The folks at Harvard have just released their latest housing study: SON (State of the Nation’s Housing) 2008. If you would rather check out a quick overview, check out their fact sheet.

In case you were wondering, yes, we have problems all across the country. Since this is a “current assessment” of the housing market, it can be viewed not as a media report but as scientific data. And yes, it’s discouraging.

Ready for some highlights lowlights? These all come directly from the fact sheet that you can read by clicking the link above.

• The months’ supply of unsold new single-family homes rose to more than 11 months in late 2007 and early 2008—a level previously not seen since the late 1970s—before dropping back slightly. The months’ supply of existing single-family homes for sale rocketed to 10.7 months by April 2008.

• By the end of 2007, the nation had 232,000 fewer construction jobs than a year earlier, dragging down employment growth in many states with previously booming housing markets such as Florida (74,000 construction jobs lost vs. 52,000 other jobs added) and Arizona (25,000 construction jobs lost vs. 23,000 other jobs added).

• The number of homes in foreclosure proceedings nearly doubled to almost one million by the end of 2007, while the number entering foreclosure topped 400,000 in the fourth quarter alone.

• In 2006, the number of severely-burdened households—paying more than half their income for housing— surged by almost four million to 17.7 million households.

I don’t think much more needs to be said about this study at this point. It is an interesting read, especially if you are having a great day and don’t like feeling so positive all the time.

I’ve been thinking lately. Maybe not always a good sign, but I’ve come up with some harebrained incredible ideas for solving or at least mitigating the foreclosure crisis in this country.

1. Have lenders agree to work with buyers who are behind on payments but are trying to still live in the home i.e. not flippers etc who put zero down and can just walk away. Work with them how? Cancel fees for a set period of time as they try to catch up on payments. Allow them to refinance to fixed rates with low or no closing costs. Offer interest only payments for a small period of time like 3 or 6 months and then go back to normal payments.

2. Offer subsidies/tax breaks to towns or commercial/philanthropic organizations to buy up property in low income areas, especially the hardest hit urban areas like Dorchester, some parts of JP, Haverhill, Lowell, etc., and work with residents who want to own a home but cannot afford more of a monthly payment that what their rent currently is. This would provide jobs to many - rehabbing that doesn’t require a permit could be done by potential owners to reduce their monthly payment for example. Offer lease to own options as well. If towns did not have enough money to buy up these properties, civic minded individuals or organizations could improve the areas while making money at the same time, especially with tax break incentives.

3. Public plea for help. Just like with Katrina, this is a crisis that is affecting many people and causing many to become homeless. People are generous, but if they don’t know how to help they won’t help. Bush’s HOPE NOW program is a start but as with most things is bureaucratic and not especially efficient. A well run nonprofit headed by a retired CEO or former president/governor etc. could collect donations and offers for assistance and distribute them equitably. Churches and social groups like Kiwanis/Rotary/Elks etc would surely respond if they were approached directly to help those in their own communities.

Do you have thoughts about this? Feel free to comment and tell me my ideas or worthless, great, or somewhere in between. Also, please give this some thought and maybe add a few of your own.

Are you in trouble with your mortgage payments? You are not alone. I found an informative article over at Yahoo! Finance that provides more discouraging detail about the foreclosure crisis that is facing this country and has not abated yet.

Of note - 1 in every 483 homeowners across the country have received some sort of foreclosure notice. There are basically three types of these notices - default notice (owners are very late on payments), auction sale notice, and bank repossession. About half of the current foreclosure proceedings will be taken care of via sale or payment by the owner, but many will be repossessed or sold at auction.

The hardest hit areas? 9 of the top 10 cities/towns are in California and Florida, with Nevada, Arizona, and Michigan also dealing with this severe problem. Why is this happening? Alan Zibel, the author of the article mentioned above, sums it up very well,

“The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with few options to avoid foreclosure. Many can’t find buyers or owe more than their home is worth and can’t get refinanced into an affordable loan.”

How can we solve this problem? Apparently not with President Bush’s Hope Now coalition. Critics say that this plan falls far short of helping with the problem. I will say that one of the major problems is that not enough consumers have reached out for help. If you are a struggling owner, feel free to visit this page to learn about some available resources.

Peter Viles, who writes a blog for the LA Times, has found a crazy deal that a homebuilder is currently offering. You can see from the ad that if you buy a home in one area (starting at $1.6 million by the way) you will receive a 2000 square foot row home in another area for free! The smaller homes are valued around $400,000 right now.

The company said they are just responding to market conditions and are trying to move inventory, and that interest has increased since they started this promotion, although no one has gone under agreement yet. They said there are many interested parties who are ‘in talks’ with them currently.

Is this a good idea or not? On one hand, it is similar to high end sellers offering a sports car, home theater system, and other goodies along with their home to tempt potential buyers. Additional items left as gifts do increase traffic and may sway potential buyers. On the other hand, the new owner will have to sell or rent out their free home if they don’t want to give it to a family member or friend, and there are many carrying costs associated with the gift as opposed to other common items like cars and HDTVs that have low to no costs like upkeep and real estate taxes.

Will this be a sign of a changing market in the new construction segment? Time will tell, and if this promotion works out other builders will be sure to consider it as a great way to attract publicity and potential buyers.

Today, the MAR reported March-April changes. While month-to-month sales were up, the number of single-family homes sold in April was down 15.8 percent with median sales prices down 8.7 percent compared to last year. The number of condominiums sold in April was down 26.6 percent, with median sales prices flat.