Ignorance is NOT bliss when it comes to housing markets.  On October 6 in San Diego, you have an opportunity to get a leg up on the market at our regional Executive Housing Seminar, and we strongly urge you take advantage of the opportunity.  Our two speakers that day will be presenting concise and powerful information about the housing market that you literally can’t find anywhere else, information that is vital to know for anyone in the home building industry as we struggle through the most challenging conditions in a generation.  Think of it as a survival guide for the next several years.  For those not nearby, over the next few months we’ll also be coming to San Francisco, Philadelphia, and Baltimore, so hopefully you get a chance to hear this vital info. Click here to Register.

What kind of information is this vital?  We’ll be cutting to the chase on this housing market with topics like how many foreclosed homes are still in the pipeline to be sold, how much they sell for compared to other resale and new homes, and when we finally work through them all, which areas will be best poised for recovery.  We’ll be answering questions like when will that recovery finally come, which areas will have the strongest housing demand thanks to the most high-quality jobs, which consumer groups will be buying homes, and where will they be buying them.  These are just some examples, you’ll hear much more on Wednesday.

Our data feature this week is a preview for Wednesday, using our ground-breaking data platform, Housing IntelligencePro, to look at the market in new ways:  In 2005, nearly $39 billion was spent on new housing across all of Southern California.  That amount represents the entire pie for the new home industry, and it gets sliced into pieces for builders, building product manufacturers, mortgage financiers, and other supporting businesses.  A year later that pie had shrunk $33 billion, and in 2007 it was down to $21 billion.  For companies in the home building industry, it’s important to know the size of the pie before you can figure out how big your piece can be.  Can you guess what it is in 2010?  Come see us in San Diego on October 6th and find out, the answer may surprise you.

In broader housing news, the topic of foreclosures is even more relevant this past week as two of the largest mortgage companies in the country announced that legal hodgepodge could delay tens to hundreds of thousands of foreclosure proceedings in the coming months.  GMAC announced last Friday that it would it would investigate foreclosure filing procedures after legal claims were made that the lender did not comply with proper filing standards.  JP Morgan Chase announced similar news on Wednesday by saying that some personnel that may have been signing off on foreclosure documents may not have personally reviewed those files themselves which could cause some delay in filings going forward.

In other economic news, consumer confidence dropped back to its lowest levels since February due to expectations for slower economic growth and a sluggish job market.  On Thursday, final GDP estimates for the second quarter showed the economy expanding at a lackluster 1.7%.

The Economy
Final estimates for second quarter gross domestic product showed the economy growing slightly faster than preliminary estimates had suggested.  The U.S. economy grew 1.7% during the second quarter which is stronger than the 1.6% pace in the preliminary report but weaker than the 2.4% estimated growth in the advance report.  Upward revisions to consumer and business spending helped to push GDP estimates slightly higher in the final second quarter report.  Estimates for economic growth in the second half and 2011 have been revised downward in recent months which exhibit the weakening state of the current economy.

First-time unemployment claims eased this past week following last week’s increase.  Initial jobless claims dropped by 16,000 to 453,000 in the week ended September 25th.  Initial jobless claims are now back to where they began the year but remain at historically high levels which will keep the unemployment rate elevated.

The consumer confidence index fell to a reading of 48.5 in September from a revised August figure of 53.2.  This is the lowest the consumer confidence index has been since February.  The index has recorded declines in three out of the past four months.  The present situation index declined from the previous month to a reading of 23.1 from 24.9 last month.  This is the fourth straight month that the present situation index has declined and the lowest it has been since February.  The expectations index fell to a reading of 65.4 from 72.0 in the previous month.

Housing Market
National average mortgage rates declined from the previous week at 4.32% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on September 30th.  The 30-year fixed rate mortgage this week matched its all-time record low set in the beginning of the month.

In the week ending September 24th, the MBA’s seasonally-adjusted purchase index increased 2.36% from the previous week but was down 32.77% compared to the same time last year.  Despite record-low mortgage rates, the purchase index remains near its lowest levels in nearly 14 years.

For market-level data and analysis please visit our website at http://www.hwmarketintelligence.com.  For more detailed information on the indicators discussed in this key indicator alert, please visit the following links: