The Housing Bubble

Bloomberg reports on California. “San Francisco Bay Area house and condominium sales fell 25 percent last month to the lowest for an August in 15 years as stricter loan standards pushed some buyers out of the market, DataQuick said. Standards are particularly strict for jumbo loans, mortgages higher than $417,000, which are prevalent in Northern California, DataQuick said.”

“‘Homes in the Bay Area are more expensive than elsewhere and most of them are financed with jumbo mortgages,’ DataQuick President Marshall Prentice said in the statement. ‘The turbulence in the mortgage markets has made it more difficult to get this type of financing.’”

“The number of homes sold fell in all nine Bay Area counties, dropping the most in Solano, which had a 43 percent decline, followed by Contra Costa with a 36 percent drop, DataQuick said.”

“Foreclosure resales accounted for 4.8 percent of last month’s Bay Area sales, up from 4.5 percent in July and 1.2 percent a year earlier.”

The San Francisco Chronicle. “Called loan modification or loan workout, it means changing a mortgage’s terms to make the payments more affordable. Mortgage lenders have publicly embraced the concept. But consumer advocates say it appears that few modifications are actually occurring, and lenders refuse to provide any data to show how common the practice is.”

“‘Lenders are not modifying these (adjustable-rate) loans,’ said Martin Eichner, director of dispute resolution at Sunnyvale’s Project Sentinel. ‘A lot of these loans are so hopeless and irrational that lenders won’t even talk to us.’”

“To be sure, many subprime borrowers have a basic problem that a loan modification cannot solve: They cannot afford their houses. They never should have gotten the mortgages they have now. They might have exaggerated their incomes or underestimated the drain of monthly payments.”

“‘If the borrower is not going to be able to handle even a modified loan in the long term, it’s probably good for the lender, investor and borrower to face that fact early on,’ said Tom Kelly, a spokesman for Chase. ‘To extend somebody so they can make payments for (an additional) six months and then face foreclosure anyway, (doesn’t) accomplish very much. We’ve incurred more costs on behalf of the investors (and those) investors are not much closer to getting their money back. If the borrower can’t handle it, they can’t handle it.’”

“Tom Davey of Mill Valley refinanced his home with an adjustable-rate jumbo mortgage that was fixed for five years at 4.875 percent.”

“‘If we don’t refinance before next May, it will jump to the fully indexed rate of at least 7.5 percent. That would add $800 a month to our payments. By refinancing, I figure the best we can do is around 6.75 percent on another jumbo short-term, interest-only fixed. Even that will increase our payments about $500,’ Davey says.”

“Davey has plenty of equity in the home, which he bought 12 years ago. ‘Although I’ve been thinking about selling our house to cash in on all that equity, we should be able to get by keeping it. But it will mean tightening our budget, such as eating out only on rare occasions and camping more instead of flying somewhere for a vacation,’ he says.”

“Although it might be painful, Davey won’t be out on the street.”

From AFP News. “With a population of nearly 300,000, Stockton has acquired the unfortunate distinction of having the highest foreclosure rate of any US city, with one in 27 households left counting the cost of the credit crunch, according to Realtytrac.”

“Sign-after-sign beckon to potential buyers on the Weston Ranch streets. ‘American Dream Realty — Reduced Price!’ reads one placard spiked into a brown lawn. ‘People are just walking away,’ said Geri Taylor, a broker at Weston Ranch Realty for twelve years. ‘We’ve seen houses with food still on the table from when the sheriffs have come knocking.’”

“‘There are just are no buyers out there right now,’ said Taylor. The average sale price has dropped by 10 percent, she said. ‘We’ve got 350 homes for sale in this neighborhood right now and at this rate, that is five years of inventory,’ said Taylor.”

“Stockton has had 8,000 foreclosures so far in 2007. ‘Home ownership is a great thing,’ said Taylor, ‘But only if you can afford it.’”

The Ventura County Star. “With 548 tallied through the second quarter, Ventura County foreclosure sales have increased 784 percent compared with 62 in the first half of 2006.”

