The Housing Bubble

The Marin Independent Journal reports from California. “In Marin, the national mortgage meltdown has done lots more than just make buyers anxious, it has cost hundreds of mortgage industry and other housing-related jobs, kept houses on the market longer and boosted the county’s foreclosure rate. ‘You’re a very small elite market, so you’re certainly not representative of the state as a whole,’ Leslie Appleton-Young, the chief economist for the California Association of Realtors, said of Marin.”

“Still, she said: ‘No one is immune from what’s happening in the marketplace right now. No one.’”

“Marin’s median single-family home price fell to $950,000 last month, higher than this time last year but below last month’s record $1.125 million. In April, the county’s median single-family home price hit $1,010,000 - the first time any California county broke the seven-figure barrier, before slipping to $925,000 in May.”

“At Charlie Christensen’s Sausalito brokerage, some clients are feeling the pressure. ‘It’s very dicey out there - it’s unprecedented,’ he said. ‘It’s going to be tougher for people to qualify for new loans.’”

“‘We’re kind of on an island here,’ he said of Marin. ‘It may not be as bad as it is in some other places, but I think it’s going to be a little worse than people think unless the Fed steps in and takes some radical steps.’”

“The situation will lead to positive reform, experts said. ‘It was so unrealistic to have the money so easily available,’ said Bill McKeon, a broker associate in Greenbrae. ‘That’s what everyone’s talking about. It was very common to have zero-down purchases, a lot based on stated income, and that was bound to end. I think what’s catching everyone by surprise is how abruptly it ended.’”

“Like all corrections, this one shall pass, Christensen said. ‘I think people need to take a deep breath and let this thing settle out,’ he said. ‘There’s a correction occurring. Some people are going to lose their homes, some in Marin. Is it going to be biblical proportions? I don’t think so.’”

The Sacramento Bee. “In a sense, New Century and other fallen lenders, as well as homeowners who are losing their properties, are victims of history. Until now, most experts say, the housing market had never undergone a serious swoon as long as the economy was still growing.”

“Lenders took comfort in the argument that only a recession could do major harm to the housing sector and ignored signs that the market was going cold. ‘The hubris of the period was driven … by the thought that the economy was on sound footing,’ said Mark Zandi, chief economist at Moody’s Economy.com. ‘That argument convinced the homebuilders and the lenders and added to the frenzy.’”

“‘We haven’t faced this before,’ said Howard Roth, chief economist at the state Department of Finance. ‘It may well be a new phenomenon that we’re seeing — a downturn in the housing sector slowing down the overall economy.’”

“‘There’s nothing to compare it to,’ said Fern-Luzzi, the Roseville branch manager of recently collapsed mortgage lender First Magnus Financial Corp. ‘I’ve seen it since the 1980s — I’ve been in downward markets and there’s always been the light at the end of the tunnel,’ she said. ‘This one seems to be different.’”

“This time, housing experienced a once-in-a-lifetime boom caused by excessively loose lending standards. ‘Globalization had a lot to do with this,’ said Greg Sandler, founder of Roseville-based 1st National Home Loans. ‘Essentially, we’re not playing with the same road map here. This is a different downturn than ever before.’”

“In the 1990s, even with unemployment soaring, it took five years for defaults in Sacramento County to double, according to DataQuick. This time, the default volume has more than tripled in a little over a year.”

“‘It’s more severe now; it’s much faster,’ said Michael Carney, a professor of finance and real estate at California State Polytechnic University, Pomona.”

The North County Times. “A group of more than 60 upscale tract houses purchased last year with 100 percent financing is falling one by one into foreclosure. The owners, individual investors who are nowhere to be found, began to default on their mortgages in May, triggering three-month countdowns to auction.”

“At least five defaults have been recorded this month, bringing the total to 40 of the 67 local houses linked to Elias Ochoa, a real estate agent who ran the Corona branch of a mortgage brokerage until June.”

“Connecting the houses like frayed threads are the names of Ochoa and 32 buyers, including that of Julio Zamarripa, who is listed as the owner of a house in Murrieta. Paul Parker, who lives two doors down, said that he wondered why someone would invest in a $475,000 house with values stagnating and nearby houses renting for just $2,000, half to two-thirds what a typical mortgage might be.”

