Summary of CBS interview with Political Chick, Lisa Chase

Summary of my interview with CBS's Lisa Chase, The Political Chick, this past Monday.  Topic was state of the residential real estate market.

* In terms of US average, prices should decrease another 10%.  Reasons include:
- glut of foreclosures in the pipeline which will decrease average prices
- expiration of the 1st time homebuyer credit
- higher interest rates as the Fed ends it's mortgage bond buying program in March 2010

* However, real estate is LOCAL and hence one should look at price trends specific to one's local market.

* The Manhattan, New York condo residential market has bottomed in real time.  For example, new development condos traded at $800 per sq ft back in Oct/Nov and then increased slightly.  Real estate market reports will take until Q1 2010 to reflect this as these reports lag 3 months (time it takes to close on a property).  The 4Q 2009 report still shows average prices at $1000 per sq ft.  From this, it's obvious that the coming report will show price declines.

* Manhattan is much less affected by foreclosures and the 1st time homebuyer credit.  I do not feel the Manhattan market will double dip.  Rather, the bottom was here and over.  Transaction volume has been surging, a key signal that the market is finding its bottom. 

* The Obama Making Homes Affordable Program was bad economics.  Should never have started.  It's just delaying the foreclosure process as most intended recipients either have incomes that are too low or own properties that are already too far underwater.

* Over the past couple months, there has been a lot of foreign interest looking to capitalize on Manhattan's downturn. 

Best,
Wei Min
Castle Avenue Partners
New York Investment Properties

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Website:  http://www.castle-avenue.com/
Blog:  http://www.wealthre.blogspot.com/