The Fix Housing First Job is Not Done Yet

When Raleigh, N.C.-based St. Lawrence Homes executive Rich Ohmann speaks, we know we have to listen.

Yesterday, it was what Rich made of the media’s take on housing starts, which portrays home builders collectively as a villainous drag on a fragile economic recovery. Here’s Ohmann’s reaction:

I love this story. It blames housing for dragging down the ‘budding economic recovery’.   I would submit that the prior turns of homebuilding were fueled by the creation of new homebuilding firms (we were one of them in the mid 1980’s). Today’s languishing condition is only partly due to the condition of the market (no disputing the fact that things are awful in our economy as a whole).  I would place the blame for a majority of the lack of vibrancy in homebuilding on the fact that innovators and new business creators aren’t able to secure ANY funding for a venture large or small.   (emphasis added by Housing Crisis) A young entrepreneur can’t start up without cash and there’s no credit.   The old world entrepreneurs are still trying to figure out what to do with what they were left with when the world came to a screeching halt.

There’s no recovery without a credit source to fuel it. Am I the idiot here or am I just one of many?

You are not alone, Rich.

As you know we’ve been on the road this week. Everywhere everyone in residential real estate–single-family, multi-family, affordable, etc.–wonders to us aloud, “What’s happening out there? What are you hearing?”

What we’re hearing is that there’s no consensus on what’s going on, as much as we crave a pattern, and want to see a trend develop. Where there are bright spots, they’re bright for isolated reasons. The theme and broader backdrop is still hugely challenging, save in part for the public home builders, whose almighty balance sheets will see them through another treacherous stretch of 12 months or more.

In Phoenix alone, points out Marcus & Millichap VP for Investments Peter TeKampe, 300,000 people have lost their job since the economic heyday that ended in 2007.  In Atlanta, the number is 60,000. Apartment vacancy rates are on the rise. Household formations are stagnating. The structural drivers of the residential investment component of the GDP are challenged.

So, we’ve been wondering for months now, when home builders say, “I’m buying lots,” what’s on the other side of that equation? Are they buying lots to replace lots they’ve sold at full value? Is the scarcity in good finished lots in Phoenix, parts of Southern California, and even in Florida, Atlanta, and the D.C. metro area a scarcity caused by home buyer demand? Think again.

How can it be now, when other than a few exception veins of economic fortitude, earnings and well-being are so uncertain?

Among the biggest questions we face in our time, and we appear to be out of time to evade them, are these:

Home builders–it is clear from a growing number of economists’ diatribes and media muckraking–are being held up as chicanery-prone, money-hungry beneficiaries of both the up and the down side of the economic parabola.

So, we have a thought, and it springs from what we feel was a highly effective unified effort among home builders in support of the extension/expansion of the home buyer tax credit and the telescoping backward of the NOL tax carry back provisions for larger companies.

We feel that in light of how successful companies were in harmonizing their interests and telling their stories to elected officials, home builders should sustain their momentum, and keep their act together.

The Fix Housing First brand, in other words, could take on a new mission. It could build off its collaborative outreach among home building, real estate, the AARP, and other organizations, to go another step or two to move the economy where it needs to go.

Fresh from the victories achieved on Capitol Hill, we’d suggest the following for Ken Gear and the organization that lobbied so well to sustain the stimulus of housing demand.

This would be a story that elected officials could both understand and act on.

We’re beginning to come to grips with the fact that the arduous, unbearably flat and grudging recovery ahead of us will continue to take a toll on what we knew as the home building landscape circa 2006. That world is done.

Home building companies need to account for how good and how trustworthy they have been and continue to be. That need goes 24/7. The minute one of them stops that, trust goes by the wayside, and a company is no longer a business.

Right now, home builders have an opportunity to seize on what they gained recently with Congress and the President, and continue the crusade to Fix Housing First, bringing their story to the public. This means staying together as a group, and putting resources and focus toward new economy solutions for one of our nation’s chronic problems–workforce housing.

