January 20, 2008

A Riches To Rags Story In California

The Orange County Register reports from California. “Kim Freeman calls her tale a ‘riches to rags story.’ At the center of it is a house in Tustin her husband calls ‘the albatross.’ The good news here is that the Freemans’ house is in escrow after 2 1/2 years on the market. The bad news is they’ve had to cut their price to $563,000 – $226,000 below their original asking price and $140,000 less than what they paid for the three-bedroom ranch house.”

“To make matters worse, the Freemans’ marriage has broken up, in part because of the house. And Kim Freeman…has been laid off from her job.The couple now is six months behind on their mortgage and could lose the home outright if their escrow doesn’t close.”

“After trying for 1 ½ years to sell his Mediterranean-style house beside a bridle path in Nellie Gail, Laguna Hills resident Paul Beyer’s cut his $2.09 million price by $600,000, and still hasn’t had a single written offer.”

“Beyer has decided to try something different. On March 1, he’ll auction off the house in his back yard.”

“‘It’s been just a year of – ugh!’ said Beyer. ‘You ride it down. I wanted to do it right. I kept groping for the right thing. If I had more offers, I could have adjusted. I was in a vacuum.’”

“When Bill and Kim Freeman bought their Charloma Drive house in the spring of 2004. They had just sold a home in Las Flores for a $180,000 profit after owning it for less than a year. Their plan was to do the same with the Tustin home, reselling at a higher price in less than three years.”

“They saw the three-bedroom home on a corner lot, noticed it had a remodeled kitchen and pounced before another buyer could get it. They paid $703,000. In retrospect, she said, they probably moved too fast.”

“‘We were caught up in that house-buying frenzy,’ Freeman said. ‘Back then, you didn’t think you could ever lose.’”

“They put $70,000 down, all that remained from their $180,000 profit from the Las Flores house after taxes and paying off debts. They were able to afford the home by using two interest-only loans. Their house payment was $3,300 a month, but would reset to more than $5,000 after three years, more than they could afford.”

“After a year, they were ready to move out. They put the home up for sale for $789,000 in the spring of 2005. They got an offer for $750,000. Acting on their agent’s advice, they rejected it – a decision the Freemans now regret.”

“In the fall, when sales slowed, the only ones stopping by their open houses were curious neighbors. A couple of buyers offered to pay $700,000, which they considered to be ‘bottom-feeder offers.’ Not now.”

“‘If you had a crystal ball, you’d do a lot of things differently,’ she said.”

“In March 2007, the couple rejected a $675,000 offer because it would have meant losing their down payment, plus an additional $10,000 in cash they’d have to pay at closing. It was their last chance.”

“This past fall, they finally went into escrow, selling the home for $563,000, $70,000 less than what they owe on the mortgages. Because it is a ’short sale,’ they can’t close until the bank agrees to accept less than the full loan amount, so the deal is in limbo.”

“The house now sits empty. The swing set that they bought for their daughters has been abandoned since Freeman has no room for it in her new apartment.”

“‘My husband used to refer to this house as an albatross, and I get it now,’ Freeman said. ‘Everything about this house was bad timing.’”

The North County Times. “Oceanside building chief Jim Zacaro said the city issued 147 building permits for single-family homes in 2007, compared with 298 permits in 2005 and 285 permits in 2006.”

“‘We’re starting to see a real slowdown,’ he said.”

“Zacaro said nowhere is that more evident than in the Arrowood development, a 1,000-home subdivision that has been growing since 2001 on about 600 acres north of Highway 76.”

“In the early days of the project, prospective buyers lined up to buy new homes as soon as they were available. Now - in the roughly five Arrowood neighborhoods still under construction — there are several empty pads and finished houses waiting for buyers.”

“‘They’ve stopped building,’ said John Greenway, who said he bought a home in Arrowood in 2004.”

“Association data shows that in the fourth quarter of 2005 - when the housing market was strong - there were 48 new homes for sale in the city, compared to 94 for sale during the same period in 2007.”

