The Housing Bubble

It’s Friday desk clearing time for this blogger. “Mortgage scammers took advantage of loopholes in New York State lending laws to defraud homeowners and lending institutions all over the state, according to a new report. In one example from 2006, Suzette Francis, a woman with two young children, no assets, working as a $10-an-hour security guard and living in a homeless shelter, obtained a mortgage for $470,000. Francis had down payment and no proven income or assets.”

“She would have to work 400 hours a month just to pay her loan. ‘I’m, like, in a million dollar debt in housing and cash poor,’ Francis told the Commission.”

“Rhode Island’s housing market continues its downward spiral, with second-quarter house prices falling to their lowest level in five years. One ‘positive sign,’ the Realtors reported, was a decline in the inventory of single-family houses on the market. Not everyone, however, is convinced.”

“‘People are taking their homes off the market,’ said Suzanne E. Mulvee, senior real estate economist at Property & Portfolio Research in Boston. ‘Why bother having open houses if the thing is not going to move?’”

“‘It takes people graduating from school, people renting now and continuing to save so they can buy,’ Mulvee said, ‘We borrowed from the future [when] we took really good renters and made them really bad homeowners.’”

“When the Town Council sent out estimated tax bills last month based on new land and home valuations, it used a tax rate of $15 per $1,000 of value. On Monday the council dropped that rate, leaving taxpayers looking at a tax rate of $14 per $1,000 of valuation. But even with that move, many Fort Kent property owners are looking at major tax increases. ‘It’s no secret there’s been a significant shift in valuations,’ said Town Manager Don Guimond. ‘Land went up across the board.’”

“‘This valuation was done at the top of the housing market,’ said Councilor Gilman Caron. ‘Now that bubble has started to burst.’”

“Saint John’s real estate market is hot, hot, hot! The experts agree Saint John is on the cusp of booming prices, growth and housing sales. ‘It’s a hot market for sure,” said Realtor Marc Mawhinney, ‘but I think it’s probably just the tip of the iceberg. I don’t think the boom has hit yet with all the projects coming.’”

“The market, both in Saint John and especially the Kennebecasis Valley, is good for sellers right now. ‘We’re seeing as many as five, six, and even eight offers on a house the day it comes out on the market. It’s amazing. We’ve never seen that before,’ said Ron Young, owner of Exit Realty.”

“A beach hut with its own patch of sand was snapped up for a staggering £85,000 by a mystery buyer. The hut, which has no running water or electricity, lies on the beach in the sought-after coastal resort of Abersoch. In recent years prices for the huts have rocketed. Three years ago the Daily Post reported the sale of a hut at £60,000.”

“Estate agent spokesman Martin Lewthwaite said: ‘The hut was sold for substantially more than the guide price of £75,000. The buyers wanted the use of the hut during the main summer season. Prices for these huts are holding up very well, there is always a demand for huts on the beach.’”

“Cymuned chief executive Aran Jones said: ‘People who live in Gwynedd are fed up to the back teeth with hearing about these absurd prices for ugly sheds on Abersoch beach, while local people can’t afford houses.’”

“Jim Kingham says the credit crunch is hurting his Belfast-area moving company more than the violence that ravaged Northern Ireland for 35 years. Kingham has fired nine of his 12 workers at A1 Shortnotice, based in Newtownards, as house prices plunge and sales dry up.”

“‘You can take me back to the days of the bombings,’ says Kingham, who has run A1 for 40 years. ‘Business was better then. Five of my six lorries haven’t left the yard for months.’”

“House prices rose at the fastest pace in Europe, data from the Royal Institute of Chartered Surveyors show. They climbed 79 percent in the two years ending in the second quarter of 2007, according to Nationwide Building Society, the U.K.’s biggest customer-owned lender.’

“‘Properties would go on the market and the same day there was maybe 10 or 20 bids in,’ says Desmond Turley, managing director of Ulster Property Sales in Belfast. ‘It was frenzied. Now it’s different. The level of interest just isn’t there.’”

“Maeve Egan bought a two-bedroom apartment in west Belfast for 130,000 pounds in 2006. Now it’s worth 30 percent less, and she can’t afford the 800-pound monthly mortgage payment after failing to find a roommate.”

“‘I’m living in my mum’s house and renting the flat out just to pay the mortgage,’ says Egan, adding that she’s cut her spending on clothes and holidays. ‘I can hardly afford to go out through the door because of it.’”

