The Union Tribune reports from California. “Lenders took back the homes of struggling San Diego County homeowners in record numbers during the first quarter. Real estate agent Linda Ring, who specializes in foreclosure sales, said she has seen many homeowners simply walk away from their properties even if they can make the payments, because they no longer want to pour money into homes now worth so much less than what they had paid.”

“In eastern Chula Vista, where foreclosures have soared, Ring estimates that 70 percent of the homes for sale are distressed properties. ‘They’re selling for practically 50 percent of what they were in 2004 and 2005,’ she said.”

“Agent Kristian Pete said he (secured) a buyer for a foreclosed home in Otay Ranch, which is in the 91913 ZIP code. It originally sold new in 2005 for $970,000 and was listed for six weeks at $589,000. Peter declined to reveal the buyer’s offering price but said buyers currently offer 5 percent to 10 percent, sometimes as much as 20 percent, below the asking figure.”

“‘It affects us all equally,’ said Peter, who also lives in the 91913 ZIP code. ‘Obviously, it’s in my best interest to try to get the situation under control and hopefully sell off the excess so the market can correct itself and go back to a stable if not appreciating market.’”

The LA Times. “In San Bernardino County, Deputy Sheriff Mike Strickland says he is now delivering eviction notices to six or seven foreclosed houses a day, about twice as many as last year. Most of the evictions are in new housing developments, he said, and the occupants have usually abandoned the property by the time he gets there.”

“‘A lot of the homes were 5 or 6 months old. The people got in by the skin of their teeth,’ Strickland said. ‘They can’t afford their payments, they skip.’”

The Fresno Bee. “The number of houses entering foreclosure in Fresno County soared to record levels last quarter. The rate of increase was less than the state as a whole — and significantly lower than hard-hit regions such as Stockton.”

“That didn’t impress DataQuick analyst Andrew LePage, who said the 2,464 notices of default — up 120.8% — sent to Fresno County property owners last quarter was the highest since tracking started in 1992. ‘A year ago you had doubled and you’re still doubling,’ he said.”

“In Fresno County, 31.7% of all resales in March were bank-owned. In Stockton and San Joaquin County, 71% of all existing home sales were houses repossessed by banks. The percentages in neighboring Stanislaus and Sacramento counties were 62.3% and 55.4% respectively.”

“The typical price tag of a foreclosure is about 15% less than a traditional property, he said. ‘Banks are finally doing the right thing,’ said Don Scordino, president of the Fresno Association of Realtors. ‘They are bringing down the price to where it needs to be. A year ago, the most unrealistic sellers in the market were the banks.’”

The Recordnet. “While the existing-home sales market in San Joaquin County appears to be on the rebound, new-home sales continue to stagnate. Greg Paquin, president of the Gregory Group, said that foreclosures need to be cleared out of the home sales market first.”

“‘Basically, they can’t produce new homes to match the prices of foreclosures,’ said Alan Nevin, chief economist for the California Building Industry Association. ‘It’s really just that simple. The market is going to have to stabilize. It probably will take another six months to go through the inventory of foreclosed homes. Now it’s just a matter of the pig going through the snake - and it’s happening.’”

“The numbers of homes in San Joaquin County and throughout California going into foreclosure both hit record levels in the first quarter of this year, DataQuick reported. The actual numbers of repossessions also are soaring.”

“Cameron Pannabecker, owner of Cal-Pro Mortgage Inc. in Stockton and a member of the board of directors of the California Association of Mortgage Brokers, said that…he continues to encounter more and more at-risk homeowners.”

“He said he doesn’t know any experts not projecting that the number of default notices will continue to double or triple last year’s numbers quarter over quarter. ‘As for the homeowner relief, it is not a pretty picture,’ Pannabecker said.”

The Santa Cruz Sentinel. “Dozens of homeowners have flooded the Watsonville Law Center, saying they were duped into buying homes and are now in the midst of foreclosures, the director told the Watsonville City Council on Tuesday, asking the city to come to their aid.”

“More bilingual interpreters, attorneys and other forms of legal services need to be available to the homeowners, along with something resembling crisis counseling. Dori Rose Inda, center director, added that some mortgage brokers duped strawberry pickers and day laborers into thinking they could afford homes, and have since left town.”

“‘We hear emotional stories,’ she told the council, ‘but we don’t prepare them for what is about to occur: That they’re really going to lose their home.’”

The Mercury News. “There’s still plenty of pain ahead for Silicon Valley’s housing market as more homeowners faced the threat of foreclosure in the first three months of this year than during any quarter on record.”

“One San Jose homeowner who owns six rental properties in Santa Clara and Santa Cruz counties said he stopped paying the mortgage on one of the Santa Cruz properties in February, though he has yet to receive a default notice. He said he’s trying to avoid foreclosure by arranging a short sale. He’s facing trouble on some of his other properties, too.”

“The homeowner, who did not want to be identified, said the renter moved out of the Santa Cruz property recently and he can’t rent it for nearly enough to cover the mortgage. He paid $770,000 for the beachfront house, but figures it’s worth $500,000 now.”

“‘Of course, with the market going down you can’t sell anything,’ he said.”

From ABC 7 News. “Two of the counties hardest hit with foreclosures are Contra Costa County and here in Santa Clara County where a senor citizen we spoke to, will now lose her home.”

“‘Had I known when we refinanced last year, I would never have gone for something like that,’ said Carmen Johnson.”

“Johnson is losing the home she has lived in for the past 35 years to a foreclosure sale. ‘I’m 65 years old. I needed a little something to retire on,’ said Johnson.”

“She refinanced her home with a sub-prime loan. Her payments recently jumped from $2,500 a month to $3,500 when the loan reset.”

“‘I didn’t read the fine print and I wanted the money,’ said Johnson. ‘I just took the money without really paying attention.’”

“‘You’ll hear that story over and over again,’ said San Jose realtor Sandra Sample.”

The San Francisco Chronicle. “Tens of thousands of Californians lost their homes during the first three months of the year as foreclosures soared more than 300 percent across the Bay Area and the state. Lenders took back 6,579 homes in the nine-county Bay Area during the first quarter, up from 1,493 a year ago and 4,573 in the fourth quarter, according to DataQuick.”

“Raul Gonzalez and his wife were thrilled after buying a San Jose home two years ago. The feeling faded quickly.”

“Gonzalez, who immigrated from Mexico in 2000, said he unwittingly used a negative-amortization loan. The balance grew each month, and after the teaser rate expired, the monthly payment rose well beyond what the 33-year-old painter could afford.”

“The main lender foreclosed on the three-bedroom home in late January and the family traded their keys for cash, moving into an apartment later that month.”

“The couple filed a lawsuit against the mortgage broker, Realtor and one of the lenders, asserting they were defrauded, among other claims. But the strain of the situation led to health problems, Gonzalez said, and the hit to his credit rating means they have little hope of buying another home anytime soon.”

“‘The reality is, I can’t do anything,’ Gonzalez said in Spanish through a translator, his attorney. ‘Perhaps it’s better to leave these problems and only rent, because I have to take care of myself.’”

The Sacramento Bee. “During the first three months of the year, banks repossessed a record-shattering 5,278 homes in the Sacramento region, DataQuick said. Put another way: The area’s first-quarter foreclosures already are half of last year’s entire total.”

“DataQuick now tallies 15,327 capital-area foreclosures since January 2007 as the post-boom housing crisis has deepened in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.”

“Last weekend Paul Sosa and his wife moved their furniture out of a Marysville home they bought in October 2005 and sent it to a rental in Sacramento. On Thursday, their Yuba County house will be repossessed.”

“Sosa and his wife found themselves with a home worth less than they owed. Paul Sosa said they were caught in a risky loan scheme that overstated their income, enabling them to buy a $341,000 home now worth – at best – $270,000. When their monthly payment jumped by $500, they were finished.”

“‘I’m not the only one losing a home. … My next-door neighbor, he lost his house, too,’ said Sosa, 71.”

“Area debt and mortgage counselors say the continued housing turmoil has spurred a dramatic change in their clients’ attitude. More and more, they say, they are hearing people talk about simply walking away from their mortgages.”

“Like the hundreds of others in this Cal Expo exhibition hall, Francisco Cervantes and his wife were looking for a home at a bargain price for their three children at a two-day auction of foreclosed homes in Sacramento. On Sunday, the pickings were lush, but their eyes were on a four-bedroom, two-bath home closer to their jobs in Woodland.”

“The 3,800-square-foot home, a symbol of a slumping Central Valley housing market, represents dreams that have been dashed and a dream opportunity. Once valued as high as $711,000, the starting bid on Sunday was just $259,000.”

“‘Maybe it will come down a little more,’ Cervantes said.”

“He left Sunday waiting to see whether a rival’s winning offer would be confirmed. And, just in case, he filled out paperwork hoping for a second chance.”

“Armand Sarcomo and his wife, Rachel, were eyeing a ranch-style home on five acres listed in the Yuba County community of Browns Valley. The house, once valued at $424,000, opened for far less and Armand was ready. He flashed his bid card at $169,000 and a few times more, stopping at $200,000. It wasn’t enough, though, and the property sold at $205,000.”

“‘We’re looking for a second home,’ said the 28-year-old union sheet metal worker. ‘It’s a good investment. We’re a young family trying to move up and take advantage of the market.’”

“Real Estate Disposition Corp. would sell 165 homes on this day, many far below their original value. The company will sell more than 1,000 properties on its nine-day tour of Northern and Central California before it pulls up stakes May 5.”

“The auctioneer’s call sends tuxedoed bid takers sprinting up and down the rows, flashing hand signals, exhorting buyers to pump up the bids. ‘One-ninety-five, one-ninety-five, one-ninety-five. I’ve got 200!’ And, just like that, it’s on to the next one.”

“Mike Burkett of Elk Grove took a cigarette break before heading back inside to bid on a bank-owned home, an investment property to give his children a doorway to their economic future. ‘You look at the appraisal price, and it’s $300,000 from two or three years ago, and it’s starting off at $49,000 or $50,000,’ Burkett said. ‘Three, four years ago, you couldn’t even buy a house.’”

“But he knows what led to this opportunity. ‘You’re bidding on somebody’s loss. You’re thinking about somebody who invested all of that money and now (the home) is on auction,’ he said.”

The Capital Journal reports from Kansas. “Topeka, like much of the rest of the country, is a buyer’s market when it comes to real estate. Home sales fell 26 percent here in the first three months of 2008 compared to sales during the same quarter a year ago. Average sales price in the first quarter 2008 was $115,240, which was down 7 percent from $124,023 a year ago. Janet Carter, president of the Topeka Area Association of Realtors, said subprime lenders have left Topeka, so consumers with less than A credit are having a tough time finding financing.”

“‘We have really lost that group of buyers,’ Carter said. ‘They have nowhere to go.’”

“Toni Shenk, an associated broker, said several foreclosed properties are coming onto the market. ‘It’s a buffet for buyers,’ she said. ‘It’s a good time to buy.’”

