The Housing Bubble

The Associated Press reports on California. “Home sales in a six-county region of Southern California dipped to a 12-year low for July as a growing percentage of homes went on the market as a result of foreclosures, a research firm said Tuesday. Foreclosure resales accounted for 8.3 percent of sales activity in July, up from 7.7 percent in June, according to DataQuick.”

“In all, 17,867 homes and condominiums were sold last month in Los Angeles, Riverside, San Bernardino, San Diego, Orange and Ventura counties. The total represents a 27.4 percent drop from July 2006, the firm reported.”

“DataQuick President Marshall Prentice said the region was experiencing a recession and people were leaving the area the last time Southern California saw home sales this slow.”

“‘These are interesting times because the slowdown in home sales isn’t part of a broader economic slowdown, it’s a post-frenzy rebalancing act,’ Prentice said.”

The Ventura County Star. “July marked the 12th straight month that the median price for new and existing homes and condominiums declined year over year in Ventura County. The median was $582,500, down 5.1 percent from $614,000 a year ago, DataQuick reported Tuesday.”

“Sales also fell significantly, from 941 units in July 2006 to 784 last month, a 16.7 percent decline. ‘Given the huge drop last year, this is a surprising drop on top of that,’ said Bill Watkins, executive director of the UC Santa Barbara Economic Forecast Project.”

The Voice of San Diego. “Last month, fewer homes sold in San Diego County than in any July since 1995, DataQuick reported Monday. The median price, the midpoint among prices for the 3,106 homes sold, was $489,000 in July. That was a 2.2 decrease from July 2006 and a 5.5 percent decrease from the peak in November 2005.”

“Lenders have spiked their rates on loans for more than $417,000. ‘That’s not going to show up in the numbers until next month,” said Andrew LePage, DataQuick analyst. ‘I would anticipate a very weak August. Even if things loosen, there will have been a long pause.’”

“The unconventional lending that swung the gate open for buyers who wouldn’t have normally been able to enter the housing market has swung nearly shut. ‘Those deals are gone, gone, gone,’ said Mark Goldman, a real estate financing consultant. Now, the affected loans include 30-year fixed mortgages, a synonym for stability among mortgage professionals.”

“‘You know, these are standard, bedrock, conservative loans,’ Goldman said. ‘And they’ve been hammered.’”

“‘There is still a tremendous resistance by sellers to price aggressively,’ said Adam Rappoport, a local Realtor. ‘It’s unfortunate. They’re going to learn the hard way.’”

The Union Tribune. “Although consumers in pricey California often complain that the low-conforming limit makes it more expensive to buy a house, lifting it has yet to gain traction in the federal government.”

“‘People in the heartland don’t have much sympathy for California home buyers,’ said Keitaro Matsuda, senior economist of Union Bank of California.”

“In the first half of 2007, 35.6 percent of all primary mortgage loans in San Diego County were jumbo loans, said DataQuick’s John Karevoll. That compares with Los Angeles County at 46 percent, Orange County at 59.5 percent and the San Francisco Bay Area at 77 percent.”

“Some investors have thrown in the towel and backed out of their real estate gambits, lifting the sold-at-a-loss percentage sixfold from a year ago, according to DataQuick. Steve Shaffer, a real estate agent and mortgage broker in University City, handled one such case, a home on Governor Drive that was bought for $659,000 in May 2005 and sold last month for $575,500, a 12.7 percent loss.”

“‘They bought it as investment,’ Shaffer said of the sellers. ‘They realized that in this market, it wasn’t a good investment.’”

“In South Bay, where all communities but Imperial Beach saw price drops in July, short sales are preferable to foreclosures, but banks have to be willing to take less than the outstanding loan balance to allow a short sale to proceed, said Scott Vinson of Coldwell Banker-Royal Realty.”

The LA Times. “Last month, the more affordable Inland Empire counties of Riverside and San Bernardino saw prices decline more than 3% from a year ago while sales tumbled more than 40%. Los Angeles County’s median price rose 5.3%, to $547,000, and sales slid 23%, and Orange County’s median was flat at $640,000, as sales fell 19.8%.”

“‘A decline in prices, like increases, tends to be self-fulling,’ said Michael Carney, head of Cal Poly Pomona’s Real Estate Research Council. ‘If buyers see prices falling, they hold off and don’t buy and cause prices to fall even further. But it takes a while.’”

