The Housing Bubble

It’s desk clearing time for this blogger. “With fewer people relocating to Virginia and a large inventory of new and existing homes, builders are halting groundbreaking on new projects in Prince William County. According to the NVAR, there was a 3.99 percent decrease in average selling price for homes in January compared with the same time last year, but was relatively better than December 2006 in which the average selling price was down 10 percent compared with December 2005.”

“Robert Lang, co-director of the Metropolitan Institute at Virginia Tech said that does not necessarily mean that an upswing in the market is nearing. ‘When it first drops, it’s in free fall for a moment,’ Lang said.”

“Atlanta has a saturated 11.2-month supply of homes and condos for sale, up from a 7.2-month inventory in December last year. Many homes are being sold by lenders who took over the properties. ‘A lot of Atlanta’s resale inventory is coming from foreclosures,’ says Mike Wright of the Atlanta Board of Realtors. ‘There’s certainly concern too much new condo product is coming on board.’”

“Data released Wednesday by the Illinois Association of Realtors confirmed what many agents said they knew: Business plunged in the fourth quarter of last year.”

“‘It’s still going to be very much a buyer’s market,’ said Plainfield agent Lisa Berendt, who added that the increased activity she expected after the Super Bowl hasn’t materialized, partly because of the weather. ‘Anybody who is thinking they’re going to get top dollar … right now is in for a big disappointment.’”

“Existing home sales in Wisconsin were the second highest on record last year, but a high inventory of unsold homes spawned a buyer’s market. ‘It won’t surprise me if 2007 looks an awful lot like 2006,’ economist David Clark said. ‘ I don’t think we’ll be breaking any statewide records.’”

“As a full time Realtor in the Indianapolis area, I was puzzled by the Feb. 8 article, ‘December home sales fell 14 percent.’ How about this headline instead, ‘National home sales down 8 percent last year, Indy area only down 1 percent?’”

“But if you are looking for something negative, let’s talk about home foreclosures in Indiana. Big production builders selling cheap homes on tiny lots for too much money to uninformed buyers. Our tax dollars also promote this by current bankruptcy laws and government programs like HUD.”

“Add to that a lack of proper oversight of lenders who make loans to unqualified buyers and this culminates in our epidemic foreclosure rates and the resulting overall residential real estate market depreciation, ruined neighborhoods, and higher property taxes for the rest of us.”

The Norway Post. “In his annual address on Thursday, Central Bank Governor Svein Gjedrem said that the bank’s key interest rate will be gradually increased to 5 per cent. He also warned young property buyers against taking chances. In his opinion, housing prices may fall.”

From India. “Realty and construction stocks fell to three-month lows on the BSE, with investors offloading the scrips in the last few trading days. Ansal Buildwell, Lok Housing, Tantia Constructions and Peninsula Land fell over 50 per cent each.”

“Rahul Rege of Brics Securities said it was a case of exuberance becoming rational now. ‘I think there was too much excitement over realty stocks based on their future earnings,’ he said.”

“A derivatives index used to bet on bonds backed by the riskiest U.S. mortgages fell for the fourth straight weekly decline as more lenders reported losing money. Prices for credit-default swaps linked to 20 securities rated BBB-, and created in the second half of 2006 declined 2.6 percent this week, and are down 15 percent since being introduced Jan. 18, traders say.”

“The decline means an investor this week would have paid more than $950,000 a year to protect $10 million of bonds against default. ‘We’ve yet to see the floor on where these things can go,’ said Paul Colonna, a fixed-income manager for GE Asset Management, which oversees $199 billion. ‘And it’s not based on housing data or performance data’ on mortgages in the bonds.”

“Last week, Realtors reported that existing- home sales in North Texas declined for the eighth consecutive month. The Metroplex has a glut of new homes sitting vacant, one of the highest mortgage delinquency rates in the country and a long run of rising foreclosures.”

“It’s correction time in the housing market, so hold on to your hat. ‘It’s going to affect the economy, period,’ says Jim Gaines, regional economist at Texas A&M. When he spoke to a group of (builders) recently, he heard a mix of resignation and gallows humor. ‘Builders were saying if you hadn’t gone under a few times, you just haven’t been around here long enough,’ Gaines says.”

