When the countries top mortgage lender makes the statement - 'Countrywide says foreclosures highest on record' it is a significant. That said, they are referring to foreclosures on their books - not the nations - and it a response to their falling stock value - an excuse if you will. Countrywide implemented a flawed automated rating system to determine a homebuyer's ability to service their mortgage, which ultimately contributed to their "highest on record" foreclosure rates. It doesn't represent the entire picture - not even close! In 2003, the ten year economic peak (Clinton was still in power) we had 1.3 million foreclosures - there are 1.2 million registered foreclosures today.

In 2005 the average existing home sale according to the Nation Association of Realtors (NAR) was $266,600, in 2006 that number rose to $268,200. The average price in 2007 was $265,800. The average existing home sale price dropped 4.9% from 2006 to 2007. Obviously some geographical areas were harder hit then others - the "West" fell an average of 7.8% while the "South" experienced a 3.1% price decline. While the decline of the average sale price of existing homes is not the bi-product of a thriving economy you also have to consider that these numbers are in direct geographical correlation to significant property increases experienced in 2003/2004. Arguably these areas are just as likely to be experiencing a "price correction". From a state specific perspective the hardest hit states are California, Florida and Texas - coincidently these same states experienced meteoric price increases in 2003/2004. Florida has also been negatively impacted by meteoric insurance increases due to recent hurricanes, a new property tax assessment procedure and an inordinate number of foreclosures because of the sub-prime mortgage debacle - the classic "perfect storm".

Another significant factor contributing to the "crumbling" housing market, in my opinion, is the left wing media. I don't think it is a mere coincidence that we find ourselves in the media heat of an election year. Americans losing their homes is a convenient election platform. As per a recent Hillary Clinton speech, "Bush has lost touch with public" - she continued "thousands of families have already been forced out of their homes" to counter this she pledges to implement a five-part stimulus package including establishing a $30 Billion Emergency Housing Crisis Fund and a 90-day moratorium on subprime foreclosures. She references $1.3 trillion in lost equity - big number - lots of homes - certainly sounds better then 4.9% doesn't it? One cannot underestimate the political contribution to this so-called crumbling housing market. Pretty politically compelling stuff isn't it - imagine Americans being "forced out of their homes" - not quite a "chicken in every pot and a car in every garage" but you get the idea.

All the while, the NAR is understandably quiet. Realtors and homeowners will agree that the most difficult obstacle to overcome when listing a home for sale is setting the asking price - a homeowner thinks their home is worth "X", a Realtor feels it is less then "X". From the perspective of the all powerful NAR why would you dispute what the media and politicians are falsely claiming - even though they have the statistics to repute it? Consider this, for every $10K that a homeowner is willing to reduce their asking price the real estate agent only loses $250 (2.5%). Personally I will be surprised if the number of exist home sales drops in 2008 - it may even increase based on the media's inaccurate reporting on the number of foreclosures, home value reductions and lower interest rates. When 2008 is all said and done the average existing home sale price will likely have dropped, but not significantly, the NAR will again collect their $70 Billion+ in annual real estate commissions and we will have a Democratic government.

So, the question is this - are we really experiencing a crumbling housing market? I say no - not according to the statistics that I subscribe to.

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