The San Francisco Chronicle. “The flood of mortgage money into expensive Bay Area real estate has slowed to a trickle - even for those buyers with strong credit scores and substantial down payments.”

“‘There just isn’t much loan product out there for jumbos,’ said Leon Huntting, a San Francisco mortgage broker. ‘There’s just an echo out there. And if we do find anything, it’s at a much higher interest rate.’”

“Some people are finding that they can’t refinance out of unfavorable loans or that home purchases that appeared affordable a month ago are now beyond their means.”

“‘Some people will back away from buying altogether,’ said Pete Ogilvie, a Santa Cruz mortgage broker and president of the California Association of Mortgage Brokers. ‘For some people, that might be the wise thing to do if they’re just starting to shop. They might want to wait a little while when sanity will be restored.’”

From USA Today. “For evidence of what is spooking Wall Street and wreaking havoc on the mortgage industry, one need only look at the housing market in Stockton, Calif., 40 miles south of Sacramento.”

“During the real estate boom, Stockton was a hotbed of speculation, bidding wars, and rocketing prices. Now, foreclosures are soaring, sales are plummeting, and there is more than a year’s supply of homes and condos on the market.”

“The housing market ‘is still sliding,” said Larry Underhill, president of the Lodi Association of Realtors, which covers Stockton. ‘The buzz is there is just a ton of foreclosures, and banks are going to own a lot more property before it’s over.’”

“The bulk of the foreclosures, Underhill said, are homes purchased with subprime, adjustable-rate mortgages or exotic loans.”

“Underhill says he’s seeing homes go under contract two or three times, and each time, the deal falls apart because ‘buyers can’t qualify, or buyers are understandably cautious. They see property values sliding and are saying, ‘Why am I doing this?’”

The Sacramento Bee. “With a cool and steely patience over the past year, John and Toni Daniels have waited out a capital-area housing market buffeted by oversupply and price depreciation. They’ve resisted every call from a real estate establishment that says this is the time to buy.”

“Now comes a new factor to reward their patience: the growing fallout in Sacramento from subprime lending.”

“As more homeowners with risky subprime loans default or lose their houses this summer, Sacramento-area home builders and sellers are absorbing another hard punch, and folks like the Danielses are reaping the benefits.”

“Asked how subprime loan problems have changed the environment, Jeff Johnson, Citrus Heights branch manager for Florida-based Pinnacle Financial Corp., a mortgage lender, has a short answer: ‘It’s driven the (home) values down,’ he says.”

“Subprime loans (were) 22 percent of all home loans last year in El Dorado, Placer, Sacramento and Yolo counties. In 2004, 2005 and 2006, these high-interest loans put thousands of Sacramento-area buyers into homes they couldn’t otherwise have afforded.”

“For some in the real estate industry, there’s a sense that changes wrought by a so-called subprime ‘meltdown’ may be good for the long run.”

“Most acknowledge that much of the capital’s housing boom, and much of the nation’s as well, was a product of rampant investor speculation and loosened lending standards. Fraud and predatory lending also played roles in moving people into houses they couldn’t afford.”

“‘It’s bringing quite a bit of sensibility back to mortgage lending,’ says Patrick D’Arcangelo, vice president of marketing at the Sacramento division of Dallas-based Centex Homes.”

“‘I think any return to rationality is a good thing,’ adds Amy Crews Cutts, deputy chief economist at mortgage giant Freddie Mac. ‘When subprime went from 10 to 25 percent of the annual market, about a third of the growth was buyers who shouldn’t have been homeowners at this point in their life.’”

“John Daniels says he’s heard the subprime ‘horror stories.’ ‘We’re watching prices of houses that we’ve seen on the market for a year,’ he says. ‘They’ve gone from $350,000 to $275,000 to $260,000.’”

“The Danielses have waited a year through record oversupply and now the spreading local fallout of subprime lending. They can wait a little longer. They have both the money to buy and the upper hand in negotiating.”

“‘It makes no sense for us to jump into something while prices are falling like this,’ John Daniels says. ‘Everybody wants the best deal possible. That’s what it is.’”

12 News reports from Arizona. “Real estate people can usually find the sunny side in any piece of bad news. These days, they’ve stopped looking. The consensus today is this is the worst Valley housing market in 10, 15, even 20 years, and the mess is spreading. ‘We all knew it was coming,’ said Patricia Garcia Duarte, executive director of Neighborhood Housing Services of a Phoenix non-profit that counsels home buyers.”

