The Housing Bubble

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The Burbank Leader reports from California. “Home prices in Burbank and Glendale plummeted more than 12% in June as foreclosures soared in the second quarter this year. The average median sale price for single-family homes in Glendale, now $654,000, dropped 13% in June from the same point last year. The number of foreclosed homes shot up 418% in the second quarter this year, from the second quarter in 2007.”

“Similar housing troubles plague Burbank, where the median home sale price, $596,000, sunk 12.2% from last year, and foreclosures rose more than 127%. The figures were released by DataQuick.”

“The most severe home price drop-off in Burbank occurred in a portion of its hillside community, encompassed by the 91501 ZIP code. There, home prices dropped to $655,000 in June, a decrease of 26.1% from last year.”

“The hardest-hit region in Glendale is the Adams Square district, where the median sale price for homes in June reached $440,000, a 32.2% drop from last year. Foreclosures shot up 800%, with nine of them recorded in the second quarter this year compared with just one during the same period last year.”

“The continued drop in the local market, and the paralleled media coverage, has further entrenched people’s belief that the worst has yet to come, said Judy Graff, a broker associate who deals in Burbank, Glendale and other San Fernando Valley neighborhoods. ‘I don’t want to paint a completely rosy picture, but in our middle-class areas, I don’t think it’s as bad as our people make it out to be,’ she said.”

“‘They’re kind of entrenching themselves a little bit,’ said Michael Teahan, president of the Adams Hill Homeowners Assn. ‘People aren’t looking to bail in Adams Hill or Adams Square. It’s not really affected people. If you’re in your house now and working, then I don’t think it makes a difference.’”

“The worsening state of the housing market in the region and state has tipped the economy closer toward a recession, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.”

“‘Los Angeles County is on the brink of a recession, and when you get to the housing sectors, we’re in a depression,’ Kyser said. ‘We should see prices bottom out in L.A. County the middle of 2009 and in the inland areas of the state - from Sacramento all the way down to Riverside County, middle of 2010.’”

The Orange County Register. “Danielle Aldrich and her fiance William Greer ignored the rule and arrived an hour early. The anxious couple got to the sale of the new Platinum Triangle condos in Anaheim at 5 p.m. on Friday, one hour before lines were supposed to form.”

“They were hoping to be among the first in line for one of 58 Stadium Lofts condos that were discounted between 24 percent and 29 percent.”

“The developer cut the condo prices because roughly 18 months after the Stadium Lofts were completed, more than half of the project’s 390 units remain unsold, the developer said at the beginning of this month.”

“‘This is a buyer’s market,’ said Linda Tawara, a Cypress resident who waited in line on Saturday to buy her second home. That’s why she didn’t fret that she was fourth to last in line. She got there at 6 a.m. on Saturday instead of the evening before.”

“Why didn’t you sleep over? ‘Uh, it’s not worth it,’ said Tawara. ‘There are other homes out there” that buyers can get for a good deal.’”

“She put a deposit down for a 1,082-square-foot two-bedroom, two-bath condo for about $350,000. That’s about a 25 percent discount or a savings of $114,300 from the original price.’

“‘It was my fourth choice. But it’s still in my budget. I’m happy,’ she said.”

The North County Times. “House prices are falling at the steepest rate on record, but for some buyers, the attraction of a home is overcoming the anxiety of buying a depreciating asset.”

“From October through April, North County homes lost about 3 percent in equity —- per month. Right in the middle of that slide, which some analysts expect to continue through the year, Steve and Shelby Nowak pooled their savings and made the biggest purchase of their lives, a $447,000 house.”

“The newlyweds bought their three-bedroom, 2,250-square foot house in an east San Marcos gated community four months ago.”

“‘”We didn’t buy the house to get rich in,’ said Steve Nowak, 28. ‘We got it to live in. It was just an ideal situation for us. The house was the right price and interest rates were low.’”

“The couple plan to have children in the near future and see the house as their home for at least five years. The Nowaks bought their home at 20 percent below the previous sale price in 2005. Because they submitted their offer in December, they were able to secure a loan with just 5 percent down, products that are tough to find now that banks have tightened lending standards.”

