The Housing Bubble

It’s Friday desk clearing time for this blogger. “From the streets lined with for sale signs to the stacks of foreclosure files, Brevard County’s clerk of courts is seeing twice as many foreclosures per month as home sales. ‘Florida has been in a recession for a year,’ Brevard County Clerk of Courts Scott Ellis said. ‘Anytime you have a very unnatural boom, you will always end in a very hard bust.’”

“‘The banks took all their lending standards and threw them out the window,’ Ellis said. ‘And literally, just anybody that wanted to borrow money for a house could borrow pretty much whatever they wanted and buy whatever they wanted. And that is purely insane.’”

“Ellis said banks may have to slash prices on homes to get them to sell. He said it may not be a buyer’s market yet, but it will be.”

“The median closing prices for homes in the region slid further last month as inventory rose more than 11 percent from a year ago, according to the MLS of Long Island…the lowest in almost three years. Broker Tina Loffredo said she has no doubt the median will slip under $400,000 this year.”

“‘The numbers are coming down drastically, said Loffredo, whose company has offices in North Babylon and Kings Park. With the closings I’m having and the offers, I can’t see it being more than what it was in 2005.’”

“South Londonderry Twp. is feeling the pain as the housing bubble deflates and the economy sags, the supervisors were told Tuesday night. Only two or three houses were sold in February, generating $4,000 in realty transfer tax receipts instead of the expected $16,000 per month, or a drop of 75 percent, township manager Tom Ernharth said.”

“‘Building permits have pretty much dried up and died’ in what had been the fastest-growing municipality in the county for several years, Ernharth said.”

“Boston taxpayers spent $10,120 last year maintaining a derelict condominium building on Hendry Street. The three-bedroom condominium deeded to Morgan Stanley is on the market for $54,900.”

“The unit, located in an area known as Meeting House Hill, sold for $299,000 two years ago, according to public records.”

“After some delay, the high-rise tower Emerald by the Sea, a forerunner in the skyline-altering island condominium boom, is scheduled for completion by month’s end. The Emerald comes on line while demand for condominiums along the Texas coast remains strong.”

“Mary Jo Naschke, a spokeswoman for the project, said it wasn’t unusual for some early investors, who were hoping to resell quickly for a profit, to change their minds.”

“‘People invest thinking they’ll make a quick sale and return for their money and they really have no intention in living in the place,’ Naschke said. ‘If time is not on their side and they can’t hold out, they tend to get angry because they panic.’”

“‘People who are looking to buy condos are going to have to understand that the free and easy money of the last three and four years is not free and easy any more,’ said Jim Gaines, research economist for the Real Estate Center at Texas A&M University.”

“Talk of a Dubai real estate bubble could not be further off the mark, says Wahid Attalla, CEO of Spectrum Consultants. Real estate prices are still cheap compared to other parts of the world, he says. What’s more, the investment return in Dubai is amongst the highest in the region – between 100 and 250 per cent.”

“‘Let me make clear something important – there is no such a thing as a bubble in Dubai’s real estate market, whether now or at any time in the future,’ Attalla said. ‘Real estate prices started low and continued to rise and they will not stabilise in the foreseeable future, not for at least another five years. The price of real estate has seen corrections – but upwards.’”

“While some real estate agents are idle due to the housing market, Julie Ferenzi is active in selling ‘pre-foreclosure’ homes. Sheila Pearson-Smith and her husband owned two properties—an investment property in Chicago and a house in Montgomery, Ill.,—that were already on sale for about a year before meeting Ferenzi in July 2007.”

“They were successful in accomplishing a short sale for the other house. Pearson-Smith owed about $247,000 on the mortgage, but they negotiated a short sale at $205,000. The bank netted $181,000 after paying several fees and taxes. Under the Federal Housing Authority’s regulations, the least a bank can accept for a short sale is a net of 82 percent of the property’s appraised value.”

“‘She did a great job,’ Pearson-Smith said. ‘She’s very efficient and very polite.’”

“The collapse of the subprime mortgage market will lead to record losses for insurance companies, overtaking Hurricane Katrina, the worst natural disaster in U.S. history.”

