December 9, 2007

Still Coming Down From The Boom

The Rocky Mountain News from Colorado. “Home prices and sales dropped in November in the Denver area, with some geographic pockets still getting ravaged by foreclosures. The data show there are 27,127 unsold homes on the market. But that’s a misleading number, said Maurice Giroux, the 2008 president of Metro Brokers, because it includes so many homes that are overpriced that they will not find a buyer in today’s market.”

“For example, he recently was showing a potential buyer condos in Aurora priced between $75,000 and $85,000, and came across similar ones that were priced between $115,000 and $125,000.”

“In Castle Rock, he showed a client a house priced at $750,000, which was competing against similar houses priced at $450,000, he said. ‘These homes are included in the statistics, but they’re not really for sale,’ Giroux said. ‘They’re not trying to get what they are worth but what they paid for them.’”

The Colorado Springs Independent. “The second-floor conference room where many El Paso County residents meet economic ruin is austere. About a dozen people wait in the room on this Wednesday morning, as the weekly sale of the county’s foreclosed homes is about to begin.”

“A man named Rodney, sitting at the table, offers $97,235 for a house in eastern Colorado Springs. A woman counters at $98,000, and a battle ensues in $1,000 increments. She ‘buys’ the home for $108,000; assuming the current occupant, who paid $159,000 for the house in 2005, does not find a way to catch up on payments during a required 75-day ‘redemption’ period, it will be hers.”

“Fifty-three other homes remain on this week’s list, but no one expresses interest in any of them. With the room fallen silent, Maria Bennett of the trustee’s office announces the week’s sale completed. Two homes sold to outside bidders, and the rest reverted back to the hands of lenders who’d rather not have them.”

“Barney Alvarado, a stockbroker turned real estate investor, gestures at the week’s list and calls it ‘heart-wrenching’ to think about. ‘And next week, there’s another list just like this,’ he says.”

The Arizona Republic. “Propelled partly by home-loan woes, Arizona bankruptcy filings, primarily involving consumers, have jumped 61 percent so far in 2007 and are on pace to surpass 10,000 applications for the year. ‘Mortgage problems are motivating a lot of it,’ said John Joseph Volin, a bankruptcy attorney in Tempe.”

“President Bush on Thursday announced a deal with lenders that will freeze interest rates. Valley resident Carrie Degnan, who said Thursday that the rate freeze would do nothing to help her. She and her husband bought a house in Queen Creek in October 2005 for $350,000.”

“It now appraises for much less, and her monthly payment has jumped from $2,700 to $3,600. Degnan said they had planned to refinance before their teaser interest rate increased but weren’t able to once the market conditions soured.”

“‘This solution isn’t a help for us,’ she said.”

“‘These people are upside down. There’s not a lot you can do for them,’ said Patricia Garcia Duarte, executive director of Neighborhood Housing Services of Phoenix. We’ve always preached (the importance of) 30-year fixed mortgages, and we don’t believe in 100 percent financing. It’s time to get back to the basics.’”

The Tucson Citizen. “Arizona is likely in a recession, a top University of Arizona economist said Friday. Marshall J. Vest, director of the UA Economic and Business Research Center, said…that three major shocks to the economy - the housing free fall, credit market turmoil and oil approaching $100 a barrel - mean it will remain weak at least through 2008.”

“‘Things got a little crazy here during the housing bubble. Times were good, we had a lot of fun while it lasted, and now we’re in the hangover stage,’ he said.”

“Arizona, Michigan, California, Florida and Nevada either are in recession or are on the brink of recession, Vest said. While not enough data are in to prove Arizona’s recession, Vest said, ‘The trends in the data are truly ominous, and it feels like the economy is contracting.’”

“Housing permits are down, inventory is up, foreclosures are up, and prices are falling, he said. ‘You shouldn’t be surprised if prices decline by as much as 20 percent,’ he said, but added that many homeowners saw their prices double from 2001 to 2006.”

