The Housing Bubble

It’s desk clearing time for this blog. South Carolina. “Three Grand Strand real estate agents made the trek to Columbia on Tuesday to tell their stories of buyers backing out of deals because of insurance costs. Even sellers offering free homeowners association dues for a year can’t sell because there are other condos for sale priced $20,000 below the market price, said Steve Tansey, agent in Myrtle Beach.”

“‘Sellers are willing to give it away, and they can’t sell it. You know you have a problem when you can’t give it away,’ agent Randy Titus said.”

From Kentucky. “The Lexington-Bluegrass Association of Realtors reported yesterday that local home sales dipped in 2006, but not nearly as steeply as building permits. ‘Residential building permits declined by 30.1 percent in Fayette County in 2006.”

“That’s a huge decline, said Dale Akins, president of The Market Edge. ‘The market got really weak, especially in the third and fourth quarters’ of 2006, Akins said.”

From Florida. “Bayboro at is a conversion of a 37-year-old apartment building. Prices start as low as $132,000 for a studio. But downtown living can be attractive yet tight. Bayboro’s largest units are 740 square feet. The smallest units have kitchens barely large enough to open the cabinets, but even third-floor windows look onto Tampa Bay.”

From Taiwan. “The nation’s property market is likely to slide as the economy shows signs of slowing down, said a report released on Wednesday. One challenge for the housing market this year is digesting the oversupply has resulted from mass construction over the last three years. The value of houses and apartments on the market was about NT$30 billion (US$1 billion) last year, compared with only NT$10 billion in the past, it said.”

“Britons filed for bankruptcy in record numbers last year, with the total exceeding 100,000, as rising interest rates forced consumers to default on swelling debts. Individual insolvencies in England and Wales rose 59 percent from 2005 to 107,288, the Department for Trade and Industry said. The reading was the highest since records began in 1960.”

“‘People are blindly taking on debt without thinking about how they’ll repay it,’ said Louise Brittain, head of personal insolvency at the U.K.’s no. 7 accountancy firm. ‘As a nation, we have totally binged. I think the numbers of insolvencies will continue to rise.’”

From Canada. “A manufacturer of housing-related products is looking around B.C. for a factory site, but Vernon appears to have priced itself out of the market. ‘We’re a bit high in terms of what they want to pay for land,’ said Dave Forai, economic development manager.”

“With home prices softening and sales volumes sagging in many local markets, real estate appraisers say that pressure on them to inflate values has reached pandemic proportions. A new survey of the national appraisal industry found that 90 percent of appraisers reported that mortgage brokers, realty agents, lenders and even consumers have pressured them to raise property valuations to enable deals to go through.”

“‘I call it a perfect storm scenario,’ said Alan Hummel, senior VP of one of the largest property valuation firms in the country. ‘You’ve got a situation where sales are down so everybody in the deal needs it to go through’ at the contract price - the mortgage broker, the Realtor, the lender, and even individual sellers.”

“The national market is going through ‘probably one of the biggest, most dangerous bubbles we’ve had in this country,’ said hedge fund manager Bill Fleckenstein at a forum sponsored by the Greater Seattle Chamber of Commerce.”

“‘I really think it was more of a lending bubble and an abdication of responsibility by the lending institutions,’ he said. ‘Anybody with a pulse could borrow any amount of money.’”

“Foreclosures have hit Sandusky County hard, with the number of actions started last year totaling 130, a 202 percent increase from 2005. That’s a larger rise than in any other county in northwest Ohio and southeast Michigan.”

“Even Hancock County, which generally is considered financially healthy, had a 69 percent increase in foreclosures last year. That county has jobs, but they may not pay as much as those from years past, noted Jim Staschiak, a broker in Findlay.”

“‘Almost anyone with a job can qualify for a home loan now,’ he said.”

From Nevada. “Let’s hope that Carson City doesn’t see another boom any time soon. Why? Because every boom has its bust that leaves victims, and in this case, they’re strewn all over Carson City.”

“Consider that homes cost an average of $199,000 in 2002, and that now, just over four years later, they’re well over $300,000, well out of reach for many of the residents of Carson City. The market is full of homes from speculators who bought intending to resell soon after at a huge profit that they’ll never see. Many of those homes are likely to become rental properties.”

“A much better scenario for Carson City is steady, sustained growth in which everyone will benefit. There may not be many people getting rich, but at least there won’t be as many people going broke.”

