The Housing Bubble

The Sacramento Bee reports from California. “Happily shucking its farm-town image, Lincoln embraced suburbia during the Sacramento area’s great housing boom. Its population tripled. Master-planned communities sprang up and prices hit blue-sky territory. Then things went sour in what had been California’s fastest-growing city. Home sales fell, prices plummeted and foreclosures grew, just as they did almost everywhere in California’s interior.”

“Since 2000 Lincoln’s population has more than tripled, to 37,410. In 2006 Lincoln grew by 23 percent compared to its 2005 population, faster than any other city in California. In 2004 and 2005, it captured a resounding 43 percent of Placer County’s population growth.”

“‘We looked at it and said, ‘That’s the way Sacramento is growing, people will be wanting to move out there,’ said Evan Weinzinger, a data-center manager from Vacaville who bought a home for $508,000 in Lincoln two years ago as an investment with his wife, Angela.”

“Some 14 percent of the homes sold in Lincoln in 2005 were purchased by investors like the Weinzingers, who schooled themselves by attending real estate seminars and watching cable-TV reality shows like ‘Flip This House.’ They bought a home in Texas and one on Keswick Court in Lincoln Crossing.”

“The Texas property is doing well. But the four-bedroom home on Keswick is another matter. The Weinzingers never found a tenant for it, maxed out their credit cards to meet the $2,900 monthly mortgage payments and lost the place to foreclosure in March. It’s listed for $389,900.”

“‘It’s brand new,’ Weinzinger said. ‘No one’s ever lived in it.’”

“Keswick Court and the adjacent Keswick Lane are one of many lost precincts of Lincoln, neighborhoods that have become pockmarked with vacancies and ‘For Sale’ signs. More than two dozen homes are for sale or rent within a half mile of the Weinzingers’ place. At least a half dozen were foreclosed.”

“For now, there’s a sense that an era has passed. Current and former residents say Lincoln used to feel more alive, prosperous, teeming with young families.”"‘It’s kind of turning into a little ghost town, isn’t it?’ said David Ladd, who lost his home on Keswick to foreclosure in August. He and his wife moved back to Redding.”

“Josh and Tiffanie Marone are bewildered by what’s happened. ‘We’ve seen a lot of people come and go, which is sad – we just love this neighborhood,’ Josh said. ‘These are houses that sold for $500,000 to $600,000 two years ago. … It blows my mind that they’re just sitting empty.’”

“The Marones have put their house up for sale, too, so they can move to a rural setting in Loomis. They’re braced for a loss: The house cost them $529,000, plus $130,000 on a backyard pond and other upgrades. They’ve listed it for $525,000.”

“The downturn in Lincoln has been swift. Just 1,265 homes have sold this year, half as many as in 2006. Foreclosures have claimed another 217 properties, according to Foreclosures.com of Folsom. The median new-home price – $429,000 – is off 18 percent in two years, says DataQuick.”

The Novato Advance. “The sub-prime mortgage market crash has hit Novato hard, from the closure of GreenPoint Mortgages, one of the city’s largest employers, to increases in foreclosure rates. Real estate offices have predicted a decline in business, as housing prices have fallen.”

“But two responses by the federal government, a proposed targeted rate freeze, and new lending restrictions being reviewed by the Federal Reserve, offer hope to homeowners facing ballooning rate hikes, and of avoiding a similar market situation in the future.”

“Kevin Stein, associate director of the California Reinvestment Coalition, said that the current situation made some of the Federal Reserve’s restrictions on risky loans a moot point at present.”

“‘These loans are not being made so much anymore, as investors aren’t willing to buy them,’ he said.”

“Michael Conway, vice president of Mortgage Lending with the Redwood Credit Union, said a certain segment of housing-market losers were not covered by the Bush plan’s protections for a reason. ‘(The plan) is not an investor bailout,’ he said. ‘Nobody’s sympathetic to absentee landlords who bought (houses) with no money down.’”