The Des Moines Register from Iowa. “Whatever the reason, neighborhoods like Four Mile are taking it on the chin. These days, the more common signs in Four Mile are the ones advertising homes for sale. Plenty are foreclosed homes. At least 75 homeowners have had foreclosure petitions filed against them between January 2005 and February 2008, according to the Register’s analysis of court data.”

“‘It’s definitely impacting the suburbs and the new-build areas as well, but the greatest percentage of foreclosure filings are happening in the lower- to middle-income neighborhoods,’ said Danny Wagener, a community organizer for Des Moines Citizens for Community Improvement. ‘It’s a lot of families who are on the cusp of homeownership who have been misled or put into situations that will inevitably fail.’”

“The median assessed value of the foreclosed homes was $96,000. That’s nearly $50,000 less than the 2006 median value of households in Polk County, about $142,000.”

“‘They’re not getting the money they want out of these houses these days, the market’s so bad,’ said Kevin Lancial, who works for Des Moines’ public works department and has lived in Four Mile for nearly 20 years. ‘And some people just get in over their heads.’”

“Lori Hall and her husband moved into a two-story, four-bedroom house in October 2004. The next year, in order to borrow on their equity and renovate a bathroom, they refinanced with an adjustable-rate mortgage. Lori said the process was confusing for these two first-time homeowners, but they thought they were getting a deal.”

“Two years after refinancing, their house payments increased from $953 a month to $1,350. The Halls couldn’t afford it and quickly fell behind in payments. And after a short period of unemployment, they declared bankruptcy. Now, they’re looking for a rental house, as their home is in the midst of foreclosure.”

“‘When you talk about Four Mile out here, there’s a lot of homes for sale right now,’ Lori Hall said. ‘If we’d stuck with the original loan, we absolutely wouldn’t have these problems today.’”

“Bob Mahaffey, a Des Moines city councilman for the east side, said some homeowners in the area assumed increasing home values would offset the price of their loans. ‘But with the downturn of the real estate market, that never happened,’ he said.”

The Indianapolis Business Journal. “Despite the national housing market’s slump, more than three-quarters of U.S. homebuyers remain confident their purchase was at least as good an investment as stocks…according to a new survey released today by the Metropolitan Indianapolis Board of Realtors.”

“‘Real estate is a long-term investment. Don’t buy and expect to make a fortune in six months,’ said Realtor John Creamer, a former MIBOR president. ‘But if you’re looking for long-term wealth accumulation, real estate in central Indiana is still a great place to invest, either in a home or a rental property.’”

“‘[Local] sales have been up and down. But buyers are still showing up at open houses and asking questions,’ said Creamer. ‘We never went through the ceiling, because we never had investors buying just to get appreciation. Our investors were a little more savvy.’”

“When considered purely as an investment vehicle, said Ball State Bureau of Business Research Director Michael Hicks, homes don’t necessarily compare favorably against stocks. But individuals can’t live inside a stock, or enjoy the intangible benefits of a well-appointed kitchen, cedar deck or recreation room. Taking all factors into consideration, he said, a house is a good long-term investment.”

“‘I’m not sure they are if you’re [just] speculating on it, but they are if you’re living in it,’ Hicks said. ‘Or at least I hope so, because I’m writing a fairly big mortgage payment every month.’”

From Today’s TMJ4 in Wisconsin. “Foreclosures are a growing problem in Milwaukee. This year alone over 1,600 people had their homes foreclosed on. ‘It’s a hard, hard battle. I have been fighting it for a while,’ Monique Ray said.”

“Ray is in a desperate fight to save her home. ‘I think owning your home is one of the most important things you can do, or you can have,’ Ray said.”

“Her annual interest rate is 11 percent. Her mortgage jumped from $700 to more than $1,600 a month. ‘I am a diabetic and I have been sick with stress worrying about bills and how I am going to pay my mortgage,’ Ray said.”

“The experts say the situation is going from bad to worse. Just ask steel worker Dennis Timlin. He makes good money but he spends every dime he makes on his bad mortgage and 12 percent interest rate. He is looking for any help he can get. ‘I am in trouble,’ Timlin said.”

The Detroit Free Press from Michigan. “At the end of 2007, there were 40,298 houses on the market in Wayne, Oakland, Macomb, Livingston and Washtenaw counties. That represents a 17.4-month supply at the current sales pace. The supply of attached new housing, such as condominiums, ranges from 14 to 24 months in the three counties.”

“The Forte Group organized in 2006 to capitalize on the huge oversupply of homes on the market. The company works with local builders to move inventory by purchasing the buyer’s existing home for 90% of the appraised value.”

“They accept just one out of eight applications because the owner isn’t ready to accept a price lower than anticipated, or he or she owes too much on the house. ‘We are trying to give fair value of what the market will pay,’ said Joshua Britton, Forte’s partner. ‘There are a lot of people in this market who are stuck. But there are a lot who aren’t.’”

“But the money isn’t in selling the houses, and they sell many at a loss to control inventory. Builders pay their fees ranging from 12.5% to 15% on the purchase price of the new home. ‘We usually sell the house at a loss,’ Britton said. ‘You can either sell a house for a gain or you can sell a house fast, but you can’t do both.’”

“Marketplace Homes LLC, which started in 2002, began operations with a rent-to-own program and that changed when the real estate bubble burst.”

“Marketplace’s buyout program includes a guaranteed three-year lease so the customer can purchase a new home, knowing that the old home will generate income to pay the mortgage and expenses until it sells. The company last year purchased or leased more than 40 homes and generated more than $10 million in new construction sales for builders.”

“‘Now the market has shifted, and people can’t get rid of their homes. They are competing against banks that are dropping the prices,’ said Skip Chelton, the company’s VP. ‘It is a terrible time to sell in Michigan. Conversely, it is a terrific time to buy.’”

The Star Tribune from Minnesota. “Until recently, local governments in Wright County have been large beneficiaries of the explosive housing growth. Wright County, which welcomed the growth, and in some areas did little to control it, is now paying the price.”

“Housing values are declining at a time when many local governments are in the midst of building new schools and roads and expanding waste-water treatment plants. And vacant homes and half-built subdivisions do little to attract employers or shops that might help turn things around.”

“‘It should have been obvious there was a problem, when developers kept building and building and building, in spite of the fact that many of their houses weren’t being sold,’ said Fred Naaktgeboren, mayor of Buffalo. ‘A lot of people wanted to believe everything was all right.’”

The Spokesman Recorder. “Minnesota Governor Tim Pawlenty has reportedly threatened to veto the Minnesota Subprime Foreclosure Deferment Act recently passed by both houses of the state legislature. In an effort to change the governor’s mind, a group of protesters set up a ‘Subprime City’ last Saturday, made up of tents and cardboard boxes outside the Governor’s Mansion in St. Paul.”

“In an April 1 press conference, Pawlenty said he is concerned about the potential effect on credit for the entire Minnesota mortgage market if the bill becomes law.”

“ACORN officials calculate that every 15 minutes a home in Minnesota is being foreclosed. ‘There are houses being foreclosed all over the state of Minnesota,’ Senior Organizer Vera Ashley pointed out. ‘Everybody didn’t take a loan out just to go buy a new car. They wanted a home, and now they’ve lost it. [They] were conned, maneuvered or tricked into adjustable rate mortgages.’”

“Sharon, who lives on St. Paul’s East Side (she asked that her last name be withheld), was among the protesters. She and her husband are currently facing foreclosure on their three-bedroom home that they purchased in 2006.”

“‘We haven’t lost our jobs,’ explained Sharon. ‘We did not get in over our heads. It was very affordable for us. When I signed the loan, I was under the impression that it would be a fixed rate. I was not aware that at a certain point the loan interest rate would skyrocket.’”

“‘The payment went from $1,675 to $2,300 a month,’ said Sharon. ‘The property tax increased while the value of the home decreased, which made it almost impossible for us to afford.’”

The Weseca County News from Minnesota. “Ten years ago, Realtor Charlie Leach got a call asking if he wanted to handle a foreclosure listing. He took it. Today, Leach handles foreclosure homes almost exclusively and works 80 hours a week to keep up with listings within about an hour’s radius of Waseca.”

“‘It’s almost overwhelming,’ he said.” “In 2007, Leach sold 135 houses; all but two of them were foreclosures. So far in 2008, he has listed 45 homes, compared to 25 at this time a year ago.”

“Occasionally, Leach has to actually remove people from their homes, which is ‘not so pleasant.’ He says he always tells them he doesn’t blame them for the foreclosure because ‘half my friends are four paychecks away’ from the same situation.”

“‘Usually they stay mad at the bank, but they don’t stay mad at me,’ he said.”

“His current foreclosure listings range from $20,000 from $585,000 and, while a certain percentage are the result of medical crisis, a divorce or a lost job, Leach said in most cases the homeowners were simply overextended.”

“The effect of the foreclosures on the local market is not that big, he said, but it is a vicious cycle. ‘The more properties I get, it drags down the value of existing homes,’ he said.”

“He expects the ‘foreclosure high tide’ to last another two years, perhaps three years if the federal government gets involved, because it would ‘just delay things another year.’”

“For each foreclosure, the result for the bank is anywhere from a slight profit to a $100,000 loss, with an average loss of $45,000 loss per house.”

“Most of the time, for the person buying the property, ‘it’s a pretty good deal,’ Leach said. He just wishes first time homeowners would have to take a class on mortgages and finances in general before signing those loan papers.”

The News Journal reports from Florida. “The local housing market shuddered again in March as sales of previously occupied, single-family houses plunged 27 percent from a year earlier and the median price took a double-digit tumble, too. Worse, the declines in both sales volume and prices were from year-earlier levels that were already sharply down from historic highs. Together, the two years of decline made for eye-popping paper losses for local homeowners.”

“Nancy Dance, president of the Daytona Beach Area Association of Realtors, said buyers were still waiting, thinking that home prices will go even lower. ‘We are seeing an increase in the number of buyers out there,’ Dance said. ‘But the prices just haven’t hit home with them yet.’”

“She said that in years past one could expect sales to pick up after a presidential election. ‘But, this is not a typical year,’ she added.”

The Orlando Sentinel. “Last week, Orlando Regional Realtor Association President Steven Moreira spun the latest existing-home sales report as ‘moving in the right direction.’ But tell that to countless accidental landlords who have tried to sell their properties only to become so mired in this frustrating market that they eventually take down the ‘for sale’ sign and try to recover some of their monthly expenses by renting.”

“Pete Frias’s been through it. Twice. Frias, a Realtor in Washington, D.C., was one of many flip-happy buyers at the height of the housing frenzy who snatched up homes in hopes of turning quick and easy profits.”

“‘I’m a capitalist, and I understood that I took a risk,’ Frias told me. ‘Obviously, it backfired.’”

“One of his targets was an apartment-to-condo conversion unit in a Casselberry complex called Cabana Key. ‘That’s my worst one,’ he said, of his collection of properties that span to Austin, Texas, and St. George, Utah.”

“Frias closed on the unit for $136,400 in September 2005. He almost immediately put it back on the market priced in the $160,000s. No takers. After four or five months, he decided to find a renter and hired a property-management company.”

