No Signs of a Housing Bottom

by: Jordan Kahn August 14, 2008    
Jordan Kahn

Jordan Kahn

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For those looking for signs of a bottom in the housing market, today's NAR Metropolitan home sales report for Q2 offers little hope.

Overall, single-family home sales in the U.S. fell -7.6% in Q2. The strongest region was the Midwest (-0.9%) while the weakest region was the West (-17.4%). Here are some of the top and bottom performers:

Top 5

  • +8.9%: Yakima, WA
  • +7.1%: Charleston, WV
  • +6.0%: Des Moines, IA
  • +5.1%: Greenville, SC
  • +4.7%: Buffalo, NY

Bottom 5

  • -35.6%: Sacramento, CA
  • -33.1%: Ft. Myers, FL
  • -32.7%: Riverside, CA
  • -29.5%: Los Angeles, CA
  • -23.9%: Anaheim, CA

Other notable cities:

  • -5.3%: New York NY
  • -9.0%: Chicago, IL
  • -10.8%: Boston, MA
  • -16.8% Washington, DC
  • -17.0%: Cleveland, OH
  • -19.1%: San Francisco, CA
  • -19.3%: Miami, FL
  • -22.5%: Phoenix, AZ
  • -23.6%: Las Vegas, NV

Obviously, states like California are in a world of hurt. But any signs of a bottom in the housing market overall remain elusive at best. This report for Q2 actually is an acceleration in the pace of declines. First we need to see signs of stabilization before we can start talking about a bottom, and then possible appreciation.

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This article has 5 comments:

  •  
    Aug 14 05:33 PM
    Thanks. Also, once the bottom is actually reached, no telling how long it will take to see an upturn or how robust the upturn will be. We are probably in a once-in-a-lifetime event.
    Reply | Link to Comment
  •  
    Aug 14 10:03 PM
    After 4,321 calls for a bottom it is nowhere in sight.
    Furthermore, no one seems to be addressing the fact that banks are looking for 20% equity and working families are simply not going to have it. Last year I was living in a $400-500K neighborhood in Birmingham, AL and was surprised at a community picnic that a group of people were saying if they needed $2,500 they didn't know how they could get it. Yep, they had the mc mansion, they had the leased BMW, the boat, the jet skis, but no cash. I was shocked, but it seems t be a trend over large portions of the country. If I am correct, then I don't know how we can get out of this mess.
    Reply | Link to Comment
  •  
    Aug 15 01:29 AM
    Remember we're only a couple years from when things were topped out. Get over it people, this is a cycle and it will take a little time.
    Reply | Link to Comment
  •  
    Aug 15 11:29 AM
    well as someone who works at a Vulture shop buying Commercial Real Estate debt and REO, as well as bulk packages for homes, land lots, finished lots, ecetera . . . This is my take there is some level where investors like myself is willing to buy and hold. This will put a floor in further drops, by soaking up excess supply. From whta I have seen, and yesterday aline I putin a bid on 117 condos in miami in one building, and 117 finished lots in florida, and 224 Finished Homes in teh Inland empire in CA - NONE of my bids were accepted there is still a bid/ask spead that while it has shrank still exist. About two montsh ago Indymac had a portfolio sale thru Eastdil Secured of over $600 millionin resi land, lots, and homes, only about $100 MM sold, and thsi was before they went belly up. The Feds lifelines to bank has slowed the painful process of banks having to sell to raise capital, they are making it a slow motion process. Miami still has some problems the bid/ask spread there is huge, on the 117 units they were looking for $15-$20MM I bid $5MM. Well located projects are clearing. but at say 30-40% on peak price, on a lot of deals is probably a marketing clearing price. NOw maybe there is cheaper money out there than mine, and I am sure there is, but I feel confident there is a floor.

    Perhaps the best indicator; I bought a Condo and closed thsi week in San Diego. Prior Price Prior Price in 2006 = $525,000 my price $409,000.
    Reply | Link to Comment
  •  
    Aug 15 06:53 PM
    To follow up on my comment above, today I spoke with a salesperson for one of the publicly traded homebuilders. Says she is getting good traffic 3-4 visits/day in her $200K-300 neighborhood. She is seeing mostly hispanic shoppers (in FLA) who have good credit, stable jobs, ok on the mortgage payments, but no down payment

    EBC - it turns out that we are almost in the same business, but I focus on commercial properties. I actually received an invite today to a "Distressed Property Convention". Not sure what that is other than a sign of the times. I suppose the condo developer passed on your offer above - it was ridiculous. What I'm seeing on the west coast of FLA near Tampa is 4 yr old condos 2,400 sqft or so near the water going for $250K when they originally sold for $400-520. I'm not buying yet - it will get worse, and Cape Coral is far worse right now.
    Reply | Link to Comment
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