The Housing Bubble

It’s Friday desk clearing time for this blogger. “When it comes to the slump in new homes, Myrtle Beach is getting hit much harder than any other metro area in the state. But, if you’re not a contractor or trying to sell your home, that news is really pretty good. The president of the Horry-Georgetown Home Builders Association said the Grand Strand housing market is just leveling out, after some big companies built homes like crazy for a couple of years.”

“‘Some of the bigger tract people did overbuild, but at the same time, the prognosis was really good,’ said Ralph Bussey. ‘So whether they knew it was being overbuilt or not, that’s not for me to say.’”

“The housing market appears to be in a free fall. Bill Henegar, a Blount County, TN home builder said, ‘We’re certainly seeing it here — the market is just flooded. Unfortunately, many of the people struggling with homes right now have interest-only and adjustable-rate loans. Many of those people should have never been given those loans in the first place.’”

“In Buffalo, NY, Carol Brent, staff attorney of Legal Services for the Elderly, says there are now 23,000 vacant homes, many of them emptied by foreclosure procedures.”

“James Kragenbring, senior investment officer at Advantus Capital Management, says the volume of subprime loans now being made is tiny compared with last year. And lenders are finding it tough to find buyers for the new loans in the secondary market. ‘To me, that makes the subprime market virtually nonexistent,’ he says. ‘It’s clear that in the future there will be different loan products and less leverage on the individual property.’”

“For the past two years, Pott County, KS, homeowners have seen property values jump between 20 and 25 percent or more. ‘I don’t think we’re going to see 20 percent increases like we have in the past,’ said appraiser Lois Schlegel. ‘Sale prices have been coming down. It’s not going to be such a crazy market like it’s been the last couple of years. I don’t think the bottom’s going to drop out.’”

“Consumers with a FICO score in the 640 range that once qualified for 100 percent financing and a decent interest rate will see that rate go up a quarter of a percent or so, said Mark Teteris, CEO of a residential mortgage lender in Bloomington, MN. Such borrowers should also expect to scrape together a down payment of at least 5 percent, he said.”

“Even if TopLine didn’t sell the loans and maintained an in-house portfolio of loans, general manager Mary Wetterlin said she doesn’t think she’d feel comfortable using her members’ money to fund loans that GSEs have decided aren’t desirable.”

“‘We just can’t help people, even if we wanted to,’ Wetterlin said. ‘I feel like I am sounding like Ebenezer Scrooge. On the one hand I don’t want to see these neighborhoods blow up and end up (with) rows of foreclosed homes. But it’s a struggle.’”

“As mainland firms close their mortgage companies, their local operations in Honolulu are left scrambling to find new financial backers for their loans.”

“Donald Lau, president-elect of the Hawaii Association of Mortgage Bankers, said there was no cause for panic here in the state.’I don’t think Hawaii is going to see a lot of foreclosures. In general, people with loans outstanding won’t be impacted as long as they make their payments and have jobs,’ said Lau.”

“Seattle-area home appreciation continued its long slide back to reality in June, according to data released Tuesday. Tim Hug and David Hofmann, who sold their San Francisco condo and closed on a Queen Anne townhouse in June, said the local market definitely was strong compared with the Bay Area’s.”

“‘We got out just in time,’ Hofmann said, noting that other sellers were having a harder time in San Francisco.”

“Coming from San Francisco, they expected Seattle to be more of a bargain, Hug said. ‘Seattle’s getting up there.’”

“Both Utah County and the state are leading the nation with double-digit gains in home prices, but those days may be numbered. According to Utah County Realtors, the number of homes available for purchase and under contract listing is up 51 percent to 5,182 units in July from a year ago, an all-time high since the group began tracking home values in 1995.”

“‘But we’ve definitely moved away from the sellers’ market,’ said Kevin Call, executive VP of the Utah County Association of Realtors. ‘We don’t have enough affordable inventory under the $250,000 price range. We expect that if the trend continues, there will be more price negotiation for homes over $400,000.’”

“Construction cranes and the shells of new buildings dot the downtown Austin skyline. But from Miami to Las Vegas, a real-estate slump has been dashing developers’ dreams.”

“Could downtown, where developers have more than 1,400 luxury condos under construction and nearly 3,200 planned for the next few years, end up with too many units and too few buyers? From 2000 to 2007, developers built 50 condos in downtown Austin priced at or above $1 million. About 40 sold, roughly six sales a year.”