“In 2005, when the quarter ended, 17 of those 48 homes had not sold. In 2007, 75 of the 94 homes had not sold by the end of the quarter.”

The Press Enterprise. “More than a year after The Promenade Shops at Dos Lagos opened along Interstate 15 in Corona, many of the tenants in the upscale shopping center are struggling and even more are complaining that not enough people know the place exists.”

“The 360,000-square-foot lakeside center, designed to resemble a traditional Main Street, has run into the headwinds of a weakening economy and housing crash.”

“‘It was poor planning. They thought they would build this and the people would come and it doesn’t happen,’ said Angela Myers, owner of Bella’s Boutique, one of more than 70 tenants at Dos Lagos, which was created as a ‘lifestyle center.’”

“Myers said her store at Dos Lagos is losing money with no turning point in sight.”

“At Z Gallerie, assistant store manager Kristy Guerrero said the home furnishings store opened with strong sales that diminished dramatically with the drop-off in housing construction. She said the store started with about 32 sales people, then over the summer laid off all but 10.”

“Inland Economist John Husing said the timing of the Dos Lagos center, which was expected to demonstrate the growing household income and sophistication of western Riverside County, ‘has been terrible.’”

“Riverside County’s once booming retail ‘turned on a dime,’ Husing said. Husing said he believes the busted housing market is the major cause for the drop-off in retail sales. He said the Dos Lagos center probably is harmed by exceptionally heavy foreclosures in communities along the Interstate 15 corridor.”

The Sacramento Bee. “In 24 years as CEO of Sacramento’s Safe Credit Union, Henry Wirz said he’s never seen such ‘widespread credit problems in the Sacramento region.’”

“It began last September with rising delinquencies on car loans. By December, the late payments spread to real estate loans. Now, increasingly, borrowers have maxed out their credit cards and home equity lines of credit, said Wirz.”

“And the problems, he said, appear worst in newer neighborhoods.”

“Wirz talked about a credit crisis he believes is still in early stages. Here are excerpts. Q: You’ve been here since 1984 and…this is the worst credit problem you’ve ever seen in Sacramento?”

“A:…’In every crisis, when we first have a downturn, it’s the people at the bottom of the economic pyramid who seem to experience the worst outcomes. I think what surprised us was in this downturn we’re seeing people who had, at the outset, relatively good credit having negative outcomes.’”

“‘In this downturn, where we analyzed the folks having problems, we saw a disproportionate number of people in that 680 to 719 credit score.’”

“Q: You’ve said you saw the problem start in September with auto loan delinquencies. What explains what you’re seeing?”

“A: ‘It makes sense in retrospect. You kind of prioritize your obligations….I think, for a lot of people, the most important thing was to hang onto their house. This is primarily a problem of people having too many bills and not enough income to cover them. So they began juggling their bills. Credit cards, auto loans, things like that took second place to keeping the mortgage payment up.’”

“‘We’ve seen a lot of the credit cards and home equity lines get fully utilized as people have drawn them down to support their monthly expenses.’”

“‘I think we’re now at the end of that rope. There just isn’t any more credit card balance available. There isn’t any home equity available, and now people are having to confront the ultimate problem, which is how do I keep my house? How do I keep my mortgage intact? I think that’s why we’re seeing people coming in.’”

“Q: You say we’re at the front end of this credit crisis? How long might this continue? A: ‘In almost every kind of lending problem it takes 18 to 24 months to work through it. I hope this one is a problem we can work through that quick. I’ve heard some others say it might not be.’”

“Q: Earlier you said that homebuyers are bypassing sellers altogether and waiting for a bank to take back the home. They think that’s where the better deal is. When do you see this housing market starting to stabilize?”