The University of Arizona. “‘All the housing indicators are still negative with no sign of the bottom yet,’ Vest said. ‘Building permits and existing home sales are still heading south. The inventory of homes is high and moving higher (and) prices are still declining.’”

“Arizona has seen four significant downturns in housing since the mid-1970s. ‘What we see today closely parallels the downturns in 1974-75 and the twin recessions in 1980 and 1981-82,’ Vest said.”

“So far, building permits over the last 25 months have fallen 56 percent statewide. In the mid-70s, permits fell 75 percent over 26 months. If you look at the twin recessions in the early 80s, permits declined 69 percent over 38 months.”

“Vest then said: ‘We get to the late 80s and 90s, the ‘Mother of all real estate recessions,’ which lasted seven years and permits fell by 81 percent. The difference was that the real estate bubble then was mostly commercial, including apartments. Now it’s reversed.’”

The Arizona Daily Sun. “Home prices that had been declining slowly in Flagstaff since spring dropped at nearly double-digit rates in November. The median price for a single family detached home in November was $346,000, down $40,000 from October and $33,000 from the same month the year before.”

“The average time on the market was 118 days, compared with 40 days just two years ago.”

“Janet and Rick Forrester listed their five-bedroom Swiss Manor home last April as Rick prepared to open a a new surveying business in Tucson. But so far, nothing has worked. The couple has tried numerous incentives, including reducing the price of the home by roughly $100,000 to $455,000.”

“Janet, who also lives and works in Tucson, says she never expected it would take so long to sell their home. ‘We didn’t know it would take this long,’ she said. ‘We thought, ‘This is Flagstaff — they’ve never had a problem with selling houses.’”

“The delay in selling the 3,000-square-foot home has become a financial burden for the family. And it couldn’t have come at a worse time. The lackluster housing market in Tucson has made turning a profit recouping the start-up costs of Rick’s surveying business and turning a profit difficult.”

“The couple has found a tenant to rent a portion of the Flagstaff house, but she says it isn’t much. ‘It just helps ease the costs,’ Janet said.”

From Las Vegas Now in Nevada. “The Greater Las Vegas Association of Realtors has just released its numbers for November. They show the median price of single family homes in the valley is down more than 11-percent in the last year.”

“That’s not all. The association also says the number of home owners who were late making their monthly payments hit record highs, too. In the third quarter the delinquency rate climbed to 5.59-percent.”

In Business Las Vegas from Nevada. “Times are tough for the housing industry in Southern Nevada and the rest of the country. Steve Hilton, CEO of Meritage Homes, said Las Vegas is a ‘tough market’ at this time.”

“KB Home and Toll Bros. are already selling in Inspirada, but Meritage has curtailed construction there pending a revision to its model homes. ‘We were not happy with the original plan and needed a product with more value,’ Hilton said. ‘We went back to the drawing board and drew up a better plan suited to today’s market. I think you will continue to see a drive toward affordability.’”

“The cut in prices reduced profits, but halting construction isn’t an option, Hilton said. Builders need the revenue to pay employees and lenders, he said.”

“The home construction executives lamented their practices and training when the housing market was going well and profits were high.”

“Jeff Mezger, CEO of KB Home, said 80 percent of his management team had never been through a downturn, and they ‘froze like deer in the headlights.’ He cited the Las Vegas team as one that hadn’t seen a downturn.”

“‘The challenge is to get out of the box and do it differently because you have done it one way so long,’ Mezger said. ‘If you do it that way, you are going to fail, and we are not going to fail.’”

“As Las Vegas homebuilders continue to slash prices and cut back on construction because of soft demand, companies are continuing to trim staff levels. In the past four to six weeks, several builders have pared their staff once again in the latest round of layoffs that started about 14 months ago.”

“Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association, said she has heard of more layoffs in recent weeks. ‘We are still coming down from the boom, and the numbers are slow,’ Caruso said. ‘It’s just a function of the lack of sales activity.’”