“‘As we look at some of these people we say, how could you have ever qualified for a $300,000 loan when your total income is $40,000 a year?’ said Mike Sullivan, director of education at Take Charge America, which counsels people struggling with debt.”

“Today we’re seeing the result: Just 5,000 homes sold in the Valley last month, but almost 3,000 foreclosures. And 55,000 homes on the market, 20,000 more than in a ‘normal’ market.”

“In a Valley economy where an estimated 1 in every 3 jobs is in some way connected to real estate, more jobs are at risk. Countrywide Lending, the nation’s leading home lender and a major Valley employer, is warning that the housing bust poses a serious threat to its business.”

“‘This is all a snowball,’ Sullivan said, ‘and the bigger the snowball gets, the harder it is to stop.’”

From KTAR.com in Arizona. “Realtor Russell Shaw says most of the foreclosures are happening on what he calls the edges of the Phoenix area. ‘Buckeye, Goodyear, Chandler, that kind of thing, Apache Junction, Queen Creek. That is where the bulk of the foreclosures will occur.’”

“That’s where land is plentiful and many investors bought houses they now can’t afford. As for the future, Shaw says things will stay this way for awhile, but ‘it’s just almost like Nostradamus. I’ve seen the future. It’s a lot like the past, only longer. So, nothing phenomenally bad is going to be happening.’”

“‘It’s not that the lenders who take them back are going to try to dump them at low prices, they’re just going to be selling them at market. But it does hurt the area,’ says Shaw.”

The Arizona Daily Star. “Several key private-sector projects meant to be the backbone of Downtown (Tucson) redevelopment have been stung badly by the housing market downturn and won’t be completed until at least 2009, stifling progress for Rio Nuevo.”

“The theory that private residential development would jump-start other redevelopment Downtown hasn’t panned out, said Jaret Barr, assistant to the city manager. ‘It’s clear it’s not happening,’ he said.”

“In their bottom lines, many of the financial plans for residential development Downtown assumed the high prices seen during the real estate boom would continue, said local developer Randi Dorman. ‘Some plans need to be recalibrated’ to reflect changes in the marketplace, Dorman said.”

In Business Las Vegas reports from Nevada. “The median price of Las Vegas homes fell $10,000 in July to the lowest point since March 2005, starting what some observers suggest may be a major correction in the existing home market.”

“The price drop occurred as the inventory of homes listed for sale continued to set records in July with a combined 30,000 single-family homes, condos and town homes on the market. Not only were new listings up 2.5 percent for single-family homes, but sales of homes listed on the service fell nearly 11 percent from June to 1,318.” “That’s 34 percent below sales totals a year ago.”

“‘It is not as good as we had hoped,’ said Devin Reiss, president of the Realtors group. ‘The inventory has been going up and prices had been holding steady, but it was a matter of time, with as much inventory as we have, to see a slipping in the median price. Unfortunately, that is the way it is heading at this point.’”

“But with Las Vegas’ resale housing inventory sufficient for 14 to 16 months, well above the national average of six to seven months, something was bound to give, analysts said.”

“‘I think we expected this, and we expect prices will continue to soften,’ said Ken Perlman, VPt with San Diego-based Sullivan Group Real Estate Advisors. ‘The market is adjusting to what people are willing to pay. And buyers are influenced by the fear about the market. They don’t want to buy when they think prices are going down.’”

“A homeowner may have a neighbor whose house sold for $600,000 in 2005, and there now is no way they could sell their own home for $500,000, Perlman said. They eventually change their minds when they see what’s happening in the market, he said.”

“‘This has got a ways to go,’ economist Chris Thornberg said. ‘Las Vegas has gotten way overbuilt and has some problems. When you look at the price of homes and incomes, it is just not sustainable.’”

“Between 2002 and 2006, the median price of resale homes rose nearly 97 percent from $145,000 to $285,000 last year, according to SalesTraq, a local housing tracking firm. The biggest jump was 40 percent in 2004.”

“Local housing analyst Steve Bottfeld predicts a boom in 2009, said July is typically a slow month for sales. Thornberg dismisses suggestions by Bottfeld and others that the housing market will recover when resorts open on the Strip in the next two years and other people move into the market. Casino jobs and other jobs created in Las Vegas don’t generate enough income to deal with affordability, he said.”