If the big builders can become part of that solution–and they have the means in both capital and skills to do it–then it will go far toward easing Rich Ohmann’s, and many many others’, anxieties about getting blamed for being both the cause of the catastrophe, the beneficiary of the rescue, and the dampener of sparks of economic momentum.

November 19, 2009 | Filed Under Financial Crisis, Home Builders, Legislation | 2 Comments 

Capitol Ideas

Bill Gloede, senior online editor for Big Builder, says it:

The government can not put a floor into stocks. It can not, obviously, control the global credit markets. It can not possibly create enough government jobs to make up for the losses in the private sector. But it can at least attempt to put a floor under housing, the single largest and most important investment to the vast swath of productive, taxpaying, investing America. Without them, there will be no economic recovery.

U.S. Senator Johnny Isakson (R-Ga.) last month introduced a bill that’s not too far removed from the original Fix Housing First proposal that would do just that with a $15,000 tax credit for all home buyers with no income restrictions. Had the Bush Administration taken this course last Spring, there is at least the possibility that the housing market would be stable now, with even toxic mortgage-backed securities trading at some known value.

While this Congress dithers this summer over global warming and health care and the empathy of the Supreme Court nominee, it should make the time to pass this bill.

July 7, 2009 | Filed Under Financial Crisis, Legislation | Leave a Comment 

Isakson Back with Home Buyer Tax Credit Bump

Senator Johnny Isakson hasn’t given up on an expanded tax credit for home buyers as a way to juice up economic recovery. 

The Georgia Republican shepherded a similar initiative through Senate approval in February, only to meet an untimely demise in the stimulus reconciliation bill eventually signed into law in mid-February as the $787 billion American Recovery and Reinvestment Act of 2009 .

Well, now a measure looking eerily akin to a demand-stimulus plan proferred last fall by the Fix Housing First Coalition of organizations including builders, real estate agents and brokers, building material suppliers, home inspectors, and home owners associations is making its way through committee as S 1230. The long and short of it is that it would up the current $8,000 credit to a maximum of $15K, open the deal to all home buyers (not just first-time buyers with a ceiling on incomes), extend the deadline for another year, and maintain historically low mortgage interest rates for that same time period.

Here’s Isakson’s take on the measure.

Johnny Isakson, D-Ga.

Johnny Isakson, D-Ga.

“The first-time homebuyer tax credit has made a difference. First-time home buyers used it and the market stabilized, but we don’t have a recession in first-time home buyers. We have a recession in the move-up market,”Isakson said. “One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can.”

Isakson has some pretty high voltage backing on this one. A group, formed in April, called the Business Roundtable Housing Working Group, consisting of the CEOs of $5 trillion worth of U.S. corporations with almost 10 million employees is wholly behind Isakson and a bi-partisan support group in Senate.

Here’s a link to the Business Roundtable.

Problem is the House of Representatives, where elected officials thought the Fix Housing First measure and its benefits smacked of a bailout for builders, the ones many voters thought caused the financial crisis in the first place.

One way or another, the Obama Administration and House chief Nancy Pelosi are going to have to get behind the plan for it to go anywhere.

Still, you got to hand it to Johnny Isakson to keep carrying the torch for a “housing-will-be-the-engine-of-recovery” plan. At a time broad economic signals seem to be short-circuiting and mixed, and the best hope now is for an anemic bounce back, a housing-led rebound sounds about as dreamy as anything.

June 16, 2009 | Filed Under Financial Crisis, Home Builders, Legislation | 1 Comment 

Steeeeeeeee-Rike Three! Mortgage Buy-down In Doubt

Question one: can somebody hook us up here with those leaks coming out of the Administration’s team on what’s happening next in housing?

Question two: what’s a Fix Housing First Coalition to do if its last best hope for a compelling get-off-the-sidelines-and-buy program from the government goes by the boards?

