In spite of gloom and doom of recent news reports on the state of the nation’s housing, there is plenty of good news, the most recent of which comes from the National Association of Realtors.

Laurence Yun, the chief economist for NAR, had plenty of positive news for Realtors at last month’s conference. Yun attributed much of today’s subprime mortgage problem to greed. Wall Street wanted the 10-12 percent return that subprime mortgages yielded as opposed to the smaller returns from more traditional mortgage products. His take on the Wall Street types: “They gambled. They lost.”

Yun’s outlook for 2008 sees a shift from greedy speculators to serious homeowners. 2008 will be a year of opportunity where there will be serious, healthy business. Furthermore, Yun predicted that the market returns to normal by 2009.

According to Yun, one of the biggest mistakes that reporters make is talking about national trends. Nationally, 2007 was the fifth best year ever on record. Home prices declined about 1.5 percent after a 50 percent run up in prices.

The challenge is that national numbers are pretty much irrelevant. Yun argues that talking about national averages is about as effective as having a national weather forecast. Like the weather, all real estate markets are local. In fact, you may have a buyer’s market and a seller’s market operating within a single market area based exclusively upon price point. Here are the other key pieces of positive news from Yun’s economic report:

1. New housing starts: Even though these are dropping, there was too much building in recent years. The market is simply adjusting to normal supply-and-demand pressures. The inventory is “being controlled which makes stabilization occur more quickly.”

2. Foreclosures: According to Yun, the 41 percent increase in foreclosures has resulted primarily from investor-heavy real estate purchases in Arizona, California, Florida and Nevada. The majority of these individuals are flippers whose investments did not payoff. More importantly, the number of foreclosures in Utah, New Mexico, North Carolina and South Carolina is actually declining.

3. Under-priced markets and superstar cities: Although the coastal markets are still overpriced, Middle America is under priced. Nevertheless, Yun cites a new trend termed, “superstar” cities. These cities will command premium prices, regardless of what the market does. There is so much wealth concentrated in these areas, that measurements are simply not predictive. In addition to London, Paris, Tokyo and New York, Yun also identified San Francisco, Miami and Seattle as potential new superstar cities.

4. The recovery has started: Other than the three states hit heavily by job losses in the automotive industry (Indiana, Michigan and Ohio), the states that first experienced a downturn in the Northeast, are now in recovery. Specifically, Connecticut, Massachusetts, New York and Rhode Island were the first to feel the slump and are now well into a recovery. Furthermore, there appears to be a pent-up demand for first-time buyer properties due to a large number of Gen Ys (born 1977 to 1994) that are now buying their first homes. Falling interest rates will motivate many of these buyers to step into the market now.

5. New jobs and corporate profits are still strong: Corporate profits are still strong with companies as diverse as Microsoft and Jack Daniels reporting close to record profits. Furthermore, the economy has generated 4 million net new jobs and wages are rising.

6. A weak dollar may harbinger more foreign investment in U.S. real estate
Although the decline of the U.S. dollar will end up costing us more when we go overseas or purchase imports, it has resulted in more manufacturing jobs returning to the U.S. It also may mean more foreign investment in U.S. properties as well. Just a few years ago, the Canadian dollar was only worth 70 cents in U.S. currency. Today, the Canadian dollar has been hovering at about $1.05 to $1.10 U.S. What this means is that we can expect more Canadians and Europeans to be purchasing U.S. property, because our prices are approximately 50 percent cheaper than they were just three years ago.

7. Real estate: Still the best shelter: For those agents who represent reluctant first-time buyers, Yun points to some interesting research from the Federal Reserve. Between 1995 and 2004, the average renter accumulated $4,000 in wealth. In contrast, the average homeowner accumulated $184,400. Furthermore, the typical homeowner holds their property for six years. Within this period of time, NAR’s research shows that approximately 97 percent of the homeowners will have a positive equity position after that period of time.

Bottom line: 2008 represents the best window that buyers will have to find excellent deals with excellent financing. Get the word out there. If they wait, prices and interest rates will be higher and the reluctant buyer may be forced out of the market.

The houses in one of Santa Fe’s newest subdivisions might look adobe brown, but they’re actually green.

