The Housing Bubble

The Santa Cruz Sentinel reports from California. “The median price for a single-family home in Santa Cruz County dropped to $599,000 in January, down 18 percent since December and a level not seen since 2004. Only 63 sales closed escrow, a new low, the previous was 107 in 2006. More than 170 local homeowners have received default notices for not making mortgage payments, up 60 percent from a year ago, and 63 homes have sold at foreclosure auctions compared to 11 at this time last year.”

“Patricia Beckwith, an Aptos accountant who has been tracking sales in the Santa Cruz Record gave up house-hunting last October. She’s not convinced this is the right time to buy. ‘Although I am seeing some sellers reducing their prices, I am also noticing sellers taking their homes off the market rather than further reduce the selling price,’ she said. ‘Sellers are stubbornly refusing to see the writing on the wall - that their asking prices are unrealistic.’”

“The current Unsold Inventory Index indicates price stability in Capitola and Santa Cruz, and price declines everywhere else, including Aptos, Scotts Valley, Soquel. The index remains the highest in Watsonville, which means more pressure for prices to fall.”

“‘I’ve got new listings coming in on the high end,’ said Gary Swanson, a broker with SCF Realty in Capitola. ‘There probably has not been a better time to buy.’”

“‘I think homes are still 20 to 30 percent overvalued,’ said Beckwith. ‘There is no way an average family will be able to buy here in Santa Cruz without the ‘teaser financing.’ And now that that kind of financing has gone away, and I seriously doubt it will be coming back in the next decade, average middle-class homes are not going to sell.’”

The Modesto Bee. “Home prices took a dramatic downward turn in January across the Northern San Joaquin Valley, with the median sales price declining by more than 25 percent from a year earlier in most categories.”

“The valley’s sales price drops were among the steepest in California, rivaled only by Sacramento, where they fell 26.8 percent last month from the previous year. The data also showed that sales volume declined in Stanislaus County by 23.9 percent last month compared with January 2007, with escrow closing on 372 homes last month.”

“Craig Lewis, CEO at Prudential Realty in Modesto, said he sees reason for optimism in valley real estate. The drop in prices and interest rates means a buyer could more easily afford a median priced house, based on a 30-year fixed mortgage with a 10 percent down payment, Lewis said.”

“‘Local people can now qualify to buy that same home,’ he said.”

The Merced Sun Star. “The median home price in Merced County clocked in at $215,000, down 33.8 percent from a year earlier, according to DataQuick Information Systems. Sales volume was down 20 percent in Merced County and 23.9 percent in Stanislaus County, compared with a year earlier.”

“Local Realtor Andy Krotik said agents in his real estate office are seeing encouraging signs of life, including multiple offers on homes and houses selling for above the asking price. The sales activity is driven mostly by banks looking to unload foreclosed properties, a phenomenon that’s pushed prices back down to the $200,000 range, said Krotik.”

“At the height of Merced’s real estate boom in August of 2005, 76 percent of houses on the market were listed at prices above $300,000, said Krotik. Today, it’s the opposite, with 76 percent of houses listed at below $300,000.”

“Many analysts believe Valley prices are now at the same level they were in 2003 and 2004, when the regional housing market was still rising.”

The Fresno Bee. “In December…sales in Fresno County were off 8.3% compared with the year previous when median prices fell 10.6% to $295,500. In addition, home builders in the Valley offered sharp discounts and other incentives on inventory houses to get them off their books.”

“Mike Miller, division president of Lennar Homes said the rising number of foreclosures in the Valley does not bode well for builders. Those houses compete with new homes for a limited supply of customers.”

“‘Two years ago, we only had seven foreclosures a month, and now we’re up to almost 200,’ he said. ‘If we continue to run at that pace … that could be 2,400 buyers. That could be 25% of the market.’”

“First-time home buyers, shut out of the market when prices skyrocketed in the first half of this decade, are becoming the dominant force in an otherwise battered market. Experts say falling prices and interest rates and an abundant supply are enticing would-be first-time home buyers off the sidelines.”

“Real estate agents — whose deserted offices provide stark contrast to the go-go atmosphere of just two years ago — are delighted. ‘I’m waiting for [a first-timer] right now,’ Fresno real estate agent Joan Jolly said while sitting in her car in front of a house listed for sale.”

