December 30, 2007

The Beginning Of The End Of The Great Real Estate Boom

The Santa Cruz Sentinel reports from California. “Watsonville farmworker Justino Mendoza Cortez was happy to be a homeowner, proud to be living at 64 College Road with his wife and six children. But he couldn’t afford it. When one of his loan payments jumped in May from $2,722 to $4,054 per month, he didn’t realize he had an adjustable-rate mortgage. The house he bought almost three years ago for $695,000 was sold on the steps of the county building Thursday for $522,750.”

“Now he wonders when his family will have to move and where they will go. He said he can afford about $2,000 a month.”

“More than 240 homeowners in Santa Cruz County have lost their homes this year — five times as many as in 2006 — and hundreds more are in danger of losing homes, all because they can’t afford their mortgages.”

“Vern Johnson, who has handled 900 foreclosure sales in Santa Cruz, Monterey and San Benito counties this year, said 99 percent of the homes have ended up with the lender. Most of those have been homes purchased in 2005 and 2006.”

“‘I don’t think it’s going to get better for a while,’ he said.”

“The Bush administration’s proposal to freeze interest rates for struggling borrowers starting Jan. 1 may not be much help. One of the requirements is for the borrower to live in the home, and Johnson said about half the homes he’s seen are empty. A large number, he added, are occupied by tenants rather than owners.”

“The market fell too fast for Howard Little. He leveraged the equity in his Boulder Creek home to invest in real estate, buying a rental in Sacramento. Instead of producing a steady income, the deal went into foreclosure.”

“In the summer, he put the home where he grew up on the market for $680,000; it sold for $550,000 in September.”

From BBC News. “The city of Stockton in California is at the centre of the mortgage crisis now sweeping America. But Stockton is also a place where you can really get a feel for the staggering amounts of money banks loaned during the boom - with few or no questions asked.”

“In his 25 years as an estate agent in Stockton, Kevin Moran had never seen anything like it as seemingly limitless bank loans sent house prices rocketing.”

“‘It was crazy,’ he says. ‘People felt that if they didn’t make a high enough offer on a house, it would be gone. Instead of saying ‘What do you want to do on a Saturday? Let’s go to the park’, they’d say ‘Let’s go buy a house.’”

“At the height of the buying frenzy, in 2006, Will Trawick was selling new homes for a Stockton developer. Faced with crowds of a hundred buyers, bank loans in hand, all chasing the 20 houses he might have on offer, he organised bingo-style lotteries.”

“‘We had ping-pong balls with numbers, just like you’d see on a TV show,’ Mr Trawick recalls. ‘Everybody would have a number. We’d put the ping-pong balls in, spin it and, you know ‘Number 22! Yoo-hoo!’ They’d jump up and yell, come on up and pick which home they wanted, and leave a deposit cheque.’”

“With house prices soaring, pretty well anyone who owned a home in Stockton suddenly found they had plenty of equity in their property - equity the banks were eager to convert into cash.”

“Steve Carrigan is in charge of economic development for Stockton. He says bank loans made it a party every day. ‘People went to the bank and got a loan on the increase in the price of their home. They went out and spent all that money,’ he explains.”

‘”Price of the home went up again, they went back to the bank and got another loan. They went out again and spent that money on cars and jewellery and furniture - whatever they wanted.’ With the help of the banks, Mr Carrigan says, people in Stockton ’spent their house.’”

The Record Searchlight. “The effects of a housing slump are rippling through Shasta County’s economy, with decreased retail sales, spikes in home foreclosures and bankruptcy filings, and a drop in charitable giving.”

“‘Housing is certainly the primary thing,’ said bankruptcy attorney Dennis Cowan, whose office has been swamped with financially distressed clients. He’s booked six weeks out.”

“Bankruptcy filings in Shasta County through November are up to 370, a 60 percent increase over a year ago. Homes lost to foreclosure in Shasta County increased 372 percent — from 64 to 302 — through November, county records show.”

“Debbie Groce had worked 20 years in mortgage lending before she lost her job in Redding in December 2006. At the peak of the market, Groce said she was making more than $40 an hour as a senior mortgage underwriter.”