“For a little more than a year he took a loss on the property each month. When his tenant moved out he tried to sell again, this time priced in the $130,000s. ‘Not a single person walked through the door for six months,’ he said.”

“Now he’s back to leasing the unit, taking a loss of more than $500 each month. ‘I would sell it right now for less than I owe on it,’ he said. ‘I probably would be willing to bring money to the table.’”

“He’s just waiting for the right time, part of that invisible but lurking inventory that could pop up any time and prolong the buyer’s market in the Orlando area.”

“About two dozen people who have had their homes foreclosed upon protested at the Orange County Courthouse on Tuesday, saying a foreclosure task force appointed by Gov. Charlie Crist hasn’t gone far enough to help them or end predatory lending practices.”

“Chenet Dorcelus said he can no longer afford the increasing monthly payments on the Edgewood home he and his wife bought last year but, unbeknownst to him, the loan had a $25,000 penalty for paying it off early. ‘I can’t sell it,’ he said.”

“At Tuesday’s press event, William Moore talked about his parents refinancing their longtime Orlando home with an adjustable-rate loan in 2005. The payments have now doubled, and the couple can no longer keep up.”

“‘There loans are designed to fail,’ Moore said. ‘It’s like selling you a chair that you wouldn’t be able to sit in.’”

From TC Palm. “The Realtors association said Martin and St. Lucie existing single-family home prices continued to spiral down. They dropped 29 percent to a median $169,700 from $239,700 in March 2007. That’s the lowest figure since March 2004.”

“‘Remember when things ran up the market and things went nuts? Now we’re seeing an overreaction in the other direction with prices,’ said Scott Wingfield, president of the Realtors Association of St. Lucie. ‘No question, it’s a bad time for people that want to sell a home, have to sell a home or need to sell a home. But for those that buy today, I’ll bet the farm that in four, five or six years from now, they will have hit home runs.’”

“‘I believe we have reached a point where buyers can’t afford to sit on the sidelines any longer watching these fantastic deals pass them by,’ said Dave Derrenbacker, president of the Realtor Association of Martin County. ‘Prices have come down so far that it is not uncommon to see sale prices that mirror 2002 levels … buyers get a do-over and I think the smart ones are realizing that.’”

The Palm Beach Post. “Home prices fell again in Palm Beach County and the Treasure Coast in March, thwarting homeowners’ hopes that prices had hit bottom. Mike Dooley, former president of the Florida Association of Realtors… pointed to a home in Sewall’s Point that recently sold for $310,000 after trading for $595,000 during the boom. And a home in southern Martin County sold for $330,000 after last selling for $550,000.”

“Pessimists point to signs of more pain for the housing market. Thousands of foreclosures are poised to flood the market, pushing down prices, and a weakening economy has cast a cloud over sales.”

“‘Everybody out there is a fence-sitter,’ said John Burford, an economist at The International Bank of Miami. ‘And even if you want to buy, you’ll have a hard time getting credit. Historically, when you have a real big debt expansion that lasted as long as this one did, it usually takes a long time for it to adjust.’”

The Miami Herald. “South Florida’s real estate market is still in the double-digit doldrums compared to a year ago. In Miami-Dade, existing single-family homes sales in March were down 56 percent vs. a year ago.”

“Miami property owner Rafael Fortuny has spent the last year trying to unload six town homes. After slashing prices by $30,000, he has managed to sell four of them — the last one in October.”

“Fortuny says he hands out about 5,000 fliers a month hoping to stumble on a buyer willing to put down $270,000 for a three-bedroom, two-bathroom house. ‘This last weekend we had maybe 10 families look at the property,’ he said. ‘Usually we have, oh, zero. So things seem to be picking up.’”

“But even eager clients are finding it hard to get loans, he said.”

“South Florida’s figures mirrored statewide data. Florida’s Realtors sold 9,142 single-family homes in March — a 26 percent decrease from last year. The median home price was down 15 percent to $205,600.”

“Condo sales slid 24 percent vs. March 2007 to 3,145 units, and their median price dropped 20 percent to $176,600.”

“At the end of March there were 4.06 million homes for sale in the United States. At the current rate of sales, it would take about 10 months to churn through the existing inventory, the National Association of Realtors said. Fortuny hopes he doesn’t have to wait that long to shed his two properties. ‘This has been a nightmare,’ he said. ‘I am just dying to get out.’”

“At the Fountains of Tamarac, the condo association has no insurance, a couple of unit owners are cutting the community’s grass themselves, and 90 percent of the unit owners aren’t paying their maintenance fees. Even two banks, both of whom acquired their condos out of foreclosure, haven’t paid their dues.”

“Condo President Cesar Gonzalez views the start of hurricane season with dread. ‘We’re hurting really bad,’ he said. ‘I don’t know if I can handle the stress.’”

“At the Club at Brickell Bay, residents say they have seen everything from nonworking elevators to broken equipment in the gym to cutbacks in cable service.”

“Kelly Ladwig, treasurer of the Townhouses of Plantation, said her board recently doubled maintenance fees after taking over the association from the developer, who converted it from rentals to condominiums. ‘A lot of people bought here as investors, and they were not able to sell. We now have a high foreclosure rate/nonpayment rate,’ said Ladwig.”

“Even if unit owners can find a buyer, Ladwig said, some banks are looking at the association’s books and refusing to make the loans. This could also block condo owners who try to refinance their loans.”

“What’s worse is the problem can snowball: The higher maintenance fees can push even more unit owners into financial trouble, leading to even more foreclosures.”

“‘This is like an avalanche,’ said Jan Bergemann, president of a statewide group of condo owners. ‘More and more people don’t pay their dues, forcing other people to pay the cost. I don’t know the solution.’”

“Lewis Freeman, a Miami lawyer who works with financially distressed properties, said this problem is going to get worse.”

“‘I think it’s like hurricane warnings,’ Freeman said. ‘They tell you to get ready a couple months before. Get batteries and water. This is going to absolutely be a catastrophe. Nobody ever saw this coming. You look at what’s going to happen with these things: utter chaos.’”

The News Press. “Some 220 houses - almost all of them in Lehigh Acres - stand abandoned in Lee County as stark reminders of a derailed real estate market. A record 10,700 foreclosures last year are stark evidence of the market’s condition.”

“‘Juveniles are squatting in them. Criminals are squatting in them,’ said Lee County sheriff’s Capt. Ed Tamayo, who oversees Lehigh Acres.”

“In Lehigh, the houses are in various stages of construction. Some are eyesores with weeds and piles of dirt overtaking yards. Others are unsafe because of exposed construction materials. One property on North Richmond Avenue in Lehigh is a slab with pipes rising over the concrete. Erosion is undercutting the slab at one corner and at a second point along the front of the slab.”

“Other houses have tar paper on the roof but no shingles. No stucco has been applied to the concrete block walls. A house at 5204 Lee St. has gaps in the tar paper on the roof and an exposed septic tank and drain field.”

“Children broke into the home and left graffiti, said neighbor Andy Morris. Two doors of the boarded-up house were ajar recently. Houses in such condition can further erode property values in an already-depressed market, but Morris expects to live with the situation for awhile.”

“‘There are too many houses for sale out here,’ he said.”

The Herald Tribune. “Luxury home builder John Cannon Homes has taken to the other end of the spectrum by creating a small division to complete and sell homes that are unfinished because the buyers or builders walked away from the work site.”

“‘We’ve had some situations where customers have more or less said, ‘Here, bank, this didn’t work out for me,’ and they are turning their keys into the lender before construction is finished,’ founder John Cannon said.”

“‘It’s not only an interesting way to stay alive, it’s also a community service,’ said Mary Dougherty-Slapp, executive officer of the Home Builders Association of Manatee County. ‘I have one of these homes in my neighborhood, and it’s sad, because it’s a reminder of how bad things have gotten.’”

The Bradenton Herald. “The median sales price of existing homes in the Bradenton-Sarasota market fell more than $52,000 in March to $239,300, compared to the same month a year earlier.”

“Local agents all agree that there are plenty of well-priced homes on the market and those who are willing to hold onto their homes for five to seven years will see a return on their investment.”

“‘Traffic is good…but they are not buying,’ said Robert Drane of Re/Max Alliance Group.’Part of the problem here is what we defined as normal has changed. Real estate is a long-term purchase. It’s a five-year minimal investment if you want to ensure you’ll make money.’”

“‘The market will eventually come back to where it was,’ said Denny Delarco, manager of Wagner Realty’s El Conquistador office.”

The St Petersburg Times. “The latest home sales figures showed an interesting anomaly: While prices continue to plummet, the home sales decline in the Tampa Bay area was less than half the state average. What seems to be swaying the market is a rash of short sales.”

“Jim Knetsch of RE/MAX Realty Associates in Carrollwood said, ‘Some of the best bargains right now are short sales. In many of the communities in central Pasco, I’m guessing half the properties or more are truly in short sale territory.’”

“Knetsch is banking on further activity this spring, as lenders sign off on short sales rather than press their claims all the way to foreclosure court.”

“‘What people have to realize is that January and February were two of the slowest individual months since at least January 2003,’ Knetsch said. ‘Hopefully we’ve survived the worst of the market.’”

Please post off-topic ideas links and Craigslist finds here.

The Contra Costa Times reports from California. “Foreclosures are a third of all home sales in California as the majority of homeowners in default lost their homes in the first quarter of the year. About 68 percent of homeowners in default during the first few months of 2008 lost their homes, typically owing around $11,474 and were about five months behind when their lender started to foreclose, DataQuick reported Tuesday. There were 47,171 homes lost to foreclosure during the first quarter, the highest since DataQuick began recording data in 1988.”

“Last quarter’s total rose 48.9 percent from 31,676 in the previous quarter, and jumped 327.6 percent from 11,032 in first quarter 2007. In the last real estate cycle, trustees deeds, which is when the lender officially forecloses, peaked at 15,418 in third-quarter 1996.”

“Lending institutions sent homeowners 113,676 default notices during the January-to-March period. That was up by 39.4 percent from 81,550 the previous quarter, and up 143.1 percent from 46,760 for first-quarter 2007, the highest since DataQuick began recording defaults in 1992.”

“‘The big ‘if’ right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans,’ said Marshall Prentice, DataQuick’s president.”

“But some economists say that the economy is already affected. ‘We’re already in a recession,’ said economist Christopher Thornberg. ‘You have falling prices and so many people underwater they realize there’s no point in staying in the home and will walk away.’”

“Last quarter’s default numbers were a record in almost all of the state’s 58 counties. The only exception was Los Angeles County, which was hit hard by the recession of the early 1990s.”

The San Francisco Chronicle. “Foreclosures spiked across the Bay Area and California during the first quarter, rising more than 300 percent as home values continued to fall. Lenders took back 6,579 homes in the nine-county region during the three-month period, up from 1,493 a year ago and 4,573 in the fourth quarter.”