“The number of home closings are down 44 percent for the year. Permits are down 25 percent.”

“Dennis Smith, president of Home Builders Research, said some area developers, title companies and lenders have made cuts as well. ‘I had someone tell me … they were referring to today (Nov. 30) as Black Friday,’ Smith says of First American Title.”

From Globe on Nevada. “After turning an eight-acre infill site here into a gated community of 92 single-family residences, regional builder Signature Homes opted to rent them out instead of trying to sell them off in a down market.”

“Called Town Las Vegas, the entire community was sold last week for $18.4 million, or $200,000 per home, which translates to a 6% capitalization rate for the new owner.”

The Salt Lake Tribune from Utah. “It’s going to be far from a cheery holiday season for the growing number of Utahns who are falling behind on their mortgages. About 3.92 percent of Utah mortgage loans were at least 30 days past due in the third quarter. That’s up from 3.71 percent in the July-August-September period in 2006, according to the Mortgage Bankers Association’s National Delinquency Survey.”

“The increase marks an abrupt departure from the trend of declining delinquencies in the state in recent years.”

“‘Many people thought if they had a problem paying the higher payments down the road, they could just sell their home and get out of it,’ said said Mark Knold, senior economist of the Utah Department of Workforce.”

“Kelli Cox in Springville faces the specter of losing her home after falling behind on the mortgage on the home her family has lived in for more than 12 years. Cox, who is separated from her husband, is struggling to make the mortgage payment alone.”

“Two month ago, a notice appeared on the garage door that her home was to be auctioned off in November. Cox, who lives with her five children, ages 2 to 16, said she’s tried hard to work with her mortgage company, but she said it wasn’t interested in helping her make reduced payments or figure out a new repayment plan.”

“Complicating matters was the fact that the home is in her husband’s name. She finally was able to raise enough cash to keep the mortgage company from taking her home. But she says cash is tight.”

“‘It is just a mess,’ she said. ‘I had to borrow from everyone I could think of to get this loan current.’”

“People with less-than-stellar credit records always have paid higher mortgage rates than those with the best credit. Soon those borrowers, and even those considered good credit risks, could pay much more.”

“Fannie Mae, which pools mortgages and sells them on the secondary market to investors, has issued new guidelines to lenders that increase the cost of obtaining a mortgage for a variety of borrowers with credit scores below 680.”

“People with scores below 620 are generally considered subprime. But this new rule will affect people with scores from 620 to 680 who traditionally have been considered the lower end of ‘prime,’ or among the best of borrowers. People in this category may have one or a few past-due marks on their credit report, but they generally pay their obligations and pay them on time.”

“‘What this does is create an almost new category of borrower - ‘mediocre prime,’ said Glen Ogden, president of the Utah Mortgage Lenders Association. ‘It’s your average American. And they are going to pay more.’”

Has Anyone Given You The, ‘You Were Right’ Speech Yet?

Readers suggested the reaction of others as a weekend topic. “I would love to hear from you Californians if any of your family, friends, co-workers, etc. have given you the, ‘you were right’ speech yet. I’ve gotten it from a couple people here and we are nowhere near the meltdown stage that California is at. It would be great to get the details and how you reacted to it.”

One posted, “CA has wayyyyy to much ego for any come-to-jesus moments. Thats reserved for you angst-ridden Woody Allen, New York types that feel it necessary to talk about everything in excruciating detail, over n over n over until I just want to step in front of the A-Train. (is there really an A-train & not just in the song)??”

One had this. “My father kept telling me to buy this piece of crap condo for 500k or I would be priced out forever because in 5 years it was going to be 1 million. Right now they are priced under 500k with being months on the market infact, houses in the area are edging closer to low 5’s.”

