A friend asked "Is Inventory in Snohomish/Everett (Cathcart Area) down compared to this summer?"

For those of you who haven't discovered the time-consuming, all-addictive social network called Facebook (www.facebook.com) I can tell you that I have. But through it I have gained connections to old friends and made great connections with new ones. And although I do enjoy the social aspect to this forum, I also enjoy my ability to share my successes in Real Estate with those to whom am connected - I believe my positive attitude and consistent contact with my clients and friends has helped me thrive through what has been a slower than past market.

Recently, an friend posed a question to me on facebook, outside of the typical "Hey there - How are you?"

Tanya G. asked me -
"Hey Stacey, I was curious to know why on Windermere there is suddenly so much less inventory of houses in our area? It seemed like this summer there was so much. Are people just not putting stuff on the market or is it selling quickly in our neck of the woods? Hope you are well and getting a ton of business :-)"

The first point I can make is when she refers to "Windermere", she is commenting on the Windermere's website (http://www.windermere.com/), where an individual can search through all homes listed on the NWMLS whether they be listed with a Windermere Agent or another real estate agency. Additionally, the area she references by "Our Area" is the Everett/Snohomish Area located just off Cathcart Way near Hwy 9 and Seattle Hill Road -- and what a Real Estate Agent would classify as area 740.

So with all of that said I prepared a graph to show the trends of inventory of homes, pending sales and sold homes for that specific area, narrowed down by the price range and square footage size found in that area $300,000 - $699,999.

So as you can see Tanya, inventory is down from the summer, but pending sales comparatively are much higher. Typically, you do see homeowners who have been trying to sell their homes take them off the market during what they believe is a "bad time" to sell (from November through December) -- however, I disagree with this thought process since homes do sell during these times and the buyers that are looking to buy are SERIOUS buyers, not just "lookey-loos" -- they usually need a home and have less inventory to view during these months, so why not let yours be one that they look at? Additionally, when those buyers who have taken their homes off the market put them back on in January, you suddenly see a HUGE rise in inventory.

Buying vs. Renting - The Benefits of Home Ownership

Trends in home prices, personal income and mortgage rates,combined with the tax advantages of home ownership, make this an excellent time to turn the home of your dreams into a reality. If you’re thinking of buying a home, you’ve probably already asked yourself, “Can I afford to buy?” Another good question to ask is, “Can I afford to continue renting?” No matter what you’re currently paying for rent, your total cash outlay over a period of several years will probably add up to a much bigger total than you may have realized. The chart below shows how quickly the rent payments you’re making add up figuring in what this money would earn invested at 5
percent interest.

The Housing and Economic Recovery Act of 2008

It’s hard to believe that anything that takes nearly 800 pages to describe could be time sensitive, however, President Bush recently signed H.R. 3221, the “Housing and Economic Recovery Act of 2008” and for many, it may provide the incentive needed to act now. A few of the major provisions in the legislation that impact homeowners and homebuyers are listed here:

Tax Credits
First-time homebuyers who purchase their primary residence between April 9, 2008 and July 1, 2009, are eligible for up to $7,500 in tax credit, provided they haven't owned a home in the last three years and fit certain income parameters. The credit is generous, but it is actually an interest free loan, paid back over 15 years at $500 per year when taxes are filed.

Larger Loans at Lower Rates
There have recently been provisions in place that have allowed loans larger than $417,000 to qualify for better financing rates than normally would be available for "jumbo" loan amounts of that size, thanks to Fannie Mae and Freddie Mac. Although these provisions were set to expire, they are being extended. However, the top end of the loan size that will be allowed under these programs will be dropping down from $729,750 to $625,500, effective January 1, 2009.

FHA Hope for Homeowners
This provision is designed to help homeowners who are "upside down" on their mortgages—that is, they owe more on their house than they can sell it for in today's market. Essentially, this plan allows homeowners who meet the requirements and are upside down to refinance their mortgage to a new 30-year Fixed FHA mortgage. There are a number of qualifying details that must be met and requirements to be agreed to, but if you're upside down on your mortgage and struggling in today's economy, this is an option worth exploring in more detail.

