The Housing Bubble

The County Sun reports from California. “Real-estate professionals know the drill: If the house won’t sell, slap a fresh coat of paint on the walls and plant fresh grass in the front yard. But with the housing market hitting the skids over the past few months, that’s just not good enough. ‘It doesn’t seem the buyers care about granite countertops,’ said (realtor) Tim Adams of. ‘The buyers are looking for deals.’”

“Agents throughout San Bernardino and Riverside counties are making deals that just a couple of years ago, when the market was booming, would have been laughable.”

“Some of the home sellers Adams has worked with during the past year wound up dropping their asking prices as much as $30,000 to $100,000 before finding buyers.”

“San Bernardino-area Realtor Cheryl Ross thought $15,000 in upgrades would do the trick on a house she is trying to sell. But six months have passed since the property went on the market, and only one offer, for $70,000 less than the asking price, has been made on the home.”

“‘Why am I having a hard time selling it? Because the market is awful,’ she said. ‘Two or three years ago, I could’ve sold it in a couple of days.’”

“Josee Maclaughlin, a Realtor in Upland remembers when houses ‘were flying off the shelves’ a few years ago in places like San Dimas, La Verne, Claremont, Upland and Rancho Cucamonga. She said buyers are offering what seems like ridiculously low prices.”

“‘We just kind of laugh, because (buyers) really low-ball it,’ Maclaughlin said. ‘We’re talking about 30 to 40 grand below asking price.’”

The Daily Bulletin. “The news was worse for homeowners in the High Desert and the Inland Empire than anywhere else in California on Monday when the California Association of Realtors released its sales and price numbers for July 2007.”

“The median price of a home in the High Desert in July was $296,220, 11.1 percent less than a year ago. In addition, sales were off 50.1 percent from July 2006.”

“‘A lot of it is affordability and the subprime market,’ said economist Eduardo Martinez. ‘There is a big allotment of oversupply in those areas, and until demand increases, it’s not going to come down.’”

“‘The problem isn’t just that people who didn’t have 20 percent down payments financed 100 percent,’ he said. ‘Some of them borrowed more than they could afford to buy bigger houses. This situation has to sort itself out, and it could take quite a few months - if not years.’”

The Ventura County Star. “Ventura County’s sales fell 17.8 percent in July from the same month a year ago, CAR reported Monday.”

“While inventory remains high, the pool of buyers is shrinking, said Tony Deleo, a real estate broker in Ventura. Most people who have contacted Deleo haven’t qualified for loans.”

“Many sellers are still unrealistic, believing that their homes can fetch the same prices the could two or three years ago, Deleo said. He estimates most of the houses on the market are 10 percent to 20 percent overpriced.”

“Naiveté among sellers is a real obstacle, he says. ‘You’re the messenger, and you’re the one getting shot,’ Deleo said.”

“‘This is a terrible time to sell,’ said Bill Watkins, executive director of the UC Santa Barbara Economic Forecast Project.”

“Still, Rose Vicente says she isn’t worried. She and her husband, Manny, put their Simi Valley home on the market about two months ago, with plans to move to Texas by the end of the year.”

“The Vicentes recently reduced the price of their five-bedroom, 1,834-square-foot house by $50,000 to $599,900. They’ve since had plenty of calls, but mostly from investors offering much less than the asking price. ‘We’re not about to give it away,’ Manny said. ‘The house is almost paid for.’”

The News Press. “Home sales in Santa Barbara County contained both good news and bad news last month. Condos on the South Coast posted a median of $590,000 in July, which is 10 percent below a year ago. Lower prices for units on the market likely helped to boost sales.”

“‘The lowest (priced) segments of the market still have not reached their bottom. Although interest rates are remaining relatively stable, foreclosures are increasing, which will continue to have a negative effect on the entry-level housing market,’ said Dan Encell, director of the estates division for Prudential California Realty in Montecito.”

‘”July’s sales and prices did not show much change,’ said Mark Schniepp, director of the California Economic Forecast. ‘We expect to see more of a reaction to the credit crunch when we get all of the August numbers.’”

“Up in the North County, home sales and prices were mostly in negative territory. Santa Maria and Lompoc also report the majority of foreclosures that have spiked steeply for the county this year.”

