Patricia Orsini

The national housing market may be in the doldrums, but Manhattan real estate is holding its own, at least for now.

Sales figures for July show that median prices on New York City apartments are up and inventory is down. And with the median sale price at $900,000, there doesn't seem to be a lack of money to spend on real estate. That contrasts with the national numbers for July, which show existing home sales fell 27 percent and new home sales fell 12.4 percent in July.

No one would argue that Manhattan's real estate market is not like the rest of the nation's. But experts are still asking: Can Manhattanites sustain this uptick in sales?

Today's homeowners aspire to ... rent?

That's what the majority of respondents to a Harris Interactive poll said when asked about attitudes toward renting. Seventy-six percent of those who responded to the May survey said that they believe that renting is a better option that buying a home in the current real estate market. Most interesting: 78 percent of those responding to the survey were homeowners.

Even with mortgage rates at historic lows, it seems that more and more people are considering putting their hard-earned dollars into a security deposit rather than a down payment on a home. With the national unemployment rate stuck at 10 percent, people are cautious about committing to a 30-year mortgage.

Tenant Steve Hamilton told The Wall Street Journal that since selling his Carlsbad, Calif., home two years ago, he prefers to rent. "When I see a steady increase in local jobs, that's when we'll step back into the market," he said. His current rent is just one-half of what he used to pay monthly for his mortgage.

While experts predict that the rate of foreclosures in 2010 will exceed those in 2009, there is some good news. RealtyTrac, an Irvine, Calif.-based data company, reported that the foreclosure rate dropped by about 5 percent during the first half of 2010.

Still, in the first quarter of the year, one in seven mortgages was delinquent or in foreclosure. That's the highest rate since 1979, when the Mortgage Bankers Association began keeping records. Foreclosures remain high in several states, including Florida, California and Arizona. In Michigan, one in every 237 homes is in some stage of foreclosure, a number that is expected to grow.

On the upside, that means a lot of deals are out there for homebuyers who have the patience and energy to tackle buying a foreclosed home.

The government wants to get out of the mortgage business. But can they do it without bringing a halt to what is already a stalled housing market?

This morning, industry leaders are discussing ways to reform Fannie Mae and Freddie Mac as part of the Conference on the Future of Housing Finance, which is being moderated by Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan in Washington, D.C.

For more conference-related coverage on AOL Real Estate, read these columns by housing experts Alyssa Katz and Jeff Corbett.

Panelists include legislators, community activists, academics and bank executives, all of whom have an interest in the outcome of the reform process, including Barbara Desoer, president of Bank of America Home Loans; Mike Heid, co-president of Wells Fargo Home Mortgage; and Susan Wachter, a professor of Real Estate, Finance and City and Regional Planning at the University of Pennsylvania's Wharton School. Topics will cover housing finance reform and the broader financial markets, as well as housing policy goals.

When the financial fallout hit the market in 2008, the government bailed out Fannie and Freddie along with a lot of private banks. The banks have been able to pay back what it borrowed, but with Fannie and Freddie, the problems were so deep, the government is still pouring taxpayer dollars into the agency.


But that doesn't mean the system is repaired. Earlier this month, Geithner said, referring to Freddie and Fannie, "We have a system that obviously didn't work, and there are fundamental aspects of the current system...that require sweeping fundamental change." What kinds of changes might Geithner be referring to?

The largest landholder in the Florida Panhandle is suffering huge losses due to the BP oil spill. And it's looking for someone to pay.

The St. Joe Company, a real estate developer in Florida that owns 577,000 acres of land near the Gulf Coast, filed a suit against Halliburton Co. on Aug. 4, asking for more than $1 billion in damages. St. Joe filed the complaint against the oil-services company, it said, because Halliburton, which helped to build the oil well, "ignored multiple warning signs" that the rig was unsafe and could have helped prevent the disaster. Halliburton is perhaps best-known as the company Dick Cheney ran as chief executive before becoming vice president under George W. Bush.

Although the well was owned by BP, St. Joe said in the complaint that Halliburton's work encasing the well in cement was not properly managed, "allowing oil and gas to escape the well, which caused the catastrophic blowout."

If there is anything that will help sell a property or a neighborhood, it's a celebrity. And the Finger Lakes Region of central New York State got a boost when rumors started spreading last month that John Travolta and wife Kelly Preston were looking at a home on Keuka Lake.

Whether Travolta ever expressed interest in the area or not is beside the point -- it has brought attention to an area that many people say is a hidden jewel of the vacation home market.

USA Today said as much when it featured the region in a spread on second homes last month, calling it best for affordable waterfront ownership. And while it might not seem affordable to the people from upstate New York, the prices for waterfront property along the Finger Lakes can seem downright cheap compared to what people pay along Long Island Sound, the Hamptons or the Jersey Shore.

While there are plenty of waterfront properties in the region priced at $1 million or more, there are also a good number of offerings that can be had for between $100,000 and $200,000.

With the news that first-time jobless claims fell more than expected last week, economists were once again trying to determine whether this will lead to growth in the economy -- and the housing market -- in coming months.

The Labor Department reported Thursday that the number of workers filing new claims for unemployment benefits declined by 11,000, to 457,000 for the week ending July 24. While that sounds like good news, it is just one number in the larger jobs picture.

The department also reported that the number of workers who continue to claim unemployment benefits increased by 81,000. And the 9.5 percent national unemployment rate will not budge.

A better job market is key to an improved housing market, say many experts, who are looking for good news wherever they can find it. The question is, did they find it in the most current numbers?

A tough real estate market coupled with a tough job market means more people need to sell their homes at a price they may not want to take for a job that they need to take.