Each home in the Oshara Village development, next to Santa Fe Community College on the south side of town, has energy-efficient lights and appliances, cellulose insulation and water-saving features. Most homes are positioned to soak in the sun through strategically placed windows, and each house is set up for the easy installation of solar panels if the owner chooses to install them. Yards are xeriscaped to save water, and the village has its own wastewater treatment plant that cycles used water back to lawns and parks to water plants.

With a built-in commercial zone, the village will be pedestrian-friendly. Residents will be able to walk to shops and restaurants, and mingle in a central plaza.

Across town, Homewise, an affordable housing organization, is planning to build about 50 green homes on 15 acres along Old Las Vegas Highway. It will be the greenest subdivision the organization has built yet, with high-performance windows to reduce heating and cooling costs, energy-efficient appliances and low-flow shower heads and toilets.

Downstate in Albuquerque, several builders have come together to build the 140-home La Cuentista subdivision on the Westside. About one-third of the development, which is certified by Build Green New Mexico, will be set aside for open space, construction waste will be recycled, and the homes will feature super-efficient insulation and water-saving amenities.

In Rio Rancho, two green subdivisions are in the works: Loma Colorado and Mariposa both feature extensive open space and multiple energy-efficient features. Like Oshara Village, the two subdivisions will be mixed-use developments, with shops, offices and other commercial enterprises as well as homes.

While the green features of the subdivisions vary, all are aimed at shrinking the ecological footprint of residential development.

“It’s just the smart thing to do,” says Mike Knight, president of Lee Michael Homes and manager of La Cuentista in Albuquerque, which recently completed phase one of its five-phase development plan. “We live in a desert. You leave sensitive areas alone, you leave the drainage intact so that the aquifer can recharge. And it’s good for the homeowner too — you’re looking at something that’s going to gain in value for the homeowner as well as save them money.”

As prices for home heating fuels rise, and as global warming and water scarcity continue to make headlines, more homebuyers are demanding green homes, adds Alan Hoffman, the mastermind behind Oshara Village.

“I see this as a trend nationwide,” he says. “People are concerned about global warming, and it’s a tremendous savings in energy and money.”

Sara Eatman of Build Green New Mexico says the Land of Enchantment is ahead of the green building curve.

“Compared to other states, New Mexico is advancing in leaps and bounds,” she says. “We’ve gone to national green building conferences, and our builders are winning awards.”

Sustainable building can save a significant amount of energy — and money. At Oshara Village, a 2,000-square-foot home will use about 52 percent less energy than a conventional home of the same size, according to a study by the New Village Institute. An Oshara resident who works in the village could see energy savings of between 54 and 59 percent, reducing his or her carbon footprint by about 26,000 pounds of carbon dioxide per year.

A La Cuentista home with solar panels can save a homeowner about 45 percent in energy costs. But every owner of a green-certified home, with its super-efficient insulation and air tight construction, will pay less in energy costs, Knight said.

“There are a thousand things you can do to make a house more efficient, and it just performs better,” he says.

While green homeowners save money, they often pay more for those green features. Knight said building green adds between $15,000 and $18,000 to the price of a home. In both La Cuentista and Oshara, home prices range from about $300,000 to $700,000, depending on the size and design of the home.

But Eatman says those costs are coming down as green building becomes more common.

“It doesn’t really increase the cost that much any more,” she says.

According to a July report by Davis Langdon, a San Francisco-based consulting business that helps architects and builders manage construction costs, building green costs about the same as building using conventional methods and materials — as long as sustainable features are incorporated in the design phase, instead of being added on later.

“Many project teams are building green buildings with little or no added cost, and with budgets well within the cost range of nongreen buildings with similar programs,” according to the report, “Cost of Green Revisited.”

Green building advocates believe the day soon will come when green building is the industry norm, rather than the exception.

“I think, in the near future, all houses are going to be built green in New Mexico,” Knight says.

“It doesn’t have to be an Earthship, it doesn’t have to mean you live in Taos,” Eatman adds, referring to a long-established community of sustainable homes in northern New Mexico. “There are so many more mainstream builders becoming aware of what they can do, and wanting to build a more efficient, economic and smarter home. It’s just logical.”

