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that could increase fuel efficiency by up to 80%. tonight on cnbc reports, hard hit home price showing new signs of life. new home sales yesterday, up for the third straight month. existing home sale also up. today, more reason for optimism. day shiller, the closely watched report, shows home prices rose in may from april showing a month over month gain for the first time in almost three years. tonight, the man behind the report is here. this month alone, up 25%. these are up 68% in a month. if the market does make a comeback, we'll get you ahead of the game on where to put your money. this is a special edition of

cnbc reports. realty check. on the general, stocks. the state of your home. your neighbor and your region. and it all starts right now. take comes the latest in a series of single that's the work is over. but is it really? let go robert shiller, one of the most foremost trackers of housing prices. thanks for being with us. your case shuler index shows home prices went up from april to may. that's a first month to month rise in three years. i'll take it. what do you say? >> you have to understand the housing is different from the stock market. it shows much more momentum. when you see like a car today reasoning down a hill, then it stops and turn around, it is like that with the housing market. it is suggesting the market is getting better.

>> so chances are when there is a teensy improvement, it might be better than you think. first a chart of today's number which shows an increase in almost three years. do we have that? without seasonal adjustment, the number went up half a percent. people are saying -- there it is. we've got it now. but then when you seasonally see it, it was down .2 of a percent. then again we've had declines 2% month to month. only a tenth of the decline. a positive sign? others are up, too. then existing sales and new sales. a lot of different pieces of evidence that are showing new strength. >> let's take a look at a chart on that. not just these new home. the prices that are up in your report. also the existing home sales.

they're up three months in a row. correct? we've got new home sales. they were up three in a row. and even another sign is your own umn index. on june 30, you created this index. based on housing prices change. is that right? this is a very important new development. but this allows you on the stock exchange to effectively buy a house without all the nuisances? costs associate with buying a house. >> it starts trading like june 30. since then, it is up 40%. now professor shul iller, you s price will go nowhere for five years. doesn't the fact that it went up 40% since june 30 say something about housing? >> several weeks ago, it was predicting that home prices

would go down 8%. in that region. and since it is 3-1 leverage, that's a big discount that security has and has now disappeared. >> and i'm sorry to do this but it is my job. i have to ask you a rude question. it seem weird to me that a guy in charge of the independent data that really moves the market, the case shuler index also has a part in the piece of paper, speculating on the direction of those trends. how do we know you won't ma up in late the data? >> for me, when i started, chip case and i started these undesks 20 years ago. we had a purpose. that was to create markets for real estate. real estate is so inefficient. there is no way to protect yourself from bubble. no way to express the view that the home prices are too high. and so that was the whole

reason. i wrote a book in 1993 about the need for a new market. i believe that this real estate, this financial crisis that involves the world now was a failure to manage rick. >> we have a wrap now. yes or no. is the worst over in housing? >> the worst decline are over. >> that would be a yes. >> i'm not sure that it is going up at this point. >> i'll just take not crashing. not crashing is the new going up. thank you very much. we'll pick the stocks that could benefit. let's get to the real deal squad. jack burkman is a lawyer with list own firm. tonya is a lawyer and a blogger for the "huffington post." and democratic strategist. and noel, republican strategist. jack burkman, what do you say? hallelujah, the worst is over?

>> capitalism has punished, mother nature has punished the speculators and the gamble errs. it is the same thing on the street with derivatives. this was not a derivatives problem. it is a gambling problem. >> how much is your house down in value? >> i've taken big -- look. i've taken big hits. i bought a house in vegas. i knew what i was doing. i wanted to gamble and i got burned. that's what happens in a free market. it is i have four or five properties. they're all down. that's life. but see, the free market makes everything stronger because it eliminates those people that can't hold on are swept away. >> you look like you want to get in here. >> we have to realize that this housing bust was based on a couple of thing. first a low interest rate for a 30-year mortgage. could you get it for well under 5%. second of all, foreclosures, and that will come to an end when all these government save your home program will basically keep people in their home. >> the government program are failing utterly.

