The Housing Bubble

The Record Searchlight reports from California. “The severity of the housing downturn hit home Tuesday with the release of North Valley Bancorp’s first-quarter earnings. The Redding bank’s nonperforming loans went from $459,000 in the first quarter a year ago to $25.7 million in 2008. The bank reported $1.6 million in nonperforming loans on Dec. 31. The dramatic spike is centered in four real estate projects, including three in Shasta County, with loans totaling a little over $24 million.”

“The two largest loans are residential development projects of $9.5 million in Placer County and $6.75 million in Shasta County.”

“‘We are seeing subdivisions or developers that are experiencing either a slowdown in sales … or price declines that are such that banks can no longer cover in terms of collateral,’ North Valley Bancorp CEO Mike Cushman said.”

“In Shasta County, the number of homes lost to foreclosure in the first quarter went from 65 in 2007 to 150 this year, according to the Shasta County Recorder’s Office.”

“Cushman, who’s been a banker for more than 30 years, said the current housing downturn is the worst he’s experienced. ‘We actually feel pretty lucky. Most of our markets are still performing pretty well. … It’s the Sacramento area where we are experiencing the greatest reduction in values,’ Cushman said.”

“The spike in North Valley’s nonperforming loans are not a result of subprime lending. ‘There were not any community banks in our area involved in any type of subprime lending,’ Cushman said.”

The Daily Bulletin. “Blaming the national real-estate market’s blowout, a local housing-land developer has gone bankrupt and left more than $5.1million of unpaid loans in the lap of its largest creditor, Rancho Cucamonga-based PFF Bancorp Inc.”

“There are other loans, but Ontario-based Empire Land LLC left PFF’s Pomona First Federal Bank & Trust holding the bag on the unpaid loans. Other big-name creditors listed include homebuilder D.R. Horton and banking giant Wachovia.”

“The bank loaned millions of dollars during the housing boom to local real-estate developers who got stung by the subprime mortgage meltdown.”

“Like several other home developers and builders, Empire Land’s revenue dropped when new-home sales began falling in the past year or so. At the same time, thousands of home foreclosures started hitting the market, forcing prices even lower and persuading would-be buyers to lay low.”

“The company owned or had interests in 11,800 properties across 14 California land projects as of March 31, according to court documents. Its sister company, Aviat Homes L.P., owned 330 residential properties - some unfinished - in California, with projects in Hesperia, Moreno Valley and Brentwood.”

From Reuters. “LandSource Communities Development LLC, a large California land and development company, is expected to file for bankruptcy protection in the next two to three weeks, a Standard & Poor’s publication reported on Tuesday, attributing the information to unnamed lenders.”

“S&P…reported that the company’s cash had declined to about $25 million from about $115 million in early February. An article on the Web site, citing unnamed sources, said a bankruptcy filing would help preserve cash and start a process to sell assets.”

“LandSource had received an official notice of default on a $1 billion loan after it failed to meet certain terms of its lenders, the Wall Street Journal reported last week. LandSource’s primary investment is The Newhall Land and Farming Company, which owns 15,000 acres of land north of Los Angeles.”

The Recordnet. “Foreclosure activity in the Stockton metropolitan area continued as the busiest of any in the nation during the first three months of this year, according to RealtyTrac. A total of 7,560 foreclosure filings, default notices, auction sale notices and bank repossessions, were filed countywide in the first quarter, RealtyTrac reported. That was almost a threefold jump year to year.”

“Six of the top 10 foreclosure hot spots in the nation were in California.”

“The actual numbers of repossessions also are soaring, DataQuick said. The firm said the number of homes repossessed during the first quarter in San Joaquin County nearly topped 2,500, more than a fivefold increase from 440 a year ago. That compares with almost 4,000 homes repossessed countywide all of last year.”

“Pending sales countywide nearly hit the 1,200 mark last month, compared with about 800 homes being foreclosed on per month countywide, at the first-quarter foreclosure rate. That’s a higher sales rate than at any time during the previous boom years of 2000 to 2005.”

“Jerry Abbott, president of Coldwell Banker Grupe, Stockton, said most of the sales are foreclosure homes.”

The Press Enterprise. “Owners of foreclosed homes in Temecula would have to register with the city and hire someone to oversee their properties under an ordinance expected to come before the Temecula City Council. As of Tuesday, there were nearly 1,000 bank-owned properties in the Temecula ZIP codes, according to Realtytrac.”

