The Housing Bubble

The LA Daily News reports from California. “The subprime home-loan rush is history. But its impact on the state’s work force is just beginning to play out as tens of thousands of real estate, finance and construction workers are left looking for work after a number of heady years. A year ago, Ed Stush, a former senior VP at a Fieldstone Mortgage office in Irvine, was earning six figures and enjoying the perks of senior management in an industry that seemingly had no growth ceiling.”

“Today, his former employer has filed for bankruptcy protection, and his income is zero. He can’t even get an interview for jobs paying less than half of what he used to make.”

“‘It’s unjust. If you were in the mortgage industry for a long time … employers think you’re used to making so much money that you’re not going to take $50,000 or $70,000 a year. … They also think (mortgage lenders) are all money-hungry pigs, but it’s not true,’ he said.”

“Like a lot of mortgage industry workers, Stush tried to get work in other kinds of financial services such as insurance, but he found a huge stigma attached to the mortgage industry that disqualified him from even being considered for many jobs.”

“It’s not uncommon to see disclaimers on Internet job postings that say: ‘NO REAL ESTATE OR MORTGAGE CANDIDATES PLEASE.’”

“The California Association of Realtors is sponsoring a series of seminars this month called SWAT: Special Weapons and Tactics to Survive a Down Market. The events run courses on processing government loans, selling homes in foreclosure and closing short sales on properties carrying much more debt than they are worth.”

“Since July, California has lost more than 50,000 construction jobs and seen at least 10,000 mortgage-related layoffs, with new cuts coming every week. The California Association of Realtors says membership has dropped 17 percent from last year.”

“Headhunters and counselors say they are having a hard time placing laid-off mortgage brokers and construction workers in new positions. Bruce Barnes, head career counselor at (a) career management company, said he has only placed half of a group of workers from a mortgage lender in Burbank who were let go last fall.”

“‘I’m not putting anybody to work right now because the homebuilders are laying off people right and left,’ said Bob Schoonmaker, a building industry headhunter in Newport Beach with clients spread across Southern California.”

“‘Some construction workers coming from the residential side are trying to move to commercial construction, but many others are standing in line for unemployment checks,’ he said.”

“Torri Shack, 29, left the mortgage business in 2007 to become a personal trainer. After five years making lots of money, she ended up declaring bankruptcy for her business, but she says she is much happier now. Entrepreneurial at heart, she is launching a new dog boot-camp venture, a workout program for dogs and their owners.”

“Two years ago, Alain Silverston was bringing in six figures as a real estate agent in Long Beach. Last year, he returned to property management, which was his profession before moving to California from France in 2001. His income has dropped to a few thousand dollars a month, his credit card is maxed out, he doesn’t go to restaurants anymore, and he only shops at Trader Joe’s.”

“Stush sees a bright future in reverse mortgages - as ‘house rich, cash poor’ seniors begin retiring. ‘Reverse mortgages are going to be huge, so I figure if you break in now, you’ll be set. I can’t sit around waiting,’ he said.”

From Fortune. “Wachovia investors are paying through the nose for the bank’s ill-advised California gold rush. Among many other things, the bank took a $2 billion charge for ‘market-disruption’ losses in the quarter, including a surprisingly high $729 million for unfunded loans and leveraged finance positions. Wachovia also took a $2.8 billion provision to cover credit-related losses.”

“The most compelling reading, however, concerns the former Golden West Financial, which Wachovia acquired in 2006 for $24.6 billion. Golden West was a leading issuer of so-called option adjusted rate mortgages…with a portfolio now valued at roughly $120 billion.”

“The fact that 58% of Wachovia’s option ARM portfolio is based in California is problematic. CreditSights argues that a new computer model put into use for Wachovia’s risk management is implying losses of between 7% and 8% for the Pick-a-Pay portfolio. That could mean another $2 billion of potential losses. The bank estimated that 14% of the loans appeared to have negative equity, or loan-to-value percentages of greater than 100.”

The Associated Press. “One in seven mortgage holders worry they may soon fail to make their monthly payments and even more fret that their home’s value is shrinking, according to a poll.”

“One nervous homeowner is Daniel Gallego, a warehouse worker in Stockton, Calif., who said in a followup interview that he may have to sell his house at a big loss.”

“‘We may have to move in with my wife’s parents or my parents,’ said Gallego, who has two young children. ‘I could pay off some debt, then we could rent, and maybe buy another house in a few years.’”

“He said the rising cost of gasoline and other expenses have made his adjustable rate mortgage unaffordable. Because he doesn’t expect his home’s value to recover soon, he said he may be better off moving now before his rates rise.”

The Bakersfield Californian. “As home foreclosures pile up, real estate auction companies are rolling into town. On Tuesday, Irvine-based Real Estate Disposition Corp. will put about 80 homes up for bid at the Kern County Fairgrounds.”

