The Housing Bubble

The Daily Bulletin reports from California. “There are exceptions, but for the most part, housing prices are falling in the Inland Empire. That’s the word from the California Association of Realtors. Sales in Riverside/San Bernardino were down 43 percent from a year ago. ‘Sales are very weak in the low end of the market,’ said Bill Velto, manager of Tarbell Realtors in Upland. ‘They’re stronger in the high end, but in the rest of the market, inventory is way up. People are still fearful that if they don’t sell, they’re going to lose out.’”

“Redlands-based regional economist John Husing has been watching the increase in long-term rates around the world, and he’s concerned. ‘I had been saying the market would sort itself out by early next year,’ he said. ‘Now I’m not sure. Depending on what happens with rates, it could take longer.’”

“Velto agrees. ‘I think a transition will come next year,’ he said. ‘But right now, no one can say what we will be transitioning into. Nobody knows.’”

“The hardest-hit areas locally were San Dimas (prices down 9.1 percent), Mira Loma (down 11 percent), Twentynine Palms (down 13.5 percent), Hesperia (down 13.9 percent) and Big Bear Lake (down 28.6 percent).”

The Orange County Register. “May was a disappointing month for home sales in Orange County and around the country, according to real estate sales data released by the California Association of Realtors. Sales of existing single-family homes locally fell 21.1 percent when compared with a year ago.”

“‘We’ve seen sales over the past three months quite a bit weaker than we anticipated,’ said Robert Kleinhenz, deputy chief economist for the California Realtors association.”

“The state group estimates that in Orange County it would take 19.8 months to sell all the homes currently listed for sale. Last month, the inventory of homes for sale in Orange County was the sixth biggest since 1992. The all-time peak for local inventory was April 1995, when the backlog was 26.2 months.”

“‘We are going through some troubling circumstances. I’m suspecting it’s not going to be as severe as in the 1990s,’ Kleinhenz said. ‘(But) I don’t see the trough bottoming out just yet.’”

“The S&P/Case-Shiller home price index for L.A. and Orange counties fell in April on a yearly basis for the third consecutive month. April’s drop (2.62% in a year) was the worst performance since February ‘96.”

The Ventura County Star. “The waiting game. Prospective buyers worried about falling real estate prices are staying away, which is the real reason that there’s been a big drop in sales activity, said Bill Watkins, director of the UC Santa Barbara Economic Forecast Project.”

“In a year-over-year comparison, home sales in May continued to slide in double-digit percentages, extending a cooling off period that began in late 2005.”

“The county median increased 1.6 percent from $688,440 in May 2006, the California Association of Realtors reported Monday. It doesn’t mean that prices are rising across the board in the county, CAR Vice President Leslie Appleton-Young said.”

“‘Prices have plateaued in Southern California,’ Appleton-Young said. ‘Prices are reflecting a change in the composition of what’s selling.’”

“Deborah Poole, a Realtor in Oxnard, says now is a great time to buy. She describes Ventura County’s housing market as realistic and priced fairly. Ventura County’s median sales price for an existing single-family home was $699,480 in May, the fourth-highest mark since January 1990.”

“The next highest medians were posted last year in June, July and August, when the record of $710,906 was set.”

“Poole predicts a gradual increase in activity for the rest of the year, a pattern that echoes the first half of 2007. ‘It’s not the mad frenzy you had a few years ago, where buyers had to make a decision in two hours, and sometimes there were 20 counteroffers,’ she said. ‘It was crazy.’”

The Merced Sun Star. “The freshly painted interior of Mike and Sharon Southern’s Atwater house looks like something you’d see on the ‘after’ segment of a home makeover show.”

“But the Southerns don’t want flattery, they want buyers for their house, and the stylish colors aren’t doing the trick. ‘Everyone that looks at it loves it, it just doesn’t seem to ever pan out,’ said Sharon Southern.”

“After almost nine months on the market and two price reductions, the Southerns are still struggling to sell their house on Sextant Drive.”

