The Housing Bubble

The Daily News reports from California. “Home prices in Los Angeles County fell from their year-ago levels in 65 of 92 markets in August as sales continued their steep decline, a trade association said Tuesday. Castaic recorded the county’s biggest decline, by 23 percent, to $465,500, and West Hollywood had the biggest increase, 35.8 percent to $930,000, according to a report prepared for CAR by DataQuick.”

“‘Price softness is even more pronounced when we look at different segments of the market,’ said association president Colleen Badagliacco.”

“‘Basically you have a housing market that is somewhat seized up from the flood of bad news that keeps coming out,’ said Jack Kyser, chief economist at the Los Angeles County Economic Development Department. ‘I would not be a bit surprised by the end of the year (that) Los Angeles County could have a year-over-year price decline.’”

“Robert Kleinhenz, the association’s deputy chief economist, said that sales fell by a bigger margin in August on an annual basis than in June and July. ‘I attribute that to the credit crunch. Qualified buyers can’t get their loans funded,’ he said.”

The Orange County Register. “Sales of existing Orange County houses fell 20.5 percent in August from the same month a year ago, CAR reported. Also out Tuesday was the July version of the S&P/Case-Shiller home price indexes. For L.A. and Orange counties, this index fell in July on a yearly basis for the sixth consecutive month. July’s drop (4.75 percent in a year) was the worst performance since July ‘94.”

“At one time, developers envisioned nearly 50 residential high-rises towering above the Orange County landscape, citing an appetite here to live in skyscrapers like New Yorkers.”

“But after two years of sagging home sales, Orange County’s new urban boom is having trouble getting off the ground. As many as 17 proposed high-rise condos out of 37 may be delayed as developers wait for better market conditions. Others may never get built, some experts say.”

“Condo towers aren’t the only types of developments facing delays. Virtually all homebuilders have reduced staff and delayed projects, said Kristine Thalman, CEO of the Orange County Building Industry Association.”

“‘Projects have been delayed because the buyer’s market came to a complete halt,’ Thalman said. ‘Everything has slowed down. Everything.’”

“Housing consultant Mark Boud said that with price tags of $500,000 and up and homeowner’s dues starting at $600 a month, condo towers in Orange County are overpriced, in part because of the success of the Marquee towers.”

“The reason Marquee sold out, he said, is 40 percent of the units sold to investors and speculators. ‘So the market wasn’t as deep as the sales rate at Marquee suggested,’ Boud said. ‘I still feel that high-rise can do very, very well in Orange County, but not at the current pricing structure.’”

The Daily Bulletin. “The long-anticipated ‘adjustment’ in housing prices hit the Inland Empire with a vengeance last month, with CAR reporting Tuesday that year-over-year home prices fell 7.4 percent in Riverside/San Bernardino.”

“They fell even further in the High Desert, off 13.7 percent from August 2006. The median price of a home in Riverside/San Bernardino was $377,130 in August, while the High Desert slipped to $287,390.”

“Economist John Husing of Redlands said none of this was really that unexpected, and that the overall effect of it probably wouldn’t be as bad as some people think. ‘In the decline of the mid ’90s, we saw a 35-40 percent drop in prices,’ he said. ‘I think when all of this is done, we’ll see prices 10 percent lower and then they’ll stay there for a while.’”

“‘The people in trouble now are the ones who bought in 2005 or 2006,’ Husing said. ‘Also the ones who refinanced and took out all their equity.’”

The Recordnet. “Home sales prices dropped off in this region, falling 11.5 percent in the Central Valley, to $309,740, and 12.1 percent in Sacramento, to $332,510, the CAR report said.”

“Central Valley sales were down nearly 34 percent year-to-year, the state association’s report said. Real estate agents and brokers in San Joaquin County complain that the increase in foreclosures is the top reason the sales market is so slow.”

“According to RealtyTrac, financial institutions took foreclosure possession on 1,501 single-family homes in San Joaquin County from January through August of this year. That’s one of every 18 foreclosed homes statewide. Last month, almost 6,000 houses were on the market in San Joaquin County.”

“Mike Collins of Collins Realty in Stockton, said asset managers for the banks are being so hard-nosed and demanding, if not irrational, about what they’re expecting for their foreclosures that it’s shocking.”

“Collins cited a $350,000 cash offer this summer for a foreclosure house listed at $360,000. That offer was turned down.”