“‘Lenders were apparently shoveling the money out the door,’ said Michael Carney, executive director of the Real Estate Research Council at California State Polytechnic University in Pomona. Another cause is that home prices leveled off and started to fall. ‘A lot of people are forgetting this,’ Carney said.”

“Early this week, Bob Majorino took a team of Prudential employees out to tour the Oxnard properties that have been foreclosed upon. ‘Looking around, I have to mentally adjust because I don’t see this every day,’ he said of the change in prices.”

The Union Tribune. “San Diego County housing prices continued their slide in August as home sales dropped to a 15-year low, DataQuick reported yesterday.”

“Ramona resident Michael Wrightsman, a site superintendent for home builders for 29 years, said he cannot find work after three months of looking.”

“‘I can’t last much longer – I’ve maxed out my credit cards – and if I don’t make my truck payment this month, I’ll lose my truck,’ said the father of four boys. ‘It’s a bad situation out there. I don’t know where to turn or what to do.’”

“San Diego’s distressed-property market grew substantially larger last month as mortgage defaults topped the 2,000 mark for the first time and foreclosures hit a record that was more than six times what they were a year ago.”

“DataQuick said notices of defaults, the first step leading to foreclosure, numbered 2,071 in August. That was up from 1,573 in July and more than twice the number recorded last year, 794. The previous record was 1,596 in June. DataQuick’s figures go back to 1988.”

The Orange County Register. “‘The month of August was probably the strangest month that I’ve ever seen in the 15 years that I’ve been in the business,’ said Jeff Altman, a mortgage broker and lender with Westcal Mortgage Corp. in Orange.”

“Last month also capped the worst selling season on record, DataQuick figures show. Just under 10,000 homes sold countywide during the peak May-through-August months this year, or 43.3 percent below the season’s average of 17,600.”

“House prices per square foot declined by 6.9 percent and condo prices dropped by 8.8 percent. ‘Prices are dropping steadily,’ said Dan Slater, owner-broker of Orange Realty, who estimates that prices in his area have dropped by 15 percent since late 2005. ‘Homes priced under $900,000 are taking it the worst.’”

“‘It’s gotten brutally hard to get a great rate on a jumbo product,’ Westcal Mortgage’s Altman said. ‘Even your good A borrowers are affected because they can’t get a great rate on financing.’”

“Next month’s sales figures promise to be even lower. According to Steven Thomas, president of a local chain of RE/MAX Real Estate offices, the number of new escrows fell 33 percent in August. Those numbers will be reflected in DataQuick’s September sales figures.”

The Press Enterprise. “Homes sales fell faster in Riverside and San Bernardino counties than anywhere else in Southern California last month as rising foreclosures and a credit crunch scared off homebuyers. A glut of unsold homes also depressed home prices.”

“Some sellers, such as Marcia Hinds, of Beaumont, have given up. Hinds said she and her husband had hoped to live in their new, expensive house for two years and then sell it at a $100,000 profit. With that they could move back to their first home, which they still owned, and she could stay home with their new baby.”

“But after putting their house on the market in November and moving back to their original home, the couple watched prices sink around them.”

“Hinds said that after they listed their house for $435,000 and got no offers, they continued to drop their price. Eventually they lowered it to $339,000 and hoped to come out even and stop having to make mortgage payments on two houses.”

“On Tuesday night they finally took down the for-sale sign, Hinds said, and decided to look for renters. She said she will have to go back to teaching. ‘I love my son. But if I knew the market would have dropped I would have waited and not had him now,’ she said.”

“From April to June, 1,489 homes in San Bernardino County were lost to foreclosure, up almost tenfold in a year, while Riverside County saw a record 2,509 foreclosures, eight times the figures from last year. The number of resale homes vying for buyers has increased almost 24 percent so far this year, compared with last.”

“Ken Gonzales said he and his wife are postponing plans to downsize to a retirement community because they were unable to get their price for their four-bedroom house in the Orangecrest community of Riverside. He said that in the three months they had the house on the market, only two agents brought clients and a half-dozen people wandered over from the community park across the street. There were no offers.”

