The Kestner Team

I received an article by Mr. Mike Larson today that was forwarded to me by one of mortgage brokers.   It’s an interesting article regarding the housing market and thought I would post it for all to see.   As always, I’m compelled to remind everyone that the media reports “national” market information which is highly fueled by those cities with the worst economy i.e. Los Angeles, Los Vegas, Phoenix, Cape Coral, etc.  Always remember that although Nashville is also in a housing “correction”, our economy is much stronger and our housing market has not suffered nearly as much as other cities.  Here’s the article:

Name: Mike Larson
Title: Interest Rate and Real Estate Analyst

Recognized as an interest rate and mortgage market expert, Mr. Larson’s views have been quoted in numerous publications nationwide, including the Washington Post, Chicago Tribune, Dow Jones Newswires, Associated Press, Reuters, CNNMoney.com, Sun-Sentinel, Tampa Tribune and the Palm Beach Post.  His in-depth analysis of the housing and mortgage market and accurate forecast of the subprime crisis has lead to frequent appearances on CNBC, CNN, Fox Business News, and Bloomberg Television, as well as many nationally syndicated radio shows.  Mr. Larson’s understanding of the U.S. real estate market has also been recognized overseas, having recently been featured in a documentary on the subject produced by a Barcelona-based television station.  In addition, his writing has been acknowledged by both the National Association of Real Estate Editors and the Massachusetts Press Association.

Among the first analysts to call the housing slide, Mr. Larson’s policy paper, “How Federal Regulators, Lenders and Wall Street Created America’s Housing Crisis: Nine Proposals for a Long-Term Recovery,” received broad media coverage following its July 2007 submission to the Federal Reserve and FDIC.  In the paper, Mr. Larson accurately predicted the long-term impact of the deepening subprime mortgage crisis on the broader economy that the nation faces today.

Mr. Larson holds B.A. and B.S. degrees from Boston University.

Another Report from the Housing Market’s Front Lines

by Mike Larson   02-26-10

I’ve been talking about interest rates an awful lot lately … and for good reason. The next BIG story in the bond market is clearly the sovereign debt crisis.

But I don’t want to ignore the housing market, either.

My best-case forecast is still a recovery — albeit an anemic, lackluster, moribund one. Some of the latest numbers leave a few questions in my mind, though. So let’s recap where we stand …

Price Declines Ebbing as
Inventory Overhang Shrinks

Home prices have been plunging for a lot of reasons:

• They got way too expensive relative to incomes.
• The monthly cost of ownership got way out of whack with monthly rents.
• The supply of homes for sale exploded, while the qualification standards for home mortgages tightened.

But many of those underlying issues have been corrected by falling home prices.

As I’ve told numerous reporters over the past couple of years, falling home prices were ALWAYS part of the solution to the housing crisis. They would eventually restore price-to-income and own-vs.-rent ratios back to their historical norms … and bring out bargain-hunting buyers.

Now you’re starting to see the results of that in the home price data. December figures from S&P/Case-Shiller show that prices rose 0.3 percent from a month earlier. That was the seventh straight gain.

Prices still fell from the year-ago level. But the 3.1 percent decline was the smallest going all the way back to May 2007. Prices actually rose in six cities, led by San Francisco at 4.8 percent and Dallas at 3 percent.

A key driver of this improvement is the shrinking supply of homes for sale, which I described for you a couple weeks ago. Total new and existing home inventories have shrunk by 1.4 million from their peak more than two years ago.