“Glenn Crellin, at Washington State University, said the drop in sales and new home building permits likely makes the Tri-Cities market buyer-friendly. ‘There’s a lower level of sales and increasing inventories, so buyers have more choices and likely, individual sellers are going to say they can’t get the price for their home that they could a year ago,’ he said.”

“Joel Hill, a job superintendent for Aho Construction, agreed with that assessment. ‘If I had my choice, we would be back where we were (two years ago),’ he said. ‘We are hungry. Buyers have a lot more choices right now.’”

The Sacramento Bee reports from California. “How does the capital region’s housing market look so far this year? Not unlike last year, but with a bit more hope that the free-fall in prices and sales may be ending. The new year opened last month with the fewest escrow closings for a January since 1998, according to DataQuick. The firm reported similar slides to 1990s levels in the Bay Area and Southern California.”

“‘Here we are on the back side of the boom in a period of stagnation that many people predicted,’ said DataQuick analyst Andrew LePage. ‘It’s anybody’s guess when we start to pull out.’”

The Contra Costa Times. “Bay Area home prices slipped last month and home sales fell for the 24th month in a row, a real estate service reported. The Bay Area’s 6,168 sales of houses and condos last month were down 26.3 percent from December and marked the lowest total for any January since 1996, when 5,504 homes were sold.”

“‘We are scraping along the bottom of the market,’ said economist Christopher Thornberg. ‘Prices are going to languish in the nether zone for some time. I don’t see any substantial recovery on the activity side until 2010 or 2011,” he said.”

“LePage agreed, although he emphasized that DataQuick does not make market predictions. ‘The market almost never turns fast,’ he said. ‘There’s hope in some areas of the industry that we’re about to stabilize and coming up on hitting bottom, but I’m not convinced of that looking at the data.’”

The Press Democrat. “Sonoma County’s sagging housing market showed no signs of stabilizing in January as sales remained at a 10-year low and the median price fell 12 percent to $545,000.”

“Resale prices for single-family homes have fallen seven consecutive months when compared with a year earlier, the longest decline since 1993, the previous downturn in the county’s housing market.”

“‘I don’t feel the bottom of the market has occurred. I think it’s going to be a little while,’ said Nick Dunlop, an appraiser who has pegged home prices in the county for 15 years.”

“Since the market’s peak in summer 2005, Dunlop has consistently appraised homes at lower values based on the most recent sales of comparable homes. His latest appraisals were down about 10 percent from the record high. ‘It really was an eye-opener for me,’ he said.”

“Listings and sales in escrow now are mostly at prices less than those for comparable properties sold two to three months earlier. Many appraisers are lowering prices about 1 percent each month, Dunlop said. More agents are turning down listings if sellers want unrealistic prices. They don’t want to spend time marketing a home that likely won’t sell without significant price reductions, broker Timothy Hedges said.”

“‘Kind of the joke on these listings is you want to be the second or third agent because by that time the seller understands what it’s going to take to get it sold,’ he said.”

The Tribune. “San Luis Obispo County home sales and median home price declined last month. ‘January was the fourth consecutive month going negative year over year,’ said Andrew LePage, a DataQuick spokesman.”

“Sean Fitzpatrick, co-owner of CornerStone Real Estate in San Luis Obispo, said the January declines are not surprising. ‘It’s a combination of values coming down, more of the lower-end homes being put on the market and the general decline in the market overall,’ said Fitzpatrick, noting that sellers are being more realistic about their prices.”

The Ventura County Star. “Despite a decline in population growth, economists describe Ventura County’s economy as exceptionally vigorous and wealthy. But economists predict a less than rosy year for the agriculture sector and Calabasas-based Countrywide Financial Corp., one of the top employers in Ventura County.”

“‘Whenever I talk to Realtors, they always talk about the collapse of housing and the fall-off in sales volume,’ said Bill Watkins, executive director of the Economic Forecast Project. ‘It’s really hurt that industry.’”

The Daily Bulletin. “American dream or American nightmare? That’s the problem many would-be home buyers are facing in California these days. With the median price of a single-family home in the state somewhere in the vicinity of half a million dollars, getting into that dream house is anything but easy.”

“But it doesn’t have to be impossible, says Patti Davenport of SMD Mortgage Corp. in Highland. ‘For most of the last 10 years, it has been a sellers’ market, but now with the market down and with lots of properties in foreclosure, it’s possible to find some bargains,’ Davenport said.”