“Gary Teeters, the owner of Coldwell Banker Kivett-Teeters with sales offices in Beaumont and Hemet, said most sellers today are realistic about pricing their houses and will negotiate. But he said, ‘buyers are reluctant to commit to a purchase because everything they read and hear tells them the market will decline more.’”

KOAA.com reports from Colorado. “Economist Fred Crowley says housing data shows 4.5% of people in Pueblo with mortgages are in foreclosure. ‘That’s a rather serious number, one out of 20 people that you run into who owns a home with a mortgage on it they’re having problems with the mortgage today,’ Crowley said. Crowley forecasts there will be a record 1,500 foreclosures in the Steel City this year.”

“He says the problem isn’t isolated. Despite the fact that El Paso County has a lower foreclosure rate than Pueblo, Crowley says 3,500 families in El Paso County, will likely go into foreclosure as well this year.”

“‘There’s a very serious foreclosure problem and a lot of people stand to lose everything,’ said Crowley.”

From News 11 in Colorado. “With the housing market in a slump, homeowners who are hoping to sell have major concerns. How do you sell without taking a financial hit? If you don’t have to sell right away, local experts recommend you wait for the housing market to rebound. But, if you do have to get rid of your house, be willing to lower the price.”

“Joseph Wooldridge put his Springs Ranch house on the market four months ago, and still hasn’t had any interested buyers. ‘Originally listed at $220,000. Now it’s at $199,000 and still very hard to get people in there,’ said Wooldridge.”

“Wooldridge is not alone. The housing market is down nationwide, including right here in Colorado Springs.”

“‘There’s more inventory on the market than there was a year ago,’ said broker Gary Beres. ‘If someone puts their house on the market today. We’re going to say, hey it could take us 270 days to sell it.’”

“‘For sale’ signs are popping up everywhere. More than 8,000 homes are for sale in El Paso County. Almost 6,000 of them are in Colorado Springs.”

The New Mexico Business Weekly. “The new home market is in a major slump nationally, but greater Albuquerque is merely seeing a lull that is being more or less weathered by large production and custom builders. The little guys, however, are finding it tougher to survive a lower demand.”

“‘This is one of those shake-out periods where the less successful don’t survive, which is not necessarily a bad thing,’ says Jim Folkman, executive VP of the Home Builders Association of Central New Mexico.”

“‘This downturn we’re in now is somewhat self-inflicted through ease of entry into the housing market,’ he says. ‘Creative financing, adjustable mortgages, the subprime market all created this squeeze. There’s an absence of capitalization in the mortgage markets because investors are withdrawing from it. They read the newspapers and they’re concerned this bubble is going to burst.’”

“‘We all like to think it’s short-lived, but we’ve been through these cycles before. We all seem to bounce back eventually. The longer it goes on, the more freaked out everyone gets,’ said Stan Strickman of land developer Curb South.”

“‘I know a couple of the production builders have gone presold only. That happens whenever the economy hiccups like this. They don’t want to be stuck with an unsold house,’ said Jack Milarch, CEO of the New Mexico Home Builders Association.”

“‘A lot of these guys were kicking ass and building lots of houses, and then they were caught in this slowdown,’ says Steve Nakamura, CEO of Rachel Matthew Homes. ‘There’s a lot of builders going out of business because they didn’t prepare for a slowdown. A lot of them are very intelligent builders, but sometimes they don’t have the business sense.’”

The Sierra Vista Herald from Arizona. “With the way the housing market is, William Johns isn’t looking to make a profit on his three-bedroom home in Vista View. After buying the home in 2005 for $133,573 and adding about $11,000 in improvements, he’s pricing his home at $144,600.”

“He has had good profits from the five homes he sold in recent years and even made a profit on a home he ‘flipped’ before he was able to add any improvements. But that was 2005, and now he just wants to break even. ‘I just gotta find the right person,’ he said.”

