The Housing Bubble

The Appeal Democrat reports from California. “Yuba County ranked second highest in the state for the percentage of foreclosure sales last month, data shows. Nadia Artero, branch manager at Countrywide Home Loans in Yuba City, said she has noticed a large number of foreclosures in the area recently. ‘All you have to do is look in the newspaper every day at the notices of default,’ she said.”

“Appeal-Democrat records show that 85 ads were taken out for notice of trustee sales in June, compared with 60 in January.”

“Artero said a decrease in property values since October 2005 has contributed to the increase. Many people purchase homes with 100 percent financing and use adjustable-rate mortgages…and people end up owing more than their homes are worth.”

“‘People can’t afford the home, can’t afford to refinance and were probably stretched just to get the home to begin with,’ she said.”

“Once someone reaches foreclosure, it’s difficult to keep the home, she said. ‘That’s tough, really tough,’ she said. ‘It’s an ugly time right now for a lot of people.’”

The San Francisco Chronicle. “Foreclosures continued to rise throughout the country, the state and the Bay Area in June, according to a report to be released today. Nationally, 164,644 foreclosure notices were filed in June, up 87 percent from June of last year, said RealtyTrac.”

“In the Bay Area, the number of foreclosure notices was 5,018, almost triple the 1,780 in June 2006.”

“In the nine-county Bay Area, 3,383 households received default notices in June, more than double the 1,460 in June 2006. Alameda and Contra Costa had the highest number, with slightly more than 1,000 such notices each, followed by Solano with 557 default notices.”

“Notices of trustee sales in the nine counties hit 1,011 in June, more than triple the 281 filed the previous June. Again, Alameda, Contra Costa and Solano counties had the most such notices.”

“There were 624 Bay Area bank repossessions in June, a dramatic increase from 39 the previous June.”

“As the number of properties in such a situation increases, banks are more likely to allow the homes to be sold at a loss in a process called a short sale, or to be sold in a foreclosure auction, also at a lower value. That in turn will depress values of nearby homes.”

“‘That has an insidious effect across the state,’ said. If one thinks of default notices as the canary in the coal mine, ‘The canary has wheezed and gasped and is probably being carried out right now,’ said Rick Sharga, VP of RealtyTrac. ‘The excessive and lax lending practices of the past couple of years of the real estate boom are coming home to roost.’”

Inside Bay Area. “Foreclosure activity continued to rise sharply in the East Bay and San Joaquin Countyo, according to RealtyTrac.”

“In another sign of the housing downturn, Redwood City-based Movoto.com reported that the number of ‘distressed’ home sales is rising, as homeowners try to avoid foreclosure.”

“The number of homes in some type of foreclosure proceeding in June was about three times higher than a year ago in Alameda County and about four times higher in Contra Costa and San Joaquin counties, according to RealtyTrac.com.”

“San Joaquin County had the highest rate of foreclosure statewide, with almost 1 out of 100 homes in some kind of foreclosure proceeding. The rate is more than triple the statewide average, the numbers show. ”

“Foreclosures in San Joaquin County are hitting newer homes more than older homes, said Dave Konesky, a Realtor with the Tracy office of Prudential California Realty.”

“‘Mostly we are seeing it in the subdivisions that were built in the last seven to 10 years,’ he said. ‘In my gut, my feeling is that it’s mostly first-time home buyers. I think it’s loans resetting (to higher rates), but I also think there are situations where the husband and wife lost their jobs.’”

“As foreclosures are on the rise, so too are the number of existing homes being sold in the so-called ‘distressed’ category. That’s when a property is in some kind of foreclosure proceeding or in a short sale, which means the home is being sold for less than the mortgage to avoid foreclosure.”

“In Contra Costa County, 15 percent of existing homes on the market in June were listed as distressed properties, according toMovoto.com. In Alameda County, the percentage was 11 percent while in San Mateo County the number was 8 percent.”

“California had 38,801 foreclosure filings in June, up 287 percent from year ago but down 2.16 percent from the previous month, according to RealtyTrac.com. Most filings, 27,483, involved default letters, while 4,236 were homes that had been taken back by the lender. Another 7,082 were foreclosure auction properties.”

