The Housing Bubble

The Daily Bulletin reports from California. “Home prices in Southern California are racing downhill, but does that mean it’s a buyer’s market? Each month real-estate agents watch prices plunge and foreclosures soar, and several buyers are still in no rush to make deals. ‘Prices aren’t just falling - they’re falling faster than they were,’ said Michael Carney, executive director of the Real Estate Research Council at Cal Poly Pomona.”

“Carney’s localized bi-annual report shows home prices dropping 18.4 percent in San Bernardino County and 21 percent in Riverside County from April 2007 to April 2008. And prices were already falling before that.”

“San Bernardino-based real-estate agent Hamid Aghili sells new homes but hasn’t negotiated a sale in months. ‘Prices are lower, but people don’t have money,’” said Aghili.”

“The 15-year real-estate veteran’s phone range off the hook during the housing boom, but not these days. More often than not, Aghili finds himself working on ’short sales.’”

“Josee Maclaughlin, real-estate agent in Upland, thinks 2010 might be the long-awaited bottom-out year. About 60 percent of her business is short sales right now.”

“‘It’s a long process,’ Maclaughlin said about short sales. ‘The banks don’t have enough employees to get it all going. It’s bank back-up.’”

“Bank-owned properties have flooded her territory, which stretches along the 210 Freeway from San Dimas to Rancho Cucamonga. ‘It kills sellers who aren’t in that situation,’ Maclaughlin said. ‘They can’t get their values up.’”

“Caroline Urso said ‘nobody really knows’ when home prices will flatten. The loan officer with Countrywide Financial in Redlands has sold one new-construction home loan in the past nine months. She was used to selling up to 10 per month.”

“And instead of packaging $400,000 mortgages, now she’s arranging loans for $100,000.”

“‘We’re in unchartered waters,’ Urso said about the current real-estate market. ‘The more and more people walk away (from their foreclosures), the more prices will keep falling. It’s really disheartening. It’s killing everybody’s value.’”

The Voice of San Diego. “San Diego County home prices dropped 20.5 percent in the most recent Standard & Poor’s/Case-Shiller home price index, the March 2008 index compared to March 2007’s. It was the 20th consecutive month of such declines.”

“North County mortgage broker Yamila Ayad said she’s seen signs of life in recent months that have pulled her out of the two hardest years in her career. ‘It’s not a market where anybody would want to voluntarily sell a home today,’ she said. ‘I have definitely seen houses that have fallen to 50 percent of what they were selling before.’”

“‘Prices are falling today because they’re too high,’ said Christopher Thornberg, Los Angeles-based principal of Beacon Economics. And the hope espoused in the literature of some perky agents — that the market will soon turn around dramatically — doesn’t fit the nature of a slow-moving regional housing market.”

“‘Home markets do not bounce, they splat,’ Thornberg said. ‘We’re not dropping a rubber ball here, we’re dropping a watermelon.’”

“Individual sellers still have to compete with banks for lowest prices on listings as banks seek to unload repossessed properties quickly. And 35.1 percent of the homes sold in April and 36.6 percent of the homes sold in March in San Diego County had been foreclosed on at some point in the prior 12 months, according to DataQuick.”

The Union Tribune. “The San Diego Case-Shiller index, set at 100 in January 2000, now stands at 185.44, down from the peak 250.34 in November 2005. That means that at the peak homes were worth 2½ times their 2000 value but have since fallen back 25.9 percent to today’s level.”

“James Hamilton, an economist at the University of California San Diego, called the Case-Shiller findings ‘pretty serious’ but ‘not mysterious.’ ‘There is still a very big overhang of unsold homes on the market,’ Hamilton said. ‘That’s going to bring the house price down.’”

“The San Diego Association of Realtors most recently said that more than 18,300 homes were listed for sale earlier this month, an eight-month supply at current sales rates.”

From Bloomberg. “About 30,000 foreclosed homes have been auctioned in California so far this year, the most of any U.S. state, according to RealtyTrac. Banks holding repossessed properties are so eager to unload them they’ll give buyers discounts of as much as 40 percent, said Celia Chen, an economist at Moody’s Economy.com.”

“‘Lower prices will certainly entice buyers back into the market, especially in a state like California where the median home price is so high it’s made it very difficult for people to afford a home,’ Chen said.”

