Assess Your Own Home

ANCHOR LEAD IN:
REAL ESTATE IS LIKE A POPULAR TEENAGER - A HOT SPOT THAT'S IN TODAY CAN BE OUT TOMORROW. BUT IF YOU WAIT FOR THE EXPERTS TO TELL YOU YOUR COMMUNITY'S REAL ESTATE BUBBLE HAS BURST, YOU MIGHT BE STUCK WITH A BUM PROPERTY. IS THERE ANY WAY TO FIGURE IT OUT YOURSELF? IN TODAY'S HEADS UP - HOW TO ASSESS YOUR OWN HOME ...

TRACK ONE Length: :06
CARMEN AND STEVEN BASSETT HAVE BEEN TRYING TO SELL THEIR HOUSE FOR TWO MONTHS. THAT MAY NOT SOUND LIKE LONG, BUT IT SURPRISED THIS COUPLE...

SOT
Key @ : :08 Name: Steven Bassett Title: Home owner
Just from you know, the mortgage rates being as good as they were, and hearing that our home would go on the market and be snatched up immediately.

TRACK TWO Length: :06
THE BASSETTS NEED TO SELL THIS HOUSE, BECAUSE THEY'VE ALREADY BOUGHT ANOTHER ONE IN THE AREA. AND NOW, CARMEN IS WORRIED...

SOT
Key @ : :21 Name: Carmen Bassett Title: Home owner
"There's always that chance that we're not going to be able to sell this one."

TRACK THREE Length: :05
HOW CAN YOU TELL IF YOUR MARKET IS GOING BUST? EXPERTS SAY YOU NEED A 'PERFECT STORM' OF EVENTS...

SOT
Key @ : :32 Name: David Lereah Title: Chief Economist, National Association of Realtors
"You need job problems, big layoffs, you need interest rates going up, you need supply going up."

TRACK FOUR Length: :05
LEREAH (le -ray) SAYS THERE ARE 'BUBBLE-LETS' AROUND THE COUNTRY, AND THERE ARE SOME SIMPLE WAYS TO TELL IF YOU'RE IN ONE.

SOT
Length: :03 No Key Name: David Lereah Title: Chief Economist, National Association of Realtors
"Days on market is a very important indicator."

TRACK FIVE Length: :16
IF HOUSES IN YOUR COMMUNITY ARE TAKING LONGER TO SELL THAN IN PREVIOUS YEARS, THAT'S A SIGN.
ALSO TAKE A LOOK AT THE NUMBER OF HOUSES ON THE MARKET.
ANOTHER SIGN: MORTGAGE DEFAULT RATES.
AND...PERCEPTION ALSO PLAYS A PART. NO ONE WANTS TO INVEST IN AN AREA PEOPLE THINK IS GOING SOUTH.

SOT
Key @ : 1:03 Name: David Lereah Title: Chief Economist, National Association of Realtors
"I call it a rolling boom, you know, we see the boom hit areas, they experience great price appreciation then air starts to come out of that balloon."

TRACK SIX Length: :05
BUT EVEN IF THE BALLOON DEFLATES A LITTLE, LEREAH SAYS, DON'T WORRY...BECAUSE HISTORY SHOWS...

SOT
Length: :04 No Key Name: David Lereah Title: Chief Economist, National Association of Realtors
"Real estate is an appreciating asset."

SOT
Length: :05 No Key Name: Carmen Bassett Title: Home owner
"It'll all work out the way that it should, but it certainly has its challenges along the way."

TRACK SEVEN Length: :03
I'M ______________ AND THAT'S TODAY'S HEADS UP.

ANCHOR TAG:
LEREAH SUGGESTS TALKING WITH REALTORS AND MORTGAGE LENDERS IN YOUR AREA FOR THE BEST PICTURE OF WHAT'S REALLY GOING ON WITH HOME SALES IN YOUR PART OF TOWN.

SOURCES

David Lereah
National Association of Realtors
550 New Jersey Avenue, Northwest
Washington
(on Capitol Hill)
202-383-1177

Walter Molony
Public Affairs
202-383-1177
wmolony@realtors.org

Things to consider:

Market activity How many homes are sold compared with the month before is the earliest indicator, but it is notorious for false positives. But if the number of homes sold starts to drop, perk up. Every county tracks this and makes it available to the public.

Inventory Some of the most crucial pieces of information are held closely by real estate agents. The number of houses on the market is one of them. The national average is 4.3 months; 6 months is closer to normal, the National Association of Realtors says. When it grows, there is trouble coming. Time on the market Agents control access to this information, and be warned: they know how to manipulate it. A house that has been languishing can be taken off and put back to look like a fresh listing. But you'll still be able to see the average time stretching as a clear signal of cooling.

Prices It's what you care about most. But month-to-month comparisons are nearly useless as an indicator because sales of a few houses on either end of the market can skew the figures. DataQuick at www.dqnews.com has some data and the Office of Federal Housing Enterprise Oversight issues quarterly reports.

Failed to sell The super-secret indicator among agents is the number of houses that are quietly taken off the market - usually because they are priced too high. Wheedle the number out of them and you'll have a strong indicator of market health.

Price-to-rent ratio This is a wonderful measure that gets at the intrinsic value of a property, but it's a tricky tool for the layman. Rent data include everything from studios to four-bedroom penthouses, making a comparison with single-family homes difficult. Some of the rent data can be found at http://www.realfacts. com

Loan quality The popularity of interest-only mortgages could become one of the best indicators of a fragile market, several economists say. Mr. Thornberg of UCLA Anderson says it's a sign that lenders are scraping the bottom of the barrel. "We are close to running out of shills," he says.

Risk The PMI Group of Walnut Creek, Calif., a provider of data to the mortgage industry, estimates how much prices could drop using an econometric model. It publishes the list of at-risk cities at http://www.pmigroup.com

Popular sentiment To judge from the media, the housing bubble may have peaked in June. According to a Nexis search of magazines and newspapers, that month was the peak, with 312 references to "housing bubble," almost six times that of a year earlier. It fell 24 percent in July