The Housing Bubble

It’s desk clearing time for this blogger. “As Miami’s unofficial prophet of doom during a condo bubble that is no longer in dispute, I wrote column after column counseling caution rather than unbridled euphoria. Now the slide has become reality, Miami’s condo-construction wave is about to end, and completed units will soon hit the closing table. I’m no longer in the minority talking bubbles — but on the plus side, I’m also not alone in seeing value in the bubble.”

“More than two years ago, when Florida International University sponsored a panel on downtown housing’s spurt, then-City Commissioner Johnny Winton was asked whether a bust would follow. He had advice for developers: ‘Build ‘em. If they fail, we’re going to end up with affordable housing.’”

“Two years to go until Florida’s housing construction returns to 2001 levels, the eve of the state’s most recent housing boom. So says Sean Snaith, University of Central Florida’s Institute for Economic Competitiveness director.”

“Snaith, you see, is generally critical of those use the word ‘bubble’ regarding Florida’s housing market and, more specifically, those who say it has or is on the verge of bursting.”

“‘It is well know that they have egos larger than an NFL player’s rap sheet,’ Snaith tosses barbs in his study at those professional and amateur forecasters who make dire predictions about housing.”

“In writing about the housing market in the past, I’ve tried to be relatively balanced. Yes, I’ve aired my concerns, but I’ve generally tempered them in various ways. Maybe I pulled too many punches.”

“It became obvious that rental prices were not rising in proportion to sale prices or appraised values. On my block, a house consisting of three rental units sold last year for $380,000. Granted, it’s in better shape than it was in 2000, when it sold for $108,000. But not that much better shape.”

“More significantly, the three units will probably at best generate about $2,500 a month in rental income for the foreseeable future. Right now, however, the total income is considerably less, especially considering that one of the three units is vacant. So how is that house a good investment? The numbers just don’t add up.”

“About 150 real estate agents and brokers camped out, some for more than 24 hours, for the chance to buy units at a much-hyped waterfront condo in a waiting game some called ’survival of the fittest.’”

“The camp-out, an increasingly common sight at some well marketed condo projects, is a sign that Toronto’s real estate market is not slowing down even as the housing recession deepens in the U.S.”

“Some analysts have been warning that over the past year or so the market has seen an influx of investor. One big risk is that a downturn in the market can cause investors to panic and start dumping their units, causing a price drop. ‘Investors are out in force, sowing their own future disappointment’ said Toronto analyst Will Dunning.”

“Again and again in these past few months, financial markets have appeared to be on the verge of something very scary. During each of these episodes, the financial pages filled with fret: Would this be the moment when markets turned south, when credit dried up, when hedge-fund managers and private-equity partners started applying for work at Wal-Mart?”

“Something with far more impact on most Americans’ lives than a stock-market correction has already happened. That something is the close of a remarkable era of easy money. If you are stuck with an ARM that’s about to reset or have been relying on home-equity loans to make ends meet, you may be in trouble.”

“D.R. Horton executives had braced for a poor spring, normally the best time of year to sell houses, but the results in the April-June quarter were even weaker than expected.”

“‘It is now clear that the selling season did not materialize this year,’ said Horton’s CEO, Donald J. Tomnitz, adding that it was unclear when a housing recovery would begin. ‘We don’t see one on the horizon.’”

“One impact of the continuing housing slump is that people find themselves owning homes they can’t really afford. But how do you know before you buy?”

“Newlyweds Sean and Susan McDonald are shopping for their first house. (They) were surprised at how much a bank was willing to lend them. ‘Then Sean did some number-crunching and realized we can’t afford a monthly payment like that,’ says Susan.”

“‘About one-third of your income devoted to all your housing costs is a very good rule of thumb,’ economist Mark Zandi says. The good news is that Zandi predicts prices will continue to fall until housing becomes more affordable for first-time buyers like the McDonalds.”