“‘There doesn’t seem to be any given common sense on how to dispose of these liabilities,’ he said. ‘They’re really not cooperative, and right now, that’s standard.’”

“‘All they’re doing is stacking up more and more foreclosures in the market, which just means that they’ll get less and less for their property,’ said Jerry Abbot, co-owner and president of Coldwell Banker Grupe.”

“They are getting offers, but they’re not accepting or making reasonable counteroffers, he said. ‘They’ll put in at $250,000, get an offer for $230,000 and counter with $249,000,’ Abbot said.”

“Mike Oldham, an agent who specializes in Stockton foreclosure properties, said asset managers for financial institutions do seem to overprice foreclosures to begin with but then start reducing prices in about 30 days in a panic.”

“Currently, they will consider offers within 10 percent of asking price, he said. Even then, they’re not slashing prices, although that might evolve months from now, he said.”

The San Mateo Daily Journal. “In 2004, South San Francisco resident Esthela Baldovinos paid just $2,300 a month for her house. Today, the payments ballooned to $7,500 and will reach $8,200 in November.”

“Baldovinos entered into an adjustable rate mortgage not realizing how high the costs could get. Now she and many like her are asking local entities to pass foreclosure moratoriums.”

“‘I am delinquent on my mortgage because I was given an adjustable rate mortgage. I started out paying 6.5 percent. Now my interest rate is over 12 percent and I can’t afford the payments,’ Baldovinos said.”

“Combined Baldovinos and her husband bring in $6,500 monthly, $1,000 less than the current mortgage payment. ‘I need time to work out a loan modification with my lender so that I can stay in my home. We want the South San Francisco City Council to do everything in their power to help people like me stay in our homes,’ she said.”

“The South San Francisco City Council is considering such a resolution. In addition, the resolution urges lenders to work with affected homeowners. However, the measure holds no authority.”

“‘Nobody should lose their home, nobody,’ said Mayor Rich Garbarino. ‘The thing that concerns me is we can all agree, ‘yes, this is terrible.’ But that’s all we’re doing.’”

The North County Times. “As leaders of two Realtor associations prepare to launch a task force on fraud today, agents and others in the industry say recent publicity and the threat of prosecution have iced some shady real estate operations, while driving others underground.”

“Mortgage lenders, at least those that remain in business, have created ‘blacklists’ of mortgage brokers whom they suspect of orchestrating fraudulent loan applications, said Todd Lackner, a San Diego appraiser who has advised state and local law enforcement agencies investigating potential real estate fraud in Southwest County.”

“And some title companies have become wary of certain real estate agents, Lackner said.”

“The initiative comes amid an unprecedented wave of foreclosures that threatens to swamp housing markets in outlying suburbs that were booming just three years ago. Lowered lending standards helped hundreds of thousands of families buy homes, but they also drew shady investment groups that hoped to make easy money in the market frenzy, according to real estate professionals.”

“Such investment groups may have helped to drive prices higher in 2004 and 2005, helping to put extra money in the pockets of ordinary sellers at the time, appraisers said in recent weeks.”

“In Southwest County, about 5,000 houses are in the foreclosure process, according to foreclosureradar.com.”

“Real estate agents have said they’re concerned that the rash of foreclosures has many potential buyers sitting on the fence until prices fall further, a situation that makes selling a house even more difficult. Fraudulent sales have become a particular target of frustration, said John Giardinelli, a Canyon Lake attorney who advises both Realtor associations.”

“‘The Realtors sense that they’re being affected to the extent that this strike force has become a necessity,’ he said.”

The Sacramento Bee. “A federal grand jury has indicted four Sacramento-area mortgage brokers and real estate agents on charges they engaged in a mortgage fraud scheme that has sent an estimated 19 Elk Grove homes toward foreclosure while they collected $277,000 in commissions and payments.”

“Indicted were James Martin; Mario Fellini III; Gabriel Viramontes; and Joseph Gallo, on charges of bank fraud and conspiracy to launder money, the U.S. Attorney’s office in Sacramento announced Tuesday.”

“Martin, Fellini and Gallo also were indicted on charges of making false statements on loan applications, while Martin, Fellini and Viramontes were indicted on mail fraud charges, U.S. attorneys said.”

