The Housing Bubble

It’s Friday desk clearing time for this blogger. “Mega homebuilder Corey Barton hopes to push potential homebuyers off the fence with a ‘Deal of a Lifetime’ this weekend when he reduces prices on 200 Treasure Valley homes by up to $70,000. ‘The market’s changing, and we want to sell some houses,’ Barton said. ‘It’s just logical. I want to build more. It’s the best time to buy.’”

“‘It’s a good thing,’ said Mandy Herrmann, who moved in last January with her husband. She said she wasn’t worried that the sale could depress the value of her house. ‘These houses have been sitting here a long time. It’d be nice to have some neighbors.’”

“Times have turned tough in the Central Oregon housing market. Brooks Resources Corp. will try to auction off the last three of its RiverWild bluff townhomes at Mt. Bachelor Village early next month. Brooks knocked $99,000 to $184,000 off the asking price of each of the three 2,000-square-foot units to come up with minimum bid prices, said Realty Marketing President John Rosenthal.”

“Brooks CEO Mike Hollern, who said he expects the Bend market to remain overstocked with housing for at least a couple more years as the speculators of the boom years try to sell their houses, is hoping that an auction will, at least in theory, produce quick sales that will allow everyone to ‘find out where the market is.’”

“‘I have no idea,’ Hollern said. ‘We’ll find out.’”

“According to the Korea Financial Telecommunications Institute and Lotte Construction yesterday, only two people bought apartments out of 50 units of Lotte Castle Medici put up for sale in Seocho-dong, Seocho-gu, leaving 48 units of apartments unsold.”

“One official of a construction company said, ‘Usually, 30% of apartment units are sold even though their location is not great as long as they are in the Gangnam area. What happened to the Lotte apartments is shocking.’”

“Developer levies have been slashed by about $25,000 per home on newly released land in Sydney’s western growth corridor. Premier Morris Iemma said the new measures were designed to make housing affordable for Sydney families.”

“The reforms came too late for Mellissa Page, who has already bought land in Harrington Park and is in the process of building a home. She said she supported any move to make housing more affordable. ‘It’s a good idea. Twenty-five thousand is quite a bit - it will be a big help,’ she said.”

“Susan Foley, recently appointed ‘foreclosure czar’ for the city of Denver, has seen firsthand the impact of people losing their homes. ‘As a Realtor, I’ve seen what foreclosures do to families and homeowners,’ Foley said.”

“Data presented at the meeting showed that 81 percent of the foreclosures in Denver were for loans priced from about $100,000 to less than $200,000. City Councilman Rick Garcia said the figures indicate that the vast majority of foreclosures are the result of people refinancing the equity out of their homes, not from people who bought homes.”

“‘There are some $100,0000 homes for sale in Denver, but not 81 percent of them,’ Garcia said.”

“On a year-over-year basis, Hawaii’s September foreclosure rate is up 145 percent, ahead of the national rate of increase of 99 percent.”

“If the percentage of people who can afford a median home in Hawaii drops below 20 percent that could put the islands in the danger zone, RealtyTrac’s Daren Blomquist said, adding that affordability in California, one of the states with the highest foreclosure rates, dropped to 17 percent of the population in 2006.”

“Interesting stats on California’s first-time homebuyers from the California of Association of Realtors confab in Anaheim. 29.4% of first-timers put zero down in ‘07 vs. 40.3% in 2006.”

“The Eureka Reporter published a story outlining Humboldt State University professor Erick Eschker’s findings that prices may fall by 40 percent in order to return a key economic indicator, the price-to-rent ratio, to historic levels. Eschker said the ratio, which compares the median price of houses with the average rent, skyrocketed after housing prices rose during the housing bubble, while the other factor, rent, stayed the same.”

“Property manager Bev Hart said she expects rent to catch up to house prices. Realtors disputed Eschker’s main point: that the North Coast is not immune from statewide or nationwide trends.”

“In an interview, Eschker stood by his original findings. ‘I’m not predicting a 40 percent drop overnight by any means. I don’t know what’s going to happen,’ Eschker said. ‘I’m just trying to ask the question, ‘what do the numbers say?’”

“I have a novel idea. What if everyone who has their house on the market who doesn’t actually need to sell right now, refuses to sell it for a lower price. Either the buyers take it at their price or leave it.”