These are just a few of the provisions that may benefit you, and there are a number of other items that impact the housing and mortgage industry as whole. But the bottom line is this, home prices are extremely reasonable right now, home loan rates are low, and new incentives are in place that may help make the decision to purchase or refinance even more appealing than before. If you're in the market for a new home or need to make some changes with your current mortgage, there's never been a better time to act.



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Housing Real Estate Markets Most Likely To Rebound - Seattle Ranked #1

Dorothy Pomerantz 10.29.08, 4:00 PM ET Forbes Magazine

If you're a homeowner seeing property values plummet, look to the commercial real estate market for solace. It might tell you which areas will recover fastest--and which will likely remain weak. The Urban Land Institute recently asked 700 real estate professionals to name the best (and worst) places to invest in commercial real estate in the coming year. Those surveyed included private developers, Realtors and Real Estate Investment Trust executives. Their answers also apply to the residential market, since the single-family-home sector typically follows the economy. As wages go up and there are more jobs, more people can buy homes, pushing prices up.

The best cities in which to invest are those that are considered gateways to international investment, have vital downtowns where people can forgo cars, and don't have a glut of condos or office space.

These traits landed Seattle the No. 1 spot on the list. No city scored above a 6.15 on a scale of one to nine (one being an abysmal place to invest and nine being excellent).

Seattle is "a diversified market, has a good base of business and is becoming a 24-hour city," says Stephen Blank, senior resident fellow, finance, of the Urban Land Institute. "It's going to be in a good position to come back."

Although the city is suffering from the loss of Washington Mutual and the downsizing of Starbucks, Boeing and Microsoft are still relatively strong. Apartment vacancies are low and there aren't too many new buildings going up, meaning the market won't be oversupplied. The same is true in the retail space.

San Francisco comes in second with a 6.12. The City by the Bay learned from the tech crash of 2001 not to overbuild. There is a reasonable supply of office and apartment space, which should limit vacancies. San Francisco's port is also expected to help the city during the downturn as Americans continue to rely on Asian imports.

Washington, D.C., New York and Los Angeles round out the top five.Of course, there's no guarantee that an improved commercial market will lead to an improved home market. However, investors have a better chance of seeing home prices rise in fundamentally strong markets like Seattle than in struggling cities like Detroit.It landed at the bottom of the list, scoring a 2.24.

Detroit has been reliant on the car industry, which is rapidly shrinking. Other businesses are unlikely to fill the void in the next few years, which means the city will be hit hard by further economic struggles.

New Orleans also lands near the bottom with a score of 3.33. The city has been losing businesses to Houston, Dallas and Atlanta since Hurricane Katrina hit in 2005.

The other cities at the bottom of the list--Columbus, Ohio, Milwaukee, Wis., and Cleveland--suffer from dying industries and lack of tourist appeal.

Recent attempts to turn downtown Milwaukee into a thriving 24-hour city haven't been enough to protect it from the coming downturn. Increasingly picky investors are expected to favor higher-quality port cities over Midwest towns. And while Columbus has the potential to become a major shipping hub for goods traveling cross-country, that revitalization may have to wait for a stronger economy and a government focused on improving the nation's roads. For now, prospects are dim.

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Pending Sales Up 4.1 Percent From Year Ago, Total Inventory Unchanged

News from NW Multiple Listing Service

KIRKLAND, Wash. (Oct. 6, 2008) – Home sales around Western Washington during September rose 4.1 percent from a year ago, reversing a 19-month pattern of declines. Members of Northwest Multiple Listing Service reported 5,982 pending sales (offers made and accepted, but not yet closed), a gain of 234 transactions from a year ago. The totals cover 19 counties in the MLS service area.

NWMLS data show the last system-wide uptick in pending sales was February 2007 when members reported a 4.8 percent gain from the previous year.

In other key indicators of housing activity, Northwest MLS reported tightening inventory with a double-digit drop in the number of new listings added during September compared to 12 months ago, and total inventory at month end that matched year-ago numbers. Figures also show area-wide softening of prices compared to a year ago.

The median price for last month's closed sales of single family homes and condominiums (combined) was $295,000, a drop of 8.3 percent from a year-ago when the median price was $321,600. King County prices fell about 3.7 percent from a year ago, from $395,000 to $380,315. For the four-county Puget Sound region (King, Snohomish, Pierce and Kitsap), the median price for last month's closed sales dropped from $349,950 to $324,000, a decline of 7.4 percent.

