The Housing Bubble

The San Gabriel Valley Tribune reports from California. “‘In terms of activity, we continue to see a slowdown throughout California’ said Robert A. Kleinhenz, CAR’s deputy chief economist. ‘We had initially said sales would fall 7 percent this year, but we revised that to 14 percent,’ Kleinhenz said. ‘The subprime story has had an adverse impact on the market outlook by consumers. We’ve had all these stories about weaknesses in the economy…and that’s had a bad hit on the psychology of the economy and the housing market.’”

“Norman Cox, regional VP for Coldwell Banker Town & Country in Covina, agreed psychology is playing a big part in the housing market’s performance.”

“‘The market is edgy,’ he said. ‘This is the third down-cycle I’ve been through, and each time we go through this you take a look and see what’s disturbing the market more than anything else, and that’s uncertainty.’”

“Ten communities in the San Gabriel Valley and closely surrounding areas registered year-over-year declines in their median price in the month of May, according to DataQuick.”

“The declines were led by El Monte, which saw its median price drop 10.1 percent to $444,500. Other cities with price drops included San Dimas (down 9.1 percent), (Covina (down 8 percent) and Claremont (down 6.6 percent).”

The Record.net. “In the Central Valley, which in the boom years saw one of the highest inflationary rates in the state and now is seeing one of the highest deflation rates. In the Valley, sales in the same period plummeted nearly 35 percent and the median sales price fell 6.7 percent to $331,580…according to the California Association of Realtors.”

“Jerry Abbott, president of Coldwell Banker Grupe, Stockton, said in this super competitive market, prime homes priced below the bottom of the market are still selling, a few even with multiple offers. But buyers know they are in a good position these days, he said, and they’re tough.”

“‘They are definitely shopping before they buy,’ he said. ‘They are easily looking at at least 10 homes before they buy. That’s high.’”

From KPBS TV. “Home sales in San Diego continue to plummet and one local economist says this means a turnaround in the real estate market will likely take longer than expected. The latest numbers show that home sales fell 16 percent in San Diego last month compared to a year ago.”

“Marney Cox is an economist with the San Diego Association of Governments. He says the new information changes predictions about the housing market.”

“Cox: ‘What this new data shows is that home sales weakness has broached over into the existing home sales, and that’s actually the largest part of the market. That represents 84 percent of sales that takes place each year. New sales represent only about 16 percent. So this new data says there’s potential further downsliding than what we’ve seen so far.’”

“Cox says originally real estate watchers believed the lagging housing market might bottom out this summer when home buying season is in full bloom. But the fact that existing home sales are falling means that the softness is likely to continue into 2008.”

“Cox: ‘If it remains relatively slow, the air is let out slowly. We’ll probably see another 5, maybe 8 percent drop in the medium price of homes. If things come crashing down, meaning we actually go into recession, unemployment rates rise, there’s a lot of job losses in the San Diego area. We’re likely to see a 15 to 20 percent drop in home prices.’”

The Daily Pilot. “”Orange County should see a drop in new residents over the next few years due to a slow-growing economy, according to Chapman University researchers.”

“A problem for the county, according to researcher James Doti and Esmael Adibi, was the housing market, which was slowing due to high mortgage rates and a decrease in the population, between the ages of 25 and 49, that usually bought homes. Adibi said the average Orange County family paid 49.8% of its gross income on mortgage payments last year, a record amount.”

The Desert Sun. “Leslie Appleton-Young, chief economist for the California Association of Realtors, said sales volumes in the Riverside and San Bernardino markets should remain significantly below levels of peak years, which is what local real estate professionals anticipated.”

“‘Any time you’re coming off a record-breaking market, there’s always kind of a market readjustment,’ said Sam Schenkl, executive officer of the Palm Springs Association of Realtors. ‘When you take the last three or four years out of the picture, this is a good market.’”

“Schenkl said the difference in today’s market is that investors, speculative buyers and ‘flippers’ largely have exited.”

“‘We thought going into the year that we’d be somewhere around 4,000 housing starts,’ said Fred Bell, executive director of the Building Industry Association’s Desert Chapter. ‘We’re probably now forecasting we’ll end up doing somewhere below 3,000 for the year. That’s based on first quarter numbers, which were off about 75 percent from the previous year.’”

“Buyers and sellers also have watched nervously as home prices have fluctuated, real estate agents said. Exuberance lingering from the boom years in 2004 and 2005 has meant a reluctance on the part of some sellers to lower prices, real estate agents said, which in turn has caused many prospective buyers to balk.”

“‘People were increasing their prices when they should have been coming down to meet the buyer,’ said Carlo Lombardelli, a Realtor who has weathered numerous ups and downs in the valley’s real estate market over the past 18 years. ‘It’s taken 14 or 15 months for things to settle’ for buyers on the sideline to wait to see prices make the appropriate moves and adjust downward.’”

“Berkemer said home sales volume likely will need to increase before prices do in the months ahead. With some 8,896 homes on the market in mid-May, plenty of incentives from new-home builders and relatively low interest rates, Berkemer said it’s a good time for buyers.”

“Whether home buyers can overcome a pervasive hesitance remains to be seen. ‘Every market is influenced by perception, and sometimes perception is reality,’ Berkemer said.”

The Press Enterprise. “Brian Weide, a director of the Inland Empire Chapter of the California Association of Mortgage Brokers, said too often people who stretched painfully to buy homes with 100 percent financing wrongly assumed they could refinance in a couple years.”

“Weide said homeowners may find they can’t refinance because they have poor credit or because stagnant or falling housing prices have left them with no equity to borrow against.”

“‘A big thing is that many of the subprime programs we had are no longer available,’ Weide said, because failing mortgages have made lenders more cautious.”

“‘There are no loans out there anymore for people with low FICO scores,’ said Robert Kapel, a certified consumer credit counselor in Riverside.”

The Sacramento Bee. “Residential finance companies fueled the winning streak in recent years as they flocked to South Placer County’s booming housing market and drove demand for office space. But from that peak, net absorption plunged to a seven-year low in 2006, as the housing boom ended and the companies that supported it downsized or, in some cases, went dark.”

“‘They’ve almost all cut back. Some put their space on the market, subleased or closed,’ said Jon Walker, a senior VP at Grubb & Ellis’ Roseville office.”

“One broker predicted that well over a third of available office space could go unleased and that a rebound could take years. ‘It’s frightening,’ said Elaine Hartin, a broker with 17 years of experience in Roseville.”

The Bakersfield Californian. “A steep but cyclical decline in real estate advertising has forced The Bakersfield Californian to eliminate 40 positions, company CEO Richard Beene announced Tuesday.”

“Between 2004 and 2006, The Californian enjoyed strong profits largely because of an ‘exploding real estate market,’ Beene said. But recently, real estate agents, home builders and others in the industry have scaled back their advertising, he said.”

“Lennar Corp. has dominated the Bakersfield homebuilding market since it bought local builder Coleman Homes in the spring of 2003.”

“At its peak two years ago, the company took out 1,042 permits to build homes in Bakersfield, according to a report by Ticor Title. Last year, Lennar took out 500 building permits through May. This year, the company pulled 176 during the same time period. In April, the company took out just one.”

“Around town, homebuilders have started offering concessions and price cuts to move homes, said Jairo Duenas, an agent (in) Bakersfield who specializes in new home sales.”

“‘The newer homes are probably easier to sell now with all the incentives they’re giving now,’ Duenas said.”

“Some builders have been offering $10,000 to help with closing costs, as well as providing free appliances and mini-blinds for a new home, Duenas said. Others are slashing prices. Some builders are offering $15,000 to $20,000 price reductions on $250,000 to $280,000 homes, Duenas said.”

The Voice of San Diego. “Lennar Corp., the second-largest U.S. homebuilder, posted its earnings for the second quarter, a net loss of $244.2 million in the three months ending May 30. That breaks down to nearly $3 million per day, calculates Peter Viles, at the LA Times’ real estate blog.”

“In September, we found that a local Lennar office had switched its break room coffee from Starbucks to Folgers, and that catered lunches had become once-a-month pizza day in light of the uncertain market. Now, nearly a year later, we wonder if even Folgers has become a distant memory.”

The Houston Chronicle reports from Texas. “Until recently, Houston has avoided the housing slowdown that’s been felt in other parts of the country. The number of homes built in the Houston area this year is expected to drop for the first time in more than a decade. Builders are projected to construct roughly 40,000 homes this year, about a 20 percent decline from last year when home building reached its peak, said housing analyst Mike Inselmann.”

“The slower pace of construction has not been the result of a sluggish economy, but rather brought on by the industry itself, said Inselmann. ‘Things are just fine,’ he said. ‘They’re not as good as we want them to be, but there’s a recovery in our future.’”

“As long as that recovery isn’t too far off, the local economy shouldn’t be seriously affected. ‘When you start building fewer homes, you’re selling fewer appliances, less carpeting, less cement and less wood to the local suppliers,’ said Jim Gaines, a research economist at the Real Estate Center at Texas A&M University.”

“The slowdown in construction, however, might not altogether be a bad thing, as it can help keep home prices stable in a market with fewer buyers. And the multifamily market is benefiting from the single-family malaise, as would-be buyers unable to qualify for loans are continuing to rent.”

“‘That’s good news, because we have a lot of apartments coming on line,’ said Bruce McClenny, president of Apartment Data Services. He said there are about 17,000 multifamily units under construction throughout the city.”

“‘First-time buyers probably for the next six months are probably going to have trouble if they don’t have good credit ratings and some money they can use for down payments,’ said Gaines, the A&M economist.”

The Denver Post from Colorado. “Denver is the only county in the metropolitan area that has seen an increase in the number of building permits issued in the first four months of the year, compared with last year, according to data from the U.S. Census Bureau.”

“Jefferson and Adams counties saw the sharpest declines in buildin permits issued but for different reasons. Jefferson County’s limited land supply is the main reason the number of building permits plummeted nearly 70 percent to 323 in the period through April.”

“But in Adams County, where land is abundant, the residential market is overbuilt and foreclosures are rampant. The number of permits issued declined nearly 60 percent to 431, compared with last year.”

“‘Foreclosures are having a psychological impact,’ Willis said. ‘Potential buyers are nervous about selling their homes, so they’re not buying.’”

“In Weld County, where homes are cheaper and foreclosures are high, the number of permits issued dropped almost 31 percent.”

‘”Those low price points are really getting hurt with the foreclosures,’ said Mike Rinner, senior analyst with the Genesis Group. ‘There’s either too much competitive supply or people are having a tough time selling their houses.’”

The Greeley Tribune from Colorado. “While activity goes up in the summer, overall sales in 2007 have been down so far, said Chalice Springfield, CEO of Sears Real Estate.”

“In 2007, there have been 844 homes sold in Greeley and Evans and there were 894 home sales in the same time in 2006, about a 6 percent reduction in sales, Springfield said. Also, the Greeley area is still far away from its peak of home sales. The area hit a record high in 2001 when there were 284 sales in August 2001. In August 2006, there were 173 sales.”

“‘That was a pretty big drop,’ said broker Nate Buie.”

“According to Information and Real Estate Services. Greeley has a nine-month inventory of homes to sell. ‘The Greeley market in 2007 is still favoring buyers at this time,’ Springfield said. ‘If there are more homes for sale and less buyers to purchase those homes, it will affect the time period in which sellers are able to sell homes.’”

“She said it’s a great time for buyers looking for a home, but sellers need to price their homes right and make sure that homes are in top-notch condition for selling.”