“March foreclosures in the 92591 ZIP code, which covers Temecula, are up 117 percent from March 2007, said RealtyTrac spokesman Daren Blomquist. Another 817 were in the foreclosure process.”

“Garnett, board president of the Redhawk homeowners association, argued that the city should drain abandoned pools and bill the lenders, whom he considers to be part of the problem. ‘These are not nice people,’ he said.”

The North County Times. “The ‘witching hour’ for foreclosures, as described by City Councilwoman Maryann Edwards, is the period from when buyers abandon the home they can’t afford to when the lender repossesses the house, a process that often takes months.”

“It is a state of ownership limbo that has cursed numerous neighborhoods in Temecula as it turns green lawns brown and clear pools into cauldrons of algae and goop. City officials envision creating a registry to track empty homes and to find the lenders who are responsible for the properties after the buyer walks away.”

“Many property managers want to see pools on abandoned properties drained. ‘As for the concern that pools may crack if we drain them, I don’t even care,’ said Harry Garnett, president of the Redhawk Homeowners Association.”

“Garnett said that, of the approximately 3,000 homes in the association, roughly 50 are abandoned.”

“‘I think this ordinance is a great idea, but we should have been talking about it three or four months ago,’ he said. ‘We didn’t think it would get this bad, and now we don’t think we’ve seen the bottom of this. It’s only going to get worse.’”

“Debra Thomas, president of the Meadowview Home Owners Association said, because of fewer assessments being paid, many associations have less money coming in for community improvements. She said it is evident that the number of foreclosures is increasing among the 900 homes in Meadowview, and ‘it’s getting worse.’”

“San Diego home prices were pummeled again in February, returning the county’s price decline to a record clip after the price freefall slowed in January. The decline in prices from the same month a year earlier hit 19.2 percent, the largest locally during this housing recession and the biggest drop since the Standard & Poor’s Case-Shiller Home Price Index started calculating home prices in 1987.”

“And when compared with January, the year-over-year gap widened by its largest margin yet, indicating that the fall in prices might be accelerating.”

“How long prices will decline for is impossible to predict, most analysts agree. And the role of easy money in the form of no-down-payment, no-verified-income loans makes this housing recession impossible to forecast, said James Hamilton, an economics professor with UC San Diego.”

“‘It’s a more extreme boom up and it’s a more extreme down,’ he said. ‘So as far as where prices are headed and when they’ll stabilize, I don’t think you can tell because I really feel we’re in uncharted territory.’”

“Kelly Cunningham, an economist with the San Diego Institute for Policy Research, said the monthly decline of 3 percent will not continue for long.”

“‘I hope not. Gosh, that’s well over 30 percent decline if it continue on for a year. I don’t think that’s going to happen,’ said Cunningham. ‘But of course I’ve been saying the worst is here for a while now and then it gets worse.’”

The Union Tribune. “Las Vegas, Miami, Phoenix, Los Angeles and San Diego, five areas that saw home prices rocket ahead in the housing boom, are now leading the retreat backward.”

“The S&P/Case-Shiller index is based on homes sold in December, January and February as compared with previous sales of the same properties. The results are translated into index values with 100 for all areas as of January 2000. Percentages then are derived from changes month by month and year over year.”

“San Diego County’s February index value was 190.34, down from 197.45 in January and 235.54 in February 2007. The all-time peak was 250.34, set in November 2005, meaning that prices soared 2½ times their level in January 2000 before falling back 25.1 percent.”

“Of the 20 areas tracked, Los Angeles, Miami and Washington, D.C., still posted index values above 200.”

“James Hamilton, an economist at the University of California San Diego, said the downward trend is likely to continue because of the ‘overhang’ of unsold homes, numbering about 19,000 in the county – several times the typical listings count at the peak of the boom in 2003-05.”

“‘It’s not a shock that we’re seeing this decline now, and I think we’ll see some further declines yet to come,’ Hamilton said. ‘That overhang of unsold homes is still there.’”

“In explaining the San Diego area’s high ranking among declining markets, Hamilton said, ‘The common element there is those were the communities that had the biggest run-up.’”

The Modesto Bee. “Dennis Swann of Swann’s Automotive Repair in Modesto said he’s seeing more people forgo repairs for things they see as unnecessary, such as air conditioning. Dennis Slewoo of USA Auto Service, also in Modesto, said he’s had to schedule more repairs in stages, rather than doing them all at once.”

