January 22, 2008

The Investment Trend May Be Over In California

The Associated Press reports from California. “Foreclosures reached a 20-year high in California during the fourth quarter of 2007 as a growing number of homeowners fell behind on their mortgage payments, according to Dataquick. A total of 31,676 homes ended up in foreclosure during the quarter ended Dec. 31, marking the highest figure since DataQuick began keeping such numbers in 1988.”

“The total represents a 30.8 percent increase from the previous quarter and a 421.2 percent jump from 6,078 foreclosures in the same quarter of 2006, DataQuick said.”

“In addition, 81,550 default notices were sent to homeowners statewide between October and December, up 12.4 percent from the previous quarter and more than 114 percent in the year-ago quarter.”

“Most of the home loans that slipped into default during the fourth quarter of 2007 were made between August 2005 and October 2006, the final months of the housing boom.”

“‘We think depreciation is the main culprit,’ said Andrew LePage, a DataQuick analyst.”

The Sacramento Bee. “Foreclosures and defaults soared to stratospheric levels in Sacramento and the rest of the state last year. Notices of default in the eight-county Sacramento region, stretching from Amador to Nevada counties, were up 106 percent in the quarter.”

“For all of 2007, foreclosures in greater Sacramento were up an astonishing 496 percent, to 10,049, DataQuick said.”

“The latest numbers underscore the enormous challenge facing the state and national economy. The Fed’s rate cut may not stave off a recession, said Scott Anderson, senior economist at Wells Fargo & Co.”

“‘It could get ugly very quickly and this is what the Fed is responding to,’ he said. The cut ‘is not going to be a panacea’ but could help bring the economy out of a recession more quickly, he said.”

The Appeal Democrat. “Builders and developers took out half as many building permits in 2007 than the year before in the rapidly growing areas of Yuba City and Yuba County, indicating that the area’s building boom is over.”

“‘The real estate boom we had in 2003, 2004, 2005 was unprecedented,’ said Darin Gale, legislative advocate for the North State Building Industry Association. ‘We’re now below normal. Definitely, that real estate boom is over.’”

“In previous years, Yuba County issued more than 1,000 permits as people waited outside sales offices to buy homes in relatively affordable subdivisions in the Plumas Lake and Edgewater areas. But what goes up must come down.”

“And a triple threat of foreclosures, tight credit and waning consumer confidence caused the boom to falter despite what should be a winning combination for the home-building business of falling home prices and interest rate cuts.”

“Uncertainty in the mortgage business caused lenders to clamp down on loans even for qualified buyers, said Gale. That was a reverse from previous years when some people obtained loans without even having to show how much they made.”

“An inventory of homes accrued in Yuba County as the market slowed. Home buyers were tempted by the availability of nearly new foreclosed homes. ‘It definitely was slower because of foreclosures,’ said Gale. ‘There’s more of a supply of homes out there.’”

“Late 2007 was particularly brutal for home builders, and Yuba-Sutter was no exception.”

“No single-family home building permits were issued at all in Plumas Lake during September, October and November, according to Three Rivers Levee Improvement Authority reports. Yuba City also experienced months during which no one took out a permit to build a home.”

The Orange County Register. “More than 100 foreclosed homes around Orange County were opened to the public Sunday as potential bidders got a chance to look them over before the homes are auctioned next month.”

“Wilfredo Lanz, who lives in Irvine’s Northpark neighborhood, drove over to look at a vacant house in the same neighborhood.”

“The three-bedroom, two-story house is listed by a broker at $959,000. Bidding will open at $449,000 when it is auctioned at the Anaheim Convention Center on Feb. 2, according to the Irvine-based company that is organizing the auction.”

“He plans to bid as much as $700,000 for it. ‘That’s the highest we’ll go,’ he said.”

“The number of foreclosures in Orange County is nearing record levels. Last month, lenders foreclosed on 644 homes, the second-highest monthly total since DataQuick began keeping track back in 1998.”

“Most of those foreclosed homes become the property of mortgage lenders after failing to attract bidders at trustees’ sales that are held each weekday in Placentia and Santa Ana.”

The Desert Sun. “With the number of foreclosures mounting, homes all across the Coachella Valley are sitting empty. In some situations the grass is overgrown and the pool water is stagnant.”