“The amount of asset writedowns and credit losses reported by the industry has reached at least $38 billion, just short of the $41.1 billion in claims from Katrina, which killed more than 1,500 people and left more than half of New Orleans homeless in 2005, data compiled by Bloomberg show.”

“Twenty-eight new condominiums on the Bremerton waterfront will go on the auction block next month — with the starting bid on the cheapest unit reduced in price by 58 percent. Bidding for the smallest condos, one bedroom, one bathroom units with about 577 square feet, will start at $109,000, down from $259,000.”

“At the high end, a 1,729-square-foot, two-bedroom two-bathroom condo originally priced at $919,000 will start at $500,000 less.”

“‘These are tough times for folks, especially this market,’ said Mark Goldberg, developer and former owner, noting that the condos are owned by the Santa Barbara, Calif.-based Chester Group, which bought the development before the condos were built.”

“Put two economists in the same room and you’re sure to get at least three different opinions, Portland Cement Association Chief Economist Ed Sullivan said Wednesday in Las Vegas. And to support his argument, Sullivan offered a glum assessment of the economy that contrasted with another more optimistic viewpoint.”

“Ken Simonson, chief economist of Associated General Contractors, said he doesn’t want to downplay the dismal housing situation and credit market. ‘I don’t think we’re in a recession or going into recession, but it’s a close call,’ the AGC economist said. ‘We’re at the bottom.’”

“‘It seems like I’m walking through the desert with this mirage of a housing turnaround being 12 months out. Every time I look again, it’s 12 months out,’ Simonson said.”

“The hottest ticket these days isn’t for the Cirque de Soleil extravaganza at the MGM Grand or the Elton John show at Caesar’s Palace.”

“It’s for a window seat on the ‘Vegas Foreclosure Express,’ a four-hour tour of repossessed homes whose former owners bet the U.S. property bubble would never pop — and lost it all.”

“In January more homes were repossessed than sold. Michele Johnson, the head of Consumer Credit Counseling Service of Nevada, said the reason is simple. ‘The median price of a home has depreciated so dramatically that the majority of homeowners owe more than their homes are worth,’ Johnson explained.”

“Keith Schwer, an economist at the University of Nevada, Las Vegas, estimates that the city’s excess supply of housing is now ’somewhere around 24,000 to 25,000 vacant housing units’ - an overhang that will take years to burn off.”

“The five-bedroom, four-bath home on Bohemian Forest Avenue, which was built in 2004, originally sold for $526,000. Two years later, it was resold for $842,000. In early 2007, a comparable home in the area sold for $1.1 million. Today, the bank is willing to take $578,000 — maybe less — to get it off its books.”

“Over on Serena Veneda Lane, the Zuckers, who began offering the tours of bank-owned properties last month, took their tour into a three-bedroom, two-bath recently repossessed home. The last owner’s business cards — he was a mortgage broker — were scattered on the floor of the bedroom closet, along with socks, shoes and a receipt.”

“‘Look,’ said Marshall Zucker, picking up a leather billfold, ‘He even left his wallet.’”

“In many cases the homes the Zuckers focus on are being offered by the banks at prices well below the sale price of the last comparable home — a sign the market hasn’t hit bottom. In an area called Monterossa, a six-bedroom, three-bath home is offered for $534,900 — nearly $200,000 below the last sale in the neighborhood recorded just a week ago.”

“But Roger Duarte, a 77-year-old retired telephone worker who sold his home for $1.5 million and was looking for a new one, didn’t think the sale price made the property a compelling deal. He thinks prices still have plenty of room to fall.”

“‘They probably had a cellophane wrapper around their heads,’ he said of the recent buyer. ‘Back when I was growing up, we called them suckers.’”

The LA Times reports from California. “Southern California home prices are now 19% below their peak last year. Home values also plunged 19% during the last real estate bust, but that was over a six-year period ending in 1997. Prices have now fallen just as much in less than a year. Betty Palacios is trying to sell her Upland condo for $140,000, or close to 40% less than what similar units in her complex were selling for two years ago.”

“Palacios has owned her condo since 1991 but still expects to take a loss because of home equity loans and refinancings over the years. Palacio said she had received only one offer, for $90,000. ‘I’m keeping my fingers crossed’ for a higher bid, said Palacios, who has already dropped her asking price once. ‘It’s all I can do now.’”

“Billie Tircuit, 26, has already taken a hit. She bought a house in Altadena two years ago with 100% financing at the urging of her husband, a mortgage broker, she said. His income vanished with the housing crash, and the couple soon could not make their payments.”

“Tircuit split with her husband and unloaded the house last month for $455,000 — a 22% loss and less than what she owed on the property.”

“For Tircuit, the real estate crash has been painful but also an instructive lesson in practical economics. ‘We had no business buying that house,’ she said, ‘but everybody was buying a house, and the loans were there. Don’t get caught in the hype. It bit me hard.’”

The Union Tribune. “San Diego County’s housing market deepened its slump last month, with the median home price now down 20 percent from its peak in November 2005.”

“In Carlsbad, renters Bill Smith and his wife see the bursting of the real estate bubble as an opportunity to enter the housing market. Smith said he knew a major price correction was coming.”

“Former Federal Reserve Chairman Alan Greenspan ’said there was no bubble, but I had a feeling that things were going in that direction,’ Smith recalled. ‘We decided to bide our time. Sure enough, it did happen. We realized that it was the time to make our move.’”

“Smith said he recently bought a 1,190-square-foot ‘beautiful starter home’ in Oceanside for $250,000. It was a reduction of nearly $100,000 from what the previous owner paid in 2005, near the height of the housing boom.”

The Desert Sun. “A total of 2,147 homes sold in February, down from 3,057 for February 2007, while the median price of a home in Riverside County last month was $325,000, down from $410,000 in the same month a year ago, according to DataQuick.”

“‘Sales remained extraordinarily low, and a significant portion of what did sell was in areas beset by foreclosure activity,’ said Marshall Prentice, DataQuick president. ‘Mainly it’s in the inland markets, often in newer suburbs, where prices got pumped up artificially with the sort of crazy loans that no longer exist.’”

The Ventura County Star. “Ventura County sales of new and existing homes and condominiums plunged 32.8 percent in February, to 495, a record low for February. Ventura County’s median sales price was $445,000, a 23.8 percent slide from $584,000 in February 2007. The median hasn’t been as low since hitting $446,000 in March 2004 — when prices were flying up in a hot market.”

“Most homes that are selling are bank-owned, said Kay Wilson-Bolton, a foreclosure specialist and broker. Foreclosure sales comprise about 80 percent of her business.”

“With the significant spike in foreclosures, Wilson-Bolton said she’s getting about two or three bank-owned properties a week. ‘The number of foreclosures that are coming to me is accelerating,’ she said. ‘It’s about 10 times as many as there were a year ago. I don’t see any letup at all.’”

The Press Democrat. “Home prices plunged to their lowest levels in four years in February as sales slowed to a crawl in Sonoma County and across the Bay Area. Sonoma County’s median price tumbled to $400,000, down 22.3 percent from a year ago, the biggest drop in the Bay Area. It is the lowest since February 2004, when the median price stood at $390,000.”

“‘With the amount of inventory and the prices, some of these properties just seem like great bargains. I was actually hoping for a little more activity. It just didn’t happen,’ said Timothy Hedges, broker in Sebastopol.”

“More and more homeowners are handing over their keys to lenders, unable to sell their homes for enough money to pay off their loans. More than 1 in 4 homes sold in Sonoma County in February had been in foreclosure sometime in the past 14 months, according to DataQuick.”

“‘With the Federal Reserve trying to pour Drano into the lending system, it will be interesting to see how things play out if jumbo financing does come back online. Theoretically, there could be enough pent-up demand, enough catch-up activity at the high end, to result in a statistically bizarre record median home price,’ dataquick’s Prentice said.”

“‘What we’re seeing now is the final capitulation of all these people that have been holding onto these houses trying to eke out the last dollar. They’re realizing they may have to lower it to get it done. But then if they’re going to move up, that property becomes cheaper,’ said Jeff Schween, an agent in Santa Rosa.”

The Mercury News. “Two newly built homes are on the market on the same street in the same development. One is a bank-owned property offered at $1 million, and the other is listed by homeowners at $1.5 million. Guess which one received 10 offers and has a sale pending?”

