February 29, 2008

Call It Variety, Or A Glut, Either Way Sellers Have An Issue

It’s Friday desk clearing time for this blogger. “A Dallas Morning News analysis of residential foreclosures shows the housing mess extends across North Texas – from high-end urban settings to far-flung suburbs. On the plus side for buyers, foreclosures have cut into housing prices. ‘There’s a lot of deals out here,’ said Valerie Daniels, who said she paid $171,000 14 months ago for her home on Ginger Trail. The 4,000-square-foot foreclosure was appraised then at $250,000.”

“Ms. Daniels, a mortgage banker in DeSoto, said lenders are offering reclaimed houses in her neighborhood for 25 percent to 50 percent below appraised value.”

“Tiffany McAdoo thought she saw a deal, paying $189,000 for a foreclosure on Gardenia Street, a five-bedroom, 3,800-square-foot house appraised at $265,000. But a foreclosure across the street, at just over half the size of her home, is listed at $139,000.”

“‘I’m constantly getting low-ball offers,’ said Ms. McAdoo, a mortgage broker now working at home. ‘I’m basically stuck until the market changes.’”

“Vicki Steele lost the home she hoped to live in with her two children. Ms. Steele said she decided to become a homeowner when she got a job and was no longer eligible for federally subsidized housing. She said she fell behind the payments when the interest rate went up from 8.8 percent to 11.5 percent, pushing her monthly payment from $853 to $1,300.”

“‘They think there’s a sucker born every minute and I looked like a sucker,’ she said of her lender. ‘I tried something for the benefit of my family but it didn’t work.’”

“Joe Osgood is preparing to move his family of five from their home, which is set to be sold on the Hinds County Courthouse steps in two weeks. This was Osgood’s first attempt at home ownership. He got an adjustable rate mortgage 5 1/2 years ago with a monthly note of $496.”

“Osgood said he knew the rate would adjust, but he never thought it would double. ‘You know they aren’t going to tell you that, because then you aren’t going to buy,’ he said.”

“A home-price index released Tuesday shows that Denver home values declined 4.5 percent between December 2006 and December 2007, the worst drop since a 5 percent annual decline in December 1988.”

“Filomena Carrillo lives in a neighborhood that has been hit hard. She bought her Aurora home in the fall of 2004 for $197,000. Today, she estimates she would be lucky to get three-quarters of that amount.”

“‘I’ve tried to refinance for a year now,’ Carrillo said. ‘I have big problems because they told me foreclosures nearby are selling for $150,000 to $136,000.’”

“The Springfield housing market has a wide variety of homes for sale, in all shapes, sizes and price ranges. The problem is that few of them are moving.” ”

“‘This is almost every day; people are slashing prices like you wouldn’t believe,’ said Richard Jones of Carol Jones, Realtors. ‘I have not seen the price reductions outnumber the new listings, thank God, but I’m waiting for that day.’”

“Among the properties being listed at below market value is the 13,000-square-foot home at 3769 E. Eaglescliffe Drive. Listing agent Indy Wallace said the home’s $1.9 million list price is well below the $3 million it cost to build the home for original owners.”

“Call it variety of selection. Or a glut. Either way, Triangle home builders and sellers have an issue: Homes are selling more slowly, and that has caused a buildup of inventory.”

“‘It’s more of a buyer’s market than a seller’s market right now,’ said Jill Flink, a broker in Raleigh. ‘The sellers have had a little bit of a slow time, and they’re much more interested in selling than they were before.’”

“So can you lowball ‘em? Sellers want to sell, Flink said, ‘not take a blood bath.’”

“Fannie Mae, the biggest source of financing for U.S. home loans, told lenders it will probably ban their use of appraisals by in-house employees or those arranged by brokers.”

“About three quarters of residential mortgage appraisals are arranged through brokers who only get paid if a loan closes, said said Jonathan Miller, CEO of Manhattan-based appraisal company Miller Samuel Inc. He called the practice ‘laughable’ because it creates a financial incentive for mortgage brokers to push appraisers toward higher valuations.”

