The Housing Bubble

The Sacramento Bee reports from California. “There was a time when all that Sacramento County Sheriff’s Deputy Mark Habecker knew about mortgages was his own monthly payment. He had never heard of subprime loans or the term ‘cash for keys.’ The deputy could count on one hand the times he’d evicted homeowners. Then came the housing crisis. Now, Habecker converses smartly about adjustable-rate mortgages.”

“He knows all about home values. And while most of his evictions still involve landlord-tenant disputes, he has new layers of paper in his stack of eviction notices. They’re from banks taking back houses.”

“‘We used to do one (bank eviction) a month and maybe 12 all year,’ Habecker says. ‘I have 10 in my stack today just for me, and there’s six of us.’”

“Most of Habecker’s evictions from bank-owned homes are in Natomas. ‘They’re all real nice and big and brand new,’ he says of the residences.”

“Inside the (Del Paso Heights) single-story house, Habecker offered a warning: ‘Never open a refrigerator. It’s the law of the land,’ he said.”

“He doesn’t have to explain why. The home’s interior is ruined. Garbage and trash cover the floors. The couple had been living in the garage. The back and side yards are filled with tires and bicycle parts. A chicken pecks for food, a discarded ham is covered with flies.”

“Real estate agent Allen Griffin says the foreclosed house appears to be owned by an absentee owner. The evicted occupants, he suspects, are friends of the people who actually rented the house or perhaps friends of their friends.”

“Placer County, too, is seeing a ‘huge rise’ in requests for tenant evictions when landlords lose homes to banks, says Ellen Caraska, a Placer County Sheriff’s Department staffer.”

“‘Lincoln has a lot. Roseville has a lot,’ she says. ‘Rocklin, too. Those are our biggest areas.’”

The Manteca Bulletin. “With 1,500 homes in various stages of foreclosure in Manteca that represents about 1 out of every 14 single-family homes in the city’s housing stock.”

“Central Valley Association of Realtors President Bev Marlow noted that even though home sales have picked up to double of last year’s pace with nine out of every 10 of the 410 existing homes that have sold in Manteca since Jan. 1 being foreclosures, there is a serious concern about how many more people will be able to take advantage of the housing market to become homeowners.”

“For now, more foreclosed homes are being sold than those that are being taken back by the banks. The biggest wave of foreclosures, though, has yet to hit.”

“Edward Parcaut, a mortgage planner out of Modesto who has been working with the non-profit No Homeowner Left Behind effort…said some lenders understand that concern which is why they are now willing to deal aggressively.”

“Staff is executing the City Council’s directive to take steps to do what can be done to ease the impact on the community and affected families. ‘Obviously, the redevelopment agency doesn’t have the resources to intervene on a (large) scale,’ said Deputy City Manager John Nowak.”

From Westside Connect. “Assessed property values in Newman plummeted nearly 20 percent from a year ago, dramatically reversing the phenomenal gains recorded in years past when home prices, new construction and sales activity soared at the peak of the housing frenzy.”

“Homeowners whose property was reassessed will see savings on their property tax bills this year. In some cases, the savings will be substantial. With base property taxes equivalent to 1 percent of a home’s assessed value, a $100,000 reduction in the assessment saves the owner $1,000 a year in taxes.”

“City officials had been prepared for a sharp decline in the assessed values, said City Manager Michael Holland, but were taken aback to learn that the values had fallen so dramatically.’

“‘We had built our budget for the coming fiscal year on a 14 percent decline in property taxes,’ he explained. ‘We were told by the county assessor at a meeting that 14 percent would be the number.’”

“The downturn in the housing market was most pronounced in West Side communities. Only Patterson, with a 22.5 percent drop, recorded a steeper decline than Newman in a comparison of the county’s nine cities.”

“‘The assessment roll is based on activity that occurred during 2007. Dramatic declines in the housing market, especially toward the end of 2007, resulted in the assessor’s office lowering values on over 40,000 properties in the county,’ County Assessor Doug Harms commented.”

“Those reductions ranged from 5 percent to 50 percent.”

“‘The assessor’s office is ready at all times to give courteous answers to questions regarding taxation and valuation assessments,’ Harms said. ‘Before owners call, however, they should understand that any further declines in value after Jan. 1, 2008, will not be calculated until the 2009-10 assessment roll which will be determined as of Jan. 1.’”

