The Housing Bubble

The Hollister Free Lance reports from California. “Despite making only $14,000 a year, strawberry picker Alberto Ramirez managed to buy his own slice of the American Dream. But his Hollister home came with a hefty price tag, $720,000. A year and a half later, Ramirez has defaulted on his loan, and he’s hoping to sell the house before it’s repossessed.”

“So how did Ramirez, with an annual income of just $14,000, purchase a $720,000 home without any money down? He had help, for one thing. Although Alberto Ramirez was the only one to sign the purchase agreement and the only one named on the loan documents, he actually bought the house with his wife Rosa Ramirez, as well as their friends Jesus Martinez and his wife.”

“However, even in a good month, the Ramirezes and Martinezes together don’t earn much more than a combined $6,500, and their official monthly payments were around $5,200.”

“The Ramirezes said Rancho Grande real estate agent Maria Avila promised they could refinance their home in three to six months to an affordable rate; until then, Rosa Ramirez said, Avila said she would pay for whatever they couldn’t afford.”

“Ramirez did supplement the mortgage payments on the Hollister home, paying about $2,200 per month for nine months. But the refinance never happened, and Martinez said Avila stopped helping with the payments at the end of 2006.”

“Rafael Cebrero, whose company Rancho Grande Real Estate sold Ramirez his home and arranged his mortgage, said subprime loans are getting a bad rap. Those loans, he said, have made it easier for many people to purchase a home.”

“Cebrero said the Ramirezes’ and Martinezes’ situation is an unfortunate one, but he said Rancho Grande was only trying to help the two families buy the home they wanted. ‘We feel we have done as much or more than we can do for these clients,’ he said.”

“Pamela Simmons, whose Soquel law firm is representing the Ramirezes, said the loan should never have been made. Simmons and Purdy attorney Alison Lawton said the firm sent a letter of demand to Rancho Grande in February alleging that Avila knew Alberto Ramirez could never afford the house and that she made the deal only for personal profit.”

“‘The real estate boom covered a multitude of sins,’ Simmons said. ‘Once the market started depreciating, the rug was pulled back to show the rot underneath.’”

The Daily Bulletin. “The housing market is looking like a complex puzzle that will take some deciphering. That’s the word from Metrostudy. ‘Almost every metropolitan market is experiencing a slowdown in new home construction driven by public builders’ retrenchment and the need to reduce new home inventory,’ said Metrostudy President Mike Inselmann.”

“Johnson said one problem developers face in California is the length of the approval and development cycles. ‘They are so lengthy in California that it is almost impossible to shut down large development projects,’ he said. ‘Thus, even in a tightening market, we continue to produce a significant number of lots.’”

“Indeed, the cost of land, entitlement, development, infrastructure and fees will keep prices from falling too far, Johnson said.”

“‘Those who have been on the fence need to recognize this market is different than any we have experienced before,’ he said. ‘Nobody is certain about the duration of the downturn.’”

“That slowdown is expected to last into 2008. ‘It looks like it will be next year before the market even stabilizes,’ said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp.”

“Kyser said there were several differences between the current downturn and the one in the early ’90s. ‘We don’t have the wild overbuilding now that we had then,’ Kyser said. ‘There has been some overbuilding, but not nearly as much.’”

The Sacramento Bee. “One would hope that a 5,100-unit housing project would face an uphill battle because it encroaches on the community’s largest employer. Or because it violates just about every principle of modern planning; build houses close to jobs, not in the boondocks where the land was cheap.”

“Only in a county that is economically desperate or predisposed to growth of any kind would a project like this have a chance. This one apparently does. It is in Yuba County. And the project is known as Yuba Highlands.”

The Press Democrat. “For home builders, the challenges have been slack demand and falling prices. Housing turned down after the market peaked at record prices two years ago. In response, builders cut back on housing starts, lowered prices and offered upgrades and other incentives to attract buyers.”

“‘We’ve gone from fear of not getting into the market to people fearful of getting into the market,’ said Frank Denney, VP of operations for Cobblestone Homes in Santa Rosa. ‘We would lose a buyer in 2004 and 2005 and have another coming in right behind. Right now we have price-driven buyers.’”

“Cobblestone has dropped prices 10 percent on its Streamside houses in east Santa Rosa, reflecting the challenge of selling homes in today’s market.”

