The Housing Bubble

The San Francisco Chronicle reports from California. “In the Bay Area, mortgage companies recorded 18,516 notices of default, up more than 140 percent from a year ago. Foreclosures rose nearly 315 percent to 9,206. As the slowing economy made it more difficult for Carlos Amaya to find regular work as a truck driver, the Amayas fell behind on their payments. The couple remains several payments behind.”

“Representatives of the company have called several times, refused to alter the terms of the loan and threatened to begin foreclosure proceedings, she said. ‘It’s my house, my kids live there,’ said Amaya. ‘I don’t want to leave the house, I love my house, and I’m trying to coordinate with them. Everything is refused when I call.’”

“Banks offering workouts can do only so much to stem climbing foreclosures, said Michael Carney, director of the Real Estate Research Council of Northern California. That’s because plummeting home values often mean borrowers owe much more on their loans then their property is worth, an issue that interest rates can’t address.”

“‘The ethical thing to do is to keep paying on the loan, but the rational thing, if it doesn’t look like your head will be above water soon … is to default,’ he said.”

The Mercury News. “The number of Santa Clara County homeowners who lost their properties to foreclosure last quarter jumped more than 500 percent, while those facing that fate nearly tripled.”

“Marlene Santiago, a foreclosure intervention counselor at Neighborhood Housing Services in San Jose, said about 10 percent of the clients whose loans she submits to lenders for possible modification get approved.”

“Santiago said most of the homeowners she works with now owe more on their mortgages than they could get for their homes. Given that, many would rather stop making their high monthly mortgage payments and find someplace to rent - sometimes at half the cost of their monthly loan obligations.”

The Marin Independent Journal. “Default notices in Marin surged more than 140 percent over the past three months. Marin had 284 recorded notices of default, during the second quarter this year, up from the 118 default notices during the period last year. Statewide, the number of default notices doubled.”

“Marin has posted 702 properties in various stages of foreclosure in the past four months, according to ForeclosureRadar. Nearly half of those properties - 337 - are in Novato, with San Rafael accounting for 193 distressed homes.”

The Press Democrat. “Lenders seized a record 788 homes in foreclosure in Sonoma County during the second quarter, up 46 percent from the first quarter and nearly five times the total from a year ago, DataQuick reported. Every week, lenders took back more than 60 homes from borrowers who had stopped paying their mortgages.”

“Sonoma County’s housing market is saturated with bank-owned properties and by homeowners who are attempting to sell and avoid foreclosure. ‘I have never seen this many of them in the 20 years I’ve been in this business. There appears to be no change in the immediate horizon,’ said John Binns, a CPS agent specializing in selling bank-owned homes.”

“Every week, more than 100 borrowers in Sonoma County fell behind on payments or stopped paying mortgages, triple the number from a year ago.”

“‘Generally the banks try to price properties at market because they’re always taking massive, massive losses on these properties,’ Binns said. ‘We’ve seen a very dramatic decline in pricing. It took place fairly rapidly as opposed to being drawn out over several years.’”

The Sacramento Bee. “Foreclosures again climbed sharply in the area during April, May and June as 6,075 more households handed keys back to the banks. The new numbers mean that 21,402 homes have been foreclosed on in the region since January 2007, according to DataQuick.”

“‘We’re not seeing it slacken off at all,’ said Pam Canada, executive director of Sacramento’s NeighborWorks HomeOwnership Center.”

“Mike Lyon, head of Sacramento-based Lyon Real Estate, still worries about a coming wave of higher-end foreclosures tied to ‘Alt-A’ loans, a category between prime and the riskier subprime loans. Many of those loans involve houses worth $350,000 to $750,000.”

“‘A lot of people won’t qualify for that,’ he said. ‘There’s the potential pileup.’”

The Tracy Press. “Kim and Juliet Chapman earned a combined $120,000 income last year. Finances were in order until Juliet was laid off from her bank job in March, after 20 years in the business. Now, it’s up to Kim to pay the bills with the $60,000 annual salary he earns as a San Mateo County employee - exactly half what the couple used to make.”

“At the same time, their home’s value has dropped drastically since they bought it in 2005. Then they took out a second mortgage last year to help with their son’s wedding.”

“Now, they’re too deep in the hole to think of a way out. ‘Things have drastically changed,’ he said, citing burgeoning gas and food prices and a $3,400 monthly mortgage payment as ample reason to contemplate Chapter 11 as a way out.”

“‘We’re thinking of retiring and starting over somewhere else,’ he said, ‘probably in another state.’”

The Monterey County Herald. “Foreclosures in Monterey County continue to climb at a record pace, with 847 homes lost to foreclosure in the second quarter, reflecting an increase of 443 percent over the second quarter of 2007. Notices of default rose by almost 287 percent, said DataQuick.”

“Sandy Haney, CEO of the Monterey County Association of Realtors, said it isn’t surprising that the coastal regions are showing increased default notices and foreclosures. ‘Your coastal regions are always more expensive,’ said Haney, ‘and people sometimes stretch to live there.’”

“Monterey County’s rising numbers may reflect another trend: a delayed reaction as stretched homeowners who initially tried to hang onto their properties decide to throw in the towel.”

“‘I think there’s been a mindset,’ said Haney. ‘A lot of people are walking away because it seems like the thing to do, because they can.’”

“But inventories remain high. At the end of June, there were 2,768 homes on the market in Monterey County, and distressed sales continue to drive down median home prices.’

“‘The deeper we get into this and the deeper the economy goes, their fingernails get short,’ said Haney. ‘They can’t hang on any longer.’”

“In the lower end of the market, where the distressed properties are concentrated, some brokers are beginning to see multiple offers again. Anything in between - the $500,000 to $900,000 range - is in what she calls ‘the no-man’s land.’”

“‘We woke up one morning,’ said Haney, ‘and it looked different.’”

The Union Tribune. “Distressed mortgages continued to drag on the troubled economy in June, as a record number of homes in San Diego County went into foreclosure. Mark Goldman, who teaches real estate finance at San Diego State University, said lenders are awakening to the realization that they need to modify more loans to keep the shaky home-mortgage system from collapsing.”

“Countywide, nearly 40 percent of all homes sold in June had been foreclosed on within the previous 12 months, he said. In neighborhoods where vacant, bank-owned homes dot the landscape, the figure can exceed 50 percent.”

“‘I think we’re seeing more mitigation,’ he said. ‘I think the lenders are so inundated with properties they are becoming more open to modifications and forbearances.’”

The Orange County Register. “John and Grayce Coffman got a killer deal on their Fullerton home’s mortgage - just 1 percent interest for five years. It came after six months of complex, sometimes contradictory, negotiations with the nation’s largest home lender to avoid foreclosure. They couldn’t afford their previous loan.”

“Most borrowers probably can’t get as sweet a deal as the Coffmans. The reason: it was a mistake. It meant to offer 1 percent for the first year, with the rate increasing one percentage point for each of the next four years. It later decided to honor the error.”

“In an emailed statement, the company said: ‘A clerical mistake was made on the loan modification documents in favor of the Coffmans. Since it was our mistake and the erroneous documents had been signed, we are honoring the rate and modification terms for the full five years.’”

“The couple, who have owned their home since 1977, borrowed $552,300 from Countrywide in the summer of 2005. They got a loan that allowed them to select their monthly payment from four options. They repeatedly chose the cheapest option, which meant the balance they owed the bank grew.”

“By fall 2007, their debt to Countrywide had increased nearly $40,000. The Coffmans, who adopted six grandchildren (five still live with them) and are unemployed, admit they fumbled their finances. They refinanced several times, taking money out of their home and spending it on remodeling the house and on living expenses.”

“But they also said they were misled by Countrywide into a complex loan they didn’t understand - a charge the company disputes.”

“‘I have accepted 50 percent of the responsibility,’ Grayce Coffman said. ‘”But the other 50 percent? No way. These people knew what they were doing.’”

The Wall Street Journal. “As lenders rush to curtail their real-estate exposure and preserve sorely needed capital, they are triggering lawsuits from builders that say the banks have unfairly cut off their construction financing, stopped their projects midstream and forced their companies to the brink of bankruptcy.”

“‘Lender-liability lawsuits are coming. It’s only just beginning,’ says Michael Hackard, a lawyer in Sacramento, Calif.”

“Developer John Thomas says he had nearly finished building a 222-unit condominium and hotel project in Stockton, Calif., when his lender wouldn’t release the final $6 million from his $40 million construction loan.”

“The bank indicated on ‘multiple occasions’ that it would finish funding the loan, but never did, according to a lawsuit Mr. Thomas’s company filed against First Bank in Superior Court in Sacramento County. As a result, Mr. Thomas’s lawyer says, liens have piled up against the project, the condo units haven’t been completed, and the hotel has been taken over by a receiver.”

“J.P. Eliopulos Enterprises Inc., a home builder in the hard-hit housing market of California’s Antelope Valley, north of Los Angeles, is suing IndyMac Bancorp Inc. which is now under federal control.”

“The bank appraisal in December 2007 valued the project, the approximately 900-acre Joshua Ranch Development, at $17 million, down from an appraised value of $82 million in May of that year, says Andrew Eliopulos, the company’s CEO.”

“The bank estimated it would take about 18 years to sell 539 houses on the property, Mr. Eliopulos said.
That’s insane, he said. ‘I told them your appraisal is flawed. This bank is in trouble, and it just wants out.’”

“He says the bank had been pursuing personal guarantees that he, his wife and his 81-year-old mother signed when the builder took out the loans. IndyMac had been requiring that the builder pay the difference between the property’s $17 million appraised value and the $27 million loan balance, or pay off the loan in full, he says.”

“‘If banks want to get out of residential lending, that’s fine; let’s sit down and figure it out,’ says Mick Pattinson, CEO of builder Barratt American, based in Carlsbad, Calif. ‘But that isn’t being done. The rug is literally being pulled from under us and games are being played.’”

