The Housing Bubble

The Miami Herald reports from Florida. “Adjustable-rate mortgages, or ARMs, popular during the housing boom, have lost both their appeal and the advantage they once offered borrowers. With the decline in home values, most South Floridians with option ARMs are, at best, stuck with them for now, unable to refinance in a conventional manner because their loan is upside-down. ‘If I would have known what was going to happen, I would have gotten a fixed rate,’ said Ronald Rostran, who bought a new three-bedroom, two-bath house in Homestead in the summer of 2007 for $250,000. ‘We thought we could stay in the house for two or three years and then sell it. I had no idea.”’

“Rostran planned to turn a profit in the housing boom. Now his hours as a truck driver have been drastically reduced and he is several months late on his $1,700 mortgage payment. More than a refinance, he’s looking for a loan modification. To top it off, the builder in his development is now selling new houses like his for $180,000 — $70,000 less than he paid. ‘Yes, for me it has been a nightmare,’ he said.”

“Mariah Fox has been trying unsuccessfully to refinance her ARM and is hoping she’ll qualify for one of the new federal packages that help people with upside-down loans. Fox bought her home in South Miami-Dade in 1998 with a fixed-rate mortgage at 8.5 percent interest. By 2005, the value of her home had more than doubled, to $172,000. She decided to refinance with an option ARM, borrowing an additional $20,000, for a new mortgage of $105,000.”

”’I wanted to repair the house and go through graduate school without being stressed out,’ said the mother of three. ‘There wasn’t much fear about [an ARM] then and the plan was to refinance in a couple of years before it started readjusting. At the time, it seemed like a good idea.”’

“The ARM started readjusting monthly in late 2008. Her house is now appraised at $100,000, down from $140,000 last year when she first tried to refinance. And her loan principal has grown to $117,000 because the minimum payment she recently has been making doesn’t cover the monthly interest due. ‘I’ve put lots of money into the house in the last six years and it’s all a wash,’ Fox said. ‘I’m going deeper into a hole every month.’”

“‘Most of our loan consultants wouldn’t put somebody in an adjustable unless it was their intent to be out of the house before it reset,’ said said Chris Buttafuoco, managing director of residential lending at Great Florida Bank. ‘We used it as a vehicle for folks not planning to be in the home long-term.”’

The Orlando Sentinel. “A troubled developer in the Four Corners area near Walt Disney World, sued by British investors after the vacation homes for which they paid thousands weren’t built, has now sought protection from its creditors in bankruptcy court. The company owes creditors a total of $184 million.”

“So far, only 96 town houses have been completed and prepared for occupancy. Of the 972 units planned for the site, 370 have purchase contracts but haven’t gone to closings. Tierra del Sol started to send buyers letters asking for contract extensions — and more money to finish the construction. ‘They started calling and trying to get me to sign another contract and pay double [the price],’ said Tom DeNapoli, who said he paid a $27,000 deposit for a four-bedroom town house that was supposed to be completed in 2005. He asked for his deposit back but never got it.”

“‘It certainly negated any other [investment] opportunity I might have had. Look at the history of this company. … I don’t think I’m going to get my money back,’ DeNapoli said.”

The New York Times. “Off the turnpike here in central Florida, hidden behind stucco walls, sits a sprawling Tuscan-style clubhouse on a hill overlooking a string of lakes, a golf course and green fields. This 1,900-acre property, called Bella Collina, was designed to hold 800 homes. Today, only 48 houses dot the landscape, and just three are occupied. The clubhouse, though open, is eerily quiet, and a promised swimming pool and equestrian center have yet to be built.”

“As the real estate boom expanded in recent years, developers and home buyers believed that residential golf resorts were a sure-fire bet. Many buyers looked to buy properties that they could flip for a quick profit. ‘The aggressive building of new resort courses continued from the mid-1990s into the 2000s, contributing to an increasing glut of inventory that finally found no market,’ said Joe Beditz, CEO of a trade group that tracks data on the golf industry.”

“Bella Collina, the brainchild of Robert Edward Ginn III, looks like a ghost town. So does Tesoro, another resort opened by Ginn near Port St. Lucie, where just 150 houses sit on 900 lots. And the Conservatory in Palm Coast, also from Ginn, is even more barren: 335 out of 340 lots are empty.”

“But when the real estate market began to tank in 2007, his empire came undone. ‘As property values plummeted, many investors had property worth less than their loans, and they were unprepared to pay their club and association fees,’ says Toby Tobin, a Florida real estate agent.”

“For Ginn, a man who could sell 400 lots in a single day during the height of the real estate boom, it has been a huge comedown. But when a new resort was in the works, Ginn knew how to generate a buying frenzy by holding lavish parties where potential buyers greatly outnumbered available lots, say agents and investors who attended the events. ‘You would come to one of Ginn’s sales weekends and you would be drinking and thinking, ‘I hope I get chosen as one of the select few who gets to buy a lot,’ recalled Hilton Wiener, a lawyer who bought an investment property at Tesoro. ‘The setting is very lush: hand-rolled cigars, fancy parties, vans with the Ginn name plastered on them.’”

“The Florida suit…alleges that Ginn worked to artificially inflate the prices of parcels in his development. In one case, according to the lawsuit, a buyer bought two properties for a total of $1.007 million, and Ginn’s title company recorded the respective sale prices as $1.007 million and $1. The company then used the larger price as a ‘comparable’ figure in an appraisal for Roy Bridges, a British financial adviser who bought a property for $1.195 million, according to appraisal records. Bridges’ property is now in foreclosure.”

“Ginn contends that ‘the county recorded it incorrectly.’”

“According to a transcript of a video obtained by a law firm representing property owners in the suit, a Ginn salesman told a group of potential buyers at Bella Collina that ‘Lot 5 sold for $2.1 million this morning.’ But property records showed that the parcel sold for just $416,900, according to the lawsuit. Ginn said he was ’shocked because the salesman deviated from company practices.’”

“Ginn says he is ‘ready to sell properties in trophy locations’ when the market turns around. ‘If you can’t sell,’ he said, ‘you die.’”

The News Press. “Rich and Linda Ricciani are using a novel marketing approach to sell their riverside estate in Fort Myers. A coupon. A coupon worth $1 million. Starting today, the coupon will appear in Florida newspapers, including The News-Press, the Wall Street Journal and newspapers in such northern cities as Boston and Minneapolis. If no buyer is found, the campaign will end July 31.”

“‘My broker and I were throwing around strategies and coming up with ideas, and one idea led to another and led to another,’ said owner Rich Ricciani. ‘Everybody puts an ad in the paper or on TV. We just wanted to think outside the box and try something different.’”