The Daily Bulletin reports from California. “They may be locking the barn door after the horse has been stolen, but California lawmakers want everyone to know they’re very unhappy about these risky mortgages that are starting to go bad. So Wednesday in Sacramento, the Senate Banking, Finance and Insurance Committee held hearings on less-than-traditional mortgages, including adjustable rates, interest only and sub-prime lending.”

“It has become clear that many of those marginal buyers were banking strongly on a continued runup in the housing market. ‘A lot of people got talked into loans they should not have taken,’ said regional economist John Husing. ‘Adjustable rates, big balloon payments, large jumps in interest rates. Housing was sold to them as an investment, and now some of them are losing their houses.’”

“Husing pointed out that whenever there is a period of ’speculative craziness,’ people look at all the money being made and want to get in on it. ‘A lot of people got into loans and didn’t have a clue what they were really signing,’ he said.”

The Sacramento Bee. “People finally are coming to realize the pitfalls of crazy loans that allow them to borrow more money and buy more house than they can afford. It’s easy to see why. Foreclosures are rising fast, as are notices of late mortgage payments.”

“One key issue was not discussed at all at the hearing: the role of nontraditional mortgages in artificially driving up home prices, feeding the affordability crisis rather than abating it.”

“One broker pleaded with senators not to do anything that might ‘take away the dream of home ownership.’ But as Paul Leonard of the Center for Responsible Lending testified, the issue is sustainable home ownership, not just the dream.”

“If people can only afford initial low payments for a couple of years but then lose the home, how does that promote the dream of home ownership?”

The Press Democrat.”Parts of the state are continuing to slump, the real estate industry’s top economist in California predicted Thursday. Sonoma County will take longer to recover because of a recent exodus of jobs in the county, said Leslie Appleton-Young, chief economist for the California Association of Realtors.”

“She forecast economic growth in California will be moderate in 2007, dragged down by the slumping housing market. ‘Real estate is the Achilles’ heel of the California economy,’ Appleton-Young said.”

“‘People are spending more of their incomes,’ she said. ‘Budgets are stretched.’ The result is a surge in foreclosure activity, which almost doubled in 2006. Lenders sent default notices to 913 Sonoma County homeowners who fell behind on their mortgages last year, up from 540 in 2005.”

“Much of the foreclosure activity is concentrated among first-time buyers who purchased homes priced at the lower end of the market, said Michael Madsen, senior loan consultant with The Madsen-Shaw Home Loans Group.”

“Appleton-Young agreed that foreclosures will continue to rise. But she predicted foreclosure rates will not reach the high levels of the early 1980s or mid-1990s when slumping economies and job losses roiled the state. ‘We have a growing economy,’ she said.”

The Orange County Register. “A ’sudden and swift’ decline in new-home demand caused profits for Standard Pacific Homesto plummet 72 percent in 2006, with the company racking up $98 million in losses during the final three months of the year, the Irvine homebuilder reported Thursday.”

“‘The sudden and swift decline in demand in most of the major housing markets across the country last year gave rise to significant price reductions and incentives to move inventory,’ CEO Stephen Scarborough said in a company statement.”

“Standard Pacific built 10,763 homes last year in eight states across the southern half of the nation, from Florida to California, the company reported.”

“Last year was ‘clearly a year of transition from the robust growth of the first half of this decade,’ Scarborough said, adding that it’s too early to predict when the housing market will improve. ‘We believe many prospective homebuyers are waiting on the sidelines for signs of stabilized pricing,’ he said.”

From CBS 13.com. “It’s hard to believe a house that’s only three-years-old has a cracked wall (that) makes it look like an ancient ruin. And the owners of this home won’t go inside with us, because of worries about their health. What could cause this kind of dread and damage?”

“‘The wind!’ said Bill Thomas, a construction consultant living in El Dorado County. He says he’s seeing that damage across El Dorado County.”

“El Dorado Hills and much of the county below Lake Tahoe are zoned for what’s called ‘Wind Exposure B.’ Thomas says exposure ‘C’ should be the standard here, but that would require stiffer materials and stronger design and drive up the cost of homes.”

“‘If it costs you $10,000 less to build it and you just built 400 homes in the subdivision, then now, you’re talking about real money,’ said Thomas.”

“‘The builders call it ‘value engineering.’ Before they start building homes, they get all their engineers together, and say, hey, how can we save money on these houses? Where could we, cut corners–if you want to look at it that way,’ said Dave Crozier.”

