The Housing Bubble

The LA Times reports from California. “Southern California home sales last month fell to their lowest level in more than 20 years. The $415,000 median price paid for a Southern California home was the lowest since January 2005 and about 18% below the peak median sale price reached last year, DataQuick reported. Los Angeles County median sales prices fell 12% in January from a year ago. Riverside County posted the largest price decline, falling 20% from the previous January.”

“The sharpest plunge in January home sales was 53% from a year ago in San Bernardino County, but Los Angeles County was close with a 50% decline. The average decline in the January sales total for all six counties was 45%.”

The Union Tribune. “San Diego County median home prices fell last month to their lowest level in four years with nearly half of existing homes selling at a loss in the face of mounting foreclosures, DataQuick reported.”

“‘Sales overall are ridiculously low,’ said DataQuick analyst Andrew LePage.”

“LePage said a record 34 percent of resale homes last month were previously in foreclosure and 9 percent were in default. Nearly half of all resale houses and condominiums were sold at a loss from when they were last purchased. The median loss was about 25 percent.”

“Ramsey Su, a veteran real estate agent who specialized in the foreclosure market starting in the early 1980s, said the market shows no sign of improving. Su said that in parts of Florida foreclosures are outnumbering regular sales.”

“‘I’ve never experienced that before,’ Su said. ‘How does it end? The end is coming in the future.’”

The North County Times. “Home inventory across North County ballooned in January, increasing the downward pressure on sales prices. The amount of time it would take to sell all homes posted for sale, jumped to 14 months in January, up 52 percent from nine months the same time a year ago, according to a report released Tuesday by the North San Diego County Association of Realtors.”

“The increase came from a divergence: Sales dropped to 365 in January — down from 490 a year ago — and active listings increased to 5,259 homes for sale in North County — up from 4,657 a year ago.”

“North County’s median home price of $562,500 is down 10 percent from a year ago, when the median hit $625,000, and is at its lowest mark since April 2004.”

“North County’s condominium market is also plump with inventory. It would take about a year to work through all available attached homes at January’s sales rate, the North County report by Cal State San Marcos professor Robert Brown showed.”

“And the condominium market experienced a drastic 8 percent drop in its median price in one month to $326,000 from December’s median of $355,000.’

“The number of foreclosures in Riverside County continued to rise at a meteoric pace in January, increasing the downward pressure on local home prices and flooding the regular home market.”

“Foreclosure sales hit 2,813 properties in January, up 475 percent from the same time a year ago, when 489 foreclosures sold, according to a report.”

“The increase was a 53 percent jump in just one month…just under the statewide average uptick of 55 percent. That meant that Riverside County shed its dubious distinction as the state’s foreclosure capital, ceding the title to San Joaquin County.”

The Desert Sun. “Nearly 3,000 foreclosed properties in Riverside County were sold at auction last month — a 475 percent increase over the number of repossessed properties auctioned off in the county a year ago, a real estate tracking firm reported today.”

“‘Defaults have not risen nearly as rapidly as auction sales. While certainly more homeowners are getting into trouble, the far larger issue is that fewer homeowners are able to get out of foreclosure than ever before,’ said ForeclosureRadar.com founder Sean O’Toole.”

“O’Toole said that in January, many lender-repossessed properties failed to receive reasonable bids at auction, despite ’significant discounts.’”

“He said the asking prices on 4,624 homes, or 23 percent of the 19,821 properties up for auction in the state, were reduced 30 percent to entice buyers.”

“‘The majority of these discounts are from the amount owed on an 80 percent first mortgage made in the last two to three years, meaning that many of these properties are being offered at 50 to 70 percent of their prior value,’ O’Toole said.”

The Orange County Register. “Orange County’s first luxury high-rise tower project now has its first foreclosure. A unit in one of the twin 18-story towers in Irvine has been repossessed by the lender, the first foreclosure in Marquee Park Place, according to two Web sites that track foreclosures.”

“And that’s not all. Veronica Hicks, head of brokerage Condos etc. in Newport Beach, said she is marketing a unit on the 16th story of one of the towers for $950,000 to $1.1 million, which is less than the debt owed to the bank.”

