The Housing Bubble

CNN Money reports on California. “On Wednesday there was some good news for California, when a local realtor group said that sales there jumped 18% in May compared to May 2007. But the hard times are far from over: Prices took a beating, plummeting 35% during the same period, according to the California Association of Realtors. ‘While this is a welcome sign for the market, it was due in part to the large share of distressed homes for sale in many parts of the state,’ said CAR President William E. Brown.”

“The Santa Barbara County area has been particularly hard-hit by falling prices; the median home sold there in May for $400,000, 24% below April prices, and 55% below May 2007. Monterey County, down 49% since last May, and the Riverside-San Bernardino area, off 35%, also suffered steep losses.”

“Los Angeles prices fell 21% from a year ago, while San Francisco prices dropped 20%, and San Diego was down 27%.”

“The state-wide median price for a home sold during the month was $384,840, down from $594,530 last May. ‘[It's the result of] a large number of short sales and foreclosures in the market,’ said CAR Chief Economist Leslie Appleton-Young.”

The Pasadena Star News. “‘It’s a first-time homebuyers’ market,’ said Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora.”

“Several San Gabriel Valley cities posted big year-over-year declines in their median home price. Hacienda Heights led the pack with a 37 percent decline, followed by Baldwin Park (-35.6 percent), Montebello (-31.3 percent) and Azusa (-30.8 percent).”

“Bill Mota, broker in West Covina, said homes a the low end of the price spectrum are quickly being bought up by first-time buyers and speculators. But the process, he said, can be arduous.”

“‘Getting a response from the bank’s repo department takes a while - they’re still overwhelmed,’ he said.”

“Rodriguez said sellers are often being asked to pay 3 percent of the buyer’s closing costs as well as 3 percent of their downpayment. ‘These kinds of programs have not been in play for at least 10 years because the market was so hot,’ she said.”

The Union Tribune. “Despite months of encouragement to help out distressed homeowners, consumer groups say the mortgage industry isn’t doing nearly enough to stem the rising tide of defaults and evictions.”

“A turnaround won’t help Maria Fuentes of Chula Vista, and her husband Rocky Segobia. The loan they received in late 2004 seemed like ‘a sweetheart of a deal’ until the interest rate began adjusting upward, Fuentes said. What started as a $1,600-per-month payment rose to $1,900. Efforts to renegotiate were unsuccessful.”

“After Segobia was laid off, the couple began missing payments and pawned their wedding rings to make ends meet. When they learned that Fuentes was going to be laid off from her job with the San Diego Unified School District, they gave up. They’re now selling their house on Del Mar Avenue for less than the amount owed in a short-sale agreement.”

“‘We are going to walk away from our home with zero money in our pockets,’ Fuentes said. ‘We’ve hit bottom.’”

The Press Democrat. “Sinking prices are discouraging homeowners from putting homes up for sale during a season when new listings often pour onto Sonoma County’s housing market. ‘There’s been absolutely less for sale than you normally see. Because if they don’t have to sell, they’re not,’ said Alice Curtis, Creative Property Services manager in Santa Rosa.”

“Many homeowners who might want to sell are staying out of the market rather than compete with such discount pricing.”

“‘The cards are stacked against the regular old homeowner trying to sell,’ said Mike Kelly, an agent in Santa Rosa. ‘If you tried to put your house on the market now, the competition around is just going to murder you.’”

The San Francisco Chronicle. “A subdued, and noticeably smaller, throng of West Coast building professionals gathered at Moscone Center this week for the annual Pacific Coast Builders Conference and trade show.”

“‘Why sugarcoat it?’ said John Frith, spokesman for the California Building Industry Association. ‘It’s ugly; it’s brutal’ in the housing market now. ‘People need to know that, and the policy makers need to know that.’”

“Alan Nevin, chief economist for the CBIA, said housing production in the state this year is likely to be at the lowest level since World War II. ‘We are not anticipating a return to vitality in the rest of 2008 or even in 2009,’ Nevin said. ‘Foreclosures are the proverbial pig in the snake.’”