“American International Group Inc., the world’s largest insurer, fell in New York trading after reporting the biggest quarterly loss in its 89-year history. The pretax writedown of $11.1 billion wiped out operating profit. AIG also had another $3.27 billion of losses before taxes on impaired holdings in its investment portfolio.”

“AIG guaranteed $61.4 billion in collateralized debt obligations that included subprime mortgages as of year-end.”

“Business terms have a long history of making a mark on the vernacular. Thus, it was probably inevitable that the word ’subprime’ would make a splash. Now, subprime is repeated many times daily, often with a sense of dread for fear the contagion will spread.”

“As a word, it’s become something of a celebrity. In fact, the American Dialect Society last month picked subprime as its ‘Word of the Year,’ underscoring just how far the once obscure real-estate term had barged into the mainstream. Some students, it seems, now describe about poor performance by saying they ’subprimed a test.’”

“‘When you have investment companies losing billions of dollars over something like bundled subprime loans, then you have to consider whether it’s important,’ said Wayne Glowka, dean of arts and humanities at Georgia’s Reinhardt College. ‘You probably also want to pay off that third mortgage.’”

“Foreclosures are on the rise in Douglas County and the rest of Oregon. Two years ago, Christina, 26, and her husband purchased a $192,000 home in west Roseburg with two subprime loans, set up as interest-only payments for the first 10 years. Based on their income, they did not qualify for a single mortgage and allowed their broker to ’state’ their income — inflate it on the loan applications.”

“‘I just really wanted the house,’ Christina said.”

“A few days ago, I heard a talk show host discussing the recent deluge of single-family home foreclosures. He seemed to agree with everyone else that the mortgage crisis was caused by financial institutions that gave out too many mortgages to too many unqualified applicants.”

“The talk show host went further than the rest of the pundits, though. He insisted that none of the blame should fall on those who had borrowed money to buy houses, which they could not afford and were about to lose. It was not their fault that they were drowning in debt. It was the fault of the evil moneylenders.”

“Then he abruptly changed subjects and said something that took my breath away. All banks, he demanded, should be banned from issuing credit cards. Why? Because credit allows us to buy things that we cannot afford, and people should not be subjected to temptation.”

“Good grief, I thought. Life without … temptation.”

“One thing pops into my head. I was young and had just moved from the Midwest to New York for my first full time job. To get to work, I had to walk past a bakery with prettily arranged pastries, pies, and cakes in the display window. The smells! My mouth watered. My taste buds threw up little white flags. I surrendered.”

“That I succumbed to it did not hurt people starving in Ethiopia. It did not topple empires. It would not, however, have felt good to a man suffering from diabetes. For him, surrendering to the enticement of a peanut butter cookie could trigger heart disease, blindness, kidney damage, stomach problems, and heavens knows what else.”

“If he had eaten one cookie, or three cookies, or ten cookies, according to the blame-game philosophy of the talk show host, it would not have been the diabetic’s fault that he landed up in a hospital … or dead. No indeed. It would have been the fault of the bakery. The bakery, you see, had provided temptation.”

“Similarly, department store windows should be covered with heavy draperies so that young secretaries won’t be tempted to buy pretty clothes; motorcycle shops should be forbidden from displaying Road Kings lest they attract the eyes of mid-life-crisis prone males; and brides should be prohibited from reading magazines advertising weddings gowns that they might, or might not, be able to afford.”

“We scrimp. We save. We work three jobs. We count our pennies. We add them up and wait until we can afford to buy it, whatever ‘it’ is. Or, at least, that is what some of us do.”

“Others buy what they want when they want it, whether they can afford to or not. And when they lose it, they blame the bank. They blame the credit card company. They blame fate. They blame temptation.”

“Silly, isn’t it? When we have the choice to be responsible or not …To blame the peanut butter cookie.”




