The Housing Bubble

The Independent Journal reports from California. “Ian Minto isn’t exactly homeless, but he sure doesn’t have his home. The former banker lost his job and, last fall, began falling behind on mortgage payments on the Mill Valley house he grew up in. He tried to refinance but said the lender that held the second mortgage refused to sell the note. Despite having plenty of equity, he was unable to restructure his payments, which forced him to default on his loans. Foreclosure proceedings began.”

“Desperate, he sold the home - appraised at $1.2 million - for about $300,000 less than it was worth. He is now suing to get his house back. ‘(I felt) like I wanted to kill somebody or jump off the bridge,’ said Minto, who just took a job at Radio Shack to help.”

“Peter Richmond, a Pacific Union realty agent who worked as a lender for more than two decades and specializes in foreclosures, noted that ‘there’s a lot more of it now than a year or two ago.’”

“David Faudman, CEO of (a) Bay Area subscription-based real estate listings service said there is more activity than people realize. Taking into account confidential notes agents leave for one another on the MLS, Faudman said the percentage of distressed properties in Novato is nearly 14 percent of the 376 total listings there.”

“‘This year it’s more short-sale activity than we’ve seen in many years. The signs were there that it was coming. There was a lot creative financing with the lenders,’ Steve Dickason, managing broker at Pacific Union in Greenbrae.”

The Fresno Bee. “After months of cutting prices and offering increasingly generous incentives at its four Central Valley communities, with less-than-expected success, Pacific Union Homes decided to up the ante by offering new home buyers a week per year at a timeshare home.”

“‘For a builder, it’s not going to make up for an overpriced house,’ added Robin Kane, a real estate market analyst in Fresno. ‘All things being equal, these offers should not be anything more than icing on the cake.’”

“‘We’ve been screaming price cuts for the last six months,’ said Robert Stankus, a marketing consultant for Pacific Union.”

“Pacific Union’s offer was accompanied by some ‘pretty steep’ price cuts, Stankus said. In the past year, the builder has slashed prices in its new Central Valley subdivisions by $70,000 to $125,000.”

The LA Times. “There’s no quicker way to get a handle on the softness in the local new-home market than to flip through the home-builder ads in the weekend paper.”

“‘Huge Inventory Reduction Sale — Up to $200,000 Off’ was one ad for houses by Century Vintage Homes in Riverside and San Bernardino counties that caught my eye. At a golf course community in Desert Hot Springs, homes were being marked down from $565,000 to $365,000.”

“But the fact is that all this builder price slashing isn’t doing much to juice sales. Indeed, the price reductions may be stoking fear instead of interest, concludes Daniel Oppenheim, a building-sector analyst with Banc of America Securities.”

“‘Agents noted price declines in every market surveyed. However, agents said that lower prices failed to attract buyers because potential buyers focus on the risk that prices will fall further rather than perceived bargains.’”

The Orange County Register. “Market watcher Steve Thomas…in Aliso Viejo has a new stat out: foreclosures and short sales listed for sale — what I’m calling distressed properties — as a share of total for-sale inventory by major O.C. communities. Short sales are where the bank agrees with a troubled borrower to take less than the loan amount due at sale.”

“The report (derived from MLS listings) shows that as of last Thursday, Santa Ana’s home inventory had the highest share of distressed properties in O.C. at 32.8%, just ahead of Anaheim at 32.6%.”

The Union Tribune. “By any standard, even after a year of decline, San Diego’s home prices are still out of whack. Look at the distance between our median income and the median price of a home.”

“To qualify for the Realtors’ median of $614,000, the borrower would need to make about $138,000, San Diego mortgage broker Greg Brooks said.”

“‘And that’s an absolute minimum, assuming that the borrowers had no other debt, had $61,000 for a down payment and could afford to spend 40 percent of their income on mortgage payments, which is the absolute maximum recommended,’ Brooks said.”