“Sellers need to be realistic when pricing their property, said Jean Giuffrida, branch manager for Long Realty in Sierra Vista. ‘They have to come to grips with not making as much as they thought they would,’ she said.”

“Building permits in Sierra Vista were down by about 66 percent in the past year. Other areas in Cochise County were lower by about 42 percent, according to the Southern Arizona Home Builders Association.”

“The housing slowdown has also had an impact on City Electric Supply, said manager Armand Celani. The residential builders are few and far between lately, he said. ‘Every contractor that comes in here says their housing (business) has really bottomed out,’ he said.”

“Some products, such as ‘exotic’ subprime mortgages, will no longer be available. ‘Many people wouldn’t be able to own a home if those aren’t available,’ said Phyllis Stroud, a mortgage loan specialist at E.F. Edwards Financial.”

“‘The world has returned to its sanity but we’re not out of the woods yet,’ said Phyllis’ husband Joe Stroud, a mortgage broker for E.F. Edwards Financial.”

“Many borrowers will probably still be dealing with the repercussions of subprime loans and adjustable rate mortgage loans in the next year, and that could continue the trend of high foreclosure rates, Joe Stroud said.”

“Arizona has one of the highest foreclosure rates in the country due to defaulted loans. Although foreclosure rates in Sierra Vista are higher than usual but not dramatically so, said Melissa Clayton, president of the Southeastern Arizona Association of Realtors. Homes priced under $200,000 and over $350,000 aren’t as affected by the subprime mortgage crisis, she said.”

“‘It’s the middle that’s a glut in the market right now,’ Clayton said.”

The East Valley Tribune from Arizona. “In the second quarter 2007, 3.55 percent of Arizona mortgages were past due, a survey by the Mortgage Bankers Association shows. That’s up from a 2.44 percent delinquency rate during the same period last year.”

“‘Some people are waking up and finding that their mortgage payments are double or even triple,’ said Jason Meyers, a spokesman for Desert Schools Federal Credit Union. Others owe more than their homes are now worth.”

“In the past month, the credit union has received a couple hundred phone calls from distressed Valley borrowers in danger of defaulting on mortgages they received from other lenders, Meyers said.”

“Some financially stretched borrowers were counting on their equity to keep increasing. Others didn’t realize that their loans had hefty penalties — as much as $20,000 in one case —for paying off the loans early.”

“‘A lot of these lenders have basically made it impossible for people to get out of these bad loans,’ Meyers said.”

“Investors have also played a roll in the delinquency problem, said Greg Geenen, VP of the Arizona Mortgage Lenders Association. Arizona has a disproportionate number of investors, and they’re more likely to walk away from properties, Geenen said.”

“‘We’re just scratching the surface of the potential ramifications of all of these foreclosures,’ Geenen said. ‘It’s going to spread.’”

The Arizona Republic. “Chandler, Mesa and the city of Maricopa had more single-family permits taken out for the first half of this year than they did during the same period in 2006. Prices for new homes have dropped into the $130,000s in Maricopa, which will likely entice more buyers.”

“‘The market continues to be more challenging than anyone expected at this stage of the year,’ said housing analyst RL Brown. ‘I think the bottom line is that until the real estate market gets back to some balance between listings and sales, and confidence and liquidity are enhanced, we are not going to see much change in the new home market. We have got too many houses for sale. That’s the bottom line.’”

“The number of new and existing homes for sale has been rising every month. In the Southeast Valley, it hit 19,214 in July according to the Arizona Regional MLS.”

Marketplace on Arizona. “Scott Jagow: ‘The Census Bureau comes out with some new figures on the housing market today. They’ll show us where the most growth occurred between 2005 and 2006. I can tell you the answer already: In the South and the West, places like Florida and Arizona. Those just happen to be the same places that are now seeing record numbers of foreclosures.’”

“Jay Butler, director of Realty Studies at Arizona State University, is thinking about the good old days because today, according to Foreclosures.com, Pinal County has one of the highest foreclosure rates in the nation.’”

“Butler: ‘The problem is when the market swings, it tends to swing widely in the same sections. You know, it’s a star today and a bust tomorrow.’”

