The Housing Bubble

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The Union Tribune reports from California. “California housing sales were at their lowest level in 13 years last month, as prices slid 30 percent from year-ago levels, DataQuick reported yesterday. The 33,024 transactions statewide were down 6 percent from April and off 10.7 percent from May 2007. It was the worst May since 1995. The statewide median price stood at $339,000, 4.2 percent below April’s level and 30 percent down from the all-time peak of $484,000 in May 2007.”

“It was the biggest year-over-year downturn for any month in 20 years of record keeping, said DataQuick analyst Andrew LePage. ‘Adjusted for inflation, mortgage payments are back to where they were in mid-2003,’ DataQuick said. ‘They are 23.3 percent below the spring 1989 peak of the prior real estate cycle. They are 38 percent below the current cycle’s peak in June 2006.’”

“DataQuick found that 38.3 percent of all sales in California in May were for properties that completed the foreclosure process in the previous 12 months, compared with 37.6 percent in April and 5.4 percent in May 2007. San Diego’s foreclosure sales represented 36 percent of the market in May.”

“LePage said Southern California buying reflects bargain shopping, particularly among first-time buyers and investors in inland areas. By contrast, buying among higher-priced homes remains ‘especially slow.’”

“‘That doesn’t bode well for the high end, where so far, prices have come off their peaks but have generally held up best,’ LePage said.”

The Fresno Bee. “As median house prices continue to fall and foreclosures rise, Beazer Homes is pulling out of the central San Joaquin Valley. The home builder recently announced that it will stop building new homes and exit the Fresno market effective Sept. 30. The company is advertising deals on completed homes this weekend.”

“‘When these guys leave, they see dirt as a liability and dump the lots, sometimes at phenomenal prices,’ said real estate analyst Robin Kane.”

“It’s a practice already happening in Fresno. Prices of raw land in Fresno have fallen 30% to 40% over the past several years.”

The Santa Cruz Sentinel. “A former FBI agent who has delved into many high-profile financial meltdowns has a new assignment — Monterey mortgage lender Cedar Funding. R. Todd Neilson, a Los Angeles forensic accountant and bankruptcy specialist, was named Tuesday as the Chapter 11 bankruptcy trustee for the 20-year-old real estate investment company that has more than 100 Santa Cruz County investors.”

“David Nilsen, president of Cedar Funding, filed for Chapter 11 bankruptcy protection for his business last month amid mounting legal and financial pressure exerted by the embattled firm’s investors.”

“Because of several troubling aspects about Ceder Funding, the judge said a trustee would have to sort out the company’s financial condition. Ceder Funding attorneys said the company has about $170 million in outstanding loans on California real estate and some 1,400 investors in individual mortgages and a mortgage investment pool.”

The Mercury News. “Far fewer homes sold last month in Santa Clara County than in May last year, and median prices fell 12 percent.”

“‘We’re getting more consumers putting deals together,’ said Dave Walsh, president of the Santa Clara County Association of Realtors. ‘It does not mean that the market has bounced back. What it means is we’re not in a softening market right now. Prices are fair, the affordability indexes are more in line, and more people can qualify for mortgages now. Buyers are still very choosy about what they pay. They’re not willing to overpay.’”

“Parag Panse and his wife made an offer to buy their first house - a four-bedroom in Sunnyvale - last week. Renters in Sunnyvale, the couple almost bought a home in 2003 and again in 2005. They finally took the plunge, after painstakingly researching the market and increasing their estimate of what they’d have to pay for a home in the Cupertino school district.”

“They beat out six other potential buyers and hope to move in during July. Sunnyvale home prices, he said, have flattened since he began his search three months ago.”

“‘It’s a home that I am buying, so once I have done that, I will not be looking at the price’ he said, referring to whether his new home will gain or lose value in months or years to come.”

“DataQuick’s figures show that 14.3 percent of all home sales in the county last month were properties that had been foreclosed upon sometime in the previous 12 months. That’s up from 1.4 percent a year earlier.”

“Across the nine-county Bay Area, 26 percent of the homes that changed hands in May had been foreclosed upon sometime in the past 12 months. In May 2007, only 3 percent of sales were previously foreclosed properties.”

The Marin Independent Journal. “Homes sales continued to plunge across the Bay Area in May, though Marin remained an anomaly as the only county with a median price increase. Just 178 single-family homes were sold - down from 287 in May 2007, DataQuick reported.”