“In 2006 and 2007 many banks allowed three or four people to sign for mortgages when the buyers didn’t qualify on their own, said a spokesman for Banco Bilbao Vizcaya Argentaria SA, Spain’s second-biggest bank. Banks also granted variable-rate loans to families at the financial limit when interest rates were close to the lowest in a generation. Kutxa even offered a 50-year mortgage in 2007.”

“‘There was a fever in the real estate business, and it was the banks who set the terms,’ says Ramon Lobo, who worked as an auditor at BBVA during the boom.”

“Jose Maria Gonzalez is struggling to unload a four-bedroom apartment in Madrid so he can pay for the 480,000-euro ($750,000) house he now lives in. Gonzalez bought a new home outside Madrid last year. He took out a bridge loan to tide him over until the sale of his apartment, reassured by an estimate that it was worth 450,000 euros.”

“After a year on the market, he dropped his asking price to 435,000 euros from 510,000 euros and is still getting no interest. Payments on the bridge loan are set to begin in October on top of 1,300 euros a month for his mortgage.”

“‘I don’t see a way out,’ he says. ‘There’s no way we can pay them both, and practically no one has been to look at the place.’”

“When Borja Fernandez bought his two-bedroom apartment in Madrid in 2005 it was valued at 530,000 euros even though he only paid 486,000 euros. That allowed Caja Madrid to overstate the amount of home equity backing his 450,000-euro mortgage.”

With Sociedad de Tasacion SA estimating that property values locally have increased 22 percent since 2005, suggesting that the apartment is worth 100,000 euros more than the best offer, he’s not ready to cave in yet.’

“‘It starts to weigh on you,’ he says. ‘People say prices will start to rise again in 2010, but then you think: What if they’re wrong?’”

“House prices fell by 2.2 percent from June to July. This continues a trend which leaves housing 3.3 percent cheaper than last year. Less borrowing also indicates that prices may continue to fall.”

“‘We no longer have confidence in our own forecast,’ says head of the Norwegian Realtor Association, Christian Dreyer. NEF had estimated that 2008 prices would rise by 3 percent.”

“The realty market has been forced to do a reality check after being hit by inflation and economic slowdown. Metro properties have suffered badly but even small cities haven’t stayed immune to the headwinds.”

“‘NRI investors are bailing out Ahmedabad. In most tier-II markets, prices have gone down sharply,’ added said Pankaj Renjhen, managing director (Mumbai) of real estate consultants Jones Lang LaSalle Meghraj.”

“Shailesh Kanani, a research analyst with brokerage Angel Broking, said that in tier-II cities, projects at realistic rates like Rs 1,500-2,000 per sq ft are being bought out by end-users. ‘But investors have already packed their bags and left this business,’ he said.”

“The 22-story Glass House residential high-rise on McKinnon Street was planned as a condominium tower. But the builder recently decided to switch to rental after several months of marketing the units to potential buyers.”

“‘A lot of the townhome market was selling with subprime mortgages and that’s gone, so that’s why it’s slow,’ said Dallas housing analyst Mike Puls. ‘And a large segment of the luxury condo market - 25 percent or so - was selling to investors.’”

“With the market facing an oversupply, developer Harvest Partners has killed plans for two condo towers in its huge Park Lane development. The condos originally were to sit atop a boutique hotel. ‘We took the condo portion off,’ said Harvest Partners’ Tod Ruble. ‘Three or four years ago, you couldn’t finance a hotel without condos. Now you can’t finance one that has them.’”

“Benton County enjoyed a recordbreaking building boom. But any code-enforcement official, Parks Department employee or city planner knows that the growing number of foreclosures, bankruptcies and those simply walking away from their homes has created quite a nightmare.”

“‘There are entire subdivisions that nothing’s happened with,’ said Rogers codeenforcement supervisor Jeff David. ‘There are weeds 6 to 8 feet tall.’”

“‘These developments and homes that were only partially completed, that’s where you start finding piles of bricks, rebar and wood in the yard,’ said Roy Lovell, Bentonville’s parks foreman. ‘A lot of times, grass was never planted, and everything is so grown over we can’t see what we’re dealing with.’”

“Demand is rising as rental home and apartment vacancies fall across the Wichita area. It’s welcome news for landlords who can finally raise rental rates after almost a decade of steady or falling demand.”

“‘Hey, five years ago people were moving out of rentals left and right to buy houses,’ said Paul Savage, president of Apartment Finders and Savage Inc. in Wichita. ‘Isn’t it amazing? What goes up is always going to come down, no matter what you do.’”

