The Housing Bubble

It’s Friday desk clearing time for this blogger. “Big Sky, Montana, is seeing a slow down in home sales, but there is no indication the resort community is perched on a housing bubble ready to pop, according to local real estate agents. Currently, 132 residential properties in Big Sky are listed for sale at $1 million or more, plus another 61 lots and acreages on sale in the same price range.”

“Five Big Sky properties sold for $1 million or more in 2004, ERA reported. Twenty properties sold for $1 million or more in 2005. Another 39 properties sold in same price range in 2006.” ”

Homes in the community aren’t selling as quickly as they have in the recent past, but the community is coming off a few extraordinary years, said ‘If you look at it from a 10-year-cycle, it is still above what we consider to be the norm, but it’s not the intense period of time we had in ‘04 and ‘05,’ said Don Pilotte, incoming executive director of the Gallatin Association of Realtors.”

“The number of people falling behind on their mortgage payments or going into foreclosure in New York State continues to climb, according to new data released by the Mortgage Bankers Association.”

“‘You are going to have people with adjustible rate mortgages who cannot make the new payments and people with subprime mortgages who cannot make their payments,’ said Bob Moulton, president of Americana Mortgage Group in Manhasset.”

“The number of El Paso homes on the market has more than doubled this year, and that’s not including homes under construction or for sale by owner. Real estate agent Barbara Berliner says the difference is clear in the Kern and Rim areas, where homes that once sold in weeks are now staying on the market for several months.”

“Prices aren’t falling yet, but Berliner expects they will if things continue this way for the next few months.”

“From North Dallas to Oak Lawn and Old East Dallas, even in the suburbs, bulldozers are plowing under thousands of aging apartments. With real estate prices soaring, developers are knocking down the dilapidated rental units to make way for new construction.”

“Many of the apartments facing destruction were constructed in the 1970s and early 1980s, often built with savings and loan money and sold to investors looking for a tax dodge. ‘It was built to reap tax benefits in place at the time,’ apartment analyst Greg Willett said. ‘There wasn’t a lot of consideration of whether the designs were appropriate for the market.’”

“In April, the average house price in Saskatchewan was $163,800, up from $132,400 in April 2006. ‘If you’re looking to get into the market, you should do it now and not wait,’ said Bill Madder, executive VP of the Association of Saskatchewan Realtors. ‘There’s no reason to think there’s going to be a drop or a crash. There’s likely more room for gains than losses.’”

“First it was mortgages equal to five or six times a homebuyer’s salary. Now the half-century home loan beckons. A UK broker firm today revealed it was in talks with a lender about launching a 50-year mortgage.”

“When it comes to stretching the length of a mortgage, Britain appears to be following in America’s footsteps. Early last year, a California-based mortgage company launched a 50-year deal that was quickly dubbed ‘the Methuselah of mortgages.’”

“Taipei’s average house price in the first quarter was eight times the annual income of the city’s residents, said the Council for Economic and Planning and Development yesterday.”

“‘First, as unlikely as it sounds, homebuyers are facing less pressure when purchasing homes and paying mortgages,’ said Chang Chin-er, a professor in National Chengchi University’s land administration department. ‘Fewer homebuyers are buying houses for speculative purposes. Homebuyers are less confident about the housing market in the future. They hold the view that house prices will remain at the current level in the short term, yet will drop in the long term.’”

“Ten years after its return to Chinese rule, Hong Kong ranks again among the world’s most expensive cities to live in after a traumatic, roller-coaster ride that has left many home owners still feeling the pain.”

“Average Hong Kongers like Rebecca Leung are still troubled by their property investments made before the handover. The 56-year-old had bought her tiny 500 sq ft flat in the busy but grimy North Point area of Hong Kong island, at an exorbitant HK$2 million in 1996.”

“Today it is worth just 60 per cent of that and Ms Leung can neither keep up the mortgage payments nor afford to sell at such a loss. Ms Leung said: ‘For a long time, property prices were rising. I bought it because I saw it as a safe investment and expected the value to go up, not down.’”

“Top 10 ways to sell your Florida house in this market: 6) When asked why you are selling, do not say, ‘Are you kidding me? I’m getting the hell out of here and moving to North Carolina.’ 5) When the buyer makes an offer for 60 percent of your asking price, try not to scream, ‘God, yes!’”