“While only two of the 232 units are under duress, a total of 42, or 18 percent, were listed for sale last week in the Southern California MLS. The towers are a little more than 2 years old.”

“Walter Hahn, a real estate economist in Irvine who has followed the project since its development, said he is not surprised about the foreclosure because builder Bosa Development did not prevent or cap sales to investors. Hahn said he believes many of the original buyers were speculators,who hoped to resell quickly.”

“‘I expect more of them to go into foreclosure,’ Hahn said.”

“Over the past six months condo foreclosures rose 321 percent vs. a year earlier in Orange County, while foreclosures on houses climbed 274 percent, DataQuick reports.”

“And foreclosures and short sales accounted for 32 percent of condos on the market last week, while 27 percent of houses, according to the math of Steve Thomas at Re/Max Real Estate Services in Aliso Viejo.”

“The unit in foreclosure at Marquee was bought in November 2006 for about $1 million. Public documents show the buyer took out a simultaneous first and second mortgage totaling the purchase price. The lender was bankrupt subprime company New Century Financialin Irvine.”

“In November 2006, the same month the buyer bought the Marquee unit, he bought a property in Rancho Santa Margarita. The $799,960 first mortgage on the Marquee unit went into default nine months later and was foreclosed upon three weeks ago.”

“Hahn said it’s unlikely the buyer had a poor credit profile typical of subprime borrowers. It’s more likely the buyer was someone who did not provide proof of income and was stretching financially with a loan that begins with a low teaser rate, he said. Such factors pushed investors into the arms of subprime lenders during the housing boom, he said.”

“Such risky loans are going bad and it’s one reason foreclosures are spiking in Orange County, Hahn said. ‘One of those eggs is hatching now, rotten eggs,’ he said.”

The Tribune. “In San Luis Obispo, even new condominiums with prices guaranteed to be lower than market rates are having a hard time selling these days.”

“Started in April 2005, Bella Montaña is a $24 million Cal Poly condominium subdivision that guarantees pricing discounts of 20 percent or more. The new 21-building condo community next to the Cal Poly campus offers prices from $323,000 to nearly $400,000 a unit.”

“But in November, the date targeted by the Housing Corp. to have sold all of its units, only 30 of its 69 condominiums had sold, said Jim Reinhart, managing director of the Cal Poly Housing Corp.”

“‘Starting in late 2006, we saw some buyers, who had put up $1,000 deposits, withdrawing their offers,’ Reinhart said. He believes the buyers were reluctant to move forward when the prices in the real estate market were declining.”

From Bloomberg. “When Mary Kamanu paid $409,000 for a house in Folsom, California, she never imagined that three years later it would be worth about 20 percent less and she would have to pay the bank more than $80,000 just to sell the place.”

“‘I’m completely upside-down on my mortgage, like a lot of people,’ said Kamanu, who wants to move 12 miles away to live with her fiancé in a suburb of Sacramento. ‘I know I’m going to have to come up with a big chunk of change.’”

“Kamanu refinanced her house in May 2007 and owes $415,000 on her mortgage. Homes in her neighborhood now sell for about $330,000, she said. The median home price in California dropped 17 percent from a year earlier in December, according to the state’s association of Realtors.”

“She said she’s willing to sell the three-bedroom, two-bath, 1,272-square foot house fully furnished and include two wide- screen televisions to entice a buyer.”

“‘I’m hearing it might be a year or two before the housing market comes back, and I can’t wait that long,’ said Kamanu. ‘I’m relying on luck, hoping that someone will come along and fall in love with the house, like I did.’”

“Thirty-nine percent of people who purchased a home two years ago already owe more than they can sell it for, according to a Feb. 12 report from Zillow.com. ‘If people owe more on their mortgage than their house is worth, a substantial number of them will give their keys back,’ said Kenneth Rosen, head of the University of California’s Fisher Center for Real Estate and Urban Economics.”

From CBS News. “For Karen Traynor, buying a condo closer to her job in San Francisco seemed like a sound financial decision. But in the last year, this home seemed to drop in value by the day - forcing Traynor to make a much more devastating decision, CBS News correspondent Sandra Hughes reports.”

“‘It would be an intentional foreclosure,’ Traynor said.”

