The Housing Bubble

The Press Enterprise reports from California. “The spring buying season got off to a weak start last month, with home prices dropping faster in Riverside and San Bernardino counties than anywhere else in Southern California and sales continuing to plunge year over year. In Riverside County, the median home price dropped more than 27 percent in a year to $306,250 last month, which was the lowest it has been since March 2004.”

“The median home price last month in San Bernardino County hit $265,000, falling more than 28 percent since March 2007. The median price in San Bernardino County hasn’t been so low since September 2004.”

“Riverside and San Bernardino counties last month led Southern California in percentage of foreclosure sales, reaching 56.4 percent of total sales in Riverside County and 48.7 percent in San Bernardino County.”

“Marlene Lopez, a real estate agent, has been trying to sell her five-bedroom house in Lake Elsinore for two months. Only three shoppers have come by to see it, she said, although the house that she bought two years ago for $535,000 is now listed for $399,000.”

“Lopez, who has to sell because of a divorce, said she is competing with a huge inventory of distressed properties, including empty houses in her development that the builder hasn’t sold.”

“Legislation raised the ceiling for government-sponsored Fannie Mae and Freddie Mac mortgages to $500,000 from $417,000 in Riverside and San Bernardino counties. But John Marcell, a California Association of Mortgage Brokers official who lobbied for the reforms, said they are not working as well as hoped.”

“Lenders who offer the larger loans are charging higher interest rates and tightening underwriting qualifications for borrowers.”

“Marcell said at the insistence of Wall Street mortgage investors, tighter lending qualifications also have been imposed on Federal Housing Administration borrowers since the ceiling on FHA-insured mortgages was raised to $500,000 from $362,790 in the Inland counties.”

“‘I don’t think Congress realized the investors were going to be so gun-shy, but they are because they got stuck with so many delinquencies and foreclosures,’ Marcell said.”

The North County. Times. “Foreclosed houses and bargain-hunting buyers have flooded Southwest County’s real estate market since year-end. Lenders have slashed asking prices as they scramble to clear foreclosed properties from their books to make room for more properties they’re seizing from delinquent borrowers.”

“The average price of single-family homes sold in the area fell to $337,000 last month, down 26 percent from March 2007 and 33 percent from a peak in May 2006, according to The Californian’s analysis.”

“A bank-owned house in Murrieta drew Dennis McCarbery last month from San Pedro, where he had lived for 40 years. A buyer borrowed the full $670,000 price of the 3,200-square-foot house in September 2006, when prices in Southwest County were peaking. When the market turned south over the next few months, he was unable to sell it to avoid foreclosure. The lender sold it to McCarbery for $385,000.”

“‘To move out here and get something that was a dream come true is quite a shock,’ McCarbery said. ‘It’s much more affordable than what I would’ve done’ in the Los Angeles area, he added.”

“McCarbery’s daughter Cynthia Nordskog, a real estate agent, said she’s sold houses to just two clients this year, including her father.”

“‘The increase in buyer activity will help define the floor in prices,’ Nordskog said.”

“Real estate agent Erin Lawrence ended an 11-month dry spell in late March when she sold two houses, thanks in part to the lower prices that banks are offering on foreclosures. ‘That’s all there is to show,’ Lawrence said.”

The Union Tribune. “San Diego County’s median home price stood at $395,000, down $20,000 from February and off 19.4 percent from a year earlier. It was the first time since November 2003 that prices were below $400,000.”

“About 36.6 percent of resale houses and condos that sold in March had gone through that process, a likely all-time high, according to DataQuick analyst Andrew LePage.”

“Dan Williams, president of San Diego Lending Solutions, said many of his customers are frustrated because even when they want to buy and can qualify for a loan, lenders take two weeks or more to grant approval.”

“‘It has absolutely gotten more difficult,’ he said, even for buyers with good credit and 5 or 10 percent down payments.”

“Christopher Thornberg, an economist with the Beacon Economics research and consulting firm in Los Angeles, welcomed the price retreat.”