“Lenders are seizing and selling the houses at particularly delicate time for the Murrieta area. More than 4,000 properties in Southwest County have tipped into default since early last year, according to the foreclosure database. About 1,800 of those have gone to the auction block.”

“With a focus on money, and not real estate, banks are becoming more willing to cut prices in order to sell off the houses they seize. Home prices stand to take much a bigger hit if banks seize and sell houses faster than companies create jobs for new homebuyers, economists say.”

“Neighbors on one block of Pepperleaf Street, where five houses are linked to Ochoa, say the weeds and brown grass don’t bode well. One owner is trying to persuade lenders to accept $450,000 for a house that he bought with a $645,000 mortgage late last year.”

“Karen Myatt, an agent who sold the house to Zamarripa and another to another Ochoa client a month later, said nothing about the transactions struck her as unusual. ‘His buyers said ‘look at these great deals; this house is going to go up another $70,000,’ Myatt mused. ‘The market was starting to turn, but no one realized it.’”

The Union Tribune. “In most neighborhoods in San Diego County, where the median home price is $489,000, a jumbo loan barely gets you through the door of a ‘reduced price’ house. Only 20 of the 92 ZIP codes in the county have a median price of less than $417,000.”

“‘People who want to take out a loan for $500,000 are getting clobbered,’ says T.J. Knowles, a mortgage broker in San Diego. ‘By historical terms, the jumbo loans are still reasonable, but in a place like Southern California, where things are already so expensive, the interest rates just add to the pain for a home buyer.’”

“‘There’s a lot of fear out there right now,’ says Knowles. ‘No logic is being applied to what’s happening in the market. Everyone’s trying to figure out what the level of risk really is and then run for cover.’”

“‘The whole mortgage business is pretty much at a standstill,’ Knowles says. ‘Everybody’s been caught like the proverbial deer in the headlights.’”

“Mark Goldman, a residential loan officer with San Diego’s Windsor Capital Mortgage Corp., the second-largest mortgage brokerage in the country, describes himself as an optimist about the real estate market, saying there are a growing number of good deals for would-be home buyers and there will be even greater opportunities once the current period of adversity ends.”

“In the short term, however, even Goldman thinks there will be a lot of pain for a lot of troubled homeowners who will not be able to switch to affordable loans, no matter what the government decides to do about the conforming limit.”

“‘For the people who are now having difficulty paying off their mortgages, a lot of them will suffer and a lot of them will lose their homes,’ Goldman said. ‘Many households are going to be seriously damaged.’”

The Record.net. “Victoria Rodriguez was not only a thriving real-estate agent in recent years, she was honored as one the area’s top-selling real-estate agents four years in a row.”

“That was in the boom time, and that spigot shut down to a trickle nearly two years ago.”

“As a single mother with four children, she said she simply couldn’t pay her bills. This in a residential real-estate market slammed so hard that sales plummeted over the months from nearly 900 in May 2005 to a low of 268 last month, a 70 percent decline in business.”

“‘It was very difficult to find buyers for properties, so I had to find something more consistent,’ she said. ‘The market just got tough. It was increasingly difficult to just get people in to look at homes.’”

“She held 15 open houses for one property, and only one person stopped by to even look, she recalled. For the first time in her eight-year career, she said, she had listings that expired without selling.”

“Rodriguez is working as a mortgage adviser. But she works on commission in that job, too, she said, and business is so slow she is drawing advances on future commissions. ‘I love selling real estate,’ she said. ‘I just have to make a living, and right now, that’s too tough.’”

“Leslie Appleton-Young, chief economist for the California Association of Realtors, said that last year the group had 210,000 agent members. So far this year, the number has dropped to about 190,000. Still, that compares with a statewide membership three years ago of about 144,000.”

“‘Membership is being pretty sticky this time,’ she said. ‘It’s not falling as rapidly as the market is.’”

“She thinks that may be because this down cycle, the economy is staying fairly strong, which allows agents to get some other work while still keeping a foot in the real-estate field.”

