The Housing Bubble

The San Francisco Chronicle reports from California. “In California, the number of homes sold fell 9.6 percent in February compared with the same period a year earlier, while the median price of a home climbed 5.7 percent to $564,700, according to a separate report from the California Association of Realtors.”

“The declining sales and rising prices suggest sellers are unwilling to lower prices to get deals done, said economist Mark Zandi. ‘There’s a delicate dance between sales and prices now being played out and you can see it in the California data,’ Zandi said. ‘It argues for weaker pricing over the course of the year.’”

“While weather is less of a factor in real estate sales in the Bay Area and other parts of the state, economists say unusually high temperatures in December and January played a big role in boosting the number of deals that were closed in February in other parts of the country. That doesn’t mean the housing market is poised for a continued recovery, though, some experts said.”

“‘Sales cannot be sustained at this level, which is way above the pace implied by mortgage applications,’ said economist Ian Shepherdson.”

The SGV Tribune. “‘Your first-time buyer market is going to get hit hard because now their credit scores have to be higher in order to qualify (for a loan),’ said (broker) Marty Rodriguez, in Glendora. ‘For buyers with good credit, the market is still there.’”

“She recently sold multimillion-dollar homes in Glendora and San Dimas, Rodriguez said. People who have the money and good credit can still afford to buy. ‘That’s what’s driving the median price, not the entry levels,’ she said.”

“The decline in sales is a case of sellers not being realistic about the market, said (broker) James Joseph in Whittier.”

“‘They’re not succeeding in adjusting their price to meet the demands,’ he said. ‘Well-priced inventory always sells, and it’s just a matter of whether the Realtor is successful in explaining to the seller the current market situation.’”

The SB Sun. “Locally, sales in the San Bernardino/Riverside area were down nearly 38 percent from February 2006, although the median price of a home still climbed 4.4 percent to $409,020. ‘There is a definite weakness in the resale market,’ said regional economist John Husing of Redlands. ‘Right now it is definitely a pricing issue.’”

“‘Houses that are priced at market value are selling,’ said Bill Velto, manager of Tarbell Realtors in Upland. ‘We’re seeing a lot of homes selling for less than their appraised value. This is just a further step in our transition into a normal market.’”

The Desert Sun. “Data from the California Association of Realtors shows that that while most Coachella Valley prices have fallen from the superheated market of 2006, median prices in Palm Desert actually posted a 3.1 percent increase to $417,000.”

“Median home prices in Desert Hot Springs and Cathedral City posted the biggest drops, with 12.2 percent and 11.4 percent off last year.”

The Daily Breeze. “Turbulence from the sub-prime real estate market is starting to be felt in Southern California, but mostly in areas of the Inland Empire, which saw more home construction than in other areas, said Delores Conway, director of USC’s Casden Real Estate Economics Forecast.”

“The uptick in foreclosures for these riskier mortgages could eventually be felt in Los Angeles, she said. ‘I’m sure we’ll see it here, too,’ Conway said. ‘We are watching it closely as it unfolds.’”

“Despite CAR’s reported year-over-year price increases in most South Bay communities, it is still a buyer’s market now, Manhattan Beach Realtor Adolph James said. He said the South Bay housing market likely peaked in July or August of 2006.”

“‘Today, when you bring a buyer to a property, they’ll look at a property and say what else do you have?’ said James. ‘In the past, I’d show them three or four more homes and they’d make a decision. Now they want to see 15.’”

The Tribune. “The year-over-year figures for January and February show a decline in San Luis Obispo County’s median. In February, it dipped nearly 3.9 percent from the previous year, and in January, it was also down 4 percent from January 2006.”

“Home sales also slowed in the county this winter. In February, they declined 12.7 percent compared with the same period a year ago, although they remained flat from January.”

“‘We don’t have enough data to see if there’s a trend of whether prices are going up or down or staying consistent,’ said Lenny Jones, a Realtor in Arroyo Grande. ‘Unless the numbers make a drastic change, I’m going to say that the number of homes selling is going to match 2006 or be a little less than 2006, and the home values could decrease up to 5 percent this year.’”

