The Housing Bubble

It’s Friday desk clearing time for this blogger. “A weak economy has dealt some bad hands to Carson Valley gaming and some retail sectors, but the good news is that real estate markets may be recovering. Realtor Marsha Tomerlin of Coldwell Banker Itildo. ‘Every six months, it’s getting better,’ Tomerlin said. ‘There is a group of people who know now is the time to buy a house.’”

“She said a large inventory of property with low interest rates is providing prospective home buyers with tremendous opportunity. ‘The market is turning into a mini-bull market,’ she said. ‘The bear is sleeping, but the bull is getting more aggressive.’”

“The mortgage meltdown continues to make headlines. One day after a report showed a 200-percent increase in Nevada foreclosures last year, buyers and economists are wondering if there is a solution.”

“The National Association of Realtors hopes so. It’s rolling out a national campaign to change minds about the housing market. The ads are hitting the airwaves hard. From now until November, expect to see or hear them on tv and radio in English and Spanish.”

“Despite being nervous about getting into the housing market, homeowner Sherie Palm jumped right in and she’s glad she did it now. ‘Basically now is the time to buy,’ Sherie insists. ‘You’re getting more home for your money, your gonna get the location you want, the amount of house you want. Now is the best time to buy because everything’s going up from here.’”

“As Florida property owners celebrate saving 240 bucks a year after voters overwhelmingly approved Amendment 1 on Tuesday, here’s some other news to consider: Nearly 7,060 people declared insolvency in Orlando’s federal bankruptcy court in 2007, a spike of 96 percent from 2006.”

“Felix came here in 1999, found a steady job and, moved by the spirit of the property-buying frenzy, closed the deal on his first home 2 1/2 years ago.”

“He took out two loans — one at 80 percent of the home value at 6.5 percent, and 10.8 percent on the smaller loan. But the perfect storm hit late last year.”

“The construction meltdown affected his job drastically. The mortgage rate on the bigger loan spiked. ‘At some point they’re going to tell me to leave my house,’ he said. ‘I’m against the wall.’”

“Many people recall popping the champagne cork the day they bought their first home. Felix remembers it differently. ‘I know there are people with bigger problems than me,’ he said, ‘but when I bought my home, that was the worst day of my life.’”

“With interest rates going down again, and housing prices also dropping, experts are saying it’s time for those having trouble affording a Cape home to consider buying. ‘There are some pretty good deals out there,’ said Alice Boyd, principal at the grant-writing firm that has also overseen several affordable housing lotteries. ‘I’m trying to push everyone I know to take a first-time homebuyer’s class.’”

“In North Eastham, builder John McShane could not sell the last of five moderate income units. Buyers who had been selected through a lottery process backed out because home prices had dropped enough that there wasn’t a big difference between a market rate home.”

“‘My heart goes out to the developers who are trying to do something good, but they are getting caught by high building costs and the high price they paid for the land,’ Boyd said.”

“Armed with lawn chairs, warm clothes, and snacks, Edwards residents Joe Robinson and Howard Glasser looked like diehard concert goers camped out for tickets — not homebuyers of affordable condos. ‘I’ve been here since about noon, and I’m staying through tonight,’ said Robinson.”

“Eagle-Vail resident Sara McClure was one of the first 10 people in line. She came at about 10:30 a.m. to wait for a one-bedroom condo. ‘I’ve been super anxious about this. There are limited numbers of the lower-priced (condos). I was planning on camping out here no matter what,’ she said.”

“Edwards resident Sophie Ozaneaux has lived on-and-off in the valley for 17 years, but ‘missed the boat’ when prices were affordable, she said. ‘There’s a real need for this,’ she said of the affordable homes. ‘This is still expensive for me. I’m working three jobs to afford it.’”

“The managing director of CB Richard Ellis Vietnam Co., predicts that the scene of long queues of people registering to buy luxury apartments will continue this year as it is forecast that demand for buying houses still far outstrips supply.”

