The Housing Bubble

The Sacramento Bee reports from California. “Owing more on properties than they’re worth, some local homeowners are voluntarily walking away from their house notes. ‘They don’t need to be foreclosed on. They’re just turning in the keys,’said Martha Lucey, president and CEO of (a) Fresno-based nonprofit credit counselors. ‘The problem we’re seeing is that (these residents’) equity position is compromised. They’re upside-down.’”

“‘We hadn’t had any foreclosures until 2007. Now, we’ve had a couple walkaways and others insinuating that they would,’ said Paul Rigdon, VP of lending at North Highlands-based SAFE Credit Union.”

“In Sacramento, certified loss mitigator Linda Caoili counsels struggling homeowners facing foreclosure and offers seminars at local bookstores with titles such as ‘Foreclosure is Not a Dirty Word’ and ‘Foreclosure is Not the End of the World.’”

“‘They rode the equity bubble, and now there’s anxiety, denial, frustration, guilt. It’s the other f-word, but I tell them it’s just a business transaction,’ Caoili said. ‘I help people to say ‘foreclosure’ out loud.’”

The Auburn Journal. “A super-stretch limousine tour of bank-foreclosed properties in Placer and Sacramento counties is attempting to help smooth out what has been a bumpy real-estate market ride in recent months.”

“‘It’s about taking a different approach in a different market,’ said Auburn Gold Rush Group’s Sidne Allinger. ‘We try to make it light, fun and festive. If you focus on the gloom and doom, you’re going to find it becomes more prevalent.’”

“The tour has plenty of properties to pick from in Placer County. The county had 293 active bank-foreclosure listings on Wednesday, according to MLS figures. Since Sept. 1, 440 foreclosed properties have been sold.”

“As for taking the limo idea one step further and hiring a Greyhound-sized bus, Allinger said that’s not the Gold Rush Group style. ‘It reminds me of getting on the bus and going to Reno,’ she said.”

Inside Bay Area. “A mixed-use development, key to Livermore’s downtown vision, has hit a snag with the downturn of the housing market. Plans for Livermore Village, at the abandoned Lucky Supermarket lot on Railroad Avenue, include 280 residential units, commercial space and artist facilities.”

“It was approved in October 2006, but the site has remained vacant since then except for a few small shops on the west end. For a while, before they were turned away, the site was recently used by homeless people as a relatively hidden encampment.”

“‘Originally, the plan was to build a lot of condo units and a small amount of retail in the first phase,’ said Jim Anderson of developer Anderson Pacific. ‘Given the current market, that’s a very tough mix to proceed with rapidly.’”

“He said that by increasing the retail component in early stages, the plan would be ‘much more viable.’”

“He said that he is optimistic about the project in general, although the housing downturn was unexpected. ‘I don’t think anyone had the foresight to see the magnitude of the shift in the market,’ Anderson said. ‘It’s real dramatic. It’s not that there haven’t been tough markets before, but the rapid shift was unprecedented.’”

“Prices inevitably have come down with the market. ‘Initially, they were going to be (priced) in the mid-$600,000s,’ said Dennis Serrao, a broker for Tofino Row. ‘Now they’re in the mid-$500,000s.’”

“Diane Klein-Gwynne of Signature Properties said the Station Square homes took a similar hit. Prices for low-end units came down about $100,000, while the top of the line homes fell nearly $175,000. Prices currently range from $436,000 to $496,000.”

The Press Telegram. “Sing along if you like: The repo bus, the repo bus, all aboard the repo bus, it chugs along like this song - all aboard the repo bus.”

“Perhaps a jingle is a bit out of line for such a dour subject, but there’s no getting around the fact that one person’s loss is often another’s gain.”

“Foreclosures continue to climb, and that’s one reason why Cerritos-based Prudential California Realty and Bellflower-based Bristol Home Loans have kicked off their weekly Bank Repo Bus Tour on Saturdays.”

“Last Saturday the bus made stops at about a dozen homes with as many potential buyers. Stops were made at homes in Bellflower, Norwalk, Downey and Lakewood.”

“‘There’s a tremendous amount of inventory of repossessed homes,” said Tim Rush, VP of business development and recruitment for Prudential. ‘In our neighborhood, it’s safe to say there are a couple thousand foreclosures.’”