“‘The typical seller in Marin, they can wait,’ said Corina Rollins, senior real estate instructor at the College of Marin for more than 20 years.”

“Rollins would do the same if she had a property to sell. ‘Why would I put it on (the market) if I don’t have to sell, in order to take less than I possibly could get by sitting around and waiting another year?’ she said.”

“A snapshot of Marin’s foreclosure picture this week, based on statistics provided by ForeclosureRadar, indicated 670 properties in various stages of foreclosure within the past 120 days. Nearly half of those - 320 - were in Novato.”

The Press Democrat. “Bay Area home sales dipped in May despite a wave of foreclosure sales in Sonoma and other outlying counties that helped push prices to a four-year low. The typical Bay Area home sold for $517,000 in May, down a record 21.7 percent from a year ago, sinking to the lowest median since summer 2004.”

“Prices continue falling because sales are concentrated at lower price ranges and the falloff has been steep in the region’s more expensive areas. Areas with the most affordable homes registered year-over-year sales gains, bucking the overall Bay Area decline. Two-thirds of the zip codes with annual increases were in Sonoma, Solano and Contra Costa counties.”

“May median sales prices in these areas, on average, were down 24 percent from a year ago and down 36 percent from their peaks. A foreclosed Santa Rosa home valued at $550,000 three years ago was put on the market by the bank for $240,000. There were 13 offers, and it sold for $280,000.”

“Homes above $500,000 and those in even more expensive regions are sitting on the market, including Marin, San Mateo and Santa Clara counties.”

“The typical monthly mortgage payment Bay Area buyers committed themselves to paying was $2,393 in May, down from $3,090 a year ago. The typical mortgage payment for a Sonoma County home purchased in May was $1,921, down from $2,432 a year ago.”

“Fire officials said someone intentionally set a large Sebastopol home on fire, destroying the Gravenstein Highway South residence. Fire investigators found signs of a fuel being poured in several areas of the 8,000-square-foot home, indicating it was intentionally set, said Gold Ridge Fire Chief Andy Pforsich Wednesday.”

“The fire was reported before dawn on May 11. It was considered suspicious early on because there was no power to the vacant home. The home, which was for sale, was considered a total loss.”

The Reporter. “Although Bay Area home sales weakened last month to a 20-year low, sales of foreclosed homes rose in the East Bay and Solano County, causing some local Realtors to hail it as a boon for investors and first-time home buyers.”

“Sales in Solano County of foreclosed properties made up 57.6 percent of the resale market, according to DataQuick. In Solano County, the median home price sank 31 percent to $300,000, compared to the same period last year.”

“A lot of first-time buyers are taking advantage of the market with the belief that home prices have hit bottom, explained John Wilkerson, a Realtor in Vacaville who has seen the majority of his sales come from foreclosures and ’short sales’ where the buyer sells the property below value.”

“‘Being a home buyer right now is like being a kid in a candy shop,’ said Kathleen Ramos, a Realtor in Vacaville.”

“In May, jumbo mortgages in the Bay Area rose to 30.6 percent, up from 28.8 percent in April. That was still less than half the level - 63.5 percent - seen a year ago.”

The Sacramento Bee. “For the second straight month, the Sacramento region showed year-over-year gains in home sales as falling prices and growing numbers of bank-owned homes prodded bargain hunters off the fence. Prices, however, didn’t show the same strength. Median prices have dropped in double-digit percentages in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties over the past year.”

“Since January, banks in the region have foreclosed on 10,224 homes, according to Foreclosures.com. At the same time only about half the number - 5,448 - of repossessed homes were sold, DataQuick reported.”

“‘The sales numbers are great, and if we can keep on that track we could have just a slight decline in value,’ said Scott Thompson, a partner in Mortgage Resolution Services in Carmichael. ‘But we’re still foreclosing on more than we’re selling, and that’s the troubling part.’”

“Sacramento County’s median sales price of $225,000 is almost 35 percent lower than the same time last year. That median price hasn’t been so low since January 2003.”

“Analysts cite one reason for the rising sales and falling prices: a glut of discounted bank-owned homes that now rule the market. The Sacramento County Association of Realtors said 65 percent of May’s existing homes sales in Sacramento County and in the city of West Sacramento were bank repossessions.’

