July 19, 2007

Forecast For California Buyers: Sunny Skies Ahead

The San Francisco Chronicle reports from California. “Bay Area home sales eroded further in June, with properties in less-expensive areas leading the way. Across the nine-county region, sales of houses and condos tumbled 26.5 percent from 10,830 in June 2006 to 7,964 last month, according to real estate information firm DataQuick.”

“Solano County…boasts the lowest median price in the Bay Area, at $475,000, down 11.7 percent from the same month last year. Sales also fell by the largest margin last month. A total of 453 properties changed hands, 41.4 percent fewer than the 773 in June 2006. ‘With rising inventory and more foreclosures, buyers see this and feel it pays to wait,’ DataQuick analyst Andrew LePage said. ‘A lot are stepping to the sidelines to watch it play out.”

“While homes are selling for multiple millions on Russian Hill or in Pacific Heights, the new inventory in the South of Market area could have a dampening effect.”

“‘South of Market, which was a sure bet for growth in the mid 1990s with Multimedia Gulch and all of the Internet companies and the new lofts being built there…that’s pretty much come to a standstill,’ said agent Gregg Lynn. ‘I have sellers there with unreasonable expectations, they’re living in two years ago.’”

The Mercury News. “While the Bay Area’s June home sales fell to their lowest level in 12 years, median prices continued to rise in the region’s costliest counties, masking problems, and falling home values, in the lower end of the market.”

“‘Right now we have a skew,’ said real estate broker Richard Calhoun of San Jose. Parts of the market’s high end are selling quickly and appreciating, while the lower end is generally experiencing slow sales and falling prices.”

“A three-bedroom house now for sale on Lean Avenue near Calero Park in Blossom Valley…is listed for $580,000. That’s about 7 percent less than the $625,000 price the owner paid for it in September 2005. The owner used a combination of a first and second mortgage to come up with the purchase price, according to public records. The home has been for sale since March.”

The Contra Costa Times. “‘With Solano County, the slowdown is a combination of heavy starter homes, at least for the Bay Area, and lender tightening criteria,’ LePage said. ‘Not that we think it’s a huge issue, but it doesn’t help.’”

“That sentiment was echoed by Larry Klapow, president of Coldwell Banker San Francisco Bay. ‘The pattern’s continuing,’ he said. ‘We’re selling lots of high-end homes, and sales aren’t doing too well on the lower end.’”

“Despite DataQuick’s findings, Brian Sharp, broker in Brentwood, said he’s seeing the opposite. ‘We’re hurting in the upper end,’ he said. ‘Our $800,000-and-up market is pretty soft, but our $300,000 to $500,000 (market) is better.’”

“Sharp said that last year his average sale was $738,000. Now it’s closer to $500,000. ‘The higher-end people are nervous about the market,’ he said. ‘The $300,000 to $500,000 crowd, they don’t read the Wall Street Journal.’”

“Most East Bay resale homes and resale condos reflected the drop in sales, whereas more new homes sold, most likely because of slashed prices. ‘Builders will do whatever they have to do to sell they house. They don’t hold onto it,’ LePage said.”

The Press Democrat. “Prices in the three least expensive counties, Sonoma, Solano and Napa, are showing signs of bending under the price pressure.”

“Sonoma County’s June median home price, which includes sales of new homes, resale homes and condominiums, fell 8.2 percent versus last year, dropping to $532,500, according to the report.”

“The median price for new homes dropped dramatically, down 43 percent, from $750,000 last June to $429,000 last month. Condominiums dropped as well, falling from $390,000 to $375,000 last month, a 4 percent dip.”

“The median price for new homes dropped dramatically, down 43 percent, from $750,000 last June to $429,000 last month. Condominiums dropped as well, falling from $390,000 to $375,000 last month, a 4 percent dip.”

“The median price of new homes in Sonoma County has come down because as the market softens, fewer people are able to sell their existing home and trade up to larger ones, said Steven Heath, an agent for Santa Rosa builder Carco Homes.”

“‘What that says to me is that someone who wants to sell his house and move up is not able to do it anymore, or do it comfortably,’ Heath said.”

“At the least expensive end of the spectrum, condominiums appear to be dropping to the point where more first-time home buyers can make the leap from renting to owning, said Joe Henderson, of Keller Williams in Winsdor. ‘I think prices are getting down to the point where buyers are able to snap ‘em up,’ Henderson said.”