“Bay Area homes continued to sell at their slowest pace in 12 years last month, as the median sales price edged up to a new peak, a real estate information service reported.”

“‘It’s likely a lot of potential buyers have been sitting on the fence….It’s easier to buy a home if you don’t think it’s going to go down in value,’ said Marshall Prentice, DataQuick president.”

“Susie and Dale Kinzer picked late April to put their Vancouver, WA, home on the market, just in time for housing sales to hit the lowest point in the past five years. May figures show Clark County home sales fell by 22.7 percent for the month.”

“‘We haven’t had a bite yet, which makes us wonder if this wasn’t such a good time to put our (home) on the market,’ said Susie Kinzer.”

“Broker Scott Mikel said homes in the $400,000 to $500,000 range aren’t selling as quickly, creating a backlog of high-end residences and problems for people who need to move quickly. ‘I’ve had people who lost value because they got called away on a job,’ Mikel said.”

“Sharon Walters, a broker in Battle Ground, blamed the rising supply of houses on the market for sluggish home sales, a situation that pits sellers who want top dollar against buyers who are looking for bargains. That means sellers need to work harder, Walters said. ‘You’re competing with everything else out there,’ she said.”

The San Francisco Chronicle reports from California. “Bay Area home sales continued their downward slide in May, with fewer properties changing hands and the mix of sales tilting toward higher-priced houses. In the nine-county area, 5,487 existing single-family homes were sold in May, down 17.4 percent from May 2006, according to DataQuick.”

“‘Sales are really low; you’d have to set the clock back 12 years to find another May with lower sales,’ said Andrew LePage, an analyst with DataQuick.”

“Realtor Saraya Motley is selling four condos in Oakland. The seller has cut between $50,000 and $60,000 off the price of each unit, which now range from $299,000 to $369,000. The lower prices generated lots of interest and one accepted offer, but two other offers fell through because the buyers could not qualify for a loan, she said.”

“Tighter lending standards ‘are really affecting the bottom 20 percent of the market right now,’ Motley said. ‘The buyers don’t qualify because the whole bottom of the market really dropped out with the subprime issue.’”

The Mercury News. “Fewer Santa Clara County homes changed hands last month than during any May since the dot-com collapse. While the county’s median price increased from May 2006, it fell from April’s record high.”

“Two years of low sales volume show ‘a housing market with very few willing buyers at these prices,’ said Stephen Levy of the Palo Alto-based Center for Continuing Study of the California Economy. ‘I don’t see volume picking up very much without a price adjustment.’”

“He also attributed buoyant median prices to the change in which types of homes are selling, saying of the apparent increase, ‘It’s not real, and it’s not going to continue.’”

“For example, agent David Martz listed a house on San Jose’s East Side in April at $599,950, below the sales prices of comparable homes, he said, but there’s been ‘no activity.’ The East Side has some of the county’s highest mortgage default rates. The recent unavailability of no-money-down financing is choking off sales to first-timers there, agents say, and driving down prices.”

“‘There are certain areas of the valley and price points that are just getting creamed,’ Martz said.”

The Contra Costa Times. “In Contra Costa County, 1,366 homes were sold, a 29.5 percent decline from a year ago. Solano County saw 476 homes sold, a 37.6 percent drop from a year ago.”

“The market today is not the same as the red-hot market three years ago, said Realtor Earl Rozran. ‘There are a number of sellers that have still not got their arms around the fact that the market is not what it used to be. Buyers just have too much inventory to choose from,’ he said.”

The Press Democrat. “Sonoma County’s slumping housing market showed little sign of improving in May as many buyers remained on the sidelines, waiting for prices to fall even further. May’s median resale price fell to $575,000, down 4.6 percent from the same month a year ago.”

“Prices have fallen for 11 consecutive months, the longest decline since The Press Democrat began tracking home sales in 1990. Sales were down 15.1 percent from a year ago.”

“The county’s housing market continues to fall back from its peak in summer 2005, when the median resale price hit $619,000. Buyers are in control with a large selection of homes and even more coming on the market during the typically busy summer sales season.”