“Look around and try to figure out how many people you know who would qualify for that loan and you’ll get an idea of why demand for San Diego housing is going to be soft as long as prices remain where they are.”

“‘Everyone’s talking about the real estate market coming back in 2009,’ said Robert Simpson, CEO of Investors Mortgage Asset Recovery Co. in Irvine. ‘We’re not coming back anywhere near 2009. It took about five years for this market to build up, and it’ll take five years to come down. Properties are going to slide back to neighborhood income, so people will be able to afford them. It has always been thus.’”

The Desert Sun. “Home sellers should get out of the market unless they are really serious about selling and not just testing the waters. And this is probably the best time for buyers to find exactly what they want.”

“That’s the advice of Greg Berkemer, executive VP of the California Desert Association of Realtors, who noted that the number of unsold homes and condos in the Coachella Valley grew to about 9,170 in October, up 571 units in a month and 1,094 more than a year ago.”

“Berkemer said home sales are down in eight Coachella Valley cities with only Indian Wells showing a gain. Sale prices are down in seven cities.”

“Recognizing the bottom will be ‘more about hindsight than foresight. The bottom is not a pinpoint on a graph. It is more like a wide bumpy trough. It appears that is where we are right now,’ said Berkemer.”

The Daily Bulletin. “Alan Long says you might just have to get by ‘riding a smile and a shoeshine’ as Arthur Miller wrote in his classic play ‘Death of a Salesman.’”

“But Long, president of the Southern California Region of Sotheby’s International Realty Inc., remains optimistic. ‘You can say the market is bad, but people still want to buy. They still have confidence in our product,’ he said.”

“That might be true. The numbers suggest a big dose of caution should accompany that confidence.”

“Leslie Appleton-Young, chief economist at the California Association of Realtors, expects things to be tough this year and next. Inventory is building, but Appleton-Young said this can be easily fixed. ‘Our industry can control this by not taking listings from unrealistic sellers.’”

“So what’s coming? ‘It’s a pretty difficult environment now to come up with a forecast that’s right on,’ Appleton-Young said.”

“Maybe. But here’s mine. Our future, residential real estate wise, is cloudy with a chance for tears.”

The Gazette reports from Colorado. “Home sales sagged last month by nearly 20 percent when compared with the same time last year, according to the association’s figures released Thursday for sales that took place mostly in El Paso and Teller counties. - The supply of homes on the market rose 12.5 percent over a year ago to 6,470, the group said.”

“Foreclosures totaled 2,877 through October, according to the El Paso County Public Trustee’s Office, and are on pace to break a 19-year-old record.”

“‘The late 1980s to early ’90s were bad,’ said Fred Crowley, a University of Colorado at Colorado Springs economist. ‘In terms of modern history, it’s probably the secondworst housing market for Colorado Springs.’”

“‘You’re going into a store with tons of selection, and everything’s on sale,’ said Randy Reynolds, a longtime residential agent.”

The Denver Post from Colorado. “A third-quarter report on home values in the metro area shows that foreclosures and short sales are still having an impact on Denver-area housing markets.”

“The number of foreclosed homes sold increased from 20 percent to 30 percent of sales between January and September. ‘The number of ARM resets will peak in March, I don’t expect to see a foreclosure peak until six to nine months after that,’ said broker Lon Welsh.”

“In the north Aurora neighborhoods he’s investing in, John Klahn says there are as many, if not more, foreclosed homes as there were six to eight months ago.”

“‘Additionally, over the past six to eight months, I have seen bank-owned homes decline in price in the same neighborhoods,’ he said. ‘So, without looking at anything more than the neighborhoods themselves, I have to conclude that we have not seen the bottom.’”

The Rocky Mountain News from Colorado. “The subprime market meltdown is hitting home builders in the Denver area harder than anytime since the 1980s.”

“‘We’re probably going to see new home sales off 50 percent at the end of this year, compared with 2005,’ said Mike Rinner of the Genesis Group. ‘By comparison, we saw about a 20 percent decline after (the terrorist attacks) on 9/11.’”