The Merced Sun Star. “A weedy 36-acre field along Winton Way could be home to a 142-house subdivision as well as the town’s first fast food restaurant. ‘We think Winton is ready,’ developer and real estate agent Andy Krotik said.”

“Krotik and real estate agent Craig Mooneyham, also an Atwater planning commissioner, bought the land in late 2005, before the housing market collapsed. ‘It was a total different animal then,’ Krotik said. ‘You reach a point (in planning) when you can’t go back.’”

“It’s still a year before construction will start on the business part, and he said the real estate market will determine the cost, design and construction rate of the homes.”

“With a Bay Area influence and population growth across the state, Krotik said the market will eventually perk up. ‘I don’t want to go back to those high prices,’ he said. ‘I just want fair prices where people can afford a home.’”

From KCRA 3. “A real estate investment scheme that has left many Elk Grove homes in foreclosure is now contributing to falling property values in the area, a KCRA 3 investigation has found.”

“With many houses hitting the market under value, homeowners such as Jared Cronroth say their property values are dropping dramatically. His house is listed at $419,000. Yet, just two blocks away, a larger home for sale because of foreclosure is listed for $50,000 less.”

“Because so many of the houses in the area are on short sale, Cronroth said he is having to take a loss.”

The Desert Sun. “As more residents in the Coachella Valley and Riverside County receive mortgage default notices and face possible home foreclosures, county officials hope a new committee can study the problem and come up with ways to educate and help financially strapped homeowners.”

“‘We all know the school of hard knocks is a mighty teacher, and it sweeps a lot of innocents,’ said Bob Buster, District One representative for the Riverside County Board of Supervisors.”

“Formation of the committee comes as 1,460 homes were foreclosed upon in Riverside County during the first three months of 2007. That’s a number about 10 times higher than the 144 homes foreclosed upon during the same period a year ago, county officials said.”

“Across both Riverside and San Bernardino counties, the combined volume of foreclosures rose to 2,369 in the first quarter, up from 255 during the same period last year, according to DataQuick.”

“In the first quarter, lenders filed 5,750 mortgage default notices in Riverside County, a 168 percent increase from a year ago, DataQuick reported. And there were 4,357 default notices sent out in San Bernardino County, a 161 percent increase.”

The Associated Press. “Financially strapped subprime mortgage lender New Century Financial Corp., failed to receive any bids for its mortgage loan origination business, forcing it to shut down the unit and lay off around 2,000 employees, the company told employees Thursday.”

“The Irvine-based company notified employees during a conference call that they would be laid off effective Friday. Speaking on the call, New Century President and CEO Brad A. Morrice said despite a number of potential buyers for its wholesale and consumer-direct operations, ‘none of those potential deals have come to pass.’”

“‘I realize that today’s announcement was not the news that any of us hoped to hear,’ Morrice said, his voice quivering at times. ‘I would be remiss if I did not say how sorry I am for any grief or hardship that any of you may experience as a result of this situation.’”

“New Century had been the second-largest provider of home loans to high-risk borrowers, but it collapsed after a spike in mortgage defaults led its lenders to pull funding and demand that it buy back bad loans.”

The Aurora Sentinel reports from Colorado. “It’s a buyer’s market in Aurora as foreclosures in 2007 are outpacing the number of residents who lost their homes in 2006. local real estate experts say. At the end of March 2006, Adams County had 1,094 foreclosures. In the first three months of this year 1,456 homes went into foreclosure, a 33 percent increase. As of April 24, Arapahoe County had 2,015 foreclosures. At the end of last April, the county had seen 1,545, according to officials.”

“‘There’s a lot of great deals out there for buyers but there’s also a lot of doom and gloom,’ real estate agent Sunny Banka told the city’s Code Enforcement committee.”

“Rather than walk away from a sale with a profit, home sellers are bringing their checkbooks to closings, said Banka, who has worked in the Aurora real estate market for 29 years.”

“Homes sold this year in northwest Aurora had an average price tag of $111,250, down $19,000 from last year, according to Banka’s data. Houses in southeast Aurora bucked the trend, selling for an average of $313,153 in 2006 and $396,443 this year, although well below the average asking price of $430,806, according to the same data.”

“‘New construction is in serious trouble,’ Banka said, adding that she’s recently seen large home building companies lay off staff and close up offices in the area.”

“Councilman Bob Broom called the report ‘gloomy’ and despite her enthusiasm for the up tick in home sales, Banka agreed, saying: ‘I think we’re in for another tough year.’”