“Century 21 Real Estate’s CEO Thomas Kunz may have unintentionally hit the nail on the head when he declared that a ‘pity party’ is gripping the housing industry right now.”

“As this punishing, steep decline has taken hold, everyone from home builder CEOs to real-estate agents to mortgage lenders can’t get over the turn of events. At an auction of townhouses near Fort Myers, Fla., last month, homeowners who had bought into a development built by Levitt and Sons for $300,000 watched as neighboring properties sold for $145,000.”

“‘They promised us that they were not going to go below the market value,’ said one of the homeowners, in a newscast . ‘This is not fair,’ said another.”

“Century 21’s Kunz is fed up with that feel-bad-for-me camp. He hears that kind of talk every day, from buyers, sellers, agents, managers, brokers and more who are angry and confused by how things have turned out.”

“What I am seeing out there is a pity party for everyone involved in real-estate transactions,’ Kunz said.”

“In the end, though, he and everyone else in housing industry must fess up that they are reaping what they sowed. That’s little solace for home owners under water or facing foreclosures. But that’s the way markets work.”

“There is hope! Earlier this week, The Times’ front page screamed, ‘Foreclosures in state hit record high.’ Indeed, Los Angeles County’s foreclosures in the second quarter this year topped out at a whopping 2,581, up more than 700% from that same period last year. Inland Empire counties had it much worse.”

“So why the upbeat interpretation of such a sad story? With potential buyers having a few choices, home prices stand to fall (albeit modestly) to levels that aren’t insane.”

“Painful as it is, the only way that can happen is for the housing market to correct itself and reverse part of the bubble, and that means more foreclosures.”

“For now my wife and I will just have to drive past those desperate for-sale signs that scream, ‘Price reduced!’ In the meantime, we’ll ponder how aggressively we’d like to renegotiate our rent.”

Time Magazine reports on California. “Up to now, the booming housing markets in Los Angeles, San Diego and Orange counties had barely felt the chill that hit Miami and Denver. But this week’s spate of gloomy housing data included ominous reports from the West Coast. Led by an astonishing 799% rise in Los Angeles County, foreclosures in southern California jumped 725% in the second quarter, to a record 9,504, from 1,152 a year ago.”

“‘We thought the upper end of the market was immune,’ says Steve Johnson, of Metrostudy. ‘But this is now like Kudzu in the South, spreading into all product types in the southern California housing market.’”

“‘People began buying houses they couldn’t afford under the theory that the more house you buy, the more wealth you have once it appreciates,’ he says. ‘It’s kind of a Ponzi scheme on a mass scale. But there has to be an end at some point.’”

“Could the Inland Empire’s contagion debilitate L.A. and areas beyond? Even John Karevoll of DataQuick admits that the sub-prime crash has plunged the entire real estate sector into uncharted territory. ‘Will it create a flood of foreclosures that drags down values in the rest of the market? So far it hasn’t but at some point, it might,’ he said.”

The County Sun. “What’s happening in San Bernardino and Riverside counties is more like a tug of war. Sellers won’t budge from prices they think their homes are worth and buyers sit tight in hopes prices will drop, according to economists and real-estate professionals.”

“‘They don’t get the market,’ Redlands-based regional economist John Husing said about buyers. ‘They don’t understand it. They think prices are too high.’”

“Only half as many homes are selling in the San Bernardino/Riverside area compared with June 2006, and their prices have decreased 3.4 percent. The median price of a home in San Bernardino and Riverside counties at the end of June was $390,230, CAR reported.”

“Pete Gliniak, a Covina-based real-estate professional who specializes in short sales all over the Inland Empire, calls it ‘oversaturation’ and thinks too many people bought expensive homes in the two-county area that they couldn’t afford and “had no business buying them,’ he said.”

“‘People got caught up in the frenzy of 2005 and it spilled into 2006,’ he said of new home builders and buyers.”