“A number of deal-seekers turned out Friday for an auction held on the front lawn of a freshly painted, three-bedroom, two-bath south Bakersfield home. The home, which was not a foreclosure property, was sold in minutes by a Bakersfield company.”

“The winning bidder paid $127,600 — including the 10 percent buyers premium — for the 1,302-square-foot house. ‘The comparables, even for short sales, are $159,000,’ said Becky Cordova, a local real estate agent who came to watch.”

“Regular resales in the neighborhood are being listed for $229,000, she said.”

The Fresno Bee. “The almost 1,100 foreclosure homes for sale in the Fresno area create an enticing opportunity for buyers who want to snag a house at a bargain price. But there are risks. Real estate experts say lender-owned houses are often priced attractively, but sometimes have hidden problems, can require costly repairs and take weeks longer to acquire.”

“The addition of an extra party — the lender — can complicate things. ‘It’s rare to get a 30-day escrow,’ said Elizabeth Weintraub, a real estate agent in Sacramento. ‘It can take 45 days or longer. The lender has to approve a closing statement, and that can take a couple weeks. They’re just backlogged.’”

“In some cases, the process takes so long that loan commitments have expired, said William Brown, president of the California Association of Realtors. ‘Every bank handles [foreclosures] differently. It’s creating havoc in the marketplace.’”

“Michael Gavin, an agent who works with banks, said the process is becoming easier as more foreclosures enter the marketplace. ‘Banks are starting to become more realistic with pricing and more flexible with buyers,’ he said.”

“Unlike the central San Joaquin Valley’s last housing downturn in the late 1990s, lenders this time aren’t paying for repairs. Banks will often pay for title insurance and a home warranty, but the houses are sold ‘as-is,’ and buyers must take that into consideration when making offers.”

“Families forced from their homes sometimes take their frustrations out on the house. They take appliances, copper wiring, air conditioner parts or other items with them.”

“‘I looked at one where it didn’t even have a front door,’ Weintraub said. ‘The bank put up plywood and bolted it from the inside.’”

“Statewide, 20,513 houses were sold by home builders and private parties through the traditional process in February. An additional 16,931 houses — representing 45% of all transactions — were sold that same month to buyers or reclaimed by lenders in courthouse auctions.”

“That compares with auctions representing 12% in February 2007 and 3% in September 2006.”

The Daily Bulletin. “A rule change that would allow California cities to purchase foreclosed homes and convert them into affordable housing will be pitched to state administrators this week by Claremont City Manager Jeff Parker.”

“‘If people leave their homes because of their foreclosures, and we start to get code-enforcement issues, it’s better to have someone living in the house,’ Parker said. ‘And it’s certainly better for us to meet a need to create affordable housing.’”

“Through February, there were about 120,000 foreclosed homes in the state, and another 184,000 in early stages of foreclosure, according to RealtyTrac.”

“In Los Angeles County, there were 54,000 homes in some stage of foreclosure through February, according to RealtyTrac. There were 27,400 foreclosures in San Bernardino County and about 35,000 in Riverside County.”

“Bill Ruh, Montclair councilman and government affairs director of the Citrus Valley Association of Realtors, called the idea ‘absolutely wonderful.’ ‘It’s a way to get people into homes right now, when houses are vacant,’ Ruh said. ‘Any opportunity you have to utilize the money that’s been sitting there for housing, and use it to get a family into a home, it’s positive for the community.’”

The Desert Dispatch. “A vacant house can become a hangout spot for bored teenagers, a target for thieves and an eyesore. The county recorder registered 49 deeds of foreclosure in the Barstow area between December 2007 and February 2008, according to DataQuick.”

“The total number of foreclosures in the county for 2007 was 8,000, said David Zook, spokesman for Supervisor Brad Mitzelfelt. In the first two months of 2008, the county saw 3,300 foreclosures. ‘There have been increasing reports of metal theft, especially in regard to abandoned homes,’ Zook said.”

“Corporal Bill Doemner with the Barstow sheriff’s station said vacant buildings do present a crime and public safety issue in Barstow.”

“‘Juveniles hang out there, not to mention you can have public nuisance problems if they’re falling into disrepair, become grafittied and are not maintained,’ he said. ‘That’s more of a code enforcement issue, but for us it’s a problem as far as inviting criminal elements to hang out.’”

“Empty buildings also provide an easy target for thieves, he said. However, Doemner said has not seen significant public safety effects from the local foreclosures yet, because many of the houses have only been vacant for a short period of time.”

“‘It will become more of a problem as the houses become more dilapidated,’ he said.”

The Press Enterprise. “As the number of foreclosures continues to rise in recently built subdivisions throughout southwestern Riverside County, vandals are increasingly preying on these newly abandoned homes, according to police.”