“Those are the types of homes two east valley cities are hoping will get cleaned up with the help of a new ordinance that addresses foreclosed homes.”

“‘The problem is … we really have no tool to actually force the lending agency or bank or whoever owns the foreclosed house to maintain it,’ said Indio City Councilman Mike Wilson.”

“As of Monday, there were almost 6,000 homes in various stages of foreclosure among the valley’s nine cities, according to RealtyTrac. Indio, the most populated city in the valley, had the most with 1,119 homes listed.”

“‘The bottom line is with the great growth spurt we went through, Indio … is going to be faced with most of the foreclosure problems,’ Wilson said.”

“A problem code enforcement officials are facing in getting properties cleaned up is not knowing that a foreclosure occurred. Often time they’ll spend months going after the owner on record only to find out a bank or mortgage company actually owns the home now.”

“‘Sometimes it takes eight to 10 months to find the actual owner,’ said Ben Guitron, spokesman for the Indio Police Department.”

The Union. “Like the rest of the country, Nevada County has been hurt by one of the worst real estate declines in years. Home foreclosures have been on the rise, and some real estate agents are dropping out of the business all together.”

“‘One of the problems we were having is that the price of real estate was too high (in the area),’ said Larry Harley, president of the Nevada County Association of Realtors. ‘Sellers weren’t lowering their prices as fast as buyers wanted them to. That created a standoff.’”

“The market already has started to improve a bit, Harley said. ‘On a large scale, sellers have begun to accept psychologically that prices are less than what they used to be,’ he said.”

The Daily Press. “Good news for those looking to rent a home in the Victor Valley. The current rental market is excellent, said Karel Probert, office manager for VIP Property Management in Apple Valley.”

“‘Due to the real estate market, we’ve been bombarded with houses that owners were unable to sell,’ she said.”

“Competition in the market is good for renters because not only do they have a lot to choose from, but they also benefit from the fact that landlords need to keep their properties in good condition to compete, said James Phillips, broker in Victorville.”

“Suzanne Meyer, a real estate agent in Apple Valley warns those in the market to rent that they need to be on the lookout for a dangerous trend that occurred in the area in the 1990s.”

“‘People are losing their homes, so they stop making payments and advertise for a renter,’ Meyer said. ‘Then all of a sudden, someone’s at the door saying ‘get out, the bank owns this home.’”

“As prices continue to drop, local real estate agents say more people will likely buy High Desert homes as investments, though that’s not yet the case.”

“There are few investors out there right now, according to broker Jim Phillips, but it will not be that way for long. ‘Until buyer confidence gets to where they feel like those prices are good, they probably want to wait,’ Phillips said. ‘My guess is they’re lining up their ducks.’”

“Around 2001, the trend of buying homes as investments was common in this area. Then by 2004 and 2005, investors found that they couldn’t cover their investment with rent rates, said broker Caroll Yule.”

“‘A lot of people bought the homes anyway, and their payment far exceeded what they were able to rent the property for,’ Yule said. ‘Now with the lowering of the sales prices, we will reach the point again where it is a very good investment in the short term.’”

“Not everyone is as optimistic. Southern California economist John Husing said that because many investors were hurt when the market turned, the investment trend may be over.”

The Fresno Bee. “New buildings coming onto the market combined with fallout from a dismal real estate industry joined forces to increase the percentage of empty offices in 2007, a Fresno realty firm reported.”

“Agents at Grubb & Ellis/Pearson Commercial said construction will drop off this year as developers concentrate on finding tenants for the new buildings and existing offices vacant because of cuts in the construction and mortgage industries.”

“This office market is unusual in the amount of space available for sublease by mortgage, construction and affiliated businesses that have moved or downsized. More than 200,000 square feet of office space is available for sublease, four times the normal, said Phil Souza, a senior VP at Grubb & Ellis/Pearson.”

“Mortgage professionals say this is the toughest time they’ve ever experienced and that many companies have had to shrink.”

“‘We’ve downsized, moved to a smaller building and cut expenses,’ said Doug Heffner, owner of Integrity Lending Group and president of the local chapter of California Association of Mortgage Brokers.”

“‘Everyone has kind of bailed on the industry, or the industry has bailed on its people,’ Heffner said.”

