The Housing Bubble

The North County Times reports from California. “While most of the nation appears mired in the middle of a severe housing slump, the southwest corner of Riverside County may be showing signs of recovery. In April, the number of houses sold was higher than the year before for the fourth straight month, leaping 73 percent last month from a year ago. And, for the first time since the housing market took a dive, house sales in the Temecula-Murrieta region were higher than sales in 2006, near the peak of the housing boom.”

“Southwest Riverside’s data had enough strong points for at least one real estate agent to warn clients that the region’s housing market will soon see prices rise.”

“‘For example, I have a couple in their late 40s. They have never owned a home and have always rented,’ said Barbara Baker, a real estate agent in Murrieta. ‘And I told them, ‘If you don’t do it (buy a home) now, you’ll always be a renter.’”

“To be sure, not all housing data in Southwest Riverside point to recovery. Sellers have already been slashing prices, setting the stage for the recent surge in buying.”

“The median home price in the region sank to $265,000 in April, a mammoth 36 percent off the $415,000 median in 2007 and 40 percent below the $439,900 level of 2006, according to an analysis by The Californian and North County Times of data from the Multi-Regional MLS.”

“Meanwhile, North San Diego County’s housing market is not showing similar signs of recovery. Its median price has fallen about 25 percent from its peak to $490,000, but house sales for the last 28 months have been lower than the same month the year before, according to a monthly real estate association report.”

“And foreclosures keep rising: Notices of default, the first step in the foreclosure process, in Southwest Riverside doubled from a year ago to 3,700 during the first quarter, according to a tracking service.”

“A booming increase in the number of notices of default suggests more bank-owned homes over the next six months, which tend to depress prices, analysts said.”

“‘There’s no bottom in sight,’ said Christopher Thornberg, an economist with Beacon Economics. ‘There’s nothing more pernicious to prices than supply, and what you have building up right now is a massive amount of foreclosures. And nobody is more motivated to sell than banks.’”

“Thornberg said he thought home prices in the Inland Empire could fall as much as 55 percent from the peak, which would mean an additional 20 percent drop in Southwest Riverside, sending the median to $200,000.”

“Thornberg’s argument is underpinned by income levels that suggest many homeowners cannot afford the typical mortgage payment.”

“For George Farraye, it was Southwest Riverside County’s falling prices that spurred him to buy. He bought a home in Murrieta earlier this month at a 43 percent discount off its previous sales price. ‘This housing market is unbelievable,’ he said. ‘There are some real dumps, and there are some real great buys. And I think we got a great buy —- we got it for less than $100 a square foot, and we’re in a gated community.’”

The Tribune. “Freddie Wright has been living for years in San Luis Obispo in an old orange Ford van, a choice he makes to save money.”

“In 2006, a longtime friend told Wright about the thousands of dollars he had earned by investing through Estate Financial Inc., a Paso Robles lender that pools investors’ money to make high-interest loans to real estate projects.”

“Based on his friend’s experience, and after meeting with the firm’s president, Karen Guth, Wright invested his life savings of $38,000 in Estate Financial’s lending fund that September. But today, Wright is among many Estate Financial investors who worry they might have lost some or all of the money they trusted to the lender.”

“Drawn by the promise of making money in a booming real estate market, Wright is now worried that he’s lost everything he saved in a deal he never really understood.”

“‘I was ignorant of the risk,’ Wright said. ‘I just didn’t know. I thought in my brain, ‘You can’t lose in real estate.’”

“Judith Baron, a home interior designer from Templeton, said she invested about $400,000. Baron said she thought she had a sophisticated background on investments and met the net worth and income minimums.”

“Ultimately Baron decided to put her money in Estate Financial’s real estate-backed loans ‘because I had a bad experience with the stock market where I lost a lot of money (in the six figures),’ she said.”

“Because she is over 60, she believes she will never be able to earn that much money again.”

“‘I thought the company had an extremely good track record (after 15 years of doing business with no investor losses),’ she said. ‘Now my savings are gone, I think, for good. I’ll never trust anyone again.’”

“In San Luis Obispo County, new-home construction is in the midst of a significant downturn… and developers are putting their projects on hold, or like Texas-based Centex Homes, have pulled out of the area.”

“‘The residential construction market: It’s dead,’ said Leslie Halls, executive director of the San Luis Obispo County Builders Exchange. ‘We’ve seen a lot of contractors lay people off. It has a ripple effect through the marketplace. They’re not buying anything but the bare necessities.’”