“You’re right. And most of the buyers didn’t care that it was a foreclosed property.”

“‘The buy-down isn’t working, the free car isn’t working,’ said Joe Davis, a real estate agent in Pleasanton and the listing agent for the $1,074,900, five-bedroom, three-bath home. ‘Price is working, period. If there’s an REO (or bank-owned property) or short sale on your street, then consider that when you list your house.’”

“The median list price in San Francisco was $809,500, while the average REO was $616,743, a difference of 24 percent. In San Mateo, the median listing price was $799,000, and the median REO was $626,500, a 22 percent difference.”

“Differences were smaller in counties where foreclosed properties were common. Contra Costa and Alameda counties had listing prices 12 and 9 percent higher, respectively, than foreclosed properties, while hard-hit San Joaquin County actually had listing prices 6 percent below median bank-owned home prices.”

“Ed Jeffry (co-)founder of the National Association of Responsible Loan Officers, helped a client buy a home in Inglewood in Southern California, said that both she and the seller agreed to $525,000. But when it was reappraised, it was found to be worth $499,000.”

“‘It’s almost to the buyer’s advantage to cancel the sale and rent for three months,’ he said. ‘Real estate is all about making money on the buy.’”

“And many buyers are threatening to walk away from deals if they feel they are paying too much. ‘Buyers don’t mind appraisers coming in less, and sellers don’t have a choice,’ said mortgage broker Jay Damato in Walnut Creek. ‘It happened the other way, too. (In the housing boom), it would appraise for a higher price, and sellers would say, ‘Too bad, make up the difference.’”

“Mike Tabacco, a certified residential real estate appraiser in Walnut Creek, said that in some areas there are few nondistressed properties to appraise.”

“‘Since October in Antioch, there were only 13 sales in the $500,000 to $600,000 range, and nine of those were short sales and foreclosures,’ he said.”

“Davis, who also sells bank-owned properties, said that speculation fed the foreclosure market in San Ramon. The client who lost the home had bought three houses in the master-planned community of Windemere, he said.”

“While some sellers have expressed animosity at his property’s lower price, he said builders are also cutting prices and adding incentives. ‘Personally, I recommend to all my clients not to sell right now,’ he said. ‘Right now is the best time to buy.’”

The Marin Independent Journal. “The median price of a single-family home in Marin sank to $830,000 in February, but there’s no cause for concern, a real estate research firm reported Thursday.”

“Just 136 single-family homes and condominiums sold, down from 228 in February 2007 - but up slightly from 122 sales in January. The median price for a single-family home was down from $929,500 in February 2007 and $990,000 in January. In the condo market where the median price fell to $430,000 in February from $560,000 in January.”

“Broker Patti Cohn in Greenbrae, says the market has hit bottom. ‘In Marin County - without condos and without Novato - 46 percent of the properties that sold in the last 30 days sold at 98 percent of the asking price,’ Cohn said. ‘Mostly what’s happening is there is a shortage of inventory.’”

“‘Marin has nothing to worry about,’ said John Karevoll, a DataQuick analyst. Most people are just waiting this out. Once the turmoil in the jumbo loan market settles down, and we expect that to happen this month or next, then we will get a true picture.’”

From Reuters. “With home mortgage foreclosures escalating, there is a dearth of investor demand for bonds backed by many mortgages. In addition, lenders are rejecting many more borrowers and house prices are falling.”

“‘The horse is out of the barn on this cycle and recession,’ said Phil Immel, broker in Dana Point.”

“‘We’re off the cliff,’ said Immel. ‘We think we have a parachute, but we can’t find the ripcord to land safely. It really will get a lot uglier for the next year across America, and it should bottom out about a year from now.’”

Investors Business Daily. “Easy come, easy go? The housing crisis has come to this: just walking away. As home values sink, people are abandoning homes, viewing their ownership as hopeless or worthless.”

“‘They can’t refinance, because they don’t have any equity,’ said Rick Sharga, VP of RealtyTrac, ‘and they can’t sell, because values have dropped.’”

