County has had the highest foreclosure rate in the nation, according to a properties listing company.”

“In Weld County, one in every 168 households defaulted on their loans. That rate is 700 times higher than the national average. Colorado is following suit with Weld’s trends.”

“A high number of foreclosures means there are more properties than normal on the market, allowing buyers to be choosy when they pick a home. Also, it likely means a drop in prices for normal home sellers, said Rick Sharga, for RealtyTrac. ‘If you can buy a 5-year-old house for 30 percent below market value because of a foreclosure, it means that the 5-year-old house next door will also have to reduce its prices to move the property,’ Sharga said.”

“Along with home owners, a high foreclosure rate can mean less property tax generated by municipalities and a loss of jobs from Realtors to home builders. According to a 2005 case study sponsored by the Home Ownership Preservation Foundation, direct municipal costs from a foreclosure can exceed $30,000 per property.”

“‘A soft housing market it not good for anybody,’ said Matt Revitte, a broker associate in Greeley. ‘I would say a lot of people will be affected by this slow down.’”

“He said the Weld County housing market is simply going through a cycle and will rebound. However, he fears that the worst might not be over. ‘I don’t see anything in the immediate horizon that says ’stop,’ Revitte said.”

“For now, Muniz will continue waiting and hoping for a miracle. His house is average, it’s on a busy thoroughfare and needs a little fixing up. He would do it himself, but he’s strapped for cash trying while trying to make two mortgage payments.”

“When he first put it on the market 18 months ago, it was appraising for $115,000. Now, Realtors tell him he could get $93,000 for it.”

“‘I think buyers right now are wanting to find a house they can move into rather than anything to do work on… I’ve heard there’s such a surplus of properties available that buyers can afford to be choosy,’ Muniz said. ‘It’s just not selling.’”

The Post Standard reports from New York. “Onondaga County home prices fell during September, another sign that a buyers’ market is emerging after a couple of years during which sellers had their way. The median price of the 447 houses sold in Onondaga County during September was $127,000, according to data from the New York State Association of Realtors. That’s down 3.9 percent compared with September 2005, when the median was $132,200.”

“The number of home sales also declined. Some 521 houses were sold in September 2005, 14.2 percent more than this year.”

“Local Realtors say the market has shifted from the sellers’ market of 2005 - a record year for real estate sales, to a slower pace in which buyers have more clout to negotiate the price down.”

The Press Herald from Maine. “Looking for a smaller home, Cindy Benjamin fell in love last spring with a three-bedroom Cape in Windham. The house needed some work, but Benjamin figured she was in a good position. The Cape had been on the market since July of 2005, and the seller was anxious. Meanwhile, high inventories and falling prices had created a buyer’s market.”

“The seller was asking $269,000, but Benjamin was able to get it for $255,000. The seller even agreed to cover $5,000 in closing costs.”

“There was only one problem. Cindy Benjamin couldn’t sell her existing home. Seven months later, she’s still living in her four-bedroom Colonial. ‘I bought at the right time, but I’m trying to sell at the wrong time,’ she said.”

“It’s a common situation, real estate agents say. On one hand, they want top dollar for their valued home; on the other, they expect a bargain from the seller. That’s not realistic, say agents, who are trying to manage expectations in a changed market.”

“With many analysts predicting further declines in the months ahead, seller-buyers need a reality check, according to (realtor) Cathy Manchester in Gray. Start with price, Manchester advised. Don’t rely on comparable sales from six months ago to figure what your house is worth, she said. ‘You have to know what you’re up against for competition,’ Manchester said.”

“Honestly compare the competition to your house. Then ask yourself why someone would pay more money for your house, when there may be dozens of other candidates to choose from.”

“Your initial asking price is crucial, said Pat Rabidoux, a broker in Yarmouth. ‘You need to make sure the property you’re selling is a perceived value,’ Robidoux said.”

“Two years ago, when the market was tight, buyers might have overlooked an older roof or leaky plumbing. Now they’re more demanding, Robidoux said. Both Robidoux and Manchester agree, however, that it rarely makes sense to spend big money to redo a kitchen or finish the upstairs.”

“‘You’re not going to get that money back in the sale,’ Robidoux said.”

“When sales were brisk, sellers might agree to a contingency sale. With sales slow and plenty of inventory, that practice has fallen out of favor. ‘Sellers now realize that’s a waste of time,’ said Leonard Scott, owner of the Assist-2-Sell agency in Falmouth.”

“Benjamin initially had listed her Colonial for $425,000. After no action, she recently switched to Assist-2-Sell and is asking $378,900. She got an offer right away, but the potential buyers wanted to make the sale contingent on selling their house. ‘I told them I just couldn’t take it off the market for 30 days,’ she said.”

“Deborah Draper of Gray i’s in the process of selling a 2,196-square-foot, contemporary Cape and buying a smaller home in town. Draper, who has been working with Cathy Manchester to sell the home, recognized that her property wasn’t worth what it might have been a year ago. With Manchester’s advice, she listed it in September at $265,000 and within six days had the first of three offers.”

