The Housing Bubble

A report from the Oregonian. “The 10,000-square-foot estate home in West Linn comes loaded with Mount Hood views, three wet bars and nanny quarters. It once fetched $3.3 million. The neoclassical Italian-style villa in the West Hills: $1.4 million. The 17th-floor riverfront condo in South Waterfront: $798,170. All were coveted properties during Oregon’s housing boom. Today, all fester in foreclosure.”

“Recently, real estate brokers who specialize in foreclosed homes say the nation’s foreclosure troubles have crept into the Portland area. Bankruptcy lawyer Michael O’Brien is seeing more people who bought expensive Happy Valley homes with a 10 percent down payment, then pulled out what little equity they had to go shopping.”

“‘They needed new furniture to furnish that big Happy Valley house,’ he said.”

“‘It’s ugly,’ says Sande Sivani, who scans foreclosures for investors and has seen filings nearly double in Multnomah and Clackamas counties to a combined 300 a month. (She doesn’t handle Washington County.) ‘There are a lot of people who bought over their heads probably because someone told them they could qualify.’”

“Bill Ridge owns dozens of rental properties, and his Ridge Mortgage Services in Tigard specializes in financing investor home purchases across the country. In 2006, Ridge thought he saw a deal on the banks of the Willamette River.”

“The Meriwether came amid a historic rise in Portland’s downtown condo supply. Ridge paid $798,170 for a place in the Meriwether. But then: ‘My wife said, ‘I hate the height,’ Ridge says.”

“They moved back to West Linn and put the condo up for rent. Ridge knew the rent wouldn’t cover his $5,748 monthly mortgage payment, but he wanted to hold on to ride what he expected would be rising value.”

“In August, he put the condo on the market for $995,000. No takers. The next month, he stopped paying his mortgage. In December, his lender put the condo into foreclosure.”

“‘This is a rags to riches and back to rags’ story, Ridge said. ‘It’s my own stupidity and my own fault I got into it.’”

“Ridge has similar troubles on other investment properties, and his mortgage business isn’t what it used to be. ‘My company’s income is going south, and my income is going south, too,’ he said.”

“Looking back, he said he tried to ride the boom too long. ‘I got greedy.’”

“Two other Meriwether condos went into foreclosure. In one case, William A. Dittrich of Vancouver paid $387,740 in June 2006 and tried to resell it for a profit four months later for $448,000.”

“But it didn’t sell. By October 2007, his listing price was down to $335,000, 14 percent less than he paid for it. It still hasn’t sold.”

“Sean and Stacey Davis used an adjustable-rate mortgage to buy a condo near Portland’s Northwest 23rd Avenue shopping district for $534,100 in March 2007. Five days later, the couple from Camas, Wash., tried to flip it for a hefty $55,000 profit.”

“‘Then, ‘the market turned,’ said Jeff Abney, a broker who tried to sell the condo. In January, the couple — who declined through their broker to be interviewed — listed the condo for $500,000, a 6 percent drop from what they paid.”

“Investors’ speculative fever spread to buyers who expected to live in their homes. In January 2005, a couple bought an Italianate villa in the West Hills for $1.4 million. Two years later, their lender foreclosed.”

“Broker Philip Higgins expects to resell the house for the lender for $850,000, a 39 percent drop. ‘The fact that the house sold for $1.4 million,’ Higgins said, ‘is flat-out ridiculous.’”

The Associated Press on Oregon. “Portland’s condo market is ailing, yet developer Mark Edlen just started his seventh condo tower since 2004. Edlen sees an untapped market for his 16-story Cyan, where a sales office recently opened.”

“The pitch goes something like this: If you’ve been priced out of the condo life in the Pearl District, come live in a new downtown building that offers smaller, more affordable condos but the same easy access to the arts, parks, MAX and groceries.”

“The Cyan will be Portland’s first large-scale condo tower to lean so heavily on the market for small, European-sized living spaces. ‘We think every city has a challenge,’ Edlen says. ‘How do you house people who don’t make $150,000 a year?’”

“Two-thirds of the Cyan’s 354 condos measure less than 600 square feet, and about 60 percent are priced less than $300,000. When asked about the Cyan, Jerry Johnson, a Portland housing economist, said: ‘That’s a head scratcher. But who knows, maybe the contrarian idea is the right way.’”