Here Comes The Bad News – Or Good, If You’re A Buyer

The Wall Street Journal reports from California. “As home prices plummet, growing numbers of borrowers are winding up owing more on their homes than the homes are worth, raising concerns that a new group of homeowners, those who can afford to pay their mortgages but have decided not to, are starting to walk away from their homes.”

“Sgt. First Class Nicklaus Skaggs bought his home in April 2005 shortly after returning to California from a one-year tour of duty in Baghdad. The $455,000 three-bedroom home he and his wife purchased in Vacaville, about one hour northeast of San Francisco, is worth an estimated $285,000 today, well below the $453,000 he owes on his mortgage.”

“The monthly mortgage payment, which jumped after its interest rate increased, is now $4,000, up from $2,980 when he bought the house.”

“He can’t sell his home, since there are few buyers, and he can’t refinance because lenders require a large down payment he doesn’t have. Now, the 18-year Army veteran has decided to walk away from his mortgage. He hopes in a few years lenders see his decision as a unique situation created by the housing meltdown.”

“‘I don’t think that house is going to recover in value any time soon,’ said the 40-year-old. ‘I’d just be throwing the money away.’”

“‘It may not be a big thing yet, and hopefully it won’t be,’ says David Berson, chief economist for mortgage insurer PMI Mortgage Group Inc. But if it turns out to be a significant trend, he says, it means that ‘delinquencies and defaults could be higher than the industry is estimating.’”

The New York Times. “Raymond Zulueta went into default on his mortgage last year. In a declining housing market, he owed more than the house was worth, and his mortgage payments, even on an interest-only loan, had shot up to $2,600, more than he could afford.”

“Carrie Newhouse, a real estate agent who also works as a loss mitigation consultant for mortgage lenders, said she saw many homeowners who looked at foreclosure as a first option, preferable to dealing with their lender. ‘I’ve had people say to me, ‘My house isn’t worth what I owe, why should I continue to make payments on it?’ Mrs. Newhouse said.”

“‘You bought an adjustable rate mortgage and you’re mad the bank is adjusting the rate,’ she said. ‘And sometimes the bank people who call these consumers aren’t really nice.’”

“‘I think I could make a case that some borrowers were ‘renting’ (with risk), rather than owning,’ Nicolas P. Retsinas, director of the Joint Center for Housing Studies at Harvard University, said in an e-mail message.”

“‘There certainly appears to be more willingness on the part of borrowers to walk away from mortgages,’ said John Mechem, spokesman for the Mortgage Bankers Association, who noted that in the past, many would try to save their homes.”

“For Raymond Zulueta, the decision to go into foreclosure brought him peace of mind. Mr. Zulueta said he felt he had let down the lender, himself, and his family.”

“‘But you got to move on,’ he said. ‘I know in a few years my credit’s going to be fine. If I want to get another house, it’s going to be there. I’m not the only one who went through this. I know I’m working the system, but you got to do what you got to do. There’s always loopholes.’”

The Mercury News. “Doug Meek, a middle school teacher who lives in Walnut Creek, is looking for a home for his 62-year-old mother. Meek said that he was a critic of the housing boom and was sure the market would eventually subside, something he told his family prior to 2004.”

“‘My wife and I just kept saving money and waited for this thing to really get crushed,’ he said. ‘I kept feeling pressure. I had three kids in one room. I had no idea the market would go down this much.’”

“He and his wife bought in January 2007, when the market was just starting to slow, saying he didn’t time the market correctly, but he hopes his mother and his brother, who was also looking to buy, will.”

“He found a town home in Concord and made an offer of about $200,000 but hasn’t heard from the owner yet. Meek feels a little vindicated though. A few years ago, the ’same little condo’ was twice the price, he said.”

“People are only concerned about the right time to buy when values may go down, said Stephen Levy, director of the Palo Alto-based Center for the Continuing Study of the California Economy. ‘Previously, there was no timing the market because the price was always going to be higher,’ he said.”

