The Housing Bubble

The Helsinki Times reports from Finland. “Over 300,000 homes are without a permanent resident in Finland. How is it possible that Helsinki has enough vacant properties to accommodate the entire population of a small town? And why are there nearly as many vacant properties in Helsinki relative to population than elsewhere in Finland? That is a good question, says Ari Pauna, the chief executive at the Mortgage Society of Finland (Hypo). ‘It’s because people here can afford to keep a mortgage-free home empty,’ he replies. ‘There are people in Helsinki who can and want to keep their homes empty.’”

The Estevan Mercury in Canada. “Estevan may still be boasting the highest rental prices in the province, but in a Saskatchewan dealing with low oil prices, there is growing pressure for those prices to decline. At 5.5 per cent a year ago, rental properties are now roughly 20 per cent vacant. Estevan’s vacancy rate was effectively zero per cent in 2013. When looking at the fixed sample, Goodson Mwale, senior market analyst for CMHC in Saskatoon noted the rental price across all unit types has declined 13.4 per cent. ‘That gives you a sense of what has happened,’ said Mwale.”

ABC in Australia. “The mayor of a rural district in the heart of Queensland’s coal seam gas country says the industry’s construction boom has ended quicker than expected, with the industry now shedding jobs. The housing market in towns such as Dalby, Chinchilla and Roma responded quickly to the drop in employment opportunities. Chinchilla real estate agent Don Hart said some investors were shocked to see how rapidly the market dropped. ‘The people that have invested in the houses are probably worried because their rents have halved,’ he said. ‘There’s something like 300 rentals available in Chinchilla between all the agents. Two years ago we might have had 30 or 40 between us all.’”

The Economic Times in India. “Rajesh Mehta’s cellphone has not stopped ringing in recent days. The Bangalore based Mehta runs one of India’s largest jewellery export companies but the calls have nothing to do with precious metals or their value which has been as volatile as crude oil in recent months. Rather, Mehta has been inundated with enquiries from cash-strapped builders about financing their incomplete projects as banks turn off the spigot and equity markets remain hostile. Such private money is coming at exorbitant rates of even 36-40 per cent a year but that has not turned off anybody. ‘They (builders) are approaching us for loans, but we are being little more selective this time as we want our interest as well as loans serviced regularly,’ Mehta says.”

The Khmer Times in Cambodia. “Phnom Penh is changing at a blinding pace, with major new residential and commercial projects. Chrek Soknim, CEO of Century 21 Mekong Realty sees oversupply in some segments of the property market – but no sign of a bubble forming. KT: ‘Is there a healthy condominium market in Cambodia?’”

“Soknim: ‘With condos, at the moment, I don’t think there is a good market because of the large oversupply. The oversupply is mostly in condos that cost $100,000 or more. Foreigners buy 80 percent, and 20 percent Cambodians. I don’t think there are many speculators in the market right now because of the 30 percent oversupply [on expensive condos]. Most of the buyers are genuine investors. There is no bubble right now – bubbles usually happen because of speculators.’”

City Metric on China. “Enough floorspace to cover Hong Kong twice over is being constructed in China’s cities each year. Yet despite the fact that 250m more people are expected to move into cities by 2030, and even though the demand for modern housing is huge, an incredible amount of apartments are currently vacant. At a rough estimate, there are around 600m m2 of floor space still unoccupied – enough to completely cover Madrid.”

“Up until very recently, China’s housing market was loaded with speculators, people looking to store their excess savings in real estate, individuals aiming to launder illicitly received funds, and other parties who were buying property they had no intention of living in. This feeding frenzy of economic activity often pushed the prices of real estate so high that the pool of potential residents was severely reduced. This has lead to many cities and districts across China standing largely empty, even when all the houses have sold. As a result, they look like ghost towns.”

All Africa on Namibia. “Housing and rental prices in Tsumeb have dropped significantly in recent months and realtors in the copper-mining town anticipated this decrease in rental and housing prices earlier this year. A two-bedroom apartment in the townships cost as much as N$4 000 in the past with prices dropping to N$2 700 currently. Some one-bedroomed apartments in the posh areas of the town were rented out for as much as N$5 000. At the moment, apartments in the posh area have dropped to about N$3 000 for a one-bedroomed apartment.”

