The Housing Bubble

The County Sun reports from California. “Development of the Foothill Walk properties in Upland began with 72 townhomes in early 2006. With a large banner draped across the fence on Foothill Boulevard screaming, ‘NOW SELLING,’ with a side note of ‘From the Mid 300’s,’ potential buyers almost couldn’t resist looking inside. Andy and Joan Knowlton are a couple of years away from retirement. After living in their one-story, 1,800-square-foot San Dimas home for 21 years, they were ready for a change.”

“I’m a Realtor and poked around on the Internet and saw the complex (at Foothill Walk) on the MLS and decided to check it out,’ Andy said.”

“The couple ended up buying a model home. ‘It was an impulse buy,’ Andy said.”

“Katie Distelrath is jumping in. ‘This is definitely a buyer’s market if you have the means to purchase,’ said the 22-year-old.”

“Distelrath closed escrow on a townhome at Foothill Walk in Upland on March 14, thanks largely to her mother who co-signed on the $339,000 property. ‘I fell in love (with it),’ Distelrath said.”

The LA Daily News. “San Fernando Valley home prices fell again in February, selling for 14 percent less than a year earlier, and sales plunged 32 percent, according to a report released Wednesday.”

“The median price for a Valley home is now $525,000 - the same as in March 2005 - or $85,000 less than February 2007, the Van Nuys-based Southland Regional Association of Realtors reported. The latest figure is also 20 percent below the record high of $655,000 set just last June.”

“Meanwhile, sales in February dropped to just 359 transactions.”

“During January and February, there were 1,084 foreclosures and 1,335 sales of houses and condos in the Glendale to Calabasas area, the center said. By comparison, during the first two months of 2007, with the market entrenched in a slump, there were just 235 foreclosures and 2,481 sales.”

“There were 7,090 properties listed for sale at the end of February, a 15-month supply at the current market pace. There were 2,182 properties listed for sale at the end of the month in the Santa Clarita Valley, a 14-month supply. In the Santa Clarita Valley, the median home price fell 14 percent, or $80,000, to $490,000. Sales declined 34 percent, to 115 transactions.”

“Association President Mary Funk, who works both valleys, has been selling real estate for 30 years and this is her third big market shift. She says one thing is certain. ‘In every downturn when the market has flipped back over,’ she said, ‘the prices have gone back up.’”

The North County Times. “Despite government efforts to aid a flagging real estate market, home loans intended for first-time buyers are getting harder to secure, according to interviews with lenders and mortgage brokers. Many banks have labeled most or all of San Diego County a ‘declining market.’ The distinction typically means all loans carry a 5 percent penalty on down payments.”

“Several mortgage brokers said they recently received an e-mail from Bank of America informing them that, starting this week, some products would no longer allow a 5 percent down payment in San Diego County.”

“Some mortgage analysts said they expect the housing market to further deteriorate as other banks follow suit —- if they haven’t already. ‘I think you’re going to see this as a definite trend, and that’s going to serve to deepen this crisis,’ said Dave Hopkins, a mortgage broker with a firm based in Rancho Bernardo.”

“North County sales over the last three months are almost 50 percent lower than the same time two years ago, according to a real estate association report. ‘It’s been extremely challenging for us to qualify buyers,’ said Yamila Ayad, a San Marcos mortgage broker who specializes in low-income buyers. ‘It’s killing everybody.’”

“‘The Fed is lending them (banks) money cheap, and they’re turning around and doing whatever they want,’ Hopkins said. ‘But honestly, it’s a smart business decision. I don’t think this thing is over and they think the same thing. We have potentially a lot more value to shed.’”

The LA Times. “Wachovia Corp. signaled that it may no longer offer some Californians the controversial ‘option ARM’ mortgages that give borrowers the choice of paying so little that their balances actually rise.”

“However, the bank said Wednesday that the memo had been sent prematurely and that it had not decided whether it would stop making the loans. In its fourth-quarter 2007 earnings report, Wachovia said its nonperforming assets, principally loans gone bad in the housing swoon, had risen to $5.2 billion from $3 billion at the end of the third quarter.”