“Three projects breaking ground this year, however, will add 567 luxury units by 2009 or 2010, many of them around $1 million. Currently, 72 condos are on the resale market downtown, with an average price of $691,000. Of those, eight are under contract, and 15 have sold in the past two months.”

“‘Today is just a very exposed time to buy a condominium unit and not expect to have the prices go down,’ said Jack Hazzard, who formed the Ontra Companies in the 1980s to dispose of distressed properties that were repossessed by more than 200 banks and savings and loans. As mortgage rates go up, ‘prices must come down, and the market could be affected dramatically.’”

“Sheridan Glen, a broker-manager of a residential and commercial brokerage firm, said it’s shortsighted to think a condo glut can’t happen in Austin. ‘You’re not insulated. Nobody is.’”

“Q: I’m sad to say that I’ve just canceled my daily delivery of the Sun-Sentinel after 21 years of loyal readership. It was a difficult decision for me as it was a pleasant morning ritual for me to read the news over a cup of tea. I realized that your newspaper has caused me great anxiety with your sensationalized version of the local news.”

“Can we put any more negative press on the front page about the housing market? Is it your business writer’s objective to send people off the edge and make buyers even more reluctant to buy? Does he froth at the mouth waiting for the monthly statistics to be released? What is the purpose of his venom-spewing articles taking over half the front page?”

“A: We always hate to hear of a cancellation, but I’m convinced the best way for all of us to deal with the current housing crisis is to stay well informed.”

“Everybody is impacted by this story. It is one of a number of pocketbook issues that affect readers directly, and they have an enormous appetite for information. So stories about the slump — just as stories a year ago about the red-hot housing market — are and will continue to be front page news.”

The Sacramento Business Journal reports from California. “Rather than drop prices to entice buyers in less time, John Leonard slashed prices on 22 new homes he built in West Sacramento to sell them in a day — he hopes in less than an hour. He’s hired a public auction company to sell homes in his River’s Side at Washington Square project quickly.”

“‘There isn’t permission for people to buy a house. People’s peers, parents and family won’t let them feel good about buying. Everyone says, ‘Wait a little longer and the prices will come down,’ Leonard said. ‘The housing market turning put me in a tight spot. I’m proud of the project. I just wish I wasn’t where I am in it.’”

“‘The market is very difficult right now. People’s inclination to buy is diminishing,’ said David Mogavero, architect on River’s Side. This is the first project Mogavero has done that hasn’t sold out during construction.”

“‘The market was way overheated, and it was driving demand’ several years ago, he said. Now, the market is still in a period of adjustment.”

The Sacramento Bee. “Sacramento city leaders have pulled back their offer to loan $10 million to fund construction of a downtown condominium high-rise.”

“Craig Nassi, the Denver-based developer behind the 39-story Aura tower, lost the city’s commitment after he failed to secure all of his private financing by the end of last month.”

“Sacramento Assistant City Manager John Dangberg said the city still supports Aura, but that it ‘has no further commitments at this time’ to the project. ‘We understand that it’s a very challenged market right now,’ Dangberg said.”

“Nassi said in an e-mail…he blamed the delay on ‘capital markets (that) have been paralyzed by the subprime fallout and the unknown of secondary market pricing.’”

“A rivalry began more than two years ago when Nassi proposed Aura three blocks from a project local developer John Saca wanted to build on Capitol Mall between Third and Fourth streets. That plan called for twin 53-story buildings featuring about 800 condominiums.”

“Each developer went all out for prospective buyers with dueling showrooms, sales parties and publicity stunts. In the end, Saca’s project busted its budget and collapsed earlier this year.”

“Irvine-based Real Estate Disposition Group, which auctioned 107 bank-repossessed houses in Sacramento on June 24, is returning to town Saturday, Sept. 22. It’s putting 22 new houses in West Sacramento on the auction block.”

“Being auctioned are three-story homes in an urban infill project called the River’s Side at Washington Square. Sales prices have been in the high $300,000s to lower $400,000s. Opening bids start at $249,000. The 25-home project opened models late last year, and also got nice reviews, but sales have been slower there, according to data from Hanley Wood.”

From Roseville & Rocklin Today. “According to the California Association of Realtors the number of households who can afford to buy and entry level home in the State increased to 24 percent at the end of the second quarter this year. Considering what has been happening in our Sacramento market the increase of only 1 percent from a year ago was surprising.”

“I checked the latest inventory of available homes and was not surprised to see there are still more homes coming on the market. As of the week ending August 27th, inventory stood at 18,844, up 185 from a week ago and 2.1 percent in the last month. In the past six months inventory has increased a staggering 40.9 percent.”