“But Groce has been unable to find work. She said there isn’t a great need for mortgage underwriters in Redding. ‘I have always had a great job and worked all my life. … It has been a whole year, and I am losing faith,’ Groce said.”

“Jobless numbers in Shasta County have been trending up all year. In November and October, the county unemployment rate reached nine-year highs for those months.”

“Redding’s sales tax haul in the third quarter (July through September) of 2007 was down 8.26 percent. The drop extends the city’s sales tax downturn to five straight quarters, the longest slump since the early 1990s.”

“Redding real estate agent Chris Young is working with a developer who has a small subdivision in Redding that is ready to go, but the client will sit out 2008.”

“‘He doesn’t want to put up with the low-ball offers,’ Young said.”

“Redding home builder Jerry Wagar of Ochoa & Shehan expects 2008 to be a lot like 2007. ‘I don’t see any indication. To me, there are no apparent signs there will be change,’ Wagar said. ‘A lot of people are still sitting on the sidelines, waiting to see what the bottom is.’”

The Desert Sun. “The number of homes sold in November was a 2.2 percent increase over October, according to the California Association of Realtors. It’s the second month in a row where sales have gone up. But other market indicators aren’t as optimistic. The median price is down 14.2 percent from a year ago. Almost 9,200 desert homes are on the market.”

“DataQuick reported 564 homes sold in October…43 percent below last year’s numbers. DataQuick has not released November figures yet.”

“While sales increased between October and November, sales overall are down 16.8 percent from a year ago.”

“‘Two months of improvement after five months of decreases is good news,’ California Desert Association of Realtors executive VP Greg Berkemer said of the housing sales. ‘But this bottom is a bumpy trough and we don’t know if if this is a just a spike.’”

“Berkemer’s advice: ‘Sellers should remain realistic and only be in the market if they need to sell their home.’”

The Press Enterprise. “For 2008, forecasts indicate a drastic slowdown in new housing construction, says Fred Bell, executive director of the Desert Chapter of the Building Industry Association of Southern California.”

“Housing starts in the desert for next year are estimated at 1,500 to 1,800 — down from a peak of about 8,000 new starts in 2005, Bell said. ‘It kind of gives you an idea about our outlook,’ he said. ‘We’ve got to figure out a way to keep some of these builders in the game and set the stage for more robust growth in 2009.’”

“The Coachella Valley will begin 2008 with a glut of homes, both new and resale, on the market: about 8,000 to 10,000 homes instead of the 3,500 to 5,000 typically seen in a healthy market, Bell said.”

“Land prices are down about 30 percent and in some cases, finished lots are selling for about ‘50 cents on the dollar,’ Bell added.”

The San Francisco Chronicle. “It became clear this year that the real estate boom of the first part of the decade had officially gone bust as lenders tightened standards, sending sales volume skidding and squelching price appreciation. The number of homes sold fell 23 percent through November in the Bay Area’s nine counties compared with the same period in 2006, according to DataQuick.”

“‘It was the beginning of the end of the great real estate boom of the (two thousand) zeros,’ said Christopher Thornberg, a founding partner of the consulting firm Beacon Economics. ‘What you’re looking at is a meltdown in the housing market that is completely unprecedented, but completely understandable when you look at the abuses in the market in the last few years.’”

“Experts say that nowhere has the shift from boom to bust been more dramatic than in the new-home market. Developers who were dangling upgrades like free hardwood floors and fancier appliances changed their tune and instead began slashing prices by as much as $150,000 in parts of the Bay Area in 2007.”

“Markets such as Brentwood, Oakley, Antioch and Pittsburg are particularly suffering, according to Greg Paquin, who runs a consulting company that advises home builders. ‘There is an abundance of product available and prices were unsustainable and continue to be,’ Paquin said. ‘The credit situation has made it more of a challenge.’”

“While new-home developers pointed to statistics about the state’s perpetual shortage of housing as they built, the homes that went up don’t necessarily meet the region’s needs, said Beacon’s Thornberg.”