“A resident of Tsumeb, Alexia Xamises says she could not afford to rent a flat six months ago but now she can afford a one-bedroomed flat, as rentals have dropped. ‘I am able to rent a place of my own now although it has not completely dropped to affordable rates, at least I can have a place of my own,’ said Xamises.”

The Business News Network in Canada. “With the strong American dollar and partial rebound in U.S. real estate prices, Canadian snowbirds are coming back to the cold, selling homes they acquired following the U.S. housing meltdown. Lennon Sweeting, Currency Strategist at CanadianForex, says there has been a sharp jump and a clear trend of Canadians selling U.S. real estate. ‘A lot of investors are realizing the gain and took advantage of a soft U.S. economy, and are now looking to reinvest in Canada [because] we’ve got a pretty hot housing market as well,’ Sweeting said.”

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The Memphis Daily News reports from Tennessee. “Hampered by a severe lot shortage, homebuilding activity in Memphis and Shelby County slowed considerably in May, with builders starting and selling fewer new homes than last year. Steady demand, coupled with low inventory, higher lot prices and escalating construction costs, has prompted builders to raise prices. The average sales price of a new home in Shelby County in May was $311,303, up a whopping 19 percent from $261,311 a year ago. ‘I cannot remember anytime dating back to the 1980s where this has occurred in the past,’ said Keith Grant, an owner of Grant & Co. ‘Even during 2005 and 2006 we were not even seeing increases of 10 percent in the market.’”

“‘Everything we’re putting up gets sold and we’re raising prices continuously,’ said David Goodwin Jr., owner of David Goodwin Jr. Cos. LLC and 2015 president of the West Tennessee Home Builders Association.”

The Wall Street Journal on New York. “Sales of Manhattan’s most-expensive luxury apartments were strong during the second quarter—with a record number of sales for more than $4 million—but sales at less-lofty prices sagged. Brokers attributed the slowdown at lower price points to buyer resistance to high asking prices and to limited supply. Julia Hoagland, a broker at Compass, said the market was ‘extremely active’ but shifting to a point where cautious buyers are often willing to walk away from high prices. ‘Buyers are just reaching the point where they say, ‘If I get a price that is fair, fine. And if I don’t, I don’t care,’ she said.”

The Press Democrat in California. “Sonoma County home prices keep rising, but plenty of sellers nonetheless are finding they can’t get as much money as they’d like for their properties. For various reasons, agents and brokers said, more owners this spring have dropped their initial asking prices. Multiple listing data suggest that better than 1 in 5 currently available properties have undergone price reductions, said Mike Kelly, an agent with Keller Williams in Santa Rosa. ‘You’re having price reductions because they priced them too high, and they can’t sell them because they think the market’s so hot they can price them for anything and people will jump all over ’em,’ Kelly said.”

The Tallahassee Democrat in Florida. “Florida’s rate of monthly home sales is 98.2 percent of when the market peaked a decade ago, housing reports indicate. But Tallahassee falls below the state’s average with sales hovering at 61 percent of peak levels. Leon County is hitting 51 percent of the 2005 rate. Joe Manausa, a Tallahassee real estate expert who mines data and produces the Tallahassee Real Estate Newsletter, said the market is still over supplied and poised to get worse. The irony, Manausa said, is that the demand builders can fill is the segment of the market that has too many homes, specifically those costing less than $300,000. He said the ‘real demand’ is for lots that cost less than $50,000.”

“‘We still have too many homes for sale in Tallahassee,’ Manausa said. ‘It looks like the situation is going to continue for the next few years.’”

The Press of Atlantic City in New Jersey. “For months, Atlantic County has led the nation in foreclosure activity for metropolitan areas with more than 200,000 residents. Faced with poor maintenance and the problem of vacant homes, neighbors may feel like celebrating when they hear a sheriff’s sale is set. But the sales rarely result in a quick happy ending, said Atlantic County Sheriff Frank Balles. First, the banks can postpone the sale as often as they want. On a recent Thursday, ‘we had 50 homes to be auctioned,’ Balles said. Only 25 to 30 actually went to auction.”