“The Lompoc Valley took the biggest hit last month, with sales dropping by 47 percent. Lompoc’s median price of $350,000 was down 13 percent from a year ago. For the year-to-date, Lompoc home sales were off by 19 percent, but the median was only about 6 percent lower, to $395,000.”

“In Santa Maria, sales dipped by 33 percent in July and the median was down by 12 percent to $389,000. For the year so far, Santa Maria’s sales were 21 percent lower and the median was $400,000, or 11 percent below a year ago.”

The San Francisco Chronicle. “Celine Damonte and Warren Ganda are in contract to buy a five-bedroom house being built in Oakley, big enough to accommodate their entire brood. It will be ready in late October.”

“But before they can afford a new house, Damonte and Ganda need to sell their existing homes. Each already owns a three-bedroom home in Antioch, where there are 1,374 homes on the market, or 1 out of every 22 residences. At the current rate, it would take 21 months to sell all the homes in Antioch now on the market.”

“Her Realtor, Janice Spencer in Antioch, has marketed the house aggressively. Its $475,500 price (down from $495,500) is moderate for the area, especially considering that it has a pool. In seven weeks on the market, the house has been viewed by just one prospective buyer.”

“‘How can there be no buyers? None?’ Damonte asked. ‘It’s not even a buyer’s market; it’s a nobody market. We’re not flipping houses or trying to cash in. We just want to move on with our lives. We’re in a tough spot.’”

“Ganda, who lives a couple of miles away, said there are dozens of ‘For Sale’ signs in his immediate neighborhood, so he isn’t optimistic about the prospects for selling his house.”

“Earlier this year when they signed papers for their new, unbuilt home they assumed each of their homes would sell for about $510,000. That meant they could readily afford the $742,000 house. So far, they’ve put down $7,000 to hold it. But like most people, the rest of their money is tied up in their respective houses.”

“Pulte Homes, the developer, has been very understanding. ‘I called and asked, ‘Is it hopeless?’ Damonte said. ‘They said, ‘Oh, no, no, no, don’t run away.’”

“Pulte said it would accept a 15 percent down payment instead of 20 percent and is open to renegotiating once they get an offer on one of their houses, according to Damonte.”

The Press Democrat. “About 400 people jammed into a Rohnert Park hotel ballroom Sunday for an auction of 22 Santa Rosa condominiums, and all had buyers in about one hour.”

“It was the first time in more than 10 years new homes had gone on the auction block in Sonoma County. This effort, by builder Centennial Homes of Novato, was an attempt to get something out of the current home sales slump.”

“All of the Chanate Village condos went well above their minimum bid, which was about 40 percent below the original asking price. But the successful buyers got them at about 15 to 20 percent lower than the asking price.”

“Dan Morgan, Centennial’s CEO, called the sale bittersweet. ‘I’m happy that all the units are sold,’ Morgan said. ‘I’m happy to see some people got some really good deals.’ But the project still lost money, he said.”

“Auctioneer Dean Cullum worked up a sweat by the end of the hour, started with $5,000 bid raises. ‘I got within a thousand dollars,’ said Kathleen Pozzi, who admitted she went beyond her maximum price. ‘I don’t know whether I’m depressed or relieved,’ she said afterward.”

“Buyers were escorted out of the ballroom to a nearby side room where they opened escrow. But most of the crowd, like the Reineckes, left via the front door. But Michael Reinecke and his wife weren’t deterred.”

“‘We’ll just wait for the market to get crappier,’ Reinecke said.”

The Record Searchlight. “July home sales in Shasta County reached their lowest level in 12 years. DataQuick reported Monday that 169 homes closed escrow last month, the fewest since July 1995, when 165 homes sold, and down from 231 sales a year ago.”

“July was the fifth consecutive month the median sale price for all homes dropped on a year-over-year basis, DataQuick said.”

“Realtors and builders blame a glut of homes on the market and tighter loan underwriting requirements which has shrunk the pool of eligible buyers.”

“‘There’s still money available, but what it (stricter loan rules) will do is weed out some of the people with less-than-stellar credit,’ said Brad Garbutt, past president of the Shasta Association of Realtors, adding that even prime borrowers are getting scrutinized more.”

“The Shasta Association of Realtors reported 2,127 homes on the market Monday. The group reported 180 homes sold in July.”

“Greg Lloyd, incoming president of the Shasta Association of Realtors, said borrowers need to bring more income documentation to the table than they did a year ago.”

