Have We Touched The Bottom Of The Real Estate Market?
One thing about societies reaction to bad news, we always react the worst when after the bottom has passed. Barrons.com has an article today on why many experts outside of the hyperventilating media are thinking that we are quickly approaching the bottom of the market nationally or all ready there.
Take a look at this…
YES, THE SUPPLY OVERHANG still is humongous, but at least the numbers are moving in the right direction, as even Treasury Secretary Henry Paulson noted last week. Speaking at a Federal Deposit Insurance Corp. conference, Paulson declared that “we are well into the adjustment process.” Inventories of new single-family homes are down 21% from a 2006 peak, he observed, while “existing-home sales appear to have flattened over the past several months, indicating that demand may be stabilizing.”
Still other numbers suggest prices are close to bottoming. The S&P/Case-Shiller Index for April, released just last month, showed the biggest year-over-year price decline yet, of 15.3%. Buried in the numbers, however, and widely ignored in the media, was the news that home prices actually rose, albeit slightly, between March and April, in eight of the 20 markets covered by the index (Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Portland, Ore., and Seattle). This was in sharp contrast to the readings for March, which showed prices falling in 18 of the 20 surveyed markets. Also, the pace of monthly price declines is starting to slow in most of the markets with negative readings. via Barrons.com.
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Comment by house flipping on 15 July 2008:
This is good news. Now if we could get the mortgage companies back in business things will return to normal.
Comment by Corey on 15 July 2008:
Not even close to the bottom. I think anyone who is saying that we are nearly there or already hit bottom are simply spreading misinformation. Optimism is not an option here.
Comment by Brian Patton, CCIM on 18 July 2008:
I agree that we are close to the bottom. However, “close” is a relative term and realistically we won’t start rebounding until late spring ‘09. I went to a really good seminar with two of the best economists recently and they gave some interesting ‘08-’09 outlook predictions. I posted their comments in this linked blog.
http://www.capitallistings.com/focus-bad-news-creates-problems-markets
Comment by Tom Royce on 18 July 2008:
I think that you are probably correct Brian, but the formation of bottoms tend to take a while. So while we may be hitting the bottom it will also take a good part of the slow winter season to solidify and then next spring it will rise when people are comfortable that the bottom is solid. Banks will also open up the lending doors when they feel comfortable that housing has stopped declining and the risk is reduced.
Comment by Jon Griffith on 19 July 2008:
Firstly, I don’t believe we have a real baseline for normal. The market’s normality is evidenced in how erradic it can be over time. It’s always either up or down. None of us have a crystal ball, but it’s clear in areas of Phoenix and Gilbert in Arizona that sales have increased but prices have only leveled off. Some areas in Scottsdale have already shown signs of rebounding. We aren’t going to see the curve go down like it has, and history shows that it will go up over time. Buy now…it will be the best investement you have ever made. The longer you wait, the less return you’ll see down the road. Sure, you may see a price dip, but if you’re in it to get rich quick, don’t get in. Buy for long-term ownership. That is what builds wealth.