“‘I think the buyers are biding time,’ said Rick Laws, Santa Rosa manager for Coldwell Banker, which prepares The Press Democrat’s monthly home sales report.”

The Sacramento Bee. “A long, slow search for bottom continues across most of the region’s real estate market. ‘The market seems to change weekly,’ said Bob Bronswick, president of the Sacramento-Tahoe division of Coldwell Banker residential brokerage. ‘Memorial Day week was unbelievable. Properties were flying out the door. Then, all of a sudden, somebody turned the valve off.’”

“DataQuick reported 3,211 new and existing homes changed hands in May in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. It was still 1,031 fewer closings than in May 2006, DataQuick reported.”

“May closings fell to a 12-year low for the month in Sacramento County. Placer County’s sales numbers were at a 10-year low, according to DataQuick.”

“‘It doesn’t look like there’s a lot of steam building at the moment, and we’re coming up to the peak of the buying and selling season,’ said DataQuick analyst Andrew LePage.”

The Tribune. “San Luis Obispo County home sales declined nearly 30 percent in May year-over- year and the all-home median price fell about 2 percent, according to DataQuick.”

“It was a 14-year low for home sales in May and the 20th consecutive month that home sales have declined year-over-year, said Data Quick analyst Andrew LePage.”

“The most significant drop-off in sales was in new homes, which fell nearly 60 percent to 34 in May from 84 the previous year. Prices of new homes were also hit hard. The median price plummeted nearly 14 percent to $525,500 in May from $609,000 last May.”

“California’s weakening real estate market helped push foreclosures, particularly for speculators and others who took out subprime mortgages, higher nationwide in the first quarter.”

“Loans are beginning to reset, and payments are jumping by hundreds of dollars per month. As home prices have slackened, more average homeowners and investors are falling behind on payments or walking away from properties altogether.”

“Prices in many Northern California markets, including Santa Cruz, Fairfield, Stockton, Napa, Modesto and Vallejo, fell in the first quarter, as measured by federal data that track sales of comparable homes.”

“At the same time, the supply of homes on the market in the state has increased to about 10 months, up from four months several years ago, said Doug Duncan, economist for the Mortgage Bankers Association of America.”

“‘If you’re an investor in those markets and you bought using a subprime (loan)…you’re going to turn those keys in,’ Duncan said.”

From KSBY.com. “Several Central Coast homes…were auctioned off in less than a half hour, for much less than market value due to foreclosure.”

“The most expensive house at the auction was one in Nipomo, appraised at over $550,000. The Arroyo Grande realtor who bought the home for $437,000 expects to see more foreclosure auctions.”

“‘We’re in a down cycle right now, and foreclosures are on the rise, so auctions are probably a thing we’ll see quite a bit of here in the future with foreclosures the way they’re going right now,’ said Arroyo Grande resident Coker Ellsworth.”

The Record Searchlight. “About 100 people showed up Thursday morning as Pacific Auction Exchange staged its first public auction in Redding.”

“It took about 10 minutes to auction off the Vermeer Place home. The opening bid was $250,000. In the end, Ken and Jason Jones of Redding got the 2,730-square-foot home for $375,000, plus a $37,500 auction fee.”

“The house had been listed for $669,000 before it was pulled off the market in late April. Jason Jones, a real estate agent, figured the home was overpriced at $669,000 and probably is worth about $550,000.”

“Don Shearing just opened the Pacific Auction Exchange franchise in Redding. He also owned the Vermeer Way home that was auctioned off Thursday. Shearing said he owed about $389,000 on the house, which originally was listed in November for $689,000.”

“‘This is the truest forum to establish market value. This is what we did here today,’ said Shearing.”

“Monthly home sales in Shasta County have been down each month this year compared with the same month in 2006. The median sales price in April was $269,500, down 5.4 percent from April 2006, according to DataQuick.”

“Ross Domke, who owns Real Estate Professionals GMAC in Redding, suspects Shearing and company didn’t get the result for which they had hoped. ‘I was surprised how few bidders there were. It was probably set up more as a test to see how the area would respond,’ Domke said.”