“In an indication that the foreclosures will continue to rise in the months ahead, mortgage defaults, the first step in the process, also climbed across the board from January to March, nearly 150 percent in the region and state. Lending institutions sent Bay Area homeowners 16,398 default notices, up from 6,730 in the year ago period and 12,704 in the preceding quarter, DataQuick said.”

The Sacramento Bee. “Banks repossessed nearly 5,300 homes in the capital region during the first three months of 2008, setting a record and pushing the region’s foreclosure tally to more than 15,300 since the beginning of 2007.”

“The number of home loan defaults also neared 10,000 during the quarter in Amador, Nevada, El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to DataQuick.”

“The firm attributed foreclosures in the capital region and statewide to falling home values that have made it impossible for many to refinance or sell their homes to escape financial problems.”

“DataQuick noted that because of falling home prices only about 32 percent of those who default on their home loans are able now to save their homes. Six months ago about half were able to save their homes, the firm reported. As recently as August 2006, DataQuick said 95 percent were able to find solutions outside foreclosure.”

“Clearly the major culprit is free-falling home prices that have many people owing more than their home is worth.”

“‘Looking at the directional trend, we expect foreclosure rates in Sacramento to rise as long as house prices are declining,’ said Mark Fleming, chief economist of First American CoreLogic.”

The Union Tribune. “March was the 36th consecutive month of year-over-year increases for both home foreclosures and notices of default.”

“But DataQuick analyst John Karevoll predicted that so long as San Diego County avoids entering a recession, the rate of homeowners defaulting on their mortgages should start to level off later this year and then begin declining in 2009.”

“‘There are two scenarios,’ he said. ‘Scenario one is that the default activity is a nasty case of indigestion that has to be digested, and once it’s digested, the market will rebalance itself. Scenario number two is where we factor in the recession. If we are in a recession, it’s not indigestion anymore. Then the default acitivty will start to migrate from this pool of at-risk home loans into the more mainstream mortgages.’”

“Looked at on a quarterly basis, foreclosures between January and March of this year continued to surge, rising 60 percent compared to the final quarter of 2007. Year-over-year, the increase was 210 percent, DataQuick reported.”

“Similarly, notices of default, the first step in the foreclosure process, were also up, rising 46 percent last quarter compared to the previous quarter, and 128 percent compared to a year earlier.”

“‘The main factor behind this foreclosure surge remains the decline in home values. Additionally, a lot of the ‘loans-gone-wild’ activity happened in late 2005 and 2006, and that’s working its way through the system,’ said Marshall Prentice, DataQuick’s president.”

The North County Times. “Foreclosure notices surged past home sales during the first quarter in San Diego County, indicating that the local housing market recession will get worse before it gets better.”

“There were 8,975 notices of default in the county in the first quarter, more than 50 percent higher than the 5,888 sales, according to DataQuick.”

“In stark contrast, first quarter home sales a year ago in San Diego County more than doubled the 3,931 notices of default.”

“Mark Goldman, a real estate lecturer at San Diego State University, said the numbers indicate that banks are going to seize more properties this year than they will be able to sell. That addition to the overall housing inventory will depress prices for another year, possibly two, he said.”

“‘You have all the lack of lending programs, plus the reduction in [house] values, plus people making less money, plus four dollars a gallon for gas,’ he said. ‘What is occurring in our economy that is going to turn this around? Not anything that I’m aware of.’”

The Record Searchlight. “Commercial real estate agents like to say that retail follows the rooftops. The rooftops have practically stopped budding.”

“Redding is on track this year to record fewer than 100 housing starts for the first time since 1974. And we’re coming off 2007 when the city issued the fewest single-family-home permits since 1981.”

“Almost on cue, available retail and office space appears to be rising. Just drive around town.”

“What’s more, there are finished strip malls sitting largely vacant. Steve Mungia, commercial relationship manager for Umpqua Bank in Redding, said the eyes don’t deceive. Commercial and office real estate activity in the north state has slowed.”

“‘We’re seeing a little bit of a correction, but it’s less severe than the housing market,’ Mungia said.”

“Redding commercial real estate agent Ken Miller said retail complexes don’t happen without an anchor tenant lined up. ‘With the retail economy slowing, you see anchor tenants pulling back,’ Miller said.”

“When I featured California Espresso Cafe in an April 7 business feature, owner Christine Sullivan was candid about the challenge these tough economic times pose for retailers like herself. But Sullivan, who bought the business in October, gave me every indication that she was going to stick it out.”

“Guess not. Sullivan cut her losses and closed suddenly last week. In an e-mail to customers and friends, Sullivan said her rent went up $600, adding that ‘we seem to just keep putting more money in and not enough is coming out.’”

“Roger Lefebvre, who sold the business to Sullivan, still owns the note but wouldn’t say how much Sullivan owes him. Lefebvre has no plans to reopen. ‘It will cost too much to reopen and try to make it the way the market is going today,’ Lefebvre said.”

The Daily Bulletin. “When you’re at the bottom of the barrel, all you can do is look up, right?”

“At least that’s what Jesse Marron and Joe Rodriguez are doing. It’s no fun jump-starting a business in the middle of a recession, but these guys are crossing their fingers that hard work will pay off in the end.”

“In December, Marron and Rodriguez opened Rialto-based J & J Classics and Air Suspension, a classic car parts dealer and refurbishing/suspension service.”

“Right now, business is erratic. One week things are slow; the next week there’s an uptick, and the two entrepreneurs are trying to not turn down customers.”

“‘Friends that’ve been in this business, they’re used to making good money, and they’re feeling low because we’re in a recession,’ Marron said. ‘But us - we never knew what it was like to make big money. It’s exciting, but scary at times.’”

“‘We asked ourselves what it would take to start this shop,’ said Marron. ‘It takes money, lots of money. I took my 1968 Impala Convertible Super Sport and sold it for $22,000 to a guy from Norway.’”

“Challenges are already putting Marron and Rodriguez to the test. ‘There’s times we ask ourselves, ‘Why did we get into this?’ Marron said.”

The Mercury News. “The 17 brand new cottage-style condos near downtown San Jose were supposed to sell swiftly, especially since they were priced to be affordable to low- and moderate-income people, and the developer offers generous loan programs for first-time buyers.”

“But in the eight months since the for-sale signs went up, only one condominium has sold, even though the developer, non-profit Neighborhood Housing Services Silicon Valley, has cut prices twice.”

“Even non-profit developers who aim to provide affordable housing to the valley’s lower-income residents are getting hammered by conditions in the real estate market.”

“‘No doubt this property would have sold out in four to six months but for the subprime debacle,’ said Ed Moncrief, executive director of the developer and home-buyer assistance organization. ‘We hit the market just as the realization of some gray cloud over the future hit.’”

“Two-bedroom condos at Villa Almendra once priced at $535,000 now are offered at $450,000. The units come with new appliances, two-car garages and granite countertops.”

“But Moncrief’s group is facing stiff competition from others. Developer Barry Swenson Builder, for example, has new studio condos nearby starting at $294,000, and there are single-family houses selling for less than $450,000 in some East Side and South San Jose neighborhoods.”

“Desperate to sell, the non-profit now is willing to accept offers from any buyers, not just those who need the special loan programs. And the group will give away a 2008 Toyota Prius in a random drawing to one of the first eight buyers who close escrow before September.”

“Other affordable-housing developers in the Bay Area are hunting for buyers, too. They’re anxious to raise money to pay back their construction loans and worried about financing future projects.”

“South County Housing last weekend auctioned some of its unsold units at Forest Park, a development in downtown Gilroy. Bids started at $295,000; some townhouses were priced at $519,000 last fall.”

“‘It’s a really tough time,’ said Nancy Wright, a senior project manager for South County Housing. ‘The credit issues are so widespread, everyone is being affected.’”

“The units at Villa Almendra went up for sale in August 2007, just as the credit crunch hit Wall Street and consumers’ confidence plunged. Attendance fell at the non-profit’s once-crowded buyer orientation sessions, and by the holidays the group knew it had a problem.”

“‘It was noticeable from the silence we heard, I guess, in terms of home buyers not being there,’ Moncrief said. ‘They disappeared.’”

“Amy Flores, who paid $590,000 for her three-bedroom condo late last year, is the lone homeowner at Villa Almendra. She’s hoping the non-profit’s efforts to sell other units pays off.”

“‘It would be nice to have neighbors,’ she said.”

Some housing bubble news from Wall Street and Washington. MarketWatch, “The U.S. housing market weakened slightly in March, as resales of U.S. homes fell, inventories climbed, and prices continued to decline, the National Association of Realtors reported Tuesday. Resales have sunk 19.3% in the past year and are down 33% from the peak in 2005. The median sales price fell 7.7% in the past year to $207,000, the second-largest price decline recorded since 1999.”

“Existing home sales are ’stable yet soft,’ said Lawrence Yun, chief economist for the real estate agents’ trade group.”

“Others said they saw no sign of a bottom in housing. ‘Inventories should be going down,’ said Dan Alpert, a managing director of a fund that buys distressed mortgages.”

From Reuters. “The inventory of homes for sale swelled by 40,000 to 4.06 million homes, or a 9.9 months’ supply at the current sales pace from 9.6 months in February.”

“Of the homes for sale, 18 percent have negative equity and so are either in foreclosure proceedings or headed for a ’short sale’ that will see the lender write off some of the original loan amount. ‘This has been a frustration of our members,’ said Yun. ‘Lenders have been dragging their feet (in approving short sales).’”

“Regionally, existing-home sales in the Northeast are 18.8 percent below March 2007. Existing-home sales in the West are 22.3 percent below a year ago. In the South, existing-home sales are 20.0 percent below March 2007. Existing-home sales in the Midwest are 15.9 percent below a year ago.”

“NAR President Richard F. Gaylord, said there are problems with the implementation of mortgage guidelines. ‘It appears there is some over-reaction on the part of some lenders now in requiring higher downpayment percentages than may be necessary,’ he said.”

The BBC News. “Royal Bank of Scotland, the UK’s second-biggest banking group, announced a write-down of £5.9bn before tax, following its exposure to the credit markets.”

“RBS said it expects additional hits to the value of assets, including the ABN AMRO wholesale business it bought last year, due to the impact of the U.S. subprime mortgage crisis and subsequent credit crunch.”

“The bank, which wrote down assets by 2.4 billion pounds last year, said…it valued below-prime Alt-A mortgages at 50 percent, down from 83 percent.”

From Bloomberg. “Two big regional banks in the United States, SunTrust Banks in Atlanta and Fifth Third Bancorp of Cincinnati, said the real estate slump, especially in Florida, had required them to increase reserves for bad debt.”

“SunTrust raised its provisions for loan losses 10-fold to $560 million because of expected defaults on mortgages, home-equity credit lines and residential construction, it said. Fifth Third increased its reserve to $544 million from $84 million.”

The Street.com. “Todd Appleman never envisioned washing his dishes in the bathtub when he opened a $64,000 home-equity line of credit to renovate his kitchen.”

“But just when he was about to advance a first payment to his contractors — who had just ripped out his cabinets and appliances — Appleman says his lender, Bank of America, froze the line without notice to him.”

