The Housing Bubble

The Union Tribune reports from California. “Even before the doors opened, dozens of people had gathered yesterday outside Golden Hall at the downtown Community Concourse to attend a free clinic for financially distressed homeowners. ‘You can tell how hungry for information people are from someone they feel they can trust,’ said Gabe del Rio, president of the nonprofit Housing Opportunities Collaborative. ‘Everyone said, ‘You’ll be able to refinance out of this.’ That is the case only if you have equity.’”

“There were 1,316 residential foreclosures countywide in February, a rise of nearly 244 percent over February 2007.”

“Thomas Frantz, a transit maintenance foreman, said his lender had been unwilling to modify his financing. his monthly mortgage payments had risen from an initial $1,989 to $2,767, more than he could afford. ‘We got into the property with no money down 2½ years ago,’ he said. ‘We didn’t really know what we were doing. They never explained about the loan, just: ‘You qualified; here’s your new home.’”

“Alicia Prather, a community relations manager for GMAC ResCap, said she was able to help one household move from an adjustable-rate loan to a fixed-rate mortgage. ‘Our job is to keep homeowners in their homes, but it has to make business sense,’ Prather said.”

The LA Daily News. “David Day’s house-flipping strategy flopped and now he’s fighting for his financial life. Like so many others, he’ll likely lose.”

“Day and his family are on foreclosure’s doorstep, struggling to make mortgage payments totaling $6,240 a month. ‘I haven’t slept in five months. I wake up every morning in a cold sweat. I’m getting ready to go into bankruptcy,’ he said. ‘There is no money for food, basically.’”

“Day, a record producer who lives in Granada Hills, is upset that his lenders won’t modify the mortgages on either his residence or investment property. So far, all the assistance plans exclude speculators.”

“Howard Hack, owner of Howardsappraisal.com, sees it happening every day. ‘In many (of these) neighborhoods, half of the comps are foreclosures,’ he said.”

“The misery continues to build. As of April 4, across Los Angeles County in the past 120 days there were 119,663 pre- foreclosure proceedings initiated, 55,482 property auctions and 30,368 properties repossessed, according to Foreclosures.com. In the San Fernando Valley alone, there were almost as many foreclosures in the first two months of this year as sales.”

“Mary Funk, president of the Southland Regional Association of Realtors, specializes in foreclosures. Some of her clients have adopted a ‘cash for keys’ policy to minimize any damage left behind by a frustrated former owner.”

“‘If they deliver the keys to me and have the house vacant and broom clean, I hand them a check and they give me the keys and they are gone,’ Funk said.”

“That might become the best- case scenario - if you want to call it that - for Day, the investor. He said he’ll probably let the investment property slide into foreclosure and keep making the mortgage payment on the house he and his family have lived in for two decades.”

“‘We had no idea that this was the beginning of the end,’ he said of his attempt to cash in on a hot market that had chilled. ‘We got blindsided.’”

“While there are not many buyers in most markets, they share a common trait: tenacity. They are striking deals in a market with a distinct yin - record low sales - and yang - soaring foreclosures that are pushing supply up and prices down.”

“Richard Shih, who’s been house hunting since 2000, always knew that financial gravity would re-enter this overheated housing market. It has. And he just made an astounding deal. Shih recently paid $336,500 in cash for a house in the 22800 block of Crespi Street in Woodland Hills, a south-of-Ventura Boulevard property valued last May at $855,000.”

“‘I’m really interested in real estate and I’ve seen former cycles,’ he said. ‘I didn’t think these prices would be sustained.’”

“Sky Hoffman and Carrie Locklyn (are) the new owners of a 1,400-square-foot, three-bedroom, two-bath bungalow in Van Nuys, not far from their apartment. Their Realtor, Steve N. Smallson, said they had great credit and a 10 percent down payment so they breezed through the qualification process for a 30-year, fixed-rate mortgage.”

