The Housing Bubble

The North County Times reports from California. “Some homeowners in the area have gone months without paying their mortgages and have yet to receive a foreclosure notice; a development that suggests banks are overloaded and that also might mean foreclosure reports are understating the region’s housing crisis. Since January, more homes entered foreclosure than were sold to new buyers, according to monthly reports from several data firms. But even that rate probably fails to include all the distressed homeowners.”

“‘It’s not even volume anymore. It’s a mountain of foreclosures. … There’s no comparison in history,’ said Ramsey Su, a real estate investor in San Diego who used to run a brokerage firm that sold foreclosures.”

“‘We have a couple of clients where we’re just like, ‘Wow, how long are you going to let them live rent-free?’ said John Woodall, a real estate agent who specializes in short sales.”

“‘Most alarming is the fact that, in spite of all these programs that are trying to save or stop the process, more and more people are not paying. The question is, are these programs encouraging people to not pay?’ Su said.”

The Union Tribune. “The University of San Diego’s monthly report on leading economic indicators fell again in July. The USD index has fallen for 27 of the last 28 months. ‘I would say the local economy is in a recession right now,’ said Alan Gin, an economist with USD’s Burnham-Moores Center for Real Estate.”

“The intensity of the housing downturn has overshadowed any gains by other sectors, dispelling the notion that San Diego’s economy was too diverse to suffer much in a recession. Gin used to endorse that theory. Not anymore.”

“‘It turns out the damage from housing, the loss of employment from housing, is much more severe than I would have thought,’ he said.”

“Kelly Cunningham, an economist with the San Diego Institute of Policy Research, thinks the recovery isn’t in sight yet. Though the pace of home-price declines may slow, there is no sign of a bottom.”

“‘It’s not just that home prices have fallen,’ he said. ‘It’s the fact that so much money has been withdrawn. That’s really what kept the economy going for so long - people being able to take money out of their homes and spend it.’”

The Press Enterprise. “Some homeowners tempted to buy a more affordable house in a declining market have committed fraud to ditch the supersized mortgage they no longer want.”

“The abusers are homeowners who could afford their mortgage payments but didn’t want to keep a house whose value had dropped below what was owed on it. On the loan application, they led the lender to believe they intended to put a tenant in the first house so they could afford the two mortgages. But once escrow closed on the new house’s purchase, they stopped making payments on the first house, letting it go into foreclosure.”

“‘This adds an element of fraud to a market that is already out of control,’ said Inland economist John Husing.”

” Michael Pfeifer, an Orange County lawyer who specializes in recovering losses from mortgage fraud for lenders, blamed the abuses on homeowners desperate to keep houses on which the mortgages have reset at higher interest rates and on ‘brokers who are out to get a commission and don’t particularly care how.’”

“A 55-year-old man said he let a house in southern Corona go to foreclosure and bought another in Lake Elsinore, lowering his monthly payments from $5,200 to $2,100. He wanted to remain anonymous because what he did ‘could be construed as fraud,’ he said.”

“His Christian beliefs told him lying was wrong, and his parents had taught him to pay his debts, he said.”

“‘The only way I can justify it (lying to his lender) is that I think a lot of people made a lot of money selling bad mortgages to anyone who walked in the door,’ he said.”

“Judging by last month’s existing home sales in Riverside and San Bernardino counties, which the California Association of Realtors said increased 177 percent from a year earlier, many consumers have decided that their circumstances make it right to buy now.”

“‘I always wanted to be a homeowner and now it is finally possible,’ said Michael Carlin, a 29-year-old Corona school teacher. Carlin, who started house hunting in July, has faced fierce competition in his $200,000 to $240,000 price range, with each house receiving up to 18 offers. He said recently he made offers on eight houses in hopes of having one accepted.”

“Carlin said he considers a house an investment and wants one with resale value. But he said he is not willing to wait for the lowest price because he is tired of living in a condominium he rents for $875 a month.”

“‘Once I buy a house, I will make a definite effort not to monitor housing prices for my own peace of mind,’ he said.”

The Fresno Bee. “The worst home-building climate in decades is buffeting another developer, forcing Woodside Homes into bankruptcy court in Riverside.”

‘The company has subdivisions throughout California, including three in Fresno and Clovis and five in Visalia and Tulare. A group of five insurance companies holding more than $155 million in notes filed an involuntary petition, asking a judge to force the builder into bankruptcy.”

“Instead, Woodside agreed on Wednesday to file a Chapter 11 reorganization petition by Sept. 16. Lafferty Homes of San Ramon and Dunmore Homes of Roseville left the Fresno marketplace, and Beazer Homes of Atlanta said it will stop building here Sept. 30.”

“‘Historically, Woodside has posted industry-leading profit margins,’ said Jennifer Mercer, a company spokeswoman. ‘Unfortunately, the tightening of the credit market, the devaluation of land and the overall economic downturn has resulted in declining home sales.’”

“After 52 years of selling everything from discount dishwashers to high-end ranges, Fresno retailer Bilsten’s has closed. Owner Paul Gilchrist said the slow economy killed sales and, on Aug. 15, his company.”

“‘There’s no one coming into the stores,’ he said.”

“Bilsten’s, like so many others, rode the wave of skyrocketing home values. Customers bought newly built homes and ordered high-end Wolf ranges for up to $15,000 and tacked on $2,000 dishwashers. The company’s outlet near Blackstone and Barstow avenues also did big business, selling dented and scratched appliances at a steep discount.”

“Then construction of new homes stopped, and high-end appliance sales dried up, said Gilchrist.”

“Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm, said he’s not surprised at the number of closures.”

“‘We have 19.5 square feet [of retail space] for every man, woman and child in the United States. That’s a crazy number,’ he said. ‘As long as our economy booms you can support that, but when the economy goes down … do you need 12 shoe stores in every mall? … Do you need eight jewelry stores? I don’t think so.’”

The Modesto Bee. “Testimony on how foreclosures are hurting the Northern San Joaquin Valley will be offered during a House Committee on Financial Services ‘field hearing’ Sept. 6 in Stockton. Valley housing experts and community leaders will share their views with members of Congress.”

“San Joaquin, Stanislaus and Merced counties have the highest foreclosure rates in the nation. More than 20,000 homes have been lost to foreclosure in the past year, and the volume of defaults keeps rising. Nearly 12 percent of all mortgages are 90 days or more delinquent in Stanislaus County and more than 15 percent are delinquent in Merced County, according to research firm First American CoreLogic.”

“‘This is an incredibly serious problem and getting worse,’ said Rep. Dennis Cardoza, D-Merced. ‘For us, this is as devastating as Hurricane Katrina. … If it had happened in one week, the federal government would have sent in Army troops to help us, but it happened over time’ so the impact isn’t widely understood.”

“Patty Amador, whose 20-year-old Modesto mortgage company is among the region’s largest, will share her concerns about recent changes Congress made to mortgage finance requirements.”

“‘Many of these buyers have the ability to qualify for loans and make payments on safe, fixed-rate mortgages. Unfortunately, few have the funds necessary for the down payment or closing costs,’ Amador said. ‘Recent legislation has not only eliminated a widely used financing tool, known as Nehemiah, but will also increase the amount of required down payment along with the monthly payment as a result of increase mortgage insurance requirements.’”

“Many first-time buyers, however, depend on down payment help to become homeowners, Amador said.”

“‘Now is not the time to be taking away financing tools, nor increasing costs to borrowers, if we are going to come out of this ‘crisis’ anytime soon,’ Amador said. ‘If we back financing tools with prudent underwriting, we can bring this market back without the risk of a reoccurrence of bad loans to the wrong borrowers.’”

The Manteca Bulletin. “Homes are now selling every 6.2 hours in Manteca. It is a torrid pace even surpassing the go-go days of the housing bubble that is fueled by one thing and one thing only - housing prices too tempting to resist.”

“There were 635 closed deals as of Aug. 22 within the City of Manteca. But that is only a part of the story. The sales pace virtually doubled overnight in mid-July when banks started aggressively pricing foreclosed homes to the point where it makes sense for investors to buy as well as first-time homebuyers.”

“Another positive is the inventory of available homes. But since foreclosures are driving 80 percent of the sales, the fact there is essentially a 4.8-month supply isn’t working to the advantage of sellers. Instead, the fire sale pricing continues at a level that apparently is working as banks are unloading foreclosed homes ahead of an increasing wave to keep a floor under the potential for even deeper losses on loans.”

“The fact the median selling price so far on all homes that have sold this year in Manteca has now slipped to $253,000 would at first glance look like the market is in the 2002-03 price range where median house prices were between $237,892 and $267,030 on previously owned properties.”

“But that is only part of the story. The bottom of the market is reflecting pricing of the late-1990s. A 1,094-square-foot home at 324 S. Powers Ave. closed escrow this month for $100,000. A similar property sold in the same neighborhood for $92,000 in 1997.”

“A 1,010-square-foot home at 314 Dan St. closed escrow this month for $109,900. A similar sized home in the same neighborhood fetched $115,000 in 1998.”

The Sacramento Bee. “Most urban analysts believe Sacramento’s future is bright. But Sacramento-area residents know one thing for sure: The region can’t successfully grow until it gets through this housing slump. How long will that take?”

“Mark Zandi, chief economist at Moody’s Economy.com and a longtime housing market bear, says Sacramento should be back on its feet within a year. ‘We are at the beginning of the end of the Sacramento housing crash,’ Zandi told Home Front in an e-mail this week. ‘There are more house price declines to come, but the worst of the free fall in prices is at hand.’”