“‘People may be just be biding their time,’ Appleton-Young said. ‘The long-term projection for California is always pretty positive - quality of life, sunshine, technology and so forth. And there tends to be an optimistic bent in general to the profession.’”

The Rocky Mountain News reports from Colorado. “Last year, the lending division Peter Garvin headed from his Denver Tech Center office made $1.5 billion in mortgage loans to new-home buyers across the country. On Aug. 6, he was laid off when his company, American Home Mortgage, filed for bankruptcy. The company said ‘extraordinary disruptions’ cut off its funding to make new loans.”

“‘I think the nature of the mortgage business is that it is a transient business that ebbs and flows with interest rate fluctuations,’ Garvin said. ‘You lose jobs, you get jobs. That has happened to me six or seven times.’”

“The almost 40 percent drop in new-home building permits in the Denver area will take its toll on other parts of the economy, from appliance and furniture sales to landscapers, said Bernie Markstein, senior economist for the National Association of Home Builders. ‘You’ll see a drop in Dunkin’ Donut sales,’ he said, half-jokingly.”

The East Valley Tribune from Arizona. “The mortgage industry’s tailspin from lofty heights has left potential Valley homebuyers scrambling to pick up the pieces of shattered deals, as lending standards tighten on a near-daily basis.”

“During the housing boom, it was easy to get a loan, said Elaine Paddy, senior VP at Alliance Home Mortgage in Mesa. ‘If you lived and breathed, the underwriting guidelines would pretty much allow for you to get a loan,’ she said.”

“Subprime and Alt-A borrowers are taking the biggest hits because they are at greatest risk for default, said loan officer Jeff Underwood. Many Alt-A borrowers are self-employed and have depended on these loans, Underwood said. That includes local investors, a number of them real estate agents, who hope to refinance loans on multiple properties in the coming months, he said.”

“‘I really feel like we’re going to see a lot of Realtors, who are going to be in trouble this year,’ he said.”

The Arizona Republic. “The number of people losing homes in metropolitan Phoenix climbed again in July, and market-watchers are concerned that foreclosures haven’t peaked yet. Last month, 806 homes were foreclosed on Valley-wide. That’s at least a five-year high, according to Information Market.”

“Most of the homes, almost 86 percent, in foreclosure now are going back to the lender. In the past, Maricopa County trustee sales or foreclosure auctions were very popular with investors. But now more is owed on most of the homes than what they are worth.”

“The precursor to foreclosures, notice of trustee sales, climbed to 2,478. That’s also a five-year high for metro Phoenix.”

“National housing analyst John Burns decided to focus on the positive in his newsletter this month since there’s ’so much doom and gloom in the market.’ Phoenix as well as Las Vegas, Atlanta and Orlando made his list of ‘favorite long-term markets.’”

“Burns also said ‘these markets were speculator favorites too, so their corrections this year will be steep.’ That’s not such great news but not a surprise. At least one-third of the foreclosures in the Valley now are on homes bought by investors.”

“Undocumented immigrants are starting to leave Arizona because of the new employer-sanctions law. Adrian, a 34-year-old undocumented immigrant from Sonora, plans to move back to Mexico as soon as he can sell a 2-acre tract he owns in Tonopah.”

“‘Yes, we are desperate to leave the moment I sell my property,’ said Adrian, who rents a house in Goodyear.”

“Adrian has been calling his real-estate agent every day to see if there are any potential buyers for his property. But Guadalupe Sosa, the agent, said this is a bad time to be selling. Undocumented immigrants are putting their homes up for sale when there is already an abundance of houses on the market, adding to a glut.”

“In July, the Arizona Regional MLS listed 52,336 homes for sale in the Valley, up 17 percent from a year earlier.”

“Adrian said his sister also is selling her house with plans to return to Mexico. He knows other undocumented immigrants who are refinancing their houses and getting cash out so they can return right away rather than waiting for their houses to sell.”

“Sosa said, many immigrants are not buying homes because they are worried about losing their jobs under the law. That has made it even harder to sell homes in immigrant neighborhoods.”