“In Elk Grove’s 95757 ZIP code, home to thousands of homes built from 2002 to 2005, 78 percent of sales involved foreclosed property. In Galt, 77 percent were, according to DataQuick.”

“Mortgage strategist Brent Wilson of Comstock Mortgage said the true test of the Sacramento real estate market will come ‘when we get to the seasonal slow times of the year - pretty much November through January. That’s going to be the true test to see if this rally has legs,’ he said.”

The Mt Shasta News. “County homeowners are no strangers to the worst housing crisis ever recorded, as the number of mortgage default notices (NODs) filed in California is at the highest level on record.”

“Siskiyou County now has the fourth fastest rising default percentage in the state. Siskiyou County has seen a 126 percent increase in the first quarter of 2008 (Jan. 1 - March 31) from the fourth quarter of 2007 (Oct. 1 - Dec. 31), according to RealtyStore. Counties with the highest increase from Q4 2007 to Q1 2008 are Glenn, Trinity and Mono with 138, 227 and 429 percent, respectively.”

“The number of statewide homeowners looking down the foreclosure barrel blasted last quarter to its highest level in more than 15 years, as the market continued to work its way through declining home values and a pool of at-risk mortgages that were originated in 2005 and 2006, according to DataQuick.com.”

“Last quarter’s number of defaults was the highest in DataQuick’s statistics, which go back to 1992.”

“Lending institutions sent Siskiyou County homeowners 106 NODs during the January-to-March period. That was up from 47 the previous quarter, according to county records.”

“‘We’re looking at more and more notices being recorded,’ Siskiyou County Recording Supervisor Rusty Neiswanger said. ‘We have already seen five percent more this month than last month. Hopefully Siskiyou County won’t be hit as hard as some of the counties in California. I do know that it’s effecting the housing market; I just know this is not good.’”

The LA Times. “With gasoline prices racing to new highs weekly, it’s crunch time for many gyms. Consumers looking to tighten their belts are giving up on tightening their buns in gyms, yoga classes and personal training sessions. Instead, they’re exercising the old-fashioned way: sweating for free at the beach, parks or on the street.”

“Canceling a monthly gym membership — which ranges from about $25 to hundreds of dollars– may not seem to shave much off the budget. But for some, it’s enough.”

“‘I know it’s next to nothing, but when you’re a starving artist, every little bit counts,’ said Ashley Brooke Moore, an aspiring dancer and actress in her 20s who canceled her $36-a-month membership at Bally’s about eight months ago. She then signed up for yoga classes, but when that got too expensive, she quit those and started going to free yoga classes at Runyon Canyon Park.”

“Money is tight because the catering company she moonlights for hasn’t been doing many jobs recently. ‘Everything’s a little bit slower, and gas prices are ridiculous,’ she said.”

“‘A lot of our clients have said, ‘You know, I can’t afford it,’ said Karen Speitel, office manager at Mind-Body Fitness Pilates Studio in Los Feliz.”

“Things really slowed down during the three-month Hollywood writers strike, she said, and never really picked up again once it ended in February. She’s tried calling former customers to remind them that group classes are only $15, but gets the same response: Even $15 a few times a month is too expensive.”

“The fitness industry ‘is certainly not immune to economic factors, i.e., the credit crunch, increasing fuel and food prices, slowing employment and the housing crisis,’ wrote Kathleen Rollauer, senior manager for research at the International Health, Racquet & Sportsclub Assn.”

Some housing bubble news from Wall Street and Washington. MarketWatch, “Home-builder executives said at an industry conference Thursday that they’re making progress clearing out excess inventory, but warned that a recession and spiking unemployment could stop that advance in its tracks. ‘No one who’s unemployed ever bought a house,’ said Lawrence Angelilli, senior VP of finance at Centex Corp.”

“‘Mortgage foreclosures were never viewed as being competition for new construction,’ said Angelilli. ‘The thing that makes today so much different … is that a lot of foreclosures are coming from nonowner-occupied borrowers who built new homes and were trying to flip them. Now you do have this first-time phenomenon of massive foreclosures that are coming through on new construction.’”

The Pioneer Press. “Earlier today, MoneyGram International announced that Phil Milne, chairman, president and CEO of the St. Louis Park-based money-transfer company, had stepped down, effective immediately. Once a Wall Street darling, MoneyGram fell hard and fast on investments in subprime mortgage related securities. The company first disclosed it would lose money on those investments in the fall of 2007, but the losses continued to mount. As of May, they stood at $1.6 billion.”