“‘Some of these homes, the prices have rolled back to what they were two or three years ago,’ Rush said.”

“All the homes on the tour are foreclosed homes being sold by the bank. Similar repo tours occurred in the early 1980s and the mid 1990s, Rush noted, adding, ‘the tide goes out and the tide goes in.’”

“‘Someone looking for a home that was selling for $600,000 a year ago that’s now $100,000 is going to continue to be renting, because that’s unrealistic,’ Rush said. ‘But that $600,000 house might be $475,000.’”

“‘How long are you going to wait and continue to make somebody else’s mortgage payment if you’re a renter?’ Rush asked. ‘We never know where the ceiling is; we never know where the floor is. People will look back on this market of 2008 and say, `I wish I’d have bought more real estate.’”

The Daily Bulletin. “It’s a market the likes of which few have seen. Desert homes perched atop beanstalk-like growth in value a year ago now entice cautious buyers with minimum bids in the sub-$100,000 range. Twenty-, 30- and 40-percent drops from peak prices have working-class renters searching for their first home, and savvy, deep-pocketed investors trying to expand their real estate empires.”

“Recent months have seen a handful of mega-auctions in San Bernardino and Riverside counties, where millions of dollars worth of homes have been taken off the hands of lenders and builders who found themselves suddenly saddled with devalued properties as the boom went bust.”

“The next auction is Saturday in Palm Springs. Another is set for Sunday in Ontario, where banks are looking to draw buyers for about 120 houses spanning the county, many now listed at prices that would have been laughable just 12 months ago.”

“‘I see the industry in general doing more auctions over a longer period of time than in previous real estate cycles,’ said Rhett Winchell, president of Kennedy Wilson Auction Group. ‘This one is different, driven by the rising prices and subprime lending … it could be down for a long period of time.’”

“According to DataQuick, prices plunged 20 percent countywide from January 2007 to January 2008, with median home prices in San Bernardino County dipping below $300,000. At the same time, foreclosures have decimated the market and flooded sellers with supply, further depreciating prices.”

“‘This housing market is going to continue to decline into 2009 in some areas,’ Winchell said, conceding that ’some areas’ is a designation that includes the Inland Empire.”

“Cal State San Bernardino economics professor Tom Pierce said the auction is a vital market mechanism, but one that creates winners and losers. In past real estate downturns, San Bernardino and other cities have been hurt by single-family homes falling into the hands of investors and renters, wreaking havoc on communities.”

“‘There’s a backlog of inventory in the market, and it has to be cleared,’ Pierce said. ‘You hope it doesn’t have bad social consequences.’”

From KSBY 6. “Four years ago, Eddie Zepeda bought his dream home with no money down for his wife and three children in the San Diego suburbs.”

“When his adjustable rate mortgage increased by $700 a month, he couldn’t keep up, despite working two jobs. And with values dropping, he now owes lenders more than the house is worth.”

“Here in California where there is a glut of foreclosed properties, authorities say predators on the internet are renting out vacant homes they don’t even own, and increasingly, people are squatting houses.”

“‘We’ve had about a dozen cases of people living in the home, inside like here, or outside the home. It’s turning into a huge problem,’ said real esate agent Steve Smallson.”

“Zepeda will be moving his family to a rented apartment, where he says despite the credit hit, they will start over.”

Some housing bubble news from Wall Street and Washington. Bloomberg, “HSH Nordbank AG, Germany’s only state- owned bank that’s partially held by private investors, said profit fell last year on subprime-related losses. The company booked writedowns and provisions on debt investments of about 1.1 billion euros, including 563 million euros linked to U.S. subprime. About 202 million euros of that sum is related to North Street, U.S. mortgage investments it bought from UBS AG, Europe’s biggest bank by assets.”

“HSH Nordbank has about 2 billion euros in U.S. subprime investments and has put two off-balance-sheet investment vehicles, Poseidon and Carrera, onto its own accounts, spokesman Rune Hoffmann said today. The 2007 writedowns were based on prices in mid-February, he added.”

From Reuters. “Countrywide Financial Corp shares fell on Monday following reports it was being investigated by the Federal Bureau of Investigation for possible securities fraud.”