“This week alone I have had three inquiries from potential clients asking me to help them with a ’short sale.’ All three are homeowners who would like to stay in their houses but can’t afford to make the payments on homes that are worth less than what they owe.”

“At the same time, I met with a prospective buyer yesterday who has decided to sit on the fence a bit longer because he believes he can buy cheaper next year.”

The Press Telegram. “The first phase of CityPlace Lofts at Fourth Street and Elm Avenue is complete and more new downtown residents are already moved in. The lofts, between Long Beach Boulevard and Elm, offer prices starting from $399,990 up to about $700,000 and sizes from 1,092 square feet to 2,085 square feet.”

“The developer dropped the asking prices on the lofts by about 10 percent off the original price. ‘They took into consideration the market, and the fact that Long Beach is very competitive,’ said Debbie Tucker, superintendent of the project.”

The Union Tribune. “Declining consumer confidence and a deteriorating job market pushed San Diego County’s economic outlook lower for the fourth month in a row, according to a report released yesterday by the Burnham-Moores Center for Real Estate at the University of San Diego.”

“‘The slow housing market remains the main influence, with fewer home sales, more foreclosures, job losses in real estate-related sectors, and lower spending as home equity declines,’ said USD economist Alan Gin, who compiles the index.”

“The index slid from 137.3 in June to 136.9 in July, its lowest point since January 2004. The county’s index fell in July for the 15th time in 16 months, a string of declines broken only by a slight uptick in March.”

“There were 37 percent fewer residential units authorized by building permits last month than in July 2006, according to the Construction Industry Research Board.”

“‘Residential construction has really been in a slump since August 2005,’ Gin said.”

From Scripps Howard News Service. “Similar to the down market of the late 1980s, home sellers must now compete not only with builders, but with foreclosures, thanks to all those subprime loans you’ve been hearing about.”

“”Earle Gibson, a real estate broker in California wine country likens her high-priced turf, which includes Napa, Sonoma and Marin counties, to a high noon stare-down between home sellers and prospective buyers, each of whom can afford to wait for the other to blink.”

“Now the power meetings are between listing agents and their anxious sellers on how to flag the attention of agents representing qualified buyers.”

“Gibson says foreclosure trustee sale notices run three full pages a day in the local newspaper. ‘In Vallejo right now, there is an inventory of well over 1,000 single-family homes and maybe 10 closings per week, while each week we add probably 20 new listings to the market,’ she says. ‘Everybody’s hurting. It’s like, who’s the lucky agent this week?’”

Some housing bubble news from Washington and the Wall Street Journal. “President Bush, looking for ways to respond to the subprime-mortgage crisis, will outline a series of policy changes and recommendations today to help borrowers avoid default, senior administration officials said. ‘The president wants to see as many homeowners who can stay in their homes with a little help be able to stay in their homes,’ a senior administration official said. ‘We’re not looking for an industry bailout or a Wall Street bailout. The focus here is on the homeowner.’”

From Bloomberg. “President George W. Bush today pledged to help people with risky subprime mortgages keep their homes and tighten safeguards against predatory lending, while rejecting a bailout for ’speculators.’”

“‘I plan to help homeowners, the government’s got a role to play,’ Bush said. ‘But it’s not the government’s job to bail out speculators or those who made the decision to buy a home they couldn’t afford.’”

From MarketWatch. “Not everyone is keen on helping borrowers who got themselves into trouble by taking out risky loans that are about to ‘reset’ and sock them with higher payments.’

“Even Barney Frank, who chairs the House Financial Services Committee agrees. ‘You can’t just give people a free ride,’ he told the New York Times this week.”

“Housing has clearly become a political issue. But support for straightforward bailouts thus far appears to be limited to private observers, while politicians are suggesting more modest steps.”

“Even with reforms, some borrowers could be left out in the cold, says Alec Crawford, mortgage-backed securities strategist at RBS Greenwich Capital. In a note, he said that the FHA is apparently only considering breaks for borrowers with so-called ‘5/1′ and ‘7/1′ adjustable-rate mortgages, not ‘2/28′ subprime loans.”

“‘Any change of the type we expect would probably have a small impact on the subprime market,’ Crawford wrote.”

“There would also be political consequences if the White House didn’t act, argues analyst Richard Bove. Still, a bailout or expensive measures rammed through by either party might be unpopular with taxpayers who had no role in other peoples’ decisions to take out risky mortgages.”

