The Housing Bubble

The Sacramento Bee reports from California. “Sacramento real estate broker Carey Covey has so much business these days he can hardly handle any more. Covey sells homes repossessed by the banks. And all signs point to a lot more of them coming onto the market. ‘It’s steadily been increasing for a year,’ said Covey, a 20-year veteran of selling homes taken back by banks. ‘I think it’s worse than the ’90s.’”

“Christine McCullough will lose her Natomas house to the bank in September. Last year the Sacramento County employee lost $1,800 in extra monthly consulting income that had made the 2005 purchase possible. She says her lender wouldn’t work out alternatives while she was still current on payments.”

“‘It was a bad time to buy,’ she said. ‘I shouldn’t have purchased. It was just a bad time.’”

From USA Today. “Lupe Arroyo and her husband just took their Sacramento home off the market. Having tried to sell it since April, they cut their $369,000 asking price three times, to $329,500.”

“‘This last reduction was well below market value,’ Arroyo says. ‘It was a giveaway (price), and we still had a low-ball offer.’”

The Recordnet. “San Joaquin County mortgage holders were among the most likely in California to fall behind on their payments, (Dataquick) reported. ‘They were making loans that were about as liberal as we’ve ever seen,’ Stockton real estate broker Art Godi said. ‘In my 46 years in real estate, they were the most liberal terms I’ve ever seen.”

“‘And now what’s happening, that’s exacerbating the situation, is the pendulum swings the other way,’ Godi said.”

The Press Democrat. “More and more Sonoma County homeowners are falling behind on their mortgage payments. Lenders sent default notices to 462 homeowners in Sonoma County during the second quarter, up 129 percent from the same period a year ago, DataQuick reported.”

“Meanwhile, the number of people who ultimately lose their homes is soaring. Broker Sandra Geary said she recently listed a home for $435,000 that a couple paid $535,000 for two years ago. The sellers can no longer afford the home after the payment on their adjustable-rate mortgage increased $600 a month.”

“‘It makes you want to cry, because what do you think that does to the house down the street?’ Geary said.”

The Mercury News. “More Santa Clara County borrowers defaulted on their loans in the second quarter than any time in the past 14 years, a real estate information firm reported.”

“‘People are getting notices that their payments are going up anywhere from $800 to $2,000 more,’ said Michelle Gutierrez, local president of the National Association of Hispanic Real Estate Professionals. ‘They got into this home that they thought was going to appreciate, of course that’s what we all want, but it’s just not happening. They have no equity and they have to go back to renting homes.’”

“Peter Van Dam, (an) associate broker who specializes in listing properties that have been repossessed by lenders, said three of the 18 such listings he has were sold at auction in the past week. Two were three-bedroom houses in San Jose’s East Side, priced at around $600,000 a few months ago. At a crowded public auction held Saturday in Concord, he said, one house sold for $420,000, the other for $445,000.”

“‘How is a couple of $450,000 comps (comparable sales) going to change the market? The more of those auction prices hit the market, the more downward pressure we’ll see on prices,’ he said.”

The San Mateo County Times. “Default notices jumped considerably throughout the Bay Area this quarter, mirroring a statewide trend that saw default notices reach their highest level in more than a decade.”

“‘When the lenders started allowing stated-income loans (when a borrower does not have to prove his or her income) and 100 percent financing,’ the trouble started, said Chuck Edell, president of the Bay East Association of Realtors and 30-year East Bay Realtor.”

The Bakersfield Californian. “The 1,593 default notices mailed to Kern homeowners between April and June marked the third-straight quarter of record setting foreclosure activity for the county. Local default notices increased by 190.2 percent this spring over a year before, reported DataQuick.”

“Stretched is how Rosedale homeowners Darrin and Diane Couch have been feeling since February. That’s when their monthly loan payments jumped from $1,300 a month to $2,700. The couple bought their home with a $137,000 loan in 2001.”

“Four years later, as home values were shooting up, they refinanced with a $206,000 adjustable rate mortgage to fund home improvements. ‘The rates were good and we just did it,’ Diane Couch said. ‘It was the biggest mistake.’”

“Bakersfield’s median home price was $274,500 in June. That represents a 10.9 percent drop from June 2006, according to the California Association of Realtors.”

“The local price decline may be steep because new home sale prices were lumped together with existing home prices in the report, Bakersfield appraiser Jim Henderson said. ‘What’s going on with the new houses right now is that the builders have built so much that they’ve slashed their prices,’ Henderson said.”