“‘During that refi and subprime craze, you could be a dead dog for four days and still get a loan,’ Lloyd said. ‘Now it’s coming back to where lenders want full or partially full documents before they make a loan.’”

“Michael Chord, regional vice president of Eagle Home Mortgage in Redding, said his industry has to re-educate the public on how to obtain a home loan. ‘For four or five years the industry did a great job of educating the public that you don’t need any money down, you don’t have to document your income,’ Chord said.”

“Rick Goates, a Redding real estate agent, said sellers need to realize they have competition. ‘The days are long gone of throwing a high number up on a home and hoping it sells,’ he noted.”

“Meanwhile, buyers can wait for prices to drop, but if they find the home they like, don’t be afraid to make an offer, Goates said. ‘What have you got to lose?’ Goates said. ‘It would be a shame to miss out… just to save a couple of thousand.’”

The Chicago Tribune reports from Illinois. “Surrounded nationally by a residential real estate market in decline, some Chicago buyers and sellers seem so determined to get the price they want that they would rather not consummate a deal than give in. Dave Zebutis, who has been house-hunting for nearly a year, said he believes prices are going to fall significantly and that he is determined to wait it out.”

“‘The market drives me batty. They all feel overpriced,’ said Zebutis, who lives in Westmont and has been looking in several DuPage County communities. ‘It seems that nobody is really making a move, despite all the news.’”

“‘We’re waiting for prices to come down,’ he said. ‘It seems that people are trying to get as much as they can, and you can’t blame them. But prices seem ridiculously high for what I think are just regular houses.’”

“Deborah Gorman is trying to sell a home near Hobart, Ind., that she bought as an investment and remodeled. After 19 months on the market, five real estate agents and several price changes, she says she’s at her limit.”

“Originally listed for $145,000, it’s now priced at $130,000, she said. Buyers are unreasonably demanding, she said.” ‘One offered me $126,000, but they wanted me to pay everything…points and all their closing fees and home inspection,’ she said.”

“‘People tell me it’s the nicest one they looked at but they all say they don’t have the credit,’ she said. ‘One couple wanted to buy the house. He had two motorcycles sitting in the garage but they had no money in the bank. People spend their money on big-screen TVs and motorcycles and they don’t leave themselves enough cash for the down payment.’”

“Barbara Hibnick, an agent in Buffalo Grove, said she is skeptical that local prices, overall, are staying in positive territory.”

“‘I’m not seeing it, I’m sorry,’ said Hibnick. She said the inventory of houses for sale in her area has doubled since the beginning of the year.”

“‘I used to tell them they have two choices — either price it [lower] to sell it or get it in absolutely gorgeous condition,’ she said. ‘I tell them they have to do both now, unless they’re going to dump the house. Their first reaction is, ‘Are you crazy?.’”

The Herald News from Illinois. “Will County’s once red-hot housing boom has gone bust. The number of residential building permits has dropped significantly, leading municipal governments and businesses all over the county to revise revenue estimates.”

“‘All businesses go through cycles,’ said Will County Board member John Gerl, who is chief financial officer for Phoenix Developers in Joliet where home building is off by 50 percent. ‘This is a serious down cycle in the residential home building market.’”

“The downturn was caused by a ‘perfect storm’ of conditions, said Erik Doersching, an executive VP for a real estate consulting firm. Though the downturn is happening region wide, it’s more pronounced in Will County because Will County has been one of the fastest growing areas in the nation in recent years, he said.”

“Doersching’s firm projects total building permits in Will County will reach only 3,122 this year, compared to 5,882 in 2006 and highs of more than 8,000 a few years ago.”

“‘It’s a significant housing downturn,’ he said. ‘We’ll never get back to the same levels we saw nationwide or in Will County from 2003 to 2005.’”

The Star Press from Indiana. “The number of foreclosed homes in Delaware County each year has risen steadily from 223 in 2000 to 700 or more likely for this year, according to the Delaware County sheriff’s office.”

“Some in the local real estate business say tougher standards for home loans are a good thing. ‘It’s better that the requirements for loans are tighter now,’ said real estate agent Sharon Strahan. ‘We saw a lot of people who refinanced for more than their house was worth.’”

“Strahan recalls a would-be homeseller who owed $90,000 on his house and hoped to sell it. ‘I couldn’t get $30,000 for his house,’ she said. ‘He ended up filing for bankruptcy. That was an extreme example, but we do see that.’”

