Keeping You Current

By Madeleine Romanello

March 2008

Supply

Beazer Homes USA Inc., one of the nation’s largest home builders, announced Friday that it will shut down operations in several major markets.
Source: The Associated Press

Supply

Total listings of homes in 29 metro areas at the end of last month were up 1.1% from a month earlier, according to figures compiled by ZipRealty Inc. Listings normally rise about 5% in January from December, said Thomas Lawler, a housing economist in Leesburg, Va.
Source: Wall Street Journal, James R. Hagerty

The supply of homes available for sale in most major metropolitan areas rose only slightly in January…

Supply

Source: NAR

Demand

“People have been waiting to buy a house because they want to see where the floor Now that lower rates are a is… factor, the question becomes: At what point will buyers be compelled to act, thinking they are getting a price they can live with and a rate they do not want to miss?”
- Susanne Cannon Director of the Real Estate Center DePaul University

Source: New York Times, David Streitfeld

Demand

Source: NAR

Mortgaging

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Source: Bankrate.com

Mortgaging

% of a person's monthly income that will be needed to make a house payment

Source: NAR

Affordability

Federal Reserve Chairman Ben Bernanke told lawmakers Tuesday he expects the downtrodden U.S. housing sector to improve by the end of the year, a senator who participated in the closed-door meeting said.

"He let us believe that the housing situation should begin to ameliorate by the end of the year," said Sen. Pete
Domenici, a New Mexico Republican.

Source: Reuters

Market

REALTrends “The Pulse”
a survey of the leading broker/owners of the real estate industry

The results indicated that participants foresee an improvement in their various markets. The survey revealed an overwhelming 63 percent of participants either somewhat or strongly agree that there is an improvement in their marketplace.
Source: Real Trends

Market

Value

“We are in an historic housing bust right now,” says creator of the index Robert J. Shiller, the chief economist at MacroMarkets and a professor at Yale.

Source: Reuters News, Al Yoon

Value

Source: BusinessWeek

Value

The survey was conducted by Harris Interactive for Zillow.com. Beneath each pie chart is Zillow.com's estimate of the actual change in house prices for the region over the past year.

Source: BusinessWeek

Value

“Acceptance is the last step you get to.”
Source: CNN Money.com, Chris Isidore

"This survey reveals that despite the data to the contrary, people either aren't paying attention to their housing market or are in denial about their own home's value," said Stan Humphries, Zillow.com vice president of data & analytics. "It's a visceral reaction; you lock into the highest price you ever heard, and you're going to hang onto it," Hugh Moore, a principal at Guerite Advisors said. "It's a grieving process. First you go through denial and disbelief.”

Value

“If you have to sell, cut your prices aggressively now.”
Source: BusinessWeek

Value

Source: New York Times

Value

www.realtor.org/gapublic.nsf/pages/economic _stimulus

All the information you need on the

Economic Stimulus Package
President Bush signed into law on February 13th

Mortgaging

Banks are tightening lending standards
Source: Federal Reserve

2002

2005

2008

Mortgaging

Many of the country's largest mortgage lenders are imposing loan restrictions in entire counties or Zip codes that they rank as risky or "declining." On Jan. 25, Countrywide Bank sent mortgage brokers a list that categorized hundreds of counties as "soft markets" with rankings from 1 to 5, in ascending order of perceived risk. In areas rated 4 and 5 -- roughly 100 counties in metropolitan areas nationwide -- Countrywide said it will now require down payments that are 5 percentage points higher than from most applicants. Source: Washington Post, Kenneth R.Harney

Mortgaging

Foreclosure Increase
% of all loans in foreclosure 3rd quarter

Source: Mortgage Bankers Association (02/08)

Foreclosures

Project Lifeline
Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., JPMorgan Chase & Co., Washington Mutual Inc., and Wells Fargo & Co. have agreed to allow some home owners to suspend foreclosures for 30 days, giving them time to work out affordable loans.

Source: The Associated Press, Marcy Gordon

Foreclosures

“Existing modification efforts are insufficient. MBA data show that foreclosures are outstripping modifications 7 to 1. For the subprime ARMs that are at the root of the current crisis, foreclosures outnumber modifications 13 to 1.”

Foreclosures

Source: Inman News

"First American CoreLogic's Core Mortgage Risk Index tracks the risk of mortgage delinquencies based on housing prices, local economic conditions and fraud, increased in Q1'08 by 23% from Q4'07 and is expected to continue rising during the next 18 months.”

Foreclosures

Reporter: "Sir, is the worst over? Will 2008 have fewer foreclosures ... “ Henry Paulson: "... in terms of subprime and the resets, the worst isn't over, the worst is just beginning. We all know that."

Source: Los Angeles Times

Foreclosures

Mark Zandi, chief economist and co-founder of Moody's Economy.com, speaking at the Reuters Housing Summit in New York. , said he expects home sales to hit bottom this spring. He also expects house prices to hit bottom in the spring of 2009. However, a rapidly deteriorating U.S. economy will cause home prices to drop by 20 percent from their peak.

Source: Reuters, Julie Haviv and Jennifer Ablan

Market

Good Investment?
I would say real estate has been a great investment over the last 5 years!

Value

FRO

GE!!! NT PA
Blogger Jeff Geoghan said the pieces are in place for the market to begin a recovery. Banks have kept mortgage rates low and the government's stimulus package includes aggressive changes to Federal Housing Authority programs. However, the gap between list prices for homes and actual prices paid remains too wide, Geoghan said Friday. That gap grew last winter to more than $58,000 by February 2007, he said. It narrowed to $14,000 in August as the subprime crisis became national news, but then list prices headed up again, while actual sale prices stayed down. The difference between average list price and average sale price reached about $38,000 in December before narrowing to $36,000 in January. January's data is encouraging, yet "Lancaster County continues to resist a price correction," Geoghan said.

Jeff R. Geoghan MBA

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