“A quick search on Bakersfield’s MLS showed 73 new listings and just 13 houses sold in the past 24 hours, Henderson said.”

The Daily News. “Foreclosures soared an annual 799 percent in Los Angeles County and California in the second quarter. In the county, 2,581 properties went into foreclosure, up from 287 a year ago, DataQuick reported.”

“Parts of the booming Inland Empire area were hit even harder, with foreclosures jumping 986.9 percent.”

“‘The housing industry is in a recession, pure and simple, and it’s going to last until 2009,’ said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. ‘It’s going to get worse. I think it’s going to get very scary.’”

“The (statewide) second-quarter foreclosure total of 17,408 is the highest since DataQuick began tracking the statistic in 1988 and eclipsed the prior record of 15,418 owners who lost houses and condominiums in the third quarter of 1996.”

“DataQuick analyst John Karevoll said the record number is essentially because of complicated foreclosure issues regarding multiple loans. In the 1990s when a property went into default, owners had several options, including refinancing, short sales or working directly with the lender.”

“‘Because there are multiple loans, it has got to go all the way through the foreclosure process because at the very end it removes the second and third loans as well as the other liens on the property,’ Karevoll explained.”

The Ventura County Star. “In Ventura County, there were 316 trustees’ deeds recorded, or the loss of a home to foreclosure, DataQuick reported. The number of foreclosures was up 754.1 percent from 37 over the same April to June period a year ago.”

“‘We’re going from a market that was red-hot, fueled by easy lending, that is now basically stone-cold,’ said economist said Jack Kyser.”

“A stalemate, with no winners and losers, is how Bill Wilson describes the housing market. But there’s still some pain out there.”

“‘The market’s slapped me on the hand, and now I’ll be a little less greedy,’ said Wilson, a semi-retired Camarillo resident (who) now works part time as an agent at Century 21.”

“Wilson flips houses as a hobby. He has two that he’s been trying to sell since January. He refuses to budge on the price of a Simi Valley town house that’s listed at $459,000. Wilson has been able to break even by renting it.”

“The other property is a Thousand Oaks house he purchased at a foreclosure auction in October. He listed it for $865,000 in January, but cut the price to $789,000 in May, killing his hope of turning a $150,000 profit. Instead, he’ll probably make $30,000, a typical return when he flips houses. He’s anxious to sell before he loses money on the house.”

“Wilson is far from losing faith. ‘I wish I had more money,’ he said. ‘I would love to swoop up all the deals right now.’”

“While homeowners watch prices in their neighborhoods decline, the median price has stayed fairly static because higher-end housing is strong and supports the market’s overall value, even as demand and prices for low-end homes slip.”

“Dave Lake, an IT analyst from Westlake Village, sold his Camarillo home in 2004, and then sold an investment property in Los Angeles. He plans to rent until the market corrects to a sustainable level.”

“‘I call it a renter’s market,’ Lake said. ‘The money you’re throwing away by renting is substantially less than what you would be throwing away with the current depreciation.’”

“Lake says he spends about $35,000 a year to rent an $800,000 house in Westlake Village. If he owned it, Lake said, he would have a hefty monthly mortgage, plus annual expenses that would run about $15,000 for taxes and maintenance. There’s also a chance the house could depreciate.”

“‘Prices have stickiness on the way down, and nothing sells,’ Lake said. ‘There’s a standoff that lasts for a year, until people have to move.’”

“He expects the next three or four years to bring more bad news for the Conejo Valley, with possible layoffs at Countrywide Financial Corp. and Amgen Inc.”

“‘We’re seeing this huge foreclosure tsunami that’s going to continue for three to four years,’ Lake said. ‘Foreclosures probably won’t peak until 2009 or later. The crash will continue for a few more years. Demand is going to be suppressed for the next five to 10 years.’”

“Eliseo Cisneros of Oxnard, a mortgage planner with America’s Lending Partners, says tightening mortgage underwriting standards are making it more difficult to qualify first-time home buyers.”

“‘In some ways, it’s good, so we won’t be experiencing the foreclosures like we are now,’ Cisneros said. ‘But then it’s a bad thing for business.’”

“Out of the 25 leads Cisneros generated in June, only two qualified for financing. Cisneros sees many people who need to sell growing more desperate and lowering their prices.”

“For example, he’s helping an 81-year-old woman who is selling her three-bedroom, one-bathroom home in Oxnard. She listed her home for $490,000 about four months ago, then recently reduced it to $425,000. She knows it’s a bad time to sell but needs to for health reasons, Cisneros said.”