“Now they send me articles like this…”NEW YORK (Dec. 6) - Housing markets from Punta Gorda, Florida, to Stockton, California, will crash and suffer price drops of more than 30 percent before the housing crisis is over, a report from Moody’s said on Thursday.”

“So, they think these people should be bailed out because realtors talked them into houses they can’t afford. My Father wants houses to stay high and protect his ‘equity’ and I want houses prices to fall so I can 1) buy a home for my family and have it paid off when I retire and 2) look at all those smug people and say, ‘I told you so.’”

A response, “How sad. I’m a Dad and I own my house and I want prices to fall so that 1) my daughter will be able to afford one some day, and 2) my taxes remain reasonable.”

“It’s my home. I’m trying to pay it off. I would appreciate it if it didn’t inflate to such ridiculous heights so that I get taxed out of it. Actually, I would like it to go to zero, because no matter the tax mill rate, zero times whatever is still zero.”

“I also think it would be nice if my children could afford to purchase a house someday, and make it their home.”

And another, “Your dad is a jerk. He doesn’t need the ‘equity,’ he needs to pay off his house and live there. You’d think he would be more concerned that his children and grandchildren can afford houses.”

One has friends in the business, “LOL. Everyone is now ‘not talking about it’ because we have a friend who is a broker who made 140k in 06 and is going to be lucky if he clears 25k this year. If housing values do come up accidentally, everyone looks at me and does the stressed out, thin lipped ‘don’t let her say I told you so’ thing.”

One from Orange County, “I finally have been hearing the you were right comments. Father in law said it was different here, no way were prices going to drop, but when the OC register said prices were down 8% last month, he capitulated and said I was right.”

“Funny how I was saying that all the funny financing, no doc loans were the root cause of this for the last 2 years (got this from this blog - thanks guys!).. and he didnt want to listen. Now that the paper finally prints what we have all been saying here, he finally gets it.”

A reply, “It’s strange how sometimes only the written word has the power to convince.”

One noticed this, “Most I have come in contact with now pretend they knew all this information all along. They’re all suffering memory lapses about conversations we had. Of course, they had their fingers in the ears and were going la la la when I used to talk to them, so it’s hard for them to remember what I was saying.”

Another concurs, “That is what I’m seeing as well. It was so self-evident, after the fact. I just shake my head. It is amazing how many knew the bubble would pop.”

One got this at work, “Several coworkers (in northern Calif.) have said I was right, and I even won a bet from one since he finally conceded there was a bubble and it has popped (we debated the topic for the last few years)…. But another just bid on a house even after I sent him here a few weeks ago….I’ve decided to hold my tongue, anyone who doesn’t get it by now is hopeless. Sold my own place in April and got out just in time thanks to what I learned here.”

One poster knows some FB. “Nah, the FBs I know are just ‘vewy vewy quiiiiet’ about the subject right now. But then they don’t have much time to talk because they are working a lot of overtime. One guy I have known professionally for a long time is suddenly throwing himself into his job in a way he never has before. The situation seems to have done wonders for his work ethic.”

And another, “Yup, the guy down the street from me who thought his house was worth 350,000 (in my neighborhood 190k or 200,000 tops) two years ago I told him no way. Now he says it’s worth 250,000 then he waits for me to agree with him (I don’t) so he’ll be dropping his price again because wishing prices are long gone.”

“He’s not too happy about the downturn. The guy down the street has his house for sale listed at 369,000 !!! I laugh everytime I drive by it.”

One saw progress, “Close family always supported me. (I’ve been correct on other bubbles in the past.) However, some uncles and cousins still aren’t there. But I’ve kept one cousin from buying a condo.”

“Coworkers have gone from yelling ‘buy now or be priced out forever’ to quietly coming up to me with bubble information. (Even if I already know it, I’ll ‘pat them on the back’ in order to help spread the news.)”

One from an Ex, “I haven’t gotten the ‘You were right’ speech, but my ex did ask me - point blank - ‘How do I get out of it?” - referring to his Florida ‘investment’ condo.”