The Bakersfield Californian. “They say during Bakersfield’s triple-digit summers, a swimming pool isn’t a luxury. It’s a necessity. But a growing number of homeowners are opting to go without. Swimming pools, it seems, are yet another casualty of the real estate slump.”

“‘We’ve had customers with excellent credit back out because they couldn’t get financing,’ said Larry Hamilton, owner of Neudeck Pools Inc. ‘Their homes aren’t worth as much, and the banks don’t like to loan to anyone with low equity.’”

“Larry Kritsch considers himself lucky. The owner of California Fiberglass Pools & Spas saw the housing crisis coming and diversified just before the industry took a dive. ‘I’ve been through business cycles before, so I knew the bubble had to burst some time,”‘ Kritsch said.”

“Now he’s got a side business doing industrial coating, although it’s not really a side business anymore because RLK Coatings has become his primary source of income.”

The Press Enterprise. “The ideas some Inland-area governments are mulling to solve their empty piggybank problems may ring familiar to anyone who has been told to open a window or put on a sweater, but under no circumstances to touch the thermostat.”

“With sales taxes and housing fees plummeting, cities across Riverside and San Bernardino counties are trying to cover the shrinkage of their main revenue sources by laying off workers, trimming services and cutting back on extras such as travel and conferences.”

“For the past couple of summers, Temecula city workers have endured offices that are a few degrees hotter to save the city on cooling costs.”

“Starting around the end of May, city maintenance Superintendent Kevin Harrington bumps the city’s thermostats about three or four degrees above the 71 or 72 degrees where they’re typically set. They stay there until October.”

“The tradeoff is they get to ditch the suits and ties and make every day a casual Friday. Though dress codes are relaxed, employees don’t go completely native. Harrington said they wear slacks and city-logo polo shirts. Open-toed shoes are still forbidden, so flip-flops and sandals are out.”

“‘It’s not like we’re running around in Hawaiian shirts,’ he said.”

The Union Tribune. “Since the Senate’s nine-day holiday began, an estimated 17,000 American homeowners defaulted on their mortgages, mostly because they were unable to keep up with rising payments on adjustable-rate loans. That translates into nearly 1,890 defaults per day, or nearly 80 per hour, based on data from RealtyTrac.”

“In San Diego County alone, homeowners are defaulting at a rate of more than 30 per day, according to DataQuick.”

“Some mortgage brokers say it could be more than a year before the wave of defaults and foreclosures abates. ‘This could easily go into late 2009,’ said Dave McDonald, president of the San Diego County chapter of the California Mortgage Brokers Association.”

“Leonard Rosen, who runs the Pit Bull Mortgage School in La Jolla, predicted ‘very tumultuous times over the next two or three years. We haven’t come close to seeing the effects of the credit crunch.’”

“‘What we have now for the first time that I’ve seen in my 30 years in the business is that people can have credit scores of 720 or 740 and still not be able to get loans,’ Rosen said, referring to the FICO credit-rating system devised by Fair Isaac Corp.”

“Rosen said most lenders are not willing to give credit to any borrower without complete documentation of employment and income. If they were unfortunate enough to take out an adjustable-rate mortgage a couple of years ago, there is little option for moving into a more affordable loan.”

“‘It’s not that the borrowers are no good,’ Rosen said. ‘It’s that there’s no product for them. As a result, a lot of good people are going into foreclosure.’”

The Los Angeles Business Journal. “L.A.’s housing market, pushed along by lower prices and sharply higher condo sales, is showing some signs of life -whether the upswing is permanent remains to be seen.”

“There were 1,254 condo units sold in June, up 115 percent from May. That was the largest number of condos sold in one month since July 2007, though sales were still off 4 percent year over year, according to HomeData Corp.”

“One reason for the surge: price. The median price of a condo that changed hands in Los Angeles County fell 12 percent year over year to $386,000. Meanwhile, there were 3,332 new and existing homes sold in June, up 30 percent from May, but down 28 percent from year-ago levels. The median price fell to $429,000 - its lowest level since October 2004.”

“One key reason condo prices have fallen: Many condo units have gone into foreclosure as first-time buyers eager to enter the real estate market got slammed by rising interest rates on adjustable rate mortgages and were unable to make payments.”

“Foreclosures also have the effect of driving down prices on surrounding units within complexes. This also holds true for single-family homes, where prices are now off 30 percent from their peak in mid-2007.”