“‘She’s anxious and frustrated, and is very aware that the market is slow,’ he said.”

A report from the Arizona Republic. “One of the Valley’s top housing analysts lowered his projection for the area’s new-home market for this year on Tuesday, saying that such stubborn problems as an oversupply of houses and turmoil in the mortgage business will delay the recovery. RL Brown said he expected Phoenix-area builders to pull 34,000 building permits this year, down from his forecast of 41,000 issued in January.”

“Brown expects the market to remain at the same level in 2008 before beginning its rebound in 2009.”

“Builders pulled more than 60,000 permits in both 2004 and 2005, a pace Brown said was unsustainable. He said the market still is flooded with homes for sale. The market has perhaps 70,000 to 90,000 of them, including the more than 52,000 on the Arizona Regional MLS typically cited as a baseline inventory figure, Brown said.”

“He estimated there are as many as 10,000 to 20,000 builder speculative, or ’spec,’ homes for sale, along with a similar number of investor-owned homes that are either vacant or being rented until they can be sold. Only some of those spec homes and rentals are on the MLS, too.”

“‘That’s a huge number,’ Brown said. ‘The point is that there are a lot of homes that are going to have to be sold or occupied before the supply comes into balance with the demand.’”

“Plus, the full effect of foreclosures hasn’t yet been felt.”

“‘We thought we had seen the bottom last year,’ said Dave Lorti, (an) agent in Tempe. ‘Some buyers were beginning to get back in the market. But now, people are wondering if we have yet to see the bottom.’”

“Phoenix-area builders still face cancellation rates from 20 to 40 percent. Builders also are reluctant to curtail production, even with a glut of unsold homes. ‘What do you do? Do you shut down the (production) line?’ Brown asked. ‘The home-building industry has never done that.’”

“Meanwhile, builders are writing down the value of land they bought during the boom, laying off employees, restructuring their businesses and looking for new ways to make homes affordable again.”

“Affordability will become increasingly important as the mortgage industry rethinks the way it did business during the boom. New lending requirements are knocking buyers out of the market, Brown said.”

“‘Underwriting guidelines have gotten very stringent,’ he said. ‘You have to have your stuff together to get a loan. What I hear more of is the people in the sales office make the deal but the buyer can’t qualify.’”

The Tucson Citizen from Arizona. “Dave Perrin didn’t plan to sell his house and buy a new one, but his wife’s illness suddenly thrust him into a bloated local real estate market that has buyers dictating terms and prices and sellers scrambling to fulfill them.”

“Perrin’s wife needed a home that could accommodate a bulky air filtration system, so they started shopping. They quickly found and bought a 2-year-old home in Vail. They paid just under $350,000 for a house that was listed for $357,000.”

“Two years ago, the previous owners pulled the home from the market when it didn’t sell for $480,000, Dave Perrin said.”

“The Perrins aren’t the only ones getting sweet deals. A glut of homes on the market, more than twice as many last May as in May 2005, has created a buyer’s market. New home prices are down, builders are offering incentives and sellers of existing homes are doing extra sprucing up to get homes sold.”

“‘It’s probably the best time in the past 10 years to buy a house,’ said real estate analyst John Strobeck, owner of Bright Future Business Consultants.”

“In 2005, investors flooded the Tucson real estate market. At the same time, buyers saw interest rates that had dipped to levels not seen since the 1960s. A ‘frenzy’ ensued that drove the median price - the price at which half of homes cost more and half less - of existing and new homes up more than 25 percent over 2004, Strobeck said.”

“But as more and more people tried to cash in, the market was inundated with homes.”

“Lately, prices have leveled off as the excess inventory is slowly being depleted. However, Strobeck said, the median price is buoyed by higher-end home prices that have not had the drops experienced by some mid- to lower-priced homes.”

“Prices are dipping because sellers are motivated. ‘When people are motivated they will come down, and we’re already beginning to see that happen,’ Strobeck said.”

“The current state of affairs has Realtors scrambling, said Holli McGarry, a Realtor who has been selling in Tucson for five years.”

“‘Two years ago anybody with a real estate license could just sit there and sell houses, but now we have to work,’ she said recently after a ’staging’ class.”

“The sluggish market has builders cutting prices and bending a little more than they have in recent years. Prices are dictated by the market, said John Bremond, president of KB Home Tucson. ‘We can only sell a home for what the buying public is willing to pay,’ Bremond said.”