“The house, a foreclosure, was bought in 2006 for $679,000 and Hoffman and Locklyn paid $420,000, or 38.1 percent less than the previous owner.”

“The former owners were evicted and the house was full of their belongings. Squatters had moved in and the copper plumbing and three window air conditioners had been stolen. ‘I call this the Disneyland house,’ Hoffman said. ‘Everything is Mickey Mouse.’”

The Press Telegram. “Many real estate agents insist this is a great time to buy a house because so many foreclosed properties are on the market. But two years from now there might be even better deals, at least in Southern California, where the foreclosure situation is going to worsen.”

“‘We’re going to see more notices of default and more notices of trustee sales (foreclosures),’ said Michael Carney, executive director of the Real Estate Research Council at California State Polytechnic University, Pomona.”

“Carney disagrees with the popular argument that the real estate meltdown was caused by the huge number of buyers who obtained funky mortgages just to get into a house.”

“He maintains it’s a factor of price, not payment. ‘The main reason for the huge surge in foreclosures is that home prices didn’t keep going up,’ he said. ‘They started falling, and this simply caused people to walk away from these properties.’”

“‘Excess supply is responsible for much of the risk we’re seeing in the market,’ David W. Berson, PMI’s chief economist and strategist, wrote in his report.”

“‘Are we nearing the end of the current housing downturn?’ Bernson wrote. ‘We don’t think so, given the magnitude of the run-up in housing, with no significant housing downturn since the recession of 1991-92.’”

Inside Bay Area. “Struggling with rising prices and a stalled economy, a growing number of Bay Area families are turning to food stamps. ‘More and more, the people the food stamp program is serving are people who are working, but simply aren’t earning enough money,’ explained Jessica Bartholow, food stamp outreach manager at the California Association of Food Banks.”

“The housing crunch has hit particularly hard for East Bay families who rely on construction work, said Allison Pratt, director of policy and services for the Alameda County Community Food Bank. ‘They’re not really building that many new houses anymore.’”

“And phones continue ringing at the food bank’s emergency help line, where call volume was 26 percent higher in March than during the same period last year. ‘To us, that’s really a strong indication the families are struggling,’ Pratt said.”

The Marin Independent Journal. “Marin’s foreclosure rate has more than doubled over the past year, according to an agency that tracks troubled properties statewide. A snapshot of Marin’s foreclosure picture…indicated 581 properties have notices of default, are likely to head to auction or have been taken back by banks within the last 120 days.”

“Out of the 581 properties, 379 are in a pre-foreclosure state, 93 are in auction and 109 are owned by the bank. Novato and San Rafael posted the most properties in various states of foreclosure trouble, with 280 and 161 respectively, over the past 120 days.”

“Mark Lachtman, president of First Capital Group in San Rafael, blamed the economy and bad loans as culprits.”

“‘People bought property when it was much easier to get a loan with little or no documentation,’ he said. ‘Now that the economy is slowing and real estate prices tend to be soft and underwriting standards continue to tighten as we speak, we don’t have appreciation and you cannot refinance to get lower rates anymore.’”

The San Francisco Chronicle. “Mortgage relief? What relief? Despite the Federal Reserve slashing interest rates and Congress raising limits for conforming loans, the home-lending system is still in a logjam. ‘Right now, borrowers are still getting the short end of the stick,’ said Rob Chrisman, director of capital markets at Residential Pacific Mortgage in Walnut Creek.”

“If anything, mortgages are harder to get and - except for traditional ‘conforming’ loans to highly qualified borrowers - more expensive.”

“‘The mortgage market has been locked up since last August and is still as locked up today as it was Sept. 1, if not worse,’ said Guy Cecala, publisher of Inside Mortgage Finance. ‘This is clearly the worst mortgage market environment we’ve seen since the Depression.’”

