The Housing Bubble

The Desert Sun reports from California. “A Palm Springs home known as a masterpiece of modernism sold Tuesday for $15 million. In the end, the famed house underperformed a bit. Christie’s New York, the auction company, initially believed the house would bring upwards of $25 million. During the bidding, even the auctioneer seemed surprised. ‘We’re at $15 million. Fair warning, now, $15 million,’ he said, taking long pauses as if waiting for an onslaught of additional offers.”

“‘It was very intriguing,’ said Eric Scharf, a new resident to Palm Springs. ‘As a semi-student of architecture, I’ve known about it for years. (The low bid) was surprising.’”

“‘Everyone was a little surprised,’ said Bob Bogard, director of marketing and communications at the museum. He said it’s being a house may have influenced the bidding, considering it would require additional expense for upkeep. Still, the audience was disappointed by the outcome.”

The Daily Bulletin. “Six California areas top a nationwide monthly foreclosure report published today, and San Bernardino and Riverside counties rank right up there with the rest of them. The number of California foreclosure filings has more than doubled since April 2007 to almost 65,000.”

“‘That’s really all we’re looking at lately is bank-owned properties and short sales,’ said Jack Ritoli, broker (in) Chino Hills.”

“‘The foreclosure is a thing we have to get used to now,’ Ritoli said. ‘A lot of people moved to the Inland Empire from L.A. and Orange County, but they bit off more than they can chew.’”

The San Gabriel Valley Tribune. “Chris Vigil, a broker and licensed appraiser in Santa Fe Springs said the foreclosures resulted from subprime loans issued in 2003 and 2004. He said we’ve yet to see the consequences of subprime loans from 2005 and 2006.”

“That means high foreclosure numbers will be the norm for some time to come. ‘What waters everything down is the sheer volume of foreclosures, shortsales and REOs,’ he said.”

“Industry analysts and Realtors in the Southland seem to have adopted a ‘get used to it and acclimate’ mantra when it comes to the current housing market.”

“‘This is the new Inland economy we have to work through,’ said Steve Johnson, director of the Southern California region for Metrostudy. ‘It’s not going to be short in duration. It’s something we have to experience for many quarters ahead,’ he said.”

“Vigil agreed and said the new market - with plenty of supply but fewer qualified buyers - is here to stay. ‘The agents have to adjust,’ he said.”

“Johnson said the Inland Empire is experiencing more than just depressed real estate values. ‘One of the more significant spin-off problems for high growth areas is the fact the national retail chains and restaurants are stopping any projects they had planned,’ he said. ‘So you’ll see this wonderful expansion come to a screeching halt. We are already seeing negotiations stall and stop in commercial centers.’”

The North County Times. “North County foreclosures reached a new high in April, and a forward-looking indicator suggests that the region’s foreclosure crisis will not be going away soon. For the fifth straight month, the number of homes entering the foreclosure process surpassed the number of homes sold.”

“‘This is a slow train wreck that we’ve seen coming for a while,’ said James Hamilton, an economics professor at UC San Diego. ‘And the more homes you have for sale, for whatever reason, the more that depresses the price. I don’t think there’s any way to slice that and come up with a different conclusion.’”

“Local politicians, teachers and lawmakers are bracing for the delivery Wednesday of what is expected to be the worst state budget news since a $38 billion gap triggered the ouster of former Gov. Gray Davis.”

“‘Here we go again, yet another budget crisis,’ said Shaun Bowler, UC Riverside political science professor. ‘It’s back to the future.’”

“The only suspense is the degree to which the news will be bad, said Jack Pitney, government professor at Claremont McKenna College in Los Angeles County. ‘The big question is whether it is going to be horrible or just bad,’ Pitney said. ‘Good is not an option.’”

The LA Times. “Bonnie Cooper has seen plenty of slumps since she began selling furniture in 1968, but nothing like the scene outside the window of the Ontario sofa store where she now works.”

“‘It’s scary out there,’ said Cooper, a saleswoman at Salmo’s Custom Sofa. ‘I think this is the tip of the iceberg — there’s more to come.’”

