Too big to fail

Posted on April 21, 2008 by grim

From CNN/Money:

The trillion-dollar mortgage time bomb

Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac.

Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor’s recently placed an estimated price tag on this worst case scenario — $420 billion to $1.1 trillion of taxpayer’s money.

This dwarfs how much it cost to help banks during the savings and loan crisis of the late 1980’s and early 1990’s. That cost taxpayers about $250 billion in today’s dollars.

S&P added that saving Fannie and Freddie might cost so much that the federal government’s AAA credit rating, the top possible rating, might even be at risk. If that was lost, then all federal government borrowing would become more expensive.
…
Wagner pointed out that at the end of January, 82% of all mortgages in the U.S. were backed by one of the firms, up from only 46% in the second quarter of 2007.
…
And Fannie and Freddie’s role in the mortgage and real estate markets is likely to grow, as Congress recently allowed them to back larger mortgages, up to $729,750, up from the previous limit of $417,000.
…
“I don’t think the message is a bailout is necessary or imminent,” Wagner said. “But they’re facing this increased role at a time that their own credit performance is suffering from the rifts in the housing and mortgage markets. They’re both projecting much higher losses than we’ve seen in some time.”
…
“The real fundamental problem is real estate prices have been falling and they might fall substantially more,” said Robert Shiller, a Yale University economist who argued for years that a bubble was forming in real estate prices. “OFHEO and Fannie and Freddie never considered the possibility of a massive real estate correction.”
…
“I would say there’s at least a 50-50 chance of some sort of bailout. I’m not saying it will necessarily cost $1 trillion, but they’ll need some kind of help, and it very well could happen this year,” said Dean Baker, co-director of the Center for Economic and Policy Research.

Posted in Housing Bubble, National Real Estate, Risky Lending | 290 Comments

Good-bye rebate!

Posted on April 21, 2008 by grim

From the AP:

Property tax rebates — touted as not being “an election year gimmick” — now ready to be cut

They’ve talked of keeping parks and the state agriculture department open and maybe boosting aid for towns and cities, but legislators have devoted scant debate this year to sustaining property tax rebates they so highly touted just a year ago.

Democrats who expanded the rebates last year and promised they weren’t an election-year gimmick seem ready to accept Democratic Gov. Jon S. Corzine’s proposal to eliminate rebates for households earning more than $150,000 and scale them back for others.

That has Republicans saying, “We told you so.” They spent last year deeming the expanded rebates a ploy to ensure Democrats — as they ultimately did — kept their legislative majorities in November’s elections.

“Why should the public believe anything we say here based on that experience?” asked Assemblyman Declan O’Scanlon, R-Monmouth.

But Democratic leaders said they couldn’t have foreseen the national economic woes that helped threaten state tax revenues and prompt Corzine to propose a $33 billion budget with $2.7 billion in spending cuts.

“No one could have foreseen the national recession to this degree when we passed that rebate program a year ago,” said Assembly Budget Chairman Lou Greenwald, D-Camden.

He noted the massive financial troubles that hit several leading Wall Street firms that employ many New Jersey residents, thus threatening state income tax collections.

“You just don’t see some of these things,” Greenwald said.
…
The proposed rebate cuts would save the state $519 million.

Households earning up to $100,000 would still get rebates averaging $1,115 under Corzine’s $33 billion budget plan, and senior citizens would still get about $1,270.

But households earning between $100,000 and $150,000 would get $665, or about $300 less than last year.

Households earning between $150,000 and $250,000 would get nothing after getting $745 last year.

Renters would see rebates cut to $80 from as much as $350 last year.

Some fear further declines in tax revenue could lead to sharper rebate cuts, but Assembly Speaker Joseph Roberts Jr. _ who has proposed converting the rebate checks to state income tax credits said the rebates have been cut enough.

Posted in New Jersey Real Estate, Politics, Property Taxes | 3 Comments

Weekend Open Discussion – Part II

Posted on April 18, 2008 by grim

Now Open, Part II!

Prior weekend thread closed due to comment overflow

Posted in General | 252 Comments

Weekend Open Discussion

Posted on April 18, 2008 by grim

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

Posted in General | 317 Comments

NJ: March unemployment steady at 4.8%

Posted on April 16, 2008 by grim

From the NJ Department of Labor and Workforce Development:

Employment Level Relatively Unchanged in March Unemployment Rate Held Steady Over the Month

New Jersey’s employment was virtually unchanged in March as employers added 1,000 workers to their payrolls. New Jersey’s unemployment rate held steady at 4.8 percent. The United States rate increased to 5.1 percent in March from 4.8 percent in February.