“‘Don’t confuse apples and oranges,’ he said. ‘We heard lots about the housing shortage during the boom and that had little to do with high-cost new houses and everything to do with low-rent apartments for immigrants.’”

“While 2007 slides into the record books as a real estate industry train wreck, few are predicting that 2008 will be much better.”

“‘A real recovery in the housing market is probably at least a year off,’ said Robert Kleinhenz, deputy chief economist for the California Association of Realtors. ‘The murkiest part of my crystal ball has to do with the liquidity crunch.’”

“‘People think it’s not going to hit their neighborhood, not going to hit their price point,’ said Thornberg. ‘But the reality is that it is only going to get worse in 2008.’”

The Union Tribune. “For San Diego County, 2007 was a horrible year for the real estate market, when it seemed that everything that could possibly go wrong did. As 2008 dawns, even the most optimistic economists say the housing market will continue to decline over the next six months.”

“In the past year, the median home price in San Diego County has fallen more than 11 percent. Home sales are down 26 percent. Defaults on mortgages have risen 150 percent. Residential construction permits fell more than 30 percent last year. That has put a dent in employment.”

“Between November 2006 and November 2007, 5,500 construction workers, 1,300 real estate workers and 500 mortgage and finance workers lost their jobs.”

“Many economists say that in the long run, the downturn will be good for the economy, since the high price of housing has made life unaffordable for many Californians and forced many people to look for jobs and housing elsewhere.”

“‘The quicker we have a downturn, the quicker we can get imbalances out of the system,’ said economist Christopher Thornberg.”

Buyers Are The Ones That Are Driving This Train

The Gazette Times reports from Oregon. “For years in Corvallis, the housing market was booming, with new construction in subdivisions such as Timberhill and Willamette Landing keeping developers and real estate agents busy. New housing permits were down 60 percent this year compared to 2006 and — thanks to tighter lending policies and a generally slower housing market — homes ranging from $300,000 to $500,000 make up 75 percent of what’s available to homebuyers in town.”

“At the upper range of the residential real estate market, a few sellers have even started to slash prices, a move unheard of in Corvallis just a few months ago. In high-end homes priced at more than $500,000, real estate agents now have a 14-month supply.”

“‘For the most part, you’re looking at home buyers who are seeing wild swings in the market and they’re sitting on the sidelines right now,’ said Mike Goodrich, who runs Legend Homes’ Corvallis office.”

The Bend Bulletin from Oregon. “After nearly a quarter of a century without a serious downturn, history finally caught up with the Central Oregon housing market in 2007. Swooning like an oxygen-starved sprinter at the end of a too-long run, the region’s residential real estate market struggled by nearly every measure throughout the year.”

“High sales prices were cold comfort to would-be home sellers who found it difficult to move their homes at any price.”

“Bend started the year with more than 1,100 unsold homes on the market, according to MLS data reported by Bratton Appraisal Group’s Mike Caba. That number quickly soared to more than 1,600 by June as speculators and other homeowners tried to sell at the same time.”

“The number of listings gradually shrank to around 1,300 by early this month, as some homes sold and some would-be sellers opted to pull their homes off the market to wait for another season.”

“Still, at the year’s average monthly sales rate, it would take more than a year to sell off even that reduced year-end inventory level.”

“The region’s other local markets had similar stories to tell in 2007. More than 572 unsold homes on urban lots were on the market in Redmond by the middle of December, according to Caba’s numbers — a 13-month supply at the year’s average sales rates.”

“Sales in La Pine were off 52 percent from 2006 through the third quarter, according to the Central Oregon Association of Realtors. The same was true in Jefferson County. In Crook County, sales numbers slipped by more than 46 percent.”

“The chill in local home sales, which actually started in summer 2006, found its roots in a number of factors, including the virtual disappearance of speculators and investors. Mortgage defaults in Deschutes County rose to their highest level in more than 10 years, with more than 560 mortgages falling far enough into arrears to enter the first stages of foreclosure by Dec. 20, according to county records.”

“Buena Vista Custom Homes, who moved into the Bend market in early 2006, tried to pull out with an auction of 29 empty homes in its inaugural northeast Bend subdivision in mid-December, but the auction was a bust. Not a single Bend home moved at a price that Buena Vista President Roger Pollock would accept.”

