The Housing Bubble

The Wall Street Journal reports on California. “While tighter lending standards have cut off all but the most credit-worthy borrowers from auto loans and home loans, many people are turning to credit cards and tapping more of their home-equity lines of credit to dig themselves in deeper. Theresa Leick of San Juan Capistrano, Calif., a loan processor, pulled $21,000 from her available home-equity line of credit in February to park in a certificate of deposit.”

“‘I’m fattening my reserves in case I have to go look for more work,’ says Ms. Leick, who says she is concerned about losing her income because she works in the mortgage business. She says she would have preferred not to have tapped her home-equity line, ‘but if the bank takes away my comfort zone, that will make me lose sleep at night.’”

“For the past several years, William Jordan, president of a financial-planning firm in Laguna Hills, Calif., has been advising clients to pull equity of their homes and put the money into safe, liquid accounts so they have access to the money. He recently advised one of his clients, Matilda Compean of La Mirada, Calif., to refinance her mortgage and take out cash after she was having trouble making ends meet.”

“The 54-year-old client-services manager began working extra hours last fall to help pay for higher household expenses, such as gas, and to save money to buy a car for her daughter, who had recently totaled her car. So, in January, she refinanced her mortgage and pulled out $60,000 in equity to purchase the automobile and set aside an emergency cash cushion.”

“Doing so, says Ms. Compean, ‘just gave me a lot of room to breathe. I was at my wit’s end. I just kept thinking things would get better.’”

National Public Radio. “Amber Barbosa didn’t graduate college. But she did get an education — by working for the now infamous subprime lender New Century Mortgage Corp.A few years later, she struck out on her own as a mortgage broker. ‘In 2006, I made close to $500,000,’ she says. Not bad for a 28-year-old with no college degree.”

“By then Barbosa, who was living outside of San Francisco, had a nice boat, a 27-foot Bayliner. She had several houses, a Mercedes and a Cadillac. ‘I was riding around in my ‘07 Escalade,’ she says. ‘God, I had three properties at the time — one right on the water with ocean access, another property worth $800,000.’”

“Barbosa says a lot of homeowners just wanted to take cash out of their homes and make a low payment — even if the rate on their loans would eventually adjust much higher.”

“She says she explained all the loan terms to them: ‘They knew about the adjustments and fees.’ But she says, ‘They just wanted their money and they wanted the deal to close. Whatever we would say to them, they would take the loan anyway.’”

“Anthony Narag worked as a loan officer for several different mortgage brokerage outfits in Southern California. He says everybody in the industry knew there was fraud all over the place: ‘It’s almost like baseball with steroids. They knew about it, but they didn’t do anything about it.’”

“According to Narag, an account executive from the now bankrupt lender New Century told brokers like him not to worry about a supporting letter from a certified public accountant.”

“‘He would tell people, ‘I have a CPA in my back pocket if you need one,’ Narag says. Narag says he also observed brokers printing fake bank statements or other income documents, and that there was a black market for these items.”

“Everybody — including the lenders and banks buying these loans — looked the other way, Narang says, because the money was so good.”

The San Gariel Valley Tribune. “Southern California’s housing market has weathered a severe downturn over the past year, with heavy price declines, tightened credit standards and scores of home foreclosures.”

“In West Covina, Master Remodelers is holding its own, despite the fact that business isn’t what it was a year ago. VP of sales Steve Kyne aid many homeowners who were looking to move up to a bigger house have opted instead to remodel or expand.”

“‘The last couple of clients we’ve done have put their house on the market but haven’t been able to find a buyer,’ he said. ‘And the economics of expanding, versus putting the house on the market and moving … there are just so many good reasons not to move.’”

“Gerald and Elsa Baca are going to have Master Remodelers renovate their 1,250-square-foot La Puente home by adding another 450 square feet. The couple had initially wanted to sell and move to a bigger home. But they couldn’t find a buyer.”

“‘Our house was on the market for nine months and our asking price dropped $50,000 but we couldn’t get a nibble,’ Baca said. ‘It’s frustrating to know that we missed the bubble. With the market declining and the subprime loans going away, that took a lot of buyers out of the market.’”

The Marin Independent Journal. “For the first time in more than a decade, the economy has supplanted transportation as the No. 1 worry of North Bay residents, according to a new poll. Among North Bay residents, 20 percent said the economy is the top concern, compared with 22 percent in the Bay Area as a whole.”