“If Wachovia cuts back, it could further disrupt distressed housing markets. ‘This product was the last remaining hope for the sub-prime borrower,’ said broker John Diamond of Bancorp Funding in Chino.”

“With the tightening of loan standards by the government-sponsored mortgage buyers Fannie Mae and Freddie Mac, and other lenders afraid or unable to lend, ‘this could be the ’straw that breaks the camel’s back,’ Diamond said.”

The Asian Journal. “A real estate research firm reported March 30 that Daly City has the highest number of foreclosures in San Mateo County. Affected homeowners are said to be mostly Filipinos and Hispanics who have never owned a home before.”

“The Daly City figures followed another report from the site indicating that foreclosure auction sales have more than doubled in San Mateo County in February over a year earlier, though sales have slowed since January.”

“‘They were much more susceptible to getting into loans that they didn’t understand,’ said John Gieseker, a San Bruno broker. ‘Immigrants have seen it as very important to own your own home because it’s a greater level of security, so they would push harder to buy something.’”

The Los Gatos Weekly Times. “In light of the problems besetting the housing market and in accordance with Proposition 8, the Santa Clara County assessor’s department is going to lower the values of about 26,000 properties in order to reflect the lower market value.”

“Santa Clara County assessor Larry Stone said the biggest problem affecting the housing market is credit availability. The market for condominiums/townhomes has softened, especially in Morgan Hill, Gilroy, Milpitas and East San Jose, which are the areas in the county experiencing the biggest problems of foreclosures and subprime loans.”

“‘Silicon Valley still follows the boom and bust. The challenge is to continue to find new things,’ said Stone. ‘Everything happens in Silicon Valley first, fastest, good, bad, up and down.’”

Bay Area Newsgroup. “Cindi Gardner, a mortgage advisor based in Palo Alto, said that in her business the FHA loans aren’t proving to be as helpful. ‘Even though it went up from $362,790 to $729,750, it’s more expensive,’ Gardner said. ‘A client can get a cheaper 5-year-fixed loan at 5.75 percent than 6.5 on an FHA.’”

“Gardner said the federal loans were supposed to be more helpful, but to make the loan attractive to banks they had to increase loan criteria and interest rates to alleviate some risk.”

“‘It’s an application that’s great for areas where prices are $400,000 and below, but that was the market it was meant for before they increased it,’ she said.”

“Gardner advises clients who are on the fence, both mentally and financially, to hold off on buying and make a jumbo loan payment for six months.”

“‘Pay the difference between a rent of $1,200 and a house payment of $3,500 into a bank account,’ she said. ‘Then they will know if they can make the payment and in six months they will have at least 5 percent down.’”

The Press Democrat. “Economic pressures that are pushing the country toward recession are having an uneven impact on Sonoma County residents, leaving some hurting and others unfazed.”

“Rachel Harika, a single Santa Rosa mother and self-described ‘victim of the whole mortgage thing,’ said she hasn’t worked since December when she lost her job as a product developer for a subprime mortgage lender.”

“She said she’s forgoing the outdoor living room she had hoped to create once the weather warmed up, as well as the ‘bunch of flowers’ she usually plants each spring ‘that would always die anyway.’”

“But several people said they hadn’t felt the pinch. Jim Adams, retired and living with his adult son in a house that’s already paid off, was taking home a new flat screen TV to replace a set that was on the fritz and not worth repairing.”

The Fresno Bee. “The parent company of Merced-based County Bank reported its first-ever annual loss Wednesday, confirming the bank’s previous warnings that the faltering Central Valley real estate market had hurt its portfolio of loans.”

“The loss was driven by the bank’s increase in reserves meant to cover bad loans, up to $29.8 million at the end of 2007, compared with $400,000 at the end of 2006. The bank’s nonaccrual loans, or loans that weren’t being paid, rose to $53.6 million at the end of 2007, up sharply from $3.2 million in the third quarter of 2007.”