“Howard Weinman, the Cyan’s lender at San Diego National Bank, notes that he closed the loan last summer before the condo market slowed further. But he remains optimistic about the Cyan in light of its pricing.”

“‘Most of the inventory is luxury condos,’ said Weinman, the bank’s Northwest real estate manager. ‘This is definitely not that. In my analysis, we felt it was a good risk. There’s a lot of people who’d like to live in the urban core, but just can’t afford it’”

“The concept dovetails with a philosophical movement of living smaller but richer lives. Edlen mentions Peter Walsh’s book, ‘It’s All Too Much,’ as part of the appeal. Or, think Target’s tagline: ‘Expect more. Pay less.’ Or, the Ikea store layouts to promote living in less than 1,000 square feet.’”

“‘As opposed to the McMansion theory,’ he said.”

“To see how people live in tightly packed cities, Edlen, along with architects and builders, toured Seoul, South Korea, Toronto, Amsterdam and Tokyo.”

“The light-bulb moment for the Cyan came in a 550-square-foot place in Toronto. About 12 people and Edlen filled the room, looked around and thought, ‘Yeah, you could hang out here,’ said broker Todd Prendergast.”

“To save space, kitchen cupboards flip up, instead of sideways — an idea snatched from Italy. The design allows a person to walk under the cupboard door, accessing all its contents, while cooking. The fridge is just 24 inches deep, compared with the typical 30 inches.”

“‘The tiny spaces, you have to be pretty clever and thoughtful about it,’ said Damin Tarlow, Gerding Edlen’s Cyan project manager. The stove has a glass top that plays double duty.”

“‘If you’re not cooking,’ Tarlow said, ’set a beer on it.’”

The Seattle PI from Washington. “Dutch and Brecky Bihary are three months behind on their mortgage payments and scrambling to hold onto the three-bedroom rambler they’ve had for 12 years. Their troubles began when they refinanced four years ago.”

“Despite asking for a 30-year fixed-rate loan, they realized at closing that their mortgage broker got them a two-year adjustable-rate mortgage they repeatedly told him they didn’t want. He also failed to tell them that monthly payments didn’t cover escrow.”

“When their interest rate reset last year, at the same time Dutch Bihary lost his job, the family couldn’t keep up payments that had doubled to $1,505 a month.”

“‘We made our decision. We don’t blame anybody. He did his job, and he didn’t look out for our best interest,’ Brecky Bihary said. ‘But buyer beware. You trust that they’re looking out for you. It didn’t happen, and now we’re having a hard time getting by.’”

“Like many borrowers, the Biharys, who live in Mount Vernon with their two young girls, assumed their broker was working for them. In reality, mortgage brokers aren’t legally obligated to do so.”

“The Biharys sought the help of a mortgage broker because they expected him to work for them.”

‘”We were told we were getting a fixed (rate loan), but through double-talk and side-stepping what we signed was an ARM,’ said Dutch Bihary. ‘I kept asking if things could be explained. He lulled us into a sense of security. This isn’t the position I wanted to be in.’”

“After the rate reset, the Biharys’ money problems were compounded by the loss of Dutch’s job and the realization that they hadn’t been paying homeowner’s insurance as part of their monthly payment. Both have since picked up various jobs, including face-painting gigs, to catch up.”

“Theresa Dimartino, who lives in Burien, put her three-bedroom rambler up for sale late last year when she couldn’t keep up with her mortgage.”

“She admits making bad decisions, including tapping her equity for home improvement, but she said her mortgage broker, whose name she can’t remember, rushed her through refinancing. He told her the ARM would increase her mortgage about $150 a month, when it actually went up by more than $400.”

“‘He saw me as someone who could fall into an easy loan that was good for him and not so good for me,’ she said, who paid about $15,000 in closing costs. When the ARM reset from 7 percent to 9.88 percent in October, around the time her live-in partner moved out, she couldn’t afford her $2,390 mortgage payment.”

“‘Had I known, I would have sought (financial) counseling,’ Dimartino said. ‘A lot of the mailings go to homeowners; they make it sound so easy and good. Getting into this mess has been humiliating, embarrassing. I lost a lot of sleep.’”

Some housing bubble news from Wall Street and Washington. Reuters, “Home builder Standard Pacific Corp reported sharply higher losses amid a downturn in the U.S. housing market and said conditions will likely worsen. Fourth-quarter home-building revenue fell 20 percent from a year earlier as new home deliveries fell 23 percent. Net new orders for the quarter fell 11 percent to 1,002 new homes. Prospective buyers canceled their orders at a rate of 37 percent, down from 44 percent in the year-ago quarter.”