“‘It’s terrible out there right now,’ said George Silva, owner of Central Drywall Inc., which has operated as a family-owned business in Grover Beach for 16 years. ‘Two years ago we were doing 300 houses a month. Now, it’s roughly 20 to 30 houses a month.’”

“‘There are still people out there with money, but the typical person here is not having a good time financially,’ said Cortland Zoff, CEO of Cortland Landscape in Arroyo Grande. ‘Too many people were buying homes as short-term investments, thinking they would never go down.’”

The Lompoc Record. “With the highest crime rate in Santa Barbara County, the city of Santa Maria should be wary about the potential for that distinction to harm the local economy by scaring off tourists or retirees looking to visit or resettle, a prominent local economist said Friday.”

“Unlike other years, when Bill Watkins, executive director of the UCSB Economic Forecast has highlighted the North County as the county’s economic engine, he noted that the ‘engine is sputtering.’ However, he said he expects it to pick up in the long term.”

“Much of the weakness in the local economy - and much of Friday’s presentation - focused on the depressed housing market. The North County housing market is being affected by the high number of foreclosures, said Kirk Lesh, a real estate economist for the forecast project.”

“In the first quarter of 2008, Lesh told the crowd, 60 percent of single-family home sales were bank-owned properties, many of which are sold thousands of dollars below the price of non-bank-owned homes. That contributed to a roughly 16 percent drop in sales prices in 2007, he said.”

The Wall Street Journal. “In June 1995, Sherrie Floyd, a clerical assistant, and her husband, Kevin Floyd, a truck driver, bought a four bedroom, 2,100 square foot home in Vallejo at auction for $170,000. After refinancing several times, their monthly payments reached an unaffordable $5,600. They stopped paying in April 2007 and filed for bankruptcy in December 2007.”

“The Floyds owe $670,000 in credit card, mortgage and auto-loan debts, according to the claim estimate from bankruptcy court. Since 1995, Mrs. Floyd estimates that they pulled roughly $100,000 out of their mortgage to pay off credit-card bills, broker fees and penalties.”

“In 2005, just as their rate was about to go up, Mrs. Floyd got pregnant with her fifth child. They refinanced again through Option One Mortgage, a subsidiary of H&R Block. At the time, their house was appraised at $610,000. They took out a $505,000 loan — roughly $452,000 went to pay off their prior loan, about $15,600 went to other outstanding debts and fees and the Floyds took out almost $23,000 in cash. Their house was recently reappraised at $470,000.”

“Mrs. Floyd says that the broker misinformed them. ‘We take responsibility for our situation. But if you don’t understand loans, a lot of brokers take advantage of you,’ she says. ‘I think my husband was talked into a lot of bad things.’”

“Currently, they are trying to find a rental. So far, landlords have been turned off by their credit rating. The family of seven plans to split up and stay with different relatives until they can find a new home.”

“‘I want to pay my debt. I pay my federal and state taxes like I’m supposed to, I go to work, and I just can’t find any help,’ said Ms. Floyd. ‘It just isn’t fair.’”

From Reuters. “A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.”

“Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments.”

“‘I knew I was sitting on time bombs,’ Forgaard said. ‘I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.’”

“‘I didn’t anticipate a downturn of epic proportions such that home values are 40 percent less than they were,’ he said.”

From Business Week. “Buying a bank-owned home requires on-the-ground research. Take, for example, the five-bedroom, four-bath, Granada Hills (Calif.) ranch house with two kitchens at the top of the BusinessWeek list of foreclosure discounts.”

“The $579,000 asking price for the 3,600-square-foot house on a pretty, tree-lined street north of Los Angeles is 43% below market value, according to RealtyTrac. But walk inside the one-story house and you’ll see that it’s a fixer-upper, said listing agent Ryan Trefry in Encino.”

“The bathroom and kitchens need updating, the paint is peeling, and the flooring is buckling. The bank that owns the property spent $2,000 just to remove trash left behind by the tenant who was evicted after the foreclosure. The house is in ‘poor to below-average shape’ and needs about $65,000 in repairs, Trefry said.”

“Still it’s a good deal even compared with other foreclosures, he said. ‘To buy a home that big in a desirable neighborhood for $500,000 is unheard of.’”

