The Housing Bubble

The Sacramento Bee reports from California. “Gracie and Louis Prado moved to Yuba County’s new commuter subdivisions later than most people, arriving just 16 months ago from Elk Grove. But they came for the same reason thousands did since 2002: more elbow room and a big house for less money. Yet the trade the Prados made for a bargain home just south of the county seat of Marysville, a long commute to work in Sacramento, is now chewing on their incomes.”

“‘We just didn’t think gas would go to $4 a gallon,’ says Louis Prado, who commutes 104 miles daily from the east Linda neighborhood of Edgewater in a V-8-powered pickup truck to his job in Rancho Cordova.”

“Real estate experts are…now starting to ask larger questions about the impact of expensive oil on such far-flung neighborhoods whose futures were tied to a metropolis many miles away: Could they become a suburban equivalent of ghost towns?”

“Lack of buyer interest is obvious in parts of Edgewater and Plumas Lake. In both neighborhoods, some model home complexes stand empty inside undeveloped subdivisions. Many finished homes have signs in front windows advertising them as available.”

“Thousands of lots, readied for development during the housing boom with sidewalks, streets, utility lines and street signs, have become fields of weeds.”

“At the current sales pace, real estate experts say, it will take 13 years to develop and sell all the new homes planned in Yuba County and its neighbor, Sutter County.”

“‘That is horrifying. That’s like seeing a mouse under the table,’ says Dean Wehrli, a Sacramento-based home-building industry consultant, addressing a home-builders meeting last week. ‘My take is that marketplace is going to be hurting for a while.’”

The San Francisco Chronicle. “In a bleak real estate market, some Bay Area residents are finding a bright spot. People who thought they could never afford a home here are buying foreclosed houses at huge discounts, sometimes more than half off the stratospheric heights they reached just a couple of years ago.”

“Admittedly, the discounts can come with caveats - iffy neighborhoods, maintenance issues - but some prices are so low they would have seemed ludicrous a year ago. Of course, the former prices were ridiculous too.”

“Buying a first home ‘is not impossible anymore,’ said Leslie Appleton-Young, chief economist at the Realtors group. ‘Median home prices have come down. The bulk of the declines are at the moderate and low end. (That) brings in people who could not have gotten in a couple of years ago.’”

“Aimee Golant and her husband are looking for a San Francisco house with a garage for under $425,000. ‘We talked to a lot of Realtors and some just laughed in our face,’ Golant said. ‘But then they started sending us listings.’”

“It turns out that their budget isn’t absurd. ‘We’ve seen half a dozen houses in our price range,’ Golant said. They were small and in marginal areas, so the couple will keep looking - but they think prices will continue to decline.”

“Scott McComas is buying a foreclosed three-bedroom Concord townhome. He paid $167,000 - less than half the $355,000 the previous owner still owed on the loan. ‘I saw that and my jaw dropped to the floor,’ he said. ‘I’m getting this for over 50 percent off; that is just amazing.’”

“Raised by a single mom, Tanya Orozco always wanted to thank her mother by getting her a home of their own. Last month that dream became a reality when Orozco and her mother bought a foreclosed four-bedroom home in East Palo Alto for $390,000. The home had previously sold for $700,000.”

“Now Orozco lives there with her mom and aunt, who both work as nannies, and her boyfriend, a student, who just got a part-time job at Home Depot, ‘which is perfect because of all the painting and projects we need to do,’ she said.”

“The monthly payment for mortgage, taxes and insurance is about $500 more than the $2,000 the foursome previously paid to rent a Menlo Park home.”

“‘It’s a nice house in a family-oriented neighborhood,’ Orozco said. ‘It’s obviously not as nice as Menlo Park, but we feel safe. We all have our own space, and it’s our space we can do whatever we want with - we can paint, do all those little things we couldn’t do as renters.’”

The Mercury News. “Renters Julie Herning and her husband, Oliver, have been trying to buy a home near San Jose’s Japantown since February. With a slow housing market, and with enough money for a healthy down payment, they figured they finally had a shot at owning a piece of property.”

“What they didn’t expect was the competition - so fierce that they’ve been outbid on four houses priced at around $500,000.”

“‘It’s kind of crazy,’ said Julie Herning. ‘One person I called said I would have been the 13th offer on the property.’”

“Bidding wars have remained common in high-priced places where stellar school districts are the big draw. But in an area such as Santa Clara County - with more than 900 houses for sale for $450,000 or less - many home buyers assumed that the market was soft, and are shocked to find themselves outbid on foreclosed, bank-owned properties in this price range.”