“Mr. Pattinson says Bank of America Corp. froze his $100 million credit line for seven months, while ordering a new appraisal of his properties. During that time, Mr. Pattinson says, his company paid down its credit line by $30 million, but then stopped making payments in March when Mr. Pattinson says he realized the bank was never going to unfreeze the loan.”

“Mr. Pattinson says that ‘after seven months, this country boy figured they weren’t going to allow us to use the credit line. I said, ‘No functioning line, no interest.’”

The Bakersfield Californian. “Two homebuilders unloaded residential tracts in Bakersfield last month for substantially less than they paid at the height of the boom, county records show.”

“The fire-price sales indicate some developers might be willing or eager to trim portfolios as land value here declines - declines that will be tallied in a matter of weeks, a county assessment official said.”

“Ennis Homes Inc., a regional builder based in Porterville, sold two southwest parcels for less than $1.5 million, county records show. Ennis bought the land in 2005 in a pair of transactions totaling more than $8.2 million.”

“KB Home, a national builder headquartered in Los Angeles, sold a northeast parcel for $765,000, records show. The company bought the land for more than $3.3 million in 2005. It’s at least the third such transaction locally since the market slipped.”

“The office is currently revaluing raw land and residential subdivisions held mostly by developers, said Tony Ansolabehere, assistant assessor. He expects ‘hundreds and hundreds of millions of dollars’ worth of property value to be shaved from the roll in the next few weeks.”

“Land that fetched up to $200,000 an acre during the peak is worth … well, it’s hard to figure, he said. If someone can get $50,000 an acre now, ‘they’re doing good,’ he said.”

“Some parcels valued at $20,000 an acre before the market run-up could sink back to that pre-boom value, he said.”

“‘Land prices have really fallen,’ he said, noting banks have foreclosed on vacant tracts and unfinished subdivisions, bringing down value further.”

The Denver Post reports from Colorado. “Real-estate agents note that resort communities have certain advantages over the Front Range and much of the nation: Foreclosures have not been a big problem, they remain attractive to retiring baby boomers, and the rich just keep on buying, which helps prop up overall sales. ‘We aren’t seeing foreclosures or the wholesale abandoning of value,’ said Doug Landin, managing broker at Eagle Ranch. ‘I think we are seeing maybe a little bit of a market correction.’”

“Summit County’s inventory of 1,955 homes for sale marks the highest point in three years. Meanwhile, the value of total Summit County home sales this year through May is down 22 percent from the same period last year.”

“Property in Eagle Ranch is still selling for at least 90 percent of asking price, Landin said.”

“But a 10 percent discount off the asking price of a house, while typical in most real-estate markets, is a notable drop in a mountain community. A year ago, an offer that came in 10 percent below asking price could ‘insult’ the seller, Landin said. Soon, it could be welcomed, he said.”

“‘People who are waiting for it to hit the bottom are rolling the dice,’ broker John Trtanj said as he lounged at his open house for a $600,000 two-bedroom condo in Singletree. ‘We’ve been saying for 30 years, ‘It can’t get any higher.’ And every year, it does. And when it gets higher again, this will be the time that people look back and call the best time to buy.’”

The Steamboat Pilot from Colorado. “Recent changes to the city’s community housing guidelines will result in higher costs to developers and increased affordable housing in Steamboat Springs, city officials said Tuesday.”

“City Council President Loui Antonucci, who is also a Realtor, voiced concern about basing the number on home sales prices from last year - a time he considered to be a ‘bubble’ when homes sold for much higher prices than they are selling for now.”

“‘Are these numbers that accurate? Prices are coming down every week. I’m not sure we should base it on those prices,’ Antonucci said.”

The Grande Junction Sentinel from Colorado. “Residential and commercial real estate sales in the Grand Valley are down 28 percent from the same time last year, and home sales decreased by 18 percent, lending officials said last week.”

“‘We’ve had eight quarters of declining real estate sales, so that is more than a trend,’ said Bob Reece, district manager of Stewart Title Company. ‘That’s a reality of where we are today. Anytime you have a decline in the number of home sales, you know you’re going to have a softening of prices.’”

“Housing inventory available is at 2,236 houses right now, Reece said. He didn’t have the inventory numbers from a year ago but recalled ‘it was substantially less.’ Property values in Grand Junction went up so quickly in the past few years that the average buyer got reluctant to buy and borrow money, he said.”

“Moab, Utah’s days as a sleepy, hidden-gem destination with a population of 4,875, according to the U.S. Census, may be numbered. The largest resort development in the town’s history, the Lionsback Resort, is weaving its way through approval and annexation into the city.”

“Moab is under a housing crunch, said Jeff Reinhart, the city’s planning director. Vacation-home seekers are buying homes that would otherwise be affordable for full-time residents, he said, and that is driving up prices.”

”One in three homes in Moab is a vacation home,’ Reinhart said. ‘The growth in that market is killing us.’”

“Julianne Fitzgerald, however, says that market no longer exists. Fitzgerald, a real estate broker in Moab who opposes the development, said Lionsback most likely would sit empty and unsold. She claims the demand for vacation homes bottomed out four months ago after a peak in 2006.”

“‘Right now, we can’t give away homes at $100,000,’ Fitzgerald said. ‘How do they expect to sell $400,000 starter mansions?’”

The Deseret News from Utah. “Home values across the nation may be tanking, but that’s not the case in Salt Lake County. Although appreciation isn’t as high as years past, ‘the Salt Lake market still is fairly strong and robust compared to the national market,’ said Tom Leech, an economic and statistical manager at the Salt Lake County Assessor’s Office.”

“Lee Gardner, Salt Lake County assessor, said he’s not in the business of philosophizing why home values are going up or down, but said that high gas prices could be in play in the southwest corner of the valley.”

“The construction boom out there might not be helping either, Leech said. ‘There just hasn’t been the demand to move out there and occupy it yet,’ Leech said.”

From Utah Business. “Utah’s residential construction industry remains dismal, as home and condominium sales continued to slow during recent months, according to Newreach, a Salt Lake City-based real estate research firm.”

“The report states that the number of new home and condo closings in Salt Lake County fell to 550 units in the second quarter of 2008, down 48 percent from 1,058 closings in the second quarter of 2007. Lot and home prices have also decreased, according to the report.”

“And Salt Lake County isn’t the only county in the Beehive State experiencing a drop in home/condo sales. ‘We’re seeing a decline across much of the state,’ said Todd Cook, VP of housing at Newreach.”

“Salt Lake County currently has 944 complete unoccupied homes/condos on the market, an 8 percent decline from 1,037 units available in the fourth quarter of 2007. This drop is significant, as the state’s standing inventory during the fourth quarter of 2007 increased 205 percent when compared to the fourth quarter of 2006.”

“Jason Eldredge, executive VP of sales at Newreach also noted that there are still development opportunities in the state. ‘Every place isn’t oversupplied; you just need to be sure that your location and prices are right,’ he said.”

“Eldredge reminded developers to be mindful of gas prices and other rising costs when searching for a location to build. ‘People can’t afford to buy on the outskirts because the money that they’re saving by buying there is lost in how much they have to spend on gas.’”

The Arizona Republic. “Metropolitan Phoenix’s foreclosure problem has spread. Many Valley neighborhoods closer in, particularly in south, west and central Phoenix, now have the highest foreclosure rates, according to an Arizona Republic analysis.”

“Foreclosures across metro Phoenix number 16,647 for the first half of the year compared with 9,966 during all of 2007 and 1,070 in 2006.”

“Many of the homes going into foreclosure were bought or refinanced during the peak of the housing boom in 2006, according to property records. Home prices are down almost 30 percent from that time, so many people struggling now owe much more than their home is worth.”

“‘It has become more of an equity problem than a subprime problem,’ said Tom Ruff, a real-estate analyst with Information Market.”

“Notice of trustee sales, or pre-foreclosures, also continue to climb. There were 35,111 pre-foreclosures filed in Maricopa County through July. That compares with 30,166 for all of 2007. When pre-foreclosures stop climbing, foreclosures could peak a few months later, Ruff said.”

“As long as foreclosures continue to rise, home prices are likely to fall.”

“‘Foreclosures are a problem for almost every neighborhood of the Valley now,’ said Margie O’Campo de Castillo of Arizona Dream Realty. ‘The problem has trickled in and will continue to get worse as people lose jobs and struggle in this economy.’”

“Real estate experts say investors and speculators opened the spigot on the foreclosure crisis but now it’s the typical homeowner who is paying the price as the result of job losses in a struggling economy.”

“During June, 40 percent of Mesa’s recorded home sales were foreclosures, 27 percent of Chandler’s were foreclosures and 20 percent of Tempe’s were foreclosures, said Jay Butler, director of real estate studies at Arizona State University.”

“‘My big concern is we’re getting change from the investor-driven to properties that were owner occupied because of job losses’ and other factors, Butler said. ‘No one sees a quick turnaround from the economic issues that the Phoenix area has been having.’”

“He said the Arizona economy has lost 26,000 jobs on a year-to-year comparison basis.”

“Bill Ryan, a broker with RE/Max Elite, which specializes in the Southeast Valley, estimated that about three-quarters of the houses being purchased are foreclosures ‘I have not personally seen a lot of properties go into foreclosure from unemployment,’ Ryan said.”

“The primary reason is that homeowners are giving up on their properties because prices are so low that they can’t envision making money off their home for at least five years, he said.”

“‘Everybody has got to get back to the mindset that you buy a house to live in,’ rather than turn a quick buck, Ryan said.”

In Business Las Vegas from Nevada. “Despite the housing slowdown that has dropped median prices more than 20 percent in the past year, affordability remains a long-term problem that could stop industries and workers from moving to Southern Nevada, according to a study done on behalf of local governments.”

“Even with the price drops, about 45 percent of the market was priced above $300,000, but homes need to be priced between $212,000 to $276,000 to be considered affordable, the study said. Between January and April, 57 percent of the housing units sold on the MLS were priced $250,000 and below.”

“The bigger concern about the housing market, however, is not prices, but the availability of credit, said Steve Schauer, a loan officer with Flagship Financial Group.”

