The Housing Bubble

KGET 17 reports from California. “A new real estate report paints another bleak picture of property values for home sellers in Bakersfield. ‘The median price of a home has dropped 20 percent since it’s peak in 2006,’ said appraiser Gary Crabtree. ‘Forty-six percent of all single family houses sold were actually foreclosure properties.’”

“Real estate agent Jon Vaughn walked TV-17 through one of those homes Monday. The four bedroom, 3,000 square-foot house might have sold for more than $600,000 two years ago, but Monday, it was listed at just under $406,000.”

“‘You’ve got to be lowest priced one in the area in order to sell it,’ said Vaughn. ‘I remember back in ‘03 and ’04, a lot of people saying, ‘I just can’t afford a home. Well, these days, it’s so much more affordable.’”

The Modesto Bee. “Monday was a record-breaking day for foreclosures in California. A staggering 5,238 properties were scheduled to be sold in auctions on courthouse steps across the state, including 145 in Stanislaus County.”

“‘This is the single largest day ever for foreclosures,’ said Sean O’Toole, (who) tracks mortgage defaults throughout the state. By comparison, 400 to 500 auctions a day were scheduled statewide a year ago, O’Toole said. That average rose to about 2,500 per day by the end of 2007, but he said there’s never been nearly as many auctions as happened Monday.”

“David Absher, president of Dual Arch International, which does most of the foreclosure auctions in the county, said that during the past six months, typically 60 to 80 auctions were scheduled a day, but ‘the volume is mounting.’”

“About 10 people showed up Monday to watch the auction in downtown Modesto, including a few who came with money to buy. But during the first 90 minutes, none of the auctioned homes attracted bids.”

“That means those lenders are stuck owning the properties they foreclosed on. Most of them, whose defaulted mortgages were issued mostly in 2005 or 2006, are owed more than the houses now are worth.”

“‘No one wants to buy this stuff because they don’t know where the housing market’s going,’ Absher said. ‘When the prices are continuing to slide down, how do you know you’re getting a good deal?’”

“Antonio Lima was looking for a good deal at Monday’s auction, but the Modesto house he came prepared to bid on had its foreclosure postponed. He’s seen the inside of that home, and he’s convinced it’s a nice three-bedroom house. That Norman Way property, however, has an outstanding mortgage of nearly $300,000.”

“‘I know for sure they’ll never sell it for that much,’ Lima said. He plans to make a lower-priced offer on the house through a real estate agent.”

From ABC 7.com. “At a packed house in Temecula, first-time home hunters and savvy investors were hoping to buy one of the roughly 80 foreclosed homes on the auction block. All are bank-owned properties.”

“Colleen Rutledge of Fallbrook bought a two-story Perris home as an investment at a foreclosure auction for $250,000, plus a $12,000 commission. She spent about $25,000 more fixing it up.”

“With similar properties selling in the low-to-mid-300s, Rutledge thought she’d make a quick profit. She initially listed it for $369,000 when it was the only foreclosed property on the block. Now the home next door, and several others on the block are in foreclosure, and prices continue to fall.”

“She’s lowered her price several times and now has it listed for $274,000. She says she’ll be lucky to walk away with any profit. Rutledge admits she got caught up in the foreclosure auction frenzy.”

“‘You really do have to know your numbers, know what your maximum bid is, and you’re done when you’re done,’ said Rutledge. ‘And you got to know what you’re getting into or you’ll lose a lot of money, unfortunately.’”

The Los Angeles Business Journal. “The state of California lost nearly 16,000 jobs last year due to the stumbling mortgage industry, by far the most of any other state, according to a survey released Monday by MortgageDaily.com.”

“Countrywide eliminated nearly 12,000 jobs across the country last year, far more than any other company, the survey said.”

The Orange County Register. “Orange County lost more than twice as many mortgage jobs last year as any state except its own, California. O.C. lost more mortgage jobs than 49 entire states.”

“The state with the second-highest number of mortgage job losses, after California, was Florida with 2,507, according to MortgageDaily.com.”

The Contra Costa Times. “It may be a new year, but 2008 is starting out with plenty of pain for East Bay mortgage and housing-industry workers.”

“Banks and mortgage lenders of varying sizes continue to chop jobs in Alameda and Contra Costa counties, according to a review by the Times. And some home-loan finance employees who have lost their jobs say the outlook for their industry looks bleak.”

“‘This is going to get worse before it gets better,’ said David Miles, an Oakland resident and mortgage worker who lost his job with Wachovia bank in December. ‘The mortgage industry hasn’t hit bottom yet.’”

“In the 12 months that ended in November, housing-related industries shed 10,300 jobs in the East Bay.” The grim totals include a loss of 7,100 jobs in residential and specialty trade construction and 2,400 jobs in credit intermediation, an industry category that consists primarily of mortgage agents and loan officers.”

“A growing number of former mortgage workers who lost their jobs have decided to seek employment outside of the field in which they had worked for years. ‘I’m keeping my fingers crossed that I can find something in the mortgage area,’ said Robin Stutzman, a San Ramon resident who lost her job with Bank of America in late 2007. ‘But if I get anything, it will probably be a temporary job.’”

“Stutzman also is seeking a job as an executive assistant, she said. ‘I’ve never seen anything like this before,’ Stutzman said. ‘I never thought that getting into the mortgage industry that it would decline this badly.’”

The Voice of San Diego. “With prosecutors nationwide illuminating real estate fraud schemes undertaken during this decade’s heated housing market, at least one of the state’s legions of real estate professionals face new training requirements.”

“California’s Office of Real Estate Appraisers raised the bar last week for would-be appraisers wishing to join the 19,500 appraisers already licensed and working around the state.”

“Some appraisers this decade were pulled into shady schemes in which agents and loan officers and buyers colluded to rip off banks.”

“Buyers would, based on artificially inflated appraisals, convince the banks to lend them more than the house was actually worth, kick cash back to the parties involved, and then foreclose, leaving the lenders holding a house worth less than the mortgage.”

“Some longtime professional appraisers, real estate and mortgage agents and brokers have complained loudly that the barrier to entry into their professions is too low. They lament the young or novice workers who entered the business to get rich quick, did sloppy work and since have left the old-timers to try to dust off their reputation.”

“‘The problem before was that any idiot could get a license,’ said Todd Lackner, a residential real estate appraiser in Mission Valley. ‘[Now] it’s going to really weed out the bottom end people.’”

“Sara Schwarzentraub is a local appraiser who teaches some of the required classes for new licensees. The state should incentivize the mentoring of new appraisers by established professionals, she said.”

“‘The training area — that, still, nothing has been done about,’ she said. ‘Training people falls to fee appraisers, and when they’re training somebody, they’re not making any money.’”

“And, without a close relationship with a mentor, the temptation rises to appraise a home at a higher value than it’s worth, or to otherwise engage in real estate fraud schemes, Schwarzentraub said.”

“When prices were rising, lenders often didn’t lose money even on homes abandoned after the cash-back schemes. But now, the lenders that are still making loans, and their backers, are saddled with so many foreclosed homes and have taken so many losses that they are exponentially more careful with the money they lend.”

“Lackner said he feels a bit vindicated by the market conditions, though his office sees about a third as many requests for appraisals as they did a couple of years ago.”

“‘People always made fun of me, they said I was conservative,’ he said. ‘They called me ‘Lowball Lackner.’ Call me what you want but I’m accurate.’”

“Pete Ogilvie, president of the California Association of Mortgage Brokers, said his organization supports increased requirements for professionalism across the board in real estate professions.”

“‘The only people we can’t make more professional are borrowers and investors,’ he said.”

The Press Enterprise. “The city of Moreno Valley could suspend a planned increase in fees charged to developers and home builders.”

“The Building Industry Association of Southern California’s Riverside County chapter has asked city officials to postpone a planned 2.6 percent increase in development-impact fees, saying it would only prolong the struggling housing market’s recovery.”

“In the current market, home builders are drastically discounting the price of newly built homes, which, in turn, drives down prices and property values on the re-sale market, he said. The BIA is asking the city to require payment at the time of occupancy, which can be six months later, Winckel said. That would reduce home builders’ costs and allow them to sell homes at more competitive prices, he said.”

“‘You don’t raise prices on goods when you’re not selling them,’ BIA Executive Officer Borre Winckel said.”

The Missoulian reports from Montana. “Missoula’s real estate climate, while sheltered from the extremes in other markets, cooled in 2007. ‘We didn’t see the huge price increases and so we’re not seeing the dramatic drops,’ said Mary Marry, president of the Missoula Organization of Realtors. ‘We’re not seeing people who went so far out on a limb as they were competing with investors.’”

“But about 200 fewer homes have changed hands. There were 1,303 homes sold so far in 2007, as compared with 1,505 in 2006. Prices have dropped for some homes and some listings are taking longer to sell. ‘I think we’ve taken a little bit of a speed bump,’ said broker Sherril McCabe.”

“Kim Chambers, the incoming president of the Missoula Building Industry Association, said…houses constructed in the $150,000 to $215,000 price range remain strong. But she has noticed a slowdown in speculatively built homes in the $600,000 range.”

The Bozeman Daily Chronicle from Montana. “After the boom year that was 2007, and in the face of a host of potentially worrisome economic indicators, local businesses are trying to remain hopeful. 2007’s roller-coaster stock market, credit and mortgage woes, and a slowing housing market have caused ripples and echoes here in the Gallatin Valley.”

“‘Shawn Cote, government affairs director of the Southwest Montana Building Industry Association, said the ongoing nationwide housing slowdown combined with a glut of new homes on the market locally will have an impact.”

“‘Given what’s going on nationally, most builders are anticipating a slower building season,’ Cote said. ‘You’ve got the liquidity crunch, and that’s how homes get built - through credit. A lot of builders are repositioning themselves, scaling down the number of lots and homes they’re building just as a protective measure in case there is a continued softening of the market.’”

“‘We’ve got a lot of people on the fence trying to time the market, which is never a good idea,’ Cote said. ‘This is a good time to be buying.’”

The Mail Tribune from Oregon. “For sellers and agents used to riding the crest of the 2002-2005 real estate joy ride, 2007 was a painful return trip to reality.”

“Gross sale volume, including rural sales, declined to 2,289 in 2007, a 16 percent drop from 2,727 transactions in 2006. You have to look back into the 1990s to find a lower number of deals.”

“Figures compiled by SOML show the median sales price of existing Jackson County homes declined to $229,000 in December from $258,000 a year earlier. For all of 2007, the median price was $260,000, down 3.7 percent from the $269,500 median in 2006. New construction saw a 19.2 percent decline to a median of $289,900 for all of 2007. The 2006 new construction median was $358,900.”

“‘The sellers’ market of the past has been replaced by the buyers’ market of today,’ said Colin Mullane of the SOML board. ‘Sellers who are moving within the valley have the advantage of offsetting any loss, perhaps buying into a lower-priced home, or a better quality home at a lower price than previously experienced.’”

The Olympian from Washington. “Sales of single-family homes and condominiums in Thurston County dropped 32 percent in December compared with a year ago, but median prices held steady in the same period, the Northwest MLS reported.”

“Buyers in the county found more choices last month as the number of single-family and condo homes listed for sale was 1,739, up more than 12 percent from 1,546 at the same time a year ago.”

“Many brokers say 2007 was a year the real estate market corrected itself from the record 2006, when more liberal lending practices boosted sales but also resulted in rising mortgage foreclosures.”

“‘I believe the bottom has arrived in the Puget Sound market and from here on prices will stay level or advance slightly in 2008,’ said Dick Beeson, broker in Tacoma.”

The Kitsap Sun from Washington. “Above-normal rainfall and floods contributed to the expected seasonal housing slowdown in western Puget Sound in December, according to officials from the Northwest MLS.”

“Mike Eliason, executive of the Kitsap Association of Realtors, said that it was only a matter of time before the housing market would come back to earth.”

“‘When you have double-digit increases in home prices year after year after year, at some point it will drop off, particularly when local wages are not increasing by the same percentage,’ he said. ‘I think you’re seeing that now.’”

“It shouldn’t surprise anybody that as the number of pending sales and closed sales decreases, sales prices will drop, Eliason said. ‘I think we’re getting back to a more stable real estate marketplace,’ Eliason said. ‘The correction in the market has been good, particularly for first-time homebuyers. There need to be places for our children and grandchildren to live.’”

The News Tribune from Washington. “Pierce County housing prices held steady last month at nearly $270,000 after three consecutive months of year-over-year price dips. The number of closed sales, however, continued to fall, according to the latest figures released Monday from the Northwest MLS.”

“Sales in the typically slow Christmas season slid by 39.3 percent compared to December 2006.”

“Listings were up, though not nearly as much as in King and Snohomish counties. Pierce County had 7,109 houses and condominiums for sale in December, according to the listing service – 34.5 percent more homes than the same month a year before.”

“Patti Dains DeYoung, (an) agent who’s been selling real estate more than 20 years, said today’s market feels much like the mid-1990s: aggressive pricing, frustrated sellers and homes staying on the market.”

“The biggest price drops were seen in North Tacoma (down 11.8 percent) and the Lake Tapps-Bonney Lake area (down 10.3 percent) with the largest boosts in the Graham area (up 33.8 percent) and DuPont (up 14.6 percent).”

“The number of sales was off by more than 50 percent in Fife and Tacoma’s North End.”

The Seattle PI from Washington. “Nobody can deny now that Seattle-area home prices have declined. The question is: Have they hit bottom?”

“A typical house in Seattle and King County sold for less in December than a year earlier, a milestone, according to data the NMLS released Monday.”

“The city price was down 9 percent from a high of $501,000 in August, while the county price was off 9.6 percent from a peak of $481,000 in July 2007. Home sales dipped 14 percent in Seattle and 28 percent in King County last month from December 2006. Pending sales, which can be a better indicator of the most recent activity, dropped by 23 percent and 34 percent, respectively.”

“That eases the recent frenzy of bidding wars and waived inspection contingencies for potential buyers. ‘The competition is a lot less,’ Jessica Gartner said outside a Greenwood open house on Sunday. ‘You can take your time looking.’”

“Meanwhile, the number of homes on the market in December had gone up 70 percent in the city and 61 percent countywide from a year earlier.”

“‘We’re willing to wait to find something we like,’ said Dan Mellott, who moved to Seattle from Philadelphia in November.”

“Patrick Anderson, who owns a Seattle house and is interested in downsizing, thinks prices are still too high. ‘I think it needs to soften up a little more,’ he said.”

“The changes leave others unsure what to think. ‘There’s all this talk about prices going down. What if it tanks after we buy, or what if we wait and it goes the opposite direction?’ Mellott said.”

The Seattle Times. “‘One of the biggest things slowing down the local market is the memory of multiple offers and sellers being unrealistic in accepting the fact that the gold rush mentality is gone,’ said Paul Simpson, an associate broker. ‘What we now have is what I like to call a normal market.’”

“The owner of the historic Smith Tower in Pioneer Square is scaling back its proposal to turn all of the building into residential condominiums, papers filed with Seattle city agencies indicate.”

“It now plans to convert just 12 top floors in the skinny part of the tower into condos, with a single unit on each floor.”

“Walton Street Capital, the building’s owner since 2006, created a big buzz last February when it sought — and ultimately got — permission to convert all but the ground level of the 38-story office tower into 150 condos.”

“The floors slated to remain as offices contain about 11,000 square feet of floor space each. The floors scheduled to become residences are smaller, about 2,000 square feet each.”

“The downtown-office market is booming, noted Matthew Gardner, a Seattle real-estate economist, while the condo market may be slowing. ‘This would certainly limit one’s exposure,’ he said.”

The Bellingham Herald from Washington. “The 2007 Whatcom County housing market numbers looked very similar to 2006, although the fourth quarter hit a sour note, according to a report.”

“The Whatcom County median home price was $290,000, an increase of 2 percent over 2006, according to Lylene Johnson of The Muljat Group South office in Fairhaven. The modest increase ends a four-year run of doubledigit increases.”

“Particularly striking was a slowdown in home sales in the fourth quarter: Whatcom County was down 14.8 percent compared to the fourth quarter of 2006; in Bellingham home sales were down 16.8 percent for that same period.”

“There are now pickier buyers out there, said Mark Brown, president of the Whatcom County Association of Realtors. ‘The buyer mindset is they are in no hurry and may be waiting until the spring to see what will happen,’ Brown said.”

“In this climate, it’s crucial to price the home correctly, Brown said. ‘I won’t take a listing now where the seller insists on pricing it 5 percent over market value,’ Brown said. ‘It’s a waste of time if the home is overpriced, because it will sit while buyers wait to see how far the price will be reduced.’”

Some housing bubble news from Wall Street and Washington. Associated Press, “The National Association of Realtors seasonally adjusted index of pending sales for existing homes fell to a reading of 87.6…down 19.2 percent from a year ago. (The) trade group predicted Tuesday that the pace of U.S. home sales will pick up significantly in the second half of 2008, bringing total sales for the year marginally higher than in 2007.”

“‘The exact timing and the strength of a home sales recovery is a bit uncertain,’ Lawrence Yun, the group’s chief economist, said in a statement. ‘A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.’”

“The Realtors group predicted new home sales would fall 13.4 percent this year to 669,000, down from a projected total of 773,000 in 2007.”

“The group did not anticipate 2007’s severe housing market downturn. A year ago, it was predicting more than 6.4 million existing home sales — about 760,000 more than actually happened.”

From Bloomberg. “Tougher lending rules are adding to market woes. A third of planned home sales were canceled or delayed in September, October and November because of loan problems, according to the results of a survey of 2,416 real-estate agents issued yesterday.”

“The Realtors association estimates…purchases of new homes will fall to 669,000 from 773,000.”

From CNN Money. “The National Association of Realtors also said it no longer sees even a modest rebound in existing home prices this year, as it had previously forecast, and pushed back its estimate of a full-year uptick in prices to 2009.”

“The group also cut its existing home price estimate for the current quarter to more than 5 percent below year-ago levels, which would mean the current period would see the steepest drop in that price measure on record.”

“Only a month ago the group’s estimate was for only a 2.5 percent drop in prices in the first quarter.”

“The latest reading on pending home sales is better only than the pace of sales in August and September, when the meltdown in mortgage markets cut off the availability of mortgage financing for many buyers.”

“The November reading is even worse than the 89.8 reading recorded in September 2001. That reading had been the weakest month on record before the current housing downturn.”

From Reuters. “KB Home posted a quarterly loss on Tuesday with abandonment and impairment charges. The company recorded an after-tax noncash charge of $514.2 million to establish a valuation allowance related to deferred tax assets.”

“KB Home also recorded $305.5 million in charges for inventory impairments, land option contract abandonments and impairments on future land sales. Joint venture impairments totaled $97.9 million.”

“New home deliveries fell 22 percent to 8,132 in the quarter from a year earlier and the average selling price fell 11.5 percent to $247,800, KB Home said. For the just-completed quarter, net orders for new homes, an indicator of future sales, were off 32 percent at 2,574. Net orders were down in each geographic region.”

“The cancellation rate for the quarter was unchanged at 58 percent from the year-earlier quarter, but up from the 50 percent reported in the third quarter of 2007.”

From MarketWatch. “‘The challenging market conditions we experienced through the first three quarters of 2007 continued during the fourth quarter,’ said Jeffrey Mezger, KB Home’s CEO. ‘We believe 2008 will be another tough year for the homebuilding industry.’”

“‘KB Home’s speculative inventory, while in line with its peer group, has been increasing as cancellations have spiked in recent months,’ wrote analysts at Majestic Research in a recent report.”

“IndyMac Bancorp Inc’s mortgage loan originations slumped 53 percent in November from a year earlier and may be hurt more as Fannie Mae and Freddie Mac tighten requirements on loans they purchase, the company said.”

“‘Growth in the pipeline and resulting production volume may be negatively impacted by further credit tightening currently being implemented by the GSEs that is requiring IndyMac to implement another round of credit guideline tightening,’ the company said.”

“Delinquencies on prime loans, which include those guaranteed by the GSEs, serviced by IndyMac rose to 6.25 percent in November from 5.8 in October, IndyMac said. In subprime, the percentage of loans in arrears for 30 or more days climbed to 26.87 percent in November from 24.43 percent in October.”

The New York Daily News. “New York will gain just 500 jobs this year - if we’re lucky - according to a scary new city forecast that sees slowdowns on Wall Street, stagnant real estate prices and an ocean of red ink in the city budget future.”

“‘The fiscal picture has dimmed considerably,’ the Independent Budget Office spokesman Doug Turetsky told the Daily News yesterday. ‘There is a fairly significant risk that things could get worse.’”

“If Wall Street loses even more money this year, the agency expects the city’s jobs will shrink by 8,700 this year, rebounding by just 15,000 jobs next year - and that’s if the national economy doesn’t sink into a recession.”

“‘While there appears little reason to think our assumptions are too pessimistic, there is a reasonable chance that they are overly optimistic,’ the IBO said.”

“The city housing market also is projected to finally cool down as prices stagnate or fall and fewer homes and apartments change hands. Commercial real estate deals also are slowing down, the IBO says.”

“‘The Manhattan real estate market is still holding firm. The rest of the city is weakening,’ Turetsky said. ‘The good, strong corporate profits seem to be coming to an end.’”

“”Treasury Secretary Henry Paulson said on Monday the Bush administration was considering how to give the economy a boost as it weathers a housing correction, but does not want to rush. more stories like this”

“Paulson said a correction in the U.S. housing market…was ‘inevitable and necessary’ after years in which banks and other mortgage grantors followed ‘lax’ lending practices and prices had risen too quickly.”

“Paulson said financial institutions were writing down the value of the assets they hold but insisted no one should be ’surprised or disappointed’ to see that happening because the long-term effect will be to strengthen their balance sheets.”

“‘This is market discipline in action and should enhance market confidence over time,’ the former Goldman Sachs CEO said.”

The Tampa Tribune reports from Florida. “In February 2006, Kim and John Cataldo bought their dream home in Tampa’s swanky Corey Lake Isles neighborhood. They paid $565,000. But a year later, after their property taxes and homeowners insurance skyrocketed, the couple couldn’t afford mortgage payments and put the house on the market. No offer was more than $500,000. The Cataldos kept making payments, but were running out of money.”

“They kept trying to sell the home, but the offers dropped lower. In November 2007, the lender filed a foreclosure lawsuit against the couple. Their best offer from a buyer is $350,000. To their astonishment, the Cataldos say their lender is considering accepting it and forgiving the rest of the loan.”

“Debbie Ferraro of American Guardian Title in Tampa said lenders had been reluctant to accept short sales, but two weeks before Christmas, attitudes changed. ‘Short sale business started going crazy,’ Ferraro said.”

“Tony Maltese, a local real estate investor, got in over his head in deals that went bad. He took out $3 million in loans on nine homes. One home has been foreclosed on, despite an offer for a short sale, he said, and another home is likely to be lost in foreclosure soon.”

“He’s now working on two short sale deals, one for a home in Zephyrhills and one for a home in New York. ‘I was reluctant to try this,’ he said. ‘But I’m trying to keep my credit from getting worse.’”

From NBC 2 News. “Many Southwest Florida homeowners trying to sell are frustrated that 2007 was not a good year for the real estate market. For homeowner Penny English, 2007 was a financial nightmare.”

“‘I’m going to be stuck here. I’m not going to get rid of this house,’ said English.”

“She’s ready to sell her nine-year-old Lehigh Acres home, but no one is buying. If anyone was interested, English says she’d probably lose about $75,000 selling her home. Overall, she says she’s just one victim of Southwest Florida’s housing market.”

“‘It’s been very hard unless you want to drop the house and get nothing out of it,’ said English.”

The News Press. “‘Speculative excess’ in single-family home construction in Lee County probably will create a soft housing market for three to four years, according to a report released Monday by Orlando-based economist Hank Fishkind.”

“The report was commissioned by Florida-based Attorneys’ Title Insurance Fund.”

“Overall it was one of Fishkind’s gloomiest predictions. As recently as July 2006, he was predicting a soft real estate market, but one that would only last two years. On Monday, he noted that the correction has been sharper and more prolonged because of the surge in foreclosures on homes bought by people with weak credit.”

“That caught him and other analysts by surprise, Fishkind said, because ‘in part it was something new, and I think in part some of the major banks obfuscated’ denying the severity of the problem at first.”

“Real estate broker Stephen Luta in Fort Myers said there’s an attitude now among potential buyers that the market’s in for more declines but that a turnaround may be coming soon. ‘You can get a house under $100,000 in Cape Coral and that’s a good deal. You can put someone in that as a renter and make it work’ as an investment, he said.”

“It takes awhile for prices in a real estate market to fall as far as they should because sellers are often unwilling to lower their prices to market levels, Fishkind said. ‘They shoot up like rockets and come down like feathers.’”

“The wave of foreclosures in Lee County recently, with more than 1,400 a month for the past three months, has the potential to cause problems, Fishkind said, ‘but I think that’s not going to happen because it’s still a very attractive place to live compared to, say, Akron or Detroit.’”

The Herald Tribune. “Florida’s best known economist says the Sarasota-Manatee residential property market bottomed out in September-October and has now stabilized in both price and volume.”

“Hank Fishkind predicts flat prices for both counties through 2010, as the region chews through excess inventories of new houses and condominiums.”

“The Sarasota market appeared to bottom out in the spring at 470 to 480 closings per month. But then a national liquidity crisis sprang to life in August, prompted by defaults on subprime mortgages issued during the feverish markets of 2003-05 and continuing into 2006.”

“For a month or so, mortgage makers froze. As a result, sales fell to 310 in September and stayed flat at 319 in October.”

“‘It seems to me that is the new bottom,’ Fishkind said, referring to sales in more recent months. ‘So I’m not seeing any major price declines, and I think volume has stabilized.’”

The Palm Beach Post. “After rising to extraordinary heights in the real estate boom, prices of existing single-family homes in Palm Beach County will remain at an average of around $440,000 at least through 2010, Fishkind said.”

“The Florida Association of Realtors, which The Palm Beach Post cites for monthly stories on home sales, uses median home prices, not average prices as Fishkind’s report does, so it’s hard to compare the two.”

“In November, the median price of an existing single-family home in Palm Beach County was $345,700, down from a peak of $421,500 in November 2005, the association said.”

“But Fishkind insists prices won’t come down anytime soon, if at all. ‘Palm Beach (County) will never see price declines,’ Fishkind said. ‘They aren’t making any more Palm Beach.’”

“Palm Beach County’s backlog of unsold homes will disappear fast once it starts moving, Fishkind said. That’s despite Palm Beach County’s housing inventory of five years or more.”

The Orlando Sentinel. “Although the housing slump overall will continue, Fishkind predicted that consumers looking for home prices in Florida, and particularly in Metro Orlando, to fall much more are not likely to be rewarded for their patience.”

“‘Housing prices tend to be sticky,’ Fishkind said, falling much more slowly than they rise, unlike other ‘products’ that often lose value fast to clear an oversupply.”

“Fishkind’s 2008 real-estate forecast has plenty of sour notes, though. He terms Miami-Dade’s condo collapse ‘the worst condominium bust cycle that Florida has seen since 1975.’”

The St Petersburg Times. “Despite a real-estate downturn and fears of a recession, the city had another record year for value of construction permitted. But this surge could be short-lived.” “Since nearly half of that figure came from a now-declining residential market with few large projects on the horizon, it’s unlikely the city can top this figure next year.”

“Miles Development Partners, which built condos at 1010 Central and the Sage, was to construct another condo building at 1701 Central Ave., but is instead planning to construct apartments.”

“Another project across from Tropicana Field, may become apartments after Grady Pridgen sold it to an Ohio developer.”

“Craig Sher, executive chairman at developer Sembler…conceded that 2008, 2009 and 2010 will be down. Sher said Sembler tracks the trends, and while St. Petersburg might be doing well relative to Florida, the state is doing poorly relative to other parts of the country.”

“The retailers that buy or rent property from Sembler are not seeing the Florida sales growth they want, Sher said, so commercial construction will, as is typical, follow residential downward.”

“Flush with new offices at a time of waning demand, the Tampa Bay area’s office market is suffering its first rise in vacancies since about 2003. Until the second half of 2007, the residential real estate slump hadn’t triggered a similar slowdown in office leasing. That’s changed.”

“As builders, Realtors, mortgage lenders and title companies purged their staffs last year, the area’s overall office vacancy crept up to 10.7 percent by the end of 2007, according to the Colliers Arnold real estate firm.”

“Colliers executive VP Russ Sampson notes that 1-million square feet of office space is available for sublet regionally after the original tenant vacated before the lease was up. Sublet space typically rents for $1 to $3 below market.”

“‘They’re willing to give it away if someone will take it,’ Sampson said.”

“Today’s situation is a far cry from the past couple of years, when brokers urged tenants to lock in leases before rents shot up. Many did, including housing industry types who didn’t expect the good times to end so suddenly.”

“‘They expanded like crazy. They really built their staffs up,’ said Colliers president Pat Duffy.”

“Some regional economies, including the Tampa Bay area, stand a greater risk of recession than others. Behind the risk is Florida’s dependence on the housing industry to provide jobs and tax revenue, as well as residents’ reliance on home equity loans to finance purchases. Each of those has tightened during the past year.”

“Retailers of big-ticket items such as cars and boats are getting hammered. ‘I guess it’s the housing market, because it’s the only thing that wasn’t there before,’ said Jack McGaughy, owner of Jack’s Interbay Marine in Tampa, where boat sales have dropped at least 30 percent over two years. ‘In general, people are not interested in buying boats. They’re not coming in the store.’”

“As home values skyrocketed two years ago, Floridians tapped into their home equity through second mortgages in huge numbers. By fall 2006, these ‘home equity extractions’ added nearly 15 percent to Floridians’ disposable income, according to Economy.com.”

“By the third quarter of 2007, home equity borrowing had fallen by half, adding only 8.5 percent to Floridians’ disposable income.”

“Wanda DeBoer, a real estate broker who represents small restaurants and retailers, sees more trouble. She insists that the economy at least is hurting small businesses, if not the big chains. ‘Look at the vacancies showing up and down the streets everywhere,’ she said.”

“A bipartisan group of lawmakers got their first chance Monday to grill state employees about the troubled State Board of Administration fund that was invested in bad securities. Lawmakers left frustrated.”

“‘It was very clear that the market was melting down in the summer,’ said Sen. Ronda Storms. ‘Somebody had a fiduciary obligation to say, ‘I’m responsible for this fund. I should ask how much money do we have in this. And shouldn’t we be getting out?’ And why didn’t anybody do that?’”

“Storms said she was doubtful an audit would give anything more than ‘four different fingers pointing in four different directions and no elected official is going to be accountable for it. And they should be. Because they ran for that job.’”

“Rep. Gayle Harrell said she wanted to make sure that an outside audit looks into who exactly was making the trades involved in the bad investments.”

“‘When I look at the scope of the amount of money that’s involved here, we are talking about assets greater than most countries,’ said Harrell. ‘I want to make sure there’s no insider trading going on. Why did we only have five brokers handling these trades. What is happening within the entity as well as the investments?’”

“Rep. Susan Bucher, a West Palm Beach Democrat, repeatedly asked why more wasn’t done in response to a March audit report that had raised red flags. ‘Who was minding the store and why didn’t we see those red flags?’”

“Jim Cassady, state Chief Financial Officer Alex Sink’s chief of staff, said: ‘Representative, that’s a good question. I can’t answer that.’”

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