“Alameda County had 1,227 homes in foreclosure, up from 440 a year ago. Contra Costa County had 1,795 homes in foreclosure, up from 460 a year ago. San Joaquin County had 1,841 homes in foreclosure, up from 473 a year ago. San Mateo County had 150 homes in foreclosure, up from 124 a year ago.”

The Orange County Register. “Orange County had 1,647 filings, or one for every 589 households. That’s more than double June 2006, and up 27% from May.”

“The June total includes 1,308 notices of default, 269 notices of trustee’s sale, and 70 REOs.”

From Bloomberg. “California had the second-highest rate, with one filing per 315 households, and the most filings overall, 38,801, for the sixth month in a row.”

“Six of the top 10 U.S. foreclosure rates for metropolitan areas were in California. Stockton, Merced, Modesto and Riverside- San Bernardino occupied the top four spots. Vallejo-Fairfield was seventh and Sacramento eighth.”

The Central Valley Business Times. “Mortgage defauls in the Central Valley and the Coachella Valley are being blamed by PFF Bancorp Inc. for a charge of $20 million to $21 million it is putting on its books in anticipation of loan and lease losses.”

“‘The provision is primarily a result of credit weaknesses we are experiencing in the residential construction and land segment of our loan portfolio, as we continue to observe slow levels of sales and downward pressure on prices on a number of residential construction projects we have financed, particularly in the Central Valley and Coachella Valley,’ the company says in a statement Thursday.”

The Press Telegram. “At a leadership retreat for the National Association of Realtors at the Ritz-Carlton Laguna Niguel in Dana Point, incoming board president Dick Gaylord and a team of real-estate experts discussed the group’s strategy in the next year.”

“The position places the 30-year real-estate veteran in a position to be one of the industry’s mouthpieces, and it puts Gaylord at the helm of the group’s national policy efforts.”

“Gaylord…carries a positive message about the market. ‘I don’t know that there’s ever been a bad time to buy,’ Gaylord said, adding that aside from a few ‘dips,’ home prices will always continue to rise. ‘If people will hold on, there’s no bad time to buy in real estate.’”

The Pioneer Press reports from Minnesota. “New numbers out Tuesday confirm suspicions: The Twin Cities housing slump has slid into, well, a bust. City officials issued just 592 building permits in June, a number nearly 50 percent off the recent monthly permit peak of 1,104 in June 2005, according to the Builders Association of the Twin Cities. But steep declines of 30 percent or more off peak activity have ‘housing recession’ written all over them, economists say.”

“Some housing experts eschew the term bust altogether. It’s just too alarmist and unfairly connotes wholesale collapse, said George Karvel, a real estate professor at the University of St. Thomas College of Business. Karvel prefers the term ‘dramatic adjustment,’ a process he anticipates could take four years to work itself out.”

The Star Tribune from Minnesota. “The Twin Cities housing market is in a clear recession. During the first six months of the year, the number of closed sales was down 16 percent while inventory continued to increase. The median sale price of single-family houses, condominiums and townhouses fell 2.17 percent, according to data released by several Realtor groups.”

“Not since the dot-com bust has so much attention been focused on a single sector of the economy, as home sales, prices and consumer confidence have headed downward so soon after one of the most prolonged real estate booms in history. Buyers, sellers and brokers have been left with whiplash.”

“‘It’s nerve-racking,’ said Deneen Price, whose south Minneapolis house has been on the market since April. She recently knocked $5,000 off the price of her three-bedroom house in the Longfellow neighborhood in hopes of drumming up activity, but she’s had no luck.”

“‘I thought it would be on the market for just a hot minute,’ she said.”

From Minnesota Public Radio. “‘Yes, it’s different from the extraordinary historic 6- or 8-year run we had previously, but it certainly is a long way from grave,’ said Steve Hyland, president of the St. Paul Area Association of Realtors.”

“Hyland says the situation is due in part to problems in the sub-prime lending market, which is leading to greater scrutiny of mortgage products. But Hyland says the current flatness also derives from the over-exuberance of the market a few years ago.”

“‘There was an awful lot of activity, and an awful lot of homes that came on the market, and a lot of condominium projects that were built and developed, and there was such a quick turn and people were doing so well with pretty nice appreciation rates. And people thought ‘Gosh, this is the way it’s always going to be,’ he says.”