The Arizona Republic. “A 400-acre parcel of desert will remain undisturbed for a little while longer after no one showed up to bid on it at the Arizona State Land Department auction on Thursday morning. Once sold, the land likely would be used for residential development.”

“The land, situated west of Desert Ridge and east of Cave Creek Road, was appraised for $100 million. The parcel had a sale price that was far less than the price of a comparable parcel in the Desert Ridge master-planned area. In April, that 270-acre parcel sold for $150 million.”

“Robert McGee has worked in banking in Tucson and Phoenix since 1971. Question: Is it a good time for companies in the area looking to expand? Answer: Depending on the business you’re in, I would be kind of cautious right now. Many of the businesses in the area have been held up by the real-estate market, and the bottom has fallen out of the housing market.”

“Q: What do you predict for the Valley’s economy in the next two years? A: The outlying residential properties could be in real trouble. When gasoline is hanging at $3 per gallon, and you have a two-lane highway to get to some of these places, a lot of the outlying areas, I mean way out, west Laveen, Pinal County, I think that will be in a slump for a while.”

“Q: What is the biggest change in the industry since you’ve been here? A: The condo suites. I’m still uncertain of the viability of the concept here, only because they’ve only been up and running for four or five years in this town, and we have not see a real-estate recession with condo suites.”

“I’m seeing a wide difference in many of the appraisals now, up to a 15 percent to 20 percent difference, depending if the appraiser uses comparable sales or sales-forecast approach. That tells me there is a correction coming in the market.”

“Metro Phoenix’s home prices are catching the attention of big lenders. In the past few weeks, parts of Maricopa and Pinal counties have been put on housing ‘watch lists,’ or lists of ‘declining markets.’”

“That usually means they will fund less of a loan on a property in case prices fall more.”

“More Arizonans filed for bankruptcy protection in October than in any prior month this year, as the weak housing market and tighter lending conditions exerted a toll on consumers.”

“Filings last month in the Phoenix metro area jumped 61 percent from a year earlier, while statewide filings increased 63 percent, according to the U.S. Bankruptcy Court for the District of Arizona.”

“All told, 1,117 Arizona consumers and businesses sought protection last month, including 745 in the Valley. ‘We’re seeing a bit more desperation,’ said Mike Sullivan, director of (a) Phoenix debt-counseling firm . ‘More people feel totally lost because of the housing situation.’”

In Business Las Vegas from Nevada. “Las Vegas housing analyst Dennis Smith says it may be 2004 all over again for the valley’s housing market. No, he’s not saying home prices will rapidly appreciate as they did that year and in 2005.”

“Smith says it won’t be long before prices return to the levels of late 2004 when it comes to the existing home market.”

“In September, Smith pegs the median price for single-family homes at $262,377, a year-to-year decline of $22,623 or 8 percent. That’s roughly the same price as in January 2005.”

“By the first quarter of 2008, Smith says he wouldn’t be surprised if the median resale price fell another $10,000 to $20,000. That would put the year-to-year drop between 13 percent and 15 percent, Smith says.”

“One impetus for the decline, Smith says, is when banks start to liquidate their growing inventory of foreclosed-upon homes. If they base prices on the market demand instead of what the notes are, that will lower prices even further, he says.”

“Pulte, Del Webb and Lennar slashed their prices 15 percent to 20 percent in some communities for homes that will close escrow by the end of the year, Smith says. Those price cuts are worth between $50,000 and $200,000. Pulte even mailed fliers for $55,000 off contracts, and Lennar had discounts of up to $200,000, Smith says.”

“‘The bottom line is that builders have been progressively getting rid of any excess new-home inventory,’ Smith says. ‘It is important to realize that any inventory that exists is not from overbuilding — it is from cancellations of sales contracts.’”

“Smith says the September cancellation rate was 39 percent in September, down from more than 50 percent in August.”

