Home Prices Decline Again

Home Prices Decline Again

As I have been predicting for quite some time (see: The Truth About Home Prices), housing prices are declining again in the aftermath of the second ill advised "first time home buyer tax credit" (should be renamed "Fool's Gold Part 2").

According to this article, FHFA Monthly Home Prices: September 2010, home prices have now fallen below their levels in September 2009. (The article states: "The FHFA monthly HPI are formulated from home purchase information collected from mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac.").



As you can see by the graph above, the home price trend clearly shows that home prices are declining again. As a result of this further (and expected) housing price decline, there are going to be an elevated level of foreclosures, short sales and other distress sales over the next several years. Due to these issues, the overall poor economy, and the fact that home prices are still historically high, housing will not begin recovering for at least 4-5 years and even then price gains will be very modest.

Nashville and Middle Tennessee Short Sale and Foreclosure Help and Assistance for Homeowners and Property Owners in Financial Distress. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee, La Vergne Tennessee, or Middle Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Nashville Tennessee and Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR, Expert and Real Estate Investor. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR, Real Estate Expert and Real Estate Investor.

Housing Prices Declining Again

Housing Prices Declining Again

According to this Real Estate Economy Watch article, Fear Seen Driving Prices Lower than Last 20 Years, the housing markets in most US cities "will see prices fall below the lowest levels of the last 20 years" according to the House Price Forecast from University Financial Associates (UFA) in Ann Arbor Michigan.

The article quotes Dennis Capozza, the Dykema Professor of Business Administration in the Ross School of Business at the University of Michigan, and a founding principal of UFA, as saying the "Detroit metro was the canary in the coal mine this cycle, with falling house prices arriving earlier than in other metros. Other metros that have already or will soon converge to pre-bubble real prices include Las Vegas, Phoenix, the inland California metros and many south Florida metros."

Overall, the UFA's forecast "would take the national median price of a home in most markets below $101,000, the national median in 1990, according to the Census Bureau." This prediction comes after other recent data which shows that housing prices are headed downward again. This will result in more short sales and foreclosures as underwater homeowners and real estate investors walk away from their upside down (i.e. negative equity) homes and properties.

Short Sale and Foreclosure Help and Assistance for Real Estate Investors, Home Builders and Developers in Nashville TN and Middle TN. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee, La Vergne Tennessee, or Middle Tennessee real estate investor, home builder, condo developer or real estate developer who cannot pay the property/project mortgage payments (due to the poor economy, adverse financing conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), have already defaulted on the mortgage, or are already in foreclosure, or owe more than the property/project is worth, please contact me to discuss your options including a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/project). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (property owners, real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Springfield TN, Gallatin TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

Housing Market Not Rebounding

Housing Market Not Rebounding

According to this USA Today article, Can home market bounce back without more help?, high foreclosures, high unemployment and short-term government housing stimulus programs (i.e. expanded FHA, expanded Fannie Mae and Freddie Mac, the $1.25 trillion mortgage securities buying program, the home buyer tax credit, etc.) will continue to challenge the housing market and may not be enough to turn housing prices around in the near future. While the article quotes experts on both sides of the housing market rebounding/not rebounding issue, it seems to me that those saying that the housing market is rebounding are only quoting housing market sales figures, sales prices, inventory, etc. without considering the forces behind those figures. For example, if the first home buyer tax credits are spurring 30% of all home sales (as stated in the article), then you cannot use the home sales, home prices and inventory figures as proof the housing market is rebounding since the tax credit is responsible for a significant portion of the sales activity. Given that this tax credit goes away on 4/30/2010, it is not a long term demand driver. Also, the government's $1.25 trillion mortgage securities buying program will end in April 2010 so that is another artificial stimulus that will disappear with the result of higher interest rates and lower demand. Therefore, in my opinion, this "housing market rebound" is a mirage and will disappear once these artificial stimulus actions end. See my post Our Phony Real Estate Market for more information.