The Sacramento Bee. “Two years into Sacramento’s real estate slowdown, the gulf between what sellers want for their homes and the price buyers are willing to pay continues to widen across much of the eight-county region.”

“In Sacramento, one of California’s major inland growth regions, escrow closings for all homes were the lowest for any June in a decade, according to DataQuick.”

“The number of for-sale signs at existing homes reached a record 15,566 in El Dorado, Placer, Sacramento and Yolo counties, according to Sacramento-based TrendGraphix. Factor in 4,899 new and yet-to-be-sold homes reported by area builders in June and it pushes the total number of area houses for sale past 20,000.”

“‘We’re not prognosticators,’ said DataQuick analyst Andrew LePage, ‘but my forecast for buyers would be sunny skies ahead.’” “The median sales price of all homes in Placer County was $428,500 in June, 18.5 percent below its December 2005 peak of $525,500.”

“Although more than 3,000 houses changed hands in June, it was hardly the surge normally associated with the month and its big-selling colleague, August.”

“‘Sacramento is sort of out there drifting all alone again without much influence from the outside, namely the speculators or investors from other parts of the state,’ said LePage. ‘We know that’s what helped fuel the frenzy that brought us to a peak in both sales and prices.’”

“Elk Grove real estate agent and broker associate Jon Nastro said he turns down listings of sellers who still want 2005 prices. The region’s record inventory, he said, stems from ‘too many unrealistic sellers.’”

“Bob Bronswick, president of the Sacramento/Tahoe region of Coldwell Banker Residential Brokerage, said rising inventory is also driven by people facing financial trouble.”

“‘People bought in 2004 with those adjustables,’ he said. ‘Their rates are starting to change now. My gut feeling is we’re seeing more people that understand the situation they’re getting into and putting the house on the market to avoid it.’”

The Merced Sun Star. “So much for summer being the hot selling season. June home sales were dismal throughout the northern San Joaquin Valley, and sales prices plummeted. Merced County home prices plunged more than 23 percent in June compared to a year ago, dropping to a median $290,000 selling price.”

“Stanislaus County homes sold for a median $343,250 in June, which was about 9 percent below last year. San Joaquin County homes sold for $396,000, which was a nearly 12 percent drop.”

“As low as those prices were, homeowners who sold property in June should consider themselves lucky because most who tried failed. Home sales nose-dived throughout the region by more than 43 percent, compared to last year.”

“Northeast Modesto, including the new home developments of Village I, had sales volume drop 31 percent and prices tumble 23 percent to a median $336,000. Ripon sales dropped 60 percent and prices fell 27 percent to $455,000.”

“Patterson sales dropped 54 percent and prices fell 23 percent to $407,000. Waterford sales dropped 46 percent and prices fell 28 percent to $285,500.”

“Atwater sales dropped 42 percent and prices fell 25 percent to $275,000. Livingston sales dropped 70 percent and prices fell 25 percent to $310,000.”

“The continued price plunge means Merced is settling into a ‘normal market’ after a period of hyperinflated activity, said Scott Oliver, president of the Merced County Association of Realtors.”

“‘Home prices now are back to about what they were in 2003,’ said Ernie Ochoa, who manages the Century 21 M&M and Associates office in Merced.”

“Even those rolled-back prices are too high for most families. ‘The median-income family earns about $47,000 a year in Merced County,’ Ochoa said. ‘So it only can afford to buy a home priced about $175,000.’”

“Ochoa said Realtors listed 1,437 used homes for sale last month in Merced County, but they sold only 53 of them. ‘We’re got a huge supply of homes for sale,’ Ochoa said.”

“Buyers have lots to look at. They can pick between foreclosed properties repossessed by banks, new houses just finished by builders, and older homes offered by anxious owners.”

“The relentless downturn in the housing market means Washington Mutual Inc. plans to jettison more than 100 jobs in the East Bay.”

“Washington Mutual has decided to shut a Dublin office that handles subprime residential mortgages, said Olivia Riley, a bank spokeswoman.”

“‘These actions are a result of the changing subprime market,’ Riley said. “The bank also will tighten its standards to qualify potential borrowers, a move that could banish a larger number of consumers from the home financing market. ‘We are not getting enough volume for these mortgages,’ Riley said.”

“The job losses, bankruptcies and company shutdowns that plague the industry are the natural result of a market that became overheated, said Doug Nesbit, sales and marketing director with San Ramon-based CMG Financial Services, which provides home loans and other financial products.”