The Review Journal from Nevada. “The inventory of homes for sale on the Multiple Listing Service grew 1.1 percent in August to 24,341, the Greater Las Vegas Association of Realtors reported. Realtors reported 1,316 single-family home sales during the month, down 37.2 percent from August 2006.”

“David Lampe of Coldwell Banker Wardley said homes will sell if owners adjust their prices, he said. ‘You have to price the home properly and market the home properly,’ he said. ‘Not all 24,000 homes (on the MLS) are properly priced. Lots of people put their home on the market but not to sell. They’re still thinking three years back.’”

“Lampe said people who understand the market don’t mind ‘taking a hit’ on their current home because they know they’re going to make it back on their next home.”

Some housing bubble news from Wall Street and Washington. The Star Ledger, “Just a few years ago, Hovnanian Enterprises held lotteries to sell new homes because demand for housing was white-picket-fence hot. Now, with the residential real estate slump deepening by the month, the largest New Jersey-based homebuilder is holding a fire sale at developments across the country. Prices this weekend will be slashed by up to six figures — $100,000, $149,000, in some cases $240,000.”

“Housing industry experts say the discounts being offered by Hovnanian are unprecedented. The so-called ‘Deal of the Century’ sale, which covers 19 states, begins at Friday and ends Sunday. Hovnanian VP Michael Skea said the company recognizes some recent homebuyers might feel uneasy about the sale. However, most of those buyers probably received some type of incentive as well, he said.”

“‘Those who purchased previously already chose the home and location they wanted,’ he said. ‘Those may not have been the same if they’d gotten a ‘Deal of the Century’ home.’”

The Phillyburbs. “Orleans Homebuilders lost $66.9 million this year as customers cancelled contracts and the company abandoned planned communities.”

“‘On a daily basis, we’re presented with different opinions and challenges regarding the direction of the economy, the impact of the subprime and other mortgage issues, and the recent turmoil in the credit capital markets,’ CEO Jeffrey Orleans said during a conference call.”

“‘Although we began the year with solid margins in the first quarter, things deteriorated quickly,’ said Orleans President Mike Vesey. ‘The decline reflected the softer market and the incentives we used to reduce our inventory of spec homes.’”

The Sun Times. “The problem with specializing is that when times are good in a particular market — they’re very good, but when they’re bad, they’re horrid. That’s the story of Chicago-based Corus Bankshares Inc., which concentrates in commercial real estate lending, particularly in the condo market.”

“‘There’s a pretty big fear running around Wall Street about the pricing in the residential market and condos,’ said Peyton Green of FTN Midwest Securities Corp.”

“Problems could arise if buyers walk away from condo contracts or sue to get out of them, noted Ronald Peterson, a Chicago analyst with Sterne, Agee & Leach. Peterson said it’s hard to tell what’s going to happen in the Florida market, where Corus is heavily exposed. Las Vegas is another significant market for Corus.”

The Dallas Morning News. “This year’s slowdown in homebuilding might mean better quality of construction for buyers. That’s because builders are no longer in such a hurry to finish houses.”

“‘The builders are carrying higher amounts of inventory than they have in the past,’ said Paula Sonkin, VP of the real estate and construction industries practice at J.D. Power and Associates. ‘They are delivering more homes on time and complete, so there are fewer construction problems. It’s a silver lining to the slowdown in the market.’”

“J.D. Power just completed its annual survey on the U.S. homebuilding industry. The annual ranking is closely watched by both consumers and builders.”

“‘If they are at the top of the list, they will be advertising it and telling their customers,’ said David Brown with housing analyst Metrostudy Inc. ‘In this market, anything they can do to set them apart from others is important.’”

From Reuters. “Countrywide Financial Corp, the largest U.S. mortgage lender, said it had funded $34.4 billion of mortgage loans in August, the fewest this year and down 17.3 percent from a year earlier, as it lost access to capital and tightened lending standards. Its pipeline of unclosed mortgages fell 16.8 percent from July to $51.8 billion.”

