The Housing Bubble

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Readers suggested a topic on investing. “Can anyone suggest a good reason why gold drops by over 1% a day, ALMOST EVERY DAY? Apparently gold and the stock and housing markets have gone their separate ways. And gold is dangerously close to the 52-week low of $1,322/oz. If it breaches that, what is the next resistance level? Can bonds do terribly if everyone and his dog knows they are going to do terribly? And where would you put your money instead?”

“Good investments: Stocks, Houses, Dollars under the mattress. Bad investments: Bonds, Gold, Bitcoin. Does that about sum up the status quo investing environment?”

A reply, “REITS.”

One said, “They are buying dividend stocks and have run them up. Way up.”

The Toronto Star in Canada. “Adam Frank and his girlfriend MaryAnne, both 29, knew they wouldn’t become homeowners overnight. The two were realistic and grounded in their approach. The couple knew buying a house in Toronto could put them over the edge. When the time came to stop renting and finally buy their first home, the couple opted for a condo.”

“‘We knew what the costs were going to be and we were comfortable with them,’ says Frank. ‘We were renting for three years. We just both knew it was time to invest.’”

Investing in a condo is appealing as these properties generally come with a lower price tag. Royal LePage reports the price of the average condo in Toronto was $356,865. Jennifer Tomic from Toronto knows home ownership is for her. The thirty-seven-year-old is eager stop renting and get into the market. She’s been approved for a mortgage, but doesn’t want a condo. Because of high costs, she’s holding out.”

“‘Trying to find an affordable house on your own is really hard. I’ve tried to recruit my friends to go in on a mortgage with me,’ Tomic says. ‘It’s a business transaction, but trying to find someone willing to invest is hard. I just don’t feel like I have enough money.’”

The Signal in California. “One of my coworkers found himself working for KB Homes during the middle of the residential real estate boom, putting together the analyses or so-called ‘land packages’ for the acquisition of property for the building of tract homes. This amounted to a painstaking and complex process where the analysts would take the price of the land, gross it up for the estimated costs of grading, infrastructure and fees, factor in the costs of tract building based on design, and then add in KB’s desired profit margin to come up with a price for the eventual sale of the proposed homes.”

“The company hit some type of internal crisis in late 2003. Based upon its cost estimates, the analysts found that no family earning the mean income in Los Angeles County could afford one of their homes. So how did KB keep selling homes, in fact hitting a sales record in the first quarter of 2006? Everyone lucid knows the answer.”

“Investors, hungry for yield in an era of what seemed extremely low interest rates, gobbled up subprime, Alt A and other exotic mortgage products, putting families in homes they could not possibly afford when teaser interest rates reset, and leaving them with little choice when the values of these homes would not support conventional mortgages after the coming bust.”

“Add to this rampant speculation the scale of which no one probably captured and the nation cooked up a ticking time bomb. My favorite anecdote relates to a coworker who learned that the lady he hired from time to time to deep clean his second home in Palm Desert once personally owned (and lost) five residences in that area.”

“The subsequent bust and the required de-leveraging caused the Great Recession that began in 2007, and ‘ended’ about two years later.”

“Have we turned the proverbial corner? Recent headlines in the Mighty Signal quote real estate industry folks absolutely giddy and nearly giggly with the state of the market in Santa Clarita, with a dearth of homes available for sale and (again anecdotal) tales of hungry buyers consulting with real estate agents so that homes have multiple offers the minute they hit the MLS.”

“In about 2005 a community columnist/financial planner wrote that houses cost too much in the area, and, indeed, the nation. He based this on something called the ‘rental equilibrium’ rule, explained thusly: Like KB homes, an investor will pay a certain price for a residence if they can expect to collect rental income that covers the cost of carrying that home and allows a reasonable profit. Once the price of homes exceeds this equilibrium, the reasonable people abandon the market, leaving only those driven by emotion, speculation, and hopes for increased values.”

“Perhaps the recent signs of life show that people can finally make a rational economic decision buying rather than renting, and if one can maintain prices within a certain range more sustainable factors can drive the housing market forward, like people moving from rental to home ownership and younger people forming their own households, something also delayed by the Great Recession. After five long years of suffering, anything would seem like a boom!”

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It’s Friday desk clearing time for this blogger. “Central Iowa is one of the fastest growing populations in the Midwest, especially noticeable in suburbs bursting with new comers. ‘The market, right now is crazy,’ says Realtor Jason Stuyvesant, whose last two houses for sale were only on the market for eight and two days. ‘If you see something you like, you have to be ready to buy,’ says Stuyvesant.”

