Chief Economist And Forecasters For C.A.R. Say Market Rising…And [Likely] Falling

Herein lies the problem with reporting on real estate: Everybody has their opinion on what the market is doing, but nobody knows for sure. Case in point, just yesterday we posted “San Francisco housing market continues to show promising signs of recovery”. We posted that from information obtained from the San Francisco Association of Realtors, and if you read the whole thing, they basically say all is good, the market is rising, but watch out because there is potential doom on the horizon that could sour the sauce.

It’s no mystery San Francisco’s market performs differently than most markets in California, but check this out:

[For California] distressed sales will account for nearly one-third of sales, inventory will be relatively lean, and the state’s median home prices are forecasted to reach $280,000 in 2010 [that's up from $271,000], according to C.A.R and Vice President and Chief Economist Leslie Appleton-Young.

In addition, she noted, ‘Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.’

In 2010, agents should see the low-end market attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end [that'd be almost ALL of San Francisco], however, will continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed [So you see, they don't know where prices are headed...nobody does].

‘Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,’ she said.

They should all be politicians! The market is going up…but wait, if that laundry list of likely scenarios comes to fruition, it could also go down. No sh*t! Thanks for pointing that out.

-C.A.R Forecast 2010

Get While The Gettin’s Good: Sell Now Or Forever Hold Your Peace

We’ve been on a lot of listing presentations lately where the motivation to call us in off the bench has been, in so many words:

We’re thinking we should sell our place now before it gets any worse.

The media (and certain local real estate blogs) are certainly good at creating panic, and Realtor blogs are certainly good at glossing over all the doom and gloom, but what’s really going on? If you’re a buyer, are you really feeling the urge to buy for fear of missing that boat again? More importantly for this thread, if you’re a homeowner and been thinking of moving (within the next 2-3 years), are you getting that feeling? You know, that one you all keep telling us? “We’re worried if we don’t sell now, we might have to wait years.”

Be honest, be anonymous, and please share your thoughts in the comments below. (NOTE: To be totally anonymous, when asked to enter email use, “a@a.com”.)

Thanks! We’re very curious to hear what you have to say.

Can Steve Jobs’ Leave Of Absence Affect SF Real Estate?

Is Steve Jobs so much of a factor that his absence could further derail the economy and possibly even our local real estate market? Certainly Steve Jobs taking a leave of absence until the end of June is not good news for Apple, and not necessarily good news for morale around these parts, but there must be a chain of command capable of taking over the reigns during this time? For chrissakes we just switched to a Mac!

Direct from the San Francisco Business Times Online:

Apple CEO Steve Jobs has told employees that he will be taking medical leave until June.

“During the past week I have learned that my health-related issues are more complex than I originally thought,” Jobs wrote in a message to employees on Wednesday.

“Unfortunately, the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well,” Jobs said.

“In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June,” the message continued.

Jobs said Apple COO Tim Cook will handle Apple’s (NASDAQ:AAPL) day-to-day operations, but that Jobs would continue to take part in “major strategic decisions.”

Jobs had skipped his traditional gig as keynote speaker at the Macworld expo in San Francisco last week. Just before the show, he revealed that he has a hormone deficiency that has caused him to lose weight. He had had a bout with pancreatic cancer in 2004 that was treated with surgery.

Godspeed for a healthy recovery!

A Little Holiday Cheer To Take You Into The Weekend

So we got this little text come across our channels yesterday and we thought we’d share it with you.

The Dow is going to drop to 7500 (at least) next year. It’s going to get uglier before it gets better. The hedge funds have yet to implode, and while not as damaging as the big time investment banks, it’s still going to bring the market down further. This is from a [higher up at a higher up bank...not currently going under].

Believe it or not? One thing is for sure, it’s a great time to be a buyer.

Have a good weekend, voting starts next week for our Sexiest Realtor, so make sure to check back on Monday, and feel free to buy a t-shirt for your friends in real estate.

