The Housing Bubble

The Tampa Tribune reports from Florida. “If you’re trying to sell your home, recent real estate news is likely getting you down. There are more homes for sale than buyers, empty houses sit on the market for months, and some homes aren’t selling. Tampa ranks second in the nation for falling prices, and economists say it will get worse. It’s hard to ignore how long it’s taking to make deals. October’s 1,700 sales are still down 30 percent from the same month last year when 2,419 homes sold. In October 2005, 3,735 homes sold.”

“Real estate agent Nick Davis in Wesley Chapel, said he is seeing an uptick in sales, as long as clients are willing to drop their asking prices. Part of the reason homes are taking longer to sell, he said, is that homeowners don’t want to accept that homes aren’t appreciating like they did during the housing boom.”

“‘People have to be realistic,’ Davis said.”

“David and Jeanine Blake find themselves on both sides of the selling fence. The couple just bought a house in Belleair and feel they got a good deal because of the slow market. Now, though, they have to sell their old home and fear it will take a while. They worry, too, whether they’ll get a price they can live with.”

“‘We’re prepared for it to take 90 to 120 days,’ David Blake said. ‘We have equity, but we’re not going to give it away just because we have equity in the home.’”

The Naples News from Florida. “The real estate boom that peaked in 2005 contributed to Southwest Florida’s unprecedented foreclosure rates in 2007, say real estate professionals and county officials.”

“In Lee County, 11,698 foreclosure cases were filed with the Clerk of Courts this year before Dec. 1, more than tripling the number of all 2006 filings. In Collier, 3,225 foreclosures had been filed as of Friday morning, an increase of more than 400 percent over 2006.”

“Single-month totals for November 2007 were greater in both counties than yearly totals in 2005.”

“‘It just gags you,’ said Lee Clerk of Courts Charlie Green. ‘I have seen the market go down before, but we have never seen this large of an increase in foreclosures.’”

“Green said a variety of factors particular to the area’s booming 2004 and 2005 real estate market ultimately led to this year’s dreary statistics. ‘A home worth $200,000 had a market value of $400,000 in a very short time, which any reasonable person knows shouldn’t happen. There was a tremendous spike in value and people bought like drunken sailors,’ he said.”

“Foreclosures might continue to increase at a rapid rate because increased payments from adjustable rate mortgages sold during the boom’s height are just now kicking in, said Ross McIntosh, a Naples real estate broker.”

“While housing prices have been falling, they have not decreased enough to match income levels in those areas yet, he added. ‘Cape Coral and Lehigh have not yet felt the brunt of the foreclosures. I don’t see a bottom, literally, for years to come. Everybody’s hurting but we’re hurting most in Southwest Florida because we had the farthest to fall, and an undiversified economy.’”

The Bradenton Herald from Florida. “Local builders might not be getting as much money per home as they did during the real estate boom, but some say sales numbers are up slightly from last year.”

“Neal Communities sold 14 homes last month, resulting in a total sales volume of about $5.3 million. In November 2006, Neal sold 12 homes, but the sales volume was nearly $2 million higher at $7.2 million. The higher sales number with lower sales volume is an indication on how far home prices have fallen.”

“Even in places like The Country Club at Lakewood Ranch, prices have been drastically reduced. A banner outside one of the gates tells prospective buyers they can get into Neal’s Wexford community for $330,000. During the boom years, prices in that development were nearly twice that.”

The Times Free Press. “After years of steady increases, housing starts in Northwest Georgia and Bradley County dropped by double digits through the third quarter of this year compared to the same period in 2006, records show.”

“But in several Southeast Tennessee counties, many of which do not require building permits for houses, officials say they are seeing an upward trend.”

“‘Right now, we are not (seeing any new construction starting),’ said Ray Brackett, building official for Marion County. ‘But we have several million dollars’ worth of new homes being built. I’ve got one (building plan) in my office right now for new condos on the river.’”

“In the greater Chattanooga area, which includes Bradley County, the number of permits dropped from 2,127 through Sept. 30, 2006, to 1,668 for the same period in 2007. In Bradley County, building permits dropped from 502 to 382 for the same comparison period, records show. That compares with double-digit increases before 2006, according to The Market Edge.”

“Bradley County posted a 14.6 percent increase from 2003 to 2004. Since then, ‘it is off some,’ said Greg Thomas, Cleveland city building inspector. ‘It seems to be a nationwide phenomenon from what I can tell. But I don’t think panic buttons are being pushed. People are still bringing housing products to the market, and I think that will continue.’”

“Mr. Brackett said the area is attractive for its low cost of living and scenic beauty. ‘We have it all, the mountains and the river,’ he said. ‘And it’s cheaper to live here.’”

“The cost of living may be low, but a lot of the new homes coming out of the ground are not.”