“Then when all those lower priced houses are sold or there is so little inventory of houses, the sellers who can wait it out, can then put their houses on the market for what they feel their house should sell for according to what the market should bring compared to all the sales that have gone before; not what the market had declined to, or what people are saying the market is going to decline to in the future.”

“After reading many of the post here about sellers being advised to be ready to pay for the buyers closing costs and any repairs and lower their prices even more, that isn’t right in my book.”

“We have never bought a house where we were given these concessions and frankly I think that is absurd. I really feel bad for those who must sell because they have been transferred or who have circumstances in their life where they need to sell and are forced to ‘eat crow’ while doing it.”

“I know some will say I am going through the anger stage and anger is correct. Much of the hoopla about all these price reductions that are needed is perpetuated by the media, bankers, real estate agents, and all the hype about how the ‘market’ is going down and you better sell now for whatever you can get or be prepared to just sit on it for years or really loose your “…”.”

“No wonder buyers are hestitant to buy houses or are backing out of sales. Can you blame them - they are waiting for a $5 hamburger to go for 50 cents and who can blame them.”

“Sellers take back your power and hold your ground!”

“I live in Mayville, a small town of not quite 5,000 people about an hour northwest of Milwaukee. We live here because our family lives here. We live here because we love this life. We live here because this is what we can afford.”

“Metro Milwaukee, like many parts of the country, is experiencing a rash of home foreclosures. More than 4,000 area homes already have entered foreclosure, and more are sure to follow.”

“The problem, in my opinion, doesn’t lie with predatory lenders. The problem rests squarely on the shoulders of homeowners who bought homes beyond their means. It’s your job, not the bank’s, to make sure you can afford the house you buy. To check and recheck the numbers. To have a backup plan, just in case.”

“We’ve thought about moving closer to Milwaukee, but the numbers just don’t add up. A four-bedroom, two-bath home in Waukesha County runs closer to $350,000. For $150,000 to $200,000, we can buy a two-bedroom, two-bath condo. Not exactly ideal lodging for a family of six.”

“Economic reality isn’t always easy to swallow. By all rights, we should be able to buy a nice home in a new subdivision. My husband, a respected professional engineer, designs said subdivisions.”

“But while we’re content to remain in the home we can afford, many people are not. They see nice homes and think they should have one, too. More often than not, home-buyers stretch to reach some unobtainable version of the American dream.”

“As a nation, our expectations have changed tremendously over the years. We used to need a roof over our heads; now, we need a roof, a media room, a master suite and a three- or four-car garage. The average new home is now 2,459 square feet, up from 1,695 square feet in 1974. Families, meanwhile, have gotten smaller.”

“Stretch if you want to for your dream home. Just don’t come crying to me when the mortgage turns out to be more than you can afford. I’ll be enjoying life in Mayville.”

The Press Enterprise reports from California. “The California Association of Realtors is predicting that in 2008, the median price of a resale home in the state will decline 4 percent to $553,000 and sales will drop another 9 percent on top of a 23-percent plunge this year. Chapman University economist Esmael Adibi said the significance of the state Realtors association projection is that it reflects a growing pessimism among real estate experts.”

“Adibi said earlier this year that many experts were forecasting that sales might rebound and home prices might stabilize by 2008. He said it is the first time that Badagliacco’s group has acknowledged the downturn may continue for another year.”

“‘We haven’t seen any turnaround in sales, and the inventory of unsold homes keeps rising,’ Adibi noted. ‘For sure there will be no rebound.’”

“Scott Chappell, owner of a Riverside real estate agency, was at the Anaheim Convention Center on Wednesday. He said agents had flocked to the trade show in hopes of finding new ways to make a living. They were at seminars in foreclosures, marketing bank repossessions and using home auctions to attract buyers.”

“Chappell said since 2005 he has seen his business fall off by two-thirds, and he is expecting a two-year-downturn. ‘There is no smart money buying right now,’ he said.”

“Lenders siezed more than 1,000 homes in Riverside County in August and again in September. That’s more than five times as many repossessed homes as in July and almost 20 times as many as in September 2006, according to RealtyTrac.” “Just before the bank took possession of a home in northwestern Riverside County, its former owners attacked the walls with paintball guns and smashed gaping holes in them.”