“While Oceanside and Escondido have seen older, subprime-plagued neighborhoods lose up to 50 percent of value, newer neighborhoods such as Nowak’s, where most homes were built after 2003, have not lost much value, based on county records and real estate Web sites.”

“Another cause for concern among home buyers is a growing number of foreclosures. Throughout North County, notices of default —- a forward-looking indicator of foreclosures —- have doubled from last year.”

“‘I don’t think (they) have a lot to be worried about in losing value,’ said Nathan Moeder, a principal with The London Group, a San Diego real estate consultant firm. ‘I think in the long run, meaning five years or more, their values should be retained at least.’”

“Moeder said that buying near Interstate 5 is a good bet because the limited real estate close to the ocean ensures better price stability. Other analysts, such as Christopher Thornberg, an economist with Beacon Economics, disagree, saying all home prices need to track incomes better.”

“For Thornberg, he suggests waiting to buy until the end of 2009. That is when he will start looking to purchase, he said. ‘Even if we are at the bottom, I don’t care,’ Thornberg said. ‘Because they (prices) are not coming up anytime soon.’”

The Tribune. “Owners of more than 12,000 homes county-wide will see their property taxes reduced - sometimes dramatically - or face no tax increase this year after the county Assessor’s Office lowered valuations a total of about $732 million.”

“All of the properties affected were those bought since January 2005. San Luis Obispo County Assessor Tom Bordonaro’s office has sent out more than 12,000 notices to property owners notifying them of the changes.”

“Bordonaro said that houses in subdivisions were down by 18 percent on average, and custom homes were down by 8 to 10 percent. He said his staff did see a few extremes of 20 to 25 percent.”

“‘Geographically, the North County and the South County were affected the most,’ he said. ‘Nipomo, Atascadero and Paso Robles, mainly the subdivisions.’”

The Mountain View Voice. “While sales of commercial real estate have slowed nationwide, Mountain View is experiencing a surge of new office development for the first time since the dot-com boom. “The city has recently managed to attract seven major new office developments, including five major high density office projects in the North Whisman Area, Google’s first-ever new building.”

“‘We’re in a unique position here in the Valley,’ said Vice Mayor Margaret Abe-Koga. ‘I was surprised to hear that the rest of the country is hurting.’”

“‘There was some concern by developers that these projects get approved in a timely manner because of the looming real estate bubble,’ Abe-Koga said, ‘but everything is working pretty well.’”

The San Francisco Chronicle. “When at a recent brunch I heard some Noe Valley residents discussing what was bolstering the value of their homes, I was particularly fascinated by a single factor they had all settled on: the proximity of the Google Shuttle stop. None of the group was employed by Google, but that didn’t seem to matter.”

“All the real estate agents who responded to my inquiries about the Google Shuttle effect offered anecdotes about Google employees who were looking for homes to buy within spitting distance of a shuttle stop.”

“‘I’m working with a couple that is specifically looking for a home/condo near the Google line. They have made several offers but were outbid every single time,’ Zephyr Real Estate’s Tanja Beck told me in typical response.”

The Marin Independent Journal. “Brittany and Climition Welch grew up in Novato and now, as new parents, they hope to buy a place of their own. As a bank clerk and a day-care worker, they can afford a mortgage of about $200,000, a limit that would normally put a home in Marin out of reach.”

“But the foreclosure crisis that’s turning some homeowners’ dreams into nightmares is opening a door for the Welches and others like them as distressed properties flood the market at fire sale prices.”

“‘We’ve been pretty optimistic about finding something,’ said Brittany, 25, who has toured five condos in Novato.”

“Condominium and townhouse prices have dropped 26 percent in the county, from $555,000 in June 2007 to $410,000 last month, according to DataQuick. ‘We have seen more people come into the market,’ said Sylvia Barry, an agent with Frank Howard Allen Realtors who recently sold a Novato townhome for $345,000 to a family who had been living in affordable housing.”