“‘As we enter 2008, we anticipate that housing market conditions will continue to weaken, resulting in a decrease in companywide deliveries,’ CEO Stephen Scarborough said in a statement.”

The Associated Press. “The latest quarter included $433.5 million in charges to write down the value of inventory and land deposits. If Standard Pacific does not improve its net worth, the lenders could declare the company in default and force the early repayment of debt.”

“Standard Pacific plans to build fewer homes and acquire less land in 2008 as it sells existing inventory.”

The Review Journal. “Focus Property Group, one of the largest developers in Southern Nevada, has stopped making interest payments on $500 million in loans secured by 4,800 acres in the Las Vegas Valley, Pahrump and Victorville, Calif., company executives said.”

“The company said 2,100 acres of the land involved is in metropolitan Las Vegas, 1,700 acres in Pahrump and 1,000 in Victorville. The company started notifying lenders late last week that it would not make its February interest payments.”

“Chairman and CEO John Ritter’s company developed the land for home builders and, to a lesser extent, shopping center developers. ‘We haven’t sold a piece of single-family residential (land) since early 2005,’ Focus Chief Operating Officer Tom DeVore said.”

“Ritter believes his company owns more raw land than any other entity in the Las Vegas area except The Howard Hughes Corp. Ritter has made news in recent years by buying large chunks of land from the Bureau of Land Management at auctions.”

“Ritter had been flying under the development radar until November 2002 when he outbid Olympia Group at a Bureau of Land Management auction, paying $160 million for nearly 1,000 acres…in the southwestern Las Vegas Valley.”

“He bought 485 acres of BLM land for Providence in the northwestern valley for $113 million in 2003 and raised the bar for land prices in 2004 when he paid $557 million for 1,940 acres in Henderson.”

“Ritter called the current real estate market conditions the worst he has seen in 26 years in the business. ‘In almost all categories of real estate, liquidity has dried up,’ Ritter said.”

From Bloomberg. “GMAC LLC, the auto and mortgage lending company 49 percent owned by General Motors Corp., posted a fourth-quarter loss as bad loans in the U.S. rose to a record. GMAC is talking to buyers for parts of the Residential Capital mortgage unit, which had a $921 million loss. The unit lost $4.3 billion for the full year.”

“ResCap’s loss stemmed from a higher provision for bad loans, fewer new mortgages and markdowns on the value of securities and loans held for sale.”

“GMAC bought $740 million of ResCap debt during the quarter to bolster the unit’s capital. Moody’s downgraded ResCap’s senior debt today. The ratings company’s statement cited lower liquidity, the risk that ResCap’s net worth could fall below its minimum net worth covenant if GMAC doesn’t provide more support, and ‘Moody’s belief that ResCap’s franchise is impaired.’”

“GMAC said it may still sell all or part of ResCap, after reducing riskier lending and announcing 5,000 job cuts. ‘We’ve taken painful and appropriate impairments and reserves throughout the year to set things right,’ Chief Financial Officer Robert Hull said on a conference call. ‘We know (2008) will be another challenging year for us, and may call for further aggressive tactics.’”

“ResCap is the second-largest independent U.S. mortgage lender after Countrywide Financial Corp, and the nation’s eighth-largest mortgage lender overall, according to the newsletter Inside Mortgage Finance.”

“Fourth-quarter mortgage volume at ResCap fell 58 percent to $20.8 billion, including declines of 83 percent in high-quality U.S. home-equity loans and 99 percent in U.S. subprime loans.”

From AFP News. “Industrial and Commercial Bank of China has set aside six times more than previously for a potential write-down of its subprime-related assets, state media reported Monday.”

“ICBC has set aside around 360 million dollars, more than six times the 429 million yuan (58.8 million) disclosed in its financial results for the third quarter ending September, analysts said.”

“‘They have done this out of caution and to reflect the decrease in market valuation (of these assets),’ said Zhang Xi, Beijing-based analyst with Galaxy Securities.”

“Fitch Ratings may downgrade all of the $220 billion of collateralized debt obligations it assesses that are based on corporate securities because of rising losses.”

