The Housing Bubble

The Union Tribune reports from California. “All six Southern California housing markets suffered year-over-year price drops last month for the first time in 12 years, DataQuick reported Wednesday. The overall median was down 8 percent to $444,000 from $482,750 in October 2006, the San Diego-based company reported. Declines ranged from a high of minus 15.1 percent in Riverside to a low of minus 3.8 percent in Los Angeles, which was the last county to go negative in the current cycle.”

“DataQuick analyst Andrew LePage said it was the first time the counties all reported a drop in monthly prices since November 1995, when all of Southern California was in recession.”

The Voice of San Diego. “The Union-Tribune today reported the new numbers from DataQuick, but made an error placing the numbers in context. The story claimed that the all-home median price (a measure we have recently shifted away from) reached its lowest point since April 2003.”

“Actually, the all-home median price logged by DataQuick for last month was $460,000. That marked the lowest level since April 2004, when the median was $445,000. That’s quite a difference from April 2003, when the median was $352,000.”

“I checked the numbers with Andrew LePage, DataQuick analyst, a few minutes ago. The month’s sales rate was, as the paper reported, the lowest October in DataQuick’s record.”

“LePage said jumbos represented 35.7 percent of the mortgage market through July, but last month were down to 21.9 percent. Purchases of jumbo-loan homes fell 62.3 percent over the past year, twice the decline of the general market.”

“Among builders, said Alan Nevin, chief economist for the California Building Industry Association, a relatively low inventory of completed, unsold homes is prompting some companies to map plans to open new projects in the new year. Thirty-six new projects opened for sale in the third quarter that ended Sept. 30, an ‘astounding’ number, considering the noncommittal market mood, Nevin said.”

“Cliff Helbock at Prudential California Realty in Escondido said that…two auctions last weekend yielded no takers.”

“Norm Miller, director of real estate academic programs at the University of San Diego, advised homeowners who have seen their equities melt by 20 percent to 30 percent to think objectively about where San Diego’s market has taken them.”

“‘I have no sympathy with somebody who bought at $200,000, saw their value go to $900,000 and now it’s worth $700,000,’ he said. ‘Boo hoo! They’re still way ahead of the rest of the country. They’re so much better off.’”

The LA Times. “As prices continue to slide, said DataQuick President Marshall Prentice, ‘a lot of potential buyers seem to be waiting this one out.’”

“‘It’s hard to buy a home when you think it might lose value, especially when you have to borrow money to do it,’ he said.”

The Press Telegram. “NAR Chief Economist Lawrence Yun and Long Beach Realtor Richard ‘Dick’ Gaylord, who was installed on Monday as NAR president, were pelted with questions by members of the media attending the conference about the state of the housing market and whether Realtors should take the blame for the downturn and the subprime lending fallout.”

“Yun also got hammered about whether there was ever a housing bubble that has now burst. He stopped short of answering, but said there may have been a bubble in the real estate industry itself, which swelled as the housing market heated - there is now one licensed real estate agent for every 50 Californians, for example.”

“‘Certainly for people in the industry … it’s clearly a bubble for them,’ Yun said. He also said it’s clear there was a bubble in the lending industry. ‘There is a large loss and bubble collapse in that area,’ he said.”

“Gaylord also insisted that despite the turbulence in the market, it’s still a good time to buy. ‘I’ve been in this business 30 years and I’ve never known a down market,’ he said. He added, ‘I’m not troubled terribly by today’s market.’”

The Daily Press. “In Victorville, 1,366 homes are in pre-foreclosure, indicating the owner has received a notice of default. There are 314 homes on the auction block and 659 owned by the bank as of Monday, according to RealtyTrac.”

“By contrast, 442 homes were listed for sale in Victorville, 46 by owner, 303 by realty company and 93 as new homes.”

The Press Enterprise. “Home prices continued to plummet in October in Inland Southern California, and the median price of a home sold in Riverside County now more than $60,000 less than it was a year ago.”

“The median price of a Riverside County home was $350,000 last month, 15.1 percent less than October 2006, according to DataQuick. In San Bernardino County, the median price fell to $330,000, a 9.6 percent decline.”

The County Sun. “If you know 43 homeowners in the area there’s a fair chance one of them just lost their house to foreclosure. Realty Trac said there is one foreclosure for every 43 households in San Bernardino and Riverside counties, according to third-quarter 2007 data.”

“That puts the region at No. 3 nationwide for home foreclosures. Stockton was at the top of the list, followed by Detroit.”

