The Housing Bubble

The Bay Area News Group reports from California. “In southeast Antioch, where a swarm of East Bay foreclosures makes its thickest nest, the children on Catanzaro Way live among a grove of real estate signs that turn like autumn leaves, from ‘For Sale’ to ‘Reduced Price’ to bright ‘Auction’ yellow. Ten vacant houses run along a single block, where two-story homes sold for as much as half a million dollars in 2005, but no one here wants to guess what they would fetch now.”

“Local agents say home values in Antioch have slipped a solid 30 percent from their highs. Now, 1,200 homes in the city are listed for sale. Banks own a third of them. Last month, fewer than 40 sold.”

“‘I’m kind of embarrassed to have my friends come over,’ said 15-year-old Angelica Berrera. ‘We used to come outside and have a good time. It used to be nice. Now it’s …’”

“‘Empty,’ said her sister, Natalie.”

“From East Oakland to North Richmond to Discovery Bay, several newer developments, along with urban enclaves that got a jolt of renewal during the housing boom, now bow under the weight of abandoned and foreclosed homes. Most, but not all, of these clusters crop up in lower-income areas, where studies have shown the subprime loan drive at its most rampant.”

“Among recent signs of trouble in the East Bay: Building officials are scurrying to board up empty houses to keep squatters and drug dealers at bay. In some areas, thieves rip through the walls of foreclosed homes for wiring and yank out copper plumbing.”

“Roofing and renovation projects are stalling at condominium complexes across the East Bay, as assessments go unpaid by owners who have walked away or are headed for foreclosure.”

“Some residents on the edge of losing their homes are stripping them inside and out, swiping light fixtures, gates, dishwashers, garbage disposals and air-conditioner units, and leaving behind piles of garbage, old cars and debris.”

“‘It’s a last act of defiance against the bank,’ said Jim Tucker, a code enforcement officer who patrols a large swath of southeast Antioch.”

“‘Some banks have responded by cleaning up properties. But most “don’t want to lose any more money than they already have,’ said Tucker, who tries to convince them that letting a house go south will cost more.”

“In Antioch, officials no longer send gentle courtesy notices before citations and fines, said Denise Skaggs, head of code enforcement. To owners about to lose their homes, it’s not much of a threat, she said.”

“‘I’m losing leverage with people. They say, ‘Go ahead and put a lien on my property. I’m losing it anyway,’ she said. ‘Threats have increased. This last year you’ve seen the tightness, that edge. People are real quick to threaten us. We don’t knock on doors anymore.’”

The Record Searchlight. “My Nov. 5 ‘Buzz’ item ‘Betting the Market’ attempted to tackle the question of how many foreclosures are homes once owned by investors who missed the market. I wrote at the time ‘unless you count each deed at the county recorder’s office, that is impossible to know.’”

“Maybe not. Realtor Chris Young e-mailed me to say you can receive weekly notices of default. Many of Young’s colleague receive said notices, he said.”

“Young sent me 34 pages of pre-foreclosures, dating from late August through late October. When the home address and the mailing address don’t match, that’s probably means it’s an investment property. Of the 126 pre-foreclosures I got, 39, or 31 percent, of the addresses didn’t match up.”

“Remember, for a nine-month stretch in 2005, the Redding area topped the nation in percentage of homes sold to investors — at that time nearly one out of every four home purchase loans was taken out by speculators.”

The Merced Sun Star. “Merced’s new home sales rose from 39 in August to 69 in September, though the figures still pale in comparison to the 106 homes sold at this time last year. A report released this week by the California Building Industry Association shows some slight gains in Merced in September.”

“‘The market seems to be kind of holding,’ said Mike Salvadori of Century 21 Salvadori Realty. ‘You never know from one month. It’s not a sign.’”

“Salvadori’s real estate business is listing about 200 homes, nearly double what it usually offers, and Salvadori said the overall market is worse than when Castle Air Force Base closed in 1995. ‘I have not seen the market quite as depressed as it is,’ he noted.”

“Merced’s real estate frenzy peaked in August 2005 when 650 new and used homes were sold. The number fell to 369 in August 2006, and by October 2007, agents sold only 71 homes, according to DataQuick.”

“The median price for new homes in Merced hovered at $323,990 in August and September. That’s nearly a 17 percent decrease from last year, when the prices were at $388,990. About 7 percent of families with a median income, $46,800, can support the mortgage on a new home, up from the 4 percent that could afford homes in the second quarter.”