“They’re not alone. In fact, they’ve got lots of company enduring a moment in Merced real estate history they’d rather not have to go through, the market correction that follows a boom. Moreover, it’s likely that falling prices haven’t yet bottomed out.”

“Although prices have tumbled in the last year, Merced still has one of the most overvalued real estate markets in the country, with the median price about 63 percent above where it should be, according to a new study by National City and Global Insight.”

“The Southerns think $329,900 is a fair price for their three-bedroom, three-and-a-half bath house, which was built about 15 years ago. But they’re having a tough time competing against brand new subdivisions offering deep discounts to move inventory. Plus, low prices on foreclosed properties are turning buyers’ heads.”

“In fact, it’s a prime time to buy, said 30-year veteran broker Loren Gonella. ‘(Interest)rates are down, inventory is up and sellers are willing to deal. What’s not to love?’ asked Gonella.”

“‘Our market is adjusting and our market has a little further to go to adjust, but sales have been improving,’ said Gonella. Gonella predicts prices will continue to fall through the end of the year, remain flat in 2008 and start to climb up again in 2009.”

“The Southerns say they’ve stopped following news about the real estate market because it’s too depressing, said Mike Southern. ‘Especially for a seller, it’s all doom and gloom,’ he said.”

“They know plenty about the recent history of Merced’s real estate scene, and say they wished they’d sold in 2005, when prices were soaring. Then, they figure, then could have sold their house for $425,000 in a month.”

“But that was before the Southerns decided to move to Alabama so they could live closer to extended family. They also say they can’t wait to experience a more affordable housing market. Sharon Southern figures housing runs about $85 per square foot in Alabama, compared to $225 in Merced. ‘The cost of living here is outrageous,’ said Sharon Southern.”

“The couple is simply following that age-old real estate mantra: location, location, location. Except it’s not in Merced.”

The Daily Herald reports from Illinois. “The highest number of existing homes in two years are sitting on the market in the suburbs, and they’re facing the lowest percentage of sales in recent times, according to figures released by local Realtors. Existing, single family homes for sale in Arlington Heights, Mount Prospect and Palatine in May, for example, are at their highest level in recent years.”

“Together, the three communities had 2,126 homes for sale, nearly twice as many as compared to 1,120 in May 2005. May is the traditional start of the selling season. In May, the percentage of homes sold in those three towns was 7.5 percent, compared to about 13 percent in May 2006 and 22 percent in May 2005.”

“This spiraling scenario is hauntingly similar in Libertyville, Vernon Hills and Mundelein in Lake County; Naperville, Bloomingdale and Addison in DuPage County; and Elgin, Cary and St. Charles in the Fox Valley.”

“In many cases, the more homes that were on the market, the fewer were sold, according to numbers obtained through the Broker Metrics database and Stark & Co. ‘This is the most challenging market I’ve ever seen,’ said Connie Hofherr, Starck VP in Mount Prospect. She’s been selling here for about 30 years.”

“Several negatives have caused a depression in the suburban housing market, which reflects similar problems nationwide. Creeping inflation, a slow economy, layoffs from major local employers, subprime lenders going belly-up, and a high number of foreclosures and bankruptcies all have taken their toll.”

“Doug Crowe, director of a real estate education firm and a broadcaster on real estate investment, said both buyers and sellers are like deer in the proverbial headlights. ‘Sellers don’t want to cut their prices and buyers are afraid that if they buy something now, it will be the same or less in six months,’ Crowe said.”

“‘It’s a lot like a Mexican stand-off,’ Crowe said. ‘People are waiting for something to happen. But when the buyers and the sellers aren’t even flinching, nothing happens.’”

The Kane County Chronicle. “Home sales in Kane County fell 20 percent in May compared to the same month last year, the Illinois Association of Realtors reported Monday.”

“‘The market is soft, there’s no question about it,’ said Donald Parisi, president of the Realtor Association of the Fox Valley. ‘Sellers who think it’s the same as last year are sorely mistaken.’”

From Chicago Business in Illinois. “Home sales in the Chicago area plummeted 20.7% last month compared with May 2006, according to the Illinois Assn. of Realtors.”

