The Housing Bubble

The San Francisco Chronicle reports from California. “The housing crisis showed no signs of abating during the traditional start of the spring selling season, as Bay Area home sales clocked another record low month in March. In the nine-county area, 4,898 new and resale homes and condos changed hands, down 41.1 percent from 8,317 in March 2006, according to DataQuick. One-quarter of the sold homes previously had been repossessed in foreclosures.”

“The Bay Area median price for all homes tumbled 16.1 percent to $536,000 from last year’s $639,000. The median is now 19.4 percent off its peak of $665,000 which was reached last June and July.”

“DataQuick said this was the slowest March since it began tracking statistics in 1988, and the seventh consecutive month of record lows.”

The Contra Costa Times. “Valerie Guerra’s Livermore home has lost $100,000 in value through no fault of her own. Foreclosures in her neighborhood and on her street have erased much of the equity in their house. ‘I certainly believe my house is worth less than what we paid,’ she said. ‘But we’re here for the long haul.’”

“The Guerras are far from alone. ‘Our values have dropped dramatically,’ said Kareen Bell, a Brentwood resident. She and her husband bought their home a few years ago for $865,000. Now, the house is worth slightly more than $600,000.”

“‘It’s scary to see people moving out all the time,’ Bell said. ‘The house across the street from us is foreclosed. So is the one behind our home. So is the one down the street. At least six houses near us have been foreclosed.’”

“Several foreclosures have jolted the Antioch neighborhood where Emissa Hutchings owns a house. Homes in her vicinity that a year or two ago were selling for $600,000 to $700,000 now are on the market for $300,000 to $400,000.”

“‘I’m almost to the point where I don’t want to stay in Antioch,’ she said. ‘I’m raising my grandkids. I wish I could move. But I’m stuck.’”

“‘This is the tech bubble all over,’ said Guy Schwartz, manager of the Walnut Creek branch of San Ramon-based CMG Financial Services.”

“Rafael Ayala bought a house in Brentwood in 2006 for nearly $700,000. He and his wife also obtained $630,000 in financing. The house is now worth about $450,000. ‘It’s hard to sell,’ he said. ‘People don’t want to buy my house.’”

“Guerra realizes that the current nose dive for housing simply marks the reverse side of what had until recently been a remarkable surge in prices and sales. ‘This is my third home and up to now I had experienced only skyrocketing values,’ she said. ‘I’m not pleased. But I’m also not crushed.’”

The Sacramento Bee. “Sacramento County’s 1,501 March closings on new and existing homes combined were the fewest since March 1997, according to DataQuick. The tally was down 14 percent from the same time last year.”

“Median sales prices also dipped to $247,000, a level not seen in the county since May 2003. Median prices are now 36 percent below August 2005 highs of $387,000.”

“Placer County’s 464 new and existing home sales were the lowest since March 1996, and were down nearly one-third from the same time last year. The county’s March median sales price of $355,000 is 19 percent below a year ago and off one-third from the August 2005 high of $525,000, DataQuick reported.”

“Yuba County saw median sales prices dip below $200,000 for the first time since January 2004.”

“Closings on new homes showed the weakest March numbers as many buyers shop for bank-owned bargains. DataQuick reported that year-over-year sales of new homes were down 35.6 percent in Sacramento County, down 42 percent in Placer County and down more than 70 percent in Sutter and Yuba counties.”

“In 2007, lenders repossessed 10,049 homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to DataQuick. Lenders also filed 24,787 notices of default, typically issued after a homeowner misses two or three monthly payments.”

“Gold River bankruptcy attorney Wendy Dezzani estimated that half of her clients have used home equity to hedge against debt. ‘For years, people were carrying a lot of credit card debt, but when housing values are dipping, you can’t make the credit card payment or the house payments,’ Dezzani said. ‘From what I hear, people are using their credit cards for their house payments, and now they have problems with credit-card debt.’”