Reduction, Ad Nauseum

I’m not a Realtor, so I’ll tell something I’m more qualified to comment on: buyers’ perspectives. For instance, I can tell you how buyers looks at a property that’s been reduced more than twice. We feel sorry for them. They’re like awkward teenage boys at their first dance, pretending to be terribly busy with their shoe laces to avoid eye contact. We all know these boys can’t really be too picky; they have to take what they can get.

This analogy might not totally work for reduced priced properties. I’m just saying that as a buyer, we tend to feel a lot more powerful when we notice a home’s asking has come down not once, but twice– a feeling that multiplies with each subsequent reduction. That’s why, as a seller, I’d really hope my agent were savvy enough to price my home right. Of course, we can’t, unless we are Dione Warwick, know what the future holds, and some of the current meltdown has caught us by surprise. Still, the writing’s been on the wall awhile. Most literate people, I’d think, would have read it.

Case in point the next three properties, whose reduction history goes from bad to worse.

1. Studio TIC at 1059 Leavenworth St #5 San Francisco, CA 94109. Current price: $325,000. In over 120 days on the market, the list price has come down thrice:

Jul 02, 2008 $399,000
Jul 03, 2008 $329,000
Sep 09, 2008 $325,000 

2. 532 Clipper St #B San Francisco, CA 94114, currently at $539,000 is a 2 bed/1 bath TIC flat. In over 170 days on the market, it’s suffered 5 reductions, each one not very big, but the conglomeration of so many price cuts is pretty damning:

May 14, 2008 $679,000
Jun 11, 2008 $659,000
Aug 13, 2008 $639,000
Aug 28, 2008 $599,000
Sep 25, 2008 $570,000
Oct 28, 2008 $539,000

3. 3630 22nd St., San Francisco, CA.  A 2bed/1bath detached cottage TIC, this one I’ve saved for “worst” because though it has not been cut as often as the above property, the overall slash down is quite dramatic. In over 100 days on the market:

Jul 18, 2008 $749,000
Sep 05, 2008 $649,000
Oct 06, 2008 $589,000
Oct 29, 2008 $499,000

In this last case, the current price seems a lot more fair. I went to the open house yesterday and the listing agent informed me the place needed about $250K in repair and pest control. I have to wonder who would have ever, ever, ever paid the original list price.

I also wonder what other SF real estate agents or buyers or sellers think of these reductions overall, so I’m serving this blog up on the Front Steps for commentary. Take it easy on those awkward teen age boys though. Everyone, and everything, is fragile right now.

Congress Fails to Deliver $700 Billion Check. Will San Francisco Real Estate Finally Fall Victim?

Surely you heard the news yesterday of the failed passing of the $700 Billion economic recovery bill, but today the Monkey gives one last effort to convince Congress to act before he rides off in the sunset to tend to his hogs.


[Photo Credit: New York Times]

The stock market has rallied today, but what about our market? Is this going to be the final blow that knocks us down for the count?

-Bush Urges Congress to Pass Bailout [New York Times]

Taking Over Fannie Mae and Freddie Mac, Some Clarification

If you’ve been wondering what all of this Government takeover of Fannie and Freddie means, you’re hardly alone, so we just went ahead and copied what we just read to give you some different perspectives of what is being said in the real estate world. We take zero credit for this, it all came from the San Francisco Association of Realtors Advantage Online:

[Update: And we just discovered more info on Trulia].

“NAR: What the Government Takeover of Fannie Mae and Freddie Mac Means to Housing Industry

In short-term, home sales should improve as mortgage rates fall Continue reading

Labor Day is over…now what?

Labor Day is behind us, which typically marks the beginning of Real Estate season. Many buyers are waiting for that special place to hit the market, and many sellers are getting their homes ready to place in the increasingly critical public eye, and hoping they sell prior to the looming Holiday Doldrums. More and more real estate blogs and “watch dogs” are among us, countless real estate listing sites have sprung up, and the mortgage market continues to spiral downward. Considerable amounts of money (new and old) are still pouring into the San Francisco economy, and those with means still have no problem qualifying for, and attaining, top-notch loans at insanely low rates.

By all accounts things are going to be interesting. Specifically, I’m busier than I’ve ever been. Generally, I think I’m lucky.

So now what?