“Both men see the same standard: Consumers, stung by high gas prices and a downbeat economy, are clamping down on their automotive expenses.”

“‘Buying a vehicle because it looks good is less and less of a reason,’ said said Chuck Parker, publisher of Automotive Digest. ‘People are looking for utility, for cars to last. People are fighting to keep their kids in school and pay their mortgage.’”

“Slewoo said a customer brought his car in for a brake inspection Tuesday. Slewoo found the brakes were nearly metal on metal and needed immediate replacement.”

“‘He asked me if we could push it back two or three weeks,’ Slewoo said. ‘With his income, he said, he has to save his money. Two or three years ago, this conversation wouldn’t happen.’”

The Salinas Californian. “The first-ever completely affordable housing project in Monterey County will instead be priced at market rates, following a decision Tuesday by the Monterey County Supervisors.”

“At the request of the developer, Woodman Development, supervisors voted unanimously to remove all affordability restrictions on 123 single-family homes in the Commons at Rogge Road, north of Salinas. The project was first approved in 2006.”

“The company has claimed falling home prices have made it impossible to sell the homes at pre-set affordable rates, which are now more expensive than market-rate homes.”

“‘I don’t think there’s an advantage to those homes sitting vacant,’ said Supervisor Dave Potter.”

“The vote means Monterey-based Woodman Development can sell the once price-restricted homes at any price they choose, and buyers won’t have to meet income requirements. The homes must be owner-occupied.”

“Additionally, the homes’ resale prices will no longer be restricted to keep them affordable - a stipulation that also kept people from buying. Woodman will also have to pay the county more than $150,000 in fees it had avoided by building affordable homes.”

“Woodman’s original agreement with the county required it to provide homes for moderate and ‘workforce’ buyers, households of up to four people with incomes ranging from $76,080 to $114,000, with a maximum price of a home set at $480,000.”

“William Silva, Woodman’s chief financial officer, told supervisors the changes are necessary because qualified buyers have been opting to purchase cheaper market rate homes with no deed restrictions.”

“‘It has left us in a predicament,’ Silva said.”

Some housing bubble news from Wall Street and Washington. Realty Check, “I went up to Capitol Hill this morning because about 1,200 members of the National Association of Home Builders are taking their annual day of action up here. It couldn’t be more timely, as several bills are working their way through Congress to help builders and borrowers alike and to right the housing market.”

“I have to say I was a little curious as to how the builders would be received, given their bold move in February, when the association cut off all PAC money to Congressional members.”

“On the hill this morning, I asked NAHB Chairman and CEO Jerry Howard if he felt at all strange coming back up here to ask for help, after his association had made such a brash move. ‘The bottom line is–our members have felt that over the course of the last 4 or 5 years – Congress had totally ignored the housing industry …finally our guys said ‘enough is enough’ - they’re not doing anything for housing–why should we play the game if they’re not going to be playing the game,’ Howard said, pretty brashly himself.”

“And without my prompting: ‘We think we have access just by virtue of the fact that we are 15 percent of the GDP–we think that gives us access. This was our way of saying ‘we need more than access, we need action across a whole range of issues.’”

“What about the quid pro quo, I asked? ‘There is no quid pro quo,’ he argues. ‘There is the housing industry and there are a multitude of actions Congress can take to show their interest in the housing sector–they hadn’t done anything.’”

The Denver Post. “Protesters in pink pig suits hammed it up Tuesday morning outside the headquarters of MDC Holdings to oppose tax breaks for homebuilders. About 20 protesters demonstrated against the inclusion of tax relief for the industry within the Foreclosure Prevention Act, legislation initially intended to help struggling home owners.”

“The protesters also have targeted Toll Brothers, Lennar, KB Home and other large builders and plan a protest in Washington, D.C., as the House takes up the legislation, said Jacob Hay, a spokesman for the Laborers’ International Union of North America, which organized the action.”

“‘They are being greedy,’ Hay said. ‘They helped cause the mortgage crisis, and now they are going to Congress asking for a bailout.’”

“Reckless lending and building practices contributed to a housing bust that has cost the nation more than 350,000 construction jobs since 2007 and put 3 million homeowners at risk of foreclosure, Hay said.”