“‘People don’t take out a line of equity with the intention of not ever using it. And wouldn’t it be courteous to give your customer a call to tell me about this?’ he says.”

“Manda Hunt of Atlanta says an exemplary payment and credit history didn’t influence her lender’s decision. Hunt opened a home-equity line when she purchased a one-bedroom condominium in Atlanta for $173,000 in 2002.”

“A recent letter she received from Countrywide…explained that she could no longer draw from her home-equity line due to declining real estate values, she says. ‘I was freaking out,’ says Hunt. ‘I wasn’t planning on accessing [the line] but I don’t want to hear that I can’t.’”

“Countrywide now values Hunt’s condominium in the mid-$150,000 range — nearly $20,000 under her purchase price, she says.”

The Associated Press. “Yale University economist Robert Shiller, pioneer of the widely watched Standard & Poor’s/Case-Shiller home price index, said there’s a good chance housing prices will fall further than the 30 percent drop in the historic depression of the 1930s. Home prices nationwide already have dropped 15 percent since their peak in 2006, he said.”

“‘I think there is a scenario that they could be down substantially more,’ Shiller said during a speech at the New Haven Lawn Club.”

“Home prices rose about 85 percent from 1997 to 2006 adjusted for inflation, the biggest national housing boom in U.S. history, Shiller said. ‘Basically we’re in uncharted territory,’ Shiller said. ‘It seems we have developed a speculative culture about housing that never existed on a national basis before.’”

“Many people became convinced that housing prices would increase 10 percent annually, a notion Shiller called crazy.”

“Shiller, who said it’s difficult to forecast prices, endorsed legislation proposed by Sen. Chris Dodd, D-Conn., and Rep. Barney Frank, D-Mass., that would allow the Federal Housing Administration to back as much as $300 billion in mortgages for struggling homeowners.”

From CNN Money. “There are calls for the government to help homeowners at risk of foreclosure. But some experts think a mortgage rescue could cause more problems than it solves.”

“Some think the Dodd-Frank plan will at least slow the decline in home prices. Problem is, that could ultimately be bad news for the economy too. That’s because some think that, as painful as it may be, the best way to fix the housing crisis is for the free market to run its course. After all, lower home prices might actually help stimulate demand again.”

“‘What the market is in the process of doing is bringing home prices back to where they should be by any traditional measure,’ said Barry Ritholtz, CEO of equity research Fusion IQ. ‘If home prices don’t go down, it means newlyweds can’t go out and find a home they can afford.’”

“‘We must work to limit the impact of the housing downturn on the real economy without impeding the completion of the necessary housing correction,’ said Treasury Secretary Henry Paulson in a speech last month.”

“William Wheaton, a professor with the Massachusetts Institute of Technology’s Center for Real Estate, argues many of the homeowners now facing foreclosure could be better off renting the same home at current market prices, rather than trying to refinance the mortgage.”

“‘It’s very popular to say you’re in favor of home ownership, even if it doesn’t make any economic sense,’ he said.”

“Robert Shiller, a Yale economist who has long argued there was a bubble in home prices, thinks the plan will do little to stop the slide in housing prices.”

“Shiller adds that when compared to measures such as rents and household income, housing prices are still out of equilibrium. ‘I’m not sure we can achieve continuing high home prices,’ he said.”

“If he’s right, more borrowers may find themselves owing more than their house is worth, which could add to the number of foreclosures and homes on the market.”

The Herald Tribune from Florida. “If no-money-down was the real estate password for the first half of the 2000s, ‘jingle-mail’ might be the word for rest of it.”

“For 2007, 142 properties out of 6,188 sales were officially tagged as being distressed in the Sarasota MLS for a rate of 2.3 percent. But the number of homes swelled to 8.1 percent in January, 8.7 percent in February and 10 percent last month, says Jose Lopez, a distressed-property specialist who is tracking the phenomenon.”

“Even the incomplete month of April already is higher than that for all of 2007.”

“‘It keeps growing and growing and growing,’ Lopez said. ‘I wouldn’t be surprised if we end up this year at six to seven times the amount of these type of properties that were sold last year.’”

“Adjustable-rate mortgages now resetting and many times pushing up monthly mortgage costs by 35 percent are ‘the thing that is going to continue to spike it up,’ said Budge Huskey.”

“‘As housing values are going up, people are more apt to do everything they can to hold onto their homes,’ said Huskey, whose company runs what is probably the largest management division in the nation for bank-owned properties. ‘There is a behavioral element, too, that in a declining environment, people are less likely to save their property. A lot of people think, ‘Well, there’s nothing I can do.’”

“Lopez is not courting banks for their listings, preferring instead to work with buyers, finding the best deals among homes owned by banks or requiring bank approval because they are worth less than the loan. He then works at making them even better deals by making low-ball offers.”

“‘There are some agents out there saying the bank will forgive up to 10 percent, that any offer has to be 90 percent of what is owed,’ Lopez said. ‘That is absolutely ridiculous. They will do 20 percent with no problem, and I have seen as high as 50 percent.’”

The Star Tribune from Minnesota. “The reckoning inside the Colvins’ four-year-old home is playing out at kitchen tables and corporate boardrooms across Minnesota — and the world.”

“Jon Colvin informed CitiFinancial that he would be unable to make his March mortgage payment, and would probably miss April’s, too. He hoped the news would finally scare the bank into renegotiating a mortgage he can’t afford for a house he can’t sell — and now wishes he had never bought.”

“‘It’s not something I feel proud doing,’ Colvin said of missing the payments. ‘But how else am I going to get the bank’s attention?’”

“By the late 1990s, with the Twin Cities suburbs filling fast, Wright County was a bargain for developers. In sleepy rural communities like St. Michael, land could be had for less than $10,000 an acre, just a quarter of prices closer to the Twin Cities.”

“In Otsego, almost 2,200 units were built during the same period. The county’s average sale price jumped from $180,102 in 2001 to $234,009 in 2007, an increase of 30 percent. In Albertville, the gains were even sharper: 43 percent.”

“‘In 2005, my dog could have sold real estate in Wright County,’ said Dan Frie, a sales agent in Monticello, who has been in the business nearly 30 years. ‘A lot of people thought this was the next big growth market, and they wanted to be part of it.’”

“While Frie blames fraud for exacerbating the problem, many of the mortgages that are in default are held by people who believed — as many did and as the real estate community told them — that real estate doesn’t lose its value.”

“Newly married in 2005, James and Angela O’Hara, 25, fell in love with a tidy two-story townhouse in St. Michael. A real estate agent urged the couple to buy early, noting that other buyers would bid up prices by 5 to 10 percent once the rest of the project became reality.”

“‘They sold the vision as much as the house,’ James said. ‘They said it would be this bustling neighborhood with all these attractions just a block away. We never imagined it would lose value.’”

“Instead of living in a bustling urban village, the O’Haras look out on a field of weeds and townhouses with ‘Bank Owned’ signs posted on their front doors. Several of the townhouses are clad in Tyvek HomeWrap, their brick facades still unfinished.”

“The O’Haras need to move out of their townhouse by next summer, when James, a staff sergeant in the Marine Corps, reports for officer’s training in Virginia. But the couple fear they won’t be able to sell the unit for enough to repay the $190,000 mortgage. ‘It’s become a huge albatross around our neck,’ James said.”

“‘A lot of the prices that people were paying for property in Wright County had no basis in reality,’ said George Schmidt, a real estate agent in Anoka. ‘They were destined for foreclosure.’”

“Jeffrey Schoenwetter, CEO of JMS Homes in Eden Prairie and one of the investors in Martin Farms, said 400 houses didn’t seem excessive when the project was hatched in 2004.”

“‘When you have 10 builders come to you and say, we want to buy 10 lots a year, and then Mr. Builder says, ‘I have five friends that want to come, too, could we have 100 lots?’ Then I said, ‘OK, I’ll develop 100 lots,’ he said.”

“Laurie Karnes, a real estate broker who specializes in selling undeveloped land in the Twin Cities, blames today’s problems on greed and a failure to acknowledge that the good times wouldn’t last forever. ‘Logic would have told you, why would you build there?’ Karnes said of some of the county’s overdeveloped communities. ‘But logic wasn’t fueling this craziness.’”

The Tennessean. “About 47,000 loans, or 42 percent of all the adjustable- rate mortgages in Tennessee, were subprime at the end of last year, according to the Mortgage Bankers Association. Housing counselors in the Nashville area say they’re seeing ARMs for subprime borrowers resetting at up to 13 percent interest.”

“Emerging from bankruptcy three years ago, Marcus Neal seemed an unlikely candidate for a home loan. But that didn’t stop his lender. With no money down, Neal was able to buy his first home, a cozy two-bedroom townhouse in La Vergne, for $89,000 just six months after walking out of U.S. Bankruptcy Court.”

“Neal said a credit counselor whose advice he sought after his bankruptcy steered him to a local real estate agent and said it made sense to buy a home. Neal said he had been living in an apartment complex with a crime problem, and home ownership seemed like a sensible way out.”

“The builder of his new townhome, Ole South Properties, one of the largest builders in Middle Tennessee, lent him $8,994 so he didn’t have to come up with a down payment.”

“Washington Mutual Inc., which financed 90 percent of the purchase price, gave Neal a 9.5 percent interest rate on an adjustable-rate mortgage that would reset after two years, according to the mortgage documents.”

“Neal said he is now several months behind on his mortgage payment after he lost his job as a boiler room operator. Plus, his mortgage reset last year, adding another $100 to his loan payment every month.”

“‘Most subprime loans were done with the thinking that, within the next two years, it would be refinanced into a prime product,’ said Keith Payne, a loan officer at Freeman Webb Mortgage.”

“Payne said he didn’t do many of those loans, telling people to wait a few years and improve their credit instead. ‘But a lot of people were not thinking about … two years down the road. It was one of those things people thought would go on forever, and now they’re finding out, nothing goes on forever,’ he said.”

The Ahwatukee Foothills News reports from Arizona. “No one says that the Arizona housing market has recovered, but it just may be that the free-fall of values and glacial sales have bottomed out, at least according to some real estate agents and the Arizona State University’s W.P. Carey School of Business. ‘A lot of homes are now priced right, which is helping,’ said Dawn Workman, an Ahwatukee Foothills resident and East Valley real estate agent.”

“For R.G. Argabright, also an East Valley real estate agent, the market is still tough, but he sees some positives with prices holding steady. ‘We may be floating on the bottom, (instead of falling),’ Argabright laughed. ‘The only negative we have is the darn foreclosures.’”

“Workman has done the classic of turning lemons into lemonade, by offering tours of foreclosed properties to generate sales. ‘I’ve been selling a lot of foreclosures lately.’”

“Workman said that it’s not uncommon for a 1,800-square-foot three-bedroom, two-bath home to sell for under $100,000. But financing may still put the brakes on the recovery, if there even is one.”

“Argabright said the days of 100 percent financing are gone and that prospective home buyers need around 5 percent down, or $5,000 for every $100,000 of home, and must have good credit before they can expect a home loan.”