“Cooper said she noticed traffic in the parking lot begin to fall off about three years ago, about the time the housing market began to soften. She sensed Levitz was in real trouble last year, when ‘they would run a humongous ad and [the turnout] would be pretty sparse. People were not responding,’ she said.”

“Acting at the request of the politically powerful real estate development industry, Orange County has agreed to postpone collecting fees for housing construction projects, without any analysis or discussion about the effect it will have on the county’s finances.”

“County officials and building industry representatives characterized the measure as an effort to help builders hit by the credit crunch and the real estate downturn to get projects off the ground.”

“One supervisor, however, questioned whether it would stimulate growth and another critic dismissed it as a favor to the building business.”

“Asked why there was no financial study, which is a common facet of virtually every proposal that could affect county finances, Tim Neely, director of planning and development services, said: ‘We weren’t asked to analyze the fiscal impact.’”

“Though it passed unanimously, one supervisor questioned the proposal. ‘To approve it as a stimulus package — I don’t know if that’s appropriate,’ Supervisor Chris Norby said.”

“Darrell Nolta, a close observer of county government, criticized the move as a favor for developers. ‘There are many, many people who need to be helped’ because of the economic downturn, Nolta said. ‘Not the builders.’”

The Bakersfield Californian. “The houses look clean from the outside. But the insides of Bakersfield’s foreclosures can be filthy and trash-strewn, a perfect playground for pests.”

“‘They’re just thoroughly infested with roaches, with rats, with black widows,’ said Jared McCaa, who owns Bakersfield’s TMC Pest Management. About one-third of the bank-owned homes he’s hired to treat have serious pest problems, McCaa said.”

“‘We have some (occupants) who leave the house a mess and pests just gravitate toward it,’ said real estate agent Fabiola Delgadillo. Many repossessed houses sit vacant for months before banks dispatch a real estate agent to prep them for sale.”

“‘By the time Realtors are able to go in … it’s not very pretty,’ she said.”

“McCaa recalled one Oildale job where neighbors came out upon his arrival, furious that pests from a foreclosed home were migrating into their yards and houses. ‘They chewed my ear for the better part of five minutes,’ he said.”

The Mercury News. “The stagnant housing market took a toll on downtown Livermore this week, as a developer scrapped ambitious plans for a large-scale mixed use project at the former Lucky’s shopping center. Despite a lack of funding to continue with the project, Anderson Pacific found a willing buyer for the 5.4-acre lot just behind downtown: the city of Livermore.”

“Anderson Pacific bought the land in 2005, mostly using an $8 million loan from the city. When the housing market crashed — killing the developer’s ability to raise money for construction — it looked like the developer would default on the city loan when it came due this week.”

“Instead, the city agreed Monday to buy Anderson Pacific’s remaining interest in the site for $2.1 million.”

“Former Councilman John Stein said he would have rather seen the property go into foreclosure. ‘They could have just taken over the property and saved $2.1 million,’ Stein said. ‘And if they own it, how are they going to find a buyer? The developer couldn’t find one, so chances are the city won’t, either.’”

“Project manager Eric Uranga added that because of equity remaining in the project and the fact that the developer has already completed costly design and entitlement work, the site is worth more than it was when the process started.”

“Stein was skeptical. ‘That’s an amazing thing,’ Stein said. ‘It’s probably the only place in all of California where the land value has gone up.’”

The Santa Cruz Sentinel. “In Santa Cruz County, April saw a 50 percent jump to 113 single-family home sales from 75 in March, according to Gary Gangnes of Real Options Realty. The median price remains $100,000 below last year’s median.”

“‘I think we’re bouncing off the bottom,’ said Gene Harding, a real estate agent with Bailey Properties. ‘The bulk of the sales [in Watsonville] are bank-owned properties. They’re coming on the market at prices where people say, ‘I can do that.’”

Inside Bay Area. “Red ink mounted at Sterlent Credit Union during the first three months of 2008, and the credit union said it is working with a possible partner to help address its financial woes. In recent years, Sterlent embarked on a program to sell home equity lines of credit to its members. But the crash in residential real estate caused many of those loans to fail.”

“‘Like many other financial institutions in similar situations regarding delinquent loans secured by real property, we continue to work with these member borrowers and under full guidance of our regulators,’ Sue Raines, CEO of Sterlent, said in an e-mail response to questions from this newspaper.”