“They ripped out stair railings, banisters and cabinet doors in the half-million-dollar Eastvale house. Then they turned on the upstairs bathroom sinks, put down the drain stoppers and fled as the bank’s locksmith arrived to rekey the doors.”

“‘You can walk into all kinds of things because the people are angry they are being evicted,’ said Lauren Rooney, a Corona agent who inspects homes just after lenders foreclose on them. ‘You get people who are really upset at the last minute, and they say, ‘We are going to make the bank pay!’”

The Daily Press. “The median home price in the Victor Valley has dropped to $285,614 at the end of September, according to the Victor Valley MLS compiled by Larry Trombley.”

“Overall, sales continued to fall, by 10.4 percent from August and 63.1 percent from September of last year. September prices were down 3.3 percent from August and 18.5 percent from September of last year.”

“‘It’s going to continue to go down a little bit more,’ Trombley said, citing the competition from foreclosures as well as new homes. ‘They keep adding incentives,’ he said.”

The Voice of San Diego. “Banks seized 14 times as many San Diego County homes last month as they did in September of last year. Market watchers say the ever-growing foreclosure inventory will drive down prices among the 23,000 homes on the resale market countywide.”

“The number of homes to make it all the way through the foreclosure process to become bank-owned properties in San Diego County soared to 866 homes, a 43 percent increase from August’s 602, according to RealtyTrac.”"Compared to many home sellers, lenders are dispassionate. They hire brokers or send properties to formal auctions with instructions to lower prices quickly to get the properties off their books. And the more properties lenders absorb, the more willing they are to lop off tens of thousands of dollars from their asking prices.”

“Ramsey Su is a retired REO broker who worked in the local market during the 1980s and 1990s who tracks the market extensively. Having attended both of the major home auctions in San Diego this year, Su estimated those auctioned homes have sold for about 30 percent less than the price the company listed as the homes’ previous values.”

“During Su’s career, an intake of 800-some REOs in a month was unheard of. ‘I don’t even remember months then that we even had 200,’ he said. ‘Two hundred would be ‘Wow, what a terrible month.’ I watch what is coming in the front door. If [banks] are in the process of acquiring 1,000 a month, the magnitude is so much.’”

“The U.S. House of Representatives passed H.R. 3648, a bill that will disallow the IRS from sending a tax bill to homeowners who negotiated short sales with their lenders. Su said the new measure could encourage others to give up, to default on their loans.”

“‘If I’m that homeowner, saying, ‘I refinanced and I bought my jet ski, I bought season tickets to the Chargers,’ what is my neighbor going to do, who’s working two jobs to make that same payment and he gets screwed? … He’s going to say, ‘I better default, too,’ Su said.”

The Orange County Register. “With all but two business days left uncounted, September is on pace to have been one of the worst home-buying months in the 20 years of O.C. market watching by DataQuick.”

“For the 22 business days ending Sept. 26, the median selling price was $585,000 — down almost 9 percent from August and the lowest since April 2005. The most recent price snapshot is 7.6% below the same period in ‘06.”

The Merced Sun Star. “”Merced finally ranks No. 1. Unfortunately, it’s the nationwide foreclosure rate. Merced posted 1,137 foreclosure-related filings last month. In September 2006, the county saw 126 such filings.”

“Sharon Mogliotti, a mortgage planning specialist with CTX Mortgage, called the skyrocketing foreclosure rate a ‘history-setting’ moment for Merced. ‘Our mortgage industry and the economy has never been through a market like this,’ she added. Mogliotti has worked in the mortgage industry for 40 years.”

“In one extreme instance, said Mogliotti, a Blockbuster clerk was given a mortgage after he wrote on his application that he earned $6,000 a month. The loan was later audited, and the loan officer was fired and fined $50,000, said Mogliotti.”

“Home prices have plummeted, leaving homeowners in over their heads with few options. ‘The bottom line is, there were a lot of people that wanted to buy a home and lenders got greedy and put them in stated income (and adjustable rate mortgages) and they just couldn’t afford it,’ said Mogliotti.”

The Mercury News. “Despite lenders announcing plans to help homeowners avoid foreclosure by increasing education or outreach, one local group says most lenders are not doing nearly enough.”