“A total of 9,750 single-family homes and condominiums were sold in the nine-county Chicago area last month. The biggest drop in sales last month occurred in outlying DeKalb, Grundy and McHenry counties. Sales in Cook County fell 20.1%.”

The Chicago Tribune. “The Illinois Association of Realtors said…statewide sales were 18.6 percent below those of May 2006. ‘I don’t think there’s a positive here,’ said economist Patrick Newport. ‘Whatever numbers came in for May are irrelevant because of what has happened in the past six weeks.’”

“Newport said the recent rise in mortgage-interest rates and the tightening credit standards because of turmoil in subprime lending are causing his firm to reassess its housing forecast.”

“‘A few weeks ago we were saying [a housing recovery was possible] in the first quarter of 2008,’ he said. ‘We’re going to rethink that, given the recent changes. We may push it back. The news isn’t good.’”

“Chicagoan Mark Stinson signed a contract to sell his Roscoe Village home after just three weeks on the market. ‘It was real fast, a lot faster than I expected,’ said Stinson, who credited the speedy sale to reasonable price expectations.”

“‘Like any seller, you have images of your home being worth a lot. But we’ve seen a lot of people around the neighborhood who price their homes high and they just sit there,’ Stinson said.”

The Post Dispatch from Missouri. “The national market for existing homes remains mired in a slump, and the St. Louis market hasn’t bucked the trend. Indeed, compared with sales a year ago, the local region fared worse than the nation.”

“In the St. Louis area, 3,751 homes were sold, a 12.7 percent decline over May 2006. At the current sales pace, it would take nine months to sell the homes listed for sale in the St. Louis region.”

“Colleen Ramonez of Glen Carbon hopes she won’t have to wait that long. Despite new carpet, light fixtures and a remodeled bathroom, her two-story brick home has been on the market since mid-January, when her husband was transferred to Maryland.”

“They priced their house below median price for similar homes in her neighborhood, and a few months ago reduced it by $5,000. Still, no offers. Her real estate agent blames the housing market, said Ramonez.”

“The housing market must clear several hurdles, experts say, including the fallout in the subprime loan market, say real estate experts.”

“‘Lenders have tightened their lending standards because of the problems with the subprime market, and that is part of the problem,’ said Stephanie Tonnies, CEO of the Realtor Association of Southwestern Illinois. ‘And many sellers are still thinking of the gains they saw in the market in previous years and are not willing to adjust their asking prices.’”

“May was a particularly bad month regionally. Comparing May 2006 with May 2007, sales declined 33 percent in the Metro East area and 8 percent on the Missouri side of the St. Louis area.”

“Al Suguitan, CEO of the Greater Gateway Association of Realtors in Glen Carbon, finds the Metro East number higher than he believes it to be, but he agrees that the market is off from the last couple of years.”

“‘I feel uncomfortable with those numbers. I believe that for the first five months of the year, we are off about 8 percent,’ Suguitan said. ‘It surprises me that it is so high.’”

Some housing bubble news from Wall Street and Washington. CNN Money, “New home sales posted a surprising drop at the start of the crucial spring selling season in May, the latest sign that the battered housing market could have a ways to go before hitting bottom. The pace of new home sales fell to an annual rate of 915,000 last month, the Census Bureau reported, from April’s 930,000 pace, which itself was revised lower.”

“Sales…tumbled 15.8 percent from May 2006, marking the 18th straight month of year-over-year declines. The reading was also the weakest performance for May since 2001, before a sharp drop in mortgage rates sparked the housing boom.”

“The median price of a new home sold last month slipped to $236,100, according to the report, down 0.9 percent from a year earlier. Yet the drop in prices may be even more severe than indicated, since about three-quarters of builders are offering incentives like free closing costs or extra features at no additional cost in a bid to bolster sales.”

From MSNBC. “With sales and prices of new and existing homes continuing a downward slide, it’s too soon to say how much longer the worst housing recession since 1989-91 will last, according to economists and housing analysts.”