“It’s a side effect from a lot of home buyers trying to take advantage of low mortgage interest rates. ‘They say that term; it’s almost free money with interest rates as low as they are,’ says Stuyvesant. ‘Wow, we are really busy right now, is that going to keep up? All signs point to yes.’”

“In a market with a limited number of properties and plenty of eager buyers, home builders are happy to be in Casper. Naked tracts of land are sprouting subdivisions and high-end homes in the Casper metro area. Small towns like Bar Nunn and emerging areas in the east and west of Casper are seeing a new spree of growth that contractors and real estate agents don’t expect to subside anytime soon.”

“Broker One has more than 100 properties that the company is developing or will build on in the near future, said associate broker Michele Trost-Hall. It is developing a new subdivision on the west side of Casper that has 26 lots under way and a potential for 200 lots, Trost-Hall said. ‘We’re banking on the fact that things won’t slow down,’ she said.”

“When Trent and Clara Ping decided to start shopping for a house in La Crosse last month, the couple lined up a Realtor and sent him a list of about a dozen homes they’d found listed online. But by the end of the week, as they were preparing to drive down from Minneapolis, word came back that almost everything on the list was sold – or had an offer pending. Ping sent him several more only to find that those had offers, too.”

“There is a new sense of urgency for buyers. ‘You’ve got to change your sense of thinking,’ said Dave Snyder of Gerrard-Hoeschler. ‘It used to be, ‘Let’s go out and look.’ Now it’s, ‘Can you see it tonight?’ If it’s priced right, it’s getting sold in days.’”

“Home prices in Southern California popped to their highest level in 58 months during April while sales hit their highest level for that month in seven years, market tracker DataQuick said. ‘This is definitely good news,’ said Robert Kleinhenz, chief economist at the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp. ‘The people who are getting loans now are very high-value borrowers. We are not sowing the seeds of a future housing market bust like the one that led up to the great recession.’”

“In some of the hottest markets, appraisals are coming in well above the selling price. Agent Eric Tan said one appraiser did a ‘drive-by’ of a West Covina, Calif., home he was selling in April. ‘He didn’t ask for any comps, to see the inside of the house, or even schedule a time to meet with me. He wrote up the appraisal right at the purchase price,’ he said. ‘I was able to sell the client’s home for about $40,000 more than I thought the appraiser would value it.’”

“Over the 12 months ended March 2013, Texas had 53,359 completed foreclosures, according to CoreLogic. Three states completed more foreclosures than Texas over the past 12 months — Florida with 102,847 foreclosures; California with 83,310 foreclosures; and Michigan with 70,315 foreclosures. On the national front, a total of 55,000 foreclosures were completed during the month of March. The market still has a ways to go. Between the years 2000 to 2006, the country was averaging 21,000 completed foreclosures a month.”

“Benton County ranked first in Arkansas foreclosure filings for April with 48 homes slated for auction and another 70 going back to lenders to put the homes up for sale in the coming days. The county processed 118 new filings, up 22.92% from the same month last year. Residents in the Raleigh Hills neighborhood of Bella Vista are anxious to see what happens to a home they have been watching since in July 2010, when the homeowners walked away. It has languished in the foreclosure pipeline since that time. In February the home went from lender Chase Bank back to investor Freddie Mac and has recently been assigned to Coldwell Banker agent Connie Turner.”

“‘There is a home in my Bentonville neighborhood that has been vacant for nearly two years and a ‘For Sale’ just went up,’ said Jim Long, an agent with Crye-Leike Realty in Bentonville. ‘We took turns mowing the yard to keep the place presentable while it languished in limbo.’”

“Just when the local housing market is looking stronger, red flags are emerging in Maryland, with foreclosure activity up triple-digits last month. Some families, like the Hoovers, are finding it tough to get by. Randy Hoover and wife Ann have enjoyed owning their home in Frederick since 2001. They received their first foreclosure notification in January, as Ann’s unemployment benefits ran out. Randy and Ann have equity in the home but they haven’t been able to pursade their lender to lower their 7.5 percent mortgage rate. ‘Every time I call the mortgage company they say they can’t work with me,’ says Randy, adding ‘I’m not asking for them to forgive my principal balance. I just want a cheaper rate so I can have a cheaper balance to keep my home.’”

