The Housing Bubble

Reuters reports on California. “New foreclosures more than tripled in Los Angeles in July from a year ago, with more than $2 billion of mortgages turning sour in Los Angeles alone, PropertyShark said. The number of newly scheduled auctions of foreclosed properties in Los Angeles County rose 249 percent to 5,982 from July 2007. Los Angeles saw foreclosure activity start to spread to wealthier areas, such as Malibu, Santa Monica, and Manhattan Beach, according to the report.”

“‘We are still in the middle of a housing hurricane where foreclosure activity remains high, home prices have declined, and the number of sales transactions has fallen dramatically,’ said CEO Bill Staniford.”

The Voice of San Diego. “As much as one-quarter of the single-family homes in foreclosure in California have renters occupying them, according to an estimate from the California Apartment Association. Gov. Arnold Schwarzenegger signed a bill into law in July to extend the amount of time such tenants are given before they must vacate the house from 30 days to 60 days.”

“Homeowners who live in their house are only entitled to three days once the bank has repossessed the house before they’re evicted. Tenants get at least 60 days to stay there, and they don’t have to pay rent.”

“‘Even though it’s bad, it’s really not as bad as it sounds,’ said local attorney Steven Kellman, who runs the Tenants Legal Center. ‘It’s kind of a soft landing. Some of them actually think of it as a benefit, because they can save up their rent.’”

“Kellman has seen a spike in calls from tenants whose landlords are in foreclosure, he said. Kellman attributed that trend to significant appreciation in the housing market this decade, where homeowners bought second or third or fifth properties with hopes of renting them out.”

“‘We had new landlords, novice landlords, coming in and going out — they get to hold their property for two, three years,’ he said. ‘But they were just visiting the land of landlords.’”

The Fontana Herald News. “The Riverside/San Bernardino metropolitan area ranked second in the country in the percentage of properties with foreclosure filings, RealtyTrac said. There were 43,600 foreclosures in the Inland Empire in the second quarter”

“Fontana has been hit very hard by the difficulties in the real estate market, but Roberto Tavarez, district manager of R & R Home Lending in Fontana, said he believes ‘the biggest hit has already been taken.’”

“Tavarez said that after the tremendous plunge in home prices during the past two years, buyers are now ready to check out the market again. ‘This is probably one of the best times to buy,’ he said. ‘Prices are basically at rock bottom. The situation has stabilized at this point.’”

“Some houses that were once in the $400,000 range are down in the $200,000s, he said.”

The Visalia Times Delta. “There have been more than 1,000 home foreclosures in the last three months in Tulare County, leaving once-full neighborhoods blotted with abandoned houses. Tracking down the former occupants isn’t always helpful. Many during the mortgage crisis have simply walked away from their homes, say real estate and community development officials.”

“Most houses in foreclosure come up with the banks as owners. Many are out-of-state banks, and some are outside the country, said Tim Burns, neighborhood preservation manager for the city of Visalia. ‘It can seem like nobody is willing to accept responsibility for a property within this [foreclosure] process,’ Burns said.”

“Dave and Pat Griepsma watched helplessly as weeds on their neighbor’s Visalia property climbed to the home’s back windows and took over the front yard.”

“The home in the 3900 block of East Oak Avenue has been vacant for two years. The for-sale sign was long gone and the owner - they knew his first name only - was nowhere to be found.”

“‘We didn’t know who to call,’ Pat Griepsma said recently.”

The Manteca Bulletin. “There were 515 completed transactions made through the MLS in Manteca as of July 29 within the city limits. That number translates into an annual sales pace of 895 homes. But if you look at the past two months when sales accelerated sharply, the market actually is on pace to reach the 1,050 mark.”

“That is more homes than what had been sold through the MLS for the previous two years when 402 homes were sold in Manteca in 2007 and 627 homes in 2006.”

“The median sales price of those 515 homes is $260,205 or the same it was in mid-2002. Prices of existing resale homes peaked in Manteca when they registered a median price of $429,000.”

“But that doesn’t reflect the quirkiness of some foreclosure sales - homes that need a lot of work. Back in 2002 with a strong market, the homes considered less desirable still held value in a reasonable relationship with the middle of the market.”

“Now with the sub-$250,000 market driving Manteca and more forecloses becoming available each day, banks are pricing those less desirable homes extremely aggressive to make sure they don’t linger. It has effectively driven prices of such homes back into the late 1990s levels.”

“Eight out of every 10 homes in Manteca are selling under duress. There are 457 existing homes currently available for sale in Manteca. That number includes 178 bank owned homes, 170 short sales, and 109 homes not under duress.”