“‘I don’t think the prices are the issue but the stricter loan guidelines,’ said Schauer. That has prevented many buyers from getting loans without putting down 3 percent to 5 percent, he said.”

“Eric Trump, VP of development and acquisitions for his dad’s company, has been coming to Las Vegas every two to four weeks overseeing the 1,282-room Trump International Hotel.”

“The Trump tower in Las Vegas has been deemed a success with 98 percent of the 1,282 units sold. The closings have been slowed by the credit market making it tougher on buyers to wrap up loans. It’s a matter of paper pushing and will take at least six more months to move closings along, he says.”

“‘It is no secret the market conditions have changed,’ Trump says. ‘Eighteen months ago, you could write a FICO score on a cocktail napkin and get what you want. Now with the subprime and overall economy, loans are being more scrutinized.’”

The Review Journal from Nevada. “Short sales have become increasingly prevalent in Las Vegas, where home values have dropped by more than 20 percent in the past year and some 5,000 homes are headed for foreclosure.”

“While more than half of all home sales in Las Vegas have been reported as foreclosures or short sales, the figure is actually closer to 80 percent in the past few weeks, a home loan consultant said.”

“About 26 percent of available inventory in Las Vegas, or 5,800 units, are listed as short sales, reported Applied Analysis.”

“Most buyers get frustrated and go looking for another house, Jo-Anne Guderian of Coldwell Banker Premier Realty said. ‘I had one property in escrow for three months and the buyer walked away,’ Guderian said. ‘They got tired of waiting. I put it back on the market at $325,000 and got an offer immediately.’”

“The problem, she said, is that the lender, Countrywide Mortgage, keeps coming up with a higher price than the market will bear. Countrywide just sold a two-story, 3,758-square-foot model match in the same area for $295,000, she said.”

“Applied Analysis principal Brian Gordon said there’s a ‘disconnect’ between the 26 percent short-sale listings and the 6.7 percent short-sale closings over the past three months.”

“Many agents believe the closing ratios for short sales under contract could be as low as 10 percent to 20 percent, Thomas Taylor of Desert Classic Properties said.”

“‘If this is the case, or anywhere near the case, there are hundreds of buyers being put on hold from a very clogged-up, nonperforming system,’ he said. ‘There is a rumor that Countrywide has decided to not do any short sales for four to six months. This can have a big impact on the market.’”

“KB Home is moving forward with construction and sales of affordable townhomes at Inspirada, a master-planned community in west Henderson. The Monet collection, as it’s being called, are priced from the $140,000s for 1,087 square feet.”

“‘Our home designs and floor plans are driven by market demand and today’s economics are driving some homebuyers to choose smaller, more affordable floor plans,’ KB spokesman Craig LeMessurier said.”

“KB’s larger Rembrandt townhomes at Inspirada start around $190,000 for 1,643 square feet.”

“Tim Sullivan, president of San Diego-based Sullivan Group, advised real estate professionals to watch out for the under-$200,000 segment of the housing market. He counted 21 active subdivisions in Las Vegas with at least one floor plan under $150,000.”

“The percentage of homes selling for under $250,000 went from 28.2 percent in 2005 to 42 percent in 2008 and the percentage of homes under $300,000 went from 44.8 percent to 63.5 percent during the same period.”

“Las Vegas’ housing opportunity index, which measures what percentage of median income households can afford a median-priced home, has gone from 64.4 percent in 2000 to 25 percent in 2007, Sullivan said at a recent seminar.”

The Las Vegas Sun from Nevada. “For more than a decade, Las Vegas has been the envy of the nation in at least one regard: its explosive growth. It’s a story Nevadans have grown accustomed to hearing. And its repeated tellings have fed the belief that such growth would never end, that Las Vegas was immune from the economic pressures that affect the rest of the country.”

“In the past week, several signs, read together, show that long-held assumptions about growth in Southern Nevada could be fundamentally changing.”

“In his previous job, when he compiled Clark County’s population estimates during the 1990s, Jeff Hardcastle said people often approached him with the same question regarding the region’s growth: ‘How long can this go on?’”

“As long as four factors remained in place, Hardcastle would reply: the relative monopoly held by Nevada’s gaming industry; the lower cost of housing, especially compared with neighboring California; the stable local and national economies; and the availability of natural resources such as water and land on which to build houses.”

“‘Since 2001, pretty much all that’s been changing,’ Hardcastle said. ‘And now we’re seeing the culmination of some of these changes.’”

“Commercial development here - which is driven by travel and tourism - has slowed dramatically. Associated General Contractors reported the value of commercial projects permitted during the second quarter of 2008 dropped 66 percent, to $131 million, from the second quarter of 2007.”

“‘Those decisions to build 30,000 hotel rooms were made several years back,’ when times were good, said Linda Macey, properties manager for Southwest Airlines. ‘We’re not sure if anyone knows whether all those rooms will be filled.’”

“Dusty Dickens retired in 2005 after 10 years as director of zoning, demographics and real estate for the School District. Even before her retirement, Dickens said, there were indications growth was slowing. During the peak of the housing boom, teachers and families were selling their homes and relocating to cash in on the bonanza.”

“‘Now you flip it the other way, and families are leaving because they’ve lost their homes,’ Dickens said. ‘Did we see this coming two or five or seven years ago? I don’t think anyone would have seen this sharp a downturn was coming.’”

The Journal News reports from New York. “Second-quarter housing trends continued to track a dismal path in Westchester and Putnam counties, a function of tougher credit requirements, unemployment and other factors, a regional real estate group said yesterday. Sales of housing of all kinds fell by double-digit percentages in both counties, compared with the second quarter of last year. Inventories for most kinds of housing in Westchester were up sharply.”

“The market was overdue for a correction following a nearly 10-year run-up in pricing starting in 1996, the MLS said. Large layoffs on Wall Street, and reduced bonuses, ‘do not bode well for the market,’ the report said.”

“Harding Mason, president of the Westchester County Board of Realtors, said the local housing market is being ‘held hostage’ by economic issues. ‘All of the factors are hitting us at the same time, just like everybody else,’ he said.”

“John Occhipinti, a retired police officer who dreams of moving to the Caribbean, said he’s thinking of reducing his price on a four-bedroom, three-bath Tudor-style house he bought in Croton-on-Hudson 10 years ago. He listed it at $829,000 six weeks ago, a price he felt was fair, given the substantial improvements that he and his wife made on the property.”

“There have been a couple of showings but no offers yet, he said. Occhipinti said he thinks that by lowering the price below $800,000, he might get the property exposed to more prospective buyers. ‘The reactions are great’ when buyers come looking, said his wife, Trish Occhipinti. ‘That’s why we’re surprised. We don’t get that follow-up phone call.’”

“Shenaaz Khalfan wants to sell her three-bedroom house in the town of Ossining for $630,000 and join her husband, who has taken a job in Australia and bought a house there. She doesn’t know how long the family can pay for two properties.”

“‘It’s a dead market,’ she said. The house was first listed for $799,000 in September and has been lowered at least four times since then. Her broker warned her the initial listing price was too high, she said, but she remembered how hot the market was just three years ago.”

“‘Lousy, dinky little houses were moving so fast, but not anymore,’ she said. ‘They’re looking for bargains out there.’”

“The MLS said more sellers were being forced to enter the market sooner by family or employment considerations. ‘I think the buyers have great opportunities in this market,’ Mason said, ‘but that doesn’t mean that sellers are going to give their houses away.’”

The New York Times. “For several years, it seemed that prices for Manhattan office buildings would never stop climbing. But now, in perhaps the clearest demonstration so far of how commercial real estate values have deteriorated in the last year, 1372 Broadway, a 21-story brick building in the garment center that was one of the last to sell before the credit crisis, is under contract to change hands again at a loss of $41 million.”

“‘We haven’t seen sellers take back financing to this degree since the early 1990s,’ said Robert M. White Jr., the president of a New York research company.”

“In June, Risanamento, a real estate company in Milan that has struggled in recent months because of the credit turmoil, announced that it was putting the 14 floors of office space at 660 Madison Avenue on the block.”

“The Wall Street Journal reported in April that Luigi Zunino, the chief executive of Risanamento, is also trying to flip a 10,000-square-foot condominium at the Plaza Hotel even before he takes possession of it.”

“The General Motors Building…languished on the market for several months before being sold with three other buildings also owned by the embattled real estate investor Harry Macklowe for a total of $3.95 billion.”

“Some real estate specialists say the three buildings, which Mr. Macklowe bought as part of a portfolio, have declined in value by 20 percent or more. But Scott A. Singer, the executive VP of a real estate finance and brokerage company that represents a number of family-owned real estate companies in New York, said the sale of the Macklowe buildings was not a good benchmark for future sales.”

“‘It was a forced sale,’ he said.”

The Glouchester Daily Times from Massachsuetts. “A foreclosure auction of the last, unbuilt piece of Pond View Village - aimed at giving the chief lender a saleable title free of more than $1.5 million owed to contractors for the state and defaulting non-profit developer - was postponed yesterday almost before it began.”

“But the move has sparked new questions regarding the status of the developing agency, Cape Ann Housing Opportunity, that grew out of Wellspring House in 2002 as a means of creating more affordable housing in the region.”

“Auctioneer Paul Saperstein opened the advertised event only to announce the auction was being pushed back to Aug. 18. The only potential bidder represented at the heavily subsidized, two-thirds finished community housing development was the lead investor, the Massachusetts Housing Investment Corp.”

“Massachusetts Housing Investment Corp. CEO Joseph Flatley said the auction was postponed in the hope that a buyer other than his corporation would appear to bid on the property. ‘Our first choice is to be fully repaid,’ said Flatley, explaining the move to go to auction.”

“‘MHIC is owed a pile of money,’ said Fran Hogan, an attorney representing the investment corporation. She described the auction as a legal maneuver to remove the liens. ‘The auction wipes out everybody behind you (in line for repayment),’ Hogan said.”