A Tainted System From A To Z

Some housing bubble news from Wall Street and Washington. Bloomberg, “Ambac Financial Group Inc., the first bond insurer to be stripped of its AAA credit rating, reported its biggest-ever loss after writing down the value of guarantees on subprime debt by $5.21 billion, according to a statement by the company today. Ambac’s loss reported today followed the company’s first- ever loss in the third quarter. Before 2007, Ambac had reported profit increases every year for the past decade.”

“Prices for credit-default swaps that pay investors if Ambac can’t meet its debt obligations imply a 72 percent chance it will default in the next five years, according to a JPMorgan Chase & Co.”

“‘In retrospect, insurers wish they’d never heard the term structured finance, much less written the business,’ said Donald Light, an insurance analyst.”

The Associated Press. “Fitch said it cut Ambac’s ratings because the company does not have enough capital reserves to cover the higher potential defaults. MBIA raised $1 billion in capital last week to boost its reserves, but Ambac balked at such a move, saying the market conditions were not optimal.”

“Business slowed sharply in the quarter, with net premiums written dropping 78 percent to $49.3 million.”

“Bank of America Corp., the second- largest U.S. bank, said earnings dropped 95 percent after $5.28 billion of mortgage-related writedowns and higher provisions for future loan losses.”

“The writedown was 76 percent more than the $3 billion that Chief Financial Officer Joe Price estimated on Nov. 13.”

“Wachovia Corp., the fourth-largest U.S. bank, said profit fell 98 percent to its lowest since 2001 after writedowns for bad loans and mortgage-backed securities.”

“The provision for credit losses rose to $1.5 billion. Holdings backed by commercial real estate mortgages were written down by $600 million.”

“Wachovia has dropped almost 45 percent in New York trading since CEO Kennedy Thompson acquired Golden West Financial Corp. for $24.6 billion in October 2006 just before the housing market peaked. Since then, U.S. home sales have slumped 21 percent, prompting Thompson to call industry conditions the ‘toughest’ in his 32 years of banking.”

“‘They’ve got a tiger by the tail in Golden West and I don’t think they know what to do,’ said Nancy Bush, an independent bank analyst.”

From CNN Money. “National City Corp. swung to a fourth-quarter net loss as the mortgage company was badly hurt by the subprime-mortgage crisis. Revenue dropped 40% to $1.7 billion.”

“The latest quarter’s results include $181 million, in mortgage-related charges and a loan-loss provision of $691 million resulting from higher credit losses on liquidating portfolios of nonconforming mortgage and out-of-footprint home equity loans, as well as other mortgage loans.”

“Nonperforming assets were $1.5 billion at Dec. 31, or 1.31% of loans, more than double $732 million a year ago, primarily due to a larger number of delinquent residential real estate loans.”

“National City, among the nation’s biggest mortgage firms, has traditionally been known for its conservatism and ‘Midwestern common sense.’ Its weak results are a sign that the credit crisis is spreading deeper among traditional banks.”

“The company had hoped that subprime loans and a larger geographic base would help it overcome slow growth closer to home, but the company now concedes that it made mistakes.”

The Indy Star. “Property appraisers helped exaggerate U.S. home values by as much as 10 percent in 2006, contributing to a record number of foreclosures because borrowers ended up owing more than their homes were worth.”

“The dollar equivalent of that 10 percent? $135 billion. Those figures come from Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School.”

“Lenders and mortgage brokers routinely pressured appraisers to boost values, said Jonathan Miller, a New York property appraiser for two decades.”

“And appraisers accepted those pressures, said Brett Martin, who owns Indianapolis Appraisal Associates. ‘There’s a saying that a good appraiser can make $50,000 a year, and a bad one can make $200,000,’ he said.”

“Debbie Huber of Las Vegas says a third of the lenders who want to hire her are looking for a guaranteed value before she appraises the property. ‘We get calls like that every hour of every day,’ said Huber, past president of the Nevada Appraisal Commission, the state agency that oversees appraisers.”

The Boston Herald. “Local activists vow to begin this week physically blocking eviction of Bostonians who lose homes to foreclosures - even if protesters wind up in jail.”