“She pointed to three of her West Valley listings that are owned by illegal immigrants who want to leave Arizona. One was a brick four-bedroom selling for $167,000 in the historic district of Avondale. Another was a beige stucco house selling for $210,000 in a new subdivision in southwest Phoenix. One was a blue townhouse selling for $95,000 in west Phoenix.”

“‘A lot of people are selling because of the uncertainty,’ she said. ‘They have one or more family members who are undocumented, and without that extra money, they can’t make the mortgage.’”

In Business Las Vegas from Nevada. “As the credit crunch worsens and consumer demand remains soft, Las Vegas builders are cutting back on their production of new homes.”

“For only the second time since January 1992, homebuilders took out fewer than 1,000 permits in a month, according to Dennis Smith, president of Home Builders Research, who expects new-home prices to continue to fall through 2008.”

“The price decline in the new-home market is caused by soft consumer demand, an oversupply in the resale market and the increasing difficulty of getting financing, he said. In July, Smith reported a median new-home sales price of $314,551. For the year, prices are down more than $20,700, or 6.2 percent, he said.”

“In the resale market, Smith said, 2,101 transactions in July brought the yearly total to 16,957, a yearly decrease of nearly 37 percent.”

“The opening of Sun City Mesquite increased residential sales in Mesquite by 10 percent in the second quarter compared with April through June 2006, according to Mesquite Realtor Chris Miller.”

“The average sales price fell from $291,379 to $249,659 in the second quarter as the average unit size fell about 200 square feet to 1,447, Miller said.”

“New home sales followed similar trends, with the average size of homes sold declining from 2,173 to 1,834 square feet and prices per square foot falling from $194 to $184, Miller said.”

The Las Vegas Business Press from Nevada. “Southern Nevada’s housing market has seen better days. A total of 3,147 new foreclosures were reported in the second quarter, 792 percent more than a year ago, reports Applied Analysis and Urban Environmental Research.”

“And the dramatic slide doesn’t look like it will slow anytime soon, with another 4,535 foreclosures actively under way in the second quarter, 820 percent more than in 2006.”

“As foreclosures occur they inevitably add to the valley’s swelling home inventory. There was a record 24,087 units on the market at the end of July, reports the Greater Las Vegas Association of Realtors. It marks an 18.8 percent increase from 12 months ago.”

“There were only 1,318 homes sold in July or 34 percent less than last year. Median sale prices dipped to $295,000 last month, which is nearly 5 percent less than in 2006.”

“There was also a record 6,269 units worth of condo/townhomes available in July, too. It marks a 28 percent increase from last year, yet sales are still sluggish with only 303 units sold last month for a 40 percent year-to-year drop.”

“‘This is more proof of what we’ve been telling prospective home buyers for months,’ said Devin Reiss, 2007 GLVAR president. ‘Now may be the optimal time to buy a home.’”

The Spectrum from Utah. “The current home mortgage situation in the U.S. is extending its unforgiving, toxic fingers into small-town America. And Southern Utah, regardless of its reputation as one of the nation’s most economically promising and fastest growing regions, is no exception.”

“To put it bluntly, some experts say the bottom is simply falling out when it comes to the mortgage industry. ‘I think this is a whole new realm,’ said Chris McCormick, a loan officer in Cedar City.”

“‘We’re just now starting to feel the impact of people who couldn’t pay their mortgages once their rates went up,’ said Winnie Warner, principal lending manager for Desert Valley Mortgage.”

“‘It’s been very difficult for people to get qualified,’ said Kam Ouellette, a former loan officer with First Colony Mortgage, one of the lenders that have gone belly up. ‘They’ve changed the guidelines so that they’re so unbelievably strict.’”

“Ouellette believes part of the problem stems from shady lending practices where agents were more concerned about their commission as opposed to their clients. Understandably, her opinion of the mortgage industry has changed significantly since everything started tail-spinning out of control.”

“‘They allow people to get into these situations, but they won’t allow them a way out,’ Ouellette said. ‘And that’s what really bothers me.’”

“In Cedar City, Jim Watson, president of the Iron County Board of Realtors, said there are currently 182 homes for sale priced under $200,000, 190 homes for sale in the $200,000 to $400,000 range, and 67 homes priced over $400,000.”

