The Housing Bubble

The Sacramento Bee reports from California. “After months of wrangling with lenders over huge debts accumulated during the housing boom, prominent Sacramento-area home builder John D. Reynen filed Wednesday for personal bankruptcy protection. Analysts say the value of thousands of acres the company bought at high boom prices three and four years ago has collapsed at the same time the firm’s home sales have fallen. The company has since halted much of its home building.”

“Reynen & Bardis also has been embroiled in recent controversies over allegedly defective homes in Rancho Murieta. In Elk Grove the builder and its related entities owe nearly $2 million in back property taxes and fees.”

“In court filings, the bank asserts that John Reynen and company co-founder Christo Bardis personally guaranteed more than $750 million in loans to various lenders and have failed to pay them. That means lenders have the right to seize their personal property.”

“‘That’s what Bank of the West did in February, filing a writ of attachment to seize homes owned by Bardis and his wife, in Gold River, Pebble Beach and Los Angeles; and homes owned in Sacramento, El Dorado Hills, Truckee and Mendocino by Reynen and his wife.”

“Reynen’s bankruptcy court filing estimates the number of creditors at 1,000 to 5,000 and puts his personal assets at between $50 million and $100 million. It estimates his liabilities between $500 million and $1 billion.”

“Spokewoman Michele McCormick said the firm controls 18,000 home-lot acres in California and Nevada.”

The Fresno Bee. “Reynen is the latest home builder to hit rough water in what Jonathan Dienhart, who tracks sales for Hanley Wood Market Intelligence, called a historically significant downturn.”

“Dunmore Homes of Roseville filed for bankruptcy protection in November and then started liquidating assets, leaving a subdivision in Dinuba unfinished. And Lafferty Homes of San Ramon abandoned a tract in southeast Fresno a year ago, leaving two dozen houses unsold.”

“‘It’s not unique,’ Dienhart said of the Reynen bankruptcy filing. ‘And lots of times it has to do with the financing side of it.’”

The Bakersfield Californian. “The developer behind southwest Bakersfield’s planned McAllister Ranch golf course community has defaulted on a $235 million loan against the property. The planned 6,000-home neighborhood is also beset by lawsuits and legal filings alleging unpaid construction bills.”

The Ventura County Reporter. “What a difference a recession makes. Within months of a gala celebration marking the groundbreaking of the much anticipated Working Artists Ventura project, backers of the much-anticipated $57 million cultural hub have found themselves scrambling for millions of dollars still needed in construction financing.”

“It will feature 69 affordable housing units serving low-income families and individuals. Another 15 will be reserved for recently homeless individuals trying to make a fresh start. Thirteen ocean-view condominiums, meanwhile, will be sold at market rates to help pay for the project.”

“‘It’s disappointing news because I really thought with so much government influence on the project it would at least be able to carry the momentum,’ says Doug Halter, a two-time city council candidate who…helped conceptualize the project. ‘I think one of the best things on this project was the win, win, win.’”

“‘I know from construction financing typically that if there’s any construction going on at the site then they’re very reluctant to extend any new financing,’ Halter says. ‘It definitely concerns me because this is a pivotal project for Downtown. As a community, as a government we really have no regard for the impact of time on economics.’”

“Halter says he and other critics of the city’s slow planning process ’saw the writing on the wall’ about the economic slowdown. ‘We knew that we had a short period of time. That was the longest economic, prosperous time that I knew of in my lifetime,’ he says.”

The Glendale News Press. “Gabriela Walsh, a Valencia resident who works in Glendale, had her heart set on buying a condo at the Americana at Brand — until she learned it would cost her more than $700,000.”

“‘That’s a bit out of my range,’ Walsh said. ‘For that location, I would say give me a beach view and I might think differently. I think that for sure I’ll rent indefinitely.’”

“The highest priced condos are 2-bedroom, 2 1/2 -bath units. While the same approximately $2-million investment could fetch some of the most luxurious single-family residences, equipped with pools, private yards and up to five bedrooms in the Glendale hills, Rick Caruso, Caruso Affiliated CEO, says that built into the price tag of an Americana condo is a lifestyle and living experience that’s beyond comparison to other properties in the regional market.”