“‘I used to tell people sometimes it’s not the right time to buy a house,’ said Steve Jobe, area mortgage sales manager for Old National Bank. ‘Maybe in a year, they can pay down their debt and earn more. In today’s world, people want to own a home. But I want to sleep at night knowing someone won’t suffer from their mortgage, and that’s what happened in the subprime world.’”

From News Channel 18 in Indiana. “Over the last few years, foreclosures in Tippecanoe County have more than doubled according to the Tippecanoe County Sheriff’s Department. Lafayette Board of Realtors President Cheryl Butcher says the increasing number of foreclosures is hurting home owners and lenders.”

“‘Whoever has the title now, they’re taking big hits on those homes because they’re selling for a lot less, even if they’re in good quality people don’t want to pay normal market prices because they’ve been vacant for up to a year,’ said Butcher.”

“Broker Sherrie Cocanower says when homeowners can’t pay and lenders foreclose, it takes realtors more than a year to get a house back on the market.”

“‘Trying to deal with some of these lenders, you don’t always have the right phone number to call you can’t get the information you need, you can’t get people to call you back, sometimes it’s a nightmare,’ said Cocanower.

The Detroit Free Press from Michigan. “Brian Jurvis of Hazel Park wasn’t surprised when he was laid off late last week from Countrywide Financial Corp.’s subprime lending division. About 16 people worked there. He went back Tuesday and the office looked abandoned.”

“‘There is no subprime market anymore,’ said Jurvis. ‘I knew something was coming down.’”

“‘I’m not aware of a subprime lender with offices in Michigan,’ said Drew Sygit, a certified mortgage and equity planning specialist in Bloomfield Hills. ‘A lot of them will not lend in Michigan.’” “For five years, the nation’s housing market was booming and mortgage companies grew quickly, at times offering lucrative jobs to people who had little experience.”

“Jurvis, an account executive at Countrywide, worked in the mortgage business a little more than two years after several years of building and installing elevators around Michigan. He now plans to go back to school to get his teaching certificate.”

The Star Tribune from Minnesota. “No one needs to remind Danelle Hoeppner that the number of mortgage defaults is skyrocketing. Almost two months ago, she and her fiancé, Brad Cheney, made an offer on a Bloomington house that was in default, but they have yet to get a response from a California lender that holds the mortgage.”

“‘With all the houses on the market, don’t you think they’d want your money?’ Hoeppner said. ‘I guess that’s not how it works.’”

“Real estate agents and prospective buyers say that offers on many bank-owned houses go unanswered for weeks and that closings are sometimes abruptly canceled. Sales agents blame the delays on a growing backlog of listings and on ill-prepared mortgage companies that might be hundreds of miles away and grossly understaffed.”

“Some experts say that buyers themselves are contributing to the problem by making unrealistic offers in hopes of snagging a bargain.”

“‘It’s unbelievable, and I’m hearing this from every agent I talk to,’ said Jay Anderson, of Coldwell Banker Burnet in Minneapolis, who has been waiting six weeks for a response to an offer of his own on a foreclosure home that he plans to hold for investment.”

“Earlier this month, a Minnesota study based on sheriff’s sales said there were 11,207 foreclosures statewide in 2006, and a record pace has continued through 2007. In July alone there were 975 foreclosures in the 13-county Twin Cities metro area, up from 392 a year earlier, according to RealtyTrac.”

“Danielle Babb, a California-based real estate investor, said inquiries about bank-owned listings have increased 400 percent nationwide, but because a typical lender can process only 10 to 12 a day, the levels are becoming unmanageable.”

“‘And with layoffs [happening within the industry], banks are even more understaffed, so they’re not ramping up yet,’ said Babb.”

“Jim Miley, president of residential real estate for Bremer Bank in Minneapolis, said many lenders are losing big bucks on their listings because they financed them at the peak of the market or extended credit beyond the value of the property. ‘We’ve had some very zealous lending going on,’ he said.”

“Richard Bauer, the agent representing the anxious sellers of the house that Hoeppner and Cheney are trying to buy, said that, across the country, lenders are struggling to adapt to changing market conditions.”

“Bauer said that he has received four offers on the Bloomington house, but that none of the other buyers was willing to wait for the lender to process the offer, leaving the sellers closer to foreclosure.”