“Just days ago, Zandi told national media that new indicators - a five-month low in unsold new houses and an easing of home price declines in some parts of the nation - showed ‘the bottom of the housing market is coming into view.’”

“And that applies to Sacramento, Zandi told Home Front. But he offers some caveats. ‘There remain some serious threats to the outlook, including the ongoing credit crunch and weak job market,’ he said. ‘But with a bit of luck, including stable oil prices and good policymaking, the Sacramento housing market will find its footing by this time next year. And prices will resume rising again early in the next decade.’”

“Others, meanwhile, wait, wondering how much more prices will drop. Scott Thompson, a partner at Citrus Heights-based Mortgage Resolution Services, doesn’t see a bottom any time soon. Thompson believes the median sales price in Sacramento County - $208,750 last month for existing homes - is headed below $200,000.”

“‘I think we are plowing through all the good buyers who are enthusiastically in the market,’ he said. ‘We’re going to get to November and be at the end of the buyer pool.’”

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

It’s Friday desk clearing time for this blogger. “After George Zito’s mother passed away, he put her East Haven home on the market. That was 6-months ago. And, still, there are no prospective buyers. The four bedroom was originally listed at $187,000. ‘We just lowered the price by over $40,000,’ Zito said.”

“Zito says he is going to do whatever it takes to make a sale. ‘I’m going to do what it takes to sell the property. I have to. And I pray to god it does go.’”

“After 20 years of living in the Baldwin Township home, the three-bedroom, ranch-style brick home Randy and Cindy Balzer bought in 1988 for $50,000 is now valued at $80,000 by the Allegheny County tax collector, but the Balzers now owe $112,000 to their mortgage lender after refinancing the house several times.”

“Wells Fargo Bank is foreclosing on the couple’s house because they have made no payments on the mortgage since it adjusted to the higher rate of 15.9 percent in March 2007.”

“‘We didn’t stop making payments,’ Randy Balzer said. ‘We kept sending them the $810. They kept sending it back to us saying that’s not the mortgage rate. I kept saying yes it is. If somebody keeps sending you $810 back and you’ve got other bills you can pay off, what are you going to do?’”

“In a sleepy, winding street in the town of Brewster, realtor Marietta Nilson is walking through a vacation home she’s listed. WBUR’s Curt Nickisch: These days, the house has been too quiet for the sellers. They first put it on the market at $636,000.”

“Nilson: In November. And we didn’t have any interest. No one was interested in the house. “Nickisch: So after a few months, they lowered the price. Five ninety five. Still no interest. Nilson: And then 550 I guess. So…”

“Nickisch: Down almost a hundred thousand dollars? “Nilson: Yeah. But, it wasn’t that the value came down, the value was never there. It was never worth $636,000.”

“Nickisch: But the owners felt it was worth a shot.”

“In Frederick County, damage to foreclosed properties is a growing problem as foreclosure listings rise, real estate agents said. When broker Diane Miller Marsden came to tour a foreclosed property recently, she found the interior of the once immaculate home turned to chaos.”

“The master bathroom was cleared out — toilet, sink and shower stall, gone. ‘The only thing left was the drain in the corner,’ she said.”

“The situation can make for angry ex-homeowners. ‘They feel like they weren’t treated fairly by the bank, and if they can’t have the home, no one can,’ said Terry Fox, a real estate agent in Frederick.o’Everyone reacts differently. Some people know they got in over their head and move on, while others are bitter.’”

“On a recent Tuesday morning, St. Croix County Sheriff Dennis Hillstead stood in the courthouse hallway and began to speak. No one was there to listen. ‘Going once, going twice, three times… sold,’ Hillstead says. ‘Hearing no bids, the bidding is closed.’”

“‘A few years ago people were buying properties at foreclosures and flipping them after fixing them up,’ Hillstead said, ‘but not now.’”

“Prospective buyers need to make sure there aren’t second or third mortgages on the property, and they need to find out what condition the home is in, Hillstead warned. There was a foreclosed property, Hillstead recalled, where the people moved out and turned off the heat, but left the water running.”

“‘A neighbor saw water coming out of a second floor bathroom window,’ Hillstead said.”

“Myrtle Beach-based custom home builder Seacoast Communities Inc. has filed for Chapter 11 bankruptcy, the latest builder to be caught in the throes of the real estate downturn. The company has been struggling to pay its bills since investors pulled out of deals on seven upscale homes, said Seacoast Communities President Guy Collins.”

“‘They just walked away from the deposits rather than close on them because of the market slowdown,’ Collins said. ‘The houses were 100 percent complete, and we were ready to go to closing, and they said they weren’t willing to close on the properties.’”

“This year, more than ever, it appears Cheyenne residents facing foreclosure are choosing to abandon their homes instead of negotiating payment options. What’s troubling to Jim Ward, a former real-estate agent who now offers foreclosure advice, is that many people are overreacting. A lot are losing their homes unnecessarily.”

“‘Most people aren’t in as bad a shape as they think,’ he said.”

“Susan Mosco has watched her neighbors in Tomball lose their homes and disappear. ‘They’re foreclosing on all these houses. Honey, I’ve been here for six months. I’ve seen 12 people move from this subdivision,’ Mosco said.”

“Foreclosures are hurting not only the families being forced out, but the homeowners left behind. ‘I put a pretty good-sized down payment down on it when I bought it. I don’t think I could sell it right now,’ Matt Travis said of his home. ‘I paid just over $120,000 for it, and I’m just guessing, I probably wouldn’t get $94,000 if I tried to sell it.’”

“It’s taking a few more days for those additional ‘For Sale” signs popping up around town to draw in a buyer. ‘That’s still a pretty hot economy no doubt about it,’ said Amarillo economist Karr Ingham. ‘I don’t know about slowing down necessarily, but maybe at least cooling off in terms of the really dramatic growth that has resulted.’”

“For Midlanders, Realtors said, the increased inventory has caused some frustration for sellers who are used to seeing homes sell within hours of hitting the market and can’t understand why they may have to cut their price a little to find a buyer.”

“‘We’ve seen more price reductions than we’ve seen in probably the last six months,’ said Chris Beckett at Pine & Beckett Realtors. However, Beckett said, while that’s hard for homeowners to reconcile with, it doesn’t mean the offers they’re getting aren’t consistent with the increase in home prices from last year.”

“‘It’s a great market in Midland. It’s just they’re not getting these incredibly high prices,’ Beckett said of buyers. ‘They’re getting really good prices. You can’t always have incredible.’”

“King County housing sales have dropped 12.2 percent in the second quarter of 2008, a trend experienced every quarter going back through 2007. The second quarter drop represents a 36.4 percent decrease over the same quarter in 2007. The new figures also note that the county’s median resale price of $450,000 - second highest in the state behind only San Juan County - has fallen some 4.3 percent.”

“The picture Harry Oestreich, Snoqualmie’s finance director, drew was not pretty. ‘Our economy is driven by one industry - the home construction industry,’ Oestreich said. ‘We are in a housing crisis, and everybody is agreeing there is no bottom yet.’”

“‘This is the slowest July I have ever seen in real estate,’ said Jim Brennan, a real estate broker who has worked in Central Oregon for several decades. ‘We had some prices that were going up 30 percent, 40 percent in one year, in certain price ranges.’”

“‘There’s a lot of land that was sold in Bend for very high prices,’ Brennan said. ‘And now, if you can find a buyer, it would go for half the price. Every block you go in town, there’s probably four out of 10 houses that are for sale, in one form or another. Where I may have shown seven or eight houses before, now I’ll show 30 houses before anybody makes a decision - if they make a decision.’”

“Jill Armstrong and her husband bought two acres of land in Redmond and got city and zoning approval, creating 16 town home lots. ‘We got it through on time and under budget, thought we were doing great - until there were no buyers,’ Armstrong said.”

“With so many properties on the market, the Armstrongs didn’t sell, and the bank took it back. ‘We went through a million dollar foreclosure, we lost a rental house, we lost a lot of money we had into it,’ she said. ‘We still have things that we could lose. So it’s a matter of fighting the fight every morning when you get up.’”

“There’s no such thing as liar loans in Hawaii, said Stephen Higa, a mortgage broker who has worked in Hawaii’s mortgage industry for more than 20 years. ‘The industry stopped that six or seven months ago,’ he said, but added that for some the damage has already been done. ‘Most of the people that we see who are in trouble in Hawaii had liar loans.’”

“‘We hardly did any of these loans and the ones that we did were mostly reserved for foreign investors or more sophisticated borrowers,’ said Zoebel Dela Cruz, principal broker of Team Mortgage Hawaii.”

“They were also commonly paired with ‘interest only” features. Even riskier were “pick-a-payment” or option ARM loans - adjustable-rate mortgages that gave borrowers the choice to defer some of their interest payments and add them to the principal.”

“Many Hawaii real estate agents and brokers, who were self-employed, used these loans to finance their own purchases, Dela Cruz said. Now that business has turned, some real estate agents and mortgage brokers are having a harder time making their payments, Dela Cruz said.”

“‘It’s really sad,’ she said. ‘This is a very tough time in the industry.’”

“Casting blame has been easy during this year’s great and ongoing epidemic of home mortgage foreclosures. Greedy bankers sought out suckers and foisted adjustable rate mortgages on them, with little emphasis on the fact that initial low monthly payments would rise within a few years to levels the borrowers probably could never pay.”

“Greedy homeowners and buyers sought out new loans because they figured the astronomical real estate price increases of the boom years early in this decade would continue forever.”