“The largest U.S. mortgage lender is being investigated for whether it misrepresented its financial condition and the quality of its loans in securities filings, the Wall Street Journal and the New York Times said over the weekend, citing people with knowledge of the case.”

National Mortgage News. “A ’scratch and dent’ executive told us recently that several Street firms, including Bear Stearns, Credit Suisse, Lehman Brothers and Morgan Stanley, are using the scratch-and-dent market to unload their nonperforming and subperforming loans.”

“More intelligence on investment bankers using contract underwriters Bohan and Clayton: ‘All the Wall Street firms used Clayton and Bohan…They never looked at all loans, mostly a sampling, which was never greater than 10%, more like 2% to 5%. Only CitiFinancial, when I was at Argent, reviewed more than 10% of Argent and Ameriquest’s loans, and it was usually around 50%.’ The source requested that his name not be used.”

The Atlanta Journal Constitution. “In the fall of 2005, well before the mortgage meltdown hit, Roland Arnall, the founder of California-based Ameriquest Mortgage, was trying to become an ambassador. But some in the U.S. Senate questioned whether Arnall was the right choice.”

“Attorneys general in states across the nation had accused Ameriquest of predatory mortgage lending practices that left thousands of consumers with troubled home loans. With the pressure on, Arnall’s company agreed early in 2006 to a $325 million settlement with the states. Within a few weeks, the Senate blessed Arnall’s nomination.”

“As it turns out, it did very little to ease the huge financial hit experienced by thousands of Americans still trapped in Ameriquest loans. For Georgians who qualified and agreed not to sue the mortgage company, checks that averaged $1,000 began arriving late last year.”

“In 2004 David and Kelly Andronica…went through with a refinance with Ameriquest. They thought everything was fine until Kelly put in a call to the company to find out why their property taxes had not been paid.”

“Kelly said the customer service agent asked her to verify some figures from her loan application, including an annual income for Kelly in excess of $60,000. ‘I haven’t made that much money in my entire life,’ said Kelly.”

“But the Andronicas were to find worse news. They discovered they had signed for an adjustable-rate mortgage instead of the 30-year fixed rate they say they wanted. And, the appraisal Ameriquest ordered significantly overstated the home’s value.”

“Jason Farmer, who supervised the higher appraisal, said in an interview that he stood by all the home values determined by his Blue Ridge-based company. However, he said that his company stopped doing business with Ameriquest because the lender tried to inappropriately influence appraisals.”

“‘Ameriquest was particularly bad about pressure for values,’ Farmer said. ‘A lot of times they would stipulate, ‘Well, we are looking at at least this value.’”

“Iowa Attorney General Tom Miller acknowledged that the $325 million didn’t come close to covering most consumers’ losses. ‘To fully compensate them, it probably would have taken billions,’ Miller said. ‘There was no way to get that out of the company.’”

“Miller also would have liked to have ordered massive changes in mortgages like the Andronicas’. But that wasn’t possible.”

“‘Ameriquest had sold the loans to secondary market investors, as did almost all subprime lenders at the time,’ said Iowa Assistant Attorney General Patrick Madigan. ‘As much as we would have liked to require Ameriquest to modify the loans, legally it was not an option available to us.’”

The Washington Post. “Appraisers are looking for signs that values are headed lower. Lenders need to know if a home worth $400,000 today might be on its way to a value of only $360,000. They want assurance that borrowers will have enough cash invested in the home to keep them from walking out on the debt.”

“‘There is higher scrutiny because the market is going down,’ said James Loizou, co-owner of Suburban Appraisers & Consultants in Fairfax.”

“Loan underwriters are being more demanding. They want information on comparable home sales, homes still on the market, those under contract, closed sales, foreclosures and incentives offered by home builders. They may even want info about homes that didn’t sell and were taken off the market.”

“‘Frankly, those are fair questions,’ Loizou said. ‘It just makes more work.’”

“If there are foreclosures nearby, or home builders offering deep discounts, or desperate sellers setting their asking prices 10 percent lower than the most recent closed sale, your appraised value will be lower.”

“One problem is that some neighborhoods haven’t had many sales over the past six months or so. When that happens, appraisers have to look for something similar in other neighborhoods.”

From USA Today. “Lender and loan servicer Dennis Lauria says his deepest losses are from borrowers who owe more than their homes are worth and simply mail in the keys, rather than try to work out a new payment plan.”