The North County Times. “San Diego’s home prices tumbled more in October than those in any major metropolitan area in the nation. Prices fell by 2.6 percent from September, the highest month-to-month decrease of the 20 metropolitan areas surveyed for Standard & Poor’s Case-Shiller Home Price Indices. Local prices dropped more than 11 percent from October 2006, fourth-highest in the nation.”

“The local depreciation was less severe than just three cities: Miami, Tampa, Fla. and Detroit.”

“Eli Tene, founder of a Woodland Hills-based firm that deals in distressed properties across the country, said the biggest drop in prices has come since October and has not yet shown up on the Case-Shiller index.”

“A local home purchased in October 2006 for $500,000 would now cost, on average, about $445,000. Most real estate agents and analysts said they expect the decline to continue well into 2008.”

“The year-over-year fall and 2.6 percent month-to-month drop were both record declines for San Diego since Case-Shiller started its reports in 1988. It also represented the region’s 16th straight month of price decline.”

“‘I think San Diego is taking it on the chin, and I think we’ll take the hit hardest early and recover sooner, which isn’t a bad thing,’ said Dan Holbrook, president of a Carlsbad-based real estate consultant firm.”

“San Diego’s low-end homes — those priced under $462,003 — have suffered the most from the housing recession, dropping almost 18 percent over the last year. That means a home purchased for $450,000 in 2006 now sells for less than $370,000.”

“The index for high-end homes — priced more than $666,652 — have been the most stable, falling 5.8 percent over the same time, meaning a home worth $1 million a year ago is now worth a little more than $940,000.”

“‘Each month we look for a little bit of light at the end of the tunnel and it’s just not there. And the fact that we saw multiple new lows shows that we’re at the very least at the bottom or that we have not reached the bottom yet,’ said Maureen Maitland, VP of Standard & Poor’s index analysis.”

“Most real estate agents agree that prices will continue to fall through next year. Tene expects to see a larger decline in home prices than many agents’ forecasts: up to 20 percent over the next eight months.”

“‘It’s not like it’s getting better any time soon. Even when we get to the bottom, it’s going to be flat for a year or two. We’re really five years away from prices going up again,’ Tene said.”

The Fontana Herald news. “Land prices have plunged as low as 50 percent in some areas of the Inland Empire to reach levels not seen since 2002, according to a report released recently by The Hoffman Company, a leading land brokerage firm that tracks land values in the region.”

“In San Bernardino County, the smallest reduction in value is in Fontana at 27.1 percent and the largest is in Highland at 48.9 percent. The largest decline in Riverside County is a 52.1 percent drop in French Valley (near Murietta) and the smallest decline is in Moreno Valley at 36.1 percent.”

“It is not only outlying areas such as Hemet and Adelanto that are hard hit. Even in Corona, average lot prices have dropped from $300,000 to $180,000.”

“‘The decline in the price of land has happened rapidly; in the past two years we’ve lost five years of appreciation,’ said Norm Scheel, a principal with The Hoffman Company. ‘We may see prices drop a few more percentage points in the first half of 2008, but land values already have taken the ‘big hit’ and whatever comes next will be minor in comparison.’”

“In Riverside County, The Hoffman Company report shows values for finished lots have fallen from their 2005 highs by an average 42 percent, down 5 percent from a September report by Hoffman. In Corona, for example, values have fallen 40 percent from a $300,000 peak.”

“In 14 cities surveyed in San Bernardino County, the estimated lot values have fallen by an average of 37 percent. Chino shows a drop of 45.7 percent from the finished lot cost of $350,000 two years ago.”

“‘The value of land in California is being set by land investors and speculators,’ Scheel said. ‘After months of stalemate, it’s suddenly a competitive environment. The price expectations of buyers and sellers are much closer today than a year ago.’”

