THERE IS AN OLD SAYING IN REAL ESTATE THAT A DECLINE CANNOT END UNTIL THE LAST OPTIMIST THROWS IN THE TOWEL.  I THINK IT IS BARELY POSSIBLE THAT WE MAY - AND I STRESS MAY - HAVE JUST WITNESSED THAT MOMENT.  I WILL TELL YOU IN JUST A MOMENT OF TWO TINY HINTS THAT MAY BE HARBINGERS OF A TURN UPWARD.  BUT FIRST I WANT TO TALK WITH YOU ABOUT WHAT I SUGGEST COULD POSSIBLY BE THE VITAL "THROWING IN OF THE TOWEL."

AS FIGHT FANS WHO WATCH BOXING SLUGFESTS KNOW, THAT IS A MOMENT WHEN THE CORNER MEN FOR ONE OF THE FIGHTERS TOSSES IT INTO THE CENTER OF THE RING AT THE FOOT OF THE REFEREE, TO SIGNIFY THAT THEIR BATTERED MAN IS BEATEN AND WILL NOT BE COMING OUT AGAIN FOR THE NEXT ROUND.

The first omen, as I see it, is a statement yesterday by former Fed Chairman Greenspan.  As you know, I think Alan is a brilliant and dedicated man.  On more than one occasion he prevented a sudden decline in housing or stocks from turning into an all-out decline in the economy.  He did so by flooding the markets with money on a vast scale.  This time he is powerless to repeat that performance.

Greenspan only has one small weakness, and by now just about everyone in finance knows what that is.  He has absolutely no sensitivity to emerging trends in the economy.  Once he was asked by reporters if there was any truth to the rumors that a recession had begun, and he angrily retorted that if that were true he would most certainly know about it.  The very next day the official arbiter of when recessions start and stop announced that one had begun six months earlier, and had fulfilled the definition of two consecutive quarters of negative GDP.

Now people are asking him again if a recession looms.  This time he was asked whether the housing downturn was almost over he answered  "NO."  As soon as I heard that he said that I began looking for other clues that we may have already seen the lowest point in housing.  It did not take long to find such a hint.  The usually optimistic trade group for real estate agents announced their new prediction, a pessimistic outlook that foretold of still lower home sales.

So I automatically began looking around for small hints, missed by everyone in their new-found gloom-and-doom mood, that there might be light showing at the end of the housing tunnel.  The first hint came in the report from the Reuters-University of Michigan Survey of Consumers.  It said that its survey of consumer sentiment had turned up slightly in the past month.  The next small hint came when sentiment was translated into action.  The Federal Reserve announced that its most recent intelligence on consumer spending shows a 7.9% increase.  Hardly what one expects if the nation was lunging into a recession, as so many in the media believe.

And then yesterday came the newest hint of a bottom in the making.  The Mortgage Bankers Association announced the results of its most recent weekly Mortgage Applications Survey, for the week ending October 5, 2007.  The Market Composite Index, a measure of mortgage loan application volume, increased 2.4% in just one week.  The seasonally adjusted Conventional Mortgage Index increased 3.4%.  The Purchase Index rose 2.2%.  The seasonally adjusted Government-backed Mortgage Index climbed 5.3%.  And the Refinance Mortgage Index rose 2.7%.  That is a fairly strong and consistent improvement showing across the board, suggesting that more people are gaining the confidence needed to take out a new mortgage and buy a home - or refinance their current mortgage.

AM I WILLING TO FLATLY DECLARE THAT THE BOTTOM IN HOUSING IS NOW BEHIND US?  NO I AM NOT, DESPITE 40 YEARS EXPERIENCE IN THIS BUSINESS AND A REPUTATION FOR ACCURACY IN FORECASTING THAT I AM TOLD IS LEGENDARY.  I AM NOT A MIND READER.  IT WILL TAKE MORE THAN THESE FEW HUNTS TO PERSUADE ME THAT THE NEXT MAJOR MOVE IN HOUSING IS UP AND NOT DOWN.  BUT I DO ADMIT THAT ALL OF MY INSTINCTS ARE NOW TWITCHING IN THAT DIRECTION.

THERE ARE A LOT OF HOMES FOR SALES TODAY, AND I AM HEARING TALES OF PEOPLE DRIVING AROUND CHECKING THEM OUT.  THEY ARE TALKING AND DREAMING AND SOMETIMES EVEN MAKING DISCREET INQUIRIES.  ALL OF THIS IS WHAT MUST HAPPEN PRIOR TO AND COINCIDENTALLY WITH A NEW UPTURN.  BUT IF IT IS OK WITH YOU I NEED MORE EVIDENCE BEFORE I GIVE MY ALL-CLEAR SIGNAL.  WATCH OVER MY SHOULDER AND WE WILL DO THIS TOGETHER.  More next week.  Adrian Van Eck.

Gail Gladstone, Long Island Realtor