“But the process wasn’t over. One potential buyer couldn’t get financing. As the process continued, Draper turned down contingency requests and had to lower her price after discovering problems with the septic system. She currently has the home under contract for $256,000, and she agreed to the buyer’s request to pay $5,000 in closing costs.”

“Meanwhile, Draper had spotted a two-bedroom ranch at an open house. The home had been reduced since August, from $214,000 to $199,900. It was still available when her home went under contract. She expects to close this week for $195,000.”

“What Draper’s situation shows, Manchester said, is that seller-buyers need to price their homes aggressively in this market. ‘It costs a lot to have a house sitting vacant,’ she said.”

The Asbury Park Press from New Jersey. “Zuhdi Karagjozi stood outside the courtroom in U.S. Bankruptcy Court in Trenton last Monday morning, looking defeated. As the owner of Kara Homes Inc., all he ever wanted to do was sell homes and make people happy, he said more than once. He just needed the banks to work with him so that everyone could come out even.”

“For Karagjozi, it has been a remarkable turnaround. The East Brunswick-based home builder, the fastest growing in the nation just a few years ago, is in tatters. Banks and suppliers are clamoring to get paid, home buyers might lose hundreds of thousands of dollars, and Karagjozi has been reduced to an observer as others try to salvage his company.”

“In retrospect, people who worked with Karagjozi said, the scene at the courthouse could have been avoided. The company borrowed too much money at too high an interest rate, they said. And it couldn’t generate enough cash to pay its mounting bills. When the real estate market softened, even a little, the business collapsed.”

“‘His luck ran out,’ said Jonathan Bristol, a Morristown lawyer representing one of Kara’s lenders in the bankruptcy case and a friend of Karagjozi’s. ‘He rode the crest and took a long, hard fall.’”

“Lori Finley signed a contract for a home at Winding Run at Little Egg Harbor in August 2004. She deposited nearly $92,000. Visiting the construction site one day, she said she noticed the house was being built the wrong way; the giant windows weren’t looking out onto the woods, but onto her neighbor’s house. Her stomach dropped.”

“A year later, with the home not finished, Finley decided to pull the plug, and she asked for her money back. Finally, last March, she drove to the company’s headquarters, sat in the executive office and refused to leave until she was reimbursed.”

“After a Kara official gave her a check, Finley said she drove to her bank, cashed it and deposited it. The check, to her relief, cleared. ‘If I did not get in my car and take this into my own hands I would have been one of the poor people who lost all that money,’ Finley said.”

“Marianne Yetto of Brooklyn, bought a house at Horizons at Woodlake Greens in Lakewood. The Kara house was 85 percent finished and she sold her Brooklyn house, when Kara filed for bankruptcy. ‘I am in such a dilemma,’ said Yetto, who has put down $75,000 toward her home.”

What do you see in your housing market this weekend? Auctions? “Land, lofts and houses are ending up on the auction block as Metro Detroit homeowners and developers try to quickly clear hard-to-move inventory in the face of a cold housing market.”

“The bulk of the Terra Land Group’s auction comes from the Town Commons development in Howell and the Copper Leaf subdivision in Genoa Township, including 80 lots and 10 houses. Three of the houses on Terra Land’s auction block will be sold no matter how low the final bid.’

In Michigan. “In Livingston County homeowners seeking more than $200,000 for their homes are experiencing losses, real estate agents say. Jim Roth, a Realtor with the Michigan Group, said it is not unusual for homeowners to experience a 20 percent to 25 percent loss on homes priced above $200,000.”

“One couple whose home was on the market for two years at a listing of $419,000 recently sold for $322,000. ‘That is not unusual,’ Roth said. ‘We’re seeing 20 (percent) to 25 percent less in the selling price than what was listed. It’s a buyer’s market.’”

In New Hampshire. “Signs of the return to earth, or at least lower elevations, are abundant along the roadsides in the area where For Sale signs are more likely to say ‘price reduced’ or ‘`newly priced’ rather than ‘under agreement’ or ’sale pending.’”

“John Bridges says he’s suggesting to some sellers who have been ‘a little enthusiastic’ in their pricing that a buyers’ market is taking hold and that dropping the asking price or waiting out the cyclical decline are their best options. He says that asking prices have been dropping something on the order of 8 to 10 percent over what they were last year.’

“A high profile housing analyst says the temperature of Toronto’s red-hot house housing market is set to drop,- and soon. Analyst Will Dunning thinks the party is over. Weaker employment growth, and a glut of new condos in the GTA, mean the value of homes could be set for a slide. ‘It’s not a bad thing,’ he told 680news.”

From Hawaii. “Fall has cast a chill over the residential real estate markets on Kauai and the Big Island, which saw both median home sales prices and sales volume lag last month as demand for properties paled. Phillip Fudge, a real estate agent in Kapaa, said real-estate flippers have mostly left the Garden Isle as prices have moved high enough where it’s hard to make short-term gains on resales, he said.”

“‘I’m hoping that the downturn is just a seasonal thing, but I’m afraid that most of our investors were from the mainland and if their markets have been impacted it impacts us here as well,’ Fudge said.”