“Pleasanton-based Sterlent reported that it had $3.1 million in delinquent loans at the end of March. About $2.9 million of those delinquent notes were adjustable rate real estate loans, according to the quarterly filing.”

East Bay Publishing. “‘The pear trees were so elegant, before all the development. All the subdivisions.’ The Lady Friend who has lived in northern California many more years than me, was speaking of Brentwood. What prompted her comment was a front page story in Sunday’s San Francisco Chronicle. ‘Brentwood: Boom to Bust.’”

“In the evening of that same day the Lady Friend and I met an engaging but troubled young couple at a Mother’s Day party. The husband was a small contractor, employed by realtors and bankers to clean out houses that have been foreclosed. He and his wife do the labor together.”

“They wouldn’t be doing such dirty, laborious, guilt-ridden work, but for the hard times. The man hasn’t had a new construction job for months.”

“They talked about what people leave behind: cellular phones, TVs, digital cameras, clothes, and, most pitiable, brand new children’s toys. ‘They just walk away,’ they said. It’s as if they’d been hit by a natural disaster.’”

The Voice of San Diego. “A couple of national stories this weekend questioned what had been reported as a growing trend, that upside-down homeowners are deciding to walk away from their homes as an economic decision. I asked you for your insight, anecdotal or otherwise.”

“Here’s what reader BG, a homeowner in Paradise Hills, had to say: ‘My immediate neighbor to the west told me he decided ‘to rent for $1,000/mo rather than pay off a mortgage at $3,000/mo.’ He and his wife (both senior citizens), walked away. I don’t miss their noisy dogs, frankly, but having a house next door in foreclosure is not a good thing. At least he has it listed for sale.’”

“BG said they’d lived next door to each other since the mid-1980s, and theorized the neighbors must have withdrawn the equity from their house to end up with a mortgage payment that high. They urged BG to buy their house before they moved to Riverside County.”

Some housing bubble news from Wall Street and Washington. Bloomberg, “U.S. foreclosure filings climbed 65 percent and bank seizures more than doubled in April from a year earlier.More than 243,300 properties were in some stage of foreclosure, the highest monthly total since RealtyTrac began in January 2005. Nevada, California and Florida had the highest rates. Filings rose 4 percent from March.”

“‘Loan modification isn’t working,’ said said Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington. ‘It’s extremely difficult for a homeowner to talk to a servicer and even if they do, it’s hard to get the servicer to change the terms. You get voice-mail hell, they don’t return calls, you can’t get a live person on the phone.’”

“The median price for a single-family home fell 7.7 percent in the first quarter, the National Association of Realtors reported yesterday. There were 4.06 million U.S. homes for sale at the end of March, 40,000 more than the prior month, the Realtors association said in an April 22 report.”

“‘Inventory levels have soared to unprecedented levels’ Brian Fabbri, chief North American economist for BNP Paribas, said in an interview. ‘Builders and homeowners have to lower their prices significantly to sell that inventory out.’”

From Realty Check. “So what about all the reports that borrowers are being helped, and all those programs to find and refi borrowers, and what about the word from some other sources that foreclosure numbers are actually dipping?”

“Apparently the system, that is whatever court or clerk or local bureaucratic office is stuck with recording all this stuff, is stressed. In Ohio, for example, I’m being told that it can take two to six months to get your filings in the system.”

“‘In states like Michigan, we’re hearing from some of the trustees who actually do the foreclosures that the lenders have asked them to slow down because they don’t want to process any more into a market that won’t absorb the properties back through sales,’ says Rick Sharga of RealtyTrac.”

“In Florida, a St. Lucie County court actually added a night shift to handle the massive backlog of foreclosure filings. The clerk of the courts was quoted as saying the caseload has become, ‘just horrendous.’”

“The court used to handle about forty filings per month. In January they were tracking 715 foreclosure filings. Some are reporting lower numbers because the numbers simply can’t get into the system.”

The Arlington Advocate. “With the pace of foreclosures continuing to break records, lawmakers attempted Tuesday to stanch some of the bleeding, offering a trio of bills that drew throngs of supporters to Beacon Hill. All three were sponsored by Sen. Dianne Wilkerson, D-Boston.”