“Barry said her investor clients are keeping a close eye on the market but, for now, they’re waiting on the sidelines. They’re looking for homes they can fix up and rent out, she said, but so far they’re not convinced the market has reached rock bottom. ‘They just want to make sure,’ she said.”

“Clustered in Novato and San Rafael’s Canal area, these homes are mostly condos between 598 and 1,525 square feet and range from one-bedroom, one-bath units to a three-bedroom, three-bathroom townhouse. The Welches’ agent, Martin Sanz, describes units in the $200,000 range as in ‘fair condition.’”

“Broker Steve Schoen says a look at the number of condos for sale on the low-end of the market shows a ‘very high ratio of pending to sales,’ which, in a normal market would mean condo sales are hot. Because of the drawn-out short sale process, instead it means there’s a backlog of offers waiting for lender approval. ‘It’s a little misleading,’ Schoen said.”

“For Welch and her husband, the dream for a home where they can raise their newborn son means avoiding the traps that have caught so many others. They have a down payment, loan approval, and plan on a 30-year fixed-rate mortgage. ‘We’re just being smart about it.’”

The Sacramento Bee. “Many homeowners associations begin planning next year’s budgets in the summer. And just like the state, the groups - and their members - are getting into a financial bind because of the weakening economy and steadily rising costs of everything from fuel to swimming pool chemicals.”

“A growing numbers of foreclosures and late payments have begun biting into monthly dues that pay for supplies and labor. That’s especially true in associations created earlier this decade as new neighborhoods blossomed in rapid time.”

“‘What we’re going to see in more of our budgets is a larger line item for bad debt write-off,’ said Dan Kocal, owner of Folsom-based Kocal Management Group. Kocal and 85 employees manage 88 HOAs in Sacramento and Northern California. For 25,000 residences, Kocal is the management arm of an HOA, collecting assessments and delivering services.”

“‘Depending on the community and its size, 3 percent to 10 percent of the budget (next year) could go for bad debt,’ Kocal said. That’s triple what’s been set aside this year.”

“The biggest problem, though, for hundreds of new associations in Southern California and the Central Valley, is a dwindling of dues payments. When people lose jobs, ‘the first thing they start doing is not paying their assessment,’ said Karen Conlon, president of a trade group for HOA property managers. California’s unemployment rate reached an 11-year high in June.”

“Kocal, the Folsom management group owner, declined to talk about which associations are troubled by delinquent assessments. He said one in Sacramento has a 25 percent delinquency rate. But naming names would spur real estate agents to flag them and would-be buyers to avoid them, he said. Another large association didn’t return a phone call about the subject.”

“Years ago, before the current housing crisis, associations pursuing back dues might have put a lien on the home, foreclosed and gotten back their money. Homeowner associations are allowed to begin foreclosure proceedings when an owner falls behind by $1,800 or a year’s worth of dues. Now, banks do the foreclosing.”

“‘When they’re not paying the assessments, they’re usually not paying the mortgage,’ Kocal said.”

“Yet, when a bank steps in, there’s typically no equity left for the HOA’s unpaid dues. ‘With falling prices there is, as someone once said, no ‘there’ there,’ Haney said. ‘The bottom line is, it’s a huge problem.’”

The Modesto Bee. “You’ve heard this before, but this time it’s probably true: This is a great time to buy a house in the Northern San Joaquin Valley. Yes, people said that last summer, too, and home prices have plummeted more than 40 percent since then. Ouch.”

“But that only makes homes a steal-of-a-deal now.”

“‘Now people who earn as little as $30,000 per year can qualify to buy a house in Modesto,’ assured Rich Loudermilk, a broker with All Star Mortgage in Modesto. He checked his math twice just to make sure he was right.”

“Monthly payments on a $100,000 mortgage, including taxes, home insurance and loan insurance, are only $837 per month, Loudermilk calculated. That’s about the same as Modesto’s median apartment rent, and it’s only about one-third of the gross monthly income for someone earning $30,000 annually.”

