Keeping You Current: Madeleine Romanello

Madeleine Romanello

Keeping You Current

May 2009

“Many analysts believe that if the world economy is going to rebound, the recovery will begin with U.S. housing.” - Don Miller, Associate Editor Money Morning

Source: Seeking Alpha 4/09/09

Sales – month over month Category

Existing Sales Pending Sales New Construction

Percent age- 3 2.1 - 0.6

RPX Monthly Housing Report “On a month-over-month basis, the total transaction count increased 21%, its largest increase during the month of February since 2004.”

Source: Radar Logic 4/23/09

Source: Seeking Alpha 4/08/09

Wall Street Journal Don't Hunt for the Bottom “Pinpointing a bottom in home prices is very difficult, akin to picking the bottom in the stock market. But data and research indicate we're getting close."

Source: Wall Street Journal 4/18/09

Interest Rates

Mortgage Rates – 30 year fixed Asset Purchase Announcement Asset Purchases Begin

1/1/2009

Source: Federal Reserve

4/23/2009

Mortgaging

Jumbo Loans Bank of America recently began trumpeting jumbo programs, offering 30-year fixed-rate jumbo mortgages with rates in the high 5% range. "To be honest, I'm not certain if [the low rates] will be around for a while," Paola A. Kielblock, national product specialist for Fairway Independent Mortgage said.

Source: Market Watch 4/05/09

Foreclosures

Thousands of mortgage loans that were supposed to reset at a higher rate this spring won't be changing, putting off the grim threat of foreclosure or bankruptcy for many Americans by as much as a year.

Source: Business Week 4/16/09

A total of 803,489 properties entered some stage of foreclosure during the first quarter, and a growing number of these properties are more expensive homes.

Source: Realty Trac 4/09

Source: OCC and OTS Mortgage Metrics Report 4/3/09

Source: OCC and OTS Mortgage Metrics Report 4/3/09

“(A higher monthly payment) increases the probability of a 90-day delinquency by 7 to 11 percent, depending on the borrower. By contrast, a 1-percentage-point increase in the unemployment rate raises this probability by 10-20 percent, while a 10-percentage-point fall in house prices raises it by more than half.”

Source: Federal Reserve Bank of Boston 4/13/09

Jobless Rate

Source: Wall Street Journal 4/18/09

Source: Global Insight 2008 4th Quarter Report 4/09

“There is a real danger that there is much more (foreclosure) inventory than we are measuring. Eventually those homes will have to be dealt with. If they're all put on the market, that will add more inventory to an already bloated market and drive down home prices even more." - Celia Chen, director of housing economics at Moody's Economy.com

Source: Wall Street Journal 4/22/09

Shadow Inventory?

Source: San Francisco Chronicle.com 4/08/09

Pricing

Source: Seeking Alpha, Tom Iacono 4/24/09

Source: Seeking Alpha, Tom Iacono 4/24/09

Prices - year over year Index

% Price Change

FHFA Case Shiller NAR IAS360 Census Bureau

(New

Homes) Source: Macro Markets, IAS, OFHEO, Census Bureau, NAR

- 6.5 - 18.6 - 12.4 - 14.4 - 12.6

List Prices The 10-City Composite Index was up 1.1% during March and is also up 1.1% for the first quarter since prices were effectively flat in January and February. This represents the first monthly and quarterly increase in listing prices since inception of the Composite Index in January 2008.

Source: Altos Research & Real IQ 4/08/09

The Fitch Report U.S. House Prices will Drop Another

12.5% Before Hitting Bottom

Source: Fitch.com 4/23/09

"We expect prices to decline further through 2009 as consumers remain wary of taking on housing debt in these uncertain economic conditions.” - Jeannine Cataldi, senior economist and manager of IHS Global Insight's Regional Real Estate Service

Source: IHS Global Insight 1Q Report 4/20/09

“We believe there is another 16% to go in pricing before we hit the bottom.” - Karen Weaver, Deutsche Bank

Analyst Meredith Whitney, well-known for her work at Oppenheimer & Co. and now at her own firm, told cable television news outlet CNBC that she expects home prices to fall another 30%. Whitney is known both for her bearish calls, and thus far, for being largely correct. Which makes her predictions worth paying attention to.

Source: Housing Wire 4/07/09

http://www.usatoday.com/money/economy/housing/2009-04-09-vacanthomes_N.htm