The Arizona Republic. “Home values have dropped about 20 percent Valleywide since the bubble burst over a year ago. Power Ranch in Gilbert is one of the more extreme examples — real estate flippers drove prices for a 4,500-square-foot home as high as $875,000 two years ago. Then came the bust, catching many home flippers short.”

“Ivano Panelli can see a line of for-sale signs blocking the view from his home. ‘This has been for sale for three years, right here,’ he says, pointing at the vacant home next door.”

“Today the bank is selling that home for $479,000. The owners of the home across the street – the very same model – paid $875,000 two years ago.”

“‘The whole subprime crisis is literally melting all over the place,’ says Anthony Sanders, a professor of fiinance and real estate at Arizona State University.”

“Home-building permits in metro Phoenix were flat again in March as the housing market continued to search for a bottom. Last month, 1,278 new-home permits were issued Valley-wide, RL Brown’s Phoenix Housing Market Letter reports.”

“‘We think that the evidence is building that we are seeing the bottom of the new-home market in the metro Phoenix area,’ Brown said.”

The East Valley Tribune from Arizona. “An analysis of 4,754 floor plans shows a 9 percent increase in price over the past four months, while 60 percent saw prices remain unchanged.”

“Some builders raising prices are trying to create a sense of urgency for buyers, said John Fioramonti, senior managing director of Meyers Builder Advisors in Scottsdale. Fioramonti said one developer in north Scottsdale has seen a big jump in foot traffic through the sales office, but people aren’t taking the plunge. They’re waiting for prices to drop further, he said.”

“‘The builders are trying to create a sense of the bottom has been hit,’ he said.”

“The hammering and drilling have stopped, the sales office is shut down and rumors are rampant in homeowner Andrew Kerr’s Maricopa neighborhood. About two weeks ago, financially strapped builder Engle Homes closed its Province sales office and 11 other field offices Valleywide, also removing the communities from its Web site.”

“Now, residents like Kerr worry what will become of their partially finished community. ‘There’s a certain level of frustration and anxiety,’ he said. ‘A lot of people really understand there’s nothing they can do about the situation.’”

“Local industry analysts say the closures are the first sign that a builder could bail. ‘That’s the lifeblood,’ said John Fioramonti. ‘Everything else doesn’t matter if you don’t have sales.’”

“Roughly 880 out of more than 1,500 homes planned at Province were sold as of February, according to the research firm. Valleywide, Engle’s more than 30 communities have been averaging 1.7 sales a month, compared with three to five sales for other builders, Fioramonti said.”

“Engle’s financial troubles aren’t unique in a flagging housing market and economy. Valley Builders have been dumping thousands of home lots to free up cash and placate anxious stockholders.”

“Capital Pacific Homes recently sold 209 lots in Maricopa to a local investor for $4.9 million, according to Business Real Estate Weekly.”

“Province homeowner Linda Demain said she believes Engle has been straightforward and doesn’t listen to the rumors whirling around the neighborhood. Engle has put a lot of time and effort into this project and, hopefully, it will be able to see it through, she said.”

“It doesn’t do any good to worry, she said. ‘Honestly, what choice is there?’ she said. ‘You can’t stay home and brood every day.’”

“Half of all homes sold in Pinal County last month were bank-owned, compared with 37.5 percent in January, according to local analyst RL Brown. In Maricopa County, 22.3 percent of all sales were homes that had been repossessed by lenders.”

“Last year’s wave of foreclosures has only grown in 2008 with thousands of Valley families defaulting on their mortgages every month. Agents say the banks have so many foreclosures and REOs to deal with that it’s sometimes taking months to get a response on a short sale offer.”

The Review Journal from Nevada. “Like many Las Vegas residents in search of a sweet deal on a foreclosed home, Mike Simpson walked away disheartened and discouraged after wasting his time at a recent foreclosure auction.”

“The starting bid for the six-bedroom house on half an acre near Alta Drive and Valley View Boulevard was $219,000. Simpson was prepared to offer $375,000. To his surprise and without prior notice, the home was pulled off the auction block.”

“‘Come to find out somebody made a deal with the bank and the deal fell through,’ Simpson said. ‘I spent 21/2 hours there on a Saturday. Why didn’t they put it on the deletion list when I first walked in?’”

“‘The banks are ready to rock and roll,’ said Dave Webb, CEO of (auction firm) Hudson & Marshall. ‘If it’s a reasonable offer, they’re ready to take it. Now, they’re not idiots. They’re not going to take 40 cents on the dollar…The longer these properties stay on the market, the more motivated they are.’”

“The latest foreclosure statistics from Foreclosures.com showed 6,152 preforeclosure filings for Clark County in March, more than double the 2,813 filings in the same month a year ago.”

“One buyer who requested anonymity said real estate agents are biased in their assessment of auctions because buyers don’t need their services. She was able to buy a Pulte home in Southern Highlands at a Hudson & Marshall auction last year for $278,000, or about $102 a square foot. The bank was cooperative and did not try to ‘jack up the price,’ she said.”

“Her second-choice home also closed escrow at the auction price of $283,500. It had sold a year earlier for about $500,000.”

“Banks that have properties for sale sometimes place ’shills’ in the audience to bid the price up, said Ron Clark, CEOof Rainbow Equity Investments in Oceanside, Calif. ‘Auctions can be a very treacherous place for a novice with a full-time job,’ Clark said. ‘You walk into an arena where you’ve got some slick, sharp operators. There’s all kinds of ways to fleece the guy who’s a novice and thinks all those banks are in trouble.’”

“With foreclosures mounting and the housing market reeling, banks should be ‘humbled’ and welcoming people with open doors, Clark said. ‘They’re not there yet. They will be in six months or a year,’ he said.”

The Las Vegas Business Press from Nevada. “Southern Nevada’s building boom is bust and the foreclosure chickens are home to roost. Some industry experts now wonder if other consequences arising from the valley’s long golden age of construction are also coming back to haunt valley consumers.”

“The number of local construction-defect lawsuits has risen alongside the valley’s population. County officials say that at the height of the building boom some inspectors were doing as many as 70 inspections a day.”

“In response to reports that county building inspectors were conducting as many as 120 inspections a day during 2004 and 2006, Clark County Director of Development Services Ron Lynn said those numbers never got higher than between 60 and 70.”

“‘They might have been given that workload, but they weren’t expected to do all those,’ he said of the 120 figure.”

“‘The problem is when you get to frame inspections, structural inspections, or the roof,’ said construction consultant Neil Opfer. ‘That will take more time.’”

“But even for the least time-consuming inspections, Opfer said the idea that one inspector would face 120 assignments a day stunned him. ‘That blew my mind,” the consultant said. ‘I think it is hard to do 120 a day and even have any type of quality. What’s happening to get those numbers is they are just doing a real spot check.’”

In Business Las Vegas from Nevada. “Maybe this is Las Vegas’ version of the canary in the coal mine when it comes to the commercial real estate market. Last week, NAI Horizon confirmed speculation to In Business Las Vegas that the commercial brokerage has closed its Las Vegas office.”

“Terry Martin-Denning, chief operating officer with NAI Horizon in Phoenix, which oversaw the Las Vegas office, cites the economy as the reason behind the closure. The slowdown started 18 months ago, and there haven’t been enough deals to sustain the operation, and activity continues to trend downward, she says.”

“‘The current investors have fed the beast as much as they can,’ Martin-Denning says. ‘I think we are seeing a lot of shakeout, and no one knows what’s going to happen. There are a lot of uncertainties with the economy. You have seen some title companies that rely on real estate transactions downsizing or closing.’”

“‘We hear disturbing news about the gaming industry, and the latest revenues are down for the first time. Gaming brings people and people need offices. The whole focus of the economic base in Las Vegas is gaming. That news was a concern,’ Martin-Denning says.”

“A once red-hot concept that had investors salivating about the prospect of owning a piece of the Strip has cooled considerably. The idea behind buying a condo hotel was having a place one could call home, yet having help making their mortgage payments.”

“The problem is the expectations of the buyers of condo hotel units aren’t being met with revenue from the city’s first two projects - the Platinum and Signature, a partnership of MGM Mirage and Turnberry.”

“That led to a lawsuit by more than 40 investors who claim they were defrauded because they were promised profits from rental income and told by sales agents how the value of their units were likely to increase.”

“‘It is not a concept for this time,’ said Paul Murad, a real estate broker and author of ‘Manhattanizing Las Vegas.’ ‘It is a very difficult to finance if you are a developer and much more difficult for end users. In some cases, it is nearly impossible. Lenders are asking people to double their down payments.’”

“Murad said he has talked to investors who are planning to walk away from their deposits on condo hotels because the units have already depreciated and won’t be the investment opportunities once imagined.”

“Murad, who recently hosted a condo hotel symposium in Las Vegas, said a lack of understanding by lenders is contributing to the problems. Unlike a straight condo project, there is the variable of a hotel and that raises questions about how it will be managed.”

“‘Buyers are much more difficult to find,’ Murad said. ‘A lot of people have been burned on other condo hotel projects. The problem is their revenue expectations were unrealistic. They were caught up in the hype.’”

“The concept hasn’t turned into what Phoenix-area resident Adam Goodman envisioned when he bought four units at Platinum. He said he learned it works for someone wanting to own a vacation resort and generate some income whenever they are not there.”

“Barbara Granati-Smedley, a residential real estate broker in Las Vegas, said she bought her condo in Trump for use when her children come visit, but she also views it as an investment. She said she hopes that having her unit in the rental pool will help cover a portion of the mortgage.”

“‘I look at it as a great investment over a period of time,’ Granati-Smedley said. ‘It can’t do anything but appreciate given that it is a quality Trump project. But this is not for someone who is not a risk-taker.’”

“Las Vegas real estate investor Glenn Pantone said he has shied away from the concept, which doesn’t make sense as an investment to him. If someone pays $500,000 for a condo and the owner and hotel split the revenue 50-50, the hotel would need a 85 percent occupancy at $225 a night to break even. That’s counting a 20 percent down interest-only loan, he said.”

“‘If it doesn’t appreciate, there is no way to make money,’ he said.”

The Daily Herald from Utah. “Even though new home construction in northern Utah County has slowed dramatically, it could take longer for Lehi, Saratoga Springs and Eagle Mountain to get rid of their glut of unsold new homes because of a significant slowdown in sales in the first quarter, according to a report by Newreach.”

“The number of unsold new homes and condominiums in Utah County skyrocketed 275 percent to 982 in the first quarter from a year ago, and is down slightly from 987 in the fourth quarter. Lehi led the state for the second consecutive quarter with the greatest number of unsold new homes, accounting for a whopping 263 units, followed closely by Saratoga Springs with 204 units and Eagle Mountain with 157 units.”

“‘Lehi, Saratoga Springs and Eagle Mountain had the lion share of homes under construction. The sheer amount of developable land in northern Utah County meant it has been a haven for builders. But as the market started to slow down, home sales also plunged in those cities,’ said Todd Cook, Newreach’s VP of research.”

