The Housing Bubble

The Orange County Register reports from California. “Home sales fell to their lowest level in at least 20 years in September. Yet, even with many buyers on the sidelines waiting for the market to settle, some are finding homes and others are signing contracts for personal reasons. There also are a few who bought earlier this year only to see a decline in the value of their homes amid falling prices.”

“Some residents of Camden Place, a new home development at the former Tustin Marine base, are feeling buyer’s remorse. The three-story condos they bought are now selling for more than $100,000 less than they paid.”

“Erin Kerr said he doesn’t regret buying his Camden Place condo but does wish he had waited a little longer. They paid $577,000. Last week, the developer offered a similar unit for $464,000. ‘We love the community, we love our home, but part of me wishes we waited maybe a few more months. Maybe we would have gotten a better deal,’ said Kerr.”

“The Tiptons are fixing up their new Anaheim Hills home, getting it ready to move in. While they got a deal on the home they bought, they couldn’t find a buyer for their old home in Whittier. So after two months of trying to sell it, they took it off the market and plan to rent it out instead.”

“‘It’s just not selling for what it’s worth,’ said drywall contractor John Tipton.”

“Is now the time to for hesitant homebuyers to make a deal? Or will there be a better time down the road when prices are lower?”

“‘If you have a long horizon, this is a good time to buy,’ said Michael Caruso, president of the Orange County Association of Realtors. ‘You have plentiful inventory, you have willing sellers and you have agents in a problem-solving mode.’”

“But Chris Thornberg, principal at Beacon Economics and a former UCLA professor, countered that buying now is folly. ‘What’s the point of buying today when you can buy it for 10 percent less in a year?’ Thornberg said. ‘For the life of me, I can’t figure out that logic.’”

The Daily Bulletin. “When people talk about a cycle in prices, they imply that prices go up for a while, eventually get too high and then fall back some. It might be true in some areas of the business world, but it doesn’t apply to California home prices.”

“‘People want to be here, and people need places to live,’ said Jack Kyser, chief economist with L.A. County Economic Development Corp. ‘That’s why prices will always go up here - because it’s California.’”

“‘I can’t imagine the median in the High Desert ever being below $200,000 again,’ said High Desert builder Todd Tatum. ‘There is no price cycle. If you look at a graph, it would look like a stairstep, going up, flattening off, going up, flattening off.’”

The Press Enterprise. “Just north of Interstate 210 sits one of this city’s marquee developments — the ‘Beverly Hills of Fontana’ as one resident recently described it.”

“And like other areas with vast tracts of new development, Fontana and the Sierra Lakes community are now bearing the brunt of the slumping housing market. Thousands of foreclosures are recorded in the area each month.”

“‘Where there is boom there is now bust,’ Fontana Councilwoman Janice Rutherford said in an interview.”

“In Sierra Lakes, the southwest corner of the 700-acre development had the highest density of foreclosures and defaults in the city during the second quarter, according an analysis of foreclosure data by The Press-Enterprise. Property values are dropping by more than 10 percent in some parts of the development, the San Bernardino County tax assessor’s office reported.”

“A large plywood sign propped against the garage door of one Sierra Lakes home begs someone to come to the homeowner’s aid. ‘Help!’ reads the sign in orange-neon paint. ‘Going to foreclosure.’ The sign says the home is worth $530,000 but will sell for $440,000, scratched down from $450,000.’”

“‘We are barely holding on here,’ said Jean Beauford, who bought into Sierra Lakes three years ago and has seen her monthly mortgage payment jump from $1,641 to $2,500 because of an adjustable interest rate.”

“Kevin Parhm’s girlfriend bought into Sierra Lakes about a year ago. Parhm said the housing crisis will only get worse. ‘If you had a pulse, you could get a loan,’ Parhm said, pointing to house after house on the street that is now vacant.”

The Bakersfield. Californian. “In September, Bakersfield’s home sales were nearly half what they were a year ago, according to the Bakersfield Association of Realtors.”