“A: ‘We’ll know there’s a turnaround when we see buyers come in and buy these properties earlier in the process. Right now, were not seeing that. People are waiting for the bottom. Everybody wants to buy at the bottom, and there cannot be a bottom until buyers come in. We’re not there yet. My guess is we’re maybe into April, maybe June or July, before we see that.’”

The Merced Sun Star. “Merced’s housing market ended 2007 on a down note, with prices and sales in December continuing the slide that defined the year. The county’s median home price fell to $257,000 in December, a 21.2 percent dip from December 2006, according to DataQuick.”

“Sales activity posted an even sharper dropoff, with just 150 houses trading hands, compared with 347 homes sold in December 2006 (although the data did not include the last day of the month).”

“Dorothy Kielty, president of the Merced County Association of Realtors, said plummeting prices could be traced mainly to foreclosures and ’short sales.’”

“Sellers should do their research…said Realtor Peggy Flanagan, but the question for them is how badly they need to unload their house.”

“‘At this point in time they have to make some real hard decisions,’ said Flanagan. ‘The guy that’s starting a new job and has to leave the area is a whole lot different than the guy who’s just wondering what kind of price he can get for his home. We’re actually counseling people that if they don’t have to sell, then don’t.’”

“With Merced’s prices dropping closer to the $200,000 mark, Flanagan said she’s seeing the return of out-of-town investors, a trend she called a positive sign.”

“‘To me, that’s really the tail-that-wags-the-dog indicator,’ said Flanagan. ‘We’re getting looked at again (by out-of-town agents and investors), and by 2010 people will be wishing that they bought in 2008.’”

A Lot Of Correction Is Going On

The Independent Record reports from Montana. “Local real estate professionals say it’s a daily struggle to explain to buyers and sellers alike that the national downturn in housing hasn’t had a strong influence on the local market. By some measures the local housing market is indeed slowing; new home construction, in particular, slipped sharply last year around Helena. Fewer homes were sold in the Helena area last year than in 2006, and the ones that sold spent a little more time on the market, according to the Helena MLS.”

“Local brokers say a slowdown can be expected after a few years of double-digit price appreciation across the area.”

“‘We had a very strong year (in 2007) in spite of the fact that it was a step down from 2005 and 2006,’ said Mike Casey of the Trimac Group. ‘You can’t continue to grow (at those rates) and not take a breath. Real estate, like all markets, is a cycle. We’ve been in a high growth cycle and there’s still plenty of opportunity out there.’”

“‘Helena does not see the high highs, and we don’t see the low lows,’ said Drew Ahmann of Coldwell Banker Ahmann Brothers. Ahmann said one trend he sees is homes not being relisted.”

“‘When a listing expires, it goes off the market,’ he said. ‘It’s not coming back on with another real estate agent. We’re seeing a lot of sellers who, if they don’t have to sell, they’re not selling.’”

“The Helena MLS currently shows 737 homes for sale, including 557 in the greater Helena area. Some areas have more inventory than others — more than a third of the local listings are in the North Valley, East Valley and Central Valley regions.”

“Those three areas of the valley offer 190 listings. By comparison, the eight MLS areas that comprise most of the city of Helena have just 90 active listings among them.”

“‘If you want a brand new home in the North Valley or East Valley, between $300,000 and $400,000, you have some choices,’ Drew Ahmann said. ‘Other than that, not so much.’”

The Idaho Statesman. “The small West Ada city of Star is a concentrated microcosm of the Treasure Valley’s housing woes.”

“Star’s population since 2000 has more than doubled to 5,000 people, but the developers who came on like a fever a few years ago have slowed construction or stopped altogether, leaving a patchwork of new subdivisions suspended in various states of completion.”

“The boom and bust have left the city with unsold homes, half-built neighborhoods and even dangerous holes in the ground that developers abandoned without filling or covering.”

“Some people who bought homes they really couldn’t afford when home values were rising now are suffering. Ada and Canyon counties’ residential foreclosures for the month of November tripled from 2006 to 2007. New houses in Star sit empty for months on end.”