“MoneyGram’s stock - which has fallen 96 percent in the past year - was trading down about 9 percent at midday.”

The Associated Press. “Financial services firm Fremont General Corp. said Wednesday night it filed for bankruptcy protection as part of its plan to sell its retail banking assets. Fremont General previously was one of the largest originators of subprime mortgages.”

“In March, regulators gave Fremont General 60 days raise new capital or sell its banking subsidiary because the bank was considered ‘undercapitalized.’ It then agreed to sell the banking operations. Fremont General shares closed at about 7 cents Wednesday, leaving the company with a market capitalization of just over $5 million. A year ago the stock traded north of $12 per share.”

“Mortgage insider Triad Guaranty Inc. said Thursday it will stop booking new business and go into run-off…a situation where an insurer no longer books new business, but instead generates revenue only on existing policies. Shares of Triad plunged 46 percent in morning trading.”

“Insurers have been facing mounting losses since the middle of 2007 as mortgage defaults have skyrocketed, leading to a spike in claims. Triad Guaranty lost $77.5 million during 2007. It plans to stop booking new business July 15. About 100 jobs will be cut as it enters into run-off, the company said.”

From Bloomberg. “HBOS Plc, the U.K.’s biggest mortgage lender, warned house prices will fall as much as 9 percent this year, more than it earlier forecast, forcing more borrowers to default on home loans.”

“The Edinburgh-based company wrote down an additional 200 million pounds ($395 million), including stakes in homebuilders, and said risks related to bond insurers almost tripled to 1.5 billion pounds.”

“The company said bad loans rose 17 percent to 4.95 billion pounds as of May 31 from 4.23 billion at the end of 2007. Late mortgage payments by ’specialist’ customers including landlords and borrowers whose incomes weren’t verified rose to 3.1 percent of total mortgages from 2.6 percent.”

The International Herald Tribune. “More than 100 golf courses have been built in Spain in the past eight years, most accompanied by high-density residential developments targeting foreign buyers. A steep downturn in the Spanish housing market… is sending ripples through all sectors of the economy.”

“During the first part of 2008, the number of home sales in Spain fell by 30 percent, according to government data, and estate agents report that house prices have dropped 10 percent to 20 percent in many tourist areas.”

“By one construction industry estimate, there are more than 650,000 unused new housing units in Spain, including the houses built for the tourist market. In some areas, local officials are working with developers to use empty units in golf course developments as subsidized housing for Spaniards who cannot afford the high price of new homes.”

“Industry experts say there is a glut of golf course villas and many of them are sitting empty, helping to drive down prices throughout the country. ‘Investors are trying to exit their investments and they’re not being able to,’ said Mark Stucklin, who tracks the market.”

From Reuters. “Models that predict payments on bonds issued and protected by Fannie Mae, Freddie Mac and Ginnie Mae have been far off the mark in recent months, resulting in increased risk to investors in the $4.5 trillion ‘agency’ MBS market.”

“Errors are happening for the same reason credit loss forecasters failed to prepare investors for the subprime mortgage meltdown: it has never happened before.”

“May data ‘was a shock to everybody,’ said Arthur Frank, head of MBS research at Deutsche Bank in New York. Vagaries of falling prices and tight credit have ‘wreaked havoc’ on models that were created during the heydey of refinancing, analysts at Merrill Lynch & Co. said in a recent research note.”

“‘An unprecedented housing market will produce unprecedented prepayments and defaults,’ said Dale Westhoff, a managing director at JPMorgan Chase & Co. in New York, who has been refining models for 18 years. ‘We’ve already seen that on the default side. On the prepayment side, the May numbers are starting to reflect this new environment.’”

“More than 400 people have been charged in a nationally coordinated probe of mortgage fraud that involved an estimated $1 billion in losses, the U.S. Justice Department said on Thursday.”

“The department, disclosing a 3 1/2 month ‘Operation Malicious Mortgage,’ said…the U.S. Corporate Fraud Task Force was ‘responding to issues raised by mortgage fraud in the corporate sector.’”