“In addition to putting the brakes on brisk growth, the housing bust has left the state and local economy more vulnerable to systemic shocks, said Leslie Appleton-Young, chief economist with the California Association of Realtors. ‘It does mean we’re closer to the edge,’ Appleton-Young said. ‘There’s more risk to the downside because other things can always happen.’”

The Tracy Press. “About 20 of those prospective homebuyers turned up at the office of real estate brokerage Saturday morning to see what kinds of deals they could get on houses that have been through foreclosure. Real estate agent Joan Fallavena told potential buyers that banks own all 19 homes on Saturday’s tour.”

“Fallavena and three other real estate agents from the office led people on a caravan through Tracy neighborhoods to look at houses that are back on the market. Some of them are among Tracy’s newest homes.”

“The previous owners of a three-bedroom house in the Edgewood subdivision apparently didn’t live there long enough to put in any landscaping in the backyard. ‘They moved in long enough to put up a few pictures, then the mortgage adjusted and they were out of here,’ said real estate agent Claire Trinkle.”

“Peggy Stout of Calaveras County added that the advantage is with people like her daughter and son-in-law, who have a huge inventory to chose from. ‘The market is great,’ she said. ‘They’re in a perfect situation, because they don’t have to sell anything.’”

The San Francisco Chronicle. “The weight of defaults on real estate loans has forced the Bay Area-based Cal State 9 Credit Union into federal conservatorship.”

“The state Department of Financial Institutions announced late Friday that it was putting the National Credit Union Administration in charge of Cal State 9 operations.”

“The credit union has five branches in San Francisco, Berkeley, Oakland, Hayward and Pleasant Hill. Its headquarters is in Concord. The Cal State 9 Credit Union, which has been in operation for nearly 60 years, has more than 29,000 members and nearly $388 million in assets, said Carol Chesbrough, California’s interim commissioner of financial institutions.”

“‘The credit union, however, had impaired capital and had become insolvent,’ Chesbrough said. The state’s action ‘is related to the credit union’s defaults on mortgages,’ California Department of Financial Institutions spokeswoman Alana Golden said.”

“The credit union reported $54.5 million in loan and lease losses in its September quarterly report on file with the state; in the previous quarter the reported losses amounted to $17 million.”

The Modesto Bee. “Two years ago, economists, Realtors and others carried on a lively and unresolved debate about whether skyrocketing housing prices constituted a bubble, a bubble that was destined to burst.”

“Today, in Stanislaus, San Joaquin and Merced counties, to say the bubble has burst is an understatement.”

“Based on past experience, we anticipate that developers soon will be asking cities for major breaks in permit fees in order to jump-start home building. Elected leaders will be tempted to acquiesce in the name of improving an ailing economy.”

“That isn’t the best solution. It’s obvious now that the demand for valley housing was artificially inflated by speculation and subprime mortgages that put many people into houses they couldn’t really afford. And for all the new homes that were built, very few were truly affordable to those with typical valley incomes.”

“Now is the time for sanity. And when building begins to boom again, which it will, let’s remember the lessons we learned.”

The LA Times. “Downtown’s boosters hailed the cranes dotting the skies over Los Angeles as sure signs that the city’s building boom and economic good fortune were continuing. At the same time, ever-rising housing prices convinced homeowners across the region that their bet on Southern California was a prudent, maybe brilliant, one.”

“But now, as the housing market undergoes a painful correction…it’s time to look beyond the real estate hype and wishful thinking. On closer inspection, much of the ‘boom’ has turned out to be a ‘bubble,’ built not on rapid growth in personal income and new jobs in many industries, as in past regional booms, but mostly on a housing market gone mad.”

“Paradoxically, a weakening real estate market may be precisely what L.A. needs. Lower housing prices could keep businesses from leaving the region because their workers could afford to buy houses. Cheaper condos could make living downtown or in other high-density areas more affordable.”