“‘It doesn’t matter,’ Thornberg said. ‘It is a function of price and income. If you can’t afford it, you can’t afford it. It is that simple.’”

The Las Vegas Business Press from Nevada. “Las Vegas Valley land values are seeing a slight dip due to rising development costs, increased interest rates and a housing market slowdown, according to a new report. Median vacant land prices were $718,500 per acre in the second quarter, $90,600 less than the previous year, according to Applied Analysis.”

“The average sales price was $16.49 per square foot in the second quarter, an 11.2 percent drop from 2006.”

“‘Demand for raw land continues to be impacted by several factors, including the performance of the residential market,’ said Jeremy Aguero, principal of Applied Analysis. ‘This shift in market demand during the past several quarters is reflected in sales volumes, which have pulled back significantly.’”

“‘The impacts associated with softening demand for land were partially offset by landowners’ unwillingness to sell at deep discounts, forcing property values to remain relatively stable,’ said Brian Gordon, principal of Applied Analysis. ‘Should residential conditions worsen materially or population growth slowdown substantially, the likelihood of price reductions may be a reality.’”

The Las Vegas Sun from Nevada. “Our valley’s top real estate experts have long been predicting a short slump with minor price corrections of less than 10 percent. The folks I talked to counted on our dynamic economy, a continuing influx of new residents and the coming wave of Strip resort development to keep the slump short and relatively harmless.”

“I believed them, and wrote in January that I expected the sluggish real estate market to improve by the end of this year. I was wrong, and was too optimistic.”

“The people I feel sorry for are the regular folks. Their home is often their biggest investment, and they’ve been failed by a market that didn’t rein in the aggressive businesses that gambled on continuously increasing prices.”

“Prices for new and resale homes continue to slowly but steadily drop, bad news, maybe, for people who hoped to make a quick profit on home sales, but a glimmer of good news for champions of Las Vegas as a town of blue-collar homeowners.”

“By spring and summer 2006 Las Vegas had priced itself out of reach of the very people who run this town, teachers, rank-and-file cops, hotel maids, food servers. The people who were needed to work here couldn’t afford to buy a home here.”

“Or they got in over their heads with seemingly attractive mortgages that came to haunt them, and they had to bail. That’s one of the reasons Las Vegas has one of the highest foreclosure rates in the nation.”

“Just look at what’s happened during the past year: for-sale signs everywhere, nobody is buying and prices are dropping.”

“By some accounts, prices would have to come down 33 percent from their peak to be affordable.”

“In the first quarter of 1999, 78 percent of homes for sale were within reach of a family earning the median income, according to real estate economist John Restrepo. By the end of 2006 only 14 percent of homes were affordable to those families.”

“A downward correction in home prices should be good news not just to Nevadans who have delayed or abandoned hope of buying a home, but to employers struggling to recruit workers.”

“‘I think you would have to have a huge drop for a lot of people to be able to afford a place to live,’ said Somer Hollingsworth, head of the Nevada Development Authority. ‘When you are making $30,000 to $35,000 to $40,000 a year, there is not much they can afford.’”

Some housing bubble news from Wall Street and Washington. Reuters, “Foreclosures and delinquencies among home loans that Countrywide Financial Corp. services rose in July to their highest in at least several years, the largest U.S. mortgage lender said on Tuesday. The company also said it made 14 percent fewer home loans in July than in June after tightening lending standards, while daily mortgage applications fell 15 percent to a nine-month low.”

“Nonprime loans including ’subprime’ totaled $1.8 billion, down 3 percent from June and 46 percent from a year earlier.”

“‘Our tighter lending guidelines (have) significantly curtailed total production,’ Chief Operating Officer David Sambol said in a statement.”

From Bloomberg. “Citigroup Inc., the biggest U.S. bank by assets, may lose as much as $3 billion in the third quarter because of the credit crisis, according to analysts at Sanford C. Bernstein & Co. LLC.”

“The company may lose between $1.2 billion and $1.5 billion on loans to buyout firms and between $500 million and $1 billion on subprime mortgages in the three months ending Sept. 30, Bernstein analysts Howard Mason and Michael Howard said today.”

“Citigroup’s consumer unit holds $22 billion of subprime mortgages, and the investment bank has perhaps an additional $13 billion of subprime home loans, the analysts said. ‘The risks are greater for the $13 billion subprime mortgage portfolio in the markets-and-banking business since these loans would typically not have been underwritten by Citi,’ the analysts said.”