“The Cumberlands at Sewanee and Timberlake at Sewanee are upscale developments on 12,000 acres on South Pittsburg Mountain. The Rarity Club at Nickajack, which will have an 18-hole golf course, is slated to have nearly 1,000 homes. Rarity officials said last month that about half of the 160 lots have sold. Many of those lots are selling from $300,000 to close to $1 million, Mr. Brackett said.”

“The rural Tennessee counties have room for new developments. In Marion County, for example, nearly 2,700 acres are being converted to residential subdivisions, according to Marion County Mayor Howell Moss. In Meigs County, officials said three developments are expected to attract as many as 6,000 new residents.”

MSN Real Estate on South Carolina. “The view from Mari Kunz’s new house in Murrells Inlet, S.C., is far from what she pictured when she and her husband, Larry, bought into this Levitt and Sons retirement community last summer.”

“Instead of tropical landscaping, lush green lawns and a steady stream of other active seniors on bikes, she sees street after street of empty lots, framed unfinished houses and streetlights that don’t work.”

“Levitt filed for Chapter 11 bankruptcy in November, putting the brakes on construction at the couple’s development, Seasons at Prince Creek West. The move left them and the rest of the residents without the lifestyle, amenities or services promised them. The posh Grand Clubhouse was never built, and the fitness center consists of little more than a gaping hole for the indoor pool and a couple of walls.”

“‘We are the only house in Phase 2,’ Kunz says. ‘We are kind of out here by ourselves.’”

The Charlotte Observer from North Carolina. “If you need a house near Houston, Rhonda Dupras wants to talk to you. She isn’t a real estate agent but a frustrated Charlotte newcomer caught up in the nation’s housing crisis.”

“She’s desperate to buy in Charlotte, one of the few places where homes continue to appreciate. But she can’t sell her property in Texas, where the real estate market is tanking. So she rents and waits.”

“‘I moved to Charlotte because I wanted a better lifestyle,’ said the 41-year-old, who works in the mortgage lending industry and has had her Katy, Texas, home on the market for 22 months. ‘I have to eat the mortgage every month. It’s why I haven’t bought a house here.’”

“Local real estate professionals say too many clients are simply blocked from buying because they can’t unload properties elsewhere. That’s becoming a drag on Charlotte’s real estate market.”

“It’s a market that has thrived this decade with transplants — about 80,000 a year — buying homes. But the local numbers now are telling a different story: Average days for a home to sell increased to 124 days in October from 118 the same month last year, according to Carolina MLS. And contracts, the most current snapshot of sales, were down 21 percent last month, compared with the same period last year.”

“Terri Wade, a Charlotte mortgage broker, started a social group of newcomers. Of the 89 newcomers in her group, about 15 are stuck with mortgages in soured markets elsewhere.”

“In her mortgage business, corporate clients relocating to the region have been spending more than a year in temporary quarters, compared with less than six months in 2006 and prior years, she said. ‘This is touching so many different people.’”

“Among the frustrated newcomers is Christopher Dobrosky, who moved to Charlotte for a new job and better pay with a construction materials company. He can’t sell his condominium in Philadelphia. He says he could afford to buy in Charlotte and make payments on two properties in two states but wouldn’t feel comfortable doing it.”

“The condominium is worth less than when he bought it four years ago. And he took out a home equity loan to pay off debt. ‘It’s crazy. I would have to choose to lose money,’ said the 34-year-old. ‘I’m kind of stuck.’”

“On the other side of the sales equation are local homeowners like Keith and Sara Sykes, who say they hear the same tale from prospective buyers who are interested but can’t close deals. The Sykeses have been trying since September to sell their condominium in located in south Charlotte.”

“The two want a bigger house with a backyard. They closed Friday on that new house, also in south Charlotte near Sedgefield. But Keith Sykes takes a deep breath when considering the local market for condominiums.”

“‘A lot of people who have looked can’t sell houses where they used to live,’ he said. ‘I think the economy is still strong here; it’s just a tough time to sell.’”

“Fortunately for the couple, Keith Sykes took some big profits from selling a Dilworth condominium almost three years ago that he owned for two years during the heart of that area’s appreciation. They have savings in case the condominium doesn’t sell by the spring but believe interest will pick quickly after the holiday season.”

“‘My real concern would be if it didn’t start selling by the end of January,’ he said.”

“Sheila Harman has experienced the slowing market. To her it feels like a complete stall.”

“She tested the market in June to gauge interest in her sprawling brick house on 12 acres in Union County. Harman and her husband listed the property at $598,000 with an agent, who brought only a few window-shoppers, she said.”

“She also listed the house on a real estate Web site that guarantees hits. And she posted signs in her neighborhood directing potential buyers to the property. Then she waited. She’s still waiting.”

“Unwilling to lower her price, Harman let the agent contract expire. And she said the listing” on the real estate Web site hasn’t produced any phone calls.”

“‘We will just hang in there,’ she said. ‘It’s very unusual to list a house like that and get no response.’”