“The Crozier’s two-year-old home is laced with cracks, like one running the entire length of the east-facing wall. And they have the loose windows, rust and mold. But there’re other problems, problems not related to the wind. The Crozier home has a, rippling roof line, and anchor bolts that aren’t secure enough to stabilize the house.”

“Dave and Vickie Crozier paid more than $700,000 for their home on the edge of Stonebriar. They’re now living with their two-kids in an apartment paid for by the builder.”

“Bob Yeadon believes Thomas is onto something big, and he points to his former home as exhibit ‘A.’ ‘Its one of those things where you work all your life, and you get, you know, your dream home,’ said Yeadon.”

“The Yeadon family moved out of their million-dollar home in the Serrano Country Club area on the advice of their doctors.”

“When the family bought this home, brand new three and a half years ago, they paid just more than $800,000, and then put in $100,000 more in upgrades like this pool. They just sold this house. The highest bid they could get–$425,000.”

Some housing bubble news from Wall Street. “Single-family homebuilder Standard Pacific Corp. posted a fourth-quarter loss of $98.4 million, compared with net income of $154.9 million, in the year-ago period. The recent period’s results include impairment charges of $290.7 million.”

“‘Our guidance for 2007 does not reflect additional inventory impairment charges or write-offs of land deposits and preacquisition costs for abandoned projects,’ CEO Stephen Scarborough said in a release. ‘If general or local market conditions deteriorate further, or our competitors change their pricing strategies, we may have to further reduce home prices or adjust our discounts and concessions which may, in turn, trigger additional impairments.’”

From MarketWatch. “M/I Homes Inc. Thursday said it swung to a loss in the fourth quarter of $11 million, compared with net income of $41.3 million a year earlier. The home builder said its quarterly results included pre-tax land-related impairment charges of $69.8 million, and $3 million worth of land and lot option deposit and pre-acquisition write-offs. The company said new contracts in the fourth quarter plunged 61% from the year-ago period.”

“Robert Schottenstein, CEO, commented, ‘2006 served as a healthy reminder of something that we have always known, that homebuilding is a cyclical business. We faced adverse and challenging conditions in most of our markets. We employed a defensive operating strategy on virtually every front, making the cuts necessary to right-size our business, incurring land-related impairment charges and write-offs and reducing our lots owned and controlled by 27% from a year ago.”

“Brookfield Homes Corporation today announced financial results for the year ended December 31, 2006. Net income for 2006 totaled $148 million, a decrease of $71 million when compared to 2005. These decreases are primarily related to fewer home and lot closings, and a decrease in housing gross margins to 26% in 2006 from 30% in 2005. Net income in 2006 includes write-downs of $10 million related to finished lots acquired in 2005 and lot options on unentitled land that expired.”

Investors Business Daily. “Growing competition for renters could inflict short-term pain on the (apartment) industry. The competition is coming from several places. Would-be condo converters are returning thousands of units to the rental market in response to the condo-buying binge’s reversal.”

“People who bought single-family homes hoping to soon sell them for a quick profit have given apartment owners perhaps the biggest competitive surprise of late: These now financially hamstrung speculators are putting the houses up for rent.”

“BRE Properties (which) owns and operates about 27,000 apartment units in the West, is facing such competition. A growing number of single-family homes are being rented in markets such as Phoenix and San Diego, BRE executives said. The supply of single-family home rentals is increasing in Sacramento too. In the fourth quarter last year, apartment occupancies fell to 92.5%.”

“Camden Property Trust, a Houston REIT that owns and operates about 64,000 apartments in 15 markets, has encountered a similar competitive situation in Las Vegas. President Keith Oden is quick to point out that the single-family rentals are competing with the company’s three-bedroom apartments.”

“‘There’s no question that in Las Vegas, we’re seeing an impact from the rentals of single-family homes,’ he said.”

The Financial Times. “The giant US subprime mortgage business is displaying a new-found caution with lenders tightening loan standards and cutting ties to overly aggressive brokers, delegates to an industry conference were told this week.”

“An index that measures the health of bonds backed by subprime loans, which are made to borrowers with tarnished credit histories, flashed new warning signals. The index…reached a record 640 basis points on Wednesday and was trading at 625bp yesterday. The spread has widened by about 150bp in the past week.”

“‘Originators have been lulled into complacency by the strong performance of the mortgage market in the last few years,’ said Elizabeth McCaul, former New York superintendent of banks.”

“The risk of default by financially stretched homeowners remains the greatest challenge to the $6,000bn-plus market for bonds backed by US mortgage loans, according to a survey unveiled at the conference.”