“The company may lower the notes by as much as five levels after failing to accurately assess the risk of debt that packages other assets, according to guidelines proposed by Fitch today. Ratings firms are responding to criticism that they failed to react quickly enough as increasing defaults on subprime mortgages in the U.S. caused a plunge in the value of CDOs.”

“Buying and selling of collateralized debt obligations based on mortgage bonds, high-yield loans or preferred shares has ground to a near-halt, traders said at the securitization industry’s largest conference.”

“‘We’re definitely in a period of very low liquidity at the moment, which has actually been dropping precipitously in the last few weeks,’ Ross Heller, an executive director at JPMorgan Securities Inc., said yesterday during a panel discussion at the American Securitization Forum’s annual conference in Las Vegas. ‘It’s a challenging time.’”

“Merrill Lynch & Co., the New York-based securities firm with a record loss last year amid writedowns on the most-senior AAA pieces of mortgage CDOs it underwrote, ‘has been actively talking to people’ about purchasing its super-seniors, said Brian Carosielli, a managing director.”

“Investors with experience with residential-mortgage assets have been buyers, paying in the ‘mid-teens to low 30′ cents on the dollar for the senior-most, or super-senior, classes of CDOs comprised of low-rated asset-backed bonds, he said.”

From MarketWatch. “Banks are raising their credit standards for mortgages, consumer loans and commercial real estate loans at a pace never seen in the 17-year history of the Fed’s quarterly survey of senior bank loan officers, the Federal Reserve reported Monday.”

“Banks are requiring more disclosures, more collateral and a higher interest rate before approving loans, the survey said. Demand is plunging for many types of loans, especially for residential mortgages and commercial real estate loans.”

“More than 80% of banks - the largest percentage ever — said they had tightened lending standards for commercial real estate loans in response to a weaker economy. Nearly 60% of the banks reported falling demand for commercial real estate loans, and 87% expect the quality of such loans already made to worsen.”

“More than half of the banks tightened their standards for prime mortgages, by far the highest percentage in the 17-year history of the survey. Seventy percent expected the quality of prime mortgages to worsen.”

“More than 80% of the banks tightened their standards for nontraditional loans, including jumbo loans and other loans that do not conform to standards set by Fannie Mae and Freddie Mac. A similar percentage expected more delinquencies.”

“For subprime mortgages, about 70% of banks that offer such loans had tightened their lending standards, but more than 90% of the banks responding to the survey said they do not offer any subprime loans.”

The New York Post. “Perhaps the greatest scandal of the mort gage crisis is that it is a direct result of an intentional loosening of underwriting standards - done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults.”

“From the current hand-wringing, you’d think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards - at the behest of community groups and “progressive” political forces.”

“In the 1980s, groups such as the activists at ACORN began pushing charges of ‘redlining’ - claims that banks discriminated against minorities in mortgage lending. In fact, minority mortgage applications were rejected more frequently than other applications - but the overwhelming reason wasn’t racial discrimination, but simply that minorities tend to have weaker finances.”

“Yet a ‘landmark’ 1992 study from the Boston Fed concluded that mortgage-lending discrimination was systemic.” “That study was tremendously flawed - a colleague and I later showed that the data it had used contained thousands of egregious typos, such as loans with negative interest rates. Our study found no evidence of discrimination.”

“Yet the political agenda triumphed - with the president of the Boston Fed saying no new studies were needed, and the US comptroller of the currency seconding the motion.”

“No sooner had the ink dried on its discrimination study than the Boston Fed, clearly speaking for the entire Fed, produced a manual for mortgage lenders stating that: ‘discrimination may be observed when a lender’s underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.’”

“Some of these ‘outdated’ criteria included the size of the mortgage payment relative to income, credit history, savings history and income verification.” “Instead, the Boston Fed ruled that participation in a credit-counseling program should be taken as evidence of an applicant’s ability to manage debt.”

“Flexible lending programs expanded even though they had higher default rates than loans with traditional standards. On the Web, you can still find Community Reinvestment Act loans available via ACORN with ‘100 percent financing . . . no credit scores . . . undocumented income . . . even if you don’t report it on your tax returns.’”

“Credit counseling is required, of course.”

“Ironically, an enthusiastic Fannie Mae Foundation report singled out one paragon of nondiscriminatory lending, which worked with community activists and followed ‘the most flexible underwriting criteria permitted.’”

“That lender’s $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003. Who was that virtuous lender? Why - Countrywide, the nation’s largest mortgage lender.”