“Coming from him, it’s the equivalent of ‘down on my knees begging for forgiveness for being a bonehead’ from a normal person.”

One wasn’t successful, “I’m worried about our nephew and his wife who bought a condo in Valley Village, LA in 2004, interest only ARM. I don’t know when the reset is. I urged them not to ‘buy’ it in 2004, but he and his parents didn’t want to hear it. It’s my husband’s family, so I keep my mouth shut. Hopefully they can afford the reset.”

This one had better luck, “Yes, yes, yes, and yes. It’s too late for some close friends and relatives. I’ve convinced quite a few people to belt tighten and live below their means recently. When people say ‘you were right,’ I just say ‘Thanks!,’ and that’s the end of that conversation…unless the person is a bubblista, then we rant on for hours.”

As did this poster, “No one from SoCal, but two friends in PA have acknowledged that I was right. One is grateful because I enthusiastically convinced him not to do a flip in Tampa 2 yrs ago.”

And this one spotted a trend, “I’ve had two people tell me they were happy they didn’t buy last year when I talked them out of it, and two people who were happy they sold last year when I told them to (they were both thinking of renting out the houses.) But no ‘you were right’ from any of them. Most people would rather think that it was their own idea.”

One on investments, “I wrote on a thread a while back that an LA friend who had invested in REITS had divested thanks to my advice and saved 50K. He admitted that I was right.” One was brief, “I have gotten a few of these in just the last two weeks…two went as far to say something like…’you saw it three years ago.’”

And finally, “I am in North County San Diego. When I check, I am beginning to see people I know on the Preforclosure list. I don’t talk about personal finances with any friends, but I have, in a very measured way, when asked, discouraged my son and his wife from buying for the last couple of years.”

“Every week my son thanks me.”

The Market Has Gone Back To 2004 And 2003 Prices

The Sun Herald reports from Florida. “As Will Rogers once said, ‘In a real estate man’s eye, the most expensive part of the city is where he has a house to sell.’ The last couple of years have chastened even the most resolute espousers of that belief, however, as real estate prices have plummeted virtually everywhere. Nathan Tracy II, broker in Englewood, acknowledged there are a lot of midpriced homes languishing unsold in the Englewood housing market.”

“‘Part of that problem is there’s not a big discrepancy in price versus what you’re getting,’ he said. ‘Why pay $150,000 for a 1970s two-bedroom, two-bathroom house when you can pay $200,000 and get a brand new, three-bedroom, two bath house in East Englewood?’”

“North Port’s picture appears a bit dimmer, according to Tony Gustitus of Century 21 Almar Associates. ‘Last year, sales were off maybe 1 percent. We held our own all the way through the year. This year, we’re running out of ways to skew the numbers,’ Gustitus admitted.”

“North Port sells about 1,100 homes a year, Gustitus added, which is how the market has been for the last three to four years. ‘But it bothers me to say we’re down to 651 sales as of Nov. 8, year to date,’ he said. ‘We’re probably going to be off by around 40 percent this year.’”

The News Press from Florida. “Jack and Cindy Claus are trying to sell their five-bedroom, three-bath house in Gateway for $429,000. The bad news is they have plenty of competition as the real estate bubble deflates from 2005’s record-setting prices.”

“The Lee County Property Appraiser lists the value of their home at $349,900. Time may not be on their side, said real estate agent Jen Buffington. ‘Like all agents, I don’t want to be negative, we want to be positive as much as we can, but the truth remains, I can’t change that,’ Buffington said. ‘It’s still a declining market. And you know, I don’t see the bottom of the market anytime soon.’”

“Prices in Lee County peaked at $322,300 in December 2005. By October, the last month available, the price had fallen 26 percent to $239,300, according to the Florida Association of Realtors.”

“‘There is not one listing I have that anyone will walk away with any money on,’ she said. ‘They’ll break even or have to bring money to the table or it’s a short sale.’”

