Is there a housing Glut?
In order to understand the condition of the housing market it is important to understand some of the more common measures and indices used by economists who track its performance. So, from time to time I will explain some of the more frequently cited indices. A popular index used by the California Association of Realtors (C.A.R.) and often cited by The Los Angeles Times and radio talk show hosts is the Unsold Inventory Index ("UII"). UII measures how fast housing inventory is being absorbed by homebuyers. Based on the number of homes being sold per month and the number of homes actively listed on the multiple listing service ("MLS"), the UII indicates how many months it would take to sell all of the homes currently listed. For example, if there are 100,000 homes for sale and 10,000 homes are being sold per month, the UII is 10. An escalating UII means the market is weakening because housing inventory is building; a falling UII means home sales are outpacing new listings as demand increases. Dramatic movements in the UII can be the result of a sudden surge or contraction of the housing supply or a sudden surge or contraction of the demand for housing. Markets crash when inventory sores at the same time that demand evaporates. Every month C.A.R. tabulates the number of houses that sold the previous month and the number of homes that were active at the end of the month regardless of whether they were listed that month. So, even if a property was listed three months ago it will be counted as long as it was active at the end of the previous month. Listings that have expired or for whatever reason were removed from the MLS will not be counted. C.A.R.'s Unsold Inventory Index for existing, single-family detached homes as of October 2008 was 5.9 months, compared with 15.2 months for the same period a year ago. Historically, the average is about 7 months. Next week I will explain why there is still a housing crisis even though there is apparently no housing glut.
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LOL - Laughs OnLine
"I really wish he'd kept the Volvo"
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What's The Big Idea? 
Flush with equity we dreamed of kitchens with islands, and islands with white sand. We dreamed of cars with new leather taking us to bed and breakfasts with no alarm clocks. So many hopes blossomed in those mineral rich fields of equity that might not otherwise have sprung forth. I have received emails from friends and associates sharing with me the despair that has taken hold of them because of what has happened to property values. My response to those emails is the following: Dreams do not wither and die unless you stop watering them. Real estate has enabled more people to live better, retire younger, and sleep sounder than any other asset class in history. It is tried, tested and proven. So doubt if you will, whether utility vehicles and jet skis are really included with hair restoration systems. Doubt whether cheerleading really launches careers in dance and theatre. If you are feeling particularly skeptical even doubt whether all heart conditions can be cured by pomegranate juice. But do not doubt whether a long-term investment strategy with real estate as its cornerstone will improve your life.
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Share If You Care
Our goal with this newsletter is simple: cover every important topic that might help homeowners and investors make more informed decisions concerning real estate. You can help in two ways:
1) Send us any articles or information you come across that might be of interest to other readers
2) Forward this newsletter to anyone and everyone you know that owns or plans to own real estate!
Sincerely,
Kwame J. Granderson
Equinaire
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Free 401k Investment Webinar
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How to use 401k's and IRA's to Purchase Real Estate
Learn How To...
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Date: January 13, 2009
Time: 7PM - 8 PM
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Did You Know?
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Did you know that married men change their underwear twice as often as single men?
Did you also know most homeowner's insurance policies will cover your neighbor if they are injured on your property but won't cover you?
Click here to read more
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Investor Tip
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Watch how much mortgage interest you write off. On your primary residence you can only write off the mortgage payments associated with the acquisition debt (the loan amount you used to buy the property) plus up to a $100,000 of an equity line. So if you refinance and pull out $300,000 to invest in rental property, a portion of your new mortgage is not tax deductible.
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Join Us For A Special FREE Saturday Webinar
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Topics include:
· How will the $700 billion bailout effect you?
· How key economic indicators help us better understand the real estate market.
Saturday, December 13
10 AM - 12 PM
Register by clicking Here
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