“Her adjustable-rate mortgage will be reset in June. And although she can afford the $900 increase in payments, she doesn’t think it makes financial sense. ‘I am not doing anything illegal. I am not scamming anybody,’ she said.”

“When real estate was booming, Traynor bought her 2-bedroom condo for $505,000 after it appraised for $520,000. Although she took out a 100 percent loan, she figured she had some equity. Now, she would be lucky to unload her property for $340,000. That’s a $165,000 loss.”

“‘Everything is negotiable in business,’ Traynor said. ‘And so this is just another business decision. I just don’t see why this is anything different.’”

Some housing bubble news from Wall Street and Washington. Associated Press, “Mortgage insurer MGIC Investment Corp. said Wednesday it lost almost $1.5 billion for the last three months of 2007 on higher home delinquencies and payouts. It also said it is looking for ways to boost its capital. CEO Curt Culver said the company still doesn’t see making money this year, if delinquencies and losses continue to rise and fewer homeowners get back on track with payments.”

“The company has been limiting its exposure to weaker housing markets by demanding higher credit scores and larger down payments. Culver told analysts on a conference call that the changes will reduce losses but they won’t get rid of them.”

“‘We feel they are not enough to help us return to profitability in a market where real estate values are declining,’ he said.”

From Reuters. “The subprime storm rattled one of Germany’s biggest state banks on Wednesday when BayernLB revealed that the crisis would cost it almost 2 billion euros ($2.9 billion). It is the latest German bank to stumble under a hail of subprime writedowns.”

The Wall Street Journal. “Losses at Japanese banks related to U.S. subprime-mortgage lending more than doubled over the course of the final quarter of last year to $5.6 billion, according to estimates released Wednesday by Japan’s banking industry regulator.”

“Highlighting the possibility of more losses, the FSA said Wednesday that Japan’s 10 biggest banking institutions held about ¥1.39 trillion in investments in products related to the U.S. subprime mortgage market as of December, up from ¥1.25 trillion in September.”

“Japanese financial institutions’ overall exposure to subprime-related securities was ¥1.52 trillion, up from ¥1.41 trillion.”

“A cheery gaggle of singers and dancers are set to open the International Builders Show here in Orlando this morning. But behind the scenes at the convention, many builders are angry and downright depressed by the state of the housing market. The target of their angst: politicians in Washington, D.C.”

“‘Our industry is struggling in a big way,’ said Charles Kasko, an at-large trustee of the political action committee of the National Association of Home Builders. ‘It’s important that they stop bickering in Washington and get the job done.’”

“Home builders, who reaped massive profits during the housing boom, have been criticized for fueling a speculative run-up in house prices and overbuilding in many markets, which contributed to the current housing crash.”

“‘Did we have a lot of speculators in the market? Yes we did,’ said Mr. Kasko. ‘But the pendulum has swung so far the other way. Many builders in America are small family businesses and this is dragging them down.’”

“The lobbying group representing homebuilders is cutting off contributions to federal congressional campaigns, saying lawmakers and the Bush administration have not done enough to stabilize the housing market.”

“The National Association of Home Builders said Tuesday its political action committee has decided to stop making contributions to candidates for Congress ‘until further notice.’”

“Lawmakers and the Bush administration, ‘have not adequately addressed the underlying economic issues that would help to stabilize the housing sector and keep the economy moving forward,’ the trade group’s president, Brian Catalde said in a statement. ‘More needs to be done to jump-start housing and ensure the economy does not fall into a recession.’”

“Continuing concerns about the impact on the U.S. economy and society prompted six major mortgage companies and the Bush administration yesterday to…announced ‘Project Lifeline,’ a new program to help deeply troubled borrowers who are more than 90 days behind in their mortgage payments and face the imminent loss of their homes.”

“Some mortgage executives are skeptical whether the new program will make a difference.”

“‘What they are proposing is nothing new,’ says William Ashmore, president of Impac Mortgage Holdings Inc., a real-estate investment trust that owns about $18 billion of mortgage loans. He added that his firm began offering to postpone foreclosures by as much as 90 days last year.”

“An earlier plan, brokered in December by the Treasury Department, called for the mortgage industry to freeze interest rates or expedite refinancing. In a companion move, the administration announced a toll-free number for homeowners.”