“Levy said that prices are still outstripping wages, a sign of an overvalued market, and to expect additional correction for at least another year. But Levy said that buyers attempting to time the bottom of the market may be disappointed.”

“‘If people had timed the market a year ago, they would have blown that,’ he said.”

“Roger Stone had spent three months shopping for a home before signing a contract in February for a $465,400, 3,500-square-foot home in Tanglewood at Live Oak Ranch in Oakley.”

“‘In that three-month period, it continued to change, change, change,’ the 46-year-old landscaper and tree-cutter said. ‘I was actually in contract with another builder to buy another house, but by December the price had changed so much. They were not willing to renegotiate, so I canceled it and walked away.’”

“Christopher Thornberg, an economist and founder of Beacon Economics, said that timing the housing market is easier than the stock market. ‘These are markets that are very long; it’s not like stocks, where the price goes up or down erratically,’ he said. ‘Home prices don’t magically rise and fall. When prices haven’t gone down for six months, then you’re good to go.’”

“Thornberg said that in the short-term, the housing market will be going down, with factors such as inflation and recession only lengthening the process.”

“‘If you have the attitude that this is your dream house, and you’re willing to take the loss in order to secure this house that you may never have a chance at again, then by all means, buy it,’ he said. ‘But if you’re not that picky, then wait.’”

From Bloomberg. “When Quinn Cuthbertson looks around his new neighborhood in El Dorado Hills, California, he sees rows of empty homes and barren hillsides. A promised new school and a clubhouse haven’t materialized.”

“Cuthbertson paid $460,000 for a four-bedroom house in this northern California town. He now suspects his neighbor spent $45,000 less. Nearby, 87 of 98 Toll Brothers Inc. home sites are undeveloped.”

“Most of the community’s growth came in the late 1990s when the El Dorado County Board of Supervisors gave approval for construction of 11,598 homes as part of five development agreements, said Laura Gill, the county’s chief administrative officer.”

“Cuthbertson, who has two sons ages 4 and 6, plans to stay in the area, and says he can afford to wait for prices to recover. ‘We’ll wait to see what the neighborhood will be like,’ Cuthbertson said. ‘We know prices might be going down, but in five years we’ll be OK.’”

“Homebuilders can’t wait. They’re cutting prices even further than last year and some are courting real estate brokers and using auctions to get rid of homes. Pacific West Cos. said this month that it’s offering a ‘risk free’ price guarantee to buyers in its California communities, including El Dorado Hills. If a similar property in the same development sells for less than a homeowner paid, the company will refund the difference.”

“Brent Sease, who bought a five-bedroom home built by Miami- based Lennar in El Dorado Hills, said a park and school that were supposed to be constructed are at least two years from being completed. Across the street, red tags that say ‘Available’ are pasted on two houses.”

“‘That’s the thing I’m concerned about,’ said Sease, a software manager with three daughters. ‘It’s going to be a while before they put all that in, because they’re not selling homes.’”

The Sacramento Bee. “Reaction came fast, furious and from all directions after three bus tours roamed the area last Saturday touring foreclosed homes. So did offers to buy.”

“Some real estate agents cringed and wrote that touring these unfortunate properties reflects badly on their profession. Others in the business said the tours provided the media another chance to show the housing market in a negative light.”

“Most, however, could not have cared less about such perceptions. They called and sent e-mails to Home Front wondering how to get on the next bus.”

“As for negative perceptions of running buses up to properties where people lost their way financially, the agents have an answer to that.”

“One tour organizer, Bruce Durham of Keller Williams Realty in Elk Grove, said on Saturday that the agents aren’t the ones who moved the people out of their homes. Agents, he said, are marketing homes as they always do. This time the owners happen to be banks.”

“Meanwhile, there’s the Central Valley of California. Yes, here comes the bad news – or good, if you’re a buyer.”

