The Wall Street Journal Reports The Housing Crisis is Over!

Several years ago, in our area, prices got to where the "entry level priced home" didn't come with dirt.  That was when I knew there woul be trouble.  Two solutions...

a) inflation -- This is painful

b) depreciation -- worse

Ouch, we got both.

"This too will pass"

Since this article came out in the beginning of May there have been posts and references to its.  As you can imagine it created quite a stir.  Thank you for your take on it - they are all different.

William - I'll have to check out the article, thanks for the link.  The financial end of thing (Mortgage Money) is pretty much a National thing in my opinion.  While I've seen the purse strings loosen up a little, knee jerk reactions and somewhat ridiculous Underwriting Guidelines are still out there.  I will say that a large part of the crisis is a Psychological One in my view, time will tell.

William - Excellent article - thanks for pointing it out.

Whether the crisis is over depends a lot on where you are located and what the local conditions are in that area.

Phoenix is still going to see a large number of foreclosures and REO properties hanging over the market for some time to come.

You can see it just driving down the street.

Drive down 64th Street, 56th Street, Greenway, Thunderbird, Cactus, or any other similar street and you can see that every third or fourth house looks like it is the West Valley or South Phoenix.

When those yards get cleaned up and the water and electricity get turned back on, you will be able to say that the crisis is on its way out.

William, it's nice to see good news.  As with San Diego, Orange County's affordability was low for several years and is now getting better.

All realty is local.  In Southeast Florida, we still have a long way to go.  Wholesalers (auctions/lenders) are successfully luring buyers.  We have a LOT of inventory remaining & some fear that more will come as foreclosures continue after ARM repricing. 

William - it was encouraging to read this article and to have the media report some more positive news, although I think we have a ways to go. There is certainly more activity, and the increased affordability helps, although the stiffer mortgage guidelines still make it tough for many to get a loan. Affordability in the coastal towns has not changed too much, with mnay still under 10% (but at least county-wide we are now above 15% where we were undr 10% for some time.

There are still many areas where the number of short sales, foreclosures and REOs is pretty scary. One really has to look locally to understand what is going on. The increased buyer activity and number of pendings is encouraging - hopefully it is not just a spring market trend.

Jeff

Good afternon William - The media is finally starting to realize things are getting somewhat better in the real estate market, that alone will help things get better.

William

I read that same article, and i think it is great. Now if you could only get my local paper to pipe down a bit and see the greatness that is ahead of us it would be great.

Happy Memorial Day to you.

Sincerely

Tom Braatz

Well William.  You can quote Mr. Moulle-Berteaux and I'll quote Winston Churchill.

"So far have we come, so far have we yet to go".

This piece in what once was a respected paper is getting a lot of "legs" by real estate agents. 

If he had been temperate is his proclamation, i.e., "The Housing Industry is recovering" or something reasonable, it would have some credibility.  To declare the housing industry well, is hyperble that leads me to believe that his position as the manager of a hedge fund would benefit from a "bump" in real estate stocks. 

Yes, I'm jaded.  I spent many years at the SEC involved in investigating these jokers.  His article reminded me of a famous case that I worked on, the "Heard On The Street" where Wall Street Journal writers deliberately recommended buying or selling stocks and traded accordingly. Mr. Wynans, et. al., the authors of that Wall Street feature series went to jail for many years.

I don't know if this link will work but try it.  It was a famous case. 

http://query.nytimes.com/gst/fullpage.html?res=9B0DE0DD1F38F934A25752C1A961948260&sec=&spon=&pagewanted=all

William, great news. It's always good to hear good news now matter who gives it. Affordability is definitely "key."  ;-)

Willliam,

Nice article!

We are seeing more buyers coming out of hiding, but they are understandably cautious and rightfully want the best deal possible. San Diego is a blood-splattered market with some areas realtively unscathed and others bleeding out with defaulted mortgages and walkaway borrowers.

Still, it is good to see positive real estate press--especially from the WJS!