“‘You hear that and it doesn’t sound logical,’ said Bauer, an agent in Minneapolis. ‘But you ask: ‘Is this whole mess logical?’”

Some housing bubble news from Wall Street and Washington. The Street.com, “Housing prices across the U.S. fell 3.2% in the second quarter from a year earlier — the largest decline in at least 20 years, according to the S&P/Case-Shiller home price index. The even worse news is that this data measured price activity up until June, which was before the sharp reduction in mortgage lending this summer, stemming from the broader credit crunch.”

“The worst-performing market was Detroit, where prices fell 11% in one year. San Diego, Washington D.C., and Tampa, Fla., were the next biggest duds, with housing prices falling about 7% in each market.”

From Bloomberg. “‘The pullback in the U.S. residential real-estate market is showing no signs of slowing down,’ said Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, said in a statement.”

“Shiller and Karl Case, an economics professor at Wellesley College, created the home-price index based on research from the 1980s. Shiller’s 2000 book ‘Irrational Exuberance’ predicted the stock market would slump and a second edition, published in 2005, said housing was in the midst of the biggest speculative boom in U.S. history.’”

The Wall Street Journal. “U.S. sales of existing homes fell slightly in July, but a surge in inventories set the stage for a steeper slump and sharper price declines in the months ahead. Sharply rising inventories are a sign of homeowners trying to sell their homes before prices tumble more, said Joseph Brusuelas, chief U.S. economist at consulting firm IDEAglobal.”

“‘There are going to be no happy endings here,’ he added. ‘It’s the last days of the old order.’”

From MarketWatch. “Shares of a $18 billion Dutch investment fund run by a Carlyle Group affiliate dropped Tuesday after it received its second bailout in a week, prompting an apology from its chief executive, and a warning that the current round of credit-market problems are worse than the problems that brought about the demise of Long-Term Capital Management nine years ago.”

“Carlyle Capital Corp. said it’s taking a loss of $30 million to $40 million after being forced to sell $900 million in assets.”

“John Stomber, CEO of the fund and Merrill Lynch’s former treasurer, said conditions are worse than in October 1998, when the Federal Reserve intervened to compel banks to bail out Long-Term Capital Management.”

”Unlike 1998, the market for AAA-rated U.S. agency floating-rate capped mortgage-backed securities issued by Fannie Mae or Freddie Mac was materially affected by recent events and the market for repurchase agreements secured by high-quality, agency-issued mortgage- backed securities experienced instability,’ Stomber told investors.”

“State Street Corp. has exposure to $22 billion of asset-backed commercial paper conduits, the types of assets that have caused problems at European banks, according to a report Tuesday in The Times of London newspaper.”

“Separately, the Boston Globe reported Tuesday that an institutional bond fund managed by State Street’s investment arm lost about 37% of its value during the first three weeks of August amid credit market woes. The fund may be facing losses from investments in mortgage-related securities which were heightened by leverage, according to the report.”

From Reuters. “CIT Group Inc on Tuesday said it has closed its mortgage lending operations. CEO Jeffrey Peek on a conference call that day said the mortgage business had a ‘problematic outlook’ and CIT was not willing to spend more to add scale and boost returns.”

The Washington Post. “For months, securities backed by risky mortgage loans have been in trouble. Now, the credit-rating agencies that once blessed those securities as safe investments are in trouble, too.”

“‘This is akin to a slow-moving train wreck,’ said Sean Egan, managing director of a rating firm, who has been a vocal critic of the three rating firms that dominate the field; Moody’s, Standard & Poor’s and Fitch Ratings.”

“Egan noted that the major rating agencies faced similar criticism when they maintained solid, investment-grade ratings until just weeks before WorldCom collapsed in 2002. ‘We’ve seen this movie before,’ he said.”

“‘The rating agencies themselves for a year were putting out warning signs…significant reports highlighting the risks, and yet they weren’t downgrading,’ said Joshua Rosner, managing director of a financial research firm for institutional investors. He said the raters, in effect, were ‘wearing blinders.’”

“Rosner said that part of the problem is that the raters were acutely aware of their power in the capital markets and hesitated to downgrade securities backed by subprime loans. ‘They were afraid their actions themselves could roil already weak markets,’ he said.”

“The other problem, he said, is that the big three credit raters are paid by the very firms they rate.”

