Friday, March 25, 2011

The housing market keeps getting worse

Ever since Bubble Meter became an on-the-NAR-reservation site within the past week, we can't take the housing pain anymore. But, unfortunately, the pain keeps coming:
U.S. home prices fell for a third straight month in January, a government agency said Tuesday, adding to evidence that the housing market is weakening even though the economy is improving.

Home prices fell 0.3% on a seasonally adjusted basis in January compared with December, according to the Federal Housing Finance Agency's monthly home-price index. ...

The National Association of Realtors reported Monday that sales of existing homes in February dropped 9.6% from a month earlier. The median sales price of $156,100 was the lowest since February 2002. Prices are