Although our median sales price in Las Vegas continues to decline, the rate of decline is slowing, indicating that prices are close to leveling out. The number of homes sold is rising, however we still have a lot of distressed properties on the market. In April, more than 70% of the closings were bank-owned, short sales or foreclosures. I wouldn't say the crisis is over, but at least we're headed in the right direction and can see the finish line.

William,

The public needs to see good news for a change. My area of West Tennessee has been in the recovering stage for a few months now. Congratulations on the featured status!

Greetings,

I've been noticing price leveling in Imperial County, specifically in the areas of El Centro, Imperial, Brawley, Calexico, Heber, Holtville, and others are showing a variety of movement. 

DOM's are still a bit out there, however in my observation it appears as if they're caused by a combination of not fully motivated sellers and some asset managers holding onto the REO prices before making significant price reductions. 

Our county is dealing with foreclsoures, like many areas of the country, however Imperial County had one of the highest concentrations of subprime mortgages and piggyback financing at high LTVs according to a report by the Consumer Federation of America (CFA), you can ready my article posted here http://blog.homeloans.cc/2008/04/27/poorest-california-county-ranks-highest-for-subprime-lending.aspx the complete CFA report which was issued in January 2008 and can be referenced http://www.consumerfed.org/pdfs/California_Subprime_2006.pdf

Recent MLS stats show that at least 50% of all MLS sales are foreclosure related, meaning they're either REOs or short sales.  During the month of April 2008, Imperial County posted the highest level of foreclosure notices ever, see my post here http://blog.homeloans.cc/2008/05/02/imperial-county-foreclosures-hit-record-in-april-2008.aspx 

After tracking some of these sales, I've noticed they seem to take an average of 3 to 4 months to make it into the MLS as an REO sale.  I have also noticed a surge in the amount of Notice of Trustee Sales that are going back to the bank as an REO, where in the past it was about 1/3 to almost 1/2 of them going back, however those numbers are showing almost 2/3rds are going back.  Notice of Trustee sales data shows that over 2/3s are now going to the court house steps.  The majority of the mortgage vintages shown for the Notice of Trustee sales were subprime loans taken out in late 2005 and throughout 2006.

Clearly we still have some work to do with these foreclosures, however it appears as of the asset managers of the REO companies are finally starting to get more accurate BPOs and other pricing indicators to ensure a quick sale and not to artificially weigh the market with excess foreclosure inventory.

It's refreshing to see some good news and know that a bottom will emerge from the mess we are still struggling with on a daily basis.

I'll take bets that the housing crisis is not over.  The issue now is the oversupply of houses, lack of qualified buyers per the new standards lenders have instituted, and the supply of foreclosures that will plentiful until at least the beginning of next year.

William: THANK YOU for posting some "good" news. What do I think? I am actually seeing a "pick up" in business in my area. Not booming, but moving.  More pendings and solds weekly.  Buyers are looking AND writing offers. 

...and there you have my two cents. Smile

Thanks for the post.  It is nice to see some positive press, as the media has been a major culprit in the confidence issues that have plagued consumers and contributed to the crisis.

William,

I'm praying but I'm not sure we are reading the same paper:) I have actually been busy since Christmas so I can't complain but in FL we have way too much of a supply to move before it will get better.

William-

I read that article as well.  There was also another one that stated that the recovery period can take up to 15 years.  I am not a "doom and gloomer", but with the new lending guidelines, lack of qualified buyers and still a lot of inventory leads me to believe there is no consumer confidence and we really need to get that back for the market to turn around.

No matter what...at some point it's going to get better for areas that are seeing the worst. Don't know when...and it all depends on the area too I suppose. We haven't seen much of anything but less sales... and still stable prices.

I just read another blog commenting on how a NYU professor is predicting another 10% to 15% drop in home prices before we see the bottom.

My personal opinion is that we are somewhere in the middle - not at the bottom, but approaching it. 

William--It is great that the WSJ is reporting some encouraging news...I have seen some similar indicators. But as Lenn notes, we still have far to go....Nice report on the San Diego market. I agree that those waiting on the fence should jump in as there are some incredible bargains out there!

