The Housing Bubble

The Union Tribune reports from California. “The ugly side of San Diego’s condominium downturn is on display along Fifth Avenue. The bones of what was supposed to be Atmosphere, nearly 80 ‘luxury live/work units for a life well-designed,’ sit open to public view. Atmosphere is one of two downtown San Diego condo projects that started then stalled. The developer of Triangle, at 14th Street and Imperial Avenue, demolished an old warehouse and then stopped. It’s a parking lot now.”

“San Diego real estate economist Gary London said the downtown skyline won’t see many new residential towers for at least four years. ‘There is a pipeline of 9,000 units of projects that are planned after this year – most of which won’t be built,’ London said.”

“For the San Diego housing market, the winds are already blowing hard. For many borrowers, July was the last month of super-low, two-year ‘teaser rates’ on their mortgage payments.”

“Already, the number of defaults, foreclosures and bank takeovers in San Diego County has risen immensely, jumping from 5,401 in the first half of 2006 to 18,409 in the first half of 2007, says RealtyTrac.”

“‘What I’m advising my clients is that the market will keep deteriorating gradually until it bottoms out in the next 12 to 18 months,’ says Gary London.”

“‘Right now, lenders are running for cover and concentrating on vanilla-type loans, lending to people with golden credit scores and a lot of money in the bank,’ says T.J. Knowles, a mortgage broker with CalBrokers. ‘They’re going back to that old cliche of saying, ‘If you don’t need a lot of money, I’d be happy to lend it to you.’”

“Knowles says he does not see the number of foreclosures leveling off soon. ‘I don’t know that I would use the word ‘catastrophic’ to describe how I view the situation, although it’s very possible that things could get that bad,’ he says.”

“With foreclosures mounting, the local rental market is experiencing growing demand. Mortgage defaults are ‘creating a new population of tenants,’ said attorney Steven Kellman, director of the Tenants Legal Center of San Diego.”

“Some displaced homeowners are getting a cool reception as the surge in real estate foreclosures sends them back to the rental market in search of shelter.”

“Nevel DeHart of a national tenant-screening company, warns that homeowners often are deeply in debt by the time a foreclosure occurs. With no financial reserves to fall back on, they sometimes make poor rental risks, he said. ‘There is just no margin for error.’”

“Ron Bowdoin, who oversees 2,500 rental units in Los Angeles and the Inland Empire, said foreclosure victims often fail to meet his company’s credit standards.”

“‘As they reach the brink of foreclosure, their credit reports have suffered tremendously,’ he said. ‘We have to do a co-signer or large deposits to get them into apartments.’”

The Napa Valley Register. “A record 906 Napa County homeowners tried to sell a home in July. Only 61 were successful. The number of homes for sale in the county peaked to an all time high in July, up 18 percent over 12 months. This leaves the market with a 14-month supply of homes, according to Trendgraphix, Inc.”

“Things couldn’t get much worse in American Canyon where a measly four homes sold in July, from 166 listed. ‘It’s pretty slow,’ said David Barker of ReMax. ‘The buyers just aren’t out there. The problem is we just have so many homes for sale. If you want to sell you have to be spectacularly priced and in absolutely cherry condition’.”

“Statistically, American Canyon faces a 41-month supply of inventory of homes for sale. ‘It’s brutal. We can’t seem to get people to look at the houses,’ said Barker. ‘We’re only selling one (home) a week on average. If it continues the way, there could be 175 or 180 (homes for sale) next month.’”

“American Canyon homeowners continue to face foreclosures or ’short sales’ to avoid foreclosure.”

“‘Those are the people who bought in the last few years, but more significantly, it’s people that bought in 2005 and 2006 with 100 percent financing and negative amortization loans. The value of the loan has increased, the value of the property has decreased, and the payments have gone up. It’s the perfect storm,’ said Barker.”

“‘What’s their option?’ said Barker. ‘They can’t refinance. They have no equity in the house. Now they have to sell. The only way to sell is with a short sale.’”

“Heidi Rickerd-Rizzo at Pacific Union GMAC Real Estate said it can be tricky getting buyers and sellers together.”

“‘We are still in a seller’s mind set. They are still looking at numbers of three years ago and they are not prepared to be reducing their price points. We have a lot of offers come to the table and they’re not able to get buyers and sellers together to get a deal done. The buyers are walking away. Sellers are not negotiating. It’s an interesting phenomenon,’ she said.”