“Foreclosure auctions are removing inventory and may lead to a faster housing market recovery as prices drop, Karl Case, co- founder of the S&P/Case-Shiller home-price index, said today.”

“‘Banks don’t wait around,’ Case said. ‘They put it on the market and get rid of it. That means prices adjust more rapidly.’”

“Sales jumped 20 percent or more in April in Las Vegas, Fort Myers, Florida, and Riverside and Sacramento, California, areas that had ’strong and sudden price drops,’ said Walt Molony, spokesman for the National Association of Realtors. Those cities also ranked among the top 10 U.S. metro areas with the highest foreclosure rates, RealtyTrac said.”

“The most expensive U.S. metropolitan market for single-family homes in the first quarter was San Jose, with a median price of $780,000, the National Association of Realtors said in a May 13 report. The national median home price was $196,300 in the same period.”

“San Francisco had the second-most expensive home sales, with a median of $701,700, followed by Honolulu, at $620,000, and the Anaheim and Santa Ana, California, areas at $597,900, according to the Realtors’ report. The metropolitan area surrounding New York was fifth, with a median single-family home price of $491,900.

The biggest U.S. state also led the nation in home-price drops. Sacramento saw the biggest price decrease in the nation during the first quarter with a loss of 29 percent, followed by the Riverside and San Bernardino areas, down 28 percent, the Realtors said.”

“San Diego’s median home price dropped 23 percent in the first quarter, the fourth-biggest U.S. price decline, according to the Realtors’ report. Los Angeles was No. 6, down 21 percent, the Realtors’ study said.”

The Contra Costa Times. “Elias Escobedo lost his house earlier this month when it was foreclosed on, but not because he didn’t pay his mortgage.”

“Instead, he’s the victim of a real estate agent who is accused of forging the deed to his home and embezzling $40,000 in a scheme to raise his credit score and pay his monthly mortgage payments, according to the Contra Costa County District Attorney’s office.”

“In the Bay Area, counties are ranked by mortgage fraud with Santa Clara being the highest and then followed by Alameda and Contra Costa counties. California is the fourth-ranked state with significant mortgage fraud, after Florida, Nevada and Michigan.”

“His agent was the same real estate agent that sold the home to Escobedo in 2004. Escobedo said that Bullard told him his credit was bad and he could come up with a way to clean it up and invest the money, he said. Using a straw buyer to hold the property, or someone paid to park the deed, they would refinance the home, take money out and pay the mortgage.”

“The agent, Rodney Alonzo Bullard, has been charged with grand theft and two felony counts of forgery by the Contra Costa County district attorney’s office.”

“Escobedo now lives with his mother in downtown Pittsburg. ‘I feel stupid because I put my trust in him,’ he said. ‘I invested all my life savings with him.’”

“This familiar scam is one of the most well-known and widely-used in California, yet homeowners still fall victim to an agent or broker who suggests the arrangement.”

“‘There was a time when we had maybe 40 notices of default a month and now we’re having 600 to 700 a month,’ said Ridge Lazard, deputy district attorney for Solano County, who said foreclosure scams have ballooned in the last year. ‘We have more and more desperate people who become easy targets. They want to hear there’s a simple solution.’”

“‘They do offer the simplest situation,’ said Chris Sadlowski, an agent with the Concord resident agency of the FBI. ‘They tell them, ‘Don’t worry about it anymore.’”

“And that is a welcome relief to worried and stressed-out homeowners, he said.”

“Sadlowski said that the East Bay has a huge amount of mortgage fraud and fraudsters target low-income and ethnic communities, specifically new immigrants or non-English-speaking populations that may not be aware of laws or regulations.”

“‘In my personal opinion, they’re already in a bad situation, so they kind of cross their fingers and hope it turns out for the best,’ he said. ‘People are working from an emotional deficit.’”

The San Francisco Chronicle. “In the San Francisco area, which Case-Shiller defines as the counties of San Francisco, Alameda, Contra Costa, Marin, San Francisco and San Mateo, the one-year price decline from March 2007 stood at 20.2 percent. The decline from February to March was 3.5 percent.”

“The Bay Area’s year-over-year price slump was the sixth steepest of 20 major metropolitan areas tracked by the index.”