“The three-story house along the Caloosahatchee, with its 8,500 square feet of living area, was to be the family’s estate. Planning started 10 years ago and construction, which was completed in 2008, took more than three years because of the home’s many custom features. Ricciani, a real estate investor and developer, said while work was under way, he and his wife decided the home was no longer appropriate for them.”

“‘Our lifestyle has changed, our family has changed,’ he said. ‘It’s too big a house for two people and I’m 10 years older. It was a great idea then.’”

“Michaele Stahl, a luxury home specialist for Prudential Florida WCI Realty in Fort Myers, endorsed the Riccianis’ approach. ‘In this market, I think anything that anybody tries is not a bad thing,’ she said. ‘A $1 million coupon is kind of unusual in real estate. I’m not really into gimmicks, but I can’t blame anybody for trying.’”

“Stahl also stressed the importance of aligning with current market standards. ‘This will get attention, but I’m not sure it will help it to sell,’ Stahl said of the coupon. ‘In this market, it really all comes down to price.’”

From Florida Today. “Existing home sales in Brevard County were up 17 percent in April from a year ago, the third consecutive month of increased sales. The median sales price for single-family homes in April was $113,600, a 29 percent drop compared with the year-ago price of $160,000. The median price was $123,700 in March. The last time the median price was lower was in April 2002, when it was $109,300.”

“The dropping prices helped tempt John Dobay and his fiancé, Dawn McDonald, to check out a condo in Cocoa Beach Wednesday. The couple from Niles, Ohio, are regular visitors to the area and were in town for one of Dobay’s sons’ high school graduation. ‘That’s why we are looking now. It is the time to buy,’ said Dobay.”

“It is those ‘distress sales’ that have driven prices down and brought buyers back to the market, said Sean Snaith, an economist at the University of Central Florida. ‘I think they are starting to recognize that there are some values out there that are going to seem like real bargains five or 10 years down the road,’ Snaith said.”

“He points out that builders have told him many homes are now selling for less than it cost to build them. ‘Houses right now are selling below their replacement cost, which tells me we overshot the bottom,’ he said.”

The Bradenton Herald. “Melissa Murray was laid off in August. In April, her husband Russell Murray was laid off. To avoid foreclosure or falling behind on the bills, the Murrays are doing what many homeowners are doing in these tough economic times — renting out a room in their home.”

“‘It’s inconvenient. It upsets me that I have to do this,’ said Melissa Murray. ‘But if we do not find a suitable renter within the next month, we won’t be able to keep our heads above water.’”

“Economist Sean Snaith said it is common during a recession for people to search for alternative methods to generate income. Room rentals, he says, seem to be a popular option when faced with foreclosure possibilities and a poor real estate market. ‘It’s more prevalant given the nature of the recession and the role housing has played,’ Snaith said. ‘In this particular downturn, more people have been forced into this option as a way to make mortgage payments. It’s difficult to sell a house and for many homeowners it’s a better option than foreclosure.’”

“Murray and her husband receive about $1,000 in unemployment compensation a month, nearly the same amount as their mortgage payment. ‘With our mortgage, utilities, vehicle insurance, phone and just your basic necessities, it’s just barely enough,’ Murray said.”

“Manatee County had 2,450 foreclosure filings this year as of May 18. Pat Palmeri-Bates, a Realtor at Keller Williams of Greater Manatee and Palmetto, said renting is just about all some homeowners can do to avoid foreclosure. ‘A lot of people don’t want to take a hit of doing a short sale so they figure they’ll try to rent it, and at least some money’s coming in. It’s better than no money.’”

“During the past year, Palmeri-Bates estimates she’s rented 29 single-family homes and has about 25 rentals on her listings. ‘It seems as soon as I get something rented I get two more,’ Palmeri-Bates said. ‘Now we’re seeing people looking to rent out rooms in their homes.’”

The Associated Press. “Mike Manikchand points toward his neighbors in Lehigh Acres — a half-dozen empty, foreclosed-upon homes, sitting on weed-strewn yards — and he wonders: What will happen if a hurricane slams into southwest Florida this year? His simple answer: ‘A lot of these places will get destroyed.”’

“A 22-year-old pharmacy student, he took advantage of a dismal housing market and bought a foreclosed duplex for $36,000. In coming months, he and millions of others along the Atlantic and Gulf coasts will dutifully track tropical weather forecasts and stockpile batteries, flashlights and tins of tuna, hoping that hurricanes blow harmlessly out to sea.”

“But who will secure all the foreclosed homes if a storm does approach? No one really knows. If the bank hasn’t yet taken the title of a home, the property is in a kind of limbo, and local officials or homeowners associations may have no legal right to trespass and secure it. And many hard-hit counties don’t have the money or manpower to do it.”

“‘Simple logistics tells me (the banks) don’t have the staff to follow up,’ said Kenneth Wilkinson, property appraiser for Lee County, which in March had the third-highest foreclosure rate in the United States, after California’s Merced County and Nevada’s Clark County.”

“One real estate agent in the Fort Myers area said the process of putting the maintenance work out to bid and then getting approval from the bank that owns the property might not be workable as a storm bears down. ‘During a hurricane, we need to get out of town, not wait for approval for funding to secure a building,’ said Suzanne Sherer, president of the Realtors Association of Greater Fort Myers and the Beaches. ‘I won’t have time to get a bid from a handyman.”’

“Residents throughout the hurricane zone are worried, especially those who live in foreclosure-dotted neighborhoods. Armando Gonzalez retired from Miami to Lehigh Acres five years ago. He and his wife moved to a small home a few blocks from the city center, in a quiet yet thriving neighborhood. But in the last two years, his neighbors left, either because of foreclosure or job loss. Now he’s the only one on his block; the home next to him has a broken window and the one across the street is only half-built.”

“When asked what would happen to all the nearby, dilapidated homes if a hurricane hit, Gonzalez shrugged and grinned. ‘I can’t do anything,’ he said. ‘Maybe I’ll pray. God will save me.”’

The Herald Tribune. “The federal government is learning from the mistakes of the housing bubble. But what lessons will local governments salvage from a boom-and-bust cycle that overestimated home demand while underestimating the problems that would ensue when the mania collapsed?”

“With the pain and perfection of hindsight, the world now knows just how destructive ‘irrational exuberance’ can be. A housing bubble, coupled with deeply flawed credit practices and risk mismanagement, triggered a financial disaster of epic proportions.”

“During the boom, some long-needed traffic improvements were planned and scheduled to tie in with proposed mega-projects, which would help pay for the work. But then the development plans collapsed with the market. In several cases the projects and the traffic improvements remain unbuilt.”