“Real estate experts say the current situation will improve if more sellers think realistically about how to price their homes. Twin Cities resident Al Heebsh recently learned that lesson. His family recently put their north Minneapolis home on the market. After a month of no showings, they lowered the home’s price by $10,000.”

“‘That was what it took,’ he says. “‘We eventually sold it for $10,000 less than what we originally put it at, which was $5,000-$10,000 less than what we could’ve expected to get it for last year.’”

“Some builders even have lowered the price of their new houses to encourage buyers to drop the price on their existing homes. Mike Hartman, president of Hartman Homes in Hudson, Wis., for example, said that…in some cases he’s dropped the price $10,000 to $20,000 on a new house to give his buyers additional incentive to sell their existing houses without giving up more of their equity.”

“Hartman, in the business for 25 years, said sellers finally are realizing the market has indeed changed. ‘A year or two ago, people selling a home wouldn’t let go of that home and wouldn’t drop that price,’ he said. ‘Now people are coming to an acceptance stage that their equity isn’t what it used to be.’”

The Pierce County Herald from Wisconsin. “The real estate business has changed since Jim Nelson and Laura Canada started in it 11 years ago. While they used to get multiple offers on a single residential property, now they represent more properties than there are buyers for them, Nelson said.”

“Besides the shift from a seller’s to a buyer’s market, the realtors faced ever-increasing complications in the metro. They’d begun by rehabilitating homes for interested parties, yet lately had to operate under conditions causing record numbers of foreclosures and vacant properties.”

“‘There are now over 1,000 registered vacant homes in the Cities and no one can inhabit them until they meet code compliancy,’ he said.”

The Journal Sentinel from Wisconsin. “Milwaukee home seller Rebecca Ahles moved into her $169,900 spanking-new condo on the city’s near north side in May 2006. Her condo now sports a ‘for sale’ sign, asking exactly what she paid.”

“‘It’s bad timing. I bought when the market was good - right before it wasn’t good,’ Ahles said. Considering selling costs, she said, ‘I am taking a hefty hit.’”

“Ahles’ condo had a $176,900 asking price in April, but she reduced it to reflect this summer’s market realities. Sales and prices have taken a tumble in much of southeastern Wisconsin this year, the Metro MLS reported Wednesday.”

“Its Milwaukee-area figures show that sales volume has shrunk 10.7% in a year’s time. Average prices for broker-handled sales in most places look no better than 2006 and in some cases worse. Prices fell by about $23,000 to $295,453 in Ozaukee County; more than $10,000 to $297,136 in Waukesha County; and by about $1,200 to $230,947 in Washington County.”

“Some drops are shocking. Glendale’s average price has slipped to $201,448 from $217,245; Mequon’s has slid to $455,409 from $479,139 and Mukwonago’s has plunged to $269,581 from $299,404. Many communities are in the same discounted boat.”

“‘Supply has grown tremendously, even over the last year. It’s extremely competitive out there - I don’t think sellers realize how competitive,’ said Jim Schleif, Ahles’ listing agent.”

“In a buyer’s market, shoppers reign supreme, typically using their clout to reduce prices, Maddente said. Adding to price pressures has been a spate of ’short sales,’ fast deals at low prices on properties being foreclosed for unpaid debts, said MLS Board President Tammy Maddente.”

“Conditions are rocky, agents say. ‘If your house needs work, is dated, or has some flaw, right now you’re getting hammered,’ said Dave Schmidt Jr., chairman of the Greater Milwaukee Association.”

“‘Most buyers just turn around and walk out’ on an imperfect property, Schmidt said. ‘Or you may get a lowball offer - 10% under your asking price.’”

“Amid Wisconsin’s deepening mortgage foreclosure crisis, Legal Aid Society of Milwaukee on Tuesday announced an inquiry into what went wrong.”

“‘We need to find out who are the people being foreclosed, who are their servicers and original lenders, and what kinds of loans did they get,’ said Catey Doyle, the organization’s chief staff attorney. ‘There are a lot of questions about who bears responsibility for this situation, (and) the only way to find out who the players are is to manually go through court files.’”

“The latest bad news on the Badger State housing front: 1,532 new property foreclosure court filings in June, according to a news release. That brings to 9,229 the number of Wisconsin households facing foreclosure this year, about 73 more homes each business day, said Robert Jansen, president of the Milwaukee-based foreclosure listing service.”