Over the first quarter of 2008, employment in New Jersey has contracted by 9,700 jobs. Nationally, employment declined by 232,000 over the same period.

“We continue to see evidence of a national economic slowdown,” said Labor Commissioner David J. Socolow. “New Jersey is following the national trend.”

Total nonfarm wage and salary employment in the Garden State edged higher by 1,000 in March, to reach a seasonally adjusted level of 4,072,900, based on preliminary estimates from the Department of Labor and Workforce Development’s monthly survey of employers. The previously released February estimates were revised lower by 400 to 4,071,900 after more complete reporting.

The monthly private sector employment change was a mixed bag of small gains and losses, resulting in four industry supersectors adding employment, four contracting and two remaining unchanged. The largest job gains were recorded in leisure and hospitality (+1,300) and trade, transportation and utilities (+1,000). The advance in leisure and hospitality was due mainly to hiring in the accommodations and food services component while the gain in trade, transportation and utilities was entirely due to increased employment in the retail trade segment. Retail employment in March may have been boosted by this year’s early arrival of the Easter shopping season. Significant job losses over the month occurred in construction (-700), and professional and business services (-600). Employment in these two industries is still being impacted by the troubled housing market and associated problems in the mortgage and credit industries.

Public sector jobholding expanded by 700 over the month led by an increase in local government (+900), which includes municipal and county level employees.

Posted in Economics, New Jersey Real Estate | 41 Comments

Sell It Yourself

Posted on April 16, 2008 by grim

From the New York Daily News:

Amid challenging real estate market, some sellers forsake agents

It’s a quiet Sunday afternoon on the Upper East Side and newlyweds Jon and Milissa Aronson are perched expectantly on their sofa. A plate of cookies and a sign-in sheet sit strategically on a kitchen counter.

The couple (he’s 35 and a broadcasting exec, she’s 33 and a social worker) have sent their dog to the neighbors, and vacuumed, dusted and tidied their 550-square-foot, one-bedroom apartment, all in hopes of selling their home without a broker. They’re asking $459,000.

“We decided to sell on our own basically because of money,” said Jon Aronson. “If you factor in a broker’s fee of 6%, plus the 1% flip tax we’ll have to pay the co-op board, plus 1.4% we’ll have to pay the city and state for the tax on the sale, that’s 8.4% of the sale price that we wouldn’t get.”

In a tough real estate market, the Aronsons are hardly alone among New Yorkers in their quest to sell minus a broker fee. In the first half of 2007, metro-area homes comprised nearly 13% of the listings on ForSaleByOwner.com, which charges $89.95 and up.

Eric Mangan, an exec at the Web site, said use of the Internet to search for real estate has helped owners everywhere connect directly with buyers, but said New York “is one of our strongest markets.”

“Homebuyers tend to be very savvy with using the Internet and sellers understand that they can sell a house on their own,” Mangan said. “Plus, they look at the bottom line. … They take into account the cost of that 6% commission.”

Walter Molony, a spokesman for the National Association of Realtors, acknowledged that commissions often drive sellers to go without brokers, although “consumers also need to keep in mind that commission rates are sometimes negotiable.”

“But the other side of the coin,” he said, “is that [buyers] are dealing directly with the owner, so sometimes they think they can get a discount on the price.” He also said statistics “show that the selling price is lower when homes are sold directly by owners” — although the best-selling book “Freakonomics” argued that just the opposite was often true, since it pays for brokers to close a deal quickly and move on, rather than try to win a higher price, of which they’d keep proportionately little.
…
Although they haven’t sold their place in seven weeks, Jon Aronson is glad he and his wife are trying on their own. He acknowledged it requires considerable effort. He said there are potential advantages for buyers, as well; since do-it-yourselfers don’t pay a commission, they might be more flexible on price.

That factor is just one reason Joseph Chang, 35, a magazine editor, prefers to buy directly from an owner. “Also, you may be able to preempt competition, as a seller may be not be willing to continue conducting open houses or showings if they’re confident they have a deal,” said Chang, who bought a Manhattan studio directly from an owner in 2006.

But the benefits of cutting out the broker can give way to impatience, he warned.