“‘I can’t get you to pay if you’ve got no skin in the game,’ says Lauria, senior VP of Popular Mortgage Servicing in Cherry Hill, N.J., who says 14% of his customers with subprime loans are in default.”

“Even some homeowners who can afford to pay their mortgages are defaulting, Lauria says, because their house might have lost 30% of its value, and they figure it will be a long time before it’s worth what they paid for it.”

“‘They say, ‘If I play my cards right, I can live here free for 12 months, maybe longer’ before the lender can foreclose, Lauria says. ‘Our challenge isn’t contacting the borrower. I can talk to them, but they stick their tongue out at me.’”

“Martin Goodman, president of Residential Capital in San Diego, says making contact is only one challenge. The other is persuading delinquent borrowers to tell the truth about their financial condition. He suspects at least 90% of borrowers don’t explain the real reason they are falling behind on their payments out of fear it might accelerate their foreclosure.”

“‘Everybody’s grandmother is dying. Everybody’s kid is having surgery,’ Goodman says. ‘I’d rather somebody say, ‘We mismanaged our debt. This is what we make, and this is what we can afford.’”

“As home prices fall from coast to coast, 8.8 million homeowners will have mortgage balances equal to or greater than the value of their property by the end of the month, Moody’s Economy.com. predicts. That could come as a shock to consumers who thought property values would always rise, and it helps explain the attitudes lenders are seeing among their troubled customers, Goodman says.”

“‘If you buy a car and it depreciates,’ Goodman says, ‘you don’t expect the automobile dealer to write off your loan. There’s a sense of entitlement (among homeowners) that is just unbelievable.’”

“In New Jersey, Lauria said he sent the FHA about 3,000 of his company’s delinquent loans to see how many could be refinanced under the FHASecure program. The answer: 61.”

“The options the companies can offer are tightly constrained by their contracts with investors who buy and sell pools of loans that are packaged as bonds.”

“But Lauria doesn’t believe every homeowner who can’t pay their mortgage can or should be saved. ‘One-third of people who are delinquent should be in foreclosure. It’s the best alternative,’ he says. ‘They don’t have the money. They shouldn’t have (gotten the loan) to begin with.’”

“And that’s why, he says, he doesn’t blame some of them for walking away from their homes.”

The Miami Herald. “Frustrated homeowners packed a Keep Your Home seminar organized by County Commissioner Barbara Jordan to discuss possible solutions to the mortgage crisis. ‘It’s so sad that the room is packed,’ said Jordan, whose District One includes Miami Gardens and Opa-locka.”

“According to 2007 statistics from the Miami-Dade County Clerk’s office, some 26,392 homeowners have faced foreclosure in the county, among 86,465 in the state. Since the beginning of 2008, about 3,000 have been foreclosed.”

“‘Many constituents were calling, trying to find out how to get their property taxes paid and what they could do to save their homes,’ Jordan said. ‘Their incomes are not growing; they are being forced to make hard decisions, and families just can’t keep up.’”

“An Opa-locka resident who would only give her first name, Angie, came to the seminar because she said her situation was overwhelming. ‘They are about to take my home,’ she said. ‘I got in this situation with balloon payments. My interest rate increased to 11.9 percent and I fell so far behind that I wanted to know my options.’”

“Phillip Giollei, community outreach manager at Washington Mutual, (who) was among panelists, said one key requirement was for homeowners to provide full and complete disclosure of their circumstances. ‘The mortgage company is not there to judge,’ he said. ‘I don’t want to set you up to fail.’”

“Giollei’s suggestions included repayment plans and loan modification. For those who must sell their homes, Giollei talked about the proper channel to list properties for sale, pre-foreclosure sales options and the possibility of a deed-in-lieu of foreclosure — a voluntary sign-over of the deed to the lender to avoid foreclosure.”

“Debra Johnson-King, a HUD-certified credit counselor based in Miami Gardens, suggested credit counseling alternatives and offered some words of hope for homeowners. ‘This, too, shall pass,’ she said. ‘I am here to help you keep a roof over your head.’”

“Johnson-King said sometimes people would have no choice but give up their homes.”

“‘Sometimes you have to just let go,’ she said. And she urged homeowners in trouble to get rid of pride and take action. ‘Credit may be messed up but that’s all right, because we will deal with it,’ she said.”