“‘We get (potential buyers) with the mind-set: I want to pay this price because I can buy a foreclosed home up the street,’ said Bill Misura, a sales associate with Tim Lewis Communities in Roseville.”

The Mercury News. “Some of the week’s conference sessions have titles such as ‘How to Sell Homes in a Down Market,’ ‘Leadership in the Face of Adversity,’ and ‘Change or Die.’”

“Reducing costs is the primary coping mechanism for any builder now, said Ray Becker, a land developer in San Benito County who is also the president of the California Building Industry Association. Many have laid off large numbers of employees, and some are selling off land the had hoped to build on.”

“‘Everyone is cutting to the bone right now,’ Becker said. ‘There’s no other choice.’”

The Recordnet. “The CBIA’s chief economist, Alan Nevin, blamed the record number of foreclosures and short sales for depressing the market for new homes, but he also said rising high fuel prices have knocked commuters out of the inland housing market from Sacramento to Riverside/San Bernardino.”

“‘Folks are no longer willing to make that long drive, even though that house may be $100,000 less,’ Nevin said. ‘You can’t justify it when the fuel (to commute) costs $1,000 a month.’”

“The projected 38,250 building permits expected to be issued statewide for single-family homes this year represents a 75 percent drop-off from three years ago.”

‘In January, Nevin took a uniquely optimistic view among economists by predicting that housing production would actually climb this year to 128,000 units, including 80,000 single-family homes, up from 70,000 in 2007.”

“A total of 348 residential building permits were issued countywide for the first five months of this year, according to the Construction Industry Research Board. That was less than the 357 residential building permits issued only in the month of January 2006, at the beginning of the current housing slowdown.”

“Joe Anfuso, CEO of Stockton-based Florsheim Homes, said…he believed the January forecast was overly optimistic.”

“‘As the banks have started to place the foreclosures in the market at prices that are now attractive and grabbing buyers, that’s certainly made things more difficult for home builders,’ he said. ‘It’s really survival and managing cash flow until we get out the other side.’”

The Ventura County Star. “It took less than 20 minutes Wednesday for Countrywide Financial Corp. shareholders to approve a garage-sale takeover by Bank of America, putting an end to a corporate meltdown that cost them billions of dollars.”

“At a special meeting Wednesday at Countrywide’s campus headquarters in Calabasas, shareholders were bused in while guards kept the media at bay. ‘It’s a really sad day in America,’ shareholder Scott Adams said afterward outside the campus. ‘This dream is dead.’”

“Countrywide’s market capitalization value has plummeted over the past year as its stock plunged from a high of $37.52 to a low of $3.95, a nearly 90 percent tailspin.”

“He was prepared Wednesday to criticize the board of directors for poor corporate governance and inability to reel in founder and CEO Angelo Mozilo. He didn’t get a chance, though. Shareholders were not permitted to speak.”

“‘It’s been a board that’s never been able to say no to Mozilo,’ Adams said.”

“The original deal was valued at about $4 billion when it was announced Jan. 11, but the value fell to about $2.8 billion as Bank of America’s stock price dropped from $39.41 then to $26.61 Wednesday, or 32.5 percent.”

“Along with Countrywide’s more favorable assets, Bank of America also will have to take on a trove of lawsuits related to Countrywide’s lending practices, among other headaches.”

“They include two brought Wednesday in California and Illinois. Both accuse Countrywide of systematically deceiving borrowers in order to get them to take on risky loans they couldn’t really afford, and name Mozilo as a defendant.”

“The California lawsuit also names as a defendant David Sambol, the lender’s former president and chief operating officer.”

The Sacramento Bee. “California Attorney General Jerry Brown says he’s seeking something quite simple for thousands of homeowners who lost money or their houses to foreclosure after borrowing from Countrywide Financial Corp. Payback.”