Brokers and lenders say the recent economic turmoil is taking a toll on activity, but also suggest negative news reports are keeping buyers on the fence and creating misunderstandings about the availability of home loans.

"Forget the news. Mortgage loans are readily available, at excellent rates and you can still get 97 percent loan to value," said Mike Welty of Liberty Financial Group in Bellevue. "There is a lot of flexibility in programs, qualification and opportunity," he emphasized, while acknowledging (with a chuckle), "Underwriting is tougher – you need a down payment and you need a job!"

REALTOR Dennis Brown, a residential and investment specialist at Windermere's Fauntleroy office, echoed Welty. "I'm loving FHA," he exclaimed, calling the largest mortgage insurer in the world "the answer to a lot of people's credit problems." Brown has used the program for first-home and move-up buyers, as well as with investors. "Investors use the program to buy everything from fixer-uppers to 4-unit buildings," he said. Among features Brown said his clients find to be most appealing about FHA loans are easy credit qualifications (typically one year of "clean credit"), low closing costs and low down payment requirements (as low as 3 percent of the purchase price).

In today's market the vast majority of buyers are first time buyers, move-up buyers, and investors, according to J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. "These three groups of buyers are moving forward with the opportunities that exist thanks to low interest rates, increased affordability, and a strong selection of homes to choose from."
Buyers still have plenty of choices, according to NWMLS data. Members added 10,889 new listings of single family homes and condominiums to inventory during September – about 1,500 fewer than a year ago for a 12 percent drop. When added to existing inventory, the number of active listings at month end totaled 48,665, slightly fewer than the year-ago number of 48,969 listings.

"We are definitely starting to see more buyers that have been waiting months to get off the fence," said NWMLS director Mike Skahen, owner/broker of Lake & Company Real Estate, Inc. in Seattle. As for the dip in prices, he attributes that in part to limited availability of jumbo loans for high-end homes, "Not surprisingly, with fewer high priced homes selling, the median price would be lower," he noted. "I'm convinced that as the national financial crisis subsides and with Seattle's good economy, buyers who have been waiting for the bottom will return and wish they had bought now." Commenting on the relatively low sales numbers over the past year, he remarked, "There must be substantial pent-up demand."

"The latest NWMLS numbers validate what our agents report from the field -- sellers that are truly motivated to move are dropping their prices, and many buyers are recognizing the opportunity this creates," said Ron Sparks, managing vice president at Coldwell Banker Bain in Bellevue. Increases in pending sales are a "good indication that our market is adjusting to current buyer attitude and demand."

Sparks acknowledged price declines aren't particularly good news for sellers, but said most sellers can be thankful the drops are really quite modest compared to other markets, where prices have recently dropped 30 percent or more. "It's apparent that home prices, both locally and nationally, are becoming irresistible in some instances," he remarked. As a result, he noted markets such as San Diego, Los Angeles and Las Vegas are seeing the same increased buyer activity as our local market.

Erik Hand, president of Response Mortgage Services (John L. Scott's in-house lender) expects some improvement in financing options, but cautioned consumers about the potential cost of procrastinating.

"With the passage of the bailout bill, I expect we will gradually see an improvement to the conditions in the Non-Conforming market in the form of a narrowing of the spreads between Conforming and Non-Conforming loan products, and in some cases, an easing of guidelines that will open up financing options to a larger pool of buyers," Hand stated.

"As for interest rates, they are expected to remain low, but like every other aspect of the economy they're subject to the volatility of the market," Hand commented, adding, "It's important for homebuyers to understand that interest rates are currently at historic lows and there's no guarantee they'll fall further with the passage of the bailout bill."

"While things in the real estate world may not be perfect right now, things are, and will continue to get better and better. The medicine tastes terrible but the cure will be worth it," NWMLS director Dick Beeson believes. Beeson, the broker/owner of Windermere/Commencement Associates in Tacoma saw a 21.8 percent surge of pending sales in Pierce County last month compared to a year ago and a notable shrinkage in inventory (down 11.2 percent from twelve months ago).