“You have to be willing to do the research on the local market [and] financing,” Chang said. “Few have the patience for this, however, and would be better off using a broker.”

Posted in Housing Bubble, National Real Estate | 248 Comments

March housing starts expected at 17 year low

Posted on April 16, 2008 by grim

From Bloomberg:

Housing Starts in U.S. Probably Approached 17-Year Low in March

Housing starts in the U.S. dropped in March, nearing a 17-year low and signaling that declining construction will continue to erode economic growth this year, economists said before a report today.

Residential starts fell 5.2 percent to an annual rate of 1.01 million homes, according to the median forecast in a Bloomberg survey of 72 economists. A separate report may show consumer prices increased in March.

Foreclosures are pushing down property values by adding to the glut of unsold homes, prompting buyers to hold out for better bargains and undermining new construction. The acceleration in inflation is unlikely to dissuade Federal Reserve policy makers from lowering interest rates again later this month to cushion the economy from the housing-led slowdown.

“Construction activity is going to continue falling,” said Celia Chen, an economist at Moody’s Economy.com in West Chester, Pennsylvania. “The market still has high levels of inventories and this is going to constrain pricing.”

Economists’ estimates for starts ranged from 950,000 to 1.1 million. Construction dropped to a 1 million pace in December, the lowest level since May 1991. The Commerce Department’s report is due in Washington at 8:30 a.m.

Permits, a gauge of future construction, probably fell to a 970,000 rate, the lowest since August 1991, according to the survey median.

Posted in Economics, Housing Bubble, National Real Estate | Comments Off on March housing starts expected at 17 year low

Foreclosures up 57% in March

Posted on April 15, 2008 by grim

From Bloomberg:

U.S. Foreclosures Jump 57% as Homeowners Walk Away

U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as adjustable mortgages increased and more owners gave up their homes to lenders.

More than 234,000 properties were in some stage of foreclosure, or one in every 538 U.S. households, Irvine, California-based RealtyTrac Inc., a seller of default data, said today in a statement. Nevada, California and Florida had the highest foreclosure rates. Filings rose 5 percent from February.

About $460 billion of adjustable-rate loans are scheduled to reset this year, according to New York-based analysts at Citigroup Inc. Auction notices rose 32 percent from a year ago, a sign that more defaulting homeowners are “simply walking away and deeding their properties back to the foreclosing lender” rather than letting the home be auctioned, RealtyTrac Chief Executive Officer James Saccacio said in the statement.

“We’re not near the bottom of this at all,” said Kenneth Rosen, chairman of Rosen Real Estate Securities LLC, a hedge fund in Berkeley, California and chairman of the Fisher Center for Real Estate at the University of California at Berkeley. “The foreclosure process will accelerate throughout the year.”
…
About 2.5 million foreclosed properties will be on the market this year and in 2009, Lehman Brothers Holdings Inc. analysts led by Michelle Meyer said in an April 10 report. U.S. home price declines will probably double to a national average of 20 percent by next year, with lower values most likely in metropolitan areas in California, Florida, Arizona and Nevada, mortgage insurer PMI Group Inc. said last week in a report.

Borrowers who owe more on their mortgages than their homes are worth may be buffeted by increasing job losses in a “very substantial recession,” Rosen said. About 8.8 million borrowers had home mortgages that exceeded the value of their property, Moody’s Economy.com said last week.

“At least 2 million jobs will be lost because of this recession, so we’ll get a cumulative negative spiral,” Rosen said. “A normal recession is 10 months. We think this one may be twice as long.”

Bank seizures climbed 129 percent from a year earlier, according to RealtyTrac, which has a database of more than 1 million properties and monitors foreclosure filings including defaults notices, auction sale notices and bank repossessions. March was the 27th consecutive month of year-on-year monthly foreclosure increases. In February, foreclosure filings rose 60 percent.

Posted in Economics, Housing Bubble, National Real Estate | 381 Comments

“The market value is what the market value is”

Posted on April 14, 2008 by grim

From the Record:

How low will homes go?

The number of home sales in North Jersey plummeted some 30 percent in 2007, raising the odds of a significant decline in home values beginning this year.

Prices inched down only slightly in 2007. But the corresponding drop in sales volume suggests this could be the year when sellers holding out for top dollar blink in their ongoing standoff with bargain-hungry buyers.

“The laws of supply and demand have not been repealed,” said Paul Merski, chief economist of the Independent Community Bankers of America. “At some point, things have to come into equilibrium. Either the demand for homes has to increase or the price has to drop to stimulate demand to get things back into balance.”