“Prices on subprime debt have fallen about 20 percent since the end of June, twice as much as they did in the second quarter, the analysts said, so Citigroup could have lost between $2 billion and $3 billion.”

“The Aegis Mortgage Corporation, a subprime lender based in Houston, filed for bankruptcy protection yesterday.”

“The company said that it owed more than $100 million to creditors, including some of the investment banks that until this year financed many loans to subprime borrowers. ‘Due to the extreme and unprecedented conditions Aegis presently faces in the marketplace, including the accelerated demands for capital, we were compelled to take the necessary and responsible step of seeking Chapter 11 protection,’ the CEO, Dan Gilbert, said in a statement.”

The Street.com. “Thornburg Mortgage plunged in furious trading after four brokerage firms downgraded the stock, saying the company may be forced to sell assets to meet margin calls.”

“The downgrades come just days after S&P Ratings cut its long-term credit rating on Thornburg, citing tough condition in the debt markets. Thornburg and other mortgage companies have been hit hard by the collapse of demand for mortgage-backed securities.”

The Kansas City Star. “Flanked on the phone line by Wall Street analysts, investor Frank Johnson spoke Monday for others holding stock in struggling NovaStar Financial Inc.”

“‘We want to know the answer to one question: Are you going to survive?’ Johnson said during the Kansas City-based mortgage lender’s second-quarter conference call.”

“CEO Scott Hartman aid the company had worked with its lenders to ensure its own credit needs and was working on a $150 million capital infusion, about a third of which it had raised. The company said last week it had lost $54.5 million in the second quarter.”

From Newsday. “More than half of the nation’s banks have tightened lending standards on subprime mortgages, a new Federal Reserve study shows.”

“About 44 percent of banks, more than twice the percentage reported in the April Federal Reserve study, reported weaker demand for subprime mortgages over the past three months.”

The Associated Press. “Lenders across the country, stuck with piles of loans investors wouldn’t buy, are jacking up rates and imposing stricter requirements on even the most creditworthy borrowers.”

“‘Every single day, there are lenders putting a freeze on something,’ says Dana Bain, president of Premiere Mortgage Services Inc., a Sterling, Mass., brokerage focusing on ‘prime’ borrowers. ‘You’re talking about a huge segment of the market being taken out’ because of the more stringent lending guidelines, he adds.”

The Globe and Mail. “The global credit crunch claimed a Canadian victim yesterday, as financing company Coventree Capital Group Inc. saw its stock plummet on news that investors have turned their backs on its $16-billion portfolio of loans.”

“Coventree is a classic go-between; it buys and packages a variety of long-term debt from other companies, and resells the loans. Retailers, for example, sell Coventree the credit card loans they extend to customers. Auto makers pass on car loans. Banks hand over residential mortgages, which can include the U.S. subprime mortgages that have spooked markets.”

“‘You may be looking at the next leg of a deeper debt crisis, as problems in subprime mortgages give way to problems with liquidity in the asset-backed market,’ said one Canadian fund manager who invests in Coventree’s trusts.”

“Deutsche Bank gave credit guarantees for the investment vehicle that nearly toppled Germany’s IKB after it racked up billions in potential losses connected to the U.S. subprime mortgage market, sources close to the matter told Reuters.”

“Sources familiar with the matter have said Deutsche was closely involved with the stricken fund, whose collapse German banking watchdog Bafin has warned could trigger the country’s worst financial crisis in more than 75 years.”

“The scale of Deutsche’s involvement offers a rare glimpse into how Germany’s flagship bank is involved in the subprime mortgage market. Germany has so far been the hardest hit by the problems that began with defaults on U.S. mortgages given to people with weak credit histories.”

“Many industry watchers say German banks went into such risky business in the first place, because state-owned lenders dominate their home markets and have squeezed profits.”

“Intervention by central banks has staved off a crisis, but investors need to know more about the true state of U.S. mortgage markets before calm can be restored to markets, a top manager at UBS said.”

“‘The original driver of this is the subprime markets in the U.S., and that is clearly an evolving scene,’ said UBS Chief Financial Officer Clive Standish in an interview.”

“‘The learning is all about the concentration of risk and a clear understanding of what the underpinning securities genuinely are,’ said Standish. ‘Did people in XYZ in Japan, Australia or Germany understand what they were fundamentally doing was investing in people’s mortgages in America and in a sector where they were of a lesser quality borrower?’”