“Part of the reason for so many homes on the market was an influx of home building that outpaced growth in the area and also a foreclosure rate so high it led the nation for five months at the end of 2006. Home prices are brought down in areas where there are a lot of foreclosures, broker Norma McMillen said.”

“‘That does affect the price of homes that are not in foreclosure, making it tougher to sell,’ she said.”

The Arizona Republic. “Arizona housing-help agencies, many of which had representatives at the town hall, are getting calls from struggling homeowners and are afraid they soon will be deluged. Many don’t have the resources or funds to handle the wave of homeowners in default that they fear is coming.”

“Joann Hauger, executive director of Community Housing Resources of Arizona, said many homeowners on the verge of foreclosure who are calling for help now are too upside down on the financing of their house, meaning they owe more than it’s currently worth, to keep it.”

“‘Almost everyone we have given default counseling to recently has already refinanced, tapped their equity and now owes more than their house is worth,’ she said.”

“A panel of housing experts agreed the No. 1 way to stem foreclosures is to educate buyers before they get a mortgage and homeowners on their best options when they get in trouble.”

“‘People have more education about buying a car than a home,’ said Sheila Harris, director of the Arizona Department of Housing.”

The Arizona Daily Star. “The number of homes sold and the median prices in the Tucson area dropped in May, according to a monthly report published by a local housing consultant.”

“The Southern Arizona Housing Market Letter, released Monday by John Strobeck of Bright Future Business Consultants, showed new home and resale home closings were both down about 22 percent compared with the same month a year ago.”

“The median prices also fell 6.7 percent for new homes and by less than 1 percent for resold home in May compared to May 2006, according to the report.”

“Permits for single-family homes dropped to the lowest level for May since 2001, according to the report. Last month, there were 602 permits pulled, down more than 40 percent from 1,032 in the same month last year. There were 534 permits in May 2001.”

“Strobeck said May’s permit numbers were relatively strong, given that the monthly number of permits has dropped as low as 328 within the past year.”

“He anticipates that prices and sales will start to increase again sometime between the end of this year and the summer of 2008, ‘Although I get a little more pessimistic each month,’ he added.”

Some housing bubble news from Wall Street and Washington. The Telegraph, “Housebuilders Taylor Woodrow and George Wimpey, which are due to complete their £5bn merger next week, have warned that the US housing market remains ‘very challenging,’ adding to fears that weakening demand for new homes in America could be pointing to the start of a global slowdown.”

“The companies also expect the UK housing market to slow in the second half of this year, as successive interest rate rises weigh on house buyers. Taylor Woodrow said today that its US order book was 45 percent lower than at the same time last year, with sales falling due to oversupply and concern about interest rates.”

“The housebuilders have been forced to cut prices to encourage cautious buyers, a move that will hit profit margins. Peter Redfern, who will be CEO of the enlarged group, admitted that the US market has worsened over recent months.”

“‘Sub-prime is a factor as is oversupply but there is less available credit than six months ago and rates are higher than at the beginning of the year,’ he explained.”

“Taylor Woodrow also warned that there was no immediate end in sight to the US housing slump. Mr Redfern added: ‘You won’t find anybody among our US competitors or market commentators who will give a firm view on when the market will start to turn.’”

The Washington Post. “Bernard M. Markstein III, senior economist and director of forecasting for the National Association of Home Builders, said the market will rebound in 2008, then start a multi-year recovery.”

“‘It looks like the decline is slowing, so we may be approaching a bottom,’ he said. ‘We’re not quite there.’”

From Business Week. “Like a mirage in the desert, the bottom of the housing slump seems to fade in and out of sight as the year progresses. Home sales jump, and there—you think you can make it out in the distance. Home sales fall, and it’s lost in the haze.”

“‘There’s a lot of competition trying to figure out when things are going to bottom,’ says Morningstar analyst Eric Landry. ‘But it’s unlikely that you’re going to figure that out before any one else does.’”

“In the last week of June, at the very end of what are traditionally the strongest three months for home sales, we learned that both existing- and new-home sales remained sluggish in May.”

