- The Washington Times - Wednesday, September 20, 2006

Hundreds of houses get auctioned off every month at the offices of Alex Cooper Auctioneers in Washington and Baltimore, where homeowners grasp at one last chance to make money off their properties.

Until late spring, while the housing boom still thundered, business was only average at the auction house’s real estate offices. Interest rates below 6 percent kept housing demand high, and selling was easy.

But as the housing market slows, auction houses, foreclosure companies, home inspectors, landscapers and other businesses that depend on the real estate industry are caught in the wake. Some say business has picked up, while others worry about a slowdown.

“I do find that there has been a greater demand from individuals who are very anxious and who can’t understand why their house has not sold,” said Paul Cooper, vice president of Alex Cooper Auctioneers.

Many of his customers bought houses during the peak of the housing boom. Now they can’t keep up with the payments.

“They borrowed too much, they paid too much,” Mr. Cooper said.

The Commerce Department reported in August that sales of new homes fell 4.3 percent while the inventory of unsold homes climbed to a record high.

Doug Goldsten, an auctioneer for National REO Auctions in the District, said his business of auctioning foreclosed homes is up 10 percent to 20 percent since the spring.

“The banks were making loans with less equity,” Mr. Goldsten said about a wave of bank loans that require little or no down payment. “People got into trouble if they couldn’t sell their house right away, so they’re getting foreclosed on.”

In August, 115,292 real estate properties nationwide entered some stage of foreclosure, a nearly 53 percent increase from a year earlier, according to RealtyTrac, an online marketplace for foreclosure properties.

Reduced competition to buy houses has relieved pressure on buyers to make a quick purchase, home inspectors say.

Some home inspectors say more buyers are willing to take the extra step of seeking an inspection now. A few months ago when the market was brisk, they say, buyers were more likely to skip the inspections.

“It’s picking up for us and that’s simply because of the fact that people are scrutinizing more,” said Sam Howlett, director of field services for Professional Home Inspections, a Crystal City home inspection company.

“[Buyers] do have more leverage because houses are staying on the market,” Mr. Howlett said. “Instead of having houses sitting on the market for five days, they’re sitting there for 100 days. Before, the real estate agents said if you put in a home inspection contingency, you lose the contract.”

Kevin Cox, owner of D.C. home inspection company Kevin Cox & Associates, said that if the housing slowdown continues, the home inspection business eventually will follow.

“Fewer sales means fewer home inspections,” Mr. Cox said.

Other businesses suffer slumps when housing sales drop.

Home sellers will pay to fix up their houses before they sell them, and buyers often want to remodel them to suit their needs. But as housing sales slow, sellers and purchasers have less need for landscapers and remodelers, business owners say.

“It’s just slow,” said Joseph Mpamaugo, project manager for Dimension Construction Remodelers, an Oxon Hill remodeling company.

He said his remodeling business started slowing in the second quarter of this year, about the same time interest rates rose and home sales dropped off.

Joel Hafner, president Fine Earth Landscaping in Poolesville, said his business is off about 20 percent from this time last year.

“The spring was one of the best springs we’ve had, but as soon as we got through Memorial Day, it really dropped off,” Mr. Hafner said. “I hear that’s really across the board with everyone I’ve spoken with. I think some of the smaller companies are really feeling the pain right now.”

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