“European Central Bank President Jean- Claude Trichet, who spearheaded a global injection of cash into the banking system, signaled the need for emergency funding is abating as financial markets settle.”

“Trichet’s statement suggests that ‘after the storm, the ECB wants to give itself room to maneuver for the September hike’ in interest rates, said Kevin Gaynor, an economist at Royal Bank of Scotland Group Plc in London.”

“ECB council member and Bundesbank President Axel Weber said in a statement following Trichet’s that ‘a normalization of risk pricing is currently taking place in financial markets.’”

“Facing a major test, the Federal Reserve on Friday pumped billions of dollars into the U.S. financial system after a global credit crunch sent Wall Street into a dive and shriveled the nest eggs of investors large and small.”

“The Fed, in a meeting Aug. 7, acknowledged that Wall Street turbulence, credit problems and a nationwide housing slump pose increasing threats to the economy. But it refrained from cutting rates and stuck to a forecast that the economy will weather the financial storm and grow gradually in coming months.”

“‘It seems like Bernanke might be more willing than (former chairman) Alan Greenspan to let financial stress play out to ensure investors don’t feel emboldened in the future and take on more risk. There is a sense that Bernanke buys into that argument more than Greenspan did,’ said Mark Zandi, chief economist at Moody’s Economy.com.”

“‘We’ll see if that is true in the next week or so. If markets remain unstable, it will be a test to see how closely the Bernanke Fed sticks to the Greenspan cookbook,’ Zandi said.”

From Marketplace. “Some pundits are pinning the blame for market uncertainty of late to former Fed chairman Alan Greenspan, but is it fair to second guess 18 years of decision-making in hindsight? Besides, he did warn borrowers two years ago, John Dimsdale reports.”

“John Dimsdale: ‘On the lecture circuit last fall, Alan Greenspan said the worst of the housing slump was behind us. Today, some pundits say Greenspan’s low interest rate policies earlier this decade created a housing bubble.’”

“Two years ago, the man who coined the phrase ‘irrational exuberance’ did warn borrowers. ‘History cautions that extended periods of low concern about credit risk have invariably been followed by reversal, with an attendant fall in the prices of risky assets.’ Former Fed chairman Alan Greenspan, speaking in September of 2005.”

The Miami Herald reports from Florida. “The proposed marriage between home builder Levitt and BFC Financial may be on the rocks. The reason: the ongoing housing slump. Levitt lost $58.1 million in its second quarter, the company said. Levitt’s second quarter revenue declined 4 percent to $127.8 million. Buyers canceled 39 percent of new home orders in the quarter, up from 21.5 percent a year ago, while the average selling price dropped 9.5 percent to $256,000. Levitt didn’t acquire new land in the second quarter.”

“CEO Alan Levan said market conditions will be challenging for the ‘foreseeable future.’ He said rising inventory of homes along with reduced credit availability is pressuring prices in all its markets.”

The Palm Beach Post. “‘Traffic at the information center at Tradition, Florida, has dramatically slowed in connection with the challenging homebuilding market in Florida,’ Levitt said.”

“The company attributed its $58.1 million net loss to ‘the continued deterioration of the homebuilding markets where we operate, particularly in Florida.’”

From NBC-2.com. “Some local home builders are going to great lengths to drum up summer business in a slumping real estate market. According to the Florida Association of Realtors, home sales have dipped 37 percent in the Cape Coral/Fort Myers between June ‘06 and June ‘07.”

“Signs in front of the line of model homes along Chiquita Boulevard in Cape Coral offer all kinds of deals. Here is a list of some of the signs: ‘Help with Down Payment.’ ‘Free Pool with Home Purchase.’”

“Cape resident Dave Lewis…expressed some skepticism. ‘If you have to pay taxes on the pool, it’s not totally free,’ said Lewis.”

From Florida Today. “The number of home mortgage foreclosure filings has continued to rise in Brevard County . There were 423 foreclosure filings in Brevard in July — the highest monthly total in at least 5½ years, according to the Brevard County Clerk of Courts.”

“July’s total surpassed the previous high of 385 foreclosure filings in June. From January through July, there were 2,398 foreclosure filings in Brevard, surpassing the total of 1,868 for all of last year, records show.”

“‘My belief is this rise in foreclosures is not a spike, but a long-term trend upwards, as we wring out the massive speculations, poor mortgages and oversupply’ of housing, said Brevard Clerk of Courts Scott Ellis.”