“For many in the past year, house payments became the easiest thing to scrap. Especially when many middle class families found declining real estate prices evaporated all their equity, with home loan balances emerging as higher than home values. At the same time, these families often see comparable homes available for rent at prices far lower than their newly bumped-up loan payments.”

“The result has been a mass tendency to say, ‘To heck with our credit rating, let’s get out of here.’”

“So while it’s easy to blame defaulting homeowners and their bankers, a lot of the problem is simply a sign of people adjusting to new economic realities.”

The Aurora Sentinel reports from Colorado. “When local Realtor Sunny Banka shows any home to a potential buyer, she immediately heads downstairs. As the number of foreclosed and abandoned properties boom with the current housing crisis, copper wire, piping and other building materials are valuable commodities, and often disappear with former owners. ‘The first thing I do is I go to the basement,’ Banka said. ‘Do we have copper plumbing? Do we have a furnace? Do we have a water heater?’”

“A measure proposed by Councilman Bob FitzGerald and drafted by assistant city attorney Jack Byron would target lenders in order to enforce maintenance standards. ‘I’ve talked to people that are really upset, because there are five or six foreclosures on various stretches of various blocks,’ FitzGerald said.”

“For properties with two mortgages from two lenders, Banka said, the problem would be in assigning responsibility.”

“‘A lot of these properties … have two mortgages, there are two lenders. Who is responsible?’ Banka said. ‘A lot of these foreclosures were bundled in with other securities … They were sold as investments on Wall Street.’”

The Deseret News from Utah. “Utah’s economic outlook is grim, and relief may not be on its way any time soon, economists at a conference hosted by the Utah Association of Appraisers said Wednesday. Jim Wood, director of the University of Utah’s Bureau of Business and Economic Research, told the audience at the summer symposium in downtown Salt Lake City that the current economy is ‘a recessionary environment.’”

“‘I’ve been following the housing market for 35 years, and I’m as pessimistic today as I’ve ever been,’ Wood said. The current downturn rivals the economic woes Utah experienced during the 1980s, he added.”

“‘Construction employment is just killing the job numbers,’ he said, noting that the state has lost about 15,000 jobs in that industry alone.”

“Rick Lifferth, president of the Utah Association of Appraisers, said that many people in his industry are feeling pressured to inflate values in order to please lenders and sellers. He said the practice of padding property values is so pervasive that it is almost commonplace, and it is hurting the credibility of his profession.”

“‘In the residential business, it’s become more of the norm than the exception,’ he said. ‘You come up with any number the customer wants, to keep the business.’”

“Wood said that the number of foreclosures in the state would likely rise significantly in the coming months.”

“‘Right now, we’re at about 4,000 foreclosure filings in Utah’ in 2008, Wood said. ‘I don’t think there is any way we’re going to keep that below 12,000 or 13,000′ in the next year, he added.”

The Arizona Daily Star. “The question of whether we’re at the bottom is of special importance to one group of players in the real estate market: land investors. Seeking big returns down the line, hedge funds and other big investors are eyeing Arizona’s acreage and waiting for the market to drop to its lowest possible point before making a move, said Will White, a Tucson broker for Land Advisors Organization. That’s the good news.”

“The bad news is they aren’t in any mood to start buying yet, he said.”

“Prices for new homes - a prime indicator of land values - are still falling. Once considered a fairly scarce resource, land suitable for development looks a lot more plentiful now, White said.”

“The average selling price for new single-family homes in the first six months of this year dropped 19.6 percent from the first half of 2006, according to Hanley Wood. The average price per square foot dropped 11 percent over that time, according to the data.”

“Sahuarita and Green Valley: New-home sales are still pretty strong, but prices have taken a big hit, mainly because of heavy competition among builders, White said. Hanley Wood data show an 18.8 percent drop in the average new-home selling price from 2006. The average price per square foot fell by an even steeper 19.5 percent.”

“Southwest Side: Prices were sharply inflated here and are falling hard as builders discount heavily to get rid of inventory, White said. Development may take a while to pick up again as builders work through remaining lots, he said. The average new-home selling price fell 23.1 percent this year from the first half of 2006, according to Hanley Wood. The average price per square foot fell 21.8 percent.”

Las Vegas Now from Nevada. “Home prices may be off nearly 30-percent in Las Vegas, prompting many to predict the worst of the housing crisis may be over. But some Realtors know another round of foreclosures may happen in the next few months, flooding the valley with vacant homes. And people have two things to blame: liars and ninjas.”

“They may be new terms for a lot of us, but liar loans and ninja loans helped push the housing market to the brink of collapse. Now the rates are changing again in September and the scars from those liars and ninjas run deep.”

“Many consider them the villains in the housing crisis, and Realtor Cynthia Glickman says their reputation has been tarnished, ‘Oh yeah, look at these people, you know. They’re liars. They’re getting what they deserve.’”

“‘They assumed the values of the homes were going to go up. So they figured, what’s the worst that could happen?’ said Glickman.”

“The lenders were caught up partly in greed, partly in speculation, hoping the sky-high housing market would keep rising. Now the market seems headed for recovery, but Glickman warns the liars and ninjas have one last sneak attack. ‘There’s going to be another wave of people for probably another good three years,’ said Glickman.”

CNBC on Nevada. “It turns out Las Vegas isn’t recession proof. High gas prices affecting critical tourism from California, airlines cutting back flights, a housing boom burst like a Cirque de Soleil show gone bad, and the seizing up of the credit markets have combined to create what Mayor Oscar Goodman describes as riding out an earthquake in a very secure building: ‘You know you’re going to be safe, you just don’t know when the rolling’s going to stop.’”

“Off the strip, in the residential neighborhoods where the housing boom once burned hottest, realtors say the market is starting to reach equilibrium. That is, the number of homes going into foreclosure every month is almost matched by the number of homes being sold out of foreclosure.”

“Michael Antos of Prudential Americana Group just sold a home out of foreclosure for $350,000 that originally sold for $579,000. To sell the house, the bank not only slashed the price, but put in new carpet, hardwood floors and appliances.”

“‘The market is absolutely great for buyers,’ he said.”

“Trump Tower up the road is reportedly struggling. Trump, like others, built a ‘condo hotel,’ a development which includes hotel rooms and also condos which could be rented out as hotel rooms. Many of these, including Trump’s, were announced as 100 percent sold before a shovel went into the ground.”

“The problem is that many of the buyers were investors who couldn’t get financing when it came time to close the deals. Claims of 100 percent sold fell to more like 50 percent … or less.”

The Las Vegas Business Press. “The most shocking part of a new report on the Las Vegas resort development pipeline isn’t that, despite the economy, there are still more than 40,000 new rooms expected to be built by the end of 2012. The stunner is the dominance of high-end rooms.”

“A new report by Deutsche Bank quantifies the Strip development pipeline and points out that 89 percent of the new supply will be in the luxury category. ‘It is too much,’ says analyst Bill Lerner, who wrote the report.”

“According to the report, nearly 36,000 rooms added from 2008 through 2012 will be luxury. Those include more than 3,000 at Palazzo and nearly 1,300 at Trump Las Vegas, both of which are already open.”

“After that, the projections get dicey. They include nearly 10,000 rooms at the proposed Plaza and Elvis hotels, neither of which is off the ground. It also includes 5,300 at Echelon, which is now on hold.”

“When asked why resort developers would invest so much money in a market when they know competitors are building similar projects, he said the answer was simple: Everyone thinks their project will be the best. The problem is only one will be right, and the rest will be scrapping for business from a finite pool.”

“‘The view is that it is always somebody else’s problem,’ Lerner said of over-saturation. ‘A lot of these firms are willing to slug it out.’”

“The bankrupt $2 billion City Crossing project in Henderson has been effectively declared dead, but disagreements remain over how to bury it.”

“At the formal meeting with creditors on Aug. 14, developer William Plise made a passing reference to finding new equity partners to restart construction, which halted shortly after the Chapter 11 filing on June 2. However, the reorganization plan filed in July mentions only selling the 126-acre site.”

“At this point, lawyers for City Crossing and its lenders are trying to negotiate a settlement of the two major differences between them: How to sell the land and how to deal with Plise’s guarantees to cover any shortfall between the value of the land and the mortgage balances.”

“‘The future sale and development of City Crossing as a whole far outweighs the value of liquidating the project site to discount shopping buyers that are presently in the market,’ according to court documents filed by City Crossing. ‘Importantly, the sale of the property on a parcel by parcel basis will result in a loss of entitlements, which will result in the loss of value to creditors.’”

“In this case, fetching the highest possible price is important not only to the lenders, a mix of banks, individuals and trusts, but to Plise himself because he personally guaranteed all loans. In the event the land sale does not repay all the loans in full, he would have to dip into his own bank accounts or sell other properties he owns to cover any shortfall.”

“In its most recent version, the master plan called for 1 million square feet of offices, 1 million square feet of shopping, two hotels and 2,500 condos and apartments.”

“As the various loans came this year, Plise found it ‘impossible’ to round up fresh financing. ‘The perception among lenders has changed and the lending environment is gone,’ he said.”

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

The Berkeley Daily Planet reports from California. “Million-dollar condos? In Berkeley? Yes, says Don Peterson, president of SNK Development, the company now building the nine-story-plus Berkeley Arpeggio on Center Street. Asked who might buy the units, Peterson said, ‘We are looking at the university population and the Berkeley population,’ with ‘empty-nesters’ a target demographic as well as people who would like to live in the heart of the city’s theater district.’”

“The new Downtown Area Plan now under review…was funded by the City Council after a commission majority voted to recommend it. Buildings-both apartments and condos-could still be financed at six floors or fewer. But the tall buildings, seen as a way to fulfill some of the regional housing-needs allocation imposed by regional government, could only be bankrolled as for-sale units, not rentals, the report said.”