“‘The scope and rate of the decline of the real estate market were completely unexpected,’ Donald T. Briggs Jr., bank board member, said in a prepared statement. ‘As a result, the company did not anticipate the value of the collateral to fall as quickly as it did.’”

The Modesto Bee. “A rise in foreclosures has led to more people using abandoned homes, creating public health risks and trouble for neighbors. The police’s Beat Health Unit is tracking roughly 200 properties, about one in five of which are believed to be abandoned.”

“The city demolished five of those buildings Tuesday. Neighbors were pleased to see the buildings come down.”

“When foreclosures happen, families suffer the most, but cities are hurt, too, said acting City Manager Jim Niskanen. The abandoned houses are ‘vulnerable. They’re just left to the negative devices of the community,’ he said.”

“Owners cooperated with the city’s decision to raze the houses, building inspector Bert Lippert said. He said the work cost about $11,000, a charge to be paid by the landowners.”

“Foreclosures can muddy the paper trail when the properties change hands. Lippert is working with a New York bank on the Benson Avenue property where Officer Amy Bublak and Cpl. David Rhea arrested squatters Wednesday.”

The Desert Sun. “The City Council formally adopted an ordinance 5-0 Tuesday that aims to reduce blight created by property foreclosures. Desert Hot Springs city leaders, along with other cities across the Coachella Valley, are struggling with this issue as state and national foreclosure rates reach record numbers.”

“About 990 homes within Desert Hot Springs’ city limits are in various stages of foreclosure, according to city documents.”

“‘When banks foreclose the property, they have to notify (the) city so houses don’t become a place to have a rave party for kids or so that the homeless don’t occupy them,’ Desert Hot Springs City Manager Rick Daniels said.”

“‘It also helps property surrounding it from decreasing in price,’ Daniels said.”

“The creation of the ordinance was prompted by concerns from residents living near foreclosed homes, whose complaints ranged from worries about mosquitoes breeding in neglected pools to break-ins to ‘kids holding keggers,’ Daniels said.”

Some housing bubble news from Wall Street and Washington. Bloomberg, “Home prices declined in 21 U.S. cities in January, led by Sacramento and Las Vegas, as banks sold foreclosed homes at bargain prices. The price per square foot in Sacramento dropped 28 percent to $166 from a year earlier, according Radar Logic Inc. Las Vegas fell 25 percent to $137 a square foot. San Diego was the third-worst U.S. market, with prices dropping 21 percent, and Los Angeles was fourth, with a 17 percent decline.”

“‘Like homebuilders who feel pressure to get rid of inventory quickly, many banks and lenders experience the same pressure when dealing with homes from foreclosure,’ and decide to sell at below-market prices, the report said.”

The Kansas City Star. “NovaStar Financial Inc. disclosed that more than half a dozen regulators and law enforcement authorities, including the FBI, have requested information from the subprime mortgage lender.”

“The decline in housing prices has clobbered NovaStar, which specialized in making mortgage loans to borrowers with shaky credit histories. Soaring delinquencies, defaults and foreclosures led to a staggering loss for the company last year of $733.1 million.”

“In its filing, the company repeated its earlier declaration that there were ’substantial doubts’ it could continue as a going concern and that it may be forced to declare bankruptcy.”

From Spiegel Online. “Germany’s second biggest state-owned bank, Bayerische Landesbank, revealed Thursday that the global credit crunch (more…) has cost the bank €4.3 billion ($6.7 billion) — far more than it had previouly predicted and more than any German state-owned bank has suffered so far.”

“During a presentation of the bank’s results Thursday, the company said that €24 billion of its assets were at risk of devaluation. On Wednesday, Germany’s third biggest state-owned bank, WestLB, reported it had lost €1.6 billion (more…) in 2007 after the credit crunch cost it over €2 billion last year.”

“‘What the real fallout will be, nobody knows right now,’ said Michael Kemmer, BayernLB’s CEO.”