“Jordan hoped residents left the seminar with options. ‘I want them to have hope,’ she said. ‘I want them to know whom to call, where to go and to make good decisions as to hold or cut their losses, move on, rent and try again.’”

The Calgary Herald. “The subprime meltdown marks the final chapter in the financial sector’s golden age of the past 25 years, Bank Credit Analyst says. Banks are facing far leaner times and so are their shareholders, the Montreal-based research firm warns in a new report.”

“‘The blow-up in the markets for subprime paper and other structured products represents a watershed event in the financial markets,’ said Martin Barnes, managing editor of Bank Credit Analysis.”

“Although Canadians may have been preoccupied with their own equity bull market this decade, the financial markets’ golden age was already drawing to a close south of the border, Barnes argues.”

“Stock market gains came to a screeching halt with the bursting of the technology bubble in 2000. The financial sector turned its attention to securitization and creating complex financial instruments instead. This allowed it to generate fees, shifted default risk off its balance sheet and freed up capital to originate more loans.”

“The value of pooled securities; mortgage-backed and other asset-backed securities, overtook that of outstanding bank loans in 2001. The market value of derivative contracts surged to $11 trillion US by June 2007 from $2.6 trillion in June 2000.”

“The subprime securitization market has now also come to a halt. While the securitization model itself isn’t dead, it will no longer be a source of easy fees, Barnes said. The market will become much more discriminating; regulators will clamp down.”

“The financial sector will likely shrink back to a more normal share of the rest of the economy.”

“‘Financial shares will likely lead the next equity market upleg, but any outperformance will be fleeting. The financial sector’s share of corporate profits and market capitalization is set to shrink significantly in the coming years,’ Barnes said.”

The News Press reports from Florida. “Foreclosure actions stayed high and single-family-home building permits stayed low in Lee County in February, statistics showed. Foreclosures were being filed at a rate of 83 per day, according to data released by the Southwest Florida Real Estate Investors Association. One thing association president Jeff Tumbarello said he’s noticed, is foreclosure has lost some of its stigma as so many people do it: ‘In ‘05 you were a leper. Now it’s cocktail party talk: ‘I had to let something go.’ ‘Oh, so did I.’”

“The bright-green foreclosure bus pulled up Sunday afternoon to the bedraggled little house on Apple Street in San Carlos Park, victim of a real estate boom turned bad. In May 2005, near the height of Lee County’s real estate frenzy, it had sold for $153,000 — a bargain at the time.”

“Now the bank is asking only $59,900: 38 cents on the dollar.”

“For the most part, the houses he showed the investors were being offered by a bank at about 50 cents on the dollar for the prices paid in 2004 or 2005.”

“‘They’re driving prices down,’ said Marc Joseph of Marc Joseph Realty in Fort Myers. ‘The banks are able to compete’ because they simply want to sell quickly and aren’t burdened by having to meet the price of an existing mortgage like many private sellers.”

“Joseph said that as more homes are taken back by lenders and put back on the market, they’ll be a bigger and bigger part of the action. Some people trying to sell and pay off a mortgage may be out of luck, he said. ‘Those sellers cannot compete with the banks.’”

The Tampa Tribune. “Mark Spector liked the Bridgewater community so much he convinced his in-laws to buy a house down the street. That was in 2004 when Lennar Corp. was in the early stages of developing the 760-home community just east of the Wesley Chapel school complex.”

“‘We were expecting a real nice, clean community,’ Spector said. ‘We’d moved from California, and we were expecting the planned communities to be similar to the planned communities we’d lived in in California.’”

“Spector says what he got instead was a community dominated by renters and out-of-town investors. Residents say the community is plagued by drug dealing, gang graffiti and poorly maintained properties.”

“‘It looks very much like an apartment complex on the weekend where you see a lot of rental trucks moving in and out,’ Spector said.”

“Binge-buying investors, many of them now stuck with homes they can’t flip and can’t afford, are either filling those houses with short-term tenants or simply abandoning them. ‘My wife and I would love to move,’ said Jim Martin, Spector’s father-in-law. ‘We can’t sell our house. I don’t know if we could give it away.’”