“On the south side of Idaho 44, development of the 574-home Heron River subdivision has slowed. Ten of 23 homes built have been sold, said Carlos Bendeck, Heron River’s assistant manager.”

“‘Much like every other community in the Valley, we had to reduce our prices anywhere between $30,000 to $55,000,’ Bendeck said via e-mail.”

“Meanwhile, the visual blight and safety issues at one northwest subdivision have outraged neighbors and city officials. ‘They made the neighborhood worse, not better,’ said Kristin Battey, who lives with her family in a 100-year-old fixer-upper farmhouse across from Orion Park. She laughs when she remembers how the developer told her: ‘We don’t build subdivisions. We build ‘communities.’”

“He tried to woo her with visions of tree canopies, walking pathways and equestrian trails. But that hasn’t happened. Now, Battey is angry that she’s left with a view of piles of dirt, rock and asphalt, as well as a minefield of uncovered manholes and stormwater vaults.”

“There are about 250 homes on the market in Star now, including 100 new homes that have never been occupied, according to the MLS. ‘A lot of what was built in 2005 and 2006 is still sitting there vacant,’ said Gary Smith, who lost his bid for City Council this past November by a single vote.”

“One of the themes of Smith’s campaign was ‘let’s finish what we started’ - meaning the city shouldn’t approve a slew of new subdivisions when so many new homes were going unsold.”

“Heidi Prigge, a real estate agent who lives in Star, said it is not just the quantity of homes in her city that’s the problem. It is also the quality. ‘When you build the same thing over and over and over again, nobody wants it,’ she said. ‘I think we’ve become Meridian. There’s so much supply, and there’s no demand.’”

“At this time last year, there were as many as 325 houses on the market, Smith said. He said investors bought homes in Star to ‘flip’ and make a quick profit.”

“Mayor Mitchell, a builder who got few jobs last year and said he had to tap his savings to feed his family says Star’s housing market is going through necessary price corrections and will rebound.”

“‘Where I see it most is in lot prices,’ he said. ‘There were 7,000 to 8,000 square-foot lots selling for $100,000. … Now, there are lots all over town at $50,000 to $70,000 that just aren’t selling. So your land basis is where a lot of correction is going on.’”

“Construction on infrastructure at Orion Park in northwest Star stopped so abruptly last year that no one covered open manholes or filled dirt around vaults in 10- to 12-foot deep holes at the site.”

“There’s not much the city can do about the piles of dirt, rocks and asphalt from a public road torn up to accommodate construction at the 379-home subdivision. ‘We were all up in arms when we saw the density. Now we’re dealing with an eyesore and hazard,’ said Brenda Weaver, who lives near Orion Park.”

“‘It seems disrespectful to leave prime agricultural land in a shambles,’ she said. ‘Why did they over-extend themselves?’”

The Lake Oswego Review from Oregon. “Feeling the pinch from the mortgage crisis and competition from other banks, the Lake Oswego branch of HomeStreet Bank will close March 28, after nine years of doing business.”

“West Coast Bancorp CEO Robert Sznewajs cited ‘dramatic slowing of the residential real estate market,’ which has led to defaults and damaged the Lake Oswego bank’s loan portfolio.”

“Floyd said HomeStreet ‘never became involved in the subprime lending’ market, which has hurt other lending institutions such as Washington Mutual and CitiBank.”

“‘We took a look at the subprime lending market and thought it might have been attractive in the short term,’ he said. ‘But we do our best to put people in the right kind of loan, that they can live with and pay off.’”

The Seattle Times from Washington. “The Kitsap County Consolidated Housing Authority, expects to see as many clients with mortgage problems this spring as it saw in all of 2007.”

“The housing slowdown is having a ripple effect that’s exacerbating the problem. On the Kitsap Peninsula, people who depend on the housing industry for work are seeing their hours cut, making it hard for them to meet their mortgage payments, reported housing counselor Marvelle Lahmeyer.”