“And the prospect of fewer buyers and lower home prices may persuade residential developers to sell their land, which could open it up for industrial, warehouse and other productive uses.”

“Far-fetched? Well, much of these scenarios played out after the collapse of the L.A. real estate market in the early 1990s. It could happen again, to the benefit of the region and the long-term sustainability of the real estate market.”

The News Record reports from Wyoming. “The local real estate market hasn’t gone cold, but the red hot sales of recent years may have tempered themselves in recent weeks. Agents from across Gillette say the housing market agreed this week that prices have begun to level off as more new houses get a ‘For Sale’ sign in front of them.”

“‘The good news for sellers is home prices have gone up and up and up and up,’ said broker Pat Avery. ‘Since 1985 they have gone up … this is the first time it has leveled off.’”

“Some segments of the market may even be turning slightly downward.”

“‘There’s a lot more new housing than there was in the past, and that’s created a drop in pricing in the used housing market,’ said Ben Novotny with Prudential Preferred Properties. ‘I’m seeing a 5 percent to 7 percent decrease in the used housing market.’”

“For people like Sue Hight, the leveling off came at an inconvenient time, just as she and her husband were trying to sell their Saunders subdivision home. After buying the house in 2005 and renovating it, the couple put their home on the market for $350,000 in May.”

“Almost six months later the home is priced at $315,000 and Hight thinks it may have to come down again.”

“To make matters worse, the Hights are now stuck with two houses after buying another home in Foothills subdivision. Both are for sale and if one doesn’t sell soon, they’ll have to start renting one to recover costs. In the meantime, their possessions are split between the two houses. ‘We’ve got part of it in this house, part of it in the other house because we want to see which one sells first,’ she said.”

“Anecdotally, many real estate agents say the character of the Gillette market is changing. ‘Sellers are having to adjust their mindsets,’ said broker Kevin Beck. ‘You’re seeing sellers that are willing to negotiate on price, willing to help pay closing costs, offer upgrade allowances, things we haven’t seen in a while.’”

“‘I think there might be a little bit of a correction,’said Jeff Riesland, chairman of the MLS. Riesland said the increase in newly built houses has left some homeowners trying to sell homes at the top of the market out in the cold.”

“‘I think a lot of people jumped on the bandwagon a little bit late,’ he said.”

“Brandon Kieson is another person trying to get money out of his house as he looks to sell. He’s reduced his price on his Sage Bluffs home by $10,000 to $215,000 since listing it over the summer.”

“‘When I bought my house, there were 79 (houses) on the market,’ he said. On Friday, there were 368 homes listed in and around Gillette.”

“‘There are just so many houses on the market,’ Kieson said. ‘I guess over $200,000 is a lot of money for people, too.’”

The Rural Northwest from Idaho. “For the first time in the six months, Boundary County’s plunging jobless rate has taken a significant hit.”

“After dropping below the 5-percent unemployment mark since April - a level Boundary County has not seen since 1989 - the county saw its seasonally adjusted jobless rate shoot up to 6 percent in October, a 1.7 percent increase from one month ago.”

“Regional labor economist Kathryn Tacke with Idaho Department of Labor, acknowledged that the growing possibility of a national recession is throwing a scare into many economists’ crystal balls.”

“‘There are more clouds out there regarding that, especially with the downturn of housing starts on the national level,’ she said. ‘It’s a scary prospect for Boundary County, since it relies so heavily on the timber industry.’”

The Oregonian. “The number of homes and condos sold in central Oregon is down about 41 percent from the same period last year, and the number of days a home spends on the market is up by a third.”

“A similar housing slowdown is under way in southern Oregon’s Jackson County, until recently another real estate boom area, especially in Ashland. Between June 2006 and 2007, Jackson County lost about 556 housing-related jobs…a drop of more than 11 percent.”

“Homebuyers in Bend, once as thick in the streets as Subaru wagons, have all but disappeared. That’s left people such as Cathy Cirillo struggling for months trying to sell their homes, sometimes while dealing with rising mortgage payments.”