“Perris police have been tracking the trend of graffiti in some of the city’s newest residential areas. Hoping to clamp down on the problem, Capt. James McElvain, who heads the Perris station of the Riverside County Sheriff’s Department, has begun training deputies to take a ‘zone policing’ approach. Instead of patrolling a wide range of areas, officers are assigned to shepherd a smaller territory day in and day out.”

“Deputy Larry Holloway recently paid a visit to the Sepulveda family of the May Ranch neighborhood, who have watched the foreclosed house next door transform from an empty nest into an undercover party house over the past six months.”

“Adolescents come and go at all hours of the night. Graffiti covers every wall inside. The intruders leave behind blankets, empty alcohol bottles and signs of drug use, according to Holloway, who patrols May Ranch.”

“‘Most of the time the tagger is telling a story. It tells the kids whose hangout this is, and they actually honor that. They’re having sex and all kinds of stuff,’ Holloway said. ‘They’re not really in here intentionally destroying things, but that’s the result. And it causes a lot of problems.’”

“Vandalism to even one house can drag down surrounding homes’ property values and the overall quality of life in the neighborhood, he said.”

“Declining home values inevitably deepen the foreclosure crisis because homeowners find they owe more on their house than it is now worth, which prompts some to walk away, explained John Denver, a Realtor who has been selling homes in the Perris and Menifee area for 30 years.”

“With predictions that the foreclosure crisis will not peak for another 18 months, Holloway said the problem could worsen.”

“‘That’s a long time. And that’s a long way to go from where we’re at right now. If something doesn’t change, a lot more people are going to lose their homes,’ Holloway said. ‘It’s just a playground for these kids.’”

“The Sepulvedas are leaving of their own accord. Enrique Sepulveda, a longtime construction worker, said he plans to move his family to an older, more established neighborhood and then rent out their May Ranch abode to help cover that mortgage.”

“Part of Sepulveda’s fear is that his 13-year-old daughter may be confronted or pressured by delinquent youths, because he suspects the culprits attend her middle school.”

“‘I find myself worrying a lot. The truth is this neighborhood may be beautiful but it doesn’t feel secure anymore. I’d trade all this for a trailer where I have security and peace,’ Sepulveda said, gesturing around a home interior with granite counters and vaulted ceilings.”

The Independent Record reports from Montana. “Speaking at a seminar on foreclosures and their impact on Montana families, Sue Woodrow, community affairs manager for the Helena Branch of the Federal Reserve Bank of Minneapolis, said there are some hotspots of foreclosure activity in Montana, but that the situation here is nowhere near as grim as in parts of the Southwest, Midwest and Florida. Woodrow cautioned that one in five loans made in Montana in 2006 was a high-cost loan, a category that includes adjustable rate mortgages.”

“‘So the thing we’ll be watching out for is what happens when those start to reset,’ she said.”

“Sheila Rice of the Montana Homeownership Network in Great Falls said there are only six bank-owned homes that have been foreclosed in the Helena area, compared to 60 in Great Falls. She cautioned, though, that her organization typically counts around 800 foreclosures a year in Montana, but anticipates 1,200 before 2008 is done.”

“She said that in addition to creative financing, many borrowers ramped up credit card use and home equity lines, which put further stress on family budgets.”

“‘There was a feeding frenzy there for a long time, where people felt like if I didn’t do this now, I will never be a homeowner,’ she said. ‘And in fairness to the buyers, in 40 to 50 percent of the subprime loans, they could have gotten a prime loan and were up-sold.’”

The Idaho Statesman. “First-quarter 2008 Treasure Valley single-family residential home sales plunged 37 percent from a year ago, according to industry statistics. Experts said many homes that were sold in the last quarter of 2007 closed in the first quarter of 2008, but not enough to rescue the quarter.”

“‘That tells you how dismal the first quarter of 2008 really was,’ said real estate agent Mike Pennington.”

“‘I’d say that in the 14 years I’ve been selling real estate in the Treasure Valley, I don’t think I’ve seen numbers as pitiful as they seem to be be,’ said associate broker Shaun Tracy. ‘Things have slowed to such a crawl that a lot of Realtors, lenders and builders are not going to make it in this environment.’”

“He knows of a couple who are both Realtors and who have just one sale between them this year. ‘And this is beginning to look like the new normal for now,’ Tracy said.”

“Median home prices have taken it on the chin, too. In Ada County, the median price for a single-family home in March was $210,000, down 7 percent from $224,900 in March 2007. Canyon County’s median price of $149,900 last month was down 7 percent from $163,300 in March 2007.”

“However, median prices in both counties were still well above 2004 levels.”

“Meanwhile, the bulging inventory of unsold homes remains a problem. According to Intermountain MLS statistics, there were 7,195 homes listed for sale in Ada and Canyon counties at the end of the first quarter, about 12 percent more than the 6,448 listings at the end of 2007. The MLS reported that 1,651 homes changed hands in Ada and Canyon counties from January through March.”