“The cause of sustainable growth might also benefit from better use of data that could serve as an early-warning system on speculative excess. These indicators could include such numbers as the proportion of homes purchased as primary residences; median price compared to median income; and divergences from historical norms in price appreciation.”

“A lack of scrutiny helped enable the financial crisis. More watchdogs are needed — not just on Wall Street but here at home, to catch the mortgage fraud, inflated appraisals and other improper activity that contributed to the destructive bubble.”

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The Associated Press reports on California. “Nowhere in the country has the bust arrived more abruptly. Santa Clara County, home to Silicon Valley, saw bankruptcies soar 59 percent in the past 12 months, and projections are that they’re still climbing. Almost every seat in the bankruptcy courtroom is full. Joel Gonzalez, who used to make $100,000 a year installing hardwood floors, earned ‘about 400 bucks’ in March doing odd jobs. His life began falling apart in the fall when his boss, distraught about his failing business, committed suicide. Suddenly out of work, Gonzalez saw the adjustable payments on his $360,000 home loan increase from $2,400 to $3,200. Two months later his savings ran out and he found himself talking to a bankruptcy attorney.”

“‘This is culture shock for me,’ he said, tugging at his dress shirt outside the federal courthouse. ‘But after my boss’ death, I’m trying to keep it in perspective. I have a money problem, and I’ll get through it.’”

“Foreclosures have kept pace with bankruptcy filings in this region, but they’re far less obvious. In a new townhouse complex just a few miles from Intel Corp.’s Santa Clara headquarters, close to 10 percent of the units are on the market as foreclosure sales. But wander down the dreamy streets — Inspiration Place, Meditation Place, Fascination Place — and you would never know. ‘They don’t hang out signs because they want to be discreet,’ says Robert Lei, who holds a master’s degree in semiconductor device physics but now works as a specialist in foreclosure sales. ‘They don’t want so many people to see so many ‘for sale’ signs and get scared away, like there’s something wrong here.’”

“Resident Jeff Nelson, 27, a firefighter, said he and his wife, a teacher, would like to move their growing family into one of many low priced single family homes now on the market, but they’re stuck in this complex, he said. The numbers just don’t add up: They bought their unit three years ago for $527,000, they owe $500,000 and his foreclosed neighbors are selling their places for less than $450,000.”

“‘We thought owning our own place would get us somewhere,’ he said. ‘But now we’ve got to stay. It’s either stay, foreclose, or short sell.’”

The Record Searchlight. “The herky-jerky nature of Shasta County’s housing market continued in April. DataQuick Information Systems reported that 131 new and used homes were sold last month, an 8.4 percent dip from March and 20 percent drop from April 2008. It was the lowest April for sales in the 15 years DataQuick has tracked Shasta County. Last month’s lag in sales happened as the median price shot up 18.6 percent from March to $210,000.”

“‘A lot of times when you see prices whipsaw back and forth, some experts say that is a sign that the market is near bottom,’ Bill Parsons of Parsons Realty in Redding said.”

“April saw an uptick in pending sales, a trend that continued into mid-May, said Brad Garbutt of Real Estate Professionals GMAC in Redding. But with lending requirements still tight, it’s not uncommon for deals to fall apart, or for escrows drag on. ‘I see anywhere from four to five deals fall out of escrow a day. I think most of the reason is buyers are not able to get the loan approved,’ Garbutt said.”

The Sacramento Bee. “The California Public Employees’ Retirement System would lose its entire $922 million investment in a Southern California land deal under a plan that could be approved by a bankruptcy court judge Monday. The ruling would wrap up one of the pension fund’s worst real estate ventures. CalPERS’ housing portfolio, once estimated to be worth $9 billion, was reported to be $6 billion last fall.”

“CalPERS bought a majority stake in the 20,000-home Newhall Ranch project in January 2007, hoping for long-term returns on a major undeveloped tract in Los Angeles County. But the project’s developer, LandSource Communities Development LLC, faltered as the real estate market crumbled. It filed for Chapter 11 bankruptcy protection in June.”

“CalPERS considered buying back into the project through the bankruptcy process. The new stake would have been no greater than $55 million, court records showed. That deal is now off, CalPERS spokeswoman Pat Macht said Friday. ‘We conducted a thorough review of the proposal and decided not to participate because it doesn’t fit well with the strategic direction we’re taking in real estate,’ she said.”

From Maktoob Business. “Emaar Properties lost a bid to buy its way out of trouble with its failed U.S. home-building business and is in talks with creditors aimed at heading off liquidation of WL Homes, news agency Dow Jones reported on Friday. Dow Jones said Judge Brendan Shannon acceded to creditor demands that he convert WL Homes’ Chapter 11 bankruptcy case into one under Chapter 7, but he held up implementation of the order while the company and creditors try to work out their differences.”

“Conversion would put WL Homes, which operates under John Laing Homes, in the hands of a trustee, who would try to get a better price for the operation than Emaar was offering. It would mean the proposed Chapter 11 auction of the company that was once one of the largest private home builders in the U.S. is off, and the bankruptcy financing Emaar was offering is no longer needed.”

“Shannon did not fault Emaar or WL Homes over the auction proposal but said the ‘exceedingly difficult circumstances’ of WL Homes case, where big money was riding on the housing bubble, produced bad Chapter 11 case economics. Bank lenders were owed more than $350 million when WL Homes filed for bankruptcy in February. The company estimates it is worth $7 million in a liquidation.”

“Conversion to the shoestring liquidation form of bankruptcy will make little practical difference to the fate of WL Homes, the judge noted. ‘We are looking at something that is functionally the same whether it’s under Chapter 7 or under Chapter 11, we’re looking at a sale,’ Shannon said. ‘Nobody’s talking about reorganising or restructuring or rebuilding this business.’”

The Tribune. “Executives of a Ventura real estate development company that was once one of the largest homebuilders in San Luis Obispo County have failed to appear for several hearings scheduled in U.S. Bankruptcy Court in Santa Barbara, the Ventura County Star has reported. Creditors of R.W. Hertel & Sons forced the developer into an involuntary Chapter 7 bankruptcy in January.”

“Creditors can petition for an involuntary bankruptcy in order to force the liquidation of a debtor’s assets to pay their obligations. ‘This was an involuntary case, and in those cases it’s hard to get debtors to cooperate,’ Sandra K. McBeth, a trustee assigned by the court to oversee the company’s assets, told the Star.”

The Recordnet. “California home builders got busy in April, with sales bolstered by a $10,000 state income tax credit, and took out 2,265 permits for single-family homes, a jump of 21 percent from March. The impact was bigger in San Joaquin County, where the 77 single-family permits issued in April was well more than twice the 34 permits builders obtained in March.”