“Townsend described such a fever for high-end apartments as a basic human greed and fear that they would not be able to get into the market. ‘This is a common thing in Asia,”’ he said after a press conference titled ‘CBRE Fearless Forecasts 2008′ in HCMC.”

“Townsend compared the queue to a crowd of people lining up for iPhone and the Microsoft software for fear that Bill Gates would not launch any new software in the market.”

“‘There are not enough houses for the people of Vietnam who have new expectations and new roles. Many and many thousands of hundreds of people are looking to upgrade their lives, and living from bicycles to motorbikes and from motorbikes to cars. So, it’s the same thing in the housing market,’ Townsend said.”

“The number of of over-stretched South African property owners losing their homes under the hammer rises to record levels, reports financial website Fin24. Alliance Group CEO Rael Levitt says so far this month, forced property sales are up 75% compared with January 2007.”

“Levitt says he has never seen so many luxury, leisure properties - typically priced at R7-million plus - on the distressed sales book. Levitt notes that some top-end homes are already being sold on auction at a 25% discount to original asking prices.”

“Says Levitt: ‘Before the National Credit Act was introduced, banks were providing easy money for people to buy rental properties and second homes. Inexperienced investors happily overextended themselves expecting property values to continue to rise.’”

“Although Levitt doesn’t expect a ‘massive’ drop in house prices, he maintains that too many South Africans mistakenly believe that values will move in a one-way direction forever.

“The local credit crisis triggered by this summer’s subprime woes in the United States has hit hard Kazakhstan’s praised banking sector and exposed its reliance on cheap foreign credit and overexposure to the speculative construction and real estate sectors.”

“A shake-up of such magnitude was a first for Kazakhstan. Until this summer, the market has been increasing steadily, and Kazakh real estate was among the most attractive investment plays in Central Asia.”

“People hurt the most by the crisis were middle-class homebuyers: those who were crowded out of the market by the ever increasing speculation, and those who are waiting in vain for the condo that they bought before the market turned.”

“It remains to be seen whether Kazakhstan will heed these lessons. The fundamental disbalances that led to the crisis have been laid open. The question is whether the government decides to tackle the problems head on or settles on half-measures and rhetorics.”

“City Assesor Bob Whiteley said this week he sees instances of new buyers paying far more than what he considers a property is worth, which skews the market. He said he does not use such sales in the annual studies he conducts to determine the fair market value of all Belfast properties.”

“Whiteley said the peaks and valleys of the national economy are flattened out in Maine, particularly along the coast. ‘The poor economy of the state tends to insulate us from extreme swings in real estate. I don’t see any loss of value either imminently or in the foreseeable future.’”

“Whiteley blames the recent ‘bubble’ in house prices on the Federal Reserve Bank, which has ‘made the cost of money so small that not only did people take it for granted, but they abused it. We are now seeing the effects of that policy,’ he said.”

“Chaos in the housing market has spoiled the fun for some of real estate’s biggest cheerleaders: flippers. many stepped or were forced to the sidelines, and failed flippers are blamed for causing some of the current crisis.”

“But others have stayed, insisting that there is a winnable off-season game still to be played: Selling’s tougher, but more is available to buy now at the teeming foreclosure bazaar.”

“In Northern California, broker hasn’t seen a lot of flipping in his area, but he has seen banks cutting prices to move properties. He says foreclosure volume is still rising in Sonoma County.”

“‘Thirteen notices of default (are) being filed every day,’ he said. ‘We started 2007 with 3.5 a day.’”

“John Donaldson, a contractor and flipper in Corona, Calif says housing prices are falling so fast in Southern California right now that they’re eroding any profits a flipper might make. ‘I’ve bought homes with a 20% profit margin and in four months that’s gone,’ he said.”

