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Housing Market: No Bottom in Sight
Tweet Share on Facebook December 23, 2008 Comment (4)A pair of reports released Tuesday indicate that the housing market's painful declines are far from over:
Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 8.6 percent to a seasonally adjusted annual rate of 4.49 million units in November from a downwardly revised level of 4.91 million in October, and are 10.6 percent below the 5.02 million-unit pace in November 2007…
Total housing inventory at the end of November rose 0.1 percent to 4.20 million existing homes available for sale, which represents an 11.2-month supply at the current sales pace, up from a 10.3-month supply in October….
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Fewer Americans on the Move, Study Says
Tweet Share on Facebook December 22, 2008 CommentThere’s an interesting report out from the Pew Research Center. It looks like Americans aren’t relocating nearly as much as they once did:
From the Pew Research Center:
As a nation, the United States is often portrayed as restless and rootless. Census data, though, indicate that Americans are settling down. Only 13% of Americans changed residences between 2006 and 2007, the smallest share since the government began tracking this trend in the late 1940s…
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Barney Frank’s 2009 Congressional Playbook
Tweet Share on Facebook December 19, 2008 Comment (100)I spoke with House Financial Services Committee Chairman Barney Frank, a Democrat from Massachusetts, on Thursday about the issues he'll be working on in 2009. (Note: This interview took place before Treasury Secretary Hank Paulson said that lawmakers would need to release the rest of the $700 billion bailout funds.)
Here's what Frank had to say:
What issues will the House Financial Services Committee be working on next year?
"Well, obviously financial regulation. The first thing off the bat is the whole systemic risk issue. Hank Paulson has talked about it. Ben Bernanke has talked about it with Rahm Emanuel and Tim Geithner, and with Paul Volcker. We are in a terrible deleveraging crisis now, and while we deal with that, it is important that we prevent over-leveraging in the future."
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Sheila Bair: We Need Foreclosure Mitigation Now
Tweet Share on Facebook December 19, 2008 Comment (5)I spoke with FDIC Chairman Sheila Bair on Wednesday about her efforts to prevent foreclosures. Here's what she had to say:
Why have you been pushing so hard for increased foreclosure mitigation?
"Our view is that there are a lot of unnecessary foreclosures going on that are creating further downward pressure on home prices. Distressed foreclosure sales really are the market in several areas of the country. So you already have an overbuilt market, you are adding a lot more inventory through unnecessary foreclosures, you are dislocating people, you are creating vacant properties and eroding tax bases and there are a lot of other external costs involved with that. So, we really think that preventing unnecessary foreclosures has got to be a top priority. It's not by itself going to solve the problem, and loan modifications by themselves are not a silver bullet—it's hard work to get these loans modified. But that underscores even more why you need a systematic process to do it and you need some financial incentives to get it done quickly.
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Mortgage Rates Hit Multi-Decade Lows
Tweet Share on Facebook December 18, 2008 CommentWhile their unprecedented measures to resolve the financial crisis have produced limited results, the Feds can certainly take credit for helping to move 30-year fixed mortgage rates to historic lows:
From The Associated Press:
Rates on 30-year-fixed mortgages dropped this week to their lowest levels in at least 37 years, as the Federal Reserve pledged to pour money into the mortgage market in an effort to spur the moribund U.S. housing market.
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Foreclosure Discounts By State
Tweet Share on Facebook December 18, 2008 Comment (1)A recently released joint study by Trulia—a U.S. News partner—and RealtyTrac included the following map:
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Foreclosure Discounts by City
Tweet Share on Facebook December 18, 2008 CommentA recently released joint study by Trulia—a U.S. News partner—and RealtyTrac included the following chart:
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Nouriel Roubini: The $700 Billion Bailout Isn’t Enough
Tweet Share on Facebook December 18, 2008 Comment (32)I spoke with the bearish—but prescient—economist Nouriel Roubini on Wednesday about what's in store for the economy, housing, and stock markets in 2009. Here's what he had to say:
What is your outlook for the length and depth of the recession?
My view is that that recession is going to continue at least through the end of 2009. It started in December 2007, so it's going to be 24 months long. It's going to be the longest we've had in the last 60 years. I expect a cumulative fall in output from the peak of 4 to 5 percent. Just to give you a sense, in the last recession, the cumulative fall in output was only 0.4 percent—this one is 10 times deeper. The unemployment rate will peak at above 9 percent sometime in 2010. And we're facing not just a U.S. recession but a global recession. There is a recession in all of the advanced economies, and now there is the beginning of a hard landing also in the emerging markets.
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Foreclosure Sales: 2009 Housing Head Wind
Tweet Share on Facebook December 18, 2008 Comment (15)With home prices having dropped a painful 21 percent from their 2006 peaks, property owners everywhere could use a splash of good news in their New Year's Eve cocktails. But as a nasty recession is now part of the picture, the chances of an aggressive housing market rebound next year are dim. "A lasting recovery in the housing market?" says Mike Larson, a real estate analyst at Weiss Research. "I don't see it in the cards until the back end of the year—if that."
Here's a look at the factors that will be weighing down the housing market in 2009:
8. Foreclosure Sales A huge problem for the housing market in 2008, foreclosure sales will continue weighing down the market next year. "There was a surge this year," Zandi says. "But next year [there] will be even more." While that will give buyers an opportunity to go bargain hunting, it's bad news for sellers. "It puts more homes out there for sale at a very deep discount," Zandi adds.
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More Americans See the Downside of Foreclosed Home Buying
Tweet Share on Facebook December 17, 2008 Comment (2)While more foreclosed homes coming on to the market, Americans are growing increasingly wary of buying them, according to a recently-released joint study by Trulia--a U.S. News partner--and RealtyTrac.
The findings suggest that foreclosed home prices may need to go even lower in order to work through the inventory.
In the previous survey conducted seven months ago, 54 percent of all U.S. adults surveyed said they would consider purchasing a foreclosed home, whereas now 47 percent of U.S. adults would consider purchasing a foreclosure, a drop of seven percentage points in only seven months…