“The number of Treasure Valley homes scheduled to be sold at a foreclosure auction this month has reached a ’staggering’ level, according to a local report released Tuesday.”

“IdahoDataProviders said 200 trustee sales are scheduled this month in Ada County, a 203 percent increase from 66 trustee sales the same month a year ago. In Canyon County, 162 homes will go on the block, a 74 percent increase from 93 trustee sales in April 2007.”

“IDP president Charlie Nate said lenders are starting foreclosure proceedings quickly, hoping that potential buyers or investors may surface soon after a notice of default is published. Nate called the level of increase ’staggering, but it’s not over yet.’”

“‘I think they (lenders) are not wasting a minute, because if nobody buys that house, it goes back to the lender,’ Nate said.”

“Nate said real estate agents and lenders are showing the strain of the ongoing housing slump. ‘You should see the ones I talk to,’ he said. ‘It’s like they’re dead. You can hear it in their tone of voice.’”

“Associate broker Shaun Tracy…said that as homes in foreclosure are sold off in a neighborhood, nearby homeowners will take notice of the lower prices the houses fetch and will be more likely to be reasonable in pricing their own homes.”

“‘What will happen is that there will be a repricing of the market,’ he said.”

“Ada County’s vacancy rate for rental housing in the first quarter was double the rate for the same period last year, according to a new survey.” “It’s a curiosity, because there should be more potential renters, considering that sales of single-family homes remain in the doldrums because of a glut of homes and the difficulty customers are having obtaining credit.”

“Tony Drost of First Rate Property Management said his company’s vacancy rate is just 2 percent. ‘I should be happy with a 2 percent vacancy rate,’ Drost said. ‘But there are certain properties that are not getting rented out, and that makes the owner unhappy, which makes me unhappy.’”

“Drost thinks some properties he manages are remaining vacant because potential renters are turning to property managers who do not screen renters as closely as they should.”

“‘I had 10 applicants rejected just this week because of bad credit,’ he said. ‘It looks like over the winter everybody decided to stop paying their bills.’”

“The biggest jump in vacancies was for five-bedroom homes, which climbed from 5.7 percent a year ago to 14.3 percent in the first quarter.”

“Mike Rampelberg of Greater Boise Property Management said the vacancy increases are attributable to a flood of available properties, as homeowners who have not been able to sell their houses have decided to turn them into rentals. Homes that were rented before they were even vacant a year ago are languishing on the market this year, he said.”

“Nevertheless, Rampelberg said he’s seeing a ‘good supply” of out-of-state renters looking for single-family homes, compared with two years ago when they would have been looking to get in on the residential buying frenzy then still sweeping the Treasure Valley.”

From KTVB.com in Idaho. “As it makes it’s way down the street, it seems like a typical charter bus But once inside you realize Davy Thomson isn’t showing the sites instead he’s showing reposessed and foreclosed homes.”

“This home was reposessed and is on the market for half a million dollars. It’s unfinished and would take money to complete, but those on the tour know that just a few years ago, the bare land the home is on would have cost that much.”

“‘The house we just showed you cost half a million dollars, this house, 90 thousand dollars they range in price for every type of buyer,’ said Thomson. ‘There are anywhere between 700 and a thousand foreclosed houses on the market right now.’”

From KOMO TV in Washington. “The national economic crisis is hitting the county. Budget Director Bob Cowan is warning the County Council of a $20 million shortfall in the 2008 budget and a $60 million shortfall in 2009.”

“‘The current plan will cut the prosecutor’s office, it will cut the sheriff’s office, it’ll cut the jail, it’ll cut the public defender,’ said sheriff’s spokesman John Urquhart. ‘So I think the public can expect there will be an awful lot of criminals that won’t get arrested, won’t go to jail and won’t get prosecuted.’”

“‘There was a sense in the county courthouse that I was only trying to scare people,’ said County Executive Ron Sims. ‘I said ‘I’m not trying to scare you; I am trying to tell you there is no money.’”

“So what’s wrong? King County budget money kept climbing as long as homes were being built and sold. The slowdown is hitting home, hard.”

“The county is also being hit with a low rate of return on investments, and had what the budget office calls ‘write-downs resulting from impaired investments.’ Another part of the problem is that people are holding on to their wallets. They aren’t buying anything, from cars to refrigerators.”

The Democrat Herald from Oregon. “Tim Groome can’t think about the houses on Grace Street without a sigh. His company, Premiere Estate Homes of Jefferson, has built 14 houses there under the name. All but one feature a prominent ‘For Sale’ sign. And have since last July.”

“‘If this were two years ago, they’d have been gone a week from being completed,’ said Groome, president of the company.”

“Communities such as Lebanon are seeing a trickledown effect, said Jacki Nicklous, president of the Santiam Board of Realtors. Sellers in Bend, Arizona and California aren’t seeing buyers come to call, so they’re not able to purchase the mid-valley properties they may have been eyeing.”