“‘For all these declines, you still have home prices relative to income at higher-than-normal levels,’ Thornberg said. ‘Everybody tries to paint this as a problem with the subprime mortgage industry. It’s not. It drove people to speculate like never before, but now home prices are falling back to their historic norms and we’re maybe halfway through that process. You probably won’t see a bottom in prices until 2009.’”

“‘We still have quite a bit of inventory we have to work through,’ said Robert Martinez of MarketPointe Realty Advisors, which tracks the new-home market. ‘We’re looking at more than two years of inventory in both categories (detached and attached housing).’”

“Laura Godfrey recently sold her Ocean Beach cottage of two years and traded it in for a significant upgrade to a $957,000 Spanish revival house with an ocean view. While she broke even on the sale of her house, she was able to buy her new house for nearly $350,000 less than the original asking price.”

“‘I feel a little stretched, but I have the income potential, and I plan to stay here for awhile,’ said Godfrey. ‘I joke around that people will be dragging my body out of here in 50 years.’”

“There is little for homeowners to like, though, about the steep plunge in home values in inland areas such as west Escondido, Encanto, Paradise Hills, Fallbrook and Spring Valley, which experienced declines of 30 percent or more last quarter.”

The LA Daily News. “Price declines ranged from 18.5 percent in Los Angeles County to 28.2 percent in San Bernardino County, said DataQuick, and indicate that the housing slump is deepening. Foreclosure sales, now at record levels in some areas, ranged from 28.8 percent in Los Angeles County to 56.4 percent in Riverside County.”

“‘This was a correction that was much needed. If we didn’t have this kind of a correction in prices, I think the regional economy would have ended up paying a heavy price for it,’ said Nima Nattagh, a real estate market consultant.”

“According to DataQuick, there is no sign that foreclosures will ease anytime soon and further price drops are expected in the coming months. ‘There is hardly anything selling. There is just a freeze-out in some areas,’ said DataQuick analyst Andrew LePage.”

“In March, jumbo loans accounted for 15 percent of sales, down from about 40 percent a year ago.”

“‘I think prices in Southern California were way out of whack relative to what the economy could support,’ Nattagh said. ‘Rents and income did not support the kind of home-price growth we have seen over the past several years.’”

The LA Times. “Homeowners who aren’t facing foreclosure often cling to outdated notions of what their properties are worth, real estate agents say. A broker for 25 years, David Emerson, (in) Lakewood said much of his work now involved telling sellers what they might not want to hear.”

“‘You go from being like a doctor who delivers babies,’ in a booming real estate market, he said, ‘to being an oncologist, just giving people bad news all day long.’”

“Emerson also believes the worst is yet to come. ‘There are just too many foreclosures coming down the pike,’ Emerson said.”

“Natalie Neith, a Beverly Hills real estate agent, credited a recent sale of a house in the West Adams area of Los Angeles to the seller’s pricing it below others in the area. The four-bedroom Craftsman house could have been listed for $850,000 a few years ago, Neith said, but the owner priced it at $725,000 and sold it in a month for close to full price.”

“Like Emerson, Neith sees more foreclosures coming. ‘When I talk to sellers now, I say you need to reduce your price. You have the prospect of thousands of foreclosures coming. That’s going to be your competition,’ Neith said.”

The Ventura County Star. “Smacked by record foreclosures that continue to drag down home values, the housing market remained ’sobering’ last month. ‘I think distressed sales are causing virtually all of the decline,’ said Bill Watkins, executive director of the UC Santa Barbara Economic Forecast Project.”

“Sales of new and existing homes and condominiums in Ventura County plunged to 549 in March, down 45 percent from 999 a year ago, DataQuick reported Tuesday. It was a record low for the month.”

“Nearly 37 percent of the transactions were sold after being foreclosed on at some point in the previous year, said Andrew LePage, a DataQuick analyst. That represents a huge shift when compared with 4.4 percent foreclosure resales the year before in Ventura County.”

“Foreclosure filings, including default notices, auction sale notices and bank repossessions, have soared in Ventura County, with 2,415 recorded in the first quarter, up from 1,514 last year and 366 filings in 2006, according to RealtyTrac.”