“‘Right now, most of the buyers are individuals using their own money,’ Scheel said. ‘They feel the land market could still drift down a bit, but the risk of waiting is greater. Getting in too late has them competing with Wall Street money that could run up land prices.’”

“A lot of attention has been focused on falling home prices and foreclosures, but that overlooks the other side of the equation, said Tom Dallape, the other principal of The Hoffman Company.”

“For example, finished lots in Fontana were selling for $240,000 at their peak and new homes were selling at $570,000, which was roughly 2.4 times the value of the land. Today, the estimated lot value in Fontana is $175,000. For a builder to realize the same profit margin, a home on that lot could be sold for $415,000.”

“‘That’s good news if you are a prospective homebuyer, but bad news for builders with existing lots and standing inventory, which also applies to homeowners who bought at the height of the market a few years ago,’ Dallape said.”

The Rocky Mountain News reports from Colorado. “The note left on the door to the house on Fulton Street was a plea to owners who no longer live there. ‘Please repair the garage door,’ read the note, dated Oct. 18. ‘Please remove all outdoor storage, trash and debris from the alley.’ It was written by a city code enforcement officer who tries to keep neighborhoods tidy. The property, an eyesore for months, was cleaned up shortly before Christmas.”

“But others like it remain unkempt, dragging down property values in neighborhoods across the metro area. The foreclosed house is in the Del Mar neighborhood, one of the hardest hit by foreclosures. Through September, 82 of 100 houses sold in the previous 12 months in the neighborhood were either foreclosed properties or short sales, according to data compiled by Your Castle Real Estate.”

“In Aurora, there were 3,387 foreclosures the first six months of this year, the city’s Community Development Division reported.”

“Through November, Aurora used a contractor more than 2,115 times to remove trash, weeds and do other needed fixes on properties, said Nancy Sheffield, director of neighborhood services.”

“That’s almost triple the number of such jobs - known as abatements - done in 2004, and 770 more than last year. While not all of the properties are foreclosed houses, the numbers have ‘been increasing primarily because of the foreclosures,’ Sheffield said.”

“The vast number of foreclosures and the volume of paperwork that goes with them have overwhelmed lenders, whose first priority is reselling the homes, said Sunny Banka, a broker who owns Metro Brokers Sunny Homes.”

“The drawn-out process to foreclose a home may also be a factor in why lenders don’t maintain the houses they take back, said Chris Holbert, president of the Colorado Mortgage Lender Association.”

“Holbert said sometimes lenders do not have ownership of the property - and the legal authority to do any maintenance - until weeks or months after the previous owner has left.”

“‘It’s not their invoice to pay,’ Holbert said about lenders. ‘I guess it would be similar to if a dealership was to repossess a car, would they be responsible for parking tickets on that car?’”

MSNBC reports on Colorado. “The head of one of the nation’s largest homebuilders made headlines early this year by bucking his industry peers’ projections of a housing turnaround by spring and instead predicting the market would ’suck, all 12 months of the calendar year.’”

“Boy did he get it right. The housing market has gone from a ‘correction’ to a ’slump,’ and as 2007 comes to a close, there are signs 2008 will get worse.”

“Amid the predictions, sellers are sitting on the sidelines, hoping 2008 will bring more traffic, while potential home buyers try to time the bottom of the market.”

“Cliff and Erika Stice of Castle Rock, Colo. have had their two-year-old stucco and stone ranch home on and off the market since February 2006. They’ve had 30 showings, just a handful of repeat lookers and no offers, despite cutting the price to $1.255 million from $1.35 million.”

“‘We really thought we would sell the house fairly quickly,’ said Cliff Stice, a retired telecommunications and cable executive.”

“Fortunately, the Stices are in no rush to sell. They won’t buy another house until theirs is under contract.”

“‘Our realtors think 2008 is going to be much better than 2007. If people are less scared to make a commitment then the market will start taking off again,’ Stice said. ‘Until then, it’s not a bad place to hang out.’”