“Florsheim Homes had eight homes for sale when the tax program began in March, and they all sold within three weeks. Now the company is back to building homes on order as well as a few speculative homes, betting there will be interested buyers when they are done. ‘You need to have some homes available for a quick close in this market, but very few,’ said Joe Anfuso, president of Florsheim Homes in Stockton.”

“That caution is justified as state officials report the popular tax credit program - limited to $100 million or the first 10,000 qualified applicants - is nearly fully subscribed. Not surprisingly, industry officials are lobbying to see the tax credit program extended. Given the multibillion-dollar state budget deficit, it’s going to be a tough sell, admitted Tim Coyle, senior vice president of the California Building Industry Association.”

“But, he contended, in the long run, the credit would boost state tax revenues as it encourages economic activity. Coyle noted a recent study found that building and selling a new home generates as much as $16,000 in revenues to the state. If you’re handing out a $10,000 tax credit and getting back $16,000, that’s a pretty good deal, he said. ‘Economic activity - that is what this effort is all about; jobs, creating jobs.’”

“John Beckman, executive officer of the Building Industry Association of the Delta, agreed. ‘The tax credit has worked,’ he said. ‘We need to continue this to help the construction industry to recover and bring the whole economy back up with it.’”

The San Gabriel Valley News. “Los Angeles County eked out its second median home price gain in April after more than a year and a half of declines, the California Association of Realtors reported Thursday. The county’s median price for an existing, single-family detached home rose 1.9 percent to $300,690 in April. But that was still 31 percent below the year-ago price of $435,980.”

“Chris Vigil, a broker/associate in Whittier, said the Southland housing market is picking up steam. ‘The consensus among agents in my office is that this feels like a sellers’ market,’ he said. ‘Every house is getting multiple offers. You’re often competing with up to 10 offers on a house.’”

“Bill Velto, a broker/manager for Tarbell Realtors in Upland, said scores of potential buyers are lined up to buy bank-owned properties. In Fontana, for example, foreclosures and short sales account for about 80 percent of the transactions his office handles. ‘We’re getting 10 to 15 offers on every property,’ he said. ‘I think the banks are being wise by not dumping a lot of these on the market because that would hurt them by driving down prices on other properties.’”

“The median home price in most San Gabriel Valley cities is far below what it was a year ago. Altadena showed the biggest year-over-year decline - a 42.2 percent drop down to $350,000, followed by Baldwin Park, which saw its median price fall 41.7 percent to $210,000.”

“San Bernardino County weathered even more severe extremes. The city of San Bernardino saw its median price fall 61.6 percent to $73,000, while Highland posted a 63.1 percent drop, bringing its median price to $120,000. ‘I don’t think we’ll be out of this recession anytime soon,’ Vigil said. ‘There are a lot more loans that will be adjusting over the next year.’”

The Burbank Leader. “Struggling homeowners sat alongside cash-strapped home shoppers and other attendees during a set of workshops Saturday aimed at helping residents through their financial crises. The workshops were organized by Assemblyman Paul Krekorian and aimed at residents within the 43rd Assembly District.”

“Severe losses led Burbank resident Calvin Jung to the event. Jung was forced to close his chiropractic and massage center in downtown Los Angeles after business had slowed to a halt during the recession. He lost close to $90,000 over two years, he said.”

“He said he hoped to get help modifying his home loan, which he wasn’t currently having trouble paying but was expecting to. ‘It’s going to get tough because my business is gone, I don’t have a job, and the [stock] market took 90% of my money in September,’ Jung said.”

The North County Times. “As you drive down Cottonwood Canyon Road, the subdivisions appear to represent one of Southern California’s premier communities: palm trees, emerald grass and 8-foot-high walls adorned with meticulously maintained shrubbery. And then the road ends. From perfectly paved to bumpy dirt.”

“This is Lake Elsinore. It has been afflicted by foreclosures more than any other community in the region. Banks have seized 1 out of every 5 houses since January 2007, according to data from ForeclosureRadar and the Riverside County assessor’s office.”

“And more foreclosures could be poised to enter the pipeline, according to a report by First American CoreLogic. It showed that in one of Lake Elsinore’s ZIP codes, 92532, 3 out of every 4 mortgages were ‘under water.’”

“The area has blazed the city’s trail to becoming the region’s foreclosure capital, the result of an explosion in construction of new homes that were sold to borrowers who could not afford the payments. From 2000 to 2008, the number of households in 92532 tripled from 1,420 to 4,648, according to census and county data.”

“Construction in the master-planned communities along Cottonwood Canyon has come to a halt as builders struggle to compete with banks selling foreclosures for half the peak price set in 2005. That has left bare foundations with protruding pipes next to brand-new homes. Portable toilets next to half-million-dollar homes.”

“It doesn’t bother Roy Meerkamper, who purchased a home a year ago in the quasi-finished development —- the empty lots offer plenty of exercise space for his three golden retrievers. ‘I just try to not look at the housing prices,’ he said.”

“Down the road, bank seizures have ripped through an area known as Tuscany Hills. In that subdivision, Dan Baldwin tired of seeing brown lawns take over. It wasn’t going to happen on his corner. After two homeowners were evicted, Baldwin grabbed his hose, borrowed a neighbor’s so that it extended down the block, and he watered the lawns.”

“‘We’ve seen a lot of yards go bad and trees go down,’ said Nancy Baldwin, Dan’s wife. ‘We figured if someone comes in, they’re more likely to buy with a healthy yard.’”

“And Lake Elsinore’s housing crisis could deepen if things don’t change for borrowers such as Sean Malebranche. He purchased a Tuscany Hills home in 2000. Malebranche said he has lost hours at his job as a longshoreman in Long Beach. ‘It’s extremely stressful,’ he said. ‘You work all your life to have something, and then to see it go down the drain —- it’s been difficult.’”

The Inland Newspapers. “It seems that real-estate busts don’t phase Doug Duncan. Fannie Mae’s vice president and chief economist spoke at the Real Estate Research Council of Southern California’s quarterly luncheon on Thursday at Cal Poly Pomona, giving a humorous yet serious view of the local and national housing markets.”

“‘There’s a presumption today that this is all new, but it’s not,’ Duncan said about the reeling housing market coupled with a battered economy. ‘This has happened cyclically time and time again.’”

“‘And we tend to think there’s a silver bullet that’s going to fix it all, but that’s not the case,’ he said, referring to state and federal initiatives to keep troubled homeowners from going into foreclosure. Duncan said he’s skeptical the government can ‘retool’ the financial system to eliminate the financial risk collectively taken by Wall Street and borrowers during the housing boom.”