“In the long term, said Mark Kramer, general manager of the region’s largest custom cabinetmaker, optimism still reigns.”

“‘No one expected it to continue at the pace it was going at,’ Kramer said, ‘But the thing about Central Oregon is, it’s still a great place to be, and everybody I talk to still feels comfortable about making an investment in a home here. Maybe there’s going to be a little bit of a lull in the market, but nobody feels there is going to be a decline in the long term.’”

“The remodeling market remains relatively strong despite — and in some ways, because of — the downturn in production home building, said Pacwest Homes’ director of sales, Gary May. That’s partly…because the price of labor and materials has plunged since the general housing market cooled down.”

“The price of framing, for example, has plunged from $20 to $25 per foot at the peak of the labor-short housing boom to around $10 to $11 per foot now, May said. Some materials, like concrete and tile, have retained the prices they hit at the peak of the boom, but others, like framing timber and cedar, have come down.”

“Pacwest laid off its in-house tile setters and drywallers at the beginning of the year, reacting, along with most home builders, to the slide in new-home construction, May said. But it has kept its project managers, finish crews and painters working, and it’s hiring subcontractors to fill in the gaps as work comes in.”

“Which is apparently keeping at least some of them working, despite the drawdown in new- home construction, albeit at lower prices.”

“‘Our subs provide great service to us, especially now that they are a little slower as well,’ May said. ‘They jump through hoops for us. And if it means the difference between working for a couple of weeks or being idle for a couple of weeks, for the sake of a couple of hundred dollars in price, we’re finding that the subs are being a little more flexible in that. So, at the end of the day, it’s the consumer who wins.’”

The Olympian from Washington. “About 2,000 homeowners in Thurston County are trying to sell their homes, according to the Northwest MLS, and it’s taking longer than many had expected.”

“Price reductions have become commonplace to stimulate sales, but it doesn’t stop there, real estate agent Eric Hjelm said.”

“Two summers ago, all most sellers had to do was put a ‘For Sale’ sign in their yard and ’start packing,’ Hjelm said. Today, the seller has a ‘laundry list’ of things to consider before marketing a home, he said.”

“Homeowner Frank Burnham of Olympia, a Hjelm client, has been putting his list to work. It includes installing new carpets, painting and making sure his 2,400-square-foot house is clean and uncluttered before it is put on the market. Burnham had planned to ask $350,000 for his house, but has lowered the price to about $329,000.

“‘Buyers are the ones that are driving this train,’ Burnham said about the current housing market.”

“Burnham, who has taken a job in Astoria, Ore., is willing to wait until the end of year to sell his house. If it doesn’t sell, he plans to turn it into a rental, even though that probably won’t cover his mortgage payments.”

“‘Some sellers are overreaching on price, but those who expect something more reasonable are selling their homes,’ said broker Ken Anderson.”

“Dan Presley of Olympia, who invests in property with a partner, has been trying to sell a 2,000-square-foot house in Lacey for about six months. After working with a real estate agent, they decided to try to sell the house themselves. They have dropped the price several times from $284,000 to $259,900, Presley said.”

“‘A year ago (the house) would have received three or four full-price offers,’ he said.”

“But with so many homes to choose from, the house has received only a couple of nibbles, Presley said. ‘It will pick back up,’ he said about the housing market. ‘It’s just kind of slowing down, and you have to roll with it.’”

“Patti Furu of Tumwater did just about all she could to sell her 1,800-square-foot house. Furu painted it, staged it, upgraded the kitchen, held open houses for nine weeks and dropped the price $20,000. After 10 weeks, Furu finally sold her house last month for about $274,000.”

“‘People are just waiting for an amazing deal,’ she said.”

“When staging and painting didn’t work, Furu began to offer an unusual incentive to buyers: free baked cookies once a month for the first year. ‘It was something to separate myself from the pack,’ she said.’”

“Today, Furu is living in a 1,300-square-foot duplex on a month-to-month lease. After working hard to sell her home, she is now going to take her time looking for the next house to buy.”