“Guy Maxwell, owner of Maxwell Homes, said he had anticipated that the booming building market would cycle through to a bust based on his past experience in the area. As a precaution, he stopped construction on any new subdivisions in 2005.”

“‘I think builders are, in part, extremely optimistic,’ he said, explaining the market’s tumble. ‘They tend to be the people who think it’s never going to end. The money’s good, it’s just fun and you get wrapped up in it.’”

From Eyeoutforyou.com. “The number of vacant houses across Bakersfield has shot up in the last year, and local leaders will look at whether the city can do something about it.”

“Vacant houses became a health issue this summer in Kern County, when the mosquito abatement district worried abandoned swimming pools could be breeding areas for mosquitoes carrying West Nile Virus. The Mosquito District had special aerial photos taken, and identified some 1,200 ’suspect’ pools.”

“Committee member Jacquie Sullivan says not only are neglected houses an eyesore, they can actully become a hazard. ‘There’s also a safety issue problem when a house is abandoned, they can certainly become a target — and that’s just not good for neighborhoods.’”

“Sullivan says vacant houses are clearly an issue with the current foreclosure situation — and somebody needs to take responsiblity for the problems from neglected properties. ‘We need to do something about it, and it really does take down the morale and the value of neighborhoods,’ Sullivan said.”

The Union Tribune. “Gov. Arnold Schwarzenegger may have swatted a home run last week – or at least a double or triple – when he got four mortgage lenders to agree to ease the way for subprime borrowers to keep their homes.”

“Unfortunately, this may only be the bottom half of the first inning of a game in which we’ve already fallen way behind.”

“There’s the problem that the mortgage lenders who issued the loans and signed the agreement with Schwarzenegger are not necessarily the people who now hold the loans. Most mortgages have been repackaged and sold to investors, who could reside as far away as Zurich, Tokyo or Beijing. Will those investors agree to follow Schwarzenegger’s recommendations? That’s an open question.”

“Second, the plan will not help out anyone who’s already fallen behind on payments. During the past six months alone, 126,514 notices of default were issued in California, including 10,056 in San Diego.”

“‘If you’re current on your loan payments, his plan will help keep you from getting into trouble,’ said T.J. Knowles, a broker with CalMortgage. ‘But what about the people who are already upside down in this market? The people at the lower end of the totem pole? The system is protecting itself, not the individual. The lending institutions will get out of this fine, but some individuals are going to be toast.’”

“Third, the plan does nothing to bail out real estate speculators. Don’t get me wrong. I’m not saying those speculators should be bailed out. But when the speculators do go into default, their foreclosed properties will continue to be a drag on the market, even if Schwarzenegger’s plan helps out every other borrower. Which it won’t.”

“And then there’s the question of whether all homeowners will want to keep making their mortgage payments in the current environment. On his Web site, local real estate agent Bob Schwartz estimates that condominiums in downtown San Diego and Mission Valley have lost about 25 percent of their value since 2005.”

“The condominiums that Schwartz has evaluated in Fashion Valley and Pacific Beach have declined by an average of nearly $100,000.”

“‘What happens when somebody wakes up and finds that the place they bought in 2005 is down a hundred grand?’ Schwartz said. ‘If they didn’t put down a down-payment and if they can find a rental that’s cheaper than their mortgage payments, I don’t know what their incentive would be to stay there.’”

“Schwartz said he thinks the Schwarzenegger program will encourage some people to keep paying on their homes, ‘but it’ll just slow down the decline (on the real estate market). It’s not going to turn it around. He’s just prolonging the inevitable.’”

The Great Falls Tribune reports from Montana. “Growth may not be noticeable from inside the city, but get to the edges of Great Falls, and it’s clear to see that the city is slowly creeping outward. Local real estate agent and developer Kyle Haynie is used to hearing that Great Falls isn’t growing, but he thinks that common assertion is easy to disprove. ‘Look at all the new homes,’ he said.”

“There are a lot more spec homes being built now, Haynie said. Eight to 10 years ago, there were usually about two or three going up at a time. Now, many developers will work on three or four at the same time. ‘There’s a lot of spec out there,’ Haynie said. ‘They’re popping. They’re selling. They’re coming out of the ground.’”