‘”I just haven’t had any viable buyers,’ said Cirillo, who listed her manufactured home in south Bend on July 1 for $184,900 and has been dropping the price ever since. She is now trying to sell the house on a large lot for $169,900.”

“‘We all got so spoiled. We just stuck a sign in the ground and it would sell,’ said Carolyn Emick, a broker in Bend. ‘We have so much inventory here and no buyers.’”

“Cracks have been showing for much of the year, with no letup in sight. In August, builders got approval for about 173 new homes, condos and apartments. That is down two-thirds from two years ago.”

“Across central Oregon this year it was common to see for-sale signs posted with the first buds of spring, faded by summer’s sun and pelted by the gusted aspen leaves of fall.”

“The trend is as pronounced in southern Oregon’s Jackson County, where the rush up in home prices and building was similarly frenzied. The loss of about 556 housing-related jobs between June 2006 and 2007 is just from company payroll, so it doesn’t cover self-employed Realtors or contractors.”

“Jackson County also had one of the country’s highest rates of speculative buying, which inflated home values. As of last spring it has the highest rate of foreclosures in the state, according to Loan Performance. Twelve percent of subprime loans in the Medford area were at least 60 days delinquent, compared with 8 percent in Portland.”

“‘Three years ago the biggest, grandest holiday parties were thrown by Realtors and mortgage brokers. This year I don’t think that’s going to be the case,’ said Guy Tauer, regional state economist for southwest Oregon.”

“Tauer and his wife cashed in when the market was good, buying a three-bedroom place for $180,000 in summer 2005 and reselling it for a profit eight weeks later.”

“‘Now the musical chairs have stopped,’ he said. ‘If we did the same thing a year later we probably would have a rental right now and be wondering whether we could sell it for what it’s mortgaged for.’”

The News Tribune from Washington. “At a time when home builders beckon with shopping sprees and new TVs, new-home sales show a surprising range of fluctuation around the South Sound.”

“In the Fife area, for example, sales on new-construction homes through Oct. 30 are down 65 percent compared to the same period a year ago, according to statistics from the Northwest MLS. Countywide, new-home sales dropped 39.8 percent through Oct. 30 this year compared to the same several months of 2006. Sales activity for all homes in Pierce County declined through September by 40.5 percent.”

“Most areas had more homes for sale this week than the amount they’ve sold all year.”

“Among the worst off is the Bonney Lake area, which had 391 homes listed this week as sales through the end of October dropped 51.1 percent year-over-year. Just 156 homes have been sold in that area this year.”

The Heraldnet from Washington. “Real estate agent Teresa Sifferman ticks off the virtues of an Everett home she is trying to sell: the cathedral entryway, the chef’s kitchen, the big yard, the designer colors, the coffered ceilings in the formal dining room.”

“A year ago, this squeaky-clean home probably would have garnered multiple offers and a quick sale at the original $469,000 asking price. Now it’s a different story.”

“The home has lingered on the market for more than two months, even after the real estate agent dropped the asking price three times, a reduction of $40,000.”

“‘Sellers are getting panicky, slashing prices and taking lower offers, that’s what I’m seeing in Snohomish County,’ said Sifferman, an agent in Lynnwood. ‘At our weekly sales meetings agents are saying open houses are dead, buyers aren’t showing up.’”

“‘Two and three years ago, the sales prices used to be the starting point. Now it’s the ending point,’ said Nathan Gorton, executive officer for the Snohomish County-Camano Association of Realtors.”

“Inventory has swelled from this time last year, it’s up more than 50 percent countywide and 71 percent in Everett and Mukilteo, according to statistics from the Northwest MLS.”

“Inventory is up partly because a boom in new construction outstripped demand, Gorton said.”

“Leah Lang and her family recently bought a home in the Northshore School District. A year ago, four or five homes that met the family’s budget and criteria might have been on the market, said their agent, Barbara Athanas in Bothell. This year, she showed them 42.”