“‘Two years ago, it took $60,000 a year to qualify for even a lower-priced home in Modesto. That was for, like, a $240,000 house, and those were hard to find,’ Loudermilk recalled.”

‘Prices have fallen so much that now more than 250 Modesto homes are for sale with list prices of $100,000 or less. Most of those houses are in the low-income parts of south and west Modesto, but there are bargains to be had elsewhere as well.”

“‘There are 360 houses for $150,000 or less within a three-mile radius of Tully and Briggsmore, which is a pretty good part of town,’ said Loudermilk.”

The Fresno Bee. “In his six years working as a repo man, Roger McKee has never been as busy as he is today. And with the economy faltering and easy lending practices of the recent past now catching up to an increasingly large number of people who borrowed beyond their means, McKee and the repossession industry are flooded with work.”

“Nationwide, auto loans at least two months overdue reached an all-time high in January, according to Fitch Ratings. And credit rating company Experian reports that 12% of consumers this year had at least one late auto payment on file.”

“Across the country, the number of vehicles repossessed grew 10% to 1.51 million in 2007, and it is expected to grow by another 10% this year, said Tom Webb, chief economist with Atlanta-based Manheim Consulting, which auctions off most of the repossessed vehicles in the United States.”

“‘It’s primarily driven by the financial squeeze that a lot of households find themselves in,’ Webb said. The collapse of the housing and credit markets leave more and more people unable to keep up with their debt load, he said.”

“McKee has seen the economic devastation up close. About half the cars he repossessed used to be reclaimed by their owners, but now that has dropped to less than one-third, he estimated. And more and more of the addresses for delinquent borrowers provided to him by banks and other lenders are foreclosed homes, he said.”

“‘We’ve been overwhelmed, and so has pretty much every other licensed agency here in California,’ said Rocky Pipkin, McKee’s boss.”

“‘I’d say the majority of people are working families, middle to lower middle class,’ Pipkin said. ‘But we have our fair share of doctors, lawyers, correctional officers, state and county employees — upper economic class people. The problem is, there are a lot of people who went in over their heads, thinking this housing boom was never going to bust.’”

A report from the Oklahoman. “Housing made forward progress with a shotgun approach for years, but it’s become a ground game in Oklahoma City, with buyers and sellers staring one another down across a line of scrimmage called a contract. Some buyers don’t get it, Realtors said. ‘They offer silly amounts of money,’ said Jim McWhirter, who owns Gemini Builders and Gemini Realtors in Choctaw.”

“McWhirter, president of the Central Oklahoma Home Builders Association, said he doesn’t always take such insults in stride. One buyer ‘offered me $50,000 less than what we were asking. I countered back with $5,000 more than I was asking,’ he said. ‘Would I advise a client to do that? Probably not.’”

The Lubbock Avalanche Journal from Texas. “Area real estate agents are facing something many have never experienced before in Lubbock - a down housing market.”

“‘We still have plenty of buyers out there. We just have lots of homes,’ said Realtor Cheryl Isaacs, who’s been surprised by the number of new listings that continue to pop up on a daily basis. ‘There are a lot of people who are testing the market (for price), but what they don’t seem to understand is there’s a lot to choose from out there,’ she said.”

“John Walton, president of Century 21/John Walton Realtors characterized the market as stable. ‘I’ve been at this 33 years. I’ve seen it go up and down. Sometimes you have to take the sweet with the sour. I’ve said we live on an island out here,’ he said.”

“Isaacs said if sellers are serious about selling their homes, they have to be realistic. ‘They have to be updated and they have to look sharp and they have to be priced realistically,’ she said.”

“As for buyers, Isaacs said: ‘If they have good credit, they will get a loan.’”

“John Sweeney just wishes the noise would stop. ‘I just wish the national news would shut up,’ said the president of the West Texas Home Builders Association.”

“Local builders are doing what’s expected of them, he said, concentrating more these days on custom-built homes instead of speculative building, which some blame on larger companies that came into the local market and then left.”

