Tops and Bottoms

The news today that foreclosures may have peaked spawned the headlines "Lee's housing market bottoms out."

Working in the industry and studying the market intently I often sit back and wonder what this means. Correctly put I believe that it should say Lee's housing market may have hit the TOP of the foreclosures. (Maybe)

We are really looking for different signs that point to recovery. At the end of the article there is a mention that baby boomers may in a couple of years come back into our market and revitialize it. I would argue that they already are!

The reason they left or stopped buying in the first place was our market became overpriced and was seen as overvalued. Our cost of ownership put many out of the market with insurance and tax costs. Now as our market corrects we are seeing the buyers come out and buy. Many are baby boomers from all over the country. Evidence of this was seen in the recent liquidation sale at Coral Lakes.

We may be seeing the top of the foreclosure market only time will tell. We need to see the top of the inventory growth and we have not yet seen that as our inventory grew again in March to just over 16,150 for single family resale homes. Sales were good but no enough to create a drain on the inventory.

We are feeling and seeing the bottom of the builder market as they are building and selling as low as we will see. As fuel and transportation costs rise so will builders costs and so will the cost to the buyer. If there is a builder with inventory or putting footers in the ground today, it may be the bottom for this sub-market.

We still have to work through the bank sales and short sales and this process is like trying to suck peanut butter through a straw.

Sellers are still hurting adjusting to what the market will offer for their home. This is hard as these foreclosures are really putting pressure on prices.

These tops and bottoms are all good signs just like watching a wound heal. Our market is healing and buyers are starting to realize that the deals are here and now.

Michael Polly - Vice President Denny Grimes and Company