“‘There’s still a lot of money out there but investors want tighter controls,’ said Robin Rose of Coldwell Banker Brokers of the Valley. ‘Our perspective right now is that short term this may be difficult but long term, the mortgage correction will be good for the real estate market.’”

The Bakersfield Californian. “Whatever is going on out there, it’s not business as usual. Default notices have been rolling in to county offices at a quickening pace since December when 407 filings warned borrowers they could lose homes if they didn’t catch up on overdue mortgage payments.”

“As the year has ticked along, the numbers have gone up: More than 500 default notices arrived in February, records from the county Recorder’s Office show. In June, 661. Last month, lenders sent 780 such notices to local property owners.”

“Prior to December’s tally, the 400-mark hadn’t been broken since March 2000.”

“Regulars at public auctions have noticed a startling change of late. Two years ago, 95 percent of homes were snagged by eager bidders, one auctioneer estimated Friday. These days, about 90 percent go back to the bank.”

“Lenders have even started discounting deeply, sometimes starting bids at 80 percent of the amount owed on the first loan. The second loans left from so-called 80/20 ‘piggyback’ deals, which required no money down, typically get eaten.”

“On Thursday, for example, the house at 2817 Dartmouth Street came up for auction, with $333,484 owed on the mortgage. The lender started bidding at $200,000. Still, no one nibbled, and the house went back to the bank.”

The Daily Press. “A spacious home sits empty on a side street off Spring Valley Parkway, the plants drying up and needing pruning. The house is one of 50 foreclosures in the 4,200-member country-club community since January, with 39 currently for sale by the trustee.”

“‘We’re getting them in all communities, all areas of the valley, all classes,’ said real estate agent Paula Hurst. ‘Even in the mountain resort communities.’”

“Aside from the devastating psychological affects, walking away from a home is deadly to a credit score, she said. ‘It’s going to be a long time before someone will trust you again with that size of a debt,’ adding that the number of years used to be from seven to 10.”

“Foreclosures could continue for two to three years in Spring Valley Lake, Hurst said. ‘It would take us two to three years to sell off the current inventory if we didn’t list anymore (homes),’ she said.”

“Real estate agent Norm Sanchez is handling two foreclosures in the lakeside community. ‘Many people were getting these things with the expectation that they were going to be able to sell it within a year,’ Sanchez said.”

“The owners of both homes were hoping to turn them around quickly, he said. One of them earned only $30,000 in annual income, and after living in it for a month, she rented it out.”

“‘People said, ‘Hey, well I’m struggling and this could be my opportunity,’ without realizing that the rents weren’t going to pay the mortgage.’”

The Sacramento Bee. “Unemployment rose in Sacramento and across California last month, state officials said Friday. The numbers provided fresh evidence of the impact of a housing slump that has rattled the financial markets in recent days.”

“The number of payroll jobs fell by 8,600, the Employment Development Department said. The construction industry lost 7,800 jobs during the month, the worst showing of any sector of the state’s economy.”

“Economic consultant Chris Thornberg said the housing industry’s problems will likely bleed into other parts of the economy. ‘The turmoil in construction by itself is not enough to cause a recession, but it’s putting a squeeze on things,’ said Thornberg, of Beacon Economics in Los Angeles.”

“Sacramento-area…payroll jobs dropped by 5,200. The construction industry shrank by 400 jobs, an unusually weak showing for a month when job sites are usually busy.”

“Although construction tends to wind down in late summer, a July cutback is rare. ‘We’re seeing construction pull back a little early,’ said EDD labor market consultant David Lyons. ‘That’s not unexpected, given the circumstances.’”

“Lyons also noted that the Sacramento area’s financial industry sector cut another 100 jobs in July, demonstrating further weakness in the mortgage and real estate industries.”

The Record Searchlight. “Two years ago, business was thriving at Carmona’s Appliance Center as the Redding retailer catered to new subdivisions and rode the real estate boom. The boom has fizzled and with it the demand for refrigerators and stoves in new homes.”

“The slowdown in new construction, housing starts in Redding through July are down 21 percent from a year ago and 68 percent from two years ago, has affected north state businesses that rely on home builders in different ways.”

“A year ago, Carmona’s store delivered appliances to as many as 20 houses a month. ‘Now we are lucky to see 10,’ said Sales Manager Joe Heslin. ‘The Northern California market is in a slowdown and Sacramento is at a standstill.’”