“Ventura County’s median sales price was $430,000 in March, a 24.1 percent decline from $566,750 a year ago, according to DataQuick. The median has retreated to a level last seen in February 2004.”

“Some sellers say they’re not being forced out, but that it’s simply time to move on. Dana Snider listed her two-bedroom, two-and-half-bath Moorpark condominium a few weeks ago for $489,000. She bought the home three years ago.”

“Snider figures that she will lose thousands of dollars, selling the home for less than what she paid. But she hopes to recoup some of that loss when her next home appreciates.”

“Snider said there’s been some foreclosures in the area, which she’s found ‘unsettling.’ Still, her house hasn’t been listed that long and she doesn’t feel pressure to lower her asking price right now.”

“Now that she’s an empty nester, she said, ‘it’s time for me to go.’”

“Robert Merritt has tried to sell his house in Thousand Oaks for a year and a half. The Camarillo resident held weekly open houses every Sunday until last month.”

“Merritt hasn’t found a buyer for the house on Otono Circle. The city found his open house signs sitting throughout the neighborhood on public land and confiscated them.”

“Thousand Oaks has a policy designed to keep in check the proliferation of signs. A city employee in a city truck stopped by the house and told Merritt he had removed two of the signs, Merritt said. He added that in the back of the truck were numerous real estate company signs advertising open houses.”

“‘The real estate industry (has) been doing this, for gosh, how many years?’ asked Merritt. ‘Everybody puts open house signs up in the neighborhoods. Here I am, just some little guy trying to sell my own house.’”

“Merritt doesn’t intend on having any more open houses in the near future and has turned to potential buyers online. ‘I think it’s a terrible time to enforce it when people really need to sell their homes,’ he said.”

Some housing bubble news from Wall Street and Washington. MarketWatch, “Housing starts plunged in March to the lowest level in 17 years. Home starts by U.S. home builders plunged 11.9% to a seasonally adjusted annual rate of 947,000 in March, the Commerce Department reported Wednesday. Starts were down 36.5% compared with March 2007. Read full government report. Also, building permits dropped 5.8% to 927,000 in March, 40.9% below the same month a year ago.”

“‘This report, while painful, implies healing in the sector,’ because at least builders aren’t digging a deeper hole, wrote economist Robert Brusca.”

“Last month’s single-family starts dropped 5.7% to a seasonally adjusted annual rate of 680,000 homes.”

The Commerce Department, March 26, 2008. “Sales of new one-family houses in February 2008 were at a seasonally adjusted annual rate of 590,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.8 percent (±15.0%)* below the revised January rate of 601,000 and is 29.8 percent (±9.6%) below the February 2007 estimate of 840,000.”

“The seasonally adjusted estimate of new houses for sale at the end of February was 471,000. This represents a supply of 9.8 months at the current sales rate.”

From CNBC.com. “RealtyTrac said there were 234,685 foreclosure findings in March, up 5 percent from February and 57 percent from March 2007.”

“The report, found, though, that the rate of increase for auction notices far trailed those for default notices and bank repossessions, showing the escalation of a recent trend for homeowners.”

“‘On a year-over-year basis, default notices were up nearly 57 percent and bank repossessions were up nearly 129 percent, but auction notices were up only 32 percent, indicating that more defaulting homeowners are simply walking away and deeding their properties back to the foreclosing lender,’ James J. Saccacio, RealtyTrac CEO, said.”

“With no equity in their homes and no particular desire to meet their financial commitments, folks are just leaving the keys in the mailbox.”

“I stood in front of a foreclosed home on a sunny corner in West Palm Beach, Florida today. The abandoned house was empty and worn, its overgrown lawn covered in trash, a sorry sight in an otherwise well-kept neighborhood.”

“I don’t know the particular story of that particular house, but I do know that plenty of folks are leaving homes like it behind, and leaving a financial mess along with it.”

From Reuters. “JPMorgan Chase, fresh from scooping up a rival investment bank, Bear Stearns, saw earnings drop 50 percent in the first quarter as it was hurt badly by market turmoil and heavy credit losses.”