“The four Sacramento County residents are alleged to have recruited six buyers to purchase homes in Elk Grove last year with no money down and promises they would fill them with renters who would cover all the expenses. Buyers were told that after two years the renters would buy the homes, the indictment states.”

“After the defendants allegedly received loan commissions and real estate fees for the transactions none of the renters materialized, court papers state.”

“Assistant U.S. Attorney Matt Stegman said the case is one of several mortgage fraud cases his office is investigating in the wake of a fallout in housing prices that experts have partially attributed to subprime mortgage loans and inflated housing prices.”

“”All but two of the 19 homes have gone into foreclosure, said Tim McDaniel, one of six people recruited to buy the homes. ‘I lost both mine and I’m ready to lose a third now,’ said McDaniel.”

Some housing bubble news from Wall Street and Washington. USA Today, “The end of the real estate recession seems nowhere in sight, in light of a slew of bleak news Tuesday of falling sales and prices, a severe decline in construction and deep losses and layoffs at one of the nation’s largest builders. The NAR says it expects more dismal figures for September as the housing market reels from the crisis in the mortgage industry.”

“But the September figures might be much worse. Re/Max International, which analyzed existing-home sales in five major cities for USA TODAY, says September totals so far are down sharply from last year. In Baltimore, Tucson and Seattle, for example, sales in the first three weeks this month are off more than 40%.”

“‘I’ve given up forecasting how low housing sales will go,’ says Joel Naroff, president of Naroff Economic Advisors.”

“And Stuart Miller, CEO of Lennar, has given up forecasting the builder’s profits after reporting a record loss of $514 million in the third fiscal quarter, as it laid off 35 percent of its employees and wrote down the value of real estate.”

“Lennar warned that more pink slips are on the way. The company began construction on 60 percent fewer homes in the June-through-August period compared with the same fiscal quarter last year. At the same time, nearly one-third of buyers canceled their contracts.”

“‘August seemed to be a melting pot of all things negative,’ Miller says. The declines were felt in every region of the country, he says.”

The Australian. “Lennar, the second-largest US home builder, yesterday warned that sellers of existing homes were starting to accept lower prices in a move that could force the industry to accelerate its own discounting strategy.”

“CEO Stuart Miller said existing home owners had ’sat on the sidelines’ during a downturn driven by oversupply and the difficulties in securing mortgage finance caused by the sub-prime crisis.”

“Mr Miller said market conditions had continued to deteriorate as a lack of consumer confidence spread to the far larger existing-home sector. ‘The existing-home market is now moving much more rapidly to adjust (prices) downwards,’ he told analysts.”

The Globe & Mail. “Bank of Canada Governor David Dodge is raising a red flag about housing prices in Canada, saying that increasingly loose lending rules may be helping overheat the country’s real estate market.”

“‘One worries about the structure of the mortgage market, that we may be actually aiding, facilitating a rise in the price of houses that is really not warranted,’ he told reporters after a speech in Vancouver.”

“In his comments to reporters yesterday, Mr. Dodge further warned that housing prices outside of the fast-growing cities of Western Canada may be rising too quickly.”

From The Age. “Six weeks ago, the newly listed RAMS Home Loans went into crisis mode. Credit markets were frozen and, due to increasing defaults in the US subprime mortgage market, mortgage-backed securities had become almost toxic.”

“RAMS was unable to refinance its short-term loans, forcing it to pay a premium for a big portion of its $14 billion-plus loan book. Today the situation is little changed.”

“Moody’s Investors Service has assigned provisional ratings to the notes while RAMS hunts for buyers. Moody’s analyst Ryan Lu said RAMS was looking for the most cost-effective way of refinancing.”

From Dow Jones. “Securities regulators are investigating whether credit-rating agencies such as Moody’s Corp. and McGraw-Hill Cos. unit Standard & Poor’s followed standard procedures for rating mortgage-backed securities, Securities and Exchange Commission Chairman Christopher Cox told the Senate Banking Committee Wednesday.”

“Vickie Tillman, executive VP of Standard & Poor’s Credit Market Services, told senators that some data used by the company in its ratings ‘has proved no longer to be as useful or reliable as it has historically been.’”

“‘Additionally, the collapse of the housing market itself has been both more severe and more precipitous than we had anticipated,’ Tillman said in testimony.”

From CNN Money. “Critics have claimed that the agencies were blinded by cozy relationships with underwriters and didn’t do enough to sound the alarm for investors. The agencies contend that they only issue opinions, and that their ratings aren’t investment recommendations.”