Some housing bubble news from Wall Street and Washington. Inman News, “Reports from the nation’s 12 Federal Reserve banks show continuing weakness in residential real estate and construction, with most districts characterizing housing markets as soft or weak, and no districts reporting an increase in new home construction.”

From Bloomberg. “Consumer advocates Thursday called on the Federal Reserve to write stricter rules to end abusive lending practices, saying the central bank had not acted forcefully enough to prevent delinquencies and foreclosures.”

“State officials and consumer advocates recommended that the Fed write rules that would require lenders to ensure a borrower’s ability to repay. ‘Common sense tells us that if you take out a loan, you should have the ability to pay,’ Iowa Atty. Gen. Tom Miller said.”

“The lenders, including JPMorgan Chase & Co. and Option One Mortgage Corp., urged the Fed to require simpler consumer disclosures and to issue guidelines instead of rules. ‘We recommend that the board be cautious,’ said Faith Schwartz, senior VP at Irvine-based Option One, a unit of H&R Block Inc.”

The New York Times. “In opening remarks, Randall S. Kroszner, a governor on the Fed’s board, said the central bank shared responsibility over mortgage lending with other state and federal regulators.”

“‘Rising foreclosures in the subprime market over the past year have led the board to consider whether and how it should use its rulemaking authority to address these concerns,’ Mr. Kroszner said. ‘In doing so, however, we must walk a fine line.’”

“In the morning, representatives from mortgage companies and an association of mortgage brokers parried, mostly in good humor. The opposing sides appeared to agree that the mortgage industry got carried away in the recent housing boom but disagreed sharply on the scope of the problem and what should be done.”

“‘There are folks that do this business the right way,’ said Pablo Sanchez, a national mortgage production specialist with JPMorgan. ‘I would hate to have this as the last record that this is all the lenders’ fault.’”

From Marketplace. “With the hope that subprime problems eventually will be worked through and won’t infect the overall mortgage market, Mortgage Bankers Association’s chief economist Doug Duncan said: ‘We’re just urging people to take a deep breath and look at the big picture.’”

The Miami Herald. “Miami’s Intercredit Bank has signed an agreement with federal bank regulators to take steps to tighten its lending practices and reduce credit risks.”

“In March, Ocean Bank was hit with a cease and desist order from the Federal Deposit Insurance Corp. Miami banking analyst Kenneth Thomas said that two actions on lending practices coming so close in time was an unusual but stemmed from the weakening real estate market and the rise in mortgage problems.”

“‘This is the second major one that emphasizes lending and not just compliance with the Bank Secrecy Act or other anti-money laundering issues,’ Thomas said.”

“Economists said homeowners trying to refinance their adjustable-rate mortgages before they reset to higher levels are already feeling pinched. The national average for the 30-year fixed-rate mortgage jumped to 6.74 percent Thursday. At the beginning of the year, the average was 6.18 percent, according to Freddie Mac, a big buyer of mortgages.”

“Last year, adjustable-rate loans accounted for 25 percent of mortgage applications, up from 11 percent in 1998, Freddie Mac said. Demand for adjustable-rate loans peaked in 2004 at 33 percent; many of those are at or near the reset point.”

“‘It’s going to be tough,’ said Adam L. Stein, president of the Washington Association of Mortgage Brokers near Seattle. ‘I talk to people every day looking to get the fixed rate. You give them the current rate and they say, ‘That doesn’t do anything for me.’”

From MarketWatch. “The mortgage bankers came out with their latest survey on mortgage delinquencies and foreclosures on Thursday, showing a small rise in the percentage of homeowners who are in the process of losing their homes because they aren’t paying the mortgage.”

“Foreclosure rates for adjustable-rate mortgages, or ARMs, have doubled over the past two years. This is not just the subprime borrowers, those with less than stellar credit. Even prime borrowers who opted for ARMs are in trouble.”

“The foreclosure rate for subprime ARMs has gone from 5.1% to 10.1% in less than two years. The delinquency rate has soared from 10% to 15.75%. For prime ARM borrowers, the foreclosure rate has doubled from 0.8% to 1.6% in just one year. The delinquency rate for prime ARMs jumped from 1.5% a year ago to 2.4% this year.”