The New York Times. “What were the managers of Bear Stearns‘ hedge funds thinking as the mortgage markets began to go haywire and investors started asking for their money back? Thursday’s indictments against those former managers, Ralph R. Cioffi and Matthew Tannin, offer some fascinating clues”

“In an April 22 e-mail from Mr. Tannin…Mr. Tannin wrote: ‘ the subprime market looks pretty damn ugly… If we believe the [CDOs report is] ANYWHERE CLOSE to accurate I think we should close the funds now. The reason for this is that if [the CDO report] is correct then the entire supbrime market is toast… If AAA bonds are systematically downgraded then there is simply now way for us to make money - ever.’”

The Arizona Republic. “Residents of Cooley Station North awoke Monday to 493 signs of more trouble for their half-empty subdivision. Process servers had blanketed the Trend Homes community in east Gilbert with foreclosure notices, targeting 493 vacant lots owned by a Scottsdale ‘land bank,’ which has fallen behind on its loan payments.”

“‘We’re living in a subdivision that’s half-full,’ said Cooley Station homeowner Krista Anderson. ‘My main concern is what’s going to happen to the subdivision.’”

“Like many other land banks that had contracted with home builders during the real-estate boom, Taro was left with hundreds of vacant parcels. ‘They ended up saddled with all these empty lots that nobody wanted,’ said Mesa real-estate analyst Zach Bowers.”

The Arizona Daily Star. “In his May report, John Strobeck of Bright Future Business Consultants, acknowledged that he didn’t see the residential real-estate bubble developing back in 2005, in part because builders were requiring affidavits of occupancy that suggested the homes they sold would be lived in.”

“‘While it is clear that many people signed the affidavits of occupancy, they did it also at three or four other subdivisions where they bought houses,’ he said. ‘It was strictly a matter of dishonesty.’”

The Daily Herald. “Foreclosures in Illinois spiked again in May to about 42 percent compared to a year ago, according to RealtyTrac. ‘We need to get rid of the inventory of homes on the market, which is about 18 to 22 months, now,’ said Marve Stockert, executive director of Lombard-based Illinois Association of Mortgage Professionals. ‘We should get that down to 12 to 14 months.’”

“He said some of the roadblocks remaining are adjustable-rate mortgages that can see interest rates soar, declining property values and tougher qualifications for those seeking to obtain mortgages.”

“‘Everyone needs to keep in mind that this is like a chicken-and-egg concept,’ said Stockert. ‘Property values are dropping and people here are finding it very difficult to re-finance. Some are buying a second home and say they’ll lease their present home. But as soon as they close on the new one, they let the other go into foreclosure. This way, they already got the mortgage on the new home before their credit was wrecked.’”

The Herald Advocate. “Bill Diehl’s job description is simple. ‘It’s to help people buy and sell homes,’ said Diehl, one of two real-estate agents behind the Repo Home Tour Chicago.”

“‘Certainly nobody feels good about the fact that people have lost their homes,’ Diehl said. ‘But the reality is that for most people they haven’t expressed great concern about it.’”

“Congress should examine preferential loans to two Senate Democrats, including the sponsor of a major housing bill, by mortgage lender Countrywide Financial Corp, a senior Democratic lawmaker said on Thursday.”

“‘My view is that these allegations should be considered by the appropriate bodies, and I understand that the Senate Ethics Committee has already begun to look into the matter,’ Rep. Barney Frank said in a statement.”

“Sen. Christopher Dodd of Connecticut and Sen. Kent Conrad of North Dakota have acknowledged that they refinanced properties as members of Countrywide’s VIP program.”

“Dodd is chairman of the powerful Senate Banking Committee, and is leading an effort this week to win Senate approval of a $300 billion housing rescue bill to help thousands of Americans facing foreclosure on their home loans.”

“Dodd told reporters earlier this week he did not think he was getting any special deal when told in 2003 that he had been placed in a VIP program while refinancing two home mortgages with Countrywide.”

The Hartford Courant. “A nonpartisan government watchdog group Wednesday listed U.S. Sen. Christopher Dodd as the Senate’s No. 1 recipient of campaign contributions from Countrywide Financial Corp. in the last two decades.”

“Though Dodd was the Senate’s leading recipient of campaign contributions from Countrywide’s political-action committee, the overall career amount of $25,000 is very small when compared with the senator’s leading contributors. For instance, his career contributions from Citigroup Inc. total $439,094.”

