The Housing Bubble

The Press Democrat reports from California. “Borrowers routinely exaggerated their incomes to obtain thousands of Sonoma County home loans during the housing boom, a major reason foreclosures are now spiraling to unprecedented highs. In their eagerness to buy a home, many borrowers inflated earnings by 50 percent or more to qualify for loans they could not otherwise afford, according to a Press Democrat analysis of loans made in 2005 and 2006.”

“When home prices peaked in 2005, the typical home buyer in Sonoma County claimed to earn $120,000 a year on loan documents, according to federal home loan data. But they actually earned about $80,700, according to Census data. The spread grew in 2006, when the typical buyer claimed to earn $132,000; their actual income was about $79,000.”

“‘The entire real estate debacle is the fault of everybody that was involved. And it was all about greed and speed,’ said Rachel Dollar, a Santa Rosa attorney who represents lenders in fraud and other cases. ‘The brokers wanted their commission. The lenders wanted their premiums. The borrowers wanted their homes.’”

“The gamble isn’t paying off for a growing number of Sonoma County homeowners. Home values have tumbled nearly 25 percent since their peak in 2005 and sales have dropped to a 12-year low. Every week, lenders seize an average of 23 homes from Sonoma County borrowers who can no longer afford their mortgage payments and cannot pay off their loans by selling their houses.”

“How could a Windsor man who supervises trash truck drivers afford a million-dollar Healdsburg home? In this case, by tripling his income on the loan application.”

“Roberto Gomez said he gambled, with assistance from his mortgage broker, that the 3,400-square-foot, five-bedroom, four-bath house would continue gaining value so he could refinance into a less-risky loan. It was spring of 2005 and Sonoma County’s housing market was booming.”

“‘I was really happy because it’s a big house. They kept telling me the values would go up. I figured I could refinance and fix my payments,’ Gomez said.”

“But home prices began falling in Sonoma County a year later as the housing downturn took hold. Gomez’s dream home became a nightmare of debt. He owed more than the home was worth and his mortgage payment more than tripled to $6,200. ‘It was ridiculous,’ Gomez said.”

“Gomez said discussions with the broker at Investors Trust Mortgage identified a dollar amount that he needed to put down for his annual income so that he could qualify for an adjustable-rate mortgage. Gomez would not have qualified for the loan had he put down his actual earnings, $6,000 a month, rather than the $19,500 income he stated.”

“‘She never told me it could happen where one day you don’t have enough money for the payments,’ he said. ‘She was positive.’”

“Gomez has sought help from Marty McCormick, owner of McCormick and Co., a Santa Rosa mortgage broker. McCormick said that no one is blameless in the deal.”

“‘The borrower signed it, but the borrower doesn’t know how to calculate the income needed,’ he said. ‘They wanted to live in a nicer home, no doubt about it. If we were doing our job as an industry, we should never have let the man buy this house. And we’re hearing this story again and again.’”

“The family is back living in the Windsor home they had refinanced, using money from the equity to help purchase the Healdsburg house. Gomez rented out the Windsor home during the two years the family lived in Healdsburg.”

“Gomez faced losing the Windsor home because the loan payments on the adjustable-rate loan were set to more than double to $3,900. Gomez, with assistance from McCormick, convinced the lender to lower the interest rate and payments for the next four years to hopefully give Gomez time to save money and perhaps regain some equity.”

“‘Right now I will try to save this house,’ Gomez said. ‘I’m starting over.’”

The Orange County Register. “A couple of years ago, the local economy looked pretty good. Today, it’s a different story. The number of Orange County residents reporting themselves unemployed rose by nearly 19,000, or 37 percent, in the 12 months through December, according to the state’s Employment Development Department.”

“When Tracy Railsback submits her resume for a job, the first thing managers notice is that she worked in the mortgage industry. It doesn’t get her a warm reception. ‘Reputable companies, they don’t want to look at you because they think everybody in that industry was bad and that’s not true. Not everybody made tons of money and not everybody was dishonest,’ she said.”