“The house was owned by a bank — an unfortunate consequence of a sinking real estate market where property values have tumbled so much that thousands of homeowners owe more on their houses than they are worth.”

“About 3,900 houses are available for sale in Fresno and Clovis, and, thanks to falling prices, the percentage of families in Fresno County that can afford an entry-priced house has climbed to 44% from 19% at the peak of the housing boom in 2006, according to the California Association of Realtors.”

“Don Scordino, president of the Fresno Association of Realtors, said 10% of all the houses sold through Fresno’s MLS in 2007 were foreclosures.”

“Real estate agents say investors also are back in the market, looking for houses to rent and, in some cases, flip. ‘I just sold a beautiful fixer-upper in University Portals for $160,000. They will put in $20,000 and rent it at $1,600 per month to four roommates from Fresno State,’ he said.”

“Michael Gilmore believes many others are waiting for prices to fall even more. ‘I’m still of the opinion that incredible pent-up demand is still sitting on the fence waiting for things to bottom out,’ said Gilmore, who operates The Mortgage Professionals in Fresno.”

“‘Prices have fallen, interest rates have fallen and there is blood in the water,’ he said. ‘It could be worse before it gets better, but we’re getting near the end of this cycle.’”

The Orange County Register. “Faced with plummeting home sales and reluctant buyers, some homebuilders are offering a plan designed to take the worry out of buying when prices are falling.”

“One plan promises to lower the amount a buyer pays for a new home if prices drop after they buy, but before they get their keys. Another lets buyers back out of deals and get their deposits back if their home is appraised for less than they paid.”

“So far, none of these plans is available in Orange County, although Los Angeles-based KB Homeswill begin offering oneat an O.C. project later this month.”

“The issue of price became more apparent last week when DataQuick released figures showing that the median price of a new home in Orange County fell 6.2 percent in January from the year before – and 26 percent from December. New home sales last month fell 62.8 percent.”

“‘It’s a way to get people comfortable,’ said Ric Hernandez, sales and marketing VP for Newport Beach-based Capital Pacific Homes, which is offering price guarantees through Feb. 28 at eight Inland Empire developments.”

“‘Everybody wants to buy at the bottom or when it’s going back up. We’re trying to find ways to overcome this challenge of buyers just waiting (the market slump) out,’ he said.”

“Irvine real estate consultant John Burns said the program actually is nothing new. Builders traditionally give buyers a break when prices fall before their escrow closes, but didn’t advertise those policies.”

“‘They’re trying to get some fence sitters to the table by advertising a policy they were already implementing,’ he said.”

“Some residents who bought condos in Tustin’s Columbus Square last spring complained in October after homebuilder Lennardropped the price by at least $100,000, lowering the value of their homes.”

“And some residents in a small development in Garden Grove sued their builder, Brandywine Homes, a year ago after prices fell by $140,000 after they had closed escrow. The homeowners accused the builder of manipulating appraisals to make it look like homes were more valuable than they were, which the builder denied.”

“One Brandywine official complained at the time that homebuyers get upset when prices drop after they buy, but never offer to share their profits with the builder when prices go up.”

The County Sun. “They don’t call this community Chapman Heights for nothin’. Yucaipa’s upscale neighborhood is surrounded by the Yucaipa Valley Golf Club and sits in full few of the majestic Crafton Hills. But like other communities that sprouted up during the housing boom in recent years, foreclosures are more commonplace these days.”

“Every couple dozen homes, you’ll find dead grass and a real-estate sign. In fact, more than 80 properties in Chapman Heights were listed as mortgage defaults, foreclosures or up for auction on Friday, according to RealtyTrac.”

“Robert Reintschler moved to the Chapman Heights neighborhood in July 2006 after living in Redlands for 30 years. ‘It ain’t Redlands, but it’s close,’ he said. ‘We downsized. We’re retired.’”

“With its two-story stucco houses and meager front yards, the housing tract has a ways to go before looking like an established community.”

“Reintschler and his wife bought their $525,000, amenity-filled home at the height of the housing market, but they’re not bothered by that. ‘We probably bought close to the peak, but we sold close to the peak,’ he said about his prior home in Redlands. ‘I was trying to capture some of that equity for retirement.’”