“Counselors at federally sponsored housing agencies reported foreclosure in 57 percent of cases and short sales at 33 percent as the most common outcomes for borrowers who can’t pay their mortgages, the San Francisco-based California Reinvestment Coalition reported Wednesday.”

“The report also said that lenders resisted modifying loans to fixed rates, offered only short-term solutions and didn’t reach out to consumers in trouble.”

“‘In my experience, the lender will offer repayment plans rather than loan modification,’ said Katrina Vizinau, a homeownership counselor. ‘They’re asking for unrealistic upfront money. If they had that kind of money, they would have made the payments.’”

The San Francisco Chronicle. “‘The most striking thing that came out of this (study) is that there is a huge chasm between what the lenders are stating, which very well may be their policies, and what’s happening on the ground,’ said Kevin Stein, associate director of the coalition.”

“Paul Howard, who has an adjustable-rate mortgage on his Sacramento home, said seeking a loan modification was frustrating.”

“Howard bought his house for $274,000 with 100 percent financing in April 2005. The in-law who arranged his adjustable mortgage told him it would stay at 5.75 percent for five years (a $1,400 monthly payment).”

“‘I was shocked when after just two years, it adjusted,’ he said. ‘I should probably have paid closer attention to details.’”

The Sacramento Bee. “Sacramento-area home builders are on track this year to sell the fewest number of new homes since 1997 following one of the toughest quarters yet in the ongoing housing slump.”

“At the current pace, capital-area sales could dip below 8,000 this year, only slightly above the 7,455 registered 10 years ago, according to the Folsom-based Gregory Group.”

“‘It’s more of the same,’ said Gregory Group President Greg Paquin. ‘It’s continuing in the same path it’s been continuing.’”

“Home building giants and local family builders alike sold 1,592 homes from July through September in the six-county region, the Gregory Group said in a report scheduled to be released today. That’s 18.6 percent below sales in the same time last year. And it’s the lowest three-month tally since the fourth quarter of 2005 when a wild, profitable ride enjoyed by builders for years suddenly shut down.”

“‘It is tough. It’s tough up and down the state,’ said Chris Hanson, a Sacramento-area executive for Costa Mesa-based Warmington Homes. The firm recently laid off 15 Sacramento staffers and folded its capital operation into an East Bay division.”

“Sacramento builder John Leonard encountered roadblocks, too, after auctioning 22 West Sacramento town homes last month. ‘The homes we sold at auction were too low and didn’t meet the bank payoff requirement,’ Leonard said.”

“Leonard said his lender rejected all bids because they were at least $88,000 below minimum for each unit. He said negotiations are proceeding for investors to take over the River’s Side at Washington Square project.”

The Press Democrat. “Sonoma County foreclosure filings more than tripled in September as homeowners struggled to keep up with their mortgage payments, according to a study.”

“Foreclosure filings soared to 272 in Sonoma County last month, up from 75 a year ago, reflecting an accelerating housing downturn across California, according to RealtyTrac.”

“For would-be buyers who have been waiting to enter the market, the flood of foreclosure activity should be good news, but they may want to wait until early next year for prices to fall further in California, Florida, Nevada, Arizona and other once high-flying markets, said Pat McPherron, an economist at Moody’s Economy.com.”

“‘People have a tendency to try to catch the bottom of the trough and really ride it to the top,’ McPherron said. ‘If someone said, ‘is that now?’ my answer is no.’”

Some housing bubble news from Wall Street and Washington. Bloomberg, “Centex Corp., the fourth-largest U.S. homebuilder, said it will have about $1 billion in expenses to write down property as the U.S. housing slump worsens. The charge, the second-largest announced by a builder in the past quarter, comes as Centex’s sales fell 13 percent in the fiscal second quarter and compares with $268.4 million in net income the company reported in the last fiscal year.”

“‘The housing market continues to be extremely difficult,’ CEO Timothy Eller said today in a statement. ‘These adjustments reflect the market’s further deterioration over the quarter and the significant effects of the mortgage- market disruptions.’”

“Five of largest homebuilders have recorded real estate writedowns and expenses of almost $4.7 billion in their most recent quarters. The 15 biggest companies have $7.75 billion in debt due through 2009 and are now selling homes at almost any price they can get.”