“‘We don’t have any experience with this,’ said Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida. ‘First of all, this was an incredible housing boom, unlike anything else we’ve had in our history. The unwinding, the downside of this, with published price declines unlike anything in history, that is the unknown.’”

The Associated Press. “U.S. home prices fell for the 17th month in a row with all regions showing the effect of the housing slowdown, according to a housing index released Tuesday by Standard & Poor’s. It was the steepest decline since 1991.”

“Boston, Detroit, Phoenix, San Diego and Washington, D.C., showed the greatest year-over-year declines in prices.”

From MarketWatch. “‘No region is immune to weakening price returns,’ said economist Robert Shiller, the co-creator of the index. Even in regions such as the Pacific Northwest or the Southeast, where prices are still rising, the gains have been slowing.”

“The Case-Shiller index is considered a superior gauge of home prices compared to the median sales-price data released by the Commerce Department or the National Association of Realtors, because it tracks multiple sales on the same property and is therefore not influenced by a different mix of homes sold in a period.”

The Street.com. “Homebuilder Lennar offered little comfort about the state of the U.S. housing market Tuesday, posting much-worse-than-expected results for the second quarter and warning of continued deterioration in selling conditions. For the quarter ended May 31, Lennar recorded a loss of $244.2 million.”

“‘The housing market has continued to deteriorate throughout the second quarter,’ said CEO Stuart Miller in a statement. ‘The supply of new and existing homes has continued to increase resulting in declining home prices across our markets.’”

“New orders fell 31% in the quarter from a year ago. Lennar said it had to lower prices to move homes, which cut into margins. Gross margins on home sales slid to 13.6% from 23.7% last year. The price declines led Lennar to record $328 million of land impairment charges.”

“‘We have continued to adjust pricing to meet today’s market conditions,’ said CEO Stuart Miller in a statement. ‘As we look to our third quarter and the remainder of 2007, we continue to see weak, and perhaps deteriorating, market conditions. Given uncertain market conditions, we continue to lack visibility as to future results, but we currently expect to be in a loss position in our third quarter.’”

“For the second quarter, home deliveries fell to 8,940 from 12,506 a year earlier. The average home price dropped to $298,000 from $322,000 in the year-ago period. To attract uncertain buyers, Lennar said sales incentives averaged $43,700 a home versus $24,700 in the same quarter last year.”

“Orders for new homes plunged 31% to 8,056 from the prior year with the cancellation rate running at 29%.”

“Lennar has been seen as one of the home builders to react most quickly to the housing bust by slashing prices aggressively to protect sales volume. ‘We expect the sequential order deterioration to be even more pronounced for home builders who attempt to limit incentives in the hopes of preserving some margin,’ wrote Banc of America Securities analyst Daniel Oppenheim in a research note Tuesday.”

“‘We’ve generally seen that buyers are extremely price sensitive, so that the builders with higher incentives receive significantly more order market share.’ He added: ‘As such, we think that builders who attempt to limit incentives or hold pricing will be forced to adjust their strategy.’”

“‘These continue to be very difficult times for the home-building industry,’ Lennar CEO Miller said during Tuesday’s conference call with analysts. ‘Simply stated, the supply of homes available for purchase has continued to climb while at the same time demand has been sharply reduced,’ he added.”

From Reuters. “‘If this is any indication of what to expect from the other home builders when they report results, this quarter is going to be pretty ugly,’ said Eric Landry, an equity analyst at Morningstar. ‘The next quarter and beyond that it doesn’t look too good either.’”

“The chief financial officer of No. 6 U.S. home builder Hovnanian Enterprises Inc. (said) that the market will not significantly recover even in 2008. ‘08 is probably not going to be a year of strong recovery,’ J. Larry Sorsby said at the Reuters Real Estate Summit in New York on Monday. ‘Our hope is that it stays no worse than we are today.’”

“Goldman Sachs Group Inc. subprime mortgage bonds issued last year are being downgraded by rating companies at the fastest rate of any issuer, according to Citigroup Inc. research dated June 22.”

