The Housing Bubble

The San Francisco Chronicle reports from California. “The dead lawns and for-sale signs are stark evidence of the Bay Area’s foreclosure crisis, and Antioch’s Meadow Creek Estates is at the epicenter of it. With 271 homes, or more than 2 percent of all residences, already foreclosed upon in the first eight months of this year, the 94531 ZIP code has the Bay Area’s highest foreclosure rate, according to a Chronicle analysis.”

“The foreclosure rate here is seven times that of the region as a whole and nearly 1,000 percent higher than it was a year ago. This small area of Antioch, with 23 foreclosures for every 1,000 homes, has twice the bank repossession rate of greater Stockton, an area often cited as the No. 1 foreclosure spot in California.”

“Burgeoning growth caused prices to rise rapidly. Houses on Catanzaro sold for about $150,000 when they were new in 1994. Two years ago, they went for more than $500,000.”

“Now prices have fallen precipitously. Catanzaro homes today are selling in the low $400,000s, if they sell at all.”

“Trinette Nastor of Fairfield owned two of the Catanzaro foreclosures. She said she bought the three-bedroom homes, located across the street from each other, for $530,000 each in late 2005, as an investment in a partnership with two acquaintances. She thinks the acquaintances got her into the deal because she owns her own business in Vacaville, so she had the credit to qualify for mortgages.”

“‘The plan was we were going to fix them up a little bit, flip them and then go from there,’ she said. Instead, ‘As soon as the market went for a loop, they were worth $470,000.’”

“Nastor said she made a couple of monthly payments of about $3,000 each, but then couldn’t keep up. ‘I kept getting paperwork (from the banks),’ she said. ‘I was like, ‘Look, we’ve got to do something about this.’ That’s when her partners disappeared, she said.”

“‘I went crazy, I didn’t know what to do,’ she said. ‘I had to let (the houses) go because they would bring my business and my health down.’”

“She stopped making payments and the lenders foreclosed on both homes in January.”

The Orange County Register. “A recovery in the housing market may start taking hold sometime in the coming two to three years, depending on whom you asked at the California Association of Realtors convention that ended Saturday.”

“Richard Green, the Oliver T. Carr Jr. Chair of Real Estate & Finance at George Washington University, cautioned real estate agents that they may need to wait longer. ‘Just try to hang on for three years,’ he said.”

“‘Realtors like good news,’ Green said. ‘For the short run, I don’t have a lot.’”

“‘It’s going to get better, but very slowly,’ said Maria Natalia Lopez, an agent in Wilmington. ‘Everyone’s waiting for prices to drop further.’”

“Easy financing, resulting in a runup in home prices, started the slump, Green said, and as a result, home sales are almost half the level of two years ago. Six of the 10 metro areas with the nation’s highest default rates are in California.”

“‘There are no economic models,’ he said. ‘We’ve never seen anything exactly like this before.’”

“Dave Emerson, an agent in Los Alamitos, said he feels like he’s on the shore watching a ‘tsunami of foreclosures’ coming. ‘I’m just scared to death,’ Emerson said. ‘Maybe I’m a victim of the media.’”

The Union Tribune. “In recent weeks, the mortgage industry has put out the word that it is shocked, simply shocked at the amount of fraud involved in home loans. ‘People are deceiving lenders at an alarming rate,’ said Jonathan Kempner, who heads the Mortgage Bankers Association.”

“But how innocent is the mortgage industry? Were lenders, as Kempner said, ‘the principal victims of mortgage fraud’? Or did the industry, with its lax standards, create an atmosphere in which fraud became pervasive? And did some mortgage firms aid and abet the fraud?”

“Bob Simpson, whose company investigates mortgage insurance claims, said he has found that many mortgage brokers encouraged borrowers to overstate their income to qualify for high-priced mortgages.”

“Simpson tells of how a manicurist gained a jumbo mortgage using a loan application that said she was making $90,000 per year. An exterminator gained a loan by saying he made $132,000. A rental car worker was listed as making $144,000.”