“‘It’s a different world now out there because there is nothing like the Americana or the Excelsior to compare it against, not only the quality of the units and the way they’re fitted out, but also to be in the environment where you’ve got the restaurants, you’ve got a park to be at, and it’s all in this beautifully landscaped, safe environment,” Caruso said.”

“And according to Caruso, there’s plenty of initial interest. Rob Miller, who lives in the San Fernando Valley and works in Glendale, is not one of them. Nor does he believe there’s real interest in the Los Angeles region among deep-pocketed buyers to move to Glendale.”

“‘In today’s market, who’s going to live there?’ Miller asked.”

“Price aside, Roger Powell wondered who would want to live above a shopping mall. ‘We were discussing yesterday how annoying it would be to live above The Grove,’ Powell said.”

The North County Times. “North County’s new condominium market is so slow that some developments have decided to shift their focus away from sales. Facing a market with few to no buyers, some complexes have implemented rent-to-own programs. Others are tossing in freebies.”

“Escondido fared the worst in the first quarter, posting ‘negative 12′ sales, meaning 12 more people canceled contracts than closed escrow, according to a report by MarketPointe Realty Advisors.”

“‘It’s getting worse and worse. They (buyers) are reading the news and they’re holding back,’ said Sandy Ramirez, sales director for a complex in Escondido. ‘I’d say 99 percent of the people who walk through the door really like the product. But they don’t know if they can get a better deal in six months.’”

“The only new project in Escondido was City Square, built by Barratt American. Though the builder has added incentives and is willing to negotiate on price, slashing price tags is not in the plans, said Michael Pattinson, president of Barratt American.”

“‘Lowering prices is a double-edged sword. If you’re in a market where the average price was $400,000, and you start selling at $300,000, you just wiped out a lot of people,’ he said. ‘They now have negative equity. Every time I or somebody else drops the price, we’re adding negative equity and negative equity is very damaging to consumer confidence.’”

The Daily Breeze. “Nearly all the homeowners who seek the services of Realtor Joyce Reese these days are in a hurry to sell. ‘Pretty much that’s all you get,’ said Reese, who sells homes in Carson and Compton.”

“In the South Bay, foreclosures have mostly hit inland areas such as Carson and Gardena, where first-time homebuyers often purchased homes they couldn’t afford, using little or no down payment.”

“For example, in March, the number of single-family homes sold in March in the South Bay - excluding Inglewood and the Palos Verdes Peninsula - dropped by more than half compared with a year earlier, with inland areas the hardest hit, according to the South Bay Association of Realtors.”

“For those needing to sell quickly, they often find that buyers are scarce and in no hurry to act, Reese said.”

“‘Unfortunately, their time periods (to sell a home) get stretched out for a real long period of time because unless you really price it low, you really can’t get it sold,’ said Reese. ‘Not a lot of buyers can qualify for what the lenders set for them.’”

The Whittier Daily News. “First the good news: Home sales in the San Fernando Valley increased for the third consecutive month in March, according to reports released Tuesday. But now the bad: Sales and prices remain in a free-fall and foreclosure woes show no signs of easing anytime soon.”

“From Glendale to Calabasas during March, 642 properties changed owners, down 52 percent from a year ago, according to the San Fernando Valley Economic Research Center at California State Northridge. The median house price fell an annual 19.4 percent to $500,000 - while foreclosures in the Valley soared nearly 200 percent from 2007.”

“The Valley’s foreclosures accounted for 22.5 percent of a record 2,267 across Los Angeles County, according to DataQuick. DataQuick’s March foreclosure report suggests the problem will worsen before it gets better. Last month, 1,553 property owners received default notices, a 142-percent increase from 642 a year ago. Meanwhile, buyers are seeing lower prices on a daily basis.”

“In the Santa Clarita Valley the median house price fell 19 percent to $470,000 and sales fell 42 percent from a year ago to 151 transactions. Condo sales dropped 52 percent, to 54 transactions, and the median price declined 28 percent, to $275,000.”