“While developers are seeing high demand for the new houses they’re building, no one seems to be able to pin the growth on one particular cause. ‘We must be getting some jobs here somewhere to build all these houses we’ve built,’ said Tom Skovron, of Tom Skovron Builders LLC.”

“More than 150 lots in Foothills Ranch Estate south of Highway 89, have already been approved. Plans call for roughly 900 acres to be developed. That subdivision has been very popular, said Todd Martin, who owns the Foothills project along with Keith Schermele and Nate Hoines.”

“Even before phase III was approved, the developers had deposits on 14 of the lots, Martin said. One spec houses in that development has a price tag of $670,000.”

“‘It’s well above what we anticipated,’ he said. ‘It’s just absolutely phenomenal to be honest with you.’”

From The Bee in Oregon. “As of early October, two Woodstock townhouse-style condos, on the market for many months, remained unsold — having been priced too high, in the view of one local real estate agent. Several blocks away, also in Woodstock, the for-sale sign in front of a single-family bungalow, listed for months, was recently revised to read, ‘Price reduced.’”

“For now, the days of multiple bids by potential buyers competing for houses in Portland are over, says Broker Ron Hackenberg. ‘It’s not a seller’s market anywhere, anymore,’ he adds.”

“Sales are down from last year, Hackenberg says; and, in some neighborhoods, home prices have fallen somewhat. ‘The key is pricing properly. It used to be that sellers would calculate their asking price by looking at sales prices for comparable houses, and then adding 10 percent. However, these days, if sellers try to squeeze every last dollar out of their homes, they might be in for a surprise,’ Hackenberg cautions. ‘I have a listing that has been sitting on the market for a long time. It’s overpriced.’”

“He adds. ‘In places like Hillsboro and Estacada, the market is just dead.’”

“Undoubtedly, on the national level, the housing market has taken a dive. But, according to a report cited by Hackenberg, as of last July Portland’s home prices year-over-year were actually up by 4.5 percent. ‘We have one of the best markets in the country,’ Hackenberg says. ‘Everything else is going south.’”

The Register Guard from Oregon. “Pending and completed home sales in Lane County in October lagged far behind levels for the same month a year ago. But the decline in year-to-year sales wasn’t as steep as it was in September, according to figures released by the Regional MLS in Portland.”

“The real plunge in sales happened in September, when the number of sale agreements dropped by 35 percent from the year before, and closed sales fell by 28 percent. Pending sales were off 27 percent in October compared with a year ago, and completed sales were down 22 percent below 2006 levels.”

“‘All in all, there’s still a down trend, but it’s less than it was in September, and the amount of unsold inventory has improved,’ said John Hoops, outgoing president of the Eugene Association of Realtors. ‘We should all be pretty happy with that.’”

“The real estate markets in places such as California and Arizona, where subprime mortgages and vastly overpriced purchases resulted in a housing crash, have affected the local housing market, Hoops said.”

“‘People in those areas are not selling their homes as quickly as they were a year or two ago, and they’re not getting the elevated prices, so they have less equity to bring up here to make purchases and they have to wait until they sell their homes there,’ he said.”

“In some cases, out-of-state newcomers are renting houses while they wait to sell their homes in more depressed markets, Hoops said.”

The Oregonian. “The U.S. Forest Service is running short of money to draw up new timber sales. The shortfall is related to the national housing slowdown, which has depressed lumber prices about as low as they have ever been, federal and industry officials say.”

“‘We didn’t know this was going to happen,’ said Peggy Kain of the Forest Service’s regional office in Portland. ‘The market hasn’t been this bad in a very long time.’”

“Lumber prices have fallen by nearly half since their last peak in 2004, said Kevin Binam of the Western Wood Products Association. Many Western sawmills are curtailing operations. ‘It’s probably as bad as it’s ever been — maybe worse,’ Binam said.”

“A few Forest Service timber sales have gone without bids, especially sales that required expensive helicopter logging, made even more costly now by higher fuel prices. The agency hopes to revise those sales and put them up for bid again, Kain said.”

“Plummeting rates of new home construction, which consumes about 40 percent of Northwest lumber, depressed demand and prices. It’s unlikely to get much better before 2009, Binam said.

The Bellingham Herald from Washington. “According to two new reports, home values in Whatcom County were 4.3 percent higher than the same time last year. Less than 1 percent of homes purchased in the past year now have negative equity.”