“There’s plenty of ‘common space’ where residents can walk or ride bikes around Crafton Hills. But resident Frank Awad isn’t concerned with that. ‘I’m not finding it interesting living here,’ the Jerusalem native said.”

“Over the years he moved from Los Angeles to Fontana, to San Bernardino, to Highland, and eventually Chapman Heights. ‘I just didn’t want to raise my kids in L.A.,’ Awad said. ‘It’s more quiet out here.’”

“Now that quietness is turning into boredom. And the $59 he pays every month in homeowners association fees isn’t cutting the mustard. ‘I’m not seeing anything worth being part of the homeowners association,’ Awad said. ‘I’m still wondering what I’m paying for.’”

The Rocky Mountain News reports from Colorado. “After years of easy money, when people in the lending industry joked that all you needed was a pulse to get a loan with a low, initial teaser rate, lenders have returned to making sure borrowers are qualified to make payments. ‘Some of my loan officers I have been talking to said, it used to be if 10 people applied for a loan, only one or two would not qualify,’ said Peter Lansing, president of Universal Lending.”

“‘Now they are saying, if 10 people apply, as many as six or seven of them will not qualify,’ Lansing said. ‘That’s been a big shocker to people.’”

“Now, even if their credit scores are high enough, if the house is underwater - that is, the loan is worth more than the real estate - they’re likely to be rejected by the lender. But people who are refinancing today, seldom take money out, Lansing said.”

“Instead, they either are refinancing to save money each month or to seek the safety of a fixed-rate loan. ‘For some people, it’s just a matter of sleeping better at night,’ Lansing said.”

The Arizona Daily Sun. “Homeowners, contractors and Flagstaff city officials all have questions about Empire Communities, the largest homebuilder in northern Arizona. Empire, it seems, is all but gone from Flagstaff, leaving townhouses unfinished and a lone salesperson in one project referring calls to the Prescott office.”

“The townhomes built by Empire in the Pinnacle Pines development in Flagstaff, once touted as ‘fairy-tale cottages,’ are proving to be a harsh reality to many.”

“Currently, the project has been only partially built, with residents scattered between empty and unfinished townhomes. A salesperson is showing homes by phone appointment only. About 40 have been built on the 22-acre parcel. A second phase of the development would have built 104 more homes on an adjacent 18-acre parcel, city records show.”

“Currently, the townhomes are priced between $299,900 and $440,900 on Empire’s Web site.”

“‘They are not paying their (subcontractors) right now,’ said Scott Daniels of the Phoenix-based Fortress Framing Inc. ‘They kind of quit answering the phones.’”

“John Wesnitzer bought his townhome in Pinnacle Pines last December. He found little things that needed to be fixed after he moved in, and at the time, Empire seemed very willing to address the issues. Today, Wesnitzer said he is still waiting for Empire to approve the work.”

“Another homeowner in the Empire-built The Retreat at Ponderosa Trails said she has been waiting for the developer to address construction issues since November 2006. The homeowner, who asked not to be identified, said the home is under the warranty provided by Empire when she purchased it.”

“‘Now that we have no contact person, we are faced with repairing these issues ourselves,’ the homeowner said. ‘The repairs have been estimated to be close to $20,000. This creates a substantial financial issue for our family, but it needs to be done.’”

The Glendale Star from Arizona. “Arizona economic guru Elliott Pollack laid it all out for those who attended WESTMARC’s annual membership breakfast meeting at Glendale Civic Center. ‘Yes, the country is ‘probably’ going through a recession. Yes, the housing market is going to get worse. Retail sales are off, and employment actually turned negative last month. If there is a recession, it has not started yet, but it is likely.”

“Pollack predicts 2008 not only will be weak but there will be continued weakness in the housing market, and housing prices will decline. In mid-2008, he predicts a weakness in commercial construction. The year will also see a decline in employment and weakness in real incomes.”

“‘The credit crunch ends when banks see stability,’ Pollack said. ‘We just have to live through it.’”

“Although the Arizona economy is suffering just like the rest of the country, it should still outperform the nation as a whole, he said, adding, ‘but we need to keep an eye on housing.’ It will be another three to five years before we will see a full recovery in the housing market, Pollack said.”

“The apartment vacancy rate is going up. Where are renters? ‘More likely than not, they’re renting single-family homes,’ Pollack said.”