From MarketWatch. “‘The level of impairments was more than expected,’ said Morgan Stanley analyst Robert Stevenson regarding Centex’s announcement. ‘This news reaffirms our belief that book value is heading even lower as housing pricing declines escalate,’ he wrote.”

“Although Stevenson said that Centex’s sales, closings and backlog declines don’t appear as large as competitors, he pointed out the company didn’t release any pricing data. ‘We expect that many of these orders and closings were driven by aggressive discounting, and worry that the cancellation rate on orders will meaningfully reduce orders,’ he warned.”

“‘Continued oversupply and under-demand, coupled with book values that remain in a free fall, and few near-term catalysts (other than Fed rate cuts) keep us cautious on the homebuilders, and we expect further underperformance,’ the analyst wrote.”

From CNBC. “Moody’s Investors Service on Thursday cut its ratings on home builders Centex, Lennar and Pulte Homes to junk status, saying it expects bleak housing industry conditions to linger at least until 2009.”

“The downgrades affect about $9.4 billion of debt and $3.25 billion of commercial paper authorizations, Moody’s said.”

“Key problems facing homebuilders include rapidly declining orders, high housing inventories, disruptions in the mortgage market and heavy cancellations, Moody’s said in a statement.”

“Moody’s Investors Service lowered ratings on $33.4 billion of securities backed by subprime mortgages, the biggest downgrade yet, saying losses on delinquent home loans will continue to rise.”

“The 2,187 securities were issued in 2006 and represent 7.8 percent of the original dollar volume of the debt rated by Moody’s, according to a statement Thursday by the credit ratings company.”

“One percent of U.S. subprime mortgages with interest rates that began to adjust in January, April and July were modified to help homeowners avoid default, Moody’s said.”

“The company now expects losses from seriously delinquent loans will be 40 percent to 50 percent, up from a traditional level of about 35 percent.”

“‘It is very challenging to come up with an assumption for losses because we don’t have many yet,’ said Nicolas Weill, Moody’s chief credit officer for structured finance. ‘To come up with an assumption we talked to a lot of servicers and we do have some losses coming in. We know that some areas will have more than 40 percent and others will have less.’”

From Reuters. “Moody’s Investors Service said it may skip its typical process of putting debt ratings on review first and accelerate rating cuts of collateralized debt obligations tied to subprime bonds, a director said on Friday.”

“‘We feel this may be warranted,’ Yuri Yoshizawa, a managing director for Moody’s U.S. derivatives group, said during a conference call on Friday. Performance of underlying subprime bonds have ‘deteriorated at an unprecedented pace.’”

“On July 11, Moody’s placed $5 billion worth of debt comprising 184 tranches from 91 CDOs on review for possible downgrade.”

“‘We expect many of these tranches will be further impacted from yesterday’s rating action,’ said Yoshizawa, noting debt originated in 2006 and the first half of 2007 have the greatest level of exposure.”

“Bond insurer Ambac Financial Group said that it expects an unrealized loss of $743 million from marking its credit derivatives portfolio to market at the end of September.”

“Ambac insures municipal bonds and structured credit products such as collateralized debt obligations. They became popular in recent years and many invested in subprime mortgage-backed securities, helping to fuel the U.S. housing boom. But now that delinquencies and foreclosures are rising, some parts of CDOs have been downgraded and have fallen in value.”

The Buffalo News. “M&T Bank Corp. on Thursday reported a loan loss provision of $34 million during the quarter, twice the $17 million it reserved in the third quarter of 2006. Bad loans on its books more than doubled to $371 million, including so-called ‘Alt-A’ mortgages to borrowers with good credit who didn’t want to prove their income.”

“‘It’s a pretty tough environment,’ said Chief Financial Officer Rene Jones.”

“M&T is the first of the nation’s largest banks to report earnings, and as such represents somewhat of a bellwether for the industry. It’s also highly regarded for its conservative underwriting and operations.”

“‘M&T is first out of the chute for banks,’ said bank analyst Joseph Fenech. ‘I don’t really see much to get excited about in the quarter, but they’re going to look a heck of a lot better than a lot of other guys.’”

“Credit quality deteriorated, as $42 million in loans to mostly Mid-Atlantic home builders and developers went sour.”

“The largest single loan to go bad was a $32 million credit to a developer on the eastern shore of Maryland. M&T is now reviewing appraisals on all home builder loans every six months to ensure it still has enough collateral, he added.”