From Reuters. “British house prices fell for the fifth month running in March, according to data from the Nationwide Building Society, as lenders pulled cheap loans, rushing to cut their exposure as they themselves struggle to obtain reliable financing.”

“Britain’s house prices have tripled in the past 10 years and, at about 174,000 pounds each, cost more than seven times the average annual salary.”

“‘Most of the recent news has been concerning,’ said Ed Stansfield of consultancy Capital Economics in London. ‘It’s looking as if the chances that we follow the United States in terms of scale of (house price) falls are rising all the time.’”

“The truth is that most British homeowners couldn’t afford their houses if they didn’t already own them. Take a buyer on an average salary of about 23,000 pounds buying an average house for about 174,000. Even if by some stroke of luck the buyer had managed to save 35,000 pounds for a deposit, finding a lender who would lend them six times their salary today is all but impossible.”

“This is beginning to dawn on many, to judge by a recent survey of British consumer morale, which showed it had fallen to its lowest level in more than 15 years in March.”

“The UK has been heavily dependent on consumer spending that is housing related in one way or another; either due to investment in housing or based on spending predicated on house price gains past and future.”

“Spain’s fast-crumbling property sector, the driver of stellar growth for a decade, still has a long way to fall and will condemn the economy to years in the doldrums, economists believe.”

“Last week official figures showed January home sales slumped 27 percent year-on-year and anecdotal evidence suggests the situation is far worse. Juanra Doral, director of operations at one of Spain’s biggest property websites, said sales on its site have more than halved year-on-year.”

“‘We are witnessing an almost complete halt. Nobody expected it to be so severe,’ he said, adding that it now took over 11 months to sell a house compared with three this time last year.”

“‘When it comes to the imbalances within the economy, Spain is like the U.S. on speed,’ said Diana Choyleva, a senior economist at Lombard Street Research in London.”

“Home starts will halve to 300,000 this year, the Madrid Association of Property Developers (ASPRIMA) said last week. The group had estimated 400,000 building starts but its chairman told journalists the estimate had become obsolete in the time it took to publish the report.”

“With hundreds of thousands of properties standing empty, prices are likely to fall 8 percent this year after tripling in the last decade, ASPRIMA has said.”

“‘Forget about Spain,’ Lombard’s Choyleva tells real estate clients asking her whether to invest in the country. ‘It’s going to be a long time before this economy returns to anywhere near the growth rates it enjoyed over the last 10 years.’”

“A plunge in consumer confidence and services sector activity shows the collapse in the property market is fast infecting the wider Spanish economy. ‘In Spain it seems to be an all-round malaise,’ said NTC chief economist Chris Williamson. ‘It was a dreadful survey.’”

“Not only that, consumer confidence fell in March to 73.1 from 76.8 in February, the Official Credit Institute said on Thursday, close to January’s all-time low of 70.9, and well below the 100 mark which separates pessimism from optimism.”

“‘Spain is a real disaster,’ said Marco Valli at Unicredit MIB. ‘The housing downturn is spilling over very quickly to all other sectors, helped by the surge in inflation that dampens purchasing power at a time in which consumer confidence drops due to the weakening labour market and economic outlook.’”

“The first hint of an end to the Spain’s decade-long property boom, which saw house prices triple, came only around the middle of last year when property websites reported prices began to dip.”

“At the time, economists and officials scoffed at any suggestion of an end to exponential growth in property. But the U.S. subprime crisis and ensuing credit crunch in the second half of last year taught Spaniards the dangers of allowing household debt to reach 130 percent of annual income.”

“The cause of the mess was cheap credit thanks to Spain’s membership of the euro zone, long hailed here as an unalloyed blessing.”

From Stuff.co.nz in New Zealand. “House prices are overvalued by about 30 percent, according to BNZ economists who warn against increasing the supply of houses when the market is diving. ‘We believe house prices risk falling by more than the 10 percent we already presume for this year,’ BNZ said in a report.”