The Orlando Sentinel. “The Orlando area’s sluggish housing market is showing no signs of a turnaround, with the latest numbers going from bad to worse during what should be the hottest sales stretch of the year.”

“Existing-home sales in the Orlando area fell again in July, a 42.6 percent plunge from the same month a year ago, and for the second time this year the median sales price posted a rare decline, the Orlando Regional Realtor Association reported Monday.”

“‘I think we’ve got six months of serious bloodshed ahead,’ said William Weaver, an associate professor of finance at the University of Central Florida.”

“For industry watchers waiting for a turnaround, the record 26,018 homes and condos on the market provided no hint that the local downturn has hit bottom. It would take a record 19.2 months to sell all those homes and condos at the recent slower sales pace.”

“ReNae Bailey…recently put her three Oviedo rental homes on the market because the taxes have gotten too high, she said. The rental income covers the cost of the mortgage and insurance, but not the property taxes.”

“‘That’s what’s going to kill the market — higher taxes,’ she said.”

“Bailey said she bought her rental homes about two years ago, at the peak of the market, and now figures she will be fortunate to break even. ‘I’ve made money on everything I’ve ever sold up until now,’ Bailey said of her sales during the past 20 years in Central Florida. ‘It’s tough right now for people.’”

“Weaver said it was particularly troubling for the Orlando home-resale market to slip for the second straight month, an even worse sign than the year-over-year decline. The 1,354 units sold in July was down 10.8 percent from June and off 22.4 percent from May.”

“‘The home-buying season is over,’ Weaver said, so the chances of an improvement are slim for the rest of the year.”

“Weaver said loan originators who pushed subprime mortgages — loans with higher rates and terms targeting buyers with weak credit histories, helped bring on the slump by making loans that now are going bad.”

“But many buyers share the blame, he said, because they took on too much debt, didn’t understand what they were getting into or got caught up in the excitement of becoming a home buyer. ‘Both sides made some dumb decisions,’ Weaver said.”

From USA Today. “Who wants to be a millionaire? Never mind.” “That’s the come-on, and ultimate torment, recently served up to Briny Breezes, a 43-acre mobile home community on Florida’s Gold Coast.”

“In January, Ocean Land Investments of Boca Raton agreed to pay Briny trailer owners $510 million for their oceanfront propertys. But two weeks ago, Ocean Land, facing an Aug. 10 deadline to pay the rest of a $5 million non-refundable deposit (it had put down $500,000) asked for a 45-day extension to talk to nearby towns opposed to the project. Briny’s board of directors refused, and the deal is off.”

“There goes the money. The new sailboats. The lavish gifts for grandchildren. Most troubling: A few dozen residents have already bought new homes in anticipation of the big payday.”

“‘Some of these people have purchased elsewhere,’ says Roger Bennett, mayor of Briny Breezes. ‘Some can afford it, but it’s the many who couldn’t that I feel sorry for.’”

“Ileane Aztiazarain says she and her husband, Jose, recently spent $52,000 on a 29-foot boat and $40,000 on a truck to tow it. The couple bought their double-wide trailer two years ago for $325,000 and were eager to pocket $1 million.”

“‘We did a few things we shouldn’t have done,’ she said. ‘It was a once-in-a lifetime opportunity. We’re working people.’”

“Jose planned to use part of the cash to start his own business. Suppressing the worry in her eyes with a half-smile, Ileane added, ‘We just have to figure out what we’re going to do now.’ If the sale doesn’t happen, she says, they’ll sell the new toys and the trailer.”

“Board member Robert Purcell, echoing the view of several residents, says the community will accept only an ‘equivalent’ price. The developer, he suggests, planned all along to reel in residents with an irresistible offer, then push the price down. Ocean Land ‘didn’t want the deal,’ he says.”

“When Bennett told Nancy Boczon, the town clerk, the deal had fizzled, she screamed. ‘I have grandchildren going to college, and I like to travel. I was willing to take the money.’”

“Joseph Good of ComNet Realty, says the developer likely fell victim to South Florida’s burst real estate bubble. High-rise condos, he says, simply aren’t selling.”

“Not worried is Joe Masterson, who looked forward to buying a new sailboat with his $840,000 and plying the Caribbean full time. ‘Being out at sea 24/7 would grow old after a while,’ he muses. ‘One beautiful sunset after another. … Now, I can stay here and ride around in my little golf cart.’”

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