The Housing Bubble

The Recordnet reports from California. “The sales run for existing homes in San Joaquin Countya…about 80 percent is the foreclosure sector…continued to pick up speed in April. Prices fell sharply in April, sliding below the $200,000 mark in Stockton, for example, for the first time since March 2003, when the median sales price was $193,000, according to MLS data. ‘We were the first in the tank, and I think we’ll be the first to crawl out,’ said Jerry Abbott, president and co-owner of Coldwell Banker Grupe.”

“Cameron Pannabecker, owner of Cal-Pro Mortgage Inc. in Stockton and a board director of the California Association of Mortgage Brokers, said he is urging caution about buying now as real estate agents and brokers tout the current market as a great time to buy. That’s consumer abuse, he said.”

“‘Tell me how it is different to tell someone to hurry up and buy into a market that is clearly still on the way down?’ he said. ‘If prices dropped 40 percent in a year when there were 4,000 foreclosures, what can it do other than decline that much or more in a year when we will have that many foreclosures in the first four months?’”

The Sacramento Bee. “About 85,000 Sacramento County homeowners will begin receiving notification next week that their next round of property taxes will be lowered due to declining home values.”

“Regionally, nearly 180,000 Sacramento-area homeowners will get tax relief this year as county assessors across the region engage in a wholesale markdown of home values.”

“‘We will have a negative assessment roll for what I think is the first time in the history of the county since 1850,’ said Assessor David Brown. ‘We have had small growth years, but we never had a negative roll.’”

The Daily News. “Housing prices across the nation are dropping and, with that, the nation is seeing an increase in foreclosures. Whether Tehama County is following that trend is open to debate.”

“Foreclosure filings between January and March have reached a new high and, according to the government, so are the number of vacant homes on the market. ‘Sixty-three percent of the homes sold in the last 30 days were bank owned property,’ said Lori Slade, of River City Realty in Red Bluff. ‘If you added short sale, there’d be more.’”

The Press Democrat. “In a sign Sonoma County’s unsettled housing market may be slowly starting to stabilize, home sales rose in April for the first annual increase in more than two years.”

“Prices are continuing to fall, with sales concentrated at lower ranges and foreclosure properties driving down values in many neighborhoods. Homeowners in financial distress continue to swamp the resale market, keeping supplies high even as sales rise with the summer home-buying season under way.”

“‘People who have held off are coming into the market,’ said Chris Smith, an agent in Santa Rosa. ‘We’ve got some outrageous deals out there. Some of them are half the price they were two years ago.’”

“More than 40 percent of homes on the market countywide are distressed properties, led by Southwest and Northwest Santa Rosa, Cotati and Rohnert Park, East Petaluma and Windsor, according to a survey by Pete Deatherage of Pacific Appraisals in Rohnert Park.”

“Banks also have been increasingly aggressive in cutting prices and marketing foreclosure properties to remove them from their books, said Smith, who also sells foreclosed homes for Countrywide Home Loans.”

“‘They’re being more realistic with their pricing. They’re starting to be more efficient about getting them on the market and in our hands,’ Smith said. ‘To some degree, they are defining the market. That’s where the business is.’”

Bay Area Newsgroup. “The East Bay employment slump shows no signs it will relent any time soon, according to a state report released Friday that sketched a grim picture of hundreds more jobs being lost in the area.”

“Propelled in part by a super-heated housing market, the East Bay economy in recent years rocketed higher and was the strongest in the Bay Area. With the fuel now largely spent, the region has spiraled lower during the last several months.”

“‘Housing is still in free fall, consumer spending is drying up and the government is getting pummelled by loss of revenue,’ said Christopher Thornberg, an economist with Beacon Economics. ‘Where is the strength in the East Bay economy? Not much points to a recovery’ soon.”

“‘It’s very difficult to find a job. It’s really bad,’ said Sheena Lewis, a Livermore resident. ‘The only jobs you can find are low paying jobs that offer no advancement.’”

“Lewis, who held a wide array of jobs in two mortgage companies in recent years, said she is not being picky in trying to find work. ‘I don’t have a preference,’ Lewis said. ‘I’m looking at anything.’”

The Santa Cruz Sentinel. “Last year, the Realtors for Easter Seals golf tournament in Aptos raised more than $40,000. This year, organizers are having trouble getting sponsors for the June 20 benefit. Lenders and title companies that gave $1,000 last year have said no.”

“‘The picture is bleak,’ said Tony Crane of First Horizon Home Loans.”

“Crane and his employer, First Horizon Home Loans of Capitola, gave $1,000 last year. This year, First Horizon said no. So did FirstNet Mortgage, Resource Lenders Inc. and Wachovia. Also sending regrets: three title companies — Santa Cruz Title, First American Title and Old Republic Title — and Terminix.”

“The Santa Cruz Association of Realtors, which gave $1,000 last year, is giving $200 this year.”

“‘It’s sad our industry has been hit so hard,’ said Misty Ewald of Century 21 in Aptos, who has volunteered for the Easter Seals golf benefit since it started seven years ago. ‘We’re not getting the money we’re used to.’”

“To compensate, she is soliciting donations from other groups and other industries. ‘The Hells Angels donated $500 for the first time ever,’ she said.”