“‘We’re talking about million-dollar condos,’ Planning Commissioner Gene Poschman told fellow commissioners. ‘Who’s going to live in them?’”

Inside Bay Area. “Homebuilders are always trying to sell their homes, but these days they have an extra incentive - beating the clock. In a few weeks, a financing option used by almost 20 percent of new-home buyers to help scrape together a down payment is going away.”

“It’s a loophole in the Federal Housing Administration rules that let builders and other home sellers channel money through a charity to help homebuyers cover their down payment. But lawmakers axed the programs - effective Oct. 1 - because almost 40 percent of FHA borrowers who went into foreclosure since October had down payment assistance.”

“‘We’re trying to let everyone know, ‘Hey this is going away,’ said Brent Urban, a salesman for Lennar Corp., referring to a sales promotion running for one of the builder’s developments in Santa Clarita.”

“At Lennar’s Esperto community in Santa Clarita, north of Los Angeles, the incentives were tied to six, finished row-style townhomes priced in the mid-$300,000 range. Buyers have to be able to close before Sept. 11, said Urban.”

“While many builders are continuing to lobby for the down payment assistance programs to be reinstated, many have changed tactics and are promoting the temporary tax credit for first-time homebuyers, which was also part of the housing stimulus law passed last month.”

“But the clock is also ticking on this deal. The tax credit of up to $7,500 and expires in less than a year.”

“Some builders are exploring ways to give buyers some of their tax savings before they file their taxes. ‘If you can come up with some way to monetize it ahead of time, it could help to offset the loss of that down payment assistance,’ said Nishu Sood, a Deutsche Bank analyst.”

“Ultimately, however, it’s going to remain difficult for a builder to fully overcome when a buyer simply doesn’t have enough cash to make their down payment.

“‘You can offer lower rates, you can offer further incentives,’ Sood said, ‘but if a homebuyer is going to have trouble coming up with a down payment, that’s difficult to offset.’”

The Napa Valley Register. “California New Car Dealers Association statistics show that in the first two quarters of 2008 new car sales statewide slid 18 percent compared to last year. The DMV data shows some Napa County dealers have increased sales as much as 21 percent so far this year, while others are down as much as 40 percent.”

“‘Business certainly has been challenging, as it has been for all dealers this year,’ said Kevin Massie, owner of Napa Ford Lincoln Mercury, citing the down housing market and shaky consumer confidence.”

“‘We are seeing people that have challenged credit … (or) foreclosures pending’ said Bob Kleis, general manager of Jimmy Vasser Chevrolet-Toyota. ‘We are seeing more cars for sale in repossession wholesale auctions.’”

“‘The mess in the home industry has trickled down into the car industry,’ said Napa Nissan owner Vince Compagno.”

“At Napa Ford, Massie said, ‘We have customers that want to get vehicles but are in the process of losing a home.’ The number of buyers in distress ‘is much greater than this time a year ago.’”

“Why would someone in financial trouble buy a car? Even if people are moving or giving up on home ownership, he said, ‘They still need reliable transportation to get to work, school and church.’”

The Ventura County Reporter. “There are 15,000 to 20,000 rental units in the city of Ventura. The California Apartment Association (CAA), a statewide rental housing trade group that tracks things such as shifting rental costs and residential transiency, determined at the end of the second quarter for 2008 a 94.1-percent occupancy rate throughout Ventura County.”

“That leaves a near 6-percent vacancy rate, which explains some For Rent signs that never seem to come down.”

“‘The rental market in Ventura County is relatively flat over the last year,’ said CAA Deputy Director Eric Wiegers. ‘The trend is really flat. No real uptake in rents.’”

“Much like the price of oil can be correlated to record high fuel costs, could there be a decisive factor that may cause rental costs to lower themselves in Ventura? There is when considering a shaky real estate situation.”

“‘The only reason I’d suggest prices might come down is, it’s tied to this whole foreclosure mess,’ said Wiegers. ‘There are some markets where some houses being foreclosed upon are being bought by investors and putting them on the rental market.’”

The Globest. “If you’re looking for the bottom of the economic downturn, you may find it here in the Inland Empire–it’s just that the ‘when’ is another matter. Experts voiced some bleak near-term outlooks Wednesday at the third annual RealShare Inland Empire conference at the Ontario Convention Center.”

“‘There’s no nice way to spin it,’ keynote speaker Richard Green, director of the USC Lusk Center for Real Estate, said of the local economy. ‘The jobs picture in San Bernardino-Riverside County right now is not particularly good. People want to know when are things going to bottom. Will we have a ‘V’ or ‘U’ in terms of the recovery?’”

“There has never been, until now, a decline in the median home prices nationally since the Great Depression, Green pointed out. The median income is falling and ‘financial institutions are in an environment of fear,’ he added.”

“Ppanels throughout the day included sessions on the capital markets and how investors are getting deals done in today’s climate…what it takes and costs to finance deals.”

“G. Ryan Smith, a senior VP with Newport Beach-based Buchanan Street Partners, said that ‘It used to be if you had a heartbeat, you could get a loan. It’s a different world than it used to be.’”

The Daily Bulletin. “In the past, Juana Recinos sold up to 15 homes a year. Now, she can’t sell one. ‘Optimistic? Well, let’s just say I took a part-time job in addition to trying to sell the five homes I have,’ said the real estate agent. ‘It’s hard to sell a house, and the lenders are making it difficult to do so. I’m beginning to think even though it’s just speculation that lenders are making money off of waiting and wasting my time.’”

“Calling the market ‘a virus,’ Recinos said she doesn’t think it’s going to get any better and doesn’t expect to stay in the real-estate business for long.”

“Recinos’ biggest fear is losing another potential buyer on the short-sale home listed for $290,000 at 10127 Vernon Ave., Montclair. The home was on the market in December for $450,000. Recinos had a potential buyer within a month. The bid was $350,000.”

“‘But those people backed out last month because the lenders never called back,’ she said.”

“Now, someone is interested in the new price tag, but once again Recinos is left to play the waiting game. ‘I’m really beginning to feel they don’t care because I keep on waiting and calling and then I get an excuse of, ‘Sorry we lost the paperwork. You have to resend it,’ or, ‘We didn’t receive it,’ and I’m back to where I started,’ she said.”

“Recinos said she and her husband have been cleaning up the vacant house ‘in preparation for a foreclosure.’ If the lenders don’t call back in three weeks, the home will be foreclosed on, and Recinos said she expects the price to drop by as much as $50,000.”

“‘If the market continues to go in the direction it is, (the price) will be lower than that,’ she said.”

“Recinos said she knows her prospective buyers are getting tired of waiting. ‘I’m afraid they’re going to give up on this home,’ she said, ‘and I’m scared all the work I’ve done in the last six, seven months is going to go out the door.’”

A report from Florida Today. “In today’s tough housing market, sometimes it takes some creative thinking to sell your house. Scott Bernard is having a picture-coloring contest and giving away his house in Sebastian to the winner — sort of. Each person who enters the contest pays a $49 entry fee. Bernard needs at least 5,400 people to enter the contest to raise enough money to pay off what he owes on the mortgage.”

“‘This was the only positive way I could come up with to sell the property,’ he said.”

“Bernard, like many people who bought homes before the housing market soured, said he could not sell his house for what he owes on it. He bought the 1,500-square-foot, three-bedroom, one-bathroom house in July 2005 for $217,000. But today, the house, built in 1957, has an estimated value of $140,000.”

“‘I bought it at the peak of the market,’ he said.”

“He’s not the first to try a unique approach to unload property in Florida’s struggling housing market. An effort this spring by St. Cloud developer Chris Wardlow to raffle off two houses fizzled with just a few dozen $250 tickets sold, well short of the 5,000 needed for him to recoup his costs and give some money to charity.”

“Merritt Island resident Dale Schamp used a buy-one-get-one-free deal earlier this year to try to sell his beach house, offering a second, smaller house on Merritt Island for free. The result: no sale.”

“‘We had tons of calls and publicity about it, but it was all to no avail. It’s just the market,’ Becker said. ‘Nobody made an offer.’”

The Bradenton Herald from Florida. “Gil Pearce’s perfectly groomed Summerfield Glen home is sandwiched between two vacant houses, one with cut screens and a wide open patio door, and the other with a ‘For Sale’ sign and an unkempt lawn. Pearce’s case is not unusual.”

“There are 35 homes currently vacant due to foreclosure or other reasons among the 1,800 homes in Summerfield and Riverwalk, said Alan Roth, chairman of the safety awareness committee for the Summerfield/Riverwalk Village Association.”

“Roth estimates that at least 60 to 70 homes are vacant because of foreclosures in all of Lakewood Ranch. He thinks that might be conservative. Every Summerfield and Riverwalk neighborhood, including the upscale Ridge, has vacancies, Roth said.”

“‘There are even foreclosures and empty houses in Country Club,’ Roth said. ‘Greenbrook probably has more than anyone.’”

The Miami Herald from Florida. “Thanks to the housing slump, professional couple Gladys and Raul Castillo finally found homes they could afford — new condo units in foreclosure within walking and biking distance of their jobs in Miami’s Brickell financial district.”

“They also had the credit record to meet lenders’ standards. But they couldn’t land an actual loan. ‘Almost all of them want 20 percent,’ said Gladys Castillo, speaking of lenders they had approached. The Castillos had saved only 10 percent, and lenders were loath to get into units in buildings rife with foreclosures.”

“So the couple have stopped searching while they save for a bigger down payment.”