Some housing bubble news from Wall Street and Washington. AP, “Standard Pacific Corp.’s first-quarter loss widened as the worsening housing sector forced hefty impairment charges, the homebuilder said Monday. The Irvine, Calif., company posted a loss of $216.4 million. The latest quarter included charges of $117.9 million to write down the value of unsold inventory and undeveloped land. The company also booked a tax asset valuation charge of $83.7 million.”

“Homebuilding revenue plunged to $348.2 million from $651.1 million last year, as deliveries dropped sharply and the average selling price slid 12 percent.”

The Wall Street Journal. “When hedge-fund chief Ron Beller’s investments in U.S. mortgages turned against him, he got a rude awakening to Wall Street’s unsentimental ways. In a matter of days, Peloton Partners LLP, once one of the world’s best-performing hedge-fund operators, lost some $17 billion.”

“At one point during the ordeal, Mr. Beller collapsed from exhaustion, according to people familiar with the matter.”

“MBIA Inc. swung to a $2.41 billion loss during the first quarter as the bond insurer faced ongoing deterioration in the credit markets and recorded billions in write-downs. MBIA was forced to reduce the value of its insured derivatives holdings by $3.58 billion. Net premiums written tumbled to $97.3 million from $171.3 million last year.”

“Initially, bond insurers only provided insurance to municipalities. But in recent years business was expanded to insure other debt, such as bonds backed by mortgages and consumer loans.”

From Bloomberg. “HSBC Holdings Plc, Europe’s biggest bank by market value, said it set aside a less-than-estimated $3.2 billion to cover bad loans in the U.S. The outlook for the rest of the year ‘remains unusually difficult to foresee in the current environment,’ the company said in a statement.”

“Mortgage insurer PMI Group Inc. said Monday it swung to a first-quarter loss, due to hefty payouts on default claims and charges to write off its investment in bond insurer FGIC.”

“The company affirmed its outlook for 2008 paid mortgage insurance claims of $825 million to $975 million.”

“IndyMac Bancorp Inc. said Monday it swung to a loss in the first quarter as deteriorating credit markets forced the mortgage lender to lower the value of mortgage-backed securities, and warned it would not post a profitable quarter in 2008.”

“The latest results included credit costs and losses of $249 million related to declining values of mortgage-backed securities. The company more than tripled its credit reserves to $2.7 billion from a year earlier.”

“‘With respect to profitability, we do not expect that Indymac will be able to return to overall profitability until the current decline in home prices decelerates,’ CEO Michael Perry said in a statement.”

The Miami Herald. “BankUnited Financial, parent company of BankUnited, lost $65.8 million for the first quarter. In response to a weaker economy, deteriorating residential housing markets and increased foreclosures, the Coral Gables-based company increased its provision for loan losses to $98 million for the quarter, up from $4 million for the quarter ended March 31, 2007.”

“BankUnited’s allowance for loan losses was increased to $202.3 million, or 1.61 percent of total loans, as of March 31. ‘This has been a difficult and disappointing quarter,’ Alfred R. Camner, BankUnited’s CEO said in a press release.”

The Daily Telegraph from Australia. “House prices in some parts of Sydney have almost halved as battling borrowers struggle to keep up with increasing interest rates. The falls - in Sydney’s west, the Hills district, and Sutherland Shire - are far steeper than previously thought.”

“In the past six months, 30 homes across Sydney have been sold for at least $100,000 less than was paid at the height of the property boom, many as a result of distressed mortgagee sales.”

“One property in Bankstown, bought for $500,000 in August 2005 sold in February for $215,000 - a loss of $285,000.”

The New Zealand Herald. “The median house sale price fell in April and the volume of sales collapsed 46 per cent from a year ago, the Real Estate Institute of New Zealand said today in its latest monthly report.”

“‘We thought that the March sales figure of 5,129 was low, due to a short month because of an early Easter, but April shows that the loss of confidence in the housing market is deeper than we had anticipated,’ REINZ President Murray Cleland said in a report titled: ‘Residential property sales slump further.’”

“Auckland city prices, which includes CBD apartments, fell to a median NZ$463,000 from NZ$510,000 the previous month, implying many apartments were sold at fire sale prices.”

From Reuters. “When a regulatory hurdle hit the Japanese housing sector last year, Tokyo assumed any delays would be short-lived. But almost a year later, a growing backlog of unsold homes threatens to dent already feeble economic growth.”