“Indeed, the number of L.A. County ZIP codes with a median single-family home price under $400,000 shot up to 85 in June from just nine a year earlier.”

“As for L.A. County’s median home price, which has fallen nearly 30 percent in a year’s time, Delores Conway, director of the Casden Forecast at the USC Lusk Center for Real Estate, said there isn’t a whole lot more room for prices to fall to return to the historical norm of being in line with monthly rents.”

“‘The last time home prices corrected 20 percent or more in L.A. County was in the 1990s, and that took six years. This is happening very quickly,’ she said. ‘There’s probably still a little ways to go in this correction before we turn the corner, but the cost of home ownership is now starting to approach the average rent.’”

“However, Conway added there is one big wild card: the prospect of substantial job cuts.”

“‘If the bottom falls out of the economy and we have significant job losses, then everything will come down: home prices, rents, everything. That could take quite a while to work through,’ she said.”

The Redlands Daily Facts. “Over the last 19 years, Tami Barr spent June planning for the fall gift season. This year, she found herself planning the closing of her State Street store, Crackerjack Gift Co.”

“Barr said the closing has been emotional for some of her faithful customers. ‘I’ve had people come up to me crying and giving me hugs,’ said Barr, who will close the store by the end of July.”

‘Redlands Chamber of Commerce Executive Director Kathie Thurston also expressed sadness at the closing. ‘We’re always sad when we see any business close,’ Thurston said. ‘And we’re starting to see more of that downtown.’”

“Barr said the state of the national economy took a toll on her business. ‘Even an established business can have a hard time hanging on through this kind of economy,’ Barr said.”

“Collective Journey, Barr’s scrapbooking and stationery store on Orange Tree Lane, is staying open.”

“Barr’s Crackerjack hasn’t been the only business on State Street to close up shop. In mid-May, the Barking Frog, a home décor retailer, also closed its doors. Lastraw, a Christian clothing store, closed in late spring.”

“In May, economist John Husing, owner of Redlands-based Economics and Politics Inc., was chosen by the City Council to draft an economic development plan for Redlands. The plan will contain specific action recommendations that should help the city steer its business growth in the right direction.”

“In the meantime, as Husing devises ways for Redlands’ economy to thrive in the future, Barr had advice for keeping State Street businesses’ doors open.”

“‘What people don’t realize is if they don’t come in and spend money on a regular basis, they can’t survive,’ Barr said. ‘If people want to keep these kinds of stores downtown, they have to go shop there.’”

Consumer Affairs reports on Missouri. “When Sheila Smith got a look at what she thought was her dream home, she didn’t hesitate to take it. Smith, a social services and business consultant in Independence, Missouri, and her family took the chance and signed the papers on the house in May 2000. It wasn’t long before the dream became a nightmare for Smith and her family.”

“Although Smith and her husband were ‘viable citizens with good credit,’ they were quickly steered into an expensive subprime loan with ballooning payments and hidden fees that they couldn’t keep up with. Their home’s builder was indicted and the mortgage broker was quickly revealed to be collaborating with the builder to, as Smith put it, ‘unload crappy homes for pretty quick money.’”

“Trying to sell the home was fruitless, as they received conflicting appraisals due to all of the defects in its construction.”

“Smith was able to use the confusing and ambiguous rules of the modern mortgage market to fight back, and convince lenders and judges alike to let her and her family keep their home — at least for now.”

“Nancy Seats, president of Homeowners Against Defective Dwellings, says that more homeowners should challenge foreclosures by lenders who can’t prove they legitimately hold the loan, and that many innocent buyers are the victims of ‘very unscrupulous activity’ propagated by lenders and investors who are motivated by ‘nothing but greed.’”

“‘They knew [the market] was all going to collapse eventually,’ Smith said. ‘They said, ‘Let’s just make as much money on the front end as possible and not worry about the back end.’”

“Even Smith’s hometown of Independence, a small city of 113,000, has been hit hard. ‘I’ve seen homes that were bought for $1.7 million go back on the market at $680,000 to get them sold quick,’ she said. ‘In a row of ten homes, maybe one-third of them will have foreclosure signs out front.’”

The Plain Dealer from Ohio. “Foreclosure-tainted houses have caused home prices in Cleveland and many East Side suburbs to plummet in 2008 as banks and lenders unload their dam aged goods at rock-bottom prices.”