“Only a small number end up selling to anyone other than the bank that holds the mortgage. If a bank or mortgage company buys a property, it ends up vacant, or the mortgage holder asks the previous owners to stay to avoid the vacant look. ‘Two weeks ago we had 45 properties for sale, and we sold six to third-party buyers,’ Balles said recently. ‘Last week we had 30, and only two sold to third parties.’”

Vegas Inc. in Nevada. “Lenders are ramping up foreclosures in Southern Nevada, seizing homes that in many cases likely have been in default — and possibly empty and in disrepair — for a lengthy amount of time. Creditors repossessed 677 homes in the Las Vegas area in May, the third consecutive month-to-month increase and the highest monthly tally in more than 2 1/2 years, according to RealtyTrac.”

“Real estate agents say banks don’t want to flood the market with listings. That could push down prices valleywide, limiting lenders’ ability to recoup their losses from soured mortgages. Today, even though there are more repossessions, lenders might not list the homes right away for that same reason. In many cases, banks and hedge funds are seizing homes and giving residents an opportunity to lease their house or buy it back, Platinum Real Estate Professionals agent Steve Hawks said. ‘They don’t put it on the market, a lot of them,’ he said.”

“Hawks said he knows a woman who owns a roughly 4,000-square-foot house in the upscale Henderson foothills community of MacDonald Highlands who hasn’t made a mortgage payment in more than 4 1/2 years. She is, however, renting out the house for nearly $4,000 per month, he said. Hawks said he recently met a man in his office who hadn’t made a mortgage payment in seven years. ‘That’s common,’ he said.”

“The two-story townhouse at 2823 Cool Water Drive in Henderson, has been empty for at least a few years. But its condition is ‘not terrible,’ and it hasn’t been vandalized, next-door neighbor Gina Hughes said. Lenders seized the home May 22, more than two years after the default notice was filed. Hughes, herself a real estate agent with Coldwell Banker, said prospective buyers have stopped by to look at the house but rarely come anymore. On a recent visit, foreclosure and abandoned-property notices were taped to the front door and to a window facing the street. ‘There is a lot of ghost inventory out there,’ Hughes said.”

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Readers wondered this morning, “How about that Chinese stock market?” A reply, “Didn’t we talk about it enough Friday? It was an expected correction that the Chinese are making sure goes no further.”

The Hong Kong Economic Journal. “Some mainland investors have borrowed money against their US real estate assets in order to invest in China’s red-hot stock market. The size of that investment could be as much as US$30 billion. Those investors are facing increased risk from the imminent US rate hike.”

“Meanwhile, the mainland equity and housing markets are out of sync with a slowing economy. It remains unclear whether A shares will continue their run-up after a deep correction in the past few days. The market is no longer cheap. In fact, it’s very expensive, with some small and medium companies hitting P/E ratios over 70 times. Heavyweight stocks are make more sense at 25 to 30 times P/E. The bull market has sparked all sorts of speculation.”

The Washington Post. “Shanghai Duolun Industry, a Chinese real estate company, managed to win over investors with a little re-branding in May. In the midst of a technology stock boom, the company decided to change its name to ‘P2P Financial Information Services Co.’ The company didn’t actually develop a peer-to-peer lending business — it just bought the domain name — but its shares jumped 10 percent anyway.”

“‘P2P Financial Information Services Co’ wasn’t alone in this strategy. One Chinese floorboard company doubled its share price by shifting to online gaming. A hotel group became a high-speed rail company and a ceramics specialist re-branded as a clean-energy group. Investors rewarded these decisions.”

“Here are five facts about China’s stock market bubble — each of which help explain why the bubble arose and what might happen to it. In just 12 months, Chinese stock markets have created enough value to give every person on Earth almost $900. This is a bubble of epic proportions. In 12 months, Chinese stock markets rose enough to create $6.5 trillion of value. It’s hard to picture, but that’s a stunning amount of money. It’s the equivalent of about 70 percent of China’s GDP in 2013, and about 40 percent of the total value of the New York Stock Exchange. It’s enough to pay off Greece’s debt 20 times over, circle the Earth 250 times with $100 bills, or build 43 International Space Stations.”