This new reality complicates the sell-a-house/buy-a-new-house paradigm that has been the norm for relocated employees. Sellers are weighing their options, asking whether they should take what they can get in a market that may not be as generous as they would like, or hang onto their home and go into the landlord business, as they wait out a market they hope will improve.

The right decision depends on a lot of factors, the most important of which is a determination of what is happening in the seller's local market, said Mitchell Hochberg, principal of Madden Real Estate Ventures, which advises residential and commercial real estate developers.

"The real estate market is a very local market," he said. "The homeowner needs to look at the trends in selling to see where the market is now: how any houses have been sold, in what price range. Find out if your market has started to turn the corner, and what it looks like over the next couple of years."

In the winter of 2009, Linda Powers was ready to retire and move with her husband from her bucolic community in the Colorado resort area of Crested Butte to Denver, closer to her children and grandchildren. But her retirement plan was based on her selling her 8-year-old home, once assessed for $1.2 million. She wanted to sell her house, but she ended up renting it to vacationers.

"It was the right time to let it go, but the timing was bad," Powers says. Because she considered her home her retirement fund, she said, she needed to sell it for close to that $1 million mark. But in this market, she expects she could only get about $800,000. After selling her business, she couldn't afford to keep paying the $3,000 mortgage. Unwilling to sell for less than she wanted, Powers turned to a solution that is becoming more popular with homeowners who find themselves in a tough housing market: She turned her home into a vacation rental that would generate enough income to help her make mortgage payments and allow her to continue on her retirement path.

Powers is now charging up to $400 a night for the three-bedroom, 2.5-bath home, through VRBO.com, a division of vacation rental site HomeAway Inc. She and her husband are now able to cover 75 percent of the mortgage.

"I got a lot less than I had hoped when I sold my business," said Powers, who had owned a toy store in Crested Butte for 31 years. "I needed to sell the house, but I didn't want to give it away at the wrong time."

Powers is just one example of those who have discovered a way to avoid financial straits as they navigate through the tricky waters of the real estate market.

Do you really need to show your mortgage broker a marriage certificate to prove that extra cash in your bank account came from a legitimate source?

Yes, if you want to be sure your mortgage application will be approved.

This is just one type of documentation prospective home buyers should be prepared to produce as they negotiate the new rules of the mortgage application process.

Adhering to these new rules means prospective homebuyers should prepare themselves for the long haul when it comes to getting approval for a mortgage.

Of course, these new rules are really the old rules just being enforced, says Todd Huettner, a mortgage broker in Denver. "Most borrowers don't know what a full loan looks like. If you purchased a house less than 10 years ago, you didn't do a full loan application. Most people don't understand what the rules really are."

When the International Monetary Fund warned of a potential double dip in the housing market last week, it raised the question yet again of what would constitute a double dip, and how will it affect homeowners?

The IMF pointed to the fact that, while signs of recovery are stronger than expected, the backlog in foreclosures and the number of mortgage holders that are still underwater, as well as still-high unemployment, "pose risks of a double dip in housing."

Indeed, with even the rich choosing strategic default over mortgages on McMansions, and celebrities selling at a discount, it would seem that the housing market is still struggling to gain momentum. While the tax credit moved some inventory in the months prior to its expiration at the end of April, sales came to a screeching halt, and even though mortgage rates are at historical lows, tougher lending rules and gun-shy buyers are pushing a big "pause" button on house sales.

But does this mean a double dip in the housing market is in our future?

Whether one considers China's housing market as "on the brink of collapse" or in the midst of a "healthy correction," all eyes are on what was until recently one of the more stable, and growing, global economies.

The fears are based on China's housing bubble, which is not unlike the bubble the U.S. and other countries experienced in the past two years.

What makes all this so scary for the U.S. is the concern that if China's growth slows, then their demand for U.S. goods will drop. Already, a drop in construction means less demand for steel, oil and other commodities.

Is New York City in for another drop in real estate prices? That's one interpretation of the most recent Case-Shiller numbers, which analyze the health of residential real estate.

The prediction, by hedge fund manager Bruce Krasting, claims a drop in consumer spending will be the outcome of the stalled housing market.

It's not all that surprising a prediction, given that a double-dip in the housing market, as well as a double-dip recession was discussed by uber-prognosticator Meredith Whitney in an appearance on CNBC's Squawk Box two weeks ago.

Both Krasting and Whitney have pointed to the fact that a good number of the people whose homes have defaulted on their mortgage are waiting out the foreclosure process, which, in New York, can go on for up to two years. In the meantime, they have not been paying a mortgage.

"There is substantial evidence," Krasting writes, "that these people are buying iPhones and going on vacation with the money they are saving by not paying the debt."

Now that major banks including Bank of America, Wells Fargo, and MetLife Bank have eliminated fees for reverse mortgages, borrowers are taking another look at this option for financing retirement.

While a reverse mortgage sounds like a good deal -- you get to stay in your home and tap your equity, rather than selling your home to get at your nest egg -- there are some things you should consider when deciding whether this is the right move for you.

If you are 62 years old or older, and have either paid off your mortgage or have a large amount of equity in your home, you can consider a reverse mortgage. But first, understand that these loans are not one-size-fits-all.

Depending on your current financial situation and the value of your home, this could be a great way to help fund retirement, or a path to more debt.

The city of Nashville is taking matters into its own hands when it comes to helping residents recover from the devastating floods this past May, offering residents a number of options to obtain additional funding to repair and rebuild.

"Because this was a 1,000-year flood event, the waters reached homes well outside the flood plain," said Loretta Owens, executive director of The Housing Fund, an affordable housing organization in Nashville that will administer the funds. "This meant that most people did not have any type of flood insurance."

Those whose homes were damaged have spent the past two months sorting through a morass of paperwork and bureaucratic roadblocks.

The new relief option offers relief for those who have exhausted federal assistance options.