“Sixty-four percent of North Bay respondents described economic conditions in the Bay Area as bad, and 49 percent said they expect economic conditions to get worse over the next 12 months. Only 15 percent of North Bay residents said they expect economic conditions to improve over the next year.”

“Cynthia Murray, CEO of the North Bay Leadership Council and a former Marin County supervisor, said a Marin County survey released in November 2007 evidenced no economic trepidation. ‘For that to be the No. 1 issue, when it wasn’t on the radar screen in November, is fascinating,’ Murray said.”

“‘A big area of concern right now,’ Murray said, ‘is how much of this is perception and how much is reality. Businesses are sitting on more cash than they have had in a long time, but they’re not spending it.’”

“Jim Wunderman, the Bay Area Council’s CEO, sees the survey results as a ‘wake-up call.’ ‘If we don’t start talking about an environment where jobs can be front and center and do it quickly,’ Wunderman said, ‘we could be in for a world of hurt.’”

The San Francisco Chronicle. “Given the mortgage crisis, the flood of foreclosures and soaring fuel prices, it is not surprising that the economy was rated the region’s top problem, said Steve Levy, director of the Center for Continuing Study of the California Economy in Palo Alto.”

“‘This (poll) says what’s been on people’s minds,’ he said, ‘and they’ve been inundated with stories about the economy, about the mortgage crisis and about foreclosures.’”

“While transportation dropped from its usual position as the top problem, officials said that doesn’t mean gridlock has lessened. Residents are just more worried these days about having a job to get to than they are about how long it will take to get there.”

“‘The concerns people have day to day about their mobility are so strong that it takes a really strong (issue) to knock it off the top of their list,’ said Randy Rentschler, spokesman for the Metropolitan Transportation Commission. ‘And this is a serious issue.’”

“Like 15 percent of those surveyed, Joshua Dilworth, 32, of San Francisco, considers the high cost of housing the Bay Area’s biggest challenge.”

“‘It’s a huge issue,’ said Dilworth, who owns a home with his wife in the Excelsior district, ‘but I don’t know if it’s anything that can be dealt with because it’s an issue of supply and demand, and there are people willing to pay the high prices.’”

The Appeal Democrat. “Erma Olivio snaps out her resume and rattles off a long list of work skills to anyone who’ll listen. As the last attendees of Wednesday’s job fair at the Yuba-Sutter Fairgrounds wander out, Olivio stays on to chat with recruiters.”

“The 45-year-old Live Oak resident could be a poster child for the nation’s — and the region’s — flagging economy. Olivio was laid off Nov. 29 after the patio-cover maker she worked for in Sacramento saw several months of plummeting sales. She has been unable to find another job that pays enough to keep up with her mortgage payments.”

“‘First, the savings goes,’ she says. ‘Then, it’s the credit card — mine is maxed.’”

“Olivio says she is coming to terms with the fact that she could soon lose at least one of her two homes. The value of the house she lives in has decreased by roughly a third since she bought it two years ago. And she recently had to lower the rent on another property she owns in order to keep it occupied.”

“‘I’m in a situation,’ she says. ‘There’s not much out there, and the money’s gotta come in.’”

“Her brother moved in with her recently to help out financially, and to allow them both to save on expenses. But then the brother also was laid off from his job.”

“‘I’m scared,’ Olivio says, finally taking her stack of job applications and heading out the door. ‘But I can’t cry about it anymore. I’m a survivor and I can’t give up.’”

“Yuba-Sutter’s unemployment rate weighed in at 12.2 percent — the third highest among U.S. metro areas. High jobless figures help out Sam Steadman, a staffing and training manager, in his near-constant search for qualified workers.”

“‘There are a lot good candidates,’ he says, ‘It’s kind of like buying a house right now: You can just about pick whatever you want.’”

The North Coast Journal. “The Redwood Curtain wasn’t thick enough to insulate Raul Merezko from the country’s subprime mortgage crisis.”

“According to public documents obtained from the Humboldt County Recorder’s Office, Merezko, chosen at random from a list of over 80 individuals who have lost their homes for nonpayment since Jan. 1, 2007, bought his home in a nice neighborhood in Eureka for around $180,000 in October 2004.”

“Shortly thereafter, he took out two loans with Southern California-based Long Beach Mortgage Company. Merezko took out two adjustable-rate rider loans, one for $136,000 and another for $34,000, which meant he didn’t have to put any money down on the house.”