“The political research center also said Dodd had received $15,000 from Countrywide for his presidential campaign.”

“Dodd’s spokesman, Bryan DeAngelis, said Wednesday: ‘As the senator said at his press conference yesterday, if the ethics committee requests any information, he will be more than happy to share it.’ But when DeAngelis was asked whether Dodd would be making any of his mortgage paperwork public, he said he had no further comment.”

From Politico.com. “Apparently, the housing crunch is nonpartisan. Washington insiders such as Ted Koppel, Ethel Kennedy and Ken Mehlman have priced to sell in a market that’s taken a noticeable downward swing.”

“‘Prices have come down in general,’ said Diana Hart, VP of the local affiliate of Sotheby’s International Realty. ‘Sellers are realistic, regardless of whether they’re members of Congress or media celebrities.’”

“‘Nightline’ anchor Koppel has dropped the price of his home in Potomac, Md., from $4.1 million to $1.95 million. The sticker price of Koppel’s 9,000-square-foot manse, which went on the market in 2005, was first slashed in August 2007, to $2.3 million.”

“Koppel’s price cut pales in comparison to that of Kennedy, widow of assassinated Sen. Robert F. Kennedy. Her home in McLean, Va., listed for $25 million in 2003, was reduced to $20 million and then to $16.5 million. The 10,524-square-foot estate is now listed by Washington Fine Properties for $12.5 million.”

“But Dewita Soeharjono, a broker in Virginia, says not to feel too bad for homeowning politicos forced to reduce their asking prices. ‘Actually, these guys bought the property way back then,’ said Soeharjono. ‘[So] they actually made multiple times on their investment.’”

“The average sales price of a home in the Washington metro area jumped only 1.5 percent in 2007, from $463,000 in 2006 to $470,000. In 2005, the average sales price increased by 21.8 percent from the previous year.”

“‘Right now, foreclosures and decline in housing prices affects everyone,’ Soeharjono said.”

The Daily Business Review reports from Florida. “Mami Beach’s Fisher Island, Fort Lauderdale’s exclusive Harborage Island and pricey private enclaves throughout Palm Beach County aren’t normally where you’d think to look for a home in foreclosure. But in the last three months alone, more than 150 notices of pending litigation, or lis pendens were recorded on South Florida properties with an estimated value of more than $1 million, according to data analyzed by the Daily Business Review.”

“Homeowners who built their fortunes in real estate are among those who are hurting the most. Some of the most expensive South Florida houses in foreclosure belong to people in the real estate industry.”

“Al LaSorte, a real estate litigation attorney, is representing local entrepreneur and real estate developer William L. Knight, who has two Highland Beach houses in foreclosure - his primary residence, which he bought for $2.2 million in 2000, and one he built as a spec home several years ago that is still on the market with an asking price of nearly $19 million.”

“‘It is difficult to carry on a mortgage for a spec house for that long,’ LaSorte said.”

The Miami Herald. “Someone had kicked the door in on the foreclosure on the 33rd floor at The Club at Brickell Bay. Last week, Lori Rice, the building’s property manager, pushed it open. Inside, she found the tell-tale signs of a squatter.”

“At a recent meeting at the Brickell, a room full of property managers sat down to commiserate over a slew of other troubles: Impostor landlords leasing units they do not own, a rash of vandalism and burglaries. Investor-owners, desperate to turn a dollar, are even renting to tourists by the day, undercutting local hotels at bargain rates.”

“‘When you come in with luggage, it’s kind of obvious,’ said the outspoken Rice, who admits her building has been hit harder than the rest. ‘They are advertising on Expedia.’”

“Paola Arboleda, manager of the Mark Yacht Club on Brickell Bay, said two months ago residents noticed someone hopping among various vacant units. A little snooping revealed the interloper was a mortgage broker.”

“‘We didn’t know who he was paying or if he was paying,’ Arboleda said. ‘Thank God, he’s gone.’”

“But most squatters aren’t in the units to just hang their hats, said Officer Jeffrey Giordano, who patrols the Brickell area. ‘They are probably involved in prostitution, burglary and other criminal activity,’ Giordano said.”

The Sun Sentinel. “Clementina Marie Giovannetti, a self-published author whose latest book was about her golden retriever, has canceled her ‘best pet lover’ essay contest that began in April. The prize would have been Giovannetti’s $1.25 million Ocala home.”