“Lang said that while the selection wasn’t as good as she would have liked, she previewed dozens online and visited dozens in their $800,000 price range. When one seller wouldn’t budge $4,000 on the asking price, the couple walked. Lang drove by that house recently, noting that after two months, the For Sale sign is still up.”

“‘Sellers don’t get it yet,’ Athanas said. ‘They have to put in some effort.’”

“In order to get the attention of buyers, sellers need to price the home realistically, and what’s realistic today might be less than what the house would have sold for six months ago, said Vern Holden, a broker based in Mill Creek.”

“‘Sellers have got to get out of the mode that my neighbor sold his for ‘X’ last year,’ he said. ‘They have to be in tune with the market at this moment.’”

The Bradenton Herald reports from Florida. “Troy Dugan remembers when buyers snatched up Dugan Construction Inc.’s affordable homes almost as quickly as his Bradenton company could build them. But now buyers are scarce for the roughly 30 properties he has on the market, including a brand-new house that hasn’t sold in almost a year. ‘Two years ago, or any time prior to that, we would’ve sold that house right away,’ said Dugan.”

“More than 1,000 Manatee homes - or 17 percent of the market - listed for sale last week were priced at $176,000 or less, the level at which property is considered affordable in Manatee.”

“In all, more than a quarter of the roughly 5,800 homes on the MLS were in the affordable and workforce price ranges. The actual numbers likely are higher because not all homes for sale are listed on the MLS.”

“Suni Byrns, who specializes in selling older resale homes in the Bayshore area, says it has become more difficult to qualify buyers for mortgages.”

“‘I’m finding more that people, just because of their credit numbers, have too much debt-to-credit ratio,’ Byrns said. ‘It’s a lot more difficult to get a mortgage today. They (lenders) are asking for additional, additional, additional information. Even within the last week before closing, they are asking for more information.’”

“‘It depends on the credit score,’ Byrns said. ‘If it’s low, they’re going to want 20 percent down.’”

“Affordable housing advocates also strike another note of caution: What’s affordable is not always desirable. Not everyone wants to live in a condo, townhouse or villa, which account for two-thirds of the local affordable market.”

“The ranks of affordably priced residences are growing. Between Oct. 15-29, almost 100 more were added to the MLS, with many falling into the affordable range when sellers dropped their asking prices.”

“And prices for already-affordable homes are falling. Sellers lowered prices for 53 affordable houses on the MLS by as much as $29,900 during the two-week period, according to the Herald’s analysis.”

“Vickie Smalls, a local real estate agent, points to a dozen of her own clients who are prequalified. ‘They don’t want what they can afford,’ she said. ‘They’re waiting for prices to go down even more, and they’re going to keep waiting until someone says, ‘Hey guys, the real estate market’s back to normal.’”

The News Press from Florida. “Over the years, the availability of reasonably priced offerings has been as closely associated with Lehigh Acres’ housing stock as sunshine is with Florida. The residential market’s explosion and contraction over the past few years doesn’t appear to have diminished that perception.”

“Broker Kevin Williamson, who’s been involved in the real estate business in Lehigh since 1986, said housing prices in the tract range from about $80,000 for a two-bedroom, one-bathroom house with a carport to roughly $180,000 for a three- or four-bedroom home with up to a two-car garage and a pool. A year ago, those same houses might have listed for $110,000 and $210,000, respectively, he added.”

“‘It’s a good time to buy because prices are running 30 to 50 percent of what they were during the peak, two years ago,’ he said.”

“One of the agency’s listings in the tract serves as an ideal case in-point. The list price for the 1964 vintage house, which has central sewer and water and an oversized lot, is $119,900, down dramatically from the $180,000 it sold for in early 2006, Williamson said.”

“‘There are a lot of good buys, compared to Fort Myers and Cape Coral,’ said R.J. Dean, a Realtor in Fort Myers. ‘Everything is going down everywhere, but especially in Lehigh.’”