New government policies and tax incentives are nudging the state toward a green building boom. In May 2006, Santa Fe adopted the “2030 Architecture Challenge” policy, making it the first city in the country to set benchmarks and timelines to decrease fossil fuel consumption in heating, cooling and lighting in all public buildings, with the aim of rendering them carbon-neutral by 2030. Sustainable building advocates say new building codes for residents are not too far off.

In Albuquerque, council members recently passed a green building code, scheduled to go into effect in April. And state and federal tax incentives for both builders and homeowners are adding to the green building momentum as well, Eatman said.

For instance, New Mexico now offers a tax credit for builders of sustainable homes. For Build Green New Mexico’s Gold Level, the maximum possible credit is $11,000 per house. For homes that meet the Leadership in Energy and Environmental Design (LEED) standards, a more stringent certification system created by architects, the maximum possible tax credit is $22,450 per house.

At the federal level, contractors could qualify for a credit of up to $2,000 for using energy-efficient features. That program has been extended through 2008.

“With all of the code changes and things, it’s pretty clear to builders that green building is going to be required in the very near future,” Eatman says. “So builders are trying to get ahead of the wave. It’s a matter of staying competitive.”

There are other signs that green building is gaining ground as well. According to the New Mexico Chapter of the U.S. Green Building Council, which created the LEED certification program, membership in the state group is up 50 percent from last year.Build Green New Mexico, too, is getting more certification requests, Eatman says. And a flip through the Yellow Pages finds several builders and construction businesses that specialize in green building.

While some might question the environmental logic of building new subdivisions at all — even green ones — Knight and Hoffman say it’s about growing sustainably.

“If you told me today there would be no more building, I’d shut Oshara down right now,” Hoffman said. “But growth is going to happen.”

“Cities grow,” Knight agrees. “And I’d say growth is always good if it’s controlled and done well. That’s what green subdivisions are doing. I think wall-to-wall housing isn’t what everybody’s looking for. I think they want to see open space and parks.”

Builders who need to learn the ropes of green building would be wise to begin now, he adds.

“Some builders will have to change their entire plans and way of doing things,” he says. “But this is the wave of the future. It’s what the cities are going to demand, and I think it’s what the public is going to want.”

As we get ready to say goodbye to 2007, it’s worth looking back at the year that was for home buyers.

Home sales are down around 20 percent from last year, according to the National Association of Realtors (NAR). Compared to 2006, when more than 8.5 million existing and new homes were sold, 2007 has seen soaring inventories of existing and new homes for sale, a record number of foreclosures, and the strongest buyers’ market in a decade.

Although sellers aren’t happy, those who did decide to buy found builders who were more than willing to deal on price and upgrades. Investors who tried to unload their properties often found no takers, leading to the largest number of vacant homes on the market since the number has been tracked.

Renters also seemed to be in short supply, dramatically boosting the number of foreclosures, bankruptcies, and, at the end of the year, prompting President Bush to announce a plan to help some borrowers with subprime mortgages avoid that fate.

Clearly, the wind came out of the real estate market, which some observers are calling the worst since World War II, and others claim is the worst since the Great Depression.

While the market is down, it’s not out. It’s just that compared to the last decade, the market moved much more slowly, giving buyers time to compare price and amenities and giving sellers heartburn.

The good news for buyers is that 2008 looks to get a bit worse in many markets. And that means deals are there to be made on favorable terms.

If you’re planning to buy a house this coming year, here’s my annual list of New Year’s resolutions you should consider making:

As a buyer, I resolve to:

1. Get my credit and finances in order.

Plenty of would-be buyers are paying off their credit cards, car loans, school loans and other forms of personal debt. While having personal debt doesn’t mean you can’t qualify for a loan, it can lower the amount of the mortgage a lender might be willing to give you. And, given the current mortgage crisis, lenders are paying close attention to your credit history and credit score.

If you keep one resolution this year, choose to clean up your credit. One of the best things you can do to prepare for buying a home is to make your monthly debt payments on time. Even if you have a lousy credit history, lenders will be more forgiving if they see you’ve gotten your act together in the last six to 12 months.

Federal law now requires each of the three main credit reporting bureaus (Experian, Equifax and TransUnion) to give you a free copy of your credit history once a year.

