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Twin Cities Sales Cool – Week Ending October 4, 2008

October 14, 2008 By Leave a Comment

Here’s this week’s report.  While we don’t know for sure if the slowing has occurred because of the elimination of some government sponsored programs as of September 30th, but it sure seems like it.

Weekly Market Activity Report

After spending weeks hypothesizing what role the sunsetting FHA seller-funded downpayment assistance was having in stimulating the recent jump in home sales, we may have our first indication this week. For the week ending October 4—the first week we’ve measured in which the program was unavailable to prospective Twin Cities home buyers—pending sales were ahead of the same week last year by only 3.5 percent. While this is still an upward annual trend, it is about a 15 percent decline in buyer activity as compared to the activity of each of the previous four weeks.

Now that the FHA program is gone, time will tell if home sales will continue to surpass 2006 levels, as seen over the past several weeks. While one week of a relative downturn is too small a sample size to be predictive of the future, our changing financial climate bears close scrutiny in the weeks ahead.

Listing supply continues to draw down, as new listings declined by 12.0 percent for the same time period comparison and the total number of homes for sale is 9.1 percent lower than it was one year ago.

Click here for this week’s full report.

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Federal Reserve Chairman, Ben Bernanke, “We’re Laying the Groundwork for Recovery”

October 14, 2008 By Leave a Comment

The Wall Street Journal publishedthis opinion piece from Federal Reserve Chairman, Ben Bernanke, in this morning’s paper.  It was a coordinated piece that coincides with the Federal government – i.e. taxpayers – taking equity stakes in 9 critical banks in the U.S.  The initial equity infusion is to the tune of $250 billion.
Treasury Secretary, Hank Paulson, is urging banks to use the capital to lend to businesses and consumers to keep the economy moving.   According to this Bloomberg report, they state:

With the equity purchases, Paulson is using more than a third of the $700 billion in government support Congress gave him the authority to use on Oct. 3. He didn’t identify any of the lenders. People familiar with the plan said nine companies will get $125 billion: Citigroup Inc., Goldman Sachs Group Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp., Merrill Lynch & Co., Morgan Stanley, State Street Corp. and Bank of New York Mellon Corp.

There is still much to be worked out given the Wall Street crash, but perhaps there are now signs that the U.S. and the global economy have avoided the worst.

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