The Housing Bubble

Please post items of interest from outside the US here.

The Valley Sun reports from California. “As prices dip and California soars to the top of the list in the nation for real estate foreclosures, Realtors in this little hamlet are holding their collective breath for ‘the other shoe to drop’ — but, as yet, prices and sales don’t appear to be affected by national, or local trends, said Carey Haynes, Realtor in La Cañada Flintridge.”

“‘It’s a different buyer here, and a different world,’ Haynes said. ‘We’re a separate entity, like an island. We don’t feel the things other cities do. We’re a different animal.’”

“She told of another couple who hoped to move back to La Cañada but were afraid to become involved in a bidding war on a home they liked, since that was the way of the market a year or so ago.”

“‘They were scared the home would have multiple offers, so they did nothing about it. Two weeks later, the home was still available so they made an offer, along with a nice letter to the owners of why they wanted the home,’ she said.”

“At first, the homeowners said they weren’t interested, but after thinking about it, they called back and said they’d take the offer. ‘The only difference I’m seeing [in sales] from a year ago is that there were more multiple offers. Now, there’s time for people to think on things and not just run on emotion,’ Haynes said.”

“‘A year ago, people would leave gifts on the front door step, give their children away, anything to get the owner to sell them the home they wanted. Now, it’s not run off of emotion so much,’ she said.”

“This isn’t to say that some homes in La Canada Flintridge haven’t been on the market for a few months, and may not remain there for a while yet. While driving down La Cañada’s Oakwood Avenue Tuesday morning, Haynes pointed out one home…listed with a different Realtor, that’s been on the market for several months.”

“‘If they’d been more realistic on the price it probably would have sold by now,’ Haynes explained.”

The Ventura County Star. “Obtaining a jumbo loan to refinance his home has been a challenge for Mike Brennan. Instead of selling and trading up, the Camarillo resident decided three years ago to use his equity line to make several home improvements.”

“He did not anticipate the housing crash, which has swallowed much of the equity in his home of 21 years.”

“In Ventura County, sales for existing single-family detached homes dropped 38.2 percent in December from the same month the previous year, the California Association of Realtors reported.”

“The median price fell to $604,730 in December, down 3 percent from $623,510 in November and a 9.9 percent decline from $670,830 for the same month a year ago. The last time the median was at this level was in November 2004.” “‘

“I think there needs to be something to light a fuse and blow up the dam that’s stopping the market from flowing,’ Brennan said. ‘Something has got to loosen up.’”

“Prices are falling, but Ventura County’s median is still three times that of the nation, said Robert Kleinhenz, deputy chief economist at CAR. ‘You still have a situation where buyers are not yet convinced that the market has bottomed out, rightly so, and therefore they’re content to sit and watch the developments,’ he said.”

“Some buyers might be scared by reports of a rapidly declining median that has occurred even in high-cost areas such as Santa Barbara. For the first time since December 2004, Santa Barbara’s South Coast median fell to less than $1 million, to $925,000. ”

“It’s difficult, but not impossible, to get a jumbo loan, Ventura County mortgage brokers say. ‘They’re available, but they are harder to qualify for,’ said Scott Friedman, a mortgage broker in Camarillo. ‘Prior to August, if you had good credit and any equity, you could probably get a jumbo loan.’”

“Now that the standards have changed, potential borrowers have to demonstrate that they can pay the loan back. This means a good credit score, equity in their homes and a minimum 10 percent down payment.”

“‘We’re looking at tax returns and pay stubs, things that were not looked at as much prior to August,’ Friedman said.”

From ABC 7. “There’s been a new surge in foreclosures in California. According to RealTytrac, which keeps tabs on foreclosures, default notices, auctions and bank repossessions, activity shot up 33-percent last month.”

“And that brings the total number of foreclosure filings in California for the year, to more than 2.2 million. That’s a 238-percent increase from 2006. The Bay Area numbers were only slightly better– 200-percent higher than 2006.”

“The most increases are in Contra Costa, Napa, and Solano counties. Foreclosures in Alameda County are up 545 percent over the past two years.”

“Perry Vittoria, a real estate agent in San Leandro says many of these homes were purchased with 100-percent financing. Most of those loans adjusted to amounts buyers could no longer afford. He says these homes could now sell for 25-percent or more below the asking price in a short sale.”

“‘It could take up to three months to get a decision back from the bank if they’re going to accept the offer,’ said Vittoria.”

“George Tribble is the former president of the California Association of Mortgage Brokers. He says approval delays by lenders are understandable.”

“‘The loan may not be their loan. They’re servicing…it’s sold through securities on Wall Street. So you have many investors, many are foreign governments that own these mortgages,’ said Tribble.”

“Tribble says these short sales may prevent some foreclosures but he believes many more are on the way. ‘Right now were probably not halfway through the foreclosures. I think there are many more on the way,’ said Tribble.”

The Voice of America. “Welcome to the foreclosure bus tour. For $20, potential buyers will tour and bid on as many as 10 homes in just under four hours — all of them at fire sale [very low] prices.”

“It is an opportunity Mike and Mary Hays did not want to miss. ‘We’re recently married and are looking for our first — well, our dream home,’ Mike said.”

“With nationwide default rates skyrocketing, bus tours like this one are becoming popular across the country. Realtors say in some cases, homes initially valued at $650,000 have sold for under $450,000.”

“Potential buyers Sandy and Jim Fisher say there is only one problem. ‘No one knows what they’re going to be asking in two to three months. That’s where the problem comes in,’ said Jim.”

“The market’s uncertainty has created hardship for Mike and Dawn Lembeck. Their four-bedroom, three-bath home has been on the market for nearly a year. Home seller Dawn Lembeck says she is optimitic about selling her home. ‘Well, we expected to have this house sold before we moved. We refinanced this home to move into our new home.’”

“The Lembecks are prepared to hold on for a year. But housing analyst Karen Weaver predicts tough times ahead for people trying to sell their homes in expensive markets like California.”

“‘It’s going to be three years before we even have flat home prices, or stability in home prices. We just have this tsunami of defaults facing us and that’s driving down prices — it’s inescapable,’ Weaver said.”

The Recordnet. “Foreclosure activity in San Joaquin County is still on the rise - just at a slower pace.”

“A total of 3,746 notices of default were filed countywide in the fourth quarter of 2007, according to DataQuick. That was a 189.7 percent year-to-year increase, compared with 2,961 default notices in the third quarter, up nearly 230 percent year-to-year.”

“‘We’re seeing a steady stream of foreclosure listings,’ said Jerry Abbott, president and co-owner of Coldwell Banker Grupe, Stockton. ‘We’re not seeing any let-up in it at all. We’ve still got a lot in the pipeline. It’s going to be a tough two years.’”

“This year, foreclosures will continue to swell the for-sale inventory throughout this year, but sales are finally on the upswing, said Larry Matos, broker based in Modesto.”

“Beginning in the fourth quarter, asset managers of repossessed houses began to aggressively cut prices, putting them more in line with the market, he said. ‘They’re not as unrealistic as they were last year,’ Matos said. ‘We saw a fundamental change.’”

The Desert Sun. “As of Tuesday, roughly 4,500 homes were in various stages of foreclosure across the Coachella Valley, according to RealtyTrac. ‘They bought high and their homes are not worth what they paid,’ said real estate agent Ernie Moreno.”

“Meanwhile, many homes now weaving their way through the foreclosure process are vacant and neglected.”

The Press Enterprise. “Riverside and San Bernardino counties last year posted among the highest foreclosure rates in the nation, according to a report.”

“Riverside County recorded 57,241 foreclosure actions in 2007, including notices of default, foreclosure and trustee sales, and bank repossession, said RealtyTrac. That was up 228 percent from the previous year and 827 percent from 2005.”

“San Bernardino County recorded 45,265 foreclosure-related filings last year, up 246 percent in a year and 680 percent in two years.”

“RealtyTrac spokesman Daren Blomquist said high levels of foreclosure activity also are expected in 2008 when new waves of adjustable-rate mortgages are scheduled to reset at higher interest rates.”

“‘That would point to at least another year of fairly tough times,’ he said.”

“Blomquist blamed the willingness of people to take on such mortgages several years ago while speculating that property values would continue to rise.”

“‘Eventually the booming market hit a ceiling and those people were left with payments they couldn’t afford and didn’t have the option to refinance or sell,’ he said. ”

The New York Times. “Look around at the still-life of half-built neighborhoods and red-tiled roofs, all so new, planted during the Miracle-Gro years when homes became A.T.M.s.”

“Look closer and you think you’re staring into a ghost exurb – empty homes left to bankers.”

