The Housing Bubble

The Sacramento Bee reports from California. “Scared by growing numbers of bank-owned houses and for-sale signs in their neighborhoods, a handful of local cities are launching moves to help homeowners threatened with foreclosure. Their initiatives so far are limited to offering advice. Nobody’s opening up the checkbook to bail out homeowners.”

“Citrus Heights, which since the first of the year has seen 270 foreclosures, has struck a deal with a nonprofit credit counseling agency based in Sacramento. The group is mailing letters to city residents who have received default notices.”

“‘We don’t know how far this is going to go,’ says Jim Lynch, community enhancement manager in Citrus Heights. ‘We’ve had housing setbacks over my 35 years, but I’ve never seen this many bank-owned properties and so many foreclosures.’”

“Folsom has seen 90 foreclosures since the start of the year, according to a Fair Oaks Web site. Sacramento, with 1,740 foreclosures since Jan. 1, has ramped up code enforcement efforts to deal with vacant housing.”

“More than 6,500 homeowners have lost houses this year to foreclosure in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to DataQuick.”

“Reed Flory, Rancho Cordova’s housing services administrator, said the city is especially concerned about its new Sunrise Douglas subdivisions. Filled with residences by local private homebuilders and big national firms, Sunrise Douglas is expected to eventually have at least 15,000 homes.”

“Yet many of the homes there came onto the market in 2005 and 2006. Those were peak buying years for borrowers now facing adjustable-rate mortgage resets and falling home values.”

“Rancho Cordova City Councilman Ken Cooley recently counted 79 homes for sale in Anatolia and fears some may be ‘fire sales’ by troubled borrowers.”

“‘I think if Anatolia has a high incidence of problems related to this kind of lending activity, that can be devastating to that neighborhood,’ he said.”

From CBS 13. “Cleanup or pay up. That’s what one local city is saying. With a record number of foreclosures, Manteca is looking at slapping homeowners who neglect their property with hefty fines.”

“San Joaquin and Stanislaus County has its share of vacant properties. And with that, homes that are empty, lawns that are dead, targets for squatters.”

“Thanks to the city’s new abandoned building ordinance, homeowners, the bank or the individual will get the notice to clean up or pay up. If owners don’t secure the entries of the homes or maintain landscaping or lawns, owners could face civil fines of up to $1,000 per day, up to $100,000.”

“If they don’t act, the city would contract to have the work done and leave the bill with the homeowner or bill.”

The Contra Costa Times. “The financial failure of Cal State 9 credit union stunned some members and left others surprised the company had become the latest firm to be engulfed by the widening mortgage morass.”

“Nothing underscores the unexpected catastrophe at the Concord-based credit union better than the recent trend for failed real estate loans on the credit union’s books. During the past two years, the number of delinquent adjustable-rate real estate loans skyrocketed, according to data supplied by a federal agency.”

“In June 2005, Cal State 9 reported that its delinquent adjustable realty loans totaled zero dollars. In June 2006, that number had risen to $4.6 million. In June 2007, the most recent period available, those loan delinquencies had soared to $25.8 million.”

“By Friday, conditions at Cal State 9 had deteriorated to the point that state regulators forced the credit union into conservatorship. The regulators handed control of Cal State 9 to the National Credit Union Administration.”

“State regulators are attempting to determine how many credit unions and other financial institutions have offered “nontraditional mortgages” in recent years, said Alana Golden, a spokeswoman for the state Department of Financial Institutions.”

“Jackie Wong, until recently the credit union’s CEO, was no longer with the organization Monday. ‘In this environment, it is not uncommon for borrowers to become delinquent and, like others, we have seen our loan delinquencies increase as a result of the decline in the housing market,’ Wong said via e-mail.”

“The last California credit union to be closed was in 2000, Golden said. And it does appear that 2007 has produced a spike in the number of credit unions taken over by federal officials through a conservatorship.”

“‘It’s pretty sad that so many people and so many companies are being affected by this housing problem,’ said Sheila Skead, a Pleasant Hill resident who was conducting business Monday at a Cal State 9 branch in her home town. ‘The whole state is being affected.’”