“Also, $26 million in ‘Alt-A’ mortgages with nontraditional terms were no longer performing. The bank tried to sell $883 million in such loans in January, but pulled them back to its own books when the mortgage crisis left it unable to get a good bid. It still has $1.3 billion in total Alt-A exposure, but is now only making loans it can sell.”

The Wall Street Journal. “Since the invention of the ticker tape 140 years ago, America has been able to boast of having the world’s most transparent financial markets.”

“These days, after a decade of frantic growth in mortgage-backed securities and other complex investments traded off exchanges, that clarity is gone. Large parts of American financial markets have become a hall of mirrors.”

“The hazards of this new age of uncertainty became clear at Dillon Read in March, when rising defaults by homeowners were hammering the value of mortgage securities. John Niblo, a hedge-fund manager at the firm, acted fast. He twice slashed his fund’s valuation of securities tied to ’subprime’ mortgages, knocking them down by about 20%, or nearly $100 million, say traders familiar with the matter.”

“But managers at UBS AG, Dillon Read’s parent company, were irate. The Swiss banking giant was carrying similar securities on its books at a far higher price, the traders say.”

“In conference calls, the UBS managers grilled Mr. Niblo on his move. ‘I’m marking to where I could reasonably sell them,’ Mr. Niblo responded during one call, according to the traders familiar with the conversations.”

“UBS later shut down the in-house hedge fund, and Mr. Niblo was let go in August. Last week, UBS announced a $3.7 billion write-down on $23 billion of securities with mortgage exposure, including securities from the shuttered fund.”

“Today, ‘way less than half’ of all securities trade on exchanges with readily available price information, according to Goldman Sachs Group Inc. analyst Daniel Harris. More and more securities are priced by dealers who don’t publish quotes.”

“Billionaire investor Warren Buffett advocates more transparency in pricing. ‘Some marks can be pretty imaginative,” he says. ‘They call it ‘marking to market,’ but it’s really marking to myth.’ He says that before funds publish financial statements, they should sell 5% of hard-to-value positions to gauge values.”

“During this summer’s credit crunch, more than 80% of investors in bonds tied to the mortgage market said they had trouble obtaining price quotes from their bond dealers, according to a survey of 251 institutional investors by Greenwich Associates.”

“Michael Vranos, a veteran mortgage-bond trader, recently told investors in his large hedge-fund company, Ellington Management Group, that he was suspending investor redemptions at the end of September because he couldn’t figure out values for some of the fund’s mortgage-related investments.”

“‘There is no way to determine [values] that would be simultaneously fair both to investors redeeming from these funds and to investors remaining in the funds,’ he wrote in a Sept. 30 letter.”

“J.P. Morgan Chase & Co. analyst Kedran Panageas estimates that 29% of lower-quality ‘collateralized debt obligations’ will eventually lose all of their value due to the recent mortgage shakeout.”

“In the case of quality CDOs, she estimated, 12% will be reduced to zero. The lost value, she says, represents roughly $85 billion of the $475 billion of such securities outstanding. So far, she believes investors have recognized only a fraction of those losses.”

“Mr. Niblo managed a portfolio of about $1 billion in CDOs and mortgage-backed securities. By February, rising mortgage defaults by homeowners with poor credit were taking a toll on the mortgage-backed market.”

“Mr. Niblo sought prices from more than a dozen Wall Street dealers, and in April marked down the portfolio of subprime mortgages by about $20 million, according to the traders with knowledge of the situation.”

“The mortgage-backed market continued to deteriorate. Again, Mr. Niblo sought prices from dealers and marked his portfolio down — this time by $75 million, the traders say.”

“Ramesh Chari, another UBS manager…asked Mr. Niblo to explain his decision. In response, Mr. Niblo asked how UBS could value the securities at a higher level ‘if we can’t sell them at these prices?’ according to traders.”

“In June, Mr. Niblo was put on administrative leave as UBS sorted out the losses and valuation issues at Dillon Read. Mr. Niblo had priced many of the mortgage-backed securities in the range of 50 to 80 cents on the dollar, while UBS valued similar securities in the 80s, the traders say.”