“The Hoovers were able to get current on the mortgage by taking money out of Randy’s 401k. Come August, that money will run out. RealtyTrak’s Daren Blomquist tells WUSA*9 ‘the other shoe is dropping in Maryland when it comes to foreclosure activity as foreclosures slowed down by the state’s foreclosure mediation law and faulty foreclosure paperwork are finally working their way through the foreclosure pipeline.’”

“A new study finds that new construction and foreclosure activity are running neck-and-neck, with building permits and foreclosure both up in the first quarter from a year ago. Combine foreclosures and new home construction and the result in many communities could be a large stock of available properties. If it turns out that housing supply is greater than generally believed that the rise in home prices could slow, especially in overbuilt areas.”

“‘We are currently experiencing a feeding frenzy in the Reno area for inventory. While the increase of foreclosures and building permits will bring some much-needed relief in the future it will unfortunately be far from a feast,’ said Craig King, COO of Chase International brokerage covering the Lake Tahoe and Reno, Nevada markets. ‘We are particularly feeling the heat for properties under $350,000. Those properties are receiving multiple offers within days of hitting the market so the builder and foreclosure inventory will be a blessing but far from an answer to the inventory shortage here.’”

“The real estate market in Washington continues to improve according to a University of Washington report. One thing preventing more sales is that there aren’t enough homes for sale, says said Glenn Crellin, the associate director for research at the university’s Runstad Center for Real Estate Studies. ‘Construction activity is improving, but builders cannot improve availability overnight. Lenders need to release properties which have been foreclosed, but are still owned by the lender to allow the market to stabilize and prevent renewed bubble conditions.’”

“Welcome to the 2006 economy, where stocks are booming, the art market is setting records, and home prices are soaring all over the country. In fact— not to rush things along too much— it’s already time for you to start worrying about the collapse of the next housing bubble. ‘Aw gee, we just had a collapse of a housing bubble!’ you exclaim, kicking the dirt in frustration. ‘I still have three partially constructed condos in Bed-Stuy to flip and IT’S NOT FAIR.’ We know, we know. But what can you do? These things happen. It’s been, like, five years since the last housing collapse— plenty of time for Americans to put it out of their minds entirely.”

“I wouldn’t worry, though: if there’s anyone smart enough to get in and out before the whole thing collapses, it’s you. You’re smarter than the others.”

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A report from New Jersey 101.5. “New Jersey’s foreclosure rate nearly doubled from March to April. RealtyTrac Vice President Daren Blomquist said a primary reason is the length of New Jersey’s foreclosure process, which currently averages above 900 days. ‘If you’re looking for a place to not make your mortgage payments, New Jersey might be more favorable,’ Blomquist joked.”

The New York Daily News. “Hurricane Sandy’s helping turn Queens into foreclosure city. The storm-slapped borough saw foreclosure notices spike to 566 in April - a whopping 1,186% increase compared with last April, a new report from RealtyTrac shows. Other factors are adding to Queens’ foreclosure woes. The borough was already the epicenter of the city’s foreclosure crisis before Sandy hit.”

“Queens’ courts had experienced an especially big backlog in foreclosures following the robo-signing scandal. Now, in the wake of the national mortgage settlement that laid down guidelines for the foreclosure process, the wheels are turning again. Overall, New York City saw foreclosures more than double in April, reaching 1,473. Every borough saw an uptick. After Queens, Brooklyn had the second biggest number of notices, 466, up 44.72%.”

The Metrowest Daily News in Massachusetts. “Foreclosure activity dropped dramatically in March, indicating an end to the foreclosure crisis in Massachusetts, The Warren Group said. Warren Group CEO Timothy Warren Jr. said some lenders are proceeding cautiously as they wait for rules about how a new state law dealing with foreclosures will be enforced. ‘Even though people are delinquent, (lenders) are slow to pull the trigger on foreclosures,’ Warren said.”

“Marlborough Code Enforcement Officer Pam Wilderman said city officials continue to feel the effects of the foreclosure crisis ‘There has been a vast reduction (in foreclosure activity),’ Wilderman said. But there has not been a significant reduction in ‘the amount of property empty because banks haven’t done anything (to sell it).’”

The Boston Business Journal in Massachusetts. “Chobee Hoy is among the top brokers in the Bay State’s hottest housing market, the town of Brookline, where buyers are literally lining up for a peak at promising open houses and sales are routinely closing far and above listed asking prices. A two family under agreement for $1.5 million, a single family at $1.72 million — that have seen bidding wars erupt during showings. She said another Brookline condo priced at slightly over $1 million had 67 buyers attend its first open house a few weeks ago. ‘People were literally standing in line,’ said Hoy, who has been a real estate agent here in the Bay State for roughly three decades. ‘It does make you a little nervous.’”