“Husband-and-wife team Kurtis and Cindy Squyres are full-time flippers in the Coachella Valley. Squyres is no construction expert. His wife manages the rehabs and he takes care of the buying and selling. ‘I don’t know the difference between a power drill and a hair dryer,’ he said.”

“The Squyres stick to buying single-family homes in nice working-class neighborhoods that need cosmetic updates. Then they spin the home quickly with ads, fliers, open houses, auctions and staging. And they sweeten the deals with sexy giveaways like flat-screen TVs, spas and other items.”

“Squyres offers extra perks to real estate agents who bring in buyers. Some properties he just acquires and then flips to other flippers, who do the rehabs and then sell.”

“Who are they targeting? First-time homebuyers are their ’sweet spot,’said Squyres, adding that with falling home prices and recent interest rate cuts, ‘all the families that have been priced out of the market for the past couple of years can afford a house now. They just don’t know it yet.’”

Inside Bay Area reports from California. “Steve Fernandes held an ‘Open House’ on a recent Saturday morning…on a cold, hazy Central Valley day. Fernandes had two interested parties that stopped by looking over the four-bedroom, three-bath, 3,176-square-foot Centex home. But Fernandes, a broker, wasn’t selling the home. He’s renting it out for $1,995 a month.”

“Fernandes said that he has been contacted by several people who want him to rent their homes in nearby Mountain House, a master-planned community near Tracy made up of 14 neighborhoods built by Lennar Corp., Pulte Homes and Centex Homes.”

“‘Mainly, it’s to help pay the mortgage,’ he said. ‘They don’t want to sell right now, and they can’t afford to hold onto the property.’”

“Fernandes said a lot of owners believe the ‘market will come back.’ ‘When people are paying $4,000 a month and being foreclosed on, renting a new house for $2,000 is very attractive,’ he said.”

“The renters, a large portion escaping foreclosure, are willing to pay $2,000 to $3,000 a month for a new house in the same neighborhood or school district for half of a mortgage payment.”

“Robin Chatham, a Brentwood real estate agent, said that it’s the individual owners who are renting out the properties, not banks. ‘They (banks) don’t want the liability,’ she said. ‘They want to sell it quickly and don’t want a tenant.’”

“Chatham said that investors are also buying blocks of homes and renting them out temporarily before ‘a turnaround’ and higher property values.”

The Contra Costa Times. “A South Bay home builder, put off by the sluggish economy and the housing slump, has backed out of a deal to buy the former Oak Park Elementary School site from Contra Costa County.”

“SummerHill Homes of Palo Alto bid $22 million in June for the 10-acre property in Pleasant Hill and planned to build as many as 96 single-family homes. SummerHill had paid $400,000 to hold the option when it notified the county in December that it did not want to proceed with the purchase.”

“A spokeswoman who declined to give her name said the company ‘terminated the contract due to current economic conditions.’”

The Press Democrat. “Construction of new homes in Sonoma County fell to the lowest level in more than a decade last year as builders scaled back in the face of slumping sales and declining prices. The price of a typical new home has dropped 19.1 percent, according to The Gregory Group.”

“Forecasts call for Sonoma County housing starts to be 800 to 1,000 this year. That would be the lowest total in the 20 years the building trade group has tracked new construction.”

“‘That really does give you an idea of the depth of the problem. It reflects very weak demand,’ said Steve Cochrane, regional economist. ‘We’ve never seen a glut quite like what we have today.’”

“Ryder Homes, a longtime county builder, began selling at its Countryside subdivision in southwest Santa Rosa last year and expected to close out the 39-home project within the year. So far, 21 have been built and 15 sold, said David Hunter, Ryder’s construction director in Sonoma County.”

“Sales also were slower than expected at Willows Wild, a 14-home Sonoma subdivision Ryder also expected to complete last year. So far, seven have been built and three sold, Hunter said.”

“‘The bottom isn’t here yet,’ he said.”