Below are some interesting quotes from the real estate experts mentioned in the article:

• Lawrence Yun, chief economist at the National Association of Realtors (NAR) - "Right now, we're not in a sustaining recovery. We're on the cusp of a self-sufficient recovery, but we're not there yet." Well, at least Lawrence got some truth into that statement even though he ended it with Realtor spin.
• Mark Zandi, chief economist at Moody's Economy.com - "Foreclosures will be high for a long time and property values won't increase. Many (homeowners) are underwater and are at high risk of defaulting. There are a lot of foreclosed properties in the pipeline that will limit the market and depress prices."

In short, there are no positive sustainable demand forces in the housing market. The tax credits will go away and the government mortgage market propping will end resulting in higher interest rates. The only sustainable housing market forces are high foreclosures, high unemployment and too much debt. All these forces mean more problems ahead for the housing market.

If you are a Middle TN homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN).  If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

Residential Home Sales Market Statistics: A Comparison of Normal Sales versus Short Sales and Foreclosures in November 2009

Middle Tennessee Residential Property Foreclosure Activity Report
Residential Real Estate Market Sales Activity - Foreclosures, Pre-foreclosures and Short Sales Compared to Regular Listings
Counties & Cities/Towns Covered:
Rutherford County Tennessee: Murfreesboro TN, Smyrna TN and La Vergne TN (LaVergne TN)
Williamson County Tennessee: Brentwood TN and Franklin TN
Month & Year	Nov-09
Start Date	11/1/2009
End Date	11/30/2009
City/Town	Active Listings - Total	Active Listings - % Foreclosures & Short Sales	Pending Sales - % Foreclosures & Short Sales	Months of Residential Inventory Based on Pending Sales Rate
Murfreesboro	1,208	10.02%	11.73%	7.46
Smyrna	316	14.56%	21.95%	7.71
La Vergne	251	22.31%	55.26%	6.61
Brentwood	541	5.55%	0.00%	10.40
Franklin	895	5.25%	5.94%	8.86
Totals & Averages	3,211	9.34%	13.96%	8.15
Notes:
As you can see from the chart above the percentage of Pending Sales that are distress sales (Foreclosures and Short Sales) is greater than their representation as a percentage of Active Listings.  This means that these distressed listings are Pending (i.e. selling) at a faster rate then regular listings.

If you are a Middle TN homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN).  If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

Residential Home Sales Market Statistics: A Comparison of Normal Sales versus Short Sales and Foreclosures in October 2009

Middle Tennessee Residential Property Foreclosure Activity Report
Residential Real Estate Market Sales Activity - Foreclosures, Pre-foreclosures and Short Sales Compared to Regular Listings
Counties & Cities/Towns Covered:
Rutherford County Tennessee: Murfreesboro TN, Smyrna TN and La Vergne TN (LaVergne TN)
Williamson County Tennessee: Brentwood TN and Franklin TN
Month & Year	Oct-09
Start Date	10/1/2009
End Date	10/31/2009
City/Town	Active Listings - Total	Active Listings - % Foreclosures & Short Sales	Pending Sales - % Foreclosures & Short Sales	Months of Residential Inventory Based on Pending Sales Rate
Murfreesboro	950	9.37%	4.82%	11.45
Smyrna	242	14.46%	19.05%	11.52
La Vergne	188	23.40%	54.55%	8.55
Brentwood	439	5.69%	0.00%	11.55
Franklin	742	5.26%	3.23%	11.97
Totals & Averages	2,561	9.06%	9.73%	11.33
Notes:
As you can see from the chart above the percentage of Pending Sales that are distress sales (Foreclosures and Short Sales) is greater than their representation as a percentage of Active Listings.  This means that these distressed listings are Pending (i.e. selling) at a faster rate then regular listings.

If you are a Middle TN homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN).  If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

Housing Will Decline In 2010

Housing Will Decline In 2010

According to this CNBC article, Housing Slump May Worsen Next Year, Not Get Better, in 2010 the housing market will get worse, not better. Their premise is that due to the first time home buyer tax credit (and the recent extension and expansion), "Sales of existing homes will peak in the final quarter of 2009, then begin a year-long slide, which is likely to be a sharp one, according to some estimates."