“He’s handling the listing for a 1,133 square-foot, West Jasmine Road home with three bedrooms, two bathrooms and a two-car garage. The asking price is $140,000 for the house, which was built in 2003.”

“Dean said he has seen the price of similar homes in the tract rocket upward from the $75,000 range to roughly $225,000 and back down again over the past three years. ‘They just skyrocketed and people couldn’t believe it,’ he said. ‘Now things seem like they’re finally settling down again.’”

“Despite all of the bad news about the slumping housing market, Bob Hensley said he remains confident that it will rebound by the time Marina Village, a $150 million mixed-use project at Tarpon Point Marina, is complete in 28 months.”

“‘I’ve been called crazy before,’ said Hensley. ‘I think we’re near the bottom of a business cycle and heading up.’”

“With a price range from about $700,000 to $1.5 million, the property isn’t as affected by a sluggish housing market, said Nick Cross, director of sales and marketing. Cross said properties below $500,000 are more affected.”

“‘Out here, waterfront property at a residential community like this, we have the buyers I call the ‘want to’ buyers,’ Cross said. ‘They don’t need it, but they see something they like and they want to buy it.’”

The Sun News from South Carolina. “The number of subprime mortgages in Horry County surged in recent years, and some economists and real estate experts say the risky, high-interest loans could be an extended drag on this area’s slumping real estate market.”

“‘The bottom line is that nobody knows when this will end,’ William Harrison, director of the Center for Real Estate at the University of South Carolina, said of this area’s worsening real estate slump.”

“Economists ‘are becoming more gloomy about what, if any, recovery we’re going to see’ any time soon, Harrison said.” “Subprime loans became so prevalent during the housing boom of recent years that they accounted for one out of every four home loans made in Horry County in 2006. That is nearly twice the rate of just two years earlier.”

“Now, as home prices fall, recent buyers with little or no equity are feeling a financial pinch. It is difficult to predict how bad things will get or when the tide will turn, economists say, because there is no historical comparison for the unprecedented subprime mortgage frenzy.”

“‘Mortgages are still deteriorating at an accelerating pace, and that’s scary,’ Karen Weaver, global head of securitization research at Deutsche Bank AG, told The Wall Street Journal. ‘We haven’t come near a stabilization, and we expect things to get worse,’ Weaver said.”

“There were 13,106 subprime mortgages totaling $1.6 billion originated in Horry County between 2004 and 2006, according to data gathered as part of the federal Home Mortgage Disclosure Act.”

“Many subprime loans in Horry County were taken by real estate speculators who bought when housing prices were peaking over the past few years. The federal data show half of the subprime loans made last year were for homes that are not the owner’s primary residence.”

“‘Myrtle Beach is a speculator market and a favorite tool of speculators is the adjustable-rate mortgage,’ Harrison said. ‘Those mortgages are like throwing gasoline on a fire.’”

“The number of subprime mortgages in Horry County nearly tripled over a three-year period - from 2,246 loans in 2004 to 6,112 loans in 2006. The monetary risk grew even faster because the value of those mortgages more than quadrupled - from $207 million in 2004 to $870 million in 2006.”

“Harrison said the risk for many of those loans was masked by rampant fraud in the subprime market, where buyers’ incomes and financial information sometimes were falsified to get a loan approved. ‘You had unscrupulous loan originators out there who were willing to do just about anything to earn that mortgage commission,’ he said.”

“Horry County home sales through September have fallen 28.9 percent compared with the same period a year ago, according to the S.C. Association of Realtors. That is the largest decrease of any metro area in the state.”

“Experts, including Coastal Carolina University economist Don Schunk, say some of those speculators will let the homes fall into foreclosure rather than continue to make mortgage payments on property they can’t flip for a profit.”

“The subprime market created ‘a large number of folks who were fueling housing growth and sales over the past few years,’ Schunk said. ‘Those folks are now out of the market,’ he said. ‘That’s a big chunk of housing demand that’s been wiped out.’”