The Review Journal from Nevada. “As any real estate professional will attest, the slumping housing market is still brimming with owners who think their property is worth far more than it actually is. There’s a reason so many homes have gone unsold for six months or a year: the prices are too high.”

“Chief among Southern Nevada’s stubborn property owners is the federal Bureau of Land Management. The agency that controls most of the acreage surrounding the Las Vegas Valley holds periodic auctions to dispose of its surplus holdings, but Thursday’s affair was almost a complete bust. Of the 31 parcels offered, only one was sold. The others drew no bids.”

“The BLM contracts with an appraiser to come up with a ‘fair market value’ for the parcels prior to the auction. Those appraisals, based on comparable land sales of similar-size and nearby properties, become the minimum bid instead of a flexible starting point.”

“A common-sense observation for the BLM: If no one makes an offer on your property, your listed price is not ‘fair market value.’”

“Right now, the public bears all the costs of managing vast amounts of land put to no productive use whatsoever. Moving these tracts into private ownership and onto the property tax rolls serves the public interest more than sticking by inflated values and refusing to sell.”

“The next time the BLM holds an auction in Las Vegas, the agency should consider changing the format to a Dutch auction, also known as a descending value auction. If no one bites at the appraised price, the auctioneer lowers his asking price until someone bids.”

“Competing investors and businesses won’t let their rivals get away with a great deal. If the price is truly ‘fair market value,’ they’ll raise their hands — and taxpayers will benefit.”

The Salt Lake Tribune. “A new type of ‘for-sale’ sign is cropping up along the Wasatch Front. It’s called a ‘lease-to-own’ or ‘lease-option.’ It’s easy to see why such agreements are so popular right now. Home sales are down in many areas locally.”

“Greg and Esther Hatch…have had their home in south Sandy with granite countertops, hardwood floors and a one-third acre lot on the market for some time. They have been offering the five-bedroom, three-bath home for sale in the $350,000 range but have recently lowered it by about $35,000.”

“But to increase the pool of available buyers, the couple began offering a lease-option for $1,850 per month for up to two years. The rent would be higher if the buyer wants the Hatches to set aside money for a down payment.”

“The Hatches are open to the idea of a lease-option, something they have never done before, because they are worried that if they rent out their home while they try to sell it, people may not treat it very well.”

“‘We feel like with a lease-option, people will take better care of it,’ Esther Hatch says.”

Some housing bubble news from Wall Street and Washington. Associated Press, “At an emergency meeting of the Citigroup Inc. board Sunday, the nation’s largest bank announced CEO Charles Prince’s widely expected departure, but also estimated it would take additional losses of $8 billion to $11 billion. In the third quarter, it already took a hit of $6.5 billion in asset mark-downs and other credit-related losses.”

The Street.com. “A writedown of that magnitude would make Citi Wall Street’s biggest loser, at least so far, on this year’s collapse of the markets for risky paper. Whether further debt-related losses are on the way at Citi will now become the biggest question surrounding the bank.”

“Indeed, the firm said in its press release announcing the writedown that ‘the impact on Citi’s financial results for the fourth quarter from changes in the fair value of these exposures will depend on future market developments and could differ materially from the range above.’”

From MarketWatch. “Separately, The Wall Street Journal reported that the Securities and Exchange Commission is reviewing Citi’s accounting for a type of funds known as structured investment vehicles, or SIVs.”

“Citigroup spokeswoman Christina Pretto denied any irregularities connected with the SIV funds, telling MarketWatch: ‘Citi is confident that its accounting for SIVs is proper and in thorough accordance with all applicable rules and regulations.’”

“Earlier this morning, Fitch Ratings downgraded Citigroup Inc.’s Long-term Issuer Default Rating to ‘AA’ from ‘AA+’, along with Citi’s other long-term ratings and the Individual rating.”

“Sizable charges are likely for Citi’s exposure to U.S. subprime-related assets, including collateralized debt obligations and other exposures. Recently, prices of these instruments have come under further considerable pressure from end-third quarter-2007.”