“HomeAmerican Mortgage, MDC’s lending arm, boosted the number of subprime loans it originated from 746 in 2005 to 2,233 in 2006, a 199 percent jump. During the same period, prime loans increased only 3.6 percent to 9,809.”

The Tampa Tribune. “Three new reports paint a gloomy picture of the Tampa Bay area’s housing market and signal more pain may be on the way for home sellers. Prices are down, sales are down and foreclosures are up.”

“‘If sellers remain stubborn on price, it will delay the recovery in home sales,’ said Chris Lafakis, an economist who covers Florida for Moody’s Economy.com.”

“Meanwhile, another report shows homeowners continue to have trouble paying their mortgages in Florida, where foreclosure filings nearly tripled compared with 2007, according to RealtyTrac.”

“Tampa Bay builders started construction on 1,277 single-family starts during the first quarter of 2008, down 43 percent from 2,240 homes during the same quarter last year. Single-family inventory, which comprises units under construction, finished vacant units and model homes, totaled 6,556 units at the end of the first quarter of 2008.”

“Even though the reports look gloomy, Lafakis said the bad news is needed. ‘It’s bad,’ he said. ‘But we just need to take our medicine and start recovering.’”

The BBC News. “House prices in the UK have recorded their first annual fall for 12 years, according to the Nationwide. Nationwide said the price falls reflected a weakening market which had been hit by ‘poor affordability and tighter financial market conditions.’”

“David Blanchflower, a member of the Bank’s Monetary Policy Committee which sets interest rates, said in a speech on Tuesday that house prices could fall by 30% over the next few years if interest rates were not cut.”

“He added: ‘I am not suggesting that such a drop will necessarily occur, but it may. Cutting interest rates now may help to prevent such a dramatic fall.’”

“But the fall in prices, down 1.8% over three months compared with the previous quarter, will be welcomed by some new buyers who have seen prices rocket up by 45% in the past five years.”

“‘Prices have been rising consistently in the last four of five years, so a bit of a fall is due. It is what markets do,’ said Peter Rollings, managing director of Marsh and Parsons Estate Agents.”

The Daily Mail. “A three million pound housing estate has been fenced off after all 20 properties failed to sell in two years. The three and four bedroom houses were on the market priced between £119,950 and £137,5000 but all are still empty.”

“And instead of being full of families, a six-foot barbed wire fence has been erected around the estate following attacks by vandals.”

“Natalie Hudson, 25, who lives nearby said: ‘They should knock them all down. All the kids smash the windows, and it’s been like that for about two years. They are an eyesore now, and just like shoe boxes. They stopped even putting glass back in the windows.’”

The Guardian. “Inside Track, the company that spearheaded the buy-to-let investment boom, is to go into administration. The demise of the firm, which once promised to show customers ‘how you could give up work and be a property millionaire instead,’ comes as buy-to-let mortgages dry up amid tumbling values for British new-build flats, Spanish apartments and Florida homes.”

“Inside Track blames the credit crunch for its collapse as banks tighten up on buy-to-let lending, effectively ending 100% loans. Profits for the group three years ago were as high as £12m, but internal management accounts for the nine months to January 31 this year show income of just £239,000, with a £97,000 loss in January alone.”

“Inside Track Seminars was set up in 2002. It specialised in holding ‘free workshops’ …lasting about two hours, these painted a world where anyone could become a ‘property millionaire.’ But it was a model that depended on a rising housing market.”

“Founder Jim Moore, who spoke at the early seminars before moving to Spain, told prospective investors they could ’start from scratch, live on easy street instead of struggling for a living.’

The Calgary Herald. “Alberta led the country with the biggest drop in resale housing activity in the first quarter of this year. The Canadian Real Estate Association says MLS sales in the province were down 30.5 per cent compared with the first quarter of 2007, new listings increased by 36.2 per cent.”

“As for sales, the data show it was the third consecutive quarterly decline since activity peaked in the second quarter last year. CREA president Cal Lindberg said it’s important to remember 2007 was a record year for MLS sales in Canada.”

“Marc Pinsonneault, senior economist with National Bank of Canada, said: ‘The upshot is that the seller’s market that had prevailed until the first half of 2007 has since clearly turned into a buyer’s market.’”

“‘Resale housing activity is trending lower in the four most active provinces,’ said CREA chief economist Gregory Klump. ‘Housing markets are becoming more balanced and price gains are becoming more modest as a result. This trend is forecast to continue as rising mortgage carrying costs and property taxes erode affordability.’”