“The bank also set aside $5.1 billion to strengthen its reserves by $2.5 billion and to account for $2.6 billion in losses in its loan portfolio.”

“Mortgage and credit card losses have ballooned, especially in areas like Arizona and Florida where housing values have plummeted and foreclosures have risen. Bank executives set aside more than $1.1 billion to cover future home equity loan losses. But they are expected to continue to rise.”

From Bloomberg. “JPMorgan Chase & Co. CEO Jamie Dimon said he expects U.S. home prices to drop as much as 9 percent this year as even borrowers with the best credit are having difficulty keeping up their mortgage payments.”

“‘Real estate is getting worse,’ Dimon said in a conference call today with investors. ‘Home prices we still expect to go down.’”

The Associated Press. “Washington Mutual, the nation’s largest savings and loan, said Tuesday it lost more than $1.1 billion in the first quarter as the struggling economy and flagging real estate values pummeled the bank’s borrowers.”

“Washington Mutual said it needed to set aside $3.5 billion to cover bad loans in its $250 billion portfolio during the first quarter. The bank set aside less than half as much to cover bad loans in the year-ago period.”

The Street.com. “Washington Mutual director Mary Pugh has resigned, the company said Tuesday at an annual shareholder meeting marked by investor anger over the company’s alleged missteps in the housing and credit crises.”

“CtW Investment Group, an activist pension fund investor, and other activist investors had called on shareholders to withhold votes for Pugh, chairwoman of the bank’s finance committee and a director since 1999, and fellow Director James Stever.”

“CtW alleges that as heads of WaMu’s committees responsible for risk management oversight and compensation plan design, the two directors ‘bear responsibility for Washington Mutual’s failure to recognize and act in a timely manner on the risks to shareholder value presented by the housing bubble,’ it said in a March letter to other WaMu shareholders that was also released to the public.”

“In addition, CtW alleged that the two directors played a part in ‘attempting to insulate executive bonuses from the consequences of this risk management failure.’”

“Standard & Poor’s on Tuesday said it may cut $57.1 billion of subprime-related debt due to continuing delinquencies and a worsening outlook, the rating company said.”

“‘Today’s rating actions incorporate our most recent economic assumptions and reflect our expectation of further defaults and losses on the underlying mortgage loans,’ S&P said in a statement.”

“S&P said it is reviewing loss expectation for more than 17 percent of U.S. subprime debt deals issued in the first half of 2007, due to the latest delinquency trends, loan risks and deterioration in the rating firm’s macroeconomic outlook.”

“The Securities and Exchange Commission will soon propose more rules to police credit rating agencies, SEC Chairman Christopher Cox said on Wednesday.”

“Credit raters have been criticized by investors, regulators and lawmakers in recent months for contributing to the U.S. subprime mortgage meltdown by issuing inaccurate ratings on products backed by subprime mortgages, and for lowering ratings too slowly after the products performed poorly.”

“‘We will shortly propose additional rules building on the lessons learned from the subprime market turmoil,’ Cox said. New rules would affect rating companies such as Moody’s Corp and McGraw-Hill Cos Inc’s Standard & Poor’s.”

The Buffalo News. “M&T Bank Corp. CEO Robert G. Wilmers, citing ‘the extraordinary time in which we find ourselves,’ called Tuesday for the re-establishment, in modern form, of a Depression-era government agency to rescue 3 million mortgage borrowers who are behind on their loans.”

“Speaking to more than 200 executives, employees and shareholders at M&T’s annual meeting, the widely respected chairman of the Buffalo-based bank said the nation is facing a ‘crisis of confidence in the financial services industry.’”

“Critics say the government should not help people who stretched to buy more than they could afford, speculated on property as investors, or lied on their loan applications.”

“‘The toughest problem — one that didn’t seem to be an issue in the 30s — was the extent that people got into mortgages they shouldn’t have gotten into and don’t deserve help,’ said Bert Ely, a regulatory consultant in Alexandria, Va. ‘There’s real concern that the people that would be helped out in this program were the ones that were least responsible financially.’”