“‘Developers are running their businesses on a hand-to-mouth basis,’ said Hiroyuki Ito of Azel Corp., a developer. ‘We cannot sit back on condominiums that are not selling.’”

“Last year, several condominiums…in Higashimurayama in western Tokyo…were sold ahead of completion. Now prices are being cut as the builders pack up. ‘We had sold only half the 249 blocks that went on sale last year,’ said Mikiko Yoshida of Nippon Steel City Produce, a developer. ‘We have cut the prices by around 20 percent to boost sales.’”

The Telegraph. “There are 1.03 million properties up for sale in Britain – a 15 per cent increase on a year ago. There are 25 million homes in Britain. Richard Graves, an estate agent in Bridlington, East Yorkshire, said: ‘There are very few buyers coming in through the door, and viewings are well down.’”

“‘Properties are taking three to four months to sell, and there are a fair few that have been on the market for over a year. They were probably over-priced with and the sellers have missed the boat,’ he said.”

From Myvesta. “Record numbers of hard-pressed British householders are facing the nightmare scenario of losing their homes as the credit crunch bites harder. As property prices start to plummet and the mortgage market melts down, many borrowers are increasingly finding themselves in a vice grip of nose-diving negative equity and rising loan repayments.”

“Between January and March in England and Wales, a staggering 27,530 families - or 300 every day - reached the brink of being homeless.”

From Dominica Today. “Housing sales, mainly in blueprints, have fallen more than 50 percent in the last few weeks, said Dominican Housing Builders and Promotores Association (Acoprovi) president Jaime González, although realtors say it’s ‘politics.’”

“‘Right now nothing is being sold’ he said, quoted by newspaper Diario Libre.”

“‘Nobody wants to risk investing in a sector that has so much insecurity.’ He said housing prices have risen as much as 20 percent.”

“‘That has caused that the sector is restricted, which is left behind just a little bit in relation to came previously being developed because obvious when to a client it says to him that the house no longer costs a million pesos, but a million two hundred, obvious that the reaction is different. The client lies down for back, the business falls,’ (he) affirms.”

“Wally Perez, real estate agent for Remax, says this month’s sales are down. He’s only sold two, which he attributes to the electoral process.”

The Calgary Herald. “Year-over-year growth in new housing prices across the country slowed for a second consecutive month in March, according to Statistics Canada.”

“The federal agency’s New Housing Price Index, released today, said ‘this deceleration continues a downward trend that started in September 2006, due mainly to the softening market in Alberta.’”

“Regionally, for the 11th straight month, prices rose at the fastest pace in Saskatoon, with a year-over-year price increase of 46.2 per cent, down from the record-setting pace of 58.3 per cent in February.”

“‘Edmonton and Calgary continued to experience slow market conditions. Builders in both cities reported lowering their prices to generate interest and stimulate sales,’ said Statistics Canada.”

The Lantern. “Thankfully, there is now light at the end of the tunnel in the race for the Democratic presidential nomination. However, the oddest developments of the Clinton campaign occurred rather recently.”

“Ever since the start of the election cycle last year, Clinton positioned herself as a responsible adult in contrast to Obama’s apparent youthful idealism. But she effectively dropped that …when she decided to propose totally idiotic policies in response to the housing crisis and rising gas prices.”

“For the housing crisis, she wanted to initiate a 90-day foreclosure moratorium that would have exacerbated the problem exponentially.”

The Daily News. “The House approved the homeowner rescue measure by a vote of 266-154. Dr. John Gnuschke, a professor of economics at the University of Memphis, isn’t sure how significant the impact would be even if it were to pass the president’s desk in this form or some other.”

“‘I believe that the housing crisis and the associated increases in foreclosures will not be solved by additional government action and that further market interference will only prolong market adjustments,’ Gnuschke said. ‘Markets are powerful and punitive, and while we don’t always like the outcomes, government cannot continue to protect every company or individual that has suffered a loss.’”

The Washington Times. “It seemed like a win-win situation when the boom was raging. Many first-time buyers attained the American dream of homeownership while the 70 percent of Americans who already owned homes watched their household wealth soar along with house prices.”

“Federal and state tax coffers were filled with revenue generated by booming home sales and prices, and political leaders reaped millions of dollars in campaign contributions from the profitable real estate and mortgage businesses and Wall Street firms, all of which benefited from keeping the party going.”

