The Housing Bubble

The Courier News reports from New Jersey. “In New Jersey, home sales fell by 30 percent in January over the same month in 2007, according to Otteau. Sales at the Jersey Shore outperformed the state, but still fell by 24 percent in Monmouth County and 26 percent in Ocean County, the firm states. ‘Sales are running at very weak levels,’ said Jeffrey Otteau, the company’s president. ‘Clearly what we have here is that the housing market continues to be in a stall.’”

“Michael Benol and his wife have their Point Pleasant home on the market while they look for a larger house for their family. As a buyer, Benol said he believes many home prices are unrealistically high.”

“‘For some reason, people still think they will get the number that they got a year and a half ago,’ he said. ‘When you put an offer in, they look at you like you are crazy and they don’t act on it.’”

The Herald Mail from Maryland. “If you’ve been trying to sell your house, the economic signs are pretty clear: You’re in a lot of pain. Especially if your home is in the upper end of the market, pricewise.”

“And if you’ve bought a house in Washington County the last few years, you’re probably hurting, too, as more of your income than ever is being used to pay the mortgage.”

“‘Soon as the gas prices went up to $3 a gallon, it’s like a wall went up on South Mountain and people stopped coming over the hill,’ said local Realtor Jeff Matthews, last year’s president of the Pen-Mar Regional Association of Realtors.”

“When that traffic went away, only those of us who live and work here were left in the local housing market. And for the most part, we ‘can’t afford a half-million-dollar house,’ Matthews said. So the median price of what homes sold, fell.”

“When the lemmings from the metro areas were running this way to buy houses, so, too, were big metro builders. Now that that crowd has gone away, what’s left is ‘more new houses than there are workers,’ NAR economist Ken Fears said.”

“NAR looks exclusively at the sales of existing homes. Its data does not look at sales of new houses. If it did, the drop in price here might be more severe. ‘They’re trying to get rid of them,’ Matthews said of the bigger builders’ houses. ‘They’re giving away all these (house feature) options.’”

“‘It’s hard for someone who bought a house, let’s say in a new subdivision, and now they’re being relocated or must sell because of circumstances,’ he said. ‘It’s hard to compete with these new house builders who are giving away things.’”

“Fears said, ‘just looking at the numbers, it looks like kind of an overhang in supply.’ That overhang, coupled with the slowdown in sales, is most noticeable in the backlog of houses waiting to be sold. You can drive on almost any street and count the number of ‘For Sale’ signs.”

“Not only new houses, but also, of course, older ones whose owners have found work elsewhere or who want to buy another, as well as those being auctioned by banks that have foreclosed.”

“In January, the latest month for which figures are available, Realtors had a total of 1,353 houses listed for sale in Washington County, according to MRIS. Of those, just 76 were sold during the month, MRIS said.”

“If sales continued at that rate and even ‘if we didn’t list another house, it would take almost two years to sell it all off,’ said Matthews.”

The Capital from Maryland. “CyBer Realty will conduct its first tour today of foreclosed homes in some of the county’s areas hardest hit by the national credit and housing crisis. ‘We’re trying to put a positive spin on the condition of the market,’ said Donale Bernarding, a broker with CyBer Realty.”

“The tour will show about a dozen homes in Pasadena, Glen Burnie, Millersville and Severn. It will showcase houses ranging from $150,000 to $400,000, said Rebecca Cymek, an associate broker and the company’s manager.”

“Industry experts attribute the rise in foreclosures mainly to homeowners who took on mortgages that they can no longer afford. In some cases, mortgage rates rose. ‘A lot of people who bought a house and had it for a period of time didn’t change their spending habits and used their house as an ATM,’ said Rick Rall, president of a Severna Park loan company. ‘A lot of them ate up their equity.’”

From WTOP Radio in Virginia. “To those who thought the sport of house-hunting went out of fashion with the collapse of the housing market, think again. It’s a buyer’s market, and house hunters are scouring the nation for properties by the busload, literally, even in Prince William County.”

“The tour visited nine foreclosed properties in the Gainesville and Haymarket areas in under three hours. They included townhomes and stand-alone homes, ranging from $200,000 to $600,000. One home was only two years old; another was marked down by $200,000.”