The article quotes Global Insight economist Patrick Newport as saying "Most of it [the tax credit] is simply shifting sales from one period to another. "It doesn’t get rid of the fundamental problem; there's still a glut of houses. At the end of 2010, you’re still going to have that glut." That is why I have been saying that new home construction does not need to slow - it needs to stop completely. According to Newport, single-family home sales will reach an annual rate of 5.88 million units in the 4th quarter of 2009 (vs. 5.30 in the third quarter). In 2010 he predicts that home sales will decline to 5.65 million units in the 1st quarter of 2010 and average around 4.75 million units in the second half of 2010. That indeed is a large decline.

According to the article, even David Crowe, chief economist at the National Association of Home Builders (NAHB), agrees with the sales shifting premise when he said "We expect a little stall in 2010. I agree, you do advance demand, so you steal it for (from?) the future. The economy and the job market didn't pick up as people expected in '09 and as a consequence that is rolling it in 2010." According to the article, NAHB has predicts a homes sales situation similar to that above with single family home sales reaching a peak of 5.60 million units in the 1st quarter 2010 and declining to about 4.50 million units in the 3rd quarter of 2010, for a 2010 home sales average of 5.15 million units.

According to the article, supporters of the tax credit (and the recent extension and $6,500 expansion to repeat home buyers) did believe that the tax credit would prompt some people to purchase a home sooner than they originally intended, thus reducing the future buyer pool, but those lost future purchases would eventually be replaced by another group of home buyers brought into the real estate market by the improving economy and job market. However, now there is doubt that the $6,500 credit for repeat buyers will help the housing market at all due to the original tax credit not being enough to help new home sales.

The article quotes Andrew Jakobovics, associate director for housing and economics at the Center for American Progress, as saying "I don’t know if the expansion is really going to get anyone else into the market, if you think about what the transaction costs (are). The people who are going to take advantage of it [the tax credit] were going to move anyway. A lot of the new households will be renters or stay renters." I agree in that the marginal effect of the tax credit extension/expansion will be much smaller than NAHB and NAR want. The article states "Most economists see the jobless rate—now 10.3 percent—peaking around 11 percent sometime in early to mid 2010 and then creeping down to around 10 percent by the end of the year. That's too high to make much of a dent in the current glut. Inventory levels are now at an 8-9-month supply--Down from the 10-11-month levels of early 2009, but still above the 6-7-month goal. Another casualty of the job market is household creation, which has meant a steady stream of buyers in the past, helping keep inventories at a healthy level. In 2008, for the first time in years, household creation fell—and sharply, too. At the same time, the number of young adults living at home and average marriage ages increased. More recently, there has been a flattening." As a result the less than desired tax credit effects, continuing high unemployment, and declining and/or flattening of household formation, the housing market will still be in poor shape near the end of 2010. Add in the expiration of the tax credit, the coming end of the government mortgage buying programs and the failing FHA (due to record defaults) - see my blog posts: Housing Faces Upcoming Challenges and Our Phony Real Estate Market - the housing market could be substantially worse in 2010. In fact, short sales and foreclosures will likely increase in 2010 and the result will continued downward pressure on housing prices.

As always, the article mentions that Lawrence Yun, NAR's chief ecomonist, as being bullish on real estate with a prediction that home prices will increase by 4% in 2010. As a homeowner I would like to believe this, but it just defies common sense.

If you are a Middle TN homeowner, property owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in and around Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN).  If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

Real Estate Fiction

Real Estate Fiction

According to this Realtor.org (NAR) article, Headed in the Right Direction, things are looking up for real estate. The article quotes, Lawrence Yun, chief economist of the NATIONAL ASSOCIATION OF REALTORS (NAR), as saying "With home sales heading up and inventories shrinking, prices are stabilizing. These are the key conditions needed for housing to lead the economy into growth mode. Once that happens, jobs will follow." I have never heard such fiction in my life. Housing prices need to stabilize so that the economy will grow and jobs will return! What!? IT IS THE OTHER WAY AROUND LAWRENCE! The economy needs to start growing so that jobs will return so that housing can then recover. The only way housing can recover without job growth is if people borrow more to make up for the fact that they are making less money. The problem is that this is want caused the financial mess in the first place. A backwards real estate market recovery will just lead to more short sales and foreclosures in the future. Please stop producing real estate fiction! We need a sustainable real estate market recovery and that can only happen AFTER jobs return.

If you are a Middle TN homeowner, property owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in and around Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN).  If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.