The Street.com. “JPMorgan Chase plans to stop offering certain Alt-A mortgages. The New York banking company said in an internal memo on Wednesday that all mortgage loan locks and underwriting under the ChaseFlex ‘No Doc’ or ‘No Ratio’ programs must be completed by Sept. 19.”

“‘We’re sort of moving along a continuum,’ a Chase spokesman says. ‘We’re taking a more disciplined approach and in the process reduced our risk because the borrower has more stake in the game — either their own cash, a better credit rating or proven their documented income or assets.’”

“First Horizon National Corp, the largest bank in Tennessee, said on Wednesday it plans to eliminate at least 1,500 jobs by the middle of next year as it slashes its mortgage sales force and closes branches.” “The bank also said it expected mortgage originations to decline significantly as it cuts up to 50 percent of its home loan sales staff.”

The Baltimore Sun. “In the wake of the subprime lending crisis, a state mortgage-broker trade group is taking steps to shore up the profession’s image and separate itself from unethical brokers who contribute to borrowers’ mortgage woes.”

“‘We’ve been very concerned for a number of years that within the large universe of mortgage brokers, there are a number of bad apples,’ said Thomas Shaner, the Maryland Association of Mortgage Brokers’s executive director.”

“The newly adopted code will give the association a legal means of suspending or revoking memberships, which it had no way to do in the past, even if a broker had been found by state regulators to have committed fraud, Shaner said.”

From Canada.com. “Home prices across Canada are ripe for a fall, says one bank economist. Adrienne Warren, senior economist with Scotia Economics, said a bustling market has led to housing in many regions of the country being overvalued, increasing the risk of prices dipping in the longer-term.”

“‘There is little doubt that current trends are unsustainable,’ added Warren. ‘Affordability is becoming increasingly stretched for many would-be buyers after almost a decade of rising home prices. More recently, economic risks have increased in the wake of the intensifying financial market turmoil stemming from the U.S. subprime mortgage problems.’”

The Herald. “Bank of England Governor Mervyn King warned yesterday of a ‘moral hazard’ in any move to bail out financial institutions that have engaged in ‘risky or reckless lending’ - warning this could ’sow the seeds of a future financial crisis.’”

“King says: “The moral hazard inherent in the provision of ex-post insurance to institutions that have engaged in risky or reckless lending is no abstract concept….If central banks underwrite any maturity transformation that threatens to damage the economy as a whole, it encourages the view that, as long as a bank takes the same sort of risks that other banks are taking, then it is more likely that their liquidity problems will be insured ex post by the central bank.’”

“‘The provision of large liquidity facilities penalises those financial institutions that sat out the dance, encourages herd behaviour and increases the intensity of future crises,’ King said.”"

From Bray People. “Residents of an exclusive Delgany housing estate who saw up to €100,000 wiped off the price of their homes have threatened to picket new homes being sold in the same development in order to warn prospective house buyers about what has happened.”

“‘There are a few houses left, so what we would be telling people is to hang on because in another couple of months you’ll get them for €100,000 less. Why run the risk of paying for them now,’ said resident Daithi O Maitiœ.”

“Mr O Maitiœ saw €70,000 shaved off the value of his two-bedroom property, which was bought for €550,000 just four months ago and is now valued at €480,000.”

“His neighbour, Seán O Hé, paid €675,000 for his three-bedroom house last December which is currently valued at €595,000, a drop of €80,0000.”

“‘When I first heard about this, it set alarm bells off in my head,’ said Mr. O Hé. My big concern is the negative equity in the property. ‘We’re continuing to service mortgages of up to €100,000 more than our homes are worth.’”

“The global credit crunch is spreading, adding commercial and residential property in Britain and beyond to its list of victims.”

“Such has been the force of the re-pricing of credit that properties of all sorts in many places have become markedly more difficult and expensive to finance over the past month.”

“It is also true that in many places, notably Britain and Spain, both commercial and residential property have been in a speculative bubble pretty similar to the one now unwinding so painfully in the U.S. Similar, in that property investment everywhere was fuelled by global markets with super-easy borrowing terms.”