“‘Write it off: ‘07 is going to be a bad year,’ Landry says. ‘It [the housing bottom] could be a 2008 event, it could be a 2009 event.’”

From MarketWatch. “In past episodes, it’s taken years for the housing market to bounce back. In the late 1980s-early 1990s slump, it took four years for new-home sales to reach the previous peak; it took nine years for prices to recover.”

“The inventory of previously owned homes rose to a 16-year high in relation to sales in May. The inventory of new homes fell in May, but the overstock still represents more than a seven-month supply, well above the more typical four-month supply.”

“‘The biggest issue facing housing right now is the unprecedented level of inventory and the fact that prices have to date been sticky, to say the least,’ wrote Richard Moody, chief economist for Mission Residential in Austin, Texas. ‘Those price declines are nowhere near sufficient to begin clearing inventory levels.’”

“Falling prices give buyers an incentive to wait before they sign, further depressing sales. For sellers, falling prices could be devastating if they are pressured to sell. Delinquent mortgages and foreclosures were rising even before the latest spike in interest rates.”

“‘Expect no salvation from the housing sector, including residential construction, for some quarters to come,’ said Gabriel Stein, an analyst for Lombard Street Research.”

“Even the most pessimistic observers say the sun will ultimately come out again, they just don’t think dawn is right around the corner. They think supply and demand could go further out of whack, as interest rates rise, adjustable-rate mortgage payments reset, lenders clamp down on marginal borrowers, and foreclosures head higher.”

“‘Sorry, but these problems go way beyond psychological factors and aren’t going away anytime soon,’ said Moody.”

From Reuters. “U.S. Securities and Exchange Commission Chairman Christopher Cox said on Tuesday that the agency is reviewing valuation methods hedge funds use for their assets, a central issue in the liquidity problems of two hedge funds managed by Bear Stearns Cos. Inc.”

“‘We are going to further review, using the SEC staff, the valuation and other issues that managers for these funds have,’ Cox told the House Financial Services Committee.”

“He told reporters after the hearing that the concern that hedge funds and the investment banks that manage them are not marking assets to their proper value is of interest to the SEC’s examinations and enforcement departments.”

“The fund’s main investments, a type of bond known as a collateralized debt obligation (CDO), trade infrequently, making their valuation difficult.”

“In response to a question about whether the SEC is generally examining whether the values of hedge fund assets have been inflated, thereby inflating the fees paid to asset managers, Cox said, ‘Those are the kinds of problems that are concerns in this area.’”

From Bloomberg. “Bear Stearns Cos. assigned its top mortgage trader to help manage the $1.6 billion bailout of a money-losing hedge fund as it tries to unwind bets on investments tied to home loans.”

“Bear Stearns said in yesterday’s statement that it ‘brought in additional resources with expertise in these asset classes to facilitate the orderly de-leveraging process.’”

“When asked on a conference call with analysts last week how a firm with a reputation for strict risk management could err in a market it dominates, Chief Financial Officer Samuel Molinaro said the asset-management arm is sealed off from the rest of Bear Stearns with a ‘Chinese wall.’”

“‘Clearly there are controls in place in the asset- management side too,’ Molinaro said on the call. ‘Obviously we didn’t envision market dislocation of this degree.’”

“Merrill Lynch & Co., the world’s third-biggest securities firm by market value, has expanded in subprime lending and the business of packaging loans into securities that can be sold to investors. Merrill also is the world’s biggest underwriter of collateralized debt obligations, or CDOs.”

“‘There are risks in some of the structures, in some of the complexities of CDOs, mortgage-backed securities and particularly prime brokerage, but there’s no clear sign that there’s contagion developing,’ CEO Stanley O’Neal said.”

“There is no way to ‘predict what the event will be that will cause contagion,’ O’Neal said. ‘The only surefire way to prepare for that is to manage liquidity.’”