“As fresh lawsuits hang over BofA’s July 1 acquisition, some say the giant bank may get more than it bargained for. ‘Bank of America is taking on a big risk,’ said Kurt Eggert, a law professor at Chapman College in Orange in Southern California.”

“Eggert said Countrywide could be liable for ‘huge sums of money and might have to return houses that have been foreclosed. Until this litigation is resolved, it strikes me that Countrywide is under a very dark financial cloud.’”

“Steve Abrams, a training manager who works for the state, has made mostly minimum payments on his Countrywide pay option ARM, adding $1,000 to his principal every month. Abrams said he has kept up payments since getting the loan in 2005. But next year, it will go up by $1,000 a month, he said.”

“He said repeated requests to Countrywide for a new kind of loan have led nowhere. ‘It’s like I’m getting deeper and deeper,’ he said.”

Some housing bubble news from Wall Street and Washington. “Existing-home sales increased 2.0 percent from April, but are 15.9 percent below the 5.93 million-unit pace in May 2007. The national median existing-home price for all housing types was $208,600 in May, down 6.3 percent from a year ago when the median was $222,700.”

“Lawrence Yun, NAR chief economist, said there’s still a lot of inventory in the market. ‘The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down,’ he said. ‘Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices.’”

From Realty Check. “I asked the Realtors how much of these sales are ‘distressed’ properties, that is, short sales and REO sales which are bank-owned properties.”

“According to the Realtors, a full one third of sales are distressed properties. Think about that. Five million home sales expected this year and of those about 1.65 million will be homes that a seller couldn’t afford to keep.”

From MarketWatch. “Lennar Corp. reported Thursday a second-quarter loss that wasn’t as deep as the year-ago period, but the home builder expects conditions in the housing market to worsen as the year wears on. Lennar posted a loss of $120.9 million in the three months ended May 31. Total revenue fell 61% to $1.13 billion, Lennar said.”

“‘We recognize that the remainder of 2008 will likely see further deterioration in overall market conditions,’ said CEO Stuart Miller. ‘Foreclosures have increased while higher unemployment and diminishing consumer confidence have defined overall economic weakness.’”

From Bloomberg. “Miller is reducing prices to lure buyers. The average price of a Lennar home in the fiscal first quarter fell 8.3 percent to $278,000 from a year earlier and the company sold the most homes in Arizona, Colorado and Texas. The median U.S. new home was $231,000 in May.”

The Atlanta Journal Constitution. “No one wants to buy Atlanta-based Post Properties. So the builder of multifamily communities announced Wednesday that it has ended its five-month quest to be purchased. A number of other factors have worked against Post, said analyst Haendel St. Juste, including the high cost of construction and the prices Post paid for land when competing against condo builders.”

“Post Properties owns 22,437 apartment homes in 62 communities. The company is also developing and selling 535 condominiums in four communities. ‘Once people got in under the [Post] kimono they realized there were some issues going on,’ St. Juste said.”

From Business Week. “A subdued Angelo Mozilo got choked up at the last shareholder meeting for Countrywide Financial. Nearly 70% of Countrywide shareholders approved the firm’s sale to Bank of America at the June 25 meeting. The deal is expected to close July 1.”

“Security was extremely tight at the event, held at Countrywide’s campus-like headquarters in suburban Calabasas, Calif., northwest of Los Angeles. Security guards in dark suits and earpieces roamed the premises. Mozilo entered the auditorium quickly from the side of the stage just before the meeting began.”

“Mozilo gave a short speech as the votes were being tallied. ‘Despite widespread and often unfounded headlines of the past year, Countrywide has made a positive impact on the country,’ he said.”

“He recounted how the company had invested early in new technologies that made mortgage processing quicker and more efficient. He said Countrywide was the first to pass $500 billion in loans made in a single year, and the first to pass $1 trillion in loans being serviced.”

“Countrywide’s passing means the end of such ‘monoline’ firms, in favor of more diversified institutions, Mozilo told shareholders. In the future, he said, ‘the business of mortgages will be housed within a banking protocol.’”