“Just as it became easier to buy a new home, finding relief from financial troubles became more difficult. Swallowed up by growing mortgage payments, many still chose the bankruptcy route.”

“In total, 17,397 people and businesses sought bankruptcy protection in a district that largely encompasses the Central Valley. The number of cases filed in the first quarter is up 82 percent from the same period last year.”

The Tracy Press. “Stephanie, 32, and Brian MacDonald, 30, never thought they’d own a home so soon. The couple had rented a $900-per-month duplex for three years before they looked to buy. And a few weeks ago, they bought their ‘dream home’ for $187,000 below its asking price.”

“Late last year, the four-bedroom tract home in western Tracy was listed at $525,000. The MacDonalds made an offer in February for $338,000. To their surprise, the bank accepted.”

“‘We are like the poster child of today’s market,’ Brian MacDonald said, describing his wife and himself.”

“‘It’s still clearly a buyer’s market, but sellers are getting more realistic, and buyers realize that there’s going to be a point in the near future that the market will see its bottom. And people are jumping on the chance to get in on it,’ local real estate agent Karl Enzmann said.”

“The near future still looks bleak for sellers, stressed Alex Alvarez, a Tracy lender. But with the average home price falling by a couple hundred-thousand dollars within a few short months, he said, people have begun to realize that things can’t get much worse.”

“‘The flip side to this dark cloud is that we now have families that can afford to buy for a reasonable price,’ Enzmann said. ‘The same home they would have competed (for) against dozens of buyers in 2004 and 2005, they’re getting to bid several hundred-thousand below the asking price.’”

“By the time their home closed escrow, the two had $5,000 to pay out of pocket. With the down payment financed at a good rate, the MacDonalds said prospects look bright, and they can easily make their $2,000 monthly mortgage payments.”

“”Despite the number of countywide foreclosures averaging about 2,400 for the month, buyers are making more offers than ever since the market took a nosedive.”

The Merced Sun. “With home prices continuing their downward slide, buyers who were waiting for Merced’s real estate to hit bottom are leaving the sidelines and getting back into the real estate game, local real estate agents say.”

“Among all homes in Merced County, both new and existing, the median price fell to $225,500 in February, down 29.5 percent from last year’s price of $320,000, according to DataQuick. In February 2006, the median home price was $372,750.”

“Sales volume during the first two months of this year — 336 houses sold — is a far cry from the same periods during 2007 and 2006. In January and February of last year, 425 houses were sold in Merced County. In 2006, 730 homes changed hands.”

“Broker Loren Gonella says plummeting price tags are getting the attention of buyers who’ve been watching the market for signs of hitting bottom. His office has closed escrow on 240 houses since the first of the year, he said — a sign that business is picking up. ‘You’ve got a perfect storm for buyers,’ said Gonella. ‘Great prices, very good interest rates and willing sellers.’”

“For sellers, the picture is less rosy, said broker Kay Flanagan. A few years ago, homeowners looking to sell faced their biggest competition from new subdivisions.”

“Now there’s another player in Merced’s market — banks dumping foreclosed properties, said Flanagan. They can sell newer houses for less than $100 a square foot; at the height of Merced’s boom such homes were selling for $200 per square foot, she said.”

“Gonella cautioned against comparing this year’s real estate picture to the red-hot market of two years ago. ‘People that are buying today, five to seven years from now are going to have a smile on their face from ear to ear,’ said Gonella. ‘They’re going to say, ‘My God what a deal we made’ — and they’re going to be right.’”

The Visalia Times Delta. “Jahan Farhang has seen it all since 1987, when he first became a licensed Realtor. At the time the market was in a slump. It’s slumping again, but the downturn has been recent and on the heels of a spectacular high.”

“He was named Realtor of the Year in 2005 by the Tulare County Association of Realtors, and now is president of the association.”

“Q: How dire is the foreclosure situation in Tulare County? What kind of shape is the real estate market here in today? Farhang: ‘Not as bad as the rest of the state. We have approximately 12 percent foreclosures compared with other areas, [where it's] as high as 30 [percent to] 50 percent.’”