“In her last job, she earned about $30 an hour, plus occasional bonuses. She wasn’t getting rich, but she and her husband lived comfortably in a rented home in Huntington Beach. Then came last year’s collapse of the subprime industry. Railsback was laid off from Peoples Choice Home Loan last May and hasn’t worked since.”

“After putting out more than 100 resumes, Railsback, who describes herself as high-strung and a worrier, is feeling a twinge of desperation. ‘Sometimes I just wake up and I’m like, oh God, I don’t want to get up,’ she said.”

“She’s sought jobs as a waitress, a bank teller and in a drugstore. She’s not heard back on any of them. ‘I’m applying for receptionist, minimum wage, anything,’ she said.”

“Ray Kikavousi is another refugee from the mortgage industry’s meltdown. He got into lending about six years ago. He got hired by Quick Loan Funding, working his way up to sales manager over four years. He was laid off last February. He briefly caught on with a mortgage broker, but was laid off again a few months later.”

“‘I went on interviews left and right. Anything: insurance, commodities, mortgages,’ he said. ‘I was feeling like what happened, what am I doing wrong? I have a college degree and nobody was hiring.’”

“Like some other former mortgage workers, Kikavousi decided to get into the debt settlement business, negotiating with creditors on behalf of overstretched consumers. ‘Debt is something that everybody has, including myself, so it seemed like a new and upcoming business,’ he said.”

“He worries about his money running out before the business takes off. ‘If that happens, I will go back to waiting tables at night and keep doing this doing during the day,’ he said.”

“For seven years, Ismael Delgado has worked alongside seven brothers and his father at Goldenwest Plumbing of Orange, installing PVC pipe and plumbing fixtures at new housing tracts. But in September, Delgado and six brothers lost their jobs as construction dried up.”

“‘They told us there’s no more work,’ said Delgado. ‘Now we’re all out of work,’ he said of his family. ‘… If there’s no more (construction) work, I’ll check for factory work or a restaurant – or move out of state.’”

“‘Basically, overall, it’s slow, even in the commercial end,’ said Jim Adams of Anaheim, the Orange County council representative to the Los Angeles/Orange County Building and Construction Trades Council.”

“‘All you’ve got to do is look around the Platinum Triangle. All those projects stopped. And look around in Irvine, at the 405 and Jamboree, and it’s pretty well shut down. I’m not sure which way this is going to go or how long it’s going to last. I don’t think anyone knows,’ he said.”

“Rancho Mission Viejo’s 14,000 home sites along Ortega Highway expected to see bulldozers as soon as last year. Same for the Irvine Co.’s 2,500-home Mountain Park development along the 241 toll road. Both sites still are as pristine as when Gaspar de Portola trekked across the county in 1769.”

“Much of the construction planned for houses and condos has shifted to new apartments. Lennar is exploring the possibility of selling a site in A-Town to an apartment developer, said Anaheim Planning Director Sheri Vander Dussen.”

“KB Homes is shopping for a buyer to convert its Platinum Triangle condos into apartments as well, she said. Apartments being built by AvalonBay Communities Inc. on Katella Avenue started out as condos.”

“Sukut Construction Inc., a Santa Ana-based grading contractor, saw its workforce drop from more than 600 people at the peak in 2005 to fewer than 300 today, said marketing director Mike Bobeczko. ‘Apartments are the only thing that’s really booming right now, and they’re booming strong,’ said Bobeczko. ‘The reason is it’s cheaper to rent than it is to buy.’”

The North County Times. “Buy now or wait? That is the question many potential homeowners face as the region continues to trudge through a housing depression that leaves them wondering how much further home prices will fall.”

“‘I think we’ve already seen the bottom,’ said Susan Anderson, manager of a Coldwell Banker office in Vista, basing her opinion on an uptick in the number of buyers looking for homes. ‘This market’s got good employment, good interest rates and availability of product. Nobody has a crystal ball. But when it turns, it will turn on a dime.’”