“The two-county area saw more than 31,661 foreclosure filings on 20,664 between20,664 properties between July and September.”

From Turn to 23 in Bakersfield. “If you’ve driven by city hall around 10am recently you may have seen a crowd gathered for foreclosure auctions. It’s that use to happen maybe once a week is now happening almost everyday.”

“Most people were there to get a deal but only about a dozen properties were actually available to be bid on and just one property near South High School was sold to a third party buyer.”

“For $75,000, the loan that sent the property into foreclosure was for $188,000. It’s an example of how lenders are losing big bucks on loans at the same time people are losing their homes.”

Inside Bay Area. “Everyone knew it was bad in San Joaquin County, but you don’t realize how bad it really is until you lead the country.”

“With an average of one for every 31 households, the Stockton metropolitan area topped the country in the rate of households filing for foreclosure in the third quarter of this year. More than 7,100 foreclosure filings on 4,409 properties were reported between July 1 and Oct. 31 in San Joaquin County, a 30 percent increase over the previous quarter, according to RealtyTrac.”

“The company listed more than 1,200 foreclosures in theTracy area, 1,253 in Manteca, 1,371 in Lathrop and 293 in Mountain House.”

“Grace Alvarez, a Realtor in Tracy, said the current buyers market is a difficult one. She said many are only looking to buy foreclosures or short sales, paying the bank less than whats owed on the loan.”

“‘Most of the clients Ive been working with are just waiting for prices to drop,’ Alvarez said. ‘Were so saturated with homes, its unbelievable. Were continually having to drop prices every two or three days to keep up with the Joneses.’”

The Associated Press. “Dave Webb said most of the properties being auctioned by his firm in inland areas of California are investment properties that ended up being repossessed by lenders after the market tanked. ‘What I’m selling this week — 700 homes in the Stockton-Oakland area — these properties were probably foreclosed a good year-and-a-half ago,’ Webb said.”

The Reporter. “Plans for an auction of homes Sunday in Vacaville has perturbed several residents of a local upscale housing development, who are concerned about the potential effect on their property values.”

“Pleasant Hill-based developer DeNova Homes is auctioning 18 of the houses in its Meadow Woods subdivision.”

“Some residents who already live in the community are not pleased. ‘We expect anywhere between a $200,000 to a $300,000 decrease in our property values overnight,’ said Meadow Woods resident Brian McLean.”

“The house McLean and his wife have lived in since April was listed at $786,000, while his neighbor Larry St John’s home was listed at $899,000 when he moved to Meadow Woods in March.”

“In contrast, the minimum selling prices in the auction range from $450,000 to $650,000 and the previous pricing on these homes ranged from $718,000 to $939,900.”

“In their letter, Meadow Woods neighbors asked for $50,000 per residence to help offset the disparity caused by the auction. The response from DeNova President Dave Sanson was brief. ‘I appreciate the opportunity to keep the lines of communication open, but regret that we will not be able to agree to the request in the letter,’ he wrote.”

“In a conversation Tuesday, Sanson said, ‘we’re all stuck in the same situation together; we’re all impacted by the downturn in the real estate market.’ He firmly believes, he said, that an auction is ‘the best way to preserve all of our property values.”

“‘The beauty of an auction,’ he said, ‘is that it brings all the buyers into one room and you can find what the true values of the property really are.’”

“St. John said he paid a $899,000 listing price on March 1 for his home; a simliar model will have an opening bid of $550,000 at Sundays auction.”

“‘Now were looking at losing $300,000,’ St. John said, saying the auction unfairly makes homeowners lose equity on top of the falling housing market. St. John said he hopes to prevent the auction, or at least start a dialogue with DeNova.”

“‘Basically, were screwed,’ he said. ‘Its not that were jealous, but the additional consequences could mean somebody who got in on a two-year loan may not be able to refinance and (may) lose their home.’”

The Mercury News. “While the national forecast for home sales remains relatively flat for the coming year, the chief economist for the country’s largest real estate trade group told reporters Tuesday that San Francisco and Silicon Valley are in stronger shape than many parts of California.”

“‘I would characterize San Francisco as not really participating in the housing boom, believe it or not,’ Yun said, adding that he includes Silicon Valley in that description.”