“The median asking prices for all existing residential types in March fell 12.7 percent to $289,900, from $331,913 a year ago, according to the Utah County Realtors. New home sellers also recognize that pricing is an issue, and are making adjustments accordingly, Cook said.”

The Deseret News from Utah. “About 6 percent fewer Salt Lake County new homes and condos went unsold in the first quarter compared to the 2007 fourth quarter, but far more new homes are lingering on the market than a year ago.”

“Statistics released by Salt Lake-based Newreach indicated that 977 new homes and condominiums were unsold in the first quarter, down from a record 1,037 in the prior quarter. But the first-quarter total last year was less than half that, at 437.”

“How quickly the inventory is depleted depends on prices, Jason Eldredge, executive VP of sales for Newreach. added. The number of units below $325,000 will likely shrink, because they’re still considered affordable.”

“‘There’s still a fair amount of complete and unoccupied (homes),’ Eldredge said, ‘but we believe that by year-end, people who are looking for deals in this sub-325 bracket might be disappointed.’”

“The combined underconstruction and new-but-unsold figure of 2,088 represents about a nine-month supply of new housing inventory in Salt Lake County, based on 715 new-home closings in the first quarter.”

“‘The worst thing we could have had happen was to have the building sector continue to slap new homes down without any buyers,’ Eldredge said. ‘If you look at data in Nevada and Idaho, Utah looks great. The worst subdivision I’ve seen in Utah has 25 to 30 homes sitting there vacant with ‘for sale’ signs. In Boise, it wasn’t uncommon to see 50-to-100-lot subdivisions, all finished, new, vacant. The same in Vegas. They continue to build. It’s amazing.’”

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The LA Times reports from California. “They filed into the Eagle Rock open house alone and in groups. Twenty-three families checked out the bedrooms and kitchen during the four-hour open house on a recent Sunday. Three expressed interest in buying the three-bedroom ‘character home,’ as agent Denise Barnes described the 1,364-square-foot 1922 California bungalow, reduced to $605,000 from $645,000. But most said they were waiting for prices to drop further.”

“‘It’s pretty ugly out there,’ said longtime broker David Toyama, who specializes in Eagle Rock, Glassell Park, Highland Park and Azusa. His business is down 50% from a year ago, he said, ‘and that wasn’t our best year either.’”

“The market slide means bargains galore in areas hard hit by foreclosures, such as Hemet 92543 in Riverside County, where median prices plummeted 48%, to $130,000, during the first quarter this year, compared with the same period a year ago, according to DataQuick.”

“Step outside the inland valleys, however, and some sellers still are stuck in the fantasy world of 2005, insisting on prices that buyers won’t entertain for a minute, then despairing when their homes attract no offers.”

“Elizabeth Powell, 28, learned how tough the market is. She first listed her four-bedroom West Covina house for sale for $600,000 in February 2007.”

“Two buyers fell out of escrow due to lending problems — they had difficulty qualifying for jumbo loans — so she lowered the price to $550,000, then $480,000, $460,000 and in August, $430,000. She sold the 1,489-square-foot house in January for $440,000.”

“‘I’m very glad it’s over with,’ Powell said of the selling experience she described as frustrating and stressful. ‘The loan terms kept changing; neighbors started selling their homes for less. I can’t imagine having to sell another property.’”

The Orange County Register. “To say Orange County’s housing market got off to a rocky start in 2008 would be an understatement. Sales and prices are down. But, perhaps more troubling, the total of 2,232 foreclosures during the first quarter was the highest in at least 20 years and up 328 percent from a year ago.”

“During a similar period in the ’90s slump, foreclosures rose at a 123 percent annual clip.”

“Santa Ana tops the list of foreclosure concentrations with two ZIP codes – 92707 and 92701. These two areas saw steep price declines in March. Last month’s median price of $219,000 in 92701 was the lowest in the county and down 37 percent in a year.”

“Each month foreclosures and short sales take up a greater portion of homes on the market, according to Steve Thomas at Re/Max Real Estate Services in Aliso Viejo. In early April there were 5,335 such distressed properties on the market, up 42 percent from Dec. 27 and accounting for 34 percent of all properties for sale at the time.”

“Walter Hahn, a real estate economist in Irvine, said foreclosures either peaked during January’s record high of 802 foreclosures, or they will by June. But it’s not straight down from here, Hahn said.”

“The end of low introductory teaser rates on mortgages are spurring foreclosures now and will do so again in 2010 and 2011, when studies show many loans will see a jump in payments, he said.”

“‘It’s not over,’ Hahn said. ‘It’s not going to be over until 2012.’”

The Daily Bulletin. “Faced with the most severe economic conditions in nearly two decades, Los Angeles County officials today will unveil proposed budgets that are expected to call for wide-ranging service reductions while also asking residents to pay more.”

“The budget squeeze comes as property and sales taxes have plummeted. The last time there was a drop in year-over-year sales- tax revenues was in the early 1990s amid a national recession.”

“‘It is a long, dark tunnel for local government these days,’ said Jack Kyser, chief economist at the Los Angeles Economic Development Corp. ‘You have the housing situation at one of its worst points, retail sales are down, and there is no immediate end in sight.’”

“Adding to pressure on all local government was the decision by county Assessor Rick Auerbach to launch a reassessment of properties as the housing market has plummeted. Auerbach said he plans to review the values of more than 300,000 properties purchased between July 2004 and July 2007 - when prices were at their highest.”

“The average reductions have been $66,000, saving the average homeowner $660 a year in taxes - but also reducing revenue to local government.”

“Jerry Nickelsburg, a senior economist at the UCLA Anderson Forecast, said the problem for local government is that the sectors it relies most on for revenue have been the hardest hit.”

“‘The areas the government relies on - real estate, sales tax and construction - are sectors that are not doing so well,’ Nickelsburg said. ‘We think the home-building sector will reach the bottom sometime this year so that it might come back beginning in 2009. But we don’t expect it to be like the volume of the past few years when government was able to generate a lot of revenue during a speculative boom.’”

The Desert Sun. “Justin Martin found his calling in teaching. He and his wife, Pandara bought a home in La Quinta in 2006 and began settling down. But with the state’s $16 billion budget crisis spilling over into every school district in California, he’s on notice that if the school district can’t cushion a $13.4 million funding shortfall, his job won’t exist next year.”

“Martin is not alone. Some 20,000 teachers, counselors and support staff across the state are in limbo, too. That doesn’t stop the unknown scenarios from running through Martin’s head as he drives to school and works on the house.”

“Instead of dinner out, they use the barbecue. He’s applied to teach summer school. Plans for a December trip to Thailand, Pandara’s home, aren’t so certain.”

“Except for a lone orange tree that’s been planted and the donated cacti they’re getting next month, the yard improvements have to wait. It’s what you do ‘when you have something that could be taken away,’ Martin said.”

“The one thing the couple is committed to is keeping the house, their dream of staying in the Coachella Valley. Between his wife’s fitness jobs at local gyms and private studios, they hope to make it work.”

“They’re committed that, whatever comes, they won’t become one of the 1,200 desert homes that are in stages of foreclosure. ‘I’ll do what I need to do,’ he said. ‘If that means working two or three part-time jobs, I’ll do it.’”

“‘I looked at my house differently. I look at my car differently,’ he said. ‘It makes you question what you need.’”

The Recordnet. “At a Dec. 13 gala to celebrate the opening of downtown’s Sheraton Hotel, a crowd sipped scotch and applauded the largest private investment downtown since American Savings Bank built its Main Street headquarters in 1989.”

“Yet even in December there was trouble at the hotel. San Joaquin County’s housing market - as elsewhere - was collapsing, and hotel owner Regent Hotel LLC had failed to sell any of 42 condominiums atop the hotel.”

“The housing market was more robust in 2004, when Regent promised to build a hotel…on land the city would sell to Regent for $1, and it required a city subsidy of $500,000. The following year, Regent obtained financing for the hotel’s construction, based in part on its expectation of an infusion of revenue from the sale of condominiums at the hotel.”

“And then the housing market fell. ‘The condos, that’s what’s killing us,’ said Rick Oshinski, chief operating officer of the parent company of Regent Hotel. ‘The condo market has gone totally into the toilet.’”

“The condominiums are not yet finished but are in a ‘fairly advanced stage of construction,’ hotel VP Jeroen Gerrese said. The number of people who have committed to buy one has fluctuated between eight and 14, he said. None has sold yet.”

“Since Dec. 21 - eight days after the hotel’s opening gala - 26 companies have filed mechanic’s liens against the property, demanding a total of $8.9 million for work they claimed to have done.”

“‘They keep putting us off and keep telling us, ‘Oh, we try to have meetings with the bank. The bank is holding our money,’ said Mike Jackson of Tracy’s Artistic Terrazzo and Tile. ‘It’s just turned into this fiasco at this point.’”

“‘I’m going to go to the hotel, and I’m going to rent a room,’ he said. ‘And in the morning when I wake up, I’m going to go, ‘I’m sorry. I don’t have any money. I’ll pay you in about six months’ — because that’s what (Regent) did.’”

The Sacramento Bee. “Only a year or two ago analysts were predicting that Sacramento’s traditionally dependable job and population growth would soon trim supply and create an atmosphere to raise rents. But the housing bust has proved unexpectedly severe and led to reassessments.”

“When a foreclosure on his landlord booted Aaron Myers from a house he rented with friends, it took no time at all to find another place in Citrus Heights. His new apartment came with a quick move-in date and cost him less than $900 a month. Best of all, it wasn’t a house where the same scenario could happen again.”

“‘It seems like there’s a lot of openings,’ Myers said.”

“Because the region dramatically overbuilt during the housing boom, there are plenty of apartments – about 111,000, according to some estimates – to go around. And a curious ’shadow market’ of new dwellings for rent – units that have come on the market principally because of foreclosure and the housing downturn – has kept monthly payments flat, they say.”

“Investors are buying foreclosed homes in the suburbs and turning them into rentals. Since 2007, more than 15,000 people in the Sacramento area have lost their homes to the banks. Homeowners who can’t sell their houses or don’t want to sell at these prices are renting out their houses.”

“Charlene Vomacka, a homeowner in Roseville, has added to the supply. She’s asking $1,600 a month for her three-bedroom, two-bath house. ‘We just purchased a new home,’ she said. ‘We decided to take this one off the (for-sale) market because we aren’t going to get what we want to. I’m thinking a lot of people are losing their homes, and they need somewhere to go.’”

“Home builders who can’t interest enough buyers in their new condominium projects are renting out their units for now. In Rocklin, Pacific West Cos. has added 171 units to the rental supply. Its Montessa development at Whitney Ranch was built to sell in the low- to mid-$200,000s.”

“Now, the condos are priced as rentals at $1,000 to $1,400 a month and have attracted 80 renters in three months, said Taylor Cohee, a Pacific West sales executive.”

“Apartment industry consultant M/PF YieldStar ranked Sacramento ranked almost dead last in the critical ’shadow market’ category that makes investors wary of buying or building new apartment complexes.”