“Pessimists point to the last local housing recession, which saw home prices decline for six years in the early 1990s before recovering, according to DataQuick numbers. Riverside County median home prices have so far declined for just one year, so there is clearly at least another year to come, they say.”

“Optimists say this recession has been sharper, meaning it will recover quicker.”

“‘I wouldn’t believe anything a Realtor says unless they have data,’ said Jim Klinge, owner of Klinge Realty in Carlsbad. ‘You can’t just say (the market has hit bottom) based on a feeling. You’re playing with people’s lives. … You can’t just have a vision when you wake up in the middle of the night and say, ‘I know it’s going to get better this year.’”

The Union Tribune. “For decades, tract homes in Southern California have been getting larger, but the current housing slump has led some local builders to downsize single-family dwellings to increase affordability and boost sales.”

“‘The folks we are seeing in the market today are marginal buyers,’ said Steve Doyle, Brookfield Homes’ president for the San Diego region. ‘They can’t afford to buy a $600,000 standard home that San Diego has been offering the last couple of years.’”

“Real estate analyst Gary London of The London Group predicts that smaller houses will become a permanent fixture in the local new-home market. The shortage of buildable land will put a downward pressure on home size for both single-family and attached dwellings, London said.”

“‘We are going to have to get much more density just to make development projects pencil out, given the higher costs of all factors of production, particularly costs of materials and labor,’ he said. ‘Small units sell for less money.’”

“Suzie Ek, VP of sales and marketing for Standard Pacific Homes in San Diego County, said that her company has created smaller-than-average homes in Santee at the Stoney Creek at Riverwalk development. Seventy-one detached single-family houses range in size from approximately 1,818 to 2,607 square feet.”

“The two-story homes range in price from the low $500,000s to $550,000.”

“‘The average lot size there is 3,300 square feet,’ Ek said. ‘Your backyard is 10 to 14 feet deep. The higher density you can get, the more cost-effective you can make it.’”

“In times of slow sales, smaller houses begin to make sense, despite the fees, Doyle said. Bank loans taken out to finance developments can be paid off sooner. And with each sale, builders can eliminate homeowner association fees, which they must pay on unsold units.”

“When sales are slow, the clock keeps running on the costs of marketing, advertising, utilities and insurance, he added. ‘The whole game is ‘How can I get out of that project quicker?’”

The Arizona Republic. “A condo-market meltdown has put the dream of owning a piece of downtown San Diego within the reach of more Valley residents. While still lofty, prices for some units are now more than 30 percent below previous highs and still falling.”

“A new 725-square-foot ‘bank-owned’ studio, two blocks from the San Diego Padres’ ballpark, is listed at $189,900, down from $289,900 at the end of September.”

“Terms like ’short sale’ and ‘lender-owned’ have become the bywords of the real-estate market downtown, along with ‘desperate’ and ‘make offer.’ Lockboxes for real-estate agents cover railings outside buildings. Inside, residents come home to find foreclosure notices on their neighbors’ doors.”

“Real-estate speculators fueled the frenzy, flipping (selling, often before taking occupancy) properties from building to building while creating an artificial demand that sent prices through the roof.”

“‘The market was so good and prices were going up so fast that we were oblivious to any kind of a peak,’ said Ken Baer, an agent in San Diego. ‘We knew things were high but thought they would keep going up.’”

“Unit 211 in Discovery at Cortez Hill, for example, sold in 2002 for $409,000 and in 2004 for $699,000. The unit sold to a Phoenix couple in December for $470,000. Downtown, there are more than 1,000 condominiums on the market in a roughly 125-block area. That is up from 700 last year and 500 in 2005.”

“Of the 1,000 units, about 400 are in new buildings that are just being completed.”

“Most of the others have been built within the past few years, and many, bought by speculators, have never been lived in. They are generally small. One-bedroom and studio units, some under 500 square feet, make up the largest category of unsold condos on the market.”

“‘An entry-level condo that sold for $400,000 a year ago is practically impossible to sell at that price in this market,’ said San Diego real- estate agent Mark Mills. As a result, prices are dropping fast for the small condos, and many are landing in foreclosure.”