The New York Times. “Ben S. Bernanke, chairman of the Federal Reserve Board, declared on Friday that the central bank ’stands ready to take additional actions as needed’ to prevent the chaos in mortgage markets from derailing the broader economy.”

“‘Obviously, if current conditions persist in mortgage markets, the demand for homes could weaken further, with possible implications for the rest of the economy,’ Mr. Bernanke told listeners at the Federal Reserve’s annual symposium.”

“Mr. Bernanke walked a very tight line between trying to reassure financial markets and locking the Federal Reserve into a rescue effort that could prove either unwarranted or unwise over the longer term.”

“‘It is not the responsibility of the Federal Reserve — nor would it be appropriate — to protect lenders and investors from the consequences of their financial decisions,’ he said.”

From Newsday. “A crisis-ridden mortgage industry maybe hoping for a bailout, but local experts awaiting President George Bush’s proposals to aid homeowners struggling to pay their loans say that that’s an unlikely scenario.”

“‘I don’t think that’s in the cards and I don’t think that’s a good idea because then it would validate some of the lending practices we’ve seen,’ said Pearl Kamer, economist for the Long Island Association.”

“Kamer said she expects the volatility in the credit markets continue for two or three months but said that there will be a return to traditional lending standards and an increased confidence on the part of lenders that borrowers will be able to repay their loans.”

“‘I don’t think we should ever return to the excesses in mortgage lending that we’ve seen over the past two years,’ she said. ‘It’s a dangerous phenomenon in a globally linked economy.’”

From Reuters. “While innovations in mortgage finance expanded home ownership around the world, they also sowed the seeds of the current U.S. subprime mortgage crisis, economists told a Federal Reserve conference on Friday.”

“‘Recent events suggest that … a revolution has produced a terror,’ professors Richard Green and Susan Wachter said in a paper presented at a conference organized by the Kansas City Federal Reserve Bank.”

“Green and Wachter said advances in computer technology, use of capital markets to funds mortgages, and low worldwide interest rates created favorable conditions for mortgage finance. Lower and more flexible borrowing costs, they said, helped spur housing demand and contributed to rising home values.”

“But the sophistication of some financial tools lulled investors into misjudging risks, the authors said.”

“‘The creation of structured finance for mortgage credit risk abetted the rise of the subprime market. For a time, capital markets seemed to have an appetite for almost any kind of risk, so long as it received sufficiently large yield in exchange,’ Green and Wachter wrote.”

“Green and Wachter said investors’ care-free attitude toward risks of subprime mortgages and the housing market defies explanation and may have further inflated the housing bubble.”

“‘When investors mis-price risk, the result is the artificial inflation of housing prices. The pricing boom of 2006 was likely in part due to this unsustainable credit boom,’ the authors wrote.”

From USA Today. “Mortgage brokers are leaving the business in droves as the crisis in subprime mortgages leads to fewer products to sell, tighter lending standards and a backlash from lenders who blame them for the meltdown.”

“Brokers don’t lend money, but they match home buyers with lenders in 58% of all home loans.”

“Darrell Sexton shuttered his Indianapolis brokerage, The Money Station, at the end of last year after sales plummeted from $5.2 million to under $1 million in three years. While Sexton’s firm also was a lender, much of the decline was in his subprime brokerage business.”

“Sexton says he had to put his own 7,000-square-foot house up for sale, though it has languished because of the housing downturn. He’s looking for a sales job in another industry.” “‘You begin to question your self-worth,’ he says.”

“Compounding the stress is that some lenders and lawmakers blame the crisis on aggressive brokers who they say pushed mortgages that customers didn’t understand or couldn’t afford. Brokers can earn higher commissions by steering borrowers to loans with higher interest rates.”

“‘Who made this mess? The short-term folks,’ John Robbins, who chairs the Mortgage Bankers Association, said in a May speech.”

“Brokers concede there are some bad actors but say they’re just peddling loans that lenders develop. ‘It’s like blaming the corner grocer for lung cancer because they sell cigarettes,’ says broker Marc Savitt of Martinsburg, W.Va.”

“The German state of Saxony’s Finance Minister Horst Metz will resign after state-owned Landesbank Sachsen Girozentrale got 17.3 billion euros ($23.7 billion) in emergency funds related to investments in U.S. subprime loans.”

“Metz will leave office Sept. 30, Finance Ministry spokesman Burkhard Beyer said in a telephone interview today. SachsenLB agreed to a takeover by LBBW, Germany’s largest state-owned bank, on Aug. 26 after its Dublin-based units couldn’t sell short-term debt on fears that bad U.S. mortgage investment would hurt their ability to repay.”