“The median home sale price in the city of Cleveland has dropped an astonishing 75 percent compared with the first six months of last year - from $62,000 to $15,500.”

“Nearly 59 percent of home loans made in Maple Heights during 2006 were subprime. That southeast suburb of modest bungalows has seen housing prices fall 67 percent for the first six months of this year.”

“In Strongsville, only 16 percent of mortgage loans in 2006 were subprime. Home prices there have fallen just 4 percent.”

“Helen Hertz, a Cleveland Heights-based real estate agent, said mortgage lending has returned to the place it was more than 20 years ago. That means buyers need to have a down payment and pay their closing costs out of their own pockets.”

“The real estate market is not going to recover right away, Hertz said. ‘I think it’s going to take three to five years to reabsorb the inventory,’ she said.”

“Sheila Tomasi walked through the back door of the newly bought house as if stepping into a cave. Slowly. Warily. Ready to shriek. She was a long way from California, where she and her husband, Eric, buy and sell real estate.”

“But she thinks they discovered a gold field in Cleveland, riches to be mined from boarded-up mysteries like this one.”

“If you looked past the cracked plaster walls, the bathroom savagely stripped of plumbing — which she was willing to do — the little blue house at the edge of Slavic Village looked almost livable. The Tomasis bought it sight unseen for less than $3,000. A sign on the front lawn on Portage Street says it could be yours for $500 down, $300 a month. That’s $25,000 in 15 years.”

“Tomasi, a sun-kissed 39-year-old who knows how to surf, is one of the newest players in Cleveland’s shell-shocked housing market. In a little more than a year, she and her husband, the principals behind TSE Properties LLC, have bought up dozens of impossibly cheap homes and resold many of them.”

“The couple purchase foreclosed homes in bunches from banks. They make minimal repairs and resell the houses as handyman specials, offering a mortgage rate less than the neighborhood’s going rent.”

“‘We’re taking a risk, but our investment is limited,’ Tomasi said. Meanwhile, her buyers, usually lifelong renters, become homeowners at 1940s prices.”

“Cleveland Councilman Tony Brancatelli, whose ward surrounds Slavic Village, is not sure what to think.
Lacking a public program that uncrates boarded-up houses and puts them back on the market, he’s supporting the Tomasis and a few other speculators like them.”

“‘It’s a piece of a strategy,’ Brancatelli said. ‘I don’t know if it’s good yet. But you’ve seen my neighborhood. I’m not throwing away any idea. Can this be part of the fix?’”

“Eric Tomasi remains a mortgage broker in the market around the couple’s hometown of San Luis Obispo, Calif. Two years ago, the couple leapt into the misery market, starting in Detroit. They bought their first foreclosed home in Cleveland last year.”

“Eric Tomasi said the move to the distressed Midwest made business sense. ‘It’s hard to lose money when you’re buying duplexes for $1,000,’ he said.”

Crain’s Detroit Business from Michigan. “In addition to running his Warren-based realty company and serving as a national spokesman in the fight against mortgage fraud, Ralph Roberts also flips houses - he has bought and sold an estimated 2,000 foreclosed homes during his career.”

“But Roberts has flipped only one so far in 2008; he invested about $110,000 in a house in Shelby Township and sold it for $190,000. ‘But three years ago I would have sold it for $300,000,’ said Roberts.”

“Roberts said money can be made on a home at any price by following a simple formula: ‘You have to buy below wholesale and sell for wholesale,’ he said.”

The Detroit Free Press from Michigan. “As more condo owners who need to move are stuck with properties they can’t sell and foreclosure rates rise, many homeowner associations are hurting for the cash needed to maintain monthly services.”

“Jon Sabo, who manages Highland Lakes Condos in Northville, says delinquencies are at 5% at the 700-unit complex. ‘Because of oversupply, prices have been devastated,’ said Sabo, who is also chapter executive director of the trade association for all Michigan homeowner, condo and property owner associations.”

“The Highland Lakes property has 16 foreclosed properties, and while sales continue, they have done so at lower prices.”

“At the peak of the real estate market, in August 2005, a lakefront 2-bedroom, 2-bath 1,400-square-foot condo at Highland Lakes sold for $220,000. The same unit now sells for $140,000.”