“The hardest hit area is Milwaukee County, with 2,327 foreclosure filings this year.”

“Early indications are disquieting. As the housing sector here slid from boom times to bad times, and as regulators urged caution, risky lending escalated.”

“‘Loans made in the last year got progressively more and more outrageous,’ Doyle said. ‘It was like a feeding frenzy. Now we’re seeing 20 foreclosures a day on average in Milwaukee County, and sometimes 30.’”

“Jansen attributes Wisconsin’s 23% surge in first-half foreclosures this year, on top of the 34% rise in 2006, to mortgage defaults tied to recent adjustable-rate and exotic loans plus soft housing conditions that prevent homeowners from refinancing or arranging a quick house sale.”

“Foreclosed properties are returning to a market already clogged with too many ‘for sale’ signs and skittish shoppers, said economist Russ Kashian, an associate professor at the University of Wisconsin-Whitewater.”

“‘All foreclosures do is push down prices,’ Kashian said. ‘Talk to banks. They’ll tell you that holding these non-performing assets on their balance sheets is not popular with bank auditors. They don’t want these houses, so they dump them.’”

The Indystar from Indiana. “KB Home has had enough of Indianapolis’ sluggish home-building market. The Los Angeles-based builder said Tuesday it will shut down local operations by the end of the year, laying off an unspecified number of employees and potentially leaving contractors and suppliers with one less source of business.”

“‘Due to the changing conditions and not seeing any improvement, it doesn’t make sense for us to continue operations here in Indiana,’ said Mark Rodocker, president of KB’s Illinois division.”

“In Central Indiana, single-family building permits had dropped to 7,500 by June, the fewest since 1991. Reasons include a drying up of cheap credit and lagging demand from buyers. Some builders are trying to hang on by cutting overhead and offering steep discounts.”

“Just a month ago, Dave Berman, KB’s then-Indiana president, said the company remained ‘absolutely committed to Indianapolis.’”

“KB spokesman Jason Lindaman said the housing market is cyclical and likely will improve nationally, but KB did not predict a big enough change ahead in the Indianapolis market.”

“‘We have waited, hoping the market would improve,’ he said. ‘It just has not.’”

Some housing bubble news from Wall Street and Washington. Associated Press, “Homebuilder M/I Homes Inc. on Thursday withdrew its full-year earnings guidance and said it may book up to $75 million in charges in the second quarter, as the persistent housing-market slump led to lower deliveries. M/I…said falling home prices amid tepid demand makes it ‘difficult for us to predict either our new contracts or margins.’”

“The company joins a host of other builders that have pulled their financial targets for the year. Many have been forced to offer major price incentives to sell houses.”

“In the quarter, which ended June 30, M/I deliveries fell 24 percent to 755 homes from 987 a year ago. New contracts slipped 10 percent to 688.”

From Reuters. “‘Today’s announcement is further evidence of the challenging and uncertain conditions facing the home building industry,’ M/I CEO Robert Schottenstein said in a statement.”

“Conditions deteriorated in the second quarter as a result of credit tightening and difficulties in the subprime market, excess inventory of new and used homes, and weakening demand, the company said.”

“The average sales price of a home in backlog was $327,000, compared with $355,000 at the end of June 2006.”

The North County Times. “Some investors are skeptical that Accredited Home Lenders’ purchase by a Texas-based private equity fund will go through, analysts watching the company said Tuesday.”

“Some investors may think there’s a ‘ticking time bomb’ in Accredited loans yet to be discovered, said Bud Leedom, publisher of the California Stock Report.”

From Newsday. “American Home Mortgage Investment Corp., the Melville-based real estate investment trust, has laid off hundreds of workers without notice or even time to clear out their desks, current and former employees said this month.”

“The company, which holds diverse interests in mortgage-related securities and retail lending, was once considered a highflier, posting double-digit growth quarter after quarter in recent years.”

“But as things turned south for many housing-related businesses, American Home has offered what one analyst called ‘overly rosy’ earnings predictions.”

The Sydney Morning Herald. “A Sydney-based hedge fund manager that manages $US 2.5 billion has put a limit on withdrawals from two of its funds that invest in risky debt products known as collateralised debt obligations, expressing fears the funds would otherwise not survive.”