julie, the white house had a big meeting today telling mortgage processors, you're not doing enough. >> yeah, they did. i feel so bad for him with his house in vegas. >> wow, sim pathy. >> i feel badly for you. a lot of people ultraplate took out leverage that they should never have taken out. the banks were complicit in this. so were the lenner, the big banks that repackages these and made billions of dollars off them. there is a lot of blame to go around. >> where we disagree is foreclosure is a healthy process. what you're doing is bringing in one more worthy -- that's an extremely healthy process. >> let me get tonya in on this. i don't feel bad for jack burkman buying in las vegas. he did it to himself. i don't feel bad for a lot of the people in foreclosure. >> well, jack burk may be a special case. a lot these folks tend to think the economy simply works

in a trickle down basis. until people at the bottom, until main street is feeling good, we're not going to see true long-term gains. i think these housing number are great. do you think they're impacted by the fact you're seeing a moratorium on foreclosures. i don't think the economy is helped by tossing a bunch of could that assumers who got us in trouble. >> right now, guys, we'll be bringing you back. all of you back in a few minutes. bear with me. two of america's most beautiful cities have been two of america's most hardest hit cities when it come to housing. we'll take you to both to show you now how they're faring. and in one case, investor have some rather unique ideas. that's just ahead. if the three most important thing in real estate are location, location, location, don't worry. we've got you covered. as we check in with the agents. at 155 miles per hour, andy roddick

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you'll pay twice as much for a studio in manhattan. two of the hardest hit places are two of the most beautiful. miami got slam in this downfall. and parts of sunny california as well fell right off a cliff. and we have updates from both places tonight. nbc's michelle is live in miami. let's start in victorville, california. >> reporter: this is one of those bedroom communities in los angeles warehousing just exploded and then had a tremendous collapse right behind me here. until three months ago, they were building new houses here. they had to tear them down. while there are signs it may not get any worse in california, it may not get any better soon. this was late april as a developer decided to bulldoze new home in victorville, rather than spend the money to complete and sell them. it was perhaps the perfect picture of the perfect storm

which has invaded california real estate. is the storm starting to clear? >> there is a lot of action if you're in the right price range. >> reporter: he has been selling home in l.a., san fernando for years and he sees a tale of two markets. >> in the lower price range, this market is as busy as it has ever been. in the upper range, it is batten down the houses. >> in home 500,000 and lower, there is only a two-month supply of inventory. but near ten time that amount in home over $1 million. like this one 2.4 million and it is still on the market for $1.9. suddenly getting some interest. >> the buyers that come through are real buyers. they are not peel that are looking. they want to sign on. >> reporter: only one sign of stability. he says the number of california home sole in june rose 13% from may, rose 26% from a year ago. though nearly half of those home were foreclosures. and the california association of realtors says the median

price here is $275,000, up 4% from the month beforeburg still down 26% from a year ago. home builders are even starting to buy land again. and fewer were sent out from the second quarter compared to the first. it may be too soon to celebrate. special tax credits to home buyers are going away and there are concerns that thousands more foreclosed home will flood the market. as moratoriums are lifted and modification program fail. >> i don't know what the correct answer is for the future. >> reporter: now while new median price is here $275,000, it is expect to go to $234,000. so a drop by the end of 2010 before rebounding to normal level. the positive signs in the california market are undeniable. if california leads the nationering with should be concern with tax credits ending and foreclosures mounting. wednesday the mark is likely to sofb again. now let's go across the country

to miami. also hard hit. but where investor are swooching in to buy up in bulk. >> enormous number of foreclosures here in south florida and along the gulf coast. something of a rush in the last several months with home buyers and investor competing over deal that were 1/5 the price they went for during the peak. now a lot of those amazing deal have been snapped up. there are pockets where it seem the bottom has been reached. and inventory here in south florida has dropped by a third since november. more than half of what is still on the market are condos. if there was ever a glut, it is here where we still have brand new condos, dark and empty on the skyline. now we're seeing something, good news that we haven't seen here during prior downturns. bulk sales of these units going for almost unbelievable prices. in swanky bell harbor, one of the most recent sales, bran new luxury building. 51 units went to one investor. whereas before, better times,