“Credit ratings are ‘not a promise of performance but an evaluation of the risk of default….Credit ratings speak to one topic and one topic only - the likelihood that rated securities will default,’ VP Vickie Tillman said in prepared remarks.”

From Bloomberg. “The SEC is examining whether the firms were ‘unduly influenced’ by issuers and underwriters that paid for the credit ratings, Cox said in testimony prepared for a hearing by the Senate Banking Committee in Washington today.”

“Senator Jim Bunning described the process as ‘like a movie studio paying a critic to review a movie and then using a quote from his review in the commercials.’”

“Speaking at a conference in New York last week, Moody’s Chief Executive Officer Raymond McDaniel Jr. said the firm ‘directionally got it right. What we missed was the magnitude and the speed of the deterioration of mortgage product in 2006.’”

“Moody’s said it receives no fees for helping clients structure their securities. ‘Moody’s does not structure, create, design or market securitization products,’ said Michael Kanef, group managing director, asset finance group, of Moody’s Financial Services. ‘We do not have the expertise to recommend one proposed structure over another, and we do not do so.’”

From Reuters. “Tillman defended S&P’s practice of working with companies when rating their transactions and securities. The dialogue does not amount to ’structuring’ securities, even in cases where the discussion is about the effect different structures may have on ratings, she said.”

“‘S&P does not tell issuers what they should or should not do,’ Tillman said.”

“S&P said it warned as early as January 2006 that there were risks in the mortgage-backed securities market, including securities backed by subprime mortgage loans.”

The Wall Street Journal. “In a recent interview with a German newspaper, former Federal Reserve Chairman Alan Greenspan said people believed rating firms ‘knew what they were doing’ in complex mortgage products, but that in fact it wasn’t feasible for them to rate some of these bonds correctly.”

“‘We’re very nervous right now,’ says Richard Metcalf, director of corporate affairs for the Laborers’ International Union of North America, which advises pension funds. ‘We’ll be much less likely to invest in these types of products if we’re not assured we’re getting an honest and independent rating.’”

“Investors and their fiduciaries must do a better job of evaluating the risks of increasingly complex securitized derivatives products, a senior U.S. Treasury official said on Wednesday.”

“Anthony Ryan, the Treasury’s assistant secretary for financial markets, said complexity may well be a reason not to invest in a security, but it should not be an excuse for a buyer to justify a loss.”

“‘Insufficient understanding or failure to perform an independent and adequate due diligence prior to making an investment decision is simply unacceptable. That’s not investing — that’s gambling,’ he told an International Swaps and Derivatives Association conference in New York.”

“Ryan also said rapid ratings downgrades for many derivatives products may suggest the need for stronger market discipline.”

This is Money. “The Bank of England todaywarned that the credit squeeze which engulfed Northern Rock will get worse before it gets better.”

“However, today’s unprecedented auction by the Bank of an extra £10bn of liquidity for the money markets found absolutely no takers.”

“The Bank of England ran the first auction of extra three month loans for banks who have refused to lend to each other for the last few weeks as they took fright at the level of risk involved.”

“Today’s auction saw no bids for the extra £10bn the bank had offered. However, the Bank acknowledged that potential borrowers will have been put off by the minimum interest rate, set at a punitive 6.75% - 1% above base rate.”

“A major attraction of today’s auction was that the Bank would accept mortgages as collateral, which commercial banks have ceased doing since the US subprime crisis broke.”

“According to the Bank’s survey of lenders, the proportion planning to cut the supply of credit to companies shot up from 20% in mid June to 49% by the middle of September. Alan Castle, economist at Lehman Brothers, said: ‘This raises questions about the health of the corporate sector which had been assumed to be in quite a strong position.’”

From Sky News. “The £10bn…offer was announced by the Bank’s Governor, Mervyn King, a week ago to relieve three-month lending markets between banks, which have been hit by fears of exposure to losses on high-risk US mortgages.”

“Only two weeks ago, the Governor had said that providing short-term liquidity to markets in trouble ‘encourages excessive risk-taking and sows the seeds of a future financial crisis.’”

“Mr King defended the decision to hold the auction in a hearing with MPs on the Treasury Select Committee last week. The penalty lending rate for the £10bn fund - a minimum of 6.75% - reflected ‘the realisation of the risks that the banks themselves have taken with the full knowledge of what the consequences would be.’”