“Scott Adams, a regional coordinator with the American Federation of State, County and Municipal Employees’s pension fund, came prepared with a speech he did not get to read. Adams scoffed at Mozilo’s claim that Countrywide’s efforts had kept 143,000 troubled borrowers in their homes. ‘He said they made 22 million loans; 143,000 is not a whole lot,’ he said.”

“‘I’m very proud of our accomplishments,’ Mozilo said. ‘We’ve made the dream of home ownership available to everyone regardless of ethnicity. We’ve helped millions of people in good times and bad.’”

The Seattle PI. “State regulators are seeking to revoke the license of Countrywide Financial and fine the nation’s largest mortgage lender $1 million after its investigation showed it engaged in alleged predatory practices.”

“‘The allegation offers evidence that Countrywide engaged in a pattern to target minority groups and engage in predatory practices,’ Gov. Chris Gregoire said at a news conference Wednesday.”

“Gregoire said Bank of America’s takeover of Countrywide ‘will not stop our enforcement actions. We want these consumers to be made whole.’”

The Chicago Tribune. “Illinois Atty. Gen. Lisa Madigan won the race by a nose Wednesday, suing mortgage lender Countrywide Financial Corp. for fraud hours before her California counterpart did the same.”

“Madigan then introduced Schaumburg special-education teacher Melissa White, who said she was one of the victims of Countrywide’s business practices. White, a single mother, said she approached Countrywide in 2005 because she wanted to refinance her two-bedroom home to pay medical bills.”

“When White showed up at the closing, she was told she didn’t qualify for a fixed-rate loan and instead would be receiving a loan known as a 3/27-a fixed rate of 8.75 percent for three years, which would beginning adjusting at regular intervals.”

“When the first reset approached, White could refinance again, her broker told her. But by then, the credit crisis was in full swing and White was stuck.”

“It took her six months and hours on the phone trying to reach someone before the mess was straightened out. Yet her credit remains damaged, White said.”

“‘I was sold a bill of goods and there are just so many more out there,’ she said. Since the problems with her mortgage, White said she and her son have been ‘going without, going to a food pantry, deciding which medication to take and which to go without.’”

“The bigger issue, said Bert Ely, a banking consultant in Virginia, is whether subprime lenders were doing exactly what the nation’s public officials wanted them to do-finding new and creative ways to boost home ownership among people who would not have qualified for traditional loans.”

“‘Public policy has done everything it can to help people make bad bets on housing,’ Ely said. ‘We’ve been encouraging people to take risks they shouldn’t have taken. There is plenty of blame to go around.’”

From CNN Money. “CNN’s Larry King on Tuesday talked to several experts in the real estate industry to get advice on handling the mortgage meltdown.”

“King: ‘Let’s take a call from Tuscaloosa, Alabama.’ Caller: ‘I have a loan with Countrywide, and they will not refinance our interest-only loan, because they say our debt-to-income ratio is too high, and their workout department won’t even look at us because we’ve never been behind on our mortgage and we’re not currently behind. It’s going to reset in August. What can we do?’”

“Barbara Corcoran: ‘I have a solution, and it’s a fall-back solution, but it sure gets attention. You can make an appointment, or not make an appointment, go over there with the deed to your property and the keys to your front door and say, OK, I’ve had it. Here’s my deed, here’s my keys, and you’ll get attention.’”

“King: ‘Is this a good time to sell a house?’ Corcoran: ‘Of course it’s not a good time to sell a house. The question is, if you must sell a house, how do you unload it?’”

The Connexion on France. “Falling sales of homes are forcing owners to slash up to 30% off the value of their house. Property websites targeting foreign buyers are seeing some of the largest drops in prices.”

“British estate agent in the Dordogne Gil Kendall, who has specialised in second homes for foreigners for 20 years, said ‘the number of sales in our part of the world has fallen dramatically.’”

“The percentage of foreign buyers was ‘greatly reduced,’ she added. ‘In the last two years prices have not risen overall and are starting to fall from the level two years ago. This explains why deals are being done at 20-30 percent below the asking price,’ she explained.”