“Gragg Miller of Coldwell Banker Miller-Arnason said he is seeing year-over-year numbers similar to the report. For him, the important factor is what the numbers say for people who bought a home more than a year ago.”

“‘Most homeowners are in a pretty good position if they bought over two years ago. The ones that purchased less than two years ago are still OK if they don’t have to sell,’ Miller said.”

The Columbian from Washington. “Lots of property owners’ holidays got a little gloomier last week as Clark County property assessments arrived in the mailbox. ‘They’re going to force us right out,’ said Patrick Morrison of Washougal.”

“Morrison’s 1,992-square-foot home on Mount Norway jumped in value from $400,090 to $529,700 in one year, the county assessor’s office found. The retired Georgia Pacific worker, who said he lives with his wife on about $34,500 annually, is dreading the tax bill that will arrive early next year.”

“Lots of owners are groaning. Because this year’s housing crash won’t go on government books until next year, the average assessment rose 12 percent, according to the county.”

“Assessment Q & A. I keep hearing about a housing slump. Is that something going on across the country but not in Clark County?”

“No. Clark County’s once-sizzling home market has cooled off substantially. The median price for houses sold in Clark County last month was 7.5 percent lower than what homes sold for in October 2006.”

“Can I appeal my property assessment? The Clark County Board of Equalization received slightly more than 1,400 petitions for the values set in 2006. According to the board’s Web site, more than 50 percent of the property values appealed to the board have resulted in some type of reduction.”

The News Tribune from Washington. “Pierce County’s rate of home sales in the third quarter fell far below the state’s and farther than its Puget Sound-area neighbors, according to the newest numbers from WSU. The figures exclude new construction and condo sales.”

“Sales dropped 32 percent compared to the same quarter in 2006. Statewide sales declined by 11 percent.”

“Pierce County prices, said Glenn Crellin, director of the center, could easily slip into negative territory in the fourth quarter, given the number of homes for sale. ‘That means buyers have a lot more market power. If they’re going to buy, they are going to negotiate aggressively,’ he said.”

The Seattle PI from Washington. “Jamie Goodwin knew it would be a tough time to sell her Central Area townhouse. ‘I’m a real estate attorney, and I knew that the market was soft,’ she said. That’s why she set her asking price at what another townhouse in her development fetched a year earlier.”

“Even so, agents weren’t even looking at the listing online, said agent Erin Goodwin, Jamie’s sister. ‘We listed in October, and I think maybe there’s 23 clicks.’”

“Sitting in a townhouse he was trying to sell last month, Real Estate agent Alex Eckardt said he’d seen a fair amount of traffic since listing the home about a month earlier, but no offers. ‘Six months ago this would have sold in the first week,’ he said.”

“More and more, homes of all types in Seattle are chasing a buyer pool that has become smaller and more cautious over the past year. But real estate agents and sales statistics show that the slowdown in townhouse sales has brought price cuts out of proportion with the rest of the market.”

“‘What we are seeing is these huge price reductions, where a guy’s asking $600,000 one week, then $550,000 the next week and $500,000 the week after that,’ said agent Ryan Thompson.”

“Greg Bartell, (an) agent who specializes in townhouses, says he has seen particular slowing since August. ‘I think the most apparent thing is prices coming down,’ he said. ‘I’ve seen some come down $90,000 off the list” price.’”

“The sales totals have held up better than those for all single-family homes, but have come at the same time as builders have put many new homes onto the market. ‘There’s just so many,’ said Susanne Stauffer, who is Erin Goodwin’s partner. ‘The market’s kind of saturated with them.’”

“The number of lots created through the permit process primarily used for townhouses increased notably between 2004 and 2005, then more than doubled between 2005 and 2006, increasing such lots from 50 percent of all subdivisions to 66 percent.”

“Builders rushed into the swelling townhouse market during the past few years, paying high land prices based on expectations of continued appreciation during construction, Bartell said. Smaller builders responsible for many of Seattle’s new townhouse developments had unrealistic expectations, Thompson said.”

“‘We got caught up in this frenzy,’ he said. ‘Then, when the market began to settle out, their ability to carry these properties was limited due to limited financial resources, so they began dropping prices very quickly.’”

“And many of the new townhouses are nearly identical, making it hard for them to stand out when they hit the market, Thompson said. ‘There was just nothing very special about (them) and the prices were super high. Those prices were first to stagnate.’”