“‘Prices are falling because they were too high - ridiculously high,’ said Christopher Thornberg, principal of Beacon Economics in San Francisco. ‘They’re now in the process of going back to a more normal level. Frankly, that’s a good thing.’”

“The index uses January 2000 as a benchmark of 100. The current number for the San Francisco area is 168.38, meaning prices are still up 68 percent from eight years ago. The last time the local number was at that level was in May 2004. Thornberg said he thinks prices could return to year 2000 levels.”

“‘We’re at a pace now to bottom out in early 2009,’ Thornberg said.”

The Eurerka Reporter. “Property tax cuts that are benefiting thousands of homeowners throughout the state are not expected to have the same impact in Humboldt County. ‘We don’t go up as fast and we don’t go down as fast,’ said Humboldt County Tax Assessor Linda Hill.”

“Even so, the market slowdown that began in 2005 could lead to property tax cuts for those who purchased at the high point of the market and have watched as their homes have lost value. A homeowner could save $30 a month in property tax for a $36,000 drop in assessed value.”

“The Sacramento Bee reported last week that assessors in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties are reviewing residential taxes for the second straight year and could cut property taxes $104 million in the eight-county region.”

“According to The Sacramento Bee, Sacramento County reassessed 50,000 properties last year and will review 85,000 this year, with potential tax cuts of $60 million.”

“Statistics from the Humboldt Association of Realtors reveal the county’s median home values peaked in second-quarter sales in 2005 at $320,000 and have fallen 6.5 percent to $299,000 in the first quarter of 2008.”

“The drop is 13 percent in the North Bay area, where the median price of a single-family home was $355,000 through the fourth quarter of 2007 before falling to $309,500 in the first three months of this year.”

“‘The prices are off only a little bit. It’s the sales that are off dramatically,’ said Realtor Richard Dorn.”

The Seattle PI reports from Washington. “Seattle-area house values continued their record-setting slide in March. Values in the area in March were down 4.4 percent from March 2007, according to the Standard & Poor’s S&P/Case-Shiller Home Price Indices, whose Seattle numbers go back to January 1990. It was the third consecutive annual decrease for the area and the second straight record decline for the Seattle index, which goes back to the start of 1990.”

“Prices have declined month to month for eight straight months now. King County’s median house price was $448,500 in April, down 3.5 percent from April 2007 and 6.8 percent from the record high of $477,345 in August, according to the Northwest MLS.”

The New York Times on Washington. “Sales and prices are still robust in Seattle and affluent suburbs like Bellevue because they are more desirable and closer to big employers.”

“‘We are still getting multiple offers on properties there,’ Phil Rodocker, a Seattle-based real estate agent, said about the downtown area and Bellevue. But ‘as you move south, every 10 miles south you go, you see more and more short sales and repossessed houses.’”

“Builders are having trouble selling units in some newer condominium buildings. Mr. Rodocker got an e-mail message from one developer last week who a few months ago had quickly sold 251 units in a project under construction. Now, investors who had signed contracts to buy 40 of those units had reneged.”

“The units in the Belltown section of Seattle are now being resold for as little as $225,950 for a one-bedroom apartment with one bathroom, prices that Mr. Rodocker said were so low as to be ‘ridiculous.’ Last fall, one-bedroom condos in the neighborhood were selling for $260,000 to $290,000, he said.”

“About 35 miles south, outside Tacoma, Irené Foster-Worthy and her husband have received no offers on their three-bedroom, two-bath ranch home since they put it on the market a month ago.”

“‘Only about four people have come to see it, which makes it difficult to sell,’ she said.”

“One of Mr. Rodocker’s clients, Dennis Humphrey, lives south of Seattle in Tukwila and has been looking to buy a home with three or four bedrooms and one or two bathrooms. Parents of 10-year-old twin boys, Mr. Humphrey and his wife live in a rental home and want a bigger place.”

“Mr. Humphrey has made offers on two homes, but the sellers have refused to negotiate. He is willing to spend up to $300,000 and has enough money to put 20 percent down, but Mr. Humphrey said he was worried prices were going to fall farther and could wipe out any money he puts into a home.”