“Lennar sold Bridgewater as a great place to raise a family. They sold quickly, even as prices passed $300,000. At the time, Spector said, Lennar’s sales staff promised no more than 30 percent of the homes would go to investors. The sales contract required buyers to promise they would live in their house for at least a year before selling.”

“‘The reality, though, is that Lennar sold to a lot of investors,’ Spector said.”

“County property records shows that nearly two-thirds of Bridgewater’s 760 homes lack homestead exemptions - a key sign they’re owned by non-residents. Californians, New Yorkers and other Floridians did most of the investment buying, property records show.”

“Cory Jarriel, a Hillsborough County firefighter, bought his house in 2005 with plans to live in it for a year then sell it. The deterioration of the neighborhood and the housing market has foiled those plans. Now Jarriel lives next to one of Bridgewater’s empty houses.”

“‘It’s never been lived in as long as I’ve been here,’ Jarriel said.”

“He’s weighing his options. ‘I have perfect credit,’ Jarriel said. ‘I thought about letting the house go back [to the bank]. It wasn’t worth letting my credit go to hell.’”

“Standing in his driveway on a bright afternoon, Bobby Martin, 29-year-old financial planner, says half-jokingly that he enjoys the quiet provided by the empty investment properties on either side of him. But more seriously, he notes: ‘The only thing you worry about is the fact that they’re basically abandoned.’”

“The HOA took down basketball hoops at the community park on Wells Road after the park became a site of drug dealing and alleged gang activity. ‘Roughly 130 homes in a community of 763 homes have never paid a single penny towards our dues,’ Spector said. ‘It’s been difficult to maintain solvency because of that.’”

“Spector tries to be upbeat. He hopes the collapsing housing market will drive out investors in favor of more owner-occupants.”

“‘These are the people who are going to move in and actually live in the community,’ Spector said. ‘These are the people who are going to take care of the community. It doesn’t matter if they had a $200,000 discount from what I paid.’”

“At the peak of the housing boom, Lennar Corp. was building more houses than anybody else in Pasco County. At Bridgewater, homeowners like Bobby Martin live beside empty houses, some apparently abandoned by their overextended owners.”

“‘They fooled a lot of people,’ Martin said of Lennar. He and his wife were first-time homebuyers in 2004 when they bought their 1,700-square-foot home.”

“Lennar still owns hundreds of acres…in central Pasco. It also owns dozens of vacant lots that are ready to build on in town house communities near Zephyrhills. In November, Lennar sold its Epperson Ranch project to Tampa-based Metro Development Corp. Epperson was the largest chunk of 8,300 potential home sites Metro bought from Lennar in November.”

“Metro has yet to say what it will do with the 1,700-acre Epperson family homestead. The same day, Lennar sold another 11,000 home sites across the country to Morgan Stanley. The two companies created a development partnership, according to documents filed with the federal Securities and Exchange Commission. Lennar sold the land to Morgan Stanley at a 60 percent loss.”

The Sun Sentinel. “A California company today is auctioning roughly 100 foreclosed homes in Palm Beach, Broward and Miami-Dade counties, with starting bids from $25,000 to $625,000. All the properties are vacant, and some are in rough shape. In each case the lender is looking to unload and move on.”

“‘The banks are very, very motivated to sell,’ said Rhett Winchell, president of Kennedy Wilson Auction Group.”

“In this depressed market, the glut of available homes, exacerbated by the foreclosure crunch, means that one doesn’t stand out from another. Frustrated owners who list their homes for sale the traditional way sometimes sit for weeks, months and even years waiting for offers.”

“Tom Granata, of Venice, auctioned his mother’s two-bedroom Plantation condominium on Friday for $110,000. He said he first considered selling it through a real estate agent, but those he interviewed insisted on him listing it with them for a year.”

“‘The property already has lost value, and I didn’t want it losing any more,’ he said of the condo, which was appraised at $134,000. ‘I think this was the way to go.’”

“Bidders also can choose from among houses and condos in Palm Beach County, including a 5-bedroom, 3 1/2-bath home with a pool in Wellington’s Black Diamond development that once was listed for $474,900. The starting bid today is $205,000.”

“Paul Bannister is one of the registered bidders for today’s auction in Fort Lauderdale. He scanned the list of available properties and is eyeing a three-bedroom home in Lauderhill with a minimum bid of $170,000. It originally was listed at $393,900.”