From CBC.com. “Calgary’s rental vacancy rate has climbed to almost four per cent, in part due to the slow sales of both new and converted condos, says a group that represents landlords.”

“Almost 40 per cent of new condominium units built last year, as well as condo conversions that did not sell, are now being rented out, said Gerry Baxter, executive director of the Calgary Apartment Association.”

“‘The market is really restabilized and you know, right now it’s like a balanced market,’ said Baxter.”

The LA Times. “As foreclosures surge, lenders might be forced to acknowledge that far more of the mortgages they sold to investors were never written properly in the first place. That’s one analyst’s conclusion from the latest earnings disaster at Countrywide Financial Corp., the nation’s biggest mortgage lender.”

“One item that caught the eye of Keefe, Bruyette & Woods Inc. analyst Frederick Cannon was a $456-million provision to buy back flawed loans from the pools of home loans that backed mortgage-based securities.”

“Most of the sub-prime and other higher-risk loans that helped stoke the housing boom were put in those pools. As of March 31, the company had set aside $1 billion to buy back such botched loans, up from $430 million a year earlier.”

“At the peak of the housing boom, the company was lending $30 billion to $50 billion a month in new mortgages — many of them, like those throughout the industry, based on misstated earnings of borrowers.”

“‘So when they set aside $1 billion that’s a day’s worth of funding,’ said Robert Simpson, CEO of Investors Mortgage Asset Recovery Co. ‘I’m not sure that addresses what the real problem may be.’”

The Columbus Dispatch. “The cold wind blowing off Lake Erie was nothing compared to the frosty reception awaiting National City Corp. directors at the troubled bank’s annual shareholders meeting yesterday.”

“The bank, facing millions in losses from high-risk mortgages, accepted a $7 billion bailout last week led by New York firm Corsair Capital. The group will buy new National City stock for $5, further depressing share prices that have declined 80 percent since July. In the past four months, the stock’s dividend has dropped from 41 cents to a penny.”

“‘This is not the way you are supposed to run a bank,’ shareholder Howard A. Kline, 75, said after the meeting. Kline said he’s lost thousands of dollars on his National City stock. ‘It’s probably not going to be in my lifetime that the stock gets back to where it was,’ he said.”

“Kline said when he was younger, getting a home loan from National City was difficult. But in the past 10 years, management lowered lending standards to issue more high-risk, high-fee loans to people with poor credit.”

“Tom Gray of Concord, Ohio, blamed the bank’s move into subprime lending on former CEO David A. Daberko, who retired last year. He gave credit to Peter Raskind, who was named CEO in July and chairman in December, for facing the hostile crowd.”

“‘I think the music has stopped, and he’s standing there with no chair,’ said Gray, a 67-year-old former employee of the company.”

“One shareholder, speaking remotely from an auditorium separate from Raskind, scolded board members for failing to oversee Daberko, Raskind and other top officers.”

“‘This is a 163-year-old company and in three short years it was practically destroyed,’ said the shareholder, who didn’t give his name. ‘Managers didn’t have the foggiest idea what they were doing and the board stood by. Current top management is not going to get any smarter. Care to comment?’ he said to loud applause.”

The New York Times. “In early February, Congress gave beleaguered mortgage borrowers a rare cause for celebration. As part of the economic stimulus package, it passed rules intended to make it easier and less expensive for people to take out hefty loans in the nation’s costliest housing markets.”

“Instead, the effort to make it easier to get jumbo mortgages — loans over $417,000 — has yielded frustration and disillusionment.”

“Since the rules took effect April 1, many prospective borrowers and their mortgage brokers say the new loans are either not available or the rates are far higher than they expected. Relief, they say, has been replaced by grief.”

“The program ‘is so much of a failure that it’s really unbelievable,’ said Daniel M. Shlufman, president of the FCMC Mortgage Corporation. Mr. Shlufman likened Congress’s effort to ‘coming up with a vaccine to a terrible disease, and then not giving it to people, or making it too expensive.’”

“‘It’s a complete joke,’ said Jose Lemus, president of a mortgage brokerage firm in Santa Ana, Calif. He said a buyer in Southern California looking to borrow $417,000 would pay an interest rate of 5.75 percent, while someone borrowing slightly more for a conforming jumbo loan would pay an interest rate of 6.99 percent.”

