Sean's Palm Springs Real Estate Blog

August 25, 2008 Existing-Home Sales Hit 5-Month High

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Mon, 25 Aug 2008 13:43:24 -0500

Daily Real Estate News | August 25, 2008 Existing-Home Sales Hit 5-Month High

Existing-home sales rose in July to the highest level in five months, although they continue to be well below the numbers from last year at this time, according to the NATIONAL ASSOCIATION OF REALTORS®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.1 percent in July to a seasonally adjusted annual rate of 5 million units from a downwardly revised level of 4.85 million in June. Sales were 13.2 percent lower than the 5.76 million-unit pace in July 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the up-and-down pattern may break soon.

“We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead,” he said. “Buyers who’ve been on the sidelines should take a closer look at what’s available to them now in terms of financing and incentives. Given some of the inventory on the market, we also strongly encourage buyers to get a professional home inspection.”

Median Price Down 7.1% from Year Ago

The national median existing-home price for all housing types was $212,400 in July, down 7.1 percent from a year ago when the median was $228,600.

Lawrence Yun, NAR chief economist, said home prices in some regions could soon increase.

“Sales have picked up significantly in several Florida and California markets. Home prices generally follow sales trends after a few months of lag time,” he said. “Still, inventory remains high in many parts of the country and will require time to fully absorb. We expect more balanced conditions in 2009 and will eventually return to normal long-term appreciation patterns.”

Analysis of NAR price data since 1968 shows home prices normally rise 1 to 2 percentage points above the overall rate of inflation, building wealth over the typical period of homeownership.

11-Month Supply of Homes for Sale

Total housing inventory at the end of July rose 3.9 percent to 4.67 million existing homes available for sale, which represents an 11.2.-month supply at the current sales pace, up from a 11.1-month supply in June. The rise in supply results from a sharp increase in condo inventory; the single family supply declined.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.43 percent in July from 6.32 percent in June; the rate was 6.70 percent in July 2007.

Single-family home sales rose 3.1 percent to a seasonally adjusted annual rate of 4.39 million in July from 4.26 million in June, but are 12.4 percent below the 5.01 million-unit level a year ago. The median existing single-family home price was $210,900 in July, down 7.7 percent from July 2007.

Existing condominium and co-op sales increased 3.4 percent to a seasonally adjusted annual rate of 610,000 units in July from 590,000 in June, but are 18.6 percent below the 749,000-unit pace in July 2007. The median existing condo price4 was $223,400 in July, which is 2.7 percent below a year ago.

In Detail: Regional Sales, Prices

West. Regionally, existing-home sales in the West jumped 9.7 percent in July to a level of 1.13 million and are 0.9 percent higher than July 2007. The median price in the West was $273,200, down 22.2 percent from a year ago.

Northeast. In the Northeast, existing-home sales rose 5.9 percent to an annual pace of 900,000 in July, but are 11.8 percent below a year ago. The median price in the Northeast was $278,700, which is 4.9 percent lower than July 2007.

Midwest. Existing-home sales in the Midwest increased 0.9 percent to an annual rate of 1.12 million in July, but are 17.0 percent lower than July 2007. The median price in the Midwest was $175,400, up 1.0 percent from a year ago.

South. In the South, existing-home sales slipped 0.5 percent to an annual pace of 1.85 million in July, and are 18.1 percent below a year ago. The median price in the South was $179,300, down 3.5 percent from June 2007.

— NAR

Bargain hunting picks up as Southern California home values fall further

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Thu, 17 Jul 2008 10:14:27 -0500

Bargain hunting picks up as Southern California home values fall further

Prices in the six-county region drop 29.3% in June compared with a year earlier. Some areas see sales rise as foreclosed houses are deeply discounted.

By Peter Y. Hong
Los Angeles Times Staff Writer

July 17, 2008

Southern California home values keep spiraling down, but sales volume is picking up in the Inland Empire and other areas where bargain hunters are snapping up foreclosed properties at steep discounts.

Home prices plunged 29.3% last month from a year earlier, to a median of $355,000 in six Southern California counties, a real estate information service reported Wednesday. That's about where prices were in 2004.

The number of homes sold in June was down 13.6% from a year earlier. But Riverside County posted an 11.8% jump in sales, thanks to repossessed homes being sold at fire-sale prices, according to DataQuick Information Systems.

Low prices are luring both first-time buyers and full-time real estate investors such as Kurtis and Cindy Squyres of La Quinta.

The couple have been buying two to four houses a month, most of them foreclosures in the Coachella Valley and Inland Empire. They look for the cheapest properties they can find, aiming to buy and quickly resell for a modest profit of perhaps $10,000.

"That's the new market," Kurtis Squyres said of foreclosures, which made up 62% of all home sales in Riverside County last month.

The housing market "would really be in trouble if these bargain hunters weren't so active," DataQuick analyst Andrew LePage said.

Without these buyers, homes would languish even longer on the market, leading to steeper price cuts, LePage said. But he cautioned that the uptick in sales activity probably wouldn't lead to a bump in values in the near-term.

"At some point prices stabilize, but that is six to 12 months later easily," LePage said. "Then you're also looking at years of relative stagnation" before prices actually rise.

Price declines in Los Angeles and Orange counties have been less severe than in the Inland Empire, but they are falling just the same. Home values were down 23.9% in Los Angeles County in June from one year earlier, to a median of $415,000.