“Davenport points out that there are plenty of interlocking programs that can get people into homes with so-called ’silent second’ mortgages as down payments. ‘There are plenty of ways for people to really leverage their money to make it work for them,’ she said.”

The North County Times. “After 28 years of service, Pat Russell’s career at Hanson Realty ended in one meeting Thursday.”

“Tom Crowley, a real estate broker and spokesman for the new owner, said the action was a direct result of the downturn in the real estate market. ‘By my opinion we’re in a (real estate) recession,’ he said. ‘It was just a practical business decision.’”

“‘Nobody knew anything about it,’ said former Hanson agent Lynn Genovese. ‘They came in and said, ‘Bye, bye.’”

The Modesto Bee. “Record numbers of homes are sitting vacant awaiting buyers in the United States. An estimated 2.1 million empty houses were listed for sale during October, November and December. That’s about 62 percent more than usual, according to U.S. Census Bureau statistics.”

“The glut of vacant houses is readily apparent throughout the Northern San Joaquin Valley, as bank foreclosures and former rental homes flood the for-sale market.”

“For 10 months, Harold and Donna Suender have tried to sell their empty Salida house. When they put the 2,305-square-foot home on the market in April, they priced it at $515,000. But the slumping real estate market has forced them to repeatedly lower their price. This week, they dropped it again to $399,996.”

“‘I’ve never seen anything like this,’ said Harold Suender, who bought a new home in Riverbank before the market turned. ‘That (near 20 percent price reduction) is a lot of money, but we have to get it sold. We can’t cover two house payments forever.’”

“Their renter moved out shortly after the home went up for sale. So no money is coming in. ‘Probably the smartest thing to do is try to rent it again, at least until the market comes back up,’ Suender said. ‘But I don’t know how the rental market is now.’”

“The answer to that is: Not good. ‘The rental market is very soft and very tough right now … and it’s deteriorating,’ said Paula Leffler Zagaris, who handles about 1,500 rental homes in the Northern San Joaquin Valley. Zagaris estimated that a home in Salida such as Suender’s now would rent for about $1,250 a month… because so many homes that have lingered on the sales market have started flooding the rental market.”

“Since the oversupply of rental property has pushed down rents, many former rental-home owners are trying to sell instead. ‘I get at least five or six calls a week from investors who want to know how much their rental home is worth. Then, when I give them the price, they get really quiet,’ said Mary Prieto, an agent who sold 80 homes in Stanislaus County last year.”

“Prieto said nine of her current 28 listings are vacant homes. Some are former rentals, but most are houses owned by people who bought elsewhere and since have been unable to sell.”

“Another reason behind the surge in empty homes, Prieto said, is the region’s rapidly increasing foreclosure rate. ‘I would say more than half the vacant homes on the market are owned by banks that have repossessed them,’ Prieto said.”

“Anne and Jorge Acuna benefited from a price reduction on the new Waterford home they bought last summer. ‘We decided to move in first, then put our Modesto house on the market because it was easier for us,’ Anne Acuna said. Their vacant Modesto home, currently priced at $379,900, has been for sale since August with little action.”

“Acuna remains optimistic, and she pointed out that previous real estate investments have gone well for her family. ‘I don’t think people should sit in a house they’re not happy with,’ Acuna said. Covering the cost of two houses ‘is not easy, but we’re tough people. It’s nothing we can’t handle.’”

“On the downside, Prieto said, buyers are reluctant to spend as much for empty homes: ‘The minute they see a vacant house, no matter what the price is, they offer 10 percent less.’”

Some housing bubble news from Wall Street and Washington. “U.S. home builders started the fewest homes in nearly a decade last month, as housing starts plunged 14.3% to a seasonally adjusted annual rate of 1.408 million, the Commerce Department reported Friday. Starts were down 37.8% compared with January 2006, the largest year-over-year decline since early 1991.”

“Also, building permits dropped to 1.568 million in January, 28.6% below the same month a year ago. The stunning drop in home construction indicates that builders are scaling back their plans on a massive scale.”

“Starts fell in three of the four regions as tracked by the Commerce Department in January, as the Northeast enjoyed warmer temperatures and drier-than-normal weather in the first half of the month. Starts rose by about 9% in the region. Starts fell by 28% in the West, by 15% in the Midwest and by 12% in the South. Starts in the Midwest were at the lowest level since 1991. Starts in the West fell to the lowest level since 1996. It was the biggest drop in the West since 1979.”