“‘I’m waiting to see what the market does,’ she said.”

The News Tribune from Washington. “This was the year Tacoma said goodbye to gonzo development. Goodbye to weekly near-weekly announcements of condo projects. Goodbye to big plans to rescue historic landmarks and goodbye to ambitious schemes for blocks-long mixed-use developments.”

“‘I think the market is taking a breather,’ said Tacoma real estate consultant J.J. McCament. ‘And that’s not necessarily a bad thing.’”

“Give credit – or blame, if you will – to a national cinching up of credit standards that washed over even a relatively strong Puget Sound-area market. And credit, too, a growing unsold inventory of high-end and midmarket condos that it will take the market months to absorb.”

“On the Foss’ east side north of the 11th Street Bridge, developer Mike Cohen earlier this year abandoned plans to build the Crosswater condo project and sold the land. At Tacoma’s Old City Hall, developers abandoned a plan for luxury condominiums. The building is now being renovated into class A office space.”

“At the old Spring Air mattress factory site, North Carolina developer Landmark Group has switched gears. Now Landmark is planning a two-phase, 300-unit apartment project for the former factory site instead of an affordably priced condo project.”

“Landmark executive Jim Sari said the group adjusted its plans after taking a second look at the Tacoma market. Sari maintains that bankers, burned by some markets where prices have collapsed, are unfairly applying tougher standards to the Puget Sound market. ‘Bankers are basically herd animals,’ he said. ‘Where one goes, the others follow.’”

“Even with the slowdowns and changes to apartments, there was ample choice of condos in Tacoma, especially in downtown or nearby areas.”

“‘There were about 3,700 units on the table when I did the analysis last spring,’ said real estate consultant McCament. ‘Now that’s down 3,500.’”

The Seattle Times. “Three Decembers ago, Vulcan Real Estate erected a tent in Seattle’s long-unfashionable South Lake Union neighborhood and invited the public to see plans for 2200, a luxury condominium project to be built there. Within days, 2200 was nearly sold out.”

“So Paul Kelly, the owner of a 17th-floor unit in 2200, should be sitting on top of the world. But it didn’t quite work out that way.”

“What looked like a surefire winner — homeownership in Seattle — has taken on a tinge of uncertainty. Trying since September, Kelly has been unable to sell his one-bedroom unit with its unobstructed view. Hardly anyone has come to see it, he says.”

“As thousands of other sellers have also found out, the Seattle area’s formerly stellar real-estate market has finally, slowly joined in the national downturn.”

“It could be good news for buyers. Negligible price increases, rather than being bad news, could actually be good by allowing wages time to catch up. That, however, is probably not what owners want to hear. But Sam Pace, an agent with Bellevue’s Executive Real Estate, says it’s realistic.”

“‘We’ve had double-digit appreciation for years in a row, and if you think you can’t handle a little bit of a dip, you have a pretty special view of what your return should be,’ Pace says.”

“So the word for next year is patience. That’s the approach Paul Kelly, the condominium owner, is taking.”

“Although he’d like to sell it now (and has reduced his price from $624,000 to $599,000 for buyers who purchase directly from him), he says that realistically it may be spring before he lists it again with a real-estate company.”

“‘I think things should hopefully settle down by then; that’s my plan anyway,’ Kelly says. ‘I know my buyer is out there. They just have to come see it.’”

It Seems To Be A Nationwide Phenomenon

The Tampa Tribune reports from Florida. “If you’re trying to sell your home, recent real estate news is likely getting you down. There are more homes for sale than buyers, empty houses sit on the market for months, and some homes aren’t selling. Tampa ranks second in the nation for falling prices, and economists say it will get worse. It’s hard to ignore how long it’s taking to make deals. October’s 1,700 sales are still down 30 percent from the same month last year when 2,419 homes sold. In October 2005, 3,735 homes sold.”

“Real estate agent Nick Davis in Wesley Chapel, said he is seeing an uptick in sales, as long as clients are willing to drop their asking prices. Part of the reason homes are taking longer to sell, he said, is that homeowners don’t want to accept that homes aren’t appreciating like they did during the housing boom.”