$1,100 a square foot was the average price. this sale, $63 a square foot. we see nine of these bulk sales in the last year. most of them have been just since last month. that is investor confidence. they're buying tens of these units or hundreds of them. turning them into rentals. the bad news sf f you're a home buyer looking for one good deal, this is what you're competing against. you may not get that great deal. you may not get the best unit. and these are all cash deals. so individuals can forget about financing for these. dennis? >> thanks very much. now lets get some real estate red meat. patrick newport is with us. the chief economist for ih global inside. he is bullish. the same for the chief economist at pmi group. danny is realtor and owner of the babs group. some great advice for those look fog get into this market. and dan, the chief economist,

bullish. the chief financial officer at zillo. dan, you're the most bullish. i would like to start with you. first do you think the housing crisis is over? is the worst finally behind us? >> i think the worst is behind us, yeah. there is so much data that look very bottomish. i think we're really on the way up. people are always arguing with me about just because it is not as bad as it was, does that mean it is better? everybody knows the data is bad. the markets, the housing market is bad but it is getting better. that's the positive here. >> go ahead. pop our bubble. >> well, i don't know what number these guys are looking at but we need to look at the methodology that some of these people are using. whether it is case shiller or the u.s. census. the case shiller that you were referring to earlier in the program -- >> sure.

a pass percent from april to may. >> the methodology they use is one family only. >> single family homes. >> rather than talk about methodology, let's zoom to the big picture here and just tell me, does it better better or worse. >> it is getting worse. it is getting worse because foreclosures are now hitting the borrowers. >> but foreclosures, one study shows, the reason they are up, it is not the prime stuff but places where people had no money down. and once those loans that have no money down therg walk away, we'll get a little better off. >> that's incorrect. you know it is incorrect because four months ago, i will you that the job loss and the unemployment situation, when it was below 8%, was going to cause the prime borrowers that we were already seeing anecdotal evidence, the prime borrowers would go bad. i can mitigate, modify interest

rates. i cannot mitigate no income. >> the fact is, overall it is getting better. take it, patrick newport if you would. >> you can't argue with the number. sale are up, housing, housing prices are starting to drop. one thing to keep in mine, even though the number are very good, the housing market is two markets. a market for single family homes, that's the market that is growing. about a third of the market. that market has never been as bad as it is now. housing starts -- >> let's ask danny ban. what are you seeing from your  eye level view? >> there are bunches of reasons. we have about one in four homeowners that are in the jumbo mark that owe more on their hom than their house is worst. they will be in foreclosure in the next couple years. it will hit this market. we also have a problem in the 

fha qualified mortgages where this this spring buying season is affecting these number and w don't even know if the home will be able to close escrow because the banks are creating a obstacles for people to actually buy. that is a big problem it is and distorting the number. the 20 metro areas, give me a breakful that is not out of the statistics. >> there is another guest coming on later in the show. he has a 55 market survey that shows prices actually going up five months in a row from month to month. >> with every foreclosure, isn't there a buying that come in and gets a pretty good value at a pretty cheap price? >> you have to separate transaction velocity from sale prices. velocity is up. home are selling and that was not the case six months ago. they're selling at very distressed prices. a quarter of the houses were sole as part of foreclosure. 60% in san diego, 70% in vegas.

it is the low end of the market. and it is foreclosure and distressed sales happening. >> on the other hand, inventory of unsold home, down 8.8 from 10.2. i'm sorry we didn't get more of you in from each of you. there are so many of you. we have to wrap right now. and next up, thanks for being with us, guys. the big fight over loan mods. it gets even bigger. and a little later, picking winners in the home building sector. we are naming names. we are charting charts. want to get in on this action? we've got some solid advice. we are building this show one block at a time.