The Arizona Republic. “As bad news goes, May 2006 initially seemed like a hiccup for the construction industry in Arizona. Up to then, the contracting industry was posting gaudy monthly sales growth, recording 30 percent more business for six straight months compared with the same time a year earlier.”

“That May, the number slowed to 24 percent - a hiccup, surely.”

“The same month, David Schweikert, Maricopa County treasurer at the time, declared the county’s fiscal health ‘the best I’ve probably seen it in my lifetime…Right now, the money is really flowing in.’”

“But looking back, Arizona’s financial outlook already was changing.”

“The tax-collection picture reflected in Arizona Department of Revenue records shows the summer of 2006 as the pivotal time when the state’s economy downshifted from boom to its more troubled present. Construction growth saw a small rebound in June but had slowed to a trickle by December.”

“The fate of a project like Elevation Chandler may have offered warning signs of the trouble to come. On May 9, 2006, the construction crane at the planned 10-story condominium near Chandler Fashion Center was removed from the unfinished site. Work there had stopped abruptly three weeks before.”

“Today, 19 months later, it remains a hulking skeleton of concrete and steel.”

“But, overall, single-family residential housing is the largest source of contracting revenue in Arizona, and its slowdown has been more dramatic. In the first nine months of this year, contracting sales on residential housing fell 10 percent. It represented a $675 million drop in business for contractors.”

“‘The market is flat stagnant,’ said David Jones, president of the Arizona Contractors Association. ‘We’re hoping the residential sector will perk up in the third quarter of 2008.’”

“As 2007 ends, the economy is teetering on recession, if not fully immersed in one, depending on which economist you believe.”

“The Southeast Valley is no exception, feeling the heat of the housing market meltdown and the credit crunch. In nearly every ZIP code in the Southeast Valley, the median home price fell on a percentage basis over the past year, according to Information Market. Among the hardest hit were Gilbert and Ahwatukee.”

“Meanwhile, the number of Valley homeowners who lost their homes to foreclosure grew by 566 percent, a result of the housing market’s slowdown and rising interest rates on risky so-called sub-prime mortgages. In the Southeast Valley alone, lenders foreclosed on 1,543 homes.”

The Las Vegas Sun from Nevada. “The winner of the latest installment of the reality TV show ‘The Apprentice,’ Stefanie Schaeffer, is facing a challenge that surpasses anything made for television.”

“Schaeffer was recently installed as marketing director overseeing sales for Donald Trump’s Vegas condo and hotel, set to soon open its first 64-story, 1,282-unit luxury tower. But real estate agents and analysts here say the timing couldn’t be worse.”

“High-rise luxury condo prices are way down in Las Vegas, reflecting local and national housing trends. The boom times of the past few years, when developers flamboyantly announced one high-rise project after another and talked of Las Vegas as the next Manhattan, ended with a thud this year.”

“Local observers say that as Trump pushes to close on units, a reckoning may come for the still fairly new concept of luxury Vegas high-rises.”

“The answer will hinge on whether the people who put down $10,000 deposits during the boom years will now be able to come up with financing for the units, priced from $700,000 to $7 million.”

“‘I’m worried about how many of those things are going to go up for sale, and are they going to linger out there, and are we going to get bad press,’ said Realtor Don Kuhl. ‘Hopefully we don’t have a huge number of people in there trying to flip units because we don’t have a strong enough market for that at the moment.’”

“Condo buyers aren’t allowed to put their units up for sale until they close, and that can’t happen until the building’s opening, which is set for the spring but could happen as early as February.”

“Kuhl and other local agents who deal in luxury condos report that an informal list of Trump reservers trying to unload units is already floating around - some estimate it reflects 30 percent of the tower. These agents believe many of the sellers won’t be able to get the price they committed to paying for the unit and some may have to walk away from their deposits.”