“In its securities and banking business, Citi’s direct exposure to U.S. subprime-related assets totals $55 billion, consisting of almost $12 billion of exposure in its lending and structuring business as well as approximately $43 billion of exposure to super senior tranches of CDOs backed by ABS.”

From Reuters. “‘Citigroup’s announcement that it would have to make $8-$11 billion of additional markdowns on its CDO exposures is unwelcome news after the very weak third-quarter results,’ said S&P’s credit analyst Tanya Azarchs.”

“‘Moreover, deteriorating credit conditions in the consumer lending space, particularly in first and second lien mortgages, suggest that the company, not just the investment bank, could face a difficult environment across a number of fronts in the short to medium term,’ S&P said in its statement.”

“‘This could result in a level of earnings volatility incompatible with a ‘AA-plus’ rating,’ S&P said.”

From Bloomberg. “H&R Block Inc. said Chief Financial Officer William Trubeck has stepped down from his position ‘effective immediately.’”

“H&R Block used emergency bank lines in September to pay off more than 90 percent of the short-term debt that creditors refused to refinance in August. H&R Block lost more than $1 billion on its Option One subprime home-loan business over five quarters.”

“The turmoil in the risky subprime mortgage-market is a ‘$1 trillion problem … There are $1 trillion worth of subprimes and Alt-As and basically garbage loans,’ said Bill Gross, chief investment officer of Pacific Investment Management Co., on CNBC Television.”

“Gross said he expects $250 billion of subprime and Alt-A mortgage loans to default and those defaults will fall to the balance sheets of investment stalwarts such as Merrill Lynch and Citigroup.”

“The Federal Reserve will have to cut its federal funds target rate to prevent a dramatic fall in housing prices in the wake of the subprime meltdown, said the manager of the world’s biggest bond fund on Monday.”

“Federal Reserve Governor Frederic Mishkin said last week’s interest-rate cut was aimed at reducing economic risks and policy makers can take back the move should it prove ‘unnecessary.’”

“‘Should the easing eventually appear to have been unnecessary, it could be removed,’ Mishkin said at a conference in New York.”

“‘If, in their quest to reduce macroeconomic risk, policy makers overshoot and ease policy too much, they need to be willing to expeditiously remove at least part of that ease before inflationary pressures become a threat,’ Mishkin said.”

“Asked about last month’s agreement among Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. to set up a fund to increase liquidity in asset-backed commercial paper, Mishkin said the ‘details’ are ‘not clear to me.’”

“The Bank of Japan is committed to gradually raising the country’s ‘very low’ borrowing costs to prevent investment bubbles, Governor Toshihiko Fukui said. ‘Keeping interest rates lower than the economy’s strength is risky,’ Fukui told business executives in Osaka today. ‘Interest rates need to be increased in a timely manner.’”

“The bank is determined to avoid economic bubbles, Fukui said. ‘Indulging ourselves in worrying about downside risks alone and just doing nothing could lead to a big policy mistake in the future,’ Fukui later told reporters.”

“Bank of Japan policy makers said the U.S. subprime mortgage collapse was caused by keeping interest rates too low, signaling their intention to increase the world’s lowest borrowing costs to prevent investment bubbles.”

“Some of the nine board members said a ‘long period’ of global monetary easing had led to ‘excessive financial behavior’ that resulted in the U.S. home-loan crisis, according to minutes of their Sept. 18-19 meeting published today in Tokyo.”

“Glenn Stevens may become the first Australian central bank governor to raise interest rates in the midst of an election campaign.”

“‘The bank’s board has no option but to increase rates; the economy is at full stretch,’ Bernie Fraser, central bank governor for seven years until 1996, said in an interview from Canberra. ‘Stevens and his board will not be deterred by the election,’ added Fraser.”

“The A$1 trillion economy is in its 16th year of expansion. The jobless rate is at a 33-year-low of 4.2 percent.”