“But the hotline has provided counseling to just 36,000 borrowers in the past two months, and representatives have suggested loan workouts for fewer than 10,000 of them — a small fraction of borrowers in need.”

“Other callers were looking for money, which the hotline doesn’t have available, or had only general questions, executives running the project say.”

Inside Bay Area. “For at least one lender, the idea of a workout and loan modification with a customer 90 days delinquent is business as usual. ‘The actual modification is exactly what we always do as a larger servicer,’ said Mary Coffin, executive VP and head of servicing for Wells Fargo Home Mortgage.”

“Coffin said that the alliance allows more publicity and awareness by laying out the exact steps so that borrowers will ‘pick up the phone and work through this. We are educating the people to be calling early and often,’ she said. ‘I can’t make a blanket promise that we’re going to be able to help everyone.’”

From Pittsburgh Live. “The plan will have little impact locally, Allegheny County Sheriff Bill Mullen said. ‘We’re already doing this, and we’ve been doing this,’ he said.”

“Mullen said sheriff’s officials advise homeowners to ask a judge for a 30-day delay if their home is in danger of being auctioned in a sheriff’s sale. The delay is almost always granted, he said, giving homeowners the time to renegotiate their loan, even if the homeowner is five or six months late on payments.”

“‘It’s a gesture, it’s a move in the right direction,’ Mullen said of Project Lifeline. ‘But I don’t think it will have an impact on anything in this area.’”

From WSBT South Bend. “Local lenders say President Bush’s Project Lifeline will have little effect on their lending practices. The reason? Local lenders at institutions such as Teachers Credit Union, Notre Dame Federal Credit Union and 1st Source Bank are already providing numerous lifelines on mortgage loans.”

“Leo Ditchcreek, CEO of Notre Dame Federal Credit Union, said the national problem is ‘more a function of third party lenders which were doing some things they should not have done.’”

“‘They are not doing old-fashioned banking of lending based on capacity, collateral and credit history,’ he said. ‘It’s nothing scientific or earth-shattering.’”

“Ditchcreek noted his institution has had to turn some people away simply because they could not afford the loan they sought. ‘In most cases, the capacity (to afford the loan) was not there,’ he said.”

The Arizona Republic. “Some Arizona observers question how effective the latest initiative will be. ‘I still see pretty significant pressure into summer’ on bankruptcies and foreclosures, said Chris Bayley, a partner at (a) Phoenix law firm, citing the slowing economy and slumping real-estate market as overriding factors.”

“‘These programs are like window dressings or Band-Aids that might not stem the flow,’ he said.”

“Steve Williams, a principal at Scottsdale bank management-consultant firm Cornerstone Advisors, also labeled the plan as window dressing. ‘The fundamental issue is that many Americans have bought too much house and too much car,’ he said. ‘Their home values, mortgage rates and personal cash flow are so out of whack that 30 days won’t make a big difference.’”

The Daily Herald. “Melanie and Steven Fugate have been going through the gut-wrenching foreclosure process on their Carol Stream home. An adjustable rate mortgage didn’t do them in; unemployment and illness did.”

“So would President Bush’s new Project Lifeline announced Tuesday help the Fugates? ‘It wouldn’t help our situation,’ said Melanie Fugate. ‘We just don’t have the money any more and we still wouldn’t have it in 30 days. We don’t have any income.’”

“David Siegel, a Wheeling attorney specializing in bankruptcy and foreclosures on behalf of homeowners, said Project Lifeline was ‘nonsense’ and ‘a fantasy.’ ‘It’s going to help very few people and to the slightest extent. Thirty days is nothing, a drop in the bucket,’ Siegel said.”

“‘Of course, there will be homeowners who still take no action, and some will simply walk away from their mortgage — particularly those borrowers who put little or no money down and whose mortgage exceeds their home value. No program can bring every struggling borrower into the counseling and evaluation process, and we cannot help those who choose not to honor their obligations,’ said U.S. Treasury Secretary Henry Paulson Jr.”

From KTVZ.com. “‘I think this is very necessary, especially in the Bend market,’ said Kristi McPheeters, a broker in Bend, Oregon. ‘I think it’s going to save that pride of ownership with the homeowners out there. It’s giving people more options than just to walk away from their house.’”