From KTAR.com in Arizona. “New housing numbers show some big price drops, especially in the west Valley, according to Arizona State University’s W.P. Carey School of Business.”

“The west Valley market is down about 15 percent over the past year, said Dr. Jay Butler, who tracks the housing market for ASU. He said much of that is because of speculators.”

“‘Many people got caught up in this hyper explosion of the residential market of ‘give me a home, give me a home anywhere, because it’s going to go up in value, etcetera,’ Butler said.”

The Review Journal from Nevada. “Sometime this weekend, several dozen of your neighbors will go back in time nearly 10 years. There, they’ll see a 3,128-square-foot Christopher Homes house in Summerlin’s upscale Country Rose Estates on sale for its circa 2000 price of $370,000.”

“So how, you want to know, will people revisit this past era? Through a time machine? Virtual reality? A tear in the fabric of a parallel universe? Nope, no fancy physics here: They’ll simply hop a ride on a foreclosure bus tour led by Barbara and Marshall Zucker of Prudential Americana Group, Realtors.”

“Other Realtors are planning or are already conducting bus rides. Through the tours, Realtors hope to chip away, 10 and 15 properties at a time, at the valley’s 7,000-home inventory of foreclosed houses.”

“For Jennifer Weinberg, foreclosure tours aren’t only about ginning up sales; they’re also about public service.”

“‘It’s a great way to stimulate business for us,’ she said. ‘But more importantly, I’ve been a resident here for 30 years, and my house has gone down in value based on (comparable sales prices), too. The only way to recover from this crazy market is to get houses off the books quickly, so we’re helping out the community, too.’”

“In addition to the Christopher home in Summerlin, which last sold in 2004 for $750,000, Zucker’s tour will take in a 1,470-square-foot home in Summerlin’s Hills listed for $212,000.”

“Among the deals offered on Weinberg’s tours is a four-bedroom, two-bath home in Summerlin that’s been reduced from $500,000 to $320,000.”

“For Las Vegans Tara and Marty Faber, Weinberg’s tour was less an opportunity to buy than a chance to get a reality check. ‘You hear all kinds of rumors, and we thought it might be a good idea, since it was free, to see if the rumors were true,’ Tara Faber said. ‘People say, ‘There are all these foreclosures, and they’re great deals, but they’re in really bad shape.’”

“Instead, Faber said, she found ’some great deals out there, and they’re in a lot better condition than we anticipated.’ The Fabers, who own a home in southwest Las Vegas, probably will go on future tours but won’t buy unless they find the ‘perfect’ floor plan at the best price, Faber said.”

“Streamline Tower is scheduled to bring 275 luxury condo units on line in the next few months, joining SoHo Lofts and Newport Lofts in the downtown Las Vegas high-rise market. The 21-story tower is substantially complete and ready for inspections and testing, managing partner Dusty Allen said.”

“He said the tower is about 65 percent sold. Some high-rise condo buyers have had trouble closing escrow as financing that was once available has either disappeared or qualifications and terms have changed as a result of the subprime mortgage crisis.”

“‘We think it’s still a very viable and exciting option for a primary or second home or an investment,’ Allen said.”

“‘Obviously, there’s struggles out there that are becoming more widely known,’ Allen said. ‘We’re still trudging along. Obviously, like other developers, we wish there’d be more sales.’”

“Units are priced from the mid-$400,000s for one bedroom to upward of $1 million for three bedrooms.”

In Business Las Vegas. “It’s been a tough year for John Ritter, and we’re only seven weeks into it. The chairman and CEO of Focus Property Group, the developer of master-planned communities such as Mountain’s Edge, Inspirada and Providence, has had to deal with a major setback for his company after years of success.”

“Focus’ financial woes are being played out for all of the Las Vegas Valley to see after the company announced it’s in discussions with its lenders to restructure debt. Focus missed an interest payment on more than $500 million in debt Feb. 1.”

“‘It is very difficult on me,’ Ritter said. ‘I have been in real estate for 26 years and never missed a payment. We did everything possible, but the fact of the matter is this is what it is, and we have to face it head on because we fully intend on surviving this market.”

“It’s not a place Ritter ever envisioned being in at the height of the Las Vegas housing boom when Focus turned heads in June 2004 by partnering with seven homebuilders to pay $557 million at a federal auction for 1,940 acres in Henderson.”