“‘They thought they were going to flip them, and they don’t want to be paying mortgage payments,’ said Realtor Paul Murad, author of ‘Manhattanizing Las Vegas.’ ‘Some of these investors are not going to be able to close.’”

“Murad estimates that 20 percent of potential buyers citywide are walking away from luxury condo deposits these days.”

“According to a report released Friday by Restrepo Consulting, high- and midrise luxury condo sales through the first three quarters of 2007 were outpacing 2006 in the number of units sold, but median prices have fallen from about $1.03 million to $860,000, a drop of about 17 percent.”

“Median hotel-condo unit prices were down in 2007 from $670,000 to $537,500, a nearly 20 percent drop.”

“Restrepo Consulting also found that units were languishing for months on the resale market. MGM’s condo-hotel, for example, had 124 units - 10 percent of its inventory - on the market an average of 117 days. Panorama Towers, a high-rise luxury condo project just west of the Strip, opened its second tower less than three months ago and is trying to resell about 10 percent of that, according to sales director Tony Preus.”

“Five Panorama units are currently in foreclosure, according to RealtyTrac, each now worth several hundred thousand dollars less than what the owners paid for them.”

“According to a recent report by Applied Analysis, 13,000 luxury condos are in planning or under construction in the Las Vegas Valley, including 8,400 under construction on or around the Strip.”

“‘It’s cyclical,’ said Preus, of the Panorama. ‘You can’t panic. People who invest are pretty savvy, and they understand that things go up, they go back down, and they go back up again. What they have is a piece of property that is very, very valuable.’”

In Business Las Vegas from Nevada. “More midrise condo projects in Las Vegas have been postponed as part of the continuing shakeout of the housing industry.”

“The number of condo units suspended jumped 21 percent in the third quarter from 3,877 to 4,688, according to the latest numbers released by Applied Analysis.”

“With financing harder to come by for developers, there were more than 20,000 units suspended or canceled through the end of the third quarter. There were more than 14,000 units postponed or canceled at the end of the first quarter.”

“Most of the attention over the past year has been on the cancellation of high-rise projects on the Strip, but more affordable midrise projects of four to nine stories away from the glamour of Las Vegas Boulevard were supposed to play a greater role because of the high cost of land and need for greater densities.”

“The fourth-quarter report is expected to show additional cancellations and the suspension of midrise projects such as Spa Lofts, 147 units planned in the southwest valley, analysts said.”

“‘There is a lot of competition in the marketplace, and it is difficult for buyers to be willing to pay the premium for a project when there are 27,000 resale units on the market today,’ Applied Analysis Principal Brian Gordon said.”

“The numbers don’t reflect the the demise of the midrise condo market in Las Vegas but simply a delay of what will become a more important part of the housing market, said Steve Bottfeld, executive VP of Marketing Solutions.”

“Bottfeld said the suspensions and cancellations were prompted by ill-advised projects that were overpriced, by lousy floor plans that were either too small or didn’t offer upscale features and by developers who couldn’t retain prospective buyers before contracts were written. Developers need to sell 50 percent to 70 percent of their units to obtain construction loans.”

“‘You add in problems with (the credit crunch), foreclosures and consumer confidence, and you have a recipe for a tough time,’ Bottfeld said. ‘Somewhere along the line people will say there is not enough demand or the market is not ready for it, but that’s not the case.’”

“At the end of the third quarter, there were 854 luxury condos on the market, up 19 percent from the second quarter. The units had an average asking price of $830,800.”

“Forty-six percent of those units are high-rise residential, 36.4 percent were condo-hotel units and 17.3 percent were midrise residential.”

National Public Radio reports on Massachusetts. “In August, the global credit markets seized up, as investors around the world realized there were many securities floating around that no one was sure how to value. ‘This summer was shocking,’ said Paul Willen, an economist with the Federal Reserve Bank of Boston. ‘Those days in August when there was bizarre stuff happening in interest rates… I mean, you’d look at the screen and you’d think, ‘That must be a mistake.’”

