Ultimate Open House

LOCAL
-The average supply of unsold inventory in the Portland Metro area is down to seven months, with numbers as low as four and five months in North, Northeast, and Southeast Portland and Aloha. Nationally, the average is holding steady at 9.4 months of supply. This is the sixth straight month that inventory numbers have gone down.
-14.4% of the Portland Metro area’s unsold inventory sold in the thirty days according to a recent Market Action report.

NATIONAL
-Nationally, existing home sales rose 7% in July to the highest level in two years, marking the fourth straight monthly increase.
-New-home sales rose nearly 10% in July, according to a government report that bolstered signs of an improving housing market. Sales of new homes climbed to a seasonally adjusted annual rate of 433,000, the highest pace since last September. The sales rate has risen 31.6% from this year’s lowest rate, which was set in January.
-Home prices recently posted their first quarterly increase in three years, adding to evidence that the housing slump is easing.
-Closed sales in July 2009 eclipsed last July’s total by 8.6%, marking the first time same-month closed sales have increased in more than two years. Pending sales, those under contract but not yet sold, also grew 8.3%.

BUILDER AND CONSUMER CONFIDENCE
-The National Association of Home Builders (NAHB) Housing Market index rose to the highest level since June 2008, indicating an improvement in home builder confidence. The improvement in home builder confidence was reflected in a fifth consecutive month of increased single-family housing starts in July.
-Consumer sentiment rose more than expected in August and expectations hit the highest level since the recession began, indicating that Americans’ pessimism about the economy may be lifting.

AFFORDABILITY
-Bolstered by affordable interest rates and low prices, nationwide housing affordability during the second quarter of 2009 continues to hover near its highest level since the series began 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).

OTHER GOOD SIGNS
-The IHS Global Insight economic outlook index predicts GDP growth starting in September, the first increase since July 2008. The decline in real GDP, at a six-month annualized rate, slowed from -5.9% in March to -0.9% in August. It’s expected to turn positive in September and increase progressively through the beginning of next year.
-Orders for durable goods rose in July by the largest amount in two years, as the manufacturing sector rebounded from the depths of the recession.
-53% of employers in a new poll say they plan to hire full-time employees in the next 12 months, according to research released this week that could spell relief for unemployed U.S. workers.

So there you have it, folks. Good signs are all around and we are finally coming out of this slump. Why not celebrate by coming down to the Pearl District for the last weekend of the 2009 NW Natural Street of Dreams? Bring a few friends, grab a cold beer, try one of the delicious restaurants downtown, and check out the gorgeous condo penthouses on display.

To help create jobs and set the stage for a strong recovery, the National Association of Home Builders (NAHB) called on Congress this week to extend and enhance the $8,000 first-time home buyer tax credit due to expire on December 1.

Specifically, NAHB is asking Congress to extend the home buyer tax credit program through November 30, 2010 and make it available to all buyers of principal residence.

“If Congress acts to extend the tax credit program, it would spur 383,000 additional home sales, including 80,000 housing starts, creating nearly 350,000 jobs over the coming year,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “That’s good for the economy and good for America.”

Although there have been some signs of economic stabilization in recent weeks, the unemployment rate is rapidly approaching double-digits. Without a concerted focus on the housing sector, which comprises more than 15 percent of the GDP, any hope for a recovery could fade.

“At best, it looks like a jobless recovery once it gets underway,” said Robson. “This is why Congress needs to take bold, meaningful action now.”

In addition to extending the tax credit, Robson said home builders will be meeting with their lawmakers in their home districts during the August congressional recess and urging them to:

Correct a faulty appraisal process. The inappropriate use of distressed and foreclosed sales as comps in determining home values is hurting home values and killing home sales. The situation is so bad that a recent NAHB survey of more than 500 builders found that one out of every four new-home sales are lost because appraisals are coming in below the contract sales price. NAHB is urging Congress to work with housing and federal regulators to adopt and enforce clear, concise regulatory guidance that will allow appraisers to develop realistic valuations based on sales that are truly comparable. Lawmakers should also call on the Federal Housing Administration, the Federal Housing Finance Agency, Fannie Mae, and Freddie Mac to establish an appeals process similar to the one used by the Veterans Affairs Loan Guaranty Program. Under the VA program, the appraiser is required to seek more information when it appears the appraised value will fall short of the sales price.

Improve housing credit conditions. Since there can be no meaningful economic recovery until the flow of credit is restored to housing, NAHB is calling on Congress to urge regulators and the banking industry to end the stranglehold on acquisition, development and construction (AD&C) loans that has emerged as a major impediment to the housing recovery. Lenders are refusing loans for viable new housing projects and cutting off funding or calling performing outstanding loans, producing unnecessary foreclosures and losses on AD&C loans. Congress needs to urge regulators to allow and encourage lenders to give leeway to residential AD&C borrowers who have loans in good standing by providing flexibility on re-appraisals, loan modifications and perhaps forbearance to give builders time to complete and sell their lots and homes.

Co-sponsor Net Operating Loss (NOL) relief legislation in the House and Senate.  NOL bills H.R. 2452 in the House and S. 823 in the Senate would prevent further layoffs in building and other industries hit hard by the recession. The legislation would help all businesses by eliminating the current $15 million cap on average annual gross receipts and allowing 2009 losses to be eligible for the expanded carryback. In addition, the bills would also help taxpayers who have been hit by the Alternative Minimum Tax to fully benefit from any NOL carryback. The bills both enjoy bipartisan support. Currently, H.R. 2452 and S. 823 have 92 and 37 co-sponsors, respectively.

Taken together, these four issues – extending the $8,000 home buyer tax credit for one year and making it eligible for all home buyers; bringing common sense to the appraisal process; urging banking regulators to ease AD&C credit; and passing the NOL carryback legislation – will not only create needed jobs for American workers quickly, but also stimulate demand for goods and services throughout Main Street America.