“The drop in home construction has prompted the Western Wood Products Association, which represents manufacturers in 12 Western states and Alaska, to revise its economic forecast. In the spring, the trade group predicted the demand for lumber would pick up next year.”

“It ‘may be until 2009 before we see any type of significant recovery,’ Western Wood Products Association spokesman Butch Bernhardt said. ‘A lot of things are happening in the mortgage markets, foreclosures are adding to the supply of houses, which will reduce demand for new housing. A lot of that needs to be worked through.’”

The Denver Post reports from Colorado. “David Bahr was all set to sell his Denver loft last year and move to Chicago, but the housing market had other plans. The loft lingered for six months without a serious bidder. ‘We reduced our price by $25,000, but almost nobody came through (to look),’ says Bahr of his property. ‘Renting was definitely not our first choice, but we were stuck. It’s awfully nerve-racking to not have the place rented and have two mortgages.’”

“Bonnie Whitehouse of Henderson put her house on the market in March 2005. She planned to move to Europe and needed to sell quickly. When a buyer didn’t surface, she quickly found someone to rent it until she moved back. ‘The values had just fallen since I purchased my house. It wasn’t a good idea to sell it,’ says Whitehouse.”

“John Dunn says his Denver-based property-management firm receives calls every week from people who can’t sell their properties. First-time renters often misunderstand how the rental market operates.”

“‘A lot of people think, ‘My house payment is $1,900 a month, so I have to get that, plus (the property management) fee.’ Dunn says. ‘The payment has nothing to do with what the rental market is.’”

The Arizona Daily Star. “First Magnus, one of Tucson’s largest employers and one of the nation’s largest mortgage lenders, grew astronomically right up until it suddenly stopped writing home loans and laid off most of its work force on Thursday. How could the rising star that had never had an unprofitable month collapse overnight?”

“‘First Magnus was riding a wave created by an enormous amount of liquidity,’ said Chris Lamoureux, at the University of Arizona. ‘They were staking a lot on the continuity of that wave.’”

“‘We had tremendous momentum going as recently as three weeks ago,’ said Gary Baraff, company spokesman. ‘Three weeks ago we were at the pinnacle.’”

“‘When you start talking about bankruptcies at companies like Countrywide, you start wondering about the pillars of the industry,’ said Richard Beidl, a mortgage-industry analyst. ‘We have artificially allowed a considerable number of people into the home market to buy homes who shouldn’t have been in the market.’”

From KVOA News 4 in Arizona. “With lending giant First Magnus taking a big hit, real estate experts say Tucsonans will experience the re-percussions.”

“‘A lot of people in Tucson are obviously extremely scared. About a third of the borrowers in this market are not going to be able to get a loan,’ said associate broker Curt Stinson. There is a positive side to all of this. ‘There is going to be extreme opportunities to be purchasing homes here in the near future at drastically reduced prices.’”

“Larry Harvey i’s trying to sell 27 acres of land. ‘Before, it used to be so much cheaper to buy land and build a house. Now I think it’s going to be a flipside, with all the foreclosures. I think land is going to sit and people are going to go out and buy some foreclosures a lot cheaper than buying land itself.’”

The Arizona Republic. “Obtaining a home loan is going to get even more difficult. ‘The mortgage market has changed drastically in just the past few weeks,’ said Tom Miner of the Scottsdale-based mortgage firm Miner Kennedy Chmura Associates. ‘”We are getting calls from buyers who can’t close anymore because lenders want more documentation or money down.’”

“Cheryl Serbic wanted to buy a condominium in central Scottsdale. Earlier this summer, the restaurant manager qualified for an adjustable-rate mortgage that required little down. But a week before she was to close, her lender said she needed a bigger down payment. Serbic called other lenders and got the same bad news.”

“‘I didn’t think I needed a down payment. My friend bought last year without one,’ she said. ‘But if the housing market is going to keep going down. I’ll save and maybe I’ll find a better deal then.’”

The Tucson Citizen from Arizona. “Foreclosures in Pima County have increased by 76 percent over the past two years, from 1,078 new filings in the second quarter of 2005 to 1,896 filings in the second quarter of this year, according to Realty Trac.”

“Fewer houses are going up this year, though Pima County housing starts have risen steadily since January, according to the U.S. Census Bureau, which tracks construction permits. There were 592 new home permits issued in Pima County in June, up from 329 in January but still fewer than last June’s 792, the Census Bureau reports.”