“Ever since word leaked that Congress would redefine conforming loans in high-cost areas to go as high as $729,750, brokers were salivating at the idea of a potential gold mine of homeowners rushing to refinance. They hoped the new ‘conforming jumbos’ or ‘jumbo lights’ - loans between the old $417,000 limit and the new $729,750 cap - would carry favorable interest rates.”

“‘I have a pipeline filled with people who can’t (refinance) because these … jumbo lights are useless,’ Marc Savoy, a mortgage broker with San Francisco Pacific Mortgage Consultants, wrote in an e-mail. ‘The qualifying guidelines are onerous (i.e., income, credit and equity) and the rates are up toward 7 percent. Who’s that going to help? Not many people.’”

“An Oakland woman, who asked not to be identified, wanted to refinance an adjustable-rate mortgage on her $1.2 million house purchased four years ago. She and her husband have excellent credit and incomes, have 30 percent equity in the home, and are willing to pay down the current loan enough to increase equity to 40 percent.”

“In fact, they can easily qualify for one of the new ‘jumbo light’ loans - but they’re being quoted interest rates at a pricey 7.5 to 8.5 percent.”

“‘What that tells me is (banks) just don’t want to lend,’ she said. ‘(The new conforming limits) are having absolutely no effect whatsoever. $417,00 is still the conforming loan limit. It’s a travesty.’”

“Bill Boze, a Realtor with Prudential California’s Montclair office, said he sees the impact of the mortgage crunch every day. Boze said he represented a well-qualified couple buying a Montclair home for more than $1 million and making a 20 percent down payment - usually considered the gold standard.”

“At the last minute, the lender said that all of Oakland is now considered a ‘declining market’ where home values are sinking, and required that the couple put down 25 percent. They were able to do it, but it doesn’t bode well for future deals.”

“‘This ‘declining market’ thing of lenders approving you, then requiring an extra 5 percent down is kind of scary,’ he said. ‘It’s a real trap for people.’”

“‘Lending today looks really familiar to people who were lending 10 or 15 years ago,’” said Mark Brunelle, senior loan officer at Montclair office of the Home Loan Group. ‘Clients have to have saved up some money for a down payment, need to demonstrate ability to pay bills on time and need to show they earn enough money to make their payments. It’s only in 21st century Northern California where that seems like a radical proposition.’”

“Thousands have flooded county tax assessors’ offices in recent weeks in an attempt to lower their taxes, officials say. The trend is particularly evident in the East Bay and in Santa Clara County, which have pockets of some of the steepest declines in home values.”

“Take Paul Harrison of San Ramon, who bought his two-bedroom condominium for $605,000 two years ago. Based on what he sees his neighbors are selling their adjacent units for, he believes the value of his condo has dropped to the low 500s.”

“Harrison, who recently lost his job at ATA airlines when the company went bankrupt, already received a $500 reduction in his property tax from the Contra Costa County assessor, but plans to appeal for a greater reduction.”

“‘I’d love to see my taxes go down as much as anybody,’ he said. ‘Now it’s especially important. The only reason I’m getting by and holding on to my home is because I have savings.’”

”We’ve been flooded with requests for property tax reductions,’ said Gus Kramer, Contra Costa County assessor, adding that calls to his office have quadrupled in the past few months. They’re now receiving up to 500 calls a day from people eager to have their assessments reduced.”

“The higher call volume is partly a response to notifications that Kramer’s office sent to all homeowners who purchased properties since 2003, stating that they may be able to save on their taxes.”

“It’s also a result of the housing market tanking in the fast-growing eastern Contra Costa cities of Pittsburg, Antioch and Brentwood. A four-bedroom, four-bath home with a pool on a golf course that sold for $890,000 in August 2005 just sold for $530,000, Kramer said.”

“‘When I see that number drop that fast, it makes me take pause,’ Kramer said. ‘I think we’ve got to review a lot more of these properties.’”