“‘With subprime mortgages, you’re dancing on the edge of a razor blade – they’re awful investments,’ said John Devaney, CEO of United Capital Markets, a specialist in distressed asset-backed securities.”

“Tony Hughes, economist at Moody’s Economy.com, told the conference: ‘There’s a chance that the commercial banking sector is acutely at risk if there’s a blow up in housing.’”

From Bloomberg. “Defaults on mortgages to people with poor or limited credit histories in November rose to the worst level since the last recession in 2001, according to Friedman Billings Ramsey Group Inc.”

“The percentage of so-called subprime mortgages packaged into securities and delinquent by 90 days or more, in foreclosure or already turned into seized properties rose to 10.09 percent from 9.08 percent in October, analysts wrote.”

“‘These borrowers are very leveraged and have little skin in the game’ because they took out loans with small, or no, down payments and many of them haven’t seen their properties appreciate, Debashish Chatterjee, an analyst at Moody’s said.”

“U.S. home prices fell from the previous month in August, September, October and November, the first monthly declines since December 2001, according to the S&P/Case-Shiller Home Price index, which tracks prices in 20 major metropolitan areas. The price drops accelerated to 0.41 percent in November.”

“Rates on about $600 billion of subprime home loans will start adjusting this year, according to Bear Stearns Cos., the largest underwriter of mortgage bonds. Foreclosures begun on subprime adjustable-rate mortgages, or ARMs, rose to a four-year high of 2.19 percent in the third quarter as borrowers struggled to pay mortgage bills while interest rates increased, the mortgage bankers’ group says.”

From Origination News. “Second-lien originator DeepGreen Financial, Cleveland, has gone out of business, according to officials close to the situation. Owned by Lightyear Capital, a New York-based investment fund, DeepGreen’s telephones no longer answer, and its website has been shut down. Since its inception in 2000, DeepGreen funded $5 billion in loans. Lightyear Capital declined to comment.”

A housing report from the Arizona Republic. “Valley home sellers frustrated by a lack of action on their listings will soon have another selling tool: the auction block. More than 100 homes are expected to go up for bid in a mass housing sale set for next month in downtown Phoenix.”

“Housing auctions, popular during the economic downturn in the early 1990s, are re-emerging as sellers look for different ways to make their home stand out from competing listings. In addition to the 40,000 resale homes on the market, it is estimated that there are as many as 25,000 ’spec,’ or speculative, houses that home builders have completed or are working on but have not sold.”

“Some experts say that any mechanism, including an auction, that reduces some of that inventory should be welcome; though they acknowledge it will take more than 200 homes to make a dent in the local inventory.”

“But auctions, especially for houses, can project the image of a cheap sale from a desperate seller. Sellers not willing to make big cuts may be frustrated to learn the buyers are bargain hunters or vulture investors.”

“‘I think they’re just kind of scammy-type predators in a market where they can hopefully get a bunch of buyers and get enthusiastic response,’ said (realtor) Doreen Drew in Anthem. ‘A lot of times, they don’t reach the reserve or the minimum amount. These guys are trying to create a little buzz. And I don’t think the sellers have capitulated yet. I don’t think they have said: ‘I just don’t care. Just drop the price to the mortgage and I’ll walk away from it.’”

“‘Historically, when auctions begin to appear, it’s not a good sign,’ said Jay Butler, head of realty studies at Arizona State University. ‘Rightly or wrongly, auctions are seen as a negative. In real estate, the auction is perceived to be a last-resort process.’”

“Brett Barry of Realty Executives said the two things stopping homes from selling now are price and the condition of the house.”

“‘If sellers are going to participate, they need to say, ‘We’ve been overpriced.’ The typical seller, they are greedy, they will think this is the magic pill,’ Barry said. ‘What is the magic dust that makes the house sell? To me, it sounds more like a gimmick unless they can get the prices down.’”

“John Burns, a real estate consultant based in California, said holding an auction is a good way for someone like a developer with an oversupply of housing to set the market value. He also thinks auctions will increase as people fall behind on risky mortgage loans.”

“‘I think the banks in this cycle will wind up with a lot of homes and would rather do this than go through a foreclosure auction,’ he said.”

“Some residents of a south Gilbert development are questioning if a battle with Chandler Unified School District would have ended differently had homeowners, and not Shea Homes representatives, run their homeowners association. Shea runs the HOA because the development has not reached the necessary percentage of sold homes to have a resident-run association.”

