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October 7, 2010 Vol. 3, Issue 11

What are real estate professionals saying to homebuyers and sellers about current marketconditions? The successful brokers and sales associates are talking about the strengths that exist in

the market. Below are positive angles that appeared recently in the media and underscore why it is

a good time to buy real estate.

John Paulson: Multibillionaire hedge fund operator John Paulson, the investment genius who made a killing going

short subprime mortgages a few years ago recently spoke to a standing room only crowd at NewClub about the U.S. economy and said the following about housing:

As this is the best time in 50 years to buy homes, Paulson advised his listeners, crowded into three

payments get locked in at re

, if you own one home, buy another

-- John Paulson: Sell Bonds; Buy Stocks; Double Digit Inflation Comingby Robert Lenzer, Forbes,Sept. 27, 2010.

Record Low Mortgage Rates Continue to FallMortgage rates headed down again, after lingering at a record low for two weeks. The benchmark

30-year fixed-rate mortgage fell 5 basis points this week, to 4.45%, according to the Bankrate.comnational survey of large lenders. In the 25-year history of Bankrate's weekly survey, the 30-year

fixed has never been lower. According to statistics compiled by the National Bureau of EconomicResearch, the last time mortgage rates were below 4.5% was in April 1953.

-- Record-Low Rates Slide Furtherby Holden Lewis, Bankrate.com, Oct. 7, 2010.

Home Purchase Mortgage Loan Demand at Highest Level Since MayU.S. mortgage applications for home purchases rose for a second straight week, with demand at its

highest level since early May as potential homeowners took advantage of record low interest rates,

data from the Mortgage Bankers Association industry group showed on Wednesday. The MBA'sseasonally adjusted purchase index, a tentative early indicator of home sales, increased 9.3%,reaching the highest level since the week ended May 7.The increase in purchase activity was led bya 17.2% increase in Federal Housing Administration (FHA) applications, while conventional purchase

applications increased by 3.6%.

-- Home Purchase Loan Demand Up as Rates Hit Record Lowsby Julie Haviv, Reuters, Oct. 6, 2010.

NAR: Pending Home Sales Increase for Second Consecutive MonthThe number of contracts to purchase previously owned homes in the U.S. increased for a secondmonth, a sign the housing market is beginning to stabilize.

index of pending home resales rose 4.3% in August, more than forecast, after a revised 4.5% gain

the prior month.

. All of the froth has been eliminated from the bubble and all we need nowis for confidence to turn higher and job growth to accelerateeconomist at TD Securities Inc. in New York.

-- Pending Sales of Existing Homes Increased in AugustCourtney Schlisserman, Bloomberg, Oct. 4. 2010.

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Case-Shiller Index Up 3.2% in July; Karl Case Says Housing Market Will Grow Slowly

The U.S. housing market has reached its lows and will expand slowly as the economic recovery

remains subdued, said the S&P/Case-Shiller index co-creator Karl Case.

The index of property values in 20 U.S. cities increased 3.2% in July from 12 months earlier. The

gauge is a three-month average, which means the July data are still being influenced bytransactions in May and June that may have benefited from the government homebuyer tax creditincentive.

-fall. The combination of the tremendous dropin prices, the fall in interest rates, the government going all in and buying mortgage-backedsecurities to keep mortgage rates low, and the credit, of course

Case said in an interview o

-- Case Says Housing Will Grow Slowly After Free-Fall: Tom KeeneCatarina Saraiva and Tom Keene,Bloomberg, Sept. 28, 2010.

Reuters Analysis: Three Reasons U.S. Homeowners ose HopeHomeowners can take solace from three historical comparisons. To start with, relative to disposableincome, houses are as cheap as they have been since records began 35 years ago. To get back to a

fair value on this measure, according to the consultancy Capital Economics, prices would have to

rise 11%. Second, adjusted for inflation house prices are now equal to their level in 2001, before

the height of the property frenzy.

Finally, the second legs of house price declines tend to be far less painful than the first. The firstwave of the Great Depression, for example, wiped 30% off property values before prices rebounded20%. The second downturn after 1937 erased less than half of this upswing. Other housing market

double dips in the United Kingdom and Sweden in the 1990s showed a similar pattern.

Of course, the American housing market has recently shown a disconcerting ability to flout historical

property prices are very close to hitting rock bottom.

-- Reuters, Oct. 6, 2010.

Wall Street Journal Columnist: to Buy a Home

In a recent column that ran in the Wall Street Journal, financial journalist and author, Brett Arends,discusses why he thinks now is a particularly good time to buy a home.

You can get a good deal: Will prices fall further? Sure, they could. You'll never catch thebottom. It doesn't really matter so much in the long haul.

Mortgages are cheap: You can get a 30-year loan for around 4.3%. These are the lowest rateson record. As recently as two years ago they were about 6.3%. That drop slashes your monthlyrepayment by a fifth.

You'll save on taxes: You can deduct the mortgage interest from your income taxes. You candeduct your real estate taxes. And you'll get a tax break on capital gains when you sell.

It offers some inflation protection: No, it's not perfect. But studies by Professor Karl Case (ofCase-Shiller), and others, suggest that over the long-term housing has tended to beat inflationby a couple of percentage points a year.

Sooner or later, the market will clear. Demand and supply will meet. And a lot of the "glut"simply won't matter: It's concentrated in a few areas, like Florida and Nevada. Unless you live

there, the glut won't have any long-term impact on housing supply in your town.

-- 10 Reasons To Buy a HomeBrett Arends, The Wall Street Journal, Sept. 16, 2010.