In Orange County, the median price in June was $495,000, down 23.3%. The median is the point at which half the homes sell for more and half for less.

By comparison, home values in San Bernardino and Riverside counties dropped more than 30%.

By the time the slump is over, home values throughout the region will be down about the same amount -- probably 40% to 50% below peak levels, predicts Los Angeles economist Christopher Thornberg of Beacon Economics.

Home values in Los Angeles and Orange counties are down roughly 25% from their peaks last year.

"In the places that were harder hit, it's pretty clear we're getting close to the bottom," Thornberg said, but "places like West L.A. -- where people said, 'It can't happen here' -- are starting to stumble now. It's a function of time."

Kurtis Squyres believes that many of the desert towns where he buys houses have hit bottom.

"Houses are already down 50%" in some neighborhoods, he said.

To find the best bargains in a market cluttered with abandoned properties, Squyres said he and his wife spend all day scouring real estate listings, phoning brokers and sending postcards to absentee property owners, asking whether they are interested in selling.

They work out of a room in their rented house; they sold their own home in 2005 when they thought the market was about to crash.

Often, they buy houses that others might consider dumps.

"You've really got to find that oddball and take advantage of it," Kurtis Squyres said.

After buying a property, the couple try to unload it as soon as they can to investors they court on their website, FarBelowMarket.com. Those buyers typically try to flip the homes for a quick profit too.

Foreclosures and short sales -- homes offered for sale at prices below their mortgage amounts -- are increasingly shaping markets even in long-established communities.

In Orange County, for instance, foreclosures and short sales constitute the majority of homes for sale in eight cities, among them Aliso Viejo, Santa Ana, Garden Grove and Anaheim, according to an analysis of listing data by Aliso Viejo real estate broker Steven Thomas.

Overall, foreclosed homes made up 41.1% of the homes sold in June, the first time the percentage has topped 40% in this real estate cycle. In June 2007, foreclosed homes made up just 7.3% of home sales.

When banks foreclose homes, they offer them first for sale at an auction, typically at a price lower than even the amount of the defaulted loan. Last month in California, foreclosed homes went to auction with opening bids set at an average of 31% less than the amount owed on the loan, according to ForeclosureRadar, a seller of default data.

Few of those homes find buyers at the auction. In California, 97% of homes auctioned are bought back by the lender because of the lack of higher bids, ForeclosureRadar said. Those homes are then sold by lenders on the open market, sometimes at prices even lower than the auction price.

The spread of foreclosures beyond the newly built developments in the inland counties is now affecting prices in more affluent areas. Some analysts had predicted the high end of the market might escape substantial price drops. But in June, the sales price of Southern California homes valued in the top one-tenth of the market declined 20% from a year earlier, according to DataQuick.

Richard Green, newly appointed director of USC's Lusk Center for Real Estate, said prices might be nearing the bottom, even in higher-priced areas. Green has been shopping for a house for himself in the Pasadena area.

"Two years ago I never would have bought a house" in the neighborhoods where he is now shopping, he said.

Green estimates the homes he is considering have fallen about 20% in value since then, he said, which is far enough for him.

"I plan to live there until I retire, so if it goes down another 10% while I'm living there I will not care," he said.

Existing home sales rise on price drop

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Fri, 27 Jun 2008 10:49:26 -0500

Existing home sales rise on price drop

Realtors' group says the number of existing homes sold in May gained 2% to an annual rate of nearly 5 million.

By Ben Rooney, CNNMoney.com staff writer

Last Updated: June 26, 2008: 11:29 AM EDT

NEW YORK (CNNMoney.com) -- Sales of existing homes rose slightly more than expected in May as home buyers responded to plummeting home prices, according to an industry trade group.

The National Association of Realtors (NAR) said Thursday that the number of existing homes sold during May rose 2% to a seasonally adjusted annual rate of 4.99 million units in May from a level of 4.89 million in April.

But sales remain 16% below the 5.93 million-unit pace in May 2007, the report showed. And Thursday's report marks only the second time in 10 months that sales have increased.

Analysts were expecting the sales rate to increase to 4.95 million last month, according to a consensus of analysts' estimates gathered by Briefing.com.

The report also showed that the national median existing-home price for all housing types fell 6.3% to $208,600 from $222,700 a year earlier.

"Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages," said NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists, in a statement.

Total housing inventory at the end of May fell 1.4% to 4.49 million existing homes available for sale, indicating a 10.8-month supply at the current sales pace. That's down from a 11.2-month supply in April, according to the report.

The large supply of homes on the market favors buyers, but it should take several more months to draw the inventory down, said Lawrence Yun, NAR chief economist.

"Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets," Yun said.

The housing market remains mixed around the country. But the report showed that highly overbuilt markets - including Sacramento, the San Fernando Valley and Monterey County in California, Sarasota, Fla. and Battle Creek, Mich. - all experienced sales increases versus last year.

However, it's important to note that Thursday's report lags the interest rate cycle and is "old news" to some extent, according to Bob Brusca, chief economist at FAO Economics.

Interest rates have risen since the existing home sales number was calculated, Brusca said. That means the current market could be less favorable for homebuyers.

What's more, the existing home sales figure mostly reflects sales by individual homeowners as opposed to Wednesday's new home sales report which tallies sales by commercial homebuilders.