“Even during the housing boom years, when credit was so free that rising economic growth projections sounded more logical than fairy tale, the state was running an unsustainable budget, he said.”

“Skyrocketing real-estate values were being used as a basis to predict future growth. Since those projections took a nose dive, California is still running at ‘unsustainable levels,’ as Duncan puts it. ‘We probably have further to go than we think,’ he said about California’s economy and real-estate markets. ‘Many losses have already been taken but not all of them. We’re not out of the woods yet.’”

“Because of a wave of adjustable mortgages lent to borrowers immediately before and after the housing bubble’s peak, 250,000 more households in California will see their monthly payments rise, most of them between now and 2014, Duncan said. This isn’t the only problem. The Mortgage Bankers Association said on Thursday that prime fixed-rate mortgages, which have been the conventional loans historically used for decades, ‘now represent the largest share of new foreclosures.’”

“It’ll be a bear for the state’s economy to withstand. ‘Is the pace of economic decline slowing? Probably,’ Duncan said. ‘But I don’t see anything close to economic growth any time soon.’”

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It’s Friday desk clearing time for this blogger. “One in eight households with a mortgage ended the first quarter late on loan payments or in the foreclosure process, the U.S. Mortgage Bankers Association said on Thursday. Foreclosures on fixed-rate mortgages, given to solid borrowers with good credit, represented the largest share of new foreclosures for the first time. The jobless rate in Florida is currently hovering at 9.6 percent, double what it was in December 2007. In Lee County, where the median cost of an existing single-family home has plunged more than two-thirds from a peak in December 2005, job losses have been a key driver behind a surge in foreclosure filings.”

“‘I’m getting to the point where I’m ready to break down,’ said Martin Garcia. The medical laboratory equipment engineer has a prime, 30-year fixed rate mortgage with a 9.5 percent annual interest rate. But Garcia was laid off seven months ago. He receives about $900 a month in unemployment benefits. But he is down to just $400 in savings and he won’t be able to keep up much longer with the more than $800 a month in mortgage and maintenance costs he pays on the Miami Beach apartment he bought in 1989.’

“‘Since I’m unemployed the banks don’t want to refinance or do anything,’ Garcia said.”

“Plunging prices, rising unemployment and a new wave of foreclosures are clouding prospects for a quick end to the American real estate debacle. ‘We’re not at the bottom and anybody that’s trying to call the bottom right now is crazy,’ said Jack McCabe, a real estate consultant based in Deerfield Beach, Florida. ‘There’s a huge foreclosure wave still ahead in the next 12-18 months and still a lot of excess inventory.’”

“As the recession deepened in the first three months of this year, foreclosures and seriously delinquent home loans in Connecticut jumped above the rate of one mortgage of every 20 for the first time in at least 30 years. In neighborhoods throughout the state, stories like that of Ruth Jarvis are piling up. A single mother, Jarvis raised her two sons in a four-bedroom, split-level in Bloomfield that she bought in 1990. She got into trouble in 2007 when she refinanced into an adjustable-rate mortgage with a 9.75 percent interest rate.”

“The value of her house has fallen and her mortgage is now higher than the house’s appraised value. ‘I keep wondering why I can’t fit into some program,’ Jarvis said. ‘I’ve been working since I was 16. I’m 59 now. I have a job. I just want [my mortgage]structured so I can afford it. You end up falling through the cracks.’”

“In Connecticut, the economic downturn and layoffs are driving mortgage delinquencies and foreclosures, said Ronald F. Van Winkle, an economist and acting town manager of West Hartford. ‘If you lose your job in Connecticut, you’re hard-pressed to find another one,’ Van Winkle said. ‘Most families need two incomes to pay the mortgage.’”

“The number of Maryland residents who face foreclosure or have missed payments on home loans rose to nearly 121,000 in the first three months of the year, with mortgage woes increasing the fastest among the less risky prime borrowers, the Mortgage Bankers Association said Thursday. ‘Delinquencies are very much tied to employment,’ said Jay Brinkmann, the MBA’s chief economist. ‘When people have jobs and will be buying houses, we’ll see [home] prices stabilize, but until prices increase in some areas we are still going to see a number of homes in foreclosure. If you lose your job, you can’t sell your home for enough to pay off the mortgage.’”

“Andy Lewis, a community development specialist who is tracking Wisconsin foreclosures for the University of Wisconsin Extension, reported that foreclosure cases in the state surged 29% between the first quarter of 2008 and first quarter of 2009. About 23% of the state’s 7,693 foreclosures are in Milwaukee County. Job cuts are taking a bigger toll on homeowners’ ability to keep up with their monthly payments, Lewis said in an interview Thursday.”

“‘The rising unemployment rates are clearly a problem,’ Lewis said. ‘We already know that the top two reasons why people face foreclosure are illness or loss of income. So with unemployment now approaching double digits, certainly that’s everybody’s fear.’”

“A new report shows the Oregon foreclosure rate has jumped to a level seen only once in the last 30 years. The Oregonian newspaper said the foreclosure rate is the highest since it hit 2.23 percent during a recession in early 1985.”

“Steve Blanton with Rogue Valley Association of Realtors says the statewide foreclosure increase could be linked to unemployment. ‘From what I can see at this point, the most recent wave of foreclosures has more to do with the jobless rate that’s out there right now. People are just having more traditional difficulties paying their mortgage payments,’ says Blanton.”

“About one in eight Nevadans is now behind on their residential mortgage, new data from the Mortgage Bankers Association show. ‘What we saw from the MBA wasn’t surprising,’ said Rick Sharga, of RealtyTrac. ‘We saw a spike in delinquency in the third quarter, but we didn’t actually see a corresponding increase in foreclosure activity. Then the moratorium was lifted and it’s pretty much like the dam burst.’”

“President Obama implemented a $350 billion federal program in March to rescue homes headed for foreclosure, which could ease the bump, said consultant Steve Bottfeld. But Rick Byrd of RB Realty in Las Vegas said not to count on it. The first 100 days have provided no traction or relief to homeowners in distress, he said.”

“‘There is no housing relief,’ he said. ‘The reality is that banks and mortgage servicers have multiple layers to obtain compensation when they foreclose on your home, but very few monetary avenues if they modify your loan. So expect foreclosures to escalate through the summer and next fall. Watch prices continue to fall.’”

“At the end of March, roughly 71 percent of owners who bought in Miami-Dade and Broward counties in the past five years were underwater, or owed more than their homes were worth, according to Zillow. Analysts have said so-called negative equity is one of the biggest reasons why borrowers fall into foreclosure — if they need to sell, they can’t, at least not for enough to cover the debt, or, they choose to throw in the towel, thinking it’s better to take their losses and rent.”