“Bill Gross, manager of the world’s largest bond fund, says U.S. housing is in such a perilous shape that the Federal Reserve may need to cut interest rates in six to nine months.”

“Not so, says Alan Greenspan, the Fed Chairman who presided over 14 straight rate increases before retiring in January 2006. The odds are 2-to-1 that the economy will avoid a downturn, he said last month. He said in a speech in Mexico City two days ago that long-term interest rates are still low and may not last.”

“What Gross and Greenspan differ most on is the direction of the real estate market. ‘They can’t both be right,’ said Brian Hilliard, chief economist at Societe Generale in London.”

“For more than two years Gross has been wrong on the direction of borrowing costs. ‘We have made a mistake over the past 12 months expecting the Fed, first of all, to stop before 5.25 percent and, second of all, to maybe start to ease a little before where the market expects it to ease,’ Gross said May 17. ‘If there’s been a mistake, that’s it.’”

“A measure of U.S. consumer prices rose less than forecast in May, evidence that ebbing inflationary pressures may allow the Federal Reserve to keep interest rates unchanged this year.”

From CNN Money. “This month’s rise in global interest rates is probably a sign of the beginning of the end of an era of supercheap money - a change with profound implications.”

“‘This is the end of the cheap money cycle,’ Marc Pado, U.S. market strategist at Cantor Fitzgerald in New York, said.”

“‘The warning shots fired by the market will perhaps make investors stop and think about whether they can continue to pile into asset classes without abandon and not have to pay the price at some time,’ said Peter Dixon, strategist at Commerzbank in London.”

“Rising rates could hurt economic growth, especially in the United States, where rising mortgage rates could threaten the already fragile housing sector by increasing the burden on home buyers.”

“The housing sector already faces pressure from an oversupply of homes on the market and falling home values in some markets. The sector also faces risks from ongoing problems in so-called subprime loans to borrowers with weak credit. Weakness in the housing sector has worried economists, and the market still may worsen.”

“According to a report from the financial service companies, National City Corp and Global Insight, the number of single-family homes they judged overvalued in the United States fell from 17 percent in the last quarter of 2006 to 14 percent in the quarter ended March 31.”

“The latest price declines were mostly clustered in areas that had seen big price run-ups during the boom, with California, Florida, New York and Massachusetts taking hits.”

“James Diffley, managing director of Global Insight’s Regional Services Group, said in a statement, ‘The price declines we are seeing today in California, Florida, and New England were predicted two years ago when we identified them as the most extremely overvalued markets in the nation.’”

“The metro areas facing the greatest threat of future price drops are in California, according to Diffley.”

“He blamed it on a, ‘huge glut of new and existing homes for sale on the market, and the tightening of credit standards in light of the subprime mortgage troubles [that] will continue to exert downward pressure on prices for some time.’”

From Reuters. “There is no good news for some the largest home building companies in the United States. ‘We do think if you’re dumb enough to buy a home builder (share), you ought to buy us,’ Ryland Group Inc. CEO R. Chad Dreier, told an investor audience at the JP Morgan Basics and Industrials Conference this week.”

“Against a backdrop of plunging sales and rising contract cancellations, there was little talk of a turnaround or a bottoming out of the housing market.”

“Most U.S. home builders have taken defensive positions looking to generate cash. They have also been selling unsold homes, land positions, paring debt, laying off employees and cutting prices to generate sales.”

“‘Our goal is close as many homes as we can in this fiscal year,’ said Don Tomnitz, CEO of D.R. Horton Inc., the largest U.S. home builder. He tells his sales force that ‘If the buyer’s got a pulse, and they’re warm, take them out of the market place’ by getting them to sign a contract.”

The Sun Sentinel reports from Florida. “Turmoil in the housing market is swirling around an increase in troubled loans and a new threat, rising interest rates. Around the nation, late home-mortgage payments and adjustable-rate loans going into foreclosure hit all-time highs in the first three months of this year.”

“The problem is acute in Florida, which had the second-largest increase for new foreclosures through the end of March, according to the Mortgage Bankers Association. ‘That’s a leading indicator that problems are rising,’ said Doug Duncan, the organization’s chief economist.”

