Peter Schiff on Housing, Economics, Politics, and Much More!

Peter Schiff on housing, economics, politics, and much more from his interview with Eric King with King World News. Video interview courtesy of YouTube.com.

U.S. Housing Recovery in 2010?

Courtesy of Bloomberg: "U.S. Housing Recovery Delayed to 2010 as Market Wanes" -- Housing quotes and predictions from some of the biggest players and analyst in the industry.

I don't think the housing crisis is over," Mark Zandi, chief economist with Moody's Economy.com

New home sales may begin to pick up by the start of the so-called spring selling season, said Toll Brothers Inc., the largest U.S. luxury homebuilder. Existing house sales may take longer.

Residential construction and property sales led the way out of the previous seven recessions going back to 1960, said David Berson, chief economist of PMI Group, the mortgage insurer in Walnut Creek, California.

"Market conditions in the homebuilding industry are still challenging, characterized by rising foreclosures, high inventory levels of available homes, increasing unemployment, tight credit for homebuyers and weak consumer confidence," said Donald R. Horton, chairman of D.R. Horton Inc., the nation's second-largest homebuilder.

The jobless rate probably will peak at 10.4 percent in 2010's first quarter, even as the U.S. economy continues an expansion that began in the third quarter, said Douglas Duncan, chief economist of Fannie Mae, the largest mortgage financier.

"You don't pay a mortgage with economic output -- you pay a mortgage with a paycheck," Jay Brinkmann, MBA's chief economist, said yesterday.

There are signs that parts of the U.S. are rebounding. California, among the states where the housing bust started, is one of the few areas that's beginning to recover.

October home prices in Orange County, San Diego and the San Francisco Bay Area increased from a year earlier, MDA DataQuick, a San Diego property information service, said this week. The number of sales also increased in the Bay Area and Southern California.

"We have to be aware that the stabilization that we've seen so far is tenuous at best," Lennar Corp. Chief Executive Stuart A. Miller said Nov. 17 at a conference in New York sponsored by UBS AG.

Homebuilders and investors will get a better gauge of whether housing demand is stabilizing in 2010's first quarter, said Robert Toll, chairman and chief executive officer of Toll Brothers, the largest builder of luxury houses.

"My prediction is we'll probably recover on a seasonal basis," Toll said yesterday at a conference in New York sponsored by Citigroup Inc. "It's generally accepted that the homebuilding industry is off the mat and on the road to recovery."

"The first-time homebuyer tax credit juiced up sales," said Moody's Zandi. "The stimulus was helpful. It augurs, at the very least, that policy makers can't pull life support from housing."

Josh Levin, a housing analyst at Citigroup Global Markets Inc. in New York, said he expects sales to continue to be slow until January or early February, followed by a surge as buyers try to beat the April 30 expiration of the tax credit.

"The bouncing along the bottom is distorted by government policies," he said in an interview yesterday.

Foreclosures will also have limited impact on driving down real estate prices as long as banks are slow to put properties on the market and the government encourages loan modification programs, he said.

"It's clear the government and banks don't want to flood the market with foreclosed homes and it's clear it's going to be dragged out," he said.

Where do you see the housing market going in 2010? Do you think your local market is on the bottom poised for a strong recovery?

U.S Housing Starts Plunge

As reported by CNNMoney.com, "Home construction at lowest point in 6 months":

Homebuilders began construction at an annual rate of 529,000 new homes during the month, 10.6% below the revised September rate of 592,000 and 30.7% below the 763,000 rate during October 2008. It was the lowest level of housing starts since April, when the annual rate was 479,000.

Building permits showed weakness as well:

That weakness included the number of building permits issued in October, which fell to seasonally adjusted annual rate of 552,000. That was 4% below the revised September rate of 575,000 and 24.3% below the October 2008 estimate of 729,000.

Click here to view the full "New Residential Construction in October 2009" report as released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development.

Pending Home Sales Index - September 2009

As reported by CNNMoney.com - "Home sales contracts rise for 8th straight month":

The number of signed sales contracts to buy homes rose in September for the eighth straight month, according to a real estate industry report released Monday.

The September Pending Home Sales Index from the National Association of Realtors (NAR) spiked 6.1% to 110.1, consolidating a 6.4% gain in August. It was the index's highest level since December 2006, when it stood at 112.8.

The leap was far better than expected. A panel of analysts surveyed by Briefing.com had forecast a 1.2% rise.

No doubt the first-time homebuyer tax credit program is helping to boost sales. A large majority of this activity will subside if the first-time homebuyer tax credit program is not extended. The House is expected to vote and extend the credit on November 5, 2009. It also appears, in addition to the $8,000.00 credit expected to be extended to first-time homebuyers, that a new $6,500.00 credit will be offered to existing homeowners who have owned their homes for 3, 5, or 7 years.