“‘We feel stopping evictions is important enough that if arrests are necessary, some people will be arrested,’ said Steve Meacham of City Life, a Jamaica Plain group that plans to launch a civil-disobedience campaign tomorrow.”

“City Life wants lenders to either rent seized properties back to former owners or sell homes to nonprofits for use as affordable housing.”

“‘That would be a way out of this crisis that we think would be better for everyone,’ Meacham said. ‘Yes, banks are going to lose some money, but they’re going to lose money anyway, because these properties are no longer worth as much as the mortgages on them.’”

The New York Times. “Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing boom. What makes Ms. Ummel different is that she is suing her agent, saying it was all his fault.”

“Ms. Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.”

“For decades, residential transactions almost always involved brokers who, whatever assistance they gave the buyer, legally represented only the seller. The long boom that began in the late 1990s put an end to that one-sided world. As prices spiked, buyer’s agents and brokers became popular as sounding boards, advisers and negotiators.”

“That makes this the first housing collapse in which large numbers of buyers had a real estate professional explicitly looking after their interests.”

“The Ummel case poses the question: In a relationship built on trust, where promises are rarely written down and where — as in this case — there is no signed contract, what are the exact obligations of these representatives in guiding their clients through a sizzling market?”

“The defendant in the Ummel case is Mike Little, a veteran agent. Little said that contrary to Ms. Ummel’s claims, the suit was motivated mainly by the declining market. ‘When people see their home values and assets declining, they always feel there’s someone to blame,’ he said. ‘This is a dangerous time for all of us in the industry.’”

“A wave of lawsuits is beginning to wash over the troubled mortgage market and the rest of the financial world. Homeowners are suing mortgage lenders. Mortgage lenders are suing Wall Street banks. Wall Street banks are suing loan specialists. And investors are suing everyone.”

“Everyone wants to know who is to blame for the losses paining Wall Street and homeowners. The answer, it seems, is someone else.”

“‘It will be a multiring circus,’ said Joseph A. Grundfest, a professor of law and business and co-director of the Rock Center for Corporate Governance at Stanford. ‘This particular species of litigation will be manifest in many different types of lawsuits in many different jurisdictions.’”

“Two questions lie at the heart of many of the cases. The first is whether lenders and investment banks alerted borrowers and investors to the risks posed by subprime loans or securities backed by them. The second is how much they were legally obliged to disclose.”

“‘What strikes me here is that this a tainted system from A to Z,’ said Tamar Frankel, a law professor at Boston University. ‘Everybody blames everybody else. If you look at what is being said, there isn’t one who doesn’t blame another and there is half-truth in everything.’”

The Plain Dealer. “For almost a century, politicians from the White House to City Hall have pushed and prodded us to own a home. The result: Nearly seven in 10 families own rather than rent.”

“But now, as foreclosures throw tens of thousands of people in Greater Cleveland out of their homes, the question arises: Did government go too far?”

“Here are some of the ways government has promoted homeownership: The Federal Reserve Bank, which influences credit by setting the interest rate that banks charge each other, let mortgage rates remain at historic lows this decade, even as analysts warned that housing prices would flatten.”

“When the prices did flatten, many borrowers were left unable to sell because their houses were worth less than what they owed.”

“‘It was a bubble that had to burst,’ says Stuart Feldstein, head of SMR Research, a company that studies mortgages and other lending. ‘Nobody was paying attention.’”

“The federal government gives homeowners $150 billion a year in income-tax deductions and other tax breaks, says George McCarthy, who analyzes homeownership campaigns for the Ford Foundation.”

“That’s 4½ times the annual budget of the Department of Housing and Urban Development, the main government sponsor of low-income rental housing.”

“The income-tax deduction for mortgage interest gained luster in 1986, when Congress scrapped deductions for credit card and other consumer debt. Homeowners also were allowed to continue claiming credit for property taxes.”

“Mortgage guarantees, through the Federal Housing Administration and the Department of Veterans Affairs, let borrowers get by with little or no down payment.”

“The VA’s guarantee of zero-down loans for World War II veterans began the mortgage industry’s long slide into looser standards, says Tom Bier, a housing researcher at Cleveland State University.”

“Fannie Mae and Freddie Mac, federally chartered corporations, buy mortgages. That gives lenders cash to make more home loans.”