The Press Democrat. “Bill Hewitt’s furniture isn’t finished, but his business is. The owner of Bare Woods is closing his Santa Rosa furniture store after 31 years, citing the sluggish housing market, cheap competition from Asia and changing tastes.”

“When he realized earlier this year that the housing slump was only getting worse, Hewitt realized he had to take action.”

“‘We haven’t been profitable in three years,’ said Hewitt recently from his quiet, cavernous warehouse and showroom. ‘I want to go out with my head held high.’”

“Sonoma County’s furniture industry is in turmoil. The housing downturn and subprime mortgage meltdown are delivering a one-two punch to many furniture retailers already reeling from competition from cheaper imports that are improving in quality.”

“Fewer home sales mean fewer people are looking to decorate new spaces. Many of those who are staying put are facing a credit crunch as either their mortgage payments increase or sliding home values make it more difficult for them to tap evaporating equity.”

“The slump that last year sank R.S. Basso in Sebastopol, and Colburn’s Wood Furniture and Greenwood Home Furnishings in Santa Rosa has deepened, as home sales have dropped to their lowest level since 1991.”

“Many that haven’t closed are struggling desperately. ‘Business is very, very slow right now. I don’t know what’s going on,’ said Ben Nejad, owner of Piner Furniture.”

The Napa Valley Register. “Napa County Assessor John Tuteur has lowered 2007-08 property assessments on about 200 Napa County homes that are worth less today than their owners paid for them.”

“So far declining assessments are limited, affecting mostly people who bought new homes within the past two years, Tuteur said.”

“Lowered assessments have been applied to houses at Sheveland Ranch in south Napa, townhomes at Valley Oak Villas in Napa’s Westwood neighborhood, condominiums at Newport North in Napa’s River Park and houses at Vintage Ranch in American Canyon, Tuteur said.”

“At Vintage Ranch, one owner who paid $765,000 had his assessment lowered to $688,000, reflecting the current market price, Tuteur said.A buyer at Sheveland Ranch had his assessment lowered from $621,000 to $559,000.”

“At Newport condominiums, a unit purchased for $362,000 was dropped to $329,000, Tuteur said.”

“In addition to the 200 lowered assessments applied to the current tax rolls, another 40 to 50 reductions have been approved for 2008-09, Tuteur said. These reductions came about after homeowners contacted his office to ask for an assessment review, he said.”

“His office will do a more widespread review of property values in April to see if additional homeowners qualify for lowered assessments, Tuteur said.”

“Many Bay Area counties have reduced assessments on significantly more properties than Napa County. Solano cut assessments on about 700 out of 109,000 residential properties. Contra Costa lowered assessments on 22,500 properties, Santa Clara on 18,000.”

“The situation today is not nearly as bad as in 1997 when his office lowered assessments on 5,700 properties, representing 12 percent of all parcels, Tuteur said. In the 1990s ‘we had some properties off as much as 25 percent. We haven’t seen that yet,’ Tuteur said.”

“The assessor’s office is taking a cautious approach, Tuteur said. ‘We don’t want to get ahead of the curve. We don’t want to predict the market going down.’”

The Journal Gazette reports from Indiana. “More Allen County residents are putting their homes up for sale to avoid foreclosure, said broker Tony Chacon. That is adding to the large pool of homes on the market. Some Allen County houses are being sold for less than the outstanding loan balance, Chacon said. The houses that couldn’t be saved through short sales went into foreclosure. Indiana had 9,087 properties with foreclosure filings in the third quarter, according to RealtyTrac.”

“Many consumers who couldn’t afford houses before jumped into the market, thanks to low interest rates and unorthodox mortgages that didn’t require down payments, said Charlene Sullivan, associate professor at Purdue University. Some lenders pushed the envelope and lent money with little documentation of the buyer’s income. Then the lenders sold the mortgage contracts to Wall Street investors, avoiding the risk of foreclosure, she said.”

“‘It was almost like your dream money-printing machine,’ Sullivan said.”

“Colleen Maier doesn’t understand why the steady stream of potential buyers eager to tour her northeast Fort Wayne house has slowed to a trickle. Maier is caring for her daughters on her own while she waits for the Shearwater Pass house to sell. Her husband is staying with relatives in St. Louis and waiting for his family to join.”

