The Avent Group Realty, Inc.

Help for foreclosures. 2009 was a record year for foreclosures and more are expected to follow in 2010, but as this IARbuzz.com post points out, home loan modifications are growing and communities hurt by foreclosure are getting much needed Neighborhood Stabilization Program funding.

YES The sales have jumped but I bet they don't include "regular home sales".  Most of the sales reported are generated on a "general" or "overall" basis of "overall sales".  These sales more than likely mark the “pre-foreclosure” and bank owned “REO's” that are flying like hotcakes lately due to the First Time Buyer Credit expiring at the end of November 2009 and the 203K loan option for fixing a home up.  These are the ONLY homes that are moving quickly.

Regular home sales have seen a marked reduction in days on market, but still have a long way to go to sell.  Average market days are still in the high 160's down from 184 on average and even higher in some areas. With the abundance of REO and foreclosure homes, regular homes just sit on the market because better deals are out there.

Economic signals have been all over the map lately, making it hard to get a handle on what's happening in the housing market and broader economy. Every now and again, it is of value to connect the dots -- the sort of thing U.S. intelligence agencies historically fail to do combating terrorism -- to get a truer picture of the state of the economy and real estate market.

With this in mind, let's look at some of the statistics that emerged in just the past seven days. It's fair to say that, when taken together, any reasonable person would be forced to conclude that the real estate market, despite talk of a budding economic recovery, is still very much in need of emergency care.

Let's begin.

Even with the much blogged about extension of the tax credit for new home buyers, sales of existing homes actually fell in January by 7.2 percent, according to the National Association of Realtors.

In large part, existing homes, in many parts of the country, are foreclosed properties selling at vastly reduced rates. Yet even with the government tax credit beckoning "buy! buy! buy," Americans clearly are not heeding the call in large enough numbers.

But that's only, of course, one dot -- one part of the puzzle needed to complete our picture.

Only days before the release of the existing home sales report, another survey revealed that the sale of new homes reached its lowest levels since 1963!

New home sales, in many ways, are more important to the health of the economy than existing home sales because new homes mean construction and other jobs to build the houses in the first place. That has a ripple effect on the rest of our economy.

Of course, as HousingWatch and others have reported on in recent months, the commercial real estate sector seems poised to implode any month now, with large numbers of commercial properties underwater, worth less than their mortgages.

Now some do argue that, despite these horrible numbers, housing sales are still ahead of January 2009. True enough. But, as the New York Times points out, "applications for mortgages have tumbled, dropping to the lowest level in 13 years last week." Not a good sign at all.

And here comes the really bad news (I know, seems like we already passed that way point, doesn't it?): The tax credit for first time home buyers is set to expire soon (the credit applies to sales occurring on or before April 30th. But, in cases where a binding sales contract is signed by that date, a home purchase completed by June 30th will still qualify for the credit). In addition, the federal government has signaled its desire to stop buying up all those mortgage-backed securities which have kept mortgage loan interest rates artificially depressed. If homes aren't selling now, when mortgage rates are still almost historically low (at least by post-Word War II standards) what happens when the rates jump up to above 6 or maybe even 6 and a half percent on a 30-year fixed rate?

And now, one last dot to connect: A Reuters article, a small one, I spied this morning in the paper that said that Fannie Mae has reported a loss of $16.3 billion for the fourth quarter and is asking the U.S. Treasury (translation: taxpayers) for another $15.3 billion to continue its operations. That brings the total going Fannie's way from the pockets of U.S. taxpayers to $76.2 billion with no end in sight. Let me repeat that last part: With no end in sight. Says who? Why, Fannie Mae.

These are the main dots that need to be connected. And, when you do, the picture of our economy that emerges in not a pretty one. Pretty ugly, I'd say.

Many economists say no meaningful economic recovery will happen until the real estate market in the United States fully rebounds.