The Sacramento Bee. “The city of Sacramento this month will give pink slips to at least 16 workers, the first wave of severe cutbacks for a municipality grappling with an estimated $55 million budget deficit next fiscal year.”

“‘It’s painful to go through this,’ said City Manager Ray Kerridge said. ‘But I would be lying if I didn’t say some warm bodies are going to leave the city’s employment.’”

“‘To my knowledge, we’ve never before laid off anyone,’ said Assistant City Manager Marty Hanneman.”

“‘Unfortunately, these layoffs could have been averted had the city been more fiscally responsible and had the foresight to see the impending downturn and commercial real estate market,’ the Union representatives from Stationary Engineers Local 39 news release stated.”

The Modesto Bee. “Diablo Grande, the luxury golf resort in the hills of western Stanislaus County, is in financial trouble and has closed its two golf courses.”

“To date, the two acclaimed golf courses, about 400 homes and a production winery have been built. The rest remains on paper.”

“The clubhouse doors were locked Wednesday, and signs were posted saying the golf courses were off-limits. ‘We are in a temporary suspension mode. We don’t know how long it will last,’ said Dwain Sanders, VP of development at the resort. ‘We are feeling the effect of the housing market, just like everyone else. We aren’t getting enough revenue to keep them open during the downturn.’”

“Sam Gardali, who along with his wife bought a second home in the resort to take advantage of the golf courses, said he wasn’t happy with how the course closures will affect property values at Diablo Grande.”

“‘Those are two beautiful golf courses; we love to play them,’ he said. ‘That’s one of the reasons we decided to purchase a second home up there.’”

The Press Telegram. “A former aerospace facility being developed as one of Southern California’s largest commercial projects may not include housing as planned…largely to poor conditions in the housing market.”

“Up to 1,400 residences, mostly single-family homes, were to be constructed on the site. ‘At this point we’re evaluating options other than housing,’ said Stephane Wandel, with Boeing Realty.”

“Long Beach City Manager Pat West favors eliminating the housing component, which has been a controversial aspect from the proposal’s inception. ‘We’re excited,’ West said. ‘Houses are great, but right now we’re really trying to stem the tide of the loss of manufacturing jobs and facilitate the creation of white-collar jobs.’”

“‘It makes sense,’ said Jack Kyser, chief economist of the Los Angeles Economic Development Corp.’I think people are looking at the realities of the housing industry and how soon will it come back. The market has been screaming ‘Do industrial space,’ but nobody has been listening because it was more financially rewarding to do housing - until now.’”

The Orange County Register. “California real estate licenses dropped last month from the year before for the first time since March 1999, ending a 7 ½ upswing in which licensees increased by 81 percent.”

“The California Department of Real Estate reported that the state had 548,959 licensees last month. That’s still the third highest number on record, and it’s equal to one licensee for every 22 California households or one for every 1.4 homes sold last year.”

“That’s down 0.1% from the number of licensees in December 2006. Local real estate executives say agents and mortgage brokers have left the business in droves, or taken other jobs to make ends meet as the number of sales fell to their lowest level in at least two decades. The count of licensees is slow to drop since they’re good for four years before requiring renewal.”

“‘When you have an up market and people perceive it’s easy to make money in real estate, all these newbies come in,’ said Phil Schaefer, past president of the Pacific West Association of Realtors. ‘A lot of these people that get in thinking it’s quick and easy find out it’s not quick and easy.’”

“Just 2,463 license tests were administered in December, the lowest number since November 2000, DRE statistics show. Exams have dropped steadily from nearly 16,000 administered in September, the last month before new regulations kicked in requiring that applicants take two additional real estate courses to qualify for taking the test.”

“‘It’s going through the floor,’ DRE spokesman Tom Pool said of license exams.”

“Pool noted that a dramatic upswing in the number of licenses issued began in the spring of 2001, following the bursting of the dot-com bubble and the lowering of mortgage interest rates.”