“For a jumbo loan that is not conforming, the rate could be as low as 7.35 percent for someone with excellent credit, Mr. Lemus said, but the rate for someone with average credit could be as high as 9 percent. ‘It’s getting harder by the day,’ Mr. Lemus said.”

“An influential trade group of the nation’s largest financial institutions, the Securities Industry and Financial Markets Association, recently made a key decision that some critics say has kept those rates from dropping. The association decided that loans above $417,000 — even those jumbo loans now considered by law as conforming — would not be eligible to participate in the ‘to be announced’ market.”

“Sean Davy, a managing director at the trade association, said that lumping the new loans in with the smaller conforming ones could have created enough uncertainty and instability to drive up rates on the conventional loans.”

“Some prospective borrowers, like Nathan Menaged, 29, are skeptical that things will change. Mr. Menaged, a marketing consultant, owes about $574,000 on his Brooklyn home. He makes monthly payments of $4,000.”

“‘I thought I had some good possibilities for getting into something more comfortable,’ Mr. Menaged said of the new rules, which he has been tracking with great hope since January. But the interest rates on them remain prohibitively high. If rates had fallen as he expected, he hoped to lower his monthly payments by $1,000 — money he wanted to pay for his daughter’s tuition.”

“‘It’s frustrating and it could become desperate if I don’t find an alternative in the near future,’ he said.”

The Union Leader reports from New Hampshire. “As the number of foreclosures in New Hampshire continues to climb, housing advocates are seeing a disturbing trend: The mortgage crisis is spreading to prime borrowers. Just more than 6 percent of mortgages in New Hampshire are delinquent, according to the latest survey by the Mortgage Bankers Association. For the first time since 1992, that’s comparable to the national rate. There were more than 18,000 mortgage loans in New Hampshire with payments past due as of the fourth quarter of last year. Of those, 10,710 were prime loans, 6,390 subprime loans.”

“Robert Tourigny, executive director of NeighborWorks Greater Manchester, said his agency has seen an ‘alarming’ increase in calls from homeowners seeking help not because of adjustable-rate loans, but because loss of income is making it difficult to keep up with their payments.”

“‘Those, I think, are what’s really troubling, because that’s a sign of the tough economy,’ Tourigny said. ‘If you don’t have the ability to pay, it doesn’t matter what your interest rate is.’”

The Beverly Citizen from Massachusetts. “When the real estate market changes, so do real estate agents. That’s the logic with a recent course from the Massachusetts Association of Realtors designed to help Realtors with foreclosure sales, short sales and selling properties at auction or those banks own.”

“Marilyn Jarvis is president of the North Shore Association of Realtors and she took the course. As a real estate agent for the past 25 years, ‘I’ve worked through changing markets in the past,’ Jarvis said.”

“Many situations she has dealt with in the past year have ‘positively been more stressful’ than sales in 2003 and 2004, for example, when the market was supercharged.”

“‘Many times they realize the interest-rate adjustment is coming and realize between the mortgage and taxes they can’t afford it,’ she said.’

“Increasingly, sellers are realizing they need to price their home based on the current market, something that was a little tougher when the market first began to soften. ‘People are starting to realize it is irrelevant what they paid for the property or what they owe,’ she said.”

The Enterprise from Massachusetts. “Thomas Fitzgerald is happy with the new home he bought two years ago, but not about the vacant houses that surround it. ‘My neighborhood is going to hell,’ said Fitzgerald, who lives in the city’s north section.”

“Recently, an elderly neighbor around the corner was shot and wounded. ‘A week after the shooting, police took homeless people out of the house on the corner,’ Fitzgerald said. ‘Then, across the street, I saw kids kicking the door in and down the hill. Kids broke in and took all the plumbing out.’”

“All three houses were vacant amid the surge of foreclosures in the city. City officials estimate there are 700 vacant houses in Brockton, with some 400 of them left empty by foreclosures.”

“The vacant houses lurk throughout the city. They include single- and multi-family dwellings. ‘It’s everywhere, there’s no neighborhood that hasn’t experienced them,’ said Carol DeLorey, a non-voting member of the Brockton Housing Partnership, a coalition of 13 local lending institutions established to address the foreclosure crisis. ‘It’s progressively getting worse,’ DeLorey said.”