“Nearly 70 of Goldman’s GSAMP-issued bonds, which include subprime loans from a variety of lenders, have been downgraded by Standard & Poor’s and Moody’s Investors Service in the year through June 15, with 60 of those issued in 2006, analysts at Citigroup Global Markets said.”

“Benchmark ABX Indexes fell to fresh lows on Tuesday, driving the cost of insuring subprime mortgage securities against default sharply higher, investors and analysts said.” “The ABX 07-1 ‘BBB-’ series, which is tied to subprime loans made in last year’s second half, sank to 55.70 on Tuesday from 56.18 at Monday’s close. The index has fallen 42 percent since it was launched in January.”

“‘This is a continued sell-off from last week coupled with the weak remittance reports from Monday,’ said one investor.”

From Bloomberg. “The housing market may deteriorate if there’s an ‘overreaction’ from regulators, said Freddie Mac Treasurer Timoth Bitsberger, a former U.S. Treasury official.”

“The fallout will also increase if investors and hedge funds rush to unwind their positions at the same time, he said. The market’s ‘financial infrastructure’ is ‘untested’ because of the pace of growth in bonds backed by mortgages and other debt, known as collateralized debt obligations, he said.”

“‘There’s a lot of dependency on the ability of the rating agencies to make objective judgments’ of the risks backing the bonds, he said. ‘I wouldn’t be surprised to potentially see a re-rating of these securities.’”

“Bill Gross, manager of the world’s largest bond fund, on Tuesday said the subprime mortgage crisis gripping U.S. financial markets was not an isolated event and will eventually take a toll on the economy.”

“Gross said there are hundreds of billions of dollars of subprime residential mortgage-backed securities (RMBS), derivatives on subprime RMBS and collateralized debt obligations…all of which he considers ‘toxic waste.’”

“‘Whether or not they’re in CDOs or Bear Stearns hedge funds matter only to the extent of the timing of the unwind,’ said Gross, who manages the $104 billion Pimco Total Return Fund. ‘To death and taxes you can add this to your list of inevitabilities: the subprime crisis is not an isolated event and it won’t be contained by a few days of headlines in The New York Times.’”

“Holders of some investment-grade portions of collateralized debt obligations backed by subprime mortgages will lose all of their money, according to Bill Gross. With subprime loan defaults at 7 percent, buyers of the BBB pieces of CDOs stand to lose their entire investment, said Gross.”

“‘AAA? You were wooed Mr. Moody’s and Mr. Poor’s by the makeup, those six-inch hooker heels and a ‘tramp stamp,’ Gross said in his monthly commentary posted on Pimco’s Web site today. ‘Many of these good looking girls are not high-class assets worth 100 cents on the dollar.’”

“Defaults on subprime loans will ‘grow and grow like a weed in your backyard tomato patch’ and if total losses reach 10 percent, CDO slices rated A may also ‘face the grim reaper,’ Gross said.”

“Bear Stearns Cos. is working to bail out two money-losing hedge funds it runs that invested in CDOs backed by subprime mortgage bonds.”

“‘Those that point to a crisis averted and a return to normalcy are really looking for contagion in all the wrong places,’ Gross said. ‘Because the problem lies not in a Bear Stearns hedge fund that can be papered over with 100 cents on the dollar marks. The flaw resides in the Summerlin suburbs of Las Vegas, Nevada, in the extended city limits of Chicago headed west towards Rockford and yes, the naked — and empty — rows of multistoried condos in Miami.’”

The Herald Tribune reports from Florida. “The summertime blues came early for Florida home sellers this year. The season, ordinarily among the state’s weakest for realty transactions, had not even begun in May before the market dropped more than a third in existing home sales. Sarasota-Bradenton median prices fell 9 percent, from $322,600 to $294,700.”

“Statistics further south in Charlotte County-North Port painted a darker picture for that market. Home sales fell 39 percent, and the median price slid 12 percent, from $213,400 to $186,900.”