“Twenty U.S. metro areas lead the nation’s downward race in home prices and seven have Highway 99 in common, says the Office of Federal Housing Enterprise Oversight. The nation’s top three metros for the severity of falling values in the fourth quarter of 2007: Merced, Modesto and Stockton.”

“All showed year-over-year sales price declines of 15 percent to 19 percent. Prices slipped 11 percent during the year in Sacramento and 10 percent in Yuba City. Fresno and Bakersfield were down 8 percent.”

The Press Democrat. “The restored Chauvet Hotel is returning to its roots as a destination for Wine Country travelers. Unable to sell the luxury condominiums it built within the century-old Glen Ellen landmark, an investment group has turned the condos into rentals for well-heeled vacationers.”

“The housing market’s sharp downturn left investors with little choice, said Christine Hansson, a managing partner for the ownership group. ‘This is a total fallback to keep the project out of foreclosure. They are going to be used as vacation rentals until the market improves and we can sell them,’ she said.”

“There was little demand for condominiums priced from $1.15 million to $1.37 million, even at nearly 2,000-square-feet each with three bedrooms, well-appointed kitchens and bathrooms, and a heated pool out back.”

“Prices were cut several times, reaching the $850,000 to $995,000 range. The owners called off an auction last year after few prospective bidders turned up. ‘The auction didn’t work; nothing worked,’ Hansson said. ‘We’re holding it until we can get to a better market.’”

“The five available condominiums have been taken off the market. Hansson and her husband own the sixth unit.”

“Larry Paul, a San Francisco architect and original managing partner with Hansson, and a handful of other investors no longer have an ownership interest, Paul and Hansson said.”

“‘I ran out of time and money. We couldn’t hang on for the next two or three years,’ Paul said. ‘Everybody, I think, will be losing money.’”

“Yet, Paul remains optimistic the vacation rental plan should work and the condominiums will someday sell. ‘I think we had a great project and they were worth what we were asking,’ he said. ‘We were a victim of bad timing and a bad market.’”




It’s Not The Craziness It Was A Couple Of Years Ago

The Press of Atlantic City reports from New Jersey. “House prices fell about 1 percent in the Atlantic City metropolitan area in the fourth quarter of 2007, a federal survey said Tuesday, the area’s first decline since the recession of the 1990s. Franklin Williams, president of the Ocean City Board of Realtors, said he and others in the industry there hadn’t seen significant price weakening.”

“‘Actually, it’s looking like the first quarter of this year is going to be above the last,’ said Williams, who is a broker in Ocean City.”

“A real estate professional who works in Philadelphia and has a house in Margate said the new figures are just starting to reflect significant price drops in the market. Marc Wiser, VP of Legend Properties, was shocked by Realtor figures earlier this month suggesting prices in Atlantic County were still going up.”

“‘It makes no sense, when every single property that is within blocks of my Margate house has been lowered due to a lack of activity,’ Wiser said then.”

“The housing price decline reported in the federal survey makes more sense, but it too has further to go, he said.”

“‘The house next door to mine was listed at $799,000. It’s now $535,000. Around the corner a home was listed for $649,000. It’s now $449,000. Both have been on the market well over two years, and I can go on and on,’ Wiser said.”

The Village Voice from New York. “This is what the subprime meltdown looks like: block after block of brick one and two family homes in this working class neighborhood in the northeast Bronx are for sale, in foreclosure proceedings or simply abandoned.”

“There are six homes in foreclosure or headed there on one short block of East 217th Street, just off the commercial district of White Plains Road. And Nancy Lewis on the corner of the next block is getting notices from Washington Mutual, who sold she and her handyman husband a $400,000 mortgage in 2006.”

“‘A lot of people got scammed,’ she said. ‘People got riped off. Mhmm. And I’m one of them,’ she said, shaking her head.”

“In 2006 Williamsbridge had one of the highest rates of homeownership in the Bronx, 31 percent, nearly matching the citywide average, according to data analyzed by NYU’s Furman Center for Real Estate and Public Policy.”

