Have We Hit the Bottom of the Housing Market? Anecdotal Evidence Says Maybe
Two pieces of anecdotal evidence says that we well may have. First, our good friends at Business Week dedicated their edition to the perils and pitfalls of the housing market. Even Dean Foust, the erstwhile reporter who has been following the market closely notices the risk in doing this issue.
When major magazines publish a cover story on a major trend, it is often weighing in late and hence, the cover inadvertently marks a turning point. Kinda a version of the old “Sports Illustrated Jinx” where the star pitcher being profiled on the cover goes out and gets bombed the next week in a big game.
I admit that BW has suffered its share of covers that were poorly timed. But anybody want to place a bet that the housing industry turns upward for good next week?
Meanwhile, reports of a turn around in mortgage demand and analysis by a Wachovia analyst think that signs are pointing to the market rebounding to a greater or lesser extent.
The Mortgage Bankers Association’s index of applications to buy a home or refinance a loan jumped 8.1 percent to 656.5 from 607.1 the prior week. A gauge of demand for credit for home purchases rose 7.4 percent, and the average rate on a 30-year fixed mortgage fell for the fourth consecutive week, the group said today.
A resilient labor market and lower home prices may support sales and eventually help reduce the glut of unsold properties, economists said. A report last week showed Americans signed more contracts to buy previously owned homes in June, a sign the weakness in the housing market may not get much worse.
“We’re at the bottom right now in housing,” said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, North Carolina. “The biggest declines are over.” via Bloomberg.com: U.S..
So what do you think, is this a dead cat bounce or have we seen the bottom?
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Great blog, keep the great content coming! 
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Pingback by The Feed Bag - I Haz A Morgidj on 8 August 2007:
[...] Tom at The Real Estate Bloggers wonders Have We Hit the Bottom of the Housing Market? Anecdotal Evidence Says Maybe [...]
Comment by Robert Coté on 8 August 2007:
The Big Picture and Calculated Risk were all over this today. There isn’t even any evidence that this bouncing off an upper story balcony has slowed the plunge.
Comment by Real Estate Problem on 9 August 2007:
While I don’t believe that the worst is over yet, the housing market will start recovering as early as next year. Check out an interesting blog post entitled “Can the Fed Help Save the Sinking Real Estate Market?” at http://www.realestateproblem.com .
Comment by Rhea on 9 August 2007:
I’m a big believer that we are nowhere near the bottom of this. In my hard-hit community of Boston, for example, the foreclosure rates are sky-high, with more to come. All of the properties that end up being owned by the banks, plus all of the inventory from our recent sloooooww selling seasons, needs to evaporate before prices can begin to come up. I believe it will be 2009 before a hint of recovery will be detected.
Pingback by Good to Go Pile . . . « Trading for the Masses on 9 August 2007:
[...] Have We Hit the Bottom of the Housing Market? Anecdotal Evidence Says Maybe [...]
Comment by glennont on 12 August 2007:
Dead cat bouncing off the side the cliff
Raging river below
Dead cat bouncing the whole way down
And such a long way to go
Comment by jt on 13 August 2007:
We have a very long way to go and anyone that tries to tell you otherwise is either ignorant and/or intellectually dishonest.
A house is a nice place to live and a Lexus is a nice car to drive…neither is a good investment by any stretch of the imagination.
A good investment is liquid, has low transaction costs, is not expensive to maintain, and appreciates more than inflation. The Vanguard 500 fund comes to mind and real estate does not. Think about it.
Cheers!
Pingback by June 15 - NY manufacturing slump deepens in June - Housing Market Index falls “unexpectedly” - Cisco and Alcatel oppose ‘Buy American’ broadband requirements - Dallas to layoff 700? - US Airways to cut 400 flight attendants - USPS on 15 June 2009:
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