“Researchers say the pair served as models for the Wall Street-led secondary market that emerged in the 1990s and crashed a decade later under the weight of high-interest loans made to people with bad credit.”

“The federal Community Reinvestment Act requires banks to lend money in neighborhoods where they have branches.”

“Under pressure from regulators, banks grudgingly lent money in low-income and minority neighborhoods in the 1990s, and discovered an untapped market. In Cleveland, unregulated mortgage companies joined in and became dominant in neighborhoods where foreclosures now rage.”

The Desmoines Register. “Jim Anderson set a Decatur County record after paying $4,000 an acre for a 75-acre farm.”

“‘It’s pretty good ground,’ Anderson said Friday after he outbid about 20 other people, including bidders from California, Illinois and northern Iowa. Decatur County typically has the lowest-priced farmland in Iowa, with an average price last year of $1,828 an acre.”

“The record-breaking bidding underscored the fact that these are high times down on the farm, where high prices for crops and farmland are sending U.S. agriculture to altitudes never seen before.”

“In Iowa and the three other states covered by Farm Credit Services of America, a leading agricultural lender, farmland prices have risen 20 percent or more in the past year, said Kirk Manker, chief appraiser of the bank.”

“Iowa State University Extension economist Michael Duffy, who conducts an annual survey of Iowa farmland prices, said he thinks Iowa’s farmland market will be strong for at least five years. ‘We have seen a fundamental shift in demand for corn due to ethanol production,’ Duffy said. ‘I don’t think this demand will diminish in the near future.’”

“Iowa farmland set a record in 2007 for the fifth year in a row, Duffy’s survey showed, rising to an average of $3,908 an acre, 22 percent more than a year ago. It was the largest one-year increase since 1976.”

“Murray Wise of a leading Midwestern farm real estate brokerage based in Champaign, Ill., said the Iowa farmland market ‘is hotter than most, but Illinois, Indiana and Ohio follow close behind.’”

“‘This is a demand-driven market,’ Wise said. ‘It’s only the second one in history.’”

“The first demand market occurred in the early 1970s, when the Soviet Union purchased large quantities of U.S. grains, Wise said. That demand market only lasted about a year. ‘It’s a different world out there,’ Wise said. ‘The good times are here for an extended period of time.’”

“One spillover from the housing market downturn, Wise said, is a shift of capital from mortgages to agriculture. ‘East Coast lenders are saying they want to go into agriculture,’ he said. ‘Capital wants a home in U.S. ag.’”

Buyers Failed To Materialize In Florida

The Sun Herald reports from Florida. “Arthur Broslat of Re/Max Palm Realty in Port Charlotte said there is a sizable local inventory of ‘relatively new’ homes, especially in North Port, selling for 40 percent of what they went for three years ago.’ ‘I’m showing a three/two (bedroom/bathroom), 1,500-square-foot home in North Port that was selling for $250,000 in 2005,’ he said. ‘Now, you can get it for $130,000 to $150,000.’”

“Jason Painter of Program Realty LLC in Port Charlotte, who specializes in Cape Haze real estate, said home prices there ‘are off a good 35 percent.’”

“‘We are seeing a $300,000 house in August 2005 sell now for $200,000,’ he said. ‘It is,” he said , ‘a buyers’ market if there ever was one.’”

“In April 2006, all five of the nation’s largest homebuilders, Pulte, D.R. Horton, Lennar/US Homes, Centex, KB Homes, were building homes in Charlotte County and North Port.”

“‘You have builders who continued to build and now have quite an inventory,’ said Al Mitchell, president of the Punta Gorda-Port Charlotte-North Port Association of Realtors. ‘On my little street, I have four houses that are brand, spanking new. The builder has water and cut the grass. Nobody is buying them.’”

“In early January, there were 6,448 homes for sale on the local Realtor association’s MLS, including 2,694 under $200,000 and 87 under $100,000.”

“Meanwhile, the area’s condominium market is stagnate. ‘They just aren’t moving at all,’ Mitchell said.”

“Painter said the resale market for condominiums along Placida Road is nonexistent. He said investors often paid $300,000 for preconstruction condo units. One recently sold ‘for $190,000,’ he said.”