“With a median household income of $31,000, many people in Williamsbridge couldn’t afford to pay their mortgages to begin with.”

“‘A lot of people are complaining about it, how they are losing their houses,’ said Richard Duodu, owner of the African Market. ‘Most of my customers, they own their own houses and another one. If it’s affected the house owners, it’s affected the businesses too. People come in and they are counting their dollars, how much can they spend?’”

The Daily Gazette from New York. “The slump that dogged the Capital Region’s housing market throughout last year has followed it into 2008, leading to a 20 percent drop in sales in January, according to statistics released Monday by the Greater Capital Association of Realtors.”

“The downturn was most pronounced in Albany County, where sales plunged 36 percent. January’s results marked the softest sales activity GCAR has posted for the month in over five years.”

“Some Realtors blamed the slowing rise of home values on the mounting negative financial news that has emboldened potential buyers. Patrick DeVaney, with the McCurdy Real Estate Group in Latham, said he has seen an increase in ‘goofy, low-ball’ offers that are $20,000 to $40,000 below a home’s listed price.”

“‘The trick is now getting the buyers and sellers to agree on a price,’ DeVaney said.”

“Given that 2007 ended on an especially slow note, that sluggishness might also be reflected in GCAR’s February sales results, said GCAR President Marie Bettini. ‘This market is a good market. It’s not the craziness that it was a couple of years ago,’ said Bettini.”

The Connecticut Post. “Jobs. Get those back and the housing market will take care of itself. That’s what Phyllis Esposito-Doyen, a 25-year veteran real estate professional, said Wednesday after the U.S. Department of Commerce published a disheartening report on the fortunes in the real estate market.”

“Esposito-Doyen, a Trumbull ReMax agent, said the market here has gone through a readjustment and appears to be returning to sanity. ‘It’s a bumpy market,’ she said, but that should have been expected after the outrageous run-up in prices that occurred here.”

“Like mold enveloping a house, the foreclosure crisis is spreading out beyond the state’s urban centers, such as Bridgeport, and starting to eat away at the fabric of suburban communities. January foreclosures in Connecticut continued to rise, according to RealtyTrac, propelling the state into the top 10 nationally based on rate of filings.”

“Connecticut, at number eight, helped round out RealtyTrac’s top 10 list, which now includes some of what, until recently, were the hottest real estate markets of the last decade — Nevada, California, Florida, Arizona and Colorado. There were 3,697 foreclosure actions taken in Connecticut in January.”

“This is not the first time Connecticut has been in the top 10. In April 2007, Connecticut had the third-highest foreclosure rate in the nation and it remained in the top 10 in May and June before falling off the top of the list in July.”

“The difference between Tuesday’s RealtyTrac report and those from 2007 is where the foreclosures took place. In 2007, the foreclosures were happening in Bridgeport, New Haven and Hartford. Now, those white-and-black auction signs are popping up more frequently in suburbs like Fairfield and Milford as well as Stamford.”

“Tuesday, there were 2,100 families in those same communities who had entered preforeclosure. The bulk of the distressed families in these 14 communities remain in Bridgeport, which accounts for about 40 percent of the homes in preforeclosure, but the numbers in other communities have doubled and tripled in just two months.”

“In reaction to the Democratic proposal, Gov. M. Jodi Rell told reporters that funding restrictions within the Connecticut Housing Financial Authority, such as federal guidelines, could limit the extent it is able to assist homeowners.”

“Speaking to reporters in her Capitol office, Rell said lawmakers should craft a bill that would protect the state if homeowners can’t meet the terms of mortgage support.”

“‘Is it going to be credit worthy for us to be able to loan money out?’ Rell said. ‘You want to protect those investments so that you’re not losing funds and you’re at least administering it in such a way that the people who qualify will, in fact, pay off that loan.’”