“There were 1.2 million homes under construction in January, down 14% from the previous January. ‘There is still a considerable amount of new supply still hitting the market,’ said Richard Moody, chief economist for Mission Residential.”

“Two weeks ago, the Commerce Department reported that the number of vacant homes increased by 34% in 2006 to 2.1 million at the end of the year, nearly double the long-term vacancy rate. Economists said there about are 1 million excess homes.”

From CNN Money. “Wachovia economist Phil Neuhart said that the report suggests that those who believed that there was a stabilization in home building, based on the strong December report, were pre-mature. ‘We never thought we had found a bottom,’ he said.”

From Bloomberg. “In another sign of growing concern about mortgages made to high-risk borrowers, Standard & Poor’s said it would no longer wait for homes to be foreclosed on and sold at a loss before alerting investors in mortgage-backed bonds that it expects to lower ratings on the bonds.”

“S&P said Wednesday that it was considering downgrades on 18 low-rated bonds from 11 securitizations of mortgages last year amid early loan problems.”

“‘It is a watershed event’ because it means S&P is now actively considering downgrading bonds within their first year, said Daniel Nigro, a portfolio manager at Dynamic Credit Partners, a manager of about $6 billion in hedge funds and collateralized debt obligations. ‘We welcome them being more open’ about their methods.”

“S&P’s warnings Wednesday were on bonds backed by so-called sub-prime and Alt-A loans, and by home-equity loans. Alt-A loans are defined as ones that fall only slightly short of the credit standards of Fannie Mae and Freddie Mac, the two largest U.S. mortgage firms.”

“Borrowers are 60 days or more behind on payments on 11-month-old 2006 sub-prime mortgages that represent 8.2% of the loans’ total original balances, Steven Abrahams, an analyst at brokerage Bear Stearns Cos., wrote.”

“One of the bonds S&P warned about this week was backed by Alt-A mortgages. It was the company’s first warning about any of those securities sold in 2006. Alt-A loans often are made with less proof of borrowers’ pay, or are interest-only loans or ‘option’ adjustable-rate mortgages.”

“‘In terms of performance, I’d say there are equal concerns’ about Alt-A loans and sub-prime loans at S&P based on early delinquencies, said Ernestine Warner, an S&P analyst. The Alt-A bond S&P warned about was issued by Calabasas-based Countrywide Financial Corp., the largest U.S. mortgage lender. Newport Beach-based Impac Mortgage Holdings Inc. made the loans.”

From Business Week. “Countrywide and Washington Mutual face some risks from so-called ‘recastings’ of pay-option ARMs. Unlike fixed-rate loans, which have decades of underwriting data behind them, pay-option ARMs haven’t been stress-tested in an environment where home-price appreciation is slowing, and even falling in some regions of the country.”

“Roughly 28% of Washington Mutual’s loans held are in these riskier option-ARM mortgage products, according to S&P analyst Stuart Plesser. By contrast, pay-option loans comprise more than 40% of Countrywide’s interest-earning assets.”

From MarketWatch. “A credit crunch in the market for low-end mortgages has left companies specializing in these subprime loans at the mercy of big banks like Merrill Lynch & Co. and J.P. Morgan Chase.”

“In recent weeks, warnings from banking giant HSBC Holdingsand New Century have shaken subprime confidence further, sparking speculation that a major bank is aggressively making margin calls. Accredited Home Lendershas had to come up with more cash after getting margin calls from some of its warehouse lenders, Stuart Marvin, executive vice president at the subprime specialist told analysts during a conference call on Wednesday.”

“‘We have eight different warehouse lenders; I would say the majority of them are acting very rationally,’ Marvin said. ‘There is one that is acting somewhat irrationally, although I won’t mention them by name.”

“Industry publication National Mortgage News said this week that Merrill Lynch has been making margins calls. A Merrill spokesman declined to comment. In late January, J.P. Morgan CEO Jamie Dimon noted rising defaults in some of its riskiest home loans and said the bank had largely exited the subprime business.”

The Wall Street Journal. “In recent months, as home-price appreciation fell and borrowers faced rising interest rates, more people defaulted on their mortgages. Under mortgage contracts, mortgage originators must often repurchase loans that default very early in their term or that come with underwriting mistakes, such as flawed property appraisals.”