“Eight months later Focus Group and eight builders paid $510 million to buy 1,710 acres in Kyle Canyon.”

“‘I got to tell you at the time those were good deals if you were looking at what homes were selling for and the pace at which they were selling,’ Ritter said. ‘Given the same circumstances, I would do those deals again. Now, of course, if I had a crystal ball and had I known there would be such a long and deep slowdown, there are probably a lot of things I would have done differently.’”

“In recent years local money was used to acquire 4,800 acres in Las Vegas, Pahrump and Victorville, Calif., that Focus has been unable to sell at the prices it wants. Some market observers put the onus on Focus for going on a buying spree without fully anticipating the slowdown in the housing market. Ritter said he doesn’t blame them.”

“‘In retrospect, with 20-20 hindsight, we were overly aggressive,’ Ritter said. ‘Certainly, had we know there was going to be a potential five-year slowdown, we would have been less aggressive. I would have to say we weren’t the only (ones) surprised by this.’”

“‘We are working on selling land, and I think it will take the market a couple of years to recover,’ Ritter said. ‘We are starting to see some positive signs, and at least locally, we are seeing it start to test the bottom. I am not saying it is at the bottom. It is difficult to say.’”

“Ritter said 2008 will be tough for the housing market and that any recovery won’t bee seen until 2009. By 2010 the market will be doing well and by 2011, there will be a boom again.”

“Other builders and developers are facing similar problems. Lenders foreclosed on raw land in Lake Las Vegas and other builders have filed for bankruptcy protection or are dealing with financial woes.”

“‘It is tough for everybody out there,’ Ritter said. ‘I think whether it has hit the paper or not, almost every real estate transaction financial vehicle is in some stage of negotiations or restructuring.’”

“The availability of credit to buy homes and the ability to stay out of a deep recession, which could stretch out the recovery, will affect any recovery, he said.”

“Harrah’s Entertainment has laid off workers and reduced hours at many of its properties around the country, citing the slowing economy, the company confirmed Friday. The current round of layoffs includes nearly 100 workers at its eight local properties.”

“Harrah’s owns four properties in Northern Nevada, one in Laughlin, and 20 more in eight states outside Nevada. ‘If business continues to be less than optimal in some regions, we’re going to have to adjust our costs there,’ said Harrah’s Entertainment spokesman Gary Thompson.”

“Harrah’s confirmation follows similar reports by Station Casinos and MGM Mirage that the economic downturn is causing layoffs, work-hour reductions and hiring freezes of a few positions.”

“The economic slowdown in gaming comes as consumer confidence ebbs because of the local housing crisis, said Brian Gordon, a principal at a Las Vegas financial consulting firm. ‘The soft economic conditions are impacting all business sectors and all geographies,’ Gordon said. ‘The Las Vegas gaming sector is feeling the downswing in the overall economy and is responding accordingly.’”

“‘There is no question these are tough times,’ Boyd Gaming Corp. spokesman Rob Stillwell said. ‘We manage our business very closely. We are always working to keep expenses in line with business levels, and today is no different than previous times.’”

“A worker at one of the company’s properties said Friday that ‘vacation relief and on-call people are dying for something to do’ because of a slowdown in business.”

The Dayton Courier from Nevada. “Nevada’s unemployment rate jumped to 5.8 percent in December — the highest it’s been since April 2002 — and Lyon County’s unemployment rate was at 6.5 percent. Meanwhile, the national unemployment rate was at 5 percent in December, said Chief Economist Bill Anderson of the Department of Employment, Training & Rehabilitation.”

“‘Although population growth in the state has slowed, Nevada’s labor force has increased by about 25,000 since June,’ Anderson said. ‘The economy has been unable to absorb the new workers, however, and the ranks of the unemployed have swelled by about 14,000.’”

“The housing slowdown remains the primary cause of labor market problems, Anderson said. The construction industry shed nearly 8,000 jobs in 2007, despite work on numerous large projects on the Las Vegas Strip.”

“Other industries have contributed to Nevada’s weak job growth — now at a five-year low of 0.6 percent. The financial industry lost 1,500 jobs in 2007, and the employment services (temporary help) sector shed 8,200 jobs.”