“‘We have always had foreclosures. There hasn’t been a year that I haven’t done evaluations for the banks because of foreclosures in the past 20 years, even in a good year. These are people who pull the equity out of their homes, and they don’t care what kind of loan they’re getting and they just go out and have a good time with their equity. Then they can’t afford to make their payments.’”

“‘Unfortunately, there are a lot of sad stories out there.’”

“‘With the interest rates still so low, that helps us a lot. It’s the best time for the first-time buyer or the investor to buy a home right now.’”

“Q: What’s your take on the role real estate professionals played in today’s rising foreclosure situation? Did they serve their clients well?”

“Farhang: ‘About six years ago I put an ad in the Times-Delta asking for listings, because I felt the market was going to go up between 16 [percent] and 20 percent. Everyone thought I was crazy, but three months later the market started kicking up.’”

“‘When you have builders and developers, they follow the trend. They are going to buy all the available property and try to get the city to annex it so they can develop it. There were also many people on waiting lists to buy homes, so prices went up.’”

“‘We didn’t have any choice but to raise prices. Then, lenders are going to come in creating all these loans, because they want to make money. I put most of the problem on the lenders when they were lending these monies with variable-rate loans, and people getting loans with no credit, or income that wasn’t true.’”

“‘I don’t think the Realtors really had much to do with this. It was the high demand for homes and it was the last chance for people to buy homes.’”

“‘We sell properties. If you come to us and want to buy a piece of property, we do our best to sell you a piece of property that’s good for you and for your budget. We don’t get into all the details of what kind of income you have, that’s all lenders. I wouldn’t blame the Realtors, but there are bad apples in every farm you go to.’”

“Q: What are your goals as president of the Tulare County Association of Realtors for 2008?”

“Farhang: ”My goal is for our agents to be ethical, just like we have been in the past several years.”

Some housing bubble news from Wall Street and Washington. HedgeFund.net, “Wall Street expected jack squat from Merrill Lynch. But that didn’t stop Merrill from reaching a new level of money-losing suckitude. For the first quarter Mother Merrill posted a loss of $2.14 billion…sprung from a $6 billion Q1 writedown the Wall Street firm blamed on its subprime mortgage exposure.”

From Bloomberg. “CIT Group Inc., the commercial finance company trying to escape a cash squeeze, said it was unprofitable for a fourth straight quarter and cut its dividend after failing to staunch losses on home and student loans. Losses in home and consumer lending units totaled $248.5 million as CIT set aside $150 million for expected costs tied to bad mortgages.”

“The lender stopped originating subprime home loans last year. CIT may have more than $4 billion of holdings tied to subprime mortgages, according to a March 17 report by Standard & Poor’s.”

The Associated Press. “The nation’s largest mortgage insurer, MGIC Investment Corp., paid out more claims with more homeowners defaulting on mortgages. The mortgage insurer incurred $691.6 million in claims during the quarter. By comparison, MGIC’s payouts last year totaled $870 million, which was a 42 percent increase over 2006.”

“At the end of March, MGIC had $221.4 billion insurance in force, compared with $178.3 billion at the same time last year.”

From Reuters. “The phenomenon of ‘walkaways’ or ‘jingle mail,’ shows every sign of gathering pace and having a substantial impact. Wachovia went so far as to change its models on how quickly loans will go bad in the face of what it called ‘unprecedented’ changes in consumer behavior.”

“‘I don’t know where the tipping point is,’ said Don Truslow, chief risk officer at Wachovia. ‘But somewhere when a borrower crosses the 100 percent loan to value, their propensity to just default and stop paying their mortgage rises dramatically and really accelerates up.’”

“He added, ‘It’s almost regardless of how they scored, say, on FICO or other kinds of credit characteristics.’”

“Regions Financial, a large U.S. bank active in the Southeast, on Tuesday announced that nonperforming assets had nearly tripled to $1.2 billion, driven in part by deterioration in its home equity loan portfolio.”