“‘People have to be realistic,’ Davis said.”

“David and Jeanine Blake find themselves on both sides of the selling fence. The couple just bought a house in Belleair and feel they got a good deal because of the slow market. Now, though, they have to sell their old home and fear it will take a while. They worry, too, whether they’ll get a price they can live with.”

“‘We’re prepared for it to take 90 to 120 days,’ David Blake said. ‘We have equity, but we’re not going to give it away just because we have equity in the home.’”

The Naples News from Florida. “The real estate boom that peaked in 2005 contributed to Southwest Florida’s unprecedented foreclosure rates in 2007, say real estate professionals and county officials.”

“In Lee County, 11,698 foreclosure cases were filed with the Clerk of Courts this year before Dec. 1, more than tripling the number of all 2006 filings. In Collier, 3,225 foreclosures had been filed as of Friday morning, an increase of more than 400 percent over 2006.”

“Single-month totals for November 2007 were greater in both counties than yearly totals in 2005.”

“‘It just gags you,’ said Lee Clerk of Courts Charlie Green. ‘I have seen the market go down before, but we have never seen this large of an increase in foreclosures.’”

“Green said a variety of factors particular to the area’s booming 2004 and 2005 real estate market ultimately led to this year’s dreary statistics. ‘A home worth $200,000 had a market value of $400,000 in a very short time, which any reasonable person knows shouldn’t happen. There was a tremendous spike in value and people bought like drunken sailors,’ he said.”

“Foreclosures might continue to increase at a rapid rate because increased payments from adjustable rate mortgages sold during the boom’s height are just now kicking in, said Ross McIntosh, a Naples real estate broker.”

“While housing prices have been falling, they have not decreased enough to match income levels in those areas yet, he added. ‘Cape Coral and Lehigh have not yet felt the brunt of the foreclosures. I don’t see a bottom, literally, for years to come. Everybody’s hurting but we’re hurting most in Southwest Florida because we had the farthest to fall, and an undiversified economy.’”

The Bradenton Herald from Florida. “Local builders might not be getting as much money per home as they did during the real estate boom, but some say sales numbers are up slightly from last year.”

“Neal Communities sold 14 homes last month, resulting in a total sales volume of about $5.3 million. In November 2006, Neal sold 12 homes, but the sales volume was nearly $2 million higher at $7.2 million. The higher sales number with lower sales volume is an indication on how far home prices have fallen.”

“Even in places like The Country Club at Lakewood Ranch, prices have been drastically reduced. A banner outside one of the gates tells prospective buyers they can get into Neal’s Wexford community for $330,000. During the boom years, prices in that development were nearly twice that.”

The Times Free Press. “After years of steady increases, housing starts in Northwest Georgia and Bradley County dropped by double digits through the third quarter of this year compared to the same period in 2006, records show.”

“But in several Southeast Tennessee counties, many of which do not require building permits for houses, officials say they are seeing an upward trend.”

“‘Right now, we are not (seeing any new construction starting),’ said Ray Brackett, building official for Marion County. ‘But we have several million dollars’ worth of new homes being built. I’ve got one (building plan) in my office right now for new condos on the river.’”

“In the greater Chattanooga area, which includes Bradley County, the number of permits dropped from 2,127 through Sept. 30, 2006, to 1,668 for the same period in 2007. In Bradley County, building permits dropped from 502 to 382 for the same comparison period, records show. That compares with double-digit increases before 2006, according to The Market Edge.”

“Bradley County posted a 14.6 percent increase from 2003 to 2004. Since then, ‘it is off some,’ said Greg Thomas, Cleveland city building inspector. ‘It seems to be a nationwide phenomenon from what I can tell. But I don’t think panic buttons are being pushed. People are still bringing housing products to the market, and I think that will continue.’”

“Mr. Brackett said the area is attractive for its low cost of living and scenic beauty. ‘We have it all, the mountains and the river,’ he said. ‘And it’s cheaper to live here.’”

“The cost of living may be low, but a lot of the new homes coming out of the ground are not.”