“The abandoned structures, often owned by out-of-city lenders, often attract vagrants, vandals and thieves. ‘Scavengers are having a blast,’ said Fire Chief Kenneth Galligan.”

From WBUR.com in Massachusetts. “The latest home sales numbers show that the Massachusetts housing market is still declining. The state has lost 3,000 construction jobs over the past year. And many of those who still have work are getting less of it. WBUR’s Business and Technology Reporter Curt Nickisch rides along with one asphalt and concrete contractor who’s hitting the pavement…to find more jobs.”

“Adrian Morgado is wearing a T-shirt that says Morgado Construction, the name of the small concrete and asphalt paving company he runs in New Bedford. He bought this truck four years ago when business was as blazing as its red paint job.”

“ADRIAN MORGADO: ‘It was amazing, there was all these condominiums being built. Non-stop. Every day, paving. Every morning, I knew my schedule.’”

“Dawn to dusk. Money was good. Morgado hired a crew ten strong, and there was more than enough work for them close to home. Today it’s different. Now Morgado’s heavy work boot rides the gas pedal, rumbling his truck down a Cape Cod highway on $4-a-gallon diesel. He has to drive much further now just to give estimates for paving jobs.”

The Telegram in Massachusetts. “Worcester County saw a 34 percent drop in sales for March, from 530 in March 2007 to 350 last month, the data shows. Condominium sales in Worcester County were down 40 percent in March from the year before, and down 37 percent for the quarter, the Warren Group data shows.”

“The state data marks the second-steepest price drop since The Warren Group began recording prices in 1987, according to CEO Timothy M. Warren Jr.”

“‘The Bay State’s housing market is looking a lot like it did at the end of 1990, when December prices fell 11 percent compared to the same month the year before,’ Mr. Warren said in a statement. ‘That was the low point of the ’90s housing crisis. Afterward, prices began to fall by smaller percentages and by 1993, they were level.’”

“‘But that downturn was fueled by the banking failures in the 1980s, while this one has more to do with the staggering number of foreclosures facing Massachusetts homeowners,’ he said.”

The Boston Herald from Massachusetts. “‘The market is in decline - and it’s accelerating downward,’ said Warren of the Warren Group, which yesterday reported that median house-sale prices dropped to $304,000 in March. That’s down 10.6 percent from March 2007, trailing only an 11 percent drop between December 1989 and December 1990 as the worst 12-month pullback on record.”

“Massachusetts Association of Realtors President Susan Renfrew said she can’t predict when real estate will bottom out. ‘I think we’re still working through a market correction,’ Renfrew said.”

“But Warren, who previously predicted housing would hit bottom some time this year, now expects the tough times to continue into 2009. ‘We may see things improve a year from now, but I don’t really think things are going to turn around this year,’ he said.”

The Boston Globe. “Home sellers in Massachusetts are slashing prices at double-digit rates to close deals, but there is no evidence the lower prices will end a housing slump now entering its third year.”

“Some of Boston’s more popular suburbs had dramatic price drops for single-family homes in the first quarter of 2008 - prices were down 19 percent in Acton, 23 percent in Westford, and 31 percent in Sudbury - compared with the same three-month period last year.”

“‘It’s a self-reinforcing cycle where prices drop and people stay out of the market because prices drop, and that makes prices drop even more,’ said Patrick Newport, an economist for a Waltham economic consulting firm. ‘There’s potential for prices to drop even more than they did in the 1990s.’”

“That housing slump lasted 3 1/2 years and, by the end, prices had fallen 10.2 percent from the market’s previous top.”

“Real estate agents said the only way sellers in many communities can attract buyers is by cutting their listing prices. But the sharp drop in the number of sales indicates these price cuts have been either too small, or too few, to close many deals.”

“‘The offers don’t come together. A buyer and seller might stale mate over $10,000 or $15,000, and you go back to square one. We’re seeing a lot of that,’ said Michael Clancy, an agent in Weymouth.”

“Condo developers are increasingly turning to auctions to unload units, both in Boston and the suburbs. Next month, 25 units at the upscale Concord Commons development will be auctioned, while the owners of the Residences at Peabody Crossing will auction 18 condos.”

“The Peabody project’s developer, Town & Country Homes of New England Inc., set minimum prices for various units in the $200,000 range. Some of the units that already sold at Peabody Crossing went for more than twice that, said Sue Hawkes, CEO of Velocity Marketing, which is handling the auction.”