“‘The REO market is cooking-hot right now,’ said Jason Chan Lee of Intero Real Estate.”

“Banks eager to unload their REO inventory - which forms a large chunk of the cheapest houses for sale in the county - have been lowering listing prices. It’s become common to find bank-owned homes in South San Jose priced at roughly $400,000 that last sold in 2005 or 2006 for $600,000 or
more, for example.”

“The competitive landscape has discouraged the Hernings, who thought they’d have an easy time buying because ‘all you hear about is ‘Oh, the market is terrible,’ Herning said. ‘We had no idea we’d still be sitting here going, ‘What’s going on? Are we going to find a house?’”

“Some agents who specialize in REOs said about half the buyers now scouring the market for deals on bank-owned properties are people who want to live in the homes, while the other half are seeking investment property to rent out.”

“But even at today’s REO prices, some investors are waiting to buy because they can’t get enough monthly rental income to cover their mortgage and expenses.”

“True, said agent Peter Carey, but the ones buying now are ‘gambling on better times’ in the future, he said, hoping to buy property in the $400,000s that will eventually gain value.”

The LA Times. “The market may be down, but sales of bank-owned properties are picking up, with multiple offers being made in many cases as lenders drop their prices to move foreclosed homes off the books.”

“Earl Bonawitz, general manager for Century 21 Wright in Temecula, said his company handles 120 to 150 bank-owned properties at any given time and has watched REO prices drop.”

“‘It costs a bank about $5,000 a month to hold a property,’ he said. ‘A $650,000 to $700,000 appraisal a year ago in some areas is now worth about $350,000. It took a while for the banks to adjust their mentality to that. Right now, anything under $300,000 is a hot price.’”

“Kirby Palmer, who owns a home in Claremont, decided to buy an REO house in northern Rialto in January to flip as part of his retirement strategy. He said because he’s self-employed it was too costly to get conventional financing; lenders were asking for 20% down with interest rates of 8.5% to 9%.”

“So he went to what is known as a hard-money lender. The lender required a 10% down payment, as well as six months’ worth of mortgage payments and the construction costs upfront at 13% interest for a six-month loan.”

“Palmer rehabbed much of the house himself and was paid back the construction costs by the lender as the work progressed. All told, he put up $64,000 on a $238,000 house.”

“The property had been stripped of all copper wiring and the air-conditioning unit. ‘I went in the first day with my sons and had to kick out a squatter,’ Palmer said. He put it back on the market at $349,000 in March but has had no offers yet.’

“‘If it doesn’t sell, I can rent it out and wait for the market to bounce back,’ he said. ‘It’s not a huge risk.’”

“‘The big question is whether we’re in a recession,’ said John Karevoll, an analyst with DataQuick. ‘If we are, we’re in for some more downturn. If we’re not in a recession, it’s likely that prices have found their bottom and that most of the declines are behind us.’”

The Bakersfield Californian. “As the housing crisis intensifies, so do homeowners association headaches. Association boards these days are grappling with how to handle unsightly foreclosures and collect monthly dues - critical for maintaining common areas and padding reserves - when so many residents are feeling squeezed by the economy.”

“In simpler times, homeowners associations had a powerful enforcement tool at hand: the lien. An indebted homeowner who wanted to sell or refinance would have to first clear the lien, said Ted Whittington, a Bakersfield attorney who represents about 40 local homeowners associations.”

“But a foreclosure wipes away an association lien, meaning a lawsuit is often the only way to collect back payments, Whittington said.”

“Catching an owner’s attention through a lawsuit costs money, said Michael Strahan, a board member for the Seven Oaks West South of Chamber Homeowners Association.”

Gated developments, such as Seven Oaks at Grand Island, typically levy hefty monthly dues to operate gates, pay a security company and, in some cases, maintain private streets.

“‘This could go on for years if a homeowner really wants to be belligerent,’ Strahan said. ‘You put a lien against a house for 600 bucks. Big deal. It costs $500 to put the lien down.’”

“Some pinched California homeowners associations are considering shutting down clubhouses or decreasing the frequency of services such as street sweeping, said Andrew Schlegel, VP for an Aliso Viejo-based management company with association clients in Bakersfield. Others raised dues.”

“Southwest Bakersfield’s Sagepointe Patio Homeowners Association, composed of owners in a 134-home neighborhood, has struggled with foreclosures and vacant homes.”

