Bruised economy likely to limp into next year

NF Reporter · 10-20-2008, 04:30 AM

AP - Beaten down by housing, credit and financial crises, the bruised economy is likely to drag into next year, leaving more people out of work and more businesses wary of making big investments.

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waltky · 11-11-2008, 07:57 AM

Should we trust the ones who used sub-prime mortgages to sell houses?...

How to Revive the Housing Market: A Proposal from Realtors
Friday, Nov. 07, 2008 - The National Association of Realtors (NAR) is lobbying for the U.S. government to artificially lower mortgage rates by purchasing loan points for home buyers.

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They say the program would cost $100 billion, and could raise home prices as much as 4% nationwide. Anyone buying a house for primary residence would be eligible for the mortgage-rate buydown, which would lower a purchaser's loan rate 1% for the life of the loan. They say the incentive should be made available for the next 12 months. "The sentiment in Washington is that we need to get the housing market moving to get the economy back on track," says Lawrence Yun, chief economist for the association. "We need to strike while the iron is hot."

But some housing-market economists question the wisdom of the idea. They say helping people who may buy houses in the future is not how the government should be providing assistance. "I can't imagine why you would want to do this," says Dean Baker, co-founder of the Center for Economic and Policy Research, a Washington think tank. "What you should be doing is helping homeowners who are already over their head."

The proposal was detailed on Friday at the association's national conference in Orlando, Fla. The group asked the 20,000 members in attendance to sign letters to Congress showing support for the initiative. It is part of a number of moves they are advocating to help boost housing prices. NAR president Charles McMillan says his organization has "shared the proposal with members of Congress in recent days" but doesn't know whether enough lawmakers would support it. "We don't have a read on that yet," he says.

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waltky · 11-23-2008, 12:22 AM

Elderly stuck in their homes, unable to sell...

Unable to sell, elderly stranded at home
23 Nov 2008, The housing crisis has kept thousands of older Americans who need support and care from moving into retirement communities or assisted-living centres, effectively stranding them in their own homes.

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Without selling their houses or condominiums, many cannot buy into retirement homes that require a payment of $100,000 to $500,000 just to move in. So they are scratching themselves off waiting lists, cancelling plans with packing services and staying put, in houses that fit well 30 years ago. “It is part of the hidden problem of the recession,” said Larry Minnix, president of the American Association of Homes and Services for the Aging. “Every neighbourhood, every family’s got them.”

Facilities that have watched their waiting lists wither and their occupancy rates fall in the last year are now scrambling to bring people through their doors. Some assisted-living centers have called in real estate agents to teach prospective residents about online advertising and how to clean and preen their homes for showings. Others have set up programs with banks to provide bridge loans to homeowners, or are discounting apartments and offering low-interest loans. The Cedar Community, which provides a range of housing for the elderly in West Bend, Wis., has seen independent-living occupancy rates drop by 4% this year. There were so many people waiting for their homes to sell that the facility decided, in some cases, to let new residents pay month-to-month until they could unload their houses and use the proceeds on the facility’s entry deposit.

“We’ve never done that before,” said Tracey MacGregor, a spokeswoman at Cedar Community. But for people like Ruth Scher, 85, selling their home is a critical first step before moving on, or moving anywhere. Scher put her two-bedroom condominium on the market last year, but has no offer yet. In the 34 years since she moved to South Florida, Scher’s husband has died, the siblings who moved south from New York to join her have died, and her friends have moved away. She is recovering from a fall that broke her clavicle and suffers from arthritis in one shoulder, and she says it is time to move back.

“It’s lonesome,” Scher said. “So many other people have passed away or moved away. It’s very lonely. The children would love me to come up and I would love to, but I just can’t sell.” Scher hoped to move to a retirement community in Cornwall, NY, where she has friends. But in the year her home sat on the market, she could not even find a broker willing to sell the property, she said. She finally de-listed her condominium. “They tell you, ‘We’re sorry, we can’t get any people to come and look,” Scher said. “If I can’t sell here, I can’t go nowhere.” There is no way to say how many older Americans are in similar straits, as no statistics track how many of America’s 4.27 million unsold homes are owned by people 65 or older. But industry groups and administrators at retirement homes call the problem a growing one, which worsened as the financial crisis spread from real estate to lending markets.

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waltky · 11-26-2008, 03:00 AM

Housing market still hasn't hit bottom...

Home prices in record decline
November 25, 2008: A Case-Shiller survey shows a 16.6% annual decline in the summer months as the housing picture continues to deteriorate.

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The home price plunge stayed on a record pace this summer, according to a widely watched gauge of national real-estate markets released Tuesday. The S&P Case-Shiller Home Price national index recorded a 16.6% decline in the third quarter compared with the same period a year ago. That eclipsed the previous record of 15.1% set during the second quarter. Prices in Case-Shiller's separate index of 10 major cities fell a record 18.6%, while its 20-city index dropped a record 17.4% With foreclosures soaring at record rates, the economic picture dimming and job losses ramping up, all the elements were in place to push prices lower.

"The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals," said David Blitzer, Standard & Poor's spokesman for the indexes, in a press release. "All three aggregate indices, and 13 of the 20 metro areas, are reporting new record rates of decline...Prices are back to where they were in early 2004." The 10-city index is now 23.4% off its peak price, which came in June 2006; the 20-city index is down 21.8% from its July 2006 high and the national index has fallen 21% since the third quarter of 2006.

Home prices in the 10-city index have fallen for 26 consecutive months. The decline has broadened over the past 12 months, with prices dropping in every city of the 20-city index during September. In the weakest market, Phoenix, the 12-month loss came to 31.9%. Las Vegas prices plummeted 31.3% and San Francisco recorded a 29.5% decline. The best performing markets, Dallas and Charlotte, N.C., still posted drops - 2.7% in Dallas and 3.5% in Charlotte.

More Home prices post a record decline in Case-Shiller survey - Nov. 25, 2008