“The situation presents particular chalenges to appraisers tasked with valuing homes during the mortgage-underwriting process. A traditional appraisal relies heavily on past sales and comparable property-valuation data — all historical information that fails to capture volatile, real-time pricing shifts occurring in the market, said Keith Florian, a certified home appraiser and owner of Beyond Appraisers Inc. in Newton.”

“Florian said he recently appraised a Newton home that sold for $81,000 above asking, a situation that required him to consider a variety of factors, not just historical comps, in determining an appraised value for the lender. He said the market’s momentum as well as the number of bidders vying for the property helped justify the value sought. ‘You definitely need to recognize what’s going on right now,’ Florian said. ‘Right now, things are very active. Here in Newton, it’s extremely hot. I haven’t killed a deal yet this year. I’ve killed plenty of deals in years past, but not this year. It makes sense after going through the (valuation) process.’”

The Ridgefield Press in Connecticut. “With approximately a third of the homes on the market under contract, Ridgefield Realtors are confident the positive results from the first quarter will carry over into the rest of the year. Colette Kabasakalian of Coldwell Banker said 62 units were sold at a median sales price of $527,750 in the first quarter of this year, January to March. Compared to the same time last year, 46 units were sold at a median sales price of $606,250. The number of units sold this year is up 26%, while the median sales price is at a 12.9% decrease from last year at this time, she said.”

“Despite inventory being down, Bob Neumann of Neumann Real Estate believes now might not be the time to sell, with prices still being down. He added that consumers’ increased faith in the market has been integral in the upturn in number of houses sold. ‘There’s a more positive view of the whole economy, not just in the real estate market,’ Mr. Neumann said. ‘With better and better forecasts coming in, there’s more belief in the market and everyone wants to keep that momentum going.’”

The Concord Monitor on New Hampshire. “Mary Skoby Cowan of Cowan and Zellers in Concord said she’s noticed buyers on the whole are more optimistic. ‘There’s a boldness on Main Street,’ she said. ‘I think you’re seeing some people go back to work, people working more hours – just a more positive energy in many industries. And more importantly, it feels organic,’ she added. ‘It’s not because of some stimulus package or other factor.’”

“Low interest rates have helped, said George Helwig, director of education and counseling at CATCH Neighborhood Housing in Concord, which helps new buyers navigate the home-buying process. By giving them greater purchasing power, they’ve drawn more potential buyers to the market. ‘Right now you get a lot more value for the property than you would have (a few years ago),’ Helwig said. ‘For the same amount, someone who could buy a home that in 2006 was priced at $150,000 can now buy a $180,000 home that was previously priced at $200,000.’”

The New Hampshire Business Review. “There’s no way around it: Today’s homebuilding statistics, especially when compared to the boom years, are depressing. New Hampshire is ‘really struggling right now,’ said Elliott Eisenberg, former longtime economist for the National Association of Home Builders. ‘Your permits are anemic. You were on the top of the world, but you haven’t regained your mojo.’”

“Kendall Buck, executive VP of the Home Builders & Remodelers Association of New Hampshire, notes that his organization’s home show in March recorded its largest attendance in a decade, and the association’s membership, after shrinking for six years, is beginning to grow again. ‘My sense is there is a great deal of optimism,’ Buck said. ‘We’d like to see that optimism turn into a reality.’”

“While some homebuilders have noticed the improvement, or see it coming, others are less hopeful. ‘Pretty minimal to be honest,’ said Kim Moore, president of Madison Lumber Mill, of his business in New Hampshire. ‘Kind of a dud. I send more wood to Pakistan now than I do to New Hampshire. We are all smothering ourselves with lumber.’”

The Montpelier Bridge in Vermont. “Washington County single-family home sales (both primary and vacation) through the Multiple Listing Service (MLS) in 2012 were almost 13 percent higher than in 2011. Put another way, there were 35 homes sales per month last year in the county, up from 27 per month in 2011, according to local real estate appraiser Guy Andrews, SRA. Condo sales were even stronger, up 24 percent. One of the biggest drivers of today’s market is the historically low level of mortgage rates, Andrews said. ‘Right now, my desk is covered with refinance work,’ he said. ‘But I am also seeing more purchase contracts. While that is typical in the spring, this is a good indicator for the market.’”