“The bicounty housing market has slowed some since last year. Glenn Crellin, director of the Washington Center for Real Estate Research, said ‘the Tri-Cities market is probably marching to its own beat.’ ‘It’s certainly a market that doesn’t warrant any panicking,’ Crellin said.”

“‘Credit standards across the board … are all much tighter than I’ve ever seen them,’ said Mark Runsvold, branch manager for CLS Mortgage in Kennewick. He said he’s a little concerned that even people with stellar credit and incomes that support buying a home aren’t able to get zero-down loans, which still are in demand.”

“Dave Retter, designated broker and co-owner of Windermere Tri-Cities in Kennewick, thinks the market will have a strong second half of the year. ‘Every year you’re not going to set a record in a good market,’ Retter said.”

“To hear some real estate salespeople tell it, the housing market isn’t all that bad and would be a lot better if “The Media” would stop publishing bad-news stories.”

“I know that folks in the housing business are going through some tough times, but I’m not willing - as a card-carrying member of said Media - to take responsibility for it. We didn’t invent the housing bubble or the mortgage crisis or the resulting economic recession. And while we do write a lot about it, perhaps lengthening the trough, we also helped hype the market when it was on the way up.”

“Remember how buyers needed to hurry, needed to pay more than listing, how it was OK to borrow more than you could afford because appreciation would take care of it? Where were the complaints about those stories?”

“Along with the economy, the conversation at the average metropolitan social gathering has suffered a downturn. But I do detect an upside.”

“People have stopped braying on about how much their property is worth and what they are going to do when all the lovely lucre from it is realised. No one is banging on about doing up rambling farmhouses in France or fincas in Spain. No one gives a floating shelf what Sarah Beeny or Kirstie Allsopp thinks this week.”

“While dreams of making pots of money from our houses - which would enable us to run off into the sunset in pursuit of the remote-worker/yoga-teacher, perfect downsized dream - are being shattered by falling property prices, this economic standstill could prompt a new appreciation for the houses we are stuck with.”

“It is probably crass to count our blessings - certainly while first-time buyers are priced out of the market and houses are being repossessed. But it is a relief that nomadism among the professional classes - and better yet, talking about it - is being forced to stop. We might get to know each other, and our homes a bit better.”

The Rocky Mountain News reports from Colorado. “From 1 to 6 p.m. Sunday, Custom home builder Darryl Wagner is listing three of his expensive homes in a Western Real Estate Auction. The auction will feature new homes priced from $375,000 to $3.2 million in Centennial, Castle Rock, Denver, Parker, Arvada and Golden. The average price of a home is around $1.5 million. At Sunday’s auction there will be undisclosed reserve prices, so the builder can reject low-ball offers.”

“Wagner said his reserve prices will be close to his net cost of building. ‘If someone offers me $500,000; I’ll just say no thanks,’ Wagner said.”

“‘In a strong housing market, we’re not so busy. In a down market, we’re really busy. We’re getting busier every month,’ said Rhett Winchell, head of that division for Kennedy Wilson. ‘If you thought you were going to sell 10 homes a month and you’re selling one home a month, the advantage of an auction is is you can sell all of your homes in one afternoon. Even though you get less than you expected, you can save an entire years worth of carrying costs.’”

“On July 20, for example, Kennedy Wilson auctioned 45 condominiums in Santa Fe. The units originally were listed from $189,000 to $310,605. Most sold from about $140,000 to $225,000, he said. Typically, Winchell said, the minimum price of a new home is 60 percent of the asking price. If a builder could get 90 percent of the asking price, he’d probably sell it outside of the auction, he said.”

The Aspen Daily News from Colorado. “Waning construction and a sluggish economy set off a round of layoffs in the local architectural sector recently, including one firm that slashed salaries by 10 percent. Speculative projects - houses and condominiums - have definitely slowed down, architects interviewed for this story agree.”‘

“‘A lot of our speculative home projects went away,’ said Jeffrey Halferty, who is technically a designer not an architect.”

“‘If you’re working for someone in the oil business in town, you’re probably doing just fine - and there are some of those in Aspen. Aspen is a rarefied place,’ added Harry Teague of Aspen-based Harry Teague Architects. ‘There are people here working in all different kinds of fields in the economy and to that extent we seem to ride out some of these waves. But this is a global economic issue, not just a national one. And I suspect we’re going to be affected.’”