“San Jose mortgage broker Mike Donohoe, a past president of the Santa Clara County Association of Realtors who was in Las Vegas for the conference, said he’s heard ‘mixed reaction’ among his fellow participants about next year’s market. Those with the rosiest outlooks say things will bounce back in spring, he said. ‘I’m also hearing from others who say they don’t see it.’”

The Columbus Dispatch reports from Ohio. “C.V. Perry & Co. spent the better part of six decades turning the fruits of its customers’ labors and good fortune into dream homes. That was yesterday. Today, the company is gone. Some of the homes that bear the company’s stamp still stand, barely, unfinished shells looking more like ruins than residences. Elsewhere in McCammon Chase and other developments across central Ohio, there are 25 other homes that C.V. Perry & Co. started but never finished. Now, it’s a coin flip whether they’ll ever be completed.”

“Home builders of all sizes are struggling as sales plunge and the inventory of homes on the market soars. ‘Nobody’s doing well,’ said Greg Smith, a Century 21 agent. ‘To talk a client into doing a new build is very difficult. I wouldn’t put my money there, that’s for sure.’”

The Sandusky Register from Ohio. “The American dream is quickly becoming the American nightmare for Erie County homeowners. The Erie County Sheriff’s office recorded fewer than 90 properties foreclosed in 1991, and the number is expected to reach 400 this year.”

“Perkins Township resident Joe Harvey lost four properties to foreclosure after he failed to make mortgage payments. Harvey, who had never missed a payment in more than 10 years, felt the mortgage squeeze late last year when his home loan interest rates rocketed to 11 percent. He tried to work with the banks, but they couldn’t reach an agreement.”

“‘I felt real bad because I lost a lot of money,’ he said. ‘I definitely tried several times to get a fixed rate, and they wouldn’t budge. I was losing more than I was making, so it was time to bail out.’”

The Bowling Green Daily News from Kentucky. “A pair of builders who were once a driving force in the local speculative housing market say they’re being driven out of business, and they blame declining demand in the face of a saturated supply of homes here and elsewhere.”

“‘You can’t make somebody buy a house if they’re scared by what they’re seeing and hearing,’ said Mike Henson said. ‘There is an oversupply, and demand is just not there.’”

The Journal Gazette from Indiana. “The county issued 53 home construction permits last month, according to the Home Builders Association of Fort Wayne. That fell from 105 permits issued in October 2006.”

“Existing Allen County home sales last month dropped nearly 23 percent in this environment, according to the Fort Wayne Area Association of Realtors’ MLS.”

“‘It’s perceived that this is not a good market, said Sharon White, president of Premier Inc. Realtors, ‘but it’s an exceptional market if you’re a buyer.’”

The Chicago Tribune from Illinois. “Speaking at two events at the trade group’s annual convention here, Lawrence Yun, chief economist for the National Association of Realtors, forecast the first year-over-year home price decline since the Great Depression.”

“Yun said that in addition to the nation’s overall economic stability, two factors — buyers wearying of waiting around for sellers’ asking prices to bottom out and a gradual return to stability in the mortgage market — would fall into place at some point next year to set sales back on a positive track.”

“Yun said that the housing meltdown resulted from a ‘period of greed’ and blamed mortgage lenders looking for big commissions, global investors seeking ‘juicy returns’ and bond-ratings agencies turning a blind eye to risk.”

“‘In the greedy environment we encountered, some people, in my view, were misled into entering home ownership too early,’ he said.”

“Yun said some of his optimism was based on regional improvement. He said the Midwest’s housing market, for example, was a bright spot. ‘There is absolutely no bubble in that region,’ Yun said. ‘It is perhaps underpriced.’”

The Bloomington Pantagraph from Illinois. “Renters hold the key to unlocking the domino effect of home sales in the Twin Cities. A renter who buys a house frees up a seller to buy another house, which will then allow another homeowner to move, said Greg Zavitz, a real estate agent in Bloomington.”

“‘A renter is able to pull the trigger and make that offer while a homeowner — until their home sells — is a looker,’ Zavitz said.”

“Because of a slowdown in the national housing market, homeowners now think twice before buying without selling their homes first, Zavitz said. But renters never have to worry about making a sale before they can buy, a fact that might be even more to their advantage now.”

“Central Illinois renters can find good opportunities to move from rent to own in a buyer’s market where price reductions are common.”

“Plus, renters appeal to sellers because they don’t have a home to sell first, Haas Riley said. A home seller won’t worry about an offer falling through because the potential buyer can’t sell his or her home — or that a sale will fall through for the potential buyer, she said.”