“Tom Warrack, managing director in the Standard & Poor’s residential mortgage group, said, ‘We believe we acted at the appropriate time.’”

“Lawrence J. White, professor of economics at the New York University Leonard N. Stern School of Business, is not persuaded: ‘Give me a break,’ he said. ‘What really matters is the rating…and if they’re not willing to change the rating, talk is cheap.’”

“In response to the latest vitriol from investors and Wall Street analysts, the big three raters have moved in recent weeks to restore confidence in their work even as they maintain that they acted appropriately and on time.”

The Associated Press. “Credit rating agency Moody’s Investors Service said Tuesday it is reviewing IndyMac Bancorp Inc. and its thrift subsidiary IndyMac Bank FSB for a possible downgrade because of the company’s exposure to the troubled mortgage market.”

“‘It is unclear if inventory write-downs would be limited to one quarter,’ said Sean Jones, a senior VP at Moody’s Financial Institutions Group. ‘These potential write-downs, and the significant drop in residential mortgage loan origination and sales volumes, is likely to weigh on the thrift’s profitability for a few quarters.’”

“Credit rating agency Moody’s Investors Service said Tuesday it downgraded Fremont General Corp.’s senior debt rating, due to low capital levels and increased uncertainty that Fremont can meet its obligations.”

“‘Fremont…could be subject to a positive inflow of capital, or incremental asset write-downs which would put further pressure on its low capital levels,’ Moody’s Sean Jones said.”

“Lehman Brothers Holdings Inc., Bear Stearns Cos. and Citigroup Inc. were downgraded (by) Merrill Lynch & Co. stock analyst Guy Moszkowski because of looming losses on mortgage bonds and leveraged loans, as well as a slowdown in investment banking.”

“Moszkowski, the top-ranked U.S. brokerage analyst in Institutional Investor magazine’s survey of money managers, said in a note to clients that New York-based Lehman and Bear Stearns will be hurt because of their dependence on debt markets.”

“The worldwide credit crunch triggered by rising defaults on U.S. subprime home loans has undermined some of Wall Street’s biggest moneymakers, including mortgage securitization.”

“‘There has been no good place to hide during the month of August, which must surely go on record as one of the industry’s most hair-raising ever,’ Moszkowski, said in the report written with Patrick Davitt and entitled ‘Differentiation Escalates.’”

“U.S. consumer sentiment took its sharpest plunge in nearly two years during August while home prices swooned in the second quarter, according to reports that show the housing crisis taking its toll.”

“‘My guess is we’re heading for a consumer-led recession beginning in a few quarters,’ said Michael Metz, chief investment strategist at Oppenheimer & Co. ‘The consumption boom is over.’”

“While not all economists are convinced a recession is inevitable, most agree that the housing downturn will put a serious damper on spending as Americans feel poorer.”

From Marketplace. “With 4.5 million unsold homes sitting on the market, could we be looking at a recession? Stacey Vanek-Smith talks to economists and takes a look into the markets. Stacey Vanek-Smith: ‘There are 4.5 million unsold homes sitting on the market, according to The National Association of Realtors.”

“David Lereah: ‘This is starting to look like a typical housing recession.’”

“Housing economist David Lereah says the real problem is that people can’t get the home loans they need. Lereah: ‘Too many homes and not enough buyers is basically what’s happening right now. There may be buyers out there, but they can’t obtain a mortgage.’”

“That doesn’t worry UCLA economist Edward Leamer. He says banks will adjust quickly and the loan market will loosen up. Leamer says what concerns him is that home sellers are holding out for the high prices of a few months ago.”

“Edward Leamer: ‘There’s sort of a stand-off between buyers and sellers.’ Leamer says that stand-off could increase the risk of a recession.”

The Florida realtors report on July sales. “With positive economic conditions such as low mortgage interest rates and job growth continuing in Florida, statewide sales of existing single-family homes totaled 11,674 in July and were closer to activity in July 2001 and 2002 – before the housing boom years – than the July 2006 figures, when 15,378 homes sold for a 24 percent decrease in the year-to-year comparison, according to the Florida Association of Realtors.”

“Florida’s median sales price for existing single-family homes last month was $237,500; a year ago, it was $250,400 for a 5 percent decrease. In July 2002, the statewide median sales price for single-family homes was $141,700, for an increase of 67.6 percent over the five-year-period, according to FAR records.”