The Arizona Daily Star. “The latest Arizona Blue Chip Economic Forecast shows drops in employment, retail sales, housing and population growth. And new figures from legislative budget analysts show that sales tax collections for June were less than $300 million. That is nearly 7 percent less than a year earlier.”

“Home permits during the first half of the year also slowed to 11,182, down from 24,783 during the same period last year. The report said Arizona’s employment and home building will not see a turnaround this year. Arizona lost 33,000 jobs overall in the past 12 months, with the most jobs lost in construction, at 33,100. At least 35,000 more construction jobs will be lost in 2008, the report predicted.”

“‘Forecasts made at the start of the year are in the shredder,’ said Associate Dean Lee McPheters of Arizona State University. McPheters said economy watchers ‘are debating just how bad the downturn will be and how long it will last.’”

The Arizona Daily. “Since the collapse of subprime lending, Arizona’s bloodied housing market has been leaning heavily on a makeshift crutch known as seller-funded down-payment assistance. A federal housing bill signed into law Wednesday will yank away that crutch on Oct. 1.”

“Customers in outlying communities such as Laveen, Maricopa, Surprise and the Hunt Highway corridor of northern Pinal County currently use down-payment assistance for nine out of every 10 sales, said Phoenix real-estate analyst Jim Belfiore.”

“‘Almost every builder out there is heavily marketing homes with down-payment assistance,’ he said. ‘The hardest-hit area of the market will be the starter-home market.’”

“Surprise resident Jesse Grob (said) it’s a shame first-time buyers will no longer be able to utilize seller-funded assistance programs as he did. ‘I’m a hardworking guy - I’m by no means poor,’ he said. ‘I made $70,000 last year, and I still had a hard time coming up with a down payment.’”

The Camp Verde Bugle from Arizona. “The market for homes in the Verde Valley, both new and old, continues to slip. Not only are sales of existing homes down from a year ago, but the average price has also continued to drop. The slump is valley wide.”

“The median price has fallen by $34,700 in the Cottonwood, Clarkdale and Cornville area to $200,800 and by $19,000 in Camp Verde to $217,000. One of the major factors driving the price of resale homes downward is bank repossession.”

“‘Finding the bottom is not going to be up to the retail market. It’s going to be up to the banks because they have so much inventory,’ says Rob Witt, an agent for Camp Verde Realty. ‘The deals we are seeing are bank deals and they are quite low. Added to that is people’s expectations are that the market is still going down.’”

“Audra Stadelman, sales manager for Coldwell Banker in Cottonwood, agrees. ‘We are having a hard time coming out of the slump because of all the foreclosures out there,’ she says. ‘They are only about 5 to 7 percent of our market, but it’s the 5 to 7 percent that is selling. It’s got to be a deal to make a deal.’”

“According to Witt, the market has an almost three-year supply of homes if houses continue to sell at the current rate.”

“How long the downturn will continue or how far prices will drop is anyone’s guess. ‘I say the fourth quarter of 2009,’ says Jerry Butterbrodt of Century 21 Sexton Realty. ‘We have enough foreclosures out there to sell for a year, then we will be back to a normal market. That’s my story and I’m sticking to it.’”

The Tooele Transcript from Utah. “Home sales are down across the state and nowhere is falling further than Tooele County. According to a new report by the Salt Lake Board of Realtors, home sales in Tooele County fell 36 percent in the second quarter of 2008 compared to the second quarter of 2007 - a larger drop than in Salt Lake, Davis, Weber and Utah counties. For the same period, median sales prices in Tooele County declined 6 percent to $183,300 - again the largest drop of the five counties.”

“Kelly Matthews, chief economist for Wells Fargo & Company in Salt Lake City, said Tooele County’s decrease in home sales may be partly caused by rising gas prices.”

“‘In a place like Tooele, gas prices are going to pose a problem in relation to someone buying a home, unless they plan to work in Tooele,’ he said. ‘People used to be willing to buy a home in Grantsville and commute to Salt Lake for work. However, the higher gas prices now are really affecting commuting costs, and people really don’t want to spend that much on gas now.’”

“Matthews also attributes the drop in home sales to tighter lending restrictions, which make it harder for potential buyers to qualify for a home loan. ‘People were getting loans who realistically couldn’t qualify under normal, traditional lending standards last year, and there were too many of those people out there who were receiving them,’ Matthews said. ‘We ended up with a big affordability problem.’”