"We're moving toward a market place with fewer properties for sale -- and fewer and fewer choices for buyers. What a time to buy, low rates, low prices, low costs, and decreasing inventory -- all ready for those smart buyers who act now," he noted.

NWMLS director Kathy Estey, managing broker at the Bellevue Downtown office of John L. Scott said "September felt like we were gathering steam and back on track," but as economic news worsened during the month buyer confidence tumbled. "The news made it sound as if buyers need 20 percent down to get a loan -- and fear become our worst enemy again," she remarked.

On a more optimistic note she added, "The Puget Sound remains a great place to own property and there are opportunities to buy low and ride the rising prices that are around the corner in a year or two."

Real Estate Outlook: Prices Stabilizing

by Kenneth R. Harney

The economy continues to send mixed messages -- some encouraging for real estate, some not -- but this week the positive are edging out the negatives.

Take housing prices for example. The research company with the largest database of ongoing real estate transactions - First American CoreLogic, which tracks property values in thousands of Zip codes and neighborhoods - reports that nominal price drops have "stabilized" in 883 core-based statistical areas, showing no declines in the past two months.

Why's that important? Because flattening out is what we need before we can see a cyclical turnaround -- in other words, where even in the hardest hit local markets in California, Florida, Arizona and Nevada, prices have hit bottom.

They're not likely to drop much further, and in some parts of California are now at such bargain levels that large investors are prospecting for entire packages of houses -- ten or more in some cases -- to buy in bulk and rent out.

Gary Crabtree, an appraiser in Bakersfield, California, told Realty Times that he knows of one investor who has a standing order for 20 houses that fit specific price and locational characteristics that he wants to purchase.

The National Association of Realtors sees similar bottoming out -- even the first signs of turnaround -- in a number of key markets in the U.S. In its latest quarterly report, home sales were up year-to-year in 26 percent of all states and 35 percent of metropolitan statistical areas.
Biggest price jumps were in Yakima, Washington, where the median was up 8.9 percent, Binghampton, New York, up 8.7 percent, and Amarillo, Texas, up by 7.2 percent.

On the other hand, the Realtors also reported the national median sales price was down by 7.6 percent from the second quarter of 2007, and now stands at $206,500.
In other key economic developments: New housing starts fell by three percent last month - which is only logical given builders' still bulging unsold inventories.

And mortgage rates took a dip this week to an average 6.47 percent for 30 year fixed. Fifteen year rates slipped below 6 percent to 5.99 percent. New loan applications for FHA mortgages to purchase homes rose slightly, according to the Mortgage Bankers Association of America -- even while applications for conventional home purchase mortgages from Fannie Mae and Freddie Mac dropped for the week.

Bush signs housing bill to provide mortgage relief

By JENNIFER LOVEN - Associated Press Writer

President Bush on Wednesday signed a massive housing bill intended to provide mortgage relief for 400,000 struggling homeowners and stabilize financial markets.

Bush signed the bill without any fanfare or signing ceremony, affixing his signature to the measure he once threatened to veto, in the Oval Office in the early morning hours. He was surrounded by top administration officials, including Treasury Secretary Henry Paulson and Housing Secretary Steve Preston.

"We look forward to put in place new authorities to improve confidence and stability in markets," White House spokesman Tony Fratto said. He said that the Federal Housing Administration would begin right away to implement new policies "intended to keep more deserving American families in their homes."

The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.

It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac and tightens controls over the two government-sponsored businesses.

The House passed the bill a week ago; the Senate voted Saturday to send it to the president.
Bush didn't like the version emerging from Congress, and initially said he would veto it, particularly over a provision containing $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.

But he withdrew that threat early last week, saying hurting homeowners could not wait - and even blaming the Democratic Congress' delays in action for forcing an imperfect solution.
Meanwhile, many Republicans, particularly those from areas hit hardest by housing woes, were eager to get behind a housing rescue as they looked ahead to tough re-election contests.

Paulson's request for the emergency power to rescue Fannie Mae and Freddie Mac helped push through the measure. So did the creation of a regulator with stronger reins on the government-sponsored companies, as Republicans long have sought.

Democrats won cherished priorities in the bargain: the aid for homeowners, a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants.
The bill takes several approaches to curing the ailing housing market.

It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration.

The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan. Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure.