“‘You can still drive anywhere and see homes being built, being remodeled, tons of infrastructure projects, said Don Wehbey, an economist with the Arizona Department of Economic Security. ‘The activity out there hasn’t been halted.’”

The Nevada Appeal. “The realities of home ownership have finally hit Northern Nevada, and the truth, for some, can be summed up with one word: Foreclosure. July statistics released by RealtyTrac show Nevadans experienced the greatest foreclosure rate per household this year.”

“A Northern Nevada Realtor said the foreclosure trend here, accompanied by the cooling market, is a means to a more ‘realistic’ future.”

“‘In the last couple years when the market was very high, I’d show doctors around, and they’d say ‘I have student loans, I can’t afford to live here,’ said Kathy Tatro, a Realtor (in) Carson. ‘Our cost of living shouldn’t be higher than our wages.’”

“‘Right now, it’s hard to be a Realtor, it’s hard to be a lender, it’s hard to be in the title company - in the long run, the market change is a really, really positive thing,’ said Tatro.”

“The long run may not come soon enough for several local real estate investors, who stand to find themselves homeless, and, at the very least, with credit in shambles. The state documented a total of 11,514 foreclosure filings during the first quarter of this year, an increase of 66 percent from the previous quarter and more than double the total reported in the first quarter of 2006.”

“Those dealing directly with beleaguered homeowners say the number of bankruptcies resulting from foreclosure locally has gone up ’substantially.’”

“‘We’ve seen an increase of about, I would say 150 to 200 percent in persons coming in who have a foreclosure pending or are in arrears on their primary home,’ said Carson City bankruptcy attorney Stephen Young. ‘The main problem seems to be in good times people were refinancing their homes to reduce debt caused by overspending, not budgeting back before they refinanced.’”

“‘So, they overspend, they accumulate credit card debt, refinance to eliminate credit card debt and the cycle repeats itself,’ he said.”

“One Carson-based mortgage broker said things could get worse. ‘This is the beginning of the foreclosures,’ said mortgage broker Kesa Pascal of Trans-Western Investments. ‘In Washoe County you get 40 defaults a week. As these foreclosures are happening more, lenders are going to cut more.’”

“‘The mortgage industry was stretching people so thin - there were some strange loans. The change is positive and it’s weeding out people that shouldn’t have been in there in the first place,’ Realtor Tatro. said.”

“‘What’s happening with the mortgage industry is a very positive thing,’ she said. ‘I just saw an editorial cartoon with two bankers, one saying to the other ‘What’s the deal with people with bad credit not buying housing?’”

The Salt Lake Tribune from Utah. “Max Johns of Salt Lake City should not be having a problem qualifying for a mortgage. His financial house is in order, and his credit score is well above the minimum most home-loan providers have had in place for years.”

“But Johns, a construction contractor, is having problems qualifying for a home loan. Sitting in a bank office a couple of weeks ago, Johns was told that although he probably would have qualified several months ago for a real estate loan, he no longer does. ‘My credit score is only a little bit below what they want now, but they definitely aren’t making any exceptions. It’s frustrating, he said.”

“Stung by widespread losses, investors are now demanding higher lending standards to reduce the risk that those loans will end up in default. ‘It’s back to more traditional lending standards,’ said Glen Ogden, president of the Utah Mortgage Lenders Association.”

“‘There’s not a day goes by that some new guidelines don’t come by my desk,’ said Michael Blackham of VelocityLoan.com in Holladay ‘There are more loans being denied than in the past.’”

“Brady Devoe of Sun Valley Mortgage in Layton said one change affecting many first-time home buyers is the increased difficulty finding a loan to finance 100 percent of the purchase price of a property.”

“Many young families in Utah have purchased homes in recent years through ‘no down’ loan programs, he said. ‘A lot of potential home buyers are going to need at least 5 percent to 10 percent down now.’”

“The prospect of falling housing prices has rattled Johns, the borrower who was told his credit score was too low under new lending guidelines. ‘Maybe it wouldn’t be a good idea to buy anything now, anyway. Who knows what’s going to happen next?’ Johns said.”

The Gazette Mail reports from West Virginia. “West Virginia appears to be sheltered from the eye of the storm buffeting the nation’s mortgage markets, but that doesn’t mean it won’t get rained on. About 30,400 homes were sold in the state in the April-to-June period, down 13.6 percent from a year earlier, according to the Realtors.”