“‘When the boom was going on here, we had a lot of investors come in, out-of-town people,’ association VPGene Foubert said. ‘They used (their homes) for rentals and didn’t pay any dues. I’d say this last year has been worse than it’s ever been before.’”

The Press Enterprise. “Lake Elsinore resident Cheri Sullivan refused to sell her home in the Rosetta Canyon neighborhood at a loss during a time when the housing market has dramatically cooled. So Sullivan got creative. Sullivan is giving away her five-bedroom, four-bathroom home to the lucky winner of a $200-per-entry essay contest.”

“‘You just have to think outside of the box in trying times,’ Sullivan said. ‘A lot of my neighbors are walking out of their homes and taking the loss, but I didn’t want to do that.’”

“Sullivan’s plan is to field 7,000 essays at $200 each; the money will be placed in a trust account. Three of Sullivan’s friends — an attorney, a restaurant manager and a yoga instructor — will judge the essays. The winner will receive the home.”

“The essays can be no more than 500 words and will be judged on “thought, creativity and sincerity,” Sullivan said. ‘They have to convey a desire to own and keep the home,’ she said.”

“Sullivan stands to earn $1.4 million, enough to pay off the mortgages, taxes on her earnings and judges’ fees and have enough left over to buy a smaller house and ‘be comfortable,’ she said.”

“Sullivan moved to Lake Elsinore from San Diego’s Hillcrest neighborhood in June 2006. She bought her house at what real estate agents said was the peak of the housing market. Then, the market went south — way south in Sullivan’s neighborhood.”

“Home prices in Rosetta Canyon, an upscale community in northeast Lake Elsinore, have fallen nearly 30 percent since the market’s height, said Marsha Swanson, a local Coldwell Banker branch manager.”

“‘There were some people paying $400,000 and $500,000 at the peak,’ Swanson said. ‘The bank-owned properties are being sold for around $300,000 now, so it’s a pretty drastic drop.’”

“Sullivan said she started thinking about selling earlier this year, but thought twice because the experience of some neighbors who were selling their houses for half of the price they paid. Her real estate agent told her it would likely be eight to 10 years before her house was worth what she bought it for.”

“‘I’m 57, I don’t have that time to wait,’ said Sullivan, who has two mortgages on the home.”

The Columbus Dispatch reports from Ohio. “For decades, central Ohio residents could count on steadily rising home prices that provided a bedrock of financial stability in good times and bad. That ended in 2005. Franklin County home values peaked that year, and the median sale price began dropping for the first time in at least 25 years, a Dispatch analysis found.”

“If not for the loose subprime-mortgage cash flowing from Wall Street, Alice Goff probably would not have become a homeowner in 2005. Last month, Deputy Eddy showed up on her porch. She and her 13-year-old daughter needed to leave.”

“Goff and her then-husband were looking for a place to rent in December 2004 when they ran across a mortgage broker’s sign that said ‘No down payment’ in front of a 90-year-old house on the South Side.”

“Although the couple lived on government disability payments for Goff’s mental problems and the income from his cleaning business, they snapped up the home. ‘It was exciting at first,’ said Goff. ‘They made it so easy.’”

“Goff’s home sits where scores of subprime loans meet plunging house prices. There were 482 home loans signed in Goff’s census tract from 2004 through 2006, and just over half were subprime. In Goff’s neighborhood, the median price of single-family homes went up 45 percent from 2000 to 2005, peaking at $79,999, according to county records.”

“But since then, the median sale price has slid 15 percent, to $67,950 last year.’

“Goff’s home cost $84,900. The interest rate on her Wells Fargo mortgage started at 9.95 percent and could never go lower. It reset every six months, and could reach as high as 15.95 percent. After six months, her monthly payment jumped from $636 to $766.”

“Goff divorced in 2006. When she was late on a payment, the monthly total was reset to $1,301, she said. ‘I didn’t know it would have got that bad,’ she said. ‘I think they knew I really didn’t qualify for the house, but they played with the numbers.’”

“Wells Fargo took back the house in March through a sheriff’s sale, paying $36,000.”

“Franklin County deputy sheriffs William Eddy estimates that 70 percent of those being evicted countywide are renters. That’s because lenders peddled many of the risky mortgages to landlords and property investors.”

“‘They ran out of chumps who wanted to be homeowners and tried the ‘I want to be Donald Trump’ crowd,’ said Paul Bellamy of a Columbus-based legal advocacy group that helps homeowners fighting foreclosure.”

The Daily Tribune from Michigan. “The dramatic drop in home values has left some Oakland County residents feeling cheated, while others don’t see a quick turnaround.”

