A report from the Daily Citizen. “U.S. Senator Johnny Isakson, R-Ga., spoke on the Senate floor last week and argued that Congress must take steps to jump-start housing demand in order to boost the slumping economy. On Jan.15, Isakson introduced the Fix Housing First Homebuyer Tax Credit Act to expand the homebuyer tax credit passed by Congress last year. The text of Isakson’s remarks is below.”
“‘Looking ahead, we continue to look at suggestions that throw money at the problem rather than getting to the root cause of the problem. In fact, with the best of intentions, I think people are struggling to meet the symptoms of a serious illness rather than treat the illness. The illness, as the Senator from Washington referred to, is the collapse of the U.S. housing market which began in the last quarter of 2007.’”
“‘I was in this business for a long time, and I called 10 people who worked for me a number of years ago last weekend in Atlanta. I talked to a lady by the name of Glennis Beacham. ‘She said: Johnny, I had nine people come to my open house last weekend…Every one of them had the money and they wanted to buy, but they were looking for two things: a short sale, which means somebody selling their house for less than is owed on it and getting a discount from the lender, which means it is a downward price or they are looking for somebody whose house is going into foreclosure that they think they can steal.’”
“‘They don’t want to even make an offer on the 80 percent of people’s houses in this country who are making their payments, aren’t in default, aren’t in foreclosure, but might need to sell. So the marketplace has died.’”
The Tennessean. “Nashville’s largest bank, Regions Financial Corp., swung to a $6.2 billion loss during the fourth quarter. Regions’ stock fell 24 percent Tuesday, part of a general collapse among many bank stocks. At Regions, Dowd Ritter, Regions’ chairman, president and CEO, issued a statement saying the bank was hurt by ‘continued declines in housing and residential-related construction project values, as well as rising unemployment.’”
“‘Prices of Florida-based properties remain under particular pressure, with the real estate downturn rippling through the economy,’ he said.”
“‘The losses were higher than expected,’ said Jefferson Harralson, an analyst with investment bank Keefe, Bruyette & Woods in Atlanta. ‘The banks aren’t really designed to be losing money.’”
The Atlanta Journa Constitution from Georgia. “Atlanta-based SunTrust Banks tumbled into the red during the fourth quarter. Georgia’s largest bank, whose housing loan business is chiefly in the Atlanta area and in Florida, cited ’significantly higher’ loan delinquencies among the reasons.”
“SunTrust is latest in a string of banks to report dismal financial results. ‘The fact that SunTrust is not alone in paying the the price of a deteriorating economy on our business and our clients does not make today’s results any less painful to report,” said James M. Wells III, SunTrust’s Chairman and CEO. ‘We are under no illusions as to the severity of this credit cycle.’”
The St Petersburg Times from Florida. “The fading hopes of Trump Tower Tampa just got fainter. A Tampa bankruptcy judge has ruled that Colonial Bank, owed $3.5-million by tower developer SimDag LLC, can proceed with its foreclosure against the project’s riverfront lot. The 1.5-acre property, which SimDag said is worth at least $15-million, could be seized or auctioned by the bank as part of the foreclosure. Trump Tower was supposed to be the region’s tallest skyscraper but could not get a $200-million construction loan.”
“When Jal and Shiraz Irani moved into Cory Lake Isles, they thought they’d found paradise. The developer had lined the streets with miles of brick, planted dense tropical foliage along the winding entrances and created a private beach and a fish-filled lake. The Iranis pay a few thousand dollars a year in community taxes for the amenities. But apparently, that may not be all they have to pay. The couple was stunned to discover recently that the house they bought two years ago carries a massive debt: $23,093.”
“If the owner ever decides to move, it will be virtually impossible to sell the house with a title that doesn’t come back clean. ‘Obviously, you have to inform the prospective buyer,’ said Realtor Russ Perkowski. ‘With as many homes that are on the market, I think a lot of buyers would look for something else.’”
“‘Just when I was thinking nothing more can surprise me, I am surprised,’ Shiraz Irani said. ‘This is shocking.’”
“‘Everybody’s been to real estate closings where you sign 100 times in three minutes,’ said James Nicholas, a retired University of Florida professor of urban planning and law who helped write much of the state’s community development district law. ‘They may have signed one of those.’”
“Neighbors packed the meetings, which grew so contentious that the community development district board hired off-duty sheriff’s deputies to keep order. As one meeting dragged on, a deputy remarked: ‘All these rich folks talking about $5,000 palm trees. That’s fine with me. It’s paying my mortgage.’”
The Orlando Sentinel. “When mortgage rates fell below 5 percent last month, broker Jeff Perdue’s phone lines lighted up as dozens of people tried to join the latest refinance boom. When the ringing stopped, only five were approved. The rest had good credit, good income and ‘decent equity’ in their homes, but that wasn’t enough, said Perdue, owner of Orlando Home Mortgage.”
“‘The value of their homes killed the deal,’ he said. ‘I had to call them and tell them, ‘I’m sorry. If your house had been worth what it was when you bought it, this would have been a piece of cake. Now the numbers don’t make sense for you.’”
“Even if you are creditworthy, don’t expect easy credit this time around. ‘Only good borrowers need apply,’ said Andrew Orr, a financial planner with OrrGroup Financial. ‘We are back to the 1950s, so to speak, when people wanted a home for shelter, not for an investment.’”
The Cape Coral Daily Breeze. “The residential real estate market that, when it fell, dragged the American economy into one of the worst recessions in recent history, hit Southwest Florida particularly hard. ‘Think of it as going to your favorite department store and seeing something you have always wanted on the discount rack and it’s 75 percent off,’ said Cape Coral Association of Realtors President Paula Hellenbrand. ‘That’s what the market is like now, and that’s why it’s trending upward.’”