“This is the new America, Southern California’s affordable edge city, drowning in a sea of debt. In the Inland Empire, the eastern-most suburbs of Los Angeles, one out of every 43 households is facing foreclosure proceedings.”

“Peek behind the palm trees and there you see the most shocking sight: abandoned swimming pools. Thousands of people have walked away without even draining the water. Mosquito control agents now patrol these murky pools, treating them with pesticides to keep disease-carrying larvae from forming.”

“‘With the skyrocketing foreclosure rate, the problem is compounding daily,’ said Jared Dever, a spokesman for the government district that monitors insect breeding grounds. He said about 2,000 abandoned swimming pools would have to be treated in just one part of Riverside County.”

“Is this the image of our consumptive age: the empty swimming pools of Riverside County? Or maybe we should look just to the west, to Orange County and beyond, to the half-empty glass hulks of the banks that changed the rules of lending, now being picked over by federal investigators and civil litigants.”

“I knew something had drastically changed a few years ago when I saw a man with an advertising sandwich board standing at a busy intersection in Los Angeles; the board said, ‘Re-fi now – guaranteed low rates.’ The banker as virtual squeegee man.”

“Now, you sense a meanness around the abandoned swimming pools of Riverside County.”

“‘Perhaps now we’ll see a removal of the low-class types,’ wrote one man in a reader post for the North County Times. ‘Too many house-flippers. Maybe they’ll be burger-flipping now,’ wrote another.”

“People who bet their pensions, their savings, their college funds on something that seemed so safe now look at these wrecks on the banking frontier and wonder: what were we thinking?”

“It’s obvious what we were thinking, all of us – homeowners, appraisers, brokers, buyers, bankers. We were all in on the bet.”

Some housing bubble news from Wall Street and Washington. MarketWatch, “Pulte Homes Inc.’s orders for new homes fell harder than those of peers in the latest quarter, suggesting it’s offering relatively thinner price cuts and incentives, a move that could hurt the home builder later, a Wall Street analyst said. The Bloomfield Hills, Mich., company reported a wider fourth-quarter loss as new orders fell 29% from a year earlier to 4,562 units.”

“The loss included $543.3 million of charges related to inventory write-downs, other land-related charges and impairment of goodwill.”

“‘To us, this indicates that Pulte did not respond to market trends as much as Ryland Centex, which reported order declines of 7% and 10% respectively,’ wrote Banc of America Securities analysts led by Daniel Oppenheim.”

“‘We think this will lead to two issues: further declines in margins when they adjust pricing and more importantly, increased cancellations as buyers in backlog see the lower prices,’ the report said.”

“Pulte’s CEO, Richard Dugas, during a conference call Thursday was cautious in his outlook for the U.S. housing market. ‘For the home-building industry, the year 2007 will likely be remembered as one of the most difficult and challenging in decades,’ the CEO said.”

“Pulte’s strategy since the third quarter of 2007 has been mothballing communities rather than selling homes at a deep discount, according to Anna Torma at Soleil Securities Group.”

“‘Additionally, the company announced it would reduce pricing and use incentives only in select communities where closings would lead to positive cash-flow generation,’ the analyst said.”

“Dugas said on the conference call that the company has more than 50 communities that are mothballed.”

The Detroit Free Press. “‘The question is, can they continue to convert the homes and the inventories into cash?’ asked Jack Lake, an analyst at Victory Capital Management, which owns Pulte shares. ‘The better they can do that, the better off they’ll be.’”

“Revenue for the builder of Del Webb-brand homes for retirees declined 34% to $2.9 billion.”

From Bloomberg. “MBIA Inc., the world’s largest bond insurer, posted its biggest-ever quarterly loss and may raise more capital to offset a slump in the value of subprime-mortgage securities.”

“MBIA posted $3.4 billion of losses from marking down the value of residential and commercial mortgages as well as CDOs that it guarantees, according to the statement.”

“MBIA CEO Gary Dunton is trying to shore up capital and retain a AAA rating for the company’s insurance unit by selling stock and bonds. Without the AAA stamp, MBIA’s business would be crippled and ratings on $652 billion of securities would be thrown into doubt.”

“Standard & Poor’s yesterday said it cut or may reduce ratings on $270.1 billion of subprime-mortgage securities and 572 CDOs valued at $263.9 billion that could extend bank losses.”

“‘We’re paying for those mistakes and I don’t just mean MBIA, I mean all the monolines,’ MBIA CEO Gary Dunton said on a conference call.”

The Associated Press. “Fitch Ratings slashed FGIC Corp.’s financial strength rating on Wednesday, harming the bond insurer’s chances of winning new business and potentially reducing the value of hundreds of billions of dollars in bonds.”

“The company, which insures almost $315 billion in debt, said it had a plan to address Fitch’s concerns, but Fitch said FGIC has yet to raise the cash. The plunge in the value of mortgage debt has damaged bond insurers’ balance sheets because of their exposure to more defaults. FGIC reported its contracts insuring risky debt lost more than $100 million in value during the third quarter.”

From Reuters. “Credit rating company Moody’s Investors Service on Thursday said it raised its assumptions for losses on loans backing subprime mortgages as much as 85 percent in response to deteriorating performance.”

“Average losses for loans made in 2006 — as underwriting standards were loosened more — will likely fall between 12 percent and 24 percent.”

“‘We see delinquencies still going up, not having reached a plateau,’ Moody’s Chief Credit Officer Nicolas Weill said. ‘There are also more concerns by the Moody’s economists on the potential for higher unemployment and recession’ and home price declines.”

“Defaults on privately insured U.S. mortgages rose 37 percent in December from the same month a year earlier, an industry report today showed.”

“The number of insured borrowers falling more than 60 days late on payments jumped to a record 64,384 last month from 46,921 in December 2006, according to the Mortgage Insurance Companies of America.”

“Defaults increased 5.5 percent from November, the prior high. The number of delinquent insured mortgages that returned to good standing fell to 34,813 in December from 37,137 a month earlier, according to the report.”

This Is Money. “Standard Chartered could take on debts of up to $7.15bn (£3.59bn) to bail out its structured investment vehicle Whistlejacket Capital in the latest case of the credit crunch squeezing banks.”

“Standard Chartered effectively committed itself to buying any of the commercial paper issued by Whistlejacket up to its total asset value of $7.15bn. The bank, which sponsors and manages the SIV, said the assets in Whistlejacket were ‘high quality with very little subprime exposure indeed’.”

“Whistlejacket, based in the U.K. Channel Islands, holds asset-backed securities and bank bonds with an average rating of AA, the third-highest investment-grade ranking. Less than 5 percent of Whistlejacket’s assets are linked to subprime mortgages, Standard Chartered said.”

“Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. reported a combined $3 billion of third-quarter losses from mortgage investments, causing profits at Japan’s two biggest banks to slump.”

“Mizuho had 530 billion yen in overseas residential mortgage backed securities at the end of December, of which 30 billion yen was backed by subprime mortgages, Mizuho said today. Mitsubishi UFJ had 282 billion yen in subprime-related investments at the end of the same period.”

“‘Mizuho didn’t know the risks and followed what U.S. banks were doing,’ said Edwin Merner, who oversees $1 billion as president of Atlantis Investment Research Corp. in Tokyo. ‘Mitsubishi is slower at doing new things and that was fortunate this time.’”

“Japan is probably already in recession, ending the longest period of economic growth in more than 60 years, Goldman Sachs Group Inc. economist Tetsufumi Yamakawa said this week. Lending by Japan’s 10 so-called city banks, including Mitsubishi UFJ and Mizuho, fell 1.7 percent in December, declining for the ninth straight month.”

“Bristol-Myers Squibb Co. wrote off $275 million in investments in the quarter, which could rise to as much as $417 million, said Rebecca Goldsmith, a spokeswoman for the drugmaker.”

“‘Some of the underlying collateral for the auction rate securities held by the company consists of sub-prime mortgages,’ the company said today in a statement. If credit and capital markets continue to deteriorate, Bristol-Myers said, it ‘may incur additional impairments to its investment portfolio.’”

“A former employee of Countrywide KB Home Loans has filed a lawsuit claiming he was wrongly fired after he reported fraudulent lending practices to superiors and refused to approve mortgages for unqualified applicants.”

“In the suit, Mark Zachary contended he was given an excellent performance review last February then fired three months later after he blew the whistle on fellow employees and outlined instances in which appraisers were ‘being strongly encouraged to inflate homes’ appraised value by as much as 6 percent.’”

“Countrywide Financial Corp., the largest U.S. mortgage lender, was subpoenaed by Florida Attorney General Bill McCollum over the company’s lending practices, Bloomberg News reported.”

“Bankruptcy trustees and others say they want to know if home-loan companies made false claims against bankrupt homeowners or used questionable proof to make them pay.”

“The subpoena comes amid a national probe of lenders, including Countrywide, in the wake of the subprime collapse.”

The Wall Street Journal. “The New York attorney general’s office, pursuing an investigation into whether Wall Street firms improperly packaged and sold mortgage securities, is latching onto a powerful regulatory tool: the 1921 Martin Act.”

“The state law, considered one of the most potent legal tools in the nation, spells out a broad definition of securities fraud without requiring that prosecutors prove intent to defraud.”

From Fortune. “The mortgage industry has officially replaced Big Oil as Washington’s favorite political punching bag.”

“But before our elected officials in Congress get too preachy about the lousy lending practices that led to today’s mortgage mess, first they ought to consider Congress’s own role in laying the groundwork.”

“The fact is, neither the expansion of the subprime market nor the proliferation of exotic interest-only or option-ARM mortgages would have been possible without federal laws passed in the 1980s.”

“Says Patricia McCoy, a law professor at the University of Connecticut: ‘Congress never likes to blame themselves, but in this case there’s no question they bear some of the responsibility.’”

“McCoy points to two key pieces of legislation that are at the root of the current mortgage crisis: the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and the Alternative Mortgage Transactions Parity Act of 1982 (AMTPA).”

“The former abolished state usury caps that had limited the interest rates banks could charge on primary mortgages, and, in the process, gave banks more incentive to make home loans to folks with less-than-perfect credit.”

“It is AMTPA, the 1982 law, that McCoy sees as most problematic.”

“Prior to the passage of AMTPA, banks were barred from making anything but the conventional fixed-rate, amortizing mortgages. AMPTA lifted those restrictions, giving birth to all the new and exotic mortgages that have so many borrowers in hot water today.”

“‘One of the problems was that there were no substitute regulations to make sure these new mortgages didn’t turn out to be exploitative,’ says McCoy.”

“Much of the grief being visited upon borrowers and lenders right now could have been avoided, she contends, if Congress had required that the underwriting standards on the new, adjustable-rate loans be applied not to the teaser rates but to the maximum rates.”

“All the problems that are rampant today existed on a smaller scale in the 1990s, which is why McCoy faults the 1990s Congress for not acting at that time.”

“‘Certainly by the late 1990s, Congress knew of the problems,’ says McCoy. ‘It had plenty of time over the past 10 years to do something, and it did nothing.’”

The Nightly Business Report on Florida. “Whether the owners of modest homes in working class suburbs or condominium towers still under construction, Floridians are being squeezed by decisions of their own making, as well as economic circumstances beyond their control. The impact can be seen in cities like Lauderhill, a Fort Lauderdale suburb.”

“Dale Holness, a realtor and Lauderdhill town councilman, says the city has seen its share of foreclosures and steep price declines.”

“‘In Lauderhill, in a condo development called International Village, last January, we had a sale of $192,000. Today, there’s a property on the market there for $89,000,’ he said. ‘That’s a big drop and it’s all over. I handle quite a bit of (inaudable) now for Freddie Mac and it’s sad to see how much foreclosure there is out there and how it affects peoples’ lives also.’”

“You wouldn’t call Sandra Sanchez a real estate speculator. Two years ago, with a daughter headed off to college and the real estate boom in full swing, she purchased this house as an investment property. It seemed like a good idea at the time.”

“‘I’m looking at the ins and outs. Maybe this would be a good idea. But unfortunately, of course, the market took a dip not for the better, but for the worse,’ Sanchez said.”

“Sanchez, struggling now to make payments on two homes, thinks the GOP and Democratic candidates are beginning to pay attention. ‘I think they’re seriously thinking about the matter…You cannot sit back and let things happen to people.’”

The Orlando Sentinel. “International buyers have become the best hope for Central Florida’s beleaguered condo-hotel developers, many of whom have truncated or indefinitely delayed their once-ambitious building plans.”

“Projects totaling nearly 15,000 rooms were proposed throughout the region, and developers launched upbeat sales campaigns that promoted hotel rooms and suites as second homes with cash flow attached. But only a handful of the projects have broken ground.”

“‘We had an incredible window open for 12 or 18 months where it seemed like the sky was the limit,’ said Larry Cohen, VP of Lake Buena Resort Village & Spa. ‘It used to be you could get people to just walk in and sign a contract. Now it takes two or three visits and a lot of questions.’”

The Tampa Tribune . “Live Oak Preserve developer TOUSA on Tuesday joined a growing list of South Florida homebuilders to file for Chapter 11 restructuring. The company, which operates in 10 states, lost $818 million in the first three quarters of 2007.”

“Spokesman Tom Becker said its subsidiary, Engle Homes, plans to continue building and selling homes and pledges to honor new home warranties for 10 years, but those decisions are up to a bankruptcy court judge.”

“Live Oak homeowner Sheldon Cohen said residents are unsure of how to take the news. ‘I see a lot of positives,’ he said. ‘There’s active construction; they’re selling houses. Are we going to get stuck paying the bills? I don’t know.’”

“Florida’s new property tax amendment should give a boost to the state’s housing market and economy, but won’t spark a major turnaround, economists and real estate professors said Wednesday.”

“David Denslow, an economist at the University of Florida, said some people may be encouraged to move now that they can transfer their property tax savings under Save Our Homes. But, in a down real estate market, many of them may fear that they won’t be able to sell their homes.”

“‘Now you know you can take it tax savings with you, but you remain insecure about whether you can sell your house,’ he said.”

The St Petersburg Times. “For all the hoopla surrounding tax relief, St. Petersburg Realtor Nancy Riley compared it to the joy of giving birth, few view Amendment 1 as a magic elixir for a housing market sickened by plunging sales and prices.”

“Typical of industry opinion was Jim Knetsch, owner of Tampa’s RE/MAX Realty Associates. ‘It’s not perfect, but it’s a start,’ Knetsch said. ‘Is it going to be a dramatic enough boost to see the benefits through the static of the negative market we’re in? The question’s still out on that.’”

“Opponents of Amendment 1 vow to challenge the measure in court, arguing it discriminates against out-of-staters moving to Florida, who can’t use portability.”

The News Press. “Don’t expect to see a turnaround in Southwest Florida’s housing market for at least two years, a business data expert said at a construction forum in Estero.”

“‘It may be into 2010 by the time the single-family-home market turns around here,’ said Cliff Brewis, senior director editorial for McGraw-Hill Construction. ‘The single-family home market got way out of line’ in terms of prices and the numbers of homes built here, he said.”

“Metrostudy said the inventory of finished, vacant houses declined slightly from 2,096 at the end of the third quarter of 2007 to 2,066 at the end of the year. By the end of 2007, there were 1,181 units under construction.”

“In Lee County, the inventory of vacant developed lots declined from 8,228 in the third quarter of 2007 to 8,207 at the end of the year — a 50-month supply of lots, according to Metrostudy.”

“Collier County’s vacant developed lots decreased from 5,444 to 5,437 in the same time period. That’s a 39.5-month supply.”

“Some of those attending the conference said the foreclosure crisis has already hit home. ‘Don’t even talk about a profit margin right now,’ said Dianne Miller, who works in sales at Fort Myers-based Meridian Construction, the lack of work has residential contractors competing at rock-bottom prices with commercial builders like Meridian.”

“In the long run, Brewis said, the construction industry won’t recover until housing is priced more realistically. ‘Prices have to come down — they shot up too dramatically.’”

“TOUSA Inc., the Hollywood-based parent company of Engle Homes, is seeking to reorganize under federal bankruptcy laws. Engle attracted some attention late last year with its advertising campaign and attention-grabbing slogan — ‘The End is Near.’”

“The message, on billboards and television commercials, was that the days of declining prices for homes were reaching an end.”

“TOUSA, the largest builder to file bankruptcy and at least the 14th since June, missed three interest payments this month as home sales and prices fell in Florida, where the company does most of its business.”

“Cookie Shepard puts a face on the housing market’s brutal impact on local government. The 27-year Lee County employee wheeled personal belongings from her office to her car in downtown Fort Myers.”

“With a co-worker’s help, she stuffed her SUV’s trunk, one victim of 29 layoffs within the Community Development Department announced that morning. ‘It was kind of like a public hanging,’ Shepard said, fighting emotions as she climbed into the driver’s seat. ‘I am raw right now. I really feel like human garbage.’”

“‘It is a difficult day,’ said Joan LaGuardia, department spokeswoman. ‘These are our co-workers; some of them have been with the county for such a long time. I don’t know what the alternative is. We don’t have the revenue coming in to pay them because things aren’t getting built. There just isn’t work.’”

“LaGuardia said 51 single-family home permits have been filed this month in unincorporated Lee County, Bonita Springs and Fort Myers Beach. That includes North Fort Myers and Lehigh Acres. ‘At our peak we were doing 1,000 a month,’ she said.”

The Naples News. “In 2005 — the peak year for Lee County building — the county issued 45,026 permits, 10,221 for single-family homes. By 2007, those numbers fell to 27,769 total permits, 2,393 for single-family homes.”

“‘It’s with a heavy heart that these layoffs have to occur at all,’ Commission Chairman Ray Judah said. ‘But it’s with the understanding that these particular jobs are fee-supported. Because of a significant decline in permit applications it is necessary. The work is not there.’”

“‘We’re looking at people working directly for the building industry,’ said Mary Gibbs, community development director, who must deliver pink slips to employees today, some of whom worked for the county for 25 years. It’s the first county layoffs Gibbs remembers for over a decade.”

“‘It’s terrible to have to lay people off,’ said Michael Reitmann of the Building Industry Association. ‘The building industry had to lay off 50 percent of their workforce in some cases.’”

The Herald Tribune. “Countrywide Financial Corp. says Manatee, Sarasota and Charlotte counties are among the riskiest communities nationwide in which to make mortgage loans. The nation’s largest mortgage brokerage listed the three counties, along with nearby Collier County, among 22 communities with serious mortgage problems.”

“‘If you’re a lender, this data is telling you that these are the weakest housing markets in the nation,’ said Ken Thomas, a Miami-based economist who specializes in analyzing the banking industry.”

“‘If you know they are the weakest, you won’t want to lend at 6 percent, you’ll want to lend at 6.25 percent,’ Thomas said. ‘Instead of 20 percent down, you’ll want 25 percent down. It will definitely make it more difficult for people in these markets to get credit, and those trying to sell will find it more difficult to sell.’”

“The Sarasota-Manatee real estate market now has a 2.4-year supply of homes on the market and a three-year supply of condominiums. Until those numbers drop to six- or seven-months’ worth, builders will not start building again, and Southwest Florida’s main economic engine will remain in the doldrums.”

“‘Things will not return to normal until 2010 or 2011,’ Thomas predicted.”

“‘All the regular conventional loan products are still there,’ said Amanda Painter, an agent in Port Charlotte. ‘The only ones that have been hurt by all this are the creative mortgage companies. The days of creative financing are over.’”

“Also on the list were six counties from California, four from both Arizona and Nevada, and one from Michigan. They were all communities hot during the housing boom.”

“‘They are where the bubble got the biggest and where it has deflated most,’ Thomas said, adding that Countrywide’s data might offer the most complete picture of the speculator-driven run-up. ‘There is no better database than Countrywide. It has the biggest market share in Florida and the nation.’”

“During the boom, Community Bank of Manatee was unwilling to compete with companies that were offering 100 percent or 120 percent loan-to-value and no-document loans. But now that rationality has returned to the market, the bank can compete, said Chairman Bill Sedgeman.”

“‘We will make loans on owner-occupied homes. But we’re not going to loan on someone’s fifth home,’ Sedgeman said.”

“Loans that are more than 90 days past due rose to $80.5 million for the 16 largest community banks in Southwest Florida during the three months ended Sept. 30, from $14 million during the same period a year earlier, a 474 percent increase.”

“At the same time, those same 16 banks wrote off $7.9 million in bad loans, an increase of 1,162 percent from the $630,000 in loans they wrote off at the end of September 2006.”

“‘The time line shows loan problems getting worse and not better,’ said Ken Thomas, a Miami-based bank analyst. ‘Chargeoffs are increasing. Foreclosures are increasing, and the fourth quarter will be worse than the third. We’re still on the downside of the economy and all signs point to recession.’”

The Sun Sentinel. “‘At 16, I was making mistake after mistake,’ Laura Richards said in the living room of her two-bedroom Boynton Beach apartment. ‘By the time I was 21, I had three children and was on public assistance. A drain on society.’”

“Richards’ voice shook. I wasn’t certain whether it was from anger or sadness. ‘I turned it around,’ she continued. ‘Did everything I was supposed to do. And now, I’m back full circle — at 37 — right back to where I started. Being a drain on society.’”

“Richards has spent most of her adult life working in the real estate business. In 14 years she had gone from receptionist to processor, and finally, a senior mortgage loan underwriter/analyst.”

“She had hopes that perhaps she’d survive the unraveling of the housing market. ‘I knew it would affect me,’ she said. ‘But I had 14 years ..’”

“The company she worked for began laying off workers in stages, in the hopes that the market would turn around before they had to make the next round of cuts. It didn’t. Richards lost her job in the next-to-last wave of cuts.”

“She and her three daughters had grown accustomed to a lifestyle based on yearly earnings of $80,000 to $100,000. ‘And that wasn’t enough,’ she said, an ironic smirk briefly flashing across her face.”

“Now Richards survives on $1,100 a month unemployment. She moved out of a $1,700-a-month three-bedroom apartment in Delray Beach to a two-bedroom place in Boynton that costs $1,100. No health insurance. No immediate prospects for another high-paying job. Her car, a Ford Freestyle, is about to be repossessed.”

“She knows all too well how money works. And that’s exasperation No. 1 for Richards. ‘The irresponsibility of the government waiting this long to do something,’ she said. ‘I saw it coming. They had to know.’”

“She can’t go back to school because she defaulted on her student loan. She has an idea for a small business: pooling other unemployed mortgage people into a group that would process loans. But she can’t get a loan because her credit is shot.”

“‘And when I say ruined, I mean ruined,’ she said. ‘The next bit of money I borrow will be to file bankruptcy.’”

“The past week has been particularly galling as presidential candidates criss-crossed the state, making promises. ‘They’re spending millions and millions campaigning and I’m sitting here wondering how I’m going to pay my rent.’”

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

Please post items of interst from outside the US here.

The LA Daily News reports from California. “Foreclosures soared 435.5 percent in the San Fernando Valley last year as nearly 3,000 homeowners surrendered to higher monthly house payments brought on by rising adjustable rate loans, the San Fernando Valley Economic Research Center at California State University, Northridge, said Tuesday. The center’s numbers cover an area from Glendale to Calabasas, where sales of new and previously owned houses and condominiums fell an annual 32.6 percent.”

“Realtor Patricia Beltran is about to be counted in this year’s foreclosure statistics. The payment on her four bedroom, three bathroom home in Porter Ranch has jumped $1,200 to about $5,000 a month. She can no longer afford it and is desperate to sell.”

“‘I, like a lot of other people, was under the assumption that after two years I would refinance and my payment would go down,’ she said.”

“Beltran, who bought the home 2.5 years ago for $620,000, tried to refinance last summer, but by then credit standards had tightened and the market, and her source of income, was dwindling.”

“‘There’s nothing we can adjust for you because you won’t be able to pay it anyway,’ she recalled a loan officer saying last summer.”

“She listed the house four months ago for $765,000 and has since dropped it to $719,000. Beltran, a single mother, now has 11 listings, and eight of the sellers are in the same fix.”

“She’s been in the business for seven years and used to do 25 to 30 sales a year. Last year she did six. ‘We’re surviving off her (daughter’s) paycheck. She’s a college student,’ Beltran said.

“In December, the median price of a previously owned home or condo in the San Fernando Valley fell an annual 7.2 percent to $580,000 and sales fell 51.5 percent to 804 units.”

“Daniel Blake, a CSUN economics professor and the center’s director, notes that December’s median price is 12.1 percent under the record $660,000 set last May. But even with the kind of market distress we are seeing now, percentage price declines won’t match sales declines.”

“‘Prices would have to fall by half to even get to the 2001 (level) and that’s a huge drop. I don’t think it’s going to go that far,’ he said.”

The Daily Breeze. “South Bay home prices experienced across-the-board declines in December as the market continued to cool, according to a report released Tuesday. Each city cited in the report had a year-over-year drop in median price for all homes sold in December - from Carson, down 15.5 percent, to Torrance, which fell 4.8 percent.”

“As for the drop in South Bay sales, one notable omission in the CAR report may bring this reality home to area residents. Manhattan Beach, which CAR consistently lists as one of the top 10 highest-priced areas, if not the highest, was excluded from the December report of individual communities.”

“That’s because the trendy beach city did not meet the report’s threshold of at least 30 home sales in a month.”

“‘The Manhattan Beach market is somewhat uncertain more because in the last 10 years it has gone up more than any other market in Los Angeles County,’ said John Parsons of Horrell Realtors in Redondo Beach. ‘It used to be second or third to Palos Verdes Estates or Rolling Hills Estates. But now it’s more than anything on The Hill.’”

The San Gabriel Valley Tribune. “In Los Angeles County, the median home price fell 16.9 percent to $487,190 in December, from $586,540 a year ago.”

“Locally, Pasadena took the biggest hit, with a year-over-year price drop of 30.1 percent from December 2006. Azusa weathered a decline (-17.6 percent) that outpaced California’s annual price drop.”

“Marty Rodriguez of Century 21 Marty Rodriguez in Glendora, said that Pasadena’s sharp decline probably reflects that fact that homes in that city were priced substantially higher than many surrounding cities to begin with.”

“‘The higher the price the harder they drop,’ Rodriguez said. ‘Those very, very expensive homes probably aren’t selling that well.’”

“‘The whole year of 2007 was a pretty sharp decline,’ said Tom Adams, owner of Century 21 Adams & Barnes in Glendora.”

“‘The downturn, Adams said, has been a normalization process that’s weeded a lot of people out of the industry, which he views as a good thing. ‘I think it has taken a little while for the public to realize now is a good time (to buy a home),’ he said.”

“Rodriguez said homeowners looking to sell must realize what houses are selling for now. ‘The reason we have so much inventory is that the sellers don’t understand,’ she said.”

The Voice of San Diego. “As economists and real estate professionals offer split opinions on what’s ahead in 2008, data released Tuesday recapped an indisputably dreary end of 2007 for those on the selling side of San Diego County’s housing market.”

“The year’s foreclosure filings in San Diego County totaled 38,917 — triple the total in 2006 and eight times as many as 2005, foreclosure tracker RealtyTrac reported.”

“And Standard & Poor’s/Case-Shiller home-price index for November 2007 (showed) San Diego County’s prices for resale detached homes dropped 3.4 percent in one month, a significant monthly drop surpassed only by Los Angeles among the 20 cities examined in the index.”

“Between November 2006 and November 2007, prices declined 13.4 percent, a yearly decline second only to Miami’s 15 percent drop. And the county’s prices were down from the peak in November 2005 by 16.3 percent.”

“Rob McNelis, president of One Stop Lending and Realty in Santee, said there’s an industry understanding that any homes that come on the market between the second week of November and the second week in January are desperate sellers. And so since Tuesday’s data referred to deals struck before that time, he expected the data to get worse in the next couple of months.”

“‘Scary as it may sound, that’s not going to be the scariest number,’ he said. ‘December and January are going to be worse.’”

“Bank-owned homes constitute a large portion of the homes on the market, 31 percent of all home sales in December, according to analyst Andrew LePage from DataQuick.”

“‘We are experiencing … the effects of someone who’s drank too much wine,’ said John Robbins, immediate past chairman of the national Mortgage Bankers Association. ‘The good news is we’ve stopped drinking. The bad news is we’re going to have a hell of a headache.’”

The Union Tribune. “Tania Jones and her husband recently were able to purchase a home in Rancho San Diego for $417,000, but only after Tania spent five months working at her hospital job 12 hours a day, five days a week to pay off bills and save enough for closing costs and to put some extra money in the bank.”

“The couple could not have afforded the original asking price of $485,000 for their 1,200-square-foot house, Jones said. Now with a mortgage payment of $3,300 and other monthly bills totaling $2,500, they have to live frugally, watching what they spend and rarely going out to eat, she said.”

“‘I still think it’s expensive to buy a house here in San Diego,’ said Jones, who previously paid $1,200 a month in rent for an El Cajon apartment.”

“‘When we were looking at houses in La Mesa, all the ones that were under $400,000 were very beaten up. In five months, the price on our house went down, so I feel very lucky,’ she said.”

The North County Times. “Riverside County had one of the worst foreclosure rates in the nation during 2007, seeing a meteoric 191 percent jump from the previous year to about one home out of every 23 entering foreclosure, according to RealtyTrac. 29,826 county homes were in some stage of foreclosure in 2007.”

“An avalanche of data showing a slumping housing market has led some in the housing industry to forecast a long, steep decline in area home prices. Others, such as the California Building Industry Association, have predicted the housing market will see a modest recovery this year.”

“‘I see this being a tough market on through 2010 and into 2011,’ said Lyle Anderson, a Poway real estate agent. ‘I had people come to me last year who’ve been in the business 20 years and saying everything’s going to be fine this year. I’m looking at them thinking, ‘What are you smoking?’ I don’t see it.’”

“Norm Miller, a professor with the University of San Diego’s Burnham-Moores Center for Real Estate, said he agrees with Anderson that local home prices will continue to decline for two or three years. He said the market would then stabilize but recovery would not come until 2012.”

“‘We’re seeing a real, fundamental decline in house prices,’ Miller said. ‘Home appreciation does not pay for mortgages. That’s the lesson we’ve learned.’”

The San Francisco Chronicle. “In the Bay Area, December sales of existing, single-family homes plummeted 38.1 percent from a year ago, according to the California Association of Realtors.”

“Meanwhile, the average cost of those homes fell 8.6 percent in the region, the November Standard & Poor’s/Case-Shiller Home Price index said. That’s the largest drop since it began reporting numbers in 1988.”

“‘Basically, the markets are coming back into a bit of reality,’ said Maureen Maitland, VP of index services at Standard and Poor’s. ‘We’re definitely in a housing recession.’”

The Bay Area News Group. “Bay Area foreclosure filings continued to soar at the end of 2007 compared with a year ago, with one home in every 93 slipping away from its owners.”

“The number of San Joaquin County foreclosures rose 301 percent from the last quarter of 2006, the most in the Bay Area. Next were Santa Clara (254 percent), Contra Costa (218 percent), San Mateo (193 percent), Alameda (180 percent) and Solano (125 percent) counties.”

“California led the nation in total foreclosure filings and the number of homes in some stage of foreclosure last year. In all, 1.9 percent of households in California received foreclosure filings.”

“Alan Fisher, executive director of an organization that advocates increased access to credit and banking to low-income and minority communities, said that…upper-middle-class homeowners who saw the downturn coming were able to sell their home and had enough equity to come out with a profit. They may be renting now and waiting to buy.”

“‘You don’t see them on the foreclosure rolls, but they are affected by the phenomenon,’ he said.”

From The Sun. “Buck Byers remembers the humorous scene like it was yesterday. At the housing boom’s peak, dozens of trucks crammed the street in front of his San Bernardino lumber operation while their enraged drivers yelled vulgarities as they navigated through the congested mess.”

“‘That was all good, but that’s not today,’ said Byers, owner of Barr Lumber on Mill Street.”

“Traffic problems are the least of his worries these days. The housing market is racing downhill and local lumber dealers like Byers are struggling to keep workers employed.”

“‘Right now we’re just trying to keep our people employed, our trucks running,’ Byers said.”

“Among the company’s six branches - four of them in the Inland Empire - Barr Lumber has laid off 80 employees since August. Its San Bernardino work force was cut in half and went from generating $8.5million per month in sales to $ 3 million over the last year.”

“It used to charge customers double for lumber, compared with what it charges now.”

“But 2008 doesn’t hold much promise for a turnaround. Byers is almost certain more layoffs are on the way. ‘The biggest reason is because all the development companies are holding their cards so close,’ he said. ‘You have no idea what their financial positions are.’”

“Even 57-year veteran Barry Johnson at Chino Lumber is trimming to the bone on his budget. Johnson remembers charging more than $3 per 2-by-4 a couple of years ago compared with about $2 these days.”

“‘I haven’t seen these prices since the mid-’70s,’ Johnson said. ‘This could top that.” The lumber industry’s last calamity was during a nationwide recession in the early 1990s, Johnson said.”

“Byers said the industry will have to hunker down until business improves. ‘Everybody always asks, ‘Is this the bottom of the market?’ he said. ‘I’d like to think it is, but I consistently see it getting worse. This is the worst we’ve ever seen it. It makes profiting virtually impossible right now.’”

“Byers still daydreams about 2004, his best year ever. ‘It was unbelievable the amount of work we were doing,’ he said. ‘It was like we were the smartest guys in the world in the best market.’”

Some housing bubble news from Wall Street and Washington. Bloomberg, “Centex Corp., the second-largest U.S. homebuilder, reported a $975.2 million third quarter loss as the housing slump and tighter lending standards cut demand. Centex wrote down $554 million in land and property values in the quarter and has cut more than 40 percent of its workforce since 2006. The company closed on 6,657 houses, a 20 percent decline from a year earlier. The average price fell 11 percent to $268,588.”

“‘The housing market continues to correct and tighter mortgage underwriting standards are affecting home prices,’ Tim Eller, Centex’s CEO, said in the statement.’

The Orange County Register. “Orange County mammoths Standard Pacific Homes in Irvine and William Lyon Homes in Newport Beach…have seen their credit ratings downgraded and both have sold properties – often at a loss – to raise cash as they struggle to stay afloat.”

“It looks like they’ve made the same old mistake: buying too much land at too high a price. ‘The companies that survive will be those that don’t have huge ownership of lots of land and that aren’t highly leveraged,’ said Kerry Vandell, professor of finance and real estate at the UC Irvine’s Merage School of Business.”

“William Lyon owned $1.62 billion in real estate inventory and had just $34.5 million in cash, according to its most recent financial report. Standard Pacific reported an inventory of $2.95 billion and only $5 million in cash.”

“‘This downturn is more protracted than anyone forecasted, and so their financial position is worsening,’ said Joseph Snider, Moody’s senior credit analyst for the housing industry. ‘Since October, we’ve had 20 ratings actions – all negative.’”

“Standard Pacific has a $150 million note due in October and $1.2 billion due between 2009 and 2015. ‘Getting out of this situation is going to be extremely hard if not impossible,’ said Tim Backshall, chief strategist of Credit Derivatives Research. ‘It’s very likely – given the lack of cash flow, the large interest and expenses – that these guys won’t survive.’”

The New York Times. “UBS, the largest Swiss bank, said Wednesday that it would write off $14 billion in losses on the troubled U.S. housing market and post a net loss for 2007. The numbers ‘include around $12 billion in losses on positions related to the U.S. subprime mortgage market and approximately $2 billion on other positions related to the U.S. residential mortgage market,’ the bank said.”

“UBS said Dec. 10 that it was writing off $10 billion of subprime investments for the fourth quarter, so the numbers Wednesday represented $4 billion more in losses than it had previously disclosed.”

“The bank had already announced a $4.4 billion loss on subprime investments in the third quarter. The figures Wednesday bring its 2007 U.S. residential mortgage-related losses to $18.4 billion.”

“Merrill Lynch & Co., the world’s largest brokerage, plans to exit the business of underwriting collateralized debt obligations and other structured credit products after the securities led to a record loss.”

“‘We are not going to be in the CDO and structured-credit types of businesses,’ new CEO John Thain said today.”

“Merrill posted its largest-ever loss last year after writing down the value of its CDOs and other assets related to subprime mortgages by more than $24 billion. The New York-based bank was the biggest underwriter of CDOs from 2004 through 2006.”

The LA Times. “The FBI is conducting 14 criminal investigations of mortgage lenders and the firms that turned their high-risk loans into complex securities that have left investors worldwide with huge losses, a top official at the federal agency said.”

“‘We’re looking at the whole range of those involved — including the investment banks and other entities that bundled the loans up for sale and the institutions that held them and reported [to investors] on their value,’ Neil Power, head of the FBI’s economic crimes unit, said in an interview from Washington.”

“The sub-prime lending investigations also extend to home builders, he said.”

“The principal focus of the probes is whether companies juggled their books to conceal problems with mortgages made during the frenzy of the housing boom. In some cases, Power said, agents are looking into whether corporate executives used inside knowledge of lending problems to benefit themselves at the expense of other shareholders.”

“In another development that came to light Tuesday, a fired loan officer alleged that a joint venture between No. 1 mortgage lender Countrywide Financial Corp. and Los Angeles-based builder KB Home improperly inflated home appraisals and falsified incomes to put borrowers into homes they couldn’t afford.”

“Officials at the Securities and Exchange Commission are conducting more than 30 investigations into the mortgage meltdown. Erik R. Sirri, head of the SEC’s market regulation division, said recently that securities firms and banks sold ‘too many lottery tickets’ tied to home loans and failed to look closely enough at their growing risks.”

“The FBI is looking at many of the same cases as the SEC, the agency said. ‘There is a lot of overlapping,’ Power said.”

From Reuters. “The FBI said it is cooperating with the Securities and Exchange Commission, which has confirmed opening at least three dozen investigations related to the subprime mortgage market.”

“Goldman Sachs, Morgan Stanley and Bear Stearns — among Wall Street’s largest banks — each said on Tuesday that government investigators are seeking information from them about their subprime activities.”

“The subprime crisis began after the housing price bubble burst months ago and left millions of U.S. homeowners with bad credit holding high-interest rate mortgages they could no longer afford. Many are now losing their homes.”

“As an economic slowdown and the subprime mortgage crisis deepen across the United States, Hispanic immigrants are increasingly in danger of losing their jobs and their homes.”

“Both legal and illegal immigrants joined Americans in buying homes they could barely afford when the market spiraled upward and many have been caught with mortgages higher than the value of their homes as prices have slumped in the past year.”

“Unemployment among Hispanics in the United States jumped to 6.3 percent in December, up from 5.7 percent the previous month and well above the national average of 5 percent, U.S. Department of Labor statistics show.”

“And almost half of the mortgage loans in the hands of Hispanics are subprime, making them especially vulnerable to the housing downturn.”

“Nelson, a 29-year-old legal immigrant and construction worker from El Salvador, had a miserable run of luck in November, when he lost his job and his subprime mortgage bills jumped $650 to about $2,650.”

“Like many caught up in the crisis, the father of three said he had no idea his monthly payments would soar two years into the mortgage when he closed the adjustable-rate subprime deal.”

“‘You have to sign a lot of things when you buy a house, so I didn’t read, I just signed. I think it was the anxiety, the happiness of buying my house,’ he said. ‘I feel a bit betrayed.’”

“He says he now has to sell the home he bought in Maryland in 2005. If he is unable to sell in the next four months, he will have to foreclose, meaning an even bigger financial loss and a damaging black mark on his credit record.”

“‘I have to practically give it away,’ he said.”

From AFP News. “Former Federal Reserve chief Alan Greenspan cast doubt on the ability of the central bank to prevent a US recession in an interview to appear on Thursday.”

“Greenspan told the German weekly Die Zeit that the Fed or political policies could ‘probably not’ keep the world’s biggest economy from sliding into recession, as financial markets widely expected the US central bank to cut its main lending rate.”

“‘The influences of the global economy today are stronger than almost any monetary or budgetary response,’ the German-language weekly quoted Greenspan as saying.”

“‘Real long-term interest rates have much more influence over the heart of economic activity than national decisions,’ he was quoted as adding. ‘And central banks have less and less power to influence long term rates.’”

“Some analysts have said that low interest rates under Greenspan’s watch were responsible in part for the US housing bubble that burst last year, and led to the current financial crisis.”

“Die Zeit quoted him as saying he found it hard to understand that ‘the Federal Reserve policy had somehow allowed housing and stock prices to rise.’”

“Fallout from the crisis, which began with a meltdown of the US market for high-risk, or subprime, mortgages, continues to rock international financial markets and now threatens the US economy with a recession.”

“For Greenspan however, the turmoil was ‘entirely the result of market forces at a global level.’”

The Charlotte Observer reports from North Carolina. “Home building and sales are falling more sharply in the Charlotte area than nationally, a sign the housing slump is worsening in what has been one of the country’s stronger markets. Building permits, an indicator of future home sales, fell 40 percent in the eight-county Charlotte region during the fourth quarter, compared with the same period in 2006.”

“Sales of existing houses, townhouses and condos also fell 24 percent in the fourth quarter, according to Market Opportunity Research Enterprises.”

“‘The national malaise was late coming to Charlotte, but it happened very quickly once it arrived,’ said Chuck Graham of Newton Graham Consultants, a veteran of the area real estate market. ‘I think we still have a little further to go.’”

“Robin and Todd Calhoun are feeling the pinch. In 2004, they bought a four-bedroom house, built about 30 years earlier, for $165,000. Robin Calhoun says that an appraisal last year for refinancing valued the northwest Charlotte house at $210,000.”

“Her husband wants to move out of the city and get a house on several acres. They’ve been trying to sell for 15 months, through a Realtor and on their own. They’ve been unable to buy three houses they liked because they haven’t been able to sell. They’ve pushed their asking price below $180,000. They’re willing to negotiate lower.”

“‘We know people are having a hard time getting loans, and the economy is so bad,’ she said. And they’re competing with all the new houses around.”

“‘People could go in and buy a new home, no money down,’ she said. ‘For younger couples, they might want that.’”

The Times Dispatch from Virginia. “Foreclosure filings in Virginia jumped nearly 460 percent in 2007, according to RealtyTrac. According to Connie Chamberlin at a housing advocacy group in Richmond, 2007 is just the tip of the iceberg for Virginia.”

“‘We expect to see another 25,000 foreclosures in the next year,’ she said.” Chamberlin blames the situation on unscrupulous brokers who took advantage of homebuyers with poor credit by putting them in high-fee adjustable subprime loans. Those loans, she said, are now starting to reset, which explains the jump, she said.”

“Chamberlin said this predicament would make it difficult for some consumers to get themselves out of the bog. ‘Some of these loans should have never been made and can’t be fixed,’ she said.”

“Chamberlin called what is happening in Virginia ‘fundamentally a disaster.’”

The Carroll County Times from Maryland. “According to an estimate based on monthly data from Metropolitan Regional Information Systems, last year saw the lowest number of homes sold in Carroll — 1,649 — since the late 1990s.”

“One reason for fewer sales is a lack of confidence in the real estate industry because of the national subprime lending crisis of 2007, said Carroll County Association of Realtors President Rus Blackburn.”

“This lack of confidence has contributed to the fall of the housing market while taking away some demand for houses, he said. ‘Your listings or your inventory are your supply, and the demand is just not there, and people who just have to sell their properties in this market are going to suffer some on price,’ Blackburn said.”

“House prices aren’t increasing as dramatically as they were a few years ago, when the county’s average price soared from about $194,000 in 2001 to more than $358,500 in 2005.”

“While the final sale prices have changed slightly, sellers aren’t getting as much as they had hoped for their homes. In December 2007, the average sold price for a home in Carroll County was $345,820, about 90 percent of the average list price of $386,784.”

“In the real estate boom years between 2001 and 2005, homes routinely sold for 98 percent or more of list prices, according to MRIS data. ‘It’s not underpriced or overpriced,’ said real estate agent Terri Mand. ‘It’s what the market is doing.’”

The Cape Gazette from Delaware. “Sussex County has been averaging about 275 sheriff’s sales a year, but the number jumped to 418 in 2006. And there have been 137 scheduled so far in the first two months of this year. If that trend continues, the county could see more than 600 sales this year.”

“A recent state foreclosure task force found that the number of foreclosures in Delaware increased 90 percent over the same period last year and the number of those who are seriously delinquent in payments (90 days behind) jumped 57 percent from 2006 to 2007.”

“Most people are under the impression that sheriff’s sales are places where people can find unprecedented bargains on houses. That is usually not the case. Attorneys representing banks or other mortgage lenders bought most of the 40 or so houses sold during the Jan. 15 county sale.”

“That is the case across the country. About 80 percent of all houses are sold to the original mortgage holder, according to The Real Estate Library information center.”

“Lynn Kleb, who works full time on the mountains of paperwork involved with the county’s sheriff sales, said her work load has doubled over the past four to six months. She also said foreclosure trends are changing to include more expensive homes in coastal Sussex. It’s not unusual to find homes in excess of $400,000 or $500,000, or even more.”

“‘We are seeing a lot more in eastern Sussex towns like Lewes, Milton and Ocean View where we had very few in the past,’ she said. ‘And we are seeing condos that we never had before.’”

“She said many more second homes in the resort area are also showing up in the sheriff’s sale listings. ‘For some it comes down to a sale or foreclosure – whichever comes first – because they want to get out from under that second payment,’ she said.”

“Kleb said there is help for homeowners who face losing their home. Her first question is: ‘What have you done to rectify the situation?’”

The Courier News from New Jersey. “New Jersey’s prime location, situated in the metropolitan triangle of New York, Connecticut and New Jersey, seems to be providing some housing protection for both homeowners and Realtors.”

“According to RealtyTrac, 4,232 foreclosures were filed in New Jersey in November 2007, and 60,802 for the year through November.”

“Carl Reed of ERA Reed Realty Inc., which serves the Plainfield area, said the Queen City’s foreclosure situation probably is ‘a little better here than elsewhere.’ ‘The majority of my clientele are in a position where more is owed than there is equity from a fair market price on the property,’ Reed said.”

“Peter Cagnassola, a top-selling agent in Bedminster with almost 25 years in the field, and Reed pointed a long finger of blame at the lending institutions. ‘Some were willing to lend buyers 110 percent on new construction,’ Reed said.”

“Home buyers in the 1980s, housing’s last boom period, ‘would never have gotten today’s loans,’ Cagnassola said.”

“And he blames the lending markets for creating a pool of buyers not truly eligible to sustain a mortgage. When these new homeowners went out and got a second loan on the property, their problems increased.”

“Brian Graham of Century 21 Worden & Green in Hillsborough, with its own Real Estate Owned Department, gave a more sober appraisal of the state’s real estate situation than other Realtors contacted.”

“‘The market dried up about four years ago, and in the last two years there have been more foreclosures,’ he said.”

“And again, Graham cited the ‘high-end properties’ as succumbing to foreclosure, ‘much more than in the last wave a dozen or so years ago.’”

“Jack Gulla of Century 21 Golden Post Realty in Middlesex, reported median home prices at about $325,000, but added, ‘the more new suburban areas are another animal. All that new construction and subprime mortgages were being fed to buyers.’”

Fox Business from New York. “Thirty-four years worth of progress assembled street by street, block by block, house by house is crumbling before Cathy Mickens’ eyes.”

“‘It’s hard to see the neighborhood being torn apart,’ said Mickens, director of the Neighborhood Housing Services (NHS) of Jamaica, the gritty eastern edge of New York City.”

“Wander any of the side streets just off Jamaica Avenue, the neighborhood’s main drag, and her meaning is clear. Dozens of empty homes, ‘For Sale’ and ‘For Rent’ signs jammed into first floor windows, stand testament to an exploding housing crisis brought on by a flood of foreclosures tied to subprime mortgages.”

“Mickens said she and her staff of eight have been watching the storm clouds gather since around 2000, when they first began to see gimmicky loans created to help people with little money or bad credit — or both — obtain mortgages.”

“So they weren’t surprised when defaults and foreclosures started picking up around 2005. Still, they said they were taken aback by the deluge that poured down in 2007, when their client roster surged by 40% from a year earlier. ‘This isn’t a new problem for us, but now it’s huge,’ said Mickens.”

“Jackie Camacho, an NHS loan counselor, said many of her immigrant clients were duped into mortgages that promised payments of, say, $1,700 a month on loans often in excess of $500,000. Sounds great, right? A loan of that size would typically generate a monthly payment of more than $3,000.”

“But no one said anything about the interest rate adjusting higher in two or three years, at which time the monthly payment might jump by $1,000 or more. And no one said anything about prepayment penalties that penalize borrowers from paying off loans before those rates adjust higher.”

“Cerinelly Disla, an NHS foreclosure advisor, said many of her clients clearly got in over their heads. One client with a $28,000 annual income used a ‘no income verified’ loan (the name speaks for itself) to obtain a $650,000 mortgage.”

“Was there an element of greed at work on both sides — homeowners grasping for something too good to be true meeting brokers out to make a fast buck? Absolutely, said Disla.”

“Consider one of her clients, a babysitter with a stated income of $10,000, who obtained two mortgages on two properties with a combined value over $1 million. The broker who approved the mortgages told the babysitter the purchases would pay for themselves if she used rent from one property to pay the mortgage on the other. It didn’t work out that way.”

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

Please post items of interest from outside the USA here.

The Used House Salespeople report from California. “Home sales decreased 33.4 percent in December in California compared with the same period a year ago, C.A.R. reported today. The median price of an existing, single-family detached home in California during December 2007 was $475,460, a 16.5 percent decrease from the revised $569,350 median for December 2006.”

“C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in December 2007 was 14.5 months, compared with 5.9 months (revised) for the same period a year ago.”

“In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 8.8 percent, or 25 out of 285 cities and communities, showed an increase in their respective median home prices from a year ago.”

The Orange County Register. “The California Association of Realtors reported today that the median Orange County house price for all of 2007 fell for the first time in 12 years. CAR reported that the median price of an existing single-family home was off 7.9% in December from December 2006.”

“According to CAR, the number of homes on the market would take 26.3 months to sell at December’s sales pace, down from 29.5 months in November…up from the 9.4-month figure for December 2006, CAR reported.”

The Union Tribune. “Despite a real estate downturn that has made housing in San Diego County more affordable, a new nationwide study shows that the county’s median priced home of $440,000 remains out of reach for most workers here…according to the Center for Housing Policy.”

“In San Diego County, the amount of household income needed to purchase a median-priced home during the third quarter of last year dropped 12 percent to $143,738, compared with $163,404 a year earlier. The county’s median household income is $68,000, and with wages destined to remain stagnant this year, there is little room for optimism for entry-level buyers, say some analysts.”

“‘We’re not going to get back to where the median-income household can afford the median priced home, so housing will still be unaffordable in San Diego,’ said Marny Cox, chief economist for the San Diego Association of Governments.”

“Foreclosure filings in Riverside County jumped more than 50 percent last month, and skyrocketed 300 percent compared to a year ago. A total 6,821 filings of mortgage default notices, auction sale notices and bank repossessions were recorded in the county in December, said RealtyTrac.”

“Statewide, there were 53,292 filings in December, a 33 percent increase over November, RealtyTrac said. The figure represented a 238 percent increase over 2006.”

“The state ‘documented the highest number of foreclosure filings and the most properties in some stage of foreclosure in 2007,’ according to a RealtyTrac statement.”

The North County Times. “New home sales in North County dropped for the second straight year, reflecting a national trend that showed the worst annual decline in new home sales ever recorded, according to by the Commerce Department.”

“New home sales in North County since 2005 have tumbled 49 percent. The region MarketPointe defines as North County Coastal - from La Jolla to Carlsbad - saw the biggest dive in new home sales, recording a mammoth 73 percent drop in fourth quarter sales to 87 properties from last year’s fourth quarter when 317 homes and condos were sold.”

“When compared to December 2006…the North County median fell 9 percent to $569,000. During housing slumps, buyers often look for the cheapest price, which tend to be in older homes, and builders often prefer to offer incentives such as granite countertops, rather than slash prices on new homes, said Russ Valone, president of MarketPointe.”

“‘There’s no doubt that we have inventory now that we never would have had three years ago,’ said Mark Connal, director of sales for a homebuilder in Escondido. ‘Loans are harder to get, the economy isn’t as good and a lot of people don’t want to buy because they haven’t perceived we’re at the bottom of the market.’”

From USA Today. “The most striking trend in the San Bernardino real estate market is the surge in foreclosures. Lenders filed close to 24,000 notices of default last year, up nearly 150% from 2006. And 7,727 homeowners lost their homes through foreclosure — roughly one in 20 sales and up nearly 720% from the previous year, according to DataQuick.”

“‘Foreclosures have been growing at a rapid pace for all of 2007, and we anticipate almost an avalanche in 2008,’ says Rich Cosner, president of Prudential California Realty.”

“His agents are telling owners who need to sell within the next five years to put it on the market now because prices are projected to fall further. For buyers…there’s a 15-month supply of homes to choose from. Price declines are hitting every neighborhood, Cosner says.”

“‘I’ve been in this business for 35 years,’ Cosner says, ‘and I don’t believe I’ve seen a more difficult market for homeowners. We are not anticipating any significant turnaround until mid-2009.’”

The Bakersfield Californian. “Kern County tops a new list of large U.S. home markets with a high probability that homeowners will miss a mortgage payment. First American CoreLogic’s report ranked Kern ahead of every other large metropolitan area in the country, just above No. 2 Stockton and No. 3 Fresno.”

“County records show that lenders sent 8,651 default notices to Kern property owners in 2007 — more than twice the rate in 2006, when 3,275 defaults were recorded.”

“Eydie Gibson, a real estate agent at Watson Touchstone Real Estate, said the recent increase in foreclosures allows some buyers into the market as lenders price foreclosed homes to sell quickly. ‘It’s a temporary bump,’ she said. ‘It’s an opportunity for some, a tragedy for others.’”

“But credit consultant Anselmo Moreno found it harder to see the ranking’s positive side. He said local real estate professionals pushed sales too hard between 2004 and 2006, leading some people to buy when they should not have.”

“‘It was just a matter of time before (mortgage lenders) realized we are at the highest risk for mortgage defaults,’ Moreno said.”

The Fresno Bee. “In Fresno County, the number of new homes sold in 2007 fell 19.4% from the year previous to the lowest level in three years, slipping below 2004 figures. In Madera County, sales fell almost 62% compared with 2006 to 432 — the lowest total since 399 houses changed hands in 2003.”

“‘Builders have been waiting for buyers and buyers have been waiting for prices to drop. At some point, they have to match up,’ said Robert Keenan, executive director of the Home Builders Association of Tulare and Kings Counties.”

“Last year was the first year that new-home prices took a tumble. The median price of a new home in Fresno County in 2007 was $293,000 compared with a peak of $349,500 in 2006. Likewise, Tulare County values fell 14.5% to $267,250 from $312,500.”

The Modesto Bee. “Northern San Joaquin Valley home prices have plummeted, but they haven’t fallen enough to become affordable for most wage earners, a new study shows.”

“Home buyers must earn about $98,000 a year to comfortably afford a median-priced house in Stanislaus County, the Center for Housing Policy reports. But workers in only one of the 64 occupations studied — construction managers — earned that much last year.”

“Even two-income couples with good jobs — such as accountants, police officers, school teachers and firefighters — barely can cover ownership costs, the report showed. The findings were about the same for San Joaquin and Merced counties.”

“Anita Hellam, executive director of Habitat for Humanity for Stanislaus County, remembers during the mid-90s ‘when the majority of the working families living in Modesto were able to find affordable housing.’”

“But Northern San Joaquin Valley home prices nearly tripled from 1996 to 2005, pushing ownership out of reach for many residents.”

“Even though valley home prices fell about 25 percent during the last year, Hellam said more people than ever are seeking Habitat for Humanity’s help to acquire their first home.”

The Recordnet. “In San Joaquin County, new-home sales fell 26.9 percent, from 2,865 in 2006 to 2,095 for all of last year, according to the Gregory Group in Folsom.”

“Joe Anfuso, CEO of Stockton-based Florsheim Homes (said), ‘I think it’s all part of what we need as part of the correction cycle.’”

“He noted that home buying traffic picked up in December and has gained some momentum, though many would-be buyers continue to sit back to see whether prices keep dropping. ‘The only thing that’s stopping them is what if the market goes down?’ he said.”

“In response, the company is rolling out a price guarantee: If a buyer purchases a new home this year, the buyer is guaranteed a rebate if the base price of that home is lower at the end of the year. ‘To get people off the fence, we’ll take the ride with them through the year,’ Anfuso said.”

“The average selling price of a new home in San Joaquin County dropped 12 percent over a year, from $519,350 in the fourth quarter of 2006 to $456,956 in the fourth quarter of last year.”

The Auburn Journal. “The comeback of the $200,000 home and the promise of Placer County’s continuing popularity as a place to live are two of the clouds local real estate leaders are focusing on during a troublesome market.”

“Placer County Association of Realtors statistics for December show a $357,000 median value for the 226 homes sold in December — down from $366,000 in November, and $439,700 in December 2006.”

“The median value is well off the peak of a red-hot August 2005 real estate market in the county, when it soared to $517,500 and 486 sales were closed.”

“Joe Newton, Association of Realtors president, said Monday that while the market has been awash with negative industry statistics, the downturn has meant clients buying and selling homes ‘rely on us even more as trusted advisors.’”

“Over the weekend, Newton had a chance to compare notes with California Association of Realtors colleagues at a conference in Indian Wells. The 2008 Placer County association president said that while the Lincoln area had some problems, the market was much more positive in other areas of the county.”

“That compares with areas like San Diego, Stockton and Elk Grove that were struggling with foreclosures, he said.”

“‘The leaders in the industry know that a positive attitude is important so our clients move forward with confidence and authority,’ Newton said.”

“Michael Lyon, CEO of Lyon Real Estate, pointed to a marked increase in the number of homes for sale priced below $200,000 as a bright sport for the industry.”

“‘Just one year ago less than two percent of the homes for sale were priced below $200,000,’ Lyon said. ‘Now 12 percent of the homes for sale in the four-county Sacramento region are priced below $200,000, with the majority of these homes being bank owned.’”

“Lyon said that increase, with the number of closed sales in December jumping 50 percent over November, indicated a ‘new boom’ in that sector of the market.”

“Lyon said the second bright spot from December’s survey revolved around the inventory of houses in the $200,000 to $300,000 range. The inventory of 3,969 homes represented 30 percent of the total number of homes listed in the four-county inventory taking in Placer, Sacramento, El Dorado and Yolo counties.”

“Placer County sales were up 300 percent for the year in the $200,000 to $300,000 price range due to sharp price declines, he said.”

“The Trendgraphix report’s overall totals for the tri-county region of Sacramento, Placer and El Dorado counties mirrored the Placer County numbers. Sales were 22 percent lower than December 2006 sales and the December inventory of 13,181 homes for sale was 28 percent higher than the December 2006 inventory.”