“‘I have a few hundred homes in the Gateway community that I take care of,’ said said Gateway resident Michael Hertog, owner of (a) landscaping company. ‘I guess I am for the first time starting to feel a little bit of the effect of the economy or real estate building falling apart.’”

“For example, he said, ‘I have several homes falling into foreclosure in the past month. I haven’t gotten payment.’ Also, he said, people who are still paying him are cutting back to bare essentials.”

“‘A lot of the properties are rental properties. I’m seeing the renters just disappearing and not paying their bills. Homes that are empty, not getting taken care of. I’m the last one that ever gets paid. I would respect them much more if they’d say, ‘I can’t afford your services anymore,’ he said.”

The St Petersburg Times from Florida. “No matter where you look in the Tampa Bay area, you’re sure to find them: Houses that have been on the market so long two hurricane seasons have come and gone. So long that babies have been conceived and born - and started walking.”

“So long that the ‘for sale’ sign seems a permanent part of the landscaping.”

“‘Price is the most important factor by far,’ says Poul Hornsleth, owner of a Gulfport real estate agency. ‘You can start high but it will turn into a stale listing, and you don’t want to get a stale listing.’”

“‘People need to understand that the market has gone back to 2004 and 2003 prices,’ says Bob Memoli, a Pasco County real estate agent. ‘If you don’t price that way, it’s just not going to move.’”

“On Sept. 7, Memoli listed a three-bedroom, two-bath house in New Port Richey for $199,900. Less than three weeks later, the seller had a contract, largely because she agreed to drop the price slightly and pick up part of the buyer’s closing costs.”

“‘She said, ‘I don’t want to leave this on the market six or nine months. I want to get on with my life,’ Memoli recalls. ‘She was realistic.’”

“It also helped that the woman, a retiree planning to downsize, had paid $125,000 for the house several years ago and had substantial equity.”

The Sun Sentinel from Florida. “What a good time it is in South Florida for renters. Rent is falling and renters have their pick of places to live.”

“An accidental landlord last year would have been called a real estate investor. But now that there are so few home buyers, many investors are renting their homes. The apartment rental professionals say the accidental landlords are a pretty aggressive group, too.”

“‘They’re competing with the [apartment] complexes even if it means they only get 50 percent of what it costs them to own that unit,’ said Jack McCabe of McCabe Research and Consulting, a Deerfield Beach firm that specializes in apartment market research. ‘You can rent a $325,000 or $400,000 house for $1,800.’”

“By comparison, the monthly payment — principal and interest, plus estimated taxes and insurance — on a $300,000, 30-year mortgage at 6 percent, would cost you $2,526.”

“‘In Boca and Wellington, the pressure is coming from investors who couldn’t sell single-family homes,’ said Cris Sullivan, senior VP of Gables Residential, which manages more than 5,000 apartment units in South Florida.”

“In fact, many complexes are offering freebies such as a month’s free rent. Add it up and overall, the cost of renting an apartment in South Florida is falling.”

“Rents in Fort Lauderdale in the third quarter of this year are down by 2.2 percent compared with last year. In Palm Beach County, the decline is 7.8 percent. ‘In a lot of the overbuilt markets, it’s better to be a renter than an owner,’ said Axiometrics President Ron Johnsey.”

“McCabe says he thinks renting is a ‘no-brainer,’ because rents are being held down by the market.”

“But that may not last. And building equity in a home will. ‘I think the issues are the same,’ said Certified Financial Planner Benjamin Tobias in Plantation. ‘Whether prices are high or low, you’re better off buying than renting.’”

The Press Register from Alabama. “Broker Randy Brooks said he never thought he’d see a house in foreclosure on Ono Island, but he’s got one listed in the mid-$600,000s. ‘The owner bought it for $895,000 in early 2005,’ he said. ‘And he was a Realtor who had to move out of state to make a living.’”