“To emphasize her point, Hellenbrand cited a home that county records reportedly show sold for just over $150,000 as recently as 2005. ‘In a few hours, one of my buyers is closing on that house for $85,000,’ she said.”
The News Press. “Major crimes in areas served by the Lee County Sheriff’s Office were down almost 8 percent in 2008 from 2007. The number of criminals arrested was up, according to statistics the sheriff’s office released. The largest increase in crime in Lee County was with residential burglaries, which jumped by almost 500, from 3,070 to 3,563. The increase in residential burglaries is attributable to a spike in the crime in Lehigh Acres, according to the statistics.”
“‘Some of the theft we’re seeing is directly connected to the economy,’ said Sheriff Mike Scott. But Lehigh Acres also has a high number of unsold and foreclosed homes that are abandoned. Many of them are furnished, which makes them an easy target for thieves, Scott said.”
“Bo Turbeville, a Lehigh businessman and chairman of the Weed and Seed steering committee, attributes the increase in residential burglaries to the number of vacant buildings. ‘Am I surprised? No. Especially in the area of residential burglaries, with the vacant residential houses and the problems people have being out of work,’ he said.”
The Daily Business Review. “Lenders have always tried to be discreet when marketing their foreclosed properties for sale. But amid an ever-worsening foreclosure crisis, it’s not exactly a secret that banks have become some of the nation’s largest property owners. And lenders are starting to shed their low-profile approach as their portfolios bloat with foreclosed properties and pressures mount to unload the real estate.”
“Fred DeFalco, a long-time South Florida auctioneer, said he has been consulting for local and regional lenders and helping them develop strategies to unload their REOs. ‘They are definitely trying to get creative, but they are lost,’ DeFalco said. ‘Look at the Washington Mutual site, it’s a great idea but no one knows it’s there. Banks don’t know how to market real estate.’”
“But they are trying and they are past the phase of denial, he said. ‘I was having dinner with some other bankers the other day and they were all openly talking about their REOs and how they were dealing with them — that’s something you didn’t see before,’ DeFalco said.”
The Bradenton Herald. “Homeowner reports of Chinese drywall — associated with a foul odor, a corrosive effect on mechanical devices and health concerns — are on the rise. The Florida Department of Health has received about 39 complaints from homeowners around the state, including in Manatee, Sarasota, Pinellas, St. Lucie, Collier and Lee counties. So far, two developers, Taylor Morrison and Lennar Homes, have been associated with having homes built with drywall imported from China.”
“Maryna Haiduk and Tomas Vapsva were growing concerned about the problems with the drywall.
Strange things began to happen. Belt buckles, jewelry, mirrors and picture frames became tarnished, and their computers had to be repaired. Air-conditioning units experienced mechanical problems. Since moving into the home in 2006, Haiduk and the couple’s two-year-old son also have been having health problems.”
“‘For this house, I paid a lot of money,’ she said. ‘Right now, this house makes me sick and I cannot get rid of my house.’”
“Renowned Florida economist Henry H. Fishkind joked in front of a crowd of about 400 at Wednesday’s 2009 Economic Breakfast at the Bradenton Auditorium that he predicted a bottom at last year’s event and was wrong. ‘If you recall, when I visited with you last year, I said, ‘I think the housing markets have bottomed out,’ Fishkind said. ‘I surely did not see the financial panic in September of 2008 that drove those markets back down again.’”
“But Fishkind said when weekly jobless claims in the nation — reported each Thursday at 8:30 a.m. — dip below 350,000, it will be a sign the bottom has been reached. ‘Obviously you would like me to tell you when that would be,’ Fishkind quipped, getting chuckles from the audience. ‘And just as obviously, you know that I do not know the answer to that question, because if I did I wouldn’t be doing this stand-up shtick for a living. That said, my prediction is: Nov. 19 at 8:30 a.m., you’ll know the recession is over.’”
“But Fishkind was serious about the downturn the nation and the state of Florida have been through. ‘I thought I would never see a day that the sky was falling. I used to think that this Chicken Little stuff was kind of a joke,’ Fishkind said. ‘And then on Sept. 15, Lehman Bros. went bankrupt and the sky really did fall.’”
“Manatee County, in particular, has a challenge to create a more diverse economic base, given the sagging housing market and declining home values in the north and other parts of the country that may prevent people from locating here, Fishkind said. For awhile, Manatee had an advantage because it was more competitively priced versus places like Sarasota and Pinellas counties. But that is less and less the case, he said.”
“‘Some of the competitive advantage that you once had is no longer here,’ Fishkind said.”
The Herald Tribune. “Despite the economist’s predictions being widely off the mark for the past two years, more than 400 political and economic leaders from around Southwest Florida still packed the Bradenton Municipal Auditorium to hear Orlando’s Hank Fishkind prognosticate about 2009 and beyond.”
“Fishkind made several jokes about how wrong he had been about the economy in recent years, but audience members did not seem to mind. ‘He can’t be faulted for that because no one got it right,’ said Judy Shinn, an agent with Michael Saunders & Co. in Bradenton.”
“Even nationally renowned figures like former Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Robert Rubin were taken by surprise. ‘No one saw this coming,’ agreed Kathy Valente, another Saunders agent.”
“Fishkind is expecting 2009 to be much worse than 2008 on the foreclosure front. He predicts 400,000 foreclosures in Florida this year compared with about 270,000 last year. In Manatee County, foreclosures will shoot past 12,000 from just under 8,000 last year and about 4,400 in 2007. ‘2009 will be another tough year,’ he said.”