“Massachusetts Housing Investment Corp. last year took over ownership of 33 unsold Pond View condominum units when the developer - Cape Ann Housing Opportunity - ran into a crumbling condo market and was unable to repay $8.57 million of $9.2 million in loans from the corporation’s big bank investment pool.”

“The auction would rub from the deed the claims of the general contractor, Worcester-based Cutler Associates, which is owed slightly more than $1 million, and those of a number of subcontractors who sued Culter and Cape Ann Housing Opportunity after it stopped paying Cutler in the project’s final days last year, when the glut of housing and the disappearance of easy credit brought a decade-long housing boom to an end across the region.”

“The ‘crown jewel’ of Pond View Village - as Christine Cousineau, Cape Ann Housing Opportunity’s former executive director, described the high rise - was to have included mostly market-priced units with views of the Annisquam River estuary. That portion of the project was designed to produce a back-end cash flow that the business plan depended on to pay off lenders and contractors and make the project whole.”

“Joining the Massachusetts Housing Investment Corp. team at the auction site was one subcontractor. Peter Grammas Jr., president of North Shore Construction, which installed the sewage system for the entire project and sued Cape Ann Housing Opportunity and Cutler for about $100,000.”

“Grammas said he was looking at the auction as the act of eliminating him from any chance of being paid.”

“‘I had to take out a second mortgage on my house,’ Grammas said, ‘but everybody (working for him, material suppliers and subcontractors) was paid. We got screwed.’”

“The Massachusetts Housing Investment Corp. has ‘been hurt, too,’ said Hogan.”

From The Day in Connecticut. “Revenues that cities and towns receive from real estate sales have plummeted in recent months, leaving red ink in some municipal budgets. New London, Montville and Norwich have seen the biggest drops in conveyance tax revenues in the past year. New London saw a 49 percent decline, Montville a 45 percent drop and Norwich a 35 percent dip in conveyance tax revenues from fiscal year 2006-07 to 2007-08.”

“Donald Goodrich, the New London finance director, spent the last few months trying to figure out how low the conveyance tax revenue would go. He started the year projecting $600,000, and revised it in March to $350,000. He soon realized ‘we’re not going to get there,’ and revised it in June to $325,000. The city ended the fiscal year with $320,793 in conveyance tax revenues.”

“Goodrich estimated $350,000 in revenues in the new budget year but admitted, if the trend continues, the city will fall way short of that total. ‘It’s the economy. It’s the housing market,’ he said.”

“Salem First Selectman Bob Ross remembers a dismal previous year. In the 2005-06 fiscal year, Salem received $78,736 in conveyance tax revenues. The next year, it dropped dramatically to $57,603, and last year rose to $66,760, still $12,000 short of the high two years ago.”

“‘We probably had a worse decline than most back in 2006-07,’ Ross said. ‘Things are hard everywhere. The problem is, like any other municipality, we have relied on this revenue, and at the end of the year, the state legislature had to break a promise to someone, either to the real estate industry or to the towns for not giving us anther tool for replacing it. If you’re a homeowner in my town, there’s a direct impact on your taxes if the conveyance tax goes away.’”

“‘We’re seeing fewer sales,’ said Groton Town Clerk Barbara Tarbox. ‘Most new subdivisions have been there for a few years, and there aren’t any new sales of condos.’”

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The San Francisco Chronicle reports from California. “Foreclosures across the state surged to a 20-year high during the last three months, as tens of thousands of additional Californians lost their homes and more than 100,000 neared the brink. Notices of default rose nearly 125 percent from a year ago during the second quarter and trustee deeds recorded, which reflect the actual homes taken back, soared more than 260 percent, according to DataQuick.”

“The number of defaults and foreclosures were the highest in DataQuick’s statistics, which go back to 1992 and 1988, respectively. Among homeowners who fall into default, an estimated 22 percent now emerge from the foreclosure process by catching up on their payments, refinancing or selling. That’s down from 52 percent a year ago.”

“In the Bay Area, mortgage servicers recorded 18,516 notices of default, up more than 140 percent from a year ago, DataQuick said. The largest increase was in Santa Clara County, where defaults rose 194.2 percent to 3,751. The smallest gain was in San Francisco, 62.6 percent to 418.”

The Ventura County Star. “In Ventura County, there were 2,303 notices of default filed for homes and condos from April to June, up 117.5 percent from 1,059 notices filed during the same period a year ago.”

“Default notices edged up 6.6 percent from 53,943 during the first quarter, and a more substantial 124.9 percent from 53,943 during the second quarter of 2007.”

“‘The small increase in defaults from the first to the second quarter may indicate that we’re nearing a plateau,’ said John Walsh, DataQuick president, in a statement. ‘We won’t know until the end of the year, but it may be that some lenders are starting to prioritize workouts with homeowners instead of grinding through the foreclosure process.’”

“Or, lenders simply might be swamped and can’t handle processing any more paperwork, he said.”

“”Most of the loans that went into default last quarter were originated from September 2005 through November 2006, according to DataQuick. On primary mortgages, California homeowners were a median five months behind on their payments when the lenders filed the notice of default.”

The Union Tribune. “Distressed mortgages continued to put a drag on the troubled economy in June as 1,838 homes in San Diego County went into foreclosure, an 18 percent increase over the previous month and a 180 percent increase over June 2007, DataQuick reported Tuesday.”

“June marked the 39th consecutive month of year-over-year increases for both foreclosures and notices of default.”

“Kelly Cunningham, economist with the San Diego Institute for Policy Research, said the market eventually will correct itself. There is a shortage of homes in San Diego County that should bring buyers back to the market sometime next year.”

“‘There is a lot of pent-up demand still and there are some bargains to be made as investors jump into the market. We won’t be seeing prices like this in the future,’ he said.”

The Modesto Bee. “First-time home buyers will be able to purchase foreclosed houses in Stanislaus, San Joaquin and Merced counties at discount prices and with reduced-rate loans, thanks to a state loan program launched Monday.”

“Gov. Schwarzenegger said the $200 million program will ‘pump up’ the region’s economy, which has been reeling from escalating foreclosures and declining home values.”

“Some of those homes have been deeply discounted. A four-bedroom house built three years ago at 424 Fusco Ave. in Modesto originally sold for about $490,000, and it’s been listed for $270,000 since being foreclosed. First-time home buyers now can purchase the 2,888-square-foot house for $237,600.”

“‘This actually is a really nice house,’ said Chad Costa, a broker who specializes in foreclosed property. Costa said he was surprised that Wells Fargo Bank, which owns the home, had reduced it so much.”

“A property Costa is trying to sell for CitiMortgage is at 243 Angora St. in Patterson. Its previous owners borrowed more than $493,000 on the home in the spring of 2005, then lost it to foreclosure. The 3,312-square-foot house had been priced at $229,900, but now it’s listed at $198,000 for participants.”

“Costa questioned the fairness of reducing home prices so drastically for first-time buyers rather than for everybody.”

The Recordnet. “The housing downturn, now permanently embossed with a ‘foreclosure’ icon, is offering many the chance to buy when only a few years ago soaring prices had put owning a home well out of reach. For many, buying a home still seems out of reach these days, although for different reasons.”

“The median selling price countywide has declined from a peak of $425,000 in July 2006 to $220,000 last month - a 48 percent drop over two years and the lowest monthly selling price level since April 2002, according to figures from the latest Coldwell Banker Grupe-TrendGraphix monthly sales report.”

“Mian Quddus, a Santa Clara man who took a foreclosure bus tour in Stockton this past spring, had been eyeing houses in hopes of finding a good deal as an investment and, later, a retirement home. He found a couple of properties he liked but decided not even to make offers, because he heard there were already a lot of people lined up wanting to buy.”

“‘So it didn’t feel right going for it,’ he said. ‘I really didn’t want to get into a bidding war.’”

“Jerry Abbott, president and co-owner of Coldwell Banker Grupe, Stockton, has been scouring the area for a good foreclosure house on behalf of his son and daughter-in-law. He’s looking in the $300,000 to $320,000 price range and offering $350,000 minus $9,000 closing costs.”

“‘I’m just writing offer after offer for them, and we can’t get anything,’ he said. ‘There are a lot of people looking to buy in that price range, because those homes sold for up to $700,000 only a few years ago.’”

The Sacramento Bee. “A signature Sacramento program that has helped almost 300,000 lower-income people nationally buy homes in the past decade - while stirring controversy for years - is likely to be shut down this week, Nehemiah Corp. of America officials acknowledged Monday.”

“The nonprofit giant believes Congress and President Bush will ban its decade-old down-payment assistance ‘gift’ program within days as part of a larger housing bill, Nehemiah CEO Scott Syphax said Monday.”

“‘Without programs such as this, it will put the American dream of homeownership in jeopardy for a lot of first-time lower-income homebuyers,’ said John Frith, spokesman for the California Building Industry Association.”

“Others say ending the program will harm prospects for a recovery in the housing market. ‘It takes a major player out of our market,’ said Jon Kaempfer, senior loan consultant at Sacramento-based Vitek Mortgage.”

“Critics say it unfairly inflates the values of homes for those who can least afford it. ‘Originally, they (gifts) went to builders, and builders would jack up their sales prices,’ Kaempfer said. ‘That’s what really ticked the FHA off.’”

The North County Times. “Wachovia closed its wholesale mortgage department Monday and announced Tuesday that it planned to reduce lending and securities products by $20 billion this year.”

“With the failure of subprime lenders about a year ago, borrowers going to local mortgage brokers are finding fewer options and even fewer loans they can qualify for as banks tighten lending requirements, mortgage brokers said.”

“‘We’re getting hit from all angles,’ said Yamila Ayad, president of Mission Home Loans in San Marcos. ‘Last August, when a lot of subprime lenders were closing, I was not shocked. But it becomes very concerning when your prime banks start closing.’”

“‘We’re overrun with people who want to buy. The challenge is getting them qualified,’ said Matt Battiata, a real estate broker based in Carlsbad. ‘The effect on the market is as if the Fed jacked up interest rates.’”