“Several of his clients expect to be ‘inundated’ with foreclosures after the first of the year, he said.”

“As of Nov. 20, there were at least 409 houses in the foreclosure filings, according to Jonathan Keith, an associate broker in Mobile who tracks the latest figures. About 25 to 30 percent of the 409 will actually go to foreclosure sale, he said.”

“‘That’s still a lot,’ he added. ‘It used to be 10 percent. But there are not as many investors willing to speculate or take as many risks.’”

“‘We’re not a hot spot,’ for foreclosures, said Lynn Sedberry of REMAX Advantage in Spanish Fort. ‘But we are seeing them where we never had them before, like Gulf Shores, Orange Beach and Foley. It’s the investment and resort home buyers. And a lot of them aren’t local.’”

“Brooks is working with more high-end homes in foreclosure than ever before, he said. One individual ‘bought a house on Bon Secour River for $922,000 in May 2005 and tried to flip it for $1.2 million. Then Hurricane Katrina hit.’ The house wasn’t damaged, but couldn’t be flipped, he said. ‘Now it’s on the market for $650,000.’”

“Condominium units in foreclosure are competing for buyers along with the almost 3,000 units listed for sale on the MLS. Prices have dropped considerably since the buying frenzy of 2004 and 2005.”

“For example, Brooks has a number of foreclosure condo units in Gulf Shores Plantation on Fort Morgan that sold for $370,000 two years ago, and today he has them listed for $145,000, he said.”

“‘I think we’ll continue to see this level of foreclosures for the next 12 months,’ Keith predicted. ‘After Katrina we had a such a push, roughly 12 to 20 percent in appreciation and a surge of high prices,’ he said. ‘Now folks can’t get those prices when they sell their home. The inventory has increased and sales have flattened.’”

“‘The last six months has been the slowest I’ve seen in my 40 years in this industry,’ said Ken Cramton, regional VP of HMC, Home Mortgage Co., in Fairhope. ‘There’s nothing under $250,000 in sale prices on the Eastern Shore and that has hurt activity. There are a few sales of homes in the $130s to $180s, but not many.’”

“Many homeowners facing foreclosure are in denial and don’t think they will lose their homes, Realtors said. Brooks said he has been dealing with a homeowner in a west Mobile subdivision who hasn’t made a mortgage payment since November 2004, but has filed lawsuits in an attempt to stay in the house.”

“‘All you can do is work with them,’ he said.”

The Daily Journal from Mississippi. “Just a year ago, machines and workmen seemed to be flattening every available square foot of ground around Oxford for new buildings. The most notable were condominium apartments slated for construction near the Square.”

“Lately, the hot real estate market in a growing college town has seen some cooling.”

“‘Oxford really experienced a housing boom over the last three years, especially, and now all of a sudden things have really slowed down,’ said Christy Knapp, VPof the Oxford-Lafayette County Economic Development Foundation. ‘I think that’s part of a national trend.’”

“‘Oxford’s market is softer than it was at the peak,’ said Harry Alexander, president of the North Central Mississippi Board of Realtors, ‘but…those years were the best years we’d ever had in history.’”

“One of the chilliest segments of Oxford’s market lately has been condominiums, which for a while were hot property for out-of-towners looking for a weekend getaway, parents whose children attend Ole Miss and, in some parts, students themselves.”

“‘When they started turning all these apartment complexes into condominiums, it kind of flooded the market,’ said Larry Butts, a real estate broker and developer. ‘I doubt if you’ll see anything more going up around the Square, at least until the economy turns around.’”

“The new optimism that has come with Ole Miss’ change of football coaches may help. ‘Whenever Ole Miss has an exciting, winning season or there is a lot of hope (about) an upcoming winning season, it has an impact on not only tourism … but also on the real estate market,’ Knapp said.”

“Alexander agreed. ‘I think with a rekindling of hope for the future on the football side of things, that will give that side of the market an uptick,’ he said. ‘How much? We’ll have to wait and see.’”