“‘I am not afraid of the monthly mortgage payment, and I am not afraid of taxes, but I am afraid of losing the value I am putting in,’ he said. ‘I believe the right deal will come along, and I am in no rush,’ He added.”

The Daily Interlake from Montana. “Montana Department of Revenue were in Kalispell on Monday, gathering information on real estate market trends for a statewide property reappraisal.”

“Department Director Dan Bucks and several staffers heard from about two dozen local bankers, appraisers and Realtors as part of an unusual effort to bring the state’s property valuations in line with volatile market trends.”

“Bucks said the effort is aimed at determining whether national housing market turmoil is affecting Montana when the state is nearing the end of a six-year reappraisal cycle.”

“‘The Department of Revenue has never done this before,’ Bucks said, explaining a five-point plan for producing reappraisals that accurately reflect current market conditions.”

“The Flathead Valley real estate experts at Monday’s meeting confirmed that local market conditions have indeed been dynamic in recent months. The group came to a consensus that the market has been in a decline, particularly for high-end housing properties.”

“Realtors reported instances of homes selling for prices below their original listing prices. One Realtor cited the example of a house selling for $265,000 in 2007. But this year, two houses with the same floor plans, in the same subdivision, sold for $250,000 and $251,000.”

“Veteran appraiser Jim Kelley reported that the Flathead Valley’s residential sales volume is down 27 percent this year compared to the first five months of last year.”

“‘The basic message is we’re seeing a decline in the real estate market,’ said Rep. Jon Sonju, who sits on the Legislature’s interim revenue committee.”

The Vancouver Sun from Canada. “For decades, generations even, rural Saskatchewan has been emptying out. Most towns had scads of homes for sale with very few buyers. Bargain basement prices prevailed.”

“The past couple years what many thought impossible has happened. In a lot of small and large towns, you can hardly find a house to buy and if you do, the price has increased dramatically. Older houses that no one wanted a few years ago are being gobbled up and renovated. Even houses in old farmyards are in demand.”

“I’m most familiar with communities on the western side of the province, but colleague Lorne McClinton says the same thing is happening in his region in south eastern Saskatchewan. He says two years ago, his community of Yellow Grass was slowly dying.”

“One year ago, McClinton says you could buy a 50-foot lot for $50 and a 100-foot lot for $100. No one wanted them. Now the town has bumped the price to $5,000 for a 50-foot lot and $10,000 for a 100-foot lot. Most have sold and the town office gets several calls a day.”

“Two or three years ago, for a two-bedroom home with single-car garage built in the mid-70s, you would be lucky to get $40,000, says McClinton. Now, he estimates it’s worth at least $125,000.”

“‘It is quite different to feel a sense of real optimism and growth,’ says McClinton. ‘Friends and I were discussing how different the conversations are now than they were just a year or so ago. Last year we were wondering if the school would close. This year we are building new subdivisions. People are quite excited.’”

“Perhaps even more promising, says McClinton, is that people from outside the community have come in to purchase the store and a bunch of commercial property along the highway. Their feeling is that with the incredible amount of drilling and development of the Bakken oil field east of Weyburn that the town is going to have a boom not seen since the region was initially settled 100 plus years ago.”

The Leader Post from Canada. “The average price of a home in Saskatoon was more than $306,000 in April, an increase an RBC economist says is not a sustainable trend in the province.”

“In March, the average home price reached $289,440 and jumped to $306,268 in April, 39 per cent higher than April 2007, the Saskatoon Region Association of Realtors reported Tuesday.”

“The number of homes sold this year is on par with last year, at 1,480, but in the month of April the number of sales dropped 12 per cent to 418 from 476 at the same time in 2007.”

“The decrease is a reflection of a larger inventory of homes, said SRAR executive officer Harry Janzen, who isn’t surprised by another price increase. ‘Because demand dictates price, we knew that we would have an increase, we just didn’t know to what degree,’ he said.”

“This is the first time the average selling price of a home in the city has topped $300,000, a price nearly double that of the April 2006 average of $155,000.”

“Amy Goldbloom, an economist with RBC Economics, believes such increases can’t be sustained because provincial wage growth lags behind the pace of home price increases.”

“During the next year, Goldbloom expects market activity in Saskatchewan to mimic what’s now happening in Alberta. Overvaluation in that market has made it impossible for potential homeowners to buy, leading to more moderate price gains.”