“‘Following early payment defaults, we exercised our contractual rights to return loans to ResMae and protect our financial interests,’ a Merrill spokesman said.”

“A decline in the subprime housing loan market may force General Motors Corp. to refund its former financing arm, GMAC LLC, as much as $950 million, according to a Reuters story. A report by investment bank Lehman Brothers Inc. said the rebate is needed to ’shore up’ GMAC.”

“GM, which retained 49% ownership of GMAC, delayed the filing of fourth-quarter financial results because of unresolved issues concerning the balance sheet of GMAC’s mortgage unit at the end of November, ResCap unit.”

The Economist. “Mortgages were written for a fee, sold to investment banks for a fee, then packaged and floated for another fee. At each link in the chain, the fees mattered more than the quality of the loans, which could always be passed on.”

“‘This was classic market failure,’ says Anthony Sanders, a mortgage expert at Ohio State University’s Fisher College of Business. ‘The private sector wanted fees and got them, and they did not much care what happened afterwards.’”

From theStreet.com. “Many in the media have opined that the bears ‘don’t understand the conditions under which real estate markets collapse, and these conditions (suggestive of a broadening credit problem) are not present.’”

“It appears that the principal reason these observers are ignoring the subprime problem and its ramifications is that the equity markets are ignoring them. Ergo, it must not be a problem. This is the definition of a Goldilocks mindset (see no evil, hear no evil), not a Goldilocks scenario.”

“There is an emerging credit crisis and it will lead to rapidly rising charge-offs. Construction lending on land and condominium loans are the next area to implode. As night follows day, the enormous securitization markets will shortly begin to demonstrate the same sort of delinquencies we have witnessed in subprime mortgage lending.”

“Restrictive credit practices are just beginning to unfold as a consequence of the poor underwriting standards applied over the last decade.”

The Sun Herald reports from Florida. “Sales of existing homes dropped 28 percent statewide during the 2006 fourth quarter compared to 2005, according to figures released Thursday by the Florida Association of Realtors. The Punta Gorda area reported a 10 percent drop in median prices, a healthy step toward putting the market back in motion. Punta Gorda’s fourth quarter median price of $209,700 compared with $233,700 during the 2005 period.”

“Local Realtors have coined the term ‘reality-based pricing’ to reflect the decline in prices, which they largely see as a positive development. Simply, if you want to sell your house, cut your price at least to what similar properties have sold for locally.”

“Indeed, ‘I dispute that properties have only come down 10 percent. I think they’ve come down more than that,’ said Bill Dryburgh, president-elect of the local Realtors.”

“‘The agents who are self-motivated and do their homework are making money while the agents who just sit back and wait for someone to call are starving,’ Dryburgh noted.”

“Both of Charlotte County’s neighboring metro areas showed both a substantial drop in sales volume combined with a big drop in median prices. At least through the end of 2006, ‘reality-based pricing’ wasn’t enough to turn prospects into buyers.”

“Median prices in Fort Myers-Cape Coral were down 23 percent, to $256,400. Sarasota-Bradenton was the same story, down 18 percent to $281,500.”

The Bradenton Herald. “Existing home sales in the Bradenton-Sarasota market fell 11 percent in the fourth quarter of 2006 compared to 2005. In addition, there is a greater inventory of homes available for sale now than a year ago, which works to the advantage of buyers, said Ron Cornette, Wagner Realty’s marketing and training director.”

“Those ‘more realistic’ prices might be just what is needed to jump-start the market, said Cornette. ‘The buyer is going to control the pricing,’ said Sue Louis, vice president of Coldwell Banker Residential Real Estate’s Sarasota division.”

From Florida Today. “Sales of single-family homes in Brevard County jumped 20 percent in the final three months of 2006, compared with a year earlier. The median sales price fell 17 percent, dropping to $207,300 from $250,700 in 2005, the Realtors group said.”

“Local condominium sales dropped 35 percent, to 270 in the fourth quarter of 2006 from 414 in 2005, while the median price fell 22 percent, to $171,000 from $219,600.”

“The practice of ‘flipping’ dropped in Florida in the last quarter, compared with the final three months of 2005, HomeSmartReports said. ‘Speculative buying and selling of homes contributes to market volatility and risk, all part of that ‘bubble’ theory people were talking about,’ President Mike Ela said.