“‘I wouldn’t be surprised if it’s another three to four years before things line up again,’ Mrs Kendall said. ‘People thought prices could only go up. Property was cheaper than at home. Suddenly the situation has changed quite dramatically.’”

The Star Phoenix from Canada. “Ron and Wendy Balezantis and their children packed their minivan Wednesday and drove south to Arizona. This will be the first time the kids see the new condominium Ron and Wendy bought a few months ago.”

“The Balezantis family has joined a growing number of Saskatchewan residents buying up houses and condos in American states, particularly Arizona. The strong Canadian dollar, combined with rock-bottom prices for real estate in many cities such as Phoenix, means Canadians can snap up vacation homes or investment properties for less than half of the price of just one year ago.”

“‘You can get brand-new houses here for nothing. Nice three-, four-bedroom places for $200,000. There is a real opportunity,’ said Glenn Williamson, CEO of the Phoenix-based Canada Arizona Business Council.”

“‘We fell in love with the area and just said, ‘Let’s do it. Let’s go for it.’ The prices are way cheaper than in Saskatoon,’ Mike Losie said.”

“The brand-new units, which Losie said range from $120,000 to $160,000, have a pool, deluxe fitness centre and other amenities. Both families intend to use the places for several weeks a year and more when they retire in a few years. If they decide to sell in the future, the market will undoubtedly have bounced back by that point, they say.”

“Phoenix Realtor Jay Thompson said if it wasn’t for Canadian buyers, ‘we’d be starving.’”

“Al Didur of Realty Executives in Saskatoon said…some of his clients are taking equity out of their Saskatoon properties and investing it in Phoenix, which is seen as a severely undervalued market that will bounce back, he said.”

“Even groups in Arizona working with low-income buyers or sellers, or those stung by predatory lending companies, welcome the influx of homebuyers from Canada. ‘Right now, we see it as a good thing,’ said Mayra Khunpannya, a counsellor with the non-profit group Acorn Housing.”

“For the Balezantis and Losie families, they say they intend to make the most of this unexpected chance to own property in such a great spot. ‘It’s a good investment and a golden opportunity for us to do something we never dreamed of doing,’ said Mike Losie.”

The Post Dispatch reports from Missouri. “All real estate is local, or so goes the saying. But the St. Louis region can’t seem to avoid the troubles of a weak national house-building market and buyer indifference. House building locally has slowed to levels not seen in almost a decade. With so much inventory on the market and with prices lower than they have been in years, it should be a natural buying opportunity, said Patrick Sullivan, executive VP of the Home Builders Association of St. Louis and Eastern Missouri.”

“Yet prospective buyers continue to sit on the sidelines. As a result, builders and other companies tied to the housing industry are cutting back staff and reducing overhead. ‘This is an unusually challenging time for builders,’ Sullivan said. ‘They have got to rid of dead wood and get much smarter to survive.’”

The Suburban Journals from Missouri. “Applying for her first mortgage was daunting for Warrenton resident Sarah Reed. ‘It was rough,’ she said. ‘I didn’t realize how much it entailed.’”

“After renting for several years, Reed and her long-time boyfriend Justin Berg moved Saturday into their first home. The couple found their dream home in Andorra Estates, just north of where Reed works at Waffle House on Highway 47. They paid in the low $100,000s for the two-story, four-bedroom and two-bath home. It had been repossessed by the bank.”

“While Reed said she knows it’s a big jump from renting to buying, she couldn’t be more excited. ‘I’m really proud of myself,’ she said. ‘Here I am, 24 years old, working at the same job for the past nine years with two boys and now I’m a homeowner.’”

The Riverside Brookfield Landmark from Illinois. “With sales at two townhome sites in Brookfield slow to materialize, the developer of a proposed 21-unit townhome project near the Congress Park train station won’t break ground until at least 2009.”