“Alameda County has been similarly hard hit by the decline in real estate values. The county assessor’s office has received about 2,000 requests for property tax reductions in the past several weeks.”

“The county will automatically review the assessments of 65,000 properties and take additional requests individually, county Assessor Ron Thomsen said. Areas most likely to receive reductions include parts of Livermore, Castro Valley and Union City, which have seen declines in some cases greater than 10 percent.”

“In Solano County, Assessor Marc Tonnesen is doing a blanket review of 38,000 properties sold between 2004 and 2007. Between August and December 2007, his office received 1,145 requests for reductions. Since January, the office has received 1,875 requests.”

“Marin County Assessor Joan Thayer said while other county officials might bemoan reducing taxes, she is pleased when she is able to give a reduction. ‘If we see a pattern, we’ll jump right in,’ Thayer said. ‘It’s easy to lower values and taxes. It’s a happy day. Every once in a while, it’s great to do something nice for the public.’”

The Sun Sentinel reports from Florida. “Almost every street has one: a vacant house that sold a couple of years ago for a jaw-dropping price. Appraisers so commonly pumped up house values to meet demands of developers, real-estate agents and lenders that complaints against them tripled in Florida in recent years, the largest complaint increase for any profession regulated by the state.”

“Cheryl Oliphant of Santa Monica, Calif., bought a house that lenders shopped to appraisers as being worth $550,000. A novice real-estate investor, Oliphant said she used her retirement savings and bought at the top of the market, thinking she had a great deal and instant equity in the house because it appraised for $50,000 more than the $450,000 sales price.”

“‘The appraisal was wishful thinking,’ said Oliphant. ‘I became a little suspicious later when I went to refinance and the next appraiser was having a hard time finding the value.’”

“Oliphant has been trying to sell the house at a $100,000 loss and plans to file for bankruptcy, losing her $50,000 down payment. She said she might ultimately have to abandon that house and four others she bought in Florida.”

“Mortgage and real-estate brokers, appraisal-management companies and banks usually choose the appraiser. ‘The manner that they use to game the system now is either mass faxes or mass e-mails,’ said Frank Gregoire, former chairman of the Florida Real Estate Appraisal Board. ‘Loan originators around the country will send out a notice: ‘We’re going to do a loan…can you get me $500,000? If you can… you’ll get the assignment.’”

“One ‘blast’ message sent in December 2006 offered Gregoire and others $350 for an appraisal of a St. Petersburg house. It cautioned appraisers about photographing the house: ‘Photos CANNOT contain pictures of any person OR UNFINISHED/CONSTRUCTION/DAMAGE PICTURES!!!’”

The Miami Herald. “Another sign of desperation in the South Florida housing market: banks tired of paying taxes and upkeep on foreclosed homes put 200 up for auction Saturday in Fort Lauderdale.”

“Ranging from the most modest one-bedroom efficiency condos to five-bedroom houses worth close to a million dollars at the height of the market, these once-dignified symbols of the American dream were reduced to tiny thumbnail photos in an auctioneer’s guidebook.”

“‘It’s very bittersweet,’ said Realtor Renee Dworkin, who accompanied several clients to the sell-off. ‘Each one of these homes represents heartache for someone.’”

“A three-bedroom house in Miami Shores that sold for $460,000 two years ago, went for $177,500. A two-bedroom house in Coral Gables that sold for $670,000 in September 2005, fetched a bid of $300,000. The buyer declined to give his name, but said he plans to rent it out.”

“Most of the deals struck on Saturday are contingent on the bank accepting the bid. Buyers will find out sometime mid-week. But about 20 percent of the sales were ‘absolute,’ said Dave Webb, co-owner of the auction company.”

“Brian Trujillo, a real estate investor from Miami, said prices had fallen even since the last auction he went to, about a month ago. ‘Condos are selling about 15 percent under the last time,’ he said. ‘Houses selling for about 10 percent less.’”

