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housing recovery: Is the Housing Recovery Real or Imagined? - 02/27/12 02:49 PM
 
With many economists claiming that the real estate market is stabilizing, some are asking, “Is the housing recovery real or imagined?” While there is some data to support an affirmative reply, a careful analysis shows us that the U.S. housing market may still be on life support. I believe it’s still too early to call a recovery in housing, and suggest that we look at some facts.
 
Positive Indicators: 
* Homebuilding stocks are surging.
* New & existing home inventory has fallen to the lowest level in 6 years.
* The median price for a new home … (10 comments)

housing recovery: What if the Housing Market Has Already Recovered? - 07/21/11 04:59 PM
What if the housing market has already recovered?  What if today’s sluggish market is the rate at which homes will be sold for ten years or longer?  Could it be that the sales levels of the past decade were just an anomaly fueled by loose lending restrictions and the attraction to phantom “investment” opportunities?  The bursting of the housing bubble was inevitable, and an attempt to stimulate a return to the sales levels of 2005-2006 would be to inflate yet another.  Today’s home sales are much closer to  “normal” than those of 2005-2006; and it’s time for sellers, Realtors® and builders … (76 comments)

housing recovery: Looking to Recoup Your Home’s Lost Value? It’s not Happening—Ever! - 12/14/10 06:47 AM
I’m still surprised by the number of people who believe that home values will magically return to those of 5 years ago; and if you are one of those looking to recoup your home’s lost value, it’s not happening—ever.  How can I be so certain?  It’s pretty easy once you look at the facts.
 
Home values have historically appreciated at a rate near the rate of inflation—once you adjust for the differences in size and discount for geographic anomalies.  However, that trend changed when we began the recovery from the “tech-bubble” of the last decade.  As the Fed encouraged easy … (105 comments)

housing recovery: Forget Looking for a Housing Bottom - 11/10/10 11:19 PM
While the pundits and economists have begun making projections on when we’ll begin to see home prices increasing, we can forget looking for a housing bottom. Macro projections may make for interesting headlines, but what homeowners want to know is when the price of THEIR home will increase; and the answer to their question could be: NEVER.
 
Much of the past year’s home price fluctuations resulted from the Housing Tax Credits and the nation’s widely varying unemployment rate. Once the Tax Credit expired, prices in most areas returned to their downward trend. However, some areas of the country—the area surrounding … (67 comments)

housing recovery: Burst Bubbles Don't Re-inflate - 09/02/10 08:42 PM
Those awaiting the "recovery" and anticipating a return of their home's pre-recession value will probably have a longer than expected wait. Home prices of 5 years ago were artificially inflated by the housing bubble, and burst bubbles don't re-inflate. A couple of examples can be seen in the stock market bubble that led to the Great Depression and the Dot-com crash of 2000.
 
The Roaring Twenties and the Dot-com bubble created many pseudo investors who for a brief time may have profited handsomely, but fortunes were also lost when the bubbles burst. And a look to the stock market trends … (26 comments)

housing recovery: The Other Shoe May Already be in the Air - 07/31/10 03:10 PM
Those hoping for a housing recovery may have to wait a bit longer as the latest numbers seem to indicate the potential for further drops in prices. This is especially troubling for sellers and somewhat disheartening for those who may have recently purchased.
 
With the inventory of existing homes increasing, and expected to rise significantly once the sales numbers for July are released, the increased competition will place additional downward pressure on prices. Should inventory numbers again rise to double digits, which some are predicting, the recent “spring surge” will soon be seen as an anomaly, not a recovery.
 
… (15 comments)

housing recovery: It Will Take Years For Home Prices To Return - 04/09/10 09:33 PM
An article in MarketWatch has just reported the cold, hard facts I’ve been sharing for the past few months; it will take years for home prices to return. Reporting on a study done by HSH Associates, a financial publishing house, the article addresses the 32.6% drop in home prices as reported by Case-Shiller. And using those numbers the study creates a fictional scenario for a home purchased at the housing peak, with the price not recovering until mid 2022.
 
The article also presents some facts and analysis from First American CoreLogic that shows a more rapid recovery for the typical … (27 comments)

housing recovery: Is The Housing Market Improving? - 11/22/09 04:33 PM
Is the housing market improving? According to Elizabeth Warren, chair of The Congressional Oversight Panel, it’s not. While the market has shown signs of improvement in some areas, the overall picture is still quite grim. According to Warren, as many as 10 to 12 million homes could be lost to foreclosure, the consequences of which could be “disastrous.”
 