“A Bend resident who does not want to be identified says she’s in the process of foreclosure on two of her homes. ‘I’ve been struggling for years to try and get out, and it seems like it’s a no-win situation,’ the woman said. ‘The extra 30 days could have been good, but I don’t know’ if it would have headed off foreclosure, she added.”

“The nation’s mortgage crisis is beginning to spill into the fight for control of Congress, adding new uncertainty to the election-year power struggle.”

“Just ask Kay Barnes, a Democrat looking to unseat Republican incumbent Sam Graves in this northwest Missouri Congressional district. Less than a year ago, Mrs. Barnes expected health care and perhaps Iraq would be the top issues. Now, housing and credit concerns are climbing in importance.”

“‘It has been bubbling up to the top,’ she said. ‘That was not true — at least it wasn’t verbalized — a few months ago.’”

The Edmonton Journal. “Don Campbell couldn’t believe a recent scene among wannabe real estate investors at the corner of Yonge and Bloor streets in Toronto, site of a planned condominium complex.”

“‘People slept there overnight for four nights,’ said Campbell, president of the Calgary-based Real Estate Investment Network. ‘A sign up above read ‘$500,000 to $1.3 million,’ although you could go across the street and buy something very similar for $425,000.’”

“‘Then the developer had the gall to paste a six over the five to make it ‘$600,000 to $1.3 million,’ and the crowd cheered, saying ‘Look, it’s going up.’ There was even a fight in the line,’ he said.”

“‘When you line up around a block with 200 people to buy the condo in the sky that doesn’t exist yet, put $20,000 down and plan to sell it as soon as it’s built, look in the lineup and tell me how many people have the exact same mentality. Then all you need is for one guy to panic and drop his price to get out, and the average price in the whole building goes down, and you’re completely at the whim of somebody else. You should only line up for U2 tickets,’ Campbell said.”

The News Press reports from Florida. “Homeowners threatened with foreclosure could get a 30-day reprieve under a Bush administration initiative announced Tuesday. But people in Lee County, where the number of foreclosures jumped to a record 1,833 in January as prices have plunged over the past two years - had little good to say about the proposal. ‘This new plan doesn’t address people like me who can’t or won’t just walk away, people who feel a sense of responsibility but who are stuck in a bad loan due to unforeseen circumstances,’ said Kathy Reed, a former real estate agent.”

“Now she finds herself paying two mortgages: one on her old house in Alva that she’s unable to sell and another on a house she bought in November 2006 in the Cascades subdivision in east Lee County.”

“Reed is unable even to refinance the new house because banks tightened their credit standards and won’t lend to a self-employed person. The situation is aggravated by the bankruptcy reorganization filed Nov. 9 by the builder of Cascades, Levitt & Son, she said.”

“‘I’m one of the lucky ones - they finished my house,’ Reed said.”

“Ed Bonkowski, a Fort Myers-based real estate broker, said the initiative will have little effect and is targeted at helping the wrong people. ‘It’s not going to do one iota of good,’ he said. ‘What’s 30 days? The people are in, they signed it and they should pay.’”

“If anything, Bonkowski said, ‘It’s just going to forestall what’s going to happen in the marketplace.’”

“Banks need to take back the houses and put them on the market at a deep discount, he said - as little as 10 percent of the loan value. Then, he said, ‘The investors will absorb the inventory and the crisis will be over. The money’s on the sidelines waiting for this to happen.’”

“Prices have fallen steeply in Lee County since the market peaked in December 2005. Zillow.com, which tracks home prices, released a report Tuesday saying that the median price of all homes in Lee County was $201,723 in the fourth quarter of 2007: down 20.1 percent from a year earlier.”

The Sun Herald from Florida. “Less than a week after Sarasota County spokesman Bob Reddy helped reporters prepare articles about layoffs, he became part of the story. In mid-August of last year Reddy was telling the media that remaining employees would have to pick up the slack. Reddy’s last day was Aug. 21.”

“Five months later Reddy is still looking for a new full-time position — and local governments are still reeling from property tax cuts.”