“In Oakland County, current property taxes are based on values as of Sept. 30, 2007. ‘Everything you read seems to point toward continued lowered home sales prices,’ said retired Oak Park police officer Kurt Skarjune, who lives in a 2,800-square-foot contemporary Cape Cod-style home in Commerce Township. ‘However, assessments aren’t accurately reflecting the lower home sales prices,’ he said.”

“The market is also affecting the prices of lofts in downtown Royal Oak. Tom Barjak, a realtor (who) sells lofts… said he has had to reduce the prices for many higher-priced lofts, some as much as 30 percent.”

“‘Our premium loft went from $389,000 to $280,000,’ he said. ‘The higher price range has dropped.’”

“A new option Barjak said his company is beginning to offer is a leasing option for lofts. Renters can lease a loft anywhere between $1,900-$2,100. ‘We’re only leasing them because we can’t sell them,’ he said. ‘It’s more advantageous to lease (than let them go unoccupied).’”

The Chicago Tribune from Illinois. “Homeowners in danger of foreclosure increasingly are looking to beat the bank to the process by selling their homes for less than the value of the mortgage, with their lender’s permission. But real estate agents say the growth of the short-sale market is having a detrimental impact on the overall housing market because it brings down comparable-sales data, making neighborhoods look less valuable.”

“‘It screws up a lot of stuff,’ said Jason Pietrucha, a broker in Glenview, adding: ‘It’s without a doubt the healthiest part of the market right now, that and bank-owned properties.’”

“A company that acts as a negotiator between real estate agents and lenders, recorded a 380 percent increase in its short-sale activity in the Chicago area between the first quarter of 2006 and this year’s first quarter.”

“‘When I go through the MLS, and I do it daily, I see ‘pre-foreclosure, must need bank approval’ all over the place,’ said Bo Buchanan, a real estate agent in Oswego.”

“Stephen Johnson of Crystal Lake, a former branch manager at a wholesale mortgage lender, is selling his home short for $220,000, when it appraised 14 months ago for $290,000, the same amount he said he owes on his mortgage.”

“Johnson had borrowed 100 percent of the home’s value in 2007 at 10 percent interest to pay for his wife to attend law school and had hoped to refinance at a lower interest rate. But he lost his job when the lender he worked for folded, and by the time he found another job in October his mortgage company already had begun foreclosure proceedings.”

“He submitted the buyer’s bid of $220,000 in January to his lender and was told less than two weeks ago that the bid was accepted and the transaction would have to close by June 15. His credit report will still take a hit, but Johnson reasons that showing that the loan was settled for less than the full amount is better than looking like he just walked away from his responsibilities.”

“‘If the short sale hadn’t been approved I would have had to be out Aug. 15 as a foreclosure,’ Johnson said. ‘The last thing you want your neighbors to see is the sheriff knocking on your door and putting your stuff out on the street. I feel bad because prior to this I was always the one who paid [on time] and understood the market.’”

The Journal Sentinel from Wisconsin. “Pedro Medellin, a young bank teller who lives with his mother, knows he isn’t a typical homebuyer. ‘With what I make,’ he asks, ‘how would I get approved for a mortgage?’”

“While earning $9.25 an hour, Medellin struggles to pay a $103,500 high-interest loan for an often-vandalized house on Milwaukee’s north side. The city assessed the property at almost $40,000 less.”

“As housing prices were rising year after year, lenders across the country had eased underwriting standards. As a result, many homebuyers were able to secure high-interest loans without disclosing such basic information as their employment, income or assets. The real estate boom stalled, and many subprime borrowers found themselves unable to refinance or sell their homes.”

“His introduction to the world of real estate came early last year when a friend encouraged him to supplement his income by becoming a property manager. The friend then hooked up Medellin, who earns less than $20,000 a year, with his sometime-real estate partner Randez Long.”

“‘I’m not a bad guy,’ said Long, who has launched a handful of small companies. ‘I don’t have to swindle people on a property deal to make money.’”

“Long has helped his younger sister take out subprime mortgages to buy about a dozen Milwaukee properties, most of which are being lost to foreclosures or fire sales, according to courthouse records and Long.”

“To try to figure out what was going on, Medellin took the bills and other paperwork to his boss at Waukesha State Bank, Juan Morales. After just a minute or two of scanning Medellin’s paperwork, Morales said he realized that his employee had bought a house in Milwaukee.”

“‘He asked me what it was. I said it was a mortgage,’ Morales recalled. ‘He was floored.’”