“‘The solution to this would be home prices readjusting in relation to peoples’ incomes, and that’s a process we’re working through,’ he said. ‘That’s why we’re seeing home prices get marked down. We’ve made significant progress in getting through this housing problem, but there will always be people out there who would like to buy a house but are waiting to see the prices go down even further.’”

The Daily Herald from Utah. “A glut of unsold new homes along the Wasatch Front is starting to shrink as more homebuyers come out of the woodwork, according to a report released Thursday by Newreach. ut the number of new homes abandoned halfway through construction — particularly those priced above $350,000 — is also rising, said Todd Cook, Newreach’s executive VP of research.”

“‘As our research shows, builders are working their way through speculation inventory, which is good news; however, there are more new homes abandoned than we have seen before,’ Cook said. ‘This could keep the unsold home inventory in a flat state, although many of these abandoned homes are in higher-priced ranges, so we should continue to see a decline in unsold homes, specifically under the $300,000 price range.’”

“In the second quarter, there were about 150 abandoned new homes in the north Utah county area, mostly in the cities of Saratoga Springs and Eagle Mountain.”

“‘That number is rising — the reason is likely [that with] many of these homes that were started, the builder is not able to finish because of construction loan release requirements,’ said Jason Eldredge, Newreach’s executive VP of sales.”

“Lehi continues to lead the state for the third consecutive quarter with the greatest number of unsold homes, accounting for a whopping 233 units, followed by Saratoga Springs with 194 units and Eagle Mountain with 157 units, according to the Newreach report.”

“The number of unsold new homes and condominiums in Utah County fell to 951 unsold units in the second quarter from a year ago, and is down slightly from 987 units at the end of 2007.”

The Review Journal from Nevada. “Numbers from local agencies designed to attract new businesses to the Las Vegas Valley reported dips in the number of companies moving to the area, and recorded drops in the economic impact of corporate growth here.”

“‘When I look at the numbers, I’m not thrilled with them,’ said Somer Hollingsworth, CEO of the Nevada Development Authority. ‘But we ought to be happy to have even these numbers, because it’s a nightmare out there.’”

“The new housing recovery law gives a glint of hope to homeowners facing foreclosure, but local business leaders doubt it will help many Southern Nevadans. Michele Johnson, CEO of the Consumer Credit Counseling Service, said Thursday she doubts the federal law will help much here.”

“Lenders with second-home loans would be wiped out and probably won’t agree to the FHA loan arrangements if they don’t also hold the first mortgage on a home, she said.”

“‘How many second-mortgage lenders are going to be willing to eat the balance (on their loan)?’ she said. ‘Probably 70 percent of the homeowners we’re seeing have a second mortgage with a different financial institution (than the first mortgage lender). Most of the (second-home loans) were for down payment on the house.’”

“Wells Fargo Bank, one of the biggest home lenders in Nevada, is analyzing geographic areas and may approve the FHA refinancing and loan reductions in distressed areas, possibly including parts of Clark County, said Kirk Clausen, regional president of Wells Fargo Bank.”

“‘It could include some forgiveness on some mortgage loans that might be underwater,’ Clausen said. ‘It’s probably too early to commit on any across the board loan forgiveness (of amounts exceeding 90 percent of appraised value).’”

Las Vegas Now from Nevada. “Bank-owned foreclosures dot the valley. The buyers are lined up ready take it over. But realtor Cynthia Glickman says there is just one problem. ‘The people in those departments really didn’t understand what was going on.’”

“Glickman has buyers to turn these troubled homes around. But the banks and mortgage lenders grind things to a halt and put the whole sale in jeopardy. She says they don’t have the knowledge or man power to handle the crisis.”

“‘Literally out of his mouth, you know, finally after asking enough questions — ‘really, yeah, ya, we pretty much don’t know what we’re doing,’ said Glickman.”

“It’s the same problem for Signature One Mortgage rep Jeff Kauffman. He secures the money for the buyer — and is shocked at how banks could be so ill-prepared for the deal. ‘Then we’re waiting and we’re waiting. And they’ll say it’ll be over by Friday. Friday comes around — and it’s not there,’ said Kauffman.”

“This is all happening when home prices are down nearly 30-percent compared to a year ago. That’s the worst drop in the country. ‘Sometimes common sense doesn’t apply to them,’ said Kauffman.”