“Willen conducted a study on people in Massachusetts who bought homes with subprime loans; he found that nearly 20 percent of them ended up in foreclosure.”

“‘The role that subprime lending has in this crisis and the reason why it’s very important right now is that it created a class of people that were extremely vulnerable’ to disruptions on the housing market, Willen said.”

“‘They buy the house and then something goes wrong,’ Willen said. ‘Like, it needs a new roof, new furnace — and that’s $10,000, and there’s just no way they can do it.’”

The Cape Cod Times from Massachusetts. “An exact figure of how many have left is difficult to pinpoint, but Cape travel agents say sales of one-way tickets to Brazil are way up.”

“‘We sold four times more than last year,’ said Rubia Galo, who works at a Main Street store that sells plane tickets and arranges money transfers for many of the area’s Brazilians. The store sold about 1,000 one-way tickets to Brazil in the past two months, she said.”

“Paulo Chacon runs a taxi service from Hyannis to New York airports. Chacon fills his van with about 10 people each time he makes the trip, he said. In the past six months, business is up, Chacon said. ‘They tell me that the cost of living here is more expensive every day,’ Chacon said.”

“Chacon also has heard more in the past few months from people who need work and are feeling the effects of the Cape’s real estate slowdown. ‘On a day like today, for example, I cannot tell you how many people came to the office because there are no carpentry jobs, there are no painting jobs,’ he said.”

“The real estate subprime shake-up also affected many of the Cape’s Brazilians, said Viviane DaSilva, owner of Brazil Real Estate.”

“‘Three years ago, it was just people buying,’ DaSilva said. Many Brazilian homebuyers chose adjustable-rate mortgages that began with a low interest rate, she said. Now that the interest charges have risen, they need to sell homes they can no longer afford, and many discover they may be better off going back to Brazil.”

The Standard Times from Massachusetts. “Home sales continued their slide, falling 28 percent in Bristol County and 17 percent in Plymouth County in November compared with the same month a year ago, according to data released Tuesday.”

“Statewide, sales of single-family homes were off 15 percent in November compared with a year ago, the third consecutive month of double-digit decline, according to The Warren Group.”

“The drop in home sales comes in the wake of the credit crisis that started this summer, said Katie Curnutte, a spokeswoman for The Warren Group. ‘I don’t think it is a surprise to anybody,’ Ms. Curnutte said.”

“Locally, the median price last month for a single-family home in Bristol County was $259,250, nearly 6 percent less than the same month last year. The median price for Plymouth County was $284,950, off more than 12 percent.”

“Since last year, the housing situation was suddenly transformed from a sellers’ market to a buyers’ market with little middle ground in between, said Doug Azarian, the Massachusetts Association of Realtors’s president.”

“‘There was really no smooth transition,’ he said.”

“However, the buyers’ market offers opportunities as homes become more affordable. ‘With a buyers’ market, we have more inventory at the $300,000-and-below price range, which makes it much more affordable and presents opportunities for first-time home buyers and first-time investors,’ Mr. Azarian said.”

“The more affordable homes will help create demand and keep the market going, he said. ‘We don’t want buyers to miss this buyers’ market,’ he said.”

The Boston Globe from Massachusetts. “Facing a slumping housing market, a developer has apparently backed off on plans to transform a dormant paper mill site on Main Street into a residential and retail village.”

“Apparently chilled by the sluggish real estate market, Freedom Development failed to meet several submission deadlines for moving ahead with the purchase and sale agreement, said Jerome Epstein, chairman of the company that owns the mill site.”

“While the real estate slump is reducing new revenue growth in some towns, a trend worrisome to many officials, other so-called smart-growth projects across the state are also at risk from the downturn. Such projects cluster residential and retail life into one common village area in an attempt to cut down on traffic congestion, land use, and energy costs.”