The plan also is designed to relieve a broader credit crunch that has taken hold because of rising defaults and falling home values. To free up safer and more affordable mortgage credit, the bill permanently would increase to $625,000 the size of home loans that Fannie Mae and Freddie Mac can buy and the FHA can insure. They also could buy and back mortgages 15 percent higher than the median home price in certain areas.

It goes far beyond addressing the current crisis, however.

The legislation overhauls the Depression-era FHA. It requires lenders to show how high a borrower's payment could get under the terms of his mortgage. It provides $180 million in pre-foreclosure counseling for struggling homeowners.

The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies.

The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.

Democratic leaders, recognizing that the measure could be one of the last items to become law during what's left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.

Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.

How the New Housing Law Affects You

The landmark measure has something for struggling homeowners, first-time buyers, and even seniors

By Luke Mullins

That wasn't so hard, was it? It only took the worst real estate slump in a generation, an economy grinding to a department-of-motor-vehicles pace, and a crisis of confidence in the heart of the mortgage finance system to get the gigantic housing bill to the finish line. The legislation, which has been signed into law by President Bush, is hugely ambitious, seeking at once to stem the tide of home foreclosures and restore confidence in mortgage finance giants Fannie Mae and Freddie Mac. To critics, it's a bailout. To supporters, it's a rescue. But no matter what you call it, it is the most sweeping housing measure in decades. Here's how it will affect you:

Struggling homeowners: A key provision of the law would allow homeowners who can't make their mortgage payments to refinance into more affordable, fixed-rate loans insured by the federal government. Under the plan, the Federal Housing Administration can guarantee up to $300 billion of such loans, enough to modify an estimated 400,000 mortgages. To participate, lenders would have to write down the original loan balance, taking a financial hit in the process.

"It's a help, but it's modest in comparison to the number of homeowners who are facing default and foreclosure," says Mark Zandi, chief economist of Moody's Economy.com. Zandi says the nation could face nearly 3 million first-mortgage defaults this year. Of those, as many as 1.5 million mortgage holders could lose their homes. "That 400,000 [of loans that will be modified under the law] is over the life of the program," Zandi says. "So I don't know if that provides much relief in 2008."

First-time home buyers: The housing law would also benefit first-time home buyers through a tax credit worth as much as $7,500. The credit, however, isn't a grant, but essentially an interest-free loan that must be paid back over 15 years. The outstanding balance must be paid back to the government if the property is sold for more than the original purchase price and the tax credit hasn't been fully repaid. James Glassman, a senior economist at JPMorgan Chase, says the tax credit is unlikely to increase demand from first-time home buyers all by itself. But when coupled with other factors—such as falling home prices—"it's just one more thing that helps," Glassman says.

Seniors: Although it has received little fanfare, a provision in the law that increases the limit on certain reverse mortgages stands to benefit senior citizens. A reverse mortgage is a type of loan—collateralized by a house—available to homeowners ages 62 and up. The loan allows homeowners to obtain monthly payments or a lump sum of cash based on the value of the property. The legislation boosts the cap on the Federal Housing Administration reverse mortgage program to as high as $625,000. "That's a benefit because it gives seniors the ability to access more equity out of their homes," says Darryl Hicks, spokesman for the National Reverse Mortgage Lenders Association.

Low-income Americans. The legislation also creates a permanent housing trust fund to benefit low-income housing. "The funds from the trust fund would be allocated to the states, which would use the money to produce and preserve affordable housing focused on the lowest-income households," says Linda Couch of the National Low Income Housing Coalition. "Low-income advocates see that section as a real victory." Couch says the fund could have as much as $600 million by 2011 from its original funding sources, Fannie and Freddie.

Prospective home buyers: The law could affect house hunters in a couple of ways:

Home prices: Although helpful, the legislation is unlikely to reverse the nationwide decline in home prices in the near term. "The impact will be more of stopping or slowing the hemorrhaging in the housing market rather than sparking some type of strong recovery," says Michael Darda, chief economist at MKM Partners. Still, in a real estate market with a glut of unsold homes, every little bit helps.

Existing home sales edge up nationwide and in Puget Sound area

By MARTIN CRUTSINGER - The Associated Press

WASHINGTON — Sales of existing homes edged up slightly nationwide in May compared with April, a trend repeated in the Puget Sound area.