“Rep. William Brownsberger, a Belmont Democrat, argued that major lenders and other large companies get federal assistance when on the verge of collapse. ‘We bail out Chrysler, we bail out Bear Stearns,’ he said. ‘Now we’re talking about neighborhoods that are going down. It’s time to change the deal.’”

“Rep. Elizabeth Malia decried what she called ‘this tsunami of economic insanity.’ ‘Allowing the termites to get fat, eventually the house is going to come down on our heads, literally,’ she said. ‘We’re rewarding [lenders] by not legislating them any further and by not protecting the homeowners and the tenants.’”

National Mortgage News. “As the fallout from the mortgage meltdown continues, pundits are scratching their heads as an increasing number of borrowers ‘just walk away’ from their homes.”

“It should come as no surprise that families who purchased homes at the height of the market would walk away when declining market prices left them upside down on their loans. This is especially true for those whose purchases were funded using 100% financing with interest-only teaser-rate ARM loans that are now resetting.”

“What is surprising is the alarming number of walk-aways who have loans a year or more away from a rate reset. Welcome to the hidden world of occupancy fraud, the ‘x’ factor in the meltdown.”

“For many years, occupancy fraud was tolerated by lenders so long as the mortgage payments were made. Speculators and investors, who played a significant role in the inflation phase of the housing bubble, took advantage of this fact by misrepresenting their intended use of the property, especially in South Florida, Arizona, Nevada and California.”

“It’s no wonder that these four states lead the nation in defaults and foreclosures, or that they sit atop the fraud indices, as these liars just walk away from their bad — and intentionally hidden — investments.”

“Does it make sense that a borrower in a 3,000-square-foot, $700,000 home in California would buy a 1,700-square-foot, $150,000 second home in Between, Georgia? Does it make sense for a borrower to own multiple properties in the same area? Of course not, especially when the ‘residence in question’ is only three miles away from the primary residence and the borrower says he’s sometimes ‘too tired to go home after working out in the gym’ (true story!).”

The Australian. “Looking to charge into the red-hot US business of sub-prime debt two years ago, Mizuho Financial Group’s brokerage poached 11 bankers, traders and salespeople, headed by structured finance ace Alexander Rekeda, from investment bank Calyon. Mizuho wanted to quickly build up its business of packaging mortgage loans into collateralised debt obligations.”

“When Mizuho releases earnings today, it will project that its losses from mortgage-related investments will total at least $US5.1 billion. ‘We wanted to take our business global,’ a Mizuho Securities spokesman said, explaining why the bank chose to enter the CDO market.”

“Mr Rekeda made frequent media appearances to promote his fledgling team. ‘The 2007 vintage of residential mortgage-backed securities is looking to be one of the best vintages in 10 years,’ Mr Rekeda said in one interview in April last year.”

“As Mizuho’s team stepped up its trading last year, signs of trouble were brewing in the market. Undaunted, Mr Rekeda and his team marched on.”

“‘There is very little trading in CDOs going on,’ Mr Rekeda acknowledged in mid-July. Nevertheless, his group put together a large CDO that month, and even managed to increase its size to $US1.6 billion from an initial $US1.2 billion, citing strong investor demand.”

From MarketWatch. “Freddie Mac…the mortgage-finance giant, posted a loss on expenses related to ‘challenging’ housing and credit-market conditions, as Freddie Mac’s CEO predicted that continuing weakness in the U.S. housing market would hurt the company’s bottom line for the year.”

“The company said difficult housing- and credit-market conditions were behind a $1.2 billion provision for credit losses taken in the latest quarter.”

The Baltimore Sun. “Home sales fell faster in Maryland than in any other state in the nation in the first three months of the year, dropping more than even in hard-hit spots of the country such as California, a Realtors group said yesterday.”

“The median price of single-family homes fell 3 percent in the Baltimore metro area in those months, which was middle of the pack in the country. In the Washington metro area, which includes parts of Maryland, the price fell 13 percent, still a far cry from the drops on the West Coast. Sales prices fell more than 25 percent in both Sacramento and Riverside, Calif.”