“U.K. Chancellor of the Exchequer Alistair Darling said banks will curtail risky forms of lending after the subprime mortgages slump in the U.S. wiped out billions of dollars of profits, a shift that he said he welcomes.”

“‘Banks will be more cautious about lending and when it comes to revising some of the more foolish lending, such as in the U.S. subprime market, then that is no bad thing,’ Darling told the BBC Radio 4’s Today program in London.”

“The U.S. housing slowdown that propelled 10-year Treasuries to their biggest gains since 2002 may soon make the same securities laggards in the government bond market.”

“Fund managers may ‘no longer buy the 10-year Treasury’ to protect their holdings, said Ajay Rajadhyaksha, head of interest rate strategy in New York at Barclays Capital Inc., one of 21 primary dealers of U.S. government securities obligated to bid at Treasury auctions.”

“In a sign that demand may already be waning, the 10-year note yield rose to 64 basis points above two-year notes, the biggest gap since April 2005. When the rally started in June, there was no difference.”

“Yields ’should be higher than they are now,’ said Michael Schultz, who helps manage $6 billion. ‘With housing prices actually decreasing coupled with tighter underwriting standards, you’ve definitely decreased the number of people who could refinance.’”

“Because fewer houses are being refinanced, the average maturity, or duration, of bonds backed by loans is increasing. Barclays estimates the duration for the mortgage market has expanded to about six years from 4.4 years in September and 3.5 years in March.”

“Rising duration can be bad for holders of longer-maturity securities. The increase has the same interest-rate risk to investors as if the Treasury boosted the supply of 10-year notes by $911 billion, according to estimates by Barclays.”

“‘This may be a unique situation in the mortgage market where rates are going down and mortgages are extending,’ said Douglas Dachille, CEO of New York-based First Principles Capital Management LLC, which oversees $3.5 billion.”

“‘Traditionally, mortgage prepayments would be screamingly fast,’ at current Treasury yields, said John Cerra, who manages $13 billion of bonds at TIAA-CREF. There are no opportunities to refinance loans for ‘any but the best borrowers,’ he said.”

From Builder Online. “Myers Barnes is one of the most respected educators in new-home sales. He sat down to talk to Pat Curry, BUILDER Senior Editor, Sales and Marketing.”

“BUILDER: What are builders doing right during the housing market slowdown? MB: Until we outstrip supply and demand, we’ll be in this situation. They’ve come to realize that building more and trying to hold profits that are phantom doesn’t work.”

“BUILDER: Even if it means slashing prices and piling on incentives?”

“MB: The reason the consumer is so confused is because he doesn’t know where the bottom is. Find the bottom as fast as you can and get it off the books. Quit playing with it….Right now we have ridiculous incentives. Just find the bottom and get it over with. And then we can move on.’”

“BUILDER: So what do builders say to their customers who bought at higher prices?”

“MB: I bought a condo at the top of the market…We’re probably never going to get our money out of it…You’ll never beat the foreclosures and flippers when their units come on the market so the comparables are going to be messed with anyway. So get the inventory out of the way. Find the bottom as fast as you can. Quit playing with it.”

Seacoast Online reports from New Hampshire. “The number of home foreclosures in Rockingham County in September were 33, compared to 19 in September a year ago, according to an independent statewide newspaper. The total number of foreclosures in New Hampshire from January through September of this year were 1,381, compared to 653 the year before, according to Real Data.”

“‘John,’ works installing dry wall. He put $17,000 down on their Collins Street fixer-upper home in 2004, he said. The couple got an adjustable rate mortgage of 8.25 percent with a fixed rate for two years and a balloon payment. They refinanced at the end of two years, but got an adjustable rate mortgage that offered a more affordable interest rate.”

“‘My credit was bad,’ John said. ‘I went to the mortgage company. I didn’t know the market was going to turn like it did. Even if it went up, I thought it would be by a hundred a month.’”

