We’ll let the first line of this bit of news speak for itself:

Prices paid for single-family homes fell 7.7 percent in the first quarter from the level of a year earlier, the steepest decline ever recorded by the National Association of Realtors, which has been tracking sales for 26 years.

Originations and loans are both way up. From the National Mortgage News Daily Briefing:

Federal Housing Administration single-family mortgage originations took off
in the first three months of this year, as FHA applications doubled to 181,900
between Dec. 31 and the end of March, according to Department of Housing
and Development data.

The data also show that FHA-insured loans jumped by 64%, to 89,000,
from December to March. Mortgage banking consultant Brian Chappelle
estimates that FHA lenders are now taking 200,000 FHA mortgage applications
per month and insuring 100,000 loans per month.

There are concerns that the FHA might not be able to handle the increase in
business. But Mr. Chappelle said the FHA direct-endorsement lenders manage
the whole approval process. From an origination standpoint, "there are no
backlogs because the lender controls the process," he said. Mr. Chappelle
is with Potomac Partners in Washington.

This means that more than ever it’s important to keep up to date on what the FHA can do for you — heck, it’s your tax dollars at work!

Ergo, you should set aside some time and some popcorn and watch VAR’s webcast, "Mortgage Lending in 2008: Back to the Future, How FHA can help you and your clients."

The questions keep coming …

“Are we in a recession?” “Aren’t we expected to make a lowball offer?” “Will we get our money back if we sell in two years?” “Won’t we make $100000 on this flip in just two months like they do on TV?”

Okay, so maybe I haven’t gotten that last question - at least not phrased like that - but everything else is verbatim. Plenty of mixed signals floating around about the real estate market, and it’s understandable that people have questions.

Making matters worse, Scott Rogers posted links to posts entitled “The Recession That Never Was Is Now Over“, and “Is Housing Slump At A Bottom?“. I point these out not because I think Scott shouldn’t have posted them, I just think that both posts make strong arguments to at least make you consider that perhaps times they are a changin’. For instance, the post “Is Housing Slump At A Bottom” makes the argument that new housing starts slumped below the one million mark in March. Historically, every time that’s happened in the last 50 years, it’s been at the bottom of a recession. It’s hard to argue with history - as a friend of mine says, “hindsight is 40/40″. Yea, she’s like me, she was never good with numbers.

I do think there are concerns that need to be addressed. Dependence on foreign oil, uncertainty overseas, among other things, compounded by a constant barrage of negativity and fear in the mainstream consciousness, have people scared. These things need to be addressed in order to begin an upswing in confidence, IMO.

One thing I DON’T understand is how we hear about massive layoffs in industries like auto and manufacturing, yet GDP is up. Wouldn’t conventional wisdom say that by laying off in massive quantities, and exporting goods and jobs out of the country, that GDP would go DOWN? In the last three years, Volvo has announced layoffs of 1000, 650 and 1100 personnel in their Dublin, VA factory, for instance - incidentally, it’s the largest truck manufacturing facility in the world. I’ve got to imagine that production in the plant slowed down accordingly, not increased … I didn’t do well in Economics, for sure, but what am I missing here?

I have writer’s block. The deadline for my column in VAR’s Commonwealth Magazine passed earlier this week, and I’ve yet to type a word of anything coherent (no wry comments, please).

So here’s the deal: YOU can help me write the column. Don’t worry, it’s not difficult. All it requires is a sense of humor and the recollection of a song or two.

ANNOUNCING: Scott’s “Songs for an Economic Slump” Contest….

Here’s the premise: In the great soundtrack of life, even an economic slump needs its own theme song.

Below are several categories. Your job is to suggest a song title or snippet of lyrics – from actual, reasonably mainstream music – that in your opinion summarizes the particular category. Just leave your suggestion in the comments on this post. I’ll take the best suggestions…determined solely by me and my own subjective and somewhat warped sense of humor…and publish them in my June Commonwealth column. (And no, this contest is NOT just limited to Virginia REALTORS®.)

So be creative. Be clever. Just be helpful. I really do need to finish this @#!% column. Deadline for submissions is Monday at 5 p.m. EDT, and you can make recommendations in any or all categories.

1. SONGS YEARNING FOR THE HOUSING MARKETS OF 2004-2006

2. SONGS FOR SUBPRIME LENDERS

3. SONGS FOR ECONOMISTS WHO DIDN’T SEE THIS COMING

4. SAD SONGS FOR SHORT-SELLERS WHO THOUGHT THEIR NO-MONEY-DOWN A.R.M. WAS A SWEET DEAL

5. SONGS FOR UNREALISTIC SELLERS AND THE REALTORS® WHO OVERPRICE THEM

6. SONGS OF THOSE ADVOCATING A FEDERAL BAILOUT

7. SONGS DESCRIBING THE WHOLE, CURSED ECONOMIC MESS

Now go to it. I look forward to hearing your entries!

Scott Rogers, with Coldwell Banker Funkhouser in Harrisonburg, VA, I mean.

Amid all the hyperbole and sweeping generalization in the media about the state of real estate markets nationwide, Rogers had added a dose of reality to that most-essential of REALTOR® marketing branding tools: He’s added his market’s monthly home sales data to the back of his business card. Clever, huh? Good conversation starter, certainly. Business tool? Absolutely. And remarkably low-tech (though of course he does direct folks to his blog for “more analysis”).

And yes, he prints new cards every month.

Ken Harney in today’s Washington Post:

Could designations of Zip codes, metropolitan areas and entire states as “declining markets” hinder a real estate recovery and hurt minority groups and moderate-income buyers disproportionately? Growing ranks of critics say yes.