The Daily Business Review. “On-site auctions, where the bidding is staged in the front yard of a property, are becoming more popular in South Florida as sellers and lenders with ballooning real estate portfolios struggle to dispose of real estate assets in a sluggish market.”

“Minutes before the auction on a foreclosed house at Southwest 142nd Court began, Richard Caso saw signs promoting the auction and checked it out. At 6:30 p.m. the auction started with an opening bid of $100,000. The house, which is owned by Chase Home Finance, last sold for $305,000 in July 2006, according to Miami-Dade County property records.”

“‘$105,000,’ Caso offered. ‘$110,000,’ countered the second bidder, Robert Perez. The two traded bids until Caso dropped out after Perez made a $130,000 offer. Perez signed the contract and wrote a check for $6,500 — the required 5 percent deposit.”

“‘It was a good price,’ said Perez, who plans to rent the house. But…Chase has the right to refuse the offer, said Troy Fowler of Miami-based Investor Realty & Auction Group.”

“Caso, who is taking advantage of the market to acquire several distressed properties, said he wasn’t disappointed at losing the bidding. ‘There are plenty of [lender-owned properties] out there,’ he said.”

“Caso said in the last two months he has bought two houses out of short-sale. ‘I usually try to get to the property before it is foreclosed,’ said Caso, who said he has seen properties selling for about 40 percent off their 2005 prices and about 20 percent less than the property’s loan principal.’”

The Naples News. “The tables have turned in the local real estate market. A few years ago, it was tough to find a home under $300,000, let alone under $250,000, especially in the Naples area. Now, they’re in the hundreds.”

“In 2004 and 2005, a frenzy of investors snapped up homes, pushing prices sky high in Southwest Florida. Community leaders scrambled to try to deal with what became known as an ‘affordable housing crisis.’”

“The median price for a single-family home in Collier County peaked at $592,500 in February 2007. Now, it’s down closer to $400,000, as sales have slowed and housing inventories have grown.”

“In January and February, the Cape Coral-Fort Myers area had the highest foreclosure rate in the country, according to RealtyTrac Inc. Lee County broke a foreclosure record in February with 2,461 filings, up from 2,297 in January.”

“These days, it’s much more common to see these phrases on a listing in the MLS: ‘Short sale, bring all offers’ or ‘This property has just entered foreclosure.’”

“A few weeks ago, Realtor Mary Catherine White got a call from a couple from Chicago looking to buy a retirement home in the area where they could spend part of the year. She took them out the day they arrived in town, and by the next day they had made an offer after finding a great deal on a two-bedroom condo at the Brooks, a gated community in Estero.”

“They got more than they wanted and paid $180,000, a price that even seemed to surprise White. The home was once listed at $369,000.”

“‘Nobody can believe that we got something for that price in the Brooks,’ she said.”

The News Press. “Lee County’s inventory of unsold homes has swollen to record levels, depressing prices and discouraging the construction of new homes - and the glut may be even worse than it appears.”

“The inventory of unsold homes swelled to almost 16,000 _ seven times what it was in 2005 at the height of the market when buyers outnumbered sellers. Nearly 5 percent of the total housing units in the county are for sale.”

“Because of the glut, contractors find it impossible to compete in price against existing homes - and any dwelling in less than perfect condition has little chance of being sold.”

“High as they are, the MLS numbers may not tell the full story. There’s a ’shadow market’ of houses not officially for sale even though they’re owned or soon will be owned by lenders who took them back in foreclosure, said Jack McCabe, a Deerfield Beach-based real estate consultant who tracks the area’s home market.”

“‘It’ll probably take federal regulators to tell them to get this stuff off the books,’ he said. ‘The lenders are the most unrealistic of the bunch right now’ - many banks still aren’t putting their repossessed houses back on the market priced to sell.”

“‘The MLS doesn’t really give us a full picture of the supply,’ said Michael Timmerman, a Naples-based senior associate with Fishkind & Associates. ‘It’s very difficult because there’s no one good source that allows us to get a handle on the total supply.’”