“Limits on withdrawals on the two Basis Capital Funds Management funds were imposed after the funds fell during June, by 14 per cent for the BasisYield Alpha Fund, and 9 per cent for the Basis Pac-Rim Opportunity Fund.”

“A newsletter distributed to unit holders said the imposition of withdrawal limits, known as gates, were ‘designed at inception to ensure [the funds'] survival through periods of extreme dislocation such as this.’”

“The newsletter specifically singled out credit ratings agencies’ moves to downgrade their ratings for risky debts, which are being repriced in the wake of large losses stemming from US ’subprime’ lending to householders.”

From Bloomberg. “TCW Group Inc. and GSC Partners created the most collateralized debt obligations that are now at risk of having their credit ratings slashed because they are backed by some of the worst-performing subprime mortgage bonds.”

“TCW of Los Angeles and GSC, a New York-based investment firm, manage 12 CDOs that will likely face ratings cut on a portion of the securities they issued, a report by Bear Stearns Cos.”

“TCW managed $27.6 billion in 29 CDOs containing asset-backed securities as of Dec. 31, according to S&P. Risk Magazine named TCW its 2006 ‘CDO Manager of the Year.’”

“‘Our transactions have a high subprime percentage and we were affected by the agencies’ re-rating of subprime,’ GSC Partners Managing Director Edward Steffelin said in an interview. The firm has ’steered away’ from securities backed by second- lien loans and mortgages to borrowers with good credit scores who decline to give information such as proof of income, he said.”

“Shares of some mortgage lenders fell Wednesday as investors worried that problems in the subprime mortgage market could spread more widely in the industry.”

“‘If it gets worse, the next area to see losses and price declines is the alt-A market,’ said Bose George, an analyst at Keefe, Bruyette & Woods Inc.”

“Rating agencies are likely to review bonds backed alt-A mortgages in the near future, said Scott Valentin, managing director of specialty finance research at Friedman, Billings, Ramsey & Co. ‘It probably will not be as bad as subprime, but there will likely be downgrades’ among alt-A-backed mortgage securities, Valentin said.”

“On Wall Street, where the $800 billion market for mortgage securities backed by subprime loans is coming unhinged, traders are belatedly acknowledging what they see isn’t what they get.”

“Some of the securities have already declined by more than 50 cents on the dollar in the past few months, according to data compiled by Merrill Lynch & Co.”

“One subprime mortgage bond, Structured Asset Investment Loan trust 2006-3 M7, was valued at about 91 cents on the dollar to yield 9.5 percent, according to the securities unit of Wachovia Corp. Wachovia today valued that security at 76 cents on the dollar for a yield of 15.9 percent, said spokeswoman Amy Jones. Merrill Lynch in New York puts the price of the same security at 67 cents to yield 18 percent. ”

“At least a third of hedge funds that invest in asset-backed bonds pick and choose values for their investment that help mask wide swings in performance, according to a survey of 1,000 funds worldwide by Paris-based Riskdata, a risk management firm for money managers.”

“‘If you have five different brokers you will get five different quotes, so if you don’t have an objective valuation process you can choose the quote which for you is the most interesting,’ said Olivier Le Marois, CEO of Riskdata. ‘There’s no consensus on where the market price is.’”

“More than a few investors would like to know what took the New York-based rating companies so long. ‘I track this market every single day and performance has been a disaster now for months,’ said Steven Eisman, who helps manage $6.5 billion at Frontpoint Partners, during a conference call hosted by S&P yesterday. ‘I’d like to understand why you made this move now when you could have done this months ago.’”

From Dow Jones. “Until now, the pricing of risks linked to housing and subprime mortgages remained something of a mystery, as risks remained hidden in the complex world of credit derivatives. But changes in ratings will force a re-pricing of the roughly $800 billion in subprime-mortgage bonds sitting in investment portfolios across the globe.”

“‘Whenever you have such a massive growth in derivatives, as we had with housing, it’s [used] to hide the losses,’ said Matt Smith of Smith Affiliated Capital. ‘Nobody knows the true counterparty risks.’”

“Some market players believe that, with the rating agencies making their moves so late in the game, they’re seeing a replay of the Enron and WorldCom debacles, which played significant parts in popping the 1990s stock-market bubble.”

“The rating agencies, then as now, have come under fire for changing their ratings only after the bad news was already out.”

