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August 13, 2009

Next week: Housing forecaster takes your questions



Ask and you shall receive ... answers.

Housing economist and forecaster Celia Chen of Moody's has kindly agreed to take reader questions in a live chat next week. Mark your calendars: Next Thursday -- Aug. 20 -- at noon.

But I encourage you to start asking your questions now. Comment below with 'em. Questions in the queue will ensure that we start the chat off with a bang rather than a whimper, and it's a way for you to participate even if you can't be here (virtually speaking) at the appointed time.

The Baltimore Sun has been doing live chats every week, but this will be the first about housing. Let's make it a good one! I know you're interested, because "housing-market forecaster" was your top choice when I asked what sorts of experts you'd like to question.

Here's a little bit about Chen:

A senior director of the Moody's research staff, she manages the company's regional house price forecast models, develops proprietary housing market indicators and writes extensively about housing issues. Chen earned her Ph.D. -- with a concentration in econometrics and international finance -- at the University of Pennsylvania.

She's happy to take housing-outlook questions about metro areas and the nation. Just don't make your questions too specific. ("What's going to happen to prices on 30-year-old split-levels in Cockeysville that were recently renovated" -- way too specific.)

Commence the questioning.

(Photo courtesy of Moody's

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (13)
Categories: Q&A


How are your models hedging against overshooting a trajectory?

What have you learned from past modeling errors (both at Moody's and elsewhere) that relied on simplistic trajectories?, and why should newer models avoid past mistakes?

How are you integrating a bottom-up approach with larger national/city stats?

Will the $8,000 tax credit for homebuyers be around for 2010?


Where can I go to find the price that homes in my neighborhood sold for during 2004-2005?

Jaded, one option is to go to the state Department of Assessments and Taxation's Real Property Data Search:

You can look up sales by street and time period. (The site seems to be slow just now, but usually it runs well.)

Just today, RealtyTrak announced foreclosures were up again this month to an all time high. How are we able to measure this "shadow inventory" when banks are holding on to properties to keep supply of REO's, short sales, foreclosures, etc. off the market? (there you go "Little Debbie")

How is the commercial real estate bubble going to influence future home prices?

Do you think the slower rate of decline is enough of a justify that we hit the bottom (home values dropping 15% year over year instead of 20%)? Or do you think once the foreclosure moratorium expires, there will be an even bigger flood of foreclosures hit the market from the Pay Option ARM recast (negative amortization) and Alt A 3/1, 5/1, 7/1 ARM's that were mainly 80/20 stated loans?

At what point do you think the lenders will have to allow for principal reduction to keep homeowners motivated to continue to make payments since it is predicted 48% of all homeowners will be negative equity in 2011?

When do you think home prices will begin to follow their normal trend of appreciating with the rate of inflation?

Hello There,

I would like to know what is the Forcast for California (Mostly Bay area) housing. It would be good to break down the forcast in terms of Inventory/Prices/Forclosure.

Also what do you think about Interest rate trend for coming year?

How is the market for higher priced homes in Baltimore city? How long have they been sitting on the market compared to homes in the under 250k range and is it fair to suggest that they are over-valued? I'm asking this question in light of the 8000 tax break for first time home owners. In my neighborhood I've noticed most homes have been selling for under 250 but anything over that is sitting for months or even years, as some were homes that sold for 500k in 2005. In other words, if someone buys a house that is priced @ 200k today, is it possible that that the value will fall if the higher priced homes go into foreclosure starting this fall?


Just to double-check. You're talking nationally, right? and not Baltimore?

I know that this isn't the best place, but I just wanted to correct one statement. I would adjust citing the 48% statistic to an active voice because we know precisely who at DB wrote that report. Second, it is not homeowners, but homeowners with a mortgage. Very big difference.

Perhaps my question was a bit too terse:

We all know the basic statistics that are driving several models downward (some of which Frank mentioned); but what are your three main hedges against overshooting a trajectory because of new trends that you don't anticipate or have trouble accounting for (e.g. possibility of write-downs, increased LEAP straddling on BBB CDO tranches, changes in presumed rational behavior, etc)...

Has the risk of pandemic influenza to the housing situation been modeled? Increased morbidity will reduce incomes/disposable incomes, and increased mortality will likely increase the inventory of housing available.

To what extent have housing markets de-coupled? In particular, Baltimore from Washington, but also NY from the Jersey or PA burbs... in other words, has the market for housing in bedroom/commuter communities de-coupled from that of their core? Please comment on house prices, gas prices, cultural ammentities, etc.


I like your style! :)

Can you comment please on the likely impact of the BRAC (Military Base Realignment & Closure) process? It is supposed to bring something like 60,000 jobs to the region over the coming 12-18 months. Is this likely to have a demonstrative impact on the glut of middle class homes - $150,000-$249,000? Do you expect the Baltimore area to continue to shadow DC in terms of prices. And finally, do you see the growth of Washington reigniting demand in bedroom cities such as Baltimore, Frederick and Hagerstown, which are around an hour from DC by car? Thanks.

Were you able to recognize the housing bubble leading up to and during it?

How much of a factor do you believe the $8,000 tax credit is having on home sales? Will we see a drop in home sales (seasonally adjusted) this fall and winter as we approach the expiration date?

I do not feel the 8,000 tax credit has motivated alot of potential buyers to purchase. As a realtor in Baltimore, local forclosures are up. A good portion of home in historically investor driven areas such as 21218, 21223, 21215 and 21217 have seen the biggest drop. Areas such as 21224,21230 and 21231 have over 12 months of available inventory on the market.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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