“Simpson can’t believe the mortgage firms were unaware of what was going on. ‘How can you look at a loan application saying that some part-time manicurist working out of her home is making $7,500 a month without being a little suspicious?’ he asked.”

“Mark Miller, a bankruptcy attorney in San Diego, said that in one bankruptcy case he’s handling, the borrowers never saw any of the actual loan documents for their home and were not present when the documents were stamped by a notary public.”

“‘The mortgage guy told them, ‘Don’t worry. I’ve got a notary I deal with,’ who happened to be a relative,’ Miller said.”

“The borrowers thought they were signing up for a fixed-rate loan at 7 percent interest. Instead they got an adjustable-rate loan that has since ballooned to 14 percent, driving them into bankruptcy.”

The Bakersfield Californian. “As Friday approached, Otto Chacon was scrambling for a solution. The first-time homebuyer was nervously anticipating Oct. 12, the day when the interest rate on his home loan was scheduled to rise, bumping his monthly payments from $2,200 a month to nearly $3,000.”

“Chacon, an electrical construction worker, knows his family will be unable to afford the new payment. He repeatedly called his out-of-state lender, NovaStar, but says he never heard back. He tried to refinance with two other mortgage companies, but cannot pay thousands in upfront fees.”

“‘It’s all a mess,’ Chacon said. ‘I wanted to move into a house and I guess I went for it.’”

“As of June, an estimated 42,560 subprime loans, the majority of which are adjustable, were active in Kern County, according to First American LoanPerformance,. Those loans accounted for 27 percent of all Kern mortgages, according to LoanPerformance.”

“Housing experts are bracing for the first quarter of 2008, when many adjustable rate mortgages will reset for the first time, said Richard Castro, a spokesman for the Anaheim office of a national housing nonprofit.”

“‘The state is going to be at the epicenter of the foreclosure crisis in 2008,’ Castro said.”

“In September, one in 3.8 home sale listings were for ‘distressed’ properties, the majority bank repossessions or short sales where a lender forgives a portion of the loan to avoid foreclosure, according to a report by Bakersfield appraiser Gary Crabtree.”

“Those distressed homes are selling for 10.7 percent less than regular listings, putting downward pressure on prices, the report states.”

“Chacon moved his family from Los Angeles to Bakersfield in 2004, lured by the city’s relatively affordable homes. With poor credit, an adjustable rate mortgage seemed like his only chance to become an owner. Chacon and his wife, Rosa, took the plunge and bought their first home for $292,000 in a northeast Bakersfield neighborhood.”

“They like it here and want to stay. But the looming monthly payment increase is weighing heavily on Chacon. ‘I know you’re responsible for your finances, but the way they picture it is, in two years you can refinance and you’ll be OK,’ he said.”

The Mercury News. “Though the prospect of seeing a house similar to the one she and her fiance bought just 10 months ago sell for $180,000 less than they paid made Cindy Jorgensen ‘want to puke,’ her American dream-turned-nightmare had somewhat of a happy ending.”

“Her mother Shannon purchased a four-bedroom, two-bathroom property, the next-to-last one in Saturday’s 34-home auction, in the same Manteca subdivision for $107,000 below the asking price.”

“‘At least we were able to get something good out of it,’ Cindy Jorgensen said. ‘It will be good to have a babysitter close by.’”

“Also in the Pleasanton Hilton ballroom were some of the existing 26 homeowners, curious to see how much of a financial nightmare would be caused by brand-new properties similar to theirs selling for hundreds of thousands of dollars less.”

“‘Words really can’t describe how I feel right now, these results justify our worst fears,’ Paseo West resident Dave Cantrell said.”

“Cantrell, who has become the organizer in the homeowner’s attempt to get some sort of rebate from Anderson Homes, said he lost $270,000 due to the disparity between his home and a similar one that sold Saturday.”

“‘There’s a false bottom that’s being generated by these fire sales, and it’s going to take years for us to recover,’ he said.”

“‘My impression is that they were mostly families,’ said Craig Barton, chief financial officer of Anderson Homes.”