“A recent study by Fitch Ratings projected that as many as 75 percent of subprime loan modifications would fall behind by 60 days or more within a year. Jay Brinkmann, chief economist for the MBA, said that so-called redefaults could show up in the new foreclosure statistics: ‘There may be repeat visitors coming back into the numbers.”’

“Brinkmann predicted foreclosures would continue to rise through the rest of the year. A large oversupply of new property makes stabilizing home prices in the state likely a distant prospect. ”It’s going to take getting demand even with supply just to put a floor under prices. Even then, it may not get it up to a point where it gets buyers back above water,’ Brinkmann said.”

“Lois Capps visited the Ventura County Realtors Association in Oxnard on Thursday with the intention of providing an update on what is happening in Washington, D.C. What she got instead was feedback on the difficulties facing the economy and housing market in the county.”

“Legislators were told that the stimulus bill was the only way to stop the free fall and that government had to put ‘a ton of money in the system.’ Capps acknowledged that there was a lot of hesitation over what it could do to the budget and to the children who will inherit this debt. ‘We were told we were in danger of going under, that there was global instability and that if we delayed it would be too late.’”

“Some Realtors pointed out that it was proving almost impossible for people to qualify for a mortgage workout. When asked why the stimulus money went to banks instead of consumers, Capps said: ‘We can’t even compare our current situation to the Great Depression. Economists have explained to leadership that nothing will become whole until the banks regain the confidence to lend. We realize now how deaf the banks had become to being in the real world.’”

“Dallas real estate agent Lydia Player hopes her bright-red convertible will turn a few heads. The new car is a snazzy perk for whoever buys a North Dallas home that Player has on the market. ‘If they don’t like red, we’ll give them another color,’ said Player, who’s offering a string of incentives to lure buyers to houses she’s trying to sell.”

“Dallas real-estate agent Charles Gregory is offering a $40,000 car-purchase credit for anyone who buys a new University Park home he’s selling. Does that mean he thinks the buyer of a $1.995 million house will make the decision based on a free car? ‘Of course not — I’m just trying to get attention,’ said Gregory.”

“Built in 2007, the five-bedroom, 6,600-square-foot house has never been lived in. ‘It’s a wonderful house, and there’s no reason it hasn’t sold,’ Gregory said.”

“Builders who spoke to the Tribune-Herald said they are cautiously optimistic about the home-building climate. Jim Bland said he’s hearing about speculative homes being bought that languished on the market for months. ‘Now it could be they were sold at reduced prices,’ Bland said, ‘but there has been a lessening of inventory.’”

“Through April of last year, Waco issued 199 permits to build single-family homes. This year, it issued 77 through April. ‘I can tell you that most of those 199 permits last year were for speculative houses, and a lot of those are still sitting there,’ builder Pat Hambrick said.”

“For his part, home builder Woody Butler is offering a vacation package valued at $3,000 to anyone buying one of his new homes. ‘Sure, I’m doing that to increase sales,’ Butler said. ‘I don’t want people to have to choose between the two.’”

“In an unusual tactic to sell his waterfront cottage, David Goyette is offering to pay the first three months of a buyer’s property taxes and will throw in a big-screen TV to boot. ‘Buy our house,’ his ad in yesterday’s Peterborough Examiner reads. ‘If you do, we’ll pay you the first three months of your property taxes and buy you a 48- inch flat screen TV of your choice.”

“Sitting in the kitchen of his White Lake property, about 20 minutes northeast of Lakefield, the 58-year-old writer smiles confidently. ‘I agree, it’s an unusual offer,’ he said. ‘I don’t think this has ever been done before.’”

“Goyette put the nearly 3,000 square-foot, four-bedroom cottage on the market last year to no avail. This year, he wanted to sweeten the deal. ‘These are tough economic times. I thought, what can be done that’s innovative?What is it that will cause the final little push?’ he said. ‘So I just made it up. The bottom line is, it’s a very small price to pay for a property that’s selling for $429,900.’”

“The federal agency predicted in its spring forecast Tuesday there will be only 3,950 single and multi-family housing starts this year in Manitoba. That would be a 28.7 per cent decline from 2008’s total of 5,537 starts, and twice the percentage decline the agency was expecting in its February market report.”

“Bank economists and home builders have been forced to repeatedly update their expectations this year as more and more dismal economic numbers come in, and CMHC is no exception. ‘It’s a pretty big revision,’ said Bob Dugan, chief economist at CMHC. ‘We were a little too optimistic for housing starts in the first quarter.’”

“‘Certainly sales had been quiet through the fall and early winter,’ Kensington Homes manager Tony Balaz said. ‘But I can also tell you that sales for April were great… and in May the sales have been good.’”

“He said its also important to remember the last few years have been unusually strong years for new home sales in Manitoba.”

“Vallejo officials said Thursday they’re tired of waiting for the main downtown redevelopment project and are ready to fight, if need be, to find someone else who will deliver. The project’s first phase — 182 condominiums (including eight live/work units) and about 11,000 square feet of retail space on the Virginia Street parking lot site — has yet to break ground.”

“Although city officials say they understand the recession has discouraged Triad from moving forward, Vallejo needs to do just that. ‘I personally think we need to terminate that agreement and believe it should have been done a long time ago,’ said Mayor Osby Davis. ‘There is no point waiting on a watered-down project that isn’t going anywhere, anyway.’”

“Yet another stalled residential development in northern Manatee County is facing foreclosure. This time it’s Curiosity Creek, which was approved for nearly 1,600 homes on the north side of Buckeye Road midway between U.S. 41 and Interstate 75 but has not broken ground.”

“John Green, a Centrum official, said Thursday that the project got caught in the credit crunch and real-estate market crash. ‘We can’t sell it, there’s no financing to develop it and the banks don’t want to lend money,’ he said, adding the developers still hope to reach a compromise with the banks.”

“Residents across Broward County should brace for less service or higher tax rates. The taxable value of homes and businesses fell 11 percent last year, according to preliminary estimates released Thursday by Property Appraiser Lori Parrish. The tax base is smaller than it was in 2006, Parrish estimated.”

“She included foreclosures and pre-foreclosure sales in setting values for the first time. She also focused on sales data from the latter half of 2008 because she said home prices were sharply lower compared with earlier in the year.”

“‘It’s the economy,’ Parrish said. ‘The false market we had could not hold.’”

“The sunny side is not facing up for local real estate agents, who can do nothing but stand back and watch while the real estate market slows down and local housing sales slump. Former independent senator and economist Mary King said yesterday that medium housing prices had fallen ‘between December 2007 and December 2008 by 47 per cent.’”