The LA Times. “There are signs that the problems with aggressive lending to sub-prime borrowers during the tail end of the housing boom afflicted the prime mortgage market as well.”

“Standard & Poor’s reported Tuesday that mortgage loans made in 2006 to borrowers who used little or no documentation to verify their incomes are going bad four times as fast as similar loans made in 2004.”

“These so-called Alt-A borrowers are considered less risky than sub-prime borrowers because they generally have good credit histories. ‘During 2006, lenders became increasingly comfortable with offering higher-risk loans in substantially greater numbers, not only to sub-prime homeowners but also to Alt-A homeowners,’ Standard & Poor’s analysts said.”

“‘The most disconcerting trend,’ the S&P report said, ‘is how quickly the performance of these delinquent borrowers has deteriorated.’”

“Mortgage applications fell for a second straight week as interest rates remained near recent highs, an industry group said on Wednesday.”

“James O’Sullivan, economist at UBS Securities, still follows the indexes closely although he has noticed some dichotomies with other aspects of the housing market.”

“‘Clearly there has been a complete breakdown of the relationship between the purchase index and home sales in recent months, with home sales clearly falling in 2007 even as the purchase index shows it rising,’ he said.”

“‘The main story is the tightening of lending standards, so more applicants are being rejected and they’re probably reapplying again,’ he said. ‘There was also a rush by some people to get their application in before rates headed higher and that has faded again.’”

From CNN Money. “It’s called ‘hitting the number,’or inflating a home’s value,- and real estate appraisers who don’t do it often enough can find it hard to make a living.”

“In prepared testimony Tuesday before a Senate subcommittee on mortgage industry abuses, Alan Hummel, spokesman for the Appraisal Institute said ‘Appraisers face pressure from various parties involved in mortgage transactions. They are told to doctor their appraisals or else never see work from those parties again.’”

“‘If the appraisal comes in below, they can’t get the deal done,’ said Evans. That’s when the mortgage brokers and real estate agents may hit the warpath. ‘They have to go out and beat up the appraisers,’ said Mike Evans, a fellow of the American Society of Appraisers. who said he’s been threatened himself, ‘and find one they can twist.’”

“The National Association of Mortgage Brokers (NAMB) addressed the issue last year, changing its bylaws to prohibit pressure on any other players in the transaction, including appraisers. ‘NAMB opposes any effort by a mortgage originator to pressure or influence the work of an appraiser,’ NAMB director Denise Leonard testified Tuesday.”

“As long as prices were quickly appreciating up, many of these problems didn’t surface but with the housing slump, they’re bubbling up.”

“The remedy to most appraisal fraud, as far as Evans is concerned, is greater scrutiny for mortgage brokers. ‘When they start getting sued, just like appraisers do, they’ll start cleaning up their act.’”

The Boston Globe reports from Massachusetts. “Maybe next spring. With the key selling season for the real estate market nearing an end, the hoped-for rebound in Massachusetts home sales hasn’t materialized. Sales of single-family homes fell by as much as 9 percent in May from a year ago, accelerating from modest declines in April, according to data released yesterday.”

“‘There were a lot of high hopes pinned on this spring season,’ said Terry Egan, editor in chief at real estate data publisher Warren Group, ‘but these numbers tell us the longed-for recovery isn’t here yet.’”

“Yesterday Warren Group reported that over the first five months of 2007, single-family home sales are down 3 percent from the same period of 2006. Separately, the Massachusetts Association of Realtors reported a more modest decline of 1 percent for the same five-month period.”

“The Realtors association only tracks homes that are sold through real estate a gents, while Warren Group totals a larger pool of transactions that includes properties sold directly by owners.”

“Both groups said single-family home sales fell sharply in the month of May alone, with the Realtors reporting a 7.5 percent decline from a year ago and Warren Group a 9.1 percent drop. Warren Group said the median price tumbled 4.6 percent to $315,000 from $330,000.”