“Wilmers noted that where commercial and savings banks held 71 percent of all private loans in 1978, that has now fallen to just one-third of more than $18.7 trillion in credit. That’s a result of the slicing, dicing and repackaging of loans by Wall Street and the involvement of new players like mortgage brokers and hedge funds.”

“‘Over an extended period of time, a great many extremely smart and sophisticated people conspired — without intending to do so — to put our overall financial system at serious risk,’ Wilmers said. ‘All the elements were put in place to turn our financial markets into a virtual casino.’”

The Columbus Dispatch. “The foreclosures keep coming, which means more vacancies, which mean more thefts. March was the worst month in memory for Franklin County, with 906 foreclosures. January had 904.”

“The average foreclosed home stays vacant for five months nationwide, said Tom Popik, who designed a national survey for Campbell Communications in Washington, D.C. During that five months, half of those homes sustain some kind of damage.”

“Some, he said, is at the hands of angry owners who damage their homes when they lose them to foreclosure.”

“For now, real-estate agents and investors are stuck. Some board up the houses, which angers the neighbors. Most try to make friends with the neighbors, hoping they will keep watch on the property.”

“Some have even tried paying the neighbors to watch, said Dave Zehala, executive director of the Columbus Real Estate Investors Association. But the thefts continue. ‘It’s a significant problem,’ he said.”

The Union Tribune. “In Encanto, where the median price of a resale home slid nearly 38 percent last quarter compared with a year earlier, foreclosure sales have been on the rise, said real estate agent Steve Lemack. Making matters worse, many disgruntled owners who have lost their homes have stripped them clean, depressing prices further, he said.”

“‘We had one house where the bank offered the tenants $2,500 relocation assistance, but the day we were supposed to go to give the check, no one was there, and the owners had stripped the kitchen of the counters, the sink and all the appliances, the water heater and the toilets. They even dug up the trees in the backyard,’ Lemack said.”

“‘I could’ve sold it for $250,000, but we sold it for $200,000. So when other agents get comps, they use lowball comparisons to push properties down further,’ he said.”

The Sun Times reports from Illinois. “It is THE single biggest wish in the American dream of home ownership: the ‘buyer’s market.’ Bill Basic, long time homebuilder and president of the SouthWest Suburban Homebuilders Association, has seen this time come around maybe three times in the past 25 years. ‘The time to buy is now. A lot of people are ‘down’ on housing and the (economic) times, but you can always find some bitterness. People who sit on the sidelines … if they’re going to sit on the fence, they’re going to be kicking themselves,’ he said. ‘Once that inventory is down, you will see prices rise.’”

“Lynne Austin, president of the Home Builders Association of Greater Fox Valley, said the ‘kick’ will come when a buyer sees other people living in ‘their’ home.”

“‘Assume people feel the market has bottomed. You’ll be in more competition for that house you’ve had your eye on. Now suppose (the price) fell another $10,000. What does that mean on your mortgage? Another $50 or $60 a month? Is it worth losing that house?,’ Austin said.”

“‘Some people think if they only wait a month or two, there will be a better deal out there,’ said Randal Ritke, president of Will-Grundy Counties Home Builders and Associates. ‘But I think it has bottomed out. A builder can only discount to a certain point, and I think the builders have bled everything they can bleed. I’ve been through a number of these cycles, and we all know that when it comes back, prices are going to rise.’”

“‘I don’t think anybody knows where the bottom is,’ Austin said. ‘The only way to know is when it starts to rise. And why would you want to wait until it rises?’”

“Buoy said some people are using the ‘worth’ of their homes from two to three years ago as a benchmark. But it is to their advantage to reduce their asking price because they can take advantage of current market conditions on a new home, he said.”

“Ritke provided a general example of the economics of this: You live in a house you value at $300,000 and the house you want to move up to is priced at $500,000. If you give a discount of 10 percent ($30,000) on your house and get a 10 percent discount ($50,000) on the new home, ‘you just made $20,000 in equity.’”