“For example, Timmerman said, a builder generally doesn’t put all the houses available in a new community on the MLS. ‘But he may have three or four sales from a development on MLS just to entice people,’ Timmerman said. ‘The MLS can be used as a system to generate leads for that particular builder.’”

“There’s no way to know exactly how much of that is going on, or how many houses are being held by a lender who ultimately will have to put them back on the market.”

“The median MLS sales price has fallen 34 percent from its peak of $322,300 in December 2005 to $211,900 in February 2008, the last month for which statistics are available, according to the Florida Association of Realtors. Permits for new houses have slowed to a trickle: only 74 in March compared to 1,558 two years earlier.”

“Steve Koffman of Cape Coral-based Century 21 Sunbelt Realty, said about 40 percent of homes sold in the city are foreclosures or short sales. The enormous inventory means that only the ones priced the lowest and in the best condition will sell, he said. Otherwise, an agent won’t bother to show them to a client.”

“‘There could be 500 like it on the market,’ Koffman said. ‘How do I pick the eight I’m going to show today? They have to stand out.’”

“That’s bad news for the houses that are half-finished or in bad shape, of which there are large numbers in areas where a lot of inexpensive homes were being built in Lehigh and the Cape during the boom, he said. Many have been vandalized by thieves or even by subcontractors who weren’t paid and illegally came back to take back items such as bathtubs, Koffman said.”

“With prices at rock bottom for existing homes, builders are offering great deals on the houses they’ve already finished - but don’t expect it to last forever, said Kevin Clark, Southwest Florida division president of national developer Beazer Homes.”

“Builders are throwing in amenities such as granite counter tops and high-end flooring to lure buyers without cutting prices further, he said. That way they won’t have to raise prices when demand picks up.”

The Herald Tribune. “The energy level was high as the auction unfolded at the Longboat Key Club and Resort, with bidders fighting it out for at least 35 of the 49 properties up on the auction block.”

“How many of those properties ultimately sell is still up in the air. Only eight were sold ‘absolute,’ leaving the rest of the high bidders below the seller’s reserve, or minimum price.”

“Prices also stalled out on some of the auction’s signature properties, demonstrating that while buyers might be back in the Southwest Florida real estate game, they are looking for deals — some to the extreme.”

“While bids subject to a reserve ended up totaling $31.3 million, many of the winning offers amounted to only a fraction of previous asking prices. For auctioneers, the work was tough at times.”

“Take 529 Putter Lane. Sky CEO Chad Roffers touted the home as the ’signature property,’ not just of the auction (it graced the cover of the auction materials), but of Sky’s entire portfolio.”

“‘This is probably the finest home we have in the Sky Sotheby’s inventory right now,’ Roffers told the crowd, saying the owner had previously turned down an offer for $4.3 million. Even so, the bidding only got started at $1 million, and despite Daniel DeCaro’s best efforts only managed to reach $2.3 million.”

“Jeffrey Roberti’s well-known, four-story Siesta Key house — complete with a rooftop pool — had not previously been offered for sale, but was assessed in 2007 at $4.6 million. DeCaro tried to open the bidding at $6 million, then $4 million, then $3 million, but no one raised a paddle.”

“Finally, someone bit at $2 million, and then other bidders jumped in, creating a small frenzy. Bidding went back and forth across the room, but only increased the amount by incremental steps. The bidding ended at $2.65 million.”

“The most strenuous effort by the auction organizers came when the so-called ‘Sugar Bay’ estate came up. Gerd Petrik’s two-parcel estate received a $14.1 million bid at Sky’s November auction but the deal later fell apart. The smaller parcel was sold off to another buyer in February, but the larger main parcel — still the subject of arbitration proceedings — was back.”