“The bank’s CEO, C. Dowd Ritter, gave analysts a similar picture of how borrowers react when confronted with steep drops in home valuations. ‘As they started to sell it or refinance, they realized that valuation was 40 percent below what it was that 18 to 24 months ago and they are walking away from those homes in those markets,’ he said.”

The NAHB. “The mortgage credit crunch has spilled over into land acquisition, land development and home construction (AD&C) lending, increasing the challenges faced by builders in the current housing downturn.”

“‘This credit crunch actually appears to be worsening despite the concerted efforts of central banks here and abroad,’ Bob Mitchell, former president of the National Association of Home Builders (NAHB), told the Senate Small Business Committee. ‘It would be ironic and tragic to have the positive work of the Fed undone by bank regulators taking a totally different vision and approach when it comes to lending matters.’”

“Banks have become so wary about lending that credit costs are being pushed up despite sharp cuts in official interest rates, and that is adding to the risks of an economic downturn, the vice chairman of the Federal Reserve said on Thursday.”

“‘It is reducing the values of some assets and tightening credit cost and availability across a wide range of instruments and counterparties, despite considerable easing in the stance of monetary policy,’ Donald Kohn said.”

“Asked after his speech whether this meant rethinking how regulators rely on credit ratings as they review capital standards, Kohn said that this was certainly up for debate.”

“‘I think part of the work-list for the regulators is to reexamine the extent to which we ourselves are relying on these rating agencies to gauge the risks that you guys are taking,’ he said. ‘I think there was far, far too much reliance on credit ratings all round.’”

“Housebuilder Taylor Wimpey said its 2008 results would be at the low end of expectations based on current conditions in British and U.S. markets.”

“‘Market conditions in the UK have weakened since we reported our preliminary results (on March 6), with first-time buyers and investors facing particular difficulties,’ the company said in a statement. ‘Sales rates remain significantly below those of the equivalent period of 2007 on a proforma basis, with higher levels of cancellations being experienced.’”

The Edinburgh Guide. “Would-be first time buyers face the ‘hardest struggle ever’ to get onto the property ladder in Scotland according to a new report from housing charity Shelter.”

“The Index shows that in Scotland, while the average weekly income of working households has risen from £548 in 1997 to £851 now (a 55% increase) - the average first time buyer property has rocketed from £38,845 ten years ago to £108,446 at present.”

“Shelter Scotland is holding a summit ‘The Scottish Housing Bubble’ to look at the prospects for the Scottish housing market.”

From Money Extra. “House prices for first time buyers throughout the UK have risen 200% in a decade, Shelter has revealed. The average first time property price has rocketed from £52,674 to £159,494, with house price to income ratios doubling from 1.72 to 3.4.”

“The figure is even higher in London with first time buyers facing a crippling 250% increase to almost £260,000.”

The London Stock Exchange. “The manager of one of the UK’s largest estate agents has issued a gloomy projection for the future of London’s housing market. Mark Anderson of Hamptons said that he perceives that prices in the capital have already slumped by 15 per cent, having hit ‘unsustainable levels’ at its peak during last summer.”

“Mr Anderson said the falls had not shown up in housing market indices yet because these tend to be based on mortgage approvals rather than completions. The decline will however become apparent in months to come, he told City AM.”

“Richard Lee spent 5.3 million pounds ($10 million) buying 20 rental homes across the U.K. with just 150,000 pounds of his own money. Today, the properties are worth about 60 percent less and owned by the banks that financed the purchases.”

“Lee was one of thousands enticed by one of Europe’s top five best-performing residential property markets during the past decade. Now repossessions are mounting and properties stand empty as many investors fail to find the tenants needed to cover their mortgages after a building boom flooded cities, especially Leeds and Manchester, with apartments.”

“‘Buy-to-let investment was a bubble inside the housing market bubble,’ said Michael Saunders, a London-based economist at Citigroup Inc. ‘It’s turning out worse than I thought.’”

