November Market Watch

Slide 1: 

November 2008

Slide 2: 

The government is all in!

Slide 5: 

Source: WSJ Sales -

Slide 6: 

“The Real Trends Housing Market Report shows that closings of residential housing are improving rapidly in several states, such as California, Nevada, Arizona and Florida all of which have turned positive when compared to the same month a year ago. RealTrends Source: Real Trends 10/08 Many other states are seeing improved unit sales when looking at September 2008 results versus September 2007 results.”

Slide 8: 

Source: Macro Markets, IAS, OFHEO, Census Bureau, NAR Prices

Slide 10: 

The 28 major metropolitan areas monitored by ZipRealty with year over year comparisons are available saw a 9.6% decrease in the number of homes available for sale at the end of Q3 2008 versus the same time last year. ZipRealty Market Report 3Q ‘08

Slide 11: 

“Asking prices for homes across the country fell 1.4 percent in September, bringing the total drop in the last three-month cycle to 2.9 percent. While inventories have continued to slowly decline, they remain at historically high levels,” said Real IQ research director Stephen Bedikian in a press statement. “The result is that prices remain under pressure in most markets. Until we see large and sustained declines in inventory, we’re not going to see a market bottom.” Source: Altos Research & Real IQ 9/04/08 List Prices

Slide 12: 

Source: ZipRealty Market Report 3Q 2008 Percentage of Listings with a Price Break

Slide 13: 

The Seller

Slide 16: 

Foreclosures Comparable Across Incomes “Delinquency and foreclosure rates for subprime borrowers were comparable across communities of all income levels,” said Michael Rubinger, president and CEO of Local Initiatives Support Corp. which just commissioned a new study. LISC also found that subprime borrowers in more prosperous communities defaulted at nearly the same rate as those that defaulted in impoverished areas. Source: Housing Wire 10/29/08

Slide 17: 

“Data paints a bleak picture of an increasingly troubled group of prime mortgage borrowers relative to subprime — underscoring the problems now emerging in the Alt-A and option ARM mortgage sectors. In fact, while subprime foreclosures actually fell 3 percent quarter over quarter prime foreclosures jumped by more than 20 percent in the same time period. Just like their subprime counterparts, many prime borrowers decided during the housing boom they needed to get into a home at any cost, and used increasingly risky loan products to do it. These borrowers are now seeing loans recapitalize or reach levels they simply never could afford. Source: Housing Wire 10/27/08 Prime Mortgages going to Foreclosure With a huge volume of forced option ARM recasts looming, the current trending in the data suggests a very large mess in 2009.”

Slide 18: 

18.3% of Mortgages Under Water Source: First American Core Logic 10/08 7,628,234 homes are now in a negative equity situation which represents 18.3% of all homes with a mortgage. Another 9,753, 818 are within 5% of being under water.

Slide 22: 

Source: Of Two Minds Blog 10/08

Slide 23: 

“The rate of U.S. home price declines will slow in the coming months, though another 10% decline is in the cards before home prices begin to exhibit more stability, according to Fitch Ratings. Fitch believes that most of the additional 10% decline, which will bring prices back to levels seen in 2003, will occur over the next eighteen months, with prices exhibiting more stability in 2010.” Source: Fitch Ratings 10/20/08 Prices to 2003 Levels?

Slide 24: 

"Our original expectation that home prices had another 15% to fall appears far too conservative. My base-case assumption is now an additional decline in the range of 20% to 25%. In a bear-case scenario where unemployment exceeds 9%, we believe prices could instead drop 30% to 35%.” - Fox-Pitt Kelton housing analyst Robert Stevenson Source: Market Watch 10/27/08 Prices

Slide 25: 

“In terms of prices, I don’t think they’ll bottom out until the end of next year and I don’t think they’re going to bounce back. They’ll crawl back.” - David Wyss, chief economist for Standard & Poor’s. Source: Yahoo News 10/19/08 Prices

Slide 26: 

Why did this one sell?

Slide 27: 

The Buyer

Slide 28: 

Return on Investment Dow S&P Nasdaq Real Estate Jan 1, 2000 - Sept 30, 2008 -20.6 - 47.8 72 -9.8

Slide 30: 

What savings? $400,000 @ 6% = $2398.20

Slide 31: 

Mortgage Rates – 30 year fixed Source: Federal Reserve In 7 weeks!!

Slide 32: 

Bankrate.com, which tracks the home loan market, says the rate of an average 30-year mortgage rose by 0.5 percentage points to 6.74 percent last week, its biggest one-week jump since 1987. Mortgage Rates Source: Bankrate.com 10/30/08

Slide 33: 

631-834-7000 steve@steveharney.com www.steveharney.com

Slide 34: 

Any questions? Contact us at info@KeepingCurrentMatters.com We’ll bend over backwards to try and help!