“‘We think more moderation is ahead for Saskatchewan, similar to what is going on in Calgary and Edmonton,’ she said. ‘We’re not looking for any sort of U.S. style correction, but we are looking for those markets that have heated up the quickest to have the most downside in terms of slower prices ahead.’”

“‘We just think housing markets have overshot their true value and they’re going to find a happier cruising speed to maintain that,’ she said.”

“Janzen, however, feels the current market in Saskatoon and the rest of the province is sustainable given a consistent influx of workers and steady wage increases. ‘The buying frenzy, as I refer to it, that we had last spring is a lot more balanced this spring, and that signals that the market is still very, very strong,’ he said.”

“Home prices in Saskatoon, he added, remain some of the most affordable in the country when compared to bigger cities such as Edmonton, where in April the average home sold for $386,000, and Calgary, where the average home sold last month for $474,000.”

“‘We’re really just coming into our own as it pertains to the exploitation of our resource base, every industry is growing,’ he said. ‘We recently had a meeting of our real estate boards from around the province … and activity is happening in literally every area of the province.’”

The News Miner from Alaska. “The Greater Fairbanks Board of Realtors reported Tuesday that one-quarter fewer homes sold around Fairbanks during the first three months of 2008 than the same stretch last year.”

“Real estate agents this winter said Fairbanks was cooling off from an overheated market but has largely missed a housing slump seen around the United States.”

“‘We currently have a 10-month supply of homes on the market,’ said Amy Krier, president of the Realtors board in Fairbanks. ‘(That’s) actually pretty balanced.’”

“James Wiedle, an analyst with the Alaska Housing Finance Corp., said rising home utility costs have likely thrown a wrench into the affordability of Fairbanks’ housing market, particularly for homeowners who live on a tight budget.”

“‘When you consider that a lot of people are kind of on the cusp with home mortgage payments, it could push them into a situation where they can’t afford to make their payment,’ Wiedle said.”

“The average of 154 homes reported sold around Fairbanks from January through March went for $218,407, according to the board. That was a 2 percent drop from last year’s first quarter average sale price but above the average of $204,334 for the first part of 2006.”

“The figure of 154 homes sold fell short of matching a surge seen in the first quarter of last year, when 206 homes were reported sold. The average reported selling price for one-bedroom homes rose by more than one-fifth from the first quarter of last year, while the average prices for two- and three-bedroom homes fell.”

“Tuesday’s numbers for Fairbanks show there are more homes on the market right now than in recent years - a 74 percent increase in inventory from early 2006 - and Krier said sellers are less likely to find multiple potential buyers ‘fighting’ for a home when it hits the marketplace.”

The Journal Gazette reports from Indiana. “The message to the City Council last week was crystal clear: The downtown Harrison Square condominiums will be built. But while developers can promise to construct the building, there is no guarantee people will buy condominiums, live in them and make downtown Fort Wayne the place to be.”

“As of last week, only five of The Harrison’s 62 condominiums had been bought. Bill Martin, of Martin Goldstine Knapke, said the condominium project represents a new product in the Fort Wayne market, and sometimes people are hesitant to change.”

“‘You can’t force them to sign a contract,’ he told the council.”

“Bob Coffee, president of the Fort Wayne Association of Realtors, said in an interview that revitalizing downtown is critical to the health of the community. Persuading people to live downtown in Fort Wayne can be a challenge, he said. ‘I’m just not sure that people in Fort Wayne are quite ready for it yet,’ he said.”

“Mike Connolly has lived at Midtowne for the past three years, but he put down a $1,000 deposit for a condominium at The Harrison with thoughts of upgrading. Connolly said the $260,000 price tag was too much for a second-story unit overlooking the ballpark.”

“‘I don’t think the value is there for what they are asking,’ he said. ‘I think it’s a great project, desperately needed for Fort Wayne. I’m not sure it’s priced right.’”

“Connolly isn’t alone. At least a dozen people have asked to have their $1,000 deposit returned.”

The Register Mail from Illinois. “The Capital Area Association of Realtors reported the 1,841 homes on the market as of this week is a record high for this time of the year.”