“Despite what King said, however, Association of Real Estate Agents’ president Richard Saunders said while there is a problem and the more pricey homes are being left on the market for longer than usual, it was not as bad as King has indicated. Following the seminar, which was held at Queen’s Hall, St Ann’s, he told the Express, ‘There is no doubt that there is some retraction in the market, because real estate follows the wider economy. If there is a decline, we will experience a similar decline. This is the situation as it exists today.’”

“He added, ‘I think 47 per cent may be a bit high, and it may reflect a future direction. I would say currently, in the high end (market), we have experienced about a 20 per cent (decrease in sales) already. And in East Trinidad and other areas, outside of that ‘wild, wild west’ it (the decline) is in the ten to 12 per cent (bracket); it’s not in the 20s certainly.’”

“Plenty of swanky summer digs are yours for the taking. From Carmel, Calif., to Newport, R.I., second homes with yachting docks, tennis courts, golf courses and infinity pools — to say nothing of the obligatory spectacular view — are languishing on the market. Prices are down an average of 20%, and as much as 30%, from their 2007 peak. Among the latest price choppers: Kenneth D. Lewis, embattled chief executive of Bank of America, who just cut the price on his 5,700-square-foot Spring Island, S.C., vacation home by 13% to $3.3 million.”

“Perhaps not surprisingly, more and more foreclosed mansions are for sale. In the first quarter, there were 1,214 foreclosures of homes worth $3 million and up, compared with just 279 in all of 2008. Last week in Telluride, Colo., a 6,150-square-foot stone and timber home hit the foreclosure list. During more than a year on the market, its price was cut from $4.995 million to $4.250 million, and the final price is likely to be significantly lower, says Corie Chandler of Peaks Real Estate in Telluride.”

“Buyers in the Northeast who decided last year to wait for further price cuts may like what they see. Sharon Smith Purdy, president of Sandpiper Realty in Martha’s Vineyard, points to a 3,000-square-foot contemporary home that sits on a bluff on Chappaquiddick Island and has 360-degree views of the island and ocean. It went on the market last year for $6.85 million. Last week its price was reduced more than 30%, to $4.48 million.”

“For an impeccably restored 1891 oceanfront mansion in Newport, ‘we will consider any offers,’ says owner Candy Keefe. ‘Anything, anything.’”

“Keefe listed the 22-room house at $14.5 million four years ago. Now, despite extensive renovation in the meantime, the offering price is $12.8 million. ‘We are a family that wants to move on,’ she says.”

Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum. And see the American Visionaries series from Schwarzfilm.

Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum. And see the American Visionaries series from Schwarzfilm.

Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum. And see the American Visionaries series from Schwarzfilm.

Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum. And see the American Visionaries series from Schwarzfilm.

Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum. And see the American Visionaries series from Schwarzfilm.

The Bozeman Daily Chronicle reports from Montana. “So far this year, 101 single-family homes in the Bozeman area have sold, compared to 502 in all of 2008 and a peak of 816 in 2005, according to the Gallatin Association of Realtors’ MLS. The median price of a home here fell 18 percent, from a peak of $341,851 in 2006 to $280,000. It’s frustrating for sellers to discover that their home is no longer worth what they paid for it, or even what it was worth a couple years ago.”

“Jake Lucas and his fiancee, for example, are trying to sell their west Bozeman home before they move to Florida. They put their 2,000-square-foot home on the market for $319,000 about a month ago. They haven’t gotten any offers, Lucas said. So they are weighing their options. If they can’t get their asking price, they are considering renting it out until the market improves.”

“‘We kind of don’t have to sell,’ said Lucas, 30. ‘Personally, I’m not willing to lose $20,000 or $30,000 so that I can not worry about it. Renting it out for a year or two until the market gets better, that’s worth it.’”

“As of mid-May, the Gallatin County Clerk and Recorder’s Office had received 231 foreclosure notices, compared to 100 in 2008. lerk and Recorder’s Office had received 231 foreclosure notices, compared to 100 in 2008. Those numbers don’t include the 75 homeowners this year and 33 last year who made good on their missed payments or settled their foreclosures by other means. One way to prevent a foreclosure is a short sale. ‘There are a lot of short sales going on right now,’ said Paul Dueringer, real estate broker in Bozeman. ‘There’s a lot more than we’ve seen in a long, long time.’”

“As for land, just 13 lots have sold around Bozeman this year, compared to 127 in 2008. None have sold in the Manhattan and Three Forks areas. ‘Lots are real slow,’ Dueringer said. ‘Lots that maybe cost $120,000 before are down to $75,000. … We have a glut of lots on the market right now.’”

From USA Today. “A year ago, the folks in Billings, Mont., thought their housing market was recession-proof. It had been sheltered from the past two economic recessions. ‘They just blew right over us,’ says Twyla Best, president of the Billings Association of Realtors.”

“But in July, economic woes hit Billings, the largest city in the Big Sky State. ‘This time, there is no place to hide,’ says Patrick Barkey, director of the University of Montana Bureau of Business and Economic Research. ‘The recession is here, and it’s not over.’”

The Idaho Statesman. “The median assessed value for residential real estate in Ada County as of Jan. 1, 2009, was $187,500 - down 12 percent from $212,800 a year ago, according to the assessor’s report. Countywide assessments have fallen the past two years. ‘They (home values) are tanking, aren’t they?’ said Assessor Bob McQuade.”

“McQuade said people who purchased their homes in 2005 and 2006 were able to take advantage of skyrocketing home values during the housing boom. Those who purchased in 2007 or 2008 have seen their equity drop and now may owe more than the house is worth, which means they can’t refinance or sell the home without taking a loss, he said.”

“‘They’re trapped,’ he said.”

Idaho News Now. “Many local homeowners are trying the short sale option as a means of steering clear of the more credit damaging foreclosure. But as many real estate agents told us - that system is not working.”

“Lisa Funkhouser is a veteran Treasure Valley realtor who came out of a short sale scenario that had her on the verge of doing what so many agents have done since the housing bubble burst – getting out of the business. One client of Funkhouser, a Nampa homeowner, had to leave the state and asked Lisa to manage a short sale on their one time home. That home was originally valued at $500,000.”

“For 18 months, Funkhouser tried to sell the house. She even mowed the lawn, did landscaping, and made repairs. The work finally paid off: she received an offer for $345,000. But the bank had to give their OK on the offer – and they took months to respond. The bank said the property was worth $365,000. Comparable properties in the area were selling for much less. ‘They wanted more money,’ Funkhouser said.”