From Marketplace. “Scott Jagow: The credit rating agencies are taking a lot of flak for this subprime mess. Wall Street, Congress, other countries wanna know what in the world they were thinking giving their top ratings to garbage mortgages. Some heads are starting to roll.”

“Standard & Poor’s President Kathleen Corbet has stepped down. The official line is ‘pursue other opportunities’ but speculation says this may be just the beginning of the subprime fallout for credit rating companies.”

From NPR.org. “People in the real estate industry like to say that housing markets are local. When prices were rising, many argued that there wouldn’t be a real nationwide housing slump, or bursting bubble, because when prices fall in some neighborhoods, they rise in others.”

“This time, though, things are different, especially in larger metro areas.”

“Bill Cheney, chief economist for John Hancock Financial Services, agrees that housing markets are local. ‘But what’s so remarkable about this cycle is that we’ve had this synchronized boom and bust across so much of the country,’ Cheney says.”

“‘Almost all the big metro areas saw prices run up. And almost all of them have seen prices come down now,’ he said.”

The Wall Street Journal reports on Florida. “Investors played a big role in pumping up home prices during the housing boom. Now, they account for an outsize proportion of loan defaults, mortgage bankers and builders say. Sazzad Khandakar is among the nation’s distressed home investors. In early 2005, he bought a $410,000 condominium and a $390,000 newly built single-family home, both in Orlando, Fla.”

“‘Everybody around me bought an investment home in Florida,’ Mr. Khandakar said. ‘Florida was all over the news; my friends were doing it….I didn’t want to miss out.’”

“He planned to keep the condo as a second home and sell the detached house for a quick profit. For the condo, Mr. Khandakar made a 10% down payment, but he borrowed 100% of the cost of the house, assuming that its rapid price appreciation would soon provide him with equity.”

“Instead, prices began falling, and he has been unable to sell the home or find a tenant. Now, Mr. Khandakar said, he is behind on both loans. ‘My credit is shot for the next six or seven years,’ he said, and he has run through $100,000 of retirement savings. ‘It will take me another five to 10 years to recover that,’ he added.”

“Many home builders say they tried to rein in sales to investors. Dom Cecere, chief financial officer of KB Home said…many investors bought anyway. ‘People do infiltrate whether you like it or not,’ he said.”

“‘For a while it went their way, they bought two or three homes and continued to roll the dice,’ said Mr. Cecere. ‘But that goes the other way when the prices go down.’”

“In the end, some investors may have made money by flipping a series of houses, and lost out only on their last investment, which they couldn’t sell before the market collapsed, Mr. Cecere said.”

The Orlando Sentinel. “Realtors say the market has become even more frustrating in recent weeks, though, as lenders have tightened credit standards, making it tougher for everyone to get a home loan, regardless of income.”

“It is particularly tough now for first-time home-buyers at the lower end of the price scale and for borrowers looking for ‘jumbo’ loans of more than $417,000, said Roseann Lutz, broker agent (who) specializes in the Four Corners area west of Walt Disney World.”

“‘Those are the ones they had the most trouble with,’ she said. ‘The biggest challenge is getting a buyer qualified for a loan,’ because lenders are now ‘being particular about who they give loans to.’”

“Aside from that, she said, many potential home buyers are still on the sidelines, not even looking at homes, while would-be home sellers continue to flood the market with properties, seemingly oblivious to the slowdown and hoping to cash in on the past five years’ worth of paper gains.”

“‘For every one sale we make, we’re getting 12 listings,’ Lutz said. ‘It’s just been really, really hard.’”

“Home builders are slashing prices on new properties because of the record slump in that market, and many existing-home sellers who have equity to work with are having to slash their asking prices, too, in an attempt to attract interest.”

“So far, Lutz said, the late-summer market is stagnant despite all that. ‘The phone is just not ringing.’”

The Herald Tribune. “Paradise Development Group hoped to ride the region’s frenzied condo wave to the edge of downtown Sarasota when it bought the offices of the Kirk Pinkerton law firm in August 2005.”

“Paradise envisioned a $35 million mix of retail space and more than two dozen high-end residences, priced at about $1 million each. Two years later, and after the collapse of the area’s condominium market, Paradise has pulled the plug and is offering the building for sale.”