The Voice of San Diego. “City Heights is struggling under the continuing housing market collapse. The 92105 ZIP code recently ranked 14th among nearly 100 county ZIP codes for foreclosures per 1,000 homes.”

‘The price per square foot paid for detached homes in the ZIP has fallen by nearly 50 percent since summer 2006, according to DataQuick. In several months of boom years like 2006, buyers paid more than $400 per square foot for detached homes. In May, 17 houses sold for a median of $220 per square foot.”

“Repossessed homes have brought values down but currently comprise the lion’s share of what sells in this market, area real estate agent Marigold Hernly said.”

“Hernly’s tour from street to street, from block to block, revealed some of those issues community residents and nonprofits are worried about. Some foreclosed properties had chain-link fences, peeling paint. Overgrown and dead lawns were other signs of distress.”

“But then, Hernly turned the corner and pulled over in her minivan on a street edging one of the community’s canyons. ‘You have to have a vision. These are million-dollar views,’ she said.”

The San Gabriel Valley Tribune. “West Covina’s downtown continues to evolve as it grapples with security concerns and a slowing economy that has forced out several tenants. Several of the businesses at The Lakes Entertainment Center are now closed, including the flagship restaurant Macaroni Grill.”

“Councilman Roger Hernandez thinks the council has fallen short in its plans to deliver a revitalized downtown to West Covina residents. ‘When the businesses came, they all came with the promise that the whole area was going to be redeveloped,’ Hernandez said, ‘and that we were going to create a critical mass of housing and businesses.’”

The Glendale News Press. “The number of building permits issued by city officials has reached its lowest point in nearly 10 months, a byproduct of an economy hit by slumping housing prices, the high cost of gasoline and ongoing problems in the financial sector, officials said Monday.”

“So far in July, Glendale’s Permits & Inspections department issued 144 housing and business permits. A steep drop from May and June this year, when the city handed out 211 permits both months, and authorized 232 in April, said Juan Diaz, customer service representative.”

“A recent report by the Los Angeles County Economic Development Corp. found that the new home building in Southern California ‘will continue its current descent in 2008, reflecting oversupply of existing units and difficulty in financing for builders and home buyers,’ chief economist Jack Kyser said.”

“‘If you are a home builder, you have run the gauntlet of trying to get construction financing,’ Kyser said. ‘Lenders are very cautious and very risk-averse. People are studying the market very, very carefully. They don’t want to go out on a limb. All over Southern California, you are hearing a pullback.’”

“In 2007, officials issued more than 200 permits in every month except September. That month the city authorized 109 permits, during a period that Diaz called an anomaly.”

“‘Last year we were busy with the Americana,’ he said. ‘There were lots of permits issued and lots of money being spent.’”

“With its luxury apartments just 25% filled and some stores reporting stagnant sales, the Americana at Brand may be experiencing the same woes other businesses in the region are currently undergoing in a distressed economy.”

“Officials hoped the $435 million complex would bring hundreds of thousands of new shoppers and residents to Glendale as well as flood the city’s treasury with tax revenue.”

“It is still a dubious time to run a business, said Judee Kendall, executive VP of Glendale’s Chamber of Commerce. ‘Other than the Americana, I’m not seeing a lot of businesses open up right now, and I am seeing and hearing from existing business that it’s slow,’ she said. ‘Its not particularly one type of business. It’s just generally slow.’”

“Still, city and mall officials said the mixed-use development has been a boon for the city.”

“‘It’s hard to quantify especially with the economic downturn,’ said Assistant Director of Finance Ron Ahlers.”

“‘We have expectations that the Americana will be positive and generate a few hundred grand in sales tax revenue this year, but that’s awful hard to equate in an economic downturn. It’s still a positive for the city, it’s just that we have no data to back it up,’ Ahern said.”

The Columbus Dispatch reports from Ohio. “It’s an age-old question, one that probably dates back to the mud-brick homes of ancient Mesopotamia: buy or rent? Ken Gold, director of the Ohio State Fisher College of Business Center for Real Estate Education and Research, said there are still good rental deals to be had. ‘There were too many apartments built five to 10 years ago, and there is a lot of empty inventory sitting there,’ he said.”

“And empty inventory equals lower rental prices. ‘Drive around and you’ll see signs in front of apartment complexes that say one or two or even three months free,’ Gold said. ‘That sign says that everything is on the table and negotiable.’”

“‘If you do not have to sell a house to buy a house, this is the absolute best time to buy a house at a good price in a good neighborhood,’ Gold said. ‘They’re giving away condos in Downtown Columbus. They’re just sitting there, empty, and every day it sits there, it costs the developer money.’”

The Lansing State Journal from Michigan. “For-sale signs dot Moorwood Drive in the subdivision tucked between Washington Middle School and Chisolm Hills Golf Club. Few of these houses have been foreclosed on, but those that have are pushing down values in this neighborhood as banks drop prices to unburden themselves of houses.”

“One house here sold in April for $150,000, about $79,000 less than the sheriff’s deed sale in October that put it into the hands of a bank.”

“‘This market is horrendous,’ said Judy Walker, whose husband left Michigan recently for a job in Alabama. The couple’s 1,400-square-foot house is listed at $174,400. Two years ago, Walker said it was appraised for $250,000.”

The Morning Sun from Michigan. “The outlook remains bleak for the central Michigan real estate market as Realtors try to explain to their sellers just exactly what they can do to sell their homes.”

‘Randy Golden, owner of Re/Max of Mt. Pleasant Inc., has never seen a market this bad during his 31 years in the business. ‘We are in what I’m describing as a predatory market,’ Golden said. ‘Buyers are not happy to get a deal anymore, they are going for the jugular.’”

“‘We have a lot of brokers and agents who are telling clients that everythings fine, and that they are busier than they have ever been,’ Golden said. ‘Yeah, right.’ That’s probably the agent that’s working on foreclosures.’”

“‘I’ve got a property at Lake Isabella right now, it was on the market a year ago for $259,000, it’s beautiful. Now, foreclosed, I’ve got it at $161,000. It is move- in condition,and not selling,’ he said.”

“‘It’s been hard to encourage people to invest (in real estate),’ said Phil Kruska, owner of Summit Realty Group. ‘Can we take some lemons and make lemonade? I’d like to say it’s challenging, but am I in denial?’”

“Kruska said ‘homes are selling, just not everybody’s.’”

The Post Tribune from Indiana. “A slumping economy is forcing banks and other financial institutions to pull the reins on commercial lending, officials say, leaving many previously approved municipal housing projects in the dust.”

“‘It would be very difficult to approve a large residential development now,’ said Jack Esala, VP of business banking for Centier Bank. ‘There’s a large inventory of lots available now, and that’s pretty much across the county.’”

“Hobart City building official Caroll Lewis said new home construction in Hobart has dropped dramatically. ‘We’ve issued two new home building permits this year,’ Lewis said. ‘Last year we issued 57. Nobody’s opened a new subdivision.’”

“‘The lending institutions are holding back because of the crisis,’ Lewis said. ‘If we were still in the same position we were three years ago when you could buy a house with no money down, these homes would be selling like hotcakes. In the ’70s you had to come up with 20 percent down. We’re going to go back to that market.’”

From WNDU.com in Indiana. “Foreclosures in the Midwest are up. According to RealtyTrac, in June 2008, Michigan was the 5th highest state for home foreclosures. Ohio came in next at 6th highest. Indiana was ranked 10th, and Illinois 13th. Nevada and California topped the state list.”

“Compare the first half of 2007 to 2008: Indiana had a 26% in home foreclosures so far this year. Comparing Michigan’s numbers during the same time, you’ll see the state had a 151% increase in home foreclosures in 2008!”

“‘They were blindly optimistic that ‘my situation today which enables me to get this mortgage…that’s going to be me three years from now,’ says Realtor Rory Paquette. ‘But to the dismay of many, financial pictures aren’t the same as they were three years ago. And so you have the same person with that adjustable rate mortgage, three years later, who doesn’t qualify to refinance.’”

“Realtors like Paquette, say they’ve been getting a lot of questions from people looking to buy or sell. ‘Buyers are very concerned, how do I know how much a house is worth before I start putting an offer in on it?’ he said.”

The Chicago Tribune from Illinois. “Now that lenders are more stringent about the debt load a borrower can carry in relation to his total income, they may re-check a borrower’s credit before closing, says Ed Conarchy of Cherry Creek Mortgage, Vernon Hills. A significant change can cancel the loan.”

“Buffalo Grove real estate attorney Marc Blumenthal relates one recent transaction where, ‘the buyer had two jobs, and needed the second income to afford the home.’ She lost the second job-and the deal.”

“Mortgage firms have always required a certified appraiser to provide a property value before lending. But in this market, when homes linger as prices drop, the purchase amount a buyer contracts for may be higher than the appraised value.”

“‘You offer $300,000, and then a couple of weeks later, when the lender orders an appraisal, other very similar homes for sale in the neighborhood have reduced their selling price to $280,000,’ says Peru appraiser Jim Blaydes.”

“The appraisal report will note the $20,000 difference, and lenders will consider the home being purchased to be worth $280,000, he adds. When there’s such a discrepancy, the lender often will require more cash upfront. If the buyer doesn’t have it, the seller would have to lower the price.”

“A couple of years ago, when buyers asked for repairs or a price reduction based on what their inspector uncovered, the issues were generally serious, notes John Haas, a Mt. Prospect real estate attorney. Now, however, the list is getting longer and more nit-picky, Haas says.”

“As opposed to the boom times, today’s buyer ‘isn’t worried that there is someone else right behind them ready to bid for the home.’ Sellers, who’ve already agreed to a low price, then refuse to make the repairs, and the contract dies, adds Haas.”

The Des Moines Register from Iowa. “Nearly $96 million worth of residential and commercial property in five Iowa counties is under threat of foreclosure or forced sale as a result of the financial demise of Regency Homes, once the state’s largest home builder.”

“Banking and real estate experts say it could take at least a year to resolve the financial mess, and maybe even longer for lenders to resell property in a troubled real estate market.”

