From The Record, Sunday, April 29, 2007:

Ara Hovnanian, the company’s 49-year-old CEO, has been there through it all. The publicly held company was founded by his father in 1959, and he joined it 20 years later after receiving his bachelor’s and MBA from the Wharton School of the University of Pennsylvania.
…
Q. How’s the outlook for housing for the rest of 2007?

My response is different today than it would have been a couple of months ago. Had you asked in January or February, I would have said it really looks like the market is stabilizing. Then this whole issue regarding the subprime mortgage industry came out, and that caused sales to dip. Now my prognosis is not as optimistic as it was. Obviously, the industry is still selling a lot of houses, but the recovery and spring bounce-back we had been hoping for seems to be stalled.

Q. When do you think things might start looking better?

My guess is at least a few quarters. I think we’re right near the bottom of the marketplace. I think it is likely to stay flat along the bottom for two to three quarters. The market needs to work off some of the excess inventory of housing.

Q. So we’re talking about the beginning of 2008?

That’s probably a reasonable guess at this point.
…

From The Wall Street Journal, April 25, 2007:

Tighter credit and a growing glut of properties are depressing an already weak U.S. housing market, wrecking the industry’s hopes for an early rebound.

That leaves buyers in a strong position to negotiate for bargains during the spring home-shopping season, the busiest time of the year for housing sales.
…
Lenders, stung by a surge in defaults, have rediscovered the virtues of caution over the past few months, eliminating many of their no-money-down loan offerings. That tightening is “really starting to bite,” says Ed Mixon, a real-estate agent for Re/Max Real Estate Services in Monarch Beach, Calif.

Mr. Mixon recently had to advise one of his clients, a young woman with a good job and credit record, to put off her dream of buying a $300,000 condo in Laguna Niguel, Calif., until she could come up with more than her current nest egg of $5,000 for a down payment. A year ago, he says, she could easily have obtained a loan to cover 100% of the condo’s price.

Stricter lending standards will reduce demand for housing by 10% this year from where it would have been had credit remained loose, estimates Thomas Lawler, a housing economist in Vienna, Va. He expects housing prices, as measured by the national S&P/Case-Shiller index, to fall 7% in the fourth quarter of 2007 from the year-earlier level.

The Federal Reserve will have to cut interest rates in the second half of this year, partly to correct a housing market that’s overvalued by as much as 20%, bond guru Bill Gross told CNBC’s Joe Kernen on “Squawk Box.”

“They don’t want to recreate a situation such as they have witnessed in Japan where property declined and you saw an asset bubble popping and producing deflation,” said Gross, chief investment officer and founder of Pimco. “So if we get down to a point where [home] prices are moving in the 5% to 10% negative category, the Fed is going to start to react.”

Prices are already down by 2% to 3% nationally, according to some studies, Gross said.

The disappearance of “innovative financing and funny money mortgages” and studies by Yale economist Robert Shiller suggest the market could be 15% to 20% overvalued at this point, he added.

But “a home is worth whatever anybody is willing to pay for or can afford to pay for it,” Gross said. “Home prices are a function of financing costs and the price of the home.”

“If financing costs and the Fed lower interest rates by 50 to 75 basis points, then they support the housing market,” he explained.

So would a rate cut maintain the liquidity that’s in the market and reflate subprime?

No, Gross says, because “the subprimes are not going to be financed like they were.”

© 2007 CNBC.com

From “Housing Panic”, April 14, 2007:

Subprime woes take toll on GE results

The US subprime mortgage crisis hit General Electric on Friday, wiping $373m from the industrial conglomerate’s first quarter profits and prompting its executives to warn of an incipient “bubble” in global credit markets.

GE said it had replaced the senior management team at its mortgage unit, and would reduce its workforce by around 1,000 people, or 40 per cent.

GE will also cut by half the loans it makes to less than $15bn this year - a sign of its belief that the subprime market has yet to hit the bottom.

“We have got to get our house in order,” Keith Sherin, GE’s chief financial officer, told the Financial Times.

Mr Sherin said the problems in the subprime sector, which targets borrowers with weak credit histories, were being replicated in the market for “Alt-A” loans for borrowers with slightly better credit scores.

The following table contains closed residential real estate transactions in Branchburg for March, 2007. However, unlike the inaccurate information promulgated by most agents and media sources, the “DOM” (Days on Market) column indicates the sum of days-on-market accrued through serial listings of the same home (it is a common agent “trick” to withdraw and re-list a home, in order to create the public impression of a “fresh” home that has seen fewer days on market). In addition, the “OLP” (Original List Price) column reflects the list price of each home at the time it was first offered for sale.

Sales statistics posted at Branchblog will always be cross-checked to provide the most accurate and unbiased housing market snapshot possible.

Please direct specific inquiries to Chip Hughes at (908) 334-2329 or chip.hughes@att.net. Better yet, leave a comment!

All information is deemed accurate, but not guaranteed, and is provided courtesy of Garden State Multiple Listing System:

AVERAGES: 183 Days-on-Market; SALE PRICE 90% of original list price.