The Boston Globe reports from Massachusetts. “The explosion in home foreclosures and a tightening in mortgage lending dragged down real estate prices in Massachusetts in August, a real estate research and publishing firm reported. Warren Group in Boston said median single-family home prices last month fell 4.9 percent, to $314,000, from August 2006 - the 16th consecutive month in which prices have declined.”

“‘Everywhere the story’s the same,’ said Patrick Newport, US economist for Global Insight. ‘You’re having more foreclosures, and they’re adding to inventory, and they’re putting more pressure on prices to drop.’”

“One longtime home shopper, Louis Rivers, reports the market ‘feels very weak’ and is ‘getting slower and slower.’ At open houses, he said, ‘very often I’m the only person there.’”

“Rivers expresses no rush to buy now. ‘I don’t feel the prices are going to go up,’ Rivers said.”

“Randy Wilburn, a real estate agent and homebuyer counselor in Boston and Milton, called the mortgage tightening the ‘X-factor’ in the market. Some buyers have pulled out of sales agreements in recent weeks, he said, ‘because they didn’t know what was happening.’”

The Boston Herald. “‘The market is stuck in a rut - (and) I think we probably have more of the same to look forward to for a while,’ Warren Group chief Tim Warren said.”

“Economist John Bitner of Boston-based Eastern Bank blamed the continued weakness on too many unsold homes clogging the market. ‘When you have a big supply of unsold inventory, the way you move it is to drop the price,’ he said. ‘So, what we’re seeing is a gradual erosion of price that I think will continue until the inventory clears.’”

“Boston developer Joseph Fallon will break ground today on Fan Pier - a $1 billion-plus bet on Boston’s waterfront that comes even as the local real estate and financial landscape is shifting.”

“In Charlestown, a major Navy Yard condo project recently flopped. After efforts to sell units fizzled, the developers of the new Harborview II complex opted to put the entire building on the market as a rental project.”

“Meanwhile, in East Boston, a long-anticipated remake of the neighborhood’s waterfront is still pending, despite years of planning and discussion. One big project, East Pier, will move into construction next month, but as apartments, not condos, a spokeswoman said.”

The Daily Times from Massachusetts. “The popping of the real-estate bubble isn’t going to have much effect on local property valuations or tax revenues this fiscal year, according to the town assessor. But fiscal 2009, which starts July 1, 2008, could be a whole different story.”

“Assessor Cheryl Gillespie said that’s because the valuations used to compute fiscal 2008’s tax rates were based on real-estate sales for 2006, before the national slump in housing sales and decline in prices.” “Condominiums were the one part of the real-estate market where things weren’t quite as bright in 2006, however.”

“‘The condo market was stable at the beginning of 2006,’ Gillespie said. ‘My final evaluation may show some depreciation because we have such an abundant supply of condos.’”

“The poor condo market is to blame for the recent auction of the site of the first million-dollar-per-unit luxury condo project approved for Salisbury Beach Center, said 2 Broadway’s former owner Peter Carbone.”

“‘Everything in this business is about timing,’ Carbone said at last week’s public auction held by Carbone’s mortgage holder, Provident Bank.”

“Carbone needed to pre-sell at least eight condos priced at from $500,000 to $1 million to get the financing package to build, he said. After spending a year beating the bushes, he only had pre-sell agreements on four. That wasn’t enough to get the five-story, 24-unit, residential/commercial project built or maintain the $1.4 million mortgage on the Broadway lot he paid $1.5 million for in 2006.”

The New York Post. “Manhattan alone appears to be weathering the latest housing storm that’s driving prices to 16-year lows across the nation’s suburbs and cities.”

“But the Big Apple could get cooked. Foreclosures on homes in the five boroughs surged 97 percent in August from a year earlier, according to RealtyTrac data.”

“In the New York metropolitan area, homebuilders have slashed prices of some new homes in the suburbs by as much as 23 percent to prod sluggish sales. Condo asking prices in the outer boroughs have also declined as much as 5 percent in some areas.”

“But in Manhattan, where a one-bedroom condo on the Upper West Side sells for up to $1.5 million, sellers apparently aren’t budging on their asking prices.”