It seems that although even a framework to address foreclosure mitigation and homeownership wealth destruction via house price declines is said to be more than a week from announcement, parts of what will and what won’t be part of the program are already decided.

What won’t apparently be in the comprehensive housing program Treasury Secretary Tim Geithner mentioned during his financial system rescue address on Tuesday is a humdinger mortgage-buy-down program aimed to spur sales.

Here’s Calculated Risk picking up on a Reuters report and adding a dash of CR-itude.

Housing policymakers weighed but have for now shelved one plan that would have seen the government stand behind low-cost mortgages of between 4 and 4.5 percent, sources said.

I need more details on the subsidies, but at least the dumb idea of buying down mortgage rates has apparently been shelved.

Before one dismisses the Obama initiative on mortgage re-terming out of hand, have a look at the orginally reported Reuters story on what’s afoot.

This is worth a healthy debate:

U.S. Treasury Secretary Timothy Geithner this week outlined a plan to take up to $1 trillion in bad assets off the banks’ books in the hope of restarting lending.

He also vowed the administration would spend $50 billion to combat foreclosures.

Geithner said on Thursday the administration would soon put a housing program in place that uses “a mix of incentive and persuasion” to get mortgage companies to rewrite loans.

“The key elements of the strategy are going to bring mortgage interest rates down to help avoid the foreclosures that we can reasonably expect to avoid,” he said.

Late mortgage payments and home foreclosures hit record highs last year. Foreclosure filings eased last month, but were still 18 percent higher than a year ago, industry research firm RealtyTrac said on Thursday.

Still in all, guess who’s taking credit for the the demise of Fix Housing First’s push for the $15,000 home buyer tax credit? Why the National Multi Housing Council, of course.

NMHC Chief Bibby

NMHC Chief Bibby

The NMHC, which pitched itself against the National Association of Home Builders in debate over the merits of home buyer tax credits, took an opportunity to pour salt in home builders’ wounds in its victory lap press statement regarding the new stimulus package.

 NMHC actively worked with lawmakers as they negotiated the final compromise, urging them to remain focused on the critical needs for which this legislation was intended:

  1. to create jobs;
  2. to provide relief to the millions of Americans who are experiencing severe economic stress as a result of losing their job and are in need of affordable housing; and
  3. to address the foreclosure crisis.

We successfully argued against overly generous homeownership incentives, such as $15,000 homebuyer tax credit and federally subsidized 4 percent mortgages, as provisions that would do more harm than good and possibly re-inflate the housing bubble.

NMHC is in the process of analyzing the final legislation to update our side-by-side comparision chart with the apartment-related elements of the package.  A partially updated version reflecting the tax title, which has been released, is available here.

In times like these, you know who your friends aren’t.

February 12, 2009 | Filed Under Financial Crisis, Legislation | 2 Comments 

Absolutely Necessary Didn’t Include Fix Housing First

President Barack Obama’s signature sound bite in pitching the biggest government program since the New Deal is: Don’t make perfection the enemy of the absolutely necessary.

Gear Engaged

Gear Engaged

As details of a compromise $789.5 billion stimulus plan continue to emerge, it’s clear already that a Senate-backed plan to fund a jolt to home-buying demand with a 10%–up to $15,000–tax credit for home purchases over the next year did not survive the cut as “absolutely necessary.”

We talked early today with Kenneth Gear, who as executive director of the Fix Housing First coalition of companies led a concerted charge to make a shock-and-awe home-buying stimulus program part of the package that Congress would hand over to the President by next Monday. Gear, as you might expect, was crestfallen about the fact that the final bill “appears to have picked up the House language for a home buyer tax credit.” That means that first-time buyers of new or existing primary residences would be eligible for a $7,500 tax credit for a purchase through Sept. 1, 2009. Apparently, still under consideration is the possibility this amount might be elevated to $8,000.