“‘The housing slump very likely contributed to the weakness in those industries as well,’ Anderson said. ‘The year 2007 was a less than memorable one for Nevada’s economy. Labor market conditions continued the deterioration that began in 2006. When the final numbers are in, the state is likely to have seen its second weakest job growth–better only than 2002–in the past 15 years.’”

“‘While much of the prior year data will be revised–with initial publication of the revisions in early March–the slowing trend reported throughout 2007 is almost certain to be confirmed,’ he said. ‘(t)his trend is likely to continue into 2008.’”

The News Press reports from Florida. “Realtor Trae Zipperer is the agent for a Key West style home along a canal in the gated, Palm Isles subdivision off San Carlos Boulevard, near Fort Myers Beach, that has an asking price of $559,000. Zipperer said he handled the sale of a lot similar to the one occupied by the Palm Isles home for $425,000 about six weeks ago. At the market’s height, the asking price for the Palm Isles home probably would have been about $875,000.”

“Jerry Bodart, a broker in Bonita Springs, said prices, in general, decline as you head east. ‘Prices have come down,’ he said. ‘Some prices haven’t come down, on the Gulf Coast, for example, but others have come down maybe up to 25 percent.’”

“The amount of bang for the buck has risen sharply depending on location and the seller’s desire to make a deal, according Marc Lobdell, a broker in Fort Myers. ‘I would think that you’re probably looking at the same dollars buying about 40 percent more home than at the peak of our market in November of 2005,’ he said.”

“Lobdell said $549,900 can buy a 2,681-square-foot home in the Briarcliff area of south Fort Myers, that sits on a 2.5 acre parcel complete with a pond. The three-bedroom, three-bathroom house also has a home office, a loft, a two-car garage and has been completely updated, inside and out, he added.”

“He said the list price was $649,900 when the home went on the market roughly 280 days ago.”

The Herald Tribune from Florida. “A planned Hyatt beach resort…will be the first of its kind in the Sarasota area to be built as a so-called ‘fractional ownership’ property: part time-share, part condo, part hotel. The cost? Six weeks each year are yours for between $250,000 and $750,000, plus additional yearly fees.”

“‘Though it can be viewed by the consumer as an alternative to buying a condo, it’s really put together quite differently,’ said Larry Shulman, senior VP of Hyatt Vacation Ownership.”

“‘In a conventional condo project, there is a lot of investment angle to the purchasing, with people attempting to resell their units for a profit and who have no intention of actually living there,’ Shulman said. He said people buy fractional properties generally because they love the place and want to vacation there on a regular basis. ‘Rental income is incidental not fundamental, you could say.’”

“Coming out of the ground these days is not a small feat. A number of Sarasota condo projects are on ice, with several others circling the bowl. Part of the reason: Financing is extremely difficult to secure in the current environment.”

“When the project was first conceived during the boom, the white sands of Siesta Key seemed like the perfect place for upscale condominiums. Times were good — Sarasota condos were selling like they were going out of style. But when the bottom fell out of the market, everything changed.”

“‘It’s the kind of thing that works more as an emotional decision,’ said Sarasota commercial real estate broker Ian Black. ‘Do I get a great financial deal with fractional? Maybe not. But do I enjoy it and love coming here? That’s what it’s about.’”

The Palm Beach Post from Florida. “Like all legendary parties, the boom-time bash in Port St. Lucie raged on for too long. The carousing should have stopped by 2006, when hundreds of empty houses accumulated on city blocks. But builders continued building homes and buying overpriced land.”

“Now the city is doing its penance. The consequences are unmistakable: The median price of an existing single-family home in the metro area that includes Port St. Lucie has dropped for 20 consecutive months.”

“Jaime Gomez is feeling the pain. The 28-year-old mortgage broker was laid off from a national bank last year after home-loan business dried up. The one-bedroom Port St. Lucie condo he bought for $110,000 in 2004 is worth about 25 percent less now, he estimates. And a second home he owns with his mother and sister in western Port St. Lucie sits next to an empty foreclosure.”

“‘It’s a scary feeling having a home in this neighborhood, and especially in St. Lucie County,’ Gomez said.”

“The small builder Chateau Homes first cut staffing at its Bayshore model in April. In August, it closed. ‘We just had no traffic whatsoever,’ said owner John Grobelny, who is based in Lake Worth. ‘We were paying salespeople to sit there and not get any sales.’”