“‘The underwriting criteria is tightening across the board,’ says Larry O’Dell, a Charleston mortgage broker. ‘They’re asking for more documentation, looking at debt ratings — it’s more difficult to get [loan requests] out of underwriting than it was two weeks ago.’”

The Rock Town Weekly from Virginia. “As the mortgage industry struggles with its subprime lending meltdown, the market is making adjustments. While those changes will leave some potential homebuyers out of the market, others will be presented new opportunities, mortgage professionals say.”

“‘We’re going to see a massive revamp of the industry,’ said said Don Earman, president of CTX Mortgage Co. ‘It’s getting more expensive to buy a home if you’re putting less than 20 percent down.’”

“The mortgage industry’s problems are an echo of the Internet bubble of 1999, according to William Wood, professor of economics at James Madison University. ‘People thought Internet stocks could only got up and they were wrong,’ Wood said. ‘And people who thought housing prices could only go up were wrong.’”

“Larry Martin, co-owner of Re/Max Performance Realty, has seen loans denied that would have been approved two years ago. ‘The last two sales I made, the sellers came off the price 9 to 11 percent to make the sale,’ Martin said. ‘We have purchased more ‘price reduced’ signs this year than anytime in our 15-year history.’”

The Baltimore Sun from Maryland. “About three years ago, back when the housing boom was still booming, David Fleming and his wife pooled their skills - hers in real estate and his in developing - and launched a building business.”

“Then the housing market slowed. Then the subprime mortgage market for those with shaky credit collapsed. Then interest rates on ‘jumbo’ mortgages - those above $417,000 - rose. And now, well, times have gotten a little tough for Fleming.”

“He’s no longer working on spec, ‘due to the tightening of the credit,’ he said. After deciding not to build on a half-acre lot he bought in Essex, he’s been trying for a year to unload the land, knocking his price down by about $30,000 to $209,000.”

“Developers…like Fleming are stuck with homes and land they can’t sell. ‘Builders are cutting costs in any way they can,’ said John Kortecamp, executive director of the Home Builders Association of Maryland. ‘It’s been difficult.’”

“Mueller Homes Inc., a builder of custom homes in the Baltimore metro area, has come close to losing two sales because of loan troubles in the past week, said VP Tony Letke.”

“One buyer had a pre-commitment from a lender for 95 percent of the purchase price on a $1.3 million custom-built house in Sykesville. But the lender recently backed off from that, saying it could finance just 80 percent, leaving the buyer with a $260,000 down payment.”

“‘I don’t know whether [the buyer] has 15 percent [more] to put down,’ Letke said.”

“‘This is going to dampen the motivation of buyers. In years past, people buying million-[dollar-]plus houses were not putting a whole lot of money down and could leave money in investments,’ Letke said.”

“‘We deal with a lot of buyers who are self-employed, and it’s hard for them to show proof of income,’ said Wendy Oliver, VP at a Severna Park builder. ‘The majority of the investor banks are putting a halt to those loans, and it’s frightening. Our buyers are going to be funneled out, and it’s going to be survival of the fittest with the buyers who can prove their earnings.’”

“Susquehanna Bank foreclosed yesterday on a small developer, putting a home and several lots on the auction block, said Christopher D. Holt, regional president at the bank.”

“‘The smaller builder, that’s who is getting caught. That’s who [has] overextended themselves,’ Holt said. ‘They bet on the market, that it was going to continue strong, and it’s working against them.’”

From ABC 11 TV in North Carolina. “So far the Triangle has survived the nation’s deflating housing bubble, but the mortgage meltdown is affecting home loans everywhere. ‘Jumbo loans’ are suddenly much harder to land, and it’s rapidly shrinking the number of potential buyers.”

“Eric and Emily Brinker put $200,000 into a Boylan Heights home just above downtown Raleigh. The Brinkers hoped to flip the home for almost $500,000, but now they are also looking for someone who is willing to rent it.”

“‘I don’t want to sacrifice really dropping the price too much just to get out from under something that’s in a good spot,’ Eric said.”

“‘If it’s hard to get a loan, that’s definitely a problem,’ realtor Melanie Osborne said. ‘A lot of people don’t have cash to buy a home. I know I don’t. Not a house this big.’”

From News 14 in North Carolina. “North Carolina’s new rules for mortgage lending companies means getting a home loan is getting more difficult.”