“Sellers shouldn’t get their hopes too high, though. Last year, the median sale price of a single-family home in Washington County fell 4.25 percent, to $191,500, according to MLS statistics. While demand is up, banks are cautious about who they will lend to. Lenders are also fussier about the condition of the house they are financing, said broker Lori Pinard of C21 Jack Associates. ‘They really read over all the appraiser’s notes very carefully,’ she said recently. ‘They are having appraisers measure isolation distances between the well and septic; things they didn’t used to do.’”

“Stronger demand is giving sellers a slightly stronger hand. But a gap remains. Andrews pointed out that the median asking price for a house in the U-32 towns now is about $245,000—close to the peak median sale price of $255,000 in 2008 to 2009 but considerably higher than the median of $196,000 last year. Why? Some sellers are sitting on big loans taken out at the market’s peak, and can’t lower their asking prices without taking a loss, Heney explained.”

“Nevertheless, more sellers appear eager to jump in. Pinard wrote in an April 26 e-mail: ‘I’ve been swamped with requests from prospective sellers who want to list by May 1.’”

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The Sun Sentinel reports from Florida. “South Florida investors flipped 4,299 homes last year, up 36 percent from 2011. They bought at an average price of $138,064 and resold at an average of $189,291. Orlando was the top market for flipped homes, with a 63 percent gross profit, RealtyTrac said. ‘When I put a house back up for sale, it usually goes very quickly,’ said Bruno Duarte, a 34-year-old former stock broker. ‘Prices since last year have risen a lot. Houses I used to buy for $70,000 or $75,000 cost $80,000 now. They’re costing a little more to buy, but they’re also selling for higher prices, too.’”

The Herald Tribune. “A little-known component of a U.S. immigration reform bill snaking its way through Congress could bolster foreign retirees’ ability to purchase Florida homes. Under the proposed federal reform, the stays in the U.S. of Canadian visitors and real estate buyers could be extended. It also would grant temporary visas to foreigners from any country who pay cash for luxury real estate in the U.S. Area Realtors hope relaxed immigration rules could further lift sales to a segment of buyers that already is energizing the housing market, especially Canadians and Europeans, who typically travel to the area for vacations.”

“‘I go up to Canada every year, show them pictures of palm trees and beaches, and they come on down,’ said Bill Weed, a Realtor with brokerage firm Michael Saunders & Co. in Lakewood Ranch. ‘It feels like that feeding frenzy again.’”

From Florida Today. “When Bobbie Dyer of Dyer Mortgage Group was able to secure a loan for first-time home buyer Emelee Arbuckle, the latter started crying. They were tears of happiness from the 22-year-old Arbuckle, who was taking a big step with her future by purchasing a home in Rockledge. ‘I had looked into renting, and I could rent a two-bedroom apartment for around $700 to $800 a month and that wasn’t including the other essentials,’ said Arbuckle, a production coordinator at The Highland Mint in Melbourne. ‘I could buy a house and pay a mortgage, and end up owning it for as little as $700 a month,’ she said.”

“The house cost Arbuckle, who eventually wants to become an art therapist, $100,000 and she pays $780 for her mortgage. Arbuckle, who attends Brevard Community College and operates a small design business, said the housing crash a few years ago was a good teachable moment to reflect on, but it didn’t paralyze her from deciding to purchase a home.”

“‘Yes and no it had an impact,’ Arbuckle said of the housing market swing. ‘I know how bad it can get because the value of my parents’ home skyrocketed and then it plummeted within a year. I know there’s a risk. But I’m not spending this money and having it going to waste.’”

The Palm Beach Post. “In West Palm Beach, new rental applications increased from 296 in 2011 to 399 last year, with a hefty number coming from international and out-of-state buyers, said Sandy Wuraftic, the city’s license permit supervisor. But not everyone follows the rules. ‘We have one person who owns 150 homes and hasn’t registered any of them,’ Wuraftic said. ‘We’ll eventually catch up to him.’”

“The fragile sense of community in homeowner Bryan Melzard’s neighborhood - the impromptu chats on the sidewalk, shared gripes about overzealous condo commandos - is fading. More renters are moving into his Greenacres, Fla., development of about 100 homes, filling investor-owned properties. Melzard said the condo commandos in his community have lost their enforcement enthusiasm with the increase in renters. He believes the softening may be because the association is just thankful for getting healthy dues again from previously delinquent units.’