“What the public will pay is illustrated by new home median prices. Last June, the median was $263,048. This year it was $241,650, Strobeck said.”

“Builders are still trying to sell homes built on speculation in the past year. The market has forced builders to accept less than the list price for such ’spec’ homes, McGarry said. ‘Builders are taking offers,’ she said. ‘They never take offers.’”

“McGarry is optimistic. Tucson is still growing, and it didn’t see the 50-percent-per-year price run-ups other cities, such as Phoenix, saw.”

“‘What goes up, must come down, and we didn’t go up as far so we don’t have as far to fall,’ she said. ‘People are thinking, ‘Well, we can go outside now. The storm has passed.’”

The Explorer News from Arizona. “The rollercoaster real estate market seems to be leveling off, but activity is still high in the Northwest area, according to numbers released last week by the Tucson Association of Realtors.”

“The numbers indicate the local market has settled since the volatile real estate boom of 2005, said Judy Lowe, president of the Tucson Association of Realtors. ‘We’re not seeing a lot of price declining,’ Lowe said.”

“Despite median and average home prices being up, this is not a direct indication that the market is taking a turn for the better, said Maile Nadelhoffer, a computer database specialist with the University of Arizona’s Economic and Business Research Center.”

“‘I don’t think the indications in that latest report were enough to think that the recovery has really started in the housing market yet,’ she said.”

“Some of the reasons the market is not ready to begin the recovery are the housing supply is still a little high, as are average days on the market and existing home sales. Existing home sales are still on their way down, Nadelhoffer said.”

“The small increase in the median and average prices is just part of the natural variability in the prices and doesn’t look like enough to push the entire market toward recovery, Nadelhoffer said.”

“‘We’ve been thinking one of the reasons for that is a lot of the sub-prime part of the market has dropped out and that’s sort of buoying the median price of housing,’ Nadelhoffer said.”

“Last Wednesday, Federal Reserve Chairman Ben Bernanke said the lagging housing market would put a drag on the national economy. Nadelhoffer said Bernanke’s comments hold a grain of truth.”

“The numbers for construction employment are declining in Tucson, which have a tie to 20 percent of the jobs in the area, she said.”

“Real estate agent Joe Evano, who has been in the business since 1994, said people are starting to adapt to the market cooling.”

“‘Sellers are getting more in tune to the fact that 2005 pricing is not there anymore, although home prices are climbing,’ he said. ‘They aren’t climbing at the extreme rates that they were in 2005.’”

Some housing bubble news from Wall Street and Washington. Associated Press, “Sales of new homes fell in June by the largest amount in five months as the housing industry continued to struggle with its worst downturn in 16 years. The Commerce Department reported that sales of new single-family homes dropped by 6.6 percent last month to a seasonally adjusted annual rate of 834,000 units.”

“The decline was more than triple what had been expected and was the largest percentage drop since sales fell by 12.7 percent in January. Sales are now 22.3 percent below the level of a year ago.”

“The median price of a new home sold last month dropped to $237,900, down by 2.2 percent from a year ago. It was the biggest year-over-year price drop since a 6.5 percent fall in April.”

From MarketWatch. “Inventories of unsold homes were unchanged at 537,000. Inventories are down 5% compared with a year earlier, indicating that builders are having only modest success in working off excess homes for sale.”

From Dow Jones. “Regionally last month, new-home sales decreased 27.1% in the Northeast, 22.5% in the West, and 17.1% in the Midwest. Demand rose 7.6% in the South.”

“An estimated 77,000 homes were actually sold in June, down from 82,000 in May, based on figures not seasonally adjusted.”

“D.R. Horton Inc. said it swung to a quarterly loss of $823.8 million. The home builder said its third-quarter results, for the period ended June 30, included pretax charges of $835.8 million for inventory impairments and $16.2 million related to write-offs on land options it’s abandoning.”

“D.R. Horton has taken over the dubious distinction of absorbing the biggest quarterly land-related write-off so far in this housing downturn, topping Pulte Homes Inc.’s roughly $750 million pretax charge announced last week. Factoring in D.R. Horton’s goodwill charge, the quarterly total was nearly $1.3 billion.”

“‘Excluding the goodwill, the land impairment alone was significantly greater than the $200 million to $400 million we believe most people were expecting,’ wrote Morgan Stanley analyst Robert Stevenson in a research note.”