“Scottsdale real-estate agent Bob Sutton has owned a second home in San Diego since 1997. Sutton started out with a $73,000 condominium in Pacific Beach and moved up to a downtown high-rise four years ago. He bought another unit as an investment at the peak of the market and has been trying to sell the one-bedroom, 800-square-foot unit since. He’s hoping to break even or take a small loss on the property.”

“‘It hasn’t turned out to be such a great investment,’ he said.”

“‘Everything went into the crapper the same time I bought this place,’ Vern Scholl said of his 1,550-square-foot penthouse in the Park Place complex downtown.”

“Scholl paid $1.9 million for the unit in 2006 and had been trying to sell it ever since. He originally asked $2.3 million but was trying to negotiate a short sale for $1.65 million prior to its sale for $1.5 million at a January foreclosure sale.”

“‘What do you do when you owe more than it’s worth?’ he said.”

The Beacon Journal reports from Ohio. “A three-year slide in the sales of existing homes in the Akron area accelerated dramatically last year, with 20 percent less money changing hands in 2007 than in the recent peak of 2004, according to the Akron Area Board of Realtors. ‘The housing market did well in 2003 and 2004. They were good years for us,’ said Marc Hustek of a Realty One office on Graham Road in Summit County. ‘Has this area been affected by the downturn in the market? Yes.’”

“‘The real estate and housing market will face challenges this year and we will have to do everything right,’ said Jim Camp of Cutler Real Estate. ‘Sellers have to be more careful in pricing their homes and keeping them in condition and we have to make sure we market the homes properly because of the huge influx of homes on the market.’”

“Camp had another explanation for the market’s behavior.”

“‘Some homeowners were using their home-equity loans like ATM machines,’ he said. ‘Say a home was purchased for $170,000 and was appraised for $200,000 and now we’re telling them their home is only worth $175,000. They feel they can’t move because they don’t want to lose money.’”

The Toledo Blade from Ohio. “Whacked by speculators, job losses, and other troubles, the northwest Ohio housing market generally staggered to higher levels of foreclosure activity last year.”

“Hardest hit among nine Ohio metro areas was Lima, where foreclosures increased 499 percent last year from 2006, according to RealtyTrac.”

“Among counties in northwest Ohio and southeast Michigan, Putnam had the largest jump, at 878 percent. Allen County was next, at 499, and then Williams County at 271 percent, the report said. Williams had the biggest jump among 16 counties from 2005, up 666 percent.”

“Mike Sheeran, a broker in Bryan, said the 130 filings last year in Williams County was tied to subprime lending. ‘I think … some of these people were going out and getting financing with no money down and the sellers paying closing costs, with a variable rate mortgage. The rates went up and they were out.’”

“In Lima, Larry Vandemark, owner of Prudential Vandemark Realty & Associates, said, ‘In 2006, our area was rated as most affordable in the United States. Right afterwards, we had a lot out-of-state investors come into the area and calling, asking if we knew of available properties.’”

“Many defaulted when adjustable mortgage rates rose and they couldn’t refinance, he said.”

“Mr. Sheeran in Bryan said, ‘This whole situation damaged our market. It brought down the prices of existing homes and you’ve got potential buyers for medium-priced homes that aren’t there any more because they can’t sell their existing homes.’”

The Detroit Free Press from Michigan. “The days of zero-down mortgages, which helped to fuel the real estate boom, are coming to an end in Michigan. The change means thousands of ‘for sale’ signs in metro Detroit aren’t going to disappear anytime soon as tougher loan qualification requirements reduce the pool of potential buyers, leading to further erosion of home prices.”

“Kelly and Nicole Shannon had to rush to close on their three-bedroom Westland home, but they made it just under the wire to get a mortgage without a down payment.”

“Kelly said he and his wife had been renting a townhouse for three years. The huge array of homes at falling prices was motivation. ‘It was like a candy store, and we could pick out anything we wanted,’ he said.”