“Similar scenes are playing out throughout the region and Florida: Developers who had hoped to capitalize on low interest rates and perceived demand are having to reconfigure, stall or abandon projects altogether. In Sarasota alone, roughly a dozen condo developments have either been shelved, revamped or put back on the market.”

“‘It’s simple. Our market is in a coma,’ said Debra Garrett, an agent in Sarasota. ‘There are too many condos, not enough buyers, and too many speculators. We’re seeing a correction now from overinflated prices, caused because people thought price increases would never stop — and they did stop.’”

“‘It was a knee-jerk reaction around the country,’ said John Harshman, president of a leading Sarasota commercial real estate brokerage firm. ‘From 2002 to 2005, developers looked at practically every site downtown and around it as a residential site.’”

“When Jeff Bacon opened the Drexel Heritage Store in Sarasota two years ago, business could not have been better. Customers were feeling rich on real estate and were buying the exclusive line to redecorate their homes.”

“But after six months, Bacon noticed a distinct change. Sales were starting to slide. Early on, he blamed the back-to-back hyperactive hurricane seasons. But as real estate continued its long slide, Bacon found his sales following the same disturbing line.”

“After long-suffering Realtors, the business people who are perhaps smarting most from plummeting home sales, furniture stores might be the next best litmus test for the fortunes of the real estate market.”

“Furniture sales in Florida have tumbled far off their housing-boom highs: sales statewide climbed 27 percent, from $9 billion in 2003-04 to $11.5 billion in 2005-06. By summer 2006, they were down 16 percent from that peak.”

“‘It’s bad across the board,’ says Michael P. Niemira, chief economist and director of research for the International Council of Shopping Centers. ‘It’s severe, it’s long and it’s not going away anytime soon. As a business cycle, we’re living with the boom-bust part of that market.’”

“Lennar Corp., the big Miami home builder that reported a $255 million loss in the most recent quarter, has trimmed more than 60 additional positions from its Southwest Florida division, bringing it to its pre-housing-boom levels, an executive said.”

“The cuts this week included Rob Allegra, the division president of Lennar Sarasota/Manatee, who has been the face of the home builder locally for more than a decade.”

“The problems at Lennar reflect the general housing market malaise. Other big builders in Southwest Florida have been cutting staffs, but experts said that companies with national exposure have been hit harder.”

“‘The home building inventory readjustment is mostly at the lower end because of all the extra sub-prime homes and all the speculative homes sold in the $250,000 to $400,000 price range, and I think it will affect the national builders more than the local builders,’ said Pat Neal, president of Lakewood Ranch-based Neal Communities.”

“‘Market conditions have eroded so much over the past six months that we are now focused on limiting the loss for the year,’ said CEO Stuart Miller, adding later that uncertain conditions made him ’suspect that we will not know that a recovery is coming until it is upon us.’”

“Vultures have been circling over the slumping Southwest Florida real estate market for a while, but few have descended to snatch properties from increasingly desperate builders and developers — until now.”

“Documents obtained by the Herald-Tribune show that Joseph L. Long, a little-known, New Jersey-based real estate investor, is negotiating with about 60 area developers and builders to buy 1,500 homes and condos at a 30 percent discount to their current list prices.”

“If Long, who has never done anything of this magnitude before, is successful in lining up the $700 million needed to pull off the deal — a very big if — it could have market-shaking consequences.”

“‘I’m extremely skeptical about a guy with no track record who doesn’t have financing in place,’ said George Huhn, a Venice real estate agent and foreclosure specialist. ‘If he thinks he’s going to get money from a hedge fund, I’ve got news for him: The liquidity out there is zero. The mortgage crisis has taken all the liquidity out of the market, and no one is sure what is going to happen.’”

“Huhn added that the smart money, the real vulture money, is waiting for banks to seize properties from developers and builders.”

“‘They don’t want to buy property for 70 cents on the dollar,’ Huhn said. ‘They want to buy for 25 to 30 cents on the dollar. They really want to feed on the dead carcass,’ Huhn said.”

The Scripps Howard News Service. “America’s housing market has gone from robust to just plain bust in the past 18 months. These are the times that try the skills of real estate professionals, says Jim Crawford, a real estate coach in Atlanta.”

“‘It’s a buyer’s market without buyers,’ he says. ‘Of the top 40 markets, 36 are down. In Atlanta at this time of year, we should have a maximum of 52,000 homes for sale; we have 114,000. What’s happened is, if you can’t sell in Chicago, you can’t buy in Atlanta. If you can’t sell in Boston, you can’t buy in Florida.’”

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