Our (extended) backyard is getting more affordable, Lake Tahoe luxury real estate takes a dip

It’s not very often that we get excited about a dip in median or average sales price, but when we’re talking our favorite playground and extended backyard, we have to admit we’re a bit giddy.

From a recent article in the Reno Gazette Journal:

“We had an absolute record-breaking year for the high-end market in 2007,” said Susan Lowe, corporate vice-president of Chase International. “Lake Tahoe usually averages two sales over $10 million around the entire lake each year. Last year, there were 11.”

Since January, however, Tahoe has seen a softening in its high-end market, Lowe said.

The decline is reflected in Dickson Realty’s latest quarterly report, which saw the number of houses sold drop by 72 percent in South Lake Tahoe, 71 percent in Incline Village and 46 percent in Zephyr Cove compared with the same period last year.

The same report also found that median prices in the first half of 2008 dropped by 1 percent in South Lake Tahoe to $1.3 million and 40 percent in Zephyr Cove to $1.7 million compared to the same period in 2007.

Incline Village was the exception, reporting a 24 percent increase in median sales price to $3.2 million.

Nancy Fennell, president and chief executive officer of Dickson Realty, attributed the softening to pressure in the lower end of the luxury market.

For the first time, Dickson Realty’s real estate-owned and short-sale division is seeing foreclosures and short sales in the $1 million to $1.5 million market from Tahoe to the Reno-Sparks area.

Truckee was the only area that remained flat for both number of properties sold and median price.

“We’re starting to see the general kind of distress in the economy creep up into the $1 million to $1.5 million range of the luxury market,” Fennell said. “I don’t think it’s going to look quite so dismal by the end of the summer. But I think there are definitely going to be fewer sales in the luxury market in 2008 compared to 2007.”

Skills we possess to earn our keep in your new Tahoe pad:

1) Back-of-hand knowledge of all ski areas in and around Tahoe

2) Ski tech

3) Sun lotion applied in smooth even strokes

4) Valet Parking and bar-tending skillz (in that order)

5) Friends in real estate in and around Lake Tahoe ;-)

-Tahoe homes on tour define luxury [Reno Gazette Journal]

Comment du Jour: “Check out the VC funding [the Bay Area] received…”

From Aubear1 in Bay Area attracts top talent and money (theFrontSteps):

Check out the percentage of VC funding that this region received during Q1 ’08 versus other parts of the country:

PWC MoneyTree.com

I can’t think of a more compelling piece of information that paints the picture of how this region continues to create both real jobs & wealth during the current economic downturn. You can go back to the previous quarters as well to see that the “Silicon Valley” region has consistently won a significant piece of the funding awarded. In my opinion, this is one of the key elements that continues to drive the local real estate market (and the US economy). This region is at the “tip of the spear” in terms of “creative destruction” and stands unique among most top tier global cities. The SF Magazine gives great recent examples of this as does the recent book, “Who’s Your City” (creativeclass.com/whos_your_city).

Thanks for letting us all in on this information bit of information….

-PWC MoneyTree.com

-creativeclass.com/whos_your_city

California Foreclosure Crisis: I ask, Senator Barbara Boxer replies

Okay, so maybe it wasn’t a personal message to me, but I contacted Senator Boxer not too long ago to find out more about her ideas behind helping Californians who are upside down on their homes (actually I was mostly interested in getting the code to post her video directly on the site.) After sifting through all kinds of Political crap and coming to grips with the fact they did not, in fact, “listen” to what I had to say, I found this quite interesting:

California is being hit particularly hard by the foreclosure crisis, reporting 481,392 foreclosure filings on 249,513 properties in 2007, the highest total of any state and more than triple the number in 2006. These foreclosures will cost Californians an estimated $67 billion in lost property values, and local governments are likely to see a decline of $4 billion in collected property, sales, and transfer taxes.