“‘The pendulum probably swung too far, and now it is swinging back towards more traditional lending guidelines,’ Nesbit said.”




The Eventual Recovery Could Be A Multi-Year Adventure

The Star Tribune reports from Minnesota. “Al Ynigues found out the hard way about the dangers that lurk in exotic high-risk home loans. A broker he trusted exaggerated his income nearly three-fold and steered him into a variable rate mortgage with rapidly escalating payments he can no longer afford, nor escape without hefty penalties.”

“The music teacher knew the rates could ‘go up a little.’ But he never thought his first home in Apple Valley would gobble up his entire monthly income.”

“‘I got burned,’ he said. ‘It’s outright fraud.’”

“He wasn’t told, he said, is that it would cost him prepayment penalties of over $4,000. Another thing Ynigues says he wasn’t told was that his broker had listed his income as $10,000 a month, more than three times what he makes in his music business.”

“On top of that, he would later learn, the broker had cut himself in for a $4,230 fee.”

The Shakopee News from Minnesota. “The Twin Cities regional housing market slowdown continues as home sales remain flat during the peak selling season. Most areas in the region have seen some sort of decline in buyer activity, according to new analysis released by the Southern Twin Cities Association of Realtors (STCAR).”

“So far this year through June, Shakopee home sales have declined by 23.7 percent compared to the same period in 2006.”

“‘The gradual decline in home sales has been continuous since late 2005 and isn’t showing signs of letting up,’ said Wayne Gilbert, president of STCAR. ‘Predicting exactly when that will change is an inexact science, but it’s becoming clear that our eventual recovery could be a multi-year adventure.’”

The Journal Sentinel from Wisconsin. “About 6,900 Wisconsin homebuyers, five times more than originally thought, are entitled to $3.2 million restitution from Ameriquest Mortgage Co. for alleged overcharging, the state attorney general said Tuesday.”

“A year ago, state officials estimated that 1,170 Wisconsin families were hoodwinked by the California-based lender, which has admitted no guilt.”

“‘Never in my wildest dreams would I think that they would be so underhanded,’ said Greenfield homeowner Elizabeth DuPlanty. For DuPlanty and her husband, Rick, the Ameriquest settlement appears too little, too late. ”

“The couple sued Ameriquest in April, and Ameriquest filed a foreclosure action against them in May, court records show. ‘We may still lose our home because we owe more than it’s worth, and no one will write a loan to us,’ Elizabeth DuPlanty said.”

“Another Ameriquest borrower, Racine homeowner Darla Evilsizor, said her family is worried these days, too.”

“‘Our situation involved an over-inflated appraisal,’ Evilsizor said. ‘We have not been able to refinance and are still struggling. One big question that I have regarding (the penalty to Ameriquest) is, will it include the appraiser who appraised our home without even seeing it?’”

The Capital Times from Wisconsin. “While still below a year ago, the local real estate market showed some signs of stabilizing in June, the Realtors Association of South Central Wisconsin reported.”

“The 894 sales of homes and condominiums reported in June in Dane County were 5.9 percent fewer than the 951 last June, but that was not as bad as the 15.8 percent decline in May sales compared to last May.”

“A total of 1,313 homes and condos in Dane County were listed for sale for the first time on the South Central Wisconsin MLS in June, 17.3 percent fewer than a year ago, although well above the range of new listings of 899 to 1,189 from 2003-05.”

“But there remains a glut of homes and condos for sale here: The 5,458 total listings at the end of June are 5.9 percent more than a year ago, 79.6 percent more than two years ago, and well over double three years ago and triple four years ago.”

The Lansing State Journal from Michigan. “It’s been a frustrating few months for Jo Ann Hershey. Hershey listed her 1,900-square-foot East Lansing house in November 2006. She started selling at $291,000 and has dropped the price twice, first to $282,000, now at $274,900. She still has no offers for the three-bedroom, two-bathroom house in the Okemos school district.”

“‘In every house I’ve ever sold, the longest it ever took me to sell a house was three weeks,’ Hershey said. ‘The last house in Haslett I sold, the first person who looked at it bought it.’”