“‘We really can’t afford two mortgages,’ she said, ’so I’m going to stay here till we sell this house.’”

“Jeffrey D. Fisher, director of the Benecki Center for Real Estate Studies at Indiana University’s Kelley School of Business…said the problem likely will continue to affect the entire country.”

“‘Nobody’s immune from the housing market problems,’ he said.”

The Chicago Tribune from Illinois. “A growing foreclosure crisis has complicated their campaign and left for-sale signs and boarded-up houses in its wake. In Humboldt Park, the number of foreclosure filings has risen at an alarming rate, from about 150 last year to more than 1,000 this year, said Hector Gamboa, program development manager at the Spanish Coalition for Housing.”

“‘I walk two blocks and I see six houses for sale,’ said Melissa Rivera.”

The Grand Rapids Press from Michigan. “Home sales in the Grand Rapids area are on the rise compared to a year ago — but experts say that’s because sellers are dramatically dropping prices. Realtors say the 11.3 percent boost in home sales is encouraging, even if the average price has dropped 28.3 percent.”

“‘I think the message there is the sellers are understanding that they have to accept less,’ said Julie Rietberg, executive director of the Grand Rapids Association of Realtors, which released the numbers.”

“The growing number of foreclosures in the area are partly to blame for the price drop. Based on association statistics, about a third of the sales recorded last month were foreclosure properties.”

“It’s not what was originally envisioned. A planned twin tower isn’t going happen. And it’s a long way from being sold out. But Icon on Bond, the largest all-new downtown housing project since 1991, is done.”

“Since the initial occupancy permits for 601 Bond Ave. NW were issued in September, three people have moved in, including father-son developers Joseph A. and Joseph P. Moch.”

“Tami Walker, a sales representative for Icon, said 63 percent of the 118 units are sold, but that includes those only reserved with refundable deposits. Some were sold to investors during the construction phase with plans to lease or resell.”

“Walker said Icon’s entry to the market during a nationwide housing slump has not helped. ‘The majority of people coming in love the condos,’ Walker said. ‘They want to live here. But they have a house to sell before they can do that.’”

“Joseph A. Moch declined to comment on Icon. He has said he does not believe coverage of the development has been fair. ‘I don’t really have anything more to say to you,’ he said.”

The Detroit News. “Ryan Homes, which made its southeast Michigan debut in 2006, will finish building 10 houses for which it already holds permits before exiting the state entirely, according to real estate agents, company employees and government officials.”

“Ryan Homes began…two subdivisions toward the end of a housing frenzy in Detroit’s outer suburbs. But a perfect storm of regional job losses, continued migration out of Michigan and national residential real estate troubles has turned the once-lucrative homebuilding business into a bust.”

“Lawrence Yun, a senior economist for the National Association of Realtors… noted that the bad news may have a golden lining for the region. ‘Fewer homes being built will give those homes waiting for buyers a chance to clear out,’ Yun said. ‘Reducing inventory is a key factor in generating a real estate turnaround.’”

The Post Crescent from Wisconsin. “If you’re ready to buy a home, perhaps because of a growing family or because you have a down payment saved, waiting a year or two for the national news to be brighter might not be the best move.”

“This could be hype from local real estate agents, who make their living by selling houses, or even bankers, who make some of their money by providing mortgages, but it could be more than hype; it could be right.”

“‘There’s a lot of inventory (of homes for sale) on the market right now so you’ve got a lot to pick from,’ said Ann Spencer, senior VP at Associated Bank, a major mortgage lender in northeastern Wisconsin.”

“It’s worth mentioning that rates and house prices could go down in the future, although historically, Fox Valley housing has never dropped. K.C. Maurer, owner of a real estate brokerage firm and a 30-year veteran of the industry, can’t recall one such price decline. What’s more likely is that appreciation slows.”

“The Midwest suffers from the double whammy of a declining housing market and economic performance that lags much of the nation.”

“‘Perhaps Cleveland and Ohio aren’t at the top of the list, but that’s like standing on the deck of the Titanic and saying we’re not taking as much water as we did the last hour,’ said Mark Wiseman, director of Cuyahoga County’s Foreclosure Prevention Program.”