“Jeff Axt of Bloomfield Hills was unable to sell two condos when he married and moved into a house in November 2007. He rents one in Royal Oak to a renter he advertised for and one in Warren to his dad.”

“Axt ran for the board of the Lancaster Woods Condominium Association three years ago, as he began to question rising association fees that were not accompanied by more services. ‘We were told year after year that the association needed more money, and it was never enough,’ said Axt.”

“Foreclosures are a concern because banks typically do not make an attempt to get association dues on a payment schedule, he said. When the condo is resold, the back fees have to be paid and the banks often have to deal with them at closing, he added. ‘You’re way down low on the food chain in terms of getting paid,’ he said.”

The Star Tribune in Minnesota. “It’s been a tough year for Americans. Home prices have dropped and the unemployment rate is up. No wonder that consumer confidence, according a widely watched survey released Tuesday, is as low as it was in 1967.”

“‘I’m sliding,’ 61-year-old Floyd Ohlson said of his household net worth. Ohlson, who works part-time, had hoped to sell his Rosemount, Minn., home this year to lower his costs and help finance his retirement. He’s had to scratch those plans now and continue working.”

“One measure, the so-called misery index, confirms that people are feeling more miserable today, but not nearly as miserable as their parents or grandparents have felt in the past. The index, calculated by adding the unemployment rate to the inflation rate, was created in the 1960s and cited often during the stagflation days of the 1970s and 1980s as a simple and catchy assessment of the economy’s well-being.”

“Add May’s 5.5 percent unemployment rate to the May inflation rate of 4.18 percent - and the misery index today is 9.68 percent. That’s the highest it’s been since September 2005, but nowhere near the all-time high of 21.98 in the summer of 1980, when the nation faced double-digit inflation and an unemployment rate of almost 12 percent.”

“The era from 1994 to 2000 brought low unemployment, inflation and energy prices, rising wages and soaring stock markets and home values. Many Americans buoyed their lifestyle with home equity and access to credit.”

“‘We got mesmerized by the increase in asset values,’ said David Joy, chief market strategist for RiverSource Investments in Minneapolis.”

“The collapse of the housing market has provided stark evidence that consumer lifestyles and the American economy may have been living on borrowed time and borrowed money.”

“Adrienne Garcia thinks it’s about time for a behavior shift. ‘Everyone’s going to have to adjust their way of living,’ said the 28-year-old St. Louis Park, Minn., resident. ‘If you think of our generation, we’ve always had it good. People need to get back to reality because it’s been way too hunky-dory for a while.’”

The Orlando Sentinel reports from Florida. “More than 2,100 homes in Lake County have fallen into foreclosure through the first half of 2008, making this a record year for mortgage defaults in just six months. The unofficial total of 2,191 foreclosure filings through the end of June shattered the county’s previous 12-month mark set last year, when lenders foreclosed on 2,080 properties. And it’s getting worse.”

“When the onslaught began last year, many of those defaulting on mortgages were ‘flippers.’ But more recently, people receiving foreclosure notices are victims of the economy — they have lost a job or can’t afford gas and still make the house payments, said Shannan Buttner, whose company, based in Umatilla, delivers foreclosure notices.”

“‘I had a woman tell me she’s working two jobs but just can’t make it anymore,’ Buttner said.”

From TC Palm. “Nearly 1,800 Treasure Coast homes went into some state of foreclosure in April, according to RealtyTrac. Every Treasure Coast community has seen a home left neglected because of foreclosure, but more than 80 percent of the foreclosures were in St. Lucie County.”

“Meanwhile, the flood of foreclosures has clogged the court system so badly it sometimes takes a year or more for the bank or lender to take possession of the house. Finding someone to take responsibility for the house in the intervening months is a challenge.”

“Even when banks care for the property, they still are absentee landlords and the problems of neglect often reoccur. SunTrust Mortgage, for example, cleaned up the home at 11 Cache Cay in Vero Beach early in the year. But by February, the same code violations - tall grass, green pool - were back to irritate neighbors.”

“‘Obviously, the banks want to put as little money into these properties as possible because they’re looking to get rid of them,’ Martin County Code Building Official Larry Massing said.”

The Palm Beach Post. “Reggie Capiro had reached his breaking point. Gas prices were climbing ever higher, and his 200-mile round-trip commute from Palm City to Miami had become too costly and too grating.”