The Herald Tribune. “Market forces continue to bleed value from homes that ran up during the recent housing boom, and nowhere was that more evident during July than in Southwest Florida. Charlotte County-North Port’s median price was 21 percent below July 2006; Sarasota-Bradenton’s was 12 percent below the comparable month last year.”

“After some initial success in flipping lots, Mick Fenn invested heavily, and now has four houses to sell. His home in North Port cost him $137,000. He put $15,000 more into it, not counting sweat equity. The house came in with a juicy looking appraisal of $190,000 in January, but the market has not agreed at all.”

“Fenn recently tried posting huge signs in the yard and on the garage door. One read: ‘Reduced $1,000 a week until sold.’ The city of North Port cracked down on the signs, and Fenn has since turned to more traditional means. ‘I think I can keep my head above water the next 90 days,’ he said. ‘At that point in time, I am going to be in big trouble.’”

“Fenn still likes Southwest Florida. He just wishes he did not own so much of it: ‘I think I got greedy and I think the greed came back to haunt me.’”

“He is in good company. Just in the Sarasota MLS, there were 7,916 single-family homes for sale as of mid-August. With Realtors closing at the rate of 87 homes per week, that is an inventory of about 21 months. In Sarasota’s condominium market, it is worse. There were 4,808 units. Realtors are closing on about 40 per week, leaving a two-year supply.”

“Sales were down 35 percent in Charlotte County-North Port during July when compared with a year ago. Ocala’s sales dropped 55 percent, while Fort Myers-Cape Coral slipped 39 percent. But dragging down the southern market is the large number of speculatively financed homes in North Port, which are now proving difficult to move, said Roger Richmond, a broker associate in Port Charlotte.”

“Typically, a speculator paid to have a three-two with a two-car garage built in North Port for a little more than $200,000, Richmond said. ‘They can now sell it for $180,000,’ he said.”

“‘Homes that sold in the $600,000s to $700,000s market are probably high $400,000s to low $500,000s now,’ said Richmond, citing the Old Grassy Point canal system in Port Charlotte as one neighborhood for such pricing.”

The News Press. “Prices and sales in Lee County were off compared to June: down 7 percent from $264,600 and off 24 percent from 558. It all adds up to a market where it’s hard to sell a house, Kathleen Bressler said. ‘I think there’s just such a saturation of houses for sale because of foreclosures and investment houses that are for sale.’”

“Maggie Morris, an executive committee member with the Florida Association of Realtors, said many people in today’s market are finding themselves having to let go of their properties. ‘I think a lot of people are walking away,’ she said, and that in turn is causing prices to adjust to real market values at last.”

The Ledger. “The number of existing homes sold in July continued Polk County’s housing slide. For the 14th consecutive month, the total was less than the year before. Realtors sold 278 homes last month, down 40 percent when compared to a year ago. Median home prices also fell: 3 percent from July. Lakeland Realtors had 172 home sales in July, down 37 percent from 274 a year ago.”

“‘We are returning to a normal market. People are adjusting their prices. They are realizing they aren’t going to get that pie in the sky price,’ said Tony Fridovich, broker in Lakeland.”

“In a market that has turned favorable to buyers, Fridovich has noticed a new type of home investor - predatory buyers. ‘They are making offers of 50 percent on the dollar,’ he said. ‘They are giving extreme low-ball offers. But all of them have been rejected.’”

The Palm Beach Post. “The median price of an existing single-family home sold in July in Palm Beach County declined 5 percent - the 12th straight month of falling home prices, the Florida group said Monday. In the Treasure Coast, the median price of an existing single-family home fell 11 percent in July - marking 14 straight months of plunging prices.”

“Worse, the inventory of homes for sale continues to grow, especially in Palm Beach County. It’s inventory - the new dirty word in real estate - that has made so many housing analysts bearish on the market.”

“Worse news may lie ahead, some economists say. ‘The July data reflects sales that were agreed to in May or June, well before the severe tightening in credit standards that occurred in July and August,’ said Nigel Gault of Global Insight. ‘It’s hard to see a bottom before mid-2008.’”

The Sun Sentinel. “Three years and counting. Sales of existing homes in Broward County declined in July, just as they have for 36 of the past 37 months. That dismal trend isn’t likely to change soon as lenders across South Florida make it tougher for consumers to qualify for mortgages.”