“According to realtor Dean Kessler, it was a golden time for homebuyers with little or no credit: ‘Basically you just had to fog a mirror and you could get a loan,’ he said.”

“A little over a year passed before Merezko decided to refinance, again with Long Beach, and this time for $238,500. On Oct. 17, 2007, three years almost to the day after he purchased his home, Merezko received a notice of default. He was behind in mortgage payments to the tune of $11,429.74.”

“Finally, in February of this year, his house sold for far below market value in what Kessler described as an ‘extreme short sale.’ A group of local investors picked up the property for $113,000.”

“Some contend that Humboldt County has weathered the national housing slump better than other parts of California. Humboldt State University economics professor Erick Eschker disagrees.”

“‘Anybody who says that there’s a Redwood Curtain, that we’re special, that we’re immune — they’re lying,’ he said.”

“In March of last year, Eschker presented a ‘County Outlook’ for 2008. In that presentation, he compared housing prices in various California cities (Redding, Sacramento, San Francisco, San Jose, Santa Rosa, Los Angeles and San Diego) to Humboldt County between 2002 and 2008.”

“‘The way that prices were rising in L.A. and Sacramento,’ he said, ‘we have the same pattern here, and so the question is what’s going to happen with Humboldt County? Well everybody who’s making price predictions for those areas is predicting further price declines. … We shared the same upswing with them and it looks like we’ve entered the same downswing [as well].’”

“Granted, not every notice of default results in a completed foreclosure, but the data that Eschker has gathered indicates that notices of default tend to peak slightly before trustee’s deeds (the final document in the foreclosure process) do.”

“That means that in light of the 19-year high in notices of default the county is experiencing now, Eschker predicts that trustee’s deeds will soon surpass their late-’90s peak.”

“The real problem, according to Dan Johnson, president of Danco Builders, is the lack of jobs in the county. The market for first-time homebuyers is nonexistent, he said, but houses in the $450,000-$600,000 range are selling.”

Some housing bubble news from Wall Street, Washington and beyond. AP, “The U.S. economy has “turned down sharply” and is at risk for further weakening, US Treasury Secretary Henry Paulson said. Paulson also called it a ‘disgrace’ that there hasn’t been any legislation to reform oversight of Fannie and Freddie. And he said financial institutions shouldn’t look to government to raise capital but should raise it on their own.”

“He said a swoon in the housing sector, which was largely to blame for the rough patch, was necessary. ‘We need to have this correction. It’s not pleasant, but we need to have it,’ Paulson said in reference to declining U.S. house prices and homebuilding.”

The Wall Street Journal. “With criticism of Former Federal Reserve Chairman Alan Greenspan more prevalent, one longtime thorn in his side couldn’t resist weighing in.”

“‘He protests too loudly of the criticism that is justly due him,’ Sen. Jim Bunning of Kentucky said after reading a lengthy article about Mr. Greenspan’s efforts to address his critics in Tuesday’s Wall Street Journal. ‘I’ve never seen someone who doesn’t think he needs defending defend himself so much,’ he told The Wall Street Journal.”

“‘On this latest housing debacle and boom, holding rates too low for too long led to the boom and to the bust,’ he said.”

“Mr. Bunning admits he didn’t tell Mr. Greenspan at the time it was holding rates too low. His own lack of foresight, however, isn’t a reason to be less critical of the Fed, he says.”

“‘If they don’t have a more sophisticated way of gauging monetary policy and the economy than an ordinary member of the House or Senate banking committee… we should do away with the Fed,’ Mr. Bunning said.”

Finfacts Ireland. “The world’s biggest banks on Wednesday publicly accepted much of the blame for the credit crisis as they seek to head-off demands for more regulation.”

“The Institute of International Finance, representing more than 375 of the world’s largest financial companies, acknowledged ‘major points of weaknesses in business practices,’ including bankers’ pay and the management of risk.”

“The report says that market changes that have both catalyzed and resulted from the growth of the ‘originate-to-distribute’ business model have created incentives for both firms and individual employees that have, in some cases, conflicted with sound underwriting practices, realization of risk-management goals, or the long-term interests of shareholders, reflecting, in part, the emphasis on short-term profitability in financial reporting and bonus payouts.”

The Arab News. “Real estate prices in Riyadh have increased by 40 to 90 percent in recent months, but analysts said property prices in the Kingdom were still the lowest compared to neighboring GCC countries.”