“The mortgage payment they could afford of $1,508 a month climbed to $2,115. ‘We got behind,’ Mary said. ‘We couldn’t keep up.’”

The Nashau Telegraph from New Hampshire. “The pace of property foreclosures in Hillsborough County isn’t slackening and may be quickening in places. Hudson has already seen three times as many foreclosures as happened all of last year.”

“Merrimack has already had half again as many foreclosures as all of last year. Litchfield had just one foreclosure in 2006 but has seen 11 this year.”

“Even the Souhegan Valley is seeing bad news: Amherst, Brookline and Hollis already have twice as many foreclosures as they had in 2006, while Milford and the Mascenic towns are already at last year’s total. Hillsborough County is on pace to have some 580 foreclosures of homes and businesses this year, nearly double last year’s tally and five times the total of 2005.”

The Cape Cod Times from Massachusetts. “The median property sale price last month was down 7.6 percent when compared with the October 2006 median of $373,500.”

“Foreclosure numbers continued to be high in October, with 27 foreclosure deeds filed with the registry, 145 percent more than were filed in the same month last year. This number adds to a record-setting year in foreclosures.”

“Through the end of October, 217 foreclosures have been completed on the Cape, according to registry records. That’s the highest number since 1995 when 222 foreclosures were filed during the first 10 months of that year.”

The Inquirer and Monitor from Massachusetts. “Beth Ann Meehan, the mortgage loan officer at Pacific National, said that the national situation has not directly affected lending on Nantucket.”

“‘What’s interesting is when the subprime thing started falling apart, people started asking me about Bank of America and I initially said there would be no impact because we’re not a subprime lender,’ Meehan said. ‘But it did impact us in a roundabout way. The jumbo rates have gotten higher. Those interest rates have crept up, and that’s one of the fallouts of the subprime mortgage disaster. I wasn’t expecting that. New guidelines are coming out every week. The easy borrowing days are pretty much over for the time being.’”

From The Day in Connecticut. “Foreclosure actions in New London County have risen nearly 42 percent this year, but experts say that if you think things are bad now, just wait until next year.”

“‘The number of people facing foreclosure is going to be doubling or tripling in the next few months,’ said Daniel S. Blinn, an attorney with the Consumer Law Group in Rocky Hill.”

“The Warren Group indicated about 1,000 homes in New London County have faced foreclosure actions in the first three quarters of the year, compared to about 700 last year.”

“Locally, experts say that banks and mortgage companies often are left to sit on properties in foreclosure for longer periods without generating any income. ‘Nobody’s even showing up for these sales,’ said Barbara Crouch, a housing counselor for Catholic Charities in Norwich. ‘There’s so many of them, nobody is showing up.’”

“She said the courts are so backlogged with cases that it can take six to eight months to evict the former owners from the property, meaning some are able to stay in their homes rent-free for almost a year before a foreclosure auction is held.”

The New York Post. “Three months after Gov. Spitzer announced a $100 million program to save New Yorkers in danger of losing their homes due to the subprime mortgage crisis, only a single mortgage rescue is in the work.”

“It is estimated that by the end of the year, some 1,250 city residents will have lost their homes through foreclosure.”

“‘I can’t explain the feelings running through my veins right now,’ Ray Dawkins, a Brooklyn homeowner who says he was duped into a risky mortgage, told Crain’s. After he tried to refinance his duplex in 2005, a mortgage broker told him his monthly payment would be $200 more than the $3,300 he was paying. Instead, it jumped to $4,500.”

“The state’s program was initially limited to single-family houses, which excluded many of the city’s potential foreclosures.”

“Another obstacle is that Fannie Mae, which is buying the loans, requires borrowers to be less than two months late on payments when they close on their new mortgages. That’s a challenge for many trying to dig their way out of mounting mortgage debt.”

The Star Ledger from New Jersey. “New Jersey’s five-year housing boom has given way to a market with flat prices and considerably lower sales volume, a Star-Ledger analysis has found.”