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with the gold delta skymiles credit card. call 1-800-skymiles to apply. this is the official card... of the world's largest airline. every song in tonight's show has the word home in it. tucson, arizona. $499, what it will get you? four bedrooms, three bathroom and a pool. nice. diana covers housing for cnbc and she has more number for us tonight. she is reporting on a growing controversy over loan modifications. >> that's right. the latest number on home sales and prices are promising. no question about that. behind those number, it is a ticking time bomb. foreclosures. the rate of those could explode

in volumes that the government and the housing industry never expected. >> the number are showing a glimmer of hopeful. >> part of it is the fear that prices will fall if you are. we've seen the reverse. that will be important. >> today one of the most bearish indicator, the s&p case shiller, while down 20%. >> it go has not in handful we're seeing it. >> reporter: existing home sale topped out at $1.7 to an annualized rate of about 4.9 million units. month to month sale have been steadily rying but much of the activity is on the low end of the market, and foreclosures. aing pressure to prices. >> particularly in the january, february, march period. they were most of the sale.

that's where we saw the steep declines. >> reporter: foreclosures continue to be the thorn in the side of recovery competing directly with new construction. many are new construction. new home sales are down from a peak of 1.4 million units to just below 400,000 annualized. while that rate jumped up 11% monthly in june, in real term, actual sales went from 33,000 in may to 36,000 in june. adding to the builder's woes, some appraisers are using foreclosures as comps. >> we've even had cases where appraise always have come in 10% or 20% below the cost of construction of a new home. >> reporter: the fact that home are selling sent housing starts up in june. they're still nowhere near the peak of two million units in 2005 but it is a start. the missing piece of the recovery puzzle is still foreclosures. >> after all these months of still 50% of the borrowers whose loans are going into foreclosure do not talk to the servicer.

>> that's why the treasury and hud secretaries, those signed on for the housing rescue plan to washington today and got a commitment from them to increase the rate of modifications. but the servicers claim, it is not all up to them. >> yes, we know you have expectations. we have expectations too. and i think that what we've hear from our service today, we're now starting, as i would say, get a groove swing. we are in fact now rolling along. the problem is, as the caveat, however, even as we start to roll along, we get rule change. >> after that meeting, the administration put out a big press release saying they were going to improve how they look at the servicers and streamline the process of decide chg were doing well and which weren't and even how freddie mac take a look. they did not at least publicly, address any of the concerns that he talk about today. dennis? >> thanks.

we're going to stay on that loan modification theme and bring in michelle cabrera who just used the new rule to refinance. michelle? something that seem wrong with that. go ahead. >> dennis, i qualified for refinancing my mortgage under president obama's making home affordable program. a few months back, interest rates were at record lows. i decided to refinance. i called bank of america. after a couple questions, the nice guy who answered the phone. me i qualify for the new government program. inthat cannot be possible. that program is for people in dire straits. it is meant to help people in trouble. i'm trying to do a basic reidentify. he said no, no, you qualify. and he direct me to the program's website to get an, i had to be employed, current on my mortgage in a loan own by fannie mae or freddie mac. it had to exceed not less than 125%. if i went with the program? what did i get. speed. no income verification, no

appraisal. instead, the nice man on the phone took my address into a government database, will me the approximate value of my home refl identify done in lightning speed. three weeks. to his credit, the white house has acknowledged the program isn't working. not reaching the people they intended. but remember, whenever you hear bankers or you hear the white house talking about how many people they're helping, think about this story. because -- >> and you're one of them. >> exactly. this is not what the government intended. >> they're supposed to be going after people on the brink. you weren't on the brink. >> no. >> stick around. will he bring the real dealers back. who wants to refinance? what do you say? >> an example of how inefficient the government is. it didn't go to who it was intended to go for. and you know, one of the odd things is, i thought that you weren't even able to qualify until you were practically in foreclosure. >> you can't be close to foreclosure. >> that's insane.

>> what's wrong forecloesh you are? foreclosure is a healthy thing that will see that recovery of the mark. if you have a poor family, if you have a poor family struggling to hole on to a house, this family should be spending money on food and clothing for children. not some big mortgage payment. they should be -- >> i'll tell you what's wrong with foreclosure. you're right. neighbor fact that you got foreclosed on is your problem. how about your neighbor whose property value will plummet because you couldn't pay your bills. isn't it better to get them better refisting where they can afford to stay in? >> what about the wloem issue of government inefficiency? why do i -- >> wait a second. >> a reidentify opportunity government program. it makes no sense. >> let me explain to you why. because our taxpayer dollars went to bail out a lot of banks. a lot of neeks are behind in their mortgages, they get some help. >> wait a second. wait, wait. i'm going to michelle's point. the notion that i like somebody