“The slump in sales has left investors scrambling to get any kind of cash flow they can. A condo at Grand Preserve looked like a hot deal when Dave Weam picked up the contract in 2005. ‘I paid $650,000 for it and I owe less than $300,000 and it is costing me $3,000 a month, with the maintenance fee and property tax and payment (principal and interest),’ he said. ‘I would rent it for $2,200. That is where we are at.’”

“Weam set the Grand Preserve condo up as a short-term rental, complete with furniture, but has been unable to rent it at all. He has the condo listed for $629,000.”

“‘If I lowered the price to $525,000 or $550,000, I still don’t think I’d be able to sell it,’ Weam said. ‘And if I am willing to rent it for $2,200 a month, why would somebody want to buy it? It is a lose-lose for me.’”

The Miami Herald. “Home sales in South Florida were sluggish in May and are expected to lag into the summer. The number of single-family homes sold in May plunged 44 percent in Miami-Dade from a year ago, according to figures released Monday by the Florida Association of Realtors. In Broward, sales dropped 34 percent from a year ago.”

“Condo sales also were down. In Miami-Dade, they were off 46 percent from last May. In Broward, they were down 29 percent from a year ago.”

“Last month, Jack Fredericks put his three-bedroom ranch house in Fort Lauderdale up for sale. He started at $335,000 and in three weeks dropped to $300,000. He found a buyer who couldn’t quite get a mortgage for his asking price and lowered it $5,000 more.”

“‘I had watched the neighborhood and saw what was going on with slow sales,’ said Fredericks, who is moving to North Florida. ‘If I could have afforded to wait around, I might have done that. But the way I look at it, I need to get any deal I can.’”

The Sun Sentinel. “Prospective home buyers let the spring selling season pass last month with a yawn and maybe a lowball offer. Palm Beach County had its slowest May since the Florida Association of Realtors started keeping track in 1994. There were 741 existing home sales compared with 982 a year ago, a 25 percent slide.”

“The median price fell $3,200, to $387,800 from $391,000 a year ago. It was the 12th consecutive month of year-over-year price declines.”

“At the end of May, Palm Beach County had nearly 37,000 homes and condominiums for sale, according to the Miami-based Keyes Co., up 29 percent from a year ago. At the current sales pace, it would take more than four years to sell all those properties.”

“Real estate agents and consumers in Palm Beach and Broward counties were hoping a new property-tax plan in Florida would boost sales. But many are disappointed, insisting the plan won’t provide enough long-term relief.”

“Josh Laddin owns a three-bedroom house, and he and his family want to buy a bigger place. Laddin is angry and frustrated at the tax changes. ‘Everything is against the home buyer,’ he said.”

The Palm Beach Post. “‘Buyers are waiting for prices to drop, and sellers are not reducing their sales prices to more realistic levels,’ said William Cozart, chief executive of the Realtors Association of the Palm Beaches.”

“Indeed, the median price of an existing single-family home in Palm Beach County fell only 1 percent in May, to $387,800 from $391,000 a year ago.”

“In the Treasure Coast, single-family home sales fell 39 percent in May 2006. New-home builders in the Treasure Coast, which saw an explosion of new development during the housing boom, have been slashing prices and offering buyer incentives, which have cut into the sales market for existing homes.”

“‘If you could buy a new home or an existing home for the same price, which would you buy?’ said Mike Morgan of Morgan Florida Real Estate Group.”

From TC Palm. “Existing home sales and prices continued to show a decline in Martin County in a year-to-year comparison, the Martin County Association of Realtors said Monday. ‘May was indicative of the amount of inventory on the market for single-family homes,’ said Jennifer Atkisson-Lovett, president of the Realtors Association of Martin County.”

“The Florida Association of Realtors said the Fort Pierce-Port St. Lucie Metropolitan Statistical Area, which includes Stuart, sold 315 existing single-family homes in May, down 39 percent from a year earlier. The median price for an existing single-family home in the area dropped 9 percent, to $228,500, in May compared with $252,300 during the same period last year.”

“Home sales in the Melbourne-Palm Bay area decreased 26 percent from 651 to 483 units sold. The median sales price declined 16 percent to $190,400 from the $227,400 recorded during the same period last year.”