“‘The question now and for the next few quarters regarding D.R. Horton is whether management is just being conservative and taking the ‘big bath’ now when the home-builder stocks are getting pummeled anyway, and will realize smaller impairments in future quarters (and possibly benefit from some reversals), or if this is a more bearish signal regarding D.R. Horton’s management and operating strategies,’ he added.”

“The company blamed the loss on the persistent housing slump that has left a glut of unsold homes on the market, forcing sharp price reductions. Looking ahead, Horton did not give any indication about when the market may turn.”

“‘We believe that market conditions will continue to be challenging, and our quarter-end impairment evaluations incorporated our more cautious outlook for the industry,’ Chairman Donald Horton said in a statement.”

From Bloomberg. “Pulte Homes Inc., the third-largest U.S. home builder, reported on Wednesday a second-quarter net loss after sales tumbled and the company wrote down the value of land as the housing slump deepened.”

“The net loss in the three months ending June 30 was $507.6 million. Revenue slid 40 percent to $2 billion, Bloomfield Hills, Mich.-based Pulte Homes said in a statement.”

“Pulte recorded charges, including those for land impairments and write-downs on joint ventures, of $749.4 million before tax. The average sales price for a Pulte home fell 4 percent to about $320,000 in the quarter, the company said on July 17.”

“The second quarter also included about $40 million of restructuring expenses as Pulte announced plans to fire 16 percent of its workforce after earlier cutting 25 percent.”

From Reuters. “Beazer Homes USA Inc., facing a deteriorating U.S. housing market and federal investigations into lending practices, posted a quarterly loss on Thursday as the builder took charges for inventory and goodwill impairments and abandonment of land option contracts.”

“For the third quarter ended June 30, Beazer posted a net loss of $123.0 million. The company said the latest quarter’s results included charges of $188.5 million. A substantial portion of the charges relate to the write-down of the value of operations in Northern California, Nevada and Florida.”

“Would-be home buyers canceled their orders at the rate of 36 percent, higher than the 29 percent in the prior quarter. New orders for homes fell 30 percent in the quarter to 3,055.”

“‘Most housing markets across the country continue to be characterized by an oversupply of both new and resale home inventory, reduced levels of consumer demand for new homes and aggressive price competition among home builders,’ CEO Ian McCarthy said in a statement.”

The Street.com. “Ryland Group…reported steep second-quarter losses, as expected, as land impairment charges and higher selling costs cut into the homebuilders’ profits. Ryland posted a loss of $52.4 million. Ryland recorded $147 million of inventory impairment charges tied to land investments.”

“The company’s revenue fell 38% from last year to $740 million. New orders declined 17%, as the company previously reported.”

“M.D.C. Holdings, Inc. today announced a net loss for the quarter ended June 30, 2007 of $106.1 million, which included pre-tax charges of $161.1 million for asset impairments and $6.4 million for write-offs of deposits and pre-acquisition costs associated with land option contracts the Company does not intend to pursue.”

“Net loss for the six months ended June 30, 2007 was $200.5 million, which included pre-tax charges of $302.5 million for asset impairments and $10.5 million for write-offs of deposits and pre-acquisition costs associated with land option contracts the Company does not intend to pursue.”

“‘Overall, the market for new homes stinks … liquidity is getting sucked out of the system,’ said Alex Vallecillo, senior portfolio analyst with Allegiant Asset Management, which has $30 billion in total assets under management. ‘Mortgages are going to be tougher to come by, more expensive. The buyers are basically drying up.’”

“With sales plunging, home builders are now writing down the value of their unsold homes and the land they have bought for future development. The lower value is reflected in each builder’s tangible book value, what a company could get if forced to hold a fire sale.”

“‘The market believes these guys are going to be writing down their book values in the next quarter or two — or more,’ Vallecillo said.”

From CNBC. “‘Moody’s predicts that from it’s peak in 2005, the national median home price will fall about 9% before stabilizing next summer,’ said Steve Liesman, CNBC’s senior economic correspondent. ‘That means the price has further to drop than it already has.’”

“According to Liesman, Moody’s Mark Zandi sees a ’stunning erosion in credit quality.’”

From Realty Check. “The builders will tell you they’ve weathered downturns before, and they will certainly weather this one. But what’s troubling is that there’s this strange tone among so many of the analysts that I talk to: this feeling that this downturn is unlike any other because of the credit factor.”

“Most housing corrections are based on fundamental broader economic issues, like a nationwide recession or massive job losses. We don’t have that now. It’s all about fear and credit. And until both of those settle, housing won’t either.”