The State Journal reports from Kentucky. “Pat Layton isn’t ready to launch a career in blues singing yet. But she’s beginning to feel she could supply B.B. King with some new and true lyrics…if the real estate market doesn’t improve in 2008. A prominent real estate agent in Frankfort, Layton has been selling houses for 16 years, ‘and this has been my worst year, by far,’ she says. ‘I understand it was worse back when interest rates went to 18 to 20 percent. But this is as slow as I’ve ever seen it.’”

“Jack McDonald, a former builder and real estate agent who now produces a meticulous real estate market report for Franklin County, says the local market is down a little this year.”

“‘Like a lot of other places, we have had a great real estate market the last several years,’ McDonald says. ‘Being down a little bit this year shouldn’t be surprising. Practically everybody who thought they might want to buy a house has already bought one. At some point in time, it has to be a natural reaction.’”

“Charlie Jones, Franklin County master commissioner and an attorney for developers, says all sectors of the real estate market “are having a bit of a downturn. Master commissioner sales ‘mostly related to foreclosures’ have increased in November and December this year, Jones says.”

“He says a lot of those sales, ‘I think, are due to change in the mortgage situation,’ with interest rates being bumped up. ‘I’m sure some people bought houses they truly couldn’t afford.’”

The Columbus Dispatch from Ohio. “The ‘for lease’ signs are going up at central Ohio condominium complexes, to the chagrin of owners who paid full price to buy there. Developers who have been trying to sell condos in a weak real-estate market now are offering to lease them with the option to purchase, while slashing prices.”

“MAS Cos. began offering the unsold condos for lease with the option to purchase. About a week ago, the company cut prices again, taking up to $70,000 off the original asking price of about $200,000. That left condo owner Andy Ballog feeling as though someone shut a trap door on him. He fears that the price cuts are devaluing his property. ‘We’re kind of stuck now,’ he said.”

“‘Who would buy now? In two years, they only sold two and now they’re leasing? Who in their right mind would buy in a place where they’re leasing?’ he said.”

The News Democrat from Illinois. “The latest local housing sales figures are lower than the year before, but analysts believe the metro-east market is still holding its own. ‘All real estate is local, and national trends do not always reflect local market conditions,’ Realtor Association of Southwestern Illinois President Tari Jacobs said.”

“Gateway Association of Realtors Executive Director Al Suguitan said the home prices are adjusting according to the market. ‘They’re just going to have to consider adjusting prices on homes,’ Suguitan said. ‘Many builders are clearing or reducing inventory and giving themselves some breathing room, and hopefully getting some buyers into brand new houses.’”

The Rockford Register Star from Illinois. “Thanks to the sudden slowdown in the Rock River Valley housing market in 2007, at least five area home builders are offering a variety of incentives to sell either finished properties or to generate housing starts for 2008.”

“‘You’ll hear people say at open houses, ‘This is the worst time to buy,’ said Dianna Dianovsky of Howlett Homes. Howlett is offering free upgrades or reduced prices at selected houses in four subdivisions. ‘This is actually the best time in 20 years. The prices you can find right now are unbelievable.’”

“‘You keep reading about a housing slump. Well, we are in a slump here,’ Rachel Nicolosi of Buckley Homes said. ‘A big thing we are hearing is, people are worried about having two mortgage payments if they can’t sell their house.’”

The Daily Herald from Illinois. “Amid signs of booming development, Lake County is quickly catching up to its neighbors on another, darker front, foreclosures. Lake County saw a 36 percent increase from 2005 to 2006, according to the Chicago-based Woodstock Institute.”

“Rapid growth in population, a building frenzy and high taxes have defined this area as well as many others around Chicago. These factors, along with bad sub-prime loans, unemployment and others have bombarded the suburban region with some of the highest foreclosure numbers in recent years.”

“Hainesville Mayor Ted Mueller shakes his head when he hears that roughly 100 of his residents went into foreclosure proceedings last year. ‘Do you really want to know what I think?’ he said. ‘I blame it on the developers because they were quick to build and sell. And I blame it on the banks because they were quick to give loans to people with credit ratings who shouldn’t have been able to borrow.’”

“Mueller said he bought his first home with 20 percent down many years ago. ‘And I wouldn’t even think of walking away from that,’ he said.”