“Michael Beckerman, who has owned the former Brookfield Moose property since January 2006, said last week that until the glut of townhome units in Brookfield dissipates, he’ll bide his time on construction.”

“‘There are two townhome projects with 34 units that are basically all available,’ Beckerman said. ‘From an inventory perspective, that’s a lot.’”

“David Hrizak, the principal owner of the Courtyards of Brookfield development, blamed media coverage of the slow housing market as scaring away buyers.”

“‘We’re in a holding pattern until the people in the media tell the buyers to start shopping,’ he said.”

The Herald Spectator from Illinois. “In 2005, Niles saw just 24 foreclosures. But there were 87 foreclosures in 2007 — a 128-percent increase. ‘There are more foreclosures now than I’ve ever seen,’ said Bill Alston, a Niles real-estate agent. ‘It scares people.’”

“The average sales price of a Niles home fell to $330,000 in 2008, down from $400,000 in 2005.”

“The volume of homes sales has also taken a dive. In 2005, 199 homes were sold. In 2007 there were only 116 closings, and 2008 is shaping up to be no better, with just 21 homes sold thus far.”

“‘It’s causing a great deal of anxiety in this community,’ said Marty Friedman, director of Niles Human and Family Services. ‘People were sold a bill of goods by mortgage companies. These are not people who were educated in housing. But they worked and they had families and they were just trying to fulfill the American dream of owning a house.’”

“Alston said builders making ‘McMansions’ were taking a bath because they were building fancy homes that were out of step with the surrounding neighborhoods’ demographics.”

“‘A lot of builders who built these McMansions are stuck,’ he said. ‘Who wants to buy a $800,000 home in a $400,000 neighborhood? You want to live in an $800,000 neighborhood.’”

“Alston, who has been selling real estate for 37 years, said the housing bubble was the result of unreasonable expectations. ‘Real estate is a long-term investment,’ he said. ‘Part of the problem is that people were speculating. The term ‘flipping’ wasn’t even invented until 2000. Now, they lost their lunch.’”

The Lincolnwood Review from Illinois. “In the almost six years she has been with the Lincolnwood Police Department, housing foreclosures haven’t figured in her conversations with clients, social worker Geri Silic says. At least up until now.”

“‘In six years, I have not had any people come to me with housing problems,’ she said. ‘In the last four months, a number of families have come in with big problems and foreclosure is part of that.’”

“The number of single family homes sold in the village decreased three years running. In 2005, 128 changed hands; in 2006, 91 were sold, and in 2007 only 68 were sold. This year, only 17 had sold as of May 1.”

“The drop comes despite evidence that owners were willing to lower their prices in order to quickly offload properties. Association figures show that the median price for a single family home in Lincolnwood rose only from $512,500 in 2005 to $514,500 in 2007, then dropped precipitously.”

“As of May 1 of this year, the median price of a single family home in Lincolnwood was $410,000.”

“Jim Berger, executive VP at the Bank of Lincolnwood, said, ‘Most of what I see in Lincolnwood is that the people who had been speculating — buying homes, probably borrowing substantially in hopes of making the big bucks on the flip — are caught.’”

The Skokie Review from Illinois. “The story is familiar: Skokie has been aggressive in recent years in expanding its condominium market. It has big development plans for downtown, which include creating luxury homes.”

“The problem on a local level can be seen in the numbers. In 2006, Skokie had 90 foreclosures compared to 173 in 2007. The median price for homes has dropped considerably as well — $400,000 in 2006, $375,000 in 2007 and $332,500 for the first four months of this year.”

“Terry Oline, Skokie Property Standards Supervisor, has seen the impact of an increasing number of foreclosures first-hand. Last month, 140 homes (not including condominiums) in Skokie were in foreclosure or in the process of heading there, Oline said. When condominiums are factored in, the number is closer to 180.”

“How does that compare to previous years? ‘It’s unheard of,” Oline said. ‘It’s a huge increase.’”

“Oline has worked for the village since 1995. ‘It’s safe to say I’ve never seen anything like this before.’”