“Another negative: Huge inventories of homes are for sale in South Florida. The number of houses and condos on the market is so large that it would take almost three years to sell them all in Palm Beach and 31 months in Broward, if the pace of recent sales continues.”

“‘The speculators are gone, they left,’ said Chappy Adams, president of Illustrated Properties in Palm Beach County. ‘Not only did they stop buying but they pretty much put their properties on the market all at the same time.’”

“The most obvious trouble is in the subprime market, where 11.61 percent of all subprime loans in Florida are past due and 2.15 percent of subprime loans entered foreclosure during the first three months of the year. Another 6.29 percent are considered seriously delinquent, because payments are more than 90 days past due.”

“Those higher rates will also make it more difficult for troubled borrowers to refinance their mortgages. ‘If there are a lot of people out there who do have the ability to refinance, the time to do it is now,’ said Jim Dean of Trust House, an investment advisory firm in Fort Lauderdale.”

From Florida Today. “This year’s HomeBuyer Expo in Orlando could be a challenge for builders, lenders and others in the housing industry. Housing prices have dropped steadily in the past 1-1/2 years, although they are still high compared to other southern states; construction has slowed; and home insurance rates and property taxes have risen, spurring reports that some people are moving out of Florida.”

“‘As the housing market has cooled off, and the investors have left the market, and the subprime loans have dried up, people really should find a lot of bargains and concessions from sellers,’ said David Westcott, director of homeownership programs for the Florida Housing Finance Corp.”

“Lennar, which has been building several communities in Palm Bay and Viera, already has adjusted to the housing market slowdown. The focus is on ‘the greatest value we can offer,’ said Laureen Ramsey, Space Coast division president for Miami-based Lennar Homes. ‘We’re focused on bulk purchases and economies of scale.’”

The Voice of America. “Stockbroker Scott Brown of St. Petersburg, Florida, says the growth deceleration is mainly the result of weakness in the housing sector. Brown says home owners are seeing a painful correction from the buying frenzy that in many areas sent home prices soaring between 2000 and 2005.”

“‘Home prices in many areas may have doubled and now you’re seeing a 10 or 20 percent correction,’ he said. ‘It’s really going to affect recent homebuyers more than anything. If you bought a home in the last year or two, your net worth in that home is probably going to be down.’”

The Miami Herald. “Amid a weakening housing market, foreclosures in South Florida are mounting with staggering speed, they have tripled in Miami-Dade County and more than doubled in Broward County from this time last year. Since January, lenders have started to take over nearly 9,000 properties in Miami-Dade and close to 8,000 in Broward, with thousands more foreclosures pending from 2006.”

“Florida outpaced all but Nevada in new foreclosures from January through March. The surge is due, in part, to speculators now saddled with souring investments, but also to borrowers who got high-priced loans during the boom.”

“In Bunche Park, cardboard signs tacked on light poles offer reverse mortgages to the elderly and foreclosure rescue services to others. Piles of furnishings dot the streets, the evidence of evictions.”

“This ZIP Code, 33054, has one of the highest loan-delinquency rates in South Florida. The main reason lies in subprime loans, once touted as a blessing and now the curse of poor neighborhoods like this one.”

“Earlier this decade, financial institutions, protected by fast-rising property values, eagerly loosened lending standards and gave about $1.3 trillion in subprime loans to borrowers with less than stellar payment histories. Florida homeowners are shouldering about a tenth of that debt, more than any other state except California, according to data from First American Loan Performance.”

“Roughly 23 percent of loans in Miami-Dade are subprime, and 18 percent in Broward. In areas like Miami Gardens, home to Bunche Park, it’s more like 66 percent.”

“‘Some lenders try to find creative ways just to get the owners in the house, and they succeed,’ said Julene Wade, program director of Harvest Fire Homeownership Program. ‘Lenders don’t consider [that borrowers have to] put food on the table, and that property taxes and insurance are going to kill them.’”

The Herald Tribune. “The shareholders of Coast Bank of Florida sued first. Now, it’s the customers. Fifty borrowers filed lawsuits Thursday against Coast, saying the Bradenton-based bank schemed to defraud them on their home loans.”