“Buy-to-let investors who were behind on their mortgages by three months or more increased by 25 percent to 7,584 in the fourth quarter, according to the London-based Council of Mortgage Lenders. Repossessions rose 26 percent to 1,247.”

“The skyline of central Leeds is dominated by construction cranes erecting high-rise condominiums, 60 percent of which were sold before completion to buy-to-let investors, according to London-based real estate broker CB Richard Ellis Hamptons International.”

“Thousands more apartments are being built in the center of the city, where two-bedroom homes lost 12 percent of their value in the past two years, according to Hometrack Ltd. Brokers report average rents for these properties have dropped by about 20 percent and about 13 percent of city- center apartments are empty, according to Leeds City Council estimates, based on local tax returns.”

“‘Twelve months ago, development was an easy way to make your fortune,’ said Tom Bloxham, chairman of Manchester-based Urban Splash, which develops derelict sites. ‘Today, it’s a disaster zone.’”

“City center condominium developments like what’s happening in Leeds represent Britain’s ‘mini-Floridas,’ said Alastair Stewart, who tracks homebuilders.”

“Lee, 37, bought an apartment in Manchester for 239,500 pounds in October 2005. An identical property in the same building sold for 115,000 pounds earlier this year, said Lee, who has surrendered his keys to the bank.”

“Lee also purchased 17 properties, most of them in Leeds, in late 2005. He said he expected to earn a steady income from renting to students. After the transactions were completed, Lee said he realized he had overpaid for the properties. He said 15 hadn’t been refurbished as promised, the tenants occupying the homes had left and rental-income projections were wildly optimistic.”

“‘The valuations were 15 years ahead of their time,’ Lee said. ‘The biggest genius in the world couldn’t have got those loans to work.’”

“Once he has dug himself out of his current financial difficulties, Lee will consider getting back into the business. ‘Would I do buy-to-let again?’ he said. ‘Without a shadow of a doubt. This time I’ll ensure I’m in control of all the levers.’”

“Lee estimates his properties are worth about 3 million pounds less than he paid for them. The banks will probably ask Lee to repay the money when the homes, now in their possession, are sold. He doesn’t have the money, he said.”

From Macleans. “It seemed like a good idea at the time. But an Ontario plan to give away up to $20,000 each to thousands of first-time homebuyers has become a surprising disappointment.”

“As the program was rolled out across the province in 2007, Ontario municipalities planned for a deluge of applications. But it hasn’t materialized.”

“Across the province, cities are struggling to find people interested in the cash, and bureaucrats admit they might not be able to give away all $36 million by next year. It may actually be possible to fail at handing out free money.”

“Huron County, a rural municipality on the shores of Lake Huron, was given 17 grants of $8,900 each. After more than half a year of trying, Don Brisson, manager of housing services for the county, has managed to hand out just five.”

“Asked why interest in his free money seems so sluggish, Brisson is stumped. ‘Maybe we need to promote it more,’ he says.”

“Such problems come as no big surprise to housing policy analyst Michael Shapcott of an urban issues think tank in Toronto. Shapcott has been watching with concern as a growing gap between home prices and incomes in larger cities reduces housing affordability across Canada, despite low interest rates.”

“‘Most renters who could afford to switch to home ownership have already made the move on their own over the past decade,’ he says.”

“Those who remain as tenants likely face serious income barriers and realize a few thousand dollars won’t help them make their monthly mortgage payments, even for a house priced below $208,000.”

“‘These folks probably understand the fundamental issues better than any well-intentioned government official,’ he notes.”

The Quad City Times. “Caught off-guard by their adjustable rate mortgage, an already-strapped Rock Island couple found themselves struggling to pay bills and make their house payment. Peggy and Dennis Wilson — she a data-entry clerk and he a warehouse supervisor — turned to Rock Island County Economic Growth Corp. for financial counseling after their house payment jumped from $633 to $744.”