“A Lubbock Avalanche-Journal analysis of the marketplace found new home permit construction down 10.8 percent at the midyear point as the city continued to wrestle with excess inventory. That was an improvement from this time a year ago, when permit activity plunged by 20.2 percent.”

“Ron Bassinger, head of Ron Bassinger Inc., said his business remains steady but admits there are more skittish buyers in the market today than in the past - many unable to make clear decisions.”

“‘It’s still better than its been in the past. I’ve been in this business since 1964 and I can tell you we had a tougher time in the mid 1980s,’ he said alluding to state’s last major real estate bust.”

“Rick Betenbough, with Lubbock-based Betenbough Homes, said the industry is in the middle of what he believes is a two-year slowdown. Betenbough, the only company to open a new subdivision in Lubbock in 2008, blames much of the local problem on outside speculative building companies who came in, dropped product on the ground and then abandoned the market.”

“‘Our permits today are realistically tied to sales. We’re not down (sales wise) that far, but we’re not up either. The Lubbock market is flat. Most of us are holding our cards close to our vests and building less specs, which tends to get everyone in trouble,’ he said.”

“B.J. Walters, a land specialist for Coldwell Banker/Rick Canup Realtors Inc., said larger national lenders have constricted access to new capital, while local lenders are leery about making speculative loans.”

“‘It started slowing down about 18 months ago,’ he said.”

“Sweeney, the home builders association president, said local builders will continue to focus their efforts on custom-built, pre-sold homes until the market can correct itself.”

“‘I know we’re down, but we’re also coming off from an all-time (building) high,’ he said.”

The Temple Daily Telegraph. “Bell County residences continue to slide into foreclosure at a record pace. According to figures just released by Foreclosure Listing Service Inc., August 2008 is up 53 percent over August 2007.”

“‘Foreclosure posting activity has surged again in Bell County reaching its second highest (monthly) level on record. This marked the 10th consecutive month that Bell foreclosure postings have exceeded 100,’ said Bonnie Brown, foreclosure analyst at FLS.”

“Ms. Brown said 90 percent of the August foreclosed real estate - valued at $17 million - is for single-family homes, condominiums and townhomes.”

“Ms. Brown said Veterans Administration loans accounted for 45 percent of residential foreclosures this year. This is the single largest type of loan that defaulted for Bell County homes. For the year, VA foreclosures are up 71 percent over 2007.”

“Deborah Huddleston, a mortgage consultant who specializes in VA loans in Killeen, hears and sees a lot about foreclosures these days. She said VA loans fall into foreclosure for a couple of reasons: Deployment to the Middle East stresses families. VA loans that require no money down, which means they’re easier to walk away from.”

“‘If they have problems when they go overseas, it’s too easy to let them go,’ Ms. Huddleston said.”

“Add to that a large supply of new houses, which makes selling existing homes tough, and you’ve got a one-two combination that affects the market.”

“‘If you get a home in Killeen and sell it in two or three years you’re not going to make a profit,’ Ms. Huddleston said. ‘They (homeowners) can’t sell it and they’re going in the hole. I have people coming in for refinancing and they’re over 100 percent. People who are going to be in the area a short time really shouldn’t buy a home.’”

The American Statesman. “A few years ago, investors from California and other boom markets flocked to Central Texas, looking for homes to buy. Many bought several houses, hoping to cash in by renting out the homes. But now some of those investors are defaulting on their mortgages and becoming a growing factor in the rising foreclosure problem in Central Texas.”

“In the past two months alone, foreclosures of homes owned by out-of-state residents have surged in Travis County more than four times the rate of foreclosures overall since last year, based on figures from Rexreport.com.”

“Builders and real estate firms began advertising in California, Nevada and other markets where home prices had skyrocketed, touting the relative affordability of homes in Austin and their investment potential.”

“The firms even took groups of prospects on bus tours of Central Texas properties for sale. Maricel Ruzol, a Las Vegas registered nurse, took one of the tours in 2005 and bought an 1,800-square-foot ranch home in a Round Rock subdivision. She put 5 percent down and got two mortgages - both at subprime rates - for $151,600.”