“Jim Link, executive VP of the Southland Regional Association of Realtors, said a lot of potential buyers are hunkering down to see how far prices will plummet. ‘An adjustment was due. This has happened historically in the market and the price decline is not something that is overly alarming because we’re coming down from a record high,’ he said.”

The Press Enterprise. “In California, trustee’s deeds, which denote the actual loss of homes to foreclosure, totaled 47,171 in the first quarter. That was the highest level of foreclosures since DataQuick started tracking trustee’s deeds in 1988. In Riverside County, 6,519 homes went to foreclosure, up almost 347 percent from a year earlier and setting a record for the fourth consecutive quarter.”

“In San Bernardino County, 4,523 homes were foreclosed on, up almost 398 percent from the first quarter of 2007 and hitting a record for the third consecutive quarter.”

“‘For the first four months of 2008 we were clearly in a recession,’ said Inland economist John Husing.”‘

“Foreclosures are going to get worse because the factors causing foreclosures are moving in the wrong direction,’ Husing said. ‘Housing prices are coming down, mortgages are adjusting up, unemployment is the highest it has been in this decade and gasoline prices and food prices are soaring.’”

“Los Angeles-based economist Christopher Thornberg said a ‘vicious cycle’ has developed in which falling home values fuel foreclosures, which in turn cause home values to decline further.”

“‘The bad news is that there will be a massive decline in home prices,’ he said, while the better news is that the flow of people who leave the state in search of more affordable housing will come to an end. ‘California will become a cheap place to live again,’ he said.”

The Visalia Times Delta. “Jodie Woodsmith, a real estate attorney who heads weekly mortgage-counseling sessions, says her office receives dozens of calls daily from Tulare residents who’ve found themselves in over their heads on mortgage payments.”

“‘There’s a real lack of education out there,’ Woodsmith said. ‘It’s like new-car syndrome. Unfortunately, many people just wanted the loan so much they just signed whatever was put in front of them.’”

“Most of the loans that went into default last quarter originated between August 2005 and October 2006. The median loan-age was 23 months, up from 16 months a year earlier.”

“Woodsmith said one couple she counseled recently had a $300,000 loan, even though both were line workers in a minimum-wage industry. ‘That was a loan that was destined to fail,’ she said.”

The San Francisco Chronicle. “Late last year, Congress, President Bush and the real estate industry hailed the Mortgage Forgiveness Debt Relief Act of 2007 as a boon for struggling homeowners who might face a big tax bill if they restructure or give up on their mortgage.”

“But like everything that comes out of Washington, it is full of fine print that borrowers should fully understand before they decide how to get out from under debt they can’t repay.”

“If you took out a home equity loan and used the money to buy a car or pay bills and the home equity loan is forgiven, you will owe tax on it. Likewise, if you refinanced your home for more than the original balance and did not use the additional loan proceeds to improve the home, the extra amount would not qualify for the tax break.”

“‘If you refinanced at all and used the refi proceeds to pay off credit cards or buy investment properties, it helps you little or not at all,’ says Richard Tomlinson, a CPA in Pittsburg.”

“Tomlinson did a tax analysis for a client who was contemplating a short sale on his home. The client bought the home seven years ago for about $300,000, refinanced it several times and now owes $650,000. Very little of the increased debt went into the house.”

“He was considering selling the house in a short sale for $400,000, which would repay the original $300,000 plus $100,000 more. The lender would forgo the remaining $250,000 in debt, but because it exceeded the amount the owner borrowed to buy or improve the house, it would have been taxable.”

“He would have had to pay $70,000 to $88,000 in federal tax, plus state tax. ‘After I did the analysis, he decided not to do the short sale. He’s going to stay in the house and tough it out,’ Tomlinson says.”

“Tax-wise, some clients might be better off going through a foreclosure than a short sale, Tomlinson says.”

Some MarketWatch news from Wall Street and Washington. MarketWatch, “U.S. home builders have slashed their prices by a record amount, but sales still plunged by 8.5% to a 17-year low in March, the Commerce Department estimated Thursday. The decline in new-home sales to a seasonally adjusted annual rate of 526,000. New-home sales are down 36.6% compared with a year ago and are down 62% from the peak in July 2005. February’s sales pace was revised lower to 575,000 from 590,000.”