The News & Observer from North Carolina. “It’s official: The once-hot Triangle housing market is hurting.”

“Sales of new homes declined 10.9 percent in July, August and September, the biggest drop in a year, according to residential researcher Market Opportunity Research Enterprises.”

“New home sales for the first nine months of this year are now down 9.8 percent and likely will continue declining as tighter lending rules and weak job growth further reduce demand, economists said.”

“‘For the longest time, we avoided what happened nationally because of the strength of our market, but with the mortgage and liquidity problems nationally [now], nobody dodges that,’ said Hampton Pitts, division president of Texas-based Centex Homes, one of the region’s biggest builders. ‘It’s somewhat of a wet blanket over the entire industry regardless of your market strength.’”

“The slump is affecting all company price ranges, which run from $130,000 to $700,000, Pitts said: ‘Everything is a little slower.’”

“Job growth has long propped up the Triangle’s biggest industry, but a cooling economy has slowed employment increases to a crawl. ‘It’s been cut in half,’ said Michael Walden, the N.C. State University economist.”

“The result is a drag on the Triangle’s biggest industry. New home sales make up about 40 percent of the $10.5 billion housing market, and suppliers, appliance dealers and interior decorators contribute billions more dollars to the economy. Sales have set yearly records since 2003 but began falling in late 2006.”

“‘We’ve got a good housing market here, and there’s still demand here, but people [moving here] still can’t sell their houses where they’re coming from, and job growth is down,’ said Audie Barefoot, president of one of the region’s largest home marketers.”

“‘Borrowers are now paying about 7.5 percent on jumbo loans,’ said loan officer Glen Astolfi, up a percentage point from this summer. On a $500,000 loan, that’s enough to raise monthly payments $376 to $3,496. Many potential borrowers are holding off purchases, he said.”

“‘Where I see the difference is in $500,000, $600,000 and $700,000 homes,’ Astolfi said. ‘The move up guy is not happening now.’”

The Charlotte Observer from North Carolina. “Housing sales and building permits fell in the Charlotte region during the third quarter, foreclosure filings rose and construction job growth stalled as the area shared the national housing slowdown’s pain.”

“The region’s building permits fell 22 percent, compared with the third quarter last year, said Karla Knotts, a Charlotte real estate consultant. That’s a sign of slower sales to come.”

“Foreclosure filings rose 43 percent in the area, with Mecklenburg counting the most but several nearby counties showing larger increases, according to RealtyTrac. Statewide, North Carolina saw an increase of more than 60 percent.”

“Prices on existing townhouses dropped slightly while new condos saw a steeper drop, according to reports from Chuck Graham of Newton Graham Consultants. New home sales were off more sharply than sales of existing houses although prices rose more, Graham said.”

“The slide in new home sales reflects the fall-off in building permits. In Mecklenburg County, an earlier Observer review found permits have reached 10-year lows this year.”

“Single-family houses represent the majority of permits and sales, and both were down for the quarter. But the steepest percentage drop in permits came in condos, falling 58 percent. New homes account for only about one-third of total sales, but they drive more jobs than existing home sales so a slowdown hurts more. Experts say that building 100 houses puts 284 people to work.”

“Graham said that in the last week, he’s heard of three builders cutting 20 to 30 jobs each. He declined to name the builders. He said the moves come as he’s hearing ’some fairly negative sales results.’”

“Some national and local experts, including Graham, talk of recovery beginning next year for Charlotte and the nation’s housing market. But increasingly, there is concern that might be too optimistic.”

“Graham has said he expects a bottom in the second quarter next year and a return to previous highs the following year. ‘I haven’t changed it yet, but I’m getting very nervous about it,’ he said.”

