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The reason is simple, if anything can be learned about a market elsewhere, lets learn it.

Secondly, markets elsewhere can shape national goals, plans, and legislation in Washington.

As example I would love for the tax credit to be longer for the Fox Valley because of our cyclical sales which I believe are based on values sytem, school schedules, and weather patterns, but it's more likely to be a national plan.

NOTE: I have not yet updated January sales stats on the www.FamilyMatters.info web site yet because I have a new computer system on order from Milwaukee PC. The migration of that data and software will likely be taking place within the next 72 hours. The reason I have not posted data is not because of any other reason.

Scott

Quote:

WASHINGTON – Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades. The Commerce Department reported Wednesday that new home sales dropped 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who had expected sales would rise about 5 percent over December's pace. While winter storms were partly to blame, home sales have fallen for three straight months despite sweeping government support. Economists were already worried that an improvement in sales in the second half of last year could falter as various government support programs are withdrawn. "There is no doubt that January and February are going to be messy months for housing, given the severe weather conditions, but that doesn't take away from the fact that the housing sector has taken another big step back, even with the government aid," Jennifer Lee, a senior economist at BMO Capital Markets, said in a research note. January's weakness was evident in all regions except the Midwest, where sales posted a 2.1 percent increase. Sales were down 35 percent in the Northeast, 12 percent in the West and almost 10 percent in the South. The drop in sales pushed the median sales price down to $203.500. That was down 5.6 percent from December's median sales price of $215,600, and off 2.4 percent from year-ago prices. New home sales for all of 2009 had fallen by almost 23 percent to 374,000, the worst year on record. The National Association of Home Builders is forecasting that sales will rise to more than 500,000 sales this year, an improvement from 2009 but still far below the boom years of 2003 through 2006 when builders clocked more than 1 million new home sales per year. January's data will increase concerns that the housing rebound could falter in coming months as the government withdraws the support it has used to try to bolster the housing market, which stood at the epicenter of the country's overall recession, the worst downturn since the 1930s. A $1.25 trillion program from the Federal Reserve which has held down mortgage rates is set to end March 31 and tax credits to bolster home buying are scheduled to expire at the end of April. First-time home buyers could qualify for a credit of up to $8,000 while homeowners who have lived in their current properties for at least five years could claim a tax credit of up to $6,500 if they decided to move into another home. Though the overall economy started growing again this past summer, economists are worried because unemployment remains high. This weakness is causing consumers to shy away from spending, especially on big-ticket items such as homes. The Conference Board reported Tuesday that its Consumer Confidence Index fell almost 11 points to 46 in February, pushing the index down to its lowest reading since last April. At 46, the index is a long way from the 90 reading that economists generally view as depicting healthy consumer attitudes.

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It was a story on volume of home sales and foreclosures...I forget the quote exactly, but I can pull it if really need be. Within the article I was quoted on how foreclosres can even put pressures on municipalites, just like those here in the Fox Valley.

Well, people chided, saying "Scott, the municipalities always get their money. Even if it's just a couple years out with a foreclosure." Well, last I checked with a Google search there were over 50 foreclosures in Neenah alone.

So, when I came across the article below today I felt it a good read to share.

Scott

Quote:

Wall Street Journal Thursday, February 18, 2010 by Ianthe Jeanne Dugan and Kris Maher Just days after becoming controller of financially strapped Harrisburg, Pa., in January, Daniel Miller began uttering an obscure term that baffled most people who had never heard it and chilled those who had: Chapter 9. The seldom-used part of U.S. bankruptcy law gives municipalities protection from creditors while developing a plan to pay off debts. Created in the wake of the Great Depression, Chapter 9 is widely considered a last resort and filings under it are more taboo than other parts of bankruptcy code because of the resulting uncertainty for everyone from municipal employees to bondholders. The economic slump, however, is forcing debt-laden cities, towns and smaller taxing districts throughout the U.S. to consider using Chapter 9. As their revenue declines faster than expenses, some public entities are scrambling to keep making payments on municipal bonds. And that is causing experts to worry about the safety of securities traditionally considered low risk. "People believe that municipal debt is safe based on assumptions that are no longer true," says Kenneth Buckfire, managing director and chief executive of Miller Buckfire & Co., an investment bank that has worked with corporations on restructurings and now is advising municipalities. For example, it isn't safe to assume that governments can raise taxes to cover shortfalls, he says. Even threatening bankruptcy signals that municipalities are willing to compromise the security of bondholders, says Richard Raphael, an analyst at Fitch Ratings. That makes it harder for cities and towns to raise money from investors and will slow the U.S. economic recovery. In Harrisburg, which is Pennsylvania's capital and has a population of about 47,000, a March 1 deadline is looming on a payment of $2 million out of the $68 million due this year for the financing of an incinerator plant. The facility has about $288 million in overall debt. "Bankruptcy is inevitable," Mr. Miller says. "We are in a terrible bind." A budget passed Saturday by Harrisburg's city council didn't include any funds to cover the debt payments, according to the city clerk's office. Harrisburg Mayor Linda Thompson, a Democrat elected in November, opposes a bankruptcy filing and has presented an emergency plan that includes selling some of the city's assets. She couldn't be reached for comment. A spokeswoman for the mayor says Ms. Thompson is working on the plan. Michele Torres, executive director of the Harrisburg Authority, which oversees the incinerator plant, says there are sufficient reserve funds to make the March 1 payment to bondholders. But that doesn't fix the problem. "No matter how perfect the facility runs, it just can't generate enough to meet the $288 million debt," she says. Since Chapter 9 was enacted in 1934, just 600 cases have been filed under the code, partly because they require state approval. Some municipalities have found escape hatches, such as raising taxes. The largest Chapter 9 case was filed in 1994, when Orange County, Calif., lost $1.6 billion on wrong-way bets on interest rates. But many experts fear that a surge in municipal bankruptcy filings is unavoidable. "The day of reckoning is coming," says Michael Pagano, dean of the University of Illinois at Chicago's College of Urban Planning and Public Affairs. To keep cities and towns from toppling into Chapter 9, more states are likely to make use of state laws to assume oversight of financially distressed municipalities, he predicts. Pittsburgh, for one, has been operating under such a law since 2004. Vallejo, Calif., a city of about 116,000 people near San Francisco, has been trying to rejigger worker contracts in bankruptcy court since it filed for Chapter 9 in 2008, after buckling under declining real-estate values. Some union contracts expire later this year, and Vallejo is attempting to scrap them and start over. In San Diego, political leaders have faced outside pressure to file for Chapter 9 bankruptcy protection as a way to get around benefits packages for public workers. San Diego Mayor Jerry Sanders has publicly dismissed the idea. Last month, Las Vegas Monorail Co., a nonprofit with over $600 million in municipal bonds, filed for Chapter 11. The company runs a 3.9-mile monorail system along the Las Vegas Strip that has been hammered by the downturn. Ridership shrank 21% last year from 2008. According to Fitch, while the monorail is covering its operating costs, default "is virtually certain" on a payment due in July. Ambac Assurance Corp., the bond-insurance unit of Ambac Financial Group Inc., is seeking to have the case converted to a Chapter 9 proceeding. The insurer contends that the company is akin to a municipality. A judge is set to decide on the petition later this month. Sandy Hoskins, interim chief executive of Sierra Kings Health District in Reedley, Calif., worked for nearly 30 years as an auditor and financial consultant. He says he never heard of Chapter 9 until October, when Mr. Hoskins filed a bankruptcy petition for the hospital system. "There was no other way around it," he says. With low cash balances, "there were vendors not even willing to do business with us. It was a critical situation." Mr. Miller, Harrisburg's controller, also sees no way out of the financial squeeze. The city's per-capita debt of $9,500 is the highest in Pennsylvania and triple the debt load of Philadelphia, he says. And selling parking facilities or other properties in a fire sale would cost Harrisburg future revenue. A spokesman for Pennsylvania Gov. Edward Rendell says Harrisburg hasn't sought help from state officials. "We can't raise taxes; they're already very high," Mr. Miller says. "If we did, people would just leave. It's cheaper to move out to the suburbs."

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Looking back at the sub 200k market:
http://www.scottroh.com/foxvalleyhomesaledata.htm

It is easy to see how the impact of the perceived expiration of tax credits had an impact on our local market with the dramatic decline in December for the same price point.

Considering the 'more responsible lending' guidelines going into effect, one hopes the footing is improving.

Encouraging too was the December sales for the 200k-400k market which surely was in part a response by 'move-up' buyers that had been able to sell in November at the lower price point.

Showing requests continue to climb as we get further away from January 1, and I am happy to report my busiest January in the past 5 years. February has begun equally strong with evidence of potential impact of the tax credit 'expansion' to existing home owners.

Granted this is all tied into consumer confidence and jobs, but with the suggestion of normalization in our language and no longer "Henny Penny the sky is falling by banks" there is comfort stirring.

Yes, there are likely to be some 4 million more forclosures to muddle thru nationally, and muddle it can be, but at least those are closer to being identified. The continued supply of these foreclosures will be a drag on prices with demand predicted to decline nationally.

Short sale homes listed within the market can be challenging as buyers lose patience with lenders unable to respond to real offers in a timely fashion. Just this week I had buyers refuse to place offers after learning vacant homes were in short-sale status.

The best priced homes still sell first and allow both the first time buyer and seller to take advantage of the current credits, creating more jobs in the process.

I'm not a buyer of LOWES or Home Depot yet, but with all the rehab that will have to be done on homes that were not taken care of I will be watching employment levels over the course of the next 18 months and maybe I will be.

January sales are not yet fully in for me to document yet, but with as busy as I am now I will be happy to post them when I can.

Scott R]]> no_email@example.com (ScottR) http://foxvalley.info/modules.php?name=Forums&file=viewtopic&p=234#234