“Steve Thomas, co-owner of Rancho Cucamonga-based CIG Property Management and Investment, hopes to capitalize on the housing market’s downturn by buying foreclosed properties in places like Fontana, Rialto and Highland.”

“‘I’m able to find properties easily at $50,000 below market, and sometimes $100,000,’ he said.”

The Desert Dispatch. “Mortgage default notices in San Bernardino County surged 180 percent in the second quarter compared to the same time last year, while the number of homes lost to foreclosure rocketed 987 percent over the same period, a real estate information service reported.”

“San Bernardino County registered 5,141 notices of mortgage default in the second quarter, up from 1,839 a year earlier. Homes lost to foreclosure in the county totaled 1,489 in the second quarter, compared to 137 over the same period last year.”

“The trend toward rising foreclosures will continue to accelerate in the area, said Carolyn McNamara, a broker in Phelan specializing in foreclosures and repossessions. ‘My office alone has received 18 foreclosures in the last two weeks, and I am just one of many agents that specializes in repossessions and foreclosures in the High Desert,’ she said.”

The Daily News. “High prices and tight credit are restricting demand in the housing industry in the Inland Empire, according to a new study by Metrostudy.”

“‘The second quarter was an awakening for the housing industry,’ said Steve Johnson, Metrostudy’s Southern California director. ‘It is clear now that there is not going to be a quick turnaround, and builders should plan accordingly.’”

“The study said that in order to sell product, home builders would be forced to price some homes at or below cost for the remainder of the year.”

The Press Enterprise. “Lenders sent default notices to Inland homeowners at nearly triple the rate of a year ago, as owners continue to fall behind on payments amid a slump in the real estate market. The number of homes that ended in foreclosure saw an even sharper increase, hitting their highest levels in a decade.”

“According to Inland data from Irvine research firm RealtyTrac, the highest total foreclosure filings by ZIP code in the second quarter — including default notices, trustee sale notices and bank repossessions — were seen in Fontana 92336 (461), Murrieta 92563 (441), Hesperia 92345 (416), Rialto 92376 (368) and Victorville 92392 (359).”

“DataQuick said the worst-hit neighborhoods in the Inland area and Central Valley might already be seeing property values eroded somewhat by foreclosures.”

The Orange County Register. “Building permits for single-family homes fell to their lowest level this year in at least two decades, Orange County construction data released Tuesday show.”

“A total of 3,627 residential permits were issued from January through June this year, the smallest number in 14 years, the research board reported. For June alone, residential permits fell to their lowest level for any month so far this year.”

“Betting on a second-half recovery for (Orange County) housing? July started out with the same old story. Fresh DataQuick figures show sales running 26% below last year for the 22 business days ended July 12.”

From Forbes. “Another homebuilder, another big loss. Like other builders that posted earnings this week, Standard Pacific racked up hefty charges as it reduced the value of its real estate holdings on its balance sheet.”

“Standard Pacific said Friday morning that it swung to a second-quarter loss of $165.9 million. The company suffered a $306.0 million charge to revalue its land and home holdings, reflecting the deterioration this year in U.S. housing prices.”

“‘This environment has resulted in significant price competition leading to margin erosion and further impairments of the company’s inventory holdings,’ said Standard Pacific CEO Stephen Scarborough.”

“Standard Pacific is headquartered in Irvine, California. Its business is heavily concentrated in the state, with 42.2% of its homebuilding revenue coming from there in the most recent quarter.”

The Tracy Press. “Foreclosure rates around Tracy are soaring, and abandonded houses are plaguing many neighborhoods. The house at 2901 Lincoln Blvd., is in foreclosure and abandoned. The front yard has chest-high weeds in place of a lawn, the side gate and garage door are wide open, and cigarette butts are strewn across the driveway. It appears to be a sitting duck for vandals and squatters.”

“The Lincoln Avenue property is hardly the only one in such shape. More than 10 percent of homes on the market in Tracy are being taken over by banks in foreclosure proceedings, local real estate agent Brian Barringer said.”