“Today, his two grandchildren each bought homes with no money down. While he describes them as responsible adults, the no-money-down policy for others could be worrisome. ‘People are entitled to affordable housing. But today, it’s gone beyond that and many people are getting unaffordable housing,’ Mueller said.”

The Detroit News from Michigan. “Just a few years ago, agents driving the hard sell of urban condominiums to suburban dwellers might have courted 10 lookers for each buyer. Nowadays, they’re parading 30 or 40 potential customers through units before getting an offer, if they’re lucky enough to get one at all.”

“‘They’re definitely getting harder to sell,’ said Andy Gutman, chief financial officer of the Farbman Group, one of Metro Detroit’s largest developers of residential condominiums. ‘We’re having to get more creative. We’re having to prove why someone would want to live in a Detroit condo.’”

“Detroit’s condominium-building blitz, driven largely by a combination of warehouse loft conversions, apartment building renovations and modern new construction, began in 1999, when 34 building permits for attached condos were issued in the city. In 2003, 223 such permits were issued, the most of any year on record with the Southeast Michigan Council of Governments.”

“Through October this year, 105 condo permits have been issued in Detroit, an increase from the 46 issued in all of 2006, but below the boom years of 2003-05.”

The Detroit Free Press. “From the well-heeled streets of the Pointes to the desolate neighborhoods of Detroit, thousands of people are facing foreclosure of their properties because they haven’t paid taxes for at least two years.”

“In 121 printed pages of the Sunday Free Press, Wayne County Treasurer Raymond Wojtowicz listed more than 18,000 properties across Wayne County facing foreclosure. Notices sent to homeowners since March have whittled the list from 161,000 properties that had been delinquent on tax payment.”

“In Oakland County, 8,300 properties are facing foreclosure because of delinquent taxes. ‘That’s the largest number of tax foreclosures we’ve had,’ Oakland County Treasurer Patrick Dohany said.”

The Leelanau Enterprise from Michigan. “Tony Brakel of Brakel Construction in Cedar says he’s like many homebuilding contractors in Leelanau County – he’s diversifying and working harder just to stay in business.”

“New home starts in Leelanau County are down more than 32 percent from this time last year. ‘I hadn’t taken a bathroom remodeling job in 10 years because I was too busy building houses,’ Brakel said. ‘But things have slowed down so much that I’m happy to hear from customers who have smaller projects for me to do.’”

The Herald Argus from Wisconsin. “Homebuilding has been hard hit, but it hasn’t come to a complete halt. Just about everything in the housing market that could go wrong has gone wrong since the nation’s 2001-05 boom busted.”

“‘There’s been a lot of pressure to let staff go and reduce overhead, or lower (profit) margins, a very difficult decision,’ said Bruce A. Johnson, president of the Milwaukee area’s Metropolitan Builders Association. ‘Builder profit margins are already really low.’”

“Meanwhile, ‘If you want extra attention, now’s the time,’ said Matt Moroney, the association’s executive director.”

The Pioneer Press from Minnesota. “The Twin Cities are now well into the nation’s housing bust, with foreclosures numbering far above last year’s recent record. At least 10,521 homes across the Twin Cities have been auctioned off in sheriff’s foreclosure sales and are on their way back to the bank as of the end of October, according to a Pioneer Press count of sheriff’s records.”

“Statewide, an estimated 20,000 Minnesotans may lose their homes this year alone.”

“Housing pros are watching the suburbs, concerned a second round of resets and payment shock will hit between 2008 and 2012, including ‘Alt A’ adjustable-rate mortgages made to people whose credit was just south of great. Many Alt A loans were ARMS with optional payments and are due for major resets after five years.”

“‘We’re actively working to see when and where resets are going to be hitting,’ said Richard Todd, a VP working on the issue at the Federal Reserve Bank of Minneapolis. ‘It’s pretty darn likely you’ll find those Alt A resets more geographically spread,’ said Prentiss Cox, a consumer protection law.”

“In the Jordan area of North Minneapolis, banks are repossessing homes at a rate of about 200 per half-square mile. About half the foreclosures in Hennepin County are investor-owned, according to Carolyn Olson, president of the Greater Metropolitan Housing Corp. That number rises as high as 70 percent in pockets of North Minneapolis, she said.”

“‘A lot of people looked at late-night TV, thought they could be an investor and bought,’ said Olson.”