“Data from the Central Coast Regional MLS, which include existing single-family homes and condos, show decreases in the median and sales for the North County, South County and the county as a whole, Jones said.”

“Leslie Appleton-Young, chief economist of the association, maintains that there’s no clear direction or trend as the housing market continues to adjust downward from a boom situation of the past few years when counties such as San Luis Obispo saw double-digit appreciation.”

“‘The kind of appreciation we experienced is not sustainable over the long run,’ she said.”

The Recordnet. “KB Home, which in October boosted its home sales with American Express gift cards, $10 to any lookers and $5,000 to buyers at five San Joaquin County projects, is trying another promotion to boost traffic at a Stockton project.”

“From noon to 3 p.m. Sunday, those coming out to look at models at KB Home’s Riverbend Community will get more than a taste of the Los Angeles-based company’s development. They’ll get free participation in a gourmet food-tasting event featuring local restaurants.”

“Chris Apostolopoulos, KB Home Central Valley division president, said his marketing team is looking for different ways to tap into potential buyers. ‘In the marketplace today, doing the same old thing isn’t going to get it done. Being creative is what it’s all about. It’s got to be outside the box,’ he said.”

“Greg Paquin, president of the Gregory Group, a real-estate information and consulting service in Folsom, said homebuilders still are offering buying incentives in a still-soft housing market.”

“The gourmet tasting seems an innovative way to get people at least out looking, he said, and it might spur other builders to try something innovative. He expects there probably will be a lot of builders there, too. Checking out the competition? ‘Yeah,’ Paquin said. ‘And to eat.’”

The Miami Herald reports from Florida. “The number of homes with ‘For Sale’ signs in South Florida reached new highs in February. At the current sales pace, it would take nearly three years to sell all the condominiums on the market. For single-family houses, it would take almost two years. ‘The market is trying to find itself,’ said Richard Barkett, CEO of the Realtor Association of Greater Fort Lauderdale. ‘We are still in correction mode.’”

“Sluggish sales pushed the number of unsold homes in Miami-Dade and Broward counties up to 69,734. A year ago, it was 37,495. Over the last 12 months, the number of condos for sale grew 81 percent to 21,308 in Miami-Dade and 91 percent in Broward to 22,243 — that’s 36 months’ worth of inventory in Miami-Dade, 31 months in Broward, at the current sales pace.”

“‘Sellers must make adjustments,’ said Gus Rubio, the Miami-Dade head of the biggest residential brokerage in South Florida. ‘If not, you are a seller thinking in yesterday’s world.’”

“Two weeks ago, Bill McGee drove to Circuit City and plunked down $5,000 for a 52-inch flat screen television. McGee said he had already lowered the price for his 2,850-square-foot house from $549,900 to $530,000. ‘It was a tough decision for me because I think it is worth more money,’ said McGee.”

“The Sharp Aquos is now sitting in his home, awaiting anyone who buys his home. ‘I have not got a red bow on it,’ McGee added. ‘But I am going to get one.’”

The Herald Tribune. “Sarasota-Bradenton’s median sales price dropped 9 percent last month when compared with February 2006. Charlotte County-North Port registered an 11 percent drop in prices, taking the market to near the $200,000 threshold.”

“‘They have to put aside unrealistic expectations in order to sell their homes — and they are,’ said real estate agent Joni Adno.”

“A growing number of people are defaulting. Lenders are reacting by tightening their loan standards. That has potentially broad implications for Southwest Florida, with its already bulging inventories of single-family homes: 130 weeks’ worth of homes in the Sarasota MLS alone.”

“The subprime shakeout is bleeding over into the broader home loan market. Lenders are being pressured by investors to take back earlier loans, and that is limiting their ability to offer fresh ones. ‘We were already having inventory issues,’ said Bob DeCecco, Florida regional manager for Opteum Financial Services. ‘This is just adding another layer of complexity because there are less people who can actually qualify to purchase a home, who would like to.’”

“Marta Grande of Commonwealth Mortgage Corp., predicted that the fallout would get worse before it lets up. ‘Say they borrowed 100 percent when they bought the house,’ Grande said. ‘What that in essence has done is made it impossible for them to refinance the house, because their value since when they bought the house has dropped. That is the nightmare, and you are going to see more foreclosures than you are seeing now.’”