Predictions about what’s ahead vary, although few experts foresee a quick return to the boom of the first half of this decade.

Donald Moliver, a real estate professor at Monmouth University, predicted that home prices in New Jersey may drop as much as 20 percent over the next several years, although he said that number could be lower if mortgage rates — now around 6 percent — decline.

A double-digit decline in home prices would eclipse the real-estate downtown of the late 1980s and early 1990s, when the state’s home prices declined about 8 percent from the top of the market and did not return to peak levels for a decade.
…
Adding to the pressure on prices are tighter mortgage standards, a weak job market and rising foreclosure rates. But homes remain unaffordable for many North Jersey families. Even with the market slowdown, home prices are almost double what they were in 2000, while New Jersey median household incomes rose only about 21 percent from 2000 to 2006, the latest figures available.

In 2007, prices dropped 1 percent to 5 percent across most of the region, with the upper-end neighborhoods hurt slightly more than lower-end areas, according to a study by The Record of about 29,000 home sales.

But the more telling statistic from The Record’s study is a steep decline in the number of sales, which are down about 40 percent from the market peak in 2004.

The drop in sales volume cuts across all segments of the market, with low-end neighborhoods in southern Bergen and Passaic counties hit slightly harder. Sales volume was off about 42 percent in neighborhoods where the typical home sells for up to $350,000, compared with a drop of about 37 percent in areas where homes generally sell for more than $600,000.

In North Arlington, for instance, the overall value of home sales fell 50 percent from a peak of $62.9 million in 2005. But the median price barely declined last year, from $410,000 to $405,000.

A tighter mortgage market has shut out many people. Rates are relatively low, but it’s much harder to qualify for loans than it was in 2004 and 2005, when lenders freely offered interest-only and no-down-payment loans.

And many potential buyers are scared of paying too much.

“A lot of them seem to be holding off, with the thought that we may not be at the market bottom yet,” said Sheldon Neal of Re/Max Real Estate in Oradell.

Still, many sellers can’t stomach the idea of lower prices.

“Maybe we’ll say a house should be listed between $500,000 and $520,000. Inevitably, the seller wants to be at $520,000 or $525,000,” Neal said. “We are seeing a little bit of a standoff where sellers are not willing to swallow too much pride and accept that the market has lowered the value of their home out of their control and out of the Realtor’s control.”

Sal Poliandro, an agent with Re/Max Properties in Ridgewood, recalled one seller who cried when he suggested she list her house at $450,000.

“The market value is what the market value is,” Poliandro said. “Nobody cares how much you owe on your mortgage. Nobody cares that you’re getting a divorce and want to start your life over.”

Posted in Economics, Housing Bubble, New Jersey Real Estate | 305 Comments

Monmouth/Ocean: Home of the Housing ATM

Posted on April 13, 2008 by grim

From the Asbury Park Press:

Borrowers used houses to get cash

Proponents had once touted subprime loans as a way for some consumers to afford the American dream of homeownership.

Yet new government data now show a nightmare scenario that economists have suspected: that most of the borrowers with low credit scores turned their homes into a virtual credit card.

Monmouth and Ocean counties led the nation last year in the percentage of borrowers extracting cash from their houses, usually through refinancing or home equity loans.

A staggering seven out of 10 high-risk borrowers in both counties — those with low credit scores — refinanced loans to obtain extra cash, Federal Reserve data for the end of 2007 showed. Those are the highest percentages in the nation among large counties with more than 2,000 subprime loans. New Jersey had five counties in the top 25.

Such mortgage debt will continue to weaken the housing market at the Shore and around New Jersey this year, experts and consumer advocates say.

“It’s no secret that we live in a credit-dependent society,” said Brett Lopes, vice president of Intercounty Mortgage in Hazlet. “In the same way that people don’t handle credit cards correctly, they perceived their house was worth more and more and they used it like a credit card.”
…
Forty percent of the 10,800 subprime loans provided to homeowners in Monmouth and Ocean counties were given without full documentation of income, and the average credit score was about 610, far below the top score of 850.

Forty percent of subprime borrowers at the Shore are also behind on their loan payments. Eleven percent are in foreclosure.