“Suleiman Al-Amri, chairman of a real estate company, said prices of real estate in some areas of Riyadh have increased by 90 percent. ‘This is really frightening.’”

“He said he believed that real estate prices in the Kingdom were much lower compared to neighboring countries. ‘This indicates that real estate prices in the Kingdom are still normal,’ he added.”

“Al-Amri spoke about growing prospects for investment in real estate in Riyadh as 70 percent of Saudis living in the city still do not own a house. ‘This situation will increase demand for real estate for building houses,’ he added.”

“Abdul Aziz Al-Jaad, a member of the real estate committee at the Riyadh Chamber of Commerce and Industry, said the tremendous hike in prices would discourage many Saudis from purchasing land. ‘They will wait until the prices come down,’ he added.”

The Geelong Advertiser from Australia. “Greenspan’s defence of his record as US Federal Reserve chairman can shed some light on the outlook for housing prices in Australia. The key is to see housing through the eyes of investors, as a financial asset.”

“‘The dramatic fall in real long-term interest rates statistically explains, and is the most likely major cause of, real estate capitalisation rates (rent as a percentage of a property’s value) that declined and converged across the globe,’ he said.”

“He said the reason for the slide in long-term bond yields was that the primary driver of those yields _ inflation, had fallen since surging in the 1970s. Low inflation means investors not only require less compensation for expected price rises but are less worried about volatility in investment returns. Accordingly, they will accept lower yields.”

“In other words, investors will pay nearly twice today what they would have in 1989 to receive a given dollar amount of rent.”

“The moral of this story is that, although housing prices might suffer a drop as the economy slows, there is no reason to believe prices have lost touch with economic fundamentals. There is no bubble to be burst.”

The Globe & Mail from Canada. “There’s no shortage of housing markets that look like bubbles waiting to burst, but economists say Canada has become one of the safer places in the developed world to own residential real estate.”

“In 2004, the U.S. was in the same state of ‘equilibrium’ Canada is now in, but blew it when banks started providing exotic mortgages, creating an artificial demand for houses, said Benjamin Tal, senior economist at CIBC World Markets Inc.”

“‘Remember that things were fine there [in the U.S.] in 2004. Then rates went up, and bankers with imagination created this bubble,’ he said.”

“Fewer speculators and more conservative lending practices have helped protect Canada from a big housing market downturn like that in the U.S. and some European markets, said Sherry Cooper, chief economist at BMO Nesbitt Burns Inc.”

“‘There’s been a real market for flipping homes [in those countries]. We just haven’t seen that develop at all in Toronto or even out West, where we have seen big increases in house prices,’ Ms. Cooper said.”

The Toronto Sun. “Compared to the first quarter of 2007, Toronto’s starts soared by 60% in the first three months of 2008, with the condo market still on fire. What you have to remember is: Today’s starts are yesterday’s sales.”

“After falling 14% in February, Toronto sales plunged another 27% in March. For the GTA sales were off 22%, with 6,631 homes changing hands last month, compared to 8,518 a year ago.”

“There will not be a crash, aka 1990s-style, says Ted Tsiakopoulos, Ontario economist with Canada Mortgage and Housing Corp. Price gains are also slowing. But Tsiakopoulous predicts Toronto’s condo market will remain strong, for a number of reasons.”

“Foreign investors continue to snap them up, empty nesters are also buying and first-time buyers are flocking to condo-apartments for affordability. Bottom line, he says: ‘Consumers are not speculating that prices are going south, which they are in the U.S.’”

The Christian Science Monitor. “In March, several hundred Toronto residents braved the cold to line up before the opening of the sales office of a new condo project. Certified checks in hand, they wanted to make sure they got their choice within Aura, a proposed 75-story residential tower scheduled to go up downtown.”

“This isn’t the first time condo sales debuts have drawn large crowds. In November 2007, speculative buyers waited patiently beside heat lamps to place deposits on another 80-story slab. Despite a last-minute price hike – apartments advertised for $2 million catapulted to $8 million – sales remained heavy.”

“In 2008, 21,000 condo units are expected to hit the market and an additional 35,000 units are under development, according to Urbanation. The city is second only to the New York City region, the epicenter of condo building in North America.”

“But with up to 40 percent of new condo units in Toronto being bought by speculative investors rather than homeowners, the conditions are in place for a realestate bubble to form, analysts say. Still, other observers remain cautiously upbeat.”