“‘It can be kind of a free-for-all,’ Melzard said. ‘There’s no such thing as a neighborhood anymore.’ With a 5-month-old baby, he and his wife are moving to central Florida to be closer to relatives. The couple already has a buyer for their home, an investor from California.”

The Orlando Sentinel. “Builders in the four-county metro area started work on 1,801 single-family houses during the first three months of the year, up from 1,386 housing starts for the same period in 2012. Construction starts have jumped 46 percent during the most-recent four quarters compared with the 12-month period prior to that. At a time when the inventory of existing homes listed for resale on the local market has edged down to less than a three-month supply, the inventory of new-but-vacant homes and those under construction increased by 21 percent from a year earlier.”

“‘The number of units in housing inventory has increased recently, but primarily in under-construction units. Completed houses are being occupied as soon as the house is finished,’ said Anthony Crocco, regional director for Metrostudy’s Orlando and Jacksonville markets.”

The New York Times. “Of the 22,000 condos created in downtown Miami during the boom years, only about 600 remain unsold — thanks mainly to an influx of Latin American investors seeking a safe haven for their money. Developers are reacting to the shrinking inventory predictably enough — by building more condos. The most ambitious project by far is the $1.05 billion Brickell CityCentre, a development that will add about 800 condos in two 43-story towers, a hotel, luxury movie theater and a wellness center aimed at tourists from Latin America.”

“‘This will be our Rockefeller Center,’ said Robert Kaplan, a principal with the Miami Beach office of Ackman-Ziff, a New York-based mortgage brokerage, referring to Brickell CityCentre.”

The Miami Herald. “Concerns are rising that South Florida’s recovering luxury residential real estate sector may be losing momentum as an increasing amount of inventory — a combination of resales and new construction — comes onto the market at higher and higher prices in Miami-Dade, Broward and Palm Beach counties. At the current 2013 sales pace of about 235 luxury properties transacting monthly, South Florida now has about 20 months of high-end inventory available on the market at a median price of more than $540 per square foot, according to an analysis of Southeast Florida MLXchange data.”

“As the resale activity has slowed in South Florida in 2013, the number of luxury residences on the market has grown to more than 4,550 properties priced at a minimum of at least $1 million each. As of April 15, 2013, more than 3,950 luxury residences — about 87 percent of the available luxury inventory — are on the market in South Florida with an asking price of between $1 million and $5 million each, according to the data.”

From WFSU. “Florida Gov. Rick Scott is considering whether to sign a bill meant to speed up the home foreclosure process. But foreclosure lawyers are saying the measure is unfair to consumers, and they’re threatening a legal fight if it becomes law. Courts are still getting crushed by the backlog of foreclosure cases. As of February, about 340,000 foreclosure cases sat unresolved in Florida courts. And it’s predicted an additional 680,000 cases will be opened in the next two years.”

“Sen. Darren Soto (D-Kissimmee) said, banks are purposely processing foreclosures slowly so they don’t flood the market with properties. Soto wrote a letter to Scott urging a veto, saying the bill would mark the biggest reduction in homeowner property rights in generations.”

“During debate on the Senate floor, he said, ‘And the innocent people we’re protecting? Hedge funds. Flippers. Foreign investors. These aren’t families buying these houses in foreclosure, they’re sophisticated investors that know the risks they have. But the people who are losing their houses. They are our constituents. They are Florida’s families.’”

The Tampa Tribune. “Pasco County Property Appraiser Mike Wells said he would release his official projections later this week, but the state Office of Economic and Demographic Research has reported Pasco’s tax base grew by 2 percent in 2012. Last year the conference projected Pasco County would see just a .6-percent loss in taxable value, so the county’s budget office was shocked when the actual tax roll showed a 5.2-percent drop.”

“That’s one reason Wells said he hasn’t even looked at the state projections for this year. He said reports that Pasco home prices have increased by double-digit rates are wildly inaccurate. His comments would appear to confirm the state’s finding that overall home prices grew by less than 1 percent. In the executive summery, the conference reported that Housing Price Index, while on the rise, excludes sales of foreclosed homes.”

“‘In this regard, the conference is particularly concerned that the foreclosure inventory of residential properties in Florida remains high, and its future effects are not reflected in the current HPI readings,’ the report states.”

“‘I keep reading about all these 10- and 12-percent increases,’ Wells said. ‘It just isn’t happening. Some neighborhoods are going up, but I have to consider the whole county. There are plenty of areas where the home prices are still going down.’”

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