“‘The credit agencies are always lagging,’ said Smith Affiliated Capital’s Matt Smith. ‘But the main difference between now and 2000 is that you could sell stocks quickly; for the real-estate market, it takes three or four years to unfold.’”

The New York Post. “FDIC Chairman Sheila Bair said she expects a CDO time bomb. ‘We’re going to see more downgrades,’ Bair said, adding that she expects the bad news to ‘creep into higher-rated’ securities.”

“Its going to get worse before it gets better. How much worse, I don’t know,’ Bair said.”

“Federal Reserve Governor Randall Kroszner on Thursday said the central bank is studying whether it can write rules to shield home buyers with blemished credit without choking off lending.”

“Banking supervisors are monitoring whether there may be any interruptions to liquidity in mortgage security markets as a result of turbulence over subprime mortgages, Kroszner said.”

“The market for repackaging subprime loans into mortgage backed securities ’seems to have been maintaining its liquidity reasonably well,’ he said. ‘The main difference is that the pricing has changed dramatically in this market, not only for the lowest rated tranches, but the highest rates tranches,’ he added.”

“The U.S. Securities and Exchange Commission adopted new rules ensuring it can sue hedge funds for misleading investors, following a court ruling that put in doubt the regulator’s authority over the $1.6 trillion industry.”

“The SEC barred hedge funds from lying about investing strategies, performance, a manager’s experience and the risks of putting money in a fund. SEC commissioners unanimously approved the rule at a public meeting in Washington.”

The LA Times. “Members of Congress on Wednesday had a message of caution for the booming, unregulated hedge fund industry: Proceed with care, because lawmakers are increasingly willing to clamp down to ensure integrity in the marketplace.”

“As warning signs, lawmakers cited the ongoing woes involving mortgage-based securities, the recent bailout of two hedge funds by Bear Stearns Cos. and an ill-fated investment by San Diego County’s retirement fund in the Amaranth Advisors hedge fund. Others on the panel expressed unhappiness about the widespread real estate foreclosures and mortgage delinquencies.”

“Rep. Barney Frank told reporters he might introduce legislation this year that would require hedge funds to save various documents, such as trading records and e-mail, that could be of use to law enforcement officials in cases of fraud.”

“Perrie Weiner, a partner with law firm DLA Piper in Los Angeles, termed such a mandate ‘extreme and unjustified’ and said document retention had never been an issue in cases he was familiar with.”

“‘It would create a new and unjustifiable burden on ordinary businesspeople that can only be viewed as a harbinger for an emerging witch hunt of epic proportions,’ he said.”

The Palm Beach Post reports from Florida. “Trying to back out of a pre-construction purchase on a condo? If you’re rich, forget it. A Palm Beach County Circuit Court judge ruled that a buyer could not back out of a contract to buy a $495,000 unit at Marina Grande, a $200 million waterfront condominium in Riviera Beach.”

“Judge Jonathan Gerber found that D&T Properties could not wiggle out of its contract based on higher-than-expected maintenance costs. Gerber concluded the buyer could afford the increase.”

“The ruling is important because condo buyers throughout South Florida are eager to get out of pre-construction contracts signed during the recent real estate frenzy. Now that the market has turned and the flippers market has died, many buyers are trying to undo their deals based on even minor changes to a project by a developer.”

“Gerber’s ruling is not binding on dozens of other cases now in the works because the ruling does not come from an appeals court, said Charles W. Edgar III, a Palm Beach Gardens real estate lawyer not involved in this case.”

“But it is the first time a judge has tried to define the law’s meaning, he said. ‘It’s not precedent, but it is a predictor of where other judges would go,’ Edgar said.”

“To take a shower in his new townhouse, Jeffrey Estis performs a complicated choreography. First he turns on the shower and watches a weak trickle of water come out. Then Estis turns on the faucets in separate bathrooms. Next he flushes a toilet. Then he turns on a third sink.”

“The water pressure is so low at his home at CitySide in West Palm Beach, Estis says, that he has to turn on all his faucets to trick the water pump outside into pushing enough water to his shower.”

“‘That’s what I have to do every morning in my $500,000 home,’ Estis said.”

“Estis blames WCI Communities Inc., the Bonita Springs-based home builder that built the development, for low water pressure and other shortcomings.”