The Palm Beach Post. “In Palm Beach County, there were 560 sales of existing single-family homes last month, a 21 percent drop from 707 in February 2006, the Realtors group said. Palm Beach County home prices also continued their slow decline, falling 4 percent to a median of $374,300 from $391,000 in February 2006.”

“Even more worrisome, the inventory of unsold homes from Boca Raton to Hobe Sound climbed to a near-record 23,713 in February, a 33 percent increase from a year ago, according to Illustrated Properties Real Estate.”

“‘With widespread media reports about potential property tax and insurance changes, many buyers are sitting on the fence waiting to see how significant the reforms will be,’ said Mike Pappas, president of The Keyes Co.”

From TC Palm. “Home sales in the Fort Pierce-Port St. Lucie market were off 37 percent in February from the same month in 2006, while median sales price dropped 9 percent.”

“Metrostudys Brad Hunter added that an uptick in foreclosures in the next year could put further ‘downward pressure on prices.’ ‘The next wave of issues we have to deal with is people who bought homes they couldn’t afford,’ Hunter said, adding that sales will likely stabilize before prices do.”

“While Stuart is included in the Fort Pierce-Port St. Lucie data, the Realtors Association of Martin County reports its own figures. There, existing single-family home sales and median home prices both dropped about 19 percent last month compared with February 2006.”

“Realtors Association of Martin County President Jennifer Atkisson-Lovett said because of the rapid increase in home prices the past couple of years, those who have lived in their homes for more than five years, and were not part of the flipper crazy the last two years, still saw sales prices above when they bought.”

“‘A lot of the $330,000 was an over inflation of the last five years, during the boom we were seeing a boom of 45 and 50 percent a year,’ she said. ‘As long as they didn’t buy in the last two to three years should still be fine.’”

The Sun Sentinel. “Real estate agents across South Florida swear they’re busy. But for the most part, finicky buyers are waiting for prices to keep falling and for property tax relief to trickle down from Tallahassee. ‘We have a lot of buyers sitting on the fence,’ said Mike Kleinrichert, an agent in Wellington. ‘But we’ve got people saying, ‘I’m not going to buy until I know what’s going on.’”

“The number of homes and condos for sale continues to grow in Palm Beach County. The number now stands at 33,587, a 10 percent increase from a year ago, according to the Miami-based Keyes Co. At the current pace, it would take several years to sell those properties.”

“Kelly and Todd Gilmore have tried to sell their three-bedroom home in Boca Raton since early November. He moved to Denver last year to take a new job, and she finally joined him this month when it became clear no sale was imminent.”

“The couple originally listed the home at $599,000 before reducing it to $549,000. This week, they cut it to $519,000. ‘It’s been an emotional experience,’ said Kelly Gilmore. ‘We’re trying to bide our time.’”

The Tampa Tribune. “Sales of previously owned, single-family homes around the northern rim of Tampa Bay declined 32 percent in February compared with a year ago, while the median sales price declined 2 percent to $213,300.”

“‘I think sellers were slow to realize this is a buyer’s market, but now they have begun to deal from that perspective,’ said Carlos Fuentes, president of the Greater Tampa Association of Realtors.”

The St Petersburg Times. “After swimming in gains last year, Florida homeowners continue to sleep with the sharks this year. Homes sales in Tampa-St. Petersburg-Clearwater gave back 32 percent year over year, from 2,957 in 2006 to 2,001 in 2007. Condo sales fell by 43 percent. Only Fort Myers-Cape Coral and Fort Pierce-Port St. Lucie registered bigger declines.”

From Florida Today. “Mark Buhrkoff of Satellite Beach said trying to sell his home has been a disappointment. He said he has been trying to sell the house himself for a year, dropping the asking price from $350,000 to $275,000, but he still is not getting much interest.”

“‘People can’t afford to buy,’ Buhrkoff said. ‘People around here don’t make that much money.’”

Please post off-topic ideas, links and Craigslist finds here.