“The meeting was filled with residents angered by what they see as a failed last-minute effort by the HOA to prevent the school board on Jan. 24 from adopting district boundaries excluding Seville residents living north of Chandler Heights Road from attending Riggs Elementary.”

“Jeff Miller, a father of school-age children who lives in the excluded northern Seville sector, said many residents remain troubled by Shea’s initial sales pitch, which included the showing of a model that displayed a school, then referred to as Seville school, especially for Seville homeowners.”

“‘They (HOA board members) don’t have to live with the property-value loss. Your home is sacred, it’s one of the biggest investments you make,’ said Brad O’Hearne, a northern sector homeowner.”

The Daily Star. “A state Senate panel agreed Wednesday to enact laws to attack mortgage fraud, though several members questioned whether the changes will do anything at all.”

“Felecia Rotellini, superintendent of the state Department of Financial Institutions, cited situations in which a buyer gives a seller more than a home is worth, with the proviso — not reported to the bank — that some of that money be given back to the buyer.”

“But the whole proposal did not sit well with Sen. Pamela Gorman, ‘Getting cash back as a buyer doesn’t make you a criminal,’ she said. Gorman also said everything this legislation would criminalize already is illegal. ‘We’re not going to say it’s illegal, because it already is,’ she said. ‘We’re going to say it’s really, really illegal, which I don’t think is a useful exercise for this body.’”

“Sen. Robert Blendu said it appears the real reason few people are charged is that neither Rotellini’s agency nor the Attorney General’s Office has the funds to investigate and prosecute. ‘All the laws in the world mean nothing unless there’s enforcement,’ he said.”

“If nothing else, Blendu said, there needs to be better regulation of appraisers, as they are the key to all types of fraud.”

“But Rotellini said other types of fraud occur because a borrower provides incorrect information about income or a lending officer purposely inflates that income to help secure a larger loan than the person would otherwise be eligible to get.”

“Rotellini said these scams have victims other than lenders. She said people who buy legitimately in areas filled with homes with artificially jacked-up prices not only pay more than they should but could find values plummeting when other buyers default and lenders find out that more is owed on the property than it is worth.”

The East Valley Tribune. “A Scottsdale developer announced Wednesday it hopes to begin construction of a 26-story condominium tower on the north shore of Tempe Town Lake early this year with sales opening in March.”

“WestStone’s tower is one of a number of planned projects that could bring more than 2,000 condos to the area surrounding the lake, said John Fioramonti with real estate research firm Hanley Wood.”

“Fioramonti said he’s seen a frenzied rush to build condos during at least three housing market cycles in the 30 years he’s lived in the Valley. ‘The bug starts, and everybody starts building condos,’ he said. ‘And then they have way too many condos, and they can’t give them away.’”

The TC Palm reports from Florida. “New vacant homes in St. Lucie County reached record levels during the fourth quarter of 2006, while the construction of new homes dropped 50 percent in Martin and Indian River counties, a quarterly housing report showed Thursday.”

“The report by Metrostudy stated that at the current rate of buyer demand it would take nine months before 1,229 unoccupied homes built last year in St. Lucie County would be absorbed by the market. The supply is the highest ever recorded for the county.”

“‘In our analysis, we see a continuing trend of sales occurring only at the low and high ends of the price spectrum,’ said (broker) Sally Daley in Vero Beach. ‘In January for example, no barrier island homes were sold between $600 to $2.3 Million, yet this price bracket represents a whopping 58 percent of inventory for sale on the island.’”

“A falloff in (Port St. Lucie) property value increases has forced city officials to scramble to balance the budget. Three years of record property tax values threw off city officials’ revenue projections. Officials also were surprised by a substantial drop in building fees because of the cooling housing market.”

“As a result, City Hall will face departmental cutbacks and trim costs to keep the budget balanced. ‘This is the first time in a decade we have seen this amount of cutbacks,’ Office of Management & Budget Director David Pollard said. ‘We didn’t expect it (the housing market) to slow down this much.’”

The Herald Tribune. “Coast Bank is unlikely to fail, but with the potential for an FDIC-induced discount-price sale, it could become the first banking casualty of the housing bubble, says a well known Miami banking analyst.”

“Independent analyst Ken Thomas believes that it was likely the federal agency that encouraged the bank’s Bradenton-based parent, Coast Financial Holdings Inc., to hire investment banking firm Sandler O’Neill & Partners to explore options.”

“‘The FDIC does not want its first failure in years, so they likely encouraged the board to hire Sandler O’Neill who, as we speak, probably has many banks doing due diligence,’ Thomas said.”