“Between 2003 and 2007 there was roughly one new dwelling built for every two additions to the population. This build-rate has been higher at times in New Zealand’s past but it was not low.”

“A correction in the housing market is inevitable. It will be painful for many people but it will be good for the economy. ‘Well, it’s here. And the potential downside bears thinking about - as our indications of a 30 percent housing overvaluation attest to.’”

“‘But let’s also bear in mind the good news, in that many potential home owners, long squeezed out of the market, stand to be big benefactors,’ BNZ said.”

The JoongAng Daily from Korea. “In a switch, the price of apartments in the Songpa District of the trendy southern Seoul area are falling as thousands of new apartments near completion.”

“‘There is a large number of new apartments and there are units for sale for 20 million ($20,470) to 30 million won less than the current market price,’ said Lee Mun-hyeong, a realtor in Jamsil-dong, Songpa District.”

“According to real estate industry experts, there will be 18,105 new apartments available between July and September in the Songpa redevelopment area. That number represents 23 percent of the 78,524 apartments now in the district and is double the average annual new housing supply in southern Seoul since 2000.”

“Apartment prices in Songpa have fallen 0.3 percent on average this year. As the trend continues, more owners are considering selling.”

“‘Apartments purchased for investment purposes are on the market and the prices have declined by 50 million won this year,’ said Lee Sang-woo, another realtor in Jamsil.”

The Calgary Herald from Canada. “Alberta’s resale housing market is cooling in the same manner as Calgary’s with sales dropping and new listings rising dramatically in February, according to the Canadian Real Estate Association.”

“The association’s latest MLS data show unit sales for residential properties (single-family homes and condos) in the province decreased by 30.3 per cent compared with a year ago in February (6,602 to 4,601) while new listings increased by 44.9 per cent (from 7,800 to 11,302).”

“New listings were at the second-highest level ever for the province.”

“‘Now that price growth has come to a grinding halt, speculators are looking to get out of the marketplace,’ said Richard Corriveau, regional economist for Canada Mortgage and Housing Corp. ‘So people who had purchased in previous months are attempting to now get out of the market because there’s no incentive to wait for future price gains in the near term.’”

“The drop in Alberta sales, said Corriveau, is due to a sharp decline in net migration and ‘a response from prospective buyers on the rapid price escalation from previous years.’”

The Calgary Sun. “Calgary homeowners Darren and Colleen Long are feeling the impact of the city’s saturated housing market. The couple has had their family’s Douglasdale Estates home on the market for six months with plenty of showings, but no offers.”

“‘You need to compete,’ Colleen said of the large number of homes for sale. ‘There are four, five or six (homes for sale) on the same street.’”

“In Calgary, the average sale price for a single-family home in February was $471,696, well up from the $448,557 in 2007.”

The Vancouver Sun. “Greater Vancouver closed March with its slowest first-quarter for sales since 2001, Canada Mortgage and Housing Corp. analyst Robyn Adamache said Wednesday.”

“In Greater Vancouver, realtors saw 2,997 sales through the MLS in March, compared with 3,582 in March 2007. New listings added to the market in March were up four per cent to 5,674 compared with the same month a year ago.”

“Prices, however, remain elevated with the benchmark price of a so-called typical single-family home hitting $764,616 in March, 12 per cent more than March 2007.”

“In the Fraser Valley, property inventories hit a 10-year high in March, the Fraser Valley Real Estate Board reported, with total active listings up 27 per cent to 9,361 units compared with a year ago, although new listings in March were down from the same month a year ago. MLS sales in the Fraser Valley of 1,315 units represented a 25-per-cent decline from the same month a year ago.”

“Tsur Somerville, director of the centre for urban economics and real estate at the Sauder School of Business at the University of B.C., added that his sense is that the market psychology has shifted from ‘unmitigated optimism’ to caution, given what has happened in the U.S.”

“‘People are cognizant of risks to real estate in a way that, two years ago, they weren’t entertaining,’ Somerville added.”