“In Stockton, Calif., a ’staggering’ 77% of homes bought a year ago are ‘underwater” with negative equity, says Stan Humphries, VP at Zillow.com. The percentage is nearly 60% in Las Vegas, above 40% in Miami and nearly 40% in Los Angeles.”

“It’s not just new owners. Plenty of people who rode the boom have spent their home equity gains. ‘People have been (cash-out) refinancing their house in order to sustain their standard of living,’ Humphries said. ‘Say they bought five years ago and have been pulling equity out of the house.’”

“Counting new delinquencies and in-process foreclosures, 7.86% of all people with a home mortgage are late on payments, said MBA Chief Economist Doug Duncan in a press briefing Thursday. ‘As equity is declining, there’s an incentive to walk away,’ he said.”

“Owners who could pay but still walk away may be contributing to an acceleration in problem loans, Wachovia’s chief risk officer, Don Truslow, said Jan. 22.”

“‘A lot of these current losses have been coming out of California,’ he said. ‘They’ve been from people (who have) otherwise had the capacity to pay but have basically just decided not to.’”

“Walkaways aren’t new. They happened amid the early-1990s swoon of prices in overheated markets such as Southern California.”

“But back then, foreclosures typically arose amid unforeseen changes in the economic condition of the borrowers, says Charles Dannis.”

“‘This time we don’t have that true economic change in the borrower’s condition,’ said Dannis, who also teaches real estate at Southern Methodist University. ‘You have a collapse of a housing market that most people really attribute to speculation, or because people are buying more house than they can afford because of the various exotic mortgage products out there.’”

The News & Observer reports from North Carolina. “When flames destroyed Tricia Warner-Peterson and Scott K. Peterson’s dream home in January…the neighbors stood and watched as 61 Shepherd Drive burned. It was another in a long string of disturbing incidents that have them worried about the value of their homes in a small Johnston County subdivision. The charred house is now boarded up with plywood, spray-painted with expletives. Laundry, which Warner-Peterson chucked out of the house’s windows, is strewn across the lawn.”

“And a broken toilet bowl in which the Petersons once planted pansies adorns the porch. ‘I feel like I’ve moved to a third-world country,’ said Kristine Ryan, who lives across the street.”

“Although the Petersons have not made mortgage payments since July, they technically still own the house. Until the drawn-out foreclosure process ends, there’s little anyone can do to stop them from treating the property however they wish.”

“It’s an extreme example of what can happen to neighborhoods as the tide of foreclosures rises across the state. ‘We cannot sell our homes,’ said Ryan, who moved to the subdivision from Boston a year ago with her husband. ‘We cannot leave.’”

“Warner-Peterson, who grew up in Cumberland County, blames herself for falling behind on mortgage payments. She said she receives treatment  for her bipolar disorder with some symptoms of schizophrenia.”

“‘A lot of this has to do with my illness,’ she said. ‘Sometimes it’s spend, spend, spend without a whole lot of thought.’”

“In April, they bought a new home in the Cottonwood Forest subdivision at McGee’s Crossroads for $186,000 with add-ons such as an insulated garage. They also invested about $10,000 in other upgrades, including hardwood floors and a Jacuzzi.”

“‘I’ve always handled our money,’ Warner-Peterson said. ‘Most of the time that goes pretty well. … This is just the time it all went south.’”

“The Jan. 9 fire, which started around the Peterson’s Christmas tree, is still under investigation. The Petersons said the insurance company thinks the fire was ’suspicious.’”

“Neighbors say the Petersons’ actions have turned them into prisoners in their own neighborhood. Another home in the subdivision has been for sale since last spring. ‘People drive in, stare and drive out,’ said Kristine Ryan. ‘It’s a freak show,’ Mike Ryan added.”

The Carroboro Citizen from North Carolina. “As the subprime mortgage crisis morphed into a debt crisis and led to a slowdown in housing markets across the country, many here were optimistic that the area would once again be insulated from the fallout. But the optimism that the local market would ride out the storm unscathed has waned.”

“Even the most upbeat realtors will acknowledge some pain. Many are leading sellers through what Weaver Street Realty’s Gary Phillips describes as ‘reality therapy,’ telling them to expect much more time on the market and a more modest assessment of the return one can expect.”