The National Association of Realtors reported that U.S. sales of existing single-family homes and condominiums rose by 2 percent to 4.99 million units last month.
Sales increased 3 percent in King County and 5.9 percent in Snohomish County last month compared with April, according to the Northwest Multiple Listing Service. In raw numbers that means an additional 61 homes sold in King and 43 in Snohomish.
Pierce County saw sales drop 15.1 percent, reflecting 135 fewer house and condo sales.

The local numbers include both existing and new homes because breakouts are not available.

Nationally, it was only the second sales increase in the past 10 months, but it was not viewed as a rebound that could be sustained. Many economists believe that prices will have to decline more before the housing industry can mount a sustained recovery.
The median price nationwide of an existing home sold in May dropped to $208,600, off 6.3 percent from a year go. That was the fifth biggest year-over-year price decline on records that go back to 1999.

King County's median price last month was $440,000 for single-family houses, reflecting a 6.2 percent price drop from a year earlier. The median price for the county's condominiums was down less than 1 percent to $287,925. This includes both new and old properties.

House prices in Snohomish and Pierce counties likewise were down in the 6 to 7 percent range compared with the previous May. In Pierce County, however, they fell 11.3 percent.

The strength in sales nationally reflected gains in all parts of the country except the South, where sales dropped by 0.5 percent. Sales were up 5.5 percent in the Midwest, 4.6 percent in the Northeast and 2 percent in the West.
Paul Bishop, senior economist for the Realtors, said that for the past few months sales have been rebounding in parts of the country that had been hardest-hit by the housing bust, while sales have weakened in some areas that formerly had been immune from the overall downturn.

Distressed areas that now are seeing sales gains included Sacramento, the San Fernando Valley and Monterey in California; Sarasota, Fla.; and Battle Creek, Mich.
The inventory of unsold homes nationwide dropped by 1.4 percent to 4.49 million units, which represents a 10.8-month supply at the May sales pace, down from a 11.2-month supply in April. That's still about double the inventory level that existed during the five-year housing boom.

"Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets," said Lawrence Yun, the Realtors' chief economist.

However, rising mortgage foreclosures are dumping even more homes onto the already glutted housing market.

Many economists predict sales will keep falling through the summer and prices will not start to rebound until next spring.

Seattle - Recession Proof?

America's Recession-Proof Cities

Joshua Zumbrun

Nationally, home prices are falling, unemployment is on the rise and the economy is expected to grow slowly--or even contract--in the first half of the year. But some cities are doing just fine. Take Oklahoma City, Okla. With falling unemployment, one of the country's strongest housing markets, and solid growth in agriculture, energy and manufacturing, it looks best positioned among the nation's largest metropolitan areas to ride out the current crisis.

San Antonio is right behind. It also features solid employment figures and affordable home prices that continue to rise. Its industries are growing; it can't hurt that the new AT&T (nyse: T - news - people ) was formed when San Antonio-based SBC Communications swallowed the old AT&T Corp. and BellSouth.

The others holding steady or improving include Austin, Texas; Houston; Charlotte, N.C.; Dallas; San Jose, Calif.; Raleigh, N.C.; Salt Lake City; and Seattle.
Behind The Numbers To find them, Forbes.com examined the country's 50 largest metros and looked at several key measures.

We examined unemployment data supplied by the U.S. Bureau of Labor Statistics for the year ending in February 2008 to see which areas are most adding or subtracting jobs. Next, we looked at the BLS data on job growth in non-farm payrolls, through February 2008, for construction, education and health services, financial activities, information, leisure and hospitality, manufacturing, natural resources and mining, professional and business services, trade, transportation and utilities, and the BLS's catch-all category, "other services."
We also took into account median home price data from the National Association of Realtors--from the fourth quarter of 2006 to the fourth quarter of 2007--to see which areas posted the largest annual gains. Our data don't account for the impact of declining sales in the first several months of this year.