“He blames the dearth of buyers on a wild run-up in prices. When he started building in Port St. Lucie in 2001, his 1,800-square-foot model was going for $145,000, including the lot. By 2006, land prices climbed so much that the same package was almost $285,000.”

“Many of his subcontractors have retreated from the city, too. ‘They’ve gone on to the Carolinas or Georgia to find work,’ he said.”

“Others are returning to the service jobs they abandoned for construction work during the boom, said Bob Stevenson, owner of a gas station and Dairy Queen in Martin County. ‘Now all these guys that were making $25 (an hour), they’re back in the restaurants and hotels making $10, $11 an hour,’ Stevenson said.”

“Joan Stotz wrote the two biggest checks of her life in 2005 and 2006. The total amount: $200,000. The recipient: Island Shore Homes. The 73-year-old widow paid upfront because the builder told her family it would help speed construction, her son Joe Gannon recalled.”

“In 2006, a year after Island Shore started her house, work stopped. Stotz is among the buyers of about 35 homes that were left incomplete homes or saddled with contractors’ debt after financial problems at Island Shore led the builder to abandon work at lots scattered around Port St. Lucie. The builder is one of several in the city who have gone belly up since the housing market started its free-fall.”

“Island Shore’s model home on Bayshore Boulevard now sits empty, the mailbox at its curb smashed to pieces. ‘I don’t know how they can get away with what they did,’ Stotz said.”

“Last year, she took out a $153,000 home-equity loan on her old home to hire a former Island Shore partner to finish work on the house. The majority of her $1,300-a-month Social Security check goes toward loan payments, which run more than $900 a month. She hadn’t been expecting any payments on the house.”

“She avoids trips to the store, eating whatever she can from her pantry to save money. ‘I don’t know how I’m going to do it, really,’ she said. ‘It’s as scary as can be.’”

“Hers isn’t the only Island Shore home in the family. Her two sons, Gannon and Robert Stotz, also signed a contract in 2005. Together, they paid more than $300,000 for a five-bedroom model, plus the lot it would be built on, according to their records.”

“Unlike their mother’s, their home was largely completed - but they say they took out a $58,000 home-equity loan to pay off liens Island Shore owed on the home. ‘We’re really hurting. We’re borrowing money that we don’t have anymore,’ said Gannon, who is unemployed and looking for work.”

“Assistant State Attorney Lev Evans said more housing-related conflicts are showing up in his office. ‘With the downturn in the economy, we’re seeing a lot of these types of … complaints against contractors, developers, Realtors, escrow companies, everything concerned with the real estate industry,’ Evans said.”

“The bus tours that have motored across foreclosure-littered neighborhoods of California, Nevada and other slumping states are pulling into the Treasure Coast and Palm Beach County.”

“‘We have been working a lot with foreclosure buyers, and we’re finding folks have similar desires: They all want to deal,’ said broker Andrea DiRico. A seat on her bus runs $20, with a box lunch. The firm hopes to offer tours every other week, branching out into neighboring areas including Martin County.”

“‘It’s a really unfortunate reality … but it also provides a tremendous opportunity,’ DiRico said.”

“If there’s an upside to this city’s real estate downturn, Tim and Fran Metzger have found it. In December the couple signed a contract to buy the 4,000-square-foot house in southern Port St. Lucie. The price: $314,000, about $100,000 less than what it would have gone for during the peak of the city’s boom.”

“‘I knew I had the upper hand, with the way the market was going down here,’ Tim said. ‘I didn’t realize I had such an upper hand.’”

“He and Fran bought their house from Melbourne-based Mercedes Homes, a builder that’s slashing prices on its inventory of unsold homes to get property off its books and cash onto its balance sheets. ‘Any business in a down market, the theory is cash is king. Pull all the cash back in you can,’ said Rob Smithwick, Treasure Coast division president for Mercedes Homes.”

“Port St. Lucie as a whole also is positioning for survival. Sixty percent to 70 percent of the builders working in Port St. Lucie during the housing boom have gone, estimated Don Santos, spokesman for the Treasure Coast Builders Association.”

“The construction industry — once the city’s bread and butter — is not flush enough now to sustain restaurants, car dealerships and other service businesses.”