The nearly 79,973 subprime borrowers in New Jersey owe an average of $250,614 on their loans, the fifth highest balance in the United States. That’s about $20 billion in subprime loans.
…
There were 12,376 foreclosure lawsuits filed in New Jersey Superior Court in the first three months of this year, state officials said Friday. If foreclosures continue at that rate for the year, there would be nearly 50,000, double the number from just two years ago.

Foreclosure lawsuits are usually filed after homeowners have missed several payments.

There were 36,358 foreclosure lawsuits filed in state Superior Court last year, up by 46 percent from 2006, according to state data.

In Monmouth and Ocean counties, 5,102 foreclosure lawsuits were filed last year, up 42 percent from 2006. Local figures for 2008 were not immediately available.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 116 Comments

Weekend Open Discussion – Part II

Posted on April 12, 2008 by grim

Now Open, Part II!

Prior weekend thread closed due to comment overflow.

Posted in General | 106 Comments

Weekend Open Discussion

Posted on April 11, 2008 by grim

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

Posted in General | 330 Comments

An Honest Mistake

Posted on April 11, 2008 by grim

From the WSJ:

RATING GAME
As Housing Boomed, Moody’s Opened Up
By AARON LUCCHETTI
April 11, 2008; Page A1

Bond-rating agency Moody’s Investors Service used to be an ivory tower of finance. Analysts were discouraged from having a drink with a client. Phone calls from bankers went unanswered if they rang during intense, almost academic debates about credit ratings.

A decade ago, as the housing market was just beginning to take off, Moody’s was a small player in analyzing complex securities based on home mortgages. Then, Moody’s joined Wall Street and many investors in partaking of the punch bowl.

A firm once known for a bookish culture began to focus on the market share that affected its own revenue and profit. The rating firm became willing, on occasion, to switch analysts if clients complained. An executive overseeing mortgage ratings went skydiving with a client. By the height of the mortgage-securities frenzy in 2006, Moody’s had pulled even with its largest competitor, rating nine out of every 10 dollars raised in these instruments. It gave many of the bonds its coveted triple-A rating.

Profits at the 99-year-old firm, which John Moody started to rate railroad bonds, rose 375% in six years. The share price quintupled.

Now, Moody’s and the other two major rating firms, the Standard & Poor’s unit of McGraw-Hill Cos. and the Fitch Ratings unit of Fimalac SA, are under fire for putting top ratings on securities that ultimately collapsed in value. Investors, many of whom relied on ratings to signal which securities were safe to buy, have lost more than $100 billion in market value. The credibility of the ratings system is in tatters as new downgrades of mortgage securities come almost weekly. Investigators from Congress, the Securities and Exchange Commission and several state attorneys general are examining the rating firms’ practices.

Moody’s acknowledges it sometimes got things wrong in judging mortgage bonds, but says these were honest mistakes and not the result of efforts to garner market share. It says it has maintained its rigor and objectivity in a rating process that is still adversarial toward big investment banks.

Posted in Housing Bubble, National Real Estate, Risky Lending | 2 Comments

The Roaring 00’s (uh-ohs)

Posted on April 10, 2008 by grim

From the Wall Street Journal:

Economy Has Further to Fall, According to Economists’ Survey
Bernanke, Paulson Grades Still Low, Despite Getting Thumbs Up on Bear Deal
By PHIL IZZO
April 10, 2008

The weakening U.S. economy has further to fall, according to the majority of economists in the latest Wall Street Journal forecasting survey.

By a 3-to-1 margin, respondents said the economy is in a recession, and almost three quarters said the economy hasn’t yet hit bottom. “It’s hard to say,” said Lou Crandall of Wrightson ICAP, since “it doesn’t feel like anything we’ve experienced in decades.”
…
Richard DeKaser of National City Corp. was among the economists who think the nadir has been reached and that the economy will soon start to recover. “First, we’ve begun to see some stabilization in existing- and new-home sales,” he said. “Second, the uncertainties plaguing the credit markets are beginning to narrow. And third, the policy actions taken by the government [the economic stimulus package and Fed rate cuts] will begin to take effect soon.”

Mr. Wyss isn’t convinced. “Home prices are still diving,” he said, adding, “I won’t believe that home sales have stabilized until we see the spring numbers. That’s when activity picks up.” He also suspects that consumer spending will slow further because of the economic turmoil.