To get yours, go to www.annualcreditreport.com. At the time, buy a copy of your credit score from Equifax. The cost is under $10, which is still less than buying it through MyFico.com.

2. Get my credit in shape.

Put a lid on your spending, perform “plastic surgery” on your credit cards, and don’t max out any one card (in fact, never charge more than 30 percent of your maximum credit limit) or your credit score will suffer. If you’re going to cancel an account, do it in writing, but you get bonus points on your credit score the longer you maintain a credit account. So a credit card account that you opened in 1984 is worth a lot more than one you opened last month.

Don’t forget that good credit also means job stability. Most lenders require that you work for the same employer for at least a year, and maybe two, before they’ll approve your home loan application. If you’re self-employed, they’ll want to see at least two years of tax returns before you’ll qualify for a conventional loan. If you’re offered a better job in your field, by all means take it. But if you want to buy a home, try not to jump from job to job within a relatively short period of time.

3. Know how much I can afford to spend before shopping for a home.

You have three options when it comes to figuring out how far your down payment and income will take you: You can guess; you can pay a visit to your local lender, who will prequalify or preapprove you for a loan; or you can go online.

Your lender will look at your income, debt, assets and liabilities, and come up with the maximum amount you can spend on a home. Once you know how much you can afford to spend, you’ll avoid making a common, heartbreaking, home-buyer error: looking at homes you can’t afford to buy.

Too busy to visit a lender? There are several Web sites that offer good mortgage information. Try Bankrate.com for a state-by-state look at current interest rates from lenders who work in your area, including online lenders. Every major mortgage lender has a Web site. And, don’t forget to check the rates at your local credit union.

4. Know my neighborhood, and be comfortable with it, before I buy a home there.

Everyone wants to live on the best block in the best neighborhood. Unfortunately, that location may not be in your budget. You might be able to afford the smallest home on the best block, but that won’t do you much good if you need four bedrooms and that home has only two. Balancing affordability with location means you may have to compromise. While you may be willing to compromise on the size of garden you have, you may not be willing to change your children’s school districts.

Start looking at various neighborhoods and the amenities they offer. Is there a park? Shopping? Transportation? A house of worship? Do your friends and family live close by? Be careful not to limit your choice of neighborhoods too early on in the process. Explore new areas and the housing stock and amenities they offer.

Make sure you spend time during different parts of the day and night in the neighborhoods you like. Walk the streets and go into local shops. Visit the neighborhood police department and local schools. Stop by the local park district offices and see what programs and classes are available. Drive the commute from prospective neighborhoods to your job during rush hour. Get to know the neighborhood and its residents inside and out before you buy.

5. Interview at least three brokers before hiring one.

There are traditional agents, buyer agents, exclusive buyer’s agents (who never represent sellers) and discount agents. There are large brokerage firms and small neighborhood shops. You can even choose not to use a real estate agent, although as a buyer you won’t be out of pocket for the cost, so there’s no reason not to use one.

Many buyers today opt to use buyer agents, or buyer brokers, who represent the interests of the buyer rather than the seller. One older study showed that buyers using buyer agents or exclusive buyer’s agents paid less for their home than those who used traditional agents.

Choosing which agent to use — or choosing not to use an agent — can be critical to your successful purchase. Look for an agent whose philosophy and mannerisms are compatible with yours. Look for someone you can trust, with whom you wouldn’t mind spending a lot of time. Look for an agent who has ample experience, and who is knowledgeable about the neighborhoods you’ve selected for yourself.

6. Read and understand all documents before signing them.

So many folks don’t even bother to read either their purchase contract or loan documents. That’s unfortunate, given the enormous legal implications of a home purchase.

Take the time to read all documents thoroughly. Ask an attorney or broker to explain things that don’t seem to make sense. It’s important that you understand what promises have been made and what warranties have been granted, and what implications these documents have for your personal financial and emotional well-being.

If you don’t understand the documents that you are being given and still don’t understand them after the broker has explained them to you, seek help from someone you trust or hire an attorney to assist you in the process. If the broker explains something to you and seems to contradict the document, make sure the broker writes into the document what she told you.