“‘In areas like Brickell or the Biscayne corridor, there is no way to get a loan unless a borrower is willing to put 30 or 40 percent down,’ said William Zalaquett, a Realtor who specializes in the area.”

“Even wealthy individuals needing financing are having a tough time, said Alex Doce, president of Baron Mortgage, a lender with an office in Miami.”

“‘Right now, I have a couple of $4 million and $5 million loans, and it’s a nightmare to try and finance these people who have high net worth. The few people that were buying these loans, like Indymac, have gone out of business or don’t have the capital to lend,’ Doce said.”

The Atlanta Journal Constitution from Georgia. “Prospective homebuyers are pondering whether prices have hit rock bottom, so the housing industry is trying to create a sense of urgency. How? By touting the new $7,500 refundable tax credit contained in the massive housing-stimulus bill President Bush signed last month. The credit expires July 1.”

“Realtors, builders and lenders wearing ‘Buy Now!’ stickers gathered on the Capitol steps Wednesday at a rally to promote the incentive. Beazer Homes, the beleaguered Atlanta-based homebuilder, held an online seminar last week to do the same thing.”

“‘You will never see a better opportunity than the opportunity before us right now,’ U.S. Sen. Johnny Isakson said, standing before an umbrella-toting crowd.”

The Birmingham News from Alabama. “Some Birmingham mortgage professionals say they are experiencing a drop in mortgage applications, reflecting a national trend. Bill May, president of Accent Mortgage, said the number of applicants seeking mortgages from his firm is down significantly from a year ago and that others in the industry are experiencing similar drops. He said national media coverage of the housing market is scaring away potential homebuyers.”

“In addition, May blames fallout from recently approved federal legislation that prohibits loan down-payment assistance from nonprofits.”

“‘The housing industry is really struggling right now,’ said May, past president of Alabama Mortgage Brokers Association. ‘Realtors are having problems selling houses. Many builders are sweating every day because properties aren’t moving.’”

“Grayson Glaze, executive director of Alabama Center for Real Estate, said there is a reason for the decline - bad economic news in the housing sector. ‘The last two months of weekly mortgage application activity have revealed a mixed bag but with a common denominator - a significant decline in volume when compared to its prior year,’ he said.”

The Tuscaloosa News from Alabama. “A Mississippi-based developer is going ahead with plans to build an estimated $110 million hotel and condo tower next to Bryant-Denny Stadium, leaving land owned by the University of Alabama out of the project - for now.”

“Spectrum Capital wants to sell the 250 rooms, ranging from 450 square feet to 1,100 square feet, with a concept similar to beach condo hotels. With prices starting near $200,000, owners don’t have to put their rooms in the hotel rotation, but the practice will be encouraged, according to documents.”

“Spectrum also plans to build a tower with 65 condominium units, with an average size of more than 1,500 square feet. Starting at $500,000, Spectrum plans to market these primarily to baby boomers looking for a second home, likely Crimson Tide fans or those with connections to the university, according to planning commission documents.”

“UA spokeswoman Cathy Andreen didn’t offer any new details on when UA would award the development of its lot, and city planning director Bill Snowden said he has not heard either. ‘It’s got to be developed,’ he said. ‘It’s just too valuable to sit there as a parking lot.’”

The Daily Journal from Mississippi. “At a recent open house, a band played while attendees snacked on pork tenderloin, all the while admiring the views inside and out of the 8,000-square-foot home. Custom built four years ago, the Louisiana plantation-style home is for sale for almost $2 million, an unheard-of asking price for a home in Northeast Mississippi just a few years ago.”

“The home is among 52 area homes on the Multiple Listing Service for sale for $500,000 or more.”

“Area real estate agents say while there’s a growing list of sellers of these homes, more buyers are entering the market, too, despite some of the woes in the housing industry going on in other parts of the country.”

“‘If you look at the last two years, it’s really not much different now,’ said Jason Warren of Prudential Magnolia Realty in Tupelo. ‘We’re in a market that’s continued to grow.’”

“Brenda Spencer of Tommy Morgan Coldwell Banker is hoping to sell the home that’s in The Summit. Spencer, who has been in the real estate business for 31 years, said the first $1 million home to be listed for sale in Tupelo happened about three years ago.”

“‘It’s not that there weren’t any homes that weren’t worth that much, because there were,’ she said. ‘It’s just that people had built them. Appraisers really didn’t have anything to compare them to; nothing had ever sold for that much.’”

“But as some of these homes came on the market, a benchmark was established, and several $1 million homes have been sold since then.”

And several are on the market today. Of the 52 homes selling for $500,000 or more, seven are listed for at least $1 million. Topping the list is a 12,380-square-foot, five bedroom, 6 1/2 bath mansion sitting on 40 acres in Booneville. The selling price: $3.9 million.”

The Tri-Parish Times from Lousiana. “Luxury home market sales in Terrebonne and Lafourche have taken a slight decline over the past year, according to developers and realtors. However, luxury home prices have not fallen locally as they have in most American cities.”

“‘Anything under $200,000 is doing well right now,’ said V.J. Caro of V.J. Caro Jr. Building Contractors Inc. “Anything above has slowed down, but the prices haven’t dropped.’”

“The beginning cost for what defines a ‘luxury’ home depends on who one asks. Some start at $300,000, others say $500,000. Either way, the definition of luxury hime has changed significantly.”

“‘Higher-end today is no longer $250,000. Especially in this market, $350,000 has become the new starter home,’ said Mona Martin Christen, owner/broker of Mona & Company, Inc.”

“Industry professionals have various opinions as to why the market has soften recently. One major concern is the coverage of the national housing market slowdown effecting how people view the local market.”

“‘People have gotten nervous about buying because of the hype on TV,’ said Christen. ‘Louisiana is not suffering nearly as much the national media is reporting. We have barely been affected. We haven’t had nearly the number of foreclosures or loan failures. It’s unreal how Louisiana has floated to the top this time around.’”

“Another problem is the crackdown on certain lending practices has made mortage companies more cautious about whom they lend money.”

“‘For a long while many of the mortgage companies were doing 100 percent financing with no money down. That’s all gone now,’ Randolph A. Bazet, III co-owner of Bazet Reality & Associates, Inc. ‘Unless you have money to put down or have a substantial credit score, it’s going to be difficult to finance the purchase of a higher-end home.’”

“‘Zero-down lending created an artificial market called the mid-market,’ said Joey Esso, co-owner of The Wood Doctor. ‘Ten years ago, once you got past $300,000, that was a custom unit. Now that’s moved up to $500,000 and a $200,000 to $400,000 unit became a spec house. That was artificial created by a miracle of financing.’”

“As long as the local economy does well, contractors and realtors are confident the luxury home market will stay strong. They see the recent sales decline as a minor hiccup and not a sign of trouble ahead.’

“‘It’s just a little slow down in sales. They’re not popping like they use to,’ Christen said. ‘I remain optimistic though.’”

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

The Union Tribune reports from California. “Workers’ incomes stagnated last year, barely outpacing the official level of inflation, according to data released yesterday by the U.S. Census Bureau. ‘2007 was probably as good as it’s going to get for a while, and these numbers show it wasn’t very good,’ said Jean Ross, director of the California Budget Project in Sacramento.”

“San Diego’s median income dropped sharply in 2002 after the high-tech boom stalled; rebounded from 2004 through 2006, coinciding with the rise of the housing bubble; but then stalled in 2007 after the real estate market peaked.”

“Kelly Cunningham, an economist with the San Diego Institute for Policy Research, said the sluggish wage growth does not bode well for the county’s beleaguered housing market.”

“‘In the early part of this decade, home prices were rising so fast that there was no way our income could keep up, which was one reason for the price bubble,’ Cunningham said. ‘Even though home prices have fallen, we have a way to go before they get in alignment with our wages.’”

The Voice of San Diego. “Home prices in San Diego dropped again in June, reaching a point not seen since September 2003, according to the Standard & Poor’s/Case-Shiller Index released Tuesday.”

“June’s price index for resale houses fell 30 percent from the market’s peak in November 2005. The overall index logged a 24 percent decline compared to June 2007. Prices in the lowest tier have now fallen 39.5 percent from that tier’s peak in June 2006. The middle tier’s prices have fallen 31 percent since November 2005, that tier’s peak. And the top tier declined 19.9 percent from the peak in June 2006.”

“In another report released Monday, First Republic Bank calculated that San Diego luxury homes have fallen in price by the most they have in a decade. The index measures price changes in houses priced at more than $1 million, usually measuring 3,000 to 6,000 square feet and having between three and six bedrooms and bathrooms.”

“Foreclosure-related properties constitute the vast majority of houses coming on the market, said Ramsey Su, a local retired real estate broker and investor who sold bank-owned properties in the 1980s and 1990s. Su included a brief analysis in a local market newsletter he sent out Tuesday: Of the 337 new home listings entered on Aug. 21 and 22, 135 of them were bank repossessions relisted for sale, and another 82 were short sales. As such, 64.4 percent of the listings entered were bank-owned or short sales.”

“‘There seems to be no understanding of the toxic nature of this inventory,’ Su wrote. ‘An inventory dominated by lender sellers, a very motivated group of sellers, means prices will be driven down hard. Private sellers with insufficient equity who have to sell in this environment will have no option but to apply for a short sale or be foreclosed upon.’”

“‘People are saying the reason prices are falling are because of all of the foreclosures, but the foreclosures are happening because the prices are falling,’ said Chris Thornberg, founding partner at Beacon Economics and former economics professor at the University of California, Los Angeles. ‘They’ve got it backwards. The prices are falling because they’re too freakin’ high.’”