“Real estate professionals are quick to point to the root of the problem; bad loans.”

“Tracy, like the rest of California, is witnessing a generation of homebuyers paying a steep personal price for risky sub-prime loans that gave them buying power just two or three years ago, said Tracy broker Dave Konesky, a director for the Central Valley Association of Realtors.”

“During his 20 years in the industry, Konesky said he’s never seen such a high number of foreclosures in Tracy or elsewhere. The last time the market took a turn like this was 20 years ago, when people first had the option of buying homes with zero money down.”

“‘Like then, people can’t make their mortgages, and the value of the home has gone down considerably,’ he said. ‘When the housing market was really high, we were giving these sub-prime loans out. And after two years of interest-only payments, the payments balloon into unmanageable amounts.’”

“Barringer began his career at the market’s height three years ago. Back then, property owners sold, refinanced or caught up with their payments if they were financially over their heads.”

“Not now. ‘There’s a lot of people walking away from their houses right now because they have no equity,’ Barringer said.”

The Whitefish Pilot reports from Montana. “A growing backlog of homes for sale in the Flathead Valley coupled with increases in foreclosures and bankruptcy filings have drawn the attention of professionals concerned about local real estate trends. Northwest Montana Realtor Association president Ted Dykstra Jr. said he was surprised in March when the number of local homes in foreclosure increased from the typical 12-20 to as high as 80.”

“‘A lot of people have gotten themselves overextended,’ said Dykstra. ‘We’ve always been about six months to a year behind the rest of the nation. Now that a recession or downturn in the market is here, we might be down for a little while, but it will probably turn around again by the end of the year.’”

“He said the correction in the local real estate market began last March, traditionally the busiest month of the year for sales, and it’s continuing. ‘I think it was due to the market being flooded with houses,’ said Dykstra.”

“Whitefish appraiser Ellie Clark said she has noticed a large increase in real estate inventory. ‘Historically, there’s been a 12-month-or-less real estate inventory,’ Clark said. ‘Now we’re facing 18 months or more, exceeding the past several years. I don’t know that in Whitefish there is necessarily a slowing, but I don’t think the sales volume is what it was.’”

“‘There’s a lot of development going on, but whether or not they sell is another story,’ said Leo King (owner of) North Country Builders, in Whitefish. ‘My feeling is there won’t be as many buyers as there are lots being created, not by a long shot. It’s a fact, there are a lot of for-sale signs on homes, and they’re staying up a lot longer. Anybody can see it.’”

“Dan Henderson, a Realtor with Realty Executives of Northwest Montana, said he’s noticed ‘a definite downward price bias in the market.’”

The Jackson Hole News from Wyoming. “David Viehman, owner and broker for Jackson Hole Real Estate & Appraisal, released a quarterly market analysis Thursday. Viehman reports the median home-sale price, as of July 1, grew to almost $1.18 million. At this time last year, it was $920,000, an increase of almost 28 percent.”

“‘Why is there a crisis?’ Viehman said. ‘The median price was just barely $1 million in April. It’s almost at $1.2 million in three months. It won’t be long until it’s $1.3 or $1.4 million.’

“For comparison, at this time in 2003, the median home-sale price was $542,500, meaning the figure more than doubled in four years.”

The Daily Bee from Idaho. “While sales for the nearly 3,000 properties on the market in Bonner and Boundary counties are down, it is at a far lower rate than the rest of the country, said Gina Hurley, executive director for Selkirk Association of Realtors.”

“‘When we look at our decline compared to the nation in terms of a decrease, it’s a far smaller decrease,’ Hurley said.”

“Sales in Bonner and Boundary counties are down, particularly if compared to 2004. ‘If we had the same (demand) three years ago, much of it would be gone,’ said Dale Pyne, president of Selkirk Association of Realtors. ‘The market and developers reacted to the demand and now there’s some beautiful inventory out there.’”