“‘Everybody was happy,’ said Sheila Bair, the Federal Deposit Insurance Corp. chairman. No one in Washington wanted to break up the financing orgy and end the housing bonanza. ‘So long as prices were going up, not many people were complaining.’”

“‘Back then, we mainly looked at it as a consumer issue. I don’t think anybody thought it had economic implications,’ Mrs. Bair said. Few people at the time had ‘a full appreciation of the costs of these mortgages, or [realized that] if the market stopped going up [borrowers] would lose their ability to pay.’”

“In addition, a community reinvestment law passed by Congress in the 1990s required banks to go to great lengths to make loans available to minorities.”

“‘The political pressure to create a housing ‘happy meal’ was enormous,’ said George Cormeny, a former loan officer at Allfirst Bank who also worked as a legislative aide. The circular reasoning rationalizing the subprime lending boom became ‘unreal’ to any longtime observer in the lending world, he said.”

“‘A financial institution would be rewarded with a good score and heaps of praise for making increasing quantities of poor quality housing credit available to marginally credit worthy borrowers,’ he said. ‘The regulators had almost complete disregard for the consequences. … The costs of this social experiment will be large and linger for a long time.’”

The Plain Dealer. “An investigator hired to examine issues surrounding the bankruptcy of New Century Financial Corp. said senior management ignored ample evidence of rising default and foreclosure rates while allowing the company to write riskier loans.”

“The report said there was plenty of evidence that New Century’s corporate officers were aware of rising default rates in 2004. About 7 percent of the loans originated by New Century in 2004 - or about $1.8 billion - defaulted after borrowers made three or fewer payments. That compares with $312 million in early-payment defaults in 2003.”

“An internal review of the company’s nine operating centers in 2004 graded the performance of seven centers as unsatisfactory and two as needing improvement.”

“A senior New Century official afterward questioned whether the auditing teams needed to change their policies rather than have the operating centers ‘clean up their act.’”

“A Plain Dealer analysis shows that nearly half of the subprime loans written in Cleveland in 2005 by five of the country’s biggest subprime lenders resulted in a foreclosure filing.”

“Cleveland resident Myra Clarke had just gotten divorced, had just lost her home at a sheriff’s sale and had just gone through a bankruptcy to shed $38,000 in debt. But that didn’t stop Long Beach Mortgage, a subsidiary of banking giant Washington Mutual, from lending her $505,000 to buy six Cleveland rental properties in 2005.”

“Her bankruptcy file showed she was a nurse making less than $40,000 a year. Escrow documents included in the foreclosure lawsuits filed against her show she provided $96,000 to cover down payments and closing costs.”

“Those foreclosures were filed on Clarke’s six houses within eight months of her buying them, which indicates that she made few, if any, payments on her loans.”

“Robert Ruckstuhl is a Newbury Township mortgage broker and appraiser who has become a consultant for attorneys in foreclosure cases. Ruckstuhl…guesses that at least 25 percent of subprime loans written in Cleveland between 2002 and 2006 contained an element of fraud that should have stopped the loan from being funded.”

“There were about $1.75 billion in subprime loans written in Cleveland during that five-year period.” “It’s impossible, Ruckstuhl said, for lenders not to have known they were originating large numbers of fraudulent loans. ‘It’s a matter of what they wanted to acknowledge,’ he said.”

“Kathleen Engel, a professor at the Cleveland-Marshall College of Law at Cleveland State University, said…a prosecutor would need to prove that executives intentionally participated in the fraud. Part of the genius of subprime lending, Engel said, was how lenders and investment banks insulated themselves from potential liability.”

“‘The reason we saw such huge growth in independent brokers was because they wanted brokers to do the dirty work,’ Engel said. ‘They were able to put a shield between themselves and liability for wrongdoing.’”

“‘This was actual fraud at the highest levels,’ said Anthony Accetta, a former federal prosecutor. ‘It wasn’t an accident. It was not a failure of oversight. It was actual fraud, and we’re not doing anything about it.’”

“In the 1970s, Accetta prosecuted what was then the largest mortgage fraud case in U.S. history. He said the subprime-lending business model worked like a Ponzi scheme. The scheme ground to a halt, Accetta said, when investment banks could no longer cover up the billions in losses that bad lending created. Too many people had stopped making their mortgage payments, which meant not enough money was coming in to pay investors.”