“Additionally, the lack of home appreciation is preventing homeowners from building equity that could help them refinance out of problem mortgages, noted J. Lennox Scott, CEO and chairman of John L. Scott.”

“Ten of the 14 distressed homeowners Teresa Seeley tried to help last month will probably lose their homes to foreclosure anyway.”

“‘We don’t have enough follow-up because we don’t have enough time. We need more counselors,’ said Seeley, housing-counseling coordinator for Consumer Counseling Northwest in Pierce County.”

The Olympian from Washington. “Mortgage foreclosure notices rose nearly 52 percent in Thurston County last year, returning to levels they reached during the recession earlier in the decade, the county auditor’s records show. Notices of trustee sale rose 52 percent, from 435 in 2006 to 662 in 2007.”

“The easy mortgages of 2005 and 2006 allowed buyers to qualify at low introductory adjustable interest rates they knew would rise in a couple of years. In some cases, as rates have risen, the owners have been unable to keep up with payments, said Randy Luke, branch manager of Horizon Mortgage.”

“In addition, South Sound home sales have slowed as inventories have risen, making it harder for buyers to escape mortgages by selling their homes.”

“‘Either the value of their house wasn’t rising enough to allow them to refinance, or because of tightening credit, they couldn’t refinance,’ Luke said.”

“He said a perfect storm occurred that lenders did not anticipate: Rising home values leveled off and lenders made it harder to get a loan or in some cases went out of business.”

“Homeowners in trouble often can work out their problems if they address them early, as Paula Carey of Lacey learned. After renting for five years, Paula and her husband decided to buy a home before they were priced out of the market.”

“With no money for a down payment, the Careys qualified for a so-called ‘80/20′ mortgage, borrowing money for both the down payment and the cost of the home. Once they were approved for the loan, the Careys bought a three-bedroom, two-bath, 1,600-square-foot house in Lacey.”

“But she and her husband eventually separated, and Paula was unable to afford the mortgage on her secretary’s salary. Soon she began receiving letters from her lender that she was behind in her mortgage payments, but one letter also offered her the chance to modify her loan.”

“In the end, the lender forgave what she owed on the first mortgage and rolled it into a future payment, she said. On the second mortgage, an adjustable rate mortgage, the lender lowered the interest rate to 8 percent from 12 percent and converted it to a fixed rate for 30 years, Carey said.”

“Luke and other South Sound lenders predict this will be another year of high foreclosure activity before victims of the liberal lending practices of the past work out their problems. ‘We’re only halfway through the cycle of people who got subprime loans in 2006,’ Luke said.”

“Ron Hanson, president and co-owner of Madrona Mortgage in Olympia, and other lenders are optimistic the market will rebound with refinancing opportunities as interest rates fall. Thurston County prices, though they have risen, remain lower than in King and Pierce counties, the lenders say.”

“The state economy must remain healthy, with continued low unemployment and job growth, to help correct the foreclosure problem, Hanson said.”

“‘The next two years could be rough unless a lot of new people move into the market,’ he said.”

It Could Get Real Nasty In Texas

The Houston Chronicle reports from Texas. “Houston-area home sales fell 4 percent last year, but 2007 still marked the second-best year on record after sales peaked in 2006. The largest piece of the market, homes priced between $80,000 and $150,000, were the hardest hit last year, falling 11.6 percent. Those home sales represented nearly 39 percent of the 69,441 properties sold through the MLS in 2007. They include mostly used but some new homes.”

“That segment has slowed because fewer people have been able to qualify for loans since subprime lending came to a halt last year. ‘If you’re making $2,000 a month and have a $300 or $400 car note, you can’t qualify to buy anything,’ said Shad Bogany of ERA Bogany Properties.”

“Edmund Choi and his family hope they won’t be affected when they put their four-bedroom Missouri City house on the market later this month. ‘I’m a little nervous,’ said Choi, who bought his home new than 12 years ago for $140,000. ‘I have a feeling I’m not going to get what I want to get.’”

