Housing and mortgage update, are we near the bottom
With the recent unexpected demise of American Home Mortgage and builders reporting losses rather than profits and rumors of bankruptcy for a number of firms in both industries, are we near the bottom of the housing downturn. One positive sign is the magazine cover story effect and Business Week took care of that issue recently. The theory goes that when the national magazines feature a company or industry on the cover, they are generally late to cover the story and it will either be the top or bottom.
Toll Brothers, which does not have a presence in the Charleston South Carolina real estate market, and is the luxury home builder famous for the word McMansion delivered preliminary results today that beat Wall Street expectations. Toll Brothers stock soared along with most of the battered home builder's. Beazer, which was rumored heading into bankruptcy just last week has now almost doubled from the $8.10 low set on August 1 to be at $15.65 one week later.
There is a most interesting article on today's stock market action in the home builder stocks on Marketwatch. A few highlights are worth pointing out.
"the industry continues to struggle against a housing market further weakened by turmoil in mortgage markets."
"People were saying the world was coming to an end for home builders, but most are well capitalized despite rumors to the contrary, and most should survive the downturn."
"With trouble swirling in credit markets and home sales down sharply, bearish investors fear some home builders won't be able to survive the current downturn."
"Hesitant customers remain on the sidelines, unsure of whether home prices have bottomed," said Chief Executive Robert Toll in a statement. However, he added that "some markets have remained strong and some appear to be stabilizing, albeit at much lower activity levels."
"In the near term, tightening credit standards for borrowers should reduce the pool of potential buyers: Liquidity and affordability issues may impede some customers from closing, while others may find it more difficult to sell their existing homes," Toll said.
Please read the entire article.
As I pointed out recently in several posts, the Charleston South Carolina real estate market seems to be displaying good signs of stabilizing, I am personally noticing activity increasing and have heard the same from other Charleston real estate friends and associates.
I don't expect an immediate turnaround or a return to the "good old days" of 2005. 
It's funny how the good old days are now just a couple of years ago, in the old days, the good old days seemed to be a long time ago.
Having said that, I expect that many buyers have been sitting on the sidelines waiting for better prices and there are good buys to be had but no apparent collapse in prices is indicated for the Charleston area. An important point made by Mr. Toll was the tightening of lending standards should reduce the pool of potential buyers.
We should expect a more reasonable number of homes to be sold in the near term, but we should not be disappointed if the number of sales is less than the very high unit sales records set in the past few years.