“A few years ago, there were 700 properties on the market, Pyne said. ‘Now we have over 1,400 homes for sale and we have over 1,600 unimproved properties,’ he said. ‘We went from 700 to 3,000. That was an answer to low inventory. We have an extensive supply.’”

“He said on Wednesday that in the last 24 hours, there were 24 pending sales and 53 properties listed for sale.”

“As for the future, Pyne remains optimistic. ‘This is a soft landing versus a market crash or a bubble burst. It’s just an economic adjustment,’ he said.”

The Oregonian. “A Denver-based developer will build a 270-apartment project among South Waterfront’s towering condos, another signal that Portland’s robust rental market and sluggish condo sales are starting to reshape the city’s housing mix.”

“Staring at slumping condo sales, Homer Williams said they agreed to sell the site for apartments.”

“Williams’ company has finished two towers at the Meriwether and has three more under construction. But sales have slowed. Williams says they sold 30 to 50 condos a month when they started. ‘That wasn’t sustainable,’ he says. ‘A lot of it was investors, speculators.’”

“Now, Williams says they sell three to four a month. Williams says he isn’t worried about the slowdown. He expects the market inventory to level out in the next six months or so. But right now, Williams says of condos: ‘You wouldn’t want any more.’”

KTVZ from Oregon. “More than 80 homes around Central Oegon are being showcased in the 19th annual Tour of Homes, and while the record number reflects a growing inventory and drop in home sales, Realtors and builders remain upbeat about the future.”

“Encouraging signs might seem hard for builders these days, with home sales around Central Oregon down 30 to 50 percent from a year ago.”

“‘There was so many people moving into the area and a lack of homes on the market that the price ranges got, I would say maybe a little bit out of control, or a little bit higher than what the market value could sustain,’ said Realtors Jennifer Wilson. ‘Whereas now, it is a market where the buyer gets to choose. There’s a lot of options out there, and there’s all ranges now.’”

The Spokane Journal from Washington. “The number of new lots platted in Spokane County shot up by almost 23 percent last year to reach its highest total since at least 1976.”

“Some 3,087 lots were platted in the county in 2006, up from 2,515 lots in 2005 and 2,574 lots in 2004, says the spring Real Estate Report. Just 1,497 lots were platted in 2003.”

“At least in the near future, lot availability isn’t a pressing problem for Condron Construction Inc. The prominent Spokane home builder maintains a five-year inventory of buildable lots, says Corey Condron, the company’s vice president.”

“‘I’m finding enough land to plat, and there is quite a bit of platted land for sale,’ he says.”

“Condron says lot prices have leveled off after a steep increase in the last few years.”

“Land, however, is significantly more expensive than it was five years ago, and that’s probably contributing to a slowdown in new-home sales after sales peaked in 2005, he says. Condron says he recently offered $42,500 per lot for a 49-lot parcel. That’s about $12,000 more per lot than he would have paid for the same lots five years ago, he says.”

“Condron Construction builds entry- and mid-level homes priced from $185,000. Five years ago, entry-level homes were selling for around $135,000, he says. ‘A pretty large chunk of the increase is in the lot prices,’ he says.”

“Company President Wendell Olson says he doesn’t see any immediate shortage of available lots. ‘We have plenty of lots and people wanting to sell us lots,’ Olson says.”

“Randy Barcus, chief economist for Spokane-based Avista Corp., says he expects an average of about 3,000 lots for single-family homes will be needed annually to handle growth in Spokane County for 20 years.”

“‘The availability of lots is important,’ Barcus says. ‘The last thing you want is a shortage of lots, or prices will go up dramatically.’”

The Olympian from Washington. “Two summers ago home sellers were in the driver’s seat as limited housing inventory and low mortgage rates resulted in strong demand and average selling times that at one point dropped to 38 days.”

“Today, the South Sound real estate market has more than 2,300 active listings, according to Northwest MLS and Olympic MLS data.”