“Last week, when UBS announced its write-down, CEO Marcel Rohner said the firm had done the best it could. ‘We feel that we have applied a prudent valuation’ that ‘reflects the current expectation of what’s going to happen.’”

“Still, Mr. Rohner himself highlighted the bigger issue clouding the financial markets. The trouble, he said, arose because UBS had to mark a price on mortgage-related securities ‘where there is no market price, where there is no trading.’”

Keepmecurrent reports from Maine. “Maine’s cooler real estate market hasn’t just delayed Corey Center’s plans for selling her cozy South Portland bungalow for a larger Scarborough home. ‘The nuptials are on hold,’ said Center, whose two-story house has sat on the market for nearly a year. ‘I don’t want to be married and living without my new husband.’”

“‘I’ve had a few offers but they were so low, they were ridiculous,’ said Center, who has dropped her asking price from $270,000 to $249,900 for the three-bedroom, one-bath home. The new price is only slightly higher than her property valuation.”

“‘It’s crazy. I couldn’t go any lower,’ Center said. ‘I completely rejected two offers and countered one but never heard back.’”

“‘This is a natural correction,’ said veteran broker Adrienne Murphy. ‘The prices have been skyrocketing for the last four or five years.’”

The Boston Herald from Massachusetts. “The number of Bay State homes falling into foreclosure is running at nearly double the pace seen a year ago, new figures show.”

“Market tracker the Warren Group reported yesterday that lenders initiated foreclosure cases against 1,986 Massachusetts homes during August’s first three weeks. That’s up 90 percent from the 1,045 filings recorded during the same period last year.”

“‘Foreclosures are still rolling along, and I think (the problem is) going to keep going,’ Warren CEO Tim Warren said.”

The Boston Globe from Massachusetts. “‘It is important to note that while auction announcements rose 52 percent in August when compared to August 2006, they are up 259.7 percent over the number of announcements in August 2005,’ Warren said in a statement.”

“Developers of the Skyline Condominiums at Station Landing, the 127-unit development in Medford, will auction off unsold condominiums in the project on Nov. 11.”

“Skyline Condominiums has sold 42 units, or one-third of the total, in the project, which officially opened this summer but was on the market prior to that, said Robert Cole, president of a marketing firm that handling the auction.”

“‘We’re in a buyer’s market now, and we really do believe the auctions, where buyers determine the price, are the best way to move product,’ Cole said.”

“Bids will start at $535,000, for example, for a 12th floor penthouse, and at $275,000 for a one-bedroom on a middling floor. ‘That price point is soft in this market,’ said Cole.”

The Daily News from Massachusetts. “It’s not a seller’s market, a buyer’s market, a lender’s market, or anybody’s market, according to the Greater Boston Housing Report Card, released today.”

“Hesitation and anticipation of what kind of curveball a turbulent housing market will throw next has everyone waiting in limbo, according to the report from.”

“‘It’s difficult times all-around,’ said Bonnie Heudorfer, co-author of the The Boston Foundation fifth annual report. ‘We’ve been calling it a housing conundrum. Homeowners and landlords are worried about property values, and at the same time affordability has improved only moderately after a long runup in prices.’”

“‘It’s kind of a standoff,’ Heudorfer said. ‘Anyone who doesn’t have to sell keeps unrealistically high prices or pulls (their house) off the market. Home buyers have a lot more to choose from, but they’re waiting, anticipating that prices are going to drop even more.’”

“‘(Housing) prices have come down but the inventory is starting to really pile up because buyers are nervous about purchasing right now or they are not able as easily to obtain a mortgage,’ said state Rep. Pam Richardson.”

“‘It’s sort of a perfect storm in the housing market right now,’ said Richardson, a former real estate agent. ‘There’s still a pocket of people that even though the prices have come down they still cannot afford to buy a house in the MetroWest area.’”

The Times Herald Record from New York. “There are motivated sellers, and then there’s Rich Romash. A real-estate investor from Putnam County, Romash is determined to sell a house he owns in the Town of Wallkill by the end of the week.”

“The highest offer he’s received by Sunday evening will get the house, assuming the buyer jumps through all the usual financial hoops. ‘It’s gonna be a great deal for somebody,’ said Romash, who still hopes to turn a profit himself.”

“‘The buyer pool has not dried up. Their level of urgency has dried up,’ said Orange County broker Chris Scibelli. ‘If they don’t have to buy, they’ll wait it out, and the price will be different.’”