“They cut things out of their budget and tightened their purse strings to make their house payments. ‘It was a very stressful year for us,’ said Peggy Wilson. ‘You think you are going to lose your dream.’”

“DeShana Forney, executive director of the Illinois Housing Development Authority, announced Wednesday that the Illinois Homeowner Assistance Initiative has a pool of $310 million, up from $200 million when the program was created in February.”

“‘I’m on a tour of the state to let people know state resources are available,’ Forney said.”

“Through budgeting, the Wilsons weathered their financial storm and are considering refinancing. When they signed the documents at closing, they didn’t know they were getting into an adjustable rate mortgage. They went to a bank that offered mortgages with only $500 down. The couple was approved in an hour.”

The Orlando Sentinel reports from Florida. “Accountant Jim Galvin thought of his home-equity line of credit as one of life’s givens, a solid reserve ready for use when the need arose. So he was shocked last month when Countrywide Financial Corp. wrote him to say it had frozen his credit line. He soon learned he wasn’t alone. ‘They are freezing everyone across the board,’ said Galvin, who lives in Clermont. ‘It’s panic mode. But I was shocked when I received my letter. I’d never seen anything like it before.’”

“In late 2006, the housing bubble began to shrink. Home sales dropped, and prices began to slip. That affected borrowing. In 2006, Americans drew on $147.5 billion worth of home-equity credit, according to the Federal Reserve. Last year, the amount fell to $60.5 billion, with the biggest decline coming in the final quarter of the year.”

“Ken Thomas, a Miami banking-industry expert, said property owners can appeal a bank’s decision to cut or eliminate their credit line, but they need to be able to make a case.”

“‘Customers can go to a bank and say their houses couldn’t have possibly dropped from, say, $500,000 to $250,000 in a matter of months,’ Thomas said. ‘But expect the banks to say it’s their right to freeze a loan.’”

“Stan Smith, an economics professor at the University of Central Florida, said concern about the decline in home-equity lending is spreading quickly. ‘Everybody is worried,’ he said. ‘I would argue that, if banks weren’t changing the terms of their loans, they aren’t very good bankers.’”

“The Orlando Realtors group had 25,472 properties available for purchase last month through its MLS. That’s 8 percent more homes than it had a year ago and still close to the record high reached last fall.”

“Larry Belcher, finance department chairman in Stetson University’s school of business administration, said the Orlando area’s lower-wage, tourism-based service economy makes the region more vulnerable to the nationwide downturn in housing because affordability is a problem for average families.”

“Those on a typical service wage of $35,000 or so a year ‘just can’t buy houses’ with mortgage-lending standards so tight, Belcher said. When first-time buyers have a harder time getting into the market, it slows the pace of sales all along the line, he added.”

“Belcher said two years’ worth of inventory is still a ‘huge overhang’ that probably means continued price declines in the Orlando area.”

From TC Palm. “There seems to be no let up in the number of foreclosures piling up on the Treasure Coast. In St. Lucie County, 549 homes entered some stage of foreclosure last month, up from 370 homes in March 2007, according to RealtyTrac.”

“Meanwhile, Martin County came in second in the tri-county region with 160 homes entering a stage of foreclosure last month, only 38 were recorded in March 2007. Indian River County had 153 homes entering a stage of foreclosure last month, up from 58 a year earlier.”

“‘The up-tick in foreclosures on the Treasure Coast is a largely function of real estate speculation that occurred in mainland projects developed in 2005 as values peaked and supply began to exceed demand,’ said Sally Daley, owner of Daley & Co. Real Estate in Vero Beach.”

The Palm Beach Post. “At the CitySide townhouses in West Palm Beach, landscapers, bug men and security guards are showing up less often. At Paradise Cove in West Palm Beach, the water in the hot tub isn’t so hot anymore.”

“And at Carriage Pointe in Boynton Beach, homeowners are paying a combined $60,000 assessment to cover dues their neighbors aren’t paying.”