Continued foreclosures will cause a ripple effect throughout the economy, as homes in those areas hardest hit see values slide even further. In a recent report, Warren described the government’s foreclosure modification efforts as “inadequate,” but it appears that nothing will … (16 comments)

housing recovery: The Effect Of Unemployment Upon Housing For 2010 - 10/02/09 07:34 AM
For the eighth consecutive month, year over year job losses have increased in all 372 U.S. metropolitan areas, and many are concerned about the effect of unemployment upon housing for 2010. How do job losses relate to the recovery and, more importantly, to the coming year? As a lagging indicator, employment is said to follow the economy, so it’s logical that we not expect joblessness to decline until the economy is improving. However, while employment may follow economic trends, it is an important indicator of what we can expect in the short term; and the relationship to the housing market is … (96 comments)

housing recovery: Housing Predictions For 2010 And Beyond - 09/20/09 05:15 PM
Okay, I’m going to do something I normally avoid; I’m going out on a limb and publicize my housing predictions for 2010. While I occasionally discuss general trends and opinions about the market, I think it’s important for all of us to have as much information as possible in order to properly plan our futures. And while this is only my opinion, after all, it’s the only one I can offer; it’s based on 4 decades of experience combined with careful observations of current trends and conditions. Here is what I see for the future of housing:
 
I think the … (206 comments)

housing recovery: The Housing Bottom We've Reached Is Quicksand - 08/31/09 06:56 AM
Recession over? Recovery on the way? Housing on its way back up? Don’t prepare for the boom just yet. While the talking heads—they’re called that for a reason—are focusing upon a few bits of positive economic news, the economy still continues its slump.
 
I think it’s important that we be aware of our economic reality rather than to ignore the facts, focusing upon “rosy” news reports and wishful scenarios that may never come to pass. Awareness of the reality is fundamental to making rational and prudent business decisions. I want the facts, and will create my goals based upon what … (10 comments)

housing recovery: Will The Shadow Inventory Affect The Housing Recovery? - 08/03/09 02:57 PM
While we keep hearing references to a mysterious and uncounted inventory of homes, the important question is: Will the shadow inventory affect the housing recovery? The answer is: Maybe. As most have discovered, this recession is anything but predictable, and forecasts from the experts regularly miss their mark.
 
Most of those experts, however, have expressed concern about how the so-called shadow inventory might impede a housing recovery. The difficulty lies in getting a handle on the actual numbers.
 
There are 3 groups of homes in this category:
• Bank owned homes which are not yet on the market. … (9 comments)

housing recovery: Economic Recovery? Where Will It Come From? - 07/18/09 02:36 PM
Many recent headlines have trumpeted the economic recovery, but what they fail to tell us is: Where will it come from? As the stock market responds to earnings reports from Goldman Sachs, J P Morgan, and reports that China’s economy is experiencing strong growth, the financial talking heads and government “experts” seem a bit inebriated on their own intoxicating concoction. They want us to believe that recovery is just around the corner (Of course they’re also telling us that we may just need a little more stimulus).
 
The problem is: Wall Street bankers don’t add to the GDP; they don’t … (8 comments)

housing recovery: Cliff Diving And Silver Linings - 06/24/09 02:17 PM
While sales of existing homes have begun to show some evidence of life, new home sales appear to be practicing the art of “cliff diving.” Sales of new homes reached a new record low for the month of May, and builders across the U.S. are struggling to make ends meet. But why aren’t the ratios between new and existing homes comparable? I believe there’s one major factor, and that is price.
 
Builders who are still marketing homes built during the past year or two, have a set cost in those homes, and are generally unwilling to sell them at a … (5 comments)

housing recovery: Housing Prices Follow Unemployment - 06/21/09 12:07 PM
In a post today in Calculated Risk, there is an interesting graph that tracks the jobless rate and housing prices. And the graph shows what most of us already knew. Housing prices increase during periods of high employment and decrease when jobs are scarce. It‘s really a pretty simple concept, when people have more money, they drive up prices of goods, services, and housing.
 
What this tells us is that we’re not likely to see stabilization in the housing market until the jobless rate shows a significant decline. And that isn’t likely to happen until next year at the earliest. … (4 comments)

housing recovery: Builder Sentiment Declines. No Kidding! - 06/15/09 01:33 PM
In an article in MarketWatch today, it was reported that homebuilders had grown a bit more pessimistic about future prospects. Duh. With only one out of six builders perceiving the current market as good, the decline reflects the first reversal since January.
 
To expect builders to feel positive about this market would be irrational. Builders realize that three ingredients are needed in order see any significant increase in the demand for new homes. First, the glut of existing homes and foreclosures must be reduced; we must stop the continual bleeding in foreclosures; and we must see stabilization in the job … (3 comments)

 

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