“Ronn Huth, a buyer’s broker in Wenham, said sales on the North Shore remain slow. Homes that sell are going for about 92 percent of original asking prices, he said. In one recent sale, Huth added, the seller probably lost money after paying commission and expenses.”

“‘I feel bad for owners like that,’ he said. ‘But buyers are getting some awfully good deals.’”

“Gus Faucher, who follows the Massachusetts economy at Moody’s Economy.com, said prices here would still be dropping into the first half of next year.”

“Inventories, while shrinking recently, remain high, Faucher said. Meanwhile, rising mortgage rates and tighter credit standards are reducing the number of buyers, dampening demand.”

“‘The housing market is still soft,’ Faucher said, ‘and it’s going to remain soft.’”

The Boston Herald. “Massachusetts house sales fell 9.1 percent in May when compared to year-ago levels. That’s the worst percentage drop in six months, and a far cry from a spring rebound brokers had hoped for amid fears housing’s woes could hurt the broader economy.”

“‘A lot of people had high hopes for the traditional spring market, but these figures clearly indicate those hopes haven’t materialized,’ said the Warren Group’s Timothy Egan.”

“Economist Raymond said in a note to clients that lower prices point to ‘ultimately broader problems for the (U.S.) economy.’”

“But economist John Bitner of Boston’s Eastern Bank said Massachusetts housing ‘is not crashing, just sliding lower.’ Bitner, who had previously forecast prices would stabilize this spring, now expects declines until winter.”

The Enterprise. “Rosa Malave put her house on the market last week, hoping for the success she failed to achieve a year ago. ‘Last year, the market was slow,’ said Malave, who took her Realtor’s advice and dropped the price more than 10 percent, listing it for under $300,000 in hopes of attracting a buyer.”

“The market is still slow, but Realtors say the right price and patience are keys to selling a home in today’s buyers’ market.”

“‘I’ve never seen so many listings on the market,’ said Diane Bruno of Fulton Real Estate in Brockton, who has been selling real estate for 35 years. ‘You’re lucky if you’re going to sell a house in 30 days. We used to get houses sold in a weekend.’”

“Today, the average market time is 161 days. That’s up slightly from 139 days a year ago and more in line with the three to six months that it took to sell a house in a traditional sustainable market, according to Peter Ruffini, president of the Plymouth and South Shore Board of Realtors Inc.”

“The market conditions that some see as a downturn are viewed by others as tempering the hectic real estate climate of the past few years.”

“‘We’re currently in a self-correcting market,’ said Sherry Palmer of Four Points Realty, West Bridgewater. ‘The values will correct themselves.’”

“Call it a market slump or correction, but consider the good news, said Bruno, whose phone has started ringing again after periods of silence when the market was slowest.”

“‘This time of year people are looking more, but they’re not jumping in like they used to,’ she said. ‘They want to see a lot more houses.’”

“And, there are more houses to see. Statistics provided by the Plymouth and South Shore Board of Realtors show that there are 2,687 single-family houses for sale in Plymouth County, down just slightly from 2,787 a year ago.”

“‘Frankly, I think people are nervous,’ said Rosen. ‘There’s so much negative news.’”

“‘I’ve seen some incentives in the form of a monetary bonus to the selling broker, a home warrantee paid by the seller,’ said Ruffini.”

“In some cases, sellers may ‘buy down’ a buyer’s interest rate for six months, he said. But the bottom line is, he said, ‘You can offer all the incentives in the world, if your home is overpriced, it’s not going to sell.’”

“With that in mind, Brockton homeowner Malave is optimistic that her house will sell this year and she can finally look to buying a condominium.”

“That may be a good move, since condominium prices are falling faster than those of single-family houses. That is directly related to a drop in condo sales, down 4.1 percent in the first four months of the year when 8,263 condos sold compared to 8,612 last year.”

“Lower sales prices mean dropping property values. ‘In condominiums, we’re seeing up to a 15 percent reduction in values,’ said Joyce Griffin, chairman of the Taunton Board of Assessors.”

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