The Washington Post. “The head of Freddie Mac has a bearish outlook for the housing market. ‘I think on a national level the whole housing market has another year and a half of tough times ahead of it,’ Richard F. Syron, CEO said in an interview Wednesday.”

“‘I think it will get materially more severe,’ he said. ‘I think we’ll probably see in real terms . . . housing prices will go down.’”

The Record. “Demand for new housing is still declining and won’t start to rebound until 2008, the chief economist of the National Association of Home Builders said Wednesday.”

“‘The big question is: Is this ball still rolling downhill? I think it is,’ said the economist, David Seiders, in his midyear forecast for the home-construction industry. ‘We’re dealing with some major problems out there.’”

“Seiders said the housing market began sliding in 2005, in reaction to the boom that dramatically inflated prices in the first half of this decade. ‘That destroyed affordability,’ he said.”

“And ‘unanticipated and sudden turmoil’ in the sub-prime mortgage market this year has further weakened the outlook for the rest of this year and 2008, Seiders said.”

“Seiders forecast that the new-house market won’t return to normal levels until 2010 or 2011. ‘We’re looking for a fairly slow climb out of this hole,’ he said.”

“Absolute Capital Group Ltd., an Australian hedge fund that invests in collateralized debt obligations, suspended withdrawals from two of its funds after forecasting losses amid a rout in U.S. subprime mortgages.”

“Basis Capital’s investments included the unrated portions of CDOs, the first in line for losses when borrowers fall behind on mortgage payments. ‘There’s probably more pain to come,’ said Michael Birch, who helps manage $133 million at a Sydney-based hedge fund.”

“The risk of owning bonds of Wall Street firms surged as concerns escalated that investment banks will be hurt by rising losses from subprime mortgages and a freeze in demand for corporate debt.”

“Credit-default swaps on $10 million of Goldman Sachs Group Inc. bonds jumped as much as $18,000 to a record $85,000, according to broker Phoenix Partners Group. Bear Stearns Cos. credit swaps surged as much as $29,000 to $110,000, also a new high. Lehman Brothers Holdings Inc. climbed as much as $24,000 to $104,000.”

From Business Week. “First, it was the second half of 2007. Then it was 2008. Now analysts are saying the national housing market may not rebound until 2009.”

“Despite the ugly national picture, Realtors are forging ahead, turning the focus to local real estate markets and buying opportunities—and blaming the media for the continued decline in home sales.”

“‘The numbers are the numbers,’ says Tom Kunz, CEO of Century21 Real Estate, a division of privately held Realogy. ‘People are going to come home tonight, have dinner, turn on the TV, and see that home sales declined. They’re going to look at that and say ‘Hell, I’ll sit on the fence.’”

The Florida realtors report on June sales. “Despite favorable mortgage interest rates, strong job growth and other positive economic conditions, statewide sales of existing single-family homes in Florida totaled 12,954 in June and were closer to activity levels in June 2002, prior to the housing boom years, than June 2006 figures when 18,607 homes sold for a 30 percent decrease in the year-to-year comparison, according to the Florida Association of Realtors.”

“Florida’s median sales price for existing single-family homes last month was $243,200; a year ago, it was $256,200 for a 5 percent decrease.”

“The Sarasota-Bradenton MSA reported the median sales price for homes was $292,700; it was $326,800 in June 2006 for a 10 percent decrease. The existing condo median sales price in June was $256,300; a year ago, it was $287,500 for an 11 percent decrease.”

“‘Several factors are influencing the market in the Sarasota-Bradenton area,’ says May Aston, president of the Manatee Association of Realtors. ‘Inventory is plentiful, and sellers have adjusted their price expectations, which helps make homes more affordable again.’”

The Sun Sentinel. “Breathe deeply, hot-under-the-collar home sellers. South Florida’s housing slump continued in June, hitting the 18-month mark. Analysts who had predicted improvement this year now are pointing to the second half of 2008 or later.”

“Sales of existing homes in Broward County tumbled 22 percent last month, to 674 from 861, FAR said Wednesday.”

“Many sellers are finding interest to be tepid, even as they cut prices. June Bechthold and Allan Sacks have been trying to sell their two-bedroom home near the water in Deerfield Beach since January. They originally asked $434,900 but have since dropped the price to what they hope is an eye-catching $387,387.”