“The figures likely overstate the number of sales because they don’t account for canceled sales, which have ballooned. with sales plunging even faster, the supply of homes on the market rose to 11 months, the most in 27 years.”

“Inventories are likely understated as well because of canceled sales contracts.”

“Median sales prices for new homes have fallen 13.3% in the past year to $227,600, the biggest decline in 38 years. Average sales prices are down 11.3% to $292,200, the biggest drop since the record book begins in 1963.”

“Sales fell in all four regions, dropping 19.4% in the Northeast to a 27-year low, falling 12.9% in the West to a 17-year low, falling 12.5% in the Midwest to a 27-year low, and slipping 4.6% in the South to a 12-year low.”

From CNN Money. “‘The explosion of single-family building permits in 2003 to 2005 produced an unsustainable, unprecedented run-up in the building economy,’ said National Association of Home Builders chief economist David Seiders.”

“But when the housing market crashed, new housing permits ‘fell off a cliff,’ according to Seiders, returning to levels not seen since the 1991 recession. That left a huge glut of unoccupied new homes on the market without many potential buyers.”

PR Newswire. “Pulte Homes announced a net loss of $696.1 million for its first quarter ended March 31, 2008. The first quarter 2008 net loss included $663.6 million of pre-tax charges related to inventory impairments and other land-related charges. Impairments and land-related charges for the prior year quarter were $132.1 million. Consolidated revenues for the quarter were $1.4 billion, a decline of 23%.”

“Net new home orders for the first quarter were 5,402 homes, valued at $1.5 billion, which represent declines of 36% and 50%, respectively, from prior year first quarter results.”

“‘The difficult housing environment continued to erode during the first quarter of 2008, said CEO Richard J. Dugas, Jr. ‘Buyer demand for new homes continues to be soft, home prices remain under pressure, and overall buyer confidence is weak.’”

From Reuters. “Ryland Group Inc, the No. 8 U.S. home builder, said on Wednesday its quarterly loss widened, citing fewer sales, lower margins and higher selling and other costs. Ryland’s quarterly results include charges for write-offs for inventory and property values of $27.4 million.”

“Home-building revenue for the Calabasas, California-based home builder fell 42.2 percent to $399.6 million, as sale closings fell 33 percent to 1,543 homes and the average selling price fell nearly 14 percent to $257,000.”

“Gross profit margins were 11.9 percent before the charges compared with 18.7 percent in the same period a year earlier. New orders during the quarter fell 27.8 percent to 2,159 and their value fell 39.7 percent to $526.4 million.”

“M.D.C. Holdings, Inc. today announced a net loss for the quarter ended March 31, 2008 of $72.8 million, which included pre-tax charges of $54.8 million for asset impairments and $1.7 million for write-offs of deposits and pre-acquisition costs associated with land option contracts the Company does not intend to pursue.”

“Paris G. Reece III, MDC’s chief financial officer, said, ‘As has been the case in each of the last five quarters, the impairments this quarter primarily occurred in our West homebuilding segment, with almost 90% applicable to subdivisions in our Arizona, Nevada and California markets. Over the last seven quarters, we have impaired approximately 60% of the 13,100 lots we owned at the end of our 2008 first quarter.”

“Reece continued, ‘We reduced our lots owned, excluding lots with homes completed or under construction, by 13% in the first quarter alone. We accomplished this reduction in large part through the sale of more than 800 lots primarily located in Arizona and California. While these land sales had little impact on our book income for this quarter, they contributed almost $30 million in proceeds and generated a tax loss in excess of $70 million.’”

“The Company closed 1,136 homes and produced home gross margins of 11.5% in the 2008 first quarter, compared with 2,001 home closings and home gross margins of 15.8% for the same period in 2007. The average selling price for the 2008 first quarter was $313,200, down $42,500 year-over-year.’”