“Sherri Hodge’s Huntersville home has been on the market since March, but so far, no one has made an offer. ‘I’ve checked with some agents, and I said, ‘Am I doing something wrong?’ and they said, ‘Truthfully, it is maybe just about the price,’ said Hodge. ‘So we reduced down, we just reduced it down again. I had some other incentives going on, and I don’t exactly know why it hasn’t sold.’”

“Abigal Jennings, president of Lake Norman Realty, said the rules involving foreclosures and mortgages will be beneficial in the long run.”

“‘The rules that are coming into play are stronger,’ said Jennings, ‘but they are probably for those individuals the best thing.’”

“As conditions in the market improve, Hodge said she hopes buyers will trickle their way into purchasing her home. ‘We’re just going to see what happens,’ said Hodge. ‘And just bring offers and see what happens. You never know what I’ll take for it.’”

What do you see in your housing market this weekend? Lower median prices? “Median real estate prices in Nevada County dropped more than 9 percent to $425,000 in July compared to a year earlier, a real-estate tracking company confirmed today. ‘Things just aren’t worth as much as they used to be,’ said Realtor Teresa Dietrich-Treco.”

“Year-to-year median prices for July also declined in the counties of Placer (8.5 percent), Sacramento (10 percent) and Yuba (nearly 14 percent), DataQuick reported.”

“Housing prices in Monterey County stayed healthy in the swanky areas while some mid-range housing areas saw a dip in price, according to figures for July 2007 from the Monterey County Association of Realtors.”

“The median sales price in south Salinas dipped to $540,000, compared with $609,000 a year ago; the median price in north Salinas fell to $520,000 from a median of $585,000 a year ago. The median sale price in South County fell to $385,000 from $517,000 a year ago.”

Lender activity? “Washington Mutual has put its downtown Stockton building up for sale. The 247,000-square-foot building has no price tag. The company is asking anyone interested in purchasing the building to make an offer.”

“The Seattle-based company said the move to try to sell the property isn’t a reflection of the decline in the residential real-estate market, or on downtown Stockton. ‘We’re going to have a lot of vacancy,’ said broker Mahala Burns. ‘All of a sudden, we’ll have all this square footage available, no real parking and no tenants, so everyone is nervous and on edge at the moment.’”

Or foreclosures? “A lot of homeowners are feeling the squeeze. So far this year, there have been more than 5,000 foreclosures in the Chicago area. A two bedroom, $400,000 condo in downtown Chicago is just one of nearly 200 foreclosed properties owned by banks that the company will sell in a live auction.”

“There’s another condo in Hyde Park for $150,000 and a single family, five-bedroom home in Lincoln Park for $800.000. All are expected to sell for 30 to 40 percent below market value. ‘Banks are not into retail. They want these properties off their books, [so they are] willing to take less than retail to move them,’ said auctioneer Pat Harvill.”

“But keep in mind that the properties are sold ‘as is.’”

New marketing techniques? “The sign spinners of a national advertising company can be found nearly every weekend along the streets of Ahwatukee Foothills, twirling their 6-foot signs in the air to promote new housing subdivisions.”

“‘Basically when you start working for us, you don’t look at it as a job – it is a sport,’ said Phoenix General Manager Bryan Sanchez. ‘Everybody is looking at you because you are the center of attention.’”

Rising inventory? “Home sales and building are down in metropolitan Phoenix, but there are other indicators to track where the housing market is headed. Home listings in the Valley climbed to almost 55,000 during the past few weeks. That’s a new high.”

“About 85 percent of the Valley homes foreclosed on in July went back to the lender, according to the Information Market. That means fewer investors bidding on foreclosure properties on the courthouse steps. In many cases, more is owed on the home than what it’s worth now.”

“New-home prices in metro Phoenix fell an average of 6 percent this year, according to Phoenix-based Belfiore Real Estate Consulting. The firm says new-home prices have dropped 21 percent in the past 18 months.”

“Recently, West Valley cities saw the biggest decline in new-home prices. Avondale’s cost for a new house fell 11.9 percent, and in north Buckeye, prices are down 9 percent.”

Signs of the credit crunch? “In Laguna Niguel, Bill Ashmore, the Impac Mortgage president, remarked on how the credit problems stemming from sub-prime loans had filtered down to a local bank branch.”

“‘It started out with this global credit crunch we’ve been reading about,’ he said as another Countrywide depositor left the bank’s office. ‘It’s now gotten down to affecting people like him and me who are closing our accounts.’”

“The other depositor shook his head as he climbed into his car. ‘It’s all over,’ he said, and drove away.”

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