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8/14/2019 keeping-current-2007-09-realmiamibeach com

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September 2007

Keeping Currentmore riveting stats .


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Homeowners across America were more likely to

report declines in their home values than at any time

since 1992, according to the Reuters/University ofMichigan Surveys of Consumers for August released onFriday.

Value

8/06/2007


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In your area, what are your expectationsfor home prices over the next year?

61.1% Home prices will rise 0-5%

8.5% Home prices will rise 5-10% 0.7% Home prices will rise 10-20% 0.0% Home prices will rise greater than 20% 29.7% Home prices will fall

http://www.realtor.org/Research.nsf/pages/REPS?OpenDocument&WT.mc_t=LS080807&WT.mc_n=Rsrch

Value

7/2007


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"I think were yet to get to the main event," said GaryShilling, president of A Gary Shilling, a money-

management firm. "We continue to look for a 25%decline in median single-family house prices. I think

this is really just getting started.

Value

8/28/2007

.com


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The S&P/Case-Shiller U.S. National Home Price Index fell3.2 percentin the second quarter, compared with the sameperiod in 2006. This was the sharpest decline since theindex was created in 1987, S&P said in a statement.Thepullback in the U.S. residential real estate market is

showing no signs of slowing down," Robert Shiller,creator of the index and chief economist at MacroMarkets

Value

8/28/2007


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Value

8/31/2007The housing markets correction is incompleteandmay prove to be long drawn given the soft growthenvironment in the U.S. economy, the tightening ofmortgage standards, and the unsettled financial marketsituation.

- Paul L. Kasriel, director of economic research


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The supply of all homes for sale at the end of the Julyclimbed 5.1 percent to 4.59 million.At the current salespace, that represented 9.6 months' worth, up from 9.1months' worth at the end of the prior month.

The inventory of single-family homes represented a 9.2months' supply, the most since October 1991.

Inventory

8/2007

http://www.realtor.org/Research.nsf/files/EHSreport.pdf/$FILE/EHSreport.pdf


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The run-up in house prices has ledto a predictable oversupply ofhousing; an oversupply far beyondanything the country has ever

experienced, with the inventory ofunsold new homes 70 percent aboveits previous record.

- Dean Baker

8/2007

Inventory


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We are very likely to see home sales continue to dropthrough the year, said Ethan Harris, chief economist atLehman Brothers Inc. in New York, who accurately theforecast the July sales rate. There's a big imbalance

between supply and demand with lots of people who

want to sell and lots of hesitant buyers.

Inventory

8/27/2007


10/28

There are in excess ofthree and one half million vacanthomes in the country.- Ronald J. Peltier, President, HomeServices of America, atRISMedia Conference in NYC

9/5/2007

Vacancy Rate


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The number of vacant ownership units is nearly twicethe previous peak. - Dean Baker

8/2007

Vacancy Rate


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Mortgage Crisis


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Ameriquest Mortgage Co., the largest U.S. subprimelender as recently as 2005, is closing.

Mortgage Crisis

9/1/2007


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http://ml-implode.com/

Since late 2006, 151 major lenders have imploded.

The "imploded" status is somewhat subjective and does notnecessarily mean operations are ceased permanently: it can meanbankruptcy filing, temporary but open-ended halting of majoroperations, or a "firesale" acquisition. The Companies include all

types (prime, subprime, or a mix of both; retail or wholesale;subsidiaries and entire companies).

- from the front page of the website Implode-o-Meter

Mortgage Crisis

9/9/2007


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Mortgage Crisis

The phenomenon of reset has already begun, and isexpected to increase in strength over the next two tothree years, even if fewer new teaser and sub-primeloans are done in the future and stricter underwritingand valuation guidelines are used. The impact ofreset will extend over several years, into the earlyyears of the coming decade.