The Gazette from Colorado. “The pace of home construction continued to slide last month, forcing some builders to lower their sights on the number of houses they hope to sell and some subcontractors to look outside the area to find more work.”

“In April, 257 singlefamily building permits were issued in El Paso County, a one-third drop when compared with the same month a year ago, according to the Pikes Peak Regional Building Department.”

“Tom Adams, a VP for Colorado Springs-based Keller Homes, suggested many homeowners also took out second mortgages and used the money on vacations, cars or other personal items. The result is that some owners haven’t built up equity. When they go to sell, they have too much debt and don’t have a nest egg to use to move up into a newer, larger home, Adams said.”

“That hurts Keller, which builds pricier homes in several upper-end subdivisions such as Flying Horse and Pine Creek on the Springs’ north side.”

“Keller has lowered this year’s sales goals by 35 percent when compared with early 2006, Adams said. Keller also eliminated about 20 jobs through attrition and layoffs last year, he said.”

“‘We’re meeting our sales goals, but our sales goals have been greatly pared back from years past,’ Adams said. ‘We really had to adjust to this marketplace.’”

From Arizona State University. “From a high of 1,785 recorded sales in second quarter 2005, the Pinal County resale market has steadily declined to 840 transactions in the first quarter of 2007, compared to 1,110 sales for first quarter 2006 and 1,435 in 2005.”

“Much like the sales activity, the median price has steadily eroded from $220,000 in fourth quarter 2005 to $204,600 in first quarter 2007.”

“‘In order to reduce inventories, new home builders have been aggressively pursuing buyers through incentives. The new home has become a strong competitive and attractive alternative to the resale home in Pinal County,’ said ASU’s Jay Butler. ‘Thus, there are many reasons for the slowing market and issues that will have to be overcome for any future recovery.’”

The East Valley Tribune from Arizona. “A massive gated development in the works for Pinal County will bring a private golf course and nearly 2,400 homes to the Queen Creek area with sales beginning by the fall.”

“Work on the more than one-square-mile project by Shea Homes, called Encanterra, is already under way at the southeast corner of Gantzel and Combs roads.”

“The largest hurdles areas like Pinal County and the far West Valley are facing are traffic congestion and rising energy costs, said Jay Butler, who heads up the Realty Studies department at ASU.”

“Builders will return to a more traditional way of selling, emphasizing locations, amenities and home designs, Butler said. ‘How do they go back and differentiate themselves from their competition?’ he said. ‘The market may be smaller. The market may be more selective.’”

Bloomberg reports on Arizona. “Rachael Babinchak, a real estate agent, is trying to rent an investment property she bought for $224,000 last May in Phoenix, after home prices climbed 26 percent from a year earlier. Since then, demand has dropped because of a glut of for-sale properties and prices have ’softened,’ she said.”

“Babinchak is asking $1,100 a month for the two-bedroom house on the north side of the city, with a one-car garage, a pool and a hot tub. The average rent in Phoenix was $756 in the first quarter and the vacancy rate was 7 percent, exceeding the national average, according to Reis.”

“‘I didn’t buy an investment property with the hopes of being a landlord, but I’m not going to get a good price right now,” Babinchak said. As soon as the real estate market rebounds, she said she’ll put the property back up for sale.”

Some housing bubble news from Wall Street and Washington, Bloomberg. “GMAC LLC, the finance company partly owned by General Motors Corp., said it had a $305 million first- quarter loss and injected $1 billion into its home-lending unit amid a ’sharp downturn’ in the U.S. mortgage market. GMAC’s Residential Capital LLC lost $905 million. GMAC’s loss reflected ResCap’s drain as delinquencies on so-called subprime loans climbed to a four-year high.”

“ResCap also will report a loss this quarter, CFO Sanjiv Khattri told analysts.”

“CEO Eric Feldstein said in the statement that ‘in light of the major setback incurred by ResCap, we have already undertaken measures to significantly mitigate risk,’ including paring its subprime loan portfolio and writing fewer loans to people with poor credit.”

“Credit-default swaps based on $10 million of the company’s bonds jumped as much as $16,000 to $191,000, the largest increase in two months.”

The Star Tribune. “The three top credit-rating agencies downgraded their outlooks for Residential Capital after the Bloomington mortgage company said Wednesday that it lost nearly $1 billion in the first quarter because of bad subprime loans.”

“S&P, Fitch Ratings and Moody’s Investors Service all cut their outlooks on the company’s ratings to ‘negative” from ’stable.’”

“‘Although the company’s exposure to this [subprime] business has diminished significantly, the effects of higher delinquencies and depressed asset valuations continue to linger,’ Fitch Ratings said.”

The Dealbreaker.com. “The US subprime market claims another victim. Dillon Read, the hedge fund started by UBS just 2 years ago, is being shut down by the Swiss bank after incurring 150 million francs in losses primarily from the subprime market. UBS does plan to pay an additional $300mm in shut down costs.”

“This is seen as UBS’ largest hedge fund gaffe since LTCM in 1998, when the bank incurred almost $700mm in losses.”

From MarketWatch. “CFO Clive Standish said Dillon Read contributed a loss of 150 million francs from its trading in the U.S. mortgage market, where conditions have been difficult since the subprime-mortgage market collapsed.”

“Morgan Stanley downgraded UBS to underweight from equal weight, saying the decision to close Dillon Read could lead to ‘organizational turbulence.’”

“Title insurer and mortgage-data firm First American Corp. said that for 2007 it expects a ‘continued slowdown in housing activity and an increase in defaults and foreclosures.’”

The Associated Press. “The practices of mortgage lenders will come under greater scrutiny Thursday, as two senators will unveil a plan to address rising foreclosures and high-interest rate home loans given to people with weak credit.”

“Sen. Charles Schumer along with Sen. Sherrod Brown will introduce legislation to strengthen standards that mortgage lenders use when providing loans.”

“The new legislation, which comes amid growing calls for Congress to enact an anti-predatory lending law, could affect big lenders such as Washington Mutual Inc., Wells Fargo & Co. and Countrywide Financial Corp., which could be forced to evaluate whether a borrower meets federal standards before issuing a loan.”

“Schumer said last month that hundreds of millions of dollars in new federal aid may be needed to assist homeowners at risk of foreclosure. Presidential candidate Sen. Christopher Dodd, who is chairman of the Senate Banking Committee, said last month he is ‘not interested’ in a bailout.”

From Reuters. “The two largest mortgage lenders in the United States have declined to endorse a set of principles that would help troubled subprime borrowers avoid foreclosure, a lawmaker who proposed the principles said on Wednesday.”

“Representatives from Countrywide Financial Corp. and Wells Fargo & Co. both attended a mid-April ’subprime summit’ organized by the chairman of the Senate Banking Committee, but those companies did not endorse the seven principles, which were formalized after that meeting.”

“A spokesman for Wells Fargo said the company ‘believes that many of the points raised at the summit are especially important, and also describe long-standing practices’ at Wells Fargo. However, the spokesman would not explain why Wells Fargo did not fully endorse the principles.”

“The seven principles are meant to aid borrowers and save them from foreclosure, according to a statement from Dodd’s office.”

“Among the principles, mortgage servicers should seek to modify the terms of subprime loans before the interest rates are reset higher, and they should set aside dedicated resources and staff to help those borrowers.”

“Another principle calls for servicers to make early contact with subprime borrowers with adjustable-rate mortgages to determine if they qualify for a more stable loan.”

The Atlanta Business Chronicle. “Haverty Furniture Cos.’ profit dropped 84 percent in the first quarter, hurt by the national housing slump, lower sales volumes and negative comparable-store sales.”

“CEO Clarence H. Smith noted the negative impact of the housing slowdown. ‘The housing sector, which is tied to our industry, has been in a severe slump,’ he said.”

“More than a third of all U.S. home builders are vulnerable to rating downgrades over the next two years as a downturn in the housing market lingers, data released by Standard & Poor’s this week showed.”

“‘The sector is now about one and a half years into what we believe may be a roughly three-year downturn,’ S&P said in a report. ‘Our home-builder rating bias is emphatically negative, as the sector is in the midst of an inventory correction of uncertain, and potentially protracted, duration.’”

“About 13 percent of U.S. home builders were on review for a possible downgrade by S&P at the end of the first quarter.”

“Ratings weakness is concentrated in junk-rated home builders. While investment-grade home builders appear to have adequate liquidity, ‘we will be looking for these companies to pare their inventory and demonstrate an ability to operate profitably at lower volumes,’ S&P said.”