“In Pepperell, Selectman Darrell Gilmore expressed disappointment at the news regarding the old mill site. ‘I think there’s still potential, but I think the question is, how they are going to push it through in a tight economy?’ he said. ‘If you build it, who is going to move into it?’”

The Eagle Tribune from Massachusetts. “Every day, it seems, the news gets worse. Home sales are down, prices are falling and properties are staying on the market for months longer than in the past. Meanwhile, the number of foreclosures keeps going up, further depressing the market, and banks are reluctant to loan money to anyone who has less-than-perfect credit.”

“The avalanche of bad publicity is starting to take a toll, say some people in the local real estate industry. ‘Media reports have home buyers scared to take the first step,’ said Frank Novak of Novak Finer Homes in Haverhill.”

“‘This is a terrific opportunity to get into the market,’ he said. ‘People can buy an entry-level house at the same price they would have paid for it in 2004 or 2005. That’s pretty good.’”

“North Andover real estate agent Debbie Moore only half-jokingly suggests that in 2003 and 2004, ‘people were used to houses selling in 15 minutes. But it was never meant to be that way. Real estate is a long-term investment.’”

“Most communities in the Merrimack Valley and Southern New Hampshire are struggling. Karen Yasenka of Yasenka Real Estate in Hampstead, N.H., said her business is way off over last year. She said the problem is that people have lost faith in the housing market.”

“‘Usually in a poor market, you’ll see developers and investors who will come in, buy a house and flip it for a profit,’ she said. ‘But even handyman specials you can get for under $200,000 are still sitting there. Nobody has any confidence in the market, and they don’t want to play with it.’”

“She recently heard of a good deal for 10 acres of land in Salem, but when she mentioned it to a local developer, he just shrugged and said he didn’t want the hassle. ‘There’s a real malaise in the economy,’ she said. ‘Faith in the housing market has to be restored.’”

“One of the major stumbling blocks to a healthy housing market, however, is the increasing number of houses being foreclosed on. ‘The street I live on has three homes that have gone up for auction,’ she said.”

“Short sales are becoming very popular, said Lawrence broker Raul Ortega and other local agents, as more banks recognize that it’s better to take a loss on a property than to foreclose on it and board it up.”

“Many banks, however, are still holding onto foreclosed properties because they are refusing to enter into short sales. Furthermore, some companies refuse to reduce the price of bank-owned properties.”

“‘If you go to an auction, you expect to be able to start bidding low. But when the bank establishes the starting point, people around here are not used to that,’ he said. ‘Back in the 1980s, people would start at $5,000 and work their way up. Banks now are being tough on that. I see those same properties sitting there forever.’”

“A combination of foreclosures and short sales are double-teaming to erode market values throughout the region, said Ron Carpenito of The Prime Property Team in Haverhill.”

“‘If you see a lot of short sales happen, it will hurt a lot of people,’ he said, noting that in one local community there are two, nearly identical houses side by side at vastly different prices. The reason? One, which is going for $280,000, is a short sale by the bank. The other, which is a market-value house being sold by the owner, is going for $350,000.”

The Worchester Business Journal from Massachusetts. “Real estate has perhaps been one of the gloomiest sectors this year: The industry has faced declining prices, increased foreclosure rates and homes that sit with ‘For Sale’ signs staked into their front lawns for months without even a look.”

“The market will be ripe for qualified buyers, and sellers willing to improvise can continue to take advantage of crafty options. One of those includes ‘auction-by-choice,’ in which sellers willingly put their homes up for bid.”

“Already, it’s a rapidly growing alternative. Mark Shear, president of Berman Auctioneers & Appraisers in Worcester, noted that he had more calls in the last year for by-choice sales than he had in the previous 17 years combined. He estimated that foreclosure auctions and by-choice auctions will comprise about 30 percent of the industry next year.”

“‘We know there’s going to be a surge’ in 2008, he said. ‘The numbers are strong.’”