“‘Obviously, over the long term, there is going to be a lot of real estate - both developed and undeveloped - in the hands of lenders over the next six months to a year,’ said Thomas Burke, a Des Moines lawyer representing three lenders. ‘You are going to have all kinds of financial institutions that are the owners of these properties and will be trying to get rid of them as best they can.’”

“Almost 300 fewer homes were sold in the Des Moines area in May compared with the previous year. Meanwhile, foreclosures are on the rise in Iowa, as they are nationally. Polk County received more than 900 court orders to sell foreclosed property in the first sixth months of this year. In all of 2000, there were 364 forced sales.”

“‘This is going to be pretty ugly for a while,’ said Melanie Lumley, who coordinates and oversees sheriff’s foreclosure sales in Polk County.”

The Duluth News Tribune from Minnesota. “Jon Hansen is ready to sell his Superior home and buy a bigger, nicer one. ‘I’m not going to sell myself short for what I think it’s worth,’ Hansen said of his home, which he’ll happily live in indefinitely until he receives a decent offer, he said.”

“Home sales for the first half of this year in the Duluth area were down by 23.8 percent from the first half of 2007. They’re down 17.7 percent in the Superior area. The drop in sales ultimately means a whole lot of Realtors are feeling as if they’re working harder for less.”

“‘We’ve got lots and lots of tire kickers, and no one’s pulling the trigger,’ said Jeffrey L. Vollman, a Realtor with Edmunds Co. of Duluth.”

“Duluth Area Association of Realtors President Tod Vendberg, said one reason prices might not be dropping more is linked to some homeowners not being able to drop their prices if they want to merely break even.”

“And some are walking away from homes in foreclosure, instead of trying to work out a deal with the bank to keep the home or trying to sell it themselves. Edmunds’ agents estimated last month that 200 to 300 foreclosed homes are in the pipeline to be sold in the Twin Ports market, or about 12 percent to 18 percent of the total residential listings in the region.”

“‘A lot of people, they just give up hope once they get their foreclosure letter,’ Vendberg said.”

“Hansen is trying to sell a home in Superior for about $110,000, and buy a home in Duluth. His home has been on the market for 49 days. It’s only been looked at twice.
But he doesn’t intend to cut his price, and he’s not worried about an interest rate increase that would put a $200,000 house beyond his price range.”

“‘I’m not going to put in an offer on a house without knowing the future of our house,’ he said.”

From KETV 7 in Nebraska. “Omaha has not seen the kind of housing slump other areas of the country have endured, but at least one local real estate agent said there are a lot of houses on the market, and it’s taking more time to move them than in years past.”

“Warren and Linda Wilson will put their home that sits at 52nd and Dodge streets up for auction at 6 p.m. Thursday. There is no minimum bid, but the Wilsons will set a price on the day of the auction and if that price isn’t met, there will be no sale.”

“The Wilsons have lived in their home for more than 15 years. The Wilsons are retiring and ready to move on. They’ve already bought their next home in Pennsylvania, closer to family.”

“‘We have had some people who were really interested, but it’s still on the market, so I guess they figure…they can come back,’ Warren Wilson said.”

“Their home has been on the market since March 1. ‘I guess people just think there’s plenty of time and we don’t have to do anything,’ Linda Wilson said.”

“Richard Purchase is with CBS Home Real Estate and he’s working with the Wilsons. He said there are about 6,000 homes on the market in Omaha. ‘There is a lot of inventory around Omaha where people aren’t buying it because they know they have all the time in the world and a whole lot of houses to look at,’ Purchase said.”

Purchase, agent Dick Mikuls and the Wilsons came up with the auction scheme.

“We have so many people sitting on the fence,” Purchase said. “If someone likes this home, they’re not going to be able to sit on the fence. We’re going to be selling this house on July 24.”

“The Wilsons said that for them, it is not about the carrying costs. Their home is paid for. But they like the auction idea because it will give them the answer they’re looking for.”

“‘It gives us a certain amount of certainty, because we have our plans,’ said Linda Wilson ‘We’ll either have a house in Omaha or we won’t, depending on what happens July 24.’”

The Orlando Sentinel reports from Florida. “Sorrento Springs, an upscale development amid the lush, rolling pastureland of rural Lake County…has an 18-hole golf course, a resortlike clubhouse, tennis courts, walking trails and neat rows of two-story, earth-toned homes with architectural flourishes. Now it is rife with foreclosures.”

“‘When we bought, there was this rumor going around that there was going to be a highway through there that would connect to Interstate 4,’ says Raza Dhanji, a 38-year-old Lake Mary businessman who bought four homes in the subdivision as investments. In fact, the proposed $2 billion Wekiva Parkway is at least 10 years away even now.”

“Dhanji assumed he could flip the houses quickly and make a tidy profit, so he didn’t worry about the interest rate on the loans. But two weeks after he closed, Engle Homes, the builder, dropped the price on the same models he bought by as much as $60,000. Dhanji not only couldn’t sell; he couldn’t find renters for two of his homes either.”

“Now he’s paying $10,000 out of pocket each month just to cover the mortgages, even as the homes’ market value plummets.”

“‘I can’t say it’s not my fault,’ he says. ‘I should have known better. But at the same time, I was misled. Now that I look back, the fact that the builders all of a sudden started dropping the prices tells me that they knew something I didn’t.’”

“Ufuoma Omosebi was pregnant with her second child in 2004 when she and her husband had their Terragona Drive house built. They got to live there just over a year and a half. Then Omosebi’s husband had to move to North Carolina for a job. She stayed behind to sell the house, which had been appraised at $425,000.”

“Six months later, after slashing the price to $330,000, she gave up and moved anyway. The payments were $2,000 a month.

“The worst thing was that the developer started selling the exact same home for a cheaper price — and they were giving the real-estate agent $10,000 bonuses and 10 percent commission,’ she says. ‘How could we compete with that?’”

“They rented the house, but their tenants broke the lease, and soon the couple had used up their $20,000 life savings and taken out another loan. Finally, in October of last year, the Omosebis declared bankruptcy.”

“‘I still can’t look at a picture of it without crying,’ Omosebi says. ‘I wouldn’t wish this experience on my worst enemy.’”

The Palm Beach Post. “Ameribank, the troubled West Virginia bank that saw a lucrative future for itself in Palm Beach County, is closing the branch it opened in 2003, conceding it should never have moved to Florida in the first place.”

“‘There was no reason to ever open a branch in Palm Beach County,’ said David Hartman, the bank’s chief financial officer, who was hired in October as part of an attempt to save the financially challenged bank. ‘We’re not a Florida bank. You shouldn’t go to areas outside your market that you don’t know.’”

“The loans were actually made by Lending One, a Boca Raton mortgage broker. The no-money-down one-year home mortgage and renovation loans were designed for speculators who wanted to buy fixer-uppers and flip them for sale at a higher price.”

“‘I am sorry I got involved,’ said Kim Knaisch, a New Orleans-area homeowner who borrowed around $300,000 from Lending One to renovate three houses in an area ravaged by Hurricane Katrina in 2005. Two of the houses are now in default.”

From Highlands Today. “It was like a slice of heaven for Gary and Bonnie King. A couple of years ago, they found the home they loved in a quiet subdivision of a rural town. Then, last year, trouble in paradise. Their next-door neighbors moved out, abandoning their $259,000 house, leaving it to the bank.”

“Months went by, said Bonnie King. The lawn went unmowed. The swimming pool turned black. ‘It’s a breeding ground,’ she said.”

“The two-bedroom, two-bath house next door to the Kings, said broker Chip Boring, is selling for $139,900. ‘In November 2005, it sold for $259,000.’”

“‘It’s got a screened pool and hot tub in the back,’ said Bonnie King, hoping someone will read this and realize it’s an incredible bargain.”

“What caused the foreclosures? ‘A lot of people bought houses who couldn’t afford the payments,’ said Boring.”

“And then there were the speculators. ‘They bought houses or built houses and never lived in them, and never intended to,’ he said. They were simply flipping houses for the profit.”

The Tampa Tribune. “Hillsborough County property owners may pay a little more in school taxes while the district’s budget shrinks. At the same time, the district is reducing its total budget by more than $46 million.”

“‘Property taxes are down, foreclosures are up, the value of houses is down,’ said Gretchen Saunders, the district’s budget director. ‘We’ve got a lot of property out there where people aren’t paying their taxes.’”

The St Petersburg Times. “After a three-year struggle that left them bankrupt and nearly $40-million in debt, the developers of Trump Tower Tampa still aren’t ready to wave the white flag.”

“At a creditors’ hearing in downtown Tampa on Friday, Frank Dagostino, head of tower developer SimDag, proposed partnering with an undisclosed cash-rich investor to resurrect the tower as a condo-hotel project.”

“The deal remains a long shot. Despite a letter of intent from the joint venture partner, SimDag representatives said the purchase offer has been too low to take seriously.”

“If the joint venture falls through, SimDag raised the possibility of auctioning off the riverfront lot. ‘If we have to do a fire sale, we won’t be able to maximize the value,’ said Dagostino, who added that the hunt for financing has brought him into contact with all varieties of scams and con men.”

The Herald Tribune. “As the once-tight office market recedes in the rear-view mirror, building owners throughout the region are having to negotiate on price and terms to land elusive tenants.”

“‘A lot is related to the construction industry,’ said Tom Streck, a commercial agent in Lakewood Ranch. ‘I don’t think people realize how much of our economy is related to construction. The slowdown has not only impacted builders and architects, but all their suppliers and vendors. Then there are interior decorators, furniture retailers, attorneys and mortgage brokers. We’re so tied to the new home industry that when it collapsed, there were a lot of ripple effects.’”

“In addition to the downturn, there also was some overbuilding. ‘A lot of the problem is new construction. It’s not just people leaving,’ Streck said. ‘Once permits are approved, people have a certain time to build and they often go ahead with their plans.’”