“The worst of the impact is being felt by homebuilders, especially mid-sized builders who have been riding the housing boom in Chatham County. Nick Tennyson, executive VP of Home Builders Association of Durham, Orange and Chatham counties, said that the slowdown has created a large inventory of homes. Spec house builders…are finding more and more of their cash tied up and are having to make large monthly payments on homes they’d hoped to have sold by now.”

“Making that worse, he said, is that the glut is being seen in larger homes. ‘How many people want something priced $750,000 to $800,000? The pool of buyers is not as deep.’”

“Michael Chandler, a local custom builder, said local builders are seeing a lot of clients adjusting their timetables. ‘Many are not motivated to get started,’ he said. ‘There’s a loss of urgency in buyers.’ The media has fueled the sense, he said, that it’s an ‘ultimate buyer’s market.’”

“Builders around here have gotten a bit unaccustomed to having clients balk at prices, Chandler said. ‘It used to be you’d say, ‘Here’s what it’s going to cost.’ Now we’re being pressured on price.’”

“Phillips said the spec builders are feeling the squeeze. ‘There’s way too much inventory,’ he said. ‘Cash has become king in a way we haven’t seen in a long time.’”

The Free Lance Star from Virginia. “Sluggish sales at the Cobblestone Square condominium complex have led the developers of that project to sell what’s left to be built to an apartment developer. The partners, which include K. Hovnanian Homes and Garrett Development Corp., are under contract to sell the rest of the development to JLB Partners, an apartment builder.”

“Chris Waller, VP of Garrett Development, said JLB’s apartments will attract high-end renters. Waller said JLB will likely charge about $1,250 a month for a 1,000-square-foot unit. A letter to current condo owners calls the new concept a ‘luxury rental community.’”

“Jonathan Franklin, who moved to Cobblestone with his wife in October, doesn’t take much comfort in that description. ‘They’re just playing semantic games,’ he said.”

“When he moved into his unit last June, condominium owner Ben Maxwell said, ‘We were under the impression that this was going to be a three- to four-year project. Three to four years from now, it’s going to be a completely different real-estate market. You would think that one of the largest home builders in the country would understand this is a cycle.’”

The Falls Church News Press from Virginia. “There are no cars are parked in the driveways of many new subdivision cul-de-sacs. ‘For Sale’ signs litter the yards in outlying areas of Fairfax and Prince William County.”

“Some new developments appear to be ghost towns. No children ride their bikes down the sidewalks — instead there are moving trucks loading up personal belongings as families wipe away tears and kiss their dream homes good-bye. The foreclosure epidemic has struck and its effects ripple across the area.”

“Virginia ranks 24th in the nation in rate of foreclosure. In Northern Virginia, hardest hit areas include Prince William County, where some newly built neighborhoods are mostly made up of foreclosure homes.”

“The cause of foreclosures can be attributed to more than one factor, says Stephen Fuller, professor of public policy and director of the Center for Regional Analysis at George Mason University, and member of the Governor’s Advisory Board of Economists.”

“‘Foreclosures are caused by a combination of several things,’ says Fuller. ‘Liberal lending policies, people thought they would enjoy price appreciation in ’03 and ’05 and later refinance. The market cooled off in ’06, housing prices decreased and the mortgage was more than the house was valued. They couldn’t refinance because their income hadn’t changed. In some cases, the rates tripled. People had no money in the house, so why not just walk away?’”

“Fuller says that some people were not in the right financial position to be purchasing a home. ‘The American dream is to own a home, but in reality, some people should just have been renters,’ Fuller explains.”

The Washington Post. “A multi-house auction at Walter E. Washington Convention Center (was) fueled by the skyrocketing numbers of local foreclosures, and it fulfilled some hopes and deferred others, as more than 200 homes went on the block.”

“While tuxedo-clad auctioneer Mark Buleziuk chattered rapid-fire prices and the public address system blared the ’80s hit ‘Living in America,’ several thousand people bid on ramblers, townhouses, condominiums, bungalows and McMansions in the District, Maryland and Virginia.”

“All the homes had been foreclosed on and were owned by banks trying to recoup some of their losses, according to Real Estate Disposition, which ran the auction.”