“Similar too, in that many property markets were, in the final analysis, going up because they were going up. People were buying because they expected future gains and feared missing out.”

“‘We are forecasting falls in property values in the UK,’ said Martin Allen, who covers property at Morgan Stanley Research Europe in London.”

“‘There is risk on the downside from our central case which is a modest fall of property values. There is a relatively high probability that it is going to be worse than that,’ Allen said.”

“Allen sees it as a global phenomenon and one that won’t improve quickly even if interbank lending issues settle down. ‘The problems are systemic, there has been overlending to property and it will take years to purge from the system.’”

“Yields on British residential property are also quite a bit lower than financing costs, with many small investors subsidizing their running costs out of capital in hopes of future capital gains. If those gains, which have been massive in recent years, don’t continue, many will decide that subsidizing someone else’s monthly housing costs no longer looks like such a great deal.”

“There are a lot of reasons why Britain is different than the United States. There are a lot of reasons why Ireland and France are, as well.”

“But that is what house buyers in New York were saying about Florida not so long ago.”

The Star Advocate reports from Florida. “Brevard County homeowners with a mortgage had a median housing cost of $1,297 a month in 2006, according to a U.S. Census Bureau report released today. That’s up 15 percent from the $1,128 figure in 2005. Titusville resident Mary Franz said she is looking forward to moving to South Carolina. That is, if her Windover Farms home sells.”

“She and her husband have had to drop their asking price from $337,000 to $299,900. Housing costs are part of the reason behind the move, Franz said. She can buy a home that costs ’six figures’ here for about $50,000 in South Carolina.”

The Orlando Sentinel. “Homeownership is taking a bigger bite out of the income of Central Floridians, especially in Seminole, Brevard, Polk and Volusia counties, according to new data released today by the Census Bureau.”

“Mortgage-holders spending 35 percent or more of their monthly net income on housing jumped by 26 percent in Seminole County from July 2005 to July 2006, while the increases in Brevard, Polk and Volusia counties were 19 percent, 19 percent and 16 percent, respectively, for the same period.”

“‘Jon Shehan, an Orlando Realtor who also owns a mortgage company, said he expected the situation was even worse now, because mortgage-interest rates have increased since July 2006. ‘A year ago was just the beginning of the problem.’”

“University of Central Florida economist Sean Snaith was not surprised by the increases in residents’ income going toward housing, given the huge increase in housing prices that peaked about a year ago.”

“Households have been paying a larger share of their income toward housing nationwide, and Florida has been no exception, he said. The same mortgage instruments ‘that are now being maligned had a positive side in allowing more people access to housing,’ said UCF’s Snaith, adding that record-low mortgage rates also spurred more ownership.”

“Much has changed since July 2006, Snaith said. ‘We’re in for a little dip here’ in the housing market, he said.”

The Palm Beach Post. “The housing meltdown is turning even economists…into comedians. University of Central Florida economist Sean Snaith writes, ‘The housing market needs the subprime meltdown like the NFL needs another dog-fighting scandal.’”

“While most everyone now agrees that 2005 was a bubble, Snaith still sticks to his ‘housing soufflé’ analogy.”

“‘The credit crunch in mortgage markets is a new twist and an unexpected ingredient in the housing soufflé,’ he writes. ‘It will weight the soufflé down and likely cause more of a decline in prices than otherwise would have been the case.’”

The St Petersburg Times. “In May, Donald Trump sued his Tampa business partners, accusing them of flubbing construction of Trump Tower Tampa, the luxury condominium high-rise that was supposed to make them all millions of dollars.”

“On Wednesday, two of those former partners returned fire and sued Trump, accusing the New York tycoon of failing to uphold his end of the bargain.”

“The project, to consist of 190 condos costing between $700,000 and $6-million, was supposed to be the deal that transformed downtown Tampa into a center of luxury living. But SimDag has struggled to find financing in the sluggish housing market.”

