JP Morgan: Further Price Declines Impact WaMu Portfolio [Housing Tracker]

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

House Sales/Price Data

It Might Be Time To Buy. “Washington County, Pennsylvania: Metropolitan Regional Information Systems data [shows] sales continued to sink every month this year from January through August, compared to a year ago. In August alone, according to MRIS, local housing sales totaled $18.7M – 25% lower than in August 2007. In all, last month, 89 housing units were sold at an average price of $210,797… The average sales price was $229,497 this past January, meaning it's dropped a lot. And August's $210,797 average is itself nearly 11% less than the average price a year ago.” (Herald Mail, Sept. 28)

Lehigh Valley Housing Market: Bottoming Out? Pennsylvania: “One Lehigh Valley economy expert predicts the average house price will bottom out at about $200,000 some time next year. That's a 19% drop from their peak sale price of $246,000 in July 2007, and a 12% drop from existing prices. And when the market stabilizes, it won't snap back to double-digit gains. More modest price appreciation is expected, meaning it could be well into the next decade before housing recovers lost ground… Moody’s Economy.com who predicts Lehigh Valley house prices will drop by at least 10% in the next year.” (The Morning Call, Sept. 28)

JP Morgan: Calif., Florida Face Further Home Price Declines. “JP Morgan expects home prices nationwide to fall another 8% from current levels, assuming unemployment of 7%, [and] another 10% in price declines in California, while prices in Florida may fall another 16%. That… translates into a 25% peak-to-trough drop in prices nationwide. Prices in California and Florida will have fallen 44% in such a scenario. Should unemployment reach 8%— the scenario for a severe recession… California could see home prices fall another 24% from current levels, while Florida would drop 36% and nationally home prices would fall 20% from where they are currently. Such a worst-case scenario would drive an extra $54 billion in losses in the [recently acquired] WaMu loan portfolio, were it to pass.” (Housing Wire, Sept. 26)

Is Now a Good Time to Buy a Home?  “Falling prices means that housing in those markets will eventually become more affordable for average families. Credit Suisse estimates that, nationally, the ratio of median home prices to household incomes will return to their historical average of 2.86 in another 18 months.” (WSJ, Sept. 26) 

Fallen Tycoon to Auction Prized Works.  “Bankrupted Lehman Brothers CEO Richard Fuld isn’t the only Lehman executive out selling assets. Former Lehman President Joe Gregory has his $32.5 million home in New York's Hamptons area up for sale and recently had his home in Manchester, Vt., up for sale. That listing has been withdrawn. Mr. Gregory also has sold the helicopter that he used to commute to work from his home in Huntington, N.Y.” (WSJ, Sept. 26)

                                                                    

Get Seeking Alpha's housing market coverage by email -- it's free and takes only seconds to sign up.