The Winnipeg Free Press. “Bargain-savvy Manitobans are creating their own little desert storm, snapping up vacation homes in the Phoenix area as Arizona builders scramble to unload properties for as little as half the usual price.”

“Tom and Angela Lamboo of Winnipeg paid $117,500 for a brand new, 1,327-square-foot bungalow that includes three bedrooms, two bathrooms, a two-car garage, all new appliances, $3,000 worth of window coverings, a fully-landscaped front yard, and a 1.8-metre-high brick fence that runs all around the property.”

“‘Did I think we would get a brand new home for that price? No!’ Angela Lamboo said in an interview. ‘When you think about it, it’s crazy.’”

“Steve Lauritano, owner of Arizona Pro Realty, Inc., and business partner Diane Olson, an ex-Winnipeg police officer now living in Phoenix, said the type of home the Lamboos bought was selling three years ago for $220,000. Lauritano said Phoenix-area house prices haven’t been this low since the late 1980s.”

“Overextended homeowners have been losing their homes left and right, the banks are flooding the market with repossessed properties, and desperate builders and developers are unloading new homes at bargain-basement prices to reduce their debt loads.”

“And because nervous Phoenix residents aren’t buying move-up homes like they used to, builders are bending over backwards to accommodate foreign buyers, Lauritano said.”

“‘The prices for buying brand new are unbelievable,’ Olson added. ‘They’re cheaper than a lot of the (resale) homes that are available through foreclosures.’”

“‘Even if we were to decide to get out in a few years, I think it will be worth more than we paid for it,’ said Tony Russell, of Stonewall. ‘So I think it’s definitely going to be a good investment, as well.’”

“Lauritano agreed. ‘Home prices definitely will go up again,’ he said, adding the only question is when.”

The New York Times. “The rapid decline in housing prices is distorting the normal workings of the American labor market. The Census Bureau, however, calculates how many people move across state lines for all reasons, and that number fell by a startling 27 percent last year, after climbing by almost that percentage for each of the previous three years.”

“Out of 3,500 employees in the United States, Applied Industrial Technologies normally transfers 25 to 30 each year from one center to another, or to the headquarters in Cleveland.”

“Almost all are career people rising in the ranks. Despite the opportunity, transfers have fallen by half, VP Richard Shaw said. That is mainly because transferred employees too often find themselves owning two homes — one in the old location and one in the new — and paying two mortgages.”

“Applied tries to minimize the problem by paying one of the two mortgages for up to six months, the expectation being that the old home will sell by then. Increasingly, that does not happen, not with inventories of homes across the country at an 18-year high, according to the National Association of Realtors. That makes employees reluctant to move, even for a raise and a promotion, Mr. Shaw said.”

“He tells of one transferred executive ‘who ended up owning two homes for more than six months and, finding himself paying two mortgages, opted to move back to his original city, surrendering his new house to the bank.’”

WCNC reports from North Carolina. “Shattered glass and plywood-covered windows are a common sight in the Windy Ridge subdivision. More than half of the owners have defaulted on their mortgage payment in the last five years, according to real estate records reviewed by WCNC. City leaders blame absentee landlords, transient residents, and predatory lending for the rapid decay of the 5-year-old subdivision.”

“‘We know that (foreclosures) will only get worse,’ said Susan Burgess, Charlotte Mayor Pro-Tem said…adding the foreclosure problem is not limited to Windy Ridge.”

“Homeowners who have stayed in Windy Ridge have seen a decline in the value of neighboring properties. A house that originally sold for $108,000 recently sold at auction for just $58,300, online records show.”

From News 14 in North Carolina. “City leaders are taking aim at stopping the rising foreclosure rate in Charlotte. In the last seven years, the numbers of foreclosure filings are up 244 percent in Charlotte, from about 2,300 to nearly 8,000.”

“‘Being that prices are so steep, it’s driving people out of the neighborhood,’ said Rodrigo Robinson, who lives with his grandparents at a home in Windy Ridge. ‘Because of the foreclosed homes and the boarded up houses, that doesn’t look good for any neighborhood.’”

