The Real State of Real Estate

November 20, 2008 San Diego
Economic & Housing Report

 

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What are real estate professionals saying to homebuyers and sellers about current market conditions? The successful brokers and sales associates are talking about the strengths that exist in the market - not the negative media hype. Below are positive angles that appeared recently in the media and underscore why it is a good time to buy real estate.

Recent Quotes & Excerpts about the Positive Signs in the Real Estate Market::
Industry Leaders See Opportunity for Homebuyers "What we've seen is that people still have jobs even though it's pushed up to 6.5% unemployment. Most people are going to see some increase in income, and we still have mid-range, single-digit interest rates. We have a lot of inventory to choose from, so there's some opportunity, and I think confidence is the issue that we need to focus on."

-- Tom Kunz, president and CEO, Century 21 Real Estate, "Century 21 CEO on Housing," CNBC Power Lunch (video), Nov. 18, 2008.

"You are buying a home for your family to live in and to enjoy. You get tax write-offs that the government gives us, so timing the market is not a smart thing. You should buy for lifestyle. Right now, in my 34 years in real estate, is the best time I've ever seen to buy real estate."

-- Jim Gillespie, president and CEO, Coldwell Banker Real Estate, "Keeping Homeowners in Their Homes," Fox Business News (video), Nov. 18, 2008.

Federal/State Governments and Banks Step Up Efforts to Hold Off Foreclosures The federal government and one of the country's largest banks are expanding their efforts to help homeowners with troubled mortgages avoid joining the millions of Americans who have already lost their homes to foreclosure.

• Fannie Mae and Freddie Mac, which own or guarantee nearly 60% of all single-family home mortgages, said that they will accelerate the process for modifying thousands of home loans.
• Citigroup announced it will expand its moratorium on foreclosures and initiate a new program to assist borrowers who may develop problems paying their mortgages.

-- "Fannie, Freddie Join Citi, Others Trying to Halt Foreclosures," by Stephanie Armour and Anna Bahney, USA Today, Nov. 17, 2008.

This year, 31 states and the District of Columbia passed 60 laws regulating foreclosures. They counsel homeowners, require lenders to notify the state before a foreclosure filing, or create a grace period for homeowners before lenders file a foreclosure, says the National Conference of State Legislatures.

-- "States Lend a Hand in Time of Home Foreclosures," by Marisol Bello, USA Today, Nov. 18, 2008.

Housing Showing Signs of Recovery
"With all the turbulence and losses in stocks and bad economic news in the headlines lately, you can easily lose perspective on what's really going on in the real estate sector.

• Well, remember that there is a huge pent-up demand simmering away out there for housing - especially from first-time buyers who want to scoop up low-priced deals.
• Fixed 30 year rates fell from 6.5% to 6.24% during the week. Fifteen year rates broke below 6% to 5.9%, down from 6.14%.
• Pending home sales were higher than year-earlier levels for the second straight month - 1.6% higher than September 2007.
• Although pending sales contracts were down slightly for the month, in the Western states they were up by 3.7%, and now stand at an extraordinary 39.7% higher than they were at the same time in 2007.
• Already sales are up significantly in major markets in many parts of the U.S. NAR Chief Economist Lawrence Yun specifically mentioned the west coast of Florida, the Phoenix area, Virginia, Long Island, N.Y., Kansas City, Minnesota and Idaho.

So here's the key point to keep in mind as you try to make sense of the headlines: The stock market is NOT the housing market. It's on a whole different set of tracks. And it's been in a highly volatile state for more than a month. Housing, on the other hand, has already endured its painful correction for two and a half years … is now pretty much stabilized … and is slowly moving toward its cyclical recovery."

-- "Real Estate Outlook: Housing in Recovery," by Kenneth R. Harney, Realty Times, Nov. 18, 2008.

Regional Update: Good News from Markets around the Nation:
Ventura County, Calif.

Southern California home sales surged to higher than expected levels in October. A total of 802 new and existing homes and condominiums closed escrow last month in Ventura County, a 49.1% jump from 538 sales for the same period a year ago, according to MDA DataQuick. October was the fourth consecutive month that sales have increased on a year-over-year basis, after 33 straight months of declines.

-- "Home Sales Increase More than Expected," by Jenni Mintz, Ventura County Star, Nov. 19, 2008.

Dallas/Fort Worth, Texas

Dallas/Ft. Worth, Texas Realtors are so up on their market that they even created a web site about it: www.DFWHousingFacts.org. The site touts all the reasons that the fourth largest metropolitan area in the U.S. is a great place to buy in today's economic environment. "The local economy is booming, with affordable median home prices and job growth second only to New York. The Metroplex is currently ranked as the top growth market in the U.S."

-- DFWHousingFacts.org, "Hot Market: Dallas/Ft. Worth: Where Everything's Big," by M. Anthony Carr, Realty Times, Nov. 17, 2008.

Fort Myers, Fla.

Prices are down 39% in Fort Myers, Florida fueling an amazing surge in sales of more than 125% in September. "Teachers, police officers and others who were priced out of the market during the feeding frenzy of 2006 are buying homes today."

-- Suzanne Sherer, president-elect of Realtor Association of Greater Fort Myers, "Hot Market: Fort Myers Market Searing," by M. Anthony Carr, Realty Times, Nov. 14, 2008.