By Larry Kudlow Anchor 

cnbc.com | 24 Jul 2008 | 02:20 PM ET | 24 Jul 2008 | 02:20 PM ET

Media reports painted a pessimistic picture of today’s release on existing home sales, which fell 15 percent from a year ago and recorded higher inventories. But inside the report was an awful lot of very good new news, which appear to be pointing to a bottom in the housing problem; in fact, maybe the tiniest beginnings of a recovery. 

| 24 Jul 2008 | 02:20 PM ET  Media reports painted a pessimistic picture of today’s release on existing home sales, which fell 15 percent from a year ago and recorded higher inventories. But inside the report was an awful lot of very good new news, which appear to be pointing to a bottom in the housing problem; in fact, maybe the tiniest beginnings of a recovery. For example, the median existing home price has increased four consecutive months and is up 10 percent since February. Yes, it’s down 6 percent over the past year. But the monthly numbers show a gradual rebound. Actually, this median home price is $215,000 in June, compared to $196,000 last winter. 

And there’s more. One of the hardest hit regions is the West, including California, Arizona, and Nevada. The other two bad states are Florida and Michigan. However, existing home sales in the western region are up four straight months, and are 17 percent above the low in October. At the same time, prices in the West have increased three straight months. 

Meanwhile, overall national existing home sales are basically stabilizing at just under five million. And in the first and second quarters of 2008, these sales dropped slightly by 3 percent in each case, which is a whole lot better than the roughly 30 percent sales drops of the prior three quarters. 

It’s a pity the mainstream media keeps searching for more and more pessimism. The reality is a possible upturn in the housing trend, and at the very least we are getting a bottom. Stocks sold off 165 points largely on media reports of terrible home sales and prices. But I am hoping the market comes to its senses and realizes the data are a whole lot better. 

And on top of all that, just as housing may be on the mend, Congress is about to ratify a huge FHA-based bailout that could total $42 billion. Congressional solons are putting up $300 billion to refinance and insure distressed loans through the Federal Housing Administration. But this dubious government agency, with a whole history of bad portfolio management, may wind up taking in the very worst loans on the books. 

Of course, taxpayers are on the hook. More government semi-socialism. 

© 2008 CNBC, Inc. All Rights Reserved URL: http://www.cnbc.com/id/25835877/  

5 Tips for Buying a Home in a Down Market

Personal Finance by Bankaholic.com
The subprime mortgage bust has scared a lot of people away from the housing market. The nightly news is filled with images and stories of everyday Americans who are losing their homes because they made greedy and uninformed decisions, they were taken advantage of by predatory brokers, or a combination of these situations. However, the news isn’t all bad. This decline in the market has dropped prices and made housing affordable to many fiscally responsible renters who never considered home ownership to be an option. 

If you find yourself house-hunting, make sure that you follow these five simple steps to take advantage of this downturn in the market; if you don’t, you could be the next sad story on your local news. 

1. Accounting for Extraneous Expenses
As with almost any major purchase, there can be a number of fees associated with buying a home. Costs associated with property taxes, homeowner’s insurance, standard maintenance, and utilities should not be overlooked. In addition, if you buy a home that is part of a complex or attached to a homeowner’s association, you will have to pay annual fees as well. Make sure that you take these additional expenses into account when you are determining how much home you can afford. 

2. Acknowledging Special Assessments
Many homes require a number of regularly scheduled special assessments to be performed in order to satisfy local regulations and ordinances. These are fees that are required in addition to standard property taxes. In order to make sure that these costs don’t take you by surprise, obtain copies of prior bills for these services and inquire about any pending and future assessments that need to be done on the property. 

3. Finding a Manageable Mortgage
A good question to ask yourself before contacting your local banker to discuss a loan is, ‘how much is too much?’ While you might be tempted to try and get as much money as possible if you can find a good rate, you do not want to make the mistake of taking on a loan so big that your finances will be stretched to the point that you cannot make your payments. Traditional income multipliers are a good place to start. If you have a single income, 3.5 times your annual salary is the maximum that you should consider requesting and if you have dual incomes, the maximum should be about 2.75 times your joint salary. If these amounts will stretch your budget too far, then it is a good idea to consider borrowing less. 

4. Determining How Much Home to Buy
Now that you have a handle on all of the costs involved and have determined how much money you can borrow, it is time to figure out just what you can afford to spend on a new home. Whatever you do, don’t bite off more than you can chew; doing so could quickly lead down the road to foreclosure. Take into account your credit history, the closing costs on the loan, the amount of the down payment, and any preexisting debts. Weigh these against your income and savings before making a move. 

5. Welcoming Your New Home into Your Basic Budget
Once you have everything in order, set a budget and stick to it. While your new home purchase will undoubtedly become both your biggest asset and your biggest expense, you still have to eat. It is also important to make sure that you start building a rainy day fund in case of emergencies; one of the things that accompany a new home is the potential for substantial unforeseen expenses. Set a reasonable budget that includes an allowance for unexpected costs and you can live happily ever after in your new home. 

How to “stage” your  home to sell

You don’t have to spend thousands of dollars to “stage” your home to sell it. Here are a few inexpensive ways to allow prospective buyers to see all your home has to offer.
·        Start with the closets. Cleaning out your closets will give you more storage space. A well organized closet will show the buyer you have ample storage. Yes, buyers will be opening your closets.
·        Pre-move. Once you sell, you will be packing up all your belongings anyway, so why not get a head start. Consider renting a storage unit and store knick-knacks, holiday décor, out of season clothes, family photos and treasures.  Remove  anything you can to keep your home looking clean and well organized.
·        How is your curb appeal? Lawn watered and mowed? Keep entryway clean and welcoming. Put a potted flowering plant by the front door. Even consider power washing driveways and patios. If you have any patches of brown grass, buy some grass seed, sprinkle it on and water it. It is simple and makes a huge difference.
·        Arrange your living room and family room furniture in a way to make the room feel more spacious. If you have more furniture than you need, move some of it out. Move furniture off the walls and center it around a focal point like a fireplace or a window view.
·        Are your walls a neutral color? Paint is an inexpensive way to transform a room. A buyer may have trouble envisioning their furniture in an orange room.
·        Hide any evidence of a pet. Use air fresheners in every room. Vacuum daily. Remove the litter box  and bed for showings.
·        Toys, toys and more toys!  Selling a home with small kids can be stressful. Suddenly your home sweet home has become a listed property. To make living in a listed home easier on your family, buy a few matching baskets to quickly and easily throw toys in. You have enough things to do, so make this fun and allow the kids to throw the toys in themselves.
·        Keep wall art neutral. Remove family photos and, your children’s beautiful masterpieces.  Even though a family wants to sell, buyers psychologically do not want to buy and displace a happy family.
·        Remove any political or religious themed items, and any questionable or risqué pieces of art. This includes artful nudes.
·        Make you bed look like a fantastic place to sleep. Look at your bedroom through strangers eyes. Think of a hotel room. Focus on the basics- bed, dresser, and nightstand.  Consider buying a bed set complete with pillow covers and sham in neutral colors. Add a few accent pillows.
·        Kitchen. Remove EVERYTHING from the countertops. Remove magnets, notes and photos from refrigerator. Straighten out cupboards and pantries.