“Eileen Durkan of Long & Foster Realtors says she got the idea after hearing about similar tours in California. ‘I thought that’s just going to be working its way here. Everything that happens in California eventually comes east, and we thought we’d like to be on the cutting edge.’”

The Times Dispatch from Virginia. “The Richmond area has been hit by the housing slump. Housing starts here are down 46 percent from their peak in January 2006. In Northern Virginia, they have slid 62.4 percent from peaking in July 2005, according to Chmura Economics & Analytics in Richmond.”

“Eric Medlin’s business was focused on doing general and termite repair work in houses that had sold. ‘I was booked over a month out. Now I’m lucky to have three days of solid work,’ he said. ‘I used to bid on a project against two or three contractors. Now, there’s five to 10 contractors bidding on the same project and we’re fighting over crumbs.’”

“‘In my almost 19 years in the home inspection business, the fourth quarter was the slowest I have ever experienced. Work went from steady to a significant drop,’ said John Jennings, of Home Pro of Richmond, a house inspection company.”

The Citizen Times from North Carolina. “Three years ago, selling a house in the Asheville area was a relatively painless affair that sometimes involved choosing between two or three offers from buyers. These days the first step to selling a home might be to check the calendar: 2008 is not 2005.”

“‘If they are selling, they are selling in a market that’s had a downward trend,’ said broker Tom Garden. ‘If they will let the Realtor price the house properly and competitively, it will sell. If they’ve got stuck in their head the old prices and won’t make changes … they may as well keep it off the market.’”

“It is no secret that home sales have declined in the Asheville area as part of the bursting of the national real estate bubble, although prices have not been hit as hard as the number of homes sold.”

“Sellers may have to reduce their price once an offer comes in, but if their initial price is outside the range a buyer is looking in, the offer just won’t happen, said Charles Giezentanner, owner of Asheville Realty & Associates.”

“‘Don’t overprice your house. Nobody’s going to look at it,’ he said.”

“Some sellers owe so much on their home that they may feel they can’t afford to make much of a price cut, said Jon Corbin, head of The Buyer’s Agent of Asheville. It’s not unusual to hear stories of sellers who are ‘upside down’ on their home loans — owing more than a home is worth — and actually end up having to bring money to a sale closing to pay off their debts.”

“Local real estate investor Mike Summey doesn’t expect the local market to bottom out until late 2009 or 2010. He says down markets tend to hit Asheville later than the rest of the country, that the local market tends to recover after the nation as a whole and the climb out of a bad market tends to mirror the slide in.”

“‘We’ve just been through the biggest upswing I’ve seen in my life, so we’re in for a long, rocky road out,’ he said.”

The Sun News from South Carolina. “Christopher James Ranone, a real estate broker and investor for 10 years, never thought a credit squeeze would force him out of his three-bedroom Myrtle Beach townhouse.”

“Now, with a handful of properties on the Grand Strand, about $15,000 in monthly debt payments, and an adjustable rate mortgage that will soon reset, something’s got to give.”

“‘What do you do in a credit crunch when you have a house that’s upside down because your neighbor down the street sold their house for 20 grand less?’ he said. ‘I don’t want to stay on a sinking ship. Better live to fight another day.’”

“Banks don’t usually like being weighed down by repossessed houses, said Kim Neisler, VP of the mortgage department for Waccamaw Bank.”

“‘How long are you going to hold it and pay the taxes and insurance, not knowing what you’re going to sell it for?’ Neisler said. ‘I think that’s why short selling has become an option out there.’”

“There were 438 foreclosure filings in South Carolina in January, up 8 percent from January 2007, according to RealtyTrac. North Carolina saw 3,373 filings, up 14 percent from January 2007.”

“No agency tracks the number of short sales, but Bank of America has seen an uptick since the housing downturn, especially in states such as Florida, California, Arizona and Nevada, said bank spokesman Terry Francisco.”

“‘Short sales can help in long-term situations where someone just has no realistic chance to be able to come back to currency on their mortgage,’ he said.”

“‘These kind of housing cycles move relatively slowly,’ Francisco said. ‘It took us awhile to get into this. It’ll take us awhile to get out of it.’”