The Fremont Bulletin. “Alameda County Assessor Ron Thomsen has delivered the 2008-2009 gross local assessment roll of $207.2 billion, reflecting a $9.6 billion increase, 4.87 percent above last year’s assessment roll.”

“‘The 2008-09 assessment roll accurately reflects assessments of more than 490,000 taxable properties including the 44,212 properties that were provided reduced assessments due to recent market value declines,’ Thomsen said.”

“Those reductions in assessed value totaled $3.1 billion.”

The Press Democrat. “Dozens of homeowners in Del Webb’s Clover Springs retirement community in Cloverdale are suing the developer, saying their homes have leaks, cracks, mold and other problems caused by faulty construction. The defects will cost millions to repair, according to the lawsuit filed last month (July) in Sonoma County Superior Court.”

“‘It’s like they just threw these places together,’ said Laureen Emmons, who has lived in Clover Springs with her husband Bob since 2000. ‘The floor keeps cracking.’”

“Clover Springs, which opened in 1998, is Cloverdale’s largest residential subdivision, with 362 single-family homes and about 650 residents. Del Webb developed the 175-acre subdivision during the housing boom of the late 1990s, said Fred Adelman, a Santa Monica attorney representing the homeowners.”

“‘It was a hot market and they wanted to take advantage of it,’ he said. ‘They cut the construction time and quality was compromised.’”

“It will cost at least $100,000 per home to fix the defects, he said.”

“Willo(cq) Rose, a real estate agent who lives in Clover Springs, said her house has problems with mold and one of the windows is cracking. ‘If I were to sell the house I’d have to replace the linoleum,’ she said.”

“Summer’s still swinging, but parents are already dragging their kids to local retailers in search of back-to-school bargains that won’t break household budgets already rattled by the recession.”

“Lanette Zootis, a real estate agent in Windsor, said the soft housing market has been tough on her family and caused her to do everything she can to ’squirrel away money for a rainy day.’ Ironically, that means more shopping, not less, as she hunts harder for the best deals.”

“‘It’s not so much that we have financial problems, but the job stability is just not there,’ she said.”

“Zootis was back-to-school shopping with her daughters at the Meryvns department store in Santa Rosa last week when her 8-year-old Karley rejected some clothes as ’so totally not my style.’”

“‘It’s on sale,’ Zootis replied. ‘It’s so totally your style.’”

The Bakersfield Californian. “The state Department of Real Estate wrapped up its arguments Monday in the mortgage fraud proceedings against David Crisp and Carl Cole, but not before fleshing out some details in the case.”

“Joe Carrillo, a senior deputy commissioner with the Department of Real Estate, testified he wore a wire for the FBI while interviewing Cole at a real estate office in May 2007.”

“Former Crisp, Cole & Associates employee Janie ‘JJ’ Stockton received at least $20,000 from Crisp in exchange for using her name as the purchaser on loan documents, Carrillo said.”

“‘She signed everything that David Crisp gave her to sign,’ Carrillo testified.”

“During cross-examination…Carrillo said Gary Crabtree brought discrepancies in the values of properties to the department’s attention. Crabtree, an appraiser, said Monday afternoon in a phone interview that he wrote a letter about ‘transactional anomalies’ to the Bakersfield Association of Realtors’ executive committee.”

“Former Tower Lending employee Jayson Costa testified that both Cole and Crisp knew he wasn’t a licensed broker. He was encouraged to get his license, but during the boom, ‘there was such a backlog at the state to get people licenses,’ he said.”

“Costa now lives in Lompoc and works at a Dodge dealership.”

“Luke Martin of the Department of Real Estate testified that when he interviewed Crisp in 2005, the real estate salesman brought magazine articles that detailed his success - the private jet, the designer clothes, the fancy cars.”

“During a hearing recess, Costa said he missed the real estate business. ‘I know Carl and David are getting in trouble. A lot of other people benefited from this boom. We just made more money than everybody else,’ Costa said.”

The County Sun. “Something you can expect to read about more, here and elsewhere, is the opportunity exporting provides businesses of all sizes in helping to push us out of recession.”

“Larry Sharp, president and chief operating officer of Arrowhead Credit Union, and Lori Van Arsdale, a city council member in Hemet, dropped by the newspaper Monday morning to talk about a major conference that’s taking place in Palm Springs in October to encourage small- and medium-size businesses in particular to take advantage of export opportunities.”

“‘Long term, we have to get out of our dependence on housing to drive our economy,’ Sharp said.”