“People often say that stock markets follow the ‘greater fool’ theory – even if a stock is irrationally overvalued, it still might be worth purchasing if there is another fool out there willing to pay a higher price. That may now be the calculus for many Chinese stock investors. As high as valuations are, novice investors keep rushing into the market. Just last week, 1.41 million new investors opened stock accounts, according to Reuters, a similar number to each of the two weeks before.”

“A survey last year showed that that two-thirds of Chinese investors haven’t completed high school. Even Chinese farmers are giving up tending their fields in order to tend their stocks. And many investors are young: According to Chinese-language media cited by Foreign Policy, over a third of China’s 100 million investors are 30 or below.”

Investors Business Daily. “At the moment, Chinese regulators appear content with letting the correction take place. But the question going forward: How long will the correction continue before it turns or China’s government steps in to prevent a panic? A continual, cascading collapse of Chinese stocks ‘would have an impact on the broader Chinese economy and how foreigners view China as an economy and as a market,’ said Sung Won Sohn, a professor at California State University Channel Islands. ‘I don’t think the market is going to stop declining any time soon.’”

The Epoch Times. “If printing money cannot maintain growth, will issuing stocks be able to guarantee growth? We Chinese are now caught in a state of elation. There is no use to talk to anyone, as everyone is thinking about how much stocks have gone up each day. It is like being at a happy feast. The noise of the feast covers up the fundamental issue. Perhaps after the bubble has burst, we can talk about innovation. Right now, no one is in the mood to talk about innovation.”

“Some people say to me: ‘Professor, you study western economics. Chinese economics and western economics are not the same.’ When we talk about science, do we divide science into East and West? If we were to follow such a path, the concept of the cost of capital would be completely turned upside down. You think you can get money from investors for zero return. Who will bear the stock market costs? Investors, of course. Companies have obtained money. When stocks fall, investors suffer heavy losses. Those who participate in creating the bubble may not think about that.”

“Wealth is not generated in this way. In the past 200 years, wealth was not created by stock market bubbles or central banks issuing money. How is wealth created? That is a question each individual, each enterprise, and the government should ask themselves; it is the basic question in economics.”

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It’s Friday desk clearing time for this blogger. “More Americans who recently went through foreclosure or bankruptcy are getting home loans. A new wave of nonbank lenders is bringing these risky buyers back into the housing market some seven years after the mortgage meltdown. The lenders are targeting borrowers who have recently gone through a foreclosure, short sale or bankruptcy—but who they say are safer than their credit profiles suggest. They are sometimes approving borrowers in as little as a few months or even weeks after a foreclosure.”

“‘Lenders are trying to carve out niches that play upon the fact that underwriting remains, by historic standards, very tight,’ said Guy Cecala, publisher of Inside Mortgage Finance. ‘That’s always the way it starts out and then you keep loosening and loosening—we’re right at the beginning of that.’”

“Earlier this year, the Federal Housing Administration, which insures mortgages for borrowers with relatively low down payments and less-than-pristine credit scores, cut its annual premium costs by half a percentage point. With that move, officials said they aimed to save borrowers an average of $900 annually and support 250,000 home sales for first-time buyers over three years. However, Edward Pinto, a housing expert with the American Enterprise Institute, said in research expected to be released Thursday that borrowers have used premium-cut savings to buy pricier properties. Further, Pinto said FHA has picked up borrowers who mostly would otherwise have taken loans backed by other federally controlled mortgage programs.”

“‘FHA’s action did little to expand access to middle-and lower-wealth borrowers,’ Pinto wrote. ‘Instead the benefits were largely captured by the National Association of Realtors and other housing-interest groups, as the premium cut was largely capitalized into the purchase of higher priced homes. The [FHA premium] reduction provided a textbook case of how the additional buying power created by liberalized credit during a seller’s market, primarily gets absorbed in price, without much increase in accessibility.’”

“Residential foreclosure rates in Wilmington have improved, but activity remains higher than the national average. Real estate agent Dave Sordelet said some of the houses may be difficult to maintain because the owners overpaid for properties to begin with. ‘If you look at the houses that sold in 2006 and 2007 that were commanding $150,000, it was questionable back then,’ he said. ‘Things got overvalued and today you can’t sell them for $100,000.’”