“‘We’re still getting over a thousand a month in foreclosure filings and sheriff’s sales,’ Wiseman said.”

“In Milwaukee, Trena Bond sees the risk become reality every day.’I see people who, for one reason or another, fall behind in their payments. Then they refinance,’ said Bond, executive director of Housing Resources Inc. Perhaps one-third of the people who come to see Bond can hold on to their homes. Many, she said, ‘just walk away’ from them.”

From GM Today in Wisconsin. “New data on foreclosures in Wisconsin show that even one of the state’s wealthiest counties is still being affected by weakness in the housing market.”

“In October, foreclosures in Waukesha County increased by 26 percent over the same month last year, according to (a) Web site. On a year-to-date basis, they’re up 46 percent in the county.”

The Journal Sentinel from Wisconsin. “Debts overpowered 2,280 Wisconsin homeowners in October, ForeclosuresWI .com reported Monday. October’s caseload, the highest monthly volume on record at the company, pushed the Badger State foreclosure tally to 17,013 in this year’s first 10 months. That’s 28% higher than the 13,256 a year earlier.”

“Worst of all is Milwaukee County, with 4,508 foreclosure filings in this year’s first 10 months, 53% higher than a year earlier. City of Milwaukee cases, meanwhile, have about tripled, reported Todd Weiler, public information coordinator for the city’s Department of Neighborhood Services.”

“‘A year ago, we had maybe 50 foreclosures a month. Now it’s up to 150 a week,’ Weiler said. ‘Last year, we had 750 sheriff’s sales. This year, we’ve already had 1,761.’”

“Preliminary findings show ‘a lot of loans made in ‘06 and ‘07 to people who couldn’t even afford the initial payment,’ said Catey Doyle, chief staff attorney for Legal Aid Society of Milwaukee. Typically, those mortgages passed through several hands before being bundled with other loans into securities ultimately purchased by big bank trust companies.”

“‘Everyone along the way says, ‘It’s not our fault, not our fault,’ the lawyer said.”

The Star Tribune from Minnesota. “As a rising tide of foreclosures washes over them, local governments are getting stuck spending more time dealing with the growing problem — and collecting less money because of it.”

“Police officers are chasing people out of more boarded buildings. Inspectors are issuing more citations for uncut grass or unshoveled snow. Assessors are having to more closely scrutinize housing to determine its market value.”

“Member cities complain most about the time involved in tracking down owners of the property. ‘It’s very difficult to locate who the owner is,’ said Laura Harris, a lobbyist for the League of Minnesota Cities. That’s because mortgage loans are resold among lenders and investors.”

“In Minneapolis, foreclosures are a dominant factor behind a doubling of vacant properties tracked by the city’s problem property unit. That’s jumped from 360 properties last December to 718 this week. And that number could hit 1,000 by the end of next year, according to Tom Deegan, who manages the unit.”

“Deegan estimated that 80 percent of those vacancies result from foreclosure.”

“The city has spent $1 million to board up properties this year. That cost can be assessed against the property, like unpaid water bills, but it can take years until the property is sold before the assessment is paid. Deegan said the city recovers maybe 60 percent of boarding costs.”

Some housing bubble news from Wall Street and Washington. Reuters, “Beazer Homes USA Inc said it cut 25 percent of its staff, would suspend its dividend and sees at least $230 million in noncash impairment charges in its fiscal fourth quarter. ‘The housing industry continues to face the most difficult business conditions in over a decade,’ CEO Ian McCarthy said in a statement.”

“Last month, Beazer said sales for the quarter fell 39 percent to 3,940 homes. Net new home orders fell 53 percent to 973, and the cancellation rate soared to 68 percent.”

The Charlotte Observer. “Beazer in October admitted some of its employees violated federal housing regulations. It will have to restate earnings for the past three years. It also is late in filing financial documents with the Securities and Exchange Commission. Beazer said preliminary financial data released Monday for the fourth quarter is unaudited and ’subject to change.’”