Finally, our rankings were adjusted using data from a November 2007 report, "U.S. Metro Economies: The Mortgage Crisis," by the U.S. Conference of Mayors. It lists each city's estimated gross metropolitan product growth by projecting how rising foreclosures and falling home prices would affect overall levels of productivity in local economies.
Sunny Southern Skies Texas cities fared best under these measures. San Antonio, Austin, Houston and Dallas-Fort Worth have benefited from historically lower home prices, which have been affordable to a large segment of the population. The availability of land--and, in some cases, little zoning--helped keep prices in these cities low. Instead of competing for homes, Texans could move to a new subdivision a little farther out.

What's more, all four boast falling unemployment rates, with Austin dropping from 3.8% to 3.6% and San Antonio from 4.3% to 4%. Cities that are expected to see growth in non-farm payrolls include Raleigh, which is expected to see 7.4% growth in professional and business services and 6% growth in education and health. In Salt Lake City, where the median home price rose 2.5% and unemployment, at 3.1%, is below the 5.1% national average, growth in education and health services is expected to be 5.5%.

Some cities have seen increasing home prices but otherwise continue to struggle. Buffalo and Rochester, N.Y., have seen home price growth (from a low base) but still contend with high unemployment--around 6%--and slow-growing or shrinking industries.

And in the San Jose area, the median home sale price is over $830,000. That's 11% higher than it was in the fourth quarter of 2006, helping to land the area at No. 4 on our list. Problem is, that growth has since cooled, and it remains to be seen whether pricey homes coupled with a 5.3% unemployment rate will cause trouble for homeowners this year.

To be sure, even in the most resilient cities, the mortgage crisis has caused suffering. People everywhere got into bad mortgages. Similarly, even in the most battered cities, the majority of people are employed and making their mortgage payments. The extent of recession or resilience is very much in the eye of the beholder, and this list represents only one of many ways to take a snapshot of economies that are standing tall.

In his statements to Congress' Joint Economic Committee earlier this month, Federal Reserve Chairman Ben Bernanke predicted the economy would possibly move into recession in the first half of 2008 but begin to rebound in the second half.

If you're tired of waiting, these might be the best places to go.

View the entire article at http://www.forbes.com/2008/04/29/cities-recession-places-forbeslife-cx_jz_0429realestate.html

Best Cities for Home Sellers

By Matt Woolsey, Forbes Magazine

Though luxury home buyers took a big bite out of the Big Apple last year--properties in the Plaza Hotel and condos along Central Park West sold for record prices and the city posted new highs in price per square foot and median sales price--2008 hasn't been as kind to sellers.

There is plenty of new construction, especially on the West Side and in the outer boroughs. But vacancies are on the rise. That's bad news, especially when the job market takes a pounding.A loosening market, job losses and new construction projects adding to an already growing inventory lands New York, typically a strong market, No. 21 on our list of best cities for home sellers.

"What happens is that people tend to look at prices as a barometer of the health of the market," says Jonathan Miller, president of Miller Samuel, a Manhattan appraisal company. "But it's really how many people are in the market, and what you're seeing now are people dropping out because of affordability or because they can't get credit."

West coast sellers are faring better. In San Jose, Calif., No. 1 on our list, tough regulatory measures make it difficult to overbuild. New home construction dropped 63% last year, while jobs grew by 1.2%. Home vacancies, which were already low at 1.6%, fell to a national bottom at 0.8%, helping make San Jose one of the country's tightest markets.

Farther north, San Francisco's conforming loan limit jumped from $417,000 to the maximum $729,750, which makes getting credit a simpler affair for many of the city's home buyers. In 2006, the market felt a softening that pushed vacancy rates up to 2.4%, but a 56% cut in construction has cut vacancy rates in half. The increased access to credit, thanks to the new Fannie Mae and Freddie Mac limits, and the lack of available properties plays to sellers' interests.

Behind The Numbers To find the other cities on our list, we looked at the country's 40 largest metro areas and assessed how friendly conditions are expected to be for sellers this year. Each city was ranked by its 2007 unsold vacancy rate, calculated by the U.S. Census American Housing Survey, and how much the market had tightened or loosened when compared with 2006 conditions.

Then we looked at construction starts, as tracked by the National Association of Home Builders, to see if building starts would compound or alleviate vacancy woes. Next was job creation, from the Bureau of Labor Statistics, as a way to measure the local economy's ability to absorb or offset housing losses.