“Jim Mander still is trying to find a buyer for the four-bedroom Davie house he listed more than a year ago. The property with a pool is set on an acre lot and has been renovated extensively. He originally was asking $789,000, but he’s down to $749,000 and getting frustrated.”

“‘I’ve got a feeling it’s not the house, it’s not the location,’ said Mander. ‘It’s just the market. My timing was wrong.’”

“If he doesn’t sell soon, Mander will try to rent the house. His agent, Debbie Anderson said exasperated sellers are having success as landlords. ‘People have the money to rent expensive homes,’ Anderson said. ‘They just don’t want to pay for them. I think they’re afraid that prices will fall even more.’”

“Home sellers will have to lower expectations from the record high prices during the housing boom of 2000 to 2005. ‘I talk very seriously with my sellers to let go of what was,’ said Cathy Prenner, a real estate agent in Lighthouse Point.”

“Kathy Connors put her five-bedroom Wellington home on the market in January. At the time, she was asking $655,000, a price she now concedes was too high.”

“The manicured property inside the gated Isles at Wellington development has a hot tub, a spiral staircase and a balcony outside the master bedroom. But with no offers and only a handful of prospective buyers stopping by, she has slashed the price to $549,900.”

“‘Just getting people in here has been the problem,’ said Connors.”

“Her new real estate agent, Polly Parker in Boca Raton, said homes that attract little interest probably are overpriced by at least 5 percent. If no buyers step forward, the properties could be overvalued by 10 percent, Parker said.”

“‘Houses sell because of amenities, location and price,’ she said. ‘If you have all three, you’ll sell the house.’”

The News Journal. “After six months of trying to sell her Ormond Beach home, Susan McDaniels is getting scared. Scared that she won’t recoup much of the money she spent on improving the kitchen or the new appliances, among other things.”

“McDaniels said her first instinct was to price her house at $279,000, what a similar house sold for about a year ago. But real estate agents told her that was too high. So she listed it for $229,000. Then she dropped it to $224,000, then to $219,000. As of Monday, the asking price was $209,000.”

“‘And we’re still not showing it. I just have to hope in a month or so that when the snowbirds arrive, we’ll get a bite,’ said McDaniels.”

“Such is the state of local real estate, post-housing boom. Sales have fallen sharply, and now average prices have dropped, too.”

“Broker Greg Antonich said sellers have to compete against the lowest-priced houses on the market in the same category. ‘Buyers are scraping the bottom of the market and coming back to the best price in whatever category’ in which they are looking, Antonich said.”

“‘It’s a tough market,’ broker Sandy Stutz said. Many properties are staying on the market six months or more, she said. She had several such properties, including one on Sunland Road in Daytona Beach. The listing expired recently.”

“‘It’s absolute precious,’ she said of the property. ‘Immaculate, but we just couldn’t get anybody to come inside.’”

From Mrytle Beach Online in South Carolina. “With a forecast of 18 more months of a slow market, real estate agent Cal Harrelson, who specializes in the oceanfront resort home market, has asked all his clients to bring their prices down by 10 percent.”

“‘Chances are that in six months, values are going to be down 10 percent anyway,’ Harrelson said. ‘I told them to do it today and get ahead of all of their competition, get the sale and move on. If they truly want to sell their property, that’s what they need to do because there is so much inventory out there.’”

“‘If they don’t reduce by 10 percent, they along with everybody else are still going to be on the market in six months and probably in two years,’ he said.”

“Harrelson said he…gave his clients the facts and all but one lowered their price. Since that time, he’s had two oceanfront homes sell in the last six weeks priced at more than $1.5 million each. So he thinks it might be a good idea for others.”

“‘There might be something to this. If other Realtors see that and they do that, then more power to them. These sellers need to hear the facts whether they are not so good or not. It’s difficult to tell them you think it’s going to be slow for another 18 months and why,’ said Harrelson, a 13-year real estate veteran and top sales agent in Garden City Beach.”

“It’s also important that homeowners realize that builders’ closing prices do not reflect the amount of incentives they’re offering, said Don Schunk, research economist at Coastal Carolina University.”

“‘What I’m seeing now is that the resale market as we saw in July is starting to come down. If prices get 20 percent or more different, that will encourage the resale market. Builders are starting to look at lowering prices versus the incentive packages,’ said Tom Maeser, president of the Fortune Academy of Real Estate.”

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