“Upscale home builder Hovnanian Enterprises Inc said the sales pace in October in most of its markets ’significantly deteriorated’ when compared with recent months.”

“Preliminary fourth-quarter results showed net contracts fell 10 percent to 2,781 homes, while deliveries slid 19 percent. The company said cancellations for the quarter that ended October 31, were 40 percent of gross contracts, up from 35 percent in the previous quarter as well as the year-ago quarter.”

“The company said its contract backlog at the end of October, excluding unconsolidated joint ventures, was 5,938 homes, down 30 percent from last year.”

The Street.com. “Some analysts now expect the homebuilder to implement another round of steep price cuts to clear its large inventory of houses. More than half of Hovnanian’s orders in the recent quarter came during the company’s heavily hyped ‘Deal of the Century’ weekend sale.”

“More pain could lie ahead, according to analyst Daniel Oppenheim. He expected a 25% year-over-year decline in orders. ‘Sales likely fizzled after Hovnanian attempted to pull away incentives from its ‘Deal of the Century’ promotions the weekend of Sept. 14-16,’ Oppenheim said. ‘We expect that Hovnanian will reintroduce discounts similar or greater than before in order to maintain sales and generate positive cash, since competitors who matched its temporary promotions actually set new market prices.’”

The Times Online. “Bovis, the (UK) housebuilder, has given warning that faltering consumer confidence has hit sales and house prices during the key autumn sales period.In one of the firmest indications yet that the housing market is slowing, Bovis said that it expected the average sales price for one of its own homes to fall by 3 per cent this year, compared with 2006.”

“The price fall would mark a dramatic reversal for Bovis and the market.”

The Irish Examiner. “The predicted downturn in the Irish housing market has become a reality with latest figures showing that registrations fell by two-thirds in October.”

“IndyMac Bancorp Inc, one of the largest independent U.S. mortgage lenders, on Tuesday posted a quarterly loss more than five times larger than it had projected, hurt by mounting delinquencies and a collapse in investor demand to buy its home loans.”

“Credit losses at IndyMac quadrupled from the second quarter to $407.7 million, while losses related to the sale of mortgages totaled $167.2 million. Results also reflected costs to eliminate 1,547 jobs.”

The Associated Press. “IndyMac increased its credit reserves by $441 million, or 47 percent, in the third quarter, to $1.39 billion. IndyMac’s charge-offs rose to $146 million in the third quarter.”

“‘We are clearly disappointed with this quarter’s results, which were driven by deteriorating mortgage delinquencies and a declining housing market combined with an unprecedented collapse in the secondary market,’ CEO Michael Perry said in a statement.”

“IndyMac primarily originated alt-A loans for customers who cannot provide documentation like traditional, prime borrowers.”

From Bloomberg. “Commerzbank AG, Germany’s second- largest bank, took a 291 million-euro writedown on its 1.2 billion euros of investments linked to U.S. subprime mortgages after record foreclosures on home loans to borrowers with poor credit histories rattled debt markets.”

“The credit contraction has saddled the world’s biggest lenders and securities firms with more than $40 billion of writedowns during the past four months.”

“Citigroup Inc., the largest U.S. bank by assets, provided $7.6 billion of emergency financing to the seven structured investment vehicles it runs after the SIVs struggled to repay maturing debt.”

“‘The current lack of liquidity in the asset-backed commercial paper market and the resulting slowdown of the CP market for SIV-issued CP have put significant pressure on the ability of all SIVs, including the Citi-advised SIVs, to refinance maturing commercial paper,’ Citigroup said.”

“Citigroup, which created the first SIV in 1988, is the largest manager of the investment companies.”

The Wall Street Journal. “Only last week, Citigroup was telling anyone who would listen that it had a mere $70 million in ‘indirect exposure’ to the subprime mortgage mess. This week, Citi CEO Charles Prince has resigned, Citi is looking at another $8 billion to $11 billion in writeoffs, and some observers are questioning whether Citigroup has the resources to absorb all of the losses.”

“More pain ahead was the theme for this year’s ABS East conference where panelists warned that the worst is yet to come for U.S. subprime mortgages and those securities tied to it.”