“But it was harder than she had expected to find tenants, and the property taxes, much higher than in Nevada, shocked her. When a renter’s washing machine malfunctioned, causing water damage, Ruzol said, she could not afford the repairs. The bank foreclosed on the home this month.”

“Even after getting a second job, ‘I can’t afford to pay the mortgage anymore,’ she said. ‘Those houses were nice, and they were really cheap, but they didn’t explain the property taxes to us. And they are too much.’”

“The vast majority of out-of-state owners in Central Texas are from California, where surging real estate prices earlier in the decade allowed many people to borrow on the equity in their homes, based on Rexreport data.”

“‘A lot of Californians had so much equity in their homes, they were looking at other places to invest,’ said Gary Painter, research director at the Lusk Center for Real Estate at the University of Southern California. ‘It only makes sense that once the Phoenix and Vegas markets shot up so fast that the investors were looking at other places that had less price risk.’”

“‘They were not too concerned with what they were paying,’ said George Roddy Sr., president of Foreclosure Listing Service Inc., an Addison company that tracks foreclosures. ‘Their thought process was … they would hold the property for five to seven years and wait for appreciation.’”

“Some investors bought two, three, six or more properties in subdivisions or condominium complexes. And some of them have lost multiple properties to foreclosure.”

“Peter Sajovich, a real estate investor and broker/owner with Re/Max Austin Advantage, said many of the out of state buyers were naive. ‘They came in in 2005 and 2006 thinking our values were going to double like they did in California, and they borrowed every penny they could,’ Sajovich said.”

“‘They got greedy, took the easy money, and now they are paying the price for it,’ Sajovich said.”

“David Buttross, an Austin investor in foreclosed properties, said many of the out-of-state buyers joined real estate clubs or went to investment seminars where they were told they could make a quick buck.”

“‘They were bombarded with bogus information,’ Buttross said. ‘They paid more for the properties than they were worth. They don’t have the financial wherewithal. They are smart people, but they haven’t done it, and they didn’t know the pitfalls.’”

“Buttross predicts that foreclosures will keep rising as out-of-state investors leave the market. ‘You are going to see a full-fledged retreat,’ he said.”

What do you see in your housing market this weekend? Speculation? “Peter - not his real name - had his dream. Five years ago, he and his wife sold their bungalow in south-west England for £270,000. They used half of the proceeds to buy a house in Britain for their two sons, and reserved half for their palace, a house in a new development called the Albatera Golf and Country Club, 20 minutes by motorway from Alicante.”

“The Spanish developers, San Jose Inversiones, called the house design an Amapola. They handed over £82,000 as a deposit and waited for the club to be built. It never was. Today, the Albatera Golf and Country Club consists of a few show homes, a row of apartments and nothing else.”

“‘I wish I’d never bloody come,’ he says. ‘I wish I was still in England, in my bungalow, with the way of life, and the friends I had there.’”

Builder problems? “YIT Oyj, Finland’s biggest construction company, fell the most in 15 years on the Helsinki exchange second-quarter profit missed analyst estimates on a slumping housing market in the Baltic countries and at home.”

“YIT has a backlog of unsold housing units in Estonia, Latvia and Lithuania, and has not started any new housing in those countries this year. It has lowered prices on unsold properties in the Baltics, Kari Kauniskangas, the head of the international construction division, said on a Webcast.”

“Housing price increases in Finland ‘are more moderate now,’ Leinonen said. YIT has ‘exceptionally many’ Helsinki- area luxury apartments in its portfolio, he added. Price growth in Russia has also slowed since the beginning of the year and housing inflation is now ‘normal’ at 15 to 20 percent, he said.”

“St. Andrews, the large commercial/residential development planned for 330 acres in the southern part of town, has been delayed indefinitely. ‘St. Andrews is on hold temporarily and the sole reason for the delay is the bad economy,’ Joe Gaudio, a representative of the majority owner of the project, told a recent public forum. ‘The capital and credit markets are in disarray.’”