“The developer ‘was hoping there’d be a good spring market like everybody else and realism set in,’ Hawkes said. The company was ‘more comfortable moving on and selling the property he has before there is further potential erosion’ in prices, she said.”

“Thomas Skahen’s firm recently dropped the prices sharply for 36 condos in Holden. ‘We’re still not getting any activity,’ he said.”

From Bloomberg. “Home prices in the Hamptons, where rich and famous New Yorkers spend summers by the sea, fell in the first quarter as Wall Street job cuts and an economic slowdown took a toll on buyers.”

“The median price declined 7.1 percent to $882,500 and the number of sales dipped 29 percent from the last three months of 2007, according to a survey by appraisal firm Miller Samuel Inc.”

“‘If you don’t price it properly you’re going to sit,’ said Prudential Douglas Elliman CEO Dottie Herman, who owns a second home in Southampton. ‘Price matters in this market. You’re dealing with more inventory so there are more choices for buyers. Sometimes people will look at houses and if it’s not priced right it will help sell someone else’s who is.’”

“The availability of mortgage financing drove down sales in the Hamptons, said Judi Desiderio, CEO of Town & Country Real Estate in East Hampton, New York.”

“‘Every market in the country is affected by that,’ Desiderio said. ‘Unless you have sterling credit and can put one- third down and own everything else you have and can prove it, they’re going to give you a hard time.’”

The Pocono Record from Pennsylvania. “New housing permits are on a steep downward slide in Monroe County, and may have yet to hit bottom. ‘I would certainly think we would be lower than last year, possibly by more than 50 percent. The downward trend was pretty clear,’ said John Woodling, director of the Monroe County Planning Commission.”

“Peter G. Gallagher, Pocono Builders Association president, cautioned against year-to-year comparisons. ‘It’s hard to compare to the last few years. We had banner years,’ he said.”

“Gallagher noted that the nation’s attention on the sagging home market has changed the way consumers approach the buying process. ‘We have seen somewhat of a shift in our business and of those I talk to in the association. People are looking for concessions — like free items. However, we all know that nothing is free,’ he said.”

“Jim Mathiesen, general manager of Target Homes in East Stroudsburg, said his company is finding new ways to compete in what he describes as a slower market.”

“‘We continue to sell homes, but not at the same rate as in 2005 and 2006. And the market is not as strong as it was last year,’ he said. ‘Builders have to work harder and offer more value for the customer to get them interested in the purchase. For example, we are offering free granite kitchen counter upgrades and to help with closing costs.’”

“But still, there’s optimism in the market. According to Gallagher, ‘It’s a great time to buy. Mortgage rates are down, property prices are down, and if they wait to long, they may end up buying when it’s going back up.’”

The Wall Street Journal. “As the growth in subprime mortgage delinquencies appears to be slowing, lenders are seeing a rapid rise in defaults on a type of mortgage that gives consumers with good credit several different monthly-payment options.”

“These mortgages, which are sometimes known as ‘pick-a-pay’ or payment-option mortgages but are generically called option adjustable-rate mortgages, are turning out, in some cases, to be even more caustic than subprime loans, in part because the loan balance and the monthly payments on some loans is growing even as home prices are falling.”

“On Tuesday, Countrywide Financial Corp. said that 9.4% of the option ARMs in its bank portfolio were at least 90 days past due, up from 5.7% at the end of December and 1% a year earlier. Countrywide also reported that it had charged off $125 million of these loans in the first quarter, compared with $35 million a quarter earlier.”

“Some borrowers say they weren’t suited for these loans or that the terms were poorly disclosed. Edward Marini, a 63-year-old disabled Vietnam veteran, took out a $280,000 option ARM from Countrywide Financial when he refinanced the mortgage on his 2,000-square-foot home in Little Egg Harbor, N.J., in 2005, pulling out cash to pay off some debts.”

“‘The way I understood it was that I would have a really low payment for five years,’ says Mr. Marini.”

“Mr. Marini recently received a note from Countrywide that his payment, now about $1,300 a month, would jump to about $3,800 next year, well above his $3,250 a month in disability payments. Mr. Marini, who owes more than his home is worth, says he was turned down by Countrywide for a refinance and, more recently, for a loan modification.”

“‘I didn’t think they would even pull this kind of stuff on someone who is on a fixed income,’ he says.”

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