“The culprit in all three cases is the housing bust. Fully half of 487 Florida associations surveyed recently by Hollywood law firm Becker & Poliakoff say they’re facing financial shortfalls because of the foreclosure crisis. And about one-fifth say they’ll increase fees or impose special assessments to make up for the shortfall.”

“At Carriage Pointe, one out of every three homeowners aren’t paying their bills, which led to that community’s hefty $60,000 assessment. Boca Raton property manager Norman Silverstein runs Carriage Pointe, and he said foreclosures are hitting hard at many of the 30 communities he operates.”

“‘I’m in a state of panic,’ Silverstein said. ‘How can I operate an association with one-third of the funds not coming in? It’s a serious problem that’s going to explode in the next few months,’ he said.”

“The financial squeeze is tightest at communities that were completed within the past few years. After all, those are the neighborhoods most likely to be filled with speculators and others who bought at the peak of the market.”

“The flood of foreclosures is also hurting associations in an unexpected way: Lenders, faced with soaring numbers of defaulted loans, have been slow to seize properties. In the past, banks would foreclose quickly and take over dues payments. Now, Direktor and others say, lenders are taking months to foreclose and start picking up the bill for dues.”

“Lenders filed notices of lawsuits on 1,765 Palm Beach County mortgages last month, nearly four times more than the 445 filings in March 2007, according to an analysis from a local data firm.”

“In Martin County, the number of foreclosures jumped from 15 in March 2007 to 104 in March 2008. And in St. Lucie County, foreclosure filings jumped from 54 in March 2007 to 368 in the first 28 days of March 2008. Foreclosure data were unavailable for the final three days of the month.”

“Homeowners stuck in unmanageable mortgages aren’t able to sell their homes or refinance into cheaper loans before payments on their adjustable rate mortgages reset higher. ‘It’s really a very sinister, spiraling devaluation, and it’s feeding on itself,’ said Bill Davis, president of (a) Palm Beach Gardens mortgage firm.”

“The largest loan to go into foreclosure in Palm Beach County in March was a $3.66 million mortgage on a condo in Palm Beach. That loan was the exception, however. The average amount of a loan that went into default in March was $251,447.”

“The highest interest rate on a loan that went into default was 16 percent, but most borrowers were paying much less. The average rate on defaulted loans in Palm Beach County was 6.7 percent.”

The Boca Raton News. “A home sale market that’s virtually dead in the water has created ‘an unfortunate trend,’ said Boca Raton City Councilwoman Susan Haynie. An increasing number of foreclosures.”

“She suggested city staff might consider following the lead of an ordinance passed in Murrieta, Calif., creating an abandoned residential property registration…’so we know who to contact’ if the property falls into disrepair or is neglected.”

“Negligence of homes is already beginning to show in Boca, Haynie said. ‘Drive through some of the neighborhoods and you’ll see.’”

“The Boca Raton News found a similar ordinance in Modesto, Calif., requiring that community to ‘track abandoned properties.’ The Modesto law makes a telling point, noting that ‘California and Florida together accounted for around 37 percent of all foreclosures in the USA filed in March [2007].’”

“‘Sometimes, it takes years to deal with foreclosures,’ said Haynie. ‘This is not fair to the neighbors.’”

The Miami Herald. “Boca Developers had hoped to raze Las Olas Riverfront and build an eclectic mix of condos, offices, shops and entertainment — including a 51-story skyscraper — that would become the ‘central destination’ in downtown Fort Lauderdale.”

“But the Deerfield Beach developer’s plans are in doubt now that Wachovia Bank has moved to foreclose on the beleaguered property along the New River.”

“The developer, which is grappling with the turmoil in the residential real estate market, also is in default on a $275 million loan intended to help finance the Las Olas Riverfront makeover and some of the firm’s other projects.”

“They are just the latest signs that Boca Developers, which has called itself ‘the most prolific developer of unique waterview communities along Florida’s eastern seaboard,’ is unraveling.”