“Glickman says they won’t accept the reality that the home price bubble has burst. ‘They’re shooting themselves in the foot because they don’t understand the decline in the market and what’s happening,’ she said.”

“The I-Team spoke over the phone with a few banks today. They didn’t really have an answer for why these foreclosure sales take longer and are more complicated.”

“Wells Fargo did say they are having to take over more properties as foreclosures continue to rise. They’re not dragging their feet on purpose. Wells Fargo said it wants to sell these homes as soon as it can. But there are so many foreclosures, they literally cannot keep up.”

KVVU Las Vegas from Nevada. “The Valley is full of for sale signs, for those who are selling, the news is not good. The Case-Schiller Housing Index shows home prices fell by the steepest rate ever in May, and Las Vegas is down 28.4 percent. ‘That could very well be true,’ said Patty Kelly, president of the Greater Las Vegas Association of Realtors.”

“She said two out of three homes are being sold after foreclosure, bringing down median sales prices. Kelly said that makes it a great market for buyers.”

“‘It’s a buyer’s market for sure. I moved here from Jersey. I’m going to rent first but seriously look hard in this area,’ said resident Bert Potts.”

The Las Vegas Sun from Nevada. “Chris Adams was excited to be one of the first occupants of a midrise condominium complex along Centennial Parkway in North Las Vegas. It made the perfect bachelor pad, with its modern architecture, apple red exterior and view of the mountains.”

“Eighteen months later, he’s getting pretty tired of still being one of the first occupants of the place. In the three-building complex, totaling 75 units, Adams has only seven neighbors.”

“The other units sit vacant in varying degrees of completion. It’s spooky at night, the darkness of the desert enclosing on the nearly empty buildings. There’s little noise or movement.”

“The pool is empty and the clubhouse remains locked, keeping a fitness center and a community room off limits. In front of the complex, the address appears to have been hastily spray-painted on a slab of rock. Above it, a billboard depicts a good-looking couple embracing, enjoying carefree living.”

“‘I can tell you that they don’t live here,’ Adams says, because he really does know everyone in the neighborhood.”

“In January 2007, he plunked down $20,000 cash for his $218,000 condo. Then he noticed the plumbers weren’t coming to finish work on neighboring units in his building. Soon the electricians stopped returning. When all the workers were gone, he started to worry.”

“The complex went into foreclosure. Now another developer plans to purchase the project. But they might not be. Blue Marble Development wants to convert the unsold units into apartments.”

“Adams shudders to think how apartments will affect the value of his condo. He certainly never intended to be surrounded by apartments when he agreed to make $1,300 monthly mortgage payments.”

“The buildings are targets for vandals. A half-dozen shattered windows have been boarded up, giving the complex that low-rent feel. ‘It could have been a nice place to live,’ he says, walking past a small playground that gets little use. ‘It would be like taking your kid to a junkyard to play.’”

“If the developer wants to turn the other units in his building from condos into apartments, Adams wants to be bought out. If that doesn’t work, he’s at least hoping they put some water in the pool.”

The Lahontan Valley News from Nevada. “You can’t blame Jolie and Dan Anderson for feeling a little worried. Their real estate firm, The Realty House Anderson & Associates, sells new houses in Fernley’s Donner Trails Estates subdivision for developer JKB/Paramount Homes Nevada.”

“Business at the large development on the east side of town has been strong enough for the builder to introduce new floor plans and begin work on new model homes. But the couple has noticed that some of the other developments in town have become mighty quiet.”

“‘You go out there, and there’s weeds growing all around those homes,’ Jolie Anderson said. ‘It’s scary.’”

“R&K Homes of Reno has four active subdivisions in Fernley. However, most of the current activity is not visible from the street. ‘We sold seven or eight homes last month, and we just had some dramatic price reductions,’ said Shana Rudd, a Realtor who is in charge of sales for the four developments.”

“Even so, there are more than 30 completed homes available in the four neighborhoods, including model homes, she said.”

“Since the beginning of the year, Linda Lawton, owner of L.L. Realty, has sold 42 new and resale homes, with sale prices down as low as $129,000. ‘The people who have existing homes have lost a lot of equity,’ Lawton said, ‘but it (the price drop) has drawn in the buyers.’”

“In the past, a majority of homebuyers came from Reno to take advantage of Fernley’s lower housing costs. ‘We used to say, ‘Drive a little, save a lot,’ said Dan Anderson. ‘But with $4-a-gallon gas, guess what? The savings aren’t as big as they were.’”

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