“Joe Hembree, who owns a Sarasota-based commercial brokerage, said he stopped building office condos two years ago. ‘It was such a hot market that a lot of people jumped in,’ Hembree said.”

My Sun Coast. “Can you get a loan? Coldwell Banker’s senior loan officer, Joan Marie Bazo, says it’s a lot harder than it used to be. ‘The lenders got really lax over the last few years. They didn’t verify anything, they were doing loans for people who could not verify income or couldn’t provide asset verification. They won’t do them anymore.’”

“Ray Suplee, chairman of the Landmark Bank, says no more 100% financing. ‘You basically need to put down 30%, and upon reflection, 30 years ago you had to put down 30%, so it’s not anything new. It’s just a cycle.’”

Although with mortgage insurance you might be able to reduce your downpayment. “You can get a conventional loan with 5% down, but you have to have at least a 680 credit score or higher because the mortgage insurance companies won’t insure them. If you have below a 680, they are requiring 10% down for a primary residence,” says Bazo.

“Bazo says says FHA loan limits in the Sarasota-Bradenton market are now $442,500, ‘Anyone can get a loan if they qualify. If they do not qualify for the loan, then they shouldn’t be taking it out in the first place. That’s how we got where we are now.’”

“Suplee says he doesn’t believe the real estate market has hit bottom yet, and neither do a lot of buyers.”

The News Press. “Lee County landlords have begun slashing rents and using other incentives to boost sagging occupancy rates brought on by a limp economy. ‘It’s a smorgasbord of concessions,’ said David Malt, broker for Malt Realty, a Fort Myers-based manager of multi-and-single-family home developments and homeowners’ associations.”

“The ante has been upped at the Lakes at College Pointe, a collection of 424, one-to-three-bedroom apartments in south Fort Myers. New tenants there receive what amounts to three months free rent for a 13-month lease and security deposits are just $300 instead of a month’s rent.”

“Given the bloated rental market and the slow economy, property manager, Tom Goodspeed predicted it will be a long time before rents return to pre-2008 levels.”

“‘If things don’t look better, we may have to go back in the other direction,’ he said. ‘It (rent) may go down. I don’t see it going up. We’re just trying to compete with everybody else and hang on to our small share.’”

“In an ironic twist, the economic slump and housing market woes are also providing some salvation for landlords, who can point to the rising number of foreclosures as a source of new tenants.”

“Daniels View was the crown jewel in rising real estate star Samir Cabrera’s ambitious group of investments in 2006, a chance for investors to get in on a hot land deal in Lee County. Two years later, investors are settling for pennies on the dollar and level allegations of fraud in a civil suit against Cabrera involving the 80-acre project in south Fort Myers.”

“‘I’m not saying Samir should be put to death, but he should go to jail,’ said Robert Caione, of New Jersey, who has a $25,000 investment in Daniels View. ‘I told him, ‘This is my life’s savings. ‘He told me, ‘Worst case, Mr. Caione, you’re going to make four times your money in a year.’”

“Now Caione…has been out of work for 18 months, in part, he says, because of the stress from his investment losses. He said he also lost about $40,000 in another land deal in Port Charlotte unrelated to Cabrera or Daniels View.”

“Caione said the cases may be complicated but the lesson he learned is simple. ‘I will never invest outside of New Jersey again,’ he said.”

The Daily Business Review. “Nearly 16 years after Hurricane Andrew devastated the city of Homestead, the town in South Miami-Dade is in the path of another potential storm: A deluge of residential foreclosures and accompanying economic turbulence.”

“One Homestead ZIP code - 33033 - leads Miami-Dade County with 263 homes in different stages of foreclosure. And 109 homes in that ZIP code have already been taken back by lenders.”

“Foreclosures are pushing prices down more than 50 percent of what they sold at during the height of the housing boom, said real estate broker Hagen Hendrix. He markets repossessed homes in Homestead for lenders. One of his lender clients dropped the price of a two-bedroom town house from $189,000 to $60,000, he said.”

“The town house is in move-in condition on a man-made lake and still isn’t selling, he said.”

“Homeowner Antonio Sueiras’ lender recently began foreclosing on his three-bedroom house near the Homestead Air Reserve Base, one of the few neighborhoods he could afford when he purchased it in 2003.”

“Sueiras paid $140,000 for the 1,564-square-foot house and put down $42,000. He comfortably paid close to $1,000 a month in mortgage and property taxes. But as property values began to rise, he made ends meet by refinancing his home several times, more than doubling his monthly housing expenses.”

“Suddenly, his mortgage payments became too expensive. He said his monthly mortgage payment is $2,200, but he makes only about $600 every two weeks. He plans to abandon the house by September. Sueiras said he owes close to $285,000, and the house is worth less than $250,000 so he won’t even try to sell it.’

“‘I am done with it,’ he said. ‘I just want this nightmare to end. The bank can take the house at once. I work and I work, but it never gets better.’”

“Carmen Miranda said he can barely afford the two mortgages he has on his five-bedroom, 6,062-square-foot home he shares with his wife and their 2-year-old daughter in the new Portofino Lakes subdivision.”

“When Miranda bought the house for $272,844 in 2004, he could easily afford it. As the housing market boomed, so did home prices, and he easily refinanced the house. Now, however, he’s had to tap into his savings to cover the second mortgage, he said.”

“‘I will be able to hang on for six to eight months,’ said Miranda.”

“Despite his troubles, Miranda is still betting on Homestead’s real estate market. In May, he purchased a bank-owned house in Portofino Estates. Miranda paid $212,000 for the four-bedroom home, a deep discount from the $285,000 the prior owner paid for it in March 2005. Miranda financed the deal with a $169,000 loan from Sky Investments in Deerfield Beach, according to public records.”

“He plans to rent out his investment property. ‘If I end up losing my home, at least I’ll have the house I just bought,’ said Miranda.”

The Miami Herald. “Amid mounting criticism of his leadership, Florida’s top mortgage industry regulator…Don Saxon, vowed to work with state Chief Financial Officer Alex Sink to tighten mortgage broker licensing standards.”

“Sink, however, has included Saxon’s resignation on a list of reforms she’s demanding to overhaul the embattled agency.”

“The call for Saxon’s ouster was prompted by a Miami Herald investigation that showed more than 10,000 criminals have been allowed to peddle home loans in Florida since 2000. Among them are bank burglars, cocaine traffickers and identity thieves who have gone on to commit at least $85 million in mortgage fraud, the newspaper found.”

“A Miami Herald analysis of the OFR’s database of mortgage professionals showed tens of thousands were denied for technical reasons, such as failing to submit a complete application.”

“But the agency issued only 28 final orders between 2000 and 2007 denying applicants based on their criminal records, the newspaper found.”

“The issues are expected to surface next Tuesday, when Crist, Sink, Attorney General Bill McCollum and Agriculture Commissioner Charles Bronson gather for an already scheduled meeting of the Financial Services Commission. Sink said she’ll also push for Saxon’s resignation — a demand she issued in a press release on Sunday.”

“‘When you’re licensing a high number of brokers, sure, you might expect a few to slip through the cracks. But not thousands. Somebody was asleep at the switch,’ Sink said.”

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

The Fresno Bee reports from California. “Thousands of Fresno County homeowners are getting some good news in the mail: They owe less in property taxes this year. That may lessen the sting of the bad news that comes with it: The homes they purchased during the height of the housing boom are now officially worth less. The county reassessed 46,500 properties — most single-family homes — bought since 2004.”

“The properties have declined in value a total of $2.5 billion. Similar reassessments are happening in Tulare and Kings counties and elsewhere in the state.”

“Miranda Brown said her home near Fort Washington Country Club in north Fresno has an assessed value of $530,000. Just two years ago, it was valued at $695,000.”

“Brown doesn’t know how much she will save in property taxes, but said she wasn’t too discouraged by the drop in her home’s value. ‘It’s the market, it’s going to go back up,’ she said. ‘I just have to sit on it and wait.’”

The Contra Costa Times. “The housing market meltdown that is eroding homeowner equity is now hurting local governments as county assessors in hard-hit portions of the state, including the East Bay, report that property tax revenues will be far less than anticipated.”

“In Contra Costa, the extent of the softening of property assessments for the 2008-09 fiscal year caught city and county officials by surprise. ‘We were quite shocked,’ said County Administrator John Cullen.”

“In Contra Costa, the news is just circulating. Assessor Gus Kramer reduced the valuation on 30 percent of the 274,400 single-family homes in the county. ‘No way,’ said San Pablo Finance Director Bradley Ward when I told him about his city’s assessment.”

“What seems almost certain is that next year will be even worse. That’s because the latest assessments for the 2008-09 fiscal year, which began July 1, are based on the value of homes as of Jan. 1, 2008.Since the start of the year, property values have only declined further.”

The Mercury News. “For Silicon Valley homeowners, the collapse of housing prices has everyone worried. One-fifth of the houses for sale in Santa Clara County today are now priced at less than $450,000, a figure that was unthinkable even a year ago.”

“But for scores of local, longtime renters, the fragile economy may present a unique opportunity. ‘I’ve been wanting to buy a house for a long time,’ said Chanelle Brearley, 27. ‘We’re just getting our feet wet, but everyone says the market may be coming down. Maybe we do have a chance.’”

“Jackie Morales-Ferrand, assistant director of San Jose’s Department of Housing, said San Jose is eager to help city workers, from teachers to faculty at San Jose State University and postal employees, buy houses.”

“The two-hour class is required to qualify for down payment assistance. ‘It answered a lot of doubts we had in our minds,’ said Dr. Neelam Rattan, a psychology professor at San Jose State who currently rents an apartment in the Evergreen area. ‘We keep hearing prices are going down. Paying rent is just money going down the drain.’”

The Tribune. “Construction of new homes in San Luis Obispo County continues to slow this year, as residential building permit activity shapes up to be the lowest it’s been in more than a decade, according to a local industry trade group.”

“If the trend continues, this will be the fourth consecutive year that fewer residential building permits are issued countywide compared to the year before. This year’s numbers are on pace to be the lowest since 1992, Home Builders Association of the Central Coastspokesman Jerry Bunin said.”