“‘I’ve discussed it with some sellers about adjusting their prices, but there’s a standoff - they think the [Federal Reserve's] rate cut was their reprieve,’ said broker Rick Kelly.”

“Kelly believes the widening housing stagnation will ‘”take a while - months - to soak in’ with Manhattan sellers. He predicted Manhattan’s first price drops will hit in the $800,000-$1.5 million co-ops and condos on the East Side and Upper West Side.”

“Meanwhile, the Standard & Poor’s/Case-Shiller index of prices of existing homes in the 10 largest metropolitan areas yesterday posted a 4.5 percent drop in July from a year earlier. That’s the index’s largest drop since the recession of 1991.” “In the New York City area index, prices slid 3.8 percent.”

The Financial News. “Credit Suisse is cutting approximately 150 jobs in its mortgage-backed securities business in New York and London in the wake of redundancies by rivals in similar businesses that have been hit by the fallout from the sub-prime crisis in the US.”

“A spokeswoman for the bank confirmed close to 150 jobs are to be cut, but that the redundancies would predominantly come in the New York office with only a very small proportion in London.”

“A structured credit banker at a European bank in London said: ‘There is inevitably going to be a degree of retrenchment within investment banks as some scale back operations this year because of losses or a fall in demand for structured products.’”

“He added: ‘Bonuses will also almost certainly be down this year, provoking a lot of movement between the major participants.’”

From Newsday in New York. “Come next November, Kathryn Clejan’s adjustable rate mortgage will get a whole lot more expensive. In fact, she estimates, it could rise by $1,986 a month, which the single mother of two boys can’t afford.”

“Clejan is carrying a $496,000 interest-only mortgage on her Manhasset home with monthly payments of $1,760. Though she says she knew when she took out the loan in 2003 that the payments would balloon at the end of five years, she had no choice. She needed the lowest possible rate or faced losing her home.”

“‘Having an interest-only loan kept me in my house during the divorce,’ said Clejan, a loan officer at Americana Mortgage Group.”

“Like many people with ARMs, Clejan is facing a difficult decision. She has to figure out how long to keep her current mortgage, which carries a 4.25 percent interest rate, before refinancing to a rate that would likely be in the 6-percent range. If she refinanced now to another interest-only mortgage, Clejan estimates her monthly tab would go up to $2,746.”

“That would put a greater strain on her monthly budget at a time when her income is suffering from the turmoil in the mortgage market.”

“Many homeowners with checkered financial backgrounds who obtained subprime mortgages are really stuck, real estate experts said. ‘If your credit is pathetic, so are your chances of getting a loan,’ said Keith Gumbinger, VP at HSH Associates.”

“Some 35 percent of the loans made in 2004 carried adjustable rates, according to the Federal Housing Finance Board. Tens of thousands of Long Islanders have such loans.”

“Among first-time homebuyers the estimates are as high as 50 percent, real estate experts said.”

“Many of these homeowners thought — or were told — they could simply refinance to more favorable terms once the teaser rates were up. But they are now finding this isn’t the case.”

“‘They played the market and they played it wrong,’ said Don Romano, president of a Lake Success-based mortgage broker.”

“The stagnation — and even decline — of housing prices has hurt some homeowners’ chances of refinancing. Some are carrying mortgages worth more than their homes. ‘A lot of people don’t have a way out,’ said Mike McHugh, mortgage banker in Melville.”

“Richard of Hewlett, who asked that his last name not be used, is struggling to find a new mortgage before the monthly payments on his ARM become unaffordable. The rate, pegged at 8.25 percent for the first two years, will soar to 11.6 percent come Jan. 1.”

“Richard and his wife decided to buy a home in 2005 after their landlady sold the house they were renting. They knew the $2,830 monthly payments would be a stretch, but figured they could make it work for two years while they improved their credit profiles. That would allow them to qualify for a better rate once the reset came.”

“To their dismay, they have not been able to raise their scores enough…At the same time, they are seeing the value of their home decline as the market slips — despite thousands of dollars of repairs they are doing.’”

“At this point, they are just hoping rates drop a little more so they can find a mortgage they can better afford, at least temporarily. Otherwise, Richard said he is hoping he can work more overtime.”

“‘It’s nerve-wracking,’ said Richard. ‘The last thing anyone wants to do is lose their house.’”

