Some Good News

The recent report by the NAHB and First American shows that 29 metro areas have been added to the list of improving real estate markets.  The list now totals 98 that have shown appreciable improvement in the past 6 months.  The index is based on local employment and housing price, housing growth trends. 

Among the new additions are Miami, Tampa, Boston, Detroit, Omaha, Salt Lake City and Kansas City.  Many mid-sized cities such as Syracuse NY and Youngstown OH have also joined the list for the first time. 

A few markets dropped off the list, once more demonstrating that this recovery is likely to be uneven.  San Jose, DC, New Orleans and Jackson MS were in retreat, at least for the moment.  In the case of DC, the change is likely due mostly to the unusually robust market over the past year that may not be sustainable for at least a time. 

Let me know if you want to learn how to access and use this information.

Housing Recovery Comments

There is a lot of discussion about reducing principal balances on underwater mortgages.  The head of the FHFA recently estimated that even a small reduction on Fan and Fred loans could cast $100 Billion, which would have to be funded by taxpayers.  That is not a very palatable option when over $150 billion has already been sunk into Fan & Fred.

Bailouts of homeowners (e.g, reducing their principal balance)  are unpopular for other reasons. First, one third of Americans rent. Why should they help bailout homeowners that are underwater? Second, 30+% of homeowners don't have a mortgage. Why should they help bailout  heavily indebted homeowners, when many over-extended unwisely? Third, The overwhleming majority (probably 85%) of homeowners with a mortgage are current in payments. Why should they help bailout other homeowners?

There would have to be a load of political air cover for these sorts of actions.  Opposition to homeowner bailouts was, after all, one of the early motivating forces in the Tea Party movement, along with TARP.  And, we already have a huge deficit and debt to manage: adding to it is problematic even in a non-election year.

Maybe people should look at their houses as homes, not assets, and just stay put until we settle into normalcy.