“Pool speculated that many got real estate licenses and went to work as loan officers and mortgage brokers. ‘It paints an interesting picture,’ Pool said. ‘One boom stopped and it kind of transitioned into another.’”

From The Sun. “New housing, an important step toward downtown revitalization, must be reinforced by city services and good planning to be successful. It’s great to see a housing project like the new Meadowbrook Park Lofts in downtown San Bernardino.”

“Unfortunately, downtown San Bernardino is anything but trendy. But you have to start somewhere. The lofts are not cheap at $350,000 to $360,000, but ANR Homes and the city have partnered to offer a $100,000 down-payment assistance program for buyers who already live or work in San Bernardino.”

“Security from crime will be an issue. The Meadowbrook Park Lofts project draws its idyllic-sounding name from the park across the street, but unfortunately that park harbors homeless people and druggies after dark. If the unsold lofts suffer break-ins and defacing, they will be that much harder to move in a worsening economy and a deflated housing market.”

“How about a special incentive program for police officers to buy and live there? That could help keep the new project secure.”

“The Fed slashed rates for the second time in eight days on Wednesday. Throughout the Inland Empire and the United States, asking prices on homes continue to fall. Foreclosures across the nation are at a record pace, driving home prices even lower.”

“Activity in the housing market has perked up in recent months, as prices have dropped precipitously and rates have remained low, said Brian Weide, a broker with Sunstar Mortgage Services in Ontario.”

“‘Sales prices are low compared to three years ago, and sellers are willing to give away the farm in terms of picking up closing costs and lowering prices. Buyers are starting to think they don’t want to miss opportunities,’ he said.”

“Economist Jack Kyser…said he uses a measurement called the ‘unsold inventory index’ to gauge housing market strength. He said single-family homes in the region were staying on the market an average of 14.5 months, up from 5.9 months in December 2006.”

“‘Buyers should be very cautious,’ he said.”

The Daily Press. “The High Desert housing market is certainly not on the rise, but it may be leveling off. That was the message Robert Kleinhenz, Deputy Chief Economist for the California Association of Realtors, brought to an audience of nearly 400.”

“While his research shows that sales on houses will continue to decrease, it will be at a much slower pace than the drop that occurred in 2007. ‘Median home prices are down slightly,’ he said. ‘Mortgage rates are very favorable. The problem is not going to be mortgage rates in 2008. The trick is going to be getting the loan funded.’”

“Still, with the population of the Inland Empire is set to overtake Orange County by 2020 and median home prices are lower in the High Desert than just about anywhere else. So Kleinhenz recommends purchasing property here if investors can hold onto their purchase for some time.”

“‘You can’t lose if you buy here,’ he said.”

The Baltimore Sun reports from Maryland. “The Station North Townhomes had no shortage of pre-construction buyers, lured by the promise of luxury living near Penn Station in Baltimore’s emerging arts district. Prices in 2005 reflected a red-hot market, rising tens of thousands of dollars with each batch of new contracts. Now, amid a housing slump that has builders slashing prices and offering giveaways, Station North’s developer is looking for tenants.”

“‘The sales just pretty much stopped,’ said James D. Campbell, a principal with Somerset Development Co.”

“Somerset hopes to rent the 14 unsold homes in the 32-unit development, offering a lease-to-buy program or straight rentals, with monthly payments ranging from $1,600 to $2,400.”

“Somerset’s sale prices, which started at a range of $280,000 to $300,000 in summer 2005 and climbed in a matter of months to the high $400,000s for the largest corner units, have already been reduced. They now range from $300,000 to $450,000. Campbell said additional price cuts were not an option.”

“‘We didn’t want to price them so low that it didn’t make any kind of economic sense,’ Campbell said. ‘Renting will be a better strategy.’”

“Melissa Wallace-Johnson moved in June from Silver Spring, where she and her husband rented, to Station North, where they bought their first home. The couple got a reduced price of $339,000 with upgrades such as granite counters.”