“With first-time homebuyer programs, buyers can have very small out-of-pocket costs similar to an apartment’s security deposit, Haas Oliver said. And homeowners will be able to build their own equity, she said.”

“‘Now you just bought an asset as opposed to paying your landlord’s mortgage,’ Haas Oliver said.”

From ABC News in Michigan. “A depressed Michigan economy hasn’t helped car dealer Michael Thiede, whose income is based on sales. His income has decreased by 30 percent in the last year. With a new baby, Thiede sees selling the family’s house as the only way to avoid financial ruin.”

“But the task has been more difficult than the family expected. ‘It’s been a real struggle,’ said Michael, of Macomb Township, Mich. ‘Foreclosures have really increased dramatically in our area specifically.’”

“Dozens of houses in the Thiedes’ neighborhood, including his next-door neighbor’s home, are for sale. Even area real estate agents said it’s the toughest market they’ve ever seen.”

“‘I’ve been in the business 41 years, and this market is probably the worst it’s ever been in my career,’ said one agent.”

“Michael had his price set at $389,900. But in a tough market, when creative selling tactics don’t work, sellers should be prepared to lower their asking price, especially before the holiday season begins.”

“There are 25 other homes for sale in the Thiedes’ neighborhood, and 12 of those are foreclosures. Some of them are priced as much as $50,000 less than the Thiedes’ asking price.”

“‘Good Morning America’ real estate contributor Wendy Bounds said sellers shouldn’t ask questions like, ‘How much is my house worth?’ or ‘How much profit can I make?’ Instead they should think ‘How much can I afford to lose?’ and ‘How long can I live here and pay the mortgage without risking foreclosure?’”

The Pioneer Press from Minnesota. “An intensifying housing recession is zapping community banks across the Twin Cities - not with belly-up mortgages, but with failing construction loans for the housing behind them.”

“Since homebuyers slammed on the brakes, developers, builders and families across the region have been defaulting on construction loans for all manner of new housing, leaving community banks holding the bag.”

“Six of the 20 most-exposed banks in the country, ranked by the percent of overall bank assets that are in nonperforming construction loans, are based in the Twin Cities, according to TheStreet.com Ratings. Nonperforming means the loans are unlikely to be repaid.”

“Failing construction loans at the six Twin Cities community banks ranged between 3.6 percent to 5.2 percent of the banks’ total assets in the second quarter, according to Philip van Doorn, TheStreet.com Ratings bank analyst. By comparison, the ratio of nonperforming construction loans to total assets for all banks nationally was 0.06 percent in the second quarter.”

“‘I’ve been in the business 40 years, and I’ve not seen it like this,’ said Gene Haberman, president of Citizens State Bank in Hudson, which has $201 million in assets and nearly $10 million in construction loans unlikely to be repaid. ‘It was like a line was drawn in the sand, and all the building stopped. No one was prepared for that.’”

“‘Is it concerning to us? Obviously. Is it an issue of solvency? Absolutely not,’ Haberman said. ‘The good news is it is real estate, and it ain’t going away. We have collateral.’”

“Haberman and Marshall MacKay, CEO of the Independent Community Bankers of Minnesota, say banks may have become too casual with their real estate underwriting.”

“‘I guess the obvious answer has to be yes, because if we knew what we now know, we would have put bigger margins in,’ Haberman said. ‘We followed traditional guidelines.’”

The Star Tribune from Minnesota. “The number of Twin Citians who put their houses on the market last month was up modestly from a year ago, while the median price fetched by homes that sold was down, according to Twin Cities-area Realtor groups.”

“‘It’s opportunity time out there for buyers. We’ve been shouting this from the mountaintop for some time, and smart buyers are beginning to take notice,’ said Deb Greene, president of the Minneapolis Area Association of Realtors. ‘Sellers are motivated, there’s an excellent inventory of well-priced, high-quality homes to choose from, and mortgage rates are phenomenal.’”

“Still, the market remains clearly in correction mode. Closed sales were down 17.7 percent in October compared with October 2006. For the first 10 months of 2007, sales are almost 16 percent lower than last year at this time.”

“Just how motivated were sellers last month? The Minneapolis Area Association of Realtors said sellers received only 93.1 percent of their original list price, down significantly from two years ago when sellers were getting on average 97.7 percent of their asking price.”