“‘I had never heard of anybody getting laid off from government before, until I did. It’s been terrible,’ he said of his job search. ‘There are jobs out there but there are thousands of people applying for single jobs. I’m willing to relocate anywhere.’”

“North Port City Manager Steve Crowell says the state cuts in property taxes and the national economic slowdown have created the ‘perfect storm.’ When Crowell began his tenure in North Port in July of 2005, when ‘the revenues were strong, the local economy was strong. We were hiring people.’”

“Before Crowell arrived, in 2003-04, ‘Things ramped up pretty quick,’ he said. After his arrival the real estate bubble burst, revenue from building permits plummeted and city officials reevaluated their plans.”

“‘I didn’t expect there to be a dramatic decrease in building permits,’ Crowell said. ‘It happened pretty quick.’”

The Miami Herald from Florida. “Aldo Roldan, an economist with a prominent investment firm, spoke to about 450 members and guests of the Executives’ Association of Fort Lauderdale on Tuesday at the Broward County Convention Center.”

“He said this recession is being led by consumers, who represent two-thirds of the economy and whose confidence is at its lowest point in years. The housing market remains flooded with homes no one is in a hurry to buy, consumers have virtually no savings, banks have little money to lend, and what they have they’re reluctant to part with except for the most reliable of borrowers.”

“Meanwhile, with house prices falling, millions of homeowners will find themselves owing more on their homes than they’re worth, Roldan said.”

“‘A consumer-led recession is a nasty recession,’ he said.”

“Ralph A. Marrinson, president of the Marrinson Group of retirement centers and assisted-living facilities, called the speech ‘realistic’ because real estate, in particular, has been overvalued.”

“‘We’ve been nuts paying some of the prices we’ve been seeing,’ he said. ‘But I do see lights at the end of the tunnel.’”

The Orlando Sentinel from Florida. “Florida is most likely already in a recession and will see a net loss in jobs this year, the top economist for the Portland Cement Association said in a report that will be circulated this week during the International Builders’ Show in Orlando.”

“Edward Sullivan, chief economist for the nation’s leading cement industry trade group, said the housing crisis and general economic slowdown ‘is expected to spread to nonresidential and public construction in 2008 and 2009 — adversely affecting cement consumption.’”

“‘PCA believes that Florida has already entered a recession or soon will,’ Sullivan said in a report completed last week in preparation for the National Association of Home Builders’ annual convention. ‘The housing crisis has temporarily put Florida’s economy into reverse.’”

“He said the cement association projects that Florida will see as many as 40,000 net jobs lost during the year, with net growth of only 20,000 jobs in 2009. The last time Florida recorded a net decrease in its total employment was the recession year of 2001, when 28,000 jobs were lost.”

“Orlando’s resale housing market continued its downward spiral in January, as sales fell to a 12-year low. The 756 single-family homes and condominiums sold by members of the Orlando Regional Realtor Association last month was the smallest monthly total since January 1996.”

“The sales count was down 30 percent from December’s revised total and 48 percent from January 2007.”

“The median price of the homes sold in January slipped to $222,250, down 1.2 percent from December and 11 percent from January 2007, the Realtors reported Tuesday. Meanwhile, the number of homes on the market through the Realtors’ listing service rose by 1,426 properties to total 25,724, a record 34-month supply at the current, slow sales pace.”

“‘It’s the law of supply and demand. This is a down market, a buyer’s market,’ said Steven Moreira, president of the Orlando Regional Realtor Association.”

“January’s median price was the lowest since the $215,000 recorded in April 2005, when prices were moving upward at double-digit annual rates. In terms of sheer volume, the local sales frenzy peaked in August 2005, when 3,134 homes and condos changed hands in a single month in the Orlando Realtors’ core market.”

“Homes in mid-2005 spent less than a month on the market before selling.”

The Sun News from South Carolina. “With the housing market lagging, Georgetown County expects a $600,000 to $700,000 shortfall in projected revenue and is working to balance its budget, Finance Director Scott Proctor said. That slowdown also has Horry County making budget trims.”

“In the Grand Strand area, sales fell 45 percent for single-family homes and 55 percent for condos in 2007 compared to 2006, according to statistics from the MLS released in January.”

“The drops follow the 2005 housing boom, when condo sales jumped 48 percent and single-family home sales rose 27 percent.”

