Lawrence Yun, chief economist for the National Association of Realtors, shared the above slide at last weekend's NAR conference in San Diego.

In regards to the tax credit, he said:

• It has raised sales by 350,000 to 400,000 units in 2009 so far in first time homebuyers.
• In 2010, he expects the extension and expansion will give existing home sales a 15% boost, and home prices a 3 to 5% boost, so almost a 20% increase to industry overall.
• Preservation of middle class wealth is really what the homebuyer tax credit is about.
• Tax credit is “trying to neutralize pessimism.”

Other trends/comments he shared:

- We have had 8 straight months of pending sales activity increases through September 2009.

- Aggregated supply has dropped to 8 months of inventory. Traditionally when supply gets to 6 months of inventory we have 3 to 5% home value increases, which was the norm in the past.

- “A boring market is not necessarily bad.”

- Showing potential pent-up demand, pre-boom 2001 – 11 million renters existed with qualifying income to buy a median priced home. In 2009, 16 million renters exist with qualifying income to buy a median priced home, but most renters aren’t qualified and should not be homeowners.

- “Home value is key to everything.” If the rate of home value loss slows, that will be good. If not, we will have bigger problems.

- Unemployment rate will probably go up in the next 3 to 4 months, then level off and start to drop very gradually.

- He stated “we are coming out of a recession.”

- Mortgage rates will be somewhat higher next year. 2009 average of 5.2%, 2010 average expected to be 5.7%.

Condoleezza Rice at NAR conference

Condoleezza Rice, former Secretary of State and current Senior Fellow on Public Policy at the Hoover Institution at Stanford University, laid out the following agenda items that the U.S, as a country must do:

1. We have to protect ourselves.
2. We have to improve the circumstances for others. Failed states are the ones that threaten us the most; for example, Pakistan, Afghanistan and areas of the Mexico/U.S. border.
3. We have to promote global economic growth.
4. We have to keep our country open so ambitious people to immigate here.
5. We must do better for the least among us - those born into the worst of circumstances.
6. We must have an optimism about the future.
7. We have to stay focused on what is important.

She then sat beside Charles McMillan, NAR president, for an interview. Among the information Ms. Rice shared, she said she has owned 5 homes. Her first home was a 2 bedroom, 1 bath flat in Palo Alto for over $100,000 (when she was earning $20,000/year). She had to work through her aunt to get some money from a trust fund for the down payment, and her aunt told her "don't you think that's a little beyond your means." She equated the Oval Office to a shrine to democracy. She also shared the story of her first time in the Oval Office, when her task was to take notes. She realized 20 minutes into the meeting that she hadn't taken one note, she was in such awe of her surroundings. When talking about the future of our country, she suggested we keep in mind that "things that seem impossible, later seem inevitable," referring to events such as tearing down the Berlin Wall, landing on the moon, etc.

I think a lot of people left the room wishing she would run for president, although she indicated she would not be the first female president, recognizing the traditional pool for presidential candidates consists of governors and senators.

FHA Commissioner session at NAR conference

That's FHA Commissioner David H. Stevens, who spoke at the NAR conference on Saturday. He shared some information that may surprise you:

• FHA guarantees approximately 25% of all housing loans today, up from around 2% during the market peak from 2004 to 2006.
• Of the FHA loans today, around 80% are for 1st time homebuyers. FHA guarantees 50% of all 1st time homebuyers today.
• Average FICO credit score for FHA loans is 690.
• The three things he, as FHA Commissioner, is most concerned about: (1) home price trends, (2) unemployment rate and (3) strategic defaults.
• He said he was only in the position until he gets things fixed, then he said he was coming back to join us...he was Long & Foster's president until he took post earlier this year.
• When explaining why the government spent capital on stimulus (including bank bailouts and homebuyer credits), he said "worrying about deficits is like worrying about water conservation when your house is on fire."
• He said that effective Monday, November 16, the second appraisal requirement for certain loan values will no longer be needed. He said "no more second appraisals ever."

Mark Bologna, Director of Loan Guaranty for the US Department of Veteran Affairs, spoke immediately after the FHA Commissioner. He shared:

• Existing VA loans only have a 2.1% foreclosure rate.
• The average FICO score on VA loan applicants is 703, although VA does not use a FICO score in the determination of credit worthiness for a VA home loan.
• He said "very soon" - but he "couldn't give us a date" veterans will be able to go online and be able to get their own certificate of eligibility.