From the Desk of Steve Eckhoff....* Article about the current housing market*
There might finally be some good news this year about the nation's dismal housing market. Or, at least, the bad news could stop.
Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.
For sure, last week we learned the widely watched S&P/Case-Shiller home-price index fell 1% in December, its fifth straight decline. The index tracks 20 major markets.
But that figure belies real reasons to be optimistic, according to some experts. If they are right, it might make sense to jump into real estate. The trick is avoiding getting burned again, and it doesn't necessarily mean owning a home.
First, let's recap the economic signs a bottom is close.
Houses Are a Good Deal
Housing is the most affordable it has been in decades, according to analysts at Moody's Analytics. They don't just look at house prices. They also look at incomes.
Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years' pay, although that varies nationally.
At the peak, midway through the last decade, a home in Los Angeles cost the equivalent of 4.5 years' pay. The average price has since fallen to just over two years' income now. That's well below its pre-bubble average of 2.6 years. This means average Los Angeles homes are cheaper in "real terms" than they were typically during the period 1989 through 2003.
The opposite is true around the Washington beltway, where it will take 26 months of pay to buy a home, versus the historical norm of 22 months.
In the end, it will be affordability that will drive people to buy homes.
"Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own," says Michael Larson, a real-estate analyst at Weiss Research in Jupiter, Fla.
It is definitely bullish. But what about timing?
"Housing prices will probably bottom in 2011," says Scott Simon, a managing director at money-management firm Pimco in Newport Beach, Calif. He foresaw the housing crash, helping his firm dodge losses that plagued Wall Street.
Rates on 30-year fixed-rate mortgage fall
It’s the third consecutive week of declines: Freddie Mac
The mortgage averaged 4.95% last week and 4.97% a year ago.
Fifteen-year fixed-rate mortgages also dropped, averaging 4.15% for the week ending March 3, down from 4.22% last week and 4.33% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.72%, down from 3.8% last week and 4.11% a year ago. And 1-year Treasury-indexed ARMs averaged 3.23%, down from 3.4% last week and 4.27% a year ago.
To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point, and the ARMs required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.
“Mortgage rates saw an overall improvement this week. Interest rates for 30-year fixed mortgages were almost 0.2 percentage points below this year’s high set just three weeks ago,” said Frank Nothaft, vice president and chief economist of Freddie Mac, in a news release. “This means that home buyers could now expect to pay $263 less per year on a $200,000 loan.”
But housing demand remains weak, he added.
“New-home sales in January were near record lows dating back to 1963 when the data began, according to the Census Bureau,” said Nothaft.
“Similarly, pending sales of existing homes fell for the second consecutive month in January, according to the National Association of Realtors,” he added.
French doors lead to a great entertaining yard with built-in BBQ, spa & waterfall. 