“The number of listings expected to close within the next 30 days was down 13.6 percent at the end of December. The number of available homes is also rising. At the end of December, 49,566 properties were on the market, an increase of 14 percent compared to last year.”

The American Statesman. “More Central Texans are feeling the pangs of foreclosure, and more pain could be in store. Foreclosure postings for the Feb. 5 auctions rose 56 percent from the same month last year in four Austin-area counties, Travis, Williamson, Hays and Bastrop, according to Foreclosure Listing Service.”

“Williamson County had the highest gain among the 20 counties, up 98 percent. Its 301 postings were a county record and the first time its foreclosure notices have topped 300 in a single month, the report said.”

“Hays County’s postings were up 57 percent, Travis County’s jumped 38 percent and Bastrop County’s rose 18 percent. The 832 notices filed in the four counties is the second-highest number on record, the report noted.”

“‘The number of foreclosures are certainly up; there’s no doubt about that. But comparing year-over-year percentage increases won’t always tell the whole story,’ said David Reed, president of CD Reed Mortgage Bankers in Austin.”

“‘We’ve got more foreclosure postings, but we’ve also sold a whole lot more homes over the past three or four years. If you set records in the number of homes sold, you’re obviously going to get the increase in foreclosure postings that go along with it,’ he said.”

“Reed said that if Central Texas were ‘in the middle of a major price reductions — which we’re certainly not — across the board for single family residences, I’d be more concerned. But I don’t think you can make too much out of it. Personally, I think it’s more of an indication of the sheer volume of homes sold.’”

“Central Texas home sales declined 13 percent in November from a year earlier, down for the sixth month in a row, according to the Austin Board of Realtors. Pending sales for December plunged 41 percent, an indicator that the year ended with an even bigger drop.”

“‘Those buyers who were there a year or two ago aren’t there anymore, or at least not on the same basis,’ said Jim Gaines, research economist with the Real Estate Center at Texas A&M University.”

“The appreciation might be skewed by fewer sales of lower-price homes because many entry-level buyers are locked out of the market, said agent Sam Chapman. ‘We’re seeing the median price being higher because lower-end homes are being cut out,’ Chapman said.”

“Real estate experts said sales in 2007 were good, just not as good as in record-breaking 2006. ‘Austin is not expanding at the rate it was a couple of years ago, but you haven’t fallen out,’ Gaines said. ‘07 is still a good year in the housing market, it’s just not as good as it was in ‘06. But 2003 to 2007 were all good years, I just think ‘06 will turn out to be a peak year.’”

“In general, Chapman said, he has seen the number of buyers decrease since August and the number of sellers increase. Still, he said, some sellers continue to want to overprice their homes, even in the declining market.”

The Dallas Morning News. “More than 5,300 homes in the four-county Dallas-Fort Worth area are set to be sold at next month’s foreclosure auctions, Addison-based Foreclosure Listing Service said Thursday. That’s a 31 percent increase in foreclosures from the same month in 2007.”

“February’s foreclosure total for D-FW was the highest ever for the month. And Dallas, Collin and Denton counties all set records for the largest number of postings in any month.”

“Almost 43,000 Dallas-Fort Worth area homes were posted for foreclosure in 2007 – an increase of 10 percent for the year.”

“Home foreclosure rates in the area have been some of the largest in the country in recent years due in large part to lax lending standards, analysts say. Many homeowners who took adjustable-rate loans a year or two ago couldn’t afford the monthly payments when the interest rates rise.”

“And, despite lots of publicity, government and mortgage industry relief plans have so far not had much impact.”

The Denton Record Chronicle. “Residential foreclosures posted for February’s auctions toppled records across North Texas, with Denton County surpassing 500 for the first time, according to foreclosure statistics.”

“Denton County residential foreclosure postings first topped the 400 mark in November, reflecting the expected increase in foreclosed homes, officials said.”