"People selling their own home usually live in the home until they sell it, so they're probably very motivated sellers, since they could be paying two mortgages," Brusca said.

Conversely, homebuilders are "authentic sellers" and the new home sales report gives a "better view of what the market is like," he said.

On Wednesday, the Census Bureau said that May sales of new single-family homes fell 2.5% to a seasonally adjusted annual rate of 512,000 from April's revised reading of 525,000.

"The message is that the housing market is probably still weakening," Brusca said.

California Home Market Shows First Signs of Recovery

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Tue, 24 Jun 2008 16:39:44 -0500

By Daniel Taub

June 18 (Bloomberg) -- The California housing market may be showing the first signs of a recovery after three years of declining sales and two years of rising foreclosures, the UCLA Anderson Forecast said today.

While home prices in the most populous U.S. state are still weak, the number of houses and condominiums changing hands in some parts of California is rising, according to the Anderson Forecast at the University of California, Los Angeles, which released its 127-page forecast for both the state and the U.S. today.

``The combination of steep price declines, lower interest rates and an easing of the credit crunch may now be bringing bargain-hunting buyers back into the market'' for California homes, Ryan Ratcliff, an Anderson Forecast economist, wrote in the report. Riverside County posted a year-on-year gain in the number of homes sold, he wrote.

The collapse of the subprime-mortgage market contributed to an increase in foreclosures as well as drops in home prices and sales in California. In the first quarter, mortgage defaults in the state rose 143 percent to the highest level in 15 years, according to La Jolla, California-based DataQuick Information Systems.

Foreclosures will probably continue to hurt California's housing market for the rest of this year and then start to moderate in 2009, the Anderson Forecast said. While a ``normal'' housing market ``is still a long way off,'' according to the report, the increase in home sales in some parts of the state is a positive sign.

`Dim Flicker'

``This is the very dim flicker of the light at the end of the tunnel,'' Ratcliff said in an interview. ``I can't say that I see an unambiguous sign of a turnaround, because by the time it's unambiguous, it's already been happening three or four months.''

Southern California house and condominium sales dropped 15 percent last month to the lowest level for a May in two decades as prices plunged 27 percent, DataQuick said earlier this week. The median home price in the region was $370,000 last month. The last time it was lower was in March 2004. San Francisco Bay Area home sales dropped 23 percent last month, DataQuick said today.

The number of homes sold dropped in every California county DataQuick tracks except Riverside, where home sales increased 4.1 percent. Foreclosure sales accounted for 57 percent of Riverside's May sales, the most of any Southern California county, DataQuick said.

Housing Pain

The price per square foot for a home in Sacramento, California's capital, dropped 31 percent in March from a year earlier to $160, while prices in San Diego declined 27 percent to $251 a square foot, according to a report released June 2 by New York-based Radar Logic Inc., a data company.

In California, the ``unprecedented speed of the price adjustment means that instead of several years of slow bleeding (like the 1990s), we have compressed the necessary adjustment into two years of intense housing pain,'' Ratcliff wrote in today's report. ``Mom always said it's better to just rip the Band-Aid off.''

To contact the reporter on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net.

Where home prices are headed next

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Mon, 23 Jun 2008 10:55:42 -0500

Where home prices are headed next

Want to know what your home will be worth this time next year? Check out these home price forecasts for the 100 largest U.S. markets, from Money Magazine.

Last Updated: May 8, 2008: 5:56 PM EDT

(Money Magazine) -- The housing implosion is nowhere near over. In 75 of the 100 top U.S. cities, prices are expected to fall in the next 12 months according to Fiserv Lending Solutions.

The S&P Case/Shiller Home Price Index, which tracks 20 of the largest housing markets, showed prices plummeting by 12.7% in the 12 months ending February. That's the biggest fall since the index began tracking prices in 2000.

Meanwhile, foreclosure filings more than doubled in the first three months of 2008, spiking 112%. So far this year 156,463 families have lost their homes to repossessions. Many markets won't hit bottom till late 2009 or even 2010.

Pity the residents of Stockton, Calif., whose homes are likely to lose more than half of their 2006 value. But if you happen to live in Texas, congratulations: The housing tornado passed you by.

