Though the banks are trying to work through the foreclosure mess as quickly as possible, putting a blanket moratorium on foreclosures now “will be a disaster for banks and the housing market, and the market won’t hit bottom,” said Steven Moore, senior economic writer for the Wall Street Journal, in the CNBC video above. “This crisis could not have come at a worse time,” Moore said, though he pointed out that, three weeks before the general election, it is playing into the hands of politicians, since it’s “a good populist issue.” According to CNCB’s David Faber, the key question is how to work through this crisis and how long it will take. “You need to sort of set the bottom,” he said. “To the extent that you delay sales of foreclosures, and have them out there weighing on the market, you won’t see prices hit where you attract buyers.” Moore also noted that these three or four extra months that banks can’t get payments will have a negative impact on the market as well.

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Supply is down in 28 different major metropolitan housing markets, according to the Wall Street Journal’s quarterly report on residential sales, with the New York City market showing the least amount of change in inventory. The number of homes listed for sale dropped just 2.5 percent in New York City since last quarter, according to the report. Long Island and Queens, listed as separate from the New York City market in the report, saw a 10.8 percent decline in inventory since the same quarter last year. Although all markets evaluated showed declines, the report said that there is major potential for inventory to creep back up, as banks acquire more foreclosed homes in the coming months.

Real estate sources say a deal to
sell Worldwide Plaza — one of the seven office towers Harry Macklowe
was forced to return to his lenders — has fallen apart. This is the
second time a deal to sell the building has fallen through, and both
instances involved George Comfort & Sons as the buyer. In the
latest transaction to break down, George Comfort and real estate
investment firm RCG Longview struck a deal to purchase the 47-story
tower for an undisclosed sum earlier this month. Deutsche Bank, which
controls the building, would have retained a stake and provided
financing for the deal. Sources say Deutsche Bank killed the
transaction. According to the Wall Street Journal, the building is on the market again. [Crain's] and [WSJ]