“(Economic) forces have pushed foreclosures up and lengthened the average time on the local market to 120 days, said associate broker Matt Bowler. It’s good news for buyers, who have more selection to choose from at lower prices. ‘There’s never been a better time to buy a house,’ said Matt Bowler, president of the Greater Lansing Association of Realtors. ‘The good news is Lansing is the bright spot in Michigan.’”

The Ann Arbor Business Review. “Development of Kingsley Lane was put on hold in mid-July until the housing market rebounds. The 46-condo project celebrated the groundbreaking for its first phase on March 21, and the developers anticipated a summer 2008 completion of 20 lofts.”

“However, the spring sales market didn’t gain traction, leaving sales commitments flat and buyers wary of their ability to sell existing homes in order to fulfill their purchase. ‘There was fantastic momentum … right up until the Pfizer announcement (in January),’ said co-developer Peter Allen.”

“Condo sales are down 18 percent this year over 2006, according to the Ann Arbor Area Board of Realtors. At the same time, the number of listings have climbed nearly 18 percent during the first half of 2007, with 1,772 condos listed for sale year to date. During that timeframe, 318 condos sold and the median sales price dropped $10,000 to $159,945.”

“At issue appears to be ongoing economic uncertainty paired with the pending departure of Pfizer from Ann Arbor, which could add over 1,000 homes to the existing excess housing inventory.”

“‘Demand has slowed down,’ Allen said. ‘It’s hard to track exactly what’s happening right now.’”

The Enquirer from Ohio. “Ohio Attorney General Marc Dann said his office is close to getting its first criminal indictments in its crackdown on predatory lending practices.”

“While Dann is already pursuing about 30 civil cases statewide, he said criminal charges are being pursued against the worst mortgage brokers and property appraisers that he believes helped give the Buckeye State the highest foreclosure rate in the nation.”

“‘Fraud is a crime and deserves to be punished,’ he said Wednesday. ‘We’re going to bring enforcement against those who cheat.’”

“In June, two Cincinnati-area mortgage firms were also among 10 named in civil lawsuits filed by Dann’s office under Ohio’s new predatory lending law. Dann has accused Ace Mortgage Funding of Sycamore Township and Premiere Service Mortgage of West Chester of improperly influencing property appraisers to ‘puff up’ property estimates to create bigger debts for homebuyers.”

“Tracey Brooks, said her purchase of a three-bedroom East Price Hill home was marred by her lender. Though she was told her loan came with a fixed rate, it adjusted after two years, pushing her $678-per-month mortgage payments to about $1,100.”

“‘I’m not in foreclosure, but it’s killing me and ruining my credit,’ she said. ‘I’ve put too much money into it to let it go.’”

The Suburban Journal from Missouri. “St. Charles County in March posted the state’s highest rate of foreclosures. One household out of every 26 in the county faced a foreclosure that month - a number 37 times the state average and almost 30 times the national average.”

“The failure to meet mortgage payments is a problem affecting all segments of the market, from those buying their first home to the luxury-home buyer. ‘It’s primarily people getting into a house that they could have waited a year or so to get into,’ said Don Rogers, president of the St. Charles County Association of Realtors.”

“In the luxury market, some lenders are settling for a less orthodox resolution to unpaid mortgages. ‘We’ve seen more short sales,’ says Cort Schneider of Schneider Real Estate.”

“What makes the upswing of foreclosures so excruciating is its damage across a wide swath of home prices. ‘The upper-end price range homes are the first ones to take a hit,’ Schneider says, though foreclosures hit homeowners ‘across the board.’”

“Rogers says that while area real estate agents work to get buyers pre-approved for loans, for some buyers, patience is the best policy.”

“‘Sometimes I see a pretty flower and I want to buy that pretty flower, and next thing I know I need to pay for the thing,’ he says of some buyers’ anxiety to get into a home fast. ‘Impulse buying is really a monster.’”




An Amorphous Blob Of Trouble

Some housing bubble news from Wall Street and Washington. Bloomberg, “MGIC Investment Corp., the largest U.S. mortgage insurer, said second-quarter profit plunged 49 percent as it paid more in claims. MGIC, which protects banks against defaults on home loans, said losses climbed 61 percent to $235.2 million.”

“‘We know California is a developing problem. We know Florida is a developing problem,’ said Geoffrey Dunn, analyst at Keefe Bruyette & Woods Inc. ‘It’s simply the amplitude that’s the surprise in the quarter. We’re going to need help from management and a lot more color on specifically what happened.’”