From Bloomberg. “Rolling Meadows-based Kimball Hill Inc. and 29 affiliates have filed for Chapter 11 bankruptcy protection as demand for new homes tumbles. Kimball Hill sells houses in California, Illinois, Florida, Texas and Las Vegas.”

“‘Today’s decision was difficult to make, but we believe it is in the best interest of all of our stakeholders,’ Ken Love, Kimball’s CEO, said in a statement.”

“Kimball Hill, now the second-largest builder in bankruptcy, announced Feb. 27 that it was exiting the Florida housing market due to increased home inventories and foreclosures there. Kimball joins at least a dozen homebuilders that have filed for bankruptcy since June.”

The Associated Press. “Credit Suisse Group on Thursday posted a loss for the first quarter as the global effects of the U.S. subprime mortgage crisis continued to spread. Switzerland’s second-largest bank said it had net write-downs of 5.3 billion francs ($5.3 billion) for big buyout loans and mortgage securities.”

“Ambac Financial Group Inc. posted another steep loss for the first quarter on Wednesday as turmoil in the bond market pummeled the value of many of the bond insurer’s deals. The company has lost almost $5.3 billion in the last nine months.”

“The New York-based insurer recorded $1.73 billion in losses on a book of contracts promising to cover missed payments on complex investments backed by home loans.”

“The contracts Ambac is recording losses on insure sophisticated investments known as collateralized debt obligations. Because these investments derive some of their payments from mortgage bonds, the insured CDOs suffered from ‘dramatically lower’ prices in the first quarter, especially in March.”

“Ambac set aside $1 billion preparing to pay claims on defaulted mortgage debt.’

The Sun Herald from Australia. “After a record-breaking boom last year house prices across Victoria are falling. A report by the Victorian Valuer-General released yesterday reveals the median house prices in Narre Warren North have had the biggest fall dropping by 24.5 per cent from $570,000 down to $430,250, while Surrey Hills dropped by 14.4 per cent from $1.1 million to $943,000.”

“Geelong median house prices fell by 8 per cent from June to September last year, and Yarrawonga house prices dropped by 10.5 per cent.”

“Property prices in seaside towns also declined with prices in Inverloch falling 13 per cent from $305,000 to $288,000 and the price of a home in Anglesea falling by 9.7 per cent from $440,000 to $420,000.”

The Sydney Morning Herald from Australia. “The big residential developers will be pleased that Barry Goldman, principal of the real estate agency Portfolio Realty, has said that Sydney property has become a buyer’s market.”

“Mr Goldman said that while prices in some outer areas of Sydney would continue to fall in the next 12 months, across the Sydney metropolitan area they would grow 10 per cent, with higher gains in the central business district and eastern suburbs.”

“‘The areas close to the CBD are like a pressure cooker with a shortage of stock and strong demand, especially from professional people who are property-savvy. Prices have not fallen there and it is absolute rubbish to suggest prices will fall by 30 per cent or more over the next few years,’ Mr Goldman said.”

“‘I believe there will be upward pressure on values very soon as interest rates fall, so the time is ripe to buy either apartments or houses. The lack of supply of new dwellings … will guarantee price increases in the longer term,’ he said.”

The Globe & Mail from Canada. “Canada may not have the sizable subprime market of the U.S., but the engine behind the country’s housing boom has been increasingly leveraged first-time buyers. Nearly two-thirds of buyers in major centres now favour extended amortization periods of up to 40 years, while putting little or no money down was prevalent in 38 per cent of regional markets surveyed across Canada.”

“The findings raise questions about what’s been driving soaring house prices in recent years. ‘The reason we think the market has been staying hotter much longer than anyone anticipated was because of these newer amortization mortgages,’ said Craig Alexander at Toronto-Dominion Bank. ‘Because it really does change the affordability equation.’”

“‘We’re more vulnerable than we were in the past, and I think that’s just a factor of financial and mortgage innovation,’ said Adrienne Warren at Bank of Nova Scotia. ‘At the same time, it’s a trade-off - more people are getting into home ownership earlier.’”

The Winnipeg Sun from Canada. ” A shortage of affordable houses is forcing prospective first-time Winnipeg buyers to accept price tags going through the roof, or to leave the market altogether. A Re/Max report on housing affordability says the inventory squeeze has brought at least a slight drop in first-time purchasing here this year.”