“The couple has had only one offer, and it was too low. ‘We’re not trying to get top dollar,’ said Bechthold. ‘We’re just going to hang in there.’”

“The number of homes and condominiums for sale in Broward has stabilized recently at about 47,000, according to Keyes Co. That figure still is more than triple the number from two years ago.”

“Meanwhile, the existing condo market took a hit in June. Sales plummeted 35 percent, to 595 from 910 a year ago. The median price fell $18,200, to $194,100 from $212,300. Existing condos in Broward may have been hurt by the deals developers are giving buyers of new units, analysts say.”

The Miami Herald. “South Florida homes continue to sit on the market, waiting for buyers, while more and more are being put up for sale. Market watchers cautioned prices can’t hold much longer given stagnant sales and ballooning inventory.”

“‘We are at the early to middle stage of the market correction,’ said economist J. Antonio Villamil of the Washington Economics Group. ‘The thing that moves initially is sales volume decline and inventory increasing. Eventually, prices will move down too.’”

“‘It’ll be a couple-year process,’ he said. ‘For those caught on the wrong side of this, there will be blood n the floor.’”

“For now, the median price of a single-family house in June was $371,600 in Miami-Dade, a drop of 2 percent from June 2006 and 7 percent from May.”

“Reflecting the lack of sales, the inventory of unsold homes continued rising. Owners of more than 77,000 single-family houses and condos have listed properties for sale. A year ago that number was just over 50,000.”

“Jack Winston of Miami’s Goodkin Consulting said he surveyed downtown Miami’s condo market and concluded the market will need five to seven years to digest all of the units under construction and be ready for new development.”

“‘Right now, people selling homes still have not adjusted their thinking to what the reality is. The sooner prices start to come down, the sooner this market returns,’ said Winston.”

The News Press. “Sales of existing single-family homes in Lee County are down 37 percent for the first six months of 2007 compared to the same period a year ago.”

“The number of sales could pick up if more prospective sellers would lower their prices to match the market, said Trae Zipperer, an agent in Fort Myers who specializes in waterfront homes.”

“‘We are still seeing a significant gap between sellers’ expectations of value and where the market actually is,’ Zipperer said. ‘The values are what they are and as long as the seller can come to grips with that, there are buyers who are looking to be in this market.’”

“Fort Myers resident Lisa Norman, a first-time home buyer who had been scanning listings for property for her mother, paid about $150,000 for a two-bedroom unit that had sold for about $243,000 in November 2005. ‘I just kind of walked into it,’ Norman said.”

“The Realtor who handled the transaction, Fiona Finn in Fort Myers, said buyers are there if sellers are really looking to sell at a competitive price. Owners who hoped for a quick sale for big profits are pulling properties off the market, she said. ‘I think we are seeing a weeding out of overpriced homes,’ Finn said.”

“Peggy Hummel, CEO of the Realtor Association of Greater Fort Myers and the Beach, said the association’s statistics show 11,916 single family homes currently listed. In Charlotte County, prices were down 10 percent from $222,300 to $199,000 and sales were off 33 percent from 323 to 218.”

The Naples News. “‘There’s been a big drop, sure, but we’re still cruising down from the peak year of 2005, so the figures are a bit skewed,’ said Robert Konst, broker in Fort Myers. ‘The percentages themselves are skewed. The history of real estate in Florida was forever changed in 2005, so we’re going to see the numbers keep dropping off year after year until 2005 is far enough away that it no longer plays a part.’”

“‘What we’re seeing is a stabilizing of the market,’ he said. ‘It’s actually steadying and the numbers are becoming more realistic. The numbers were dramatically skewed going up, and they’re going to be dramatically skewed going down.’”

“Jerry Mosely, general manager of Barbee and Son Inc. in Fort Myers, agrees. ‘Personally, I feel like the market’s leveling out nicely,’ he said. ‘It’s going to drop little by little until we get away from the outrageous price increases we’ve seen over the past several years, but after that it’s going to be just fine.’”

“‘Developers are substantially cutting prices now, and they’re also increasing their commissions to the Realtors,’ he said. ‘They’re really doing everything they can to entice the buyers back.’”

From Florida Today. “The median resale price for single-family homes sold by Realtors in Brevard County was $198,000 in June, down $34,800 from June 2006, FAR reported Wednesday. That’s a 15 percent drop, the largest year-over-year percentage decrease in any of the 20 Florida metropolitan areas tracked by the association.”

“The number of single-family homes sold by Realtors in Brevard County fell 21 percent, compared with June 2006.”