who may be has been on time ends up paying a higher interest rate than someone who has been late for months and months is unpalatable. the loan modification program should be available to more consumers themselves should be available to people who aren't simply on the brink. because by the way, when we clear up more money -- >> i have to tell you. you guys say, well, they bailed out the big banks so therefore they should have to bail out the little consumers. we bailed out the banks so they could help the consumers. >> let me say. this you're saying mere the consumers are the only one at fault. you don't take into tkt predatory lending? >> no one had a gun to their head. >> excuse me. you don't think -- come on. it's like you were not around the past few years. you don't think there was any preer to lending involved? >> i don't excuse that people took mortgage that's they were

unqualified for. >> doesn't it make you mad that i get a government sponsor reidentify? >> it doesn't bother me. i'm thrilled for you. >> this is going to be worse if health care reform passes. you're going to see higher unemployment. higher taxes. >> bring it back to housing. >> you have to keep in mine that the government, you know, i'm hear from the government to help you. the federal government caused almost all these problems in the first place with two thing call fannie and freddie. >> thank you so much for being with us. i love that spirited discussion. appreciate your playing in the realty check. with everyone out there in tv than, a lot more ahead.

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sweet home birmingham, bam bax. $300,000. four bedrooms, five bathrooms. got more real deal for you. now that the housing crisis finally is easing krk we take a few second to reveal a few lesson? just because the bank is crazy enough to loan you money doesn't mean you should be crazy enough to take it. debt always costs more than you expect. second lesson. when everyone else is buying, you should be selling. from the year 2000 to 2007, median home price roared up over

50% we should have known 2008 was no time to buy. third and final lesson. we forgot the most important point. a house isn't an invest many. it shouldn't be judged by return on equity or projected appreciation. a house is your home. you should buy it because that's where you would like to spend a major part of your life. and on that note about investing, let talk about it in the home building sector. john tomlinson, the senior analyst at majestic research. where should i put money right now? >> hey, dennis. it looks like from the data that we're attracting, at least, most of the improvement that we're seeing is pretty bra based. at this point in time, all the data is pointing to improved fundamentals for all the builders. that that, there are some winner and some companies. >> the one that were looking at strong as we predict were nvr. >> i want to know the one i should buy.

>> these are the one showing the strongest trend. nvr, standard pacific, beeser, and hot mania. the one seeing some strength just to not the same degree on r centex. the one company that is showing not so good trends is basically the absorption rates down. the sector as a whole is showing the first gain in absorption rates, going back four years. >> tell us what you mean by absorption. >> in retail, same store sales. sale for community. and that is the focus of most investor. when that strengthens, that mean the overall demand on the same store base sis improving for the bullers. >> i think we'll have to wrap that up. thank you for being with us tonight. and a view from the top now on warehousing is headed and what

role if any washington should play. jack is with remax international. and jim gillespie is the ceo of coldwell banker. you have a 55 city survey instead of the 20-city survey with case shiller. >> i'll get to that in a second. i have to tell you the tips you gave when we came back from the break were right on. i could not agree with you more. >> wow! i made them up. thanks. >> we don't really track the. that tracks 55 major metropolitan areas. now, we provide them direct mull mr. listing stats from those 55 major metro areas. and our analysis, the last five months, the median home price, the average median home price in

those 55 markets has gone up. so the case shiller news released today did not surprise us at all. we've been seeing that trend. >> five months in a row. that's nice. jim gleps that i, do you agree with those numbers? >> yes. i spent about 40% of my time on the road. and the heartland of america is doing well. it is nowhere near what it was a few years ago. >> half of the foreclosure are in only four states, right? >> half the foreclosures are actually in 35 counties, according to the usa today. >> so go ahead. >> well, my point is, it that what we're seeing is the demand side is fine for investors. they're seeing this is the best time ever. at least since the great depression to purchase properties. we're seeing good demand from first time home buyers. the problem and the concern that i have is that the move-up buyer is not in the marketplace. if you look at the number of home sole in this krirg it will be between $4.5 and 5 million.