“‘It’s a big problem. Demand is insatiable,’ Cliff King, a broker with Re/Max Executives Realty, said of the trend in Winnipeg which nevertheless continues to be one of Canada’s most affordable centres for housing.”

“‘I’ve had some first-time buyers who have just thrown in the towel and said, ‘This is crazy.’ One couple, who I think I wrote 12 or 13 offers with over a lengthy period of time, didn’t get a house. So they finally kept increasing and increasing what they would pay, and still couldn’t get anything,’ he said.”

Dow Jones Newswires. “In a bleak warning on the state of the U.K. housing market, house builder Persimmon Thursday said conditions had worsened over the past three weeks and were likely to deteriorate further.”

“Revenue for 2008 is currently about GBP1.37 billion, down 24% from GBP1.8 billion last year. Volumes are down about 18%. The statement didn’t say what the current cancellation rate is, but in February the company said the rate was 19%.”

“Persimmon noted: ‘An increase in discounting, marketing costs and incentives are being utilized in the market to compete for the reduced level of demand and this is having a negative impact on margins.’”

“The British Bankers’ Association Wednesday reported that mortgage approvals last month slumped to the lowest level in a decade. The Bank of England this week sought to restart the interbank lending market by making GBP50 billion of lending available to banks by swapping government bonds for mortgages.”

“British banks will be happy to swap their hard-to-sell assets for trusty government debt, but don’t look for them to increase their exposure to the teetering housing market.”

“What it is, in short, is liquidity. What it isn’t is capital, which is the true constraint on British mortgage lending. While banks could theoretically take the government bonds, turn them into cash and lend the money to homeowners, gearing up their already very big exposure to British housing, it would be a risky move by an industry now rediscovering risk controls.”

“‘I don’t think it gives the banks a green light to go through an enormous lending program,’ said Mike Amey, a fund manager in London with Pimco. ‘While it will free up some liquidity, how much we would see in mortgage rates coming down is less clear cut.’”

“A measure authored by Rep. Barney Frank, chairman of the House Financial Services Committee, (would) use the Federal Housing Administration to avoid foreclosures by moving borrowers into more affordable loans.”

“The strongest opponents to the Frank plan remain Senate Republicans, according to analysts. ‘It is going to have a tough time passing the Senate,’ said Andy Laperriere, managing director of ISI Group. ‘Most Republicans are of the same point of view, that a taxpayer-funded bailout is not going to help, and it is not fair and it is not popular.’”

“‘To think that we can continue to simply issue more debt and the rest of the world is gladly going to buy it at attractive rates to us…I kinda doubt it,’ said Paul Kasriel, chief economist at Northern Trust Co. in Chicago.”

The Times News from South Carolina. “Like many around the country, this home is in foreclosure. The family will move to an apartment in Greensboro, where the wife has a new job.”

“The husband, who asked not to be named, said the trouble began with the drought. He works for a waterproofing company and made nearly $100,000 annually in a sales job. With the drought, he said, people weren’t concerned with water proofing their basements and crawl spaces anymore.”

“As soon as he and his wife recognized their financial crisis, they decided she’d return to work as a physician’s assistant. She hadn’t worked since the children were younger and her license had lapsed. It took more than four months before she renewed her license and found work. But it was too late to save their home.”

“His pay was entirely commission, so he quickly went from making great money to being unable to pay the mortgage. ‘I’m not blameless,’ the salesman said. ‘This was not self-inflicting. I didn’t just decide, ‘To hell with my job. I’m not going to pay for my house.’ Life happened to me.’”

The C & G News from Michigan. “Facing foreclosure is a difficult and emotional ordeal. The good news is that there is an alternative to foreclosure — the short sale.”

“‘We need to let people know there is a resource out there for them that will somewhat save their credit, and that option is a short sale in lieu of foreclosure,’ said Gary Patrosso, a Realtor in St. Clair Shores.”