“Mayor Pat McCrory said he wants to target landlords who allow homes to fall into ruin or become havens for criminal activity.”

The Charlotte Observer from North Carolina. “The developers of a 75-unit condo project in South End have stopped sales and will build it as apartments instead. ‘We are returning deposits and releasing buyers from their contracts,’ said Terrence Llewellyn, whose Llewellyn Development is doing the project.”

“Other multifamily developers have adopted strategies similar to Chelsea’s and are shifting to apartments, said real estate analyst Frank Warren of Warren & Associates. In the Charlotte area, the apartment vacancy rate rose two percentage points to 9.2 percent over the past year due mainly to a flurry of new construction, especially along the light-rail line.”

“‘If Chelsea’s developers have any challenges,’ Warren said, ‘It’s going to be the potential for an oversupply of apartments in the South End market.’”

The Washington Post. “A new form of sightseeing is catching on in the Washington suburbs. They are known as foreclosure tours or home buyer tours. One that originated yesterday at a Northern Virginia Long and Foster office was labeled ‘The Centreville Gateway Foreclosure Tour of Homes.’”

“‘The benefit of this is that everyone is here at one time,’ said Debbie Jeffries, a Centreville resident who was hunting for something with enough garage space for her mint-condition 1985 Lincoln Town Car. ‘I want rock-bottom prices.’”

“One stop on the tour was a massive townhouse in Centreville that sold for $519,000 in February 2007 and is now listed at $399,000. Then there was a hearty brick rambler on a quiet Manassas Park street with a huge yard, hardwood floors and a finished basement. Asking price: $284,000.”

“‘As a buyer, you can still get in with zero money out of your pocket,’ said Kellian McIlwrath, a loan officer from Wells Fargo-affiliated Prosperity Mortgage, adding that banks are so eager to sell foreclosed properties that they are offering cash back to provide borrowers with enough for a down payment and closing costs.”

“After years of climbing, Frederick County home prices fell 2 percent in 2007. The figures didn’t surprise real estate appraiser Wayne Six. ‘We knew this was going to happen,’ said Six. The slump, he said, is a correction to the double-digit-percentage run-up in house prices from June 2001 to June 2005.”

“Doris White, supervisor of assessments for Frederick County, said she has seen a big increase in the number of foreclosures. ‘In every pile of deeds, I’m probably going to have five or six that are foreclosures,’ she said, noting that she has never experienced this in 25 years of assessment work.”

“‘People bought more than they should have when the market was at its peak,’ said Mary Richeimer, owner of an Urbana agency that represents only buyers. Now, she said, the foreclosures are adding to the glut of homes on the market.”

“Some of Richeimer’s clients prefer houses in poorer condition that sell for 25 to 30 percent less than comparable homes in good condition, she said, because they can make some repairs and show what she called ’some instant equity.’”

“Richeimer said she is also seeing more attempts at short sales. But getting a bank to accept a short sale, in which it forgives the seller the difference between the price of the house and the higher mortgage, is often wishful thinking on the seller’s part, she said.”

The Asbury Park Press from New Jersey. “After languishing for nearly two years, frozen in a declining market, more than 50 Lakewood homes were put up for sale Wednesday in the largest auction yet of properties seized from bankrupt real estate mogul Solomon Dwek.”

“Yet by the end, the banks still owned at least a third of the properties. Of the first 25 auctioned off, only 10 fell into the hands of individual bidders. The rest were either bought back or kept by the dozen banks because many offers fell short of mortgage amounts. Amboy Bank alone took home nine of its 17 parcels.”

“The first auctioned home — a three-bedroom condominium with a new kitchen on Governors Road — went for $155,000 to a mother buying it for her daughter. Later a young couple closed at $165,000 on the home they were renting on Downing Street.”

“After being outbid three times, Alexander Vargas, 29, and his fiancee, Mila Borisevich, 27, finally purchased a three-bedroom ranch house on Morris Avenue for $200,000 — their preset limit. After May 19, the couple can move into their first home, putting to use a house that has sat empty under an investor’s ownership.”