“The Cumberlands at Sewanee and Timberlake at Sewanee are upscale developments on 12,000 acres on South Pittsburg Mountain. The Rarity Club at Nickajack, which will have an 18-hole golf course, is slated to have nearly 1,000 homes. Rarity officials said last month that about half of the 160 lots have sold. Many of those lots are selling from $300,000 to close to $1 million, Mr. Brackett said.”

“The rural Tennessee counties have room for new developments. In Marion County, for example, nearly 2,700 acres are being converted to residential subdivisions, according to Marion County Mayor Howell Moss. In Meigs County, officials said three developments are expected to attract as many as 6,000 new residents.”

MSN Real Estate on South Carolina. “The view from Mari Kunz’s new house in Murrells Inlet, S.C., is far from what she pictured when she and her husband, Larry, bought into this Levitt and Sons retirement community last summer.”

“Instead of tropical landscaping, lush green lawns and a steady stream of other active seniors on bikes, she sees street after street of empty lots, framed unfinished houses and streetlights that don’t work.”

“Levitt filed for Chapter 11 bankruptcy in November, putting the brakes on construction at the couple’s development, Seasons at Prince Creek West. The move left them and the rest of the residents without the lifestyle, amenities or services promised them. The posh Grand Clubhouse was never built, and the fitness center consists of little more than a gaping hole for the indoor pool and a couple of walls.”

“‘We are the only house in Phase 2,’ Kunz says. ‘We are kind of out here by ourselves.’”

The Charlotte Observer from North Carolina. “If you need a house near Houston, Rhonda Dupras wants to talk to you. She isn’t a real estate agent but a frustrated Charlotte newcomer caught up in the nation’s housing crisis.”

“She’s desperate to buy in Charlotte, one of the few places where homes continue to appreciate. But she can’t sell her property in Texas, where the real estate market is tanking. So she rents and waits.”

“‘I moved to Charlotte because I wanted a better lifestyle,’ said the 41-year-old, who works in the mortgage lending industry and has had her Katy, Texas, home on the market for 22 months. ‘I have to eat the mortgage every month. It’s why I haven’t bought a house here.’”

“Local real estate professionals say too many clients are simply blocked from buying because they can’t unload properties elsewhere. That’s becoming a drag on Charlotte’s real estate market.”

“It’s a market that has thrived this decade with transplants — about 80,000 a year — buying homes. But the local numbers now are telling a different story: Average days for a home to sell increased to 124 days in October from 118 the same month last year, according to Carolina MLS. And contracts, the most current snapshot of sales, were down 21 percent last month, compared with the same period last year.”

“Terri Wade, a Charlotte mortgage broker, started a social group of newcomers. Of the 89 newcomers in her group, about 15 are stuck with mortgages in soured markets elsewhere.”

“In her mortgage business, corporate clients relocating to the region have been spending more than a year in temporary quarters, compared with less than six months in 2006 and prior years, she said. ‘This is touching so many different people.’”

“Among the frustrated newcomers is Christopher Dobrosky, who moved to Charlotte for a new job and better pay with a construction materials company. He can’t sell his condominium in Philadelphia. He says he could afford to buy in Charlotte and make payments on two properties in two states but wouldn’t feel comfortable doing it.”

“The condominium is worth less than when he bought it four years ago. And he took out a home equity loan to pay off debt. ‘It’s crazy. I would have to choose to lose money,’ said the 34-year-old. ‘I’m kind of stuck.’”

“On the other side of the sales equation are local homeowners like Keith and Sara Sykes, who say they hear the same tale from prospective buyers who are interested but can’t close deals. The Sykeses have been trying since September to sell their condominium in located in south Charlotte.”

“The two want a bigger house with a backyard. They closed Friday on that new house, also in south Charlotte near Sedgefield. But Keith Sykes takes a deep breath when considering the local market for condominiums.”

“‘A lot of people who have looked can’t sell houses where they used to live,’ he said. ‘I think the economy is still strong here; it’s just a tough time to sell.’”

“Fortunately for the couple, Keith Sykes took some big profits from selling a Dilworth condominium almost three years ago that he owned for two years during the heart of that area’s appreciation. They have savings in case the condominium doesn’t sell by the spring but believe interest will pick quickly after the holiday season.”