“Watson said the amount of homes on the market locally is definitely unusual. And because the credit crisis is a national problem, and most of Southern Utah’s buyers come from other markets, no one is buying here.”

“‘Our market is driven by sales in the Las Vegas, Arizona and California markets,’ Watson said. ‘Since those houses are not selling as quickly in those markets, our potential clients aren’t moving as quickly here as they have in the past.’”

“Also, like always, when a market is overly saturated, the overall value of the product naturally decreases. Value also declines when homeowners are forced to sell at a lower price than what they paid.”

“But even when the value of a home goes down, sellers want to avoid taking losses at all costs, especially when they have to pay off their high-interest, subprime or Alt-A loans to avoid foreclosure, or if they’ve dipped into their equity funds.”

“Watson said this phenomenon has left some realtors struggling to make ends meet, but he is optimistic that the housing market will rebound quickly. ‘We’re hoping for an upspring by spring of 2008,’ Watson said.”

The Baltimore Sun reports from Maryland. “An increasing swath of the Baltimore region is caught up in a housing slump that is getting worse and appears to have further to fall. Average home-sale prices in the first six months of the year fell in a little more than half of Baltimore’s suburban communities and a third of city neighborhoods, while sales volume in the region was the lowest for the first half of a year since 2000, a Sun analysis found.”

“In the well-to-do Anne Arundel community of Severna Park, for instance, average prices fell more than 10 percent compared with the first half of last year, to about $550,000. That is a $70,000 drop in a year.”

“‘I call it Economics 101,’ said Marc Witman, who has been a Realtor since 1989. ‘The buyers that are out there are sitting on the sidelines, saying, ‘I don’t see the value out there; I’m not buying.’ If your house has been around for quite a while and it’s not selling, it’s the price.’”

“‘The market is saturated,’ said Dahlia Kaminsky, a Realtor who does most of her business in neighborhoods near Baltimore’s Patterson Park. ‘It’s a great time to be a buyer, let’s put it that way.’”

“Miriam Kelly bought a house in Pikesville at the beginning of last year for $272,000, intending it for her elder daughter. But the daughter married and moved to Hawaii, so Kelly put the four-bedroom home up for auction this month. It sold for $246,000, a loss of nearly 10 percent.”

“Kelly was fortunate that she didn’t have a mortgage on the property. ‘Look, you don’t make money on everything,’ she said. ‘Prices are dropping simply because the interest rates are going up.’”

“Sedgrick Williams figures the end to easy credit is hurting his efforts to sell a ranch-style house in Randallstown. The three-bedroom home has been on the market a bit more than two months. Few people have come to see it. No one came to two of the open houses.”

“Williams is asking $255,000, down $10,000 from his original asking price, and is offering to install appliances of the buyer’s choice at his expense. ‘I think I would have been better off if I sold last year,’ said Williams. He paused, then added: ‘I definitely would have been better off.’”

“The waning of summer has brought on the end-of-season sales in Maryland’s beach resort town. And in a sputtering housing market, Ocean City’s real estate is in the mix, too.”

“The banners tell the story. They’re hung across pastel-colored buildings along Coastal Highway: No closing costs. 100 percent financing. 5.75 fixed. Reduced prices. Now, several projects sit partially sold, hoping to lure buyers with reduced prices or incentives.”

“‘Unless it was already started and potentially couldn’t have been stopped, there’s no builder out there looking to build spec inventory and continue to flood the market,’ said Chris Jett, an agent in Ocean City.”

“The number of condos for sale in Ocean City had nearly doubled as of the end of July (the latest report available) to 1,667 from 843 listings at the height of the market in July 2005, according to the Coastal Association of Realtors.”

“This month, 541 units were available in new condominium projects, according to Hanley Wood Market Intelligence. Still, developers continue building condos in more than half a dozen projects launched before the downturn, totaling about 700 more units under construction.”