“The Shannons ended up getting their first home in Westland for $34,000 off the original listing price of $162,900. They were set to close Feb. 15 on their 1,190-square-foot house across the street from an elementary school. But their broker at Citizens First Mortgage called last week and said if they didn’t close by Jan. 31, they would lose the zero-down option.”

“The rush to close on zero-down deals is the result of a letter that mortgage backer Fannie Mae sent to lenders in December reiterating its rule that requires a minimum 5% down payment on homes sold in declining markets.”

“‘Lenders got pretty loose with their money in the past couple of years. They are retightening their standards,’ said John Mechem, spokesman for the Mortgage Bankers Association. ‘No down … is going to be a very difficult loan to obtain in the future, if it ever comes back.’”

“‘We are missing an opportunity to slow down the depreciation we are facing. You have a lot of people who would buy right now because the prices are declining,’ said Drew Sygit, a certified mortgage and equity planner in Bloomfield Hills. ‘They know it’s a great time to buy, but they don’t have the money.’”

The Sun Times from Illinois. “Associations are beginning to feel some pain over fallout from the subprime mortgage debacle.”

“‘Foreclosures are a problem for some of our client associations,’ said David Sugar of the Chicago law firm of Arnstein & Lehr. ‘Newer associations and associations with many first-time buyers have been hardest hit because so many of their unit owners purchased their units with little or no money down and now have little or no equity in their units.’”

“With small to nonexistent financial stakes, they simply choose to let their loans go to foreclosure, he said.”

“Jordan Shifrin, a principal in the Buffalo Grove legal firm of Kovitz Shifrin & Nesbit, would not describe the situation as a crisis. Not yet, that is. ‘There are looming crises that haven’t blossomed yet,’ he said. ‘It’s still too early to tell.’”

“Shifrin places a good part of the problem at the feet of property-flippers, especially in Chicago. ‘A large number of units were purchased by investors with no money down, intent on selling for a profit before or just after they closed,’ he said. Now they can’t find buyers because the market has softened.”

“At the same time, the rental market has a surplus of vacant units, so leasing is not a promising option.”

“‘Some of these subprime purchasers will walk away from their properties and their loans and leave associations with big deficits until the lender takes them back and starts paying assessments,’ Shifrin said.”

“But, again, these are circumstances that have not reached their most serious point. ‘This is forecast for the next six to 18 months,’ he said.”

“Evidence of the growing number of foreclosures hitting associations was provided by Stacey Johnson, executive VP of E.L. Johnson Investigations in Chicago. Thirteen years ago, the firm began to specialize in the foreclosure process service for lawyers employed by mortgage companies to go after nonpaying borrowers.”

“‘In the last few months, our volume has at least tripled from last year,’ said Johnson. At least 30 percent of the homeowners to whom they serve notices are condominium residents.”

The Sauk Prairie Eagle from Wisconsin. “South Central Wisconsin Realtor’s Association Executive Vice President John Deininger, said the local real estate situation has not followed the greater national trends. Deininger said that home prices in south central Wisconsin have not increased as much as in past years, but still were up 1 1/2 percent through November.”

“‘Was there a housing bubble? In certain markets there was — areas where prices were doubling every couple of years had a real problem,’ he said. ‘In Wisconsin, prices have risen at a moderate rate.’”

“The perceived problem by homeowners struggling to sell their property is the result not of a decrease in home sales, but that of a significant increase in homes on the market, Deininger said.”

“‘In 2005, sellers had to beat them back with a stick there were so many buyers,’ he said. ‘The buyers are still there, the sellers are just competing against a lot more properties.’”

The Wisconsin State Journal. “The second phase of Downtown Madison ’s largest private housing project is in default to the tune of more than $26 million, its lenders said in court documents that seek foreclosure of its three mortgages.”

“The fate of the newly completed Metropolitan Place II, a 164-unit condominium tower, could indicate that national housing trends are reaching Madison, thought by some to be more immune than most places to twists and turns in U.S. economy.”