“‘My real concern would be if it didn’t start selling by the end of January,’ he said.”

“Sheila Harman has experienced the slowing market. To her it feels like a complete stall.”

“She tested the market in June to gauge interest in her sprawling brick house on 12 acres in Union County. Harman and her husband listed the property at $598,000 with an agent, who brought only a few window-shoppers, she said.”

“She also listed the house on a real estate Web site that guarantees hits. And she posted signs in her neighborhood directing potential buyers to the property. Then she waited. She’s still waiting.”

“Unwilling to lower her price, Harman let the agent contract expire. And she said the listing” on the real estate Web site hasn’t produced any phone calls.”

“‘We will just hang in there,’ she said. ‘It’s very unusual to list a house like that and get no response.’”

Local Market Observations!

What do you see in your local housing market this weekend? Price reductions? “The number of homes for sale on the Jackson market reached a two- year high on Nov. 30, when houses reached an 8.5 month supply at the current rate of sales. That data comes from the Central West Tennessee Association of Realtors MLS. Investors from California and other states have helped prop up Jackson’s mid-priced housing market, said Ben Roberts of Crye-Leike Blue Skies Real Estate.”

“‘I have some (San Jose,) California investors who are buying houses from $110,000 to $130,000,’ he said. ‘They have done their homework and like the property appreciation.’”

“The number of Madison County homes entered into foreclosure doubled this year from 2006, said Linda Waldon, Madison County Register of Deeds. ‘We have never seen this rate of foreclosures since I have been in here since 1990,’ she said. ‘This is pretty bad for this county.’”

“Effects of the nation’s housing decline can be seen in the Memphis real estate market. ‘I inspected a house (in Memphis) that sold for $127,000 last week,’ said Jim Callicutt of Accurate Home Inspection in Memphis. ‘The same plan sold one subdivision over for $165,000 earlier this summer.’”

“Like most other parts of the country, Rhode Island’s housing market has been in decline. When it will rebound is anyone’s guess. ‘I wish I had a crystal ball,’ said Roger Warren, executive director of the Rhode Island Builder’s Association.”

“In Rhode Island, the inventory of unsold single-family houses listed with real estate agents in September rose to 6,883, a 10-month supply, up from a 9.2-month supply in September of last year, according to the Rhode Island Association of Realtors. For the first nine months of this year, the median price was $276,000, down 3.2 percent from the first nine months of last year and the first decline in the January-through-September period in a dozen years.”

Or property tax problems? “Valley homeowners upset about the fast rise in their property-tax assessments may feel some relief this year as the latest valuation notices hit their mailboxes. The Maricopa County Assessor’s Office says the new round of valuations to be mailed around Feb. 1 will reflect the slump in the housing market.”

“Paul Petersen, an assessor’s spokesman, said appeals have increased 25 to 30 percent during the housing boom. The combined median prices of new and existing homes increased 55 percent in the Valley from 2004 through 2006, according to Arizona State University.”

“But the market turned locally and nationally, and home prices fell in more than half of the Valley’s ZIP codes in the first eight months of this year, according to The Republic’s latest Valley Home Values study.”

Markets related to housing? “The commercial real estate market follows the residential market by 12 to 18 months, according to conventional wisdom. Those 12 to 18 months ended in early 2007. And like the residential market, Southwest Florida’s commercial real estate market has begun to slide.”

“Both the total number of deals and the total dollar volume in the three-county region were down 30 percent over the 12 months ended Nov. 30 compared with the same period a year earlier, according to county property appraiser data.”

“‘This summer was dreadful,’ said John Swart, VP of commercial sales for Schroeder-Manatee Ranch.”

“‘The market really fell off late this summer,’ said Mark Vitner, senior economist with Wachovia Bank. ‘A lot of buyers couldn’t raise capital, and that situation hasn’t gotten any better. We’re not going to see a lot of volume. Prices will continue to come down, and construction will slow.’”

Bits Bucket And Craigslist Finds For December 30, 2007

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