First Published: May 7, 2008: 8:30 AM EDT

Metro Area	Home Price (median)	Price Change (5 years)	Forecast (May '09)	% change in foreclosure rate (1 year)
McAllen, TX	$109,000	23.3%	4.0%	23%
Rochester, NY	$121,000	20.1%	2.7%	5%
Birmingham	$156,000	29.4%	2.7%	20%
Syracuse	$126,000	29.5%	2.6%	27%
Buffalo/Niagara Falls	$105,000	24.5%	2.4%	14%
New Orleans	$158,000	43.7%	2.2%	49%
Scranton	$128,000	41.1%	2.2%	8%
Baton Rouge	$170,000	38.3%	1.9%	14%
Grand Rapids	$124,000	8.3%	1.9%	37%
El Paso	$134,000	51.9%	1.8%	32%
Wichita	$114,000	17.8%	1.5%	9%
Tulsa	$128,000	18.8%	1.4%	5%
Fort Worth/Arlington	$134,000	17.4%	1.4%	16%
Indianapolis	$114,000	12.0%	1.3%	11%
Houston	$150,000	25.1%	1.2%	11%
Dallas	$161,000	15.8%	1.2%	14%
Gary, IN	$125,000	25.6%	1.1%	12%
Albany, NY	$200,000	64.1%	0.9%	10%
San Antonio	$152,000	39.6%	0.8%	22%
Greensboro, NC	$151,000	17.8%	0.6%	256%
Omaha	$136,000	17.7%	0.6%	71%
Little Rock	$128,000	28.4%	0.5%	405%
Louisville	$133,000	20.7%	0.5%	17%
Columbia, SC	$145,000	28.1%	0.3%	16%
Oklahoma City	$134,000	29.8%	0.3%	16%
Austin	$186,000	28.9%	-0.1%	-6%
Raleigh/Cary, NC	$236,000	26.4%	-0.2%	62%
Charlotte, NC	$205,000	27.8%	-0.5%	15%
Kansas City	$148,000	19.4%	-0.6%	22%
St. Louis	$134,000	31.7%	-0.8%	22%
Lake County, IL	$260,000	30.4%	-0.8%	N.A.
Pittsburgh	$144,000	18.1%	-1.3%	1%
Memphis	$124,000	8.7%	-1.5%	28%
Richmond	$226,000	61.4%	-1.8%	72%
Milwaukee	$220,000	35.7%	-1.8%	53%
Atlanta	$205,000	16.0%	-2.3%	52%
Youngstown, OH	$87,000	2.8%	-3.0%	3%
Nashville	$154,000	34.8%	-3.3%	28%
Allentown, PA	$247,000	58.9%	-3.3%	52%
Akron	$143,000	5.2%	-3.8%	15%
Toledo	$122,000	1.9%	-4.0%	12%
Cincinnati	$166,000	7.4%	-4.2%	9%
Cleveland	$145,000	1.2%	-4.3%	11%
Columbus, OH	$155,000	5.7%	-4.4%	17%
Dayton	$125,000	7.7%	-4.4%	10%
Knoxville	$144,000	35.6%	-5.2%	39%
Minneapolis/St. Paul	$235,000	15.9%	-5.6%	71%
Farmington Hills, MI	$175,000	-7.5%	-5.9%	N.A.
Poughkeepsie, NY	$260,000	50.8%	-6.8%	35%
Chicago	$279,000	29.2%	-6.8%	9%
Virginia Beach	$236,000	90.1%	-7.1%	33%
Cambridge, MA	$417,000	10.7%	-8.5%	57%
Detroit	$120,000	-6.3%	-8.6%	41%
Peabody, MA	$365,000	10.4%	-8.8%	9%
Sacramento	$330,000	23.3%	-8.9%	210%
Seattle	$430,000	61.9%	-9.0%	58%
Worcester, MA	$257,000	13.5%	-9.2%	102%
Springfield, MA	$195,000	33.6%	-9.5%	241%
Jacksonville	$197,000	47.7%	-9.6%	130%
San Diego	$522,000	31.3%	-9.7%	175%
Salt Lake City	$229,000	59.9%	-9.8%	18%
San Francisco	$840,000	40.7%	-10.1%	175%
Wilmington, DE	$259,000	50.9%	-10.3%	145%
Boston	$363,000	13.4%	-10.5%	57%
Albuquerque	$174,000	50.7%	-10.5%	23%
Denver	$254,000	4.5%	-10.8%	23%
Philadelphia	$200,000	50.0%	-11.1%	29%
Providence	$275,000	32.0%	-11.6%	107%
Oakland	$595,000	27.7%	-11.7%	266%
Baltimore	$264,000	64.7%	-12.5%	92%
San Jose	$750,000	38.7%	-12.5%	347%
Hartford, CT	$249,000	29.1%	-12.6%	51%
Bethesda, MD	$460,000	54.9%	-12.9%	118%
Ventura County, CA	$577,000	42.7%	-13.1%	240%
Tacoma	$283,000	64.3%	-13.2%	68%
Washington, DC	$408,000	49.2%	-13.2%	42%
New York City	$471,000	43.5%	-13.2%	3%
Bakersfield, CA	$255,000	73.0%	-13.6%	391%
Stamford, CT	$562,000	32.8%	-13.9%	66%
New Haven	$260,000	36.3%	-14.2%	83%
Fresno	$276,000	62.1%	-14.3%	285%
Nassau/Suffolk, NY	$465,000	40.2%	-14.4%	N.A.
Portland, OR	$306,000	62.3%	-14.7%	100%
Camden, NJ	$220,000	50.9%	-14.9%	11%
Santa Ana, CA	$669,000	52.4%	-15.2%	290%
Newark	$419,000	38.1%	-15.4%	-5%
Sarasota	$230,000	38.0%	-15.5%	458%
Edison, NJ	$358,000	36.0%	-15.8%	0%
Honolulu	$625,000	95.3%	-16.2%	129%
Los Angeles	$528,000	67.7%	-16.8%	261%
Stockton, CA	$341,000	17.8%	-16.8%	379%
Tucson	$217,000	54.5%	-16.9%	14%
Riverside, CA	$340,000	49.9%	-16.9%	299%
Tampa	$200,000	52.1%	-17.1%	281%
West Palm Beach, FL	$305,000	46.1%	-17.6%	435%
Las Vegas	$277,000	60.8%	-18.3%	2%
Phoenix	$237,000	60.9%	-18.3%	9%
Orlando	$245,000	62.5%	-21.0%	399%
Fort Lauderdale	$309,000	56.1%	-22.2%	450%
Miami	$329,000	94.8%	-24.9%	370%
USA	$206,000	32.7%	-9.7%	65%

SOURCES: Fiserv Lending Solutions; First American CoreLogic, LoanPerformance data; city and county assessors in McAllen, Texas, Poughkeepsie, N.Y. and Lake County, Ill.; MetroTex Association of Realtors; Scranton Board of Realtors; and Greater Tulsa Association of Realtors.