“The situation at Las Olas Riverfront has deteriorated so severely that a Broward judge recently appointed a receiver for the property to protect Wachovia’s interest. Receiver Tim Rivers didn’t respond to a request for comment. But in court papers, he claimed Las Olas Riverfront’s owner isn’t paying bills, is neglecting the property, and is not following through on getting city approval to level it.”

“Las Olas Riverfront Holdings, the Boca Development-controlled entity that owns the property, lost $3 million on just $2.8 million in revenue last year, a financial statement filed with Wachovia’s foreclosure suit indicates.”

“Boca Developers’ financial troubles appear to have short-circuited redevelopment. It was only four months ago that it submitted another set of revised plans to the city. ‘We were working full guns on a submittal,’ said Oscar Garcia, lead architect on the project. ‘It got to a certain point and it all fizzled out.’”

“‘The complex has been a failure because the owner has quit marketing the complex,’ said Fort Lauderdale Mayor Jim Naugle. Naugle added Las Olas Riverfront’s owners are obligated to operate the property as an entertainment district for at least the next few years.”

“‘Hopefully the property will get into some responsible hands . . . and be less of a burden on the city,’ Naugle said.”

The News Press. “Last year, Lehigh Acres resident Marshawn Green was doing brisk work building outdoor kitchens at local homes. Then, construction of new homes and sales of existing homes stalled and Green’s livelihood evaporated.”

“‘When construction takes a downturn, it hurts so many people,’ Green said. ‘Even the people who have money don’t want to spend it right now.’”

“Green was among more than 2,100 job seekers at the CareerBuilder Job Fair Wednesday at Harborside Event Center in Fort Myers. The fair was the second major job fair in as many days. A career fair on the campus of Florida Gulf Coast University drew about 1,600 job seekers.”

“Lee County’s unemployment rate was 6.1 percent in February, up from 3.5 percent the previous year.”

“Douglas Bassett, general manager of Brinks Home Security in Fort Myers, said he has been seeing plenty of applicants with construction experience or previous jobs in fields related to real estate. ‘A lot of people jumped into real estate and construction from other industries when that was so hot and now they are jumping back into their previous professions,’ Bassett said.”

“Dave Cory of Estero, said he has been looking for work since moving here from Michigan about six months ago. In Michigan, he installed and serviced equipment for homes and industry. ‘I really like this area, but there is not much industry and that has made it hard to find something,’ Cory said.”

The Herald Tribune. “More than 1,800 homes in Southwest Florida slipped into foreclosure in March, bringing the region’s total to about 5,500 so far this year and signalling that the phenomenon is far from over, analysts said.”

“During March, Manatee, Sarasota and Charlotte counties had a 4 percent increase in foreclosure filings to 1,830 from 1,759 the month before. Year-over-year, foreclosures in the three-county area are up 239 percent, said RealtyTrac.”

“‘More and more people are walking away from their mortgages,’ said Paul Kasriel, Northern Trust’s chief economist. ‘In some cases they simply can’t meet the new interest rates being adjusted to. In other cases, people are saying: Why continue to pay on this house that is losing money?’”

“Some Southwest Florida builders think that the regional market has bottomed, but note that buyers remain hesitant to buy because they are having difficulty selling the home they are in and because they are not certain that home prices are finished dropping.”

“That is likely to have dire consequences for many smaller Southwest Florida builders who have tried to hold on for a rebound, said Lakewood Ranch-based builder Lee Wetherington. ‘I think 60 to 70 percent of builders in Sarasota and Manatee will be lost over next 12 months,’ Wetherington said.”

“Don Cantin, a custom builder who operates in Charlotte County South Gulf Cove area, was building as many as 50 houses per year during the boom. He has seen the pace slacken to about 20 homes.”

“Cantin said two of his recent buyers were European investors — one from Norway and the other from France. ‘The dollar being down, they figured they would build now, use the houses for vacations and for their friends and make money later,’ Cantin said.”

“‘If there’s any good thing about this, it’s that when people come back into market, the housing will be more affordable. Things got too high for most people during the boom,’ Wetherington said.”

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