“‘What really hurts it is what is happening with the ‘for sale’ (home) sector. There is too much available product out there. That is going to lead to a lot of shadow market rentals on the single-family side,’ said M/PF research chief Greg Willett.”

The San Francsico Chronicle. “It’s clear that some sectors carry more exposure to the perils and pitfalls of the national economy. Financial services companies, already battered from the subprime mortgage fallout, are likely to undergo more woes in 2008. Retailers are already feeling the pinch as newly house-poor consumers tighten their belts.”

“The housing slump affects the local economy in ways that can’t be measured in corporate financials. As home prices plummet and foreclosures mount, many residents will undergo wrenching personal changes.”

“‘It’s obviously very hurtful to middle-class working families who were able to buy a home and are now being pushed out of the home ownership market,’ said Jim Wunderman, CEO of the Bay Area Council.”

“But the painful process is also likely to help mitigate one of the region’s biggest problems, the lack of affordable housing. Falling prices could put home ownership within reach of a wider segment of the population. ‘Housing affordability is a challenge to our economic competitiveness,’ said Stephen Levy, director of Palo Alto’s Center for the Continuing Study of the California Economy.”

“‘Lower housing prices, while painful to people, overall are helpful to the Bay Area by restoring some measure of affordability. You cannot run an economy, even in the Bay Area, with housing prices that are four times the national average. The salaries here are not four times the national average,’ Levy said.”

Some housing bubble news from Wall Street and Washington. MarketWatch, “Bank of America Corp.’s first-quarter profit fell 77% as credit-loss provisions jumped $4.78 billion, driven by weakness in home-equity loans as well as credit extended to small businesses and home builders, the company said Monday. In addition, the bank said it had increased its loan-loss provisions to $14.89 billion as of March 31, compared with $8.73 billion a year earlier — a function of tightening credit markets and a sluggish housing market.”

“‘Credit quality deteriorated in several areas, most notably in regions that have experienced the most significant home price declines, which includes the former high-flying areas such as California, Arizona and Florida,’ said analyst Walter O’Haire.”

From Bloomberg. “National City Corp., Ohio’s biggest bank and subprime lender, said today in a statement the net loss for the first quarter was $171 million. National City posted three consecutive quarterly losses as homebuyers struggle to repay loans.”

“National City lost about 83 percent of its market value in the past year. The lender will raise $6.37 billion selling convertible securities. ‘Shareholders continue to get penalized,’ said analyst Gerard Cassidy. ‘It’s another major company going to the capital markets to enable them to survive in this incredibly deflationary environment.’”

From Reuters. “Swiss bank UBS AG released on Monday its ‘Shareholder Report on UBS Writedowns’, a document that might be better named ‘How Not to Run a Bank.’ The report is part of a forensic exercise ordered by Swiss banking regulator EBK in the wake of UBS’ $37 billion in writedowns on the subprime crisis — the biggest by any bank.”

“Analysts said some of the most disturbing passages relate to UBS’ apparent belief then that it was immune to the same problems that were facing the broader market.”

“‘The various parties involved with the portfolio were aware of the content of the portfolio and the deterioration in the subprime markets generally. However, those persons seem to have believed that there would not be an impact on the highly rated ABS in the portfolio,’ the report said.”

“The report also offers a clear warning sign to regulators wondering whether their attempts to forestall a systemic collapse through massive liquidity injections would pose a moral hazard, or entice others into more risk-taking.”

“UBS admits as much, saying specifically that its traders abandoned caution, knowing that they could always exchange their assets against government bonds as collateral at a central bank.”

“‘Further comfort was taken from the continued acceptance of the respective assets as eligible collateral with the relevant Central Banks,’ UBS says in the report.”

The Observer. “British expats desperate to return home are having problems selling their Spanish homes due to plummeting house prices, the strong euro and potential buyers being put off by press reports of illegal building practices.”

“‘We’re amazed at how difficult it’s been to sell,’ says Maureen Renno of her four-bed apartment at Calahonda, near Marbella on the Costa del Sol. ‘We thought it would go really quickly, but it’s been on the market for over two years.’”

“Maureen and her husband, both retirees, sold their home in Horsham, West Sussex and moved to Spain four years ago, buying their property outright for €325,000 (£262,000). Maureen, however, found it hard to settle in Spain and began pining for home and her family. After two years, the couple decided to put their flat on the market and move back to the UK.”

“They were shocked to discover that, instead of appreciating in value, their apartment was worth, at best, only what they had paid for it two years earlier. The glut of new-builds in their area was stifling the sales of older properties, as investors were seeking to buy off-plan.”

“After several months without any interest, the Rennos dropped their price to €299,000 and moved back home. Now living in rented accommodation costing £900 a month, the couple are running out of savings. ‘We need the money from the Spanish property to be able to buy in the UK,’ explains Maureen. ‘Without it we’re stuck.’”

“Maxine Crooknorth, from East Sussex, decided to move to the Costa del Sol with her six-year-old son in 2005 in search of a fresh start. She bought her two-bedroom, golf course apartment for €247,000, paying half of the purchase price upfront. She believed she would be able to comfortably afford the remaining mortgage and that the property would be a great investment.”

“‘It seemed like a good idea to buy then,’ she says. ‘Everyone was saying how good Spain was, how cheap the lifestyle was and that property prices would go up. In hindsight, I bought at totally the wrong time.’”

“Within a year of moving into her new home, Crooknorth discovered that, as a single mother, she was not able to find work as easily as she’d thought. The cost of living was also higher than expected, and within months she was in financial difficulty. She struggled on until her only option was to sell her home.”

“Nine months ago she put the apartment on the market for €265,000 based on the valuation she was given, but has since had to drop the price to €220,000.”

“‘I’m finding it quite a struggle,’ she says. ‘But I can’t really drop the price any more because all my equity is tied up in it and it’s a lot of money to lose. I can’t rent it because the payments wouldn’t cover the mortgage, but if I don’t sell soon I’ll be facing repossession.’”

“‘There is a lot of property for sale right now,’ she says. ‘Lots of people are desperate and there are some real bargains.’”

The Washington Post. “If you thought buying a new home was expensive, wait until you see how much it costs you to back out of the deal. With appraised values coming in below the contract price, buyers have to come up with more cash to follow through on such a deal. Sometimes walking away from a purchase is the least painful, most financially prudent option.”

“As you might imagine, builders don’t relinquish that money gladly. Builders typically ask for 10 percent of the contract price as a deposit, said Harvey S. Jacobs, a Rockville real estate lawyer. ‘If you can get away with paying less, great,’ he said. ‘But they ask for 10 percent.’”

“In addition to the cash deposit, builders frequently ask buyers to sign a promissory note for an equal amount of money, Jacobs said. If buyers are willing to forfeit $50,000 to walk away from a $500,000 home sale, maybe being on the hook for $100,000 would keep them in the deal. ‘I’m definitely seeing more letters saying, ‘We’re going to enforce your promissory note if you don’t close,’ Jacobs said.’”

“What’s more worrisome, Jacobs said, is that many people don’t even realize they have signed such a note, just one page among the many included in a sales contract.”

The Arizona Republic. “Instead of mailing in their monthly mortgage payment, a growing number of homeowners are sending lenders their keys. The growing trend, called ‘jingle mail,’ is pushing up foreclosures and alarming market watchers, particularly in metropolitan Phoenix, where home prices have dropped 18 percent in the past year.”

“Foreclosures across metropolitan Phoenix climbed to a record 2,365 in March, according to Information Market. That is more than quadruple the number from a year ago.”

“Joan Shaffer is turning in the keys of the north Phoenix Tatum Ranch home she bought with her daughter in late 2005. They put nothing down on the home, took out a loan that let them pay less than they owed each month and now their loan is $200,000 more than the house is worth.”

“‘We paid $585,000. It was the peak of the market, but no one told us,’ said Shaffer, a real-estate agent from Colorado. ‘We would probably have to spend the next 20 years trying to get right on the mortgage. That’s crazy.’”

“‘Even if someone put 5 to 10 percent down but bought in the Valley during ‘05 or ‘06, they are likely upside down now,’ said Brett Barry of the north Phoenix office of Realty Executives. ‘I don’t advise people to walk away, but how do you convince someone to keep paying when they owe so much more than their home is worth? They can’t sell, and their lender isn’t going to forgive $100,000 in principal. It’s not good.’”

“Investors started the walk-away trend, but it has spread to the typical homeowner. Housing analyst RL Brown said he is hearing about young families who bought during the peak and are now walking away from houses as the interest rates on their loans reset and payments increase.”

“‘Instead of calling it a foreclosure, these couples are saying, ‘We’re giving it back to the bank,’ and then moving a couple of blocks away and renting a home for half their mortgage payment,’ he said. ‘These people are finding it easier to walk away.’”

The Star Tribune from Minnesota. “In the rush to find blame for the nation’s current housing crisis, the easiest targets have been the lenders and mortgage brokers who peddled predatory loans. But across the country, from the desert suburbs of Las Vegas to the treeless subdivisions of Wright County, many homeowners face a predicament of their own making.”

“Now, with home prices falling and mortgage payments rising, panic has set in. Investors are dumping houses on the market before prices collapse further, or simply turning the keys back to the lender. That, in turn, is dragging down values for even longtime homeowners, wiping out the equity they’d built up over the years.”

“Officials estimate that up to half of all houses that have gone into foreclosure during the past year are owned by investors. ‘You had people buying houses here that they have never even seen,’ said Dean Zachman, a sales agent in St. Michael. ‘They took bets that, in hindsight, seem reckless.’”

“Bruce McAlpin, a real estate agent in Monticello, said he was asked several months ago by a lender to evaluate a house in the early stages of foreclosure, in a new housing development called Norin Landing in Otsego. He estimates the house is worth $500,000, though an investor bought it in 2006 for $1.375 million and never lived in it.”

“‘I’m still looking for the gold chandelier, but it’s not there,’ he said.”

“Many of these investors are hardly the struggling home buyers portrayed as victims of the nation’s foreclosure crisis. ‘Once regular people stopped buying houses, builders had to create their own market,’ McAlpin said. ‘They preyed on people who weren’t savvy real estate investors.’”

“Norm Imholte, a truck driver from Freeport, said a builder paid him $50,000 for agreeing to buy a $425,000 house in St. Michael. The builder told him the house would be sold within 30 days and Imholte wouldn’t have to worry about making a payment.”

“Imholte bought a new truck with the cash, but the house never sold and has since slipped into foreclosure. He recently got a call from a state Department of Commerce official investigating mortgage fraud. ‘I never had any business owning a $425,000 house in Wright County,’ he said.”

“Other investors are clinging to their houses in the hope that the Wright County real estate market will bounce back to its pre-2007 peak. ‘I can’t sell these now,’ said Michael Morland, who bought two houses in separate subdivisions in Otsego. ‘But if I can’t get rid of these for a profit in five years, then I’m in trouble.’”

“For Bradley and Sarah Collin, buying real estate in Wright County seemed like