“Cantrell agreed, saying: ‘That may be the only good news that came out of this. I’m looking forward to having good neighbors, just not at a quarter of a million dollars less.’”

“Overall, the homes went for about 32 percent below the original asking price. The minimum bids had been set about 40 percent below asking price.”

“For Cindy Jorgensen, who moved from a condominium in Dublin that she’s still trying to sell, the worry is about what impact Saturday’s auction might have when applying for future home loans. ‘Will we get the price we paid for it, or will we get the bottomed-out price,’ she said. ‘It’s just been frustrating.’”

The Daily News reports from Texas. “Karen Smith and husband Gerald Cleveland had no ambitions to become landlords. But their custom-built West End home has been on the market for more than a year. Even a $100,000 price cut didn’t budge it. And the longer it sat, the warmer they got to the idea of tenants. This week, they hammered a second sign into their yard, this one heralding the home’s debut in the rental market.”

“Since January, developers have either built, begun or announced plans to build more than 4,200 condominium units on the island, according to the Galveston Economic Development Partnership. Meanwhile, developers are planning hundreds more rooftops on the West End.”

“Smith and Cleveland are asking $595,000 for the three-bedroom, 2.5-bath resort home. They’re willing to rent it for $2,700 a month until the housing market rebounds.”

“Smith and Cleveland say too much competition pushed them reluctantly down the path to landlordship. ‘With all these condos springing up on the island, homes seem to be going much slower,’ Smith said. ‘Why do developers keep building?’”

“In August, the island had an 18.6-month supply on the market, according to the most recent statistics available from the center.”

“The Galveston MLS offered 1,764 homes for sale in August, up 176 percent from a year ago. Not all homes for sale are listed on the service.”

The Express News. “What can you do for me? It’s the first question potential home buyers are asking these days when they walk into a builder’s model home, and with good reason.”

“With a few thousand ready-for-move-in homes awaiting owners, San Antonio’s new-home market has shifted in favor of buyers for the first time in at least five years. Some builders are offering upgrades, discounts off the price of a home, money toward a down payment or no-cost move-in deals.”

“San Antonio has about 3,000 completed new homes, according to Metrostudy, a housing research firm. ‘That’s higher than a year ago,’ said Keith Fahey, vice president of marketing for Centex Homes in San Antonio. ‘Last year at this time, we had about 1,900 homes. It’s got us above the equilibrium.’”

“Translation: Homes are on sale. ‘Now is the time,” said David Marne, owner of the Half Priced Real Estate Co. ‘You can pick up some gems right now. There are homes selling at last year’s prices.’”

“Builders are much more flexible than they were a year ago. Centex, for instance, is offering buyers a set amount of money, depending on the home’s price, that they can use for upgrades, for buying down their mortgage interest rate or for a down payment.”

“‘A lot of people are using it toward their down payment,’ Fahey said. ‘People can afford the monthly payment. It’s the down payment that is a problem.’”

“But home buyers shouldn’t get too caught up in the incentives, said Jane Caskey, manager at the Coldwell Banker D’Ann Harper Realtors office in Alamo Ranch. ‘The builders are setting the discount, but they’re also setting the starting price,’ Caskey said. ‘Is it really a discount?’”

“Often, it is. But it makes sense to stop and ask questions about how the builder arrived at both the price and the discount. On a spec home, for instance, the builder may have finished the home several months ago and had a deal with another buyer fall apart. The house has been sitting empty ever since.”

“‘There’s a difference between what it cost them to build it six months ago and today,’ Marne said. In those six months, the price of homes in the neighborhood has been climbing every month.”

“Making an offer that is lower than today’s prices but higher than prices six months ago often results in a good deal for the buyer (and for the builder who finally can get that house off his books). ‘It’s still more than they were going to get for the house six months ago,’ Marne said. ‘Everything is negotiable.’”

“The biggest problem in San Antonio real estate was an invasion of out-of-town investors in 2005 and 2006, most of whom have since left the market. Those investor-buyers helped fuel a run-up in building, then backed out of contracts when it was clear San Antonio wasn’t the kind of market where double-digit returns can be had.”