“Since 2005, more than 1-in-3 Detroit properties — 139,699 of 384,672 — have been foreclosed because of mortgage defaults or unpaid taxes, property records show. The vast majority are houses. When Talise Banks bought in 2002, all homes on the block were occupied. All but seven of 24 homes on the block have been foreclosed in the past 10 years. Her mortgage payment is $900 per month for a home appraised at $5,000. She owes $82,000 on the mortgage for the 900-square-foot home.”

“‘People come around and see no neighbors, so they steal, rob and strip,’ said Banks, 30, a single mother of two young boys. ‘They come by, take out windows, hot water heaters and whatever else from homes. There’re just a lot of problems.’”

“Marc Cohodes, once called Wall Street’s highest-profile short-seller by the New York Times, has come out of partial retirement to make targeted bets against ’subprime’ Canadian lenders. Cohodes — who is familiar with Vancouver — says Vancouver real estate has reached peak insanity, and any number of factors could trigger a collapse. ‘The cross-currents are beyond crazy in Vancouver — it’s a mix of money laundering, speculation, low interest rates,’ he said. ‘A house is something you live in, but in Vancouver you guys are trading them like the penny stocks on Howe Street. It’s as clear as day that the market is a Chinese money laundering mecca.’”

“Surging Chinese demand for Australian homes is dwarfing efforts to root out illegal buyers as the government struggles to avert a backlash against unaffordable housing. Chinese already buy almost a quarter of new homes in Sydney and their outlay will more than double to A$60 billion ($46 billion) in the six years to 2020, according to Credit Suisse Group AG. ‘Forget the anti-corruption,’ said Ray Chan, managing director of Sydney-based Henson Properties, which sells homes almost exclusively to Chinese. ‘A lot of money is coming through.’”

“Macau’s six-year lucky streak has come to an end. That’s become evident not just at the baccarat tables but at real estate agencies, too. After more than quintupling over six years, residential prices are heading for their first year of declines since 2008, tracking a gambling revenue slump in the world’s largest casino hub. China President Xi Jinping’s drive to eradicate corruption and a slowing economy has kept high rollers away, dragging down the city’s economic output 24.5 percent in the first quarter.”

“Prices fell as much as 26 percent at One Central Residences, high-end serviced apartments located next to casinos, according to Franco Liu, Macau head of Savills Plc. ‘Those in the casino industry are concentrated in the luxury home segment,’ Liu said. ‘They’ve made lots of money in the past and spent it on properties or cars. These past few months, the drop is more significant because they’re offloading some of their investments.’”

“A year after lensmen from The Business Times put together a photo essay on ‘dark condos’ to highlight the rising vacancies in the private housing market, they returned to the same 10 completed condo projects to capture these developments, as far as possible, from the same angles. They even went at around the same time - between 8 pm and 9.30 pm on a weekday, before the school holidays, when people could reasonably be expected to be home. Their findings: Only one of the 10 developments was visibly more lit up than a year ago.”

“Roving expats and rich foreigners occupying condos only part of the time could be seen as contributing to the sub-optimal use of Singapore’s real estate, said DTZ South-east Asia’s chief executive Ong Choon Fah, but then again, this is ‘the price you pay for being a global city.”

“The idea was logical enough: The government should step in to restore the housing market, which the financial crisis had crippled. While low interest rates may have given housing prices a boost, they have not increased home ownership. As Lance Roberts noted on his blog, ‘trillions of dollars have been directly focused at the housing markets including HARP and HAMP, mortgage write-downs, delayed foreclosures, government backed settlements of ‘fraud-closure’ issues, debt forgiveness and direct buying of mortgage bonds by the Fed to drive refinancing and purchase rates lower.’”

“‘Speculators have flooded the market with a majority of the properties being paid for in cash and then turned into rentals,’ Roberts wrote. ‘This activity drives the prices of homes higher, reduces inventory and increases rental rates which prices first-time homebuyers out of the market.’ In other words, government policies designed to turn renters into homebuyers have instead created more renters. But at least institutional investors made money.”