“Marc Witman, a partner with Yerman Witman Gaines & Conklin Realty in Baltimore, strongly suspects that Maryland home sales are falling so fast because prices aren’t.”

“‘There’s a disconnect between what the buyers expect to see and what the sellers expect to receive,’ he said. ‘It’s like the buyers are the only ones reading the newspapers. I think when you see the median price come down 10 or so percent, then you’re going to see more buyers come off the sidelines.’”

“Amna Kirmani, a marketing professor at the University of Maryland who specializes in consumer behavior, calls it the ‘my house is different’ phenomenon: ‘People are anchoring on their own love for their houses instead of anchoring on what the market is doing right now. We never think it applies to us.’”

“Some sellers, particularly those who bought in the past few years, think they have no choice. If they lower their asking prices, they’ll get less than they owe on their loans. ‘It’s a challenging time right now,’ said Keith T. Gumbinger, a VP with financial publisher HSH Associates.”

“Maryland rode the wave higher than most: Prices here rose 21 percent in 2005, according to the Office of Federal Housing Enterprise Oversight - a bigger increase than all but three states and the District of Columbia. California’s increase was just slightly smaller.”

“‘Our prices went up most precipitously, and the prices aren’t coming down’ to the extent that they are in California and the D.C. area, said Witman, the real estate broker. ‘Witman’s theory’ is the prices ran up so quickly that we need to give something back.’”

The Bucks County Courier Times. “Nervous homebuyers looked but didn’t buy during the second quarter, cutting Toll Brothers’ homebuilding revenue by 30 percent.”

“‘When we have held promotions, buyers have come out to play and put down deposits,’ CEO Robert Toll said during a conference call Tuesday with investors. ‘Often, however, a lack of confidence in the direction of home prices overcomes their enthusiasm and they don’t take the next step of going to contract.’”

“Toll also said potential homebuyers are afraid they won’t be able to sell their existing homes.”

“Sales contracts after cancellations totaled 929 homes for $496.4 million, a decline of 44 percent in number of homes and 58 percent in dollars from the same period last year.”

“‘It’s clearly a buyer’s market, but buyers can only take advantage of it if they buy,’ Toll said. ‘Sooner or later they will, but unfortunately, we can’t predict when.’”

“Toll said most U.S. home markets have weakened. But a surprising high point has been Naples, Fla., an area that’s among the hardest hit by the housing downturn. He gave the area an A-minus, while all other markets in Florida were given an F. He said Philadelphia suburbs are a C-minus, but the Pocono Mountain region is an F-minus.”

“‘You can’t give away stuff in the East right now,’ he said. ‘It’s very surprising.’”

The Street.com. “Blaming the media for the fractured state of your business is lamer than the retail industry’s fallback excuse of too hot/cold/rainy/dry weather. It is also an indication that your troubles are far from over.”

“Enter Robert Toll, CEO of the estimable Toll Brothers, flapping his gums about how media reports about falling house prices are scaring customers away from buying.”

“Said Toll, while announcing anemic preliminary quarterly results: ‘We believe there is significant pent-up demand which is growing. When we have held promotions, buyers have come out to play and put down deposits. Often, however, a lack of confidence in the direction of home prices overcomes their enthusiasm and they don’t take the next step of going to contract. They, like all of us, read the papers and watch TV, both of which keep advising them that home prices are declining.’”

“This has become quite a go-to line for the leader of an overextended company, one whose products customers can’t afford based on carrying costs.”

“Last quarter, while reporting the company’s worst results in two decades, he said: ‘Ceaseless talk of a recession continues to dampen the mood of consumers. This drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures has kept pent-up demand on the sidelines.’”

“Got that? It’s not that a recession is (probably) at hand. Nah. It’s the media talking up a recession, probably because they want the newspapers they work for to go Chapter 11 even quicker.”

“Let’s count the ways that Toll’s sad little mantra is misleading: 1) I don’t remember Toll crediting the media during the ridiculous housing run-up for chasing real estate advertising money with 1,423,789,678 happy profiles about people in houses that they had redecorated and were going to increase in value forever. Remember? The word ’subprime’ was literally not in the journalistic vocabulary.”