“The result was those 3,000 inventory homes on which buyers now can get a good deal. ‘We have job growth, but we overbuilt,’ said Jack Inselmann, of Metrostudy.”

The Dallas Morning News. “Home starts fell almost 30 percent in the Dallas-Fort Worth area during the third quarter. Sales of new housing fell to 10,000 units during the third quarter in Dallas-Fort Worth. Homes priced under $200,000 are seeing the biggest decline.”

“And sales of new houses were off 20 percent from the same period of 2006, according to Metrostudy Inc. The drop in new home sales was in line with the 19 percent dip in pre-owned homes reported earlier.”

“Builders started 8,855 houses in the just-completed quarter. That’s down from more than 12,000 starts in the same period of 2006. At the same time, sales fell to 10,000 units, a decline from 12,520 new home purchases a year earlier.”

“Through the first nine months of the year, new home sales in Dallas-Fort Worth are off 14 percent, according to Metrostudy. Most of the drop in sales has been in houses priced under $200,000, buyers most likely to be affected by recent toughening in home loan underwriting standards.”

“‘The reason the closings have been off so much is because of the mortgage problems,’ said David Brown, director of Metrostudy’s Dallas office.”

“Builders have managed to trim the inventory of homes available for purchase by almost 4,500 units so far this year. ‘It’s going to take awhile longer,’ Mr. Brown said. ‘We still have 24,500 new homes in inventory,’ both completed and under construction. ‘That needs to get down under 20,000.’”

“Although builders have cut back on the number of speculative houses they build, many homebuyers back out of the purchase before the house is finished. ‘We are continuing to hear of elevated cancellation rates,’ he said.”

“‘Sometimes they don’t know whether they have a spec house or not until they get to the closing table,’ Mr. Brown said.”

“North Texas home sales plunged in September. The 19 percent drop in sales of pre-owned homes was the largest annual decline in more than seven years.”

“Local real estate agents sold only 6,031 pre-owned homes last month, according to statistics released Monday by the North Texas Real Estate Information System. That’s a big falloff from August’s 8,480 sales and the lowest monthly total since February.”

“‘The tightened mortgage market has forced some buyers, especially first-time or easy credit-dependent buyers, out of the market,’ said Jim Gaines, an economist with Texas A&M University’s Real Estate Center. Dr. Gaines said this change ‘reflects a reversion to market norms rather than the sky falling.’”

“Real estate agent Bob Edmonson said some ‘buyers have been scared off, thinking that either they won’t be able to qualify or home prices may go lower. I wonder just how many people are incapable of obtaining a mortgage now vs. how many think they can’t get a mortgage,’ he said.”

“At the end of September, almost 49,000 pre-owned single-family homes were for sale in North Texas, an increase of about 4 percent from a year earlier. That works out to about a 6.5-month supply.”

“The outlook for October sales isn’t promising. At the start of the month, the number of pending home sales in the pipeline was down 17 percent.”

The Providence Journal reports from Rhode Island. “The new property owners in some neighborhoods here mark their turf with padlocks, plywood and messages such as the one scrawled on a front door in Olneyville: ‘Copper Gone. Vacant houses have always been easy prey for vandals, no less so when the owners are giant banks, companies representing Wall Street investors.”

“Block by city block, foreclosures are scarring the landscape in neighborhoods such as Olneyville, Elmwood and the West End, raising fears that the deteriorating real-estate market could hurt property values. These neighborhoods became magnets for real-estate speculators who bought up houses and then resold them for twice what they’d paid.”

“Now, house prices are down and the speculators are gone, leaving behind vacant properties and ‘For Sale’ signs.”

“The number of houses on the market in August climbed to a 10-month supply, compared with a less than 6-month supply in August of 2005, according to the MLS.”

“On Daboll Street, in the city’s West End, Gaensly Luceus and his wife, Erika, put their house on the market in July for $350,000. ‘A couple of years ago, there were people knocking on my door trying to buy my house,’ Luceus said. But the summer passed without a single offer. So last month, they took it off the market.”