Gear did not hide his disappointment. “First off, we’re hopeful that this bill [the one Congress has cobbled together] will stimulate the economy, but we have some doubts it will. It still doesn’t get to the root cause.  The market’s still in a free-fall. It’s not going to stop the vicious circle of home price declines, because you’re not giving enough of an incentive to spur demand.”

Here’s what Wachovia Securities housing analyst Carl Reichardt says to sum up the impact of the scaled-down tax credit for home buyers.

Preliminary news also suggests that the Senate’s proposed $15,000 tax credit for all home buyers was not included in the Stimulus package.  Instead, the House’s $7,500 tax credit for first-time home buyers was selected.  The House version is essentially the same bill that was included in July’s stimulus plan (the Housing Economic and Recovery Act of 2008) except that it removes the requirement to pay the government back. While this is a marginal positive over the plan established before the Stimulus as it turns the credit into a gift versus a tax-free loan, we believe the Senate’s credit would have been much more impactful to unit demand given its size and its applicability to all home buyers, not just first-time buyers.

Gear says, “We’re not folding up our tent.” He points to generalized verbiage in U.S. Treasury Secretary Timothy Geithner’s remarks on Tuesday that address a “comprehensive program” to address the housing crisis. This would include foreclosure mitigation, and Gear hopes, a mortgage rate buy-down program for home buyers.

Not included in Fix Housing First’s agenda was a push to extend net operating loss tax provisions to allow companies to carry present losses back to prior-year profits to recover taxes paid. That push flopped as well.

Here’s Wachovia’s Reichardt on implications of the way the NOL tax carry back provision looks as it stands right now:

Both the original House and Senate bills included a net operating loss (NOL) carryback provision that would have allowed companies (other than those receiving TARP funds) to carryback their operating losses for 5 years in order to obtain potentially substantial tax returns. Preliminary news indications are that the NOL carryback was removed from the stimulus plan for large companies. Both bills originally included it and we have not observed  meaningful public opposition to it until very recently. For HOV, KBH, LEN, CTX and MDC (for which the immediate benefit is minimal), the elimination of the NOL carryback is a negative, in our view. These companies would have been able to amend their 2008 tax returns immediately to request additional tax refunds.  For DHI, RYL, PHM and MTH we believe it is also negative, but less so: these companies did not stand to gain immediately, but could have benefited at year-end 2009.  For TOL and NVR the elimination of the NOL carryback is from our perspective a positive. The carryback would have provided additional cash to allow for the creation of home capacity at lower margins to continue to compete with these stronger players. TOL and NVR would not have benefited from the carryback extension as they have not generated significant taxable losses. For SPF and BZH the NOL carryback would not have been applicable because they had “ownership changes” which mitigated the ability monetize NOLs.

One doesn’t need to be entirely cynical to see partisan politics at work in the way these pro-home builder measures got squelched when the Senate’s plan met with the House’s.

Now, expectations soar as the nation looks to see what its elected officials mean by “absolutely necessary,” and what effect that will have.

And Ken Gear goes back to work this morning, not giving up his cause.

February 12, 2009 | Filed Under Financial Crisis, Home Builders | 4 Comments 

Wruh-Wroh, Fix Housing Credit May Go

Here’s the Wall Street Journal headline: Deal Near on Stimulus Plan.

Congress’s House and Senate are said to be close to reaching agreement on a scaled-down $790 billion Stimulus plan that the President has tentatively blessed.

But look:

Lawmakers are discussing trimming the cost of Senate-approved tax cuts intended to spur auto and home sales, but would preserve a $70 billion measure intended to shield millions of middle income Americans from the alternative minimum tax, a levy originally designed to hit the wealthy.

Looks like the Fix Housing First Coalition still has all their work cut out for them.

February 11, 2009 | Filed Under Financial Crisis | Leave a Comment 

CR Weighs in on $15K Tax Credit for Home Buyers

Calculated Risk’s write-up on the plusses and minuses of the new Stimulus package’s intent to jolt home buying by providing a 10%–up to $15,000–tax credit on the purchase of a new or existing home within a year.