“‘That’s a good investment any way you look at it,’ he said.”

“The same economic value that makes home ownership the American dream applies across the buyer spectrum, whether it’s a first-timer looking at a townhouse, a family looking for a spacious four-bedroom in a clubhouse community, or someone looking for a home built exactly to their needs and specifications.”

“Basic gave this example: ‘In 1991 the average price of a home was $120,000. Now it’s around $246,000. That’s more than double. You can never lose in housing. That’s where all the nation’s wealth is sitting.’”

The Chicago Tribune from Illinois. “For 18 years, Gloria Murtaugh has served as a mediator between residents slipping into foreclosure and their lenders. But never in her career has there been a time like this, she said.”

“For-sale signs and boarded-up houses dot many communities, leaving housing counselors such as Murtaugh overwhelmed and depressed at times by the tragic stories they hear day after day.”

“‘Oh, honey, it’s overwhelming,’ said Donna Reed, director of Catholic Charities’ Daybreak Center in Joliet. ‘You have all these people come in, and you want to give them all the assistance they need to keep their housing. But they still can’t maintain because the interest rates go up, and they just can’t meet it.’”

“In Will County, the number of foreclosure filings increased from 2,742 in 2006 to 3,388 in 2007, a 23.6 percent increase, a Woodstock Institute report shows. Between 2005 and 2007, the number skyrocketed by 79 percent.”

“For the six-county Chicago region, the number of foreclosure filings has risen from 21,302 in 2005 to 38,215 in 2007, a 79 percent increase.”

“Homeowners call Murtaugh’s office, panicked and stressed, looking for guidance. And many times now, there’s little she can do. ‘I used to make the calls to the banks and lenders myself,’ she said. ‘But it’s too overwhelming now. I tell them where to go and what to say, what to do. There are so many defaults and foreclosures, and it’s just difficult to see a positive outcome.’”

“Chicago building owners would be required to secure, maintain and light up their vacant buildings under a mayoral crackdown in the works to prevent the epidemic of home foreclosures from ruining entire neighborhoods.”

“The use of plywood to cover doors and windows would be prohibited on buildings vacant for at least six months, under an ordinance introduced by Mayor Daley at this week’s City Council meeting.”

“A six-month vacancy also would trigger a requirement that buildings either be secured with steel panels or have all windows and doors installed, a functioning security system and an ‘active account’ with a private security company. Dusk-to-dawn lighting would be required at all exits.”

“‘The more foreclosures happen, [the more] people are abandoning their homes. If you live on that block, all of the sudden, no one is gonna take care of it. No one has responsibility. It’s gonna affect the value of your property, your assessment — the whole community. It’s a crisis out there,’ Daley said.”

“Vacant buildings must be secured to prevent them from becoming fire hazards and magnets for crime, the mayor said. ‘They just tear the plywood off the back and they go in the back or the basement window.’”

“The number of home foreclosures in Chicago shot up 46 percent last year –to 14,250, according to a study by the National Training and Information Center.”

The Journal Gazette from Indiana. “The nation’s housing woes have seen almost a quarter of the nation’s ZIP codes blacklisted for certain types of loans by mortgage insurance companies, including most of the Fort Wayne area and parts of Wells and Whitley counties.”

“Some local real estate professionals see the stricter regulations as long overdue self-policing by the mortgage insurance industry.”

“While the flagged areas will make it more difficult for some borrowers, Joe Weigand, president of Weigand Mortgage, calls them ‘extreme measures for extreme times’ that the industry should have employed five years ago.”

“Shelly Reberg, a mortgage loan originator at Star Financial Bank, agreed that the industry needed stricter guidelines such as closer analysis of appraisals. The changes in the industry have had the effect of real estate professionals helping buyers look more closely at what they can afford.”

“‘We are no longer originators; we are counselors,’ she said.”

The Vindicator from Ohio. “Stricter mortgage standards that mean lenders are (gasp) verifying borrowers’ financial information. The difference between the March 2008 housing market and the March 2006 market is like night and day.”