“Gaudio said the national economic scene was ‘unprecedented in my experience’ and that the impact of rising energy and food prices present ‘huge implications for doing business in the town of Hyde Park.’”

Bank problems? “First National Bank, the state’s largest locally based bank and a specialist in lower-quality mortgages, was closed by regulators Friday, a victim of problem loans and the lingering real-estate slump. Friday’s announcement ends a decadelong odyssey for First National, which rode Arizona’s economic boom to become the largest independent bank here, only to collapse even faster.”

“Bank executives didn’t see the approaching train wreck in the real-estate and credit markets. ‘I don’t see a bubble,’ said former president and CEO Gary Dorris, in mid-2005.”

“Northrim Bancorp said its second-quarter profits totaled $1.44 million, down 54 percent from the same three months of last year. The Anchorage-based banking company said profits fell due primarily to two factors: Interest received from loans fell more than interest paid on deposits. Northrim set aside more money to cover bad loans, and it wrote down $977,000 connected to foreclosed real estate.”

“‘While our housing market remains stable, we have experienced longer sales cycles in our major markets, reflecting a tighter mortgage loan market and reduced consumer confidence and uncertainty,’ said CEO Marc Langland.”

“The troubled Florida real estate market is continuing to cause major losses for in-state and out-of-state banks, earnings reports showed this week.”

“On Friday, officials at Stuart-based Seacoast Banking Corp. of Florida said they had written off more than a third of the roughly $100 million they had made in real estate loans, most of it in construction and land development.”

“Dennis Hudson III said during a conference call that the bank was gearing up for massive liquidation sales. In some cases, the value of vacant land slated for development has declined by up to 50 percent of the purchase prices paid during the peak of the real estate boom in 2004 and 2005, CEO Dennis Hudson III said.”

“Given those massive land-value declines, it’s logical that land holders might walk away from their loans, said Ken Thomas, an economist and Miami banking analyst. Thomas said he thinks housing prices won’t stabilize until the middle of 2010 and doesn’t buy more optimistic projections from groups such as the National Association of Realtors.”

“‘People don’t want bad news,’ Thomas said.”

Bubble fallout? “In the Chicago area, some communities that keep track of garage sale numbers-and not all do-report a growth in requests for permits this year, from a slight increase in the City of Chicago to spikes in Park Ridge, Streamwood and Bartlett.”

“In Bartlett, the Woodland Hills subdivision’s fourth annual garage sale last weekend was bigger than ever, a growth that organizers say may have had something to do with cash-strapped wallets.”

“‘A lot of people [are] talking about how this is a great time to do it because of the economy,’ said Ralph Binetti, organizer of the sale, which included 100 homes this year, up from the usual 65 to 75.”

“Even in communities where garage sale permits haven’t been in high demand, the slumping economy was still mentioned, especially the downturn in the housing market.”

“Bolingbrook saw garage sale permits decrease from 809 to 719 during the first six months of the year compared with the same period last year. That decline likely was tied to slumping home sales, said Jules Stanley, assistant to the village’s finance director.”

“‘Because homes aren’t selling as fast, there are fewer garage sales for people who are moving,’ he said.”

Or foreclosures? “The Chicago area had 21,488 properties in some stage of foreclosure in the second quarter of the year, or one of every 144 households, according to a report released Friday by RealtyTrac. Chicago’s foreclosure rate marks a 22 percent jump from the previous quarter and a 58.3 percent increase from the same period a year ago.”

“Foreclosures are a growing problem in Frederick County and Gray wants to limit the ripple effects. The county had 53 foreclosure filings in 2005, according to RealtyTrac. That number jumped to 100 in 2006 and 898 in 2007. From January to June 2008, RealtyTrac lists 964 Frederick County foreclosure filings.”

“The county ranked 18th in Maryland counties for foreclosures in June. Prince George’s was No. 1, according to the firm. Frederick County might step in to help alleviate the housing crisis. Next week, the Frederick County Commissioners plan to discuss a new law to prevent overgrown lawns.”

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