Legitimate questions in his concluding commentary:

By this measure sales are still above the normal range of about 6% per year. Inventory is above the usual range too. With 76 million owner occupied households, a normal range for existing homes sales is about 4.5 million per year.

The key problem for housing is prices are too high. How does this tax credit help reduce prices? Why are we trying to artificially increase the turnover rate? And why are we targeting a tax credit at higher income individuals?

This tax credit seems ill-conceived, and probably should be removed from the stimulus package. No one has adequately explained how this helps “fix housing first”.

Home builders and sellers have to be part of the solution to catalyze home sales. They have to lower prices to a sustainable–income and/or rental equivalent–level in order to reduce the real vacancies, new and existing inventory. People need to feel as if they’re going to miss out on a particularly smart opportunity if they don’t move to buy into the current market environment.

More on this later.

February 7, 2009 | Filed Under Financial Crisis | Leave a Comment 

Traction for Fix Housing First–Update

Progress for the Fix Housing First cause!

The New York Times reports: Senate Approves Tax Break for Homebuyers.

The vote to add the tax credit, at a cost of about $18.5 billion, came as Senate leaders seemed to be finalizing their negotiations, with moderate lawmakers in both parties pushing to reduce the overall cost of the $900 billion stimulus measure and to focus it more tightly on provisions that will quickly spur spending and create jobs. The vote came as President Obama met with centrist lawmakers to address concerns about the package.

Need your thoughts on this immediately. [A billion here, a billion there, and pretty soon you're talking about real money... tap hit to the late Senator E. Dirkson.]

Gear-ed Up, Click for more

Gear-ed Up, Click for more

At the very least, kudos go to Fix Housing First Coalition executive director Ken Gear for working the Hill as effectively as he and his team have, even as lobbyists from every industry sector out there have lined up as supplicants for critical aid. This language is exactly the terms the Fix Housing First confab has sought:

The tax credit would give buyers 10 percent of the price of a primary residence bought within one year, up to $15,000, and is intended to stabilize plummeting home prices, which caused a wave of foreclosures and led to the near collapse of the financial system as Wall Street firms wrote down billions in mortgage-backed assets.

It’s still too early to say whether the measure will stick, especially as the Stimulus package undergoes reconciliation with an already-passed House legislation that currently excludes the home buyer tax credit. The AP notes:

Democrats readily agreed to the proposal, although it may be changed or even deleted as the stimulus measure makes its way through Congress over the next 10 days or so.

Calculated Risk supplies us this picture of what’s motivating Congress to lean toward the tax credit. Look particularly at the years 1974 and 1975 for illustration of the impact of a jolt to the economy enacted at that time.

Click on Calculated Risks graph to access analyis.

Click on Calculated Risk's graph to access analyis.

One issue to consider immediately is will the measure have the effect its designers intend. Here’s comment from Calculated Risk.

New home sales increased from a 477 thousand SAAR in March 1975 to over 600 thousand SAAR later in the year. But that was from a depressed level as shown on the graph. The real boom in sales happened when the economy recovered – so I’m not sure of the actual impact of the 1975 tax credit.

Comment from the financial types who frequent CR’s blog pretty much capture the issues.

A story from Builder senior editor Pat Curry notes that the provisions of the $15k tax credit would not allow a home buyer to monetize the credit at closing.

“Emails were flying back and forth this morning, asking ‘Can it be used for closing?’” says Michelle Smallwood, vice president of sales for Melbourne, Fla.-based Holiday Builders.

Meanwhile the sphere of support for home buyer stimulants, at least among those whose livelihoods rely on new residential construction, has grown in volume and energy. ProSales editor Craig Webb reports that lumber and building materials dealers have increased their sabre-rattling as President Obama’s economic recovery package takes its final form.