“‘This shows that the national foreclosure crisis has hit Downtown Madison for the first time in any meaningful way,’ said Ald. Mike Verveer, whose 4th District contains Metropolitan Place II.”

“Construction of several ambitious condo projects and conversions of apartments to condominiums in recent years have flooded the market, developers and the real estate industry say.”

“‘There ’s certainly a significant inventory that will have to be absorbed,’ said John Deininger, executive VP of the Realtors Association of South Central Wisconsin. ‘I anticipate we ‘ll see fewer (condo) projects come to the drawing board.’”

“On the East Side, Todd McGrath has delayed construction of his mixed-use Union Corners project, and at the Capitol West Downtown and Hilldale on the West Side, developers have revised later phases from condo towers to hotels.”

“Developer Cliff Fisher ’s attorney, Tim Homar, said Fisher will oppose any move to put the project into receivership. Without receivership, he said, Fisher could continue to sell units and make his payments. But under receivership, Homar said, the banks could sell off condos at ‘bargain basement prices.’”

The Capital Times from Wisconsin. “Knowing they’d be moving into a new house in the fall, Al and Aly Wendorf put their home up for sale last February. ‘We were thinking that would give us more than enough time to get it sold,’ said Al Wendorf, who works in the construction industry and had been through the process five times before.”

“Since then, they’ve been through two Realtors and dropped their asking price from $324,900 to $294,900 without receiving a single offer on the eight-year-old, 2,600-square-foot home on the southwest side.”

“And they’ve been paying for both homes since September. ‘It’s not fun,’ Wendorf said with a wry chuckle. ‘You’re working your tail off to pay two mortgages, and you have nothing to show for it.’”

“Such is life in a housing market gone stagnant: After a long boom that peaked in 2005, sales of homes and condominiums in Dane County fell 10.4 percent in 2006 and another 6.3 percent last year to their lowest level since 2002.”

“Wendorf doesn’t feel the market ‘tanked’ until last summer and believes that if they had initially listed the home at $294,900 it would have sold. They took the home off the market last month to have it painted and the carpets professionally cleaned and plan to put it back on the market this month as a FSBO (for sale by owner) at $273,000.”

“‘I won’t have to pay commission, so we can lower the price,’ said Wendorf, who has used FSBO for three of his five previous home sales. ‘I think price is driving this market more than anything else. Everyone has the mind-set that there are bargains out there, and everyone is thinking price, price, price.’”

“Although the Wendorfs’ house is out of Nick and Liz Schultz’s price range, that sentiment is music to the ears of the couple, who have been trying to buy a house for about a year.”

“The Schultzes, who rent a house in the town of Primrose and have no pressure to move, have grown frustrated with what they see as unreasonably priced homes for sale in their $200,000 price range.”

“‘It’s just crazy,’ Nick Schultz said. ‘People have been used to this bubble around here for so long…they still think you can buy a house and two years later sell it and make $50,000 on it even though the market is terrible.’”

The Hastings Star Gazette from Minnesota. “In 2003, Hastings’ biggest year of growth in recent history, almost 150 single-family homes, and more than 200 townhome units, were built in the city. In 2007, however, those numbers were down to nine and 54, respectively.”

“The slowdown in residential construction in Hastings is part of a national trend, Hastings Planning Director John Hinzman said.”

“Just nine single-family homes being built in one year is at least a 17-year-low for Hastings, according to Hinzman. Before 1990, the city doesn’t have good records on residential development statistics, Hinzman said.”

“Hinzman said between 2000 and 2003 the city annexed a good amount of land, and residential development began quickly in those areas. The Century South neighborhood in south Hastings simply wasn’t there in 2000.”

“It was originally thought it would take five to eight years to build out Century South, but between 2001 and 2003, sales were good, so homes were continually being built. The development was finished in about half the time it was originally thought it would take.”

“Also during those three years, average housing prices jumped from about $154,000 (in 2000) to more than $222,000 (in 2003), according to numbers from the Regional MLS of Minnesota. Yearly growth averaged almost $23,000, or 11 percent.”