“The CitySide homeowners association is considering hiring a law firm to pursue legal action against WCI. The company already is being sued by condo associations.”

“Matthew Nicolosi also gripes about the poor water pressure and WCI’s lack of response to his complaints. ‘I can barely take a shower,’ Nicolosi said. ‘You call WCI, you get the royal runaround.’”

“Another CitySide owner, David Moya, likewise is irritated by unfinished tasks such as the lack of electronic gates in the fence along Congress Avenue. ‘It’s been over a year, and they still have not completed the project,’ said Moya, a real estate agent.”

The St Petersburg Times. “For Floridians besieged by soaring home insurance and rising property taxes, this is the cruel twist no one saw coming. Even as the stagnant real estate market drags down their home values, property tax assessments for well more than 100,000 Tampa Bay area homeowners will actually increase this fall.”

“‘There’s going to be some sticker shock,’ said Ken Wilkinson, Lee County property appraiser. It has many county officials bracing for an avalanche of confused, if not angry, homeowners.”

“Declining property values are a rarity in recent Florida history. But this year in Pinellas County, values decreased on 67,000 homesteaded properties. In Hillsborough, 50,000 dipped. In Hernando, 2,800.”

From TC Palm. “American Equity Mortgage Co. is shutting its West Palm Beach office and six other offices nationwide because of the slowdown in the U.S. housing market.”

The Miami Herald. “Hundreds of Miami-Dade County employees would be laid off and hundreds more vacant positions eliminated under a cost-cutting budget that Mayor Carlos Alvarez will announce today.”

“The details have been kept among a small group of leaders, all anxious to see whether Alvarez and County Manager George Burgess managed to absorb property-tax cuts without slashing services.”

The Herald Tribune. “On the Gulf Coast and across Florida, newspapers are cutting staff and shrinking what they deliver to readers. The real estate slump is hitting Florida newspapers hard, cutting revenues by millions of dollars across the state. Like other businesses affected by the real estate slump, newspapers are cutting costs.”

“‘Problems in real estate, that goes beyond builder advertising,’ said Paul C. Tash, CEO of Times Publishing Co., publisher of the St. Petersburg Times, the state’s largest newspaper. ‘We were in the midst of a real estate boom a year ago, and in comparison to that, this doesn’t feel as good.’”

“‘California and Florida, those two states in general are seeing some pretty tough classified real estate declines right now,’ said James Walden, a stock analyst who covers the publishing industry for Morningstar.”

“If the problem were limited to real estate, it would not be that bad. But it spreads from there to affect all kinds of auxiliary businesses, from furniture showrooms to automobile dealers to corner cafes.”

“‘It is obvious that there is a domino effect on small business,’ said Vicki Vega, VP of business development at the Greater Sarasota Chamber of Commerce. ‘If there is no work for the builders, than naturally all the complementary businesses are feeling it as well.’”

The Orlando Sentinel. “After nearly two decades of smooth sailing, Sanford-based Federal Trust Bank has run into some serious head winds. Profit has plummeted, bad loans have skyrocketed and assets have decreased for the longtime Central Florida savings and loan.”

“It is a dramatic departure for a savings and loan that ranked 53rd in a 2005 survey of the nation’s 100 best-performing public thrifts. Profit fell 23 percent last year.”

“Federal Trust is not alone in its troubles, said John McCune, research director for SNL Financial LLC. The housing slump has especially hurt thrifts, because many invested heavily in residential development during the boom years, he said.”

“‘The thrift industry as a whole is getting hit, but Federal Trust is being hit harder than most,’ McCune said.”

“One of the bank’s most problematic issues has been the large increase in nonperforming assets, or bad loans that are in default. Noncurrent loans jumped almost fivefold to $16.7 million in the first quarter. Overall, nonperforming assets totaled $18.8 million, an increase of 376 percent.”

“Nationally known economist Mark Zandi told home builders and industry professionals meeting Wednesday in Orlando that the beleaguered U.S. housing industry could bleed for another year or more.”

“And Florida, he said, will be one of the states with the worst hemorrhaging.”

“‘There’s no sign at all of stabilization,’ said Zandi, a featured speaker at an industry forum related to the Southeast Building Conference, which opens today at the Orange County Convention Center.”

“More needs to be done, he said, including deeper price cuts for both existing and new homes, and further cuts in housing starts.”

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