“The result is that Olympia home stagers such as Karen Nielsen of Eye 4 Design LLC and Susan Bogni of Atmosphere InStyle have experienced an uptick in business during the last six to nine months.”

“Now, when the phone rings, the caller is usually someone who has heard the real estate market has slowed and wants to stage their home before it’s listed, or their home is listed and nobody’s making offers, Nielsen said.”

“Lacey homeowner C.S. Sodhi put his 3,000-square-foot, custom- built home on the market last year and then pulled it off the market after 90 days. He listed it again last week using Nielsen’s advice.”

“The staging, plus a reduction in price from $349,000 to $315,000, has him feeling more hopeful about a possible sale, Sodhi said.”

“Chad and Melissa Stussey of Tumwater put their 2,600-square-foot home up for sale in March. After a month on the market, they lowered the price and then did it again just to be a little more competitive, Melissa Stussey said.”

“The Stusseys had yet to sell their home as of late last week. While staging it might prove to be fruitful, they also lowered the listing price from $435,000 to $399,000, Melissa Stussey said.”

“The lack of interest has the Stusseys puzzled because their 2,600-square-foot home also sits on more than one acre. They’d like a smaller home so that her husband can return to school to get a teaching certificate, Melissa Stussey said.”

“‘If we end up staying, that’s OK, too,’ she said.”

The Journal News reports from New York. “The housing market in Putnam County continued to weaken in the second quarter as sales fell and the median price of a single-family house dropped by 9.1 percent, to $398,500, the Westchester-Putnam MLS said. It was the second quarter in a row that saw a year-over-year decline in the median house price in Putnam.”

“Joel and Michele Antonini’s four-bedroom, 4,000-square-foot house in Carmel was priced at $649,900 in May. Since then, they’ve reduced the price by $10,000. Just five people showed up at an open house last weekend.”

“The family bought the newly constructed house in September 2005. Then Joel Antonini moved the family to Houston this year when he accepted a job offer there. He figured it would take some time to sell the house in Carmel since other new houses were being built nearby; now he’s thinking he may have to rent it, or take a small loss on a sale.”

“‘I’m not willing to take a major loss on the house.’ he said.”

“At the Fox Run condominium complex, associate broker Joyce Brennan has been trying to sell a one-bedroom unit for five months. Listed at the start at about $170,000, Brennan said, the price has been reduced four times. Now it’s at $139,000.”

“‘There’s nothing at all wrong with it,’ Brennan said. ‘It’s indicative of what’s going on.’”

“In the second quarter, year over year, the median price fell slightly, the Westchester-Putnam MLS said. The median price of a Westchester house was $700,000, down 2.1 percent.”

“The region’s transition ‘from the feverish markets of 2004 and 2005 to the adjusted realities of 2006 and 2007 has been not too rough - more of a dip than a dive,’ the MLS report said.”

“‘Sales volumes have reset to levels that are fairly strong when viewed in the long term,’ the report continued. ‘There has been a slight downward price correction in the range of 2-3 percent in the main property categories but there are no signals of larger price reductions to come.’”

The Staten Island Advance from New York. “Staten Island trailed the rest of the city in prices for one- to three-family homes in the year’s second quarter, according to a report.”

“Michael Slattery, senior VP at REBNY, said Staten Island could be losing potential home buyers to New Jersey suburbs, where the market also has stalled.”

“Slattery said that downzonings on Staten Island and the elimination of tax abatements for new housing here will lead to a drop in new-home construction and supply and rising prices.”

“There is currently a 19-month inventory of new homes, a recent high, according to estimates by the Bulls Head-based Building Industry Association.”

“Permits for new buildings in the borough also dropped by 25 percent during the first six months of the year, from 464 in 2006 to 345 so far this year, according to the Buildings Department. Last year, new building permits fell by 44 percent, the biggest drop in 14 years and the sharpest decline citywide.”