“This damage was quite predictable: ‘After the warm and fuzzy glow of ‘flexible underwriting standards’ has worn off, we may discover that they are nothing more than standards that lead to bad loans. . . these policies will have done a disservice to their putative beneficiaries if . . . they are dispossessed from their homes.’ I wrote that, with Ted Day, in a 1998 academic article.”

“Sadly, we were spitting into the wind. These days, everyone claims to favor strong lending standards. What about all those self-righteous newspapers, politicians and regulators who were intent on loosening lending standards?”

The Times Union reports from Florida. “Northeast Florida homeowners applying for home equity loans - also known as second mortgages - are finding the cup isn’t as full as it was during the real estate boom. Instead of making such loans based on 100 percent of a home’s equity, most lenders have become more cautious by dropping the maximum amount to 90 percent or less, said Donny Griffin of Liberty Mortgages Inc. in Jacksonville.”

“Homeowners might be able to find a loan for the full amount, but the odds are against it, he said. ‘It’s not impossible, but it’s the next level to impossible,’ he said.”

“Tom Morcum, president of Coastline Home Mortgage in Jacksonville, said lenders are reacting to forecasts that home values will fall, leaving lenders vulnerable if borrowers default.”

“‘I think all financial institutions are going to be constantly evaluating the performance of their real estate loan portfolios,’ he said. ‘While we’re in the businesses of making loans, we’re also in the business of making good loans in expectation of being repaid.’”

The Sun Sentinel. “Some took notes frantically, as if in a college classroom. Others sunk their heads in their hands as if to hide their confusion and desperation. But all who attended a forum Saturday at Boynton Beach High School hoped to learn something to keep foreclosure at bay.”

“Jose Varga is trying to hold on to his house in West Palm Beach. His problems started when he lost his job in October. After two months of unemployment, he fell behind on his payments.”

“‘When I call, they tell me to pay or they will take my house,’ he said. ‘I want to make some kind of arrangement so that I can pay and keep it.’”

“Vargas’ credit wasn’t strong enough to qualify for a mortgage with a low interest rate. On top of that, his home’s value declined from $330,000 to $250,000 last year.”

“‘I’m trapped,’ he said. ‘I can’t even sell it to pay my mortgage and move to a more affordable place farther north.’”

The Palm Beach Post. “How do you make a small fortune? Start with a large fortune, then invest in Florida apartments in late 2005, with plans for a condo conversion.”

“BH Capital Group of Miami in 2005 paid a total of $59.7 million for Waters Edge and the Fountains, both in Delray Beach. BH Capital this month sold the two properties to companies affiliated with Goldman Sachs for $36.75 million, according to deeds recorded this week.”

“‘I know they were selling them at a large discount,’ said Jay Jacobson, South Florida director for apartment developer Wood Partners. ‘They bought them at the height of the condo craze.’”

The St Petersburg Times. “John McRae watched as weeds took over the yard of the house across the street, 3223 Hibiscus Drive. In an otherwise peaceful neighborhood, deputies began to show up regularly to stop fights between renters. A crew of vagrants moved into a crawl space underneath the house.”

“Meanwhile, the home on Hibiscus, valued for tax purposes at $416,476, repeatedly sold for much more: $560,000 in April 2005, $810,000 a year later and $835,000 six months after that.”

“‘Once it went above $800,000 - that’s just totally, absolutely, catastrophically out of proportion to what that property is worth,’ McRae said. ‘We thought somebody was putting a lot of money in their pockets.’”

“By analyzing property records, the St. Petersburg Times found dozens of what the FBI calls indicators of mortgage fraud. These include houses, such as the one on Hibiscus, that began to slip into foreclosure almost immediately after their purchase.”

“Dishonest investors apparently targeted Hernando Beach because its waterfront houses were expensive enough to hide inflated prices, said county Property Appraiser Alvin Mazourek.”

“The larger problem was distant mortgage companies making loans with no knowledge of local markets, said Frank Gregoire, a St. Petersburg property appraiser and president of the Florida Real Estate Appraisal Board.”

“Many of these companies were too eager to grant high-risk, high-interest loans, said Jay Newton, an administrator with the state Bureau of Finance Regulation.”

“‘It’s a matter of greed, and it affected everyone from buyers who knew they couldn’t afford a $650,000 home to lenders who saw the opportunity to give out a $650,000 loan at 8 or 9 percent interest,’ Newton said. ‘Lenders were crawling all over themselves to lend money.’”