“Giovannetti said on her Web site that she had halted the competition due to a low response, despite coverage by several television stations and newspapers.”

“While Giovannetti had said her purpose was to ‘bless someone else’s life with this magnificent house,’ others suggested her contest was a creative way to unload an expensive property in a bad housing market. As for the Ocala mansion: It’s back on the market. Price? The original $1.25 million.”

The Orlando Sentinel. “A week after Shaquille O’Neal told the Orlando Sentinel that he’s working on a plan to rescue Central Floridians facing foreclosure, he has learned just how widespread the problem is. ‘He has two or three thousand e-mails,’ said Curtis Cooper, an Orlando Realtor and mortgage broker working with O’Neal on the project.”

“‘There are so many shysters out there who take advantage of you financially and emotionally,” said Belinda Petroccia, who saw her income dip with the tumbling real-estate market and now faces foreclosure on her Wedgefield home in east Orange County. ‘When I saw this, I thought, ‘That’s what I need — maybe Shaq can help.’”

From NBC 2. “The number of foreclosures in Lee County is up 350-percent for the first five months of the year. NBC2 found out why people who can afford to keep their home are also paying the price.”

“Less than a year ago, Lisa Norman bought a condo in the Terraces at Riverwalk. Now her neighbors are becoming scarce and she’s feeling the hit. She just received a $500 bill out of the blue from her homeowner’s association.”

“‘I can’t afford it. It’s not in my budget,’ said Norman.”

“Just a few miles away from Riverwalk at Matera, homeowners just got hit with a $1,500 special assessment. Don Roedding’s company manages about a 150 properties across Southwest Florida.”

“‘It’s a nightmare across the board for everybody,’ said Roedding. ‘Now what you’ve done is taken the same fees and reduced the number of people paying into it. So as much as you don’t want to pay it, if you don’t, you’re hurting yourself that much more if you’re trying to get out of it.’”

“Association fees maintain a community’s curb appeal. But that fact doesn’t make Norman feel any better. ‘It’s not worth it,’ she said. ‘I have my own financial problems to worry about. I can’t, I can’t worry about anybody else.’”

The News Press. “Garage sales have morphed in Southwest Florida from a means to purge the flotsam and jetsam in people’s lives to simply helping them survive. Floyd Harrison of Harrison Auctions in Cape Coral said he’s getting more calls from people who are not necessarily moving away from Southwest Florida, but selling their personal property because of short sales on their homes.”

“Instead of leftover glassware or used DVDs, the items being sold may include family antiques, heirloom jewelry and favorite pieces of furniture. Harrison’s firm had about 45 estate and personal property auctions total in 2007. He’s nearly reached that number in 2008, and May is not over.”

“On May 18, Harrison held a jewelry sale at which a Cape Coral woman sold her $12,000 diamond ring for $2,000. She, her husband and three children are losing their home to a short sale and moving to Tennessee, he said.”

“Others, realizing there is no shame in losing your home despite best efforts to keep it, spoke freely. In Lehigh Acres…Shirley Duttko and her husband were holding a garage sale to sell the contents of their home. They plan to move to Arizona to be near her brother, Shirley said. They’re also leaving behind their house - just walking away.”

“The Duttkos’ home was appraised at more than $300,000. Yet a similar home down the street just sold for $140,000, she said. ‘I couldn’t even sell it for what the second mortgage is for,’ she said. ‘I honestly can’t afford to sell my house.’”

The Herald Tribune. “Evidence of the continued housing slump and slowing commercial real estate market showed up in a big way in the financial statements of Southwest Florida’s community banks during the first quarter. All told, the region’s 17 banks lost $15 million during the first three months of 2008.”

“The banks also reported $188 million in noncurrent loans during the first quarter, a 361 percent increase from the $40.8 million in problem loans they reported last year.”

“‘It’s tough out there now,’ said Tramm Hudson, a longtime Southwest Florida banker. ‘Based on conversations with bankers around the state, this situation is probably going to last until well into 2009, if not 2010.’”

The Tampa Tribune. “It was supposed to be the shining example of downtown Tampa’s revitalization. A luxury condominium with a name recognizable around the globe. On Tuesday, the developer of proposed 52-story Trump Tower Tampa joined three other condo projects mired in bankruptcy. The filing is yet another sign the waterfront Trump Tower Tampa may never see light of day.’