“More than 1,000 people called the city comptroller’s three-month-old Foreclosure Prevention Helpline, with 15 percent, from distressed Staten Island homeowners.”

“Comptroller William Thompson was expected to announce today the borough breakdown of callers, people often struggling to pay high-interest, subprime loans.”

“So far, operators have fielded at total of 1,150 calls, with 45 percent (518 queries) from Queens; 32 percent (366 calls) from Brooklyn; 7 percent (80 calls) from the Bronx, and 1 percent from Manhattan (11 calls).”

“The helpline also has fielded inquiries from New Jersey, Connecticut and as far away as Florida, said Jeff Simmons, a spokesman for Thompson. ‘It’s troubling, because we never expected so many calls,’ he said.”

“The rate of subprime lending in the borough tripled between 2002 and 2005, according to a report from the New York University’s Furman Center, and the borough has struggled with rising foreclosures.”

“According to a Manhattan-based nonprofit, there were 986 foreclosure actions filed on Staten Island last year. The nonprofit estimates that number could climb to 1,600 by the end of this year because of adjustable rate mortgages.”

The Glouchester Daily Times from Massachusetts. “(Haverhill) is known as an old mill town built on the once powerful shoe industry, hence the nickname ‘Queen Slipper City.’ But with the shoe industry long gone, and developers spending tens of millions of dollars on housing projects, perhaps ‘Condo City’ would be more appropriate now.”

“Two more condominium complexes near downtown are opening within the next eight weeks. The condo boom before now has been concentrated downtown, but the River Street and Vila Street projects mark the spread of these developments beyond the city’s center.”

“Both new condo projects are opening to customers in the coming weeks as the housing market is in the middle of a slump, and condo sales are slow downtown. William Pillsbury, the city’s planning director in charge of economic development, said the market is slow but condos are still selling in Haverhill.”

“‘There is still demand out there,’ Pillsbury said. ‘It’s slow, but it’s not dead.’”

“Around the city’s center…more than 800 condominiums and apartments have been recently built or are in the planning stages. The developers said they are optimistic despite the housing slump.”

“Heather Machia-Gore, manager of The Vila, said she hopes for a rebound in the market, which has a lot of apprehensive buyers. ‘I’m hoping it’s going to make a comeback,’ she said of the condo market. ‘I think buyers are just scared, wondering if it will dip down more. They are trying to wait out the market.’”

“The housing market is sluggish, but Haverhill should recover, according to urban economist Aaron Gruen, a Chicago-based market strategist who wrote the city’s new downtown master plan. Gruen anticipates that by 2020, the annual demand for new homes in the Merrimack Valley will hit 5,300 units.”

“Kathryn O’Brien has been selling homes locally for 21 years and has seen ups and downs. She said the market is ripe for people who are looking for good deals, and people who could not afford a home or condo during the boom can get one now.”

“‘It’s actually a wonderful time to invest because Haverhill is a very up-and-coming city,’ O’Brien said. ‘I’m looking at this as a boom for the buying market.’”

“Other downtown condo sales have been slow. The new Franchi building, which has 53 condos, has sold nine units and two have been rented, Gruen’s master plan report said. Another condominium project on Washington Street has sold only five of 11 units in 21/2 years, with prices ranging from $189,000 to $259,000, the report said.”

“Developers also will try to fill several hundred apartments downtown.”

The Frederick News Post from Maryland. “According to the Maryland Association of Realtors, 248 homes were sold last month in Frederick County, down from 381 in June 2006. Those figures include both new and existing home sales. The average price for a home sold in the county in June was $345,473, a drop from $380,512 last year.”

“Stephen Mackintosh, of Mackintosh Inc. Realtors, said the current market is much like the early 1980s: ‘A flurry of activity then a slow period.’”

“For five years prior to 2006 the housing market soared, both in prices and sales, then stalled with higher mortgage rates and an emerging problem of delinquencies. Though only comprising about 1 percent of the mortgage market, delinquencies, due primarily to risky subprime lending, are causing concern in the industry.”