The North County Times. “One real estate agent who specializes in higher-end markets, Eric Elegado of Mira Mesa, said foreclosures in more expensive neighborhoods will push down prices further.”

“‘In Santaluz, there’s some foreclosures and short sales coming onto the market, so that will set a new price point,’ Elegado said.”

“‘This thing’s going to hit bottom some point in mid-2009, and it’s going to sit there for two years —- at least,’ said Thornberg. ‘I’ve heard people say you’re going to miss the bottom. You’ve got to be kidding. If there’s any asset market where you can’t miss the bottom, it’s housing.’”

The LA Daily News. “San Fernando Valley housing prices continued their free fall in July, plunging 29 percent as foreclosures mounted at a record pace. The median price tumbled to $453,500, down nearly $20,000 from June and a whopping $186,000 below the median in July 2007, said the San Fernando Valley Economic Research Center at California State University, Northridge.”

“At the same time, foreclosures jumped 221 percent, flooding the market with deeply discounted homes seized by lenders. Sales ticked up 5 percent.”

“‘The problem right now is we’re getting foreclosures … faster than sales are taking them off the market,’ said Daniel Blake, the center’s director and an economics professor at CSUN.”

“‘It seems to have leveled off. The erosion seems pretty much to have stabilized,’ said Jim Link, chief executive officer of the Van Nuys-based Southland Regional Association of Realtors, of the sales slide. ‘But I don’t want to paint a rosy picture and say things will be better real soon.’”

The Fresno Bee. “Fresno experienced double-digit appreciation during the real estate boom that peaked in 2005. In August of that year, an analyst for economy.com labeled Fresno the most overpriced housing market in the nation. That came three months after the Federal Deposit Insurance Corp. classified Fresno as a ‘boom’ market because values climbed 58% between 2002 and 2004.

“Experts said speculators fueled the market and helped drive up prices. But values fell, owners couldn’t refinance and thousands of houses went into default. ‘We had a great deal of speculation money,” said Patrick Prince, a real estate agent in Fresno. ‘That created inflated and unrealistic prices that our population could not afford. Prices have been going down for a year and a half.’”

“Sean O’Toole, president of Discovery Bay-based ForeclosureRadar, said a hard fall was a natural consequence. ‘If you believe in reversion to the mean, then the higher you get, the further you [fall].’”

“Real estate analysts say prices could fall some more, but they caution buyers against waiting too long to make a purchase because interest rates could rise and financing could become harder to obtain.”

“‘Trying to guess the bottom is the worst thing you can do,’ said Robin Kane, a housing analyst in Fresno. ‘You only see the bottom through the rear-view mirror.’”

The Patterson Irrigator. “Barring yet another unforeseen development, the Diablo Grande golf resort and housing development should be sold at a bankruptcy hearing Thursday. The sale, which is scheduled to be approved at 10 a.m. at the U.S. Bankruptcy Court in Sacramento, was initially supposed to take place at a hearing Aug. 19.”

“But sale negotiations were still ongoing between Diablo Grande and at least two potential buyers, so Diablo Grande attorney Michael Ahrens requested that the hearing be postponed until Thursday.”

“Ahrens said at the Aug. 19 hearing that Diablo Grande, which has taken out more than $2 million in loans to continue operating during the sale process, only has enough money on hand to make it through this week.”

“That could be bad news for residents, who rely on the water Diablo Grande has been providing by way of those loans. If a sale is not approved by the bankruptcy judge on Thursday, Diablo Grande might have no choice but to liquidate in Chapter 7 bankruptcy.”

“Diablo Grande has been for sale since at least November, when Encino-based Marcus & Millichap listed the project for $150 million. It later dropped that price to $85 million, but no sale was completed. The developer filed for Chapter 11 bankruptcy March 10.”

The Manteca Bulletin. “Three years ago not a single existing home that closed escrow in Manteca sold for under $320,000 in August. This August it is a drastically different story. Of the last 70 homes to close escrow in Manteca all but four ended up changing hands for less than $320,000.”

“That $320,000 home three years ago had 896 square feet, two bedrooms, one bathroom, no garage and a lot barely bigger than the house. The highest priced house closing escrow so far this month for under $320,000 in Manteca - $312,000 - was for 3,166 square feet with five bedrooms and three bathrooms.”

“Aggressively priced homes started hitting the market in July as many banks undercut previous price points as they went to list new foreclosures. The aggressive change in bank pricing and the growing tidal wave of accepted offers has dropped the average sales price for the year down $8,252 since July 21 reflecting the much lower selling prices.”

“That reflects a drop in the average value of $235.80 a day for the past 35 days. And that average is destined to drop even farther. There is a record 290 pending deals in Manteca with an average price of $223,330. But the real story is the pending foreclosure sales that account for 212 homes and an average selling price of $200,006.”

“Agent Jim Muthart said the ‘magic number’ that is assures a home will move quickly unless it has major structural issue or some other unusual circumstance is $170,000. That is a price at which an investor can buy the home with 20 percent down, drop some money into it and still come away the first month renting it with a $100 positive cash flow.”

“Others argue that magic number is $220,000 to $230,000 but as Muthurt pointed out homes bought in the $170,000 and under price range are the largest segment of the market seeking rentals which is $1,200 or less a month”

“As to when the market will bottom out, Muthart is fairly confident it is at the bottom or near it - at least when it comes to the lower end of the market.”

“It’s a bottom he described as a ‘bouncing up and down’ along the bottom where one home lands with a lower price while a similar home gets a bounce up from the bottom due to spirited bidding wars.”

The Bakersfield Californian. “The Southern Oaks house where David Crisp has been staying in recent months - after the once high-flying Realtor lost all of his own properties to foreclosure - fell into default Tuesday, county records show.”

“The property is owned by real estate broker David ‘Ty’ Stewart. ‘I’d like to keep it if I could,’ Stewart said, ’so I don’t have to evict a tenant who can’t pay rent.’”

“Monthly payments are $4,500, Stewart said, and the interest rate is 12.5 percent. The house is also worth $200,000 less than Stewart bought it for, he said, because of the declining market.”

“Stewart bought the house in August 2006 for $629,000, county property records show. A pair of ‘piggyback’ loans from SunTrust Mortgage Inc. provided 100-percent financing.”

“The property was listed by Crisp & Cole Real Estate, Crisp’s former company, when Stewart bought it, listing records indicate. Stewart was the listing agent.”

“‘I’m just a victim’ of the down economy ‘who’s struggling like everyone else,’ he said.”

The Chicago Tribune reports from Illinois. “Home buyers and sellers in the Chicago area just can’t agree on the price of a house. Sales of existing homes continue to be down, Chicago-area home prices are flat, and real estate agents who want to close deals are pleading with players on both sides to be realistic. ‘You’ve got sellers in denial,’ said Ken Reeder, a broker associate at Baird & Warner. ‘They’re reducing, but they’re being slow.’”

“Denise Dominici put her Romeoville tri-level house on the market in April 2007 for $275,000. It hasn’t sold and reducing the price has been painful for her, even though she’s moved into a new $425,000 custom-built Shorewood ranch in September. She’s turned down offers from renters, reduced the price to $235,900 and offered to throw in the furnishings. To her, the house at its current price is a steal, not a reflection of a bad market.”

“‘I don’t know what these people want,’ she said. ‘To me, I feel like I’m handing them everything.’”

“Meanwhile, Liz Meyer and her boyfriend, Will Aquino, find themselves stymied in their quest to become first-time homeowners.”

“In the past eight months, the couple has looked at 25 condominiums. They’d like to make an offer for their favorite, a two-bedroom unit in Humboldt Park, but they think it’s worth $30,000 less than it’s listed. And their real estate agent heard that higher offers have been rejected and the sellers may pull it from the market.”

“‘We’re seeing a lot of people that bought within the last two years when money was cheap. So to break even, they’re maintaining a high listing [price]. It’s only worth what I’m going to pay for it,’ Meyer said.”

“Sales of existing single-family homes and condos in the nine-county metropolitan Chicago area dropped 25.2 percent in July from a year earlier, the Illinois Association of Realtors said Monday.”

“Sitting at an open house Sunday for an Elmhurst home first listed in February for $857,000 and now priced at $759,000, real estate agent Sheila Barbre saw six groups of people, including two who stumbled upon the house after seeing a sign Barbre had posted nearby at the Illinois Prairie Path. ”

“‘Everybody had the same comment,’ she said. ‘They wanted to stay away from the market because of the way this year is. They are looking into next spring to do something.’”

The Pioneer Local from Illinois. “Martin Paulson, Lake County chief assessment officer, said despite the slowdown in the housing market, most taxpayers will see an increase in their assessments. That’s because assessments in Illinois townships are based on sales transactions that occurred during the three previous years — 2005, 2006 and 2007 — when the housing market was stronger.”

“‘Many people do expect their assessments are going to go down,’ said Paulson. ‘The reality is that isn’t going to happen this year.’”

“Antioch Township Assessor Heather Kulfalk-Marotta said her office has received a number of calls from residents wondering why their assessments are going up when the housing market is in a slump. She has to explain to them that assessments are based on an average of the three previous years, not on current year’s sales activity.”

“‘A lot of people say ‘I can’t even sell my home for what I paid for it,’ she said.”

The Indianapolis Business Journal. “The squishy Indianapolis-area residential real estate market has come to this: Sluggish though it is, the region hasn’t been hit as hard as the nation as a whole. Sellers have the greatest advantage if their house is priced below $75,000 or if the house is in Hendricks County. Buyers have the most leverage if the house is priced over $1 million or if the house is in Morgan County.”