“With more than 3,300 single-family homes on the market in Orange County — about twice as many as there were just a few years ago — buyers have plenty to choose from, and little incentive to settle on a house they aren’t entirely happy with.”

Newsday reports from New York. “The Long Island housing market appears to have taken another hit. The MLS of Long Island said Thursday that the median closing price of a home on the Island plunged 4.5 percent in September from a year earlier. And 30 percent fewer contracts were written on houses last month compared to September 2006. The median closing price also fell in Queens.”

“Statistics show that inventory has remained..’around the 36,000 mark,’ according to a MLSLI press release (the exact number for September was not released), but real estate experts said that ‘tighter’ mortgage standards are keeping would-be home buyers out of the market.”

“Robert Campbell, professor of real estate finance at Hofstra University, said he was surprised by the extent of the drop in median price and predicted that it would take another year for the market to turn around.”

“‘It’s bigger than I expected, and it’s not going to help the foreclosure problems that we have,’ Campbell said. ‘People that bought houses last year with those 100 percent loans that were easier to get last year now own properties that are worth less than the mortgage.’”

“‘I think we are in that transitory period where the buyers are looking for a great advantage and the sellers are looking for yesterday’s prices,’ said Richard B. Arnold, a partner in Richard B. Arnold Real Estate in Sea Cliff. ‘Until we can get them to meet, it’s going to be this way.’”

“Like house hunters, even some real estate investors have stopped buying foreclosures.”

“That’s what some local experts said Thursday as RealtyTrac reported a 27.4-percent jump in Nassau’s foreclosure-related filings from the second to third quarter while Suffolk’s was up 14.4 percent.”

“‘The investors are not even buying the foreclosures’ at auction, said Mineola real estate attorney Michele Messina, who represents lenders on foreclosed homes. ‘They’re watching and waiting. If they’re purchasing something at auction, two or three months down the road, those prices are dropping again.’”

“In the last six weeks, Messina said, she has had two cases of prospective buyers walking away from their down payments, it’s the first time in 22 years that anyone has done that in her experience, even when the funds required by lenders range from $5,000 to $10,000.”

“‘They can get another home or another condo or townhouse for $20,000 or $30,000 less than what they entered into two months ago,’ she said. ‘Maybe the next property…was even better equipped, updated, newer kitchen, newer this, newer that, for $30,000 under the value that she already was in contract for. She’s walking away from 10, but she made 20.’”

“For-sale listings of foreclosures for broker Mike Carroll has increased many fold since the market began slowing early last year. He now has 40 to 60 foreclosure listings.”

“‘We haven’t seen this amount of foreclosures probably since 1993,’ said Carroll, who has three Re/Max Best offices on Long Island and also works as an auctioneer of foreclosed homes.”

The Courier Post from New Jersey. “More and more New Jerseyans are saying good-bye to the Garden State, and other Americans aren’t eager to take their place, according to a Rutgers University study.”

“The trend is a symptom of New Jersey’s high housing costs and taxes, and more robust job growth elsewhere, the report said. Between 2000 and 2005, it said, one in eight residents left the state. In 2006, 72,547 more U.S. residents left New Jersey than moved in.”

“‘New Jersey’s become a very, very, extraordinarily expensive place to live,’ said James W. Hughes, dean of Rutgers’ Bloustein School of Planning and Public Policy and co-author of the report.”

“Families looking to move to New Jersey may be stunned by housing prices here. The median cost for homeowners with a mortgage in New Jersey is 52 percent higher than the national average, Hughes said.”

“‘The problem is sticker shock. If you’re coming from North Carolina and have a nice house for $300,000, that’ll buy you a shoe box in New Jersey,’ Hughes said.”

The Gloucester County Times. “The new data showed that in the last six years, nearly 1.1 million people moved out of New Jersey; one in every eight state residents. Over the same period, 883,405 moved in.”

“‘That’s starting to have significant effects,’ Hughes said.”

“The difference cost the state an estimated $10 billion in personal income and $680 million in state tax revenues between 2000 and 2006, the report found.”

“Rutgers’ Professor Joseph J. Seneca and Hughes also concluded that the migration could slow in the near future as a result of the current slump in the housing market.”

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