“John Murphy, sales agent and a specialist in the western suburbs, said that given the level of inventory, prices could come down even more. ‘It doesn’t necessarily mean prices have to come down a lot,’ he said. ‘But 5 to 10 percent off the current asking price seems reasonable. Whether or not that will get buyers back into the game is hard to know.’”

“He added that there are still plenty of buyers, but many are being patient and are waiting for listings to ‘age,’ or to sit on the market until a seller makes a price reduction or gets desperate.”

“‘Buyers are still looking for deals,’ he said. ‘And most sellers aren’t willing to give them the deals buyers are looking for.’”

Some housing bubble news from Wall Street and Washington. Associated Press, “HSBC Holdings PLC said Wednesday it was taking a $3.4 billion charge against third-quarter profits because of accelerating losses in its HSBC Finance Corp. mortgage business in the United States. ‘There is the probability of further deterioration if the current housing market distress continues and further impacts the broader economy,’ the company said.”

From Bloomberg. “Bank of America Corp., the nation’s second-largest bank, may need to write down $3 billion in debt securities in the fourth quarter that have lost value because of defaults on subprime mortgages.”

“‘As market conditions change and possibly worsen, there could be additional diminution in value,’ said Chief Financial Officer Joseph Price. ‘There is complexity and difficulty in estimating the value of these positions, especially the collateralized debt obligations.’”

From Dow Jones Newswire. “Bear Stearns Cos. said it expects to record a loss in its fiscal fourth quarter after taking a write-down it currently estimates at about $1.2 billion. The losses relate to the company’s heavy exposure to rapidly deteriorating residential mortgages, mortgage securities and collateralized debt obligations.”

“‘Our view on the mortgage market is bearish,’ Bear Stearns Chief Financial Officer Samuel Molinaro said. ‘Fundamentals continue to be very challenging and deteriorating.”

“Molinaro said the $1.2 billion write-down it has taken to date in the fourth quarter potentially could get worse before the quarter ends in two weeks. ‘We like to hope we have the worst of the mortgage marks behind us,’ he said, ‘but people keep saying that every quarter.’”

“Bank of Montreal and National Bank of Canada may write down a combined C$1 billion ($1.05 billion) for investments in asset-backed securities, adding to the C$787 million in writedowns already announced by Canadian banks, Scotia Capital analyst Kevin Choquette said.”

“The Florida agency that manages about $50 billion of short-term investments for the state, school districts and local governments holds $2.2 billion of debt that was cut below investment grade. The data from Florida shows how far the effects of the bursting of the housing bubble are being felt as complex investment vehicles once marketed as high-yielding safe havens are now backed by collateral shunned by investors.”

“Florida isn’t the only government whose short-term investments have been affected by rising mortgage defaults in the U.S. and investors’ diminished appetite for the securities tied to them.”

“‘I think there are other communities that are going to follow, probably a lot of them,’ former U.S. Securities and Exchange Commission Chairman Arthur Levitt said today.”

From Reuters. “Mizuho Financial Group Inc, Japan’s second-largest bank, posted a 17 percent drop in its first-half profit and cut its full-year forecast on Wednesday, after the subprime-market turmoil sparked losses at its brokerage unit and increased credit costs.”

“The bank said it had a total of 800 billion yen ($7.2 billion) invested in products related to residential mortgage-backed securities (RMBS), with 106 billion yen of that exposed to the subprime-mortgage market.”

“‘These (subprime) products have all had their ratings downgraded and there is very little liquidity. The market just keeps going down,’ President Terunobu Maeda told a news conference. ‘In a sense, the market is crashing and you can’t accurately determine prices.’”

The Independent. “Larry Fink, whose fund management firm BlackRock helped create the market for mortgage-backed securities, echoed predictions that the crisis could get ‘a lot worse.’ He told attendees: ‘Many institutions don’t understand what the credit crunch is going to do to earnings and their balance sheet.’”

“The main credit rating agencies have admitted to MPs that they failed to spot the looming credit crunch and that investors had taken their positive ratings as a ‘green light’ to buy opaque securities. ‘In hindsight we would have rated them differently,’ said Ian Bell, head of European structured finance at Standard & Poor’s, referring to credit products whose values crashed after 9 August.”

“The agencies said they had earned fees from Northern Rock for rating its securities, but that these played no part in their failure to downgrade the mortgage bank between itsinterim results in July and the Bank of England’s emergency funding on 14 September.”

“‘Why was it none of you flagged up after July the danger facing Northern Rock?’ asked Michael Fallon, the committee’s senior Conservative member.”