“Metropolitan Indianapolis Board of Realtors President David Bickell said markets are digesting excesses from the housing bust. ‘That excess supply is being worked through very nicely,’ said Bickell. ‘We’re pretty near the bottom.’”

“July sales plunged 21 percent, to 9,502 units, from July 2007, MIBOR reported. The median sale price fell 3 percent, to $124,500.”

“People wanting to unload a house at $1 million or more are likely to wait a long time. The category has a 47-month supply, much more than the recent second-quarter low of 32 months, in 2006.”

“Broker Jeff Kucic said there isn’t enough information yet to declare that the downturn is over. ‘We’re in the mucky bottom,’ Kucic said. ‘We’re up one day and down the next.’”

The Quad City Times from Iowa. “A little more than a year ago, three major projects - upscale condominiums at Oneida Landing, rehabilitation of the vacant One River Place building into a mixed use commercial and residential building and a new office and apartment complex headed up by the McNamara Development Group - were contemplated.”

“Now, construction has begun on the McNamara building, but Pat and JJ Condon’s Oneida Landing condo tower is shelved and their plans to work with the owner of One River Place on a rehab project has stalled due to disagreement on the value of the property.”

“The property the Condons were going to build on is owned by area businessman Jim Sweet. He said he was forced to terminate the Condons’ option on the property because of the slow pace of pre-sales.”

“The project was very ambitious by Quad-City development standards. It was billed as an $18 million, eight-story luxury condominium highrise, with prices ranging from $214,000 on the second floor to $750,000 on the top floor.”

“‘I held the property for two years at no cost to them, and I felt they either needed to buy the property or pay a monthly stipend to keep it off the market,’ he said. ‘The problem is the economy. It’s tough to stick your neck out in this economy.’”

“Levee Improvement Commission member Lucky Lang said it’s unfortunate the projects are on hold, but he remains optimistic about the long-term prospects for that section of riverfront.”

“‘Davenport may not have been quite ready for what Pat and JJ proposed,’ he said. ‘The concept is awesome. It’s what a lot of riverfront communities do. It may have been a little too contemporary, a little too advanced for this moment.’”

The Bay City Times from Michigan. “Bay City developers Paul and Peggy Rowley have laid out plans for an $8 million project on the downtown Bay City site of the former Mill End building. In all, there would be five retail stores, one or two restaurants, and 20 to 30 condo units, according to the plans.”

“Rowley has said he will not move quickly on the project until he experiences more sales at the Boathouse Condominiums, an upscale condo development on Water Street. He described the proposed housing units at Mill End location as ‘much lower price than the Boathouse.’”

“Rowley, in the past, has said Boathouse condo prices ranged from $384,000 to $727,000. ‘They’ll be smaller units, something like 800 to 1,100 square feet,’ he said.”

“State Rep. Jeff Mayes, Bay City, authored legislation this year to expand the state’s Commercial Rehabilitation Act to accommodate the Mill End project. ‘That area of the city is the last real piece to be developed, and then we can set our sights on Uptown at RiversEdge,’ he said. ‘Of course, there’s a process that has to be followed and I suspect there will be questions.’”

The Ann Arbor News from Michigan. “Washtenaw County home and condo sales were steady in July compared to the same month last year, although the average sale price of a house plummeted nearly $28,200 - a 10.6 percent drop - to $236,209, the Ann Arbor Area Board of Realtors reported this month.”

“John Cimaglia, (a) Corvette owner, is hoping to get $780,000 for his 3,000-square-foot custom-built home on 27 acres in Augusta Township. He and his wife are hoping to downsize, and may not have room for their hunter green, mint-condition Stingray. With the market as tough as it is, he thought the car might at least attract attention.”

“Mary Hettinger, of Keller Williams, said she had seen a house for sale in Northville with a classic car thrown into the deal. But, she said, it’s not likely such gimmicks would have a big impact locally.”

“‘The bottom line is, it’s about the price,’ said Laura Dykstra, sales manager for the Edward Surovell Realtors.”

“Buyers rarely select a home based on extras thrown into the deal, she said, ‘But hey, in this market, people are willing to try just about anything.’”

The Daily Press & Argus from Michigan. “The numbers tell the story about new home construction in Livingston County, albeit a depressing one. It should come as no surprise that new homes are trickling into a county that was once booming with new home construction. Several years ago, subdivisions appeared to pop up almost overnight as rising home values and easy financing allowed people to move into a highly desirable community.”

“Home values are now falling, banks aren’t lending so quickly and there’s plenty of homes available with the increase in foreclosures.”

“Bill Rogers, who runs a family-owned modular home business, said he was the No. 1 builder last year for one of the biggest companies in the business, All American Homes. Rogers said the slowdown really started not long after Sept. 11, 2001, and it hit quickly.”

“‘It fell off a cliff,’ Rogers said. ‘It wasn’t a bungee jump. It was jumping off a cliff with no bungee cord. It’s essentially dead.’”

“When he receives a call from someone asking whether to build, Rogers said he’s faced with telling them a painful truth.”

“‘If I can lie, you want to build,’ he usually begins telling them. He then tells them the truth, which is there are some great deals out there on foreclosures and other homes. All it takes is some legwork on the part of the buyer.”

From TH Online. “In all 12 Midwestern cities tracked in The Associated Press-Re/Max Monthly Housing Report, sales fell by at least 10 percent from July last year. The report analyzed home sales recorded by all real estate agents in those cities, regardless of company affiliation.”

“The median price fell in every city in the AP-Re/Max report, except Rapid City, S.D., where it rose by 4.8 percent from a year ago to $179,000.”

“The largest price drop, by contrast, was in Detroit, where the sinking economy and skyrocketing foreclosures helped push the median price down 36 percent to $81,000.”

“Bob Mitchell, an agent who works in Detroit and its suburbs, is currently listing a 6,100-square foot brick Queen Anne-style home, which needs major repairs, for a mere $80,000. ‘It’s just amazing,’ he said. ‘How much lower can they go?’”

“In Minneapolis, prices were down 12.5 percent — the second-largest drop after Detroit — to a median of nearly $192,000 in July. Sales were down more than 19 percent.”

“‘I really don’t see (a recovery) happening any time in the near future,’ said Susan Hofflander, an agent in Minneapolis who only represents buyers.”

The Jackson County Chronicle from Wisconsin. “Existing home sales in Wisconsin fell 22.2 percent during the second quarter from a year ago, a steeper decline than the Midwest region and the nation, according to a report issued Thursday by the Wisconsin Association of Realtors. Median sale prices were down 3 percent to $162,200 from last year.”

“‘It’s a mirror image of what happened in the first quarter,’ said David Clark, an economist (in) of Milwaukee. ‘It looks like buyers are still reluctant to dive into this market.’”

“Many Wisconsin real estate agents don’t expect much market improvement before 2009. In an online survey conducted last week for the association, 84.4 percent said they expect fourth-quarter sales to be the same or worse than the same period in 2007.”

The seasonally adjusted pace of sales in south-central Wisconsin has been stable for a year, according to Dave Stark of Stark Company Realtors.

“‘If you’ve been waiting or hoping for things to get better, stop,’ he wrote.”

From KAAL TV in Minnesota. “Rochester Realtor Robin Gwaltney agrees that prices are lower today than they were five years ago. She says it’s because sellers are asking for closer to the actual value of their home.”

“5 years ago sellers would ask for 10 to 20 percent more than what the home was worth.”

From KIMT News 3 in Minnesota. “A foreclosed housing development will be going to the highest bidder. The city of Albert Lea says the Eagle’s Rest development will be on the auction block in September. Larry Thorstad has lived near the Eagle’s Rest golf course area in Albert Lea for 15 years.”

“‘Well, with the golf course the way it was it was a beautiful area. Well used. You know…with the lake there and everything. Right now, we’re kind of blocked from all of the eye sore that we see,’ Thorstad said.”

“Behind Thorstad’s house sits the torn up development. ‘It’s very discouraging that it’s just sitting there all tore up and nothing is being done that we can see or hear.’”

“Last December, American Bank bought back the property that was going to be turned into a housing development called Eagle’s Rest. Construction crews came in and started working on the project last year, but neighbors say within a couple months all that work just came to a halt.”

“Even though it’s months past the foreclosure, the developer has one year, or until the end of this December to pay the mortgage off under his right of redemption. Albert Lea’s City Manager says the developer plans to do that during an auction in about three weeks. And the developer is also offering to sell the city some acres. Right now, the city is saying ‘no deal.’”

“‘This is kind of a bad thing. A lot of people are very disappointed with the way this was handled. They’re very disappointed that now it just sits there and now it’s a big eyesore for the whole city,’ Thorstad said.”

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

The Sacramento Bee reports from California. “California’s free-falling home prices sparked a fourth straight month of year-over-year sales gains during July, the California Association of Realtors reported Monday. Median sales prices were down a record 40.3 percent from July 2007, CAR reported. ‘Deeply discounted, distressed sales continue to drive volume in many regions of the state,’ CAR President William E. Brown said in a statement.”

“C.C. Myers couldn’t fix this one. The legendary highway contractor, has filed for personal bankruptcy. Myers is being sued for $40 million by Wachovia Bank over Winchester Country Club, an Auburn golf and luxury housing development that he personally developed.”

“‘There are some very unhappy people around here,’ said Richard Shepherd, a Bay Area transplant who retired to Winchester with his wife four years ago.”