“2) Since the housing downturn began, a good portion of the media has been busily predicting its recovery. Watch The Wall Street Journal build an entire imminent recovery story on a single statistic: from a realtor trade no less.”

“Or witness The New York Times not even mentioning the role of the strong dollar in temporarily propping up New York City housing prices. Or that widespread declaration of a recovery before the downturn had hardly begun when existing home sales blipped up for a grand total of two months in a row. Usually it takes three to declare a false trend, but they made an exception for real estate at two.”

“The irony is that the media, so cowed by fear, eager to shift story lines and write real estate recovery stories and apt to report in an on-the-one-hand-on-the-other-hand fashion, which gives a free showcase to any ridiculous claim, does not call this for what it is: a hustle job.”

“Look closely at Toll’s quote at his company’s most recent disaster of a quarter. He mentions people reacting to promotions, but not going all the way to closing. Anyone in any business will tell you this: If people are getting intrigued by discounts and promotions, but not yet making it all the way to the cash register, guess what it means?”

“The discounts and promotions are not steep enough and prices have to come down by another 20%. And that ain’t the media’s fault.”

From CNBC.com. “The Federal Reserve may start using regulation or even interest rates to fight asset-price bubbles, instead of trying to limit the damage once they burst, as it has done until now, the Financial Times reported on its Web site.”

“One option is for the Fed to set interest rates higher than they would otherwise be when asset prices appear to be rising beyond levels justified by economic fundamentals, the paper said.”

“Fed Chairman Ben Bernanke, who rejected this approach in 2002 after the dot-com bubble burst and endorsed Alan Greenspan’s view that the Fed should not ‘lean against the wind,’ is now willing to reevaluate it in the light of the housing and credit crises.”

A report from the Columbia Missourian. “Boone County witnessed its first spike of foreclosures in 2003, when the number rose from 99 the previous year to 150, according to the Boone County Recorder of Deeds office. Banks foreclosed on 143 homes and other properties in Boone County during 2006, and that number increased to 231 in 2007. During the first four months of this year, 103 foreclosures were recorded in Boone County compared to 58 during the same period in 2007.”

“‘I think this year is definitely going to be a record year in terms of foreclosures,’ said Bob Peery of Premier Mortgage Service. ‘In the near future, they’re going to get worse.’”

“Subprime loans were very much in play as recently as 2006. In 2004, 20 percent of home loans were subprime in an area that includes some of Columbia’s First Ward, according to the Home Mortgage Disclosure Act. The next year, subprime loans accounted for about 51 percent of the loans in the same area. In Centralia, subprime loans made up 7 percent of all home loans in 2004 and 19 percent in 2005.”

“Some buyers purchase their homes by borrowing 95 to 100 percent of the cost with little or no down payment. Then, somehow, they fall behind on their payments.”

“‘If I put $20,000 on a house, I’m going to do everything I possibly can, because if I lose that I’ve lost my house and $20,000,’ Peery said. ‘If I do a 100 percent financing, what do you give up? It may hurt your credit, but as far as financially, there’s no consequence. That’s why some of these people are letting it go back.’”

The St Charles Journal from Missouri. “Amidst a housing market where homeowners laugh tonight only to cry tomorrow when their dream of home ownership is broken by foreclosure, two local real estate agents have decided to spruce up the boulevard of broken dreams in St. Charles County.”

“On May 4, agents Laura Ellis and Lorrie Travers rented a 24-person coach bus to take would-be investors, young home buyers and those looking for a fixer-upper through a tour of nine foreclosure properties throughout St. Charles County.”

“‘Prices in St. Charles County have dropped low enough to where people can afford to buy up these properties, whether it’s an investor or even just a regular buyer,’said Ellis.”

“‘People shouldn’t be afraid to throw in any offer. It just depends on how much the owner owed on that house,’ Ellis said. ‘Especially if it doesn’t sell in a couple months, they shouldn’t be afraid to throw in any offer.’”

From Medill Reports in Illinois. “With the Trump brand now a permanent fixture in the neighborhood, downtown Chicago residents and workers have mixed feelings about what its presence means during times of a flimsy economy, depressed housing and the gap between the rich and poor growing wider.”