“‘It costs the bank an average of $50-$60 per day for every day they have a foreclosure sitting vacant on the market, because they’ve got to pay commission to the agent, pay utilities, taxes, lawn care and upkeep, and then things like people breaking into vacant homes and stealing things, and they have to pay for the board-up and maintenance,’ said Ralph Newkirk, manager of Real Estate One-Corporate Foreclosure Division in Southfield.”

“‘By the time that it gets to the foreclosure process and once it’s over the houses aren’t in that great of shape. … A lot of time in foreclosure, people take it out on the house — they rip up carpeting, take lighting fixtures, the furnace, and things like this. The old saying is that they’ll take everything but the kitchen sink, but I had a house in Commerce where I didn’t even know where the kitchen was,’ said Newkirk.”

“To qualify for a short sale…the homeowner will have to submit a hardship letter, among other documents to prove their case.”

“‘The essay question is, ‘How did you get in this trouble?’… Don’t just put on there that you don’t have any money. Tell them how you got there: Tell them about job loss, job reduction or price, divorce, illness, death, something. Go into fine detail and tell them exactly what happened. … Don’t be embarrassed,’ said Newkirk. ‘This market is just the way it is, and you’re not alone — don’t feel bad.’”

“Short sale sellers also have to consider all of their assets, said Newkirk, so it’s a good idea to talk to a CPA.”

“‘With that short sale packet, you have to list all your assets and all your liabilities. That includes 401Ks, any properties they have, anything, besides any liabilities, which include second and third mortgages,’ said Newkirk. ‘If they have assets, like a 401K, the banks are going to ask them to try and pull some money out of there and try to keep the house up.’”

The Valley Voice reports from Vermont. “Despite national headlines, local realtors remain optimistic that the Addison County residential real estate market is strong and will improve throughout 2008. The first quarter 2008 closed with thirty-two residential sales in Addison County as reported by the MLS. Coldwell Banker Bill Beck Real Estate reports that this is a 24% decline from the first quarter in 2007.”

“The report explains that the drop in sales from 2007 to 2008 does not mean that property values are decreasing in Addison County. ‘This is a reflection of the activity levels in the lower priced homes. Of the houses that were sold in the first quarter only three were over $300,000.’”

“Local realtors are concerned about the grim outlook the national news is painting of the local residential market. Nancy Larrow, CRS of Associates in Lake and Mountain Properties explains, ‘Buyers are confused by the national news. Buyers are looking for bottom dollar deals and …sellers are not taking these offers.’ Larrow also explains ’sellers are being realistic in their pricing and are realizing that pricing is crucial.’”

The Republican from Massachusetts. “The median sales price of homes in the Pioneer Valley fell 4.9 percent to $195,000 in the first quarter of this year compared with the same time period of 2007. The number of homes sold in Hampden, Franklin and Hampshire counties also fell 27.6 percent in January, February and March from the first quarter of 2007, according to the Realtor Association of Pioneer Valley.”

“‘We did expect these numbers,’ said Susan M. Renfrew, of Greenfield, president of the Massachusetts Association of Realtors.”

“It is the first time the median price for the first quarter fell below $200,000 since it was $187,500 in 2005, also according to the local Realtor Association. The number of unsold homes on the local market has also doubled since the housing boom was going full bore in 2005.”

“Kevin M. Sears, of Sears Real Estate in Springfield, secretary and treasurer of the state association, said he gets a lot of sellers saying things like ‘Well, my neighbor just sold his house for X (amount).’ ‘Well, that was last year,’ Sears said.”

The Boston Globe from Massachusetts. “Once immune to the real estate downturn that hit Boston’s suburbs hard, the downtown Boston condo market is now sorting itself out. Condos in two buildings will hit the auction block in the next two months: the Broadluxe, a loft project in the Financial District near the waterfront, and The Modern, at the fringes of the South End.”

“‘There’s no urban pioneering in a soft market,’ said Debra Taylor Blair, president of Listing Information Network. ‘In a soft market, the fringe areas tend to depreciate a lot quicker than properties in known and established neighborhoods.’”