The Sydney Morning Herald. “Investors in the collapsed $320 million Basis Yield fund could receive less than 50c in the dollar from distressed asset sales, making Basis Capital and its investors the first Australian casualties from the subprime mortgage meltdown in the US.”

“In a letter sent by Basis Capital to unit holders on Wednesday, the previously highly-rated fund manager said Basis Yield’s master fund, the Cayman Islands-registered Basis Alpha Yield, had been unable to pay margin calls on loans.”

“The note warned: ‘Basis Capital assesses that enforcement action by the financiers of the master fund at distressed sale prices would result in a reduction in the net asset value of the units for the Basis Yield Fund to below half of the level as at May 31.’”

“Basis Alpha Yield invests primarily in complex collateralised debt obligations, or CDOs, which do not have an easily established market price.”

The Sacramento Business Journal. “National mortgage company IndyMac Bancorp Inc. started the second phase of its expansion into Austin, Texas, and plans to nearly double its employees there by year’s end.”

“About 8 percent of the loans in its portfolio are in delinquency. Many of the jobs opening up this year at the Austin servicing center will be focused on dealing with delinquent loans and foreclosures, said J.K. Huey, IndyMac’s senior VP of home loan servicing.”

From Reuters. “Troubles in mortgageland may get worse before they get better, especially for the so-called ’subprime’ borrowers whose spotty credit histories put them into more costly loans.”

“‘It’s an amorphous blob of trouble,’ says Keith Gumbinger of HSH Associates, a mortgage research firm. ‘And there’s more pain to come.’”

“In the first quarter of this year, roughly one of every 41 subprime loans was entering foreclosure, and more than one of every six were delinquent, according to the Mortgage Bankers Association. Those are the worst mortgage default statistics since the Great Depression.”

“And it’s likely to get worse because the 2006 crop of mortgages, which will start resetting next year, were of a particularly low quality.”

“Federal Reserve Chairman Ben Bernanke said on Thursday that subprime mortgage losses could hit $100 billion and threaten consumer spending.”

“‘The credit losses associated with subprime have come to light and they are fairly significant,’ Bernanke told the Senate Banking Committee in a second day of testimony. ‘Some estimates are in the order of between $50 billion and $100 billion of losses associated with subprime credit problems,’ he said.”

From MarketWatch. “Senators pressed Bernanke to respond to news earlier in the week that Bear Stearns Cos. told investors in two of its specialty hedge funds, which had invested in derivatives based on mortgage-backed securities, that the two funds were almost worthless.”

“Bernanke said these were ‘market innovations’ and ’sometimes there are bumps’ in the new-product road.”

“‘We’ll see how this works out,’ Bernanke said.”

“In addition, Bernanke told members of the Senate Banking Committee that the pain and suffering felt from foreclosures and delinquencies will ‘likely get worse before they get better.’”

“Bernanke, under fire from lawmakers for the Fed’s failure to step in earlier to address the factors underlying the nation’s housing bubble, said the Fed and other regulators will soon issue stronger rules to protect consumers.”

The Associated Press. “Under pressure from Congress to combat problems in the market for subprime loans given to people with spotty credit, Bernanke highlighted the Fed’s efforts to tighten protections in the troubled home loan market in a midyear economic report to Congress.”

“Bernanke told the House Financial Services Committee that the Fed is examining new rules in several areas including restrictions on so-called ‘liar loans,’ limitations on financial penalties for borrowers who make early payments and a mandate that lenders require set-aside payments for subprime borrowers’ property taxes and homeowners’ insurance.”

“‘The recent rapid expansion of the subprime market was clearly accompanied by deterioration in underwriting standards and, in some cases, by abusive lending practices and outright fraud,’ Bernanke said.”

From CNN Money. “Despite government calls for tougher regulation in the subprime mortgage market, brokers and lenders don’t seem to be getting their guidance from Washington. Instead, they’re turning to Wall Street.”

“‘It’s more the market that’s been dictating what kinds of loans are made. Lenders are reacting to what investors will buy,’ said Steve Habetz, a mortgage broker in Connecticut.”

“When regulators tightened subprime lending guidance in late June to try to curtail risky practices that led to record foreclosures, all it did was reinforce a trend that Wall Street had started long before.”

“David Wyss, chief economist for Standard and Poor’s, which rates the bonds backed by subprime and other mortgage loans, said Wall Street stopped buying the loans since early spring, long before the Fed released its guidelines.”