For the full reply, read on… Continue reading

San Francisco Real Estate watch: SF Chronicle’s recipe for fear

The main ingredient: “The Associated Press-AOL Money & Finance telephone poll of 1,002 adults, including 769 homeowners, portrayed a public afflicted with anxiety about what will happen to their pocketbooks in the near future. Those anxieties also show how the slumping real estate market has led to a weakened economy. [No shit?]“

Add the graph:

Shake and stir in: “The people most affected are those who bought recently with little or no money down. When home values decline, many such homeowners end up “underwater” – owing more than their house is worth. [Really?]“

Yet another excellent Chronicle treat that is sure to help boost both the economy and general well-being of our nation and specifically housing market. Well done!

But did you notice San Francisco? I call for a petition to officially change the name of our region’s largest publication from “San Francisco Chronicle” to “Bay Area Chronicle, and Everything Bad about it“.

-Homeowners get that drowning feeling [sfgate]

Mercury rising? San Francisco foreclosures on the increase?

Browsing TechCrunch today, we came across a site we had visited before, HotPads.com, that provides a fair bit of mashing goodness, and were reminded that we had never posted on the matter. Given all the continued hoopla in the media over the perpetual demise of real estate and the end of the world as we know it, we thought we would point out a few things about this little bubble we call San Francisco. Actually, we’ll leave that to the maps:

Hotpads.com

Notice that around 1 in 2500 homes in San Francisco are in foreclosure (according to the map). Some areas are more, some less, but you’d have to agree, the sky has not fallen. Also important to note, and TechCrunch missed this, the little home/building icons you see do not represent the actual homes in foreclosure, rather homes for sale or rent. Slightly misleading? Yes. Food for the bubblistas? Definitely. Cause for panic? No.

All in all, the mercury on that map doesn’t appear to be rising to the to the extent you might be reading.

For another data point on foreclosures, check out the list of San Francisco foreclosures provided to sfnewsletter via PropertyShark.com. Yes, the list has grown, but it’s hardly cause for headline reporting.

[Update: "Tyler" points us to what should have been obvious: "If you click the 'foreclosure' tab at the top, the houses change to foreclosures."]

Is San Francisco real estate still “Holding On”?

A reader forwards us this link to a recent article in this special section of the New York Times, which leaves us wondering, “Is San Francisco real estate still ‘Holding On’?”

Some quotes:

-”Once real estate in the most expensive cities no longer seemed to be a can’t-miss investment, you might have thought more people would flee, bringing prices down sharply. That would further shrink the gap between a place like San Francisco and one like Sacramento. Instead, the gap is growing again.”

-”What, then, can explain the contours of this housing bust? The best answer is that the sheer scale of the bubble obscured another — in all likelihood, more lasting — trend: despite all the ways that technology has made distance matter less, geography matters more. It may be easier to transport an individual job from [San Francisco to Sacramento], but the value of being in [San Francisco] is actually greater than it used to be.”

-”In recent years, New York, Boston, Washington and San Francisco have widened their lead in household income and educational attainment over much of the rest of the country. So it makes perfect sense that they have widened their lead in housing prices, too.”

-”Mark Zandi, who runs Moody’s Economy.com, has built a statistical model designed to predict the proper level for housing prices in every major metro area. The model is based on population, housing supply, income and various other factors. As of the end of last year, Zandi estimated, prices were still 30 percent too high in much of Florida and roughly 25 percent too high in Las Vegas and Phoenix. But prices looked somewhat more sensible in New York (16 percent overvalued), Los Angeles (10 percent), Washington (9 percent), Boston (7 percent) and San Francisco (6 percent).”

And from an entirely different article in the New York Times, we direct you to yet another reason San Francisco will always attract top level talent, and top level earnings potential.

-Cafe Capitalism, San Francisco Style [New York Times]

-Holding On [New York Times]

Still confused about Conforming Loan Limits?

3 Oceans Real Estate provides some answers:

Raising the conforming loan limit has the following benefits:

1. It does in fact greatly stimulate the economy

2. Many consumers who got in over their head will now be able to afford their mortgage

3. Greater affordability for housing is created

4. It will influence a portion of the jumbo market that has been lost and create some investor confidence, and finally

5. California has been long overdue to have a raise to the conforming limit given that over 50% of the nation’s jumbo mortgages were originated in California.