“‘This is a national catastrophe, and the perpetrators [on Wall Street] are not being prosecuted,’ Accetta said. ‘It’s one of the easiest cases to prove because there are plenty of witnesses and plenty of evidence out there.’”

“Eric Forster, a Los Angeles-based consultant for mortgage fraud litigation, said the entire subprime mortgage industry was ‘fraught with fraud.’”

“‘What makes this crime wave unique is that, in most cases, the banks cooperated with the perpetrators,’ Forster said. ‘Once they discovered they could securitize loans and transfer the risk to some investors in China or Europe, there was no reason to underwrite the loans any longer.’”

“Despite the FBI and SEC investigations, Accetta said he doesn’t think the U.S. Justice Department ‘has the stomach’ to prosecute these companies, out of fear it would undermine confidence in those financial institutions and our capital structure.”

“‘So you’re left with prosecuting individuals,’ Accetta said. ‘This was systemic. It had nothing to do with this individual or that individual. There was no individual in any of the investment banks who could have stopped it even if they wanted to.’”

The Bradenton Herald reports from Florida. “Thomas Wilson strolls through his Stoneybrook at Heritage Harbour neighborhood, pointing out the subtle signs of financial fallout. Windows with views of empty rooms. Weeds sprouting through once well-manicured lawns. Small, bright orange stickers on front doors, the tell-tale sign that the houses have been abandoned.”

“Just on Wilson’s street, Stone Harbour Loop, 16 foreclosure actions were filed last year. In the first three months of 2008, seven more were filed.”

“He’s angered by the aggressive lending and poor oversight that have landed thousands of families in the same predicament. ‘It’s just terrible what they’re doing to people here,’ Wilson says. ‘They’re killing America and they don’t even know what they’re doing.’”

“He and his wife closed on their $522,500 home in December 2005. Five months later, they were sued for foreclosure and are still fighting to save their home. Wilson, who is not currently making payments on the loan, acknowledges that the couple should have looked at the loan documents more carefully.”

“‘I didn’t read the papers,’ Wilson said.”

“‘I’m not trying to weasel out of anything. If I owe you $530,000 I’m going to pay it,’ says Wilson. ‘Make this loan work with $2,500 (payments) like you initially said. And everyone walks away a winner. If you can’t do that, let us out.’”

“Leslie McHugh and her husband, Sean, bought their 2,200-square-foot home on 123rd Place East in River Plantation about a month ago for $195,000. It was a steal, considering the previous owners had purchased the home for $358,000 less than three years ago, according to Manatee County property records.”

“Still, Leslie McHugh realizes that can cut both ways, depending on how long it takes stability to return to the neighborhood.”

“‘At this point, it hasn’t affected us because we got a great deal,’ she says. ‘But I guess when we go to sell our house, they factor in your neighbors’ homes to determine the value. I kind of feel we’re at the bottom of how bad it’s going to be.’”

“As far as Wilson is concerned, it couldn’t get much worse. ‘If I had it to do all over again, I wouldn’t be here,’ Wilson says.”

From CBS 4.com. “If you’re one of the thousands of South Florida residents who have bought a house in the past few years, a new study shows homeowners who bought their homes recently are most likely ‘upside down’ in their mortgages.”

“The study, from Zillow, showed homeowners who bought a house in the last year run a 71% chance your mortgage is upside down. If your home was bought in the last two years, the likelihood of your mortgage being upside down jumps to 77%.”

“But Joseph Castaneda, of Home Appraisals, Inc, believes the Zillow numbers may be underestimating the drop by counting only what is sold. ‘We’ve experienced a 20% drop in values over the past year. So if someone put down 20% or less, that equity has been wiped away,’ Castaneda away.”

“For homeowners like Adele Booza of Cutler Bay, the real estate collapse has forced her to make some difficult decisions. She and her husband were planning to move to South Carolina in November and put their home on the market.”

“The home sat on the market for four months and in that time, ‘No one came to see the house, ever. I was very surprised. Even in my listings that I had put up, I’d put the house was on the news and I though for sure I was going to get calls, and nothing,’ Adele said.”

“The news for sellers may not be improving much, as both appraisers CBS4 spoke with believe bigger price drops are on the horizon. For example, banks and developers are putting up homes for $80,000 that might be exactly the same as your home that should be worth $200,000, which is great news for buyers, but horrible news for owners.”