The Ledger Enquirer from Georgia. “Fewer homes were sold in the Columbus and Phenix City housing markets in 2007, and it took longer to find buyers for those dwellings that did sell.”

“National media coverage has had an impact, said Sandi Green, president of the Greater Columbus Board of Realtors. It has generated fear, prompting many prospective homebuyers to sit tight.”

“‘We are not really losing value in our market here,’ Green said. ‘There’s such an abundance of inventory just because people got frightened of the national news, and Columbus is not affected by the national market. We did appreciate at a more normal rate.’”

“It definitely is a buyer’s market, said Rodney Niles, president of the Phenix City Board of Realtors. But that’s not necessarily a bad thing, he said. Niles believes the real estate sector is actually returning to normal and will require agents to work harder and smarter aslike they once did.”

“‘In essence, it’s going back to the way that it should be, meaning it’s no longer put a sign in the yard, get an offer and sell the home,’ he said. ‘Real estate people are having to market their product and that’s what we’re supposed to be doing.’”

“Columbus real estate agent Guerry Clegg has experienced the highs and lows of the last five years. Prior to the national housing downturn, he recalls how easy it was to make a commission off a home sale.”

“‘I had buyers paying more than I was comfortable with them paying, but I knew if they didn’t pay it, they wouldn’t get the house,’ said Clegg. ‘What do you do? Because if they want the house bad enough, I can’t show you any data that says it’s worth it. But the fact that you’re going to have four or five people lined up to buy it says that it is worth it.’”

The Post & Courier from South Carolina. “Rising foreclosures across the country have put government-run auctions of distressed properties in the spotlight, drawing new faces to the sales held at the Charleston County courthouse twice a month.”

“But the twist is, few people attending these events are actually pulling out their checkbooks. The properties cycling through the foreclosure process lately are now viewed as overvalued, given the impact that the slowing real estate market has had on prices.”

“A condominium in the Seaside Farms development in Mount Pleasant came up for auction Jan. 8. Court documents show that the borrower owed at least $264,541.87, but the lender lowered its opening offer to $209,000.”

“A clerk called off the dollar amount and paused, waiting for bids. The investors wouldn’t bite. Many knew that comparable condos at the Seaside Farms complex sold last year at a median price of $220,000, leaving little opportunity for them to squeeze a profit out of the distressed unit.”

“The clerk looked up, scanning the group of people to see if there was any interest. The crowd was silent. She looked back down, called off the bidding price twice more and, with no takers, the property went back to the lender.”

From Statesville.com in North Carolina. “Christie Case fell in love with the two-story house on Bell Farm Road the moment she laid eyes on it. She saw potential in the unfinished modular home and it seemed like it was the perfect solution since the house she and her boyfriend, Brandon Stephens, rented went into foreclosure, forcing the couple to find a new home.”

“Now, the couple is struggling to make their monthly $1,755 mortgage payments and avoid foreclosure themselves.”

“‘A $1,000 payment would be great,’ Case said. ‘We got to fix something. If we keep going at this rate, we are going to be able to buy two of these houses.’”

“Stephens and Case admitted they had less than ideal credit when they decided to buy the house. Stephens wasn’t required to produce any documentation when he received a mortgage for more than $166,000 with a 12-percent interest rate through the seller, J.M. Workman and Co. in Davidson.”

“J.M Workman picked up the $10,000 in closing costs and supplemented the couple’s first six months of mortgage payments.”

“J.M Workman salesman Jon Dixon, who helped the couple secure the loan, said Stephens’ loan did not require any documentation, such as proof of income. J.M. Workman only helped to secure two of these loans to Dixon’s knowledge. ‘They were eliminated because of the number of foreclosures,’ he explained.”

“Lenders and investors haven’t left the arena unscathed either. As a result of the foreclosures, many lenders have gone out of business. ‘I had 20 lenders available to me at one point,’ said Danny Turner, owner of Turner Mortgage Brokerage Inc. ‘I notice half of those have gone by the wayside.’”

“Stan Suther, a broker with Century 21 Hecht Realty, said lenders are partially to blame for the nation’s mortgage crisis. ‘The fundamental problem it appears to me was the lenders were willing to back people who were not as credit worthy as they needed to be,’ he said.”

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