“Bruce Gibson, 2nd District county supervisor, said the drop in residential permit activity is a reflection of unresolved national economic issues. ‘I think people thought housing prices would go up indefinitely,’ he said.”

“Home builders are experiencing significant losses as many of their completed projects continue to go unsold, said Jerry Rioux, executive director of the San Luis Obispo County Housing Trust Fund.”

“‘This is horrible for the builders,’ Rioux said. ‘We’ll see some go bankrupt and projects stopped midway.’”

The North County Times. “Data suggest that North County’s foreclosure beast evolving as it spreads beyond subprime to all sorts of loans. In two areas that have dominated foreclosures over the last year —- north Oceanside and east Escondido —- cases have flattened over the last three months. Meanwhile, foreclosures in neighborhoods with newer homes and higher median incomes, such as places in San Marcos and Carlsbad, are growing.”

“‘As prices continue to decline, we’ll see more foreclosures. And as we see more foreclosures, we see more price declines,’ said Sean O’Toole, founder of ForeclosureRadar. ‘It’s kind of a toilet bowl effect.’”

“‘The overall pace ‘hasn’t dissipated at all,’ said Ward Hanigan, founder of a San Diego foreclosure investment firm.”

“Hanigan said he does not expect to buy up foreclosed properties until 2010. He said his company is waiting until a recovery is in sight for housing. ‘When the banks get so desperate that they’ll sell us one or two properties at a wholesale price, then we’ll know we’re at a bottom,’ he said. ‘We’re not at that liquidation mind-set yet.’”

“JPMorgan Chase released its second-quarter earnings report Thursday. Its findings support the trend of price depreciation forcing foreclosures among less risky borrowers.”

“While subprime losses continued to dominate, foreclosures on prime mortgages are starting to hit the bank hard. Subprime losses have jumped sixfold from a year ago. Prime losses are up 25-fold.”

“‘We are seeing that the problem loans have spilled beyond subprime, beyond home equity (lines of credit) and into prime,’ said Thomas Kelly, spokesman for the bank. ‘Some people could afford it (the house), but chose not to, and the biggest impact is falling home prices.’”

The Orange County Register. “This year is shaping up as one of local real estate’s lousiest for home sellers or anyone who makes a living off selling houses. The median selling price for 2008 so far was $500,000 - down $125,000 from the year before, a 20 percent decline.”

“Shoppers weren’t impressed, though. Just 10,782 Orange County homes have been sold from January through June, according to DataQuick Information Systems. That’s the smallest number of sales for any six-month period in records dating back to 1988. At the same time, soaring foreclosures and loan defaults top peaks of the 1990s.”

“Banks took possession of 5,317 houses and condos in the first half of the year. That’s 28 percent more than the 4,160 foreclosures in all of 2007.”

“Here’s another measure: lenders took possession of 1,131 homes in May alone. That was the highest monthly total since at least 1988, when DataQuick began tracking foreclosures, and 68 percent higher than the record set in the 1990s.”

“Growing foreclosures spells even more price declines for the future, said Irvine housing consultant John Burns. ‘How can prices stabilize when there are more people going into default than buying homes?’ he asked.”

“Over-priced properties are drawing little attention, said agent Cary Hairabedian. ‘The houses that are sitting are overpriced for their condition and their location,’ he said. ‘Buyers aren’t stupid. They were stupid in 2005 and 2006, but they’ve sobered up real quick.’”

“Hunter Norred, 22, a new real estate agent…agreed last week to buy a repossessed two-bedroom condo in Placentia for $115,000. County records show that the unit’s pre-foreclosure sales price was $325,000. He estimated his monthly payment and dues at $1,000.”

“‘You couldn’t even get a two-bedroom apartment for that,’ Norred said.”

The LA Daily News. “Concerned about crime and a spike in abandoned homes, more than 100 residents poured into the Sportsmen’s Lodge on Sunday for a neighborhood empowerment meeting. The more than 80,000 foreclosures in California during the last quarter of 2007 have left their mark on the San Fernando Valley.”

“As a result, gangs and vandals are zeroing in and are converting some into hangouts. Residents fear the properties are creating blight, said Los Angeles Councilwoman Wendy Greuel, who hosted the meeting.”

“One developer in foreclosure did not finish tearing down three homes in the 11900 block of Riverside Drive. Transients began moving in. Graffiti sprang up. The eyesore prompted residents to call city officials for help, Greuel said.”

“‘It’s a double tragedy. It’s a tragedy that someone loses a home or a developer loses a property,’ she said. ‘At the same time, you want to ensure that the neighborhood is protected.’”

“Terry Holtzman has watched his income sour in recent months as the plummeting housing market pushed much of the Southland’s economy to the verge of recession. And now, when the Woodland Hills construction worker has less to spend, rising prices for everything from food to fuel have intensified the squeeze on money for even the most basic of needs: such as keeping the power on at home.”

“‘It’s tightening up my budget,’ Holtzman said as he waited to pay his $350 Department of Water and Power bill at a Winnetka customer service center last week. ‘I’m not being able to pay my bills in full for whatever bills I have.’”

“DWP officials said 358,374 customers - nearly one in four of the 1.4 million the utility serves - had overdue bills in May. That was 13 percent more customers with overdue bills than in May of last year, officials noted.”

“The vast majority of the 358,374 - about 293,000 of them - were homeowners, according to DWP records. But overdue accounts of apartment dwellers also surged - up 40 percent from a year ago to 22,251.”

“‘They’re in a vise and don’t know when it will ease,’ said Jack Kyser, chief economist with the nonprofit Los Angeles County Economic Development Corp. ‘In many cases they’re really stuck and don’t know what to do. It’s easier to let the utility bill slide and then catch up, especially if they’re facing a big jump in variable-rate mortgage payments.’”

The Pasadena Star News. “A $33 million housing project originally intended to provide affordable homeownership in Old Town Monrovia has been converted into leasable units as the developer attempts to weather a distressed housing market.”

“The Colorado Commons housing development on West Lemon Avenue was originally intended as purchasable condominiums when Barker Pacific Group, the developer, began construction in October 2006.”

“Since then, however, the ‘unprecedented condition of the mortgage lending market’ has led Barker to seek approval from the Monrovia City Council to instead rent the units, according to City Manager Scott Ochoa.”

“Barker intended to price the residential units between $375,000 and the high $700,000s when they began the project. Now, however, in today’s market, the value of any one unit ‘could be from 15 to 25 percent lower,’ said Reed Garwood, project manager for Barker.”

“Barker must pay Monrovia $2,500 per month to compensate the city for the loss of property tax revenue. Barker must also promote a lease-to-own program for renters. Also, the units must be converted back into purchasable condominiums within 12 months of when the median home value in the area returns to September 2006 levels.”

“That probably won’t happen anytime soon, Garwood predicted. ‘It will probably be a while - not in the immediate future. Somewhere around four to five years, depending how it goes,’ he said.”

“City spokesman Dick Singer said that the project would likely have been foreclosed upon had Barker not been allowed to convert the units into rentals. ‘They don’t have enough to pay the bank,’ he said. ‘What we’re facing is a takeover by the lending institutions of the whole project.’”

“The three council members who voted for the conversion said leasing was the best available option, under the circumstances. ‘No one foresaw the depth of where we are today,’ said Mayor Pro Tem Dan Kirby at the council meeting. ‘This was not our first choice.’”

“The property was previously a ‘large police problem’ before it was developed, according to Councilman Tom Adams.”

The Daily Pilot. “Getting more people on the Westside to buy homes instead of renting has been a top priority for city officials, but they have experienced a setback in achieving that goal. The Costa Mesa City Council voted unanimously Tuesday to allow a developer planning to build 151 condominiums to rent them instead of selling them.”

“Nexus Development Corporation, which already owns the parcel of Westside land on which the company plans to build the condos, pleaded with the council that it could not possibly finance the project if it were forced to sell the units because of the housing slump.”

“‘The problem with having some sort of restriction is that you can’t get financing,’ said Cory Alder, the president of Nexus. ‘There are different types of lenders. There are lenders for rental projects and lenders for condominium projects. Lenders for condominium projects are not in the market today.’”

“More than a dozen Westside business owners and residents came to speak in favor of giving the developer the freedom to put up a rental complex, but most echoed the council’s preference for owner-occupied condominiums.”

“‘The huge problem on the Westside is overcrowding. We’ve got too many rentals, and we’ve got too many people living in those rentals,’ said Roger MacGregor, the founder of MacGregor Yacht Corporation, which owns the 5 acres immediately east of the proposed project.”

The Desert Sun. “In May, the residents of the neighborhood north of Vista Chino and west of Landau Boulevard heard that the developer had stopped paying for upkeep of the community park, clubhouse and pool. Since then, they’ve kept up the area as much as possible just through volunteers.”

“That attitude seems more the exception than the rule. ‘I’ve got my own yard’ and ‘I’m having trouble keeping up with mine,’ is a common refrain.”

“Andrea Dooley, steering committee member of the Cove Neighborhood Association in La Quinta, said she isn’t surprised the helping neighbor of yesteryear is scarcely found.”

“‘The reality is - I don’t know, maybe I’m negative on this - I just don’t see that (helping spirit), not just in our neighborhood, but any neighborhood,’ she said. ‘Without (a homeowners association), I would say there aren’t many people that would step up to the plate.’”

“Michael Richerson, a Palm Springs Realtor, paid $25 for someone to haul away a rotting couch from a foreclosure down the street from his home. ‘It was worth it to get rid of it because I was tired of looking at it,’ he said.”

“Ernest Meeker and his partner Douglas Cron chipped in. Facing an impending foreclosure that they sidestepped by signing the home back over to the lender, the couple commuted between their rental and their Cathedral City home to water the grass and care for the pool - until the bank changed the locks.”

“‘We were trying to make it look like we were still there,’ Cron said. Cron and Meeker had hoped to work something out with the bank that would keep them in their home.”

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