April Housing Sales in Coachella Valley up 25% from March and the strongest since 2005!!!

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Fri, 30 May 2008 10:33:22 -0500

April housing sales strongest since September 2005

April's housing sales marked the strongest year-over-year showing the Coachella Valley has seen since September 2005.

The 912 homes sold in April reflect a 3.8 percent drop from the year before - a marked improvement compared to typical year-over-year declines that have hovered around 30 percent.

The sales also mark a 25.1 percent increase over March, according to a monthly analysis of the valley DataQuick Information Systems released this week.

A bulk of April's sales were resale homes, which made year-over-year gains.

It comes as median prices are down to $301,000 - the lowest since September 2004 - and as local real estate agents are touting the Coachella Valley as a prime buyers' market.

"We've seen little baby steps, little baby steps (in the market upswing). Now you're starting to see full strides," said Sam Schenkl, executive officer of the Palm Springs Regional Association of Realtors, which represents 1,500 agents and brokers.

DataQuick's April analysis also shows:

The resale market continues to drive housing sales.

A total of 496 existing single-family homes sold, up 2.5 percent from April 2007. There were 276 resale condos sold in April, up 1.5 percent from a year ago.

New construction continues to struggle, though sales rose over previous months. A total of 140 new homes were sold. That's a 27.1 percent decline from April 2007.

The valley's median price of $301,000 was down 22.8 percent from April last year.

The most expensive home sold in April was a $7.7 million home in Indian Wells.

April's sales continue an upward swing that began in the fall. It's the highest number of monthly sales since July.

Coldwell Banker's local offices recorded about 300 open escrows in April, regional vice president Ron Gerlich said.

The company is "right on track" to see the same in May, Gerlich said.

He noted there continues to be a number of people looking at homes but not quite ready to commit to a purchase.

"Second quarter, I'm sure we'll be in better shape," Gerlich said of the increasing sales trends. "There's all sorts of activity."

Experts credit renewed confidence from investors, notably Canadians, for helping boosting April's sales.

Many visitors who have enjoyed the desert all season want to buy before they leave and summer starts.

"People have been holding off; now they're ready to make the move," Schenkl said.

U.S. housing starts rallied back in April!

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Fri, 16 May 2008 11:34:27 -0500

U.S. housing starts rallied back in April

U.S. housing starts rallied back in April, rising 8.2%, to recoup some ground after March’s huge 13.8% drop. Starts came in at a 1.032 million unit annual pace from March’s 954,000 units which was the slowest since March 1991. Starts were 30.6% below the level recorded in April 2007 and started the second quarter about a percent below the average level of the first quarter. Still, activity in April was stronger than expected as economists forecasted that starts would edge down 0.8% to 939,000 units. Building permits also bounced back in April, rising 5% to post the first increase in five months.

The rise in April housing starts was concentrated in the multiple unit segment which increased 36% in April relative to March. Single-family home starts fell by 1.7%. Regionally, three of the four major census regions saw stronger activity with gains ranging from 24.4% in the Midwest to 3.6% in the South. The Northeastern states saw starts drop by 12.7% in April. The rebound in permits was moderately encouraging news but the level of permits remained depressed and was 56.8% below the recent peak level recorded in September 2005.

In Q1, residential construction activity trimmed 1.25 percentage points from the quarterly GDP growth rate and the low level of April starts and permits point to this sector continuing to act as a drag in the second quarter. With the inventory of homes available for sale holding at elevated levels, further price reductions will likely be needed to clear the inventory and set the course for stronger construction activity. While today’s report hints that this process may be getting underway, it is a fair distance from supporting a sustained pickup in building. The drag from construction may lighten up as 2008 proceeds but the sector will likely remain under pressure for the duration of this year.

Mid-Summer home price rise expected - Bottom already here -

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Thu, 08 May 2008 13:12:56 -0500

Soft Existing-Home Sales Expected Near-Term But to Rise Midsummer

WASHINGTON, May 07, 2008

A flat pattern in home sales activity should continue for the next couple months before improving over the summer, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said the extent of an expected recovery hinges on better access to affordable loans. "Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas," he said. "As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. Some time is needed for FHA and new conforming jumbo loans to become widely available."

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in March, edged down 1.0 percent to 83.0 from a downwardly revised level of 83.8 in February, and was 20.1 percent lower than the March 2007 index of 103.9.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said additional costs in many markets are hindering a recovery. “Our members are telling us that more buyers are looking at homes but are slow in signing contracts, and that’s contributing to the weakness in pending home sales,” he said. “In many cases buyers are waiting for greater access to affordable credit, especially in higher cost areas, but some are disappointed with what appears to be unnecessarily restrictive lending requirements. The good news this week is there is some discussion toward relaxing some of the burdensome lending practices.”