“Both Roffers and DeCaro crisscrossed the room feverishly as bidding started at $4.5 million, well below the $9 million offer received in November and a third of the $15 million list price, and bidders fought it up to $5.85 million, where things stalled.”

“After a few moments and some effective persuasion, a shout came from across the room, and things picked up again. But after some more back-and-forth between two remaining bidders, things stalled again at $5.92 million.”

“The bidder who was hesitating was in the back of the room, a cell phone in his hand. He was on the phone with his wife. DeCaro came over and gently put his arm around the man’s shoulder.”

“‘5.95?’ DeCaro said, almost in a whisper.”

“No dice; the answer was no. The auctioneer returned to the stage. ‘Folks, the reserve price on this is $8.2 million,’ he said.”

“The rustling continued for a few more moments, as the auction employees continued to work the crowd. ‘Get that guy’s wife back on the phone,’ DeCaro joked. ‘We’re not taking no for an answer.’”

“But it was not to be. Bidding was closed at $5.92 million.”

What do you see in your local housing market? Foreclosures? “Across the state, those who advise Vermonters facing foreclosures say they are starting to see a dramatic increase in the number of people seeking assistance — particularly among those who have subprime mortgages from out-of-state banks. ‘The canary is coughing at this point,’ said George Mathias, director of home ownership programs for the Northeast Kingdom’s Gilman Housing Trust.”

“The first foreclosure tour of its kind in the Midwest will take real estate buyers to 20 Omaha homes on Sunday. In late February, a third of Nebraskans were behind in their payments, state data shows. ‘I know of a home right now out in west Omaha that’s listed at $325,000 that they paid over $400,000 for just two years ago,’ said real estate agent Mike Pettid.”

Legal changes? “City Commissioners voted unanimously Thursday to ban panhandling in downtown, part of an effort to revitalize the city and compete with other major metropolises for tourists and business dollars. The area has several unfinished condo projects and city leaders want to insure the city draws and keep new residents, especially during the housing crisis.”

“‘If we’re serious about bringing about a standard for downtown that we would like to see - that we see in other cities - it’s time for us to act,’ said Miami City Commissioner Joe Sanchez.”

New marketing? “One of the more subtle signs of the shift in the housing sector can be found in my mailbox. For the last few years, I’ve been buried in piles of books promising to show everyone and their brother how to get rich in the real estate market.”

“And now that subprime mortgages have wound up as one of the worst Wall Street investments since Studebaker stock…the few property investment tomes I see these days have a definite funerary air.”

“‘Making Big Money Investing in Foreclosures Without Cash or Credit,’ proclaims one title. ‘Finding Foreclosures: An Insider’s Guide to Cashing In on This Hidden Market,’ shouts another.”

Lower prices? “These days Roger Lebbin, the Mid-Atlantic Builders president may have more frowns than smiles. The slumping housing industry has forced him to change a business model that until now has worked well. One way Lebbin is ‘fighting back,’ as he calls it, is offering buyers the chance to negotiate prices.”

“‘It’s the first time in 20 years we’ve done this,’ said Lebbin, who grew up in Bethesda. ‘Today we are doing that because all of our competitors are doing it. And I think it’s unfortunate, but customers now expect it.’”

“That’s because Mid-Atlantic’s inventory, which includes mostly homes in the $500,000-to-$1 million range, reached 19 homes earlier this year. ‘That’s the largest inventory we’ve ever had,’ said Lebbin.”

“‘You’re never going to see this again. This is a buyers market — it’s a great time to buy,’ he said. ”If you looked at graph [marking on a piece of paper], and this is price, and this is time, we saw over a long period of time the market went up steadily. Then I’d say in Washington over the last part of 2006 and all of 2007, this trend line has been heading down and it’s been going downward by a big chunk.’”

“‘Lately we’ve been bouncing around at what most people think is the bottom … but nobody really knows where the bottom is.’”

Please post off-topic ideas, links and Craigslist finds here.