Here’s a comment on Calculated Risk from “EvilHenryPaulson” that about sums up the sentiment:

You need to have an income for a tax credit to work

If someone has a data file with income, and house prices by region, I would import it into matlab and output a map of the expected % impact

$15,000 x top maginal federal income tax rate / house price = meh

not going to make a difference until the inventory is gone, the new price floor will just be a little higher
EvilHenryPaulson | 02.04.09 – 10:29 pm |

That’s pretty clear thinking for 10:29 pm, which is past the hour when housingcrisis.com’s braincells stop functioning.

February 4, 2009 | Filed Under Financial Crisis | 2 Comments 

Talking the Walk

Is the Fix Housing First Coalition getting traction, as it asserts? Or is the mess that is Stimulus II such a mess that it’s hard to know which end is up.

The Washington Post today has this story about Senators who’re barking for alterations to the current $885 billion proposed recovery plan. The story includes this key quote:

A small but growing number of senators are upset that neither bill provides money to address the housing crisis. “We should first fix the real problem: housing,” said  Sen. Lamar Alexander (R-Tenn.).

The Coalition put out a news release today that rolls up the sound bites of Senators who’re supposedly favorably disposed.

Washington, February 2, 2009 – The Fix Housing First Coalition today commended members of the U.S. Senate who are pushing for the inclusion of housing provisions in the stimulus package currently moving through Congress.

Over the weekend on several of the talking-head shows and elsewhere, several Senators stressed that immediate economic stimulus will only be achieved if the housing crisis is addressed. Comments included:

Mitch McConnell (R-KY): “We’re going to recommend, for example, you go right at the housing problem. We have a four-percent mortgage proposal where creditworthy homebuyers could buy down their mortgages or save them on the average fifty-six hundred dollars a year. Let’s fix housing first. That’s what started all of this.” (Face the Nation, CBS, February 1, 2009

Charles Schumer (D-NY): “I think we can do more for housing. One of the Republican proposals is to raise the seventy-five hundred tax credit we give to new homebuyers, raise it to up to fifteen thousand, do it for all homebuyers. That’s something that we look favorably upon. Getting mortgages down to four and a half percent as Senator McConnell mentioned. That’s a good idea.” (Face the Nation, CBS, February 1, 2009)

Jon Kyl (R-AZ): “So I think you have to start from scratch and reconstruct [the stimulus package] to start with the problem that created the entire cascade of events that have occurred here, the housing collapse.” (Fox News Sunday, Fox News Channel, February 1, 2009

John Ensign (R-NV): “Regardless of the jobs you are going to create you are not going to treat the cancer that is affecting our economy, and that is the housing problem. And that’s why we have put together a plan to solve the housing problem in the United States. And if you don’t do that, whatever short term jobs you’re going to put in with this stimulus bill, it’s really a spending bill, are not going to help bring us out.”

Kent Conrad (D-ND): “Are we doing enough to help the financial sector? Are we doing enough about housing? Because if we don’t get those two right, we’re not going to see the kind of lift out of this downturn that we need.” (State of the Union with John King, CNN, February 1, 2009

John Kerry (D-MA): “Housing has to be a component of this… Just this package will not fix this if we don’t also do something about housing…” (Meet the Press, NBC, February 1, 2009)

Then again, the Senate has a long way to go to determine what ultimately will be in the bill. Then it has to jive with what the House has already approved.

February 3, 2009 | Filed Under Financial Crisis | 1 Comment 

Stuck in the Lobby

Yes, its 647 pages are full of pork. Yes, it sadly reflects a cynical patchwork quilt of local re-election campaign tactics, and failing attempts to attach a “bi” to partisan political machinations. Yes, it probably puts too much into spending, and not enough into tax breaks–especially for businesses that could be rewarded to keep people on payrolls. Yes, it’s a “stimulus” package full of programs whose stimulative effect is uncertain, or even laughable. Per the Wall Street Journal account:

Also tucked inside is $335 million for programs that help prevent sexually transmitted diseases, and $50 million for the National Endowment for the Arts. The Senate version includes $70 million for a supercomputer at the National Oceanic and Atmospheric Administration and $75 million for smoking-cessation programs.