“A developer who once hoped to build luxury condominiums along the Mississippi River in Hastings has canceled any plans for the downtown waterfront.”

“‘The condo market fell apart, and the whole plan kind of collapsed on its own,’ Hastings Mayor Paul Hicks said. ‘They were kind of high-priced condos … but it would not have been easy to develop the area there.’”

“Not far from downtown, a condo project behind the Schoolhouse Square center at East 10th and Vermillion streets also has failed to find legs. Plans once called for 57 condos, but the concept was retooled into a proposed senior-housing cooperative. That project, too, is on hold.”

The St Cloud Times from Minnesota. “Single-family home sales dropped 16 percent in the St. Cloud area from the third quarter of 2006 to the third quarter of this year, according to the most recent data from the St. Cloud Area Association of Realtors.”

“To Paul Elwell, executive of the association, the news is not as bad as it seems. The difference between the years is about 100 homes, he said, and that’s not surprising given the current real estate market.”

“‘The reality is that we have increased inventory. There’s no doubt about it,’ he said.”

“Financial institutions tightened lending standards in the credit crunch that hit in August. A few years ago a home buyer didn’t need much of a down payment or other qualifications to buy a home, but now a person must have 10, 15 or even 20 percent for a down payment, he said. On a $200,000 home, that’s a lot of money. ‘Who’s got $40,000?’ Elwell said.”

“‘Once buyers adjust to the more realistic qualifications for buying a property, the market will continue on. This is not the first time this has happened,’ he said.”

What do you see in your local housing market thsi weekend? Lower prices? “What is striking about the mansions and tree-lined roads of this exclusive suburb of Detroit is not the elegance and wealth — it’s the real estate signs. Almost 700 homes are currently on the market in the five Grosse Pointe communities, according to brokers, twice as many as in the same time in 2005.”

“And since June, prices for the most expensive houses have dropped by around $100,000 a month.”

More foreclosures? “The Mortgage Bankers Association estimates that 1.35 million homes will enter the foreclosure process this year and another 1.44 million in 2008, up from 705,000 in 2005.”

“The projected supply of foreclosed homes is equal to about 45% of existing home sales and could add four months to the supply of existing homes, says Dale Westhoff, a senior managing director at Bear Stearns. This is a ‘fundamental shift’ in the housing supply, says Mr. Westhoff, who believes that home prices will drop further as lenders ‘mark to market’ repossessed homes.”

“Foreclosed homes typically sell at a discount of 20% to 25% compared to the sale of an owner-occupied home, analysts say. Lenders are eager to unload the properties, and the homes tend to be in poorer condition.”

“‘People didn’t leave the house happily,’ says Jason Bosch, a broker with Home Center Realty in Norco, Calif. ‘There are often signs of that. There’s used, dirty carpet. The grass is dead.’ Mr. Bosch says he now has about 120 bank-owned properties for sale or in escrow compared with none a year ago.”

“Real-estate agents, who look at prices for comparable homes, or comps, say the sale of bank-owned properties can have a big impact. ‘One month the comps are showing one price and then a bank comes in and sells a property for $30,000 less,’ says Randal Gibson, a real-estate agent in Henderson, Nev. ‘All of the sudden, that’s the new comp.’”

“Foreclosures in St. Tammany Parish surged nearly 700 percent in the third quarter this year compared to the year-ago period as homeowners struggle to make exorbitant mortgage payments caused by a post Hurricane Katrina housing frenzy.”

“‘A lot of people after Hurricane Katrina had to buy when prices were extraordinary high and extremely inflated,’ said Susan Ameen, a realtor in Mandeville. ‘They needed housing and could barely afford the house note. Now the littlest thing could set them back. That’s pretty frightening.’”

Or corporate news? “It’s a far cry from late October, when Countrywide CEO Angelo Mozilo said he expected the fourth quarter to be profitable - comments that drove the stock up to $17.11 the next day. The mortgage giant’s stock is now trading at nearly half the $18 conversion price for the $2 billion of preferred stock that Bank of America bought back in August.”

“Countrywide is facing mounting foreclosures and loan delinquencies from borrowers who were hoping to refinance before their low-interest teaser rates soared. The company has said that nearly 24 percent of the $118 billion in its subprime servicing portfolio is in some stage of delinquency. That equals about $27 billion.”

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