“The word ‘recession’ has also been a factor, she said. Even when layoff talk is just rumors at the watercooler, ‘it’s still enough to scare people into waiting.’”

“Groome figures even a full-blown statewide recession won’t slow Oregon down for long. ‘It never has,’ he said.”

The Bend Bulletin from Oregon. “Median home sales prices in the first three months of 2008 fell almost 12 percent in Bend and 14 percent in Redmond from the first quarter of 2007, according to a report from the Central Oregon Association of Realtors.”

“Elsewhere in the region, home prices dropped 15.5 percent in Sisters, 27.5 percent in La Pine and 9.1 percent in Jefferson County, but prices rose 16.5 percent in Sunriver and 8.1 percent in Crook County, the report said.”

“The number of homes sold in Bend in the quarter dropped 44 percent, to 222 units, and 30.3 percent in Redmond, to 92 homes.”

“Local real estate officials weren’t surprised by the declines in sales and prices. ‘That’s the market,’ said Tom Greene, president of the Realtors association. ‘Sellers aren’t going to get what they got in 2006.’”

“At the end of March, Bend and Redmond had 12 and 13 months’ worth of homes on the market, respectively, Greene said. ‘We’re coming to the realization that the recession is one of the reasons we’re down,’ Greene said.”

“‘Lending practices have changed dramatically,’ said David Block, an appraiser for Bend-based Cornerstone Appraisal Group. ‘People can’t get out of their properties because values have dropped and they can’t get a loan.’”

“The region’s two highest-priced markets — Sunriver and Sisters — both maintained year-over-year gains in median sales prices, according to the MLS data. Sunriver’s price gain was based on 11 sales, however, a 65 percent drop from the same period in 2007.”

“‘January and February were not good for anybody out here,” said Mike Riley, general manager and principle broker for Coldwell Banker First Resort Realty in Sunriver.”

“Heavy snowfall this winter contributed to the sales drop — so did people’s reluctance to drop their asking prices, Riley said. ‘Sunriver is a second-home market — it isn’t affected in the same way,’ Riley said. ‘A lot of owners haven’t budged in their prices or panicked.’”

The Lake Oswego Review from Oregon. “Recent real estate reports show that Lake Oswego and West Linn are not immune to market pressures. The number of active listings in February 2008 was 893 compared to 641 in February 2007. In February 2006, the number was 354.”

“Local Realtors and mortgage experts agree that the inventory of homes is high. ‘The buyers are being very careful because of all of the negative news coming from Wall Street,’ said Realtor John DeCosta. ‘The (lending) environment now is very rigid and down payments are more in the 25 to 30 percent range.’”

“He said the number of closed sales this quarter is almost half of that from the first quarter of 2007. ‘Builders are being squeezed to sell their inventory before the construction loans expire,’ said DeCosta. ‘Builders are leading the sellers in dropping prices and putting deals together.’”

“The average sales price for a Lake Oswego/West Linn home in February 2008 was $568,000, as opposed to $497,000 a year ago. In 2000, it was $325,000.”

“Broker Dale Kuhn said she has seen an increase in inventory for higher-end homes. ‘I think we’re seeing people come down in price and being a little more realistic in pricing,’ Kuhn said. ‘People realize we no longer are having 15 to 16 percent appreciation rates.’”

“She said the national media has portrayed a gloom-and-doom housing crisis in the United States. In addition, she said the Lake Oswego and the Portland area did not partake to the degree that cities like Miami in the speculative boom.”

“‘I don’t think Portland and Oregon struggle. Florida and California have gorgeous weather,’ she said. ‘People don’t move here for the speculative market.’”

The Oregonian. “Until recently, a vibrant housing market provided many of the jobs and much of the income that stoked the southwest suburbs’ economy for the past half-decade. Much has happened in the past year to erase the double-digit profits that home sellers were taking for granted.”

“The number of houses on the market, for instance, has increased almost sixfold since 2006, giving buyers the upper hand. The multiple offers and bidding wars common among prospective buyers as recently as 2005 have been replaced by sellers trimming asking prices 10 percent and more to keep buyers from shopping elsewhere.”

“Ron Ares jumped from his job as marketing director for a high-tech company to a family-run real estate business in West Linn three years ago. That may as well have been a lifetime ago. The market hit its peak, in terms of median sales prices and number of houses sold, last July or August, Ares said.”

“‘Inventories were half of what they are now, full-price offers were commonplace and if buyers didn’t have all their ducks in a row, they were likely to miss out on houses that were selling the same day they came on the market,’ said Ares, a Tigard resident who specializes in the southwest suburbs. ‘It was one open house, one advertisement and ‘Katie bar the door.’”