From Business Week. “Maybe you guessed it, but now it’s official: The housing market has not hit bottom. Poor home sales in cold-and-quiet February may be excusable; but in March, April, and May, they are a sure sign of distress.”

“The latest numbers indicate that the spring of 2007 will go down as one of the worst real estate seasons in years.”

“March, April, and May are traditionally the strongest months for home sales. But this year, the usual throngs of spring buyers just aren’t there. On May 1, the National Association of Realtors reported that home sales closed in April will remain soft, with some drag possible into May.”

“‘March [home sales] weren’t anywhere near where they should have been, but April is going to be the month that reveals that things really aren’t good,’ says Pat McPherron, housing economist for Moody’s Economy.com. ‘If April doesn’t go well, then that’s it. This is the market.’”

“Tighter lending standards are only part of the problem. ‘Even if they kept [standards] the same you wouldn’t get the same recovery,’ says McPherron, noting that house prices accelerated faster than incomes during the housing boom.”

“McPherron says he wouldn’t be surprised if home sales were still soft well into the summer months. ‘Many people think, ‘if I can just hang on ’til the spring,’ they will get an offer,’ says McPherron. ‘This spring, they’ll be lucky to sell.’”

The Guardian reports on Florida. “Florida’s over-saturated luxury housing market has caused Taylor Woodrow to abandon plans to build a massive $180 development. The builder paid more than $31.5m for the land at Clearwater Beach in 2005 and planned to build a 15-storey tower. A second tower was to house a condo hotel with 78 suites.”

“‘The spring selling season for our high-rise tower division in Florida has been very poor,’ CEO Ian Smith said. ‘Market weakness persists in California and particularly Florida and conditions have worsened in certain submarkets within those states.’”

“Taylor Woodrow wrote down its US assets in February, also at a cost of £40m, but the continued weakness of the overall north American market had led to speculation that values have fallen even further.”

“‘We missed the curve with Clearwater Beach,’ said spokesman Tim Knight, explaining that the Florida condo market staggered to a halt before pre-sales could be booked. The tourist town has lost thousands of hotel rooms over the last few years as developers razed buildings to cash in on the condo boom.”

“Real estate experts say there are already 800 unsold condos available in the Clearwater area and tens of thousands across the state. In the Miami area alone, 20,000 new units are scheduled to come to market by the end of next year.”

“In Florida, the company said although the locations of its sites were ‘excellent,’ the high-rise market had weakened ’significantly’ and it wanted to save costs by suspending sales efforts for the business until market conditions improved.”

“‘In the particular areas we’re looking at where we’ve been taking provisions we’re looking at price declines of around 100,000 to 150,000 stg,’ Smith told analysts. ‘I should say these are not starter homes, but reasonably high-priced homes, 700,000 to 800,000 usd homes.’”

The St Petersburg Times. “Could Clearwater Beach become a hotel haven again? Many of the old mom-and-pop motels that once dotted the shoreline have been bought up and torn down to make way for glitzy condos.”

“But with the slow housing market and many condominium projects at a standstill, Pinellas County leaders are talking about creating incentives that encourage developers to build hotels instead.”

“‘I don’t think that our citizens and our tourists really want us to look like Miami Beach,’ Commissioner Karen Seel said.”

“Clearwater Beach has seen big condo developments gobble up thousands of hotel rooms in the past half-decade. ‘I think right now the condominium market is stagnant, to say the least,’ Mayor Frank Hibbard said.”

“The architectural plans for Trump Tower Tampa may not be set in marble and glass. The Miami development company negotiating to take over the much-delayed Tampa high-rise suggests the project be revamped to reflect a changing real estate market.”

“‘I think there will be a project built there,’ said Eric Fordin, a project manager at the Related Group. ‘But I’m not sure what form it will take.’”

“That means what’s been marketed as the tallest condo skyscraper on Florida’s West Coast, with 52 stories and 190 condominiums, could be downsized.”

“Since its sales launch in February 2005, Trump Tower has trumpeted itself as not just the highest skyscraper, but also most luxurious residential address.”

“The timing turned out to be poor for developer SimDag LLC. Banks have shied from financing the $300-million building, wary of a housing downturn that has tossed thousands of unsold condos onto the Tampa area market.”

“One possibility is that SimDag will cut ties with the project entirely. ‘Part of SimDag would love to be involved in the deal,’ Fordin said. ‘Part of them would like to go home.’”