“With no agreement in place: the bank brought the foreclosure hammer down. Three weeks later, Wells Fargo Home Mortgage put the home on the auction block. Opening bid? $310,250 – just $250 more than Funkhouser had negotiated in the short sale. ‘And my heart sunk,’ Funkhouser said.”

“Wells Fargo didn’t get any takers in the auction – so the home went back on the market. But Funkhouser was no longer in the loop. ‘I felt very bad for her. It was totally unfair,’ buyer Wendy Crownover said. ‘She spent a year and a half taking care of the property. She got absolutely nothing - she was in tears.’”

“Funkhouser said, despite her bad experience, she isn’t going to stop working on short sales. ‘Nope that’s where the market is,’ she said. ‘With probably close to 70 percent of the market being short sales right now - if you don’t do ‘em you’re out of the business.’”

The Oregonian. “The spring buying season has started, and the numbers - surprise - don’t reveal many sunny story lines. The Portland-area median home price in April was $249,900, down 17 percent from the bubble-era peak. The number of closed sales through April was down 30 percent from a year ago. Anyone who bought after January 2006 has seen his home lose value.”

“The trouble is most acute among downtown condo towers and luxury homes. Sales of homes above $1 million are off nearly two-thirds from last year. It doesn’t look as if things will get better soon. In the Portland area, foreclosures and short sales accounted for nearly one in five of the 14,300 listings in the regional listing service last week.”

“Former Trail Blazer Rasheed Wallace has been trying to sell his 9,900-square-foot mansion in the exclusive Dunthorpe area since February 2006. He first listed it for $5.5 million and has since dropped it to $4.9 million. There are 55 homes on the market in Dunthorpe, enough inventory to last 3 1/2 years. Steve Kaer, Wallace’s real estate broker, said he has had one accepted offer that fell through. ‘People right now are being cautious,’ Kaer said.”

“The condo trouble is most clear among the downtown Portland towers that rose in the boom time. ‘The condos are still as dead as a doorknob,’ said Jerry Johnson, a Portland housing consultant to homebuilders and cities.”

“Demand was high for the futuristic John Ross tower when sales opened in 2005. A fifth-floor condo sold for $233,700 when the building was finished two years later. The buyer tried to flip the condo for a quick $25,000 profit less then two months later. The 638-square-foot studio sat on the market. And sat. And sat. Now, it’s in a short sale for $170,000 - a $63,000 loss.”

Oregon Public Broadcasting. “Bend and central Oregon real estate brokers and developers have already dealt with a double whammy: a collapsed housing market and a slowdown in new home construction. Housing prices are back where they were a decade ago. And the city of Bend says permits to build just 8 new homes were filed in April. That number was above 800 in August of 2006.”

“Darren Powderly is a broker at Compass Commercial. He says everyone’s been talking about the slowdown in commercial real estate as ‘the next shoe to drop.’”

‘Darren Powderly: ‘Along with ‘another shoe to drop’, another cliché is ‘the bigger the party the bigger the hangover.’ Central Oregon was one of the best real estate success stories in the country, and in some respects this is uncharted waters. But real estate is a cyclical business, so this will work itself out.’”

The Kitsap Sun in Washington. “Contractor Jerry Becker of Bremerton is $1.5 million in debt and close to ruin. He blames Westsound Bank for much of his misery. Over the years, he borrowed money to construct homes, develop land and build his business. But when the bank began its dive, and with suspicious regulators closely watching its every move, it stopped giving Becker draws on his loans.”

“Suddenly, he couldn’t pay his subcontractors or complete his projects. His livelihood screeched to a halt. His loans fells in arrears. He said he tried repeatedly to work with Westsound — he felt they could work it out as they always had — but the spigot was shut tight. ‘They didn’t care. They didn’t want to talk with me,’ Becker said. ‘I have no option but to go bankrupt.’”

“With home-appreciation rates rising 20 percent year after year, there seemed no end to the party. Westsound became a go-to bank for many local contractors like Becker. Many were overextended, but they were confident the economy would continue strong. ‘They would loan money to anybody,’ Becker said.”

“Becker’s son-in-law, Matt Templeton, said he was able to get $1.3 million in loans from Westsound when he was only making $35,000 a year.”

“And then there are the investors who lost their money. Westsound investor Rod Rodriguez of Chico lost several thousand dollars. He feels betrayed. Investment promoters led him to believe there was little risk, he said. He believed them, and admits he didn’t watch the falling stock price as closely as he might have.”

“‘It’s not investing anymore; it’s gambling,’ he said.”

The Calgary Herald in Canada. “Residents of a north Edmonton condominium learned last week it will cost $8 million to repair mould and rot in their six-year-old building. Patricia Lo, who sits on the board of the 200-unit condo, said residents don’t know how they will be able to pay their share of the repairs. Lo said she doesn’t know where she will find $45,000 to pay for her share. She was one of the last people to move into the complex, purchasing a $150,000 condo in January 2004.”

“‘We just feel so ripped off,’ she said. ‘We bought this condo. It was supposed to be built properly and it wasn’t. We just feel really helpless.’”

“Sandi Cooper, a spokeswoman for the Edmonton branch of the Canadian Condominium Institute, said people sitting on condo boards are struggling to deal with having to raise funds through special assessments to pay for repairs to new buildings. ‘It will be very prevalent for the next little while because during the building boom phase, qualified contract people were hard to find,’ she said.”

“Journeyman carpenter Ian Parker said he just went shopping for a new home and spotted deficiencies in many of the homes he saw, even the one he decided to buy. ‘They don’t even come close to building code, which is the minimum,’ he said. ‘There are a lot of fellows claiming to be carpenters who are ripping off the general public.’”

The Vancouver Sun. “A real-estate developer is suing 24 would-be buyers for a total of $1.9-million after they backed out of a Leduc condominium development, which has lost value since it was first sold to buyers during the housing boom two years ago. Urbia Homes Ltd. is suing buyers who walked away from sales for the diminished value of the units and other costs, claiming $75,000 in damages in most of the lawsuits.”

“Edmonton real-estate lawyers say they are seeing such cases with increasing frequency, two years after the housing market was sizzling and buyers were sometimes paying more than the listed price for homes that hadn’t yet been built.”

“Don Kramer, a lawyer who represents condo corporations, said this type of lawsuit is fallout from a housing bubble 18 months ago. ‘I think that companies are saying, ‘I wouldn’t have built this if you weren’t prepared to buy it. You said you’d buy it. I built it. Here it is. Please pay me,’ Kramer said.”

“‘Maybe I walked into this a little too fast, but they should have been looking after me,’ said one buyer. ‘I’m still interested in the place, but I want a fair deal.’”

Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum. And see the American Visionaries series from Schwarzfilm.