“Morales said he didn’t understand how Medellin got the 30-year loan. ‘Simple math would tell you he couldn’t afford it,’ said Morales, a banker for eight years.”

“Appraiser Michael Davis…set the value for the house on N. 34th St. at $115,000 - the exact price listed on the purchase offer and the amount for which it was sold. Appraisers are required to make an independent judgment of the house’s value.”

“In two interviews, the appraiser defended his work, acknowledging he used the offering price in his calculations. Appraising real estate, Davis said, is an inexact science.”

“‘All it is, is an opinion of value, sir,’ Davis said. “You could say it’s worth $2, and I could say it’s worth a million.’”

“From the start, Central States had limited information about Medellin. The type of loan that he received did not require him to report his employer, income or assets. His impressive credit score in the mid-700s helped guarantee that the loan would sail through, said Central States’ director of operations.”

“Christopher Whalen, managing director of a California risk management firm, (said): ‘In the rarefied atmosphere that we had in this country, my dog could have gotten a mortgage. With a paw print, it might have gotten through.’”

The Post Crescent from Wisconsin. “Buying a house is one of the biggest decisions a young couple can make. Making that decision when your husband is finishing a second tour of duty in Iraq requires added finesse.”

“Neenah’s Stephanie Waitrovich, 23, took a second walk through her new home Saturday just a day after purchasing one of 20 houses for sale at the first Great Fox Valley Home Event, which continues today.”

“Stephanie and 2-year-old son Benjamin will move into their new home June 27. Husband Josh, 23, will reunite with his family later this summer. ‘(The house) kind of fell into our laps and we couldn’t pass it up,’ she said.”

“Developer Fox Valley Homes, which is owned by Robert and Stephanie Millay, came up with the idea to sell the houses in one weekend to promote the first phase of the company’s new 161-lot housing development.”

“Robert Millay likened the innovative marketing approach to the stock market. ‘This is our theory: What do you do with stocks? Buy when they are low. Why not try it with housing?’ he said.”

“Houses including lots were sold at discounted prices from $119,000 to $139,000 - $30,000 less than valued.”

“‘Subcontractors and contractors are slow during winter,’ Robert Millay said. ‘When we approached with this possibility of building 20 homes at once, they were drooling.’”

The Pioneer Press from Minnesota. “The sour economy and continued deterioration of the real estate market are driving down profits for Twin Cities-based banks, according to figures released Thursday from the Federal Deposit Insurance Corp. A growing number, in fact, are losing money.”

“Of 121 banks in the Twin Cities, more than one-fifth posted losses in the first quarter, according to the FDIC. Last year, 14 percent of Twin Cities banks posted a first-quarter loss.”

“‘One reason banks’ earnings are down this quarter is because they set aside a record amount of earnings to take care of problem loans,’ said David Barr of the FDIC. Most of those problems loans are real estate related.”

“‘Our losses are coming because we’re reserving, knowing the real estate market continues to turn down and we have builders (who are customers) who haven’t been able to sell homes,’ said Heidi Gesell, president of BankCherokee, a 100-year-old bank in St. Paul that reported a loss of almost $700,000 in the quarter.”

“Though most banks in Minnesota are solid and doing well - despite a tough first quarter - the list of ‘problem’ banks on the state Commerce Department’s watch list has doubled in the past five years, Murphy said.”

“That list is not made public, but Murphy said about 10 percent of the 330 banks that his department regulates are on it. When asked if its possible a bank in Minnesota could fail, Murphy said: ‘There is a chance of that.’”

What do you see in your housing market this weekend? More construction? “With the rest of the country still reeling from the worst housing crisis since the Great Depression, New York will today unveil fresh plans for its tallest residential tower. The Beekman Tower, a 76-storey, 867ft luxury apartment building that will loom over lower Manhattan, is a symbol of the unallayed appeal of the city and the continued ability of ambitious projects in the city to draw financing.”

“New York added 40,800 jobs in April compared with a year earlier, its economy grew by more than 3% in the first quarter, and house prices are largely holding up.”

“Rae Rosen, senior economist at the New York Fed, says the economy is still taking time to climb down from last year’s exuberant growth. ‘What we see right now is a gradual decelerating in the pace of growth and we expect that to continue throughout the year, slower and slower,’ she said. ‘Eventually we will hit… a decline, but right now we are well above zero.’”

More foreclosures? “The number of foreclosures rivals the number of home sales in some Bay State cities hit hardest by the current housing crisis.”