Since late 2007, most lenders, insurers and mortgage investment firms have compiled lists of markets that they regard as higher risks because housing values are dropping. In those areas, borrowers are charged higher rates and loan fees and are required to make bigger down payments — costs that can rise significantly when applicants have credit scores below designated minimum levels.

In some cases, the extra fees can add more than two percentage points to the interest rate and require much more cash up front. At their extreme, declining-market designations remove entire categories of real estate from financing eligibility. Some private mortgage insurers, for instance, won’t touch second homes or rental-home investments anywhere in large swaths of Florida and California.

Industry estimates on affected Zip codes range from 8,000 to more than 12,000 across the country. Many parts of the Washington area are included.

Full story here.

Raw data is…well…raw data and that means if you misread the numbers, read them with bias, or even read them in a vacuum, it’s easy to misconstrue any sort of research. Home sales stats are no different and this realization is one of the driving factors in the renovation of Virginia’s home sales report.

VAR has now formed a strategic partnership with GMU’s Office of Housing Policy Research that adds additional value and context to its home sales reports. The main aim of the partnership is to produce more in depth quarterly accounts of Virginia home sales that view the state’s housing situation from a chronologically broader and more analytical viewpoint, improving on the snapshot analysis that was the former focus of monthly reports. The new report format now includes not only raw data from local associations, but also

• A look at both national and state markets
• Statistics on job growth and other important economic indicators
• Housing affordability analysis and
• Honest interpretation of the facts

In addition to reinventing the report format, VAR and GMU have also renovated its distribution. Members and the general public can still download reports online, however now media have the opportunity to call in and get an in-person perspective from Virginia’s REALTOR(r) leaders and expert researchers.

The Virginia 2008 first quarter home sales report is now available online and its most important messages are implicit: Perspective is critically important and considering context is crucial.

A Few Highlights…

If you’re looking at national stats, recession is likely. If you zoom into Virginia, our economy has continually outperformed the nation, is still experiencing job growth, and these factors and the diversity of industry across the state contribute to a healthy economic outlook.

Nationally households with an average income can afford 47 percent of homes on the market. When you zoom into Virginia you see households with an average income can afford 50-60 percent of homes on the market.

Nationally and in Virginia prices are dropping and in most areas stabilizing. In both cases, this is contributing to an overall housing affordability increase and created market entry opportunities for a new sect of savvy buyers.

It’s no secret that home prices in Northern Virginia are expected to continue to decrease; however, that’s only half the story. In Prince William, one of the hardest hit areas; pending sales have increased from 1,645 in the first quarter of 2007 to 2,341 in the first quarter of 2008. This isn’t surprising with interest rate decreasing and price stabilization, it seems like prospective homeowners are starting to get the message. Now IS a great time to buy.

No one knows exactly what the next stage will be in the life of the imaginary “national” housing market and its also true that unlike 2004-06 not just anyone can be successful in real estate. But for the smart buyers, sellers, and REALTORS(r), there’s a lot of opportunity for wealth building and Virginia is still one of the best places to be in real estate in the nation.

Don’t take my word for it; check out the good, the bad, and the real Virginia perspective on the housing market at www.VARealtor.com/HomeSalesReport today.

This is excellent perspective, compiled by Charlottesville Association president Judy Savage and blogged by CAAR’s CEO, Dave Phillips.

This from last Friday’s WSJ, on Moody’s and the other bond rating agencies’ complicity in bringing about the current market crisis.

This from last Thursday’s WSJ on lessons learned from the current housing crisis. Here’s a snippet:

The great American experiment with homeownership for all and mortgages for everyone is over.

Millions of homeowners will lose their houses. The government is scurrying to minimize the damage to the nation’s economy and banking system. Wall Street is picking shards out of its hide. Politicians are beseeching experts for ways to prevent a recurrence. Academics are straining to find the right historical analogy and tally the losses. And the press is looking for people to blame.

In this cacophony, it’s hard to hear a couple of important questions, let alone the answers: What have we learned about providing affordable housing to low-income Americans? And can the current “oversupply” of housing be used as subsidized shelter for those who need it?

Making every American adult a homeowner was always imprudent and impractical; now that’s obvious. Four years ago, President Bush declared: “The more people who own their home, the better off America is.” And as his administration proposed federal guarantees for mortgages without requiring down payments, then-Federal Housing Commissioner John Weicher told me in 2004: “We will have some defaults, but nearly all those families will remain homeowners.”

It was true then, and clear today, that some people should rent. Some Americans don’t earn enough to pay for a mortgage and maintain a house; in recent years, mortgage brokers worried little about the first concern and never mentioned the second. Homeownership can give Americans a stake in society and help build savings — but not if they don’t have any equity in their homes. Better to help them open savings or retirement accounts.

And this from the Calculated Risk blog, from a recent Wachovia conference call on how it views consumers “walking away” from mortgage obligations. Here’s a quote from Wachovia’s chief risk officer:

The severities in the market place when we take a house back, it takes a lower price to get homes sold and our outlook is — and as I think everybody has been reading, there is an expectation that there’s a broad accumulation of foreclosed properties that haven’t hit the market yet and perhaps even some shadow foreclosures that haven’t emerged as yet. So our concern, looking forward is that — and again, what we’re beginning to see more evidence of and sense more of in the first quarter is that conditions are going to continue to get tougher and there’s an overhang of inventory out there that is going to be costly for the industry to work through.

And on that cheery note…Good day.

Info here.