“Foreclosures are impacting the real estate industry. Steve Maszaros, treasurer for the Maryland Association of Realtors, said people waiting for foreclosures to find a bargain are holding up sales in the regular market.”

“Both Maszaros and Mackintosh blame the media for painting a gloom and doom picture, causing people to fence-sit instead of looking to buy a home. ‘There’s no secret that Frederick County has taken a hit,’ on home sales, Maszaros said.”

“He owns two real estate offices in Anne Arundel County and said he is considering buying homes for investment. ‘It is the best time to buy a home in 30 years,’ Maszaros said, ‘especially for the buyers.’”

“Frederick County has a glut of more than 2,000 homes on the market, about twice the normal level.”

“In June, Montgomery County saw a drop of 19.2 percent in sales, compared to a year earlier, with a median price of a home last month at $584,878. Washington County, where the median price was $262,271, saw a drop of 32.5 percent in sales. Maryland’s home sales were down 22.1 percent in June.”

The Gazette from Maryland. “Garry and Evelyn Scott put their four-bedroom home in the Perrywood community up for sale in February, hoping they would have it off their hands by the time their new house in Upper Marlboro was built.”

“They knew the market was cooling, so they listed the property at $615,000, $10,000 below its assessed value. But the spacious home wasn’t getting any takers. So they lowered the price to $610,000. Then $605,000. Then $599,000. Then $575,000. And they threw in $15,000 in closing costs. Still no offers.”

“‘I’m smoking again. … I’m nervous,’ Garry Scott said. The couple, who bought the home seven years ago, can’t carry two mortgages, and their new home is almost finished.”

“The Scotts’ home is just one of more than 6,000 on the flooded market in Prince George’s County. The boom that lasted close to five years has made a full reversal, as homes that used to be snatched up in a matter of days are sitting on the market for months.”

“‘In any market, there’s a time when what goes up must go down,’ said Realtor Eric Coaxum, who works in Laurel.”

“Agents and experts say the prolonged and frantic boom, which began cooling toward the end of 2005, is one of the reasons for the drastic slowdown. There are fewer buyers, because so many bought property a few years ago. Plus, they say concerns about foreclosures, which are particularly high in Prince George’s, have scared prospective buyers.”

“‘I’ve been doing this for 23 years, and I’ve had to do things I haven’t had to do for 10 years’ to sell a home, said the Scotts’ agent, Ansa Tyus, a Realtor in Washington, D.C. She’s had to circulate postcards for open houses and pursue other tactics she describes as ‘guerrilla marketing.’”

“June statistics released by the Metropolitan Regional Information Systems, showed 6,294 active listings in Prince George’s. The last time the housing stock topped 5,000 was in early 1999. That’s compared with fewer than 1,000 homes for sale in the early part of 2005.”

“Darrell Carrington, a senior loan officer in Bowie, said foreclosure fears have rippled through the market. Of the 4,522 foreclosures recorded statewide last year, 1,558 were in Prince George’s.”

“Agents say the sellers of higher-priced homes are having the most difficult time, especially because they are competing with new luxury homes being built in developments throughout the county. And some of those developers offer competitive incentives. Ryan Homes, for example, is offering 50 percent-off options in several of its residential developments until the end of the month.”

“‘A couple years ago, you could put a price on it — anybody would pay for it. It’s not like that anymore,’ said Donald Frederick, president of the Prince George’s Association of Realtors.”

“On Barnacle Geese Court in Perrywood, the Scotts said they thought they would have an offer by now. They said they’ve put more than $100,000 of equity into the property, including a deck, ceiling fans and hardwood flooring.”

“‘It’s a little discouraging,’ Garry Scott said. The home is still listing at $575,000, and they’re offering a $3,500 bonus for the buyer’s agent. ‘It’s priced right now,’ Evelyn Scott said confidently.”

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