Okay, let’s say that raising the conforming loan limit is good for a moment. What’s next and what are the details? There’s still some speculation, but here goes:

1. The conforming loan amount will be determined based on 125% of the median price of a given county…

2. This allowance will NOT go into effect for purchase or refinance transactions until July 1, 2008 (that’s the earliest date that the loan application may be signed) since the market needs from now to June 30, 2008 to liquidate current qualifying mortgages available for sale from institutions

3. The types of programs allowed will be fixed-rate programs on a full-doc basis, which means that the hybrid, interest-only programs using “stated” income will not be allowed

4. The property must be single-family and owner occupied, which means that 2nd homes, investment properties and multi-unit properties are ineligible

5. Credit scores must be “reasonable” with a combined loan-to-value not to exceed 90%

6. No cash-out, which means that a refinance may not allow the borrower to receive any greater than $2,000 at closing

7. Loans must be funded and closed prior to December 31, 2008

Please visit their site for more on the matter, or feel free to ask our very own Kelly McCray.

-How stimulating will raising the conforming loan limit be? [3 Oceans Real Estate]

Chop go the rates…again! (Feds cutting rates makes us queezy)

“Fed Cuts Rate by Half-Point; 2nd Reduction in 8 Days” [New York Times]

In lowering its benchmark Federal funds rate by half a point, to 3 percent, the central bank acknowledged that it is now far more worried about an economic slowdown than rising inflation, and it left open the possibility of additional rate reductions.

“Financial markets remain under considerable stress, and credit has tightened further for some businesses and households,” the central bank said in a statement accompanying its decision. In addition, it said, recent data indicated that the housing market is still getting worse and the job market appears to be “softening.”

What’s going on here? This roller coaster is making us queezy!

Marc Herrenbruck had this to say:

As expected the Fed lowered “rates” by .50% so how will this effect you? Banks will be reporting that Prime has now fallen to 6%! Four months ago it was at 8.25%. People with HELOC loans rejoice you have experienced a 2.25% reduction in your interest in the last 4 months or if you had a $250,000 line of credit your payments went from $1718.00 to $1250.00 a month, a savings of almost $500.00 a month! I also want to say that rates for 30 year, 15 year and 3,5,7,10/1 arms are not benefiting from this in fact rates have been going up since the Fed lowered rates by .75% last Tuesday. That is because money is moving from the bond market to the stock market which supports what the Fed is doing to fight recession, lower Fed Fund and Discount Rates to stimulate the economy.

N.A.R. Housing Forecast

NAR Issues Housing Forecast: “Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise”

Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of REALTORS®.

Lawrence Yun, NAR chief economist, said there is a pull and tug exerting itself on the market. “On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” he said. “On the other, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain. A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.” Continue reading

California Association of Realtors Housing Outlook 2008

Rather than giving excerpts, we thought we’d give you the whole thing. Found via the San Francisco Association of Realtors Advantage Online Publication:

“California experienced another year of weak home sales in 2007. Sales of existing detached single-family homes, which declined 23.6 percent for the year 2006, were projected to decrease another 26.0 percent to 353,200 homes for the year 2007. Sales fell steeply in the last quarter of the year as the liquidity crunch severely constrained availability of funds for mortgage loans. Monthly sales fell below 300,000 units on a seasonally adjusted and annualized basis, levels that had not been seen in over 20 years.

Despite the decline in sales, the statewide median home price set a new record of $597,640 in April and remained near record levels for much of the year. This was partly due to the downward stickiness in prices in a slowing market, but also had to do with the mix of sales in 2007 compared with prior years. While low- to moderately-priced markets suffered throughout the year, the high end of the market was somewhat more resilient and propped up the statewide median price. However, with the onset of the liquidity crunch later in the year, that market segment saw weakness both in sales and prices and forced the statewide median price below $500,000 in October and November for the first time since early 2005.

In general, lower-priced markets experienced large sales declines and weaker home prices as compared to higher-priced markets in 2007. Sales through August for homes valued below $500,000 declined 24.6 percent year-to-date, and sales of homes between $500,000 and $999,999 fell 24.2 percent when compared to 2006. By comparison, sales of homes priced $1 million and above declined only 0.5 percent from the same period of last year. However, the liquidity crunch choked off sales beginning in September, with the $500,000 to $999,999 market experiencing year-to-year sales declines in the range of 50 percent through the end of the year, and the market over $1 million market showing year-to-year declines of roughly 25 percent.