“‘If we’d bought in Silver Spring, it would have been double the price,’ Wallace-Johnson said. ‘We’ve fallen in love with the neighborhood. You can tell it’s on the verge of something.’”

“The couple does not regret the decision, despite the conversion to rentals, which Wallace-Johnson said is a better route than slashing prices to try to sell.”

“‘We went into this knowing we would not be there forever, but we didn’t go into it to make money,’ she said. ‘We wanted to buy and own. We’re confident we won’t lose money.’”

“WCI Communities Inc. has returned deposits to everyone with reservations for its Plaza Residences - the 23-story tower planned near the Columbia lakefront - while keeping the reservations intact, the company said in a statement this week.”

“Barbara Byrd, who lives in the nearby Lakeside condos with her husband, was one of those surprised last week to receive a deposit check back from WCI. Byrd said her excitement when she first saw WCI clear the land quickly evaporated when she saw grass planted on it.”

“‘It doesn’t look like anything is happening now,’ she said.”

“‘It’s an example right in our own community of the impact of the housing slump,’ said Del. Elizabeth Bobo, whose legislative district includes Town Center, where the tower is planned. ‘What I hear from people in the industry and related industries is that it’s hitting the high-end market as hard as any others. It’s a major local example of what’s happening across the country.’”

The Washington Times. “Despite falling home prices and interest rates, the Washington area still is priced far above the earning power of most home buyers, according to a study.”

“Purchasing a home in the Washington area requires a steady income of at least $121,197 a year, according to the Center for Housing Policy. The median personal income in the region is $46,782 a year, according to the U.S. Census Bureau.”

“Registered nurses, who earned the highest median annual income among high-growth occupations at $63,291 a year, are making only slightly more than half the money needed to buy a home, the nonprofit group reported.”

“The other occupations — retail salesman, customer service representative, food preparation worker and office clerk — earned median annual incomes ranging from $21,566 to $39,473.”

“Economic trends of the past few months suggest affordability problems might be lessening. However, real estate executives say the home buying market still is in turmoil.”

“‘The lower pricing would normally make housing more affordable but the lending requirements have tightened, so buyers need more money for down payments than they did two years ago,’ said Aaron Liebert, real estate developer JPI’s managing partner for the Washington area. ‘This has helped the rental housing market, except that there is now a large number of for-sale units — houses and condos — that are being rented individually at deep discounts.’”

“Average rent for a two-bedroom apartment in Washington was $1,286 a month in the third quarter of 2007, the Center reported.”

The Connection from Virginia. “Fallout from the real estate bubble is not likely to blow over in the next year, but it may have struck a blow for the cause of ‘affordable housing.’”

“Real estate agents emphasize that tumbling sales prices have created a buyer’s market. ‘For anyone who buys in the next 12 to 16 months, this is the best time IÕve seen to buy since about 1991,’ said longtime Loudoun real estate agent Nancy Yahner. ‘For anyone who bought in 2005 and 2006,’ she acknowledged, ‘it’s hard on them.’”

“Last year, the average sales price of a home in Loudoun fell by about $40,000, from $547,429 in 2006 to $507,542. It was a significant drop, although not as drastic as the $108,922 leap in sales prices between 2004 and 2005.”

“Following that spike, market activity plunged in 2006, with 5,919 residential units sold that year, as opposed to 9,123 the year before. ‘I think buyer confidence is quite low out there,’ said Yahner. ‘People are scared.’”

“She also attributed the slump to the record number of foreclosures last year. A couple of years ago, when banks were able to borrow money from the federal government at low rates, a number of ‘less traditional’ institutions were lending money without requiring borrowers to verify their incomes, debt ratios or other qualifications, she said.”

“‘Practically, if you had a pulse, you could buy a house,’ said Yahner.”

“Melinda Hetzel, deputy commissioner of accounts for Loudoun’s Circuit Court, said she had seen some 600 to 700 foreclosure accounts filed last year, while her office had never seen more than 100 such accounts filed in any previous year.”