“‘This might be a better way to get a good price,’ he said. ‘I’d like to get it for $250,000. If it goes much above that, I’m going to put my hand down.’”

“Real estate agents are trying to capitalize on the trend and become accredited auctioneers, said Chris Longly, spokesman for the national auction group. ‘I think people are starting to see the benefits of the whole process,’ Longly said.”

The Times Union. “Redeveloping downtown Jacksonville was rife with risk when Cameron Kuhn and his helicopter swooped in. He leapt into Jacksonville ready to buy - gobbling up three buildings and a lot in late 2005 and a crumbling trio of buildings about a year later.”

“In all, he paid $55 million - not including any money he’d need to overhaul the structures. ‘FOR US, THIS IS NO RISK.’ Cameron Kuhn to the Times-Union shortly after buying his second downtown Jacksonville building in less than a month, Oct. 30, 2005.”

“‘WHEN I COME INTO A MARKET, I MAKE IT SNAP, CRACKLE AND POP.’ Kuhn to the Times-Union, Dec. 16, 2005.”

“‘I NEVER HAD ANY DOUBT. I DON’T FUNCTION IN FEAR.’ Kuhn, after reaching a preliminary deal with the city and the Landing on parking spaces, to the Times-Union, March 24, 2006.”

“The days ticked off the calendar. And, unbeknownst to Kuhn and other developers, so did the profitable days in Florida’s real estate market. ‘I WILL LOSE SOME BUILDINGS.’ Kuhn to the Orlando Business Journal, Jan. 24, 2008.”

“The souring real estate market certainly didn’t help Kuhn, observers say, and he’s not the only developer in a crunch these days. ‘MY EGO WAS TOO BIG … QUITE FRANKLY.’ Kuhn to Orlando News 13, Feb. 7, 2008.”

“Kuhn’s offices in Jacksonville are gone. He sold the helicopter. Kuhn moved out of the prime offices on the top of the Plaza in downtown Orlando, even though the address is the same on the company Web site.”

“And, from a trip to the 21st floor last month, it’s clear others have been looking for him there, too. A woman just off the elevator directs another visitor to Kuhn’s new offices, where all but one of the handful of entrances was bolted shut last month.”

“‘124 West Pine Street,’ she says, the way a flight attendant rolls through another pre-flight message.”

The Pensacola News Journal. “A single mom with a 2-month-old infant called the other day with a question. She was confused and looking for some advice. Seems the young woman, a Warrington resident, wanted a home equity loan to add on a bedroom, consolidate credit card debt and buy new furniture.”

“But, as it turned out, she was in for a shock. ‘Someone told me I couldn’t get a home improvement loan because I was upside down,’ she said over the phone. ‘What does that mean?’”

“I tried to explain that her house is now worth less than what is currently owed on the mortgage.”

“‘But I still don’t understand,’ she said. ‘I put $20,000 down on my house when I bought it. I’ve been making my mortgage payments every month for the past three years. How could I have lost all that money?’”

“In her case, the bank lost business and she’ll continue paying 19 percent on her credit card debt. Plus, the carpenter didn’t get a job adding on the new bedroom and the local furniture store still has that new bedroom suite she wanted.”

“The Federal Reserve announced this week that Americans’ percentage of equity in their homes fell below 50 percent for the first time since 1945. And economists expect this figure to drop even further. All of which brings up the question that’s on the lips of nearly everyone, especially Realtors: ‘Where is the bottom to this housing free fall?’”

“I turned to resident housing guru Al Muller, whose Metro Market Trends Inc. tracks residential and commercial sales data in the Pensacola Bay Area. ‘To me, the bottom isn’t when things turn around and start getting better,’ he said. ‘It’s when things stop getting worse and basically stay there for some period of time.’”

“And the way Muller sees it, there’s a lot more downside to come. But if you think it’s bad here in the Pensacola area, Muller suggests spending some time in Miami. He says it’s the worst housing market in Florida, and one of the worst in the nation.”

“One can only take so much bad news, so I asked Muller to lay some good on me. Anything will do, I pleaded.”

“‘The good news for Pensacola is that the typical median price of a single family home is now selling for about $185,000,’ he said. ‘We’re getting much closer to being affordable.’”

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