God, I hope not. In more ways than one.
It’s unlikely he’s correct.
The four states hit hardest by the mortgage crisis are California, Michigan, Florida, and Nevada.
The media is always behind the curve on any real event. And notice, the meaninglessness of the median sale price number. If the better homes are not put up for sale because the seller is unwilling to give it to bargain hunters, by definition the median (middle) price will go down even without anyone actually lowering a price. These kind of scare tactics, I am convinced, are part of the writer’s intention to create a lower market because they are trying to buy a home and want it lower. Self-serving is not limited to politicians.
We are seeing the sales here in AZ begin to accelerate and the few bargains dry up. Lookers are coming back and volumes in some areas are exploding, again. One realtor told us she is closing $ 2MM /mo. in homes in nice neighborhoods. Somebody rang the bell.
Good news for some...but in other areas I think further slides will continue. Florida has even come close to bottom yet.
I see houses selling, folks moving in and out.. I also live in one of the less price affected counties in the state, knock on a fault line, urr, knock on wood.
With rates still well down there,, and now some properties and their asking prices,, time to get ‘er done!
Perhaps those with more knowledge can explain this chart.
http://calculatedrisk.blogspot.com/2007/10/imf-mortgage-reset-chart.html
If the above is true then the downturn in R.E. in CA is over for sure, In normal times (not crazy boom times as we had) the average listing time for a home was about 6-12 weeks or 42-72 days. The answer all along was for homeowners to get realistic about the value of their home and that has begun to happen. As more and more homes sell, more and more homes will sell and the inventory reduction will surpass the new homes coming on the market. Price drives demand, lower prices = higher demand and off we go on the next housing cycle which will THIS time be different :-).
It was simply a market correction for an overpriced housing market. Even with a drop in value of over a third of the value, the houses are still a bit overpriced.
Homes are around $140.00 to $160.00 a square foot in my area. They have also reached the affordability index of income vs. rent or own ratio.
I got some interesting information from a realtor in my area of CA. They told me that the banks are pricing the foreclosures a little lower than market value and they are beginning to see multiple bids on these homes which eventually end up being bid up to market value. She said many of these foreclosures receive 10 to 15 bids and some of her clients are getting burnt out on having offers turned down because something better was offered on a house they wanted. Also, some foreclosures may be 10 to 20 grand under what someone who has maintained and upgraded their house is asking, and in the end if you have to put 20 to 40 into a poorly kept and run down foreclosure it may not be such a bargain after all.
Uh... how many times so far have people called a “bottom” to the housing deflation and the attending bank problems?
One of these days, such people will be right, simply because housing prices won’t go to zero, but to call a bottom now ignores the wave of Option-ARM loans which are just starting to reset.
We’re mostly done with the sub-prime problems, which might lead to a temporary situation of relative stability, but to look at the situation from the credit/bond side of things, we’re just about to the halfway point.
There’s now a whole new set of problems that will be a drag on California housing: banks, now suffering third degree burns, are going to actually require such old-fashioned and outdated nostrums as actual down payments (gasp!), real credit checks (the horror!), appraisals that are done by people not involved with making the loan, etc.
Oh, and banks might actually stop lending to people who have a history of not paying loans back. What a business plan!
This is going to slow down any recovery to previous levels.
Compounding the problem was the size of homes, designed to facilitate multiple family occupation, the hall mark of blue collar anchor babies and their illegal alien extended family. Many tracks featured cheap homes, priced well above $600K because they were multistory with 5 to 7 bedrooms.
I saw a chart on the net last week that shows “as reported GDP” vs “GDP minus M.E.W.”(mortgage equity withdrawal)for the years 96-06. If what it shows is truthful then folks, our economy has been in the tank since 2000. 01-02 negative growth and 02-06 about 1%/yr.
It seems to me that giving away our manufacturing economy, which adds value, to becoming a service economy of burger flippers, strippers, computer programmers, gamers, lawyers, mowers, real estate flippers and debtors that we have gone down the scuppers.
Homes once prohibitively costly are now affordable to a wider spectrum of the people. The market does its work efficiently and without gubberment interference.
Bump
The only way out for the feds is through mega inflation. how else can they pay off a 54 trillion dollar debt? I think they will just keep printing up money. After all it is free. The cost of ink..paper and the full faith and credit of the US federal government. Where are those million dollar bills???