The News Press. “Marquis Simms and her fiance moved to Naples from Michigan two years ago, only to find themselves aghast at the high prices of homes and the frenzied buyers who were snapping them up.”

“‘We felt like we were never going to be able to buy a house,’ the office manager said. ‘They’d be on the market one day and then gone.’”

“But that was then and this now. Sales of existing single-family homes in Lee County were down 42 percent from 993 in May 2006 to 575 last month and the median sales price was down 2 percent to $281,500.”

“Now, Simms said, they’re actively looking for a house and are looking forward to moving out of their tiny condominium and buying something bigger, they’ll probably rent out the condo because the market is so bad right now.”

“Residential real estate broker Denny Grimes in Fort Myers said the future is bleak for home values in Lee County. ‘I think there’s a 100 percent chance our prices are going to be lower in two years,’ Grimes said.”

“The inventory of unsold homes is about 15,200, he said, noting that foreclosures and dumping of houses by builders at discount prices are preventing that number from going down anytime soon.”

“J. Larry Sorsby, chief financial officer of Hovnanian Enterprises, said Monday at the Reuters Real Estate Summit in New York that Lee County is ‘by far the worst housing market that we’re in and I wouldn’t be surprised if it’s the worst housing market in the country.’”

The Gainesville Sun. “Market conditions are tipping the balance toward renting instead of buying for many would-be home buyers, Gainesville housing observers say. That is especially true in the condominium market, with many struggling condo conversions going back to leasing.”

“‘The problem with a lot of conversions is they’re not unique,’ said Wayne Archer, director of the University of Florida’s Bergstrom Center for Real Estate Studies. ‘All the conversions are garden apartments out in the perimeter areas. They’ve got more competition from the rental market.’”

The St Petersburg Times. “If you’re a real estate agent, the bay area is a rough place to be right now…and it’s getting rougher. In May, home sales here fell harder than almost anywhere in the country. The good news (for buyers, anyway): Prices are falling, too, though not as quickly.”

“According to the Florida Association of Realtors, sales of existing single-family homes in the Tampa Bay area fell 42 percent last month, compared with May 2006. In May, the median price of an existing home in the bay area was $209,300, an 8 percent decline from the previous year.”

The Orlando Sentinel. “Existing-home sales for May in the Orlando area, released earlier this month by the Orlando Regional Realtor Association, were down even more than those at the state and national levels, 45 percent compared with a year earlier.”

“The local inventory of homes for sale also surged to a record 25,463 in May, up more than 40 percent from a year ago. And that doesn’t include for-sale-by-owner properties or unsold homes in builders’ inventories.”

“‘When you see the inventory dropping four or five months in a row, we’ll be out of the woods. Right now, we’re still in the woods,’ said Bob Walters, chief economist for Quicken Loans.”

The News Journal. “During May, Realtors sold just 644 existing single-family homes in Volusia and Flagler counties, 29 percent fewer than the 912 that changed hands in May 2006. The median selling price in the two-county area dropped 14 percent to $196,800, the Florida Association of Realtors reported Monday.”

‘It was the second time in the past three months that area house prices have dipped below the $200,000 level.”

“Terri Ossi tried to sell her Ormond beachside home for $349,000 but, after three months, only one person came by to take a look. So she decided to lower her asking price by $14,000 and throw in some freebies.”

“Her new package deal includes not only a pool home with an in-law apartment, but also the kitchen appliances, washer, dryer, house warranty, termite bond, and a 1998 Honda CR-V valued at $5,000.”

“‘The furniture is negotiable, and if they want the dog, they can have him, too,’ Ossi joked.”

“‘Pricing is everything,’ added said Marge Allison, VP of the Daytona Beach Area Association of Realtors. ‘The buyers that we have are looking for bargains.’”

“Builders are offering the biggest incentives, Allison said. ‘They’re the ones offering the free appliances, free cars and the free boats,’ she said.”

“No one has shown any interest yet in Ossi’s aging Honda, said her agent, Keith Freeman. ‘But it can’t hurt,’ he added.”

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