The Palm Beach Post reports from Florida. “The faster they rise, the harder they fall. That old saw aptly applies to new-home prices, and so it is that Palm Beach County and the Treasure Coast are now leading the retreat from a boom that saw sales skyrocket and prices soar for five consecutive record-setting years.”

“Local builders also admit having a hard time, even though many are still selling hundreds and even thousands of new homes a year. ‘Sales are very slow. The residential real estate market is on life support,’ said Bobby Julien, CEO of Kolter Communities in West Palm Beach.”

“‘Depending on location and product, investors have made up as much as 90 percent of a particular market during the past 24 months,’ said Clemmer Mayhew, a Realtor in Palm Beach County.”

“Investors, who drove the boom’s unprecedented success, also provided the seeds of its decline. ‘Because of investors, and the greed of builders who sold to investors, we have a huge oversupply,’ said Pete Hegener, the developer of massive St. Lucie West and Tradition, both in Port St. Lucie.”

“Kolter Communities’ Julien agreed. ‘We had a whole bunch of builders overbuilding,’ he said.”

“‘I don’t believe any of us were prepared,’ said Kevin Lawler, managing partner of N-K Ventures in West Palm Beach. A lot of speculators got caught holding the bag, or, in this case, the unsold house, for which they most likely paid a record price. About half of the 991 vacant finished new homes in Palm Beach County developments in the third quarter of this year cost more than $500,000.”

“‘Many homes are coming back to builders as contracts are canceled,’ said Brad Hunter Metrostudy. ‘We have firsthand knowledge of hundreds of units in the Treasure Coast, among different builders.’”

“A local real estate lawyer agrees. ‘I have been receiving a lot of calls from buyers who want to default and walk away, and wonder if they can get their deposits back,’ said John Pankauski in West Palm Beach.”

“In Palm Beach County, the supply of vacant finished new homes has more than quadrupled in a year, according to Metrostudy, to 991 in the third quarter from 226 in the same quarter a year ago. In St. Lucie County, the number has nearly tripled, and in slow-growth Martin County, the number of vacant finished new homes has nearly doubled in a year.”

“After soaring to $400,000 in September 2005 during an unprecedented five-year real estate boom, the median price of an existing home in Palm Beach County plunged to $365,500 last month, a 9 percent year-over-year drop. It tied with the Treasure Coast for the third-largest drop in the state.”

The News Press. “‘We were No. 1 going up, and we are No. 1 going down,’ said Naples-based real estate broker Ross McIntosh. ‘A lot of buildings are going up, but I don’t see slabs. The handwriting is more than written on the wall; it’s carved on the wall. If you are in business in Southwest Florida, you know what’s going on.’”

“We know people are coming in, but we must also realize that people are going out. McIntosh’s analysis of drivers’ license data suggests that for every two or three people that move into the state, another one leaves, and each of those leaves a home.”

“McIntosh is skeptical of what he calls New Urbanism projects, suggesting that investors, not users, are buying residential condos in mixed-use developments such as the Coconut Point mall. ‘People would prefer to live in Rapallo than over a shoe store,’ he quipped.”

“McIntosh says there are only two problems with this real estate market: One is price and the other is supply.”

“Developers in unincorporated Lee County, Bonita Springs and Fort Myers Beach pulled 458 permits for single-family houses in September, a drop of 61 percent from the previous year and 22 percent from August. ‘Obviously if that is down so drastically, it’s going to affect the employees,’ said Michael Reitmann, of the Lee Building Industry Association.”

“In the Tampa Bay area, employment in the construction industry has shed more than 2,000 jobs since May, from 87,000 to 84,700. In a good month, Alpine Plumbing of Odessa does about 100 jobs, manager Kyle McCullough said. By September, that fell by half.”

“‘In December, it’ll probably be even less,’ he said. ‘In 2007, it could be even worse. Our guys tell us it’s a ghost town out there in the subdivisions.’”

The Tallahassee Democrat. “The Board of Governors of the Mortgage Bankers Association of Tallahassee issued a consumer alert this week to warn home buyers not to fall for the offers of Option Adjustable Rate Mortgages, or Option ARMs. ‘I’m refinancing a customer right now who opened an Option ARM a year and a half ago,’ said Pat Gaver, incoming president of the local Mortgage Bankers Association.”

“‘This customer chose the minimum payment option. Her loan balance increased $11,000 in the first year. She opted to pay a 3 percent pre-payment penalty of her total loan balance, which came out to $8,000, just to get out of the loan,’ Gaver said. ‘It could have been much worse for her because most prepayment penalties are as much as 6 percent.’”

The Orlando Sentinel. “Rhonda Morgan has pulled out all the stops for her recent open houses: big signs, balloons and people in costumes out by the street waving to passers-by.”

“Beth Goldstein got into real estate five years ago. She said of the shift to the Internet. ‘It’s a big source of my business, buyers from out of state.’ Unfortunately, Goldstein said, ‘I haven’t had a buyer off the Internet in about three months.’”

“Goldstein recently organized two open houses on the same day for the same house in Oviedo, one for potential buyers and the other for brokers, with a prize drawing worth $300. ‘We’re getting a little desperate,’ she said, because the number of listings has spiked and sales have tumbled from the record heights of a year ago.”

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