“It took some nine years for the wheels of justice to catch up with one of this city’s most notorious real estate con men. But, justice finally prevailed last week in the case of Michael David Scott, a now 51-year-old from Mansfield who ravaged the Dorchester real estate market with a rash of bogus mortgage and bank loan schemes.”

“Amazingly, Scott kept up his bold dealings after he was indicted in 2010. It was only after the Globe and the Reporter exposed his continued practices that he lost his realtor’s license in 2012. It’s no secret that state and federal authorities were too slow to act on the rampant real estate shenanigans that helped plunge the country into deep recession in the mid-to-late 2000s.”

“Michael David Scott is a poster boy for that reckless, unchecked period that wreaked havoc on the streets where he operated— places with names like Parkman Street, Adams Street and Navillus Terrace. We hope the punishment he will receive fits the crime.”

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The Real Deal reports on New York. “There are at least 99 single-residence listings priced at $30 million or more in Manhattan, according to New York real estate appraiser Jonathan Miller, a staggeringly high number by historical standards. And how many potential buyers for these pads are out there? The data seems to indicate that developers would be better served building apartments at the lower end of the ultra-luxury market. ‘Two million square feet, potentially, in the next few years is a little daunting,’ HFZ Capital Group’s Ziel Feldman said.”

“‘I don’t think I have ever in my career seen such a disconnect between what is desperately needed built and what is being built,’ Miller said. He argued that while demand for the most expensive units is strong, developers are ‘over-enthusiastically’ building too many of them. Meanwhile, lower price points are being neglected, in part because the high cost of land often makes them unfeasible. The oversupply in the super-luxury market is ‘probably the world’s worst kept secret,’ Miller added.”

Chicago Business in Illinois. “A lakefront mansion in Wilmette came on the market yesterday with an asking price of $10.9 million, bringing the number of Chicago-area homes priced at $10 million-plus to 21, the highest it has ever been. The last high-water mark for homes like this was during the last years of the housing boom, when 11 homes were on the market at $10 million or more; their prices were mostly at $12.5 million or lower, while this latest round includes six at $15 million or more.”

“Up at the tip of the pyramid, buyers may have unusual demands for a property. Jessica Price, one of two agents selling a 22,000-square-foot home in Barrington Hills that’s priced at $14.9 million, said one potential buyer who was looking at being transferred from Switzerland to Chicago needed a home where a helicopter could take off and land. The client didn’t end up moving to Chicago, she said. When the property first came on the market in 2007, for $17 million, the agent who had the listing then ‘was going after the sports stars, but that’s gone,’ Price said. ‘The athletes aren’t buying the big houses anymore.’”

“When Chicago home prices were climbing fast, before the housing bust, an athlete who was in town for only a few years could re-sell his home at a profit. Sliding prices have changed that, and the example of Michael Jordan’s palatial Highland Park house, which has sat untouched for three years and is now priced at about half the original list price of $29 million, may give them caution.”

The Houston Chronicle in Texas. “A few years ago, ‘overvalued’ would never have been a word that described Houston real estate. ‘Cheap,’ ‘abundant’ or ’suburban’ might have been more apropos. But local home prices got so high in such a short period that national ratings agency Fitch released a report at the end of March pronouncing Houston as the second-most overvalued housing market in the country. Hammered by low oil prices, Houston-area employers are expected to generate just a third as many jobs as were predicted earlier this year.”

“Don’t expect buyers to continue to line up to make offers on homes they saw for 10 minutes or even from a Skype call with their real estate agents. And as builders continue to put stakes in the ground, especially in new subdivisions around the Grand Parkway, prices could soften as sellers of older homes compete with builders. The earlier Fitch report said Houston home prices spiked a staggering 43 percent between 2011 and the end of 2014. Stefan Hilts, a director in Fitch’s U.S. residential mortgage-backed securities group, said last week that the growth rate here has already started to slow in recent months.”

“‘In the last quarter or two, we’ve seen that disappear,’ Hilts said about Houston’s red-hot price appreciation.”