The News Journal. “Sales of existing single-family homes in the Volusia and Flagler market dropped about 33 percent for the fourth quarter of 2006, according to FAR.”

“Some people may be holding on to homes because they are afraid to sell them, said Gloria Weimer, president of the New Smyrna Beach Board of Realtors, while they wait for prices similar to those in 2005. ‘They need to be realistic. There are ups and downs throughout the years,’ Weimer said, calling 2005 ‘a fluke.’”

The News Press. “The Florida Realtors released a report saying that Realtor-assisted sales of single-family homes in Lee County fell 23 percent in the fourth quarter, down to $256,400 from $332,000 in the fourth quarter of 2005. Condominiums fared somewhat better: down 14 percent from $300,000 to $258,600.”

The Herald Tribune. “Sellers have been giving ground on home prices, and during the fourth quarter of 2006 it really showed. The median sales price for a home sold in the Sarasota-Bradenton market was down 18 percent from the same time in 2005. That was the second biggest drop in the state behind Fort Myers-Cape Coral, which saw a drop of 23 percent.”

“Condos in the Sarasota-Bradenton market were selling at about half the rate they were in 2005 during the fourth quarter, down 46 percent from the 1,063 in the previous year’s fourth quarter. The median sales price was $230,900, down 24 percent from $304,100.”

“The state’s biggest sales drop was Lakeland-Winter Haven at 56 percent. That community was followed by Tampa-St. Petersburg-Clearwater at 40 percent, Naples-Marco Island at 34 percent, and Orlando and Daytona Beach, both at 33 percent.”

“Martin Higgenbotham did everything he could to get people bidding on Michael Tringali’s high-end Sarasota and rural Manatee County properties.”

“In the end, high bids on properties came in at a half or a third of what the real estate sold for at the height of Southwest Florida’s phenomenal boom.”

“The high bid for a 3,300-square-foot luxury home in Tringali’s Portofino on the Bay subdivision off Vamo Road in Sarasota, that might have commanded more than $1 million in the boom, was just $500,000. Bids for undeveloped lots in the same subdivision that sold for $325,000 and up in 2005, came in at $170,000 or less.”

“And finished homes in the Golden Verna Estates subdivision near Myakka City, selling for around $380,000 during the boom, generated bids of no more than $240,000 and most garnered no more than $170,000. ‘That’s low,’ said Barbara Anson, a veteran Realtor in Myakka City. ‘But this is an auction.’”

“The Lakeland organization hired to conduct the sale had hoped to sell 32 of Tringali’s properties, but many, especially the building lots at Portofino on the Bay, didn’t draw any bidders.”

“It will not be clear until Monday night whether bankers, who loaned millions of dollars to Tringali during the boom, will be willing to accept the bids that did come in.”

“Tringali’s 253-acre tract near Myakka City was bought by an unidentified Manatee County rancher for $6,500 per acre. That is is $5,500 less than the $12,000-per-acre price Husani paid for the property in August 2005 and $23,500 less than the $30,000-per-acre price Tringali supposedly paid a week later.”

“If it accepts that price, Coast Bank, which loaned $4.94 million to Tringali in August 2005, would have to take a $3.3 million loss.”

“Though Higgenbotham told his audience that they were missing tremendous opportunities, agent Garrick Newman expects there will be a lot more opportunities for the region’s buyers to get deals at auction. ‘We’ll see a lot more of these.’”

The Boston Herald reports fron Massachusetts. “Just trying to sell a deluxe downtown condo is no picnic in this market. Yet a few developers in Dorchester and Roxbury are finding buyers willing to shell out big numbers as if it were the summer of 2005 all over again. But hold the champagne.”

“Many of those buyers are facing foreclosure after signing up to buy not one, but two, three or four units for numbers well higher than $1 million. Sometimes the foreclosure notices are arriving before anyone has even moved in.”

“These developers appear to have recruited their own pool of live bodies ready to sign off on whatever mortgage paperwork they are shown. The developer walks away with a big sale. A profusion of easy, ’stated-income’ loans makes it all possible.”

“‘When you couldn’t put together a legitimate deal (anymore), you had to sell scams,’ Dorchester housing researcher John Anderson said of real estate downturn. Anderson has identified three or four groups of speculators who are scoring big at a time when most are not even scoring at all.”