“Mr Bell said: ‘August took everyone by surprise. We did not see a way in which the sub-prime crisis would ripple throughout the markets of the world to affect a bank like Northern Rock.’”

National Mortgage News. “According to the Mortgage Bankers Association, the mortgage lending industry has lost billions of dollars as a result of fraud and the sum is steadily rising. The FBI has estimated that fraud cost mortgage lenders as much as $4.2 billion in 2006 alone.”

“‘We do not need more federal laws to combat fraud. Instead, we need a more coordinated effort and more resources to investigate and prosecute,’ said Jonathan L. Kempner, president and CEO of the MBA. ‘In addition to being illegal and costly, we know that fraud has also contributed to the recent rise in delinquencies and foreclosures, and the industry and government must step up our anti-fraud efforts to help curtail these related problems.’”

“Losses to banks and investors from the subprime mortgage crisis could rise to $480 billion in coming years, analysts at UBS AG said in a research note published late on Tuesday.”

“The possible hit between $380 billion and $480 billion is based on a ‘reasonable’ loss rate assumption of 44 percent as home prices decline, the New York-based analysts, led by Laurie Goodman, said in the note. Some $85 billion of the losses may come from collateralized debt obligations, or CDOs, they said.”

“Determining what percentage of losses have been realized is impossible, however, the analysts said. ‘We do not get sucked into believing that recovery depends on loss recognition by all investors,’ they wrote. ‘Rather, we argue the real problem is that large sections of the MBS market are frozen, with little price discovery.’”

The Wall Street Journal. “The tumbling housing market is claiming a new class of victim: customers of insolvent home builders. And the situation is likely to worsen in the first half of next year, says Ivy Zelman, an independent housing analyst. ‘We’re in the first or second inning,’ Ms. Zelman says. ‘There are going to be a significant number of insolvent builders.’”

“As the housing market has slumped, builders have struggled with rising inventories, falling home prices and cancellation rates that have topped 40% in some markets. Land prices have also dropped, leaving builders owing more for some parcels than those properties are now worth.”

“Banks, meanwhile, are tightening their standards — not only for home buyers, but for the builders as well.”

“Jeff Benes and Maggie Byrne paid $269,000 for a four-bedroom Homes Inc. home in Antioch, Ill., in 2003. Now they are wondering what the company’s bankruptcy filing will mean for property values — not to mention who will plow the development’s unfinished streets this winter and when the promised clubhouse, pool and volleyball courts will be completed.”

“‘We’re all up in the air now not knowing what is going to happen,’ says Ms. Byrne.”

The Seattle PI. “Seattle is becoming a ’superstar’ market, where housing costs may never settle back into historical relationships to incomes, the National Association of Realtors, association Chief Economist Lawrence Yun declared on Tuesday.”

“It’s also possible that some are joining the ranks of international cities like London, Paris, San Francisco and New York, where costs are less tied to incomes, he said. ‘Now I’m beginning to think: Miami, Seattle, are they becoming superstar markets?’”

“Asked if there was a housing bubble, Yun said there was a lending bubble and some markets might have had a bubble in home prices, but national prices have proved ‘exceptionally resilient.’”

“Realtors’ officials continued to blame everyone but themselves for problems in the housing market, while saying it would recover quickly. Greedy lenders and investors put out bad loans, then overreacted when some turned out to be problematic, Yun said.”

“‘The word that usually follows after greed is fear,’ he said. ‘We went through a cycle of fear in 2007.’”

“The media, meanwhile, played up problems in the market, Yun said. ‘They have a natural bias of wanting to sensationalize all the news items.’ And, while many markets remained healthy, he said: ‘The local media, many are just very lazy. They just copy the national stories and put them in their local papers.’”

“At a news conference later…Association Public Affairs Director Lucien Salvant stepped in to keep newly installed Association President Richard Gaylord from answering a question about the faulty prediction record of Yun’s predecessor, David Lereah.”

“‘David Lereah doesn’t work for (the association) anymore,’ Salvant said. ‘His predictions were his predictions at the time.’”

“Pressed on Realtors’ possible responsibility for market problems at his own news conference, Yun noted that there are 1.36 million Realtors. ‘Certainly some are guilty,’ he said, adding that Realtors do have a responsibility to advise their clients against paying too much or getting in over their heads.”

“John Tuccillo, a former Realtors’ chief economist, was considerably harsher.”