We will know when we hit bottom is when we see it on our rear view mirror

I have noticed that the lenders are starting to come back around on some loans

At least there is some positive press!  This after reading Friday that Fannie Mae predicts the market will worsen over the next 12 months and will not start coming back until 2010...I don't know which to believe..but since the power of the press seems to effect the public, I'm all for more positive articles like this one!  Thanks William!

Because it is written it simply is, right? Whatever. Positive is good but we have to begin to plan our own market instead of waiting for the media to tell us what it is. Later in the rain~Deb

Consumer confidence was mentioned by one responder, and I'm betting that we will be seeing articles like this as an effort to spur consumer confidence.  I see it more as an effort at manipulating the situation in hopes it will help turn things in a positive direction.  Sadly, if gas prices keep going up, up, up, prices of everything else (except home values) will keep going up as well, and the consumer just won't be buying into articles like this.

When I speak with our people at our corporate office, they are certain we have quite a ways to go, at least 2-3 years.  Not being one to listen to one side of a story, I've phoned a number of professionals around the country, and I would say at least 90% of them feel that articles like this are bogus, as things in their neck of the woods look quite bleak.  Many are pointing their fingers at banks/mtg. companies for their crazy policies in not working with homeowners as a huge mistake and a major contributor to the problems they expect to keep dealing with.

There are a few areas where the Realtors/LO's feel their areas really haven't been too affected by this mess.  It's not too bad where I live, however, these pockets are in the minority.  My research tells me we have quite a ways to go.

Not so sure I think the Wall Street Journal is the pinacle of journalism but I enjoyed the post.  Here in the Dayton Ohio area the market continues to show signs of improvement.

Hi Wiliam...we are definately seeing more affordability and as the foreclosures increase the banks will start flooding the market and we'll probably end up with under-value )in my opinion)

One of the biggest hurdles is financing.

I also think this winter with oil half again as much as last...there will be even more people going under.

It's not just housing....it's the whole economy! I think this will be with us a while.

Our "crisis" here was only because of the national media.  Things have been slowly moving in the right direction, though :)

I've seen this article cited several times.  What continually gets left out is that it is an OPINION article by a hedge-fund manager.   While that is not necessarily bad, Mr. Moulle-Berteaux's fund includes significant holdings of Centex, Dr. Horton, Pulte, Toll Brothers, Lennar, Bear Sterns, Citigroup, Morgan Stanley, Citizens Bank, and Goldman Sachs.  Obviously, the author has more than 1 reason to express a positive opinion of the market.  I do not know Mr Moulle-Berteaux so I cannot say whether this is his true opinion or whether he is talking up his portfolio.  However, the WSJ should have diviluged this info so that her reader's could judge for themselves.

One of the leading indicators in Denver after our housing crisis in the 1980's and early 90's (remember S&L's?) was when days on the market started going down.  In retrospect, that was the beginning of our slow recovery.  We're seeing this again, with days on the market lessening and inventory slowly diminishing.  It won't be a fast turn-around and there won't be a run-up again for a very long time.  Let's just hope for a balanced market soon.

Yeah right.

I'm siding with Lenn on this.  Leave it to good ol' Rupert to deface a once credible source of news with an asinine title for an article such as this.  What a shame.

Hard to say if it's over but buying activity has definitely picked up so that is a good sign!  Thanks for the information!

Nice article and informative.  We are seeing multiple offers, buyer out of hiding and good activity.

I have been looking for this article, thank you for sharing

William great news, always good to hear something positive about the housing market...

Maybe the housing crises is over according to the Wall Street Journal's cheerleader for the industry, but I'm not so certain about the financing crisis. How in the heck could a "milder house-price decline scenario lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year"? What do securitized mortgages have to do with declining home values? MBS money gone bad is just exactlly that: MBS money gone bad. Sure sounds like Jabberwockey to me. I'm suspicious if that writer could even balance their own checkbook with that kind of comment. Sorry, but I don't buy it. Have a nice holiday.

What great comments.  William, you sparked a good conversation.  I'm gratified to see that I was not alone with comments of doubt and on, not what was written in the WSJ Opinion piece, but by whom it was written, i.e., hedge fund manager. 