“Painter said when Town Homes of Cape Haze ‘originally came out, guys were talking about selling units for $500,000. Now the price is in the $250s — and not a single resale yet.’”

“Most new condos, he said, were purchased to generate rental income. ‘They’re getting $1,200 a month in rent, tops,’ Painter said. ‘It’s hard to keep a cash-flow property when you paid $500,000 and can only get $1,200 a month rent.’”

“Broslat said price cycles are more extreme for vacant land than other types of real estate. ‘We’ve had a drop on land prices, in standard lots, 80 percent — $50,000 lots are now $10,000 lots,’ Boslat said.”

“He cites Northwest Port Charlotte lots with access to the Gulf and/or the Myakka River as an example. In May, Broslat said, four such lots sold for $108,000 each. The same lots sold for $340,000 in 2005, he said.”

“It’s a similar story in South Gulf Cove, Painter said. ‘I saw one go for $72,000 — a dry lot. Now that same lot can be purchased for $10,000,’ he said.”

The Herald Tribune. “Another bank seized another apartment complex through foreclosure last week, driving home the fact that Southwest Florida’s condo conversion market is as dead as dead can get.”

“The Turnbury Park at Palm-Aire apartment complex is just the latest casualty of a once overheated market, which saw investors paying multimillion-dollar premiums for apartment complexes around the state in the belief that the units would be worth far more for sale as condos than for rent as apartments.”

“But when buyers failed to materialize and condo converters were unable to pay their debts, it became clear that apartment complexes would have to revert to their original purposes and that premiums paid would have to be written off as losses.”

“‘Tarragon Corp. bought a ton of apartment complexes at the height of the boom and recently resold five of them for what amounted to a 40 percent haircut,’ said Jack McCabe, a Deerfield Beach-based real estate consultant.”

“McCabe added that other condo converters are defaulting on projects all around the state. He said seven went down in South Florida in the past 90 days, and many more will follow.”

“For Coconut Grove-based condo converter Peter Wenzel, who has completed a dozen condo conversion projects in Florida over the past 25 years, the collapse of his Southern Manatee conversion came as a complete surprise.”

“His 354-unit Courtney Palms condo conversion project in Tampa sold out in nine months during the height of the boom. But the Turnbury Park conversion project went bad almost as soon as the partners closed on the complex in November 2005.”

“‘No one understands why we hit the wall so fast,’ Wenzel said. ‘We thought the Sarasota market would be the last to be affected by a downturn. It really took us by surprise.’”

“A lot of smart people were taken by surprise, agreed Stan Rutstein, a commercial agent who invested in a Bradenton conversion project during the boom.”

“‘The problem is that our market attracted a tremendous amount of weekly workers oriented toward construction. The minute these apartment complexes started to convert, these people got up and left. They didn’t want to go through the hassle, and there was no one to replace them,’ he said.”

“Southwest Florida is not economically diversified enough to sustain employment during a housing downturn, Rutstein said. ‘There is a high vacancy in conversions and in apartments because we are not attracting out-of-town people to come and work,’ he said.”

“Wenzel said…he is still smarting from the loss of a project that could have worked given more time.”

“‘Our price point of $210,000 for units and our arrangement with the golf course community made this a very attractive proposition,’ Wenzel said. ‘It would have provided a very nice second home for people up north. What happened to the market has left us all shaking our heads.’”

The St Petersburg Times. “Are we in a recession or just teetering on the edge? Economists are debating the point as conditions deteriorate. The little picture is a whole lot clearer. If you’ve lost your job or your income has fallen, the recession has arrived.”

“In the real estate business, the recession is more than a current problem; it’s a long-running nightmare. Vernon Taylor has tapped his home equity to keep the doors open at VET Realty in Lutz. After handling about $12-million in deals in 2006, the company saw business drop in half last year.”

“‘It’s a real struggle to pay the bills,’ Taylor said. A single part-timer has replaced his two full-time employees, and four of his 15 agents have dropped out of the business.”

“‘You can forget the ‘retire at 62′ stuff,’ he said. ‘It gets scary when you start dipping into things you spent so many years saving for.’”

“Business started going downhill in April, said Larry R. Holly, an independent insurance agent in St. Petersburg. ‘The whole industry is down,’ he said. ‘It’s the worst I’ve seen in 25 years.’”