“‘The system stinks because on the front end of the market are people who close the loans and walk away with no responsibility and pocket their checks,’ he told an audience of Realtors during a presentation, drawing a round of applause.”

“‘Why are you clapping?’ he asked. ‘I’m including you.’”

News 14 reports from North Carolina. “There is bad news in the real estate market in the Charlotte region. For years, the area seemed almost immune to the national housing slump. That immunity appears to be wearing off as fewer homes are selling and the ones that are selling are doing so for less money. ‘It does get frustrating after awhile. We’ve had consistent showings but not a lot of interests past that, but we’re waiting,’ said Greg Gelting.”

“He and his fiancée are trying to sell their townhome just outside of uptown Charlotte. With a wedding a half year away, they’re anxious to sell the home.”

“A recent survey by the Charlotte Regional Realtor Association shows a sharp decline in home sales; they are down 23 percent from this time last year. The potentially worse news is that average housing prices actually dropped.”

“Good news for Gelting, who is looking forward to being the buyer instead of seller. ‘As frustrating as that is, talking to our agent and looking at what’s out there, it’s going to be a good time to buy and that’s what we’re looking forward to.’”

The Sun News from South Carolina. “Indebted home builder Levitt and Sons and 37 of its subsidiaries have filed for bankruptcy, leaving residents of its unfinished Murrells Inlet project wondering whether they will ever live in the carefree, active retirement community builders promised.”

“‘We’re in a community that looks like a ghost town almost, as far as things not being finished,’ said Donna Jones, who lives in Seasons with her husband in a home that she bought in July.”

“Residents worry that plans to build 460 houses and a 27,000 square-foot clubhouse won’t materialize. Only 80 homes have been finished and another 100 or so are in various stages of construction, said resident Nancy Darr.”

“The shell of the clubhouse greets residents at the community’s entrance. ‘None of us would have bought here if it weren’t for the amenities center,’ said Darr.”

“Residents also have been told that security in the development would be scaled back and that their home warranties aren’t any good. On top of that, contractors and subcontractors have filed liens against Levitt and Sons and against individual homeowners.”

“It’s unclear who will pay off the liens or whether people whose homes are unfinished will get their down payments back. ‘We bought here because we had a dream and now it’s turned into a nightmare,’ said resident Ed Schumann.”

“It’s very frustrating, all the promises they made and then they do nothing,” said resident Jim McLaughlin.

The Miami Herald from Florida. “Levitt and Sons will abandon thousands of home lots if its lenders don’t provide additional financing, lawyers for the home builder said in the company’s first bankruptcy hearing Tuesday.”

“Levitt and Sons has more than 9,000 home lots in various stages of construction in Florida, Georgia, South Carolina and Tennessee. Its customers have been in limbo since September.”

“Philip M. Hudson III, a Miami lawyer who represents KeyBank, said the Cleveland lender was prepared to foreclose on the lots securing its loans if it decides foreclosing is cheaper than providing financing to Levitt and Sons. ‘We just need to make a business judgment which scenario is better,’ Hudson said.”

“Asked the about the hang-up on reaching agreements, Paul S. Singerman, Levitt and Sons’ Miami bankruptcy lawyer said he suspected lenders may be ‘overwhelmed by the mountain of distressed loans’ they have.”

“Before Levitt and Sons suspended operations in September, Singerman said cancellations exceeded sales by 145 percent. The builder has more than 23,000 creditors. One landscaping contractor went so far as to remove plants from a community in Georgia, the Atlanta-Journal Constitution reported.”

The Herald Tribune from Florida. “Although the housing market has slowed, Gov. Charlie Crist said there is ‘no way’ the state or Southwest Florida has slipped into a recession.”

“‘I feel great about the economy,’ Crist said as he left a political fundraiser.”

“Economic numbers in the region are not quite as positive. Taxable sales are declining, housing permits are down 70 percent, unemployment is on the rise and business bankruptcies have doubled in the last two years.”

The Ledger from Florida. “With the state government facing a $2 billion shortfall in next year’s budget, many analysts are pointing to the state’s slumping housing market as the primary reason for the economic decline and the drop-off in state tax collections.”

“‘There are some fundamentals that the policy makers don’t have a sizable handle on yet. There are a lot of ‘what-ifs.’ We’re wondering if there is a sea change and what does that portend?’ said Dominic Calabro, president of Florida TaxWatch. ‘We really don’t know why all these people aren’t moving here.’”