What do you see in your local housing market this weekend? Price cuts? “Up to 25% Off home prices PLUS 3% Toward Closing Costs!*

Or boosterism? “Healthy real estate markets in Kentucky and Midwestern states are being hurt by national news reports of problems in other areas, Lawrence Yun told Lexington Realtors yesterday. ‘It’s the coastal markets that are out of whack and, some might say, have a (home price) bubble,’ said Yun, the chief economist for the National Association of Realtors.”

“There is ‘absolutely zero bubble’ in Central Kentucky, and the area’s housing remains remains ‘very affordable,’ maybe even ‘undervalued,’ he declared, as his audience applauded.”

“The total number of home sales for Scott County is down 14 percent year-to-date from last year, and September’s sales are down 36 percent from a year ago, according to Lexington-Bluegrass Association of Realtors figures. Scott County’s median sales price has fallen 3 percent year-to-date from $157,800 in 2006 to $153,000 year-to-date in 2007.”

“Economist Lawrence Yun said that it is important to keep the current housing market in perspective because 2007 still will be the nation’s fifth-highest year on record for existing-home sales.”

“‘Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year - a lot of people are, in fact, buying homes,’ Yun said.”

“Scott County’s higher inventory should be encouraging to prospective buyers, said Becky Murphy, LBAR president. ‘With unprecedented inventory levels, it is an excellent time to purchase a home as buyers should have no problem finding exactly what they are looking for,’ she said.”

The rolling bubble? “Local housing experts have provided evidence backing their assertion that homes in Carlsbad are becoming more valuable by the month.”

“A few local case studies also provide some insight into the market. According to information provided by Dunagan, for example, a $77,500 house purchased on West Blodgett Street in September 2005 sold for $91,500 in July 2007. The $14,000 jump represented an 18 percent increase, and minimal changes were made.”

“‘When they say minimal, usually it’s paint,’ said broker George Dunagan. ‘They basically did nothing but maintenance to the house, so it’s pretty indicative to the market.’”

Or job cut notices? “Employees were laid off at Wells Fargo’s Billings loan-processing center Thursday. ‘After evaluating our operations in the current housing market, we must reduce staffing to better align capacity and increase the efficiency of our home equity fulfillment operations,’ wrote Lori Sinsley, a Wells Fargo corporate spokeswoman. ‘To that end, we are making adjustments to the number of our home equity team members in Billings.’”

“Tom Frisby, regional Job Service director, hopes the lending industry layoffs don’t become widespread. ‘I hope this is not a portent of something in the financial industry that is going to really impact Billings,’ he said.”

“Canfor Corp. president and CEO Jim Shepard said Friday he won’t hesitate to take more sawmill shutdowns in the face of a continuing poor market and high Canadian dollar.”

“‘If this market ratchets down, we will ratchet down our production, full stop,’ Shepherd told analysts and reporters on a conference call to discuss the company’s $42.1-million third-quarter loss.”

“Prince George Trucking Association president Stan Wheeldon said there was already a reduction in work in the summer which meant more people chasing less work.”

Retail changes? “Wal-Mart is selling 26-inch high-definition TVs for $450 this weekend. Circuit City plans to give away consumer electronics prizes every day for the next 30 days, starting Sunday.”

“Retailers, eyeing the housing slump and the credit crunch that has decimated consumer confidence, are slashing prices early in the hope of snagging a bigger share of the annual Christmas spending spree. That spree is expected to be more subdued than usual, said Ellen Davis, spokeswoman for the National Retail Federation.”

Related markets? “Experts are detecting a slowing in the commercial, industrial and office markets in Chandler, and new numbers bear that out. Real estate developer Michael Pollack takes the real estate cycles in stride.”

“‘I don’t believe we’ll see a crash and burn scenario, but I do believe we’re seeing a correction occurring…in all types of real estate,’ he said.”

“Some projects are overpriced for leasing because investors paid too much for the property, Pollack said. It’s similar to the single-family home investors who overpaid, relying on the greater fool theory.”

“‘They were a fool for buying it for too much money and were hoping for a greater fool to come and save them,’ Pollack said.”

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