The Miami Herald reports from Florida. “South Florida’s housing market continues its slump. Home sales fell sharply in August, the Florida Association of Realtors reported. In Miami-Dade County, existing single-family home sales in August dropped 45 percent from the same month a year ago and 24 percent from July. Broward single-family home sales in August were off 23 percent from August 2006.”

“It was a similar story for condominiums. Miami-Dade condo sales fell 44 percent in August over last year and 16 percent from July. Broward condo sales were off 22 percent from last year and 2 percent compared to July.”

“The number of homes waiting for buyers continued growing, from 60,900 in Miami-Dade and Broward in August 2006 to more than 80,000 this year. At the current rate, it would take 25 months to sell all of the single-family homes on the market in Miami-Dade, and 36 months for condos. It would take 21 months to sell all the homes in Broward, and 29 months for condos.”

“Broward condos are the one area where sellers reduced prices in a meaningful way. The median price dropped 12 percent over last August to $178,800. This scenario, observers say, will be the key to market recovery: Cut prices to spur buying, which will reduce the number of homes for sale.”

“‘When prices start to relax and fall, it is part of the healing process to bring us back to a balanced market,’ said Richard Barkett, CEO of the Realtor Association of Greater Fort Lauderdale.”

“‘There are times when the market speaks loudly and clearly and gives an indication that it’s time to pull back and retrench and to wait for another day, and these are those times,’ Miami (based) home builder Lennar CEO Stuart Miller said.”

The Herald Tribune. “The median sales price for a home in the Sarasota-Bradenton market slid 11 percent from last August to its low point for the year at $273,500, a Tuesday report from the Florida Association of Realtors showed.”

“That continued a pricing decline that started in July after six straight months in which the market had seemed to bottom out in the $292,000 range.”

“Statistics in Manatee and Sarasota counties tell the same tale over the last two years: threefold to fourfold increases in inventory and a sell-through rate that is 50 percent to 60 percent of its former self.”

“In that two years, Manatee’s listings went up by 380 percent to 5,372 homes. Meanwhile, the number of sold homes per month slid to 174, a 45 percent decline from two years earlier. In Sarasota County, the inventory rose by an almost identical 372 percent to 4,756 homes. The number of closings fell by exactly 50 percent to an average of 36 homes per week.”

“But Jim Willig, a Sarasota real estate investor, says that so far, his offers are not being taken seriously by the banks that are left holding homes when a seller goes into default.”

“‘Honestly, I feel like Rodney Dangerfield,’ said Willig. ‘What is amazing is how little respect I get. I am a cash buyer in this marketplace, yet no one cares.’”

“‘The prices have really dropped 25 percent from the peak,’ said broker Bill Norberg. Waterfront bargains abound: Norberg recently sold his own home in Burnt Store Isles, on sailboat water and appraised at $650,000 in January 2005, for $450,000.”

“‘The only way I could sell it was to be the cheapest house in the neighborhood,’ he said.”

The Ledger. “Marred by inflated prices, a glut of new home inventory and indecisive buyers, Polk County’s housing market continued its decline last month. Existing home sales dropped nearly 32 percent from 499 in August 2006 to 340 last month. It was the 15th consecutive month sales totals had declined from the year before.”

“‘People just have to get realistic,’ said Scott Coulombe, executive director of the Polk County Builders Association. ‘People selling a home can’t ask for those outrageous prices anymore.’”

From TC Palm. “Jennifer Atkisson-Lovett, president of the Realtors Association of Martin County, said) that…sellers realized the changing market and lowered their prices. The median home price in August was $247,750, down 16 percent from a year earlier.”

“The condominium market in Martin saw a 58 percent decrease in the number of units sold, with 37 changing hands in August. The median condo price dropped by a third to $160,000.”

“The Realtors Association of Indian River County reported 159 existing single-family homes were sold in August — 16.9 percent more than from the same period a year earlier. Meanwhile, the median home price dipped 6.4 percent to $207,000 for the same period.”

“‘It’s a little glimpse of glory,’ said Karen Hall, association president. ‘I am encouraged by these figures. … I think we are headed in the right direction.’”

“Hall said the increase was likely driven by sellers lowering their prices. ‘Sellers are becoming more realistic about their prices,’ Hall said. ‘They are realizing that they may not be seeing the big bucks that some people were making in the past.’”

“According to William Pittenger, chief real estate economist for Seacoast National Bank, prices will need to continue to roll back to 2003-2004 levels ‘before we start to see any major action in the market.’”