Nightly Business Report. “JEFF YASTINE, NBR CORRESPONDENT: ‘If the economic earthquake that’s hit the U.S. residential real estate market has an epicenter, it’s probably here — Cape Coral, Florida, which lies on the state’s west coast near Ft. Myers.’”

“Median sale prices are off more than 25 percent in the past two years. Realtor and market analyst Annette Barbaccia says the discounts of many individual properties are even more extreme. ‘We recently sold a house for $100,000 that is a year old. The owner paid $240,000 for it and the new owners got a great windfall.’”

The Miami Herald. “The hard numbers were sobering. It wasn’t just the stats — like 85 percent of our population can’t afford the area’s median-priced home — that were tough to swallow in the 82-page Workforce Housing Needs Assessment put out by FIU’s Metropolitan Center and released by the Greater Miami Chamber last week.”

“It was the projections, too. There were lots of tables but the bottom line is we’re a low-wage, service-oriented economy, and in 2015 we will still be one.”

“Yet we have luxury high-rise after luxury high-rise and more coming on line.”

The Orlando Sentinel. “The mantra is clear: Live where you work. Work where you play. Planners hope neighborhoods mixing homes and businesses are a solution for a Central Florida population expected to double to more than 7 million by 2050.”

“But newly converted urban dwellers, drawn from the suburbs by the allure of night life and amenities just a short jaunt away, are realizing city life comes at a price.”

“Their urban utopia can be a noisy place. Longtime residents are lodging complaints about the increase in traffic and noise. ‘One man’s wonderful music is another man’s absolute annoyance,’ said Mount Dora Mayor Melissa DeMarco.”

“Carrie and Karl Stairs, who live with their children in a historic building near the West End Trading Co. in Sanford, one of the clubs cited, say they are putting their home on the market because of all the changes.”

“Music from West End toned down after the arrests, but Stairs said there are still problems with traffic and patrons being loud and obnoxious after leaving. ‘The direction Sanford wants to go with their night life is one we don’t want to stick around for,’ Carrie Stairs said.”

The News Journal. “Like other types of property in the Daytona Beach area, beachside homes and condominiums experienced slower sales last year as the economy sputtered and adjustable-rate mortgages grew more expensive and harder to get.”

“Joe Palmer, a broker in Ormond Beach, isn’t hopeful. He characterized the local market as a ‘long roller-coaster ride down into hell’ with out-of-town buyers still reluctant to make a commitment because of the unsettled economy.”

“‘Unless they’re buying a primary residence, they’re very, very gun-shy,’ he said.”

“In late 2006, Palmer and a business partner tried selling fractional ownership shares in a cottage in Ormond-by-the-Sea but couldn’t find any buyers for monthly shares costing $20,000 to $30,000 each. Instead, they’re renting out the property in an effort to cover some of their carrying charges.”

“‘There are so many condo hotel units on the market, and some of them are only $60,000,’ he said. ‘That makes it hard to sell a traditional beachside home.’”

“William London, a Gainesville-based loan officer, said he chose an oceanfront home in Wilbur-by-the-Sea as a future retirement spot precisely because the area is relatively quiet and unpretentious.”

“‘I’m sure I have the smallest, ugliest house on the ocean,’ he said, referring to a two-bedroom, 1,100-square foot home he bought last month for $795,000, a markdown from an original asking price of $1.5 million. The sale price for the 63-year-old pink bungalow tucked into a 50-foot-wide lot also was $171,728 below its Volusia County tax assessment of $966,728.”

“Actually, London and his wife will continue spending many of their weekends in a much larger Harbor Village condo in Ponce Inlet they share with London’s brother. The Wilbur house will be rented out for the summer season, and the Londons will use it only during off-season periods. In 10 years or so, the couple hopes to retire to Wilbur.”

“London sold property in the Washington, D.C., area for 25 years, and continues to follow the real estate market in his banking job. He said soft real estate cycles tend to last five to seven years, so he thinks area prices will stay flat or decline for a few more years. At least 60 units in his Harbor Village complex are for sale, he noted, and some have been on the market for more than a year.”

“However, he decided to buy property this year because the Wilbur house had been deeply discounted by a new owner who wanted to liquidate an inheritance. ‘It was an opportunity that was too good to pass up,’ London said. ‘As that adage goes, they’re not making any more oceanfront.’”

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