“At South Beach Boardwalk, a new luxury building on the Boardwalk with a rooftop pool, three-bedroom, oceanfront units can be had for $1.2 million, reduced from $1.46 million, with no closing costs. The Bella Vista, which has sold 10 of 40 units so far, has shaved as much as $90,000 off the bayside condos that now start at $499,900.”

The News Post from Maryland. “Some Realtors think the slowdown in new construction will bring more people into the existing home market. There are more than 2,000 homes listed for sale in Frederick County.”

“‘This month there were 2,214 foreclosure events, which is the highest number on record since January of 2005,’ said DLLR Secretary Thomas E. Perez. ‘Nationally, Maryland has been on a steady slide in the wrong direction. In less than one year, Maryland has jumped from 40th to 16th in the nation for the number of foreclosure events.’”

“According to RealtyTrac, Maryland saw a 146 percent increase in foreclosure events. The statistics are staggering, Perez said, when comparing July of 2006 to July of 2007, which saw foreclosure events increase 575 percent.”

“Villages of Urbana residents have different reasons for foreclosure, according to the court documents they filed. In at least two of five foreclosures the county initiated in July and August, homeowners ended up owing more money than they agreed to pay for their house.”

“A couple bought a house on Hope Commons Circle for $357,750 on June 30, 2005, according to land records. Over the next two years, they paid $35 against the principal. Because the interest was nearly 7 percent, they owe $368,919.”

“Susan Szajna, the association manager of Community Association Services Inc., said she does not know why people are foreclosing. ‘I really don’t want to know what someone’s personal situation is,’ she said. ‘When people get in that kind of situation when their life is such a mess, they usually don’t want to talk about it.’”

“A recent spike in the number of foreclosures has prompted the Villages of Urbana Board to take action. About $2,000 of the million-dollar homeowners’ association budget is going to be spent on tending to yards abandoned by residents, said Szajna.”

“‘Between delinquencies and bankruptcies, our workload has quadrupled,’ Szajna said. ‘Probably six or seven homes have gone to foreclosure in the Villages and two are pending.’”

“The board’s decision at a meeting last month to trim bushes and mow unkempt lawns so yards don’t look run down sparked mixed reactions Wednesday among residents.”

“‘I think it’s good to keep the community up, but why should we have to pay for that?’ Jennifer Ginsburg asked. The bank or the mortgage company benefiting from the sale should pay for it, she said.”

“At Rines Tavern Lane, where the distance to the Villages’ shopping center is a half block walk, a townhouse that cost its owners $320,000 in 2005 is in foreclosure. It is due to be sold Aug. 8 at a public auction.”

“Bob Faulkner can see Rines Tavern Lane from his front porch. He said the board’s decision to keep things tidy makes sense. ‘I’d rather have the yard neat coming out of the homeowners association rather than it be an eyesore,’ he said. ‘That’s what we pay for.’”

The News Journal from Delaware. “Some of Delaware’s smaller banks have suddenly found themselves in demand with home buyers after years of being shunned for mortgage lenders that offered better rates.”

“‘With the liquidity issues, they [the mortgage lenders] are having to cut back and sometimes even close,’ says Stephen Fowle, chief financial officer at WSFS Bank in Wilmington.”

“In the past week alone, Fowle said, he has seen referrals for mortgages increase, often from buyers with pre-approvals from now defunct mortgage companies like American Home Mortgage. ‘They’re saying, I want to close and I need help.’”

“When the housing market slowed and foreclosures began piling up, investors realized they may have bought into more risk than they’d realized.”

“‘In theory, securitization spreads all that risk around … so it makes us less vulnerable,’ says Jay Bryson, global economist at Wachovia Corp. ‘What we’re finding out now is everybody feels a little bit of the hurt and they don’t like it … so they’re pulling back on their lending opportunities.’”

“‘There are people who literally would have been approved a year ago or six months ago who we can no longer get approved for a mortgage,’ says Ann G. Riley, president of Gilpin Mortgage Co. in Wilmington. ‘We have advised borrowers as well as real estate agents that if someone was pre-approved six months ago, we need to pre-approve them again — because that product might not be there anymore.’”