“‘If we’re seeing foreclosures up today, that’s probably reflecting a process that began years ago,’ said Dr. Bernard Wein­stein, director of the Center for Economic Development at the University of North Texas.”

“‘It’s reflecting a lot of poorly collateralized lending in ‘04, ‘05 and ‘06 — particularly to low- and moderate-income households and single-adult households. We’re now seeing the result of that — not because the economy is heading south,’ Weinstein said. ‘North Texas is one of the strongest metropolitan areas economically in the country.’”

“With 566 homes set for auction next month, Denton County was not alone in the record-breaking foreclosure numbers, according to Foreclosure Listing Service Inc. Denton County records showed a 50 percent increase from last February, which had 377 residential foreclosure postings. The February numbers were 44 percent higher than January.”

“One reason cited for the substantial increase in February postings is due to the January auction sale falling on New Year’s Day, according to George Roddy Sr., president of Foreclosure Listing Service. By law, lenders in Texas are only allowed to take properties through foreclosure on the first Tuesday of each month.”

“‘This was kind of a shocker even though we knew there was an impact due to a lack of filings for the Jan. 1 auction,’ he said. ‘This actually caught us by surprise.’”

“Roddy figured about 15 percent of the increased postings in February were likely tied to the delayed postings. ‘The fact that we saw the astronomical increases all over the metroplex is an indicator that it is not just that factor,’ he said, adding that the March residential foreclosure listings will tell a clearer picture about what is happening in North Texas.”

“Projecting whether the record-breaking February numbers will continue in March is difficult, Roddy said, adding that even the 1980s numbers during the oil bust didn’t touch the current records. ‘If we see the same indicators, with a higher than the last 12-month average, then we’ve got something to really talk about,’ he said.”

“Home foreclosures in the Dallas-Fort Worth area have grown by one of the biggest amounts in the country in recent years due in large part to lax lending standards, analysts say. Weinstein cited data indicating that in 2006, the Dallas-Fort Worth market had an estimated $7.5 billion in subprime lending.”

“‘That’s an indication of how vulnerable we are,’ he said. The amount totaled an estimated 23 percent to 24 percent of all of the loan volume that year, he said.”

“‘It could get real nasty,’ he said. ‘Let’s just hope we muddle through, as we have in the past.’”

The Star Telegram. “The 43 unsold condos in the restored Neil P. at Burnett Park in downtown Fort Worth have been taken off the residential market and are now being pitched to the commercial market by a Dallas brokerage firm looking for a single buyer for the entire project.”

“The review comes as downtown condo sales appear to be slowing. Only 14 of the 57 units in the Neil P. were sold during a 22-month period, according to Tarrant County deed records. Prices at The Neil P. ranged from the $200,000s to the $700,000s, and the units ranged in size from 760 to 2,252 square feet. A penthouse unit was listed at $1 million.”

“The latest housing figures compiled by Downtown Fort Worth Inc. shows that…in the last three months of 2007, 18 units were sold, compared with 39 in 2006.”

“The proposed sale of the Neil P. project is not the result of poor sales or market conditions, said Rick Waggoner of M.C. Smith Interests. ‘I can’t say that [sales] didn’t meet expectations,’ Waggoner said. ‘We’re proud of what we built over there. We have all the confidence in the world in Fort Worth. It’s a matter of balancing our portfolio.’”

“Construction on the Neil P. began in 2005 and the first unit sold in November of that year. Nine units were sold between July and December of 2006, three in March, and the last one sold in September.”

“Not long after, residents were told that the building would be sold. It went on the market with Cushman & Wakefield’s Apartment Services division several weeks ago.”

“There are 18 completed condos and 25 that await finish-out. The 4,158-square-foot, 11th-floor penthouse is available as are a mix of one-, two- and three-bedroom units. The lobby and amenities areas are completed.”

“‘In some ways we’re sad to sell,’ Waggoner said. ‘It was a nice product for Fort Worth, and it reflects on us well.’”