“Sarasota attorney Alan Tannenbaum says he will file another 75 lawsuits for Coast borrowers who claim they are stuck with homes or lots that are worth less than what they owe on their mortgages. Most of his clients have stopped making payments on their loans, Tannenbaum said.”

“Bank spokesman Tramm Hudson said…the bank expects borrowers to pay their loans. ‘Obviously we’re not going to rescind any contracts,’ he said.”

“The bank made $110 million in loans to nearly 500 customers of Construction Compliance Inc., a now-bankrupt home builder in St. Petersburg. In one of the new lawsuits, Michael J. and Telma L. Dorcey of Tarzana, Calif., say they borrowed $228,600 to build a CCI home in North Port.”

“Coast disbursed $83,055 to CCI, but the company did no work on the Dorceys’ lot. ‘Somewhere between 80 and 100 of my clients have just lots,’ Tannenbaum said.”

The St Petersburg Times. “He’s down on the mat, he’s bloody, the fans are booing. But can the Tampa Bay area housing market rise from the arena as the Comeback Kid? You can bet the house on it, said Lawrence Yun, senior economist at the National Association of Realtors.”

“‘Five years from now you will be very happy you’re in this business and located in Tampa,’ Yun said over a brown-bag lunch to about 75 real estate agents.”

“In Yun’s view, rising incomes and declining home prices ought to have stimulated sales this year were it not for housing bubble scares in the media.”

“Yun was appointed last month as the top economic spokesman for the Realtors group. He succeeded economist David Lereah, discredited after maintaining rosy outlooks amid an increasingly troubled housing market and promoting his 2005 book, ‘Are You Missing The Real Estate Boom - Why Home Values and Other Real Estate Investments Will Climb Through the End of the Decade.’”

“In one worst-case scenario, an economist suggested the gap between incomes and home prices would depress housing values 40 percent.”

“Yun scoffed at the idea: The real measure of affordability, he said citing a formula, is mortgage obligation relative to income. He clicked a slide showing Tampa-St. Petersburg-Clearwater hovering at the national average. Much of California isn’t so lucky, nor is high-priced Miami and Naples.”

“Yun based his housing projections on a list of economic trends: speculators leaving the market, strong job creation, baby boomers buying second homes and reform, a slow process now under way, of Florida’s property tax and insurance systems.”

“On that last item, Yun predicted a ’sonic boom,’ should the state Legislature succeed in bringing insurance premiums back to earth.”

“The local housing market’s biggest problem is a record-high inventory of homes for sale. Listings hold about 40,000 houses and condos, quadruple the number of two years ago.”

“Ever optimistic, Yun suggested a way out of the thicket: Thousands of homes will peel off into the rental market, while others drop off the charts as owners wait out the slump. ‘In a job-growth area, people can hold onto the house without being desperate,’ he said.”

“Carlos Fuentes, the association’s elected president, urged member’s to spread the gospel according to Yun. ‘You need to know the facts,’ Fuentes said. ‘You need to know how to present them as well.’”

“While lawmakers were slapping one another on the back in Tallahassee on Thursday, pleased with the property tax reform they had wrought, the bill does next to nothing for those who are already carrying the biggest property tax loads in the state: landlords, business owners and snowbirds, those players say.”

“‘They’re beginning to call Florida the U-turn state,’ said Terri Noyes, a Massachusetts hotelier who owns a winter house and two rental properties on Bradenton Beach. ‘People come down here. They see the property taxes,, and they turn around and go home.’”

“Noyes saw the levy on a property in Bradenton Beach go up 313 percent, from $3,603 in 2002 to $11,279, last year. Another nearby property went up 284 percent from $4,288 to $12,219. The total increase comes to $15,607. With the rollback, Noyes’ tax bill would drop $2,396.”

“Noyes has only been able to raise rents by $50 per month on each residence, or $600 per year. ‘In the beginning we were breaking even on rent, but now we’re deep in the red and can’t give the property away,’ she said.”

“Two residences are assessed at $1.2 million, and Noyes initially listed them for sale at $895,000. She has reduced the price in two $100,000 increments to $695,000, and still no bites.”

“‘This is the worst place in the country to own property,’ Noyes said. ‘Investors are no longer coming down the highway. They have no interest in being here.’”

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