“He said many homeowners were worried about declining equity in their homes. They’re also fretting that their club and golf memberships, for which they’ve spent tens of thousands of dollars, could decline in value. ‘We love it here,’ he said. ‘We just feel sorry for the people who’ve lost their equity, the money they pumped into being a member. It’s a mess.’”

“Kathryn Boyce, an analyst in Sacramento for consultant Hanley Wood Market Intelligence…said none of the project’s 24 custom-built luxury homes has been built or sold. Those homes, which Myers expected to sell for more than $2 million each, were supposed to snare wealthy Bay Area and Los Angeles buyers.”

“‘We’re talking about highly wealthy people who mostly travel on private planes,’ said Myers’ son, Clint W., president of the Myers’ firm’s home building division.”

“‘That’s our target. You can fly into Auburn with a Learjet,’ the younger Myers told The Bee in 2006.”

The San Francisco Chronicle. “In the Bay Area, sales increased 6.7 percent, and the median sank 21.2 percent to $663,190. ‘We are seeing a robust response to improved affordability,’ the Realtors’ Chief Economist Leslie Appleton-Young said. ‘But obviously the $64,000 question is when will we be at the bottom? I don’t think we’ll see that this year.’”

“Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, had a more bearish take on Monday’s numbers.”

“‘It doesn’t reflect a recovering housing market; it reflects a broken housing market,’ he said. ‘It’s a reflection of the fact that foreclosed homes are being liquidated at very low prices.’”

The Contra Costa Times. “Contra Costa cities hardest hit by the foreclosure crisis say the county assessor has made their fiscal situations worse with wholesale downgrades of property values. Just doing my job, says Gus Kramer.”

“The county is not alone - assessed values dropped in almost every Contra Costa city. ‘You wouldn’t believe some of the conversations I’ve had and with who I’ve had them,’ said Kramer last week. ‘They’ve been ugly, very ugly.’”

“Kramer also acknowledges using foreclosures as comparisons in certain instances. Foreclosures used to be considered anomalies, Kramer said, and would not be considered in assessments.”

“‘Today, with 50 percent of properties on the market being foreclosures, they are the market. It’s like trying to ignore the 800-pound gorilla in the room,’ said Kramer, whose office is across the street from a Martinez subdivision he reassessed. Those homes were selling in the low $600,000s, and now peak in the high $400,000s, he said.”

“‘Look, everybody wants to blame somebody, but that’s OK. I’ve got broad shoulders. They can blame me until the cows come home. They know the truth and, more importantly, the homeowners know the truth,’ he said.”

The Merced Sun Star. “The New York Times, in recapping Merced’s housing market climb and crash, drew an obvious conclusion: No one planned ahead. And numbers from July — showing more foreclosures than sales — demonstrated the continuing toll from that lack of foresight.”

“Some residents genuinely can’t afford their payment, he said. Yet other owners see abandoning their home as a wise long-term financial move. So they accept about five year’s worth of bad credit and walk away from the house, real estate agent Andy Krotik explained.”

“It makes little sense for them to pay off a $300,000 investment that’s depreciated by half. ‘Is it better to have bad credit for five years or live up to your obligation?’ Krotik asked. ‘There are true sad stories, but there are a lot of business decisions out there.’”

The Ventura County Star. “Ventura County sales for existing homes last month rose 20.6 percent from a year ago and 25.6 percent from June, California Association of Realtors reported Monday. The median was $475,000, down from $480,340, or 1.1 percent, from June and from $682,930, or 30.4 percent, from July 2007.”

“Even in more prominent areas such as Thousand Oaks and Westlake Village, short sales and foreclosures are a problem, said Bob Merritt, a yacht broker who has been trying to sell his Thousand Oaks home for the past year and a half.”

“‘It’s everywhere,’ he said. ‘I don’t think there’s one area that’s immune to it.’”

“In order to compete with the distressed property selling for so much less, Merritt lowered his original asking price for his 2,653-square-foot, 4-bedroom, 2.5-bath home with a pool and spa from $969,000 to $799,900. But he won’t go any lower.”

The San Gabriel Valley Tribune. “Home prices in Los Angeles County dropped 3.6 percent in July compared with June, and they were down 27.3 percent from a year ago, according to a report released Monday by the California Association of Realtors.”

“Statewide, the median home price dipped 40.3 percent from 2007 prices, which was the largest decline ever recorded.”

“‘Once again, the 40.3 percent year-to-year decrease in the median price of a home was an all-time record, surpassing the previous record set in June with a 37.9 percent decrease,’ said CAR Chief Economist Leslie Appleton-Young in a statement.”

“Hacienda Heights’ median home price in July was $345,000, down 43 percent compared with July 2007. Last year, ‘the prices were just way too high, way too overpriced,’ said real estate broker Ann Ellis-Hall, who works in the area.”

“Houses down near the 60 Freeway have quickly lost value. ‘Those houses never should have been sold so high,’ she said.”

“A few years ago, said Realtor Martha Calder in Hacienda Heights, people illogically assumed that home prices would keep rising. ‘It didn’t take a genius to see these home prices were going to fall,’ she said.”

The Daily Breeze. “The South Bay’s median home price fell 13.4 percent in July to $597,250, compared with the same month a year ago. Local real estate broker Mercedes Santacruz said Lawndale is seeing numerous foreclosures and short sales. ‘There are quite a few that have gone to short sales and foreclosures. Prices are down,’ said Santacruz.”

“Lawndale’s median home price fell 20 percent in July, to $380,000, compared with July of last year. ‘Carson is terrible right now,’ she said. ‘The east side of Hawthorne is really bad because of defaults.’”

“Carson’s median for July was $357,500, down 30.6 percent from a year earlier. Hawthorne’s median was $480,000, down 16.3 percent. More upscale areas of the South Bay also were down. Torrance saw a median drop of 13.2 percent to $564,000. The median in Redondo Beach fell 10.5 percent to $752,000.”

The North County Times. “A North County real estate company has sued a lender for a failed short sale, a transaction that has become increasingly popular while home prices tumble.”

“‘To me, in general, (the lawsuit) speaks to the level of frustration people have in dealing with short sales,’ said John Woodall, a Vista real estate agent who specializes in foreclosures. He said about 50 percent of all short sale deals fail. ‘Most everyone is on edge in this market,’ he said. ‘There’s a lot of skittish, nervous and occasionally angry people in the real estate market. And justifiably so, it’s a tough market.’”

“A spokesman for Aurora Loan Services, a division of investment bank Lehman Brothers, declined to comment. Aurora holds a $587,000 loan on the Tucson, Ariz., home and accepted the short sale offer of $158,000, a 73 percent drop in value, according to the lawsuit.”

The Desert Sun. “The Coachella Valley’s median price dipped to its lowest levels since January 2004, helping boost July’s housing sales. July’s $274,000 median price is down 8.7 percent from June and down 28.8 percent from July 2007, according to new figures from DataQuick.”

“New construction continued to struggle. In July, 93 new homes were sold, which is down 53.5 percent from 2007.”

“A significant number of bargains are out there, too, said Sam Schenkl, executive officer with the Palm Springs Regional Association of Realtors. He mentioned Palm Springs condos that were in the $100,000-range and a listing that was priced in the $1 million range is now drawing multiple offers at $599,000.”

“The latest numbers show nearly half of the Coachella Valley could afford an entry-level home during the second quarter, a record rate. ‘Buyers are in the best place they’ve been in years,’ said Greg Berkemer, executive VP of California Desert Association of Realtors.”

The Press Enterprise. “Some of the people who used to build housing tracts in Inland Southern California thought the boom would provide them with a living for the rest of their working lives.”

“On Tuesday, many of them started learning about some of the alternatives. The Riverside County Economic Development Agency brought out-of-work construction workers together with job-training officials and union leaders for the start of a process to determine how the workers’ skills might match up with the current economy’s needs.”

“Jerry Carroll spent 11 years laying tile at high-end homes in the Coachella Valley. Carroll, like several other construction workers, never expected the residential construction industry to dry up to the degree that it has.”

“‘It’s in your mind it’s a bubble. We knew the bubble would burst but not this bad,’ said Bryan Ricks, 38, of Riverside, who owned a flooring company that employed 12 people. ‘It was perfect, smooth — and then it just dropped off to nothing.’”

The Bakersfield Californian. “Call it the last gasp of no-money-down. In recent weeks, homebuilders have loudly advertised zero-down options at entry-level tracts around Bakersfield. That’s because a seller-funded program - one widely used during the recent boom - is slated to end Oct. 1.”

“Bakersfield homebuilder John Balfanz said losing the program is going to hurt. ‘It’s been a good thing, so I hate to see it go,’ Balfanz said.”

“His company builds houses in a half-dozen communities around metropolitan Bakersfield with prices ranging from $1.6 million down to $200,000-plus units in Bella Vista, an entry-level tract south of Hosking Road on the west side of Highway 99.”

“Ads for Bella Vista currently tout the zero-down option, something Balfanz said will continue as long as loans continue to close before the Oct. 1 deadline.”

“‘I think people who buy right now are going to be smiling in three to five years,’ he said. ‘It’s a fantastic time to buy.’”

“Like many others involved in real estate, Balfanz thinks no-money-down loans are part of ‘what got us in this trouble in the first place.’ ‘Why not walk?’ he wondered, if your own money isn’t at risk.”

“The market could be healthier if buyers have to ’scratch and claw to put money together’ for a down payment, he said.”

“John Lara, broker of San Joaquin Realty in Delano, said about 80 percent of homebuyers his company works with make use of seller assistance. The coming change could ultimately nudge folks back to piggy banks.”

“‘If they want to buy a home, they have to start saving money,’ Lara said.”