“Stagnation in the real estate market is one reason. Where he was giving 20 to 25 quotes a week for new homeowners insurance a year ago - and selling about half of them - this year he’s lucky to be asked for two or three quotes a week and sell one or two policies.”

“Another sign that people are feeling the pinch is the growing number of Holly’s customers who fail to renew their auto insurance until they get a threatening letter from the state.”

“‘Then they make a payment, but let it lapse until they hear from the state again,’ he said. ‘It’s a never-ending scenario, but when money is tight, that’s where you cut.’”

The News Press. “Foreclosures and bankruptcies, unfinished homes and subdivisions, plummeting prices and lease rates, layoffs and market saturation were much in the news in Lee County and nationally, throughout the year.”

“On the residential side, 2007 was a time when a terrible threesome left their mark, according to Ron Carpenter, president of the Realtors Association of Greater Fort Myers and the Beach.”

“‘Home sales slowed to a crawl in 2007, due in part to real estate investors with more money than common sense, mortgage brokers and banks willing to give homebuyers more money than could possibly be paid back, and homebuyers who did not take the time to read the mortgage terms associated with the biggest financial deal of their life,’ he said.”

The Orlando Sentinel. “A new subdivision is stirring in west Orange County. Castle & Cooke Florida, the developer of Oakland Park, is building 10 homes in an exclusive project that overlooks the south shore of Lake Apopka. And none of the 10 homes has an owner or buyer in sight.”

“Several custom-home builders in that community are also busy erecting houses without buyers in hand.”

“With excess inventory of unsold new homes blamed in part for the nationwide slump in housing last year, it might seem strange that builders would be adding to the unsold inventory. But in growth-oriented Central Florida, it is still happening and even picking up speed, spec homes rising from bare ground.”

“Anthony Crocco, an analyst who tracks the new-home market throughout much of Florida, said Monday the days of building homes without a confirmed buyer are returning, for sound economic reasons, to this part of the state.”

“One reason that speculative home construction will increase in percentage terms in the coming months, he said, is that more buyers will demand a finished home, an ‘inventory home,’ rather than wait for one to be built from scratch.”

“When the real estate market was hot a few years ago, Crocco said, people could count on their existing home selling quickly, so they felt they could buy a new, unbuilt home and make the move fairly easily on a timetable of their choosing.”

“Now, however, sellers are uncertain of when, or if, they will be able to unload their existing home, so they are reluctant to buy an unbuilt home. They are waiting until their existing home sells, then moving quickly into a finished home pre-selected from the region’s new-home inventory.”

“So now the balance has tipped to the point that the construction side of the ledger must begin to creep back up or risk a more serious imbalance, Crocco said. ‘Some builders are having to take a bit of a risk,’ he said, by starting homes without buyers.”

The Palm Beach Post. “With the condo market deader than the Miami Heat’s playoff hopes, the apartment market is struggling, too.”

“Just ask Kyle Riva, president of Winter Park-based Epoch Properties. The developer recently landed a $150 million loan and began construction on Las Ventanas, a 494-apartment complex in Boynton Beach.”

“While Riva is optimistic about the apartment market’s long-term prospects, he worries that homeowners who can’t sell are flooding the market with houses and condos for lease. ‘That is having a negative effect on rental housing,’ Riva said. ‘The market is not the best right now.’”

“At least for landlords. Tenants, on the other hand, can find deals. The first tenants at Las Ventanas won’t start moving in until 2009, and Riva hopes the glut of homes for sale will shrink by then. Monthly rents will range from $1,300 for a one-bedroom unit to $3,000 for a three-story townhouse with garage.”

“If you want a ground’s eye view of local economic trends, you can cruise on down to Fast Eddie’s Pawn in Riviera Beach. ‘Last week, I took in five or six Rolexes,’ says proprietor Brian O’Brien.”

“Fast Eddie’s has been in Riviera for 21 years, so there’s plenty of local perspective. And since the economy started to tank, says O’Brien, ‘it has been a whole different level of customer.’”

“There are contractors, for instance, and insurance agents whose clients have stopped paying monthly premiums. And they are not bringing in junk - witness the wave of Rolexes.”

Bits Bucket And Craigslist Finds For January 22, 2008

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