“‘The thing that marks the boom in Toronto is that unlike New York City or Miami at its height, prices here are still really affordable,’ says Jane Renwick, editor of Urbanation. ‘Still, there’s a sense that the city’s real estate market is now in the eighth year of a five-year cycle.’”

From Reuters. “Fewer Dutch houses were sold in the first quarter of 2008 as Dutch consumer confidence suffered from the credit crisis, but average prices still went up, the Dutch organisation of house agents NVM said on Thursday.”

“NVM Chairman Ger Hukker dismissed fears of a Dutch housing bubble after the International Monetary Fund said last week that for some countries, including the Netherlands, house prices had grown in the decade ending in 2007 to 30 percent higher than economic fundamentals would suggest.”

“Dutch Finance Minister Wouter Bos also rebuffed the IMF’s concerns on Thursday, saying in a statement that the Dutch housing market was not comparable to the U.S. market. ‘In the Netherlands we do not have a thriving market for risky mortgages as in the United States, where these were the cause of the financial crisis,’ Bos said.”

The Financial Times. “The Bank of Ireland Mortgages has e-mailed brokers with the update that its mortgage range, which includes standard, self-certification and buy-to-let products, will be pulled until the end of next week.”

“It said the move had been prompted by the need to preserve service levels after experiencing high demand for products after many lenders have pulled products out of the market.”

From Belfast Today. “In a fresh sign of the uncertain housing market, a Northern Ireland lender last night became the last UK bank offering 100 per cent mortgages.”

“The Ulster Bank withdrew its equivalent product yesterday following the last mainstream UK bank’s withdrawal from the high risk sector on Monday. Such mortgages do not require the buyer to pay any deposit and were a common feature during the credit boom.”

“Andrew Hagger, spokesman for Moneyfacts, said that no other UK bank was now offering 100 per cent mortgages. ‘This time last year there were about 40 mortgage providers offering 100 per cent mortgages,’ he said. ‘Previously, 125 per cent mortgages were available, but now the most you can borrow is 97 per cent of a property’s value and those deals are coming under pressure.’”

The Strabane Chronicle. “Tough challenges lie ahead for the North West’s construction workers as a downturn in the industry begins to take hold, a leading building company warned this week. Bridge Construction’s Contracts Manager Michael McCauley spoke out after the Construction Employers Federation warned that ‘hundreds, if not thousands’ of jobs are at risk if the slump continues.”

“Around 84,000 people work in the construction industry in the North of Ireland, generating as much as £3.5bn annually.”

“‘One of the main reasons is that mortgages are a lot harder to get now, so people have stopped buying. So the market is being flooded with properties that no one is purchasing and the demand for new builds just isn’t there. It is making life very difficult for the construction industry,’ Mr McCauley explained.”

“‘Largely what has happened is that over the past four or five years house prices here have been on the rise. But the investors who were snapping up the properties have moved on and what we are seeing now is the knock on effect of that,’ he said. ‘The next six months to a year will be a major challenge because things are looking fairly bleak.’”

From Kilkenny Today. “The asking price for houses being sold in Kilkenny fell 3.3% in the first quarter of this year, according to a leading property web site. The average asking price for a house in Kilkenny is now €321,025.”

“The most significant drops occurred in the most expensive areas of the country, with asking prices falling by up to 7% in three months in South County Dublin and Wicklow. The fall in asking prices in early 2008 marks a change from late 2007, when asking prices remained static, but many sellers accepted offers below the advertised price.”

“‘Sellers appear to have accepted that the downturn in the housing market may last a while,’ commented economist Ronan Lyons. ‘With huge numbers of property for sale in many parts of the country, sellers are now finding they have to reduce the asking price in order to attract interest from buyers.’”

The Guardian. “Property Ladder, that inspirational Channel 4 show in which aspiring developers buy a house, do it up and flog it on for what they confidently expect will be a massive profit, returned to our screens for a new series last night, accompanied by a rash of front pages predicting imminent meltdown in the UK housing market.”

“And could Property Ladder itself, presented by the irrepressible Sarah Beeny, not be profitably remodelled as Property Snake?”

“Not a bit of it, says Beeny brightly, though she concedes it is a pretty cool title for a show: ‘How to make money in a falling market - that could be a real winner. It’s not going to happen, though, first of all because despite all those headlines saying property prices are going to collapse by half, I genuinely think a crash is phenomenally unlikely to happen. Some property prices will fall - some already have - but I don’t believe the majority will.’”