The Fayetteville Observer from North Carolina. “Developers have been building often luxurious homes in anticipation of up to 45,000 people coming to the Fayetteville area by 2011 through base realignment. Some in the housing industry say the war, BRAC, a credit squeeze and a sluggish economy have led to overbuilding and a glut of houses on the market.”

“Figures from the Fayetteville Association of Realtors MLS appear to support that analysis. Those figures show 889 existing homes and 319 new homes on the market in July, an increase of 183 residential listings and 21 new constructions from a year ago. The average time it takes for a new house to sell has increased from 18 months at this time last year to 21 months today.”

“Developers are stuck with empty homes that won’t sell. ‘It got this way the last two to three years,’ said Bill Richardson, president of Richardson and Sons Construction. ‘The BRAC thing has brought on a lot of it. Everybody got a little bit ahead of themselves.’”

“‘On the Cumberland-Hoke line,’ he said, ‘there are subdivisions that have got hundreds of houses. And in one of them, they didn’t have one sold. But there’s a hell of a lot of houses out there. More houses than I’d be wanting to sit on.’”

“Developer Watson Caviness, who has been in business for 12 years in the Fayetteville area, blamed the media for giving the local housing market a bad rap of late. Reports of a bad market, he said, have been exaggerated.”

“‘It certainly is slow. It certainly is off,’ he said. ‘I have seen a lot of indicators that the fall could be a good market.’”

“Builder Loyd Landry said 200 to 300 builders can be found within 60 miles of Fayetteville. ‘And that’s what’s killing the market,’ he said. There’s an 11-month surplus of some homes that sell within the same price range, he said.”

“Richardson said his company is not building homes during this weak market stretch. ‘I think it’s overbuilt right now,’ he said. ‘It’s a cycle around here. Only this time, they’ve overbuilt more than in the past.’”

What do you see in your local housing market this weekend? Lending problems? “‘I have never seen it as bad as this in 16 years. It can’t have bottomed out, there are still all those bad loans out there,’ said Margaret Massitti, a real estate broker in Cleveland, Ohio. ‘People just walked away from their homes. Now it’s worse. One buyer had agreed a mortgage on a two-bedroom home, he had agreed to put down 5 per cent [deposit]. Last week, the lender now says he no longer qualifies.’”

Lower appraisals? “‘We have noticed recently that the incidence of down valuations has increased over the last couple of months, as the market has slowed down. Most down valuations have been in the 5 per cent to 10 per cent range, with the occasional one which is much heavier,’ said independent mortgage broker Ray Boulger.”

“James Scott-Lee, spokesman for The Royal Institution of Chartered Surveyors, confirmed: ‘Surveyors need to look at the whole market and not just the particular property. Because prices are cooling, we may well see more instances of down valuations.’”

Signs of contagion? “Some of Canada’s biggest subprime mortgage lenders are pulling out of areas of the business, at least temporarily, indicating that problems in the commercial paper market have spilled over to affect some Canadian consumers.”

“Jim Murphy, CEO of the Canadian Association of Accredited Mortgage Professionals, said ‘this really has nothing to do with the Canadian real estate market.’”

“It stems from the problems in the commercial paper market, which are the result of trouble in the U.S., he said. The housing market in Canada is still strong, and the changes are only applying to new applicants, he said.”

Or foreclosures? “As foreclosures surge both nationally and in New Hampshire, a local organization that has helped many people purchase their own homes is also offering free counseling on how to hold on to them.”

“As to the scope of the problem, ‘I’ve never seen anything like this before,’ said foreclosure counselor Gail Engle, who had 26 years of experience with a local bank prior to joining the land trust back in May.”

Media reaction? “With the mortgage meltdown, foreclosures on the rise and property values in freefall, TLC’s ‘Property Ladder’ and about a half-dozen other shows have started to address the downturn. Nets like TLC, HGTV and Bravo are now running into the real-life dramas among homeowners and real estate flippers as the market moves from boom to bust.”

“‘We’re starting to see it now in the stuff we’re filming,’ says Brant Pinvidic, TLC’s senior VP of programming. ‘It’s gone from, ‘Oh, I can get so much money for my house’ to, ‘Oh my goodness, what if I don’t sell my house?’”

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