“So in October, he and his wife decided to move south and put their three-bedroom, three-bath Palm City dream house on the market.”

“They hoped to find a buyer willing to pay at least as much as the balance on their mortgage. The Capiros paid $406,000 in 2003 but owed about $440,000 after refinancing to pay down credit card debt. They got into a bigger hole than expected when Reggie’s commissions as a Martin County boat salesman dried up after the 2004 hurricanes.”

“He and his wife petitioned their lender for a short sale. About six months later, Wells Fargo Home Mortgage and its servicing company have yet to accept an offer. Instead, the Capiros’ home is on the brink of foreclosure and scheduled to be auctioned on the courthouse steps July 15.”

“‘If one or more of these stakeholders says the offer price is below fair market value - or the minimum amount they are willing to accept in a short sale - Wells Fargo has no choice but to communicate the offer is denied,’ the bank said in an e-mailed statement.”

“Reggie Capiro worries about the blemish a foreclosure will leave on his record. The lease on his car is almost up, and he fears he won’t be able to qualify for a new vehicle.”

“He and his wife are now renting a home in Miami for $1,600 a month. Capiro still has keys to their empty house in Palm City, but he and his family never make the drive back. It’s too painful.”

“‘This is devastating,’ said the father of two daughters. ‘I tried my damnedest to keep my house up there…because I loved it.’”

“Despite the standing-room-only crowd and live music, a recent auction of 22 properties in Port St. Lucie’s tony Tesoro community didn’t yield a single sale. It’s not that no bids emerged at the June 28 event - it’s just that none of them were high enough for the owners of the 16 lots and six homes.”

“One four-bedroom home listed for sale at $3.75 million attracted a high bid of only $1.2 million. Another, a three-bedroom, fetched a $450,000 high bid, though it’s on the market for $2.15 million, according to Scott Powell, a Stuart-based appraiser who attended the auction.”

“‘It was very sudden, and it was a surprise,’ he said. ‘Everybody thought they were going to come back to the homes, and then they went on to the lots.’”

“After taking four high bids on the 16 lots, the bidding stopped again.”

“What happened at the Tesoro auction is consistent with what agents are seeing around Florida, said said Jose Boza, a spokesman for the auctioneer. ‘Buyers are continuing to look for steep discounts, and sellers are looking for top dollar,’ he said. ‘Until sellers readjust their asking prices, there will continue to be an overhang of properties in Florida.’”

“In March 2006, when the real estate market was still near its peak, city leaders broke ground on a development they said would give teachers, firefighters and other workers the chance to own a home.”

“MerryPlace was meant to bring new life to a long-neglected neighborhood full of renters, dilapidated houses and vacant lots. But two years later, many of the lots that were supposed to sprout with condos and townhouses are still empty.”

“And in the worst national housing downturn since the Great Depression, even government-sponsored affordable housing is proving to be a tough sell.”

“Today, buyers can find better deals in the free market, said Marc Schoen, the first real estate broker hired to sell the development. Some older condos are selling for less than $100, 000 in the Villages of Palm Beach Lakes. In CitySide, across from the Palm Beach Mall, several nearly new units with granite counter tops and amenities including a pool recently sold for less than $200,000.”

“‘There are much nicer properties in gated communities at lower prices,’ Schoen said.”

The News Press. “The historic, preliminary assessment of Lee County taxable property values stumbling about 12 percent - possibly the first time this has happened since the Great Depression - remained about the same in the final numbers that will go to the state for approval.”

“And Cape Coral took the hardest hit with a 25 percent fall, although that was down from the original estimate of 26.6 percent. Lehigh Acres took quite a hit too, a 16.3 percent decrease.”

“Pat Foote, who owns a house in southeast Cape Coral, said she is being careful with improvements she makes because she doesn’t want to risk the value dropping more, and losing the money she put into the house in the first place.”

“‘I’m redoing the bathrooms, but I’m not touching the kitchen until the value goes up again,’ she said. ‘I think that will happen sooner or later.’”

“The assessed value of Foote’s home was $133,620 in 2004, when she bought it. It peaked at $218,480 in 2006, then dropped to $212,590 in 2007.”

“Vicki Ferrazzano, who owns Greater Cape Realty, said the lower property values are generating some activity. But she said the quick boom and then sharp bust Lee County has experienced in the last several years has been painful for some people.”