“In an opening panel discussion on the state of the structured finance market, investors and issuers agreed that falling home prices, rising defaults and foreclosures along with tighter credit left the U.S. housing market in a tailspin this year. But fallout in the future remained a key concern.”

“‘It’s been a staggering blow. I think there’s more to come,’ said Paul Colonna, portfolio manager at GE Asset Management, during the panel discussion, referring to the subprime mortgage crisis.”

“Colonna said the biggest surprise to him this year, was not the rising delinquencies or declining home prices in the housing sector, but the big disruption to other markets.”

“‘The 90-day T-bill auction in August was a bigger surprise to me. That sent a huge warning to the world that we’re in a liquidity crunch,’ said Colonna. ‘We didn’t even know where rates were in Treasuries then. The U.S. government didn’t know where it was going to finance itself.’”

“‘There’s a major crisis of confidence right now and investors need to be reassured. People are not addressing issues of transparency in ABCP and SIV’s portfolios and their pricings,’ said one investor, who spoke on condition of anonymity. ‘The problem in asset-backeds is that the people who are originating are also taking losses.’”

“At the conclusion of the discussion, the moderator asked panelists what would make the ABS market feel normal again — to which participants responded, an entire restructuring of the structured finance market.”

The Scotsman. “Howard Archer, the chief UK economist of Global Insight, said: ‘What has become clear is that the problems associated with the subprime mortgages in America will carry on for some time to come.’”

“‘It was hoped, back in August, that it would quickly pass, but that was always fanciful. The problem is no-one is really sure who is liable for these debts, as they can be bundled up and repackaged on,’ he said.”

“It has been estimated there could be as much as £100 billion in subprime loans circulating in the system. Peter Hahn, a former Citigroup executive, said: ‘We have accounted for £20 billion, but what about the other £80 billion? It leaves a lot of big questions.’”

The Independent. “The banks remain unwilling to lend to each other, preferring to rebuild their balance sheets and ‘hoard liquidity’ to buttress themselves against any shocks from repatriating off-balance-sheet losses from their special investment vehicles. However, this tightening up has led to a vicious circle.”

“Samir Shah at Landsbanki Securities said: ‘People thought most of the bad news had been priced in. It seems we’re entering a second phase of the credit squeeze. We’re going back to a place where liquidity is drying up and volatility is increasing.’”

“‘There is a concern about the extent of the debts among the banks generally and who will be left holding the debt,’ Richard Hunter, of Hargreaves Lansdown, said. ‘There’s a read-across to Barclays Capital. People are concerned about the exposure it has.’”

“Bank of England Governor Mervyn King said it may take months before commercial banks publish their full losses from the U.S. subprime mortgage slump.”

“King’s assessment of banking conditions is correct, said Martin Weale, director of a research group funded by the Bank of England and the U.K. Treasury.”

“‘In October we saw people saying things were getting better but that’s turned out to be a bit of a mirage,’ Weale said. ‘The wholesale market is still very tight. Banks are now getting into a situation where they are short of capital.’”

“Fitch Ratings said on Tuesday that it may cut the AAA ratings of bond insurers after an upcoming review of their exposure to complex collateralized debt obligations.”

“If the ratings of one or more of the bond insurers are cut, the rating on the bonds they insure will fall too. This may force some investors who can only hold very secure debt to sell, depressing prices which would already be under pressure.”

“It could also touch off another round of writedowns by banks, insurance companies and others who hold instruments insured by these companies.”

“UBS estimates that bond insurers back about $2.2 trillion worth of debt, mostly subprime mortgage-backed securities and municipal bonds.”

United Press International. “The U.S. subprime mortgage crisis probably will worsen over the next 12 months before improving, a Federal Reserve governor said Monday.”

“‘(Two) conditions suggest that conditions for subprime borrowers have the potential to get worse before they get better,’ Federal Reserve Governor Randall S. Kroszner said. The conditions are indications of a weakening in housing activity and the second is that ‘the bulk of resets is yet to come,’ he said.”

“For each quarter from now until the end of next year, on average, monthly payments for more than 400,000 subprime mortgages are scheduled to undergo their first interest adjustment, up from the roughly 200,000 per quarter during the first half of 2007.”