“These real estate wheeler-dealers have bought and quickly flipped at least 150 to 200 units. The prices are often more than $300,000, or even $400,000, not bad for tough neighborhoods in a down market. As many as 30 units are now mired in foreclosure proceedings, often just a few months after the sale. It’s about as fast as a mortgage can go into default.”

“This suspicious sales boomlet is producing what should be a statistical impossibility, two and often three condos in a triple-decker all facing foreclosure at the same time. Examples can be found on Park, Dix, Armedine, Draper and Bowdoin streets.”

The Champion from Massachusetts. “It’s a buyers market out there, plain and simple. Though there are plenty of homes for sale, they are not selling for nearly so much. ‘Sellers can’t shoot for the moon anymore,’ said agent Nick Storrs.”

“Storrs has been in the real estate business for nearly 20 years. ‘For the most part,’ he says, ‘The numbers in 2006 are significantly lower than they were in 2005. Houses today are going to be worth less than the day they were bought. If someone wants to sell their home now, that statistic is a bad thing.’”

“Charles Caron has seen a similar pattern, said people were buying high in 2005, resulting in a drop in real estate value today, a good thing for current buyers. He said many homes have fallen below $200,000.”

“Sellers, Storrs says, need to continue to be brutally aggressive on their prices. ‘It’s just a fact of life,’ he said. ‘You hear a lot ‘it’s not fair, my house is worth more’ and I say, yeah, that’s true, but not in today’s market.’”

The Boston Globe. “Boston homeowners, reacting to a fifth year of property tax hikes, have inundated the city with requests for relief. Current assessments are based on property values as of Jan. 1, 2006, before last year’s downturn was in full swing.”

“‘People were surprised to see the value they’re being given by their assessors when they’ve been reading, or found out first hand, that their home would not sell for that,’ said Barbara Anderson, executive director of Citizens for Limited Taxation.”

The New Hampshire Business Review. “Last year, real estate agencies across the state and Grafton County experienced an overall downturn in sales. Littleton area Realtors felt the slump too.”

“‘There’s no denying that it was a relatively difficult year in terms of sales,’ said Bonnie Guevin, New Hampshire Association of Realtors president.”

“(Realtor) Andy Smith said 2005 and 2006 were completely different in terms of sales, though he was quick to point out that expensive housing markets in Lebanon and Hanover often heavily skew countywide data. Smith said however, local towns did experience a similar slumping phenomenon in comparison to the rest of the county.”

“(Broker) Dick Reinhold said much of the change was due to a lack of real estate investors in the area. ‘Investors are fleeing the real estate market,’ Reinhold said.”

“While some areas, like Littleton, are generally not affected by investors just looking to turn a profit, towns like Franconia, Sugar Hill and Bretton Woods typically see investment-related sales. Bethlehem, Franconia and Whitefield all experienced significant drops in price, for overall percentage changes ranging from a 12 to 17 percent decline in pricing.”

The Herald Community from New York. “Real estate agents say there are no statistics on people who are returning and buying homes, and that while some do come back, many more young people are moving out of the county. Pearl Kamer, an economist with the Long Island Association, said that from 2000 and 2005, 65,000 people between ages 25 and 44 left Nassau and Suffolk counties, according to the survey, which is coordinated by the U.S. Census Bureau.”

“It is no secret that Nassau County is losing young people. ‘Young people can’t afford the high taxes or housing,’ Kamer said. ‘They can get better salaries elsewhere.’”

“Realtors say that for younger people looking to buy in Baldwin or nearby towns, the current housing market is actually in their favor. There are currently 260 homes on the market in Baldwin, (Broker) Erik Mahler said, compared with 193 in Oceanside.”

“Housing prices are dropping as well. According to Prudential Douglas Elliman, the average price of a home in Nassau County was $586,401 in the fourth quarter of 2006, down 5.6 percent from the previous year’s average of $621,445.”

“Mahler and others said that potential home buyers have become savvy, and are ignoring homes that are overpriced. Unlike 2003, when demand was at its highest, real estate agents say that overpriced homes are languishing on the market.”

“‘Buyers became smarter,’ (realtor) Sandy Boci said. ‘A lot of homes are overpriced right now, because the sellers think they are going to get 2005 prices, but it’s not going to happen. It was just overblown.’”

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