The Orlando Sentinel. “Orlando Realtors reported their June sales numbers earlier this month, down 43 percent year-over-year in the four-county metro area, Orange, Seminole, Lake and Osceola counties.”

“‘A lot of this is just psychology,’ said Mike Kelley, sales manager in the Orlando office of HomeBanc Mortgage Corp, of the sales slowdown. ‘People are concerned and kind of sitting on the fence.’”

“But if buyers wait to see whether prices continue to fall, Kelley said, it could cost them because mortgage interest rates have been creeping up and the value of their own home for sale could continue to slide.”

“HomeBanc Corp., the Atlanta-based parent of HomeBanc Mortgage, said in its first-quarter report that it lost $23.8 million, down from a $500,000 profit in the same period a year ago. The mortgage company’s mortgage loan originations fell 13 percent when compared with the same quarter in 2006, and the rate of decline for its Florida loans was almost twice as steep, 25 percent.”

The News Journal. “Existing-home sales in Volusia and Flagler counties fell 29 percent in June compared with the same month a year ago, with the median sales price dropping 10 percent over the same period to $197,100, the FAR reported.”

“‘It’s a tough market and I’m feeling it firsthand,’ said Terri Ossi, who has been trying to sell her Ormond Beach house for several months. She has dropped her asking price from $349,000 to $335,000. ‘Someone asked me what I was going to do if I don’t sell my house,’ she said. ‘I’ll pay the mortgage. What else can you do?’”

“‘We are close to where the market was a few years ago and there’s a continued downward pressure on the prices to bring them back down to a reasonable level,’ said Mark Dougherty, executive director of the Daytona Beach Area Association of Realtors. ‘It’s a great time to buy.’”

The Palm Beach Post. “Single-family home sales in Palm Beach County plunged 19 percent in June, to 764 from 947 a year ago, the FAR said. The median price fell 7 percent, to $377,900 from $405,500 in June 2006, the associaton said.”

“In the Treasure Coast, single-family home sales in June fell 38 percent, to 316 from 513 in June 2006, FAR said. The median price of a single-family home fell 8 percent, to $237,100 from $257,500 a year ago, FAR said.”

“In Palm Beach County, sales of existing single-family homes fell 19 percent when compared with June 2006, and the median price took a tumble to $377,900 from $405,500. It was the first significant drop, 7 percent, in home prices since the market started cooling off from its unprecedented run-up two years ago.”

“The median price of an existing single-family home in Martin and St. Lucie counties fell 8 percent as sellers realized they needed to lower prices to see the sales close. The median price fell to $237,100 from $257,500.”

“‘We’re seeing a market that has been cut in half in sales and quadrupled in inventory,’ said Jack McCabe, president of McCabe Research and Consulting in Deerfield Beach. ‘We haven’t reached bottom yet, not by a long shot.’”

“The decline in housing prices in the Treasure Coast follows the dramatic run-up two years ago, when speculators grabbed everything on the market.”

“‘We’ve seen the highest run-up in inflated values,’ McCabe said. ‘We have in the Treasure Coast - and across the country - the highest historical inventory for existing homes, new homes, single-family and multifamily.’”

From TC Palm. “The association said members in the Fort Pierce-Port St. Lucie MSA, which includes Stuart, sold 316 existing single-family homes in June, down 38 percent from the 513 purchased by home buyers a year earlier. The median price for an existing single-family home in the area dropped 8 percent, to $237,100, in June compared with $257,500 during the same period last year.”

“‘We’ve reached a plateau and for the prices to only drop 8 percent, I see that as reasonable,’ said Don Santos, past president of the Treasure Coast Builders Association. ‘The exuberance of 2005 has died down. And being down 38 percent isn’t so bad because in the past we’ve seen sales drop 40 or 50 percent in some cases.’”

“The West Palm Beach-Boca Raton area saw 764 sales of existing homes, down 19 percent from the 947 recorded during the same period last year. Prices dropped 7 percent to $377,900 from $405,500 last year.”

“Home sales in the Melbourne-Palm Bay area decreased 21 percent from 629 to 497 units sold. The median sales price declined 15 percent to $198,000 from the $232,800 recorded during the same period last year.”

“Jennifer Atkisson-Lovett, president of the Realtors Association of Martin County, described the report as a positive sign for the local housing market. ‘We were pleased to see that Martin County fared much better than the state and (Treasure Coast) MSA,’ said Atkisson-Lovett.”

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