'There's nothing to compare it to'

From the New York Times (hat tip Calculated Risk):

The median price of American homes is expected to fall this year for the first time since federal housing agencies began keeping statistics in 1950...The reversal is particularly striking because many government officials and housing-industry executives had said that a nationwide decline would never happen, even though prices had fallen in some coastal areas as recently as the early 1990s.

From the Sacramento Bee:

In a sense, New Century and other fallen lenders -- as well as homeowners who are losing their properties -- are victims of history. Until now, most experts say, the housing market had never undergone a serious swoon as long as the economy was still growing. Lenders took comfort in the argument that only a recession could do major harm to the housing sector and ignored signs that the market was going cold.
...
Mortgage specialist Heather Fern-Luzzi, with two decades of experience in the business, thought she'd seen it all. But this downturn, which just claimed her job, has her baffled. "There's nothing to compare it to," said Fern-Luzzi, the Roseville branch manager of recently collapsed mortgage lender First Magnus Financial Corp. "I've seen it since the 1980s -- I've been in downward markets and there's always been the light at the end of the tunnel," she said as she packed files for shipment to First Magnus' headquarters in Arizona. "This one seems to be different."
...
Loose loans have made the collapse unusually swift. Defaults and foreclosures have increased at a much faster pace than in previous slumps. In the 1990s, even with unemployment soaring, it took five years for defaults in Sacramento County to double, according to DataQuick Information Systems. This time, the default volume has more than tripled in a little over a year.
...
"It's more severe now; it's much faster," said Michael Carney, a professor of finance and real estate at California State Polytechnic University, Pomona, and director of the nonprofit Real Estate Research Council.

Mortgage defaults 90s v. now chart (4-county)

• 90's peak: 3,055 (6-7 years into bust)
  
• 2007 Q2: 5,201 (2 years into bust)
  

From Realty Times:

Banks, loan companies and small real estate companies are going out of business. Record numbers of home owners are going into foreclosure or attempting to sell their home "short sale" (less than what they owe). Many loan companies have stopped doing 100% loans and eliminated several other loan products, raised rates and requirements for the loans they will do.

Many have said that this market is worst than 1991 for sellers and most anyone involved in the real estate industry. I've been in real estate full time now since 1991 and I agree. We have more internet technology than we did in 1991 so more information is available to people than before and consumer confidence is at an all time low.

From the Sacramento Bee's editorial page:

As is now well known, the subprime blimp has crashed to Earth, and the wreckage on the ground includes tens of thousands of homeowners and real estate businesses that, for a variety of reasons, failed to see this crash coming.
...
This page has warned since 2003 that the real estate market was being overinflated by risky and predatory lending practices, such as interest-only loans and deceptive marketing. But we failed to anticipate that when the bubble finally burst, it would not only send shock waves into subdivisions in Stockton and Elk Grove but to markets around the globe.
...
Looking back, it is easy to see how this bubble burst so dramatically. Behind each subprime lender was a phalanx of financial institutions, which bundled risky loans with regular mortgages and sold them to investors. Just as many prospective home buyers imprudently failed to examine the conditions of their loans, many investors didn't realize the risks involved with what they were buying. When they did, they panicked.

From the Modesto Bee:

If all the homes for sale in Modesto were crammed on a menu, it probably would be several inches thick and weigh a couple of pounds. A recent search of Realtor.com showed 2,273 single-family homes; 197 condos and town homes; and 131 mobile homes for sale in Modesto.
...
"When there's so much to choose from, you kind of get gun-shy," [Modesto newcomer Kevin] Schinmann said, "because you know there's always going to be something else to look at." And look he did. During his three-month search, Schinmann studied a couple of hundred Internet listings and toured about 40 homes. "We ended up buying the very first house we had looked at online when we were back in Chicago," Schinmann said. But between the time he initially spotted that Bayview Drive house and the day he bought it, he said, "the price dropped $130,000."

It's been that kind of market. Prices for new and used homes have been dropping as inventory has soared. Median sales prices are down more than 13 percent since last summer and sales volume has plunged about 45 percent.

From the Stockton Record:

Victoria Rodriguez was not only a thriving real-estate agent in recent years, she was honored as one the area's top-selling real-estate agents four years in a row. That was in the boom time, and that spigot shut down to a trickle nearly two years ago. Today Rodriguez is still in the real-estate field, but she's not working as an agent. As a single mother with four children, she said she simply couldn't pay her bills. This in a residential real-estate market slammed so hard that sales plummeted over the months from nearly 900 in May 2005 to a low of 268 last month - a 70 percent decline in business.
...
The Central Valley Association of Realtors, which covers much of San Joaquin County and Stanislaus County, reported that membership is down about 14 percent since January. Marian Norris, president of the group, said the market shift was partly the reason why she closed her Real Estate Gateway agency in the spring.

Also from The Record:

At first glance it looks likes a dream business plucked straight from a late-night infomercial: buy foreclosed homes and turn them around in a short time for a big profit. It's the American dream.

But in the case of Stockton's Iftikhar Ahmad, federal agents suspect it was too good to be true. Ahmad is accused of spearheading a ring using his company I&R Investment Properties to illegally "flip" more than 100 homes, allowing him to reap millions of dollars along the way...The one common thread in all the deals was Ahmad who bought up Stockton homes in foreclosure - often paying cash - and sold them at inflated prices to "straw buyers," or fake buyers, created with the help of stolen identities or fake documents, the affidavit said.

Ahmad supposedly sold the homes to some of those named in the affidavit who obtained subprime loans using the false identities. That allowed them to put little or nothing down to start. Most of the homes went into foreclosure within months when nobody made the loan payments, the affidavit says. Ahmad amassed $8.6 million in the past decade....

"This is happening everywhere in the country, and it's easy to do," said Ralph Roberts, a Detroit-based realtor who has published widely on property scams...In mortgage scams, lenders lose the most money, but neighbors of the foreclosed homes who are left looking at empty, unkempt homes suffer most, Roberts said. Their property values drop, he said, describing the scams as a "cancer of the American dream."