No, Virginia, the Housing Market Has Not Yet Bottomed
In depth WSJ column that essentially states that there is more downside to come in Residential RE, and how many economists were fooled by the price action:
“Home values posted the largest decline in the first quarter since late 2008, prompting many economists to push back their estimates of when the housing market will hit a bottom.
Home values fell 3% in the first quarter from the previous quarter and 1.1% in March from the previous month, pushed down by an abundance of foreclosed homes on the market, according to data to be released Monday by real-estate website Zillow.com. Prices have now fallen for 57 consecutive months, according to Zillow.
Last year, the housing market showed signs of improving as price depreciation slowed in some markets and stabilized in others. In response, a number of economists began forecasting that housing would hit a bottom in late 2011, then begin to recover. But the improvements, spurred by federal programs that gave buyers up to $8,000 in tax credits, proved fleeting. Sales collapsed when the credits expired last summer, and prices in many markets have been falling ever since.”
The full article is definitely worth your time . . .
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Previously:
A Closer Look at the Second Leg Down in Housing (June 24th, 2010)
Source:
Home Market Takes a Tumble
NICK TIMIRAOS And DAWN WOTAPKA
WSJ, MAY 9, 2011
http://online.wsj.com/article/SB10001424052748704810504576309532810406782.html
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May 9th, 2011 at 9:38 am
So much for the Spring selling season. Maybe next year, er, decade……….
May 9th, 2011 at 9:57 am
Interesting. On April 26 Case-Shiller only reported 3.3% YOY drop from February 2010 to February 2011.
May 9th, 2011 at 10:09 am
On one hand I’m a little disappointed that my house is worth only what I paid for it and might be worth less in a couple of years. On the other hand, it’s paid for and some massive bargains might be available in a couple of years. Where will be a good place to move with low taxes, good weather, no tornadoes or hurricanes or flooded basements, and still have a double glut of homes in good shape at low low prices? Is it too early to be thinking a couple of years down the road?
I’ve never owned a 2nd home. Whats the downside. How do you look after the empty one for an extended period?
May 9th, 2011 at 10:12 am
“How do you look after the empty one for an extended period?”
Buy a nice one in a great area, DH. I’ll take care of it when you’re not there.
May 9th, 2011 at 10:24 am
Cramer calls a housing bottom LOL
http://www.ritholtz.com/blog/2009/06/cramer-calls-a-housing-bottom-yet-again/
May 9th, 2011 at 10:26 am
@dead hobo
The wealthiest person I know (who is also the happiest, go figure) will soon downsize out of his now empty nest. and will rent for, as he has claimed, for the rest of his life. And this coming from a guy who made his fortune in RE. He has never owned a second home, and scorns the concept at any opportunity.
May 9th, 2011 at 11:32 am
@dead hobo
Denver. Especially nice if you enjoy skiing.
May 9th, 2011 at 12:54 pm
Good for first time home buyers, even without the tax credit. Crummy for those home owners hoping to sell anytime soon. Maybe renting is the better of the two evils?
May 9th, 2011 at 2:36 pm
Owning two homes in this market is a looser. You take on double the expenses and double the risk. The folks with an extra home will be the first to loose the mortgage interest deduction.
May 9th, 2011 at 2:45 pm
Sage Buffett said housing will recover this year, besides we have a presidential re-election rescue package coming soon….
May 9th, 2011 at 4:34 pm
“besides we have a presidential re-election rescue package coming soon….”
What do u base this on? Are you thinking principal reduction? Do you think the bankers care who wins the White House?
May 14th, 2011 at 7:09 pm
Here in SoCal there are few existing home sales and practically no new home sales visible to the anecdotal observer. One striking thing, hits you between the eyes: abundance of “For Lease” or “Available” signs in Malls for retail/commercial real estate. Where is the bottom? Nobody really knows, not even Buffett!