“Local developer Gerry Hughes said he believes the uncertain economy has been a factor in the relatively slow traffic since he and his brother, Steve, put two downtown condos on the market in early March.”

“‘People just aren’t sure what’s going to happen. To be honest, if I was looking to buy right now, I might just sit back and wait, unless you have a rock-solid job that’s not affected by the economy,’ Hughes said.”

“Hughes said the brothers cut the initial asking price of $248,000 for the larger condo and $230,000 for the smaller to $220,000 for each. But he said that was based on the going price for downtown condos, not the economy.”

“‘We’ll play it by ear, but we’re not going to have a fire sale. We might have just started out a little high,’ Hughes said.”

“Association president Phil Chiles said he has tried to keep the 2008 numbers in perspective. ‘We keep looking at this and comparing it to the best year on record (2007),’ Chiles said. ‘We’re back where we were in 2004 and 2003. It’s not terrible. It’s just slow.’”

From Medill Reports in Illinois. “New, single-family home sales lingered near low levels not seen since 1991, according to a report Tuesday by the U. S. Census Bureau and the Department of Housing and Urban Development. The report showed April new-home sales in the Midwest were down 39.7 percent from a year ago.”

“Adolfo Laurenti, senior economist at Mesirow Financial in Chicago, said the spring and summer are prime periods for sales activity, and even with seasonal adjustments, spring hasn’t fared well so far.”

“‘These numbers are a little bit of a disappointment,’ Laurenti said. ‘They are as bad as they were in the early 1990s when we had a recession.’”

“Laurenti said he thinks the large inventory of homes for sale combined with hesitation from potential buyers have kept the real estate market from swinging back up.”

“‘The best we can hope for at this point is for these numbers to stabilize,’ he said. ‘If they could start moving sideways instead of going down, that would be a huge improvement. But I don’t think we are there yet.’”

“The Illinois Association of Realtors reported Friday that total April home sales in the state were down 27.2 percent from the year-ago period. The median price dipped 6.3 percent to $187,500 from $200,000 in April 2007.”

The Detroit News from Michigan. “The Westin Book Cadillac Detroit not only brings some old-fashioned style back to downtown when it opens, but many buyers of the hotel’s upscale condos say they’ll bring the city jobs, too.”

“At least half of the 55 buyers of the housing units at The Book own small- to midsize businesses and many are looking to set up shop or expand their business presence in Detroit, said Jon Grabowski, president of the company handling the sale of the Book Cadillac condominiums.”

“Wes Wyatt, CEO of Cintron Beverage Group in Philadelphia who bought one of The Book’s $1 million-plus penthouses, says he too thinks the Book was too good to pass up. Compared with Philadelphia real estate prices, Wyatt called the seven-figure price tag for his three-story penthouse ‘a bargain.’”

“‘I’m just a big fan of the city,’ added Wyatt, who has described Detroit’s downtown revival as ‘raising the Titanic.’”

“Another penthouse buyer, Bob Bartlett, doesn’t intend to move the insurance cost-containment firm he co-founded, from Farmington Hills to Detroit. ‘But so many people now want us to have meetings at The Book, I can see us benefiting the city,’ Bartlett said.”

“Bartlett lives in Birmingham, and when he mentioned that he was moving to Detroit, ‘A few people told me I was crazy,’ he said. ‘But as more details come out about The Book, some people now think I’m brilliant.’”

The Kalamazoo Gazette from Michigan. “Sales of residential property in the greater Kalamazoo area fell in April, the fourth straight month this year.”

“But the decline was at a far slower rate than in previous months this year, possibly signaling that the housing market has stabilized and may be poised for a rebound, said Matthew Maire, CEO of the Greater Kalamazoo Association of Realtors.”

“‘We’re happy to see that inventory has stabilized and that we may be on the way back up,’ Maire said.”

“The total value of homes sales through the first four months this year also was off, falling 18 percent compared to the same period last year. But in April, the value of those sales declined by 12.8 percent compared to April 2007. In previous months this year, the declines were between 19 percent to 22 percent.”

“Buying activity may be up, but the high number of foreclosure homes on the market tends to depress prices. Through May 1 this year, 337 homes in Kalamazoo County were repossessed by mortgage lenders, up 14 percent from the same period last year.”