“Shelly Kidd, a realtor in Hastings, said 10 to 15 percent yearly increases in average sales prices are not normal. She said they rose so quickly because there was rising demand in the city, as more people moved here.”

“‘People were willing to pay more for properties,’ Kidd said.”

“Lance Twedt, a realtor with Midwest Realty, said growth rates like the city saw from 2000 to 2003 simply cannot be sustained over a long period of time and that the ‘correction’ that’s occurring now is healthy.”

“Twedt said when the large build-out of townhomes was occurring in the early 2000s, trends were saying that retiring baby boomers wanted to move out of their single-family homes and into townhomes and condos.”

“At the time it seemed like a sure bet, but in retrospect, Twedt said, Hastings may have over-built townhomes.”

“The large supply of townhomes today has driven prices down, Twedt said. Today sellers trying to put their townhomes on the market for what they paid for them six or eight years ago aren’t finding much success because the market simply won’t allow for it, Twedt said.”

What do you see in your local housing market? Lending changes? “At a time when many lenders are pulling back on nontraditional mortgages, Wachovia Corp. is diving in deeper. The Charlotte bank argues that its ‘Pick-A-Payment’ mortgage gives customers more flexibility to manage their personal finances. But the product, amid turbulent times in the housing market, has drawn concern from the bank’s investors, consumer advocates and even some employees.”

“In recent weeks, current and former employees have told the Observer that they have felt pressure to sell Pick-A-Payment loans. ‘It’s amazing that all the big players are pulling out of the product, and we’re getting the full court press,’ said one employee who asked to have his name withheld because he was concerned about losing his job.”

Seasonal observations? “For years in the business of selling houses, the weekend after the Super Bowl was the time when people started house hunting. Yet if this year is like the last two, the Super Bowl is now just the last game of the season, not the opening shot of the home- selling year.”

“Indeed, there’s a chance the peak buying activity of 2008 may have already happened. In both 2006 and 2007, escrow closings, where all the paperwork is done and buyers get the keys, peaked in March, according to DataQuick. That means the homes were likely sold sometime in January or early February.”

Related industries? “Like many in his trade, Tony Vicari thought that when home construction began to dry up a year ago, it would lead to a boom in the remodeling sector. The logic was that after the housing bubble burst, consumers would fix up the home they already owned rather than build a new one. However, that hasn’t been the case.”

“Figures obtained from the Lake Havasu City Development Services Department show residential additions and alterations fell by 164, or 13.5 percent, last year.”

“Vicari anticipated that remodeling work would help sustain his business after home construction began to level off. More than a year later, he’s still waiting for a boom he admits will probably never come. ‘It hasn’t picked up. It’s dropped off as much as the new construction,’ Vicari said.”

“The Hawaii automobile industry is braced for lower car sales this year, with vehicle registrations expected to drop 4.1 percent as the economy slows, according to the latest report by the Hawaii Automobile Dealers Association.”

“Total vehicle registrations are expected to barely exceed 57,000 due to extremely tight credit markets, rising unemployment, declining housing values, excessive consumer debt and high gas prices, the report said.”

“‘The market has now moved below its trend levels as economic events have taken a predictable toll on new vehicle sales,’ the latest report said.”

New construction? “Northwest Wichita’s first high-end housing development in several years is on the way. Pier 37, a 29-unit development that markets itself as relaxation without leaving home…will include houses from $400,000 to $1 million around a 50-acre boating lake.”

“Wichita real estate observers say it’s the first northwest development dedicated to luxury homes in 10 to 15 years. ‘To the best of my knowledge, there aren’t a lot of high-end homes in that area,’ said Stan Longhofer, director of Wichita State University’s Center for Real Estate.”

“While lower-end home sales softened slightly in late 2007, the Wichita market remains strong for luxury homes.”

“‘I believe there’s a market for it,’ said Sharon West, senior VP of Plaza Real Estate. ‘Mainly because we lack that in the market, and we have people living on the west side who want to live in those types of houses. Not everyone wants to live on the east side.’”

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