“‘What I’m telling clients is, if you need to sell and don’t want to get stuck, look at what the peak pricing was and take 5 percent off the asking price,’ Ares said. ‘Otherwise, they’ll just be chasing the market down.’”

“Dale Kirby wasn’t surprised at the reaction she got when she told friends and family in December that she was putting her Tigard-area house on the market no later than March. ‘They all said, ‘Ooohhhhh, what a horrible time to try to sell your house,’ ‘ Kirby said, laughing.”

“Her three-bedroom, 2.5-bathroom house, built in 2001 overlooking Fanno Creek, was listed March 14 with an asking price of $417,500. Kirby said she’d have asked $35,000 more if she had listed the house at the same time last year. She attributed the reduction to the softened market.”

“‘I bought it three years ago, pretty much at the height,’ she said. ‘I offered almost full price and it had been on the market for only two days.’”

“Despite a regionwide housing inventory that’s swelled to nearly a year’s worth of dwellings, Kirby is confident the right buyer will walk through her door. ‘The house is all detailed out right now and looks great,’ she said. ‘Besides, everything always works that way for me.’”

The Houston Chronicle reports from Texas. “After avoiding many of the problems suffered by other housing markets across the country, the Houston area finally began to feel some sting last year. ‘We’ve gone from a period of people talking about Houston being an island to the recognition that we’re indeed being affected,’ said Evert Crawford of Crawford Realty Advisors.”

“The University of Houston’s Institute for Regional Forecasting looked at 66,828 single-family homes sold through the MLS in Harris, Fort Bend, Montgomery, Galveston and Brazoria counties. Most of the homes were existing, but 18.2 percent were new. Of the 2,127 subdivisions surveyed, almost half posted price declines.”

“Philip and Marilyn Taylor, who moved here for a job this year, are experiencing two very different housing markets. In February, the empty-nesters bought a new three-bedroom house in the Eagle Springs subdivision for $251,500 after relocating from the Chicago area.”

“Sales in their Humble neighborhood have been strong. But they’re still trying to sell their townhouse back home that’s been on the market since December. ‘I wish the market up in Chicago was as good,’ said Marilyn Taylor.”

“John Geddie felt the slowdown last year when he took his four-bedroom, 3,400-square-foot house in West University Place off the market after trying to sell it for six months. He was asking $770,000, or about $226 per square foot.”

“Geddie still thinks the West University market is strong, and that he was just asking too much for the brick house, which was custom-designed by an architect in 1998. ‘I didn’t need or want to sell the house, but thought if I could get an extraordinary price, I would,’ he said.”

“‘There are good values out there, good interest rates. But we don’t have buyers to take advantage of it,’ said real estate broker Ronnie Matthews. ‘Until that gets to a more equitable playing field, we’re going to have a weaker market.’”

“Foreclosures in Harris, Montgomery and Fort Bend counties soared 21 percent in 2007.”

“‘The combination of us having an affordable housing market and growing economy is offsetting to a large extent the problems of foreclosure,’ said economist Barton Smith, director of the Institute of Regional Forecasting at UH. ‘The foreclosure problem shouldn’t be dismissed in Houston, but at least we’re at a better position to handle it if we have the will.’”

“A growing share of home sales in the Houston area are foreclosures. And that’s putting downward pressure on the sales prices of existing homes, according to a survey.” “Foreclosures accounted for 16.5 percent of home sales last year, with a median sales price of $100,000. That’s compared with 9.6 percent in 2006 at nearly the same price.”

“‘This is the first year in a long time the foreclosures are driving the home resales down in value,’ said Michael Weaster, an agent who specializes in selling foreclosures for banks. ‘This will be the first time Realtors who don’t do foreclosures realize they are going to have to tell Mr. and Mrs. Smith selling their home, ‘Look, you’ve got foreclosures you’re competing with, and we need to price competitively.’”

“Though the trend is sprinkled throughout the Houston area in pockets, it is most notable in expanding or newer subdivisions outside the Beltway. Neighborhoods with homes below $150,000 near areas where builders are still putting up new houses are feeling it more than others, said Timothy Verge, an agent in Katy.”

“‘They have to sell their houses for less because you can buy a brand new house or a foreclosure that’s newer for less,’ he said.”

“Take, for instance, Teal Run in Fresno, which saw more than 100 foreclosures. Of its 180 sales last year, 61.5 percent were foreclosures, helping to push the median sales price per square foot of homes there down 7 percent. Nearby Estates of Teal Run had 47 sales, 73.2 percent of which were foreclosures, pushing the price per square foot of homes sold in the neighborhood down 3.8 percent.”

“Craig Hayes, who has lived in his current house in Teal Run for six years — 11 total in the neighborhood — has watched his home’s value decline by $10,000 as foreclosures mounted.”

“Hayes, the pastor at a local church, considered selling his house but figured he’d end up selling it at a loss if he moved. ‘Even if I wanted to move, I couldn’t, because it’s not worth it,’ he said.”