“The new proposals follow in the wake of a slew of programs unveiled by private lenders and state and local governments during the last year. But groups like the Association of Communities for Reform Now told the Connecticut Post in previous interviews this does nothing but delay the date people get thrown out into the street.”

“And Tuesday, the head of RealtyTrac wondered the same thing. ‘The big question is whether those efforts are truly helping owners avoid foreclosure in the long term or if they are just temporarily forestalling the inevitable for many beleaguered borrowers,’ RealtyTrac CEO James Saccacio said.”

The Gloucester Daily Times from Massachusetts. “Numbers released last week by The Warren Group sounded an alarm: with 800 foreclosures statewide last month, Massachusetts had hit its highest numbers since August of last year.”

“Essex County saw a 268 percent increase in foreclosures over last year, with a total of 1,038 homes seized.”

“‘Everybody was seeing home prices go up so fast, it was very tempting to participate and join in the real estate market,’ CEO Tim Warren said.”

“‘What I find astounding is that 30,000 homes entered into the foreclosure process last year (statewide),’ Warren said. ‘That’s 30,000 desperate households that have to do something, 30,000 distressed properties. Only 50,000 homes were sold across the state.’”

“Warren said experts differ on whether the real estate market has ever seen a crisis of this magnitude, but that some believe foreclosure rates were higher during the last major real estate downturn in the mid-1990s.”

“‘In that case, the real estate market turned down for five straight years and then took five years to turn back,’ Warren said. ‘I’d certainly hope we aren’t in that type of cycle again.’”

The Salem News. “The number of foreclosures on the North Shore more than tripled last year, according to figures from the Southern Essex Registry of Deeds. ‘There has been a large increase of (abandoned) properties,’ Peabody Building Inspector Kevin Goggin said. He cited a number of reasons, including foreclosures.”

“‘We’re seeing a few more empty houses, which is highly unusual,’ Tom St. Pierre, Salem’s building inspector, said. ‘When you see an empty house, (usually) there’s a For Sale sign up on it. Now, we’re seeing empty houses with nothing up.’”

“The foreclosure problem has become so serious that last week the Southern Essex Registry of Deeds launched a program to help North Shore residents find out who owns empty buildings in their neighborhoods.”

“‘We got a couple of phone calls from people who were looking to find out who the bank was that owned a piece of property,’ Register John O’Brien said. ‘It happened to me in my own neighborhood. A couple of my neighbors wanted to know about a foreclosed (house) that was just sitting vacant … and not shoveled. That got me thinking — this must be happening everywhere.’”

The Boston Globe from Massachusetts. “Are high prices a sign of Boston’s success, or a damper on that success?”

“An opinion piece in the latest issue of Banker & Tradesman that argued Massachusetts needs more home construction — even now, when the market appears glutted — because housing prices are too high and only a lot more homes can change the situation.”

“The writer is Benjamin Fierro of the Home Builders Association of Massachusetts, which has a professional interest in the debate.”

“The basic argument is certainly correct. The current drop in housing prices is extremely modest compared to the climb that preceded it. The middle of the Massachusetts market is still roughly twice as expensive as it was a decade ago. And while prices are likely to keep dropping in the coming months, almost no one thinks we’re on our way back to 1997 prices, even adjusting for inflation.”

“But a recent research note from the Boston Fed says: ‘While young professionals do spend a greater share of their income on housing in New England, they tend to earn enough to purchase a home in the region…’”

“Are Boston’s housing prices sending young professionals to other cities? A recent editorial in the Salem News tells the story of Maureen Hentz, a recruiter for a company based in Danvers, who says that job candidates routinely reject her offers of six-figure salaries because they’d rather buy a larger house in another state.”

“‘I can’t get somebody to move from Cleveland to here,’ the paper quotes Hentz as saying.”

“The mayor of Salem is quoted as responding, ‘I’ve been to Cleveland, and you can’t touch what we have here.’”




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Bits Bucket And Craigslist Finds For February 29, 2008

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