Local Market Observations!

What do you see in your local housing market this weekend? Lower prices? “The housing slump hit Mecklenburg County hard last year, with building permits for new homes down 29 percent to the lowest level in at least 10 years. Builders saddled with unsold homes are cutting prices. ‘We think the market has definitively softened up tremendously in Charlotte,’ said Rick Bell, CEO of Turnberry Homes.”

“The high-end Nashville builder has stopped building in the Charlotte area and cut prices on its remaining houses. ‘Our misfortune should be someone else’s fortune,’ Bell said. ‘They can get a very good home for a fraction of what it cost last year.’”

Cancelled projects? “Portman Holdings, citing an uncertain economy, is postponing development of One Charlotte, a high-end, 40-story condo tower planned uptown next to the Westin Charlotte. The Atlanta developer had planned to start construction this summer of the project, which includes 99 ‘urban estate homes’ priced from $1.5 million to $10 million.”

“Charlotte multi-family housing analyst Emma Littlejohn said One Charlotte’s $1-million-plus target buyers, like people in the broader residential market, are having difficulty selling homes and can’t easily move up to a luxury condo.”

“‘Their values have eroded and they, therefore, are not buying at the top of the market,’ she said.”

Or foreclosures? “A large number of foreclosed homes is pushing down home sale prices locally, Realtors said. ‘The market is flooded,’ said Kathy Carroll, president of the Youngstown-Columbiana Association of Realtors. ‘We have an overabundance of houses.’”

“About 20 percent of the home sales in the area are foreclosed homes, said Dan Crouse, past president of the Warren Area Board of Realtors. ‘Banks are offering them at an incredible price. They want these homes off their books,’ he said.”

Advice about renting? “Homeowners across East Anglia have seen thousands of pounds shaved off the value of their homes in the last few weeks, according to a report released today.”

“‘I think prices are falling and I think we are probably at the stage where we do not quite know where prices are going,’ said Carl Eastwood, a partner at Bidwells estate agents in Norwich. ‘With the stock we have from last year, the ones that are selling are the ones where people are reducing the price. If prices have not been reduced, they are not shifting at all.’”

“‘My advice if you are selling is to listen to your agent. You might have to accept that your house is worth less than it was last summer,’ he said. ‘If you are a prospective first-time buyer in rented accommodation, sit tight. Prices are not going to go up, you are best to bide your time.’”

Industry boosterism? “For those who believe that housing is going to stage a turnaround, the next month may be a last chance to get a home at a bargain price. That’s because, if the early spring selling season gets off to a strong start, incentives and discounts may soon be a thing of the past.”

“‘There are signs that consumers are growing a bit more confident and that there is some pent-up demand for new homes,’ said Jack Sorenson, president of U.S. Shelter, based in Hoffman Estates.”

“Some builders said they are redesigning townhouses, to make them more affordable. Multifamily housing is comprising a larger portion of the local market. ‘We won’t see any further lowering of prices,’ said Chris Naatz, VP of sales and marketing for Pulte Homes/Dell Webb in Schaumburg.”

“As for land prices, ‘in some cases, land is worth 40 percent less than it was a few years ago, and builders are eager to clear if off their books,’ said Andy Konovodoff, president of the Illinois division of Town & Country Homes in Lombard.”

A related slowdown? “A national slump in housing starts and the shaky health of the home mortgage industry are key factors in RY Timber’s decision Monday to temporarily shut down its mills in Townsend and Livingston. Each mill employs 100 workers, and each has an annual payroll of approximately $2.5 million, said Scott Stern, Montana operations general manager for RY.”

“Stern, who has worked in the lumber industry since 1971, said that the wood products industry had major layoffs in 1980 and 1981. ‘It was a market-driven housing thing,’ he said. ‘The market was every bit as bad then as it is now.’”

Bits Bucket And Craigslist Finds For January 20, 2008

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