“Jim Bourgoin…a Spring Hill real estate broker who only represents buyers, says he can no longer tell clients whether asking prices in Hernando Beach are fair because he often cannot find legitimate sales for comparison.”

“‘Fraud just totally messed up the market,’ Bourgoin said.”

“He blames not only investors and Realtors, but the county Realtors association for also failing to address the problem.”

“He explained why in a letter to the paper in December. Dishonest investors and real estate agents, he said, ‘are doing an injustice to our community by selling houses knowing these properties will eventually go into foreclosure and become a burden and an eyesore. … These Realtors need to be exposed and their licenses revoked.’”

From Tampa Bays 10. “Sandi Staskal remembers the day she closed on her Clearwater home. ‘I specified at the time of buying this home, which was 3 years ago that I would not accept an adjustable rate mortgage. I would not accept a prepayment penalty.’”

“But in the rush to sign all the paperwork and get her house keys she did something she says she never intended to do. ‘The man there said, ‘By the way, I do have to give you this piece of paper that you’ve got an adjustable rate mortgage.’ And I knew better but for some reason you’re in such turmoil and the pressure. I wanted the house and I signed it.’”

“It was a move Staskal says she regrets because her mortgage payment goes up every three months.”

The News Press. “Because waterfront — especially Gulf access — is king, $700,000 to $800,000 will usually buy a bigger home inland than it will along the Caloosahatchee. However, in this topsy-turvy real estate market, more and more exceptions can be found to that rule of thumb.”

“Broker associate Alicia Galante said the price of waterfront homes has dropped drastically from the days when real estate was at its height. She said that houses with direct Gulf access generally carried a pricetag of $1 million or more and it’s now possible to find them for $700,000 to $800,000.”

“‘That’s where I think we’re seeing the biggest drop because everyone paid so much for them when the market was high,’ she said.”

The Miami Herald. “Homestead City Manager Curt Ivy watched fretfully as the results from Tuesday night’s property tax vote trickled in on his television. Last year, a state-mandated $3.5 million tax cut forced Ivy’s South Miami-Dade town to eliminate 21 positions and cut back on services like lawn maintenance in its $42 million budget.”

“The Jan. 29 vote means another $1 million in lost revenue to the hardscrabble town that leads to the Florida Keys.”

“Tuesday’s vote will surely cut into their budgets, leaders say, but most also express fear over an expected decrease in property assessments in June, which would curtail revenues. ‘It’s like a double whammy,’ Aventura City Manager Eric Soroka said.”

“Copy that, says Ivy, whose city was in a nation-leading home-building frenzy before the market collapse last summer. ‘We forecasted a softer landing. We didn’t forecast a nose-dive,’ he said.”

“Karen Azari wasted no time after Florida voters overwhelmingly approved the property-tax amendment last week. Azari, who owns a Miami granite countertop business, promptly put her longtime home in Bay Harbor Islands up for sale.”

“She figures that the portability provision, which allows homeowners to transfer tax savings to another home when they move, will help her out.”

“How much the amendment will help jump-start the sluggish real-estate market overall is another question. Most analysts say it will boost sales only modestly in the short term.”

“‘There’s not going to be a running of the bulls,’ said Richard Barkett, chief executive officer of the Realtors Association of Greater Fort Lauderdale. ‘But now, people are not chained to their homes, and now they have the freedom to trade up or trade down and take their tax savings with them.’”

“But a bigger roadblock is that many potential buyers are waiting for signs of a market bottom. Nobody wants to buy a house when prices are on the way down.”

“‘It certainly will have some effect,’ said Ron Shuffield, president of a real-estate brokerage firm in Coral Gables. ‘But will it eat up all the excess inventory of homes on the market? No. We still have the market we’re in. If someone wants to move, they still have to sell their home before they will buy another one.’”

“Indeed, Azari — the eager seller in Bay Harbor Islands — said that if her house sells, she’ll scour the market until she finds a sure bargain, ‘maybe a foreclosure.’”

“The amendment ‘helps some, but it’s far from being the answer,’ said Martha Gomez, who owns several rental properties in Miami-Dade.”

“The $8,500 tax bill for one home on Southwest 63rd Place, which rents for $1,900 a month, ate up more than four months of income, she said. ‘When you couple the taxes with the insurance and maintenance, we’re losing money on these rentals.’”

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