“Court documents list SimDag’s debts between $10 million and $50 million. It estimates more than 200 creditors, including scores of buyers who plunked down 20 percent deposits on condos sold for up to $6.5 million.”

“The property is prime waterfront land, but selling it in today’s market could be tough. SimDag paid $16 million for the property in 2004. Patrick Berman, senior director for Cushman & Wakefield in Tampa, said recently that the property would likely fetch only $10 million to $12 million in today’s market, even though developers may have invested as much as $25 million in infrastructure on the site.”

“Trump told The Tampa Tribune on Wednesday that he is disappointed SimDag filed for bankruptcy and still wishes his name was on a condominium in Tampa. He said he expects the land eventually to be sold at auction. If that happens, he said, he would like to bid on it and build a Trump Tower himself.”

“‘It’s a real shame it has come to this,’ he said.”

“The condos were originally priced between $700,000 and $6.5 million. Half of buyers’ 20 percent deposits were put into escrow so they could be returned. The rest was turned over to SimDag and used for site preparation.

Several buyers have sued, trying to get their money back. Developers have given some buyers half of their deposits. Tampa buyer Joyce Williams said she got back half of her $129,000 deposit and is ‘devastated’ SimDag has filed for bankruptcy reorganization. She doubts she will ever see the rest of her money.”

“‘This has been a nightmare,’ said Williams. ‘I can’t afford to lose that kind of money. I have a kid in college. This was my retirement money.’”

“Swimmers will have the option of wearing nothing at all at the Arbors at Branch Creek, a complex of 390 homes that landed on the idea to help move units in a down market. One pool is being set aside for nude swimmers, sunbathers and hot-tub users, said Christine Pirkle, director of sales with Eden condominiums, the project’s developer.”

“It will be several months before the nudity rules are put in place, Pirkle said. Landscaping is needed to keep out prying eyes, for one thing, plus condo owners must approve. But there are few owners among all the renters; developers hold a number of units.”

“Eden purchased the property three years ago with a condo conversion plan in mind. Then, said Pirkle, ‘The market went in the toilet and nothing was selling.’”

“Eden came up with a new strategy, ‘to set us apart from the thousands of other condos out there,’ she said.”

“Rumors spread that the whole complex was going clothing optional, sparked by a provocative posting under Lifestyle in the developer’s online promotional material.”

“‘You’re going to be very comfortable with our dress code,’ it says. ‘Our residents are welcome to shed more than their inhibitions as they enter the gates of Eden. Because when our residents come home after a busy day in the working world, they want to completely unburden themselves, shed the trappings of the outside world … and be totally free.’”

“That’s not true, Pirkle said, and the language is being tweaked.”

“Some residents of the complex were unaware of the plans. ‘I think that’s something they should probably … let us know,’ said Justin Gralnick.”

The NWF Daily News. “Home foreclosures continue to soar on the Emerald Coast and stymie the overall real estate market. In May, Okaloosa County recorded 164 home foreclosures. That is nearly three times the number of foreclosures recorded during the same month in 2007.”

“Walton County recorded 158 foreclosures in May - nearly four times as many as were booked in May of last year. If June follows a similar trend, both counties could surpass in the first half of 2008 the total number of foreclosures in all of 2007.”

“Santa Rosa County registered 112 foreclosures in May - a 45 percent increase over the same month last year. ‘Pretty eye-opening numbers,’ said Don Howard, Okaloosa County’s clerk of the circuit court.”

“Experts say the main cause of the spike in foreclosures is that many people purchased second homes or condos when real estate was booming with the intention of reselling them quickly for a profit.”

“But when real estate sales slowed, those investors were often stuck making an additional mortgage payment with no buyers in sight. Those who could not afford it now face foreclosure.”

“‘Frenzy is probably the best word,’ said Cliff Chaplin from the Emerald Coast Association of Realtors as he describes the boom.”

“‘I’ve told people real estate isn’t like day trading (on the stock market), and people were treating it that way,’ he said. ‘Some of those properties would be sold two or three times before they were even built.’”

“Economist Rick Harper, director of the University of West Florida’s Haas Center for Business Research and Economic Development, agreed. ‘The condo market is in a lot more pain,’ Harper said. ‘And I think they’re overshooting on price, so those will actually fall below normal.’”

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