“‘Delinquencies and foreclosures are therefore likely to continue to rise for a number of quarters,’ Kroszner said.”

“Former Federal Reserve Chairman Alan Greenspan and billionaire investor George Soros said the downturn in the U.S. housing market had yet to take its full toll on growth.”

“Greenspan told a forum that high inventories of unsold homes presented a major risk to the U.S. economy and that he was not sanguine about how quickly the glut could be reduced.”

“‘We still need to accelerate the rate of inventory liquidation, and that will mean bringing housing starts down and sales up. We have a long way to go,’ said Greenspan.”

“Former Federal Reserve Chairman Alan Greenspan said Tuesday that cutting excess home inventories in the United States is key to stabilize the financial system at home and the rest of the world.”

“‘The critical issue on the whole subprime, and by extension, the international financial system rests very narrowly on getting rid of probably 200,000-300,000 excess units in inventory,’ Greenspan told a business leaders’ forum.”

“The former Fed chairman urged central banks to avoid suppressing asset bubbles, which is ‘exceptionally difficult’ to do.”

The Palm Beach Post reports from Florida. “In Palm Beach County’s new-home developments there were 755 single-family move-ins during the third quarter of this year, the fewest in more than a decade, according to MetroStudy. That’s also 52 percent fewer than the same quarter last year. There were 486 single-family home starts in Palm Beach County developments in the third quarter of this year, MetroStudy said, a 52 percent drop from the third quarter of 2006.”

“Brad Hunter, an analyst at MetroStudy, said that total new-home inventory in Palm Beach County dropped to 2,989 units in the third quarter from 3,258 units in the second quarter. The number of units under construction fell to 1,464 units in the third quarter from 1,776 in the second quarter.”

“‘I believe we’ve got the lowest prices in town,’ said Robert Smithwick, Mercedes Homes’ Treasure Coast Division president.”

“Many other local builders are offering incentives to attract buyers in what has become the worst housing slump in 16 years. Some of them are impressive indeed. Truth be told, we don’t have room to list them all in this column.”

“We see news releases from Centex Homes and DiVosta Homes on our desk, for instance. It’s a trend we expect to continue well into next year as builders seek to work off their bulging inventories homes and condos.”

The New York Times. “Based on the number of sales, the Florida real estate market as a whole has taken a huge hit this year. September sales of existing homes in Polk are down 44 percent from a year ago; building permits for new home construction are down about 36 percent.”

“‘There is more inventory in all price ranges,’ said Deborah Boza Valledor, the chief operating officer of the Realtor Association of Greater Miami and the Beaches.”

“More than 78,000 homes were for sale in the Miami area in August, up from 51,000 a year before, according to ZipRealty. The overhang of unsold homes helps explain why reported selling prices do not tell the whole story.”

“Sellers ‘are making concessions,’ Boza Valledor said. ‘They will offer a year’s worth of paid maintenance fees to the buyer, or they will pay for the parking space or they will throw in country club fees that might be part of the expense of buying a home in a gated community.’”

The Orlando Sentinel. “True to the ambiguity of humdrum reality, there is no black hat in this story, just a man, Neal Winnie, who may have to pass the hat if his fortunes don’t improve.”

“One day the lenders stopped giving loans to his clients. Winnie blames the media, especially TV, for hyping the bursting of the housing bubble and panicking investors.”

“The depressed housing market in Central Florida finally forced him to shut down his company, Sunquest Mortgage. How bad is the market in Central Florida? So bad that things are better in Detroit, where Winnie has another mortgage business.”

“‘I’m working in Michigan now, because I can’t get anything done here. And it’s not as if I weren’t trying,’ he said, describing a mass-marketing effort here that produced zero customers.”

“He hasn’t forgotten Rose Harkey, (who) owns a small construction company and does remodeling. ‘I’m gonna pay these guys,’ he said. ‘They’re super people. I would recommend them to anyone. They did their job, now I need to do mine.’”

“Winnie said he hopes to be back on his feet by the New Year, and plans to pay JA-RO the balance of $4,000, with interest.”