I read it and like you thought it was good news coming from the WSJ. We are stabalizing here, and the housing crisis to many is a great opportunity for some people. It's cyclical....we have to learn to work differently in every market. We forget how frantic the sellers market was and how many people were shut out from buying in the city of Ann Arbor. Now they can.

I think that the mortgage industry has to stop overreacting and loosen up its guidelines before things can get better.

Thanks! It's good to hear something encouraging for a change in the media. Even though times are not bad in the real estate market in our county, it has hurt a lot of professionals trying to make a living. I see light at the end of the tunnel now. It feels GOOD!!!! 

To all my readers here in ActiveRain that have commented here on this post. Many of you see hopeful signs while other see a different reality. I purposely did not extend reciprocal comments in hopes of allowing the discussion to flush out many of the different feelings and observations that are out there.

We would all mostly agree that the times we are in are difficult. So many lives have been affected and others will yet be affected, and many within our own ranks and related professions.

There are some that would paint this canvas in shades of blame, anger, frustration and failure. While others will see hope. With the blame game still ongoing in many circles, we are saddled with a new reality. Things are different. Huge mistakes have been made in judgments and in actions. No matter the course we take, we will affect those past judgments and actions very little.

What we can do is to see Hope and we can be the force to help others reconcile the new reality whatever it may be. Under all the Land. Remember that. It will always have the greatest value ,no matter the specific trading value of the day. We must be encouraged that more care and better counseling will be the way of our future. We will by necessity be encouraged to use better judgment in our future decisions. We must recognize past greed for what it was and not attach circumstances to that that would reconcile it. We are charged as custodians of the land and its free utilization, enhancement and transfer.

While it is essential to all that we remain truthful in all our dealings, Hope and the knowledge learned can also free the shackles of indecision. Seeing Hope in our future is not a weakness or a strength, it is a choice. A glass half full even with a leak in it may be better than no glass at all.

LOL....good news has been reported? I am glad they are finally reporting some good news. I have noticed more buyer activity as well.

The Hawaii market always follows afer California so thisis good news. I still don't think we are out of the woods.

William,
Great article!
Many familiar faces here in your comments, I am glad to see those around.

Well, about your article I think the goverment is helping in this situation with the FHA, FHA is helping a lot in this situation, so buyers now can afford a house that they could not afford these days with a conventional loan. Conventional Loans seem now harder to do, they require more down payment.

Other factor that I see that helps is that homes in California are much more affordable for the crisis that happened, so buyers are tempting to buy and they do anything that they need to do to try to buy these days.

Investors are doing the same, buying when is still low, economy is trying to work again from that reason, interest rates are still low as you wrote, so that's an incentive too, and some other factors that I have not mentioned, that's some of the reasons that we see more buyers these days lately. this article is great and on time well done !

Ray Saenz,  

Thank you Ray for your very thoughtful comments and so nice to see you back on ActiveRain.You have been missed. What we have the opportunity for Ray, is Hope. No matter the reason or the background of the author of the good news, we need our media to be on the side of helping with solutions. To clearly have identified the players, to report the actions that brought us to this point and to keep the door open to the possibilities that we can get through this by avoiding the mistakes of the past , by recognizing that the value of our homes and the land is the core element of our overall value as a nation of free people. Values vary as to the dollar exchange of it on a daily basis, but it is the land after all that is our country. We must always have hope that we can fix the mistakes, that we can handle the assets and we can be honest in our dealings. If we can do that , we will see the sun rise again and the economics of our land back in the balance of perspective.

I hate the word crisis...it conjures up a sort of helter skelter visual where there is no order....an emergency room after a huge accident, a tornado touching down, a cyclone hitting...don't think we ever really had that in southeastern Wisconsin...soft...oh yes....Now....if I could stay awake more hours, I could get more done....but 18 is about all I can manage.

William,
:)   Agreed ! and thanks for your welcome.