“When homeowners can’t sell, they also can’t buy, noted real estate agent Shad Bogany.”

“‘If you can’t sell your house, you can’t move out,’ he said. ‘It’s frustrating because a lot of lenders are just giving the houses away and dumping the properties, so people who live there can’t sell and move up.’”

“Real estate broker and investor Mario Guzman Jr. had to rent one property because it couldn’t sell. He has had another house in the Cypress neighborhood of Lancaster on the market for three months and figures it will take much longer to sell because of foreclosures and short sales.”

“Of Lancaster’s 39 sales last year, 27 percent were foreclosures, which helped push the median sales price per square foot down 5.5 percent.”

“Guzman’s offering a $2,500 bonus to any agent who can sell the house, and he’s offering to contribute to the buyer’s closing costs and down payment.”

“‘Usually people put a $500 bonus. I’ve been investing for a while,’ said Guzman, who has 21 properties for sale. ‘Now I have to be more aggressive.’”

“Almost 800 buyers paid at least $1 million for houses in 2007 through transactions handled by agents in places like Stablewood, Memorial and River Oaks. That was up 23 percent from the year before and 64 percent over the sales for 2005, according to the Houston Association of Realtors.”

“Home values are spiking in upscale neighborhoods where builders are scrapping outdated properties to put up amenity-filled McMansions, according to a study.”

“The inventory of such homes, however, is growing. It would take slightly more than a year to sell all the million-dollar homes that were on the market at the end of February, the association estimates.”

“‘Once you get to a million, you limit your pool,’ said agent Suzann Richardson.” “At the beginning of the year, a local energy trader in his mid-30s spent ‘between $1.5 million and $2 million’ in cash for a parcel just under 20,000 square feet in River Oaks.”

“‘Relative to other investments I could make, it seemed a little more stable,’ said the trader. ‘If I buy a piece of property and the value goes down, at least I’m enjoying it. If I buy a piece of paper, a stock or some other financial instrument and it depreciates, I’ve just lost money.’”

“In his 15 years in the mortgage business, David Zugheri had never seen a first-time home buyer spend $1 million on a house in the Houston area until last year, when he saw three — all in the energy industry.”

“Still, University of Houston economist Barton Smith worries about what could happen if the energy market weakens.”

“‘These energy booms never last forever,’ he said in a recent interview. ‘What happens when the energy boom softens and their incomes go from seven- to six- to five-digit levels? All of a sudden, that million-dollar home may be a significant burden to them.’”

The Beaumont Enterprise. “The owners of two housing developments in Beaumont’s West End say their developments are on track and moving forward, despite national problems that have halted some new-home building. The Crescent on Walden and Metropolitan Park on Dowlen Road both have sold lots and have homes currently under construction.”

“Richard Guseman, president of Guseman Homes and of the Home Builders Association of Southeast Texas, said national troubles of foreclosures, a weak economy and the credit crisis still have not taken a toll on Beaumont.”

“The number of single-family home building permits issued in Beaumont increased in 2003, 2006 and 2007, according to the city’s building codes division. ‘We’re the bubble in the country that’s not affected,’ he said.”

“Metropolitan Park owner Bryan Lee said two and a half years after starting work on the $80 million project, construction of 104 condominiums and completion of the neighborhood’s streets are in the works. The condominiums, Lee said, start at $185,000.”

“Mary Jane Mouton, who is leasing some of the houses in Metropolitan Park, said a small number the 40 lots have been sold, and she suspects more sales once construction gets under way. ‘There isn’t really anything there for people to look at,’ she said. ‘We need to have something there for people to touch and feel.’”

“Hayes said he doesn’t think national foreclosure and credit problems have caught up with Beaumont. ‘I think Beaumont has been blessed with the fact that we’re unusual from the national housing market,’ he said.”

The Temple Daily Telegram. “According to figures from the Temple-Belton Board of Realtors, the number of home sales are down 13 percent, and dollar volume 8.11 percent, for first quarter 2008, compared with first quarter 2007. The median price of homes sold also dropped, $118,500, for the first quarter 2008, compared to $123,350 for the last quarter 2007.”

“Local builders say they are keeping busy, and the numbers support them. Staff at city hall stays busy processing builders requests for plats and lots for their subdivisions.”

“The city of Temple for the first quarter 2008 has processed requests from builders for 1,283 lots in the first quarter, more than 10 times the number for first quarter 2007. Troy Glasson, director of government affairs at the Temple Area Builders Association, said the Temple-Belton area has sustained steady growth for a variety of reasons.”

“‘Number one is that our builders are very conscientious of local market drivers and don’t tend to over build,’ he said.”

“Brenna Diggs with Stillwater Custom Homes said they are ’staying very busy’ building custom and speculative homes and remodeling jobs.”