The housing market is unlikely to see significant recovery in 2008. A further six percent decline in sales is expected for the year 2008. Peak to trough, annual sales are expected to decline 47 percent from peak levels of approximately 625,000 homes in 2004 and 2005 to 332,000 homes in 2008. Meanwhile, the statewide median price will show its first decline since 1996, with a projected 5.5 percent annual decline in 2008 to $536,500.

As the economy remains in the late stages of expansion with many mixed signals, economic growth for 2008 is expected to be positive, but will be below the potential GDP growth rate of 3 to 4 percent. The California economy should grow on a par with the national economy, with non-farm job growth increasing 0.9 percent, and unemployment rate approaching 6 percent in 2008.

Current market problems, however, have their roots in financing, not in weakening economic conditions. As such, this is not like the situation in the 1990s. Market weakness will continue to be driven in part by the ongoing problems in the subprime arena. Subprime mortgage payment resets are expected to peak in late 2007 and early 2008, so defaults and foreclosures should crest later in the year before easing as the year draws to a close. This will continue to put downward pressure on home prices, particularly in parts of the state that had a lot of new home building. Improvement in market conditions is more likely in the latter part of the year, as mortgage problems begin to subside and as buyers and sellers sense that home prices may have stabilized.”

And with any luck, Garrett will hook us up with some condo stats real soon.

…and Here they Come: Foreigners Buying San Francisco Real Estate is Next

It all starts with a vacation, then turns into an impulsive need to buy. We’re already seeing more Europeans purchasing New York property, so if San Francisco can get past the extra 5-6 hours spent on a plane for most Europeans, we will certainly begin to see more of them pouring some of their hard earned Euros into our local real estate market.

Canadians? What is your excuse…besides our homeless problem?

Aussies? We have the waves, even if our water is a bit “seppo”. You’re equally half-way around the world from either coast, so you might as well go Californian…it’s a natural fit.

Debate the differences between NYC and SF all you want, but you’ll still find many similarities. Is New York a good barometer of our market? Not so sure, but we are sure that if our market dips this year, it will be slight, and San Francisco real estate as a LONG TERM investment will almost always be a good choice.

A few quotes:

The precipitous fall of the dollar – a decline that picked up steam in 2007 – has turned the United States into a giant bargain basement for much of the world, especially visitors carrying strong European, Canadian and Australian currencies. And they are coming – in droves.

Despite it great distance from Europe, San Francisco International Airport was the sixth-most-popular arrival point in the United States during the first nine months of 2007. Just over 1 million foreign visitors flew into San Francisco, up 9 percent from the comparable period in 2006, close to the 10 percent increase registered for the United States as a whole, according to the Commerce Department’s Office of Travel and Tourism Industries.

San Francisco is always so popular, but now it’s like you’ve got a great big sale,” said Marc LePage, Canada’s consul-general in San Francisco. “Every time I get on a plane, there are more people on the plane.”

Isn’t it funny how when one thing rattle our nerves, a silver lining comes out of such a dark cloud?

Good thing your editor speaks German, French, and Italian, and is gearing up for a bit of an increase in European clients, as should all agents in San Francisco. Agents, you should at least know the difference between real Football, and the fake stuff if you embark down the path to getting European clients. Go Arsenal!

-Foreign Visitors Descend on SF for Bargains [sfgate]

In His Own Words: Warren Buffett and the Mortgage Crisis

On the issue of the securitized mortgages, Buffett said one can make more money “selling toxic waste to customers,” but that doesn’t mean it’s a good idea.

“Wall Street started believing its own PR on this – they started holding this stuff themselves, maybe because they couldn’t sell it. It worked wonderfully until it didn’t work at all.”

Now, “Wall Street is reaping what they’ve sown,” Buffett said. “It will sort itself out over time with a fair amount of pain. We have an economy that can take it.

-Mortgage crisis perplexes even shrewd investor Warren Buffett [San Francisco Chronicle]