“Just up the block, three houses are boarded up.”

The New York Times. “A surge in subprime lending across the region in recent years is now helping to fuel a boom in foreclosures, with the number of filings rising 55 percent in suburban counties in the first nine months of this year, compared with the same period last year, an analysis of real estate data shows.”

“On Long Island, the number of foreclosure actions increased sharply during the summer. Nearly 1,000 foreclosure notices were filed in July, and 728 foreclosures were scheduled in the third quarter. Both numbers represent an increase of more than 60 percent over the same period in 2006, according to Long Island Profiles.”

“Counselors at housing agencies have begun to see a stampede of new clients with payments they can’t afford and who are desperate to keep their homes. ‘We’re running at three times the calls we got last year,’ said Lynn Law, director of education and counseling at the Long Island Housing Partnership. ‘It started in May and June, and continued through the summer.’”

“In Westchester, Jacqueline Borrero said the mortgage payment on the two-family home her brother bought for $299,000 in 1998 rose to $4,800 from $4,000 last May. The loan will cost $5,100 a month starting in November, when the interest rate increases to 11 percent.”

“‘We’re really scared,’ said Ms. Borrero. She and her mother and brother are working extra part-time jobs to meet the mortgage bill, but their combined income won’t be enough to cover the payment, she said. ‘We got some bad advice on this loan,’ she said, ‘Now we don’t know where to turn. We don’t want to become one of the statistics.’”

“In the Southampton village of Sagaponack, the median home price has risen a staggering 44 percent since last year, to $5.5 million. Yet as of the end of August, the number of homes sold had dropped by more than half, to 21.”

“That’s a telling example of what is happening across the East End: a meteoric rise in sale prices that many brokers say is driven by big Hamptons trophy-home sales, but a glut of homes valued under $10 million sitting on the market, including some new ones built by speculators.”

“That can make for lower prices in some places, as sellers slowly stop ‘reaching for what was,’ as broker Judi Desiderio put it, and realize that buyers have lots of inventory to peruse. ‘A buyer today comes out and looks at dozens of properties,’ she said. ‘They’ll know instantly if a house is priced at last year’s or today’s prices.’”

“E-mail messages are regularly flying out to East End brokers, announcing new pricing. ‘I see it every day on the computer,’ broker Paul Brennan said. ‘More and more houses that come from brokers saying, ‘Price reduction, price reduction, price reduction.’”

The Morning Call from Pennsylvania. “When builder Bill Wall decided to start a home in Powder Valley without having a buyer lined up in early 2006, the real estate market was roaring. Houses were selling in days instead of weeks, and often for more than the asking price.”

“But, by the time the home was finished in January 2007, the Lehigh Valley real estate market had stalled. Inventory piled up. Cautious buyers were rethinking their intentions.”

”’I listed it for $699,000 and got only one offer — for substantially less than the asking price,’ says Wall, who has built and sold several million-dollar homes over the past six years.”

“After nine more months dragged on, Wall decided to lower the asking price to $659,000 and he sweetened the pot by throwing in a three-year lease for a Lexus RX 350.” “An open house in late September drew plenty of interest, but no offers. Still, Wall is hopeful that he can find the right buyer.”

“‘Sure, I’m disappointed,’ he says. ‘But I understand that there is a lot on the market right now in this price range. And it’s a very tough range. You need two incomes, and you need the right match.’”

The Baltimore Sun from Maryland. “Pulte Homes is trying to combat the housing slump with a Halloween-themed ‘monster’ sale at seven Maryland communities, including Baltimore, with incentives that include selling at cost and guaranteeing the purchase of buyers’ current dwellings.”

“The homebuilder hopes to entice buyers frightened by plummeting sales, stagnant or falling prices and the potential of getting stuck with two mortgages.”

“‘The unusual blockage of the market we had for the month of September, where it was difficult for prospective buyers to come by a mortgage has exacerbated what was already a difficult situation,’ said John E. Kortecamp, executive director of the Home Builders Association of Maryland. ‘These larger, national production builders are going to do some dramatic things. It’s all about shedding inventory.’”