“‘I know of a person who had a $250,000 mortgage,’ Ferrazzano said. ‘When the bank foreclosed, they put the house back on the market for $125,000.’”

“Despite the increased house-buying among investors, Ferrazzano said too many homeowners are ‘upside down’ in their mortgages. ‘I think there is more (in the downturn) to go because there are a lot more foreclosures that are going to happen,’ she said.”

The Bradenton Herald. “Open up the phone book and look under real estate appraisers and odds are if you select a few numbers at random, nearly half of them have been disconnected. ‘The volume of available work has decreased by about 40 percent,’ said Debbie Dietz, owner of Alliance Appraisal Associates in Sarasota.”

“As a result, the last cycle of license renewal for appraisers in 2006 found the numbers of appraisers across the nation cut nearly in half, Dietz said. ‘On one hand, I think it’s good. The industry shakes out,’ Dietz added.”

“During the housing boom, there were many ways less-than-reputable appraisers took advantage of the system, local appraisers say. Some used trainees to do the work and didn’t check figures while others allowed unscrupulous mortgage brokers to influence their appraisals.”

“‘They (the mortgage brokers) didn’t really care what the house was worth, they just wanted the loan to close,’ Dietz said.

“‘I turned down five or 10 appraisals a week at times,’ said Jeff Deuitch, owner of Manatee Appraisal Service in Palmetto. ‘Generally the requests came from small mortgage companies from out of state.’”

“Some of these requests would have attached notes that told an appraiser if the home’s appraisal exceeded a certain price, they should proceed with the order. ‘The pressure was out there all the time,’ he said. ‘It’s a violation to accept an assignment contingent to a certain value.’”

“Overinflated appraisals have led to an influx of reviews requested by lenders. Dietz and Deuitch have both been hired to review other appraisers’ work. ‘I’d say 99 percent of the reviews I am looking at, I disagree with the value,’ Dietz said.”

“Not all appraisal errors were intentional, Dietz stressed. Inexperienced appraisers inadvertently made errors in some cases. ‘So many people got their license as second jobs and were looking to make a quick buck,’ Dietz said.”

“‘For five or six years all you really had to have was a number in the phone book,’ Deuitch said.”

“‘There’s not too many of us anymore,’ said Gerry Russell, owner of Bradenton-based Realty Appraisal Services of Southwest Florida. One of Russell’s newest residential appraisers is delivering pizzas at night to supplement his income.”

“Where the lenders might have asked appraisers for three or four comparable houses in the past, now some lenders want six or more. ‘They have to do more to appease FHA and they have to do more to appease the lender,’ said Pete Minarich, vice president of CTX Mortgage of Bradenton.”

“With slower sales, appraisers have to get creative because there haven’t been any traditional home sales in the community for six months or more. ‘Some of the properties, you just can’t get newer comparables,’ Minarich said.”

The St Petersburg Times. “When Heidi and Harry Oelgart went online and saw real estate prices dipping in this vast retirement community, they hopped on a plane to Tampa. An agent showed the New Jersey couple a three-bedroom, lakefront home in the ritzy Renaissance section.”

“The garage was big enough to hold their two cars and Harry’s hot rod. ‘My husband saw the garage and said, ‘Let’s make an offer,’ Heidi Oelgart said.”

“They did: $345,000 on a 2-year-old house that once listed at $458,000. The couple had made three previous offers on places in Sun City Center, but they never got a call back.”

‘At 7 that night, the doorbell rang where they were staying. It was their agent, with a smile on her face and a bottle of champagne in her hands. ‘You got the house,’ Heidi Oelgart remembers her saying.”

“Thanks to plummeting prices - some condos go for as low as $37,000 - desperate sellers and buyers with money to spend, Sun City Center’s sales are on the rise.”

“Janet Johnson and her husband have visited friends in Sun City Center for years. The Maryland couple was attracted to the community’s clubs and activities. About a year ago, the retired business owners sought a place of their own with plans to keep the Maryland house.”

“‘I wasn’t going to just buy anything,’ Janet Johnson, 72, said. When she found something she liked, the price was perfect.”

“In early June, she signed a $130,000 contract for a 1,500-square-foot house with two master bedrooms, a two-car garage and a lanai. The house had once listed for $200,000.”

“‘(The price) is what made me decide,’ she said. ‘I’m afraid they are going to start going up again.’”

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