“‘It needs some new paint and carpet and it’s ready to go,’ Vargas, an Arby’s manager, said.”

“When Charles Stanziale, as one of the auctioneers Wednesday, cried ‘I’m shocked’ when a house on Tudor Court failed to get more than $171,000, investor Pat Fasano of Asbury Park scoffed, saying, ‘You’re in Lakewood. Where do you think you are, Beverly Hills?’”

“Overall, Stanziale considered the auction a success. ‘We got a lot of interest,’ he said. ‘Many were low-grade properties and we were lucky we got anything for them.’”

From 13 WHAM.com in New York. “Developers hoped to have all 23 lots on Northampton Estates in Ogden built and sold by now. Two years later, there are still nine lots left.”

“Housing starts in Monroe County are the lowest they’ve been since at least 1990, according to the Rochester Home Builders’ Association. In the last five years, there’s been a dramatic drop in single-family home construction. In 2002, 1,474 single-family home permits were issued, compared to 821 in 2007.”

“Rick Herman of RHBA, downplayed the numbers, pointing out that Rochester is in much better shape than some cities where there’s a glut in new homes.”

“‘I think it’s an adjustment period that we’re going through. The early 90s and mid-90s were really boom areas,’ Herman said. ‘We’ve also seen a number of those units go to outlying counties.’”

WCBS TV in New York. “The subprime mortgage mess is being blamed for a big spike in the number of foreclosures in Westchester County.”

“Westchester County Clerk Tim Idoni says foreclosure filings are up 39 percent over the first quarter of last year and up more than 200 percent over the first quarter of 2005. Many filings are hitting homes like 82 Maple Lane in Yonkers – in low-income neighborhoods.”

“‘Lower income areas, particularly in Mount Vernon and Yonkers have been preyed upon by some mortgage brokers who did not qualify the residents properly,’ Idoni said.”

“Nassau and Suffolk lead suburban counties with the highest number of foreclosure filings. But Putnam County has the highest foreclosure rate. The foreclosure rate in Westchester County is about average for New York State, and New York is doing a lot better than many other places.”

“Nevada, California and Florida lead the nation in terms of the foreclosure rate. New Jersey is ranked 13th, Connecticut 14th and New York all the way down at 30th.”

“For Matt Mickelson of Ossining, the American dream of home ownership has taken a distinctly nightmarish turn. He blames the broker who sold him a complicated mortgage that could reset to a higher rate at any moment.”

“‘I’m on the edge of foreclosure all the time because I don’t know when the next shoe is gonna drop,’ Mickelson said. ‘When they say hey you’re paying $2,500 now but next month it’s $5,000, just because that’s the way the ball bounces. Every day is like living with a gun to your head.’”

From Bloomberg. “Manhattan apartment sales plunged the most in 18 years in the first quarter as buyers faced the prospect of a recession and job cuts at Wall Street securities firms. Financial companies have cut at least 34,000 jobs in the past nine months as losses and writedowns related to mortgage- backed securities climbed to at least $230 billion.”

“Wall Street drives Manhattan real estate, with the median apartment price roughly tracking bonuses paid by investment banks since 1997, said New York-based real estate appraiser Miller Samuel President Jonathan Miller.”

“‘It’s not that they’re not looking, but there is no sense of urgency,’ said Prudential Douglas Elliman CEO Dottie Herman. ‘If you continue to see inventory rise, that would be a sign that you are going to see a price dip.’”

“‘What we are seeing now is buyers who are emboldened to be more aggressive in their offers,’ said Pam Liebman, Corcoran’s CEO. ‘They don’t hesitate to bid lower and sellers now will have to decide whether or not they want to lower their prices.’”

“‘There is no question 2007 was the record year for real estate in New York City,’ Liebman said. ‘I don’t think any of us will be surprised if 2008 doesn’t hold up in comparison.’”

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