“The number of Maryland properties about to be put on the foreclosure auction block more than tripled last month from a year earlier, as homeowners struggle with the one-two punch of mortgages they can’t afford and homes they can’t quickly sell.”

“About 1,730 notices of impending auction were issued last month, up from about 550 in September 2006, RealtyTrac said. The number of properties taken back by lenders last month after no one bought them at auction increased 10-fold from September 2006, to about 220. Though some might be commercial properties, the great majority are homes, the company said.”

“‘The picture in Maryland is a troubling picture, and we cannot deny that. In virtually every corner of the state, foreclosure events have increased dramatically,’ said Thomas E. Perez, the state secretary of labor, licensing and regulation.”

The Gazette from Maryland. “The credit crunch in the housing market has squeezed the bottom line of some area banks. First Mariner Bancorp, the Baltimore parent of First Mariner Bank that was founded in 1995, showed a net loss of $3.9 million for its 2007 second quarter.”

“First Mariner has stopped issuing ‘Alt-A’ mortgages through its wholesale lending division, said CEO Edwin F. Hale Sr. The company has also decided to close its wholesale lending operation and taken steps to modify underwriting guidelines and strengthen borrower qualification terms.”

“The bank will slow its development of new branches and ‘eliminate any poor-performing locations,’ Hale said. Some job cuts are expected, mostly through attrition, he said.”

“Provident Bankshares Corp. of Baltimore saw residential mortgage loans decline by $92 million, or 23 percent, in its second quarter from a year ago.”

“M&T Bank Corp. of Buffalo, N.Y., the fourth largest bank in Maryland in deposits, works hard with qualified borrowers who don’t carry as much risk, said Atwood Collins III, president of M&T’s mid-Atlantic division in Baltimore.”

“‘The residential mortgage loan market is not what it was two years ago, but qualified borrowers need not worry,’ Collins said.”

The News Tribune from New Jersey. “Expensive, high interest rate mortgage loans continued to grab a larger share of the market last year, and thousands of homeowners like Paul and Elizabeth Duncan are feeling the squeeze.”

“The Toms River couple are finding it increasingly hard to make the $3,200 monthly payments on their $327,000 mortgage, which they refinanced last year at a 9 percent interest rate. They are not sure how they are going to make this month’s installment.”

“‘We have more going out than coming in,’ Elizabeth Duncan said.”

“Soon, the Duncans say, they may be forced to sell their new dining room furniture, or take out a cash advance on a credit card in order to make payments and buy some time.”

“The Press analysis found that in Monmouth and Ocean counties last year, one in five home loans were granted to subprime borrowers, for a total of $3.1 billion. In 2004, about 1 in 10 loans had gone to subprime borrowers.”

“Richard G. Stafford of Capital Home Mortgage in Spring Lake said he believes many borrowers were addicted to shopping. ‘They didn’t change their lifestyle,’ Stafford said. ‘The appraisers were generous to them. They just kept refinancing and then maxed their credit cards out again.’”

“Phyllis Salowe-Kaye, executive director of the consumer advocate group New Jersey Citizen Action, called such comments ‘blaming the victim.’”

“She and other advocates fault mortgages sales staff who gave loans to borrowers who never could make the payments long term or made promises that were not kept. ‘These people are in business to make money, but they’re in the business to make money on the backs of people,’ Salowe-Kaye said.”

“The Duncans appear to be an example for both arguments.”

“The couple married in 1999, but with two children each from previous marriages, they soon found that their two-bedroom mobile home was much too small. They bought the three-bedroom colonial in 2004 with $28,000 down and a $211,000 mortgage, land records show. The Duncans earn $80,000 a year.”

“They said they so enjoyed owning the house that they took out a $50,000 home equity loan to build a 450-square-foot family room extension. They also racked up another $46,420 on five credit cards as they landscaped their front yard, and purchased new televisions, a $5,500 dining room set and a $5,000 pool table.”