From Fauquier Now in Virginia. “Imagine a Fauquier County with thousands of suburban homes that relatively few want to buy, businesses that can’t find workers and an aging citizenry resembling that of Florida. Demographics and development patterns pose significant challenges to Fauquier’s future, a pair of experts told an audience of 300 people in Warrenton. ‘It used to be we were optimistic,’ Matt Thornhill, president of The Boomer Project said to the audience. ‘Now we’re not so sure. The only thing we’re certain of is that things are gonna change.’”

“In Fauquier — as in much of the nation — that change includes a rapidly-aging citizenry. Baby diaper sales nationwide have fallen 8 percent, while adult diaper sales have increased 20 percent, Mr. Thornhill noted. By 2025, Fauquier’s senior citizens will outnumber school-age children for the first time in county history. The number of those older than 65 will increase 90 percent between 2010 and 2030. ‘We have an oversupply of large-lot, single-family housing and we have a shortage of almost everything else,’ said Ed McMahon, the senior fellow for sustainable development at the Urban Land Institute in Washington.”

The Press of Atlantic City in New Jersey. “The Villages at Farmington, Farmington Cove and Green Spring North and South all sound like the perfect places for families to build their dream homes. Small problem: The developments were never built. There are many developments in southern New Jersey that were planned but never built, said Rick Van Osten, a spokesman for the Builders League of South Jersey. ‘Honestly, I think a lot of these projects are never going to be built,’ Van Osten said. ‘The recession played a huge part in this. The recession started in 2006, but developers and builders really didn’t feel it until late 2007 and late 2008.’”

“The largest development planned, according to the list, is the more than 600-home Villages at Farmington, proposed by Pennsylvania-based Pulte Group. Pulte appeared before the Planning Board in January 2007 and was granted preliminary approval for the project, but never sought final approval, officials said. During the hearing, a township planner hailed the project as a turning point for the municipality. ‘If I had any doubts that our community has turned into a major city, I don’t have those doubts anymore,’ then-Chairman Robert Levy said during the hearing. The site is still vacant.”

The Sun Sentinel in Florida. “It’s hard to stand out when it comes to crime in South Florida, but the attempted bowling ball bombing of a foreclosed home does the trick. There is little worse than losing your home to foreclosure. Tyler Butler, 21, of Loxahatchee didn’t want to part with his own; he wanted to blow his old home into tiny parts. First Butler tried to use a cigarette lighter to burn his home down. And then he got the bright idea to fill a bowling ball with gun powder and add a wick. By the time authorities responded to the fire, the found the ticking … or lit … bowling ball bomb.”

“Housing prices are up. And the foreclosure stock is shrinking. But Mr. Butler reminds us that a lot of people are still facing hard times. Hopefully, Mr. Butler bit the bullet for all of us. He made crime history with a bowling bomb plot that fizzled … just like the American dream continues to fizzle for so many people.”

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A report from the Associated Press. “Real estate has gotten hot again. Home sales are on pace for their best year since 2007. First-time buyers are streaming back into the market. Prices are skyrocketing, aided by a stronger job market and tantalizingly low mortgage rates that are creating pressure for buyers to act fast. More homes are selling at a faster clip. A stunning 28 percent of homes are selling within two weeks, compared to 19 percent before the recession, according to a recent survey by the brokerage Coldwell Banker.”

“Buyers such as Amanda Fyler saw more financial benefits in owning after renting a 400 square-foot studio in Washington, D.C. The 32 year-old nonprofit analyst is in the middle of finalizing the purchase of a two-bedroom condominium. She figures that by renting the extra bedroom, her housing costs will largely stay the same as her current rent. Plus, she will be able to build equity and deduct the interest from her taxes. ‘Otherwise,’ she said, ‘it’s not affordable in this city.’”

The Wall Street Journal. “Many low-down-payment borrowers—including first-time home buyers—are returning to the market, boosting housing but raising concern among skeptics who worry about the risk of such mortgages. Joseph Rowe, 29 years old, bought his first home in Taylors, S.C., in May. Mr. Rowe said that he and his wife made a 3.5% down payment, which he said was all they could afford, and that their mortgage payment on the $163,000, three-bedroom home is only slightly higher than what they paid in rent. He said that they think home prices, which climbed 5% in the past year through April according to the South Carolina Association of Realtors, will continue to rise in their area, reducing the risk of putting so little down.”