The Tribune. “A former Arizona real estate agent is suspected in five armed robberies in San Luis Obispo County, including one of a real estate agent and another at a real estate office.”

“David Albertsen, 64, is suspected of robbing the agent during an open house in Atascadero on April 27, two days after he allegedly walked into a real estate office in Arroyo Grande and robbed an employee at gunpoint, according to police.”

“Paso Robles investigators say Albertsen robbed a man sitting in a car at a gas station May 2, adding that he seemed rather apologetic during the crime.”

“‘He said, ‘Sorry dude, but I’m kind of desperate,’ the victim told police.”

The Adobe Press. “The economic future for northern Santa Barbara County is not bright, and the situation is not expected to begin improving until 2009 or 2010, according to predictions released last Friday by the UCSB Economic Forecast Project.”

“With the real estate market ‘close to freefall, both in sales and price,’ retail sales in a slump, population falling and agriculture weak, the area’s economy is deep in a three-year recession, according to the forecast delivered at Allan Hancock College.”

“Northern Santa Barbara has felt the real estate crisis more strongly than the rest of the county as a whole, according to the Economic Forecast Project.”

“‘The region has been very hard hit by the collapse in home sales,’ Bill Watkins, executive director of the UCSB Economic Forecast Project, said in his executive summary. ‘The housing, construction and financing/real estate issue will continue to be a drag on North County’s economy for some time.’

“In just two years - 2006 and 2007 - home sales plummeted 60 percent. While the median price for all homes - single and multifamily, new and used - slumped 1.9 percent in 2006, the price fell another 15.9 percent in 2007.”

“In Lompoc, the price fell $57,100; in Santa Maria, the price plunged $70,400, or 18.8 percent, over two years.”

“At the same time, the area has taken the brunt of the county’s foreclosures, the report says. Santa Maria, Lompoc and Guadalupe accounted for 87.3 percent of all foreclosures in Santa Barbara County in 2007. Santa Maria suffered the most, accounting for 64.6 percent of the 676 foreclosures in the county in 2007.”

The Orange County Register. “The Great Park, billed as the first great metropolitan park of the 21st Century, relies on one source for about a third of its $1.1 billion construction budget: Lennar Corp.”

“But some critics fear that the housing slump could imperil the next big chunk of cash needed for the park: $201 million worth of bonds to pay for infrastructure. Lennar originally believed it would be selling homes by now in its Great Parks Neighborhoods - formerly Heritage Fields.”

“But homes aren’t selling, so Lennar’s not building - at least not until late 2010, at the soonest.”

“‘When housing slows down, it affects everything, said Dick Sim, a former Great Park board member who resigned in 2005. ‘Revenues go down, and costs go up. This park will drag on for 20 or 30 years.’”

“Walter Hahn, an Irvine real estate consultant, agrees that housing delays have pushed park development back about three years or more. But he believes that once the housing market returns, homes will sell briskly in Lennar’s Great Park Neighborhoods, which he called a ‘golden’ property.’”

“‘In my opinion, it’s going to happen because the money’s going to flow once the (tax districts) get formed and the bonds get sold and the housing gets built,’ Hahn said. ‘We have another boom coming. Don’t lose sight of that.’”

The San Diego Business Journal. “In May, foreclosed homes in San Diego County owned by lenders reached 5,463; an additional 3,413 foreclosed homes were scheduled for auction; and 12,320 homes were in default and headed to foreclosure, says Brian Yui, founder of HouseRebate in San Diego.”

“San Diego County auction sales increased by 50 percent from March to April. Statewide, auction sales of foreclosed homes averaged 1,000 a day in April - four times the rate of April 2007, according to ForeclosureRadar.com.”

“‘We’ve been chasing it for six months. There’s all kinds of fluff on the Internet, but you find that it’s brokers tied to brokers,’ said says Lorne Polger, managing partner of San Diego-based Pathfinder Partners LLC, who says he has access to $400 million in institutional money to buy pools of REO properties.”

“‘Unfortunately, we’ve got the money ready to go, but so far it’s a fruitless endeavor,’ he said.”

The Union Tribune. “A growing number of housing professionals…are preparing foreclosed homes for resale. The work can range from simple landscaping to removing debris that angry evictees have strewn through their former residences.”

“It’s not unusual to find vacant dwellings filled with trash and stained carpets, said Al Neilson of Neilson Construction Cleanup Services in San Diego. Neilson has repaired bank-owned homes during several sales downturns.”

“Cabinets often are missing, he said. Sometimes even the toilets and bathtubs have been removed. ‘I would say 50 percent of the houses get trashed,’ Neilson said. The evicted homeowners ‘are discouraged about how the system has let them down.’”

“Recently, an MHS repairman found out just how angry displaced homeowners can be. He couldn’t find a house he was sent to work on in Yucaipa, even with the aid of a GPS navigation system. Finally, he realized he was in the right place, but the house was no longer there.”

“‘He called and said, ‘I know I am in front of the right house, but somebody has knocked it down,’ Jay Kerr said. ‘Someone took a skip loader and knocked the house down. It was in a big pile.’”

“When he reported the incident, Kerr expected bank representatives to be upset, but ‘it wasn’t like they even raised an eyebrow.’”

“That’s probably because there are so many foreclosures, he said. Lenders are overwhelmed ‘and the work keeps coming.’”