The Oakland Business Review from Michigan. “Even Oakland County’s luxury home market faces a chilling effect from the general market freeze, as potential buyers can’t sell their current houses for the price they want. Conventional wisdom suggests the $500,000-and-up markets should be insulated from lower-end troubles, but such home sales fell off in the last two years.”

“Fewer people in Oakland County are ‘buying up,’ said Dennis Wolf, president of a niche real estate brokerage managing high-end listings. ‘The thing that’s most troubling to me is, you have buyers who don’t want to buy. There are a lot who would and can’t because they can’t get credit, but there are a lot who think prices haven’t bottomed out,’ he said.”

“‘It affects the high-end market in that they have a bottom house to sell. If they have to give on price too much, they won’t put their house in the market and make that move,’ Wolf explained.

“There were 13 non-foreclosure houses sold in Oakland County this year in the $1 million-$2 million price range, and one that was in foreclosure…according to Farmington Hills-based Realcomp II Ltd.”

“In the $400,000-$1 million range, there were 41 foreclosures sold so far this year and 260 non-foreclosure houses sold in Oakland County.”

“‘If you have a three- to five-year supply of homes, you may have 50 or 60 competing with yours and only seven a year are selling,’ said Kelly Sweeney, CEO of Birmingham-based Weir Manuel Realtors.”

“The supply of houses in the $500,000-plus price range is as high as 60 months, reported Dan Elsea, president of Real Estate One. The supply of high-end homes was relatively high even when the economy was robust, he added. ‘That was because of builders, who prefer to build the upper end over the lower end,’ he said.”

The Journal Sentinel from Wisconsin. “After more than seven years and $937,159 in federal funds, the West Pointe mixed-use project is still not completed and needs more public money, a Common Council committee was told Monday.”

“Ald. Robert Bauman, who represents the area, said West End claims it needs about $350,000 to complete the ground-floor retail space and 14 condominium units. ‘Foreclosure isn’t necessarily the worst-case scenario,’ he said. ‘They may not be able to sell condos.’”

“Leo Ries, director of the Local Initiatives Support Corp.’s Milwaukee office, a private nonprofit that provides support for neighborhood development projects, said his agency initially invested $270,000 in West Pointe and is willing to pay for an outside project manager to assess the project and to look for a for-profit developer to take ownership, he said.”

“‘I argue that foreclosure would be the worst-case scenario because it wipes out the city’s lien rights, and the city would have to repay the U.S. Department of Housing and Urban Development,’ he said. ‘The party at the greatest risk here is the city.’”

The Pioneer Press from Minnesota. “Oh, woe and doom! The dreary truth presses dark upon the homeowner, cast about on a sea of uncertainty. (Oops. Sorry. I’ve been reading ‘Moby Dick.’)”

“The struggling housing market has plenty of homeowners worried, even those for whom foreclosure does not lurk beneath the stormy waters like a massive creature threatening to overturn all that floats in the name of shelter and security.”

“Hang in there, says Zoe Liston, a Twin Cities Realtor since 1994 and an appraiser since 1998. People seem to have forgotten that buying a house is a long-term investment, Liston says.”

“‘They’ve been spoiled in the last few years, expecting to get their money back in four or five years,’ Liston said.”

“Home prices increased so rapidly and steadily for so many years that a whole generation expects it to be that way, according to Liston. ‘Too many people used their house like a bank account,’ she adds. ‘We paid $250,000 and it’s now worth $300,000 - let’s go on a vacation!’”

“‘When people buy a house,’ she says, ‘it’s emotional, not logical.’ The emotions tied to homebuying are one reason Liston got out of selling houses and into appraising houses.”

“An appraiser’s job is to compare the house to three or four recent sales of similar homes - less emotional, more practical, Liston says. And for years, each appraisal brought good news for homeowners, as prices rose in the Twin Cities market.”

“‘Except now, people hate me,’ she says with a half-laugh, ‘as values drop.’”

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