‘”The market has been way ahead of the Fed,’ he said. ‘If anything, it has overreacted.’”

“Doug Duncan, chief economist for the Mortgage Bankers Association, agreed with Wyss. ‘For more than six months there’s been tightening,’ he said.”

“Washington Mutual Inc, one of the largest U.S. mortgage lenders, on Wednesday said it will stop offering some popular home loans for subprime borrowers, after rising defaults caused losses to mount.”

“CEO Kerry Killinger said that effective immediately, Seattle-based WaMu will require full documentation of income and assets from prospective subprime borrowers, eliminating riskier ’stated income’ loans.”

“WaMu will also no longer offer subprime adjustable-rate mortgages with initial fixed terms of fewer than five years. This eliminates so-called 2/28 and 3/27 loans.”

“The home loans unit posted a $37 million loss. Overall loan volume fell 24 percent. WaMu set aside $372 million for credit losses, up 66 percent. Net charge-offs more than doubled to $271 million. Killinger citing housing market deterioration.”

“WaMu now plans to set aside $1.5 billion to $1.7 billion this year for credit losses, up from its prior $1.3 billion to $1.5 billion forecast.”

“CIT Group Inc. said on Wednesday it was exiting the mortgage business and posted a surprise second-quarter loss, as the commercial and consumer lender became the latest to bail out of the struggling home loan sector.”

“CIT CEO Jeff Peek…cited poor returns in mortgages as a reason for shedding the business. CIT posted a second-quarter net loss of $134.5 million. The company said it incurred a loss…on the exit from its home lending and construction business, after lowering the fair-market value of a mortgage portfolio worth more than $11 billion.”

“Standard and Poor’s Rating Services dropped the other shoe Thursday, announcing it would downgrade 418 classes of U.S. residential mortgage backed securities (RMBS) backed by second-lien collateral. The rating agency said it acted because of the poor payment histories for these loans.”

“The action covered second-mortgage loans, such as home equity loans (HELs) and home equity lines of credit (HELOCs).”

“The original total balance of all the loans being downgraded came to about $3.8 billion. That represents 6.1 percent of the approximately $62 billion in U.S. RMBS backed by second-lien collateral that S&P rated from the beginning of January 2005 through the end of January 2007.”

“The dollar amount of all mortgages extended during that period came to about $2.5 trillion, but the downgrades are expected to have more of an impact than the numbers might indicate.”

“‘It’s going to be more severe [than last week's action],’ said S&P’s chief economist, David Wyss.”

The Prescott Herald. “Subprime borrowers are having growing problems making their mortgage payments, and there has been evidence of outright fraud in some low-documentation loans.”

“The issue was raised last week when Standard & Poor‘s and Moody‘s Investors Service, the two largest bond-rating agencies, reported that billions of dollars worth of subprime mortgage-backed bonds issued last year were performing worse than they expected and will likely continue to deteriorate as the housing market continues to decline at least into early 2008.”

“David Wyss, Standard & Poor‘s chief economist, said that housing prices should continue to drop in parts of the country well into next year, and some of the biggest bubble spots could see price drops of up to 20 percent, putting subprime borrowers in a tough spot if they can‘t make their mortgage payments.”




Guess What? It’s Become A Renters’ Market In Florida

WESH reports from Florida. “Orlando is becoming one of the most difficult cities in America to sell a home for fair-market value, WESH 2 News reported. A new study shows Orlando-area homeowners more than a 50 percent chance of lower home values by mid-2009.”

“Tawn Kelley helps people get loans to buy Morrison homes. She said that like every builder trying to sell their developments, the shrinking values in the housing market as well as the glut of homes for sale has forced them to play by new rules.”

“‘A customer would come in and talk about…purchasing something that was going to built specifically for them eight, nine or 10 months from now,’ Kelley said. ‘It is now inventory that is selling.’”

“Even with houses for sale all around him, James Phillips said he will only let serious buyers inside his front door because he’s in no hurry to sell. ‘I’m not really desperate to sell,’ Phillips said. ‘I know the value of my house, so I just have to wait it out.’”

The Ledger. “Polk County builders pulled 321 home permits last month, a 44 percent decline from the June 2006 total of 571. It is a story home builders are getting used to, an overabundance of new home inventory has the market at a near standstill.”

“‘We still have a lot of entry-level houses on the market,’ said Bill Cook, president of Cook Construction in Winter Haven. ‘Until those get cleared off, it’s going to be slow.’”