Iam Shepherdson of High Frequency Economics agrees. “I expect soft consumption will keep growth way below trend right through next year and I would not be surprised by a soft 2010 either,” he said. “You can’t party for a decade, stop on Saturday and expect the hangover to be gone by Sunday lunchtime so you can go out and start all over again.”
…
One area supporting the point on consumption is the employment outlook. After three consecutive drops in nonfarm payrolls, the economists now expect the economy to shed 1,625 jobs a month, on average, over the next year. They expect the unemployment rate, now 5.1%, to rise to 5.6% by December. Meanwhile, just 21% of economists expect home prices to hit a bottom this year, while 67% see the bottom in 2009 and 12% say it won’t be until 2010.

(emphasis added)

Posted in Economics, Housing Bubble, National Real Estate | 29 Comments

Tracking Realtor Spin

Posted on April 9, 2008 by grim

Hat tip to RentingInNJ for providing the chart and compling the quotes. Kudos!

1. “There’s no question there is a strong demand for housing from a growing population.” – David Lereah, NAR Chief Economist

2. “For the foreseeable future, the demand for homes will continue to outstrip supply” – Al Mansell, NAR President

3. “We’ve been expecting sales to remain at historically high levels, but this performance underscores the value of housing as an investment and the importance of homeownership in fulfilling the American dream.” – David Lereah, NAR Chief Economist

4. “We are returning to more balanced markets between home buyers and sellers… We feel confident that housing is landing softly as rates continue to rise.” – David Lereah, NAR Chief Economist

5. “This is part of the market adjustment we’ve been discussing, with a soft landing in sight for the housing sector. The level of home sales activity is now at a sustainable level. Overall fundamentals remain solid…” – David Lereah, NAR Chief Economist

6. “Higher interest rates are slowing home sales, but we see this as another sign of a soft landing for the housing sector which remains at historically high levels.” – David Lereah, NAR Chief Economist

“After five years of booming sales, we are now experiencing normal market conditions across most of the country… most owners can expect steadier gains in home values for the foreseeable future.” – Thomas M. Stevens, NAR President

7. “Over the last three months home sales have held in a narrow range, easing to a level that is near our annual projection, which tells us the market is stabilizing” – David Lereah, NAR Chief Economist

8. “Now sellers in many areas of the country are pricing to reflect current market realities. As a result, there could be some lift to home sales, but it’ll likely take some months for price appreciation to rise.” – David Lereah, NAR Chief Economist

9. Existing-home sales stabilized at a sustainable pace in August – NAR

10. “…the worst is behind us as far as a market correction — this is likely the trough for sales. When consumers recognize that home sales are stabilizing, we’ll see the buyers who’ve been on the sidelines get back into the market” – David Lereah, NAR Chief Economist

11. “It looks like we’re moving beyond the low for the housing cycle last fall, and buyers are responding to historically low interest rates and competitive pricing by home sellers. In addition, a tightening inventory of homes on the market is supporting prices.” – David Lereah, NAR Chief Economist

12. “Fundamentals have improved in the housing market and buyers see a window now with historically-low mortgage interest rates and competitive pricing by sellers,” – David Lereah, NAR Chief Economist

13. “We also may be seeing some losses as a result of the subprime fallout. However, this is masking improved fundamentals in the housing market, with lower mortgage interest rates and motivated sellers.” – David Lereah, NAR Chief Economist

14. “Buyers who’ve been on the sidelines may want to take a closer look at current conditions in their area – if they wait for sales to rise, their choices and negotiating position won’t be as good as they are now.” – Pat V. Combs, NAR President

15. “The rise in sales and prices in the Northeast region on a fairly consistent basis in recent months is promising because this was the first region that underwent sales and price weakness after the boom. Now, it appears that it will be the first region to climb back, indicating that other regions could follow a similar path.” – Lawrence Yun, NAR Chief Economist

16. “The unusual disruptions in the mortgage market, including a significant rise in jumbo loan rates, resulted in a fairly high number of postponed or cancelled sales…Once we get through these disruptions, we’ll get a better sense of where the actual market is in late fall as conditions begin to normalize,” – Lawrence Yun, NAR Chief Economist

17. “Existing-Home Sales Rise in November, Market Likely Stabilizing” – NAR

18. “Home sales remain weak despite improved affordability conditions in many parts of the country, but we could get a quick boost to the market if loan limits are raised in combination with the bold cut in the Fed funds rate,” – Lawrence Yun, NAR Chief Economist

19. Existing-Home Sales to Stablize Before Upturn in Second Half of 2008 – NAR

Posted in Housing Bubble | 324 Comments