“Second, she continues, ‘People who make property make money in all markets and in all countries. There’ll be a few more losers, sure: people have been under the impression that you really can’t fail, and over the past two years you could have bought somewhere, sat on a sunlounger for a month, sold it on and made a profit. So there’s been overconfidence, and there’ll be caution. But people have to live somewhere, and as long as you buy at the right price.’”

“Britain’s biggest and oldest home interiors mag, editor Isobel McKenzie-Price has few qualms about the knock-on effect of a housing slump either.”

“‘Obviously these are going to be tough times,’ she remarks. ‘But what we’ve really noticed over the past five years or so is that people don’t talk about their ‘home’ any more - they talk about their ‘property’. They’re hyper-aware that their house is their biggest asset, and what they’re interested in doing is making the most of it.’”

“‘There’s always going to be a market for these programmes,’ concludes a thoroughly bouncy Beeny. ‘I’m not saying mine will be among them, and there may not be as many of them as there are at the moment - which, I would be the first to admit, is a little bit excessive. It would be nice, just once in a while, to see something else on the telly for a change.’”

From BBC News. “The drop in house prices might be a disaster for many home-owners, but some first-time buyers see it as a godsend. Left behind by more than a decade of soaring property values, thousands of young workers look to a slump as their only hope of securing an affordable mortgage.”

“One frustrated young professional is 34-year-old Izzy Miyaghi from Birmingham. He has been trying to get his feet on the first rung of the property ladder for three years. But Izzy’s masters degree and £28,000-a-year job as a community education outreach officer have not helped him achieve his ambition.”

“With a typical flat in his area selling for £120,000, he believes only a housing recession will help him. ‘I can’t wait for the crash,’ he says. ‘Bring it on.’”

“‘People talk about the crisis in the property market. But the real crisis is that so many people can’t afford a home of their own,’ he said. ‘I’m not looking for an investment. I’m looking for somewhere to live. The sooner a correction comes along, the better.’”

“However, the falling cost of property may not be the immediate salvation many would-be home-owners are banking on. Jonathan Davis, managing director of chartered financial planners Armstrong Davis Ltd, predicted the credit crunch would eventually be good news for those priced out of the market - but advised first-time buyers to wait.”

“‘Prices are likely to fall by 30-40% over a four-year period nationally,’ he advises. ‘Don’t touch property with a bargepole for two or three years.’”"

Seacoast Online reports on Maine. “After more than 20 years in business, Downeast Mortgage has closed all but one of its offices in Maine, including its York Branch. According to William Lund, superintendent of Maine’s Bureau of Consumer Credit Protection, Downeast Mortgage’s demise reflects a statewide crisis that began last year. ‘It’s very reflective of what’s been happening the last 12 months,’ Lund said. ‘Nearly every week, we’ve been in conference calls with regulators in other states to deal with other mortgage companies in other states.’”

“‘A decade ago, there were 150 lenders and brokers who were licensed in Maine,’ Lund said. ‘Last year, we had over 1,000. This past year, the number of lenders is down 20 percent, so we’re down to 800. Obviously, there’s been a severe contraction in the business.’”

“Lund said there are no easy solutions to the mortgage predicament, and cited the secondary market, in which lenders sell mortgages to investors, as the culprit.”

“‘There was a growing reluctance of investors to get involved,’ he said. ‘When the investors looked at the quality of subprime loans, they saw they were not as advertised. This sentiment spilled over and trickled down.’”

“Not even Jeffrey Turcotte, who opened the York branch in 2005 and resigned this past February, saw it coming. ‘I had a feeling something wasn’t right, but I did not know it would close its doors within two months,’ said Turcotte, who has since moved on to First Horizon Home Loans.”

“Turcotte does believe, however, some good can come from what has transpired in the past year within the mortgage industry. ‘I think a lot of the loan officers and companies that took advantage of loose underwriting and consumers are gone,’ he said.”

Vermont Public Radio. “Vermont has avoided the most serious problems in the housing and credit markets. But a new report shows that real estate sales and prices have both declined over the winter.”

“‘Median prices of single-family primary homes are not rising anymore. In fact for this one four-month period we looked at, they had dropped 2.6 compared to the same four-month period a year earlier,’ (said) Phil Dodd who publishes the Vermont Property Owners Report.”