“Trump Tower condominium residences range in size from 580 to 6,800 square feet with prices that vary from $580,000 to more than $9 million. Costing anywhere from $850,000 to over $3 million, the hotel condominiums are 530 to 2,245 square feet. According to the website, current prices hotel condominium room rates range from $385 to just over $1800.”

“According to Peter Raisch of a public relations company that represents Trump Tower Chicago, investing in hotel condominiums is a growing trend that’s an alternative form of ownership in the uncertain current real estate market. ‘Owning a hotel room is like an investment. It’s also a way for hotels to gain revenues with the market the way it is.’”

“Trump Tower brings several possibilities to Chicago. ‘It will do nothing but drive the nearby property values up,’ said Renee Guider-Selmon, who owns a condo in the area.”

“Asked whether Chicago’s depressed housing market was affecting business, Trump said fine timing afforded him much favor in the current market conditions.”

“‘Hopefully [it’s affected us] positively, because I don’t think that anybody else is going to be building a building in Chicago for a while,’ Trump joked. ‘I don’t see anyone being able to get financing.’”

The Chicago Tribune from Illinois. “Nearly 6,000 condos, by far a record number, are expected to come on the market in downtown Chicago this year at a time when mortgages are tougher to get and sales have slowed dramatically, according to a report.”

“‘It’s tremendously serious,’ said Steven Hovany, president of Strategy Planning Associates Inc., a planning and real estate consulting firm. ‘What you are going to see are buildings going into foreclosure.’”

“Downtown living, almost inconceivable 15 years ago, has contributed an extraordinary amount to Chicago’s economy and its reputation as a livable city. That momentum has drawn more and more projects, but now developers and real estate analysts say more downtown condos are coming on the market than demand warrants.”

“‘There certainly is some oversupply,’ said Alan Lev, president of the Chicago home-building firm Belgravia Group. ‘If you are in the South Loop or the West Loop, you have some inventory to burn off.’”

The South Town Star from Illinois. “Manhattan officials hope to give away $1 million, no lottery ticket necessary. The first 200 people to buy a newly built home in the next 14 months will get a $5,000 rebate from the village. Buy a new townhouse or duplex, get $3,500.”

“Trustee Tom Biscan said he hopes the program works, but he has seen no evidence that this will actually jumpstart housing sales. The $5,000 rebate ‘is probably not going to move the market,’ he said. ‘I suggest developers cut their prices by $5,000 and leave our fees alone.’”

“‘This is a national problem. We’re swimming upstream. We think we can promote ourselves out of this. What if $5,000 doesn’t work? Do we give them another $5,000? What do we do next to placate developers? Do we lower our housing standards?’ Biscan said.”

“‘This will grab people’s attention. It is saying, ‘Hey, come check out Manhattan,’ said Mayor Bill Borgo. ‘We don’t know if it’s going to work, but we have to do something.’”

The Daily Herald from Illinois. “Biscan suggested developers cut their prices across the board by $5,000.”

“‘Lowering the housing prices would lower the equalized assessed value on surrounding homes,’ Borgo responded.”

The Kane County Chronicle from Illinois. “The Illinois Association of Realtors reported that home sales in Kane County declined by 34 percent in the first three months this year. Overall, 796 homes sold in the county from January to March this year. During the same period in 2007, 1,211 homes in Kane County were sold.”

“In the first quarter of 2006, 1,420 homes were sold in the county.”

“‘It will not go down in history as a prize-winning quarter, that’s for sure,’ Peter Swaufield, executive director of the Fox Valley Association of Realtors, said. ‘But, unfortunately, it’s pretty typical of what’s going on in many parts of the country.’”

“‘This is as good a time as we’ve ever had in history to buy,’ Swaufield said. ‘We just need to get more first-time buyers into this market to ease up the logjam.’”

The Dayton Daily News from Ohio. “The city of Dayton plans to aggressively snatch up properties for land banking, with a goal of acquiring up to 1,000 properties this year. The city currently has more than 10,000 vacant housing units in more than 3,800 structures.”