“East Orange had a 59 percent drop in sales volume, Paterson a 57 percent decrease, Plainfield 46 percent, Elizabeth 41 percent and Newark 37 percent. ‘Every upswing has a downswing,’ said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. ‘And we’re in the downswing.’”

“The drop in sales is not from a lack of houses on the market, real estate experts say. New Jersey’s inventory of homes for sale reached record levels this year, soaring to more than 72,000 in June, they report.”

“Bruce Gaylen of Wayne said he has looked at at least 40 two-family houses over the past year. In all but three instances, he didn’t make an offer. ‘I don’t understand how they are asking that much for some of these places,’ said Gaylen, a first-time buyer.”

“Indeed, some sellers, especially investors looking for a quick profit, are still living in the past, experts said, asking for prices as if the market remained as robust as it had been several years ago.”

“Buyers also have become increasingly patient, brokers said, waiting for the market to hit bottom before they pull the trigger.”

“‘Nobody wants to buy something for $500,000 when they think that if they wait a while they can get it for $450,000,’ said Lawrence Perlaki, a broker at a firm in Jersey City. ‘Nobody wants to look like a sucker. Everybody wants to say they got a great deal.’”

“It’s no longer so easy for many to borrow money to a buy a house. ‘The industry has become more rational about how we’re lending money,’ said Michael Borodinsky, assistant VP for Wells Fargo Home Mortgage. ‘The industry is scrutinizing borrowers like we should have been before.’”

“Perlaki has been selling real estate in the city for more than 30 years. During the peak of the real estate boom, Perlaki said, developers of the luxury housing projects would ignore his inquiries on whether they wanted his help selling their unit.”

“Now, he said, the developers are holding parties for local Realtors to enlist their help. ‘Every day, I get e-mails from them,’ Perlaki said. ‘It’s crazy.’”

The Times Online from Pennsylvania. “In the Middle Ages, St. Teresa of Avila began to bury medals of St. Joseph in the ground of properties sought for Carmelite Convents. Over time, the medals became statues and the tradition of burying a statue of St. Joseph in the grounds of homes for sale became very prevalent.”

“If real estate agents thought they had the market cornered on selling homes, they got it all wrong. With today’s sluggish housing market, many home owners are turning to a higher power to help sell their property: St. Joseph. Heck, he even comes with his own real estate kit.”

“St. Joseph is enjoying a surge in popularity with homeowners of all religious backgrounds desperate for a quick sale of their home.”

“Dave Lichius, owner of St. Francis de Sales Catholic Books and Gifts in Beaver, estimates he has sold nearly 4,000 plastic figurines of St. Joseph since a flustered real estate agent burst in the store a decade ago desperate to buy one of the figurines for a client.”

“‘This harried looking guy, a real estate agent, rushed in and said ‘I need a statue of St. Steven.’ He was frantic about it, you know,’ Lichius recalled. ‘I called around to some other shops to find out what this guy wanted. As it turned out it was St. Joseph the home seller. Since then we’ve sold quite a few. People come in and ask for them all the time.’”

“The Web site known as ‘the underground real estate agent kit,’ is just one site devoted to selling the statues and offers a free online home listing as well as testimonials from believers, including a bevy of real estate agents. Ordering is simply - and the number unforgettable - at (888) Bury-Joe.”

“‘On Tuesday we had 564 orders come in,’ said Phil Cates, who started selling the kits in 1990.”

“Mary Sonnett, manager of St. Francis de Sales shop, said she noticed that the sale of kits started to pick up last summer, just when the market started to turn sour. ‘We’ve shipped them everywhere, really,’ Lichius said. ‘Even overseas.’”

“His clients, he said, aren’t limited to those with a Catholic background. He once sold several real estate kits to a Jewish rabbi who said he planned to distribute the statues among friends. ‘I guess when there’s a lot of money is concerned, the theological lines get blurred,’ Lichius said with a laugh.”

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