The PHSI in the Northeast jumped 12.5 percent in March to 80.8 but remains 15.4 percent below a year ago. In the South, the index slipped 0.1 percent to 84.9 and is 26.7 percent lower than March 2007. The index in the West declined 1.4 percent in March to 91.2 and is 9.5 percent below a year ago. In the Midwest, the index fell 10.4 percent in March to 74.1 and is 22.3 percent below March 2007.

Existing-home sales are projected to rise from an annual pace of 4.95 million in the first quarter to 5.82 million in the fourth quarter. For all of 2008, existing-home sales are likely to total 5.39 million, and then rise 6.1 percent to 5.72 million next year. “Although more than half of local markets are expected to see price growth this year, the aggregate existing-home price will decline 2.4 percent in 2008, driven by a relatively few markets that are very oversupplied,” Yun said. The median price is forecast at $213,700 this year before rising 4.1 percent to $222,600 in 2009.

Some areas already are seeing sales increases, underscoring that all real estate is local. In March, unpublished snapshot data shows sales in Bakersfield, Calif., and Jackson, Miss., were higher than a year ago. At the same time, price gains were noted in markets such as Buffalo-Niagara Falls, and Cedar Rapids, Iowa. On May 13, NAR will report first-quarter data on metropolitan area home prices, covering about 150 metro areas, and state home sales.

"Although some market adjustments are necessary, a downward overshooting of the housing market would cause unnecessary loss in economic output, income and jobs," Yun said. "It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that."

New-home sales are expected to fall 30.9 percent to 536,000 this year before rising 10.1 percent to 590,000 in 2009. Housing starts, including multifamily units, will probably drop 29.5 percent to 955,000 in 2008, and then rise 1.3 percent to 967,000 next year. The median new-home price is estimated to fall 3.7 percent to $238,000 this year, and then rise 5.4 percent in 2009 to $250,900.

The 30-year fixed-rate mortgage is likely to rise gradually to 6.2 percent by the end of the year, and then average 6.3 percent in 2009. NAR’s housing affordability index is expected to rise 10 percentage points to 127.0 for all of 2008.

Growth in the U.S. gross domestic product (GDP) should be 1.5 percent this year and 2.3 percent in 2009. The unemployment rate is projected to average 5.3 percent in 2008 and 5.5 percent next year.

Inflation, as measured by the Consumer Price Index, is seen at 3.4 percent this year and 2.2 percent in 2009. Inflation-adjusted disposable personal income is forecast to grow 1.2 percent in 2008 and 3.0 percent next year.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for April will be released May 23; the next Forecast / Pending Home Sales Index will be released June 9.

More Positive News - Canadian News Expressing Positive Growth in the U.S.

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Mon, 05 May 2008 11:24:04 -0500

U.S. ISM non-manufacturing index rises, points to positive economic growth

In today’s only major economic release in Canada and the United States, the U.S. ISM non-manufacturing index increased to 52 in April from 49.6 in March contrary to market expectations calling for a slight drop in the index.

The business activity index dropped 1.3 points to 50.9. However, it still remained above the 50 threshold, indicating expanding activity in the sector. The employment index increased to 50.8 in April from 46.9 in March, reinforcing the non-farm payrolls data, which showed a 90,000 job gain in the services sector. The new orders index dipped slightly to 50.1 from 50.2. The new export orders index fell 6.5 points to 48.5. The prices index increased to 72.1, a high since November 2007.

The level of the overall index in April is historically consistent with GDP growth of around 2% on an annualized basis. The earlier-released ISM manufacturing survey for April is also pointing to positive growth in the economy. As well, the business activity index, which correlates as well with real GDP growth as the non-manufacturing index, has remained consistently above the 50 boom/bust mark for three straight months after its peculiar collapse in January. These factors suggest some upside risk to our forecast calling for a contraction in second-quarter GDP growth. However, with confidence depressed, employment declining and gas-prices sky high, it is clear that considerable headwinds are still facing the U.S. economy.

Wall Street hopes the worst is over...

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Sun, 04 May 2008 21:52:38 -0500

Consumers may not be that cheerful, but traders and portfolio managers are growing more confident that U.S. financial markets are heading toward a second-half recovery.

NEW YORK (AP) -- Wall Street goes into the new week in an upbeat mood, with investors growing more confident that the economy and the financial markets are heading toward a second-half recovery.

There's been a steady stream lately of decent earnings reports and mostly benign economic data, and there's a sense that the credit crisis that pummeled stocks since last fall is nearing an end. For the first time in weeks, there's optimism that the government might have actually staved off a deep recession.

The U.S. consumer clearly isn't that cheerful, judging from consumer confidence figures released last week, but traders and portfolio managers on Wall Street often get ahead of themselves, looking past any bad news and toward future profits.

Analysts are a little more cautious.

"The market has cleared its hurdles, but the race isn't over yet -- we haven't crossed the finish line," said Chris Johnson, president of Johnson Research Group. "You'll now start to see lots of money that will be migrating sector to sector because everyone has been waiting for this momentum."

Johnson has a very bullish stance for stocks in the near term, calling for up to a 10 percent rise within the next four to six weeks. But, he's also realistic -- "markets have a tendency to be overbought really quickly." That was one reason the Dow Jones industrials pared some of its gains Friday, gaining 48 points after being up more than 100 earlier in the day and shooting up 190 in the previous session.

The Dow gained 1.29 percent over the course of the week, the Standard & Poor's 500 index ended up 1.15 percent, and the Nasdaq composite index rose 2.23 percent.