“Almost as many homes were foreclosed in Lawrence, 156, as were sold, 184, during the first four months of the year, according to the Warren Group, the Boston real estate tracker. More than 45 percent of all real estate transactions in the city are now bank seizures.”

“Dorchester saw 244 foreclosures compared to 340 sales during the first four months of the year, or 41 percent of the total. In some parts of the Brockton market, the number of foreclosures now outnumbers the number of sales.”

“‘It is certainly disturbing,’ said Thomas Callahan, head of the Massachusetts Affordable Housing Alliance. ‘It has the effect of depressing the market.’”

Lower prices? “Maine home sellers appear to have stopped holding out for top dollar. After months of decline in the number of houses sold, prices in April finally followed suit, with the median cost of a single-family home dropping by 11.3 percent compared to last year.”

“The number of houses sold dropped 23.1 percent for the month, compared to 2007. ‘I would agree that the market is in a process of correcting itself here in Maine,’ said Lou Demers, a Realtor with Maine Coast Properties.”

“‘My feeling is the real estate market moves on a collective mentality,’ Demers said. ‘I think what’s happening right now is buyers are hesitant to buy because they want to wait until we hit bottom. The question is where is the bottom? No one seems to know that.’”

Builder problems? “At least a dozen banks have filed lawsuits seeking payment and property from one of Iowa’s largest land developers.”

The mounting lawsuits against Oaks Development, owned by John C. Kline and Randy Walters, come as lenders meet and liens pile up against Regency Homes, which halted operations a month ago.”

“Don Neiman, a Des Moines bankruptcy attorney for nearly 40 years, said he’s never before seen the ‘depth and severity’ of the residential fallout now hitting central Iowa builders.”

“‘It’s not just the big people who will get caught. It’s going to be the smaller subcontractors and the suppliers who get scraped off’ with the foreclosure lawsuits, said Neiman. ‘They would end up receiving nothing. It’s amazing the number of limited liability companies that these builders either owned or controlled or were a percentage owner of. It’s going to take some time to put your arms around … to determine how deep this is.’”

“Firefighters are blaming construction materials used in newer houses for the speed with which fires are racing through the buildings - and giving them less time to battle the flames. Six firefighters were injured Sunday afternoon battling a fire in a Leesburg home in which lightweight construction materials - including vinyl siding, plywood and lightweight wood supports - were used.”

“An exhaustive report following the death of Prince William County firefighter Kyle Wilson last year highlighted lightweight construction as a reason the fire intensified so rapidly and was blamed as a factor in the death.”

“‘From a fire safety perspective, we know that lightweight construction is going to fail quicker that the traditional materials,’ said Melvin Byrne, division chief of the Virginia Department of Fire Programs and a Loudoun County volunteer firefighter.”

“However, because of the cost of materials, especially the skyrocketing price for lumber, lightweight materials are essential, he said. ‘Without lightweight construction, none of us would be able to afford a house.’”

Economic fallout? “The Canadian economy shrank unexpectedly for the first time in five years, according to figures released yesterday by Statistics Canada, raising alarm among some economists that the economy is on the verge of contracting.”

“It was the first quarterly decline since the second quarter of 2003, the federal agency said. ‘Certainly, you might argue that we are seeing the early signs of a recession,’ Ted Carmichael, chief economist of JP Morgan Canada said.”

“The U.S. slowdown has side-swiped Canadian manufacturers - especially those in Ontario - who export more than 70 per cent of their products across the border.”

“‘Anyone who thought that the downturn in the U.S. economy would not seriously impact Canada should have a look at the real GDP figures for the first quarter,’ TD Bank Financial Group stated in a report.”

“‘This might be the appropriate time to forget decoupling scenarios and revert to the old cliché of when the U.S. economy sneezes, Canada catches a cold,’ the report said.”

“The city will eliminate hundreds of positions as it copes with a budget shortfall and a slowdown in tax revenue, City Manager Dale Fisseler said in a letter to employees. ‘I am convinced that these budget cuts will require us to reduce the workforce by several hundred positions,’ Fisseler wrote.”

“Fort Worth is hardly alone in facing revenue shortfalls. State and local governments nationwide are struggling to make up for declining revenue and are considering layoffs, service cuts and other measures to make ends meet.”

“A recent study estimated that at least 27 states are facing a combined $47 billion in shortfalls next year. ‘The bursting of the housing bubble has reduced state sales tax revenue collections from sales of furniture, appliances, construction materials, and the like,’ the study stated.”

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