“Many Polk cities had their totals take a plunge in June. Auburndale, Bartow, Haines City, Lake Alfred and Winter Haven continue to be affected by Central Florida’s sluggish housing market.”

From Bay News 9. “The number of foreclosed homes in Pasco County has jumped in the last year. ‘Unfortunately, a lot of people have adjustable rates and can’t afford the insurance,’ said Pasco County community development director George Romagnoli.”

“Rosalyn Fenton from the Pasco County Clerk’s Office said last year about 10 foreclosures were processed per week, but now it’s about 40 per week. The number of actual cases where they did lose their property has jumped almost 200 percent.”

The Palm Beach Post. “Now that Palm Beach County’s boom-time home-sales market is settling down…guess what? It’s become a renters’ market, according to a report released Wednesday. While that’s good for renters, it isn’t welcome news to landlords or home sellers.”

“Home sellers competing for buyers in the county’s volatile market now have a glut of rental apartments to worry about, according to RealFacts.”

“The occupancy rate for (June) was 90.7 percent, down nearly 3 percent from a year ago. ‘I would anticipate that as long as occupancy stays in the lower 90s, there won’t be much rent growth - and maybe you’ll even see decreases,’ said Chris Bates, sales and marketing director for RealFacts.”

“‘In the MLS, the average days on market (to find a renter) is between 90 and 105 days,’ said Todd Breen, broker-president of an affiliate of Re/Max. ‘When you have days on market that are three months or longer, that’s extraordinary,’ he said.”

“Rental communities, like sellers of new homes, are offering ’so many concessions I can’t remember them all,’ Breen said.”

“‘One trend is emerging that I find very refreshing,’ he said. ‘After years of the mortgage market taking tenants away from our inventory by turning them into buyers, we’re now seeing prime tenants - good incomes and credentials - returning to the rental market vs. buying a house in a declining market.’”

From Business Week. “In Palm Beach…rents declined 0.5% in the second quarter. ‘In Florida, so many apartment buildings were converted to condos over the course of the housing boom that there’s now a large shadow inventory, or shadow market [of condos being rented out],’ says Sam Chandon, chief economist at Reis.”

“How long will renting remain a more appealing option than buying? ‘When negative news comes out, from a consumer’s point of view they just see ‘housing is bad,’ says NAR senior economist Lawrence Yun. ‘But that just doesn’t make sense in all markets. Eventually, renters will say, ‘I’m tired of putting my rental payment into some landlord’s pocket—I want to build equity.’”

The News Press. “Occupancy rates in Fort Myers’ big apartment complexes plunged 10.9 percent in the second quarter while rents edged up, according to a report.”

“Jim Garinger, a real estate agent who follows the multifamily market, said occupancy rates in the big complexes dropped because of competition from other sources, including the conversion of apartments to condominiums.”

“‘The amount of condo conversions that’s happened in the last two years has had a big impact,’ he said. ‘Those units were pulled off initially as condominiums but now we see them coming back on and being rented.’”

“‘That in combination with the regular condo products that were sold pre-construction and they were either sold to someone who’s renting them out or the developer decided to rent them,’ Garinger said.”

“‘Apartment complexes also are competing with single-family homes that were built by speculators who weren’t able to sell at a profit, Garinger said. ‘You can rent a single-family, three-bedroom home in south Lee County for $1,800 a month.’”

The Herald Tribune. “Although real estate auctions have become a more familiar phenomenon in Southwest Florida and the state as a whole with the cooling housing market, the region’s top brokerage, Michael Saunders & Co., fired off a sharp broadside against the practice in a recent advertising section.”

“Recently, real estate broker Sky Sotheby’s International and J.P. King Auction Co. sold more than $30 million of property, virtually in one afternoon, in front of a standing-room-only crowd at the Ritz-Carlton Sarasota.”

“But the Saunders ad poo-pooed ‘the well-publicized tent auction, held amid a party atmosphere and attended by fewer buyers than curious onlookers. We daresay that sellers who participated were in no mood to party at the end of the day.’”

“I attended that auction and did not see any sellers with twisted arms or guns to their heads. If a seller chooses to accept an immediate cash sale, it is a successful sale at the then-market price.”




Bits Bucket And Craigslist Finds For July 19, 2007

Please post off-topic ideas, links and Craigslist finds here.