The Housing Bubble

It’s Friday desk clearing time for this blogger. “The wealth-sapping downturn in home prices continued during the fourth quarter of 2007, the Florida Association of Realtors said Thursday. And county clerks in Palm Beach and St. Lucie counties report foreclosure filings tripled from January 2006 to January 2007. In one recent short sale, agent Bob Graeve brokered a deal for a West Palm Beach condo for $90,000. The seller owed the bank $180,000.”

“And in another deal in Jupiter, the seller paid $430,000 in 2005 - and is under contract to sell for only $309,000. ‘Buyers will buy if they’re getting a deal,’ Graeve said. ‘Buyers aren’t going to pay last year’s price.’”

“Former Lansing resident Brian Kramer moved to Oregon for a job opportunity three years ago. But his house on Aurelius Road is still for sale. Kramer has dropped the price several times but hasn’t found a taker. The audio-video technician said he might resort to selling it for less than he owes.”

“Kramer originally listed it for $129,000. After slashing the price several times, he plans to relist the house for $110,000 and possibly work out a short sale. ‘I just want to get rid of it at this point,’ he said. ‘It’s been such a hassle. I can’t do anything with the house. I just want to offload it, basically, and I want to be able to not owe thousands and thousands of dollars on it.’”

“‘You just can’t sell it because you can’t compete with the foreclosure market and the foreclosure market has hit every price range,’ said James Pyle, owner of Lana Wagner & Co. Real Estate in East Lansing. ‘You have inexpensive homes to homes that are billion-dollar homes that have been foreclosed on.’”

“Pyle said he has seen a house originally sell for $75,000 and then be listed for less than $10,000 after foreclosure.”

“Nearly 18-percent of homes sold in Nevada last year were foreclosures. That’s said to be four times more than the number of bank owned homes sold in 2006. Some local REMAX brokers have bought a bus and they’ll take you on a tour to see foreclosed homes in the area.”

“We checked out one home that was in foreclosure and has dramatically dropped in price. It sold for $700,000 roughly two years ago. Now a sale is pending for $425,000.”

“It costs a lot less to buy a condominium today in Kitsap County than a year ago, according to new real-estate tracking figures. The January median closing price of $299,900 was down $135,000 from a year ago. The average closing price fell nearly $87,000, to $346,980, according to the Northwest MLS.”

“One of the largest condo complexes in Kitsap advertised one unit marked down from $545,000 to $449,000. Even with the lure of new bargains and plenty of choice, the Kitsap condo market has slowed. Only five condo sales closed last month in Kitsap, down from 33 in January 2007.”

“Lee Avery, branch manager for the Bremerton John L. Scott office in Bremerton, is optimistic about tomorrow. ‘From here, it’s only going to go up,’ Avery said.”

“It wasn’t long ago that home buyers felt obligated to pounce on the first good deal that came along. Home sales were sizzling and another bidder was certain to make an offer. Today, house ‘for sale’ signs seem to be sprouting like dandelions across the Salem area.”

“‘You could throw a rock and hit three,’ said Bob Riggi, a real-estate broker with Windermere/ Pacific West Properties Inc.”

“Home sales have dropped, builders are seeking fewer construction permits, and homeowners are having to wait longer to sell their properties. Foreclosures also have surged.”

“But builders and other players say the Alaska housing market has remained fairly isolated from the Lower 48 housing depression. Dan Fauske, who heads the Alaska Housing Finance Corp., a state lending agency, and others said it’s not surprising the downturn could nail some builders after a string of bullish building seasons.”

“‘Last year, people were pretty much in denial that nongrowth was happening,’ said Chuck Spinelli, owner of one of the area’s largest home builders. ‘Everybody thought that by spring and summer of last year, this little hiccup bubble would be over and we’d be on the fast track again. By fall, everybody realized it didn’t happen and there were some harsh realities showing through.’”

“The whole local housing industry has tightened up for leaner times, he said. ‘Nobody is out there lending money on speculative building the way they were a year and a half ago,’ he said.”

“Houston-home builders builders ended 2007 on a sour note, posting big drops in starts and sales as the housing market continued to weaken. Even with production cuts, there were 21,570 single-family homes under construction or completed and vacant at the end of last year.”

“To get rid of some of that inventory, builders have been aggressively cutting prices. This week Beazer Homes launched a promotion giving $45,000 discounts on homes priced between $220,000 and $350,000 and $25,000 off lower-priced properties.”

“The builder is also slashing prices on new-home orders — or so-called ‘dirt sales.’ ‘We need to generate some excitement,’ said Kurt Watzek, Houston division president for Beazer Homes. ‘That’s the whole point of what we’re doing today — to get some new sticks in the air and get people excited about coming into communities.’”

“Home sales in Omaha fell nearly 10 percent in the fourth quarter of 2007 compared to the fourth quarter of 2006. Omaha experienced strong home sales from 2002 to 2006, said Mike Riedmann, president for residential sales at NP Dodge Real Estate. In June 2006, sales started to drop and inventory started to build, he said.”

“‘It seems both years the market just ran out of steam. Inventory built, and people waited,’ said Riedmann.”

“Mark Hart, president of the Omaha Area Board of Realtors, said the board along with the Metro Omaha Builders Association and several large real estate companies will launch a $250,000 campaign Monday to educate people on why it’s a great time to buy.”

“‘In the next six months to a year, people are going to be saying, ‘Why didn’t I buy in the first quarter of 2008?’ Hart said.”

“Asked whether the property industry was in crisis, Lugton’s Real Estate general manager Kevin Laurence said the Real Estate Institute of New Zealand figures for February and March would give a better indication of the state of the market.”

“A glut of houses for sale and a cooling in property prices have tipped the Hamilton housing market firmly in favour of buyers. There are more houses for sale than almost any other time in the past decade, with some sellers struggling to get any nibbles, and open homes attracting no one.”

“Lodge Real Estate Hamilton East branch manager Warwick Johnson estimated there were more than 1600 houses for sale in Hamilton, up 30 per cent on a year ago. ‘When the market was ticking along very well we would be listing and selling houses on the same day with competing offers and that’s not happening now,’ he said.”

“When the toxic substance of choice is greed, who is to blame: the pushers or the addicts? This is today’s question as Mike Cox, the attorney general, fills auditoriums from Cobo Center to Saginaw, bringing government to the people at his foreclosure forums.”

“At a mortgage broker’s spiffed-up office on Livernois, where the ceramic tile floors were laid just as the bubble was bursting, even the brokers are signing up for civic group duty. Bill Haley, at Prime Financial Plus, sees houses crumbling, owners crying, and a foreclosure aftermath of looting and collapse.”

“The lenders and the borrowers and the regulators are all in meetings. They’re in recovery, like 12-step group members, but dealing with the consequences of too many loans gone bad.”

“In the housing binge, everybody stuffed themselves. The getting was good, and only a few suckers seemed to be getting hurt. The housing churn pushed up the state tax collections, enriched investors and bankers, and enabled Michigan homeowners to go granite in their kitchens.”

“When the toxic substance is greed, the addicts hit bottom first, and later even some of the pushers get hurt.”