“Diane Maloney of the Marketing Group said her firm initially sold more than half of Broadluxe’s 44 units when the project was on the market about two years ago; those purchase and sales agreements were terminated in the foreclosure.”

“At the time, those units sold at an average price of $675 per square foot. This time around it will be ‘very difficult to get that,’ Maloney said.”

The New Haven Independent from Connecticut. “Westville neighbors got a rare firsthand glimpse at the housing crisis from a Willard Street lawn Saturday. Attorney Frank Capone oversaw a bidless foreclosure auction from the lawn.”

“In the absence of bidders, the light-green two family house went back to the bank. A bid of just one dollar over the bank’s bid of $270,000 would have won the three-story house, which was recently appraised at $350,000, said Capone.”

“Jennifer Blemings of 48 Willard St, said that she had seen the house for sale at least three times in the 10 years that she’s lived nearby, once for as much as $599,000.”

“‘Values are plummeting,’ Capone said later. He said that the house’s recent appraisal was $20,000 less than an appraisal just a few months earlier.”

“Capone speculated that the bank was trying to cut its losses by offering a bid that was low relative to the debt owed on the house. ‘To attract buyers they put it at $270,000. Maybe that was their thought process,’ he said.”

“He said that the bank, located in California, ‘has thousands of foreclosures. They outsource them to brokerage firms to sell.’”

From 13 WHAM in New York. “According to the Greater Rochester Association of Realtors, March home sales dipped 27 percen, with 655 home sales compared to 893 last year. February home sales were down 18 percent over last year.”

“Bob Miglioratti of ReMax Realty believes this is as bad as it’s going to get. ‘We have more people in the marketplace, which we think in the next 30 to 60 days will offset the declines we just experienced,’ he said.”

“Laura Ribbing has struggled to sell her Henrietta home for months. She blames the uncertain economy and fears over the housing market. ‘If it’s a starter house and they want to move in and maybe in a few years they’re going to try to sell it and it’s not going to sell because of the market, I don’t know,’ she said.”

National Public Radio. “The Washington, D.C., metropolitan area has been hit hard. Prices tumbled an average of 11 percent in the past year. That’s the big picture. But a look at Ashburn, Va., about 40 miles from the center of town, finds a steeper fall.”

“In parts of the county, housing prices have dropped 18 percent over that same period. New construction has ground to a halt.”

“Realtor Danilo Bogdanovic surveyed two rows of neat, new, brick townhouses on Falkner’s Lane. ‘These were selling for about $550,000 at the peak, which was about August ‘05, and they’re selling right now for about $350,000,’ Bogdanovic said. ‘Fifty percent of this community has been ether foreclosed on or is facing foreclosure.’”

“At a recent auction of foreclosed homes north of Washington, in the Maryland suburbs, there weren’t many takers. All of the addresses are far from downtown, and average commute times are among the highest in the nation.”

The Daily Press from Virginia. “The number of homes sold in Hampton Roads in the first quarter of 2008 continued to slide as prices held flat.”

“The sales decline was especially pronounced in the Williamsburg area, which includes upper York and James City counties. A 45 percent drop in the number of homes sold in Williamsburg, compared with a year earlier, was the largest of the 22 areas tracked by the Virginia Association of Realtors. Statewide, the number of homes sold declined 26 percent.”

“Frank Hughes, a Realtor in Williamsburg, is still optimistic and thinks that there’s substantial pent-up demand. He pointed out that pending sales in the Williamsburg area are down only 22 percent from the year before.”

“The number of homes on the market has built up over the past couple of years, but the Virginia Association of Realtors doesn’t have inventory figures. The Hampton Roads Real Estate Information Network keeps track of inventory, along with performance by locality. But the group recently decided that it would no longer make its data public.”

“R. Scott Brunner, CEO of the Virginia Association of Realtors, acknowledged Realtors say so often that it’s a great time to buy, they lose credibility. But, he said, now really is a great time.”

“Potential buyers should stop listening to national media stories that paint a gloom-and-doom picture and quit trying to time their purchases with an anticipated bottoming of the market.”

“‘People are waiting it out,’ he said, ‘hoping there’s going to be a magic point when it hits a bottom.’”

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