“Shear stressed, however, that the process is most successful with desirable properties that haven’t been listed anywhere else. It’s also helpful when sellers maintain a realistic expectation of the current value of their property. ‘Something is only worth what someone is willing to pay,’ he said.”

“We’re likely to see increased foreclosure rates that will continue to do ‘lots of financial damage’ in 2008, according to Jeff Hall, VP of the Worcester Regional Association of Realtors. ‘It’s going to take us another couple of years to turn it around,’ he said.”

The Times Herald Record from New York. “Homeowners increasingly failed to keep up with their home-loan payments in November, as the number of foreclosure-related filings surged 68 percent nationwide compared with the same month a year ago, according to a mortgage research company.”

“Compared with October, filings in Orange increased 78 percent, while Sullivan’s climbed 46 percent.”

The Daily News from New York. “The number of city homeowners caught up in foreclosure woes rose by one-third last month from a year ago, but actually dropped from the previous month’s total.”

“As the subprime mess continued to unfold, another 2,848 city households filed foreclosure-related papers in November, according to RealtyTrac. Queens saw 1,338 foreclosure-related documents, up 55% from November 2006.”

“‘Queens looks to be the weak link,’ said Rick Sharga of RealtyTrac.”

The New York Sun. “New York City’s status as a rosy exception to the nation’s slowing housing market may be starting to come to an end.”

“New York, one of the 10 cities in the Standard & Poor’s S&P/Case-Shiller Home Price Index, saw home prices drop 4.1% over the past 12 months. These New York numbers include a large swath of northern New Jersey, Fairfield County in Connecticut, and Putnam and Nassau counties in New York.”

“‘When you look at the amount of inventory out there, the fact that lending standards are tightening, and the flow of mortgage credit has slowed — particularly for jumbo mortgages — we still have farther to fall,’ the chief economist at Mission Residential, Richard Moody, said.”

“While the S&P/Case-Shiller index may not emphasize Manhattan proper, ‘we track a large area where the homeowners’ livelihood ties back to the New York City economy,’ the chairman of the index committee at Standard & Poor’s, David Blitzer, said. ‘The home prices in New York have been weak, and don’t show signs of a quick turnaround,’ he added.”

“New York home prices began dropping in June 2006, and have fallen roughly 5% over the past 15 months, bringing the Case-Shiller indices back to the level they were at in September 2005. In the past 5.5 years, the New York market has increased 115%.”

“‘So anyone who bought a house before September 2005 is probably still ahead of the game,’ Mr. Blitzer said.”

“As for Manhattan’s coop and condo market, ‘I don’t think Manhattan apartments are immune to the downturn,’ Mr. Blitzer said. ‘My sense is that we will see softness here over the next several months.’”

“‘For New York City, the wild card will be what happens with Wall Street,’ said the director of research at Radar Logic, Jonathan Miller. ‘The impact on real estate will be more associated with jobs and bonuses than anything else.’”

The Courier Times from Pennsylvania. “At the beginning of the year, homebuilders were predicting the housing market wouldn’t fall much further. But as 2007 wore on, builders realized the end was nowhere in sight.”

“Lower Makefield-based DeLuca Homes joined other builders in offering weeklong fire sales to reduce inventory, offering discounts of up to $150,000.”

“Complicating matters in the housing market was the rise in home foreclosures and the subsequent fallout in the mortgage industry. In Bucks County, houses sold at foreclosure were up 42 percent from last year, according to the sheriff’s office, which handles the foreclosure sales.”

“The high foreclosure rate led to a tightening of credit rules, with banks requiring higher credit rates in return for loans.”

“Not even Toll Brothers, the nation’s largest luxury homebuilder, was safe. The Horsham-based company reported an $81.8 million fourth-quarter loss earlier this month, its first quarterly loss since it became a public company 21 years ago.”

“‘By many measures, fiscal 2007 was the most challenging of the 40 years that Toll Brothers has been in business,’ CEO Robert Toll said at the time.”

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