Also, there is something that I do not like it in word of "Crisis" as Sally wrote above, what about the GAS?  Diesel is almost 5 dollars per gallon that's crazy !!!. That will be a good problem for everybody especiall for us "realtors" who travel from one side to other. 

Do you think that we will be like ASIA ? with bikes and motorcycles?

It is good to hear some good news. This crisis will not be over until inventory goes down.

At our office thank God we are all busy, our phones began ringing since the second week of January and have not stopped since.  I was not around for the big wave so to me this is a perfect pace.

It looks like we are getting closer to the light at the end of the tunnel in Miami Beach. Not sure about the rest of Miami as there is still a lot of inventory coming online in the next 1-2 years. Good luck. Thanks for the news!

Hi Ray, Glad to hear your market is turning upwards.

Hi Wayne, That is right and hopefully we will all see that happening over the next few months. Thanks for stopping by.

Claudia, The 2nd wave is coming. it may be a couple years but you will see one. All the Best! So glad your market is doing well and others will be improving soon.

Hi Mitchael, The beach areas on both coasts are known to be highly sought after so stability usually always starts there.

Perhaps Wall Street is over the crisis but the consumer is going to be licking wounds for the short term. When this thing turns is anyones guess but it is safe to say we all hope it is sooner rather than later.

Hi Internet Marketing NJ, as there was no true beginning date, there will be no clear ending date. It's about perception. What we all hope for is a moderation of the extreme anxiety that holds people back from making their own "Best" decisions. This may never actually end, but it will change and that hopeful change may turn more positive and that will be the welcome news.

Hello, Hello :)
just visiting your blog for a little bit !
Keep the good work
Ray Saenz

Good Morning Ray, Thanks for stopping by. always wonderful to have you back!

Hi William and thanks for the story. We are definitely on the upswing here in Akron Ohio. Most hard working agents are very busy and those of us that appreciate the Internet and blogging are doing better than most. Most of my business comes from Internet searches now and I am extremely grateful that I saw this trend early. The big markets spot trends early and the mid west falls in several years later. I got a good head start thanks to people like you. Thank you and I am a huge fan.

William,

Positive news have been rather rare for a while now, so it's encouraging to read about them again. The crisis is nearing the end, in real estate and mortgages. Looks like the markets' sliding has halted and now they are getting ready for a recovery.

Hello David, Nice to see you again and Thank You so much for that. Wow, for sure I know I still struggle but I promise to try to be an enlarger for others to emulate by trying harder. I believe we are on the way up. Recovery as a word is really not applicable. Change and adaptation are more the operatives today. Recovery to me would be that we are stable and the foreclosures would be more the exception, not the rule. Until be get all these short sales out that way that is hurting everyones property values we are destined to only improve but not  fully recover. I think in medical terms it is a syndrome. Learning to adapt to what cannot  be fixed in the short term.

There may be some viable solutions that are helping to improve various markets. I can only hope it is not too short term but progressively it gets stronger and stronger. On the immediate horizon, I think we are best served by being encouraging while we add a measure of caution to make the best judgments. In other words, the market is improving for many. For some it is not. And then help them determine which category they are in. If they are buying for the right reasons, that being for the security of owning a home for a period of time and to maintain, enhance and belong to and be responsible citizens in a community. The wrong reasons are anything for the short term. There is no empirical evidence to support or even begin to guarantee that further adjustment in downward prices may not be inevitable. That was a double negative but how you see the point.

Hi Esko, It does seem to have so much more activity and the loan guidelines are getting more realistic as well. I think by fall or spring there might be enough data to say the tide has turned. What we all are seeing is the extend of a huge pent up demand for moderate prices, and improved quality in the residence. But for also, just as much for bargains, not the same old tried and rehashed efforts of the past. Real bargains.  It is indeed a new day and a hopeful one.

i dont know about that ...but we are getting there.....still 6-12 months away

Hi Bryan, Thanks for dropping by and sharing your thoughts. welcome and thanks again.

I think I'm seeing a glimmer in our neck of the woods too.  Either that or my personal business is just exploding at someone elses expense.

Hi Kathy, maybe both are happening at the same time. Sounds very good either way.