“Year to date, the average residential sale price fell to $137,778, down from $149,746 in the same period last year. And year to date, the median sale price dropped to $112,750, down from $125,000 at the same point in 2007.”

The Journal Sentinel from Wisconsin. “Daly’s Pen Shop is one of a handful of high-end retailers still doing business at what is now called the Shops of Grand Avenue.”

“‘It’s because I’m the only fine-writing store in the state of Wisconsin,’ said owner Brad Bodart, who bought Daly’s in 2001. ‘Customers who want to buy something need to come downtown.’”

“But it could be better, and Bodart isn’t happy about the lack of progress from current owner Ashkenazy Acquisitions Corp. of New York, in filling the growing number of empty spaces in the center.”

“It’s a tough time to try to find tenants for an ailing center, with many national retailers closing stores or slowing expansion plans. To make matters worse, the mall is about to lose a major tenant when Linens ‘n Things closes soon.”

“Linens’ exit will create a 30,000-square-foot vacancy and will leave the Plankinton Arcade section of the mall more than half empty. Another store, The Dress Barn, at center court on the second level, closed this month.”

“Even though Milwaukee has added a lot of downtown housing, the number of people working downtown isn’t large, and downtown workers are the basis for downtown retail, said John Melaniphy, a Chicago retail real estate consultant.”

“‘We do extremely well if there are tourists in town,’ said Richard Keppler, owner of Brew City Beer Gear. But there aren’t enough tourists or other customers in the mall often enough these days, said Keppler. ‘It’s very tough,’ he said. ‘We’re at a point where something has to be done.’”

“‘The downtown mall is right smack in the middle of what’s going on,’ Keppler said. ‘Why can’t it get a resurgence? It should get a resurgence.’”

“Rocky Marcoux, city development commissioner, acknowledges that the Grand Avenue’s current tenant mix has few stores that serve the new residents of the upscale condos and apartments being developed in and near downtown.”

“‘They are working very hard to bring in some different retail presence in Grand Avenue,’ Marcoux said. ‘Ashkenazy is not in business to lose money.’”

The Gazette Extra from Wisconsin. “The Janesville real estate market is down, but local homebuilders and real estate agents say it’s nowhere near the free-fall of the national housing market. In Janesville, they say, new home construction was down 12.6 percent last year compared with a 24.8 percent drop on the national level.”

“Sales of existing homes in Janesville dropped 5.5 percent, but the average price of the homes sold rose 2.4 percent to the highest level ever.”

“‘This is not a crash-and-burn market,’ said Dan Kruse, president of the Rock-Green Realtors Association. ‘This is a market that continues to move along steadily, and the sales and prices reflect that.’”

“Realtors sold 927 single-family homes in Janesville last year, a number lower than the previous four years.”

“This year, real estate agents are off to a slower start. Through May 8, they sold 240 homes in Janesville at an average sales price of $128,729. Through the same date last year, they’d sold 321 at an average price of $141,884.”

“‘It’s not a bad time to buy or sell, but we are in a correcting market,’ said Jerry Morse of The Morse Co. in Janesville. ‘With all the national news, move-up buyers are kind of cautious right now. With the foreclosure situation, there are also people out there just looking for bargains.’”

“‘But in most cases, owners aren’t going to sacrifice price. I can show them what the market is doing, but they say that if they can’t get their price, they’ll wait it out,’ he said.”

“‘Last year’s numbers were down, but they weren’t that far off from what we saw in 2000 and 2001,’ said Tom Wellnitz, president of the South Central Wisconsin Builders Association.”

“‘There have certainly been changes in the economy, and a lot of it has to do with how people feel,’ he said. ‘They read the local newspaper and see AP (Associated Press) stories about the housing crisis. But they only read the headline and don’t read any further to see that the problem is in Missouri or Timbuktu.’”

“Wellnitz said the local homebuilding market has been hit hardest in the middle market, where new houses cost around $250,000. Wellnitz expects the inventory of new homes will tighten as fewer builders put up ’spec’ homes, which are homes built without a contract from a buyer.”

“‘With the middle-market problems, I won’t be doing any $250,000 spec homes,’ Wellnitz said. ‘I may do two $150,000 homes instead. The local market had a tough year, but home values continue to increase. When home values start decreasing, that’s a bad sign.’”

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