“‘People are shopping by comparison, so sellers are having to reduce their houses,’ said Tupelo real estate agent Brenda Estes. ‘We’ve got 1,290 houses on the market, and that’s a lot for the Northeast Mississippi area. Last year was 591 houses at this time.’”

Local Market Observations!

What do you see in your local housing market this weekend? Blame shifting? “Two officers with the Washington Association of Mortgage Brokers defended their roles at an Olympian editorial board meeting Wednesday and said their industry was largely not to blame for the nation’s subprime mortgage crisis. Incoming president David Erickson singled out the surge in creative mortgage products as fueling problems with subprime loans.”

“‘It was a very bad product,’ said Erickson about some of the liberal loans available during the housing boom of a couple of years ago. ‘When the grocery store has bad meat with E. coli do we blame the grocery store? We’re offering product that is available.’”

Cancelled projects? “Pulte Homes of Greater Kansas City Inc., which began operating here in 1994, is beginning a phased withdrawal that will continue during the next two years, said Melanie Hearsch, corporate communications manager. ‘We decided to focus on areas with higher demand,’ Hearsch said. ‘There’s a lot of inventory on the ground in Kansas City. It wasn’t making the best financial sense for us to stay.’”

“Plans for an upscale, 1,400-home subdivision near Parmer Lane and the Texas 45 North toll road have been called off because of a national pullback by struggling Dallas-based home builder Centex Homes.”

“Centex has canceled its contract to buy 465 acres of the 750-acre Pearson family ranch, where it planned to spend $275 million to build one of the largest master-planned communities in Central Texas. The Pearson Place project was announced in February.”

“Centex isn’t the only company pulling back in Central Texas, which began as early as 2006, said Eldon Rude, local director for Metrostudy.”

“‘The largest public builders are continuing to face significant challenges around the country, especially in California, Nevada, Arizona and Florida,’ Rude said. ‘As a result of that, they are looking to all of their divisions all over the country to take part in their move to conserve funds, and so even in some of the healthier markets, like Austin, they are looking to local divisions to buy less land.’”

Or fraud? “Investigators admit, mortgage fraud is hard to grasp. That it is a complex white-collar crime. Already dozens have been arrested, but no bust has been bigger than the one unveiled Thursday.”

“Investigators announced indictments against 37 people. They allegedly took out $5.6 million in fraudulent loans on 17 houses in Houston and other parts of Harris County.”

“‘These individuals range from loan processors to mortgage brokers to real estate agents,’ said Harris County Prosecutor Lester Blizzard.”

Industry cutbacks? “For employees of District-based Fannie Mae, retirement is looking less secure. The company informed its workforce Thursday that it is capping the amount of money it will pay toward the premiums of retirees and their dependents for those who retire after Dec. 31.”

Or black humor? “A subprime-linked investment has cost four Norwegian towns as much as 451 million kroner ($82.1 million) and left them wondering how they’ll pay workers this Christmas. The rest of the country is cracking jokes.”

“‘Just imagine how many lottery tickets they could have got for 400 million kroner,’ Jon Almaas, the host of Norway’s most-watched television program, joked on a recent episode. ‘Or, for fear of appearing old-fashioned, they could have spent it on health and education.’”

“The losses on securities tied to the U.S. housing market are providing plenty of fodder for Norwegian comics, who compare the towns of Rana, Hemnes, Narvik and Hattfjelldal to naive country bumpkins taken in by big city hucksters.”

“Last weekend, more than 10,000 people took a multiple choice quiz on NRK’s Web site to determine whether they were a ‘Naive Northerner or a Slippery Salesman?’”

“‘Where do you keep your money?’ was one question, with the possible answers being ‘Certainly not in a hedge fund; I leave that to the local government,’ or ‘A nice man with aftershave takes care of it for me.’”

Bits Bucket And Craigslist Finds For December 9, 2007

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