Homes for Sale in Westerly RI

National Housing Market Update

• It’s premature to be calling the bottom.
• Encouraging signs – YTD through September transaction sides going up
• Pretty much confined to lower price range
• No sign of any spill over effect on move up or luxury market
• Homes under $100,000 up 7% in sides
• $100,000 to $400,000 down 9%
• $400,000 to $750,000 down 30%
• Over $750,000 down 39%
• Is this a bottom up recovery?  Is it sustainable?  - It’s too early to tell
• Fannie Mae and NAR national forecasts
• NAR – 4^th qtr 2009 sides will be up 11.5% - prices down 5.1%
• Fannie Mae – 4^th qtr 2009 sides will be up 9.9% - prices down 3.3%
• NAR – full year 2010 sides will be up 9% - prices up 3.9%
• Fannie Mae – full year 2010 sides will be up 11.3% - prices down 3.2%
• Over the past couple of years, Fannie Mae has been more accurate than NAR

Macro Economic Indicators

• National debt – close to $12 trillion – 8.3% of gross domestic product (GDP) – highest since end of WWII
• National deficit - $1.4 trillion per year – will average $1 trillion per year for next 10 years 
• leads to higher taxes and higher interest rates.
• 70% of GDP is result of consumer confidence.
•  Sept 2009 consumer confidence was 53.1%.
•  The last time consumer confidence was below 60% was 1993.
• Unemployment – September 2009 – 9.8%.
• August 2009 – 9.7% 
• 15.1 million people out of work.
• 263,000 jobs lost in September 2009.
• 7.1 million jobs lost since September 2008.
• Delinquencies and foreclosures –

·         1.9 million filings in first half of 2009.

·         9.4% of all mortgages are delinquent (besides those already in foreclosure)

·         Highest % ever.

·         15.2 million mortgages are underwater (negative equity) – 32% of all mortgages. 

·         There will be a 2^nd wave of foreclosures

• Tax Credit – will congress extend the tax credit? overwhelming concern for health care reform is hindering tax credit acceptance
• Will probably be added to extension of unemployment benefits bill
• Real estate industry is pushing for $15,000 credit for all buyers
• IRS is claiming there are up to 100,000 fraudulent claims for tax credit