The Post Gazette from Pennsylvania. “A report released yesterday suggests that contrary to many perceptions, Pennsylvania did experience a housing bubble. The Keystone Research Center in Harrisburg recently completed the first detailed study of the housing market in the state, which concluded that hard times still might be ahead for Pennsylvanians due to fallout from subprime mortgages.”

“‘While the run-up in housing prices began slightly later in Pennsylvania than in the rest of the nation, housing prices here have mirrored the national trend since 2001,’ said Stephen Herzenberg, a KRC economist.”

“He said that in just five years, from 2001 to 2006, housing prices rose 54 percent, compared with an overall inflation rate of only 13 percent. ‘Housing price hikes far outstripped increases in rents and the cost of construction,’ Mr. Herzenberg said. ‘That is clear evidence of a bubble in Pennsylvania.’”

“According to data in the report, the counties with the greatest share of new home mortgages originated in 2006 that were subprime were Forest, Cameron, Venango and Fayette.”

“An estimated 45,500 subprime mortgage foreclosures are projected in Pennsylvania between the third quarter of 2007 and the end of 2009, which the study’s authors say represents a loss of $2.4 billion in property values.”

The Morning Call from Pennsylvania. “Rural counties in central Pennsylvania and the Philadelphia area are expected to bear the brunt of the mortgage lending crisis in the state, but the Lehigh Valley will also have its share of home foreclosures, according to the Keystone Research Center.”

“In Forest County, in northwest Pennsylvania, 46 percent of the mortgages originated in 2006 were subprime, Keystone estimates. In addition, some neighborhoods in the Slate Belt, downtown Allentown and Easton, and Carbon County had levels of subprime mortgages in 2006 that exceeded 30 percent.”

“‘There is still a lot of uncertainty. [The] area had a large increase in prices. That makes us nervous,’ said Mark Price, one of the economists who authored the report. ‘The concern going forward is what happens if prices begin to decline.’”

“‘It is true in Pennsylvania we have not yet had the level of foreclosures in Ohio and Michigan to our west, and not as much of a decline in housing prices as places like New Jersey and New York to our east,’ said Herzenberg. ‘We have steered a narrow path between those two extremes. That does not mean we are out of the woods,’ he added.”

“The report said three factors will help determine which areas will be hit hardest by the expected wave of foreclosures: the percentage of subprime mortgages; the rise in home prices; and unemployment rates.”

The Philadelphia Inquirer from Pennsylvania. “Numbers for December and all of 2007 were not yet available for the seven counties surrounding Philadelphia, said Joseph Wadsworth of Hanley Wood Market Intelligence.”

“For the first 11 months of 2007, net new-home sales (minus cancellations) in the seven suburban counties fell just 11.3 percent from the January-November period in 2006, Wadsworth said.(Hanley Wood began tracking sales within Philadelphia in August, so no comparisons with 2006 are available.)”

“The pace of sales may have fallen off, but newly built homes are still appealing to some buyers.”

“‘I’m not one of those people who follows what the media and the public say,’ said Vera Germanotta, who, with her daughter, Maria, bought side-by-side units at Westrum Development Co.’s Villas of Packer Park in South Philadelphia, where prices range from the mid-$300,000s to the low $400,000s.”

“If there’s a new house you really want, you buy it, said Kathleen Czermanski, who has settled in at Wicklow, a development of eight $1 million-plus carriage houses in Wayne. She signed a contract in August 2006, long before the foundation was dug.”

“‘I wanted to buy there when I first heard about it three or four years ago,’ said Czermanski.”

“But her house in Malvern isn’t selling, even though ‘I’ve reduced the price three times and put $30,000 more into it, even after [putting] a new kitchen and three bathrooms into it.’”

“Czermanski took out a swing loan in the meantime, yet ‘I don’t regret buying the new house, not for a minute.’”

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