“Meanwhile, JA-RO is hanging on, getting by on remodeling jobs. ‘We can’t afford to go ahead and build spec houses now,’ Harkey said. ‘But we’re small enough that we’ll find something. We live pretty frugally. We’ll just have to slim down, that’s all.’”

The Tampa Tribune. “Once, they were dream homes, with views of the golf course, a marble-floored music room, servants’ quarters and a taste of the good life behind the gates of some of Tampa’s most posh communities.”

“Now, they sit abandoned, with overgrown lawns, leaky roofs and deep-green, algae-filled pools. They are empty and overpriced. All are in foreclosure. All were bought sight unseen by a South Florida investor who is suing his former business partners and lawyer for fraud and identity theft.”

“The five transactions took place between February and June 2006. All involved the same team of real estate agents and a broker from Florida Executive Realty. In each case, the homes were purchased by Atlantic Coast Investments, which is partially owned by Boca Raton businessman Alan Nathan, and deeded the same day to Nathan’s partners at inflated prices.”

“‘That’s what we call a standard land flip,’ said Doug Pollock, president of Information Data Services. ‘You have simultaneous closings, but the only funding is on the second transaction.’”

“Collectively, the mortgages for the five Hillsborough houses totaled $900,000 more than the sale prices for the properties.”

“Code Enforcement Director Curtis Lane lives two doors down from the Edinburgh house, which has broken windows, a neglected pool and an overgrown lawn. His department has cited the owner and is on the verge of levying hefty fines.”

“‘That’s right by my house,’ Lane said. ‘I knew there was something fishy about it. I look at that mess every day.’”

From WFTV.com “Car arson is on the rise and the motivation behind it may be changing. Investigators say arsons are typically used to torch evidence of another crime. But there is a surprising new reason Central Florida vehicles are going up in smoke.”

“‘There’s a lot of foreclosures going on right now. People can’t afford the cars they once used to be able to afford. So in order to get out of the payment they’ll burn the car,’ said Bill Newman of the Bureau of Fire and Arson.”

“‘When the local economy hits the skids, it’s not unusual to see a spark in auto arsons,’ said a spokesman. By the end of September, investigators reported 310 car arsons. That’s compared 390 for all of last year.”

The St Petersburg Times. “Why, amid a historic housing slump, is citrus grower like Joe Davis planning to develop his plump groves to make way for homes, which are withering on the vine? ‘I don’t want voters determining how I can use my land,’ said Davis of Highlands County. ‘So I’ve speeded up my plans.’”

“Call it the Florida Hometown Democracy Effect. Supporters of this so-named measure limiting growth still don’t know if they’ll collect enough signatures to get it on the November 2008 ballot. But landowners like Davis, who owns about 10,000 acres in Central Florida, aren’t taking chances.”

“They’re flooding state and local agencies with plans that would, if approved before Election Day next year, guarantee them the right to develop their land, even if the ballot measure is passed by voters.”

“In 10 counties in central and southwestern Florida, the state is reviewing major development plans that cover a total area of at least 1,000 square miles - or two-thirds the size of Rhode Island - that would skirt restrictions imposed by Hometown Democracy.”

“Most of these counties are rural and sparsely populated, where market demand for housing is entirely absent. ‘There hasn’t been a house selling in this county for a year and a half,’ said Don Hanna, a Highlands County planner.”

The Ledger. “Silver Companies is putting the brakes on its proposed 550-acre development in northwest Bartow, at least for now. And the delay will impact an elementary school the Polk County School District plans to build on the north end of the unnamed development.”

“‘We have just tabled it for now because of the market conditions,’ said Richard Tremblay, executive VP of development for Silver.”

“‘We are still committed to the project and feel very strongly about Bartow, but the market is so down,’ he said. ‘We’re going to wait for the dust to settle enough for builders to have a stronger interest in the project.’”

“Silver had planned to break ground this year on the initial 500 lots in the development. At build out, the development is projected to have 1,353 houses, 324 apartments and a commercial complex.”

“At this point, Silver is reviewing the market monthly, hoping for an upturn. ‘It’s the same all over Florida,’ he said. ‘It’s not just Bartow. We’re disappointed with the delay, but the last thing we want to do is start this project in a down market.’”

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