“The increase, however, didn’t spill over to the rest of the Treasure Coast. The Fort Pierce-Port St. Lucie area, which includes Stuart, had 287 single-family homes sold in August, reflecting a 26 percent decrease from a year ago, according to the Florida Association of Realtors.”

“The median home price for the same period also fell 15 percent to $214,200.”

The News Press. “In Lee County, the median price of a single-family home sold with the assistance of a Realtor dropped 5 percent to $250,800 from $264,100 in August 2006. Sales were down 25 percent to 520 from 691 in August 2006, according to the Florida Association of Realtors.”

“Statewide, the median price fell 6 percent, from $246,800 to $231,900 and the number of sales fell 26 percent from 15,252 to 11,279.”

“‘Another month of falling sales and rising inventories tells us the housing market is still a basket case,’ said economist Joel Naroff. ‘It is going to take a long time to work off that imbalance and undoubtedly prices will have to fall a whole lot further.’”

From Tampa Bay 10. “Take a trip down any street in Tampa, the for-sale signs are tough to ignore. ‘It’s huge, there’s a lot of properties on the market,’ said realtor Bradd Monroe. He’s been in the local industry for more than 20-years.”

“‘We have a few months of inventory, about 17-months of inventory, which I believe is a record for us,’ he stated.”

“The building boom two years ago seems to have backfired. Monroe says too many people wanted to flip for a quick buck. It didn’t happen. And many homeowners, he said, got in over their heads with loans they couldn’t afford and didn’t understand.”

“‘616 on the ‘Lis Pendens’ of foreclosure filed this month in Hillsborough County,’ Monroe said.”

“The developer of the new Platinum condominium in Miami’s Edgewater neighborhood auctioned 20 units Thursday in hopes of speeding up sales in the sluggish housing market. But Maysville now says bids were so low that it is rejecting all offers except those it promised to honor regardless of price. It plans to rent the units and wait until the market improves.”

”The bids were significantly lower then even our preconstruction prices,’ said Alex Redondo, Maysville president. ‘I had hopes that units would at least sell north of that.’”

“Maysville initially promised to sell eight of the units absolute, meaning the units would go to the highest bidder no matter how low the price. Ultimately the developer sold nine without minimums.”

“At the auction, Redondo said, the most expensive unit sold for $269 per square foot, and one even went for as low as $195 per square foot. ‘I am not going to just give away my work,’ Redondo said. ‘I was very surprised.’”

“‘It’s symptomatic of part of the problem, buyers and sellers are still too far apart,’ said Tom Dixon, a commercial real estate broker who assesses property values for tax appeals. ‘Someone has to say, ouch, I give up.’”

“Said Kevin Tomlinson, a Miami Beach condo broker, ‘this is the market speaking.’”

“Redondo said he didn’t undercut his previous buyers but the market did, albeit vividly illustrated through an auction. ‘The market is what it is,’ Redondo said. ‘This is a sign that the market has already come down more than people are thinking.’”

“Do you recall that guilt trip that the media and others attempted to apply to us Southwest Florida residents at the height of the building boom?”

“It went something like this: ‘Property values are so high that the community’s critical workers — the police, firefighters, teachers and nurses — can’t afford to buy homes and live in Southwest Florida. Therefore, the taxpayers ought to subsidize such things as apartment projects and housing projects.’ Remember that?”

“Even though I am retired, I don’t speculate in real estate, bought my first home almost on ‘green stamps,’ exist on limited income and pay my medical bills myself, I felt like I was doing something wrong — because I was living in my own home.”

“The News-Press and other media said that I was being unfair to the police, firefighters, teachers and nurses because I could afford a home, and they couldn’t.”

“That’s why I was so happy when the building boom went bust.”

“I figured that now that housing prices are in the toilet, and that home bargains are galore, that all those police, firefighters, teachers and nurses would be snapping up homes like it was a fire sale. I’m so happy that they now can afford what they couldn’t afford before, and now I don’t have to feel guilty.”

“I think it would be a great story if The News-Press did one of its investigative reports on how many of those police, firefighters, teachers and nurses are taking advantage of this building bust to achieve their home ownership dreams.”

“Heck, given the degree of the problem before, their home buying should turn this bust back into a boom.”

Please post off-topic ideas, links and Craigslist finds here.