“‘Building permits are down, documentary stamps are down, recording fees are down,’ Proctor said. ‘It’s not just for 2008. It will affect our fiscal process as we look toward our next budget. We’d love for it to turn around.’”

“Already the County Council has made several budget reductions. In January, the council cut the appropriations to the general fund by $180,000 because of the possible shortfall from building permit fees, decreased the Midway Fire fund by $100,000 because of expected shortfalls in impact fee revenue and lowered the environmental services fund by $150,000 because of projections of less landfill-tipping-fee revenues.”

“‘Even since then, it looks like we’re going to need to reduce it even more,’ Proctor said.”

The Star News from North Carolina. “Marcia Threewitts took a different route from most newcomers to get to Brunswick County: She drove north. This retail sales consultant moved from Sarasota, Fla. Actually, she’s staying in Little River, S.C., and working in Calabash, but she hopes to buy a home north of the state line soon.”

“She said aspects of Brunswick County’s growth remind her of the tremendous boom she saw on Florida’s west coast. But she hopes that this area can avoid the pitfalls she saw down there.”

“Threewitts is a consultant for Portrait Homes, selling homes in a new development called Calabash Lakes. With the nation in a well-publicized housing slump, she said sales aren’t as brisk as she’d like to see. ‘Many people who come fall in love with the community, but they have a home up north that they must sell,’ she said.”

“She said Brunswick County’s current real estate market is far more active than Florida’s, where a land rush from the mid-1990s until 2006 abruptly ended.”

“‘When the crash-boom-bang happened, it wasn’t a soft landing,’ she said. ‘It was a crash.’”

The Chattanooga Times Free Press from Tennessee. “In 2007, John Buechner bought into what he thought would be a dream retirement home in a condominium complex off Mountain Creek Road.”

“Instead, Mr. Buechner and the other 27 buyers at the Village at Greenway have found themselves surrounded by unfinished condominiums and empty lots.”

“Although he says he is happy with his own home and his neighbors, Mr. Buechner and others in the stalled complex say they are eager for the other 49 planned units — and a neighboring 100-lot subdivision that has only cleared lots and dirt streets — to be finished and occupied.”

“‘The people here are great, but we obviously hope that the rest of the project can get back on track,’ Mr. Buechner said.”

“The Village at Greenway, a 76-unit project begun two years ago, was one of a record number of properties faced with foreclosure in Chattanooga during 2007. Last year, Hamilton County Register of Deeds records indicate home foreclosures rose by nearly 11 percent to a record high of more than 1,000 houses.”

“The slowdown in home sales has hit home in Chattanooga with several projects stalled by financing or foreclosure problems. Sales at two downtown condominium projects stalled late last year, and each face lawsuits in Hamilton County Chancery Court from condo buyers upset that the projects didn’t provide all that was promised.”

“The Clark Centre was forced into an involuntary bankruptcy in December. An auction is scheduled for March 22 to help sell the rest of the unsold units, auctioneer Henry Glascock said.”

“‘The market has certainly slowed, and some of the inflated prices are coming down,’ said Mr. Glascock, who also appraises real estate.”

“With more sellers than buyers, another condo development next to the Village of Greenway — Wellstone Creekside — had its development loan yanked out last year by the lender and site work halted, said developer Rusty Criminger. The lender, which Mr. Criminger declined to name, decided it had too many outstanding loans on its books.”

“‘The public doesn’t need failed housing projects,’ Mr. Criminger said. ‘All the banks are taking such a hit. It’s not just subprime loans but banks that were faced with reduced limits on how much their portfolios could make.’”

“First Volunteer Bank, which provided some of the construction financing for the Battery Place condos, is offering special loan incentives to qualified buyers at the March auction, Mr. Glascock said.”

“‘Lenders are being more innovative,’ he said. ‘Flippers aren’t able to turn properties for quick profits like they did in the past.’”

“One real estate agent said she blames the mortgage crunch and foreclosure fallout on lending practices in recent years.”

“‘In all honesty, banks were willing to give money and were not concerned about how they (clients) could pay it back,’ said broker Teresa Boyer. ‘People got in over their heads and couldn’t make payments.’”

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