“Coast may face a loss of $20 million to $30 million, a major hit on its ‘already thin’ capital of $51 million, Thomas said.”

“Coast made 482 loans on Southwest Florida properties whose owners were building homes with CCI. Most were for less than $250,000, not the kind of loan to require board review.”

“But local bankers say the fact that all the borrowers were dealing with a single builder should have raised red flags long ago. ‘That’s where somebody dropped the ball,’ said a long-time Sarasota banker. ‘Somebody didn’t put two and two together.’”

“The house of cards that Neil Mohamad Husani and Michael Tringali built during the height of the real estate boom has finally been flattened. Husani left the country in March after the FBI launched an investigation into the presentation of false documents to at least two banks.”

“One of the properties that changed hands is a parcel on Tamiami Trail in the heart of downtown Sarasota where Tringali, Husani and a third partner, Robert Martin, had planned to build a $125 million condo tower.”

“‘Mike and I lost our asses. We lost a ton of money,’ said Martin. ‘That’s what happens.’”

The News Journal. “The Emerald Shores hotel has postponed plans to sell its 82 rooms as condominium units, hotel representatives confirmed.”

“Henry Perfilio, an agent with the Condo Hotel Center in North Miami, said units at the property were removed from the condo hotel market earlier this month. A hotel manager said the owners, an investment group based in Charleston, S.C., have put their conversion plan on hold until next year.”

“The hotel had announced last April that its units would be available for purchase by individuals at $170,000 each.”

The Venice Gondolier. “Wednesday was the deadline for members of Venice Area Board of Realtors Inc. to pay their dues. Of 919 members, 699 renewed, according to VABR Executive VP Marlene Merkle.”

“That’s a 25-percent drop in membership. ‘We had 143 Realtors resign, and another 76 are in limbo,’ Merkle said. She estimates half the real estate salespeople in Florida don’t belong to their local board of Realtors.”

“Still, anecdotal evidence shows a significant number of those selling real estate are getting out of the business. One Englewood realty firm went from 10 employees down to one within six months last summer. ‘I think a lot of people who were in it to sell one or two houses a year, or were trying to make a quick buck. They are the ones leaving, for the most part,’ Merkle said.”

The Tampa Tribune. “A Brandon mortgage broker and his longtime friend face felony charges stemming from allegations he defrauded dozens of elderly residents and corporate lenders out of more than $408,000.”

“Authorities arrested Michael W. Danish on Thursday morning at his home. He remained at Orient Road Jail late Thursday with bail set at $500,000. Investigators said that between 2002 and 2004, Danish bilked more than 40 victims with the help of Donna Whitlock, a Tampa title agent.”

“Investigators said Danish targeted elderly, naive borrowers. He filled out loan papers supplied by Whitlock, who notarized loan documents without the borrowers present, investigators said.”

“Joseph Wilson, a financial crimes investigator with the Florida Office of Financial Regulation, said Whitlock told him she knew the practice was illegal but Danish asked her for a favor. It was ‘common business practice for people you know,’ Wilson said she told him.”

“If convicted, Danish and Whitlock each face up to 65 years in prison and $825,000 in fines.”

The Sun Times. “Because this housing ‘fiasco’ has now begun to take the forefront as possibly the single largest factor in the future of the U.S. economy, it is time for the real estate community to take action to save themselves as well as the economy as a whole.”

“Recently, we spoke with a salesperson from one of the major developments right down the road from Marco Island, on the 951 corridor. He indicated that their projected sales for 2007 were down nearly 80 percent, that’s right, 80 percent!”

“Compounding this statistic is that these numbers were ‘projected’ sales. This reveals the lack of confidence from the developers who, with their own assets at stake, must take a more realistic approach to what really lies ahead as opposed to the ‘Pollyanna’ forecasts by those with no financial liabilities to go with their sometimes unrealistic projections and promises.”

“Perhaps if there were more liability for ‘promises made vs. promises kept’ in this particular industry, we might actually see a quicker resolution to what appears to be a protracted and prolonged recovery from the ‘hangover’ from ‘too much, too soon.’”

“Nobody has all of the answers, but sometimes simple ‘horse sense’ can carry a great deal of weight. One idea to help stem the flow of negative pressure on the economy could very well be as simple as (apologies to the ’sacred cow’) lowering the prices as opposed to thinking that we can outlast the markets by maintaining artificial and unsustainable prices from the markets peak of over two years ago.”

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