“Randall Holcombe, a Florida State University economics professor, said that the state’s boom times are to blame for the bad times. He said a drop in the economy was almost inevitable following the combination of a national real estate boom and the dramatic retail bump following hurricanes in 2004 and 2005.”

“‘What we should have done is been more responsible in previous years,’ he said.”

The Times Union from Florida. “Blame the housing market, says Amy Baker, coordinator of the state Office of Economic & Demographic Research.”

“‘The end of the housing boom is the catalyst of everything,’ Baker said. ‘We went through a five-year period of double-digit growth in terms of values and appreciation and construction starts, and when it evaporated and returned to normal, it took a lot of steam out of the economy. And now we’re actually a little below normal.’”

The Palm Beach Post from Florida. “A deluge of factors working against cash-strapped homeowners in Palm Beach County and the Treasure Coast came together last month. Faced with adjustable mortgage payments resetting at double and sometimes triple the original percentage rate, local homeowners threw away their keys three times faster in October than they did in the same month last year, studies released Tuesday show.”

“In Palm Beach County, 1,620 homeowners received mortgage default notices, according to the clerk’s office. And in St. Lucie County, where the sound of hammers all day long signified one of the hottest real estate markets in the nation, until the bubble burst, 610 homeowners could not afford their mortgage payments. That compared with 193 foreclosures a year ago.”

From Local 10.com in Florida. “It’s definitely a buyer’s market in today’s real estate rollercoaster. The number of available foreclosure properties is soaring in South Florida, Local 10’s Julie Summers reported.”

“There are more than double the amounts of foreclosed properties than this time last year.”

“Bargains are out there now. But the best may be yet to come. ‘Nobody’s giving away real estate yet in this market,’ said David Dabby, a South Florida real estate analyst.”

USA Today on Florida. “After a red-hot market during the housing boom, Jacksonville now faces tougher times. Newly built houses and condos that aren’t on the waterfront…have tended to fall in price this year, brokers say.”

“The market has evolved considerably. At its peak, ‘People were fighting over properties before the ‘for sale’ sign got into the yard,’ says Janie Boyd, a broker associate. ‘Today, a home may be on the market 90 days to six months or more.’”

“Canadian snowbirds are rethinking Florida. ‘I haven’t met one person this year that wants to stay in Florida,’ said Boynton Beach resident Dory Kilburn, who heads the Boynton Intracoastal Group, a Canadian advocacy organization. ‘They all say they are getting out.’”

“In the last few months, Gerry Brissenden said, the majority of people he has talked to say they are planning to leave Florida. It’s not a small number. ‘We have held meetings throughout Ontario. I have had perhaps 5,000 people at meetings,’ he said. ‘Of those coming to Florida, about 70 percent are saying, ‘We are going to sell our place.’”

“The housing recovery will be very uneven, with some markets bouncing back more quickly, predicted National Association of Realtors economist Lawrence Yun.”

“Florida may see a particularly spotty rebound after having been turned into ‘ground zero for the housing market slump,’ he said.”

“Sarasota has seen prices drop about 10 percent, he noted. ‘It was one of the strongest markets during the boom,’ so it is one of the biggest losers now, and will take some time to correct, he said.” “‘People who recently bought are feeling pain,’ he said.”

“Housing will start to recover next year, if only because people will keep getting married, having babies, changing jobs and retiring, forcing them to buy or sell homes, Yun said. ‘The pent-up demand is there,’ he said.”

“At the moment, the housing market is stalled because those would-be buyers are holding out for lower prices, while sellers are waiting for prices to rebound. ‘This is a battle between buyers and sellers,’ Yun noted.”

“More than 30,000 members and guests of the NAR streamed into Las Vegas Monday to launch their annual Convention & Expo.”

“Among this week’s participants are about two dozen members of the Realtors Association of the Palm Beaches. Eric Sain, president-elect of RAPB, said members of his group are concerned primarily about lowering property taxes and ‘making houses affordable.’”

“He noted that nationally, the average home costs roughly $250,000, compared with $350,000 in his area. That’s down from a peak of about $430,000, but still too high for many potential buyers, he said.”

“Chuck Bonfiglio, president-elect of Florida Association of Realtors, said that while lower prices would help more people buy homes, some sellers are still reluctant to cut prices because of ‘culture shock.’”

“In Florida, ‘we were used to seeing constant appreciation,’ he said. ‘For five years, it was so great,’ he said, referring to 2001-2005. ‘But it can’t just go up like that forever.’”

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