“With bills piling high, a telemarketer called one day and offered a mortgage refinancing to Elizabeth. The woman told her they could refinance all their debt and pay $400 a month less than they were before.”

“The credit card and home equity payoffs, along with mortgage company fees, came to $327,000, at a 9 percent per year interest rate. But there was a catch.”

“Until they received a notice for late taxes, the Duncans said they failed to realize that the loan, unlike most mortgage loans, did not include payments for property taxes. Buried one-inch deep in the paperwork was an ‘Escrow Waiver’ form, mixed in with several other required disclosures.”

“Now the Duncans have set up the escrow account to pay taxes and homeowners insurance, but their mortgage payments are now $200 a month higher than their total debt payments were before they refinanced.”

“The couple say they are angry about the lender not including the $200-a-month escrow payments in the loan, but the Duncans say they realize they have spent themselves into their current crisis.”

“‘We shouldn’t have gone so crazy when we moved in here,’ Elizabeth Duncan said. ‘We went overboard, way overboard.’” “She said she hopes others will learn from their experiences. ‘Maybe someone else won’t make the same mistake,’ she said.”

What do you see in your housing market this weekend? An auction? “Laguna Oaks Condo development is the latest to take the auction route. On November 4th, 50 units will go to the highest bidder in the space of two hours. The two bedroom units will open at $145,000, the three bedrooms open at $165,000. That’s about half the normal asking prices.”

Slower sales? “Chilliwack home sales in September were down 20 per cent from the same time last year, and by about 30 per cent from the ’sizzling sales’ recorded just a month earlier in August.”

“Trude Kafka, president of the Chilliwack and District Real Estate Board says she was ’shocked’ when she saw the September sales figures. The sales dip isn’t confined to housing, she adds, ‘it’s all across the board’ from single-family homes to townhouses, apartments and even houses on acreage.”

More defaults? “Creditors launched 1,778 new foreclosure actions in Wisconsin last month - 30% more than in September 2006, ForeclosuresWI.com reported.”

“In Wisconsin, last year was bad - 16,473 foreclosure actions statewide - but this is worse, figures show. In this year’s first nine months, 14,733 foreclosure actions were filed in Wisconsin, a 27% increase in households facing the loss of their homes to unpaid debt than in the same period a year earlier.”

Or contingencies? “Sanghomitra and Upayan Sengupta put a bid in on a two-bedroom condo in St. Francis for about $100,000 more than the asking price of their current one-bedroom place, about $189,000.”

“‘There are a couple other condos up for sale in our complex - the one just across from us, for almost a year. Our house has been on sale for about a month, and hasn’t had much traffic,’ said Sanghomitra Sengupta of their downtown Milwaukee home.”

“‘The contract says we have until December, but if worst comes to worst, we might just give it up,’ she said.”

Or financial news? “The downgrade of three home builders into junk territory by Moody’s Investors Service may only be the start of a rash of cuts of high grade builders into high yield, which may present funding challenges for some companies.”

“‘The fact that Moody’s would even consider — let alone act upon — a two-notch downgrade for an investment grade builder signals some serious worries that the current downturn has eroded debt protection measures to very uncomfortable levels,’ according to analysts at CreditSights. ‘We would not be surprised if S&P and Fitch came out with similar assessments in the upcoming months as there is now a two-notch disparity amongst the agencies,’ they said.”

Or cancellations? “Comstock Homebuilding Cos. of Reston yesterday reported that even though it sold 81 houses in the third quarter, 78 sales were canceled, a net of just three sales in three months and a striking reminder of the building industry’s deepening troubles.

“‘Market conditions have continued to deteriorate throughout the year,” CEO Christopher Clemente said in a statement.”

“In the Washington region, the cancellation rate for newly built homes shot up to 48 percent in July and August from 18 percent at the comparable time last year, according to Hanley Wood Market Intelligence.”

“The most dramatic rise was among condominiums, where the cancellation rate jumped to nearly 124 percent from 13.5 percent a year earlier, which means there were more cancellations of previous sales than there were new sales.”

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