“‘Over the last four or five, six years, people saw their house as a giant ATM machine. And as it went up in value 6, 7, 8, 10 percent per year, on a $150,000-$200,000 house, you’re talking about significant increases in the value of that house … And people were spending based on their increased wealth,’ said economist Art Woolf.”

“Woolf believes it will get worse - and prices will continue to decline into next year. (Woolf) ‘I think that it’s going to be quite a long time before housing prices start increasing at any significant rate of growth. And that harkens back to the 1990s. From about 1990 until about 1997, the average price house in Vermont didn’t change at all.’”

The Telegraph from New Hampshire. “Foreclosures in Hillsborough County accelerated during the first quarter of the year compared to last year’s level, which was very high.”

“According to the Hillsborough County Registry of Deeds, 224 foreclosures were completed between Jan. 1 and March 31 this year, compared to 96 in the same period in 2007 – an increase of more than 130 percent.”

“The jump was particularly sharp in Nashua, Hudson and Merrimack, all of which saw foreclosures triple during the first quarter, compared to the first quarter of 2007. Last year, Hillsborough County had 629 foreclosures, more than twice as many as the year before and six times the tally of 2005.”

“(In) Nashua, foreclosures are…growing quickly enough to attract the Foreclosure Express – a whirlwind Saturday tour of about 10 bank-owned properties…the first of its kind in New Hampshire.”

“Prices started at $95,000 for a condo with severe water damage, averaged in the mid to upper $100s or low to mid $200s for single-family homes, and capped out at $419,900 for the standout – a brand new home in Hudson that went into foreclosure while the builder still owned it.”

“‘We liked the brand new one, of course,’ said Mary Clawson, 24, of Nashua. ‘Other than that, most of these are too much work.’”

The Standard Times from Massachusetts. “The developer in the transit-related apartment and condo complex near the Middleboro/Lakeville commuter rail station is seeking to build all market-rate condominiums due to the housing slump.”

“Developer Jonathan White said the project can no longer secure financing if the condos are not all built at market-rate prices. There also is the possibility that more units would be used as apartments rather than condos.”

“‘If I don’t get this sort of relief, I may not be able to build this complex,’ Mr. White told the selectmen.”

“Mr. White said, the condos would level off at a lower price due to the elimination of the affordable units. He said condos would sell for less than $200,000.”

The Boston Channel from Massachusetts. “NewsCenter 5’s Gail Huff reported that there are concerns about arson fires becoming a problem around the state as more and more properties are abandonded and become vacant.”

“Back in the early 1990s, when the real estate market tanket, many properties succumbed to arson and officials don’t want history repeating itself. In Brockton, at least six houses burned down over the winter and state Fire Marshal Stephen Coan fears there will be a similar surge if something isn’t done proactively to address the foreclosure crisis.”

The Hartford Courant from Connecticut. “Connecticut’s declining housing market showed no signs of improvement in February, with the median sales price of single-family homes dropping by $15,000 compared to a year ago — the third month in a row that prices have fallen.”

“Sales of single-family houses also plunged in February, the sixth month in a row that the number of home sales in Connecticut dropped by double-digit percentages, according to The Warren Group.”

“Local observers of the real estate market said that it will probably get worse before it gets better.”

“‘I think it’s really going to be a slow market for housing in Connecticut. This is not the kind of thing that is going to turn on a dime and start to improve,’ said Steven P. Lanza, executive editor of the University of Connecticut’s economic publication. ‘It’s a weak market and it is going to take time to work our way out of it. We’re just not seeing signs that the market is even beginning to work its way out.’”

“‘Whether or not your house sells depends purely on the improvements in the house. If it’s nice and shows well, there are people still out there who will pay a premium for that,’ said Charlie Kaylor, an agent in West Hartford. ‘People don’t want fixer-uppers, even at a reduced price. Sellers know that they…can’t just put it on the market and hope they get a buyer like they could three years ago. It just won’t happen.’”

The Litchfield County Times from Connecticut. “David Bain of Bain Real Estate in Kent feels that the Connecticut market has remained healthy despite the national market’s doldrums.”

“‘Buyers are being very cautious right now,’ Mr. Bain said. ‘They’re expecting sellers to come down [on price], and sellers know they don’t have to, because they know that buyers’ mentality is because of bad press. It’s a great time for someone to buy a house. These prices are going to be ones that you will be dreaming about six months from now.’”