3/2007

MORTGAGE PAYMENTRESET STUDY


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http://realestate.yahoo.com/Foreclosures

Foreclosures


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http://www.realtor.org/subprime_lending.nsf/pages/subprime_lending_issue_in_depth?OpenDocument

Foreclosures


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The problems may be most acute in the markets forlower-endhomes, which tend to go to less credit-worthy borrowers,

and forhigher-end homes that require buyers to take out so-called jumbo loans. Jumbos are loans of more than $417,000,

the limit observed by Freddie Mac and Fannie Mae, thegovernment sponsored enterprises (GSEs) that buy loans in thesecondary markets. Freddie and Fannie don't buy loans abovethat cap. Rates for such loans, which exceed $417,000, jumped

sharply this month.

Restrictions


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How is the tightening credit situationimpacting your market?

31.4% Significant impact of shutting out many

would-be buyers with marginal credit

43.0% Moderate impact as some borrowers look toother loan products like the FHA and VA loans and/or

for lower loan amounts 23.5% Little impact since I deal primarily with prime

borrowers

2.2% I don't know

http://www.realtor.org/Research.nsf/pages/REPS?OpenDocument&WT.mc_t=LS080807&WT.mc_n=Rsrch

Restrictions


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Because loan standards are now much tougher, at least10% to 15% of the people who could have qualified for a

home-purchase loan last year can't do so now, says JanHatzius, chief U.S. economist at Goldman Sachs.

Restrictions

8/06/2007

X X

X


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Jumbo 30-year fixed-rate loans last week were beingoffered for an average of around 7.4%, orabout 0.9percentage point above those on conforming

loans, according to HSH Associates, a financialpublisher that surveys lenders daily. Usually, jumbo

rates are only around a quarter point aboveconforming.

9/2/2007

Restrictions


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At the beginning of 2007, I said:

We would lose about 10% of our fellow realtors House prices would fall 10-15% in many parts of the

country

Commissions would increase as our job got moredifficult There would be an avalanche of foreclosures all over

the country The number of foreclosures would rattle the mortgage

industry

The agents who accepted the first five premiseswould make small fortunes this year!!

Keeping Current


23/28

The "Fair Mortgages Practices Act, " H.R. 3012

The next six months

8/15/2007

U.S. Rep. Spencer Bachus introduced a bill in theHouse of Representatives that would authorize theFederal Appraisal Subcommittee to regulate state

appraisal licensing agencies.


24/28

Christopher Cagan, director of research at First AmericanCoreLogic, a housing and mortgage data supplier in SantaAna, recently found that less than 7% of 32 million U.S.households studied as of December owed more than

their homes were worth, based on computer estimates

of the property values. An additional 4% had home

equity of 5% or less.

8/16/2007

The next six months


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In recent years, FHA lost market share as the market for subprime loansexploded and home buyers of all income levels were offered a range ofexotic loan products, such as no-money-down mortgages and interest-onlypayments. While FHA-insured loans once accounted for roughly 15% of themortgage market, that number has fallen below 5%. The next eighteenmonths will see a return to historical market numbers.

The next six months

2001 2006

% in $volume

Subprime

FHA

2009


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The ratio of the median-price home to the medianfamily income is 32% above above the mean ratio ofthe previous 25 years mostly because of rising homeprices.

8/18/2007 Jan Hatzius, chief U.S. economist at Goldman Sachs

The next six months


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Year Median Household Income (2005 Dollars)

2000 $47,599

2001 $46,569

2002 $46,036

2003 $45,970

2004 $45,817

2005 $46,236

9/2007

The next six months


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Credit card borrowing was up 11 percent in May andJune, likely because homeowners are using plastic

to pay for daily expenses to free up more cash to

make their mortgage payments. Moreover, whileborrowers previously have tapped into mortgage equity

to produce the money needed to resolve credit-cardand other debt, a Goldman Sachs report notes that"cash-outs" peaked during the fourth quarter of 2005.

8/27/2007

The next six months

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