“Susie Lovett, assistant manager at Monteith Abstract & Title, said business is strong for both Belton and Temple. ‘I think we’re doing fantastic,’ Ms. Lovett said. ‘I don’t think this negativity in the news is reflecting what’s going on in Temple.’”

The Tyler Morning Telegraph. “Through March, buyers had closed on 399 homes, according to the Greater Tyler Association of Realtors. Last year during the same period, the number was 454 units.”

“This year, at the Texas Association of Realtors winter meeting, TAR officials called the local association presidents into a room for reports on how their regions were faring, Jason Wright, GTAR 2008 president said.”

“‘It was overwhelmingly positive, even to the extent where Randy Jeffers (TAR board chairman) said, ‘We knew Texas was still in good shape; we just didn’t know that it was in this good of shape,’ Wright said. ‘The only struggles that you hear about are the national new home builders who literally just went out there, took investment capital and built these housing farms; they just threw rooftops all over the place.’”

“That is not hurting the local real estate business, but Wright said he imagines some of the national builders are feeling a pinch because of a housing glut.”

“Fellow Realtors locally and statewide are telling him their businesses are doing well. And, he added, Realtors are honest with each other. ‘Whenever we’re in those (TAR) meetings, it’s all about no sugar-coating, here’s what’s going on,’ he said.”

“Wright said he is noticing homes are appreciating at a slower rate, because the margins that were once in new construction have dwindled somewhat.”

“‘Even Tyler, with a market as strong as we have, I think that anyone would agree that the $400,000-$500,000 price range became overbuilt,’ Wright said. ‘A new home that a builder used to get $130 a (square) foot for, now he’s selling for $115 a square foot, thus making that existing home that you could sell for $110 a square foot harder to sell, because now for $5 more I get a brand new house.’”

“Wright said many people are moving up to other homes in Tyler, making the competition to sell their current homes stiffer. He said he also believes people are pulling back slightly - maybe about 1 percent - on the asking price because they believe they must in order to sell the house.”

“‘The psychology is, ‘The market is bad, so I can’t get as much for my house,’ he said.”

“Local authorities said many of these borrowers bought houses with subprime loans because they could not have qualified for a prime loan. But lenders have since toughened their qualifying standards, which Wright said is a good thing because borrowers who are well qualified for a home loan now will more likely be in a position not to default on it later.”

“‘What we’re seeing is that borrowers have to bring some money to the table,’ Wright said. ‘You had people literally moving into houses and just picking up payments, going to closing with no money and getting into a house.’”

The Amarillo Globe News. “Maybe the housing woes of other urban markets haven’t hit Amarillo, but the resulting mortgage lending restrictions can be felt here. ‘I think we’re seeing it harder for some borrowers to find a mortgage loan,’ said Mindy Jackson, a broker and past president of the Amarillo Association of Realtors.”

“Mortgage lenders will be checking income tax returns, bank statements and credit scores to evaluate an applicant’s income, assets and whether they pay their bills on time, Jackson said.”

“‘A late house payment is a killer,’ she said. ‘Who wants to loan money to somebody who makes their house payment late or doesn’t make it?’”

“Even those with good credit should expect to have a down payment, Jackson said. ‘There are no 100 percent loans out there, or very few,’ she said.”

“Housing market crises in other parts of the country have colored some perceptions of the local market, Jackson said. ‘The general perception is, ‘Why are there so many houses on the market?’ Jackson said.”

The Dallas Morning News. “North Texas pre-owned home sales slid 25 percent in March from a year ago. Last month’s decline in home sales – one of the steepest so far – was enough to put the entire first quarter into a double-digit downturn, according to preliminary statistics.”

“During the first three months of 2008, pre-owned home sales in North Texas dropped by 18 percent from the same period last year, according to sales through the Realtors’ multiple listing services.”

“Much of the decline in home sales is being attributed to tougher lending standards that have locked some potential buyers out of the market. Investors who had purchased thousands of houses are also on the sidelines.”

“The first-quarter drop in pre-owned single-family home sales – while significant – was less than the 30 percent-plus decline in new home sales in Dallas-Fort Worth during the same period.”

“Sales of condominiums and townhouses have fallen even further – down 40 percent in March from a year earlier, according to the latest Realtor numbers.”

“The outlook for the period ahead is clouded. Pending house sales were down 30 percent last month from a year earlier. The number of pending condo and townhouse sales was down 37 percent.”

“Economists don’t expect a quick rebound in the local housing market. ‘My best guess is no real market improvement until latter 2009,’ said Dr. James Gaines with Texas A&M University’s Real Estate Center. ‘This year and next will be trying for everybody.’”

“‘2009 probably may show some slight improvement, but nothing to get real excited about,’ he said. ‘It’ll take that long to work through the excess new home inventory plus sell off all the foreclosures, which won’t slow down until later next year.’”

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