Last, we factored in the degree to which new conforming loan limits from Freddie Mac and Fannie Mae will improve each market's lending conditions. When Freddie and Fannie get more involved, lenders get the implicit backing of the Federal Government, something that softens the risks that have slowed lending elsewhere, as jumbo, or nonconforming loans, can be expensive losses.

"There is still an unwillingness on the behalf of lenders to bear the higher risks of jumbos given the potential loss severity," says Anthony Sanders, a professor of finance at Arizona State University. "Recent price declines are scaring investors and lenders alike."

San Jose and San Francisco came out on top because they fit the profile of a sellers' market--low inventory rates that were still shrinking, good job creation, a large scale cutback in new home construction and a boost in the credit market from new Fannie and Freddie loan limits.

But one look at the rest of the spots on our list will remind you that the term "seller's market" is relative. Many, like Denver, have experienced consecutive quarterly price declines. Prices here dropped 6.3% last year, according to the National Association of Realtors. Seventh-place Denver also has a 3% unsold vacancy rate. Still a 2% jump in new jobs and a 49% cut in construction are reasons to be optimistic about the next year or two.

Seattle has experienced similar construction rate cuts. The city went through its own bust in 2002 and 2003, as the result of mass overbuilding. Since homes take a few years to finish, when construction rates plummet, as they did in Seattle from 2003-2005, it takes years before those adjustments are felt. By 2006, Seattle had the lowest vacancy rate in the country, and wasn't as prone to the price adjustments felt elsewhere, making it our 10th best sellers market today.

While job growth, new construction and vacancy rates and access to credit are important barometers, the bottom line is this: When there are more buyers chasing property than sellers looking to unload, that means a relatively quicker sale, which in this market is the best that can be expected, even if it's a small or flat price gain.

Seattle home values hottest in U.S.

By AUBREY COHEN
P-I REPORTER

Seattle-area home appreciation has been the hottest in the nation for 11 months in a row, despite steadily slowing for the past year and a half, according to data released Tuesday.

July's price for a typical home in King, Pierce and Snohomish counties was up 6.9 percent from July 2006 and 0.2 percent from June 2007, according to the S&P/Case-Shiller Home Price Indices, which do not give actual prices.

The August median home price was $439,000 in Seattle and $415,000 in King County, according to the Northwest Multiple Listing Service. Both medians figured in condominiums and single-family homes.

While July's annual increase was the smallest for the Seattle area in nearly four years, it was still the largest in July among the 20 metropolitan areas the indices track, just five of which posted an increase.

The story is a bit different for month-to-month appreciation, with nine other areas posting increases and all but one of those exceeding Seattle's percentage change. The 20-city composite index declined 0.4 percent from June and 3.9 percent from July 2006.

"The decline in home prices clearly continued into the summer months," Robert Shiller, chief economist at MacroMarkets LLC, said in a news release accompanying the report.

Detroit was simultaneously worst among the 20 cities for annual price change, with a 9.7 percent decline from July 2006 to July 2007, and first for monthly change, with a 1.3 percent jump from June to July.

Tampa, Fla., had the second-highest annual decline, at 8.8 percent, while Charlotte, N.C., was second to Seattle for increases, at 6 percent. Miami posted the biggest monthly decline, with prices down 1.7 percent, followed by Tampa and New York, which were both down 1 percent.

The drop in the 20-city index was the largest ever for that measure, which goes back to 2000, while the 4.5 percent decline in S&P's 10-city index was the largest for it since July 1991.

S&P Index Committee Chairman David Blitzer said prices might level off nationally by the end of the year.

"Maybe the first stage is steep declines, and we're just about done with those," he said. "The second stage is not much gain, not much loss. The rest of the economy has to catch up to home prices."

Shiller, an economist at Yale University, told lawmakers in a statement last week that the loss of a boom mentality among consumers posed a "significant risk" of a recession within the next year.

Unlike monthly sales statistics, the Standard & Poor's indices try to track the price of typical houses in a market by applying a formula to repeat sales of homes.

They screen sales for distortions, such as foreclosures or sales between family members, and weigh them for such factors as remodeling, neglect and the time between sales.

The Seattle area saw 33 months of double-digit annual appreciation, peaking at 18.5 percent in November and December 2005.