“‘I think we are really in a separate market than the national, and we continue to be,’ Mr. Bain continued. ‘Once it’s perceived that you’ve hit the bottom, these prices won’t be available. The sellers will dig their heels in all the more.’”

The Journal News from New York. “The median price for a single-family home in Rockland fell 5.2 percent during the first three months of the year to $455,000 compared with $480,000 in the same period a year ago, according to figures from the Greater Hudson Valley MLS.”

“Calling the figures ‘disappointing,’ said Ann Garti, CEO at Greater Hudson Valley MLS., ‘There’s been a significant change in the number of units sold.’”

“During the first three months of the year, 216 single-family homes changed hands in Rockland County, more than a third fewer than last year when 329 units found new owners. At the current pace, it would take about a year and a half to sell all of the single-family homes currently for sale in Rockland County, according to calculations by The Journal News.”

“The same phenomena that afflicted Rockland homes - far fewer transactions - occurred in Orange, with sales falling by nearly half to 383 during the quarter, compared with 563 last year.”

“Pricing aggressively is a good strategy, said Matt Rand, managing partner at Prudential Rand Realty, which has offices throughout Westchester, Putnam, Rockland and other Hudson Valley counties.”

“Buyers want to pay what a home is worth, he said, but not a penny more.”

“With the spring selling season under way, April could be a key month for those looking to sell, Rand said, noting that his firm planned about 145 open houses in Rockland alone this weekend.”

“‘We have demand out there,’ Rand said. ‘What we need is some new inventory that’s priced well.’”

AHN News on New York. “The MLS of Long Island’s Website showed a list with almost a thousand homes with price ranging from $1 million to $1.5 million on its roster. The units are located mostly in Nassau and Suffolk.”

“But it would likely take time to sell these pricey properties since purchasing one involves more than just paying a $250,000 to $500,000 downpayment. New owners would also need to shoulder the mansion tax, equivalent to 1 percent of the home’s price tag.”

“Peter Elkowitz, CEO of the Long Island Housing Partnership, pointed out these large houses would require a job that pays $400,000 yearly, although most of their buyers source their down payment from the sale of their current unit.”

“Homeowners, from large ones to smaller ones, have been struggling with keeping up with their monthly amortizations. On the last quarter of 2007, delinquency rates rose to 5.82 percent, a 23-year high.”

The Press of Atlantic City from New Jersey. “The United States is in a recession, according to the Economic Cycle Research Institute. And southern New Jersey’s economic activity is receding, too, losing jobs and falling behind the rest of the state for the first time in years.”

“‘Everybody and your mother knows it’s a recession, except for President Bush and Bernanke,’ said Lakshman Achuthan, managing director of ECRI. ‘They know in private, but it’s their role to be cheerleaders for the economy.’”

“The region’s recession is clearer in the construction segment, said Richard Perniciaro, dean of administration at Atlantic Cape Community College and director of its Center for Regional and Business Research. Building permits in the two-county market have fallen from 2,432 in 2005 to 1,070 last year, a level not seen since the last recession.”

“The loss of jobs has been led by the area’s dominant casino industry, which shed 500 jobs in the past year, he said.”

“‘We continue to attract retirees with a fair amount of money, but we’re not attracting the working families because there is no job growth going on,’ Perniciaro said.”

The Courier Post from New Jersey. “A Pennsylvania company has withdrawn as redeveloper for a controversial project along Big Timber Creek here, officials said Wednesday.”

“Fieldstone Associates said the weak housing market doomed its $50 million project, which had called for 253 condominiums and 15,000 square feet of retail space.”

“Wednesday’s announcement, which was welcomed by the project’s critics, was the second big redevelopment project to fall through in South Jersey in recent weeks. Cherokee Investment Partners of North Carolina also cited the housing slump when it dropped plans last week for a $1 billion makeover of Pennsauken’s Delaware River waterfront, including Petty’s Island.”

“‘The Westville project is a victim of the national recession and a depressed housing market,’ said Art Corsini, a principal in the Doylestown firm.”

“The project sparked opposition because 27 property owners would have had to make way for planned construction. Critics feared some landowners would be forced to sell their property by eminent domain.”

“‘I’m glad if it eliminates the threat of eminent domain,’ said Paul Demier, a resident who lives just outside the redevelopment zone. ‘Maybe this could be a new starting point, where we could improve Westville without hurting anybody.’”

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