The News Press. “The number of permits pulled for single-family homes in April was down throughout Lee County. That’s about 17 percent fewer than in March and 69 percent less than the same month a year ago.”

“In Cape Coral, city officials reported 115 permits were pulled, down 74 percent from April 2006’s 439. Fort Myers builders pulled 40 single-family permits, down 70 percent from March’s 135 and down 38 percent from April 2006’s 65.”

“‘Hopefully now that we have been skating along the bottom like this, basically going back to the numbers of four years ago, now it will pick up,’ said Michael Reitmann, executive VP of the Lee County Building Industry Association.”

“Metrostudy’s Southwest Florida market research director Brad Hunter noted the first quarter of 2007 saw a marked decrease in new home construction: 887 single-family home starts compared with 1,558 in the first quarter of 2006.”

“Also, he said, ‘The drop in units under construction suggests that a significant decline in finished vacant inventory will soon follow, providing substantial relief from the downward pressure on prices.’”

“As the residential permits stay at low levels, said Mary Gibbs, head of the county Department of Community Development, ‘I’m looking at eliminating 19 positions in the budget this year’ because not as many building inspectors and plan reviewers are needed.”

The Orlando Sentinel. “Mortgage woes, higher gas prices and a ‘perfect storm’ of other financial troubles have caused personal bankruptcies to spike in Central Florida so far this year, according to the latest court records.”

“Nearly 1,300 personal-bankruptcy cases were filed in Orlando during the first three months of 2007, nearly twice as many as during the first quarter of last year.”

“Personal-bankruptcy cases for the entire Middle District, which extends from Fort Myers to Jacksonville, jumped nearly 80 percent in the first quarter, to 5,308 filings, compared with the same period a year earlier.”

“A Lake County couple , who spoke only on the condition of anonymity, tried to sell their home late last year to pay off their bills, but the house wouldn’t sell in the slumping market. Finally, in March, they filed Chapter 7 bankruptcy in Orlando federal court.”

“‘This didn’t just happen overnight,’ the husband said. ‘We’ve been fighting these bills for three years. But everything’s just been snowballing against us.’”

“During the five-year housing boom, many of those headed for financial trouble were able to refinance their mortgage, experts noted, to extract equity that could be used to pay off debt. But now, with home prices flat or in decline, that option is often not available.”

“‘Prices have tapered off, and there’s no more equity to refinance with,’ said Doug Neway, an Orlando consumer-bankruptcy lawyer. ‘There are many who want to save their homes, but some people are in such bad shape, they really just need to walk away from them.’”

“This year’s first-quarter personal bankruptcy filing’s are up 97 percent from a year ago. Many people are now taking huge hits from ill-advised purchases made during the housing boom, especially those who financed their homes with adjustable-rate loans, which are now ratcheting higher to unaffordable levels in some cases.”

“‘There has been a perceptible increase in filings by people who are trying to prevent foreclosure,’ said Jonathan Alper, a bankruptcy lawyer in Lake Mary. ‘I don’t think we’ve begun to see the full effect of that.’”

The Gainesville from Georgia. “Jody and Shelley Ray’s dream house went on the market in October and six months later, a ‘for sale’ sign still is posted in the front yard of the four-bedroom, three-bath house.”

“‘It’s frustrating,’ said Jody, who now commutes from Gainesville to Marietta. Real estate agents have regularly brought prospective buyers, but have yet to find a new owner.”

“The Rays are not alone. The once robust resale market in Gainesville is not as strong as it was a couple of years ago.”

“Ed Phillips, executive VP of the Homebuilders Association of Georgia said that throughout the state there are pockets of good and bad news. ‘It’s all over the map,’ Phillips said. ‘There are places where it’s dead.’”

“He said that some areas have too much housing inventory on the market, adding that builders statewide are taking a conservative approach in building speculative houses.”

“‘I think the banks are helping lead that effort; nobody wants to get caught,’ Phillips said. ‘Our business is down, but in Georgia I don’t think you’re going to see problems like huge devaluations that we have seen elsewhere.’”

“‘I have seen people having to come down on their prices, taking less than they would two or three years ago, because there is so much competition out there,’ said Susan Barkley, a mortgage specialist in Gainesville.”

“The Rays have done just that, dropping the listing price of their home. They are optimistic that they will find a buyer during the busy home-buying and selling season that takes place toward the end of May.”

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