KeNo's Housing and Economic Portal: Tuesday April 13 Housing and Economic stories

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TOP STORIES:

A Florida Sprawl Development's Road to Foreclosure - (eyeonmiami.blogspot.com) The story is not just subprime mortgages wrapped up in financial pools enriching bankers from Wall Street to main street. And it is not just representative examples of Americans for whom the Ownership Society turned into a sour myth. The story to tell-- that we have tried to do on our blog for more than three years-- is how politics and zoning and hubris wrecked the Florida landscape. It started right here in Miami where the snatch and grab development machine, spinning fees to Brickell Avenue law firms like Greenberg Traurig and Holland and Knight perfected all the gears of operation long before historic low interest rates poured money into farmland, backed by false demand, fakery, corruption and greed. Here is an example from the end of the party. In the middle of Miami-Dade agricultural lands also buffer lands of Everglades National Park, this sad looking subdivision was platted and cement was poured in 2007. The property now is vacant and appears to still be in the middle of a lengthy foreclosure battle which could wipe out the $12.2 million dollar second mortgage held by Falcon Fundings, Arthur Falcone.

Microcosm of the Housing Crisis on an Arizona Street - (www.nytimes.com) The uncertain line between hope and despair divides this exurb of Phoenix, where the trim stucco houses used to sell so briskly. It winds around the swimming pools and the pebbled yards of East Montgomery Road like a slow-burning fuse. On one side are people like the Setbackens, Gary and Cissie, who moved here from Washington State and, with prudence, have managed to pay their mortgage bill month after month. On the other side are those like Kelley Carter, who never dreamed that home prices would fall so hard, and got in over their heads. Two in five homeowners in this sprawling development 30 miles northeast of Phoenix are underwater on their mortgages. And that reality is wearing away household budgets and people’s patience.

In Boston, a Lender Steps in After Foreclosures - (dealbook.blogs.nytimes.com) The uncertain line between hope and despair divides this exurb of Phoenix, where the trim stucco houses used to sell so briskly. It winds around the swimming pools and the pebbled yards of East Montgomery Road like a slow-burning fuse. On one side are people like the Setbackens, Gary and Cissie, who moved here from Washington State and, with prudence, have managed to pay their mortgage bill month after month. On the other side are those like Kelley Carter, who never dreamed that home prices would fall so hard, and got in over their heads. Two in five homeowners in this sprawling development 30 miles northeast of Phoenix are underwater on their mortgages. And that reality is wearing away household budgets and people’s patience.

House Builders Can't Compete With Foreclosures - (www.forbes.com) "The continual flow of distressed properties priced below the cost of production is having an adverse effect on new-home appraisals and also making it tough for builders' customers to sell their existing homes," said Bob Jones, a home builder from Bloomfield Hills, Mich. and chairman of the National Association of Home Builders. The NAHB/Wells Fargo housing market index, a monthly survey of home builder sentiment, fell 2 points in March from 17 to 15. All three components of the index slipped, including expected and current sales and buyer traffic, which fell to their lowest levels since March 2009. Overall the index is still up from a year ago, when it registered a record low reading of 9. A reading of less than 50 indicates that home builders still view market conditions as "poor." "I'm pretty worried," says Jennifer Lee, senior economist with BMO Capital Markets. "You still have a lot more foreclosures coming to the market in the next months, as the government program to avoid foreclosures is not hitting as many homeowners as it could." The report comes one day before the Commerce Department will publish its own data. According to analysts surveyed by Thomson Reuters, U.S. housing starts will drop 3.6% to 570,000 units in February because of bad weather, while building permits are seen decreasing about 1.9% to 610,000 units in February compared to the previous month.

Are the Brits headed for the PIGS sty? - (money.cnn.com) Is the United Kingdom in danger of being exiled to the island of misfit debtors? For most of the past year, anxiety about overextended governments has focused on the southern European countries derisively known as the PIGS-- for Portugal, Italy, Greece and Spain. But the PIGS may soon have company. U.K. officials this week released a budget that was short on cost-cutting details. Silence on that unpopular subject was hardly surprising, given the U.K. economy's slow recovery and the political jockeying ahead of a national election that is expected to take place in early May. The move wasn't the biggest stunner in a week that saw a downgrade in Portugal, squabbles over a Greek bailout and a selloff in long-dated U.S. government bonds. Even so, observers warn of a squandered opportunity to quell fears over the cost of financing a recovery in the hard-hit U.K. economy. Government spending is on track to account for more than half of U.K. gross domestic product in 2010, while government debt is heading toward 64% of GDP next year, up from 44% in fiscal 2009. "All in all, the budget has failed to upgrade the market's perceptions of the U.K. credit," Tullett Prebon economist Lena Komileva wrote in a note to clients this week. With the government yet to make unpopular spending cuts, "it is too early to suggest that an official downgrade of the U.K.'s AAA rating is unlikely."