“Here’s a before-the-boom-and-after look at the housing market.”

“Then: No down payment? No problem. Now: Show me the money. Then: Want it? Make an offer they can’t refuse. Now: Take your time. Then offer 10 percent less. Then: Lots of debt, little income? That’s OK. We won’t check anyway. Now: Nothing will get past us now.”

“During the boom, some buyers pounced on houses during the first showing, skipping home inspections and bidding up the price to get in. But now, ‘home buyers can definitely be patient,’ says Edina Realty Realtor Kelly O’Neil. And with some good price data for the neighborhood, buyers can successfully offer less than the seller’s asking price.”

“Some companies were putting borrowers in home loans without verifying income sources and lending money to people with debt payments that ate up half of their before-tax pay. Today, borrowers should try to reduce what they owe so their debt-to-income ratio is no higher than 40 percent.”

“It’s like we stepped in a time machine and went back to the mortgage standards of a decade ago. Minnesota Mortgage Association President Tim Bendel said 100 percent financing has all but disappeared.”

“And don’t even think about fudging your financials. ‘You can’t tell us you’ve got $50,000 in the bank,’ said Bendel. ‘We’re going to want to see it.’”

The Detroit Free Press from Michigan. “Metro Detroit had a staggering 18.9-month supply of homes for sale at the end of 2007, and some cities were swamped with four years or more worth of housing inventory that people are desperately trying to sell.”

“Sales prospects in many spots are grim. Huntington Woods had a 45.7-month home supply, and Oakland County had a 20.2-month inventory overall, according to listing data released last week by Real Estate One in Southfield. Detroit had a 51.1-month inventory of homes listed.”

“Don Grimes, a University of Michigan economist, said buyers are here but they are waiting for prices to hit rock-bottom before they buy. Family formation is still going on. Once they start buying, inventories will fall to normal levels, he predicted.”

“‘From what I am able to tell, it may be getting down to the bottom in the Detroit area,’ Grimes said. ‘People need to see that prices have hit bottom so they won’t be kicking themselves six months from now.’”

“One of the biggest reasons for the oversupply is that sellers overpriced their homes, Grimes said. That seems to be the issue in Huntington Woods, said Greg Barnas, an agent in Royal Oak.”

“‘A lot of what is still out there in Huntington Woods is still overpriced,’ Barnas said.”

“Betsey Rubel isn’t worried about selling her 2,086-square-foot home on LaSalle Boulevard. The four-bedroom, two-bath home has been listed since January for $299,900. The Rubels, who want to move to Bloomfield Township to be closer to their daughter’s school, paid $220,000 in 2001.”

“‘We’re not in a time crunch,’ said Rubel. ‘When our house is ready to sell, it will.’”

“Rubel said she has seen houses linger on the market in the city over the past several months, but she said she believes some of them have been overpriced — like one down the street that sat for about a year, listed at more than $800,000.”

“Charlie Lutz, a realty agent in Roseville, said it’s all about price. He has had a Macomb Township home listed for six months that’s gotten two offers in the past three months. But the home has been on the market for more than two years with different agents and had no offers until this year.”

“Seller Jackie Odbert won’t budge off the current price of $249,900. That’s down from the original price of $329,000 for the four-bedroom, 2,600-square-foot home.”

“‘After over 40 showings, Jackie is one of many sellers who are in shock when they understand the market controls the price, not the seller or the Realtor,’ Lutz said. ‘The buyer is the market and they don’t negotiate on an overpriced property.’”

“Odbert built a new house in St. Clair County just before putting her home on the market in August 2005, just when the market started to slow. She’s working overtime to take care of both homes.”

“‘As we keep going down with the price, it’s disappointing,’ Odbert said. ‘The people come in, and it seems they want everything for nothing. They want you to pay closing costs, they want a finished basement, a three-car garage. They don’t seem to realize how much the owner put into it, and we won’t get it back.’”

“‘I just might have to let it go to the next person who makes an offer of $220,000,’ she said. ‘Who knows if it’s going to get better in Michigan?’”

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