Johnson points out there are still some big obstacles that could stand in the way of the market extending its gains. Chief among them is the health of the consumer, whose spending habits account for more than two-thirds of the U.S. economy.

That means economic data and upcoming quarterly earnings from retailers will take on even bigger significance than usual. For example, investors are likely to focus on Walt Disney Co.'s earnings report Tuesday to determine the strength of sales at its U.S. amusement parks and of Disney (DIS, Fortune 500) products.

But they'll also be looking at results from Cisco Systems Inc. (CSCO, Fortune 500), which makes Internet routers and other wireless devices, when it posts results Tuesday. And they'll be looking for comments Tuesday from global bank UBS AG on the state of the credit markets. Fannie Mae (FNM, Fortune 500), the government-sponsored mortgage finance company, might give some perspective on the housing market.

The market will also get more economic data. If the numbers are good, the Federal Reserve is more likely to pause in its campaign of lowering rates -- a move that would allow the central bank to combat inflation and boost the anemic dollar.

"We're slow growth, but not imploding," said Steven Goldman, chief market strategist at Weeden & Co. "For the market, just like any patient that is ill, time heals. We're getting some confirmation of this, but we're still not entirely certain -- there's hope and expectations that the worst is over."

Among the reports scheduled this week, the Institute for Supply Management on Monday releases its April reading on the service sector. The index is expected to come in at 49.3, according to economists surveyed by Thomson Financial/IFR. That would indicate a slightly larger contraction in activity than March's reading of 49.6.

The Labor Department on Wednesday reports on first-quarter productivity and labor costs. Productivity is expected to have risen at an annual rate of 1 percent, while labor costs -- one indicator of inflation -- are expected to have increased by 2.5 percent.

Also Wednesday, the National Association of Realtors releases its pending home sales index, which is expected to have fallen to its lowest level ever in March, while the Federal Reserve reports on consumer debt in March.

On Friday, the Commerce Department reports on international trade in March, data that should provide insight into how the weak U.S. dollar has affected the nation's imports and exports. Economists are expecting a decline in the trade gap.

Fed Lowers Key interest rates again....maybe for the last time

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Wed, 30 Apr 2008 14:15:42 -0500

Fed lowers rates, hints cuts may be at end

By Mark Felsenthal 14 minutes ago

WASHINGTON (Reuters) - The Federal Reserve lowered a key U.S. interest rate by a modest quarter percentage point on Wednesday and hinted the move could be the last in a series dating to mid-September.

However, it kept its options open and financial markets saw some chance more rate cuts could be in store.

In announcing its decision, the U.S. central bank pointed to the "substantial" reductions it has already put in place and noted that energy and other commodity prices were on the rise. It also dropped a reference contained in its last interest-rate announcement that "downside risks to growth remain."

"The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity," the central bank said.

While the Fed said uncertainty on the outlook for prices remained high, it also said it still believed inflation would moderate over time, which some analysts saw as suggesting the possibility rates could move lower. Two Fed officials dissented from the decision to cut rates, preferring no change.

Prices for U.S. stocks and government bonds rose, while the dollar fell.

"This statement strongly implies that the Fed will be on pause for some time," said Joseph Brusuelas, U.S. chief economist at IDEAglobal in New York. "The risks to the upside vis-a-vis inflation are serious enough to be on hold until the lagged impact of past Fed monetary policy and the fiscal stimulus on its way take hold."

The Fed's action takes the bellwether federal funds rate, which banks charge each other for overnight loans, to 2 percent, the lowest since December 2004. It was the seventh reduction in a campaign that has brought the key lending rate down by 3.25 percentage points since mid-September.

The central bank also lowered the discount rate it charges on direct loans to banks to 2.25 percent from 2.5 percent.

President George W. Bush on Tuesday said the U.S. economy faced a "tough time," a point underscored on Wednesday by a report that showed U.S. gross domestic product expanded at a slim 0.6 percent annual rate in the first quarter.

While the growth rate was a bit stronger than economists had expected, it reflected a buildup in inventories that may weigh on the economy in coming months.

Other details in the report were decidedly weak.

Consumer spending, which accounts for two-thirds of U.S. output, grew at the slowest pace since 2001, business investment fell and homebuilding continued to nosedive, recording the biggest drop in 26 years.

Fed Chairman Ben Bernanke told Congress on April 2 that "recession is possible," adding that the Fed believed there might be a "slight contraction" in the economy in the first six months of the year.

At the same time, with gasoline prices heading toward $4 dollars a gallon and strong global demand pushing up food prices, some Fed officials have worried that a desire to bolster the economy could divert the central bank's attention from inflation pressures.

In addition to rate cuts, the Fed has taken a number of emergency steps to ease credit strains that have threatened to make the economy's ills worse, pumping billions of dollars into markets to keep them from choking on mortgage-related bets.

At their meeting on Wednesday, Fed officials discussed a new measure -- paying interest on commercial bank reserves held at the central bank -- that could improve their ability to provide liquid funds to the market.

The Fed has also mulled whether expanding the size of its term auction facility cash auctions for banks and extending the duration of those loans beyond 28 days could help ease still-tight credit conditions.

Why the worst may be over - CNN MONEY

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Fri, 25 Apr 2008 10:20:38 -0500

The credit crunch may be behind us and earnings have been better than expected. That could lead to happier times if the Fed starts focusing on inflation.