“‘I love living in a house as opposed to an apartment. I wish I could have been able to do that earlier. We just didn’t have the money to put down,’ he said.”

“Nina Armah, a 33-year-old account manager, bought a $250,000 studio in Washington, D.C., after finding that her costs to rent a new place would be about as much as her mortgage payment. She said she didn’t have the savings to make a 20% down payment, but was able to effectively put no money down on a home by getting an FHA loan along with a subsidy from a Washington program geared to first-time home buyers. She said she isn’t worried that home prices could drop. ‘I definitely felt that property values were only ever increasing,’ said Ms. Armah. ‘I felt the impending ‘you’ve got to get into the market now’ feeling.’”

The Post and Courier in South Carolina. “Hugo Diedericks, a Realtor with Carolina One west of the Ashley, says he’s ‘relatively new’ to Charleston real estate but is familiar with properties in which local first-time homebuyers would show interest. There are rules of thumb, he says, that first-time homebuyers in the Lowcountry market — or any market, for that matter — can consider. ‘Nowhere in the world has real estate devalued over any 15-year period,’ he says. ‘The value of your home will double every 14 years, based on the last 4 and 14 year cycles.’”

“Moreover, with finance costs still low, ‘Now is a very good time to enter the real estate market. In fact it could still be the best lifetime investment for the average American — that is to purchase your primary residence,’ Diedericks says.”

WFAA in Texas. ” In the southeast corner of Denton County, around Lewisville, The Colony, and Carrollton, real estate broker Christy Thompson has, ‘A list of buyers who are just waiting, and waiting, and waiting.’ But most of the buyers Christy Thompson has dealt with aren’t going to work for any of those big businesses. Investors know the market here will likely only get hotter as workers do start to move in. ‘What I am seeing is a lot of investors,’ she said. ‘A lot of investors buying up the houses, paying cash.’”

The Coloradoan. “It is still beyond hard to find an affordable apartment in Fort Collins. Average rents in March fell to $1,174, down from $1,219 a year ago, but much of that decrease is attributed to a big decrease in northwest Fort Collins, which dropped from $1,407 to $1,017. Hundreds of new student and market-rate apartments are under construction or making their way through the city’s development process. During the early 2000s, the last rental bubble, landlords gave away washers and dryers, free cable or Internet, a free month’s rent and more to draw people to their property.”

“Fort Collins has not seen a significant impact from new construction yet, said Bev Perina of Armadillo Property Management in Fort Collins. ‘I’ve seen two times where we’ve had a huge impact from overbuilding. We’re not there yet, but I think it’s coming.’ Fort Collins is getting its share of investors snapping up rental property, Perina said. ‘Maybe we’ll be just fine and we won’t see a downturn, but it’s possible.’”

The Miami Herald in Florida. “After several years of overheated gains, South Florida real estate may be in for a slowdown. Prices have grown too high and the buyer pool is shrinking, say local brokers who are on the industry’s front lines. And it’s not just the usual summer doldrums. ‘There are too many properties out there that are over-priced,’ said Jeff Morr, an agent at Douglas Elliman and chairman of the Miami Master Brokers Forum. ‘The biggest thing that holds a property from selling is the price.’”

“‘Prices are getting too high,’ agreed Cyril Bijaoui, a broker at Westside Estate Agency, a Los Angeles firm that recently opened a Coral Gables office. ‘Sellers’ expectations about what they can get have gone way up and people smell opportunities. But it’s creating buyer frustration and a definite slowdown.’”

“Rising prices and static salaries have made South Florida one of the least affordable housing markets in the nation — and that’s putting a damper on buyers. ‘The number of showings is not what you’d expect,’ said Liza Mendez, a broker at Pedro Realty. ‘Something’s off. The market talks and we may have to readjust our prices.’”

“The market will need to correct its pricing in order to keep sales moving, said Christopher Zoller, president of the Miami realtor association. ‘Most sellers are realizing that buyers are more educated and more cautious and are shopping around a little harder,’ Zoller said. ‘We’re starting to see sellers getting more realistic on their pricing.’”