“‘It’s clear by what’s out there in the media that there is a high rate of foreclosure,’ said Mary Clare Quella, associate general counsel for the auction firm. ‘Lenders do have large portfolios in foreclosed homes.’”

“Investors Leon Segears and Joyce Palmer, who buy, rehab and sell homes for a living, had targeted five dwellings in the auction catalog but managed the winning bid on only one. The three-story rowhouse on Madison Street NW had been valued at $398,000. The starting bid was $149,000. The partners’ winning bid was about $275,000.”

“The two said later that they had calculated how much each house would cost to renovate, how much they could later sell it for and how much they were prepared to spend. They said that despite the mortgage crisis, there was money to be made by the disciplined investor.”

“‘We don’t get emotional,’ Palmer said. ‘If the numbers work, we do it. If the numbers don’t work, we don’t do it.’”

The Daily Times. “Delmarva’s real estate roller coaster can’t go any further downhill, according to some local housing experts. But it remains a mystery when and if an upswing in home sales will kick in.”

“‘I think we’ve already hit the bottom, and most of the buyers know it,’ said Kevin Decker, a Realtor in Ocean City.” “In Worcester County, there are about 2,400 properties for sale. Of those, 2,000 are in Ocean City, said Rick Meehan, the resort’s mayor and a real estate agent.”

“‘It’s a buyer’s market,’ he said. ‘I know it sounds like a cliché, but it’s a fact. I think a lot of people have held back, waiting to see what’s going to happen.’”

“On Delmarva, new homes sales fell 9 percent between October and November last year, and new construction is down 24 percent from a year ago, according to Bill McCain, an appraiser in Salisbury.”

“McCain said the Shore’s housing market will yield minimal sales for the rest of 2008, especially for expensive single-family homes and condominiums. It might be another decade, he said, before we’re back to peak pricing in that market.”

“‘There are less purchasers out there who can afford these high-end properties,’ he said. ‘Add to that the fact that the lending community is much tighter, much more cautious in making loans.’”

“‘Some sub-prime lenders were aggressively lending in a rising real estate market,’ he said. ‘They got away from some of the fundamentals of good lending practices. There were loans being made at ratios of 100 percent of equity, or 120 percent, which is a very, very high-risk practice.’”

“As the market begins to level off, many property owners are finding themselves upside-down — owing more on the home than its assessed value. It’s created a mountain of foreclosures in a short time. Maryland’s foreclosure rate exploded from 715 at the end of 2006 to 9,772 a year later, according to RealtyTrac.”

“The combination of a lagging economy, an over-stocked housing market and the troubled lending industry has created what McCain calls ‘a bit of the perfect storm.’ ‘It’s these negatives occurring simultaneously,’ he said. ‘Are we in a recession? If we’re not in one, we’re close to one.’”

The Press of Atlantic City from New Jersey. “There’s no sign of bottoming out as New Jersey and the nation continue to witness an upswing in foreclosure activity.”

“While the vast majority of homes in foreclosure filings are worth less than $1 million, some properties in the region’s wealthier enclaves are in the beginning of the foreclosure process or have been sold.”

“One Longport property, just off the John F. Kennedy Memorial Bridge, is assessed at $1.2 million and started the foreclosure process in November. A two-story Beach Haven home assessed at $1.05 million was sold for $1.2 million three months ago.”

“The Garden State had 5,598 properties in foreclosure filings in February, ranking it 13th nationwide, where overall foreclosure filings totaled 223,651 properties. In Cape May County, 95 properties were involved in foreclosure activity in February 2008, up from 71 properties in February 2007.”

“‘It’s people who weren’t experienced and they decided to jump in late to the housing market,’ said foreclosure attorney Brett Wiltsey, who has represented lending institutions against delinquent county homeowners. ‘Then the market changed on them.’”

“Watchdog group New Jersey Citizen Action estimates one in five New Jersey subprime loans could default by the end of 2009.”

“‘It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house,’ said Phyllis Salowe-Kaye, New Jersey Citizen Action executive director. ‘But it is possible to purchase a mortgage with a one-in-five chance of putting a family out of their house and into the street.’”

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