By Paul R. La Monica, CNNMoney.com editor at large

Last Updated: April 25, 2008: 10:46 AM EDT

NEW YORK (CNNMoney.com) -- What a wild week.

Oil hit another record high but has since pulled back. The dollar has finally started to show some signs of life. And for the most part, corporate earnings were - as Larry David would say - pretty pretty good.

Boeing (BA, Fortune 500) blew away earnings estimates. Ford (F, Fortune 500) posted a surprise profit. And even though investors Friday appear to be disappointed by the forecast from Microsoft (MSFT, Fortune 500) for the current quarter, the company issued a healthy outlook for its next fiscal year.

The worst of the credit crunch may finally be behind us. There have been no more major bombshells from financial institutions, a sign that the Fed's six rate cuts since last September and massive injections of liquidity into the banking system may be working.

In fact, Merrill Lynch (MER, Fortune 500) indicated yesterday that it would pay its dividend this quarter, relieving investors who were anticipating a cut.

For the first time in a while, there seems to be cause for optimism about the markets. The Dow is trading at its highest level since Jan. 10.

The bond market is acting as if it's not as worried about a recession anymore either.

Bonds have fallen in recent weeks, sending the yield on the benchmark 10-year U.S. Treasury to about 3.86%, up from a year-to-date low of 3.28% in January. Bond prices and yields move in opposite directions and lower yields are usually associated as a sign of economic weakness.

And for consumers, even though it's still a painful time because of rising food and gas prices, help is on the way as well. The first of the government's tax rebate checks will be hitting mailboxes on Monday.

Of course, it still is a rough economic environment. The surging price of food threatens to disrupt not just U.S. consumer spending patterns but the overall global economy.

Will Ben save the day?

That's where the Federal Reserve will hopefully step in. The Fed's policy-setting committee holds a two-day meeting next week and will announce its next step regarding interest rates on Wednesday.

As my Fortune colleague Colin Barr pointed out earlier this week, the Fed has a great chance to show the markets that it is serious about keeping inflation in check by holding its key federal funds rate steady.

Many fear that more rate cuts could lead to a further weakening of the dollar, which in turn, could fuel more speculation in the commodities markets and drive food and gas prices even higher.

"The Fed's intention to pause...may be part of an international effort to stabilize the falling value of the dollar in light of the deteriorating state of world food prices. Indeed, the falling value of the dollar has been an integral component of soaring commodity prices," wrote Ashraf Laidi, chief currency strategist with CMC Markets U.S. in a report Friday morning.

I doubt the Fed will be so bold to pause just yet though. Fed chairman Ben Bernanke, like his predecessor Alan Greenspan, likes to telegraph the central bank's moves well in advance and not surprise the markets. And according to the latest federal funds futures price on the Chicago Board of Trade, investors are pricing in an 80% chance of a quarter-point cut.

So my money is on that scenario playing out, which would put the federal funds rate at 2%. The Fed is also likely to carefully word its statement to reflect concerns about rising commodity prices. Expect the Fed to say something along the lines of "further policy action will be data dependent."

In other words, if the credit crisis isn't over and the housing market plunges even further into an abyss in the coming months, the central bank could lower rates again. But if the dollar stays weak and food and oil prices keep surging, the Fed might actually start raising rates later in the year.

"For American consumers, a lower federal funds rate could do more harm than good," wrote Jack Ablin, chief investment officer of Harris Private Bank in a report Thursday.

So as strange as this may sound, higher interest rates, or at the very least, not more cuts, might be exactly what this market and economy needs. Hopefully, the Fed will send a strong signal to investors Wednesday that it is getting ready to sit tight.

Issue #1 - America's Money: All this week at noon ET, CNN explains how the weakening economy affects you. Full coverage.

Under the government's economic stimulus plan, 130 million people will receive tax rebate checks for $300 and up, starting April 28. What do you plan to do with your check? How do you think the stimulus plan will affect the economy? Send us your photos and videos, or email us and tell us what you think.

First Published: April 25, 2008: 10:33 AM EDT

Mortgage application volume up 2.5%

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Sat, 19 Apr 2008 23:34:31 -0500

Some good news from CNN Money, Lets keep the good news coming!

Mortgage Bankers Association's weekly survey says the number of people filing home loan applications edged higher last week; refinance volume up 5.2%.

WASHINGTON (AP) -- Mortgage application volume increased 2.5% during the week ending April 11, according to the Mortgage Bankers Association's weekly application survey.

The MBA's mortgage application index rose to 743.4 from 725.6 the previous week.

Refinance volume increased 5.2% during the week, while purchase volume fell 0.8%. Refinance applications accounted for 53.5% of total mortgage applications.

The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 743.4 means mortgage application activity is 7.434 times higher than it was when the MBA began tracking the data.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50% of all residential retail mortgage originations each week.

Application volume rose slightly as interest rates posted small declines. The average interest rate for traditional, 30-year fixed-rate mortgages fell to 5.74% from 5.78%. The average rate for 15-year fixed-rate mortgages, often a popular option for refinancing a loan, fell to 5.27% from 5.39%.

The rate for one-year adjustable-rate mortgages fell to 7.02% from 7.06% the previous week.

Mortgage application volume up 2.5%

Sean Casey Palm Springs Real Estate Realtor (Greater Palm Springs Realty) — Sat, 19 Apr 2008 23:33:58 -0500