“Less combative than the corporate tyrant he likes to play on TV, Trump added some parting words: ‘It’s too bad how things turned out.’”

From TC Palm. “Stalled school enrollment seems one more sign of a Treasure Coast housing market failing to recover from its boom and bust.”

“But optimistic analysts say the Treasure Coast should rebound more quickly than South Florida from the havoc wreaked by speculators who drove up prices and flooded the area with new homes now sitting empty.”

“‘It doesn’t mean there’s any change in growth prospects for the Treasure Coast,’ said Brad Hunter, director of Metrostudy in West Palm Beach. ‘It just means we got a little ahead of ourselves.’”

“In Palm Beach County, the school district was one of the first agencies to notice growth going awry. The district began losing students two years ago, signaling a period of stagnant population increases caused by rising housing costs and speculators — not families — building and buying homes.”

“‘No one really knew what was going on,’ said Nat Harrington, spokesman for Palm Beach County schools, which has been forced to cancel building projects because of the unexpected enrollment decreases.”

“Some builders have worried this year’s slowdown in Treasure Coast school enrollment might be the start of a similar trend. Indian River County Schools had about five fewer new students than expected. Martin County Schools actually lost about 100 students, and even St. Lucie County Schools, which added about 1,200 children, saw its growth cut in half from the previous year.”

“‘Next year, it would not surprise me to see the schools have even less growth,’ said Don Santos, spokesman for the Treasure Coast Builders Association.”

The News Press. “Hiring prospects appear bleak across Lee and Collier counties for the rest of the year, according to a labor market survey to be released today.”

“One-third of employers surveyed by Manpower Inc. expect to trim employees by the end of the year and just 17 percent expect to add workers.”

“Those prospects made the local market one of the weakest in the nation, according to Manpower data. Only Cleveland, Bakersfield, Calif., and Gaston, near Charlotte, N.C., had a greater disparity between employers who expected to trim jobs and those who expected to add.”

“A year ago, 32 percent of the employers surveyed in Lee and Collier counties expected to add employees.”

“‘It’s definitely slowing for us everywhere from Charlotte (County) to Naples,’ said Darla Betzer, regional manager for Manpower Inc. in Southwest Florida. ‘Few people are looking to hire and they are treading very lightly.’”

“Betzer said the caution appears to be radiating from the stalled housing construction sector. The sector that includes construction accounted for about 36,900 jobs in Lee for July, down about 300 from a year ago, according to state data.”

“However, that includes only direct construction jobs and not various industries closely tied to construction. The job sector that includes finance, insurance and real estate is among those where reductions are most expected, Betzer said.”

“Lee County thinks more than 2,000 residents have filed petitions arguing their property isn’t worth what the county estimates.”

“They have an ally in Lt. Gov. Jeff Kottkamp. Kottkamp filed a petition indicating his home in North Fort Myers is overvalued by 38 percent. The appraiser’s office estimated the home value at $1,382,920.”

“The notices tell the value of a person’s taxable property and what they can expect to pay in property taxes. The market rate is based on comparable home sales in 2006. Many property owners have seen heavy market declines since then, but in order to have the value changed a person must present evidence the appraiser’s value is inaccurate based on comparable 2006 sales.”

“The burden is on property owners to prove the appraiser incorrect. Some residents presented independent appraisals or did their own research.”

“Rebecca Werner is retired and living with her husband in a condominium near the gulf in Fort Myers Beach. She filed a petition showing her condo, appraised at $574,000, to be overvalued by $175,000.”

“‘If you look at the equivalent comparisons in that building, there is very little rhyme or reason to it,’ Werner said.”

“Bruce Johnson bought his Cape Coral home two years ago. ‘They got my property going up $60,000,’ Johnson said. ‘I got it going down $100,000.’”

“Cleve Frederick of Lehigh Acres submitted a petition arguing his home, valued at $293,800, should be valued about $53,000 less. His market value spiked $44,000 from last year.”

“‘I said, ‘What the hell — this house isn’t worth that kind of money,’ Frederick said.”

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