“Targeted properties have been abandoned by owners, who do not pay their property taxes. ‘We’re already maintaining these properties,’ said Dayton City Commissioner Nan Whaley. ‘We might as well control them. We can’t sit around and do nothing.’”

The Toledo Blade from Ohio. “The sales price of Toledo-area homes dropped at twice the rate of the national average at the beginning of this year. But on a positive note, Ohio homes are selling much faster than in other states, a new report shows.”

“The National Association of Realtors said yesterday that the median sales value of homes in metro Toledo fell 13.8 percent to $89,700 in the January through March period compared to the same period a year ago.”

“‘Foreclosures have definitely had a huge impact on our market in Toledo,’ said Larry Cain, a Re/Max agent in downtown Toledo. Lenders are quick to sell them, and buyers have begun to flood the foreclosure market.”

“In the Toledo metro area in the first quarter, 1,877 foreclosure-related filings were made, according to RealtyTrac Inc.. But the influx of foreclosed homes began much earlier, said local experts, and their cheap prices are just now affecting sales values.”

The Gazette Extra from Wisconsin. “Playing your music as loud as you want. Painting your room any color that catches your fancy. Knowing you’re not throwing money away on rent.”

“Those are the factors that encouraged Melissa Williams and her boyfriend Bryan Robbins to buy a brand-new house in Edgerton. The housing market ‘crisis’ didn’t even enter their thinking, Williams said.”

“‘We just looked at our finances and decided we could definitely do it, and that was it,’ the 23-year-old said.”

“Paula Carrier, owner of Best Realty, points to people such as Williams and Robbins when she says the Edgerton housing market is steady. ‘Media in general painted this picture that said, ‘Don’t buy, prices are still bottoming out,’ Carrier said. ‘They’re not here.’”

“‘The fact is, that the boom that we had in small towns in Wisconsin is just nothing like the boom that was experienced in many places in the country,’ said Morris Davis, a professor of real estate at UW-Madison. ‘In small communities, house prices just aren’t going to fall that much.’”

“Paula Carrier isn’t worried about nationwide housing problems affecting sales of condos in Edgerton’s Fulton Square project. Carrier and broker Chris Sweeney are selling the condos for Keller Development of Madison.”

“No one has bought a condo yet, but Carrier and Sweeney have heard plenty of interest, especially from ’snowbirds’ who spend summers in Wisconsin and winters down South, they said. Prices for the condos range from $112,000 to $165,000, Carrier said. The developer is targeting ‘empty-nesters,’ professionals and childless couples.”

“‘It’s going to make our downtown just sparkle,’ she said.”

“Young adults, such as Williams and Robbins, are taking advantage of low interest rates, Carrier said. ‘Why would you wait until the rates are high and the prices are high?’ she asked.”

The Hudson Star Observer from Wisconsin. “Realty agents Cindy Otten and Laurie Larsen are making the best of a bad situation. With dozens of repossessed homes on the market because of the mortgage meltdown, Otten and Larsen have found a niche in selling them.”

“‘A home buyer should absolutely be looking right now,’ says Otten. ‘They should find some very nice deals on the market.’”

“‘Things are really heating up, especially in the foreclosure market. That’s what’s really selling,’ Otten says. She and Larsen are advertising a ‘Repo Bus Tour’ that they hope to guide soon.”

“Larsen recently sold a house on Riverside Drive in North Hudson that provides scenic views of Lake Mallalieu. It’s in good condition and sold for $100,000 less than it would have three years ago, according to Larsen.The offerings range in price from $70,000 for some homes in outlying communities to $780,000 for a mansion in Hudson.”

“‘There are some very nice homes out there. And there are some homes that need work,’ says Larsen. ‘Whatever anybody wants, we’ve got them.’”

“‘Agents in western Wisconsin are trying to do their part to get them sold so we can move on – get our market back to where it needs to be,’ Otten says. ‘The faster the foreclosures get sold, the better it is for everyone. It benefits everyone by stabilizing the whole economy.’”

“Otten and Larsen say they haven’t had enough people sign up for the bus tour yet to schedule a trip. But they’re expecting it to happen now that the weather has warmed. ‘We’ve already got the bus hired. We’re ready to go as soon as we get enough (buyers) to fill a bus,’ Larsen says.”

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