Talk to its critics, whose ideologies cover the political gamut, and you’ll hear that it panders, it squanders, it smolders, and it smothers.

We don’t know whether anyone else thinks that the following thought is unfortunate. Our collective IQs, survival instincts, and passions need so to focus on the merits or lack-thereof of a quick-dry $900 billion clean-up plan for an oil spill that Wall Street, Capitol Hill, and Main Street together dumped on our economic shores with “wink-wink, you’re rich” Ponzi-like policies, behaviors, and dead-wrong reckoning.

And yes, what about housing? Think of yourselves as part of an ever-expanding universe of worthy and unworthy petitioners bidding for the billions. Your best hope to get a pass to the front of the line was the term “underlying cause of economic recession.”  Housing, the argument goes, started it all. Housing, the argument continues, can and will start the snap-back, turning an L-shaped term of suffering into a V.

What gives then? What happened to the Fix Housing First last-ditch lobbying effort, and that oh, so compelling assertion that everything will continue to behave very badly in the economy if home buyers don’t get a kick with a credit and easier mortgage rate terms? The Senate mark-up of the Stimulus adds about $80 billion in cost, not the $80 billion the Fix Housing First Coalition was hoping for.

The update from the Coalition’s executive director Kenneth Gear today is that, “Senators in committee weren’t accepting amendments,” and that the strategy now will be to line up sponsors of amendments to the mark-up during the Senate debate, which is expected to lead to a vote in the next week or so.

Oddly, even high-profile economists who take issue with parts or all of the Obama plan don’t mention fixing housing via stimulative home buyer tax credit and mortgage buy-down as a lynchpin to recovery. The New York Times talked with seven economists and got 150 or more comments, none of which says, “You’re missing the root cause, and you must stimulate home buying to fix the economy.”

Fact is, home builders are going to have to do it themselves. Prices got too high. They lost their comfort zone with household incomes and monthly rent comparisons. They’re correcting. Overcorrecting. When new home prices re-couple with reality, they’ll sell. The bail-out will be a combination of self-determined pain on the part of builders and developers who paid too much for four years of land, and self-determination on the part of home buyers with down payments and sustainable mortage-paying ability.

One reason for this. The Fix Housing First lobbying effort may help, but it’s not succeeding.

Still, look at today’s numbers on new homes sold. Ok, yes, it’s down to an annualized 900 homes a day vs. nearly 6,000 a day in 2005. It’s not all depressing though. The absolute inventory count of new homes started is down to 357,000 [a 9% improvement]. Home builders are working through their new-home inventory, and finding ways, by hook or by crook, to put cash in their coffers.

Our conclusion: the resources of those who have banded together to support a lobbying coalition to fruitlessly lobby Congress for inclusion in the current stimulus bill would be better served creating innovative sales tactics, mortage-buy downs, and marketing messages on a company-by-company basis.

We could be wrong. Maybe, Fix Housing First will find a sponsor, supporters, and navigate its way into a Trillion Dollar New Deal package. Unlikely.

Have a look at one view of the current situation from a comment in Calculated Risk’s commentary on Record Low New Home Sales in December.

anonymous writes:
If you listen closely, you can hear the sound of a whirring fan. That’s the economy shutting down. Somebody hit CTRL-ALT-DEL in Sept./Oct. and we’re in the process of a hard reboot. The screen is going dark, the L.E.D.’s are blinking red and we’re heading for a global reset.

When the system comes back up, don’t press any keys for awhile or everything will really be messed up.
anonymous | 01.29.09 – 10:38 am |

January 29, 2009 | Filed Under Financial Crisis, Home Builders, Legislation | 1 Comment 

Next Page →