with half are move-up buyers. that is way up. >> the guy that buys a more expensive home than before? >> maybe they've had a baby, a job promotion. >> prices are coming down. they're down 30% from the peak. you might be getting more house for a smaller price. >> what they're seeing, they're concerned about jobs themselves see these national surveys where prices are off 18% and they are really reflective of distressed properties. the move-up buyer is sitting on their hand waiting for prices to keep moving down. so what we're pushing very, very hard for is the $15,000 tax credit for all buyers for appeared of one year with no income cap. that's the bill in the senate right now. >> actually, jack, what do you think happens? do home prices or home sales actually fall off if government -- does the $8,000 first time buyer credit that expires november 30, right? what will be the impact there? >> we are concerned about that.

there is no doubt about that. it expires december 1, as up. and i know the legislator are talking about various proposals to come up with some type of extension on some type of tax credit. i could not agree with you more. that is one part of the stum lust package that has really worked and it is something we need moving forward. >> did you say this was for 18,000? $15,000? >> we want this for all buyers. >> for all buyers. that's exactly what i want. what do you think the chances are that passes the senate? >> i was on capitol hill about three, four weeks ago. and i talk to seven members of the house and private meetings and four members of the senate, and there is very much of a receptive attitude there. i don't know if we'll get that passed, the $15,000 or not but we're hoping to get something passed for all buyers. and it is important to have no income limits. >> jack, what do you think about the purist had a say enough with

the government training wheel. if this housing market can't rebound on its own, heck with it. let it stay mired in a slump for years to come. >> i that's short-sighted. i do think that it is recovering and it is recovering nicely. there is a lot of good news out there. the gentleman out there who said forecloesh surz a good thing, that's a bad way to put it. jim is talking about the tax credit. we're also talking to the fhfa about the short sale process. and without getting into details on that, the short sale process is a much, much better way to go than the foreclosure process. >> if it is better, why doesn't it happen more? >> it is so much better. >> because the public is not educated about it. in fact, a lot of the realtors are not educated about the process. they are making it the process,

it needs to be stream-line. >> congratulations to both of you for getting into wash and trying to light a candle instead of sitting back and cursing the darkness. thank you for being with us. next up, we're going across america from sea to shining sea to show you where real estate stands in different parts of the great nation of ours. oñññ having the right tools is crucial

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right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. - 154 people are tracking shipments on a train. - ( train whistles ) 33 are im'ing on a ferry. and 1300 are secretly checking email... - on a vacation. - hmm? ( groans ) that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com. jacksonville, you get five bedroom and three bathrooms. probably a nice swimming pool in the backyard, too. the three most important thing in real estate, location, location, location. and we go across america tonight and check the real estate temperature in different parts of the country.

and phoenix, you know, prices there are down 50% in a year or two. brett barry, realtor at home. joel mill we are wall street capital funning in atlanta. and from the high end market in new york city. dolly lynn, vice chairman of prudential. dolly, we'll start. but it is all about my needs and i rent. i was a divorced guy. i rent and i'm getting ready to go back in the market in brooklyn heights and start trying to buy. should i keep renting because prices will keep falling? >> i think it is really an individual analysis. everyone has to sit there and say for me, here's the story. so we would have to locate your information and your situation and then the property you're looking at, the property you're renting and go through it. it is not about broad strokes. >> it really isn't about broad strokes. we're cable television. i'm for some broad strokes. brett barry of phoenix, you were saying in the notes, 75% of the home sold in one county are foreclosures or short sale.

this doesn't have to be a bad thing. aren't the buyers getting good buys in that case? >> g fantastic buys right now. unbelievable. the hottest selling lt of the market is probably under $one hunl,000. we're seeing a huge number. cash sales. there is a lot of money on the sidelines and definitely buyers waiting, many fha buyers waiting for a good deal. i agree with you. it is a good thing flg let me add, i don't think that we're anywhere near the bottom of the market. >> you don't. >> no way. we're down 55%, 54% from the peak which was in 2005. we're still seeing price decline of a little over 2%. but the thing that you guys, that everybody needs to watch is foreclosures. and that is the pulse of the market right now. as long as there are a lot of foreclosures, this will continue. >> four states have half of all the foreclosures in the entire country. and i'm thinking we might be okay here. what does it look like in atlantic? are you a rent, sell or buy guy?

>> i'm very much a buy guy. the atlanta market is one of the markets where affordability is extremely strong. and doing good down here right now if we look at expired listings and withdrawal listings we're doing just fine. home sales are up, and i'm feeling pretty good now so i would look to get into the market down here in atlanta and one thing to keep in mind it's still very affordable here in atlanta as opposed to other parts of the country which is why i think we're seeing so much growth. >> inventory of unsold homes, joel, way down, a year's supply and down to eight months. >> yes. >> dolly, isn't there something that's going to happen in the consumer psyche where we end up feeling like we're missing out on great buys and more people come into the market? >> nobody's ringing a bell saying hey we're at bottom, come join us! you have to decide that for yourself. in new york city we're at or close to bottom. it will be flat for awhile and then go up so you won't miss it but i think you should get in now to look at what's going on. >> get in now to buy, dolly?

>> look at what's going. >> you're a buy, aren't you? >> i'm a buy. >> there you go, baby. good job. glad to hear it. >> love you, dennis. >> we should get together and show me a few apartments. oh, no, you're dealing $10 million apartments and i work for cnbc. go ahead, brett, what else you got on this? brett, i want to also caution you, you're in phoenix. i know it's been painful there. you guys had one of the biggest tumbles because you had one of the biggest rises. couldn't it be you're a little more depressed than you need to be? >> i'm not depressed. i think we have to be realistic. you know, i'm listening to your guests and i heard jack say that foreclosures are good for the market. you know all we're really doing at this point is recycling human beings from old to new, all right? the modifications we keep talking about those, and those are tough to do, and we know the recidivism rate is over 40% on modifications. here's the deal, though. if those people don't work out on their modification, they're going to be back in the market and a possible foreclosure, and

that's what's bringing the market down now. >> right, and are we yet seeing a rebalancing of the rent versus buy economics? i think one problem during the housing bubble there, joel miller, is that prices are going up so high, it was a lot cheaper to rent. is that coming back into a better long-term balance? >> yeah, absolutely. you know, a lot of people were getting into houses because the rental market was where it was at and home prices going through the roof. things have balanced back out and it is still a good time to get out of an apartment and get into a home just because of all the opportunities and the tax credit, like you were talking about on the previous segment, are in place now. if i was sitting on the sidelines i would look to put cash into the market and get going. right now in atlanta we're seeing multiple bids on homes. short sales are coming on the market people getting 20 offers on their home. >> nice. we got to wrap here. dolly lenz you might be hearing from me. >> thank you. >> a lot more of "cnbc reports"

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all right, so as you know, from this show, my hopes are rising for a recovery in housing. the end of the recession certainly helps and i'm telling you, this recession is over but if you're ever in need of someone to dash your hopes there's no better place to go than the blogosphere as i have told you it is the bitterest realm on earth and one of the most cowardly. it is today an anonymous blogger weighs in on the housing rebound and coins a new phrase. "dennis kneale accounting." this blogger calls himself blinders. he writes about how it's silly to celebrate a minor increase in home sales from one month to the next when sales and prices remain down 20% from this time a year ago. call it dennis kneale accounting. we get a couple of normal seasonal housing starts, housing sold and every idiot on tv claims the recession is over and we have a housing bottom and blinders says, "sorry, but it doesn't work that way." actually, sir, oh, yes, it does. it's all about the anticipation, baby! that's why stocks start rising

six to nine months before the economy reaches a turnaround. less work is the new up guy and it will lift our spirits and make us feel better and that will help this recovery fare better than most folks expect. i'm dennis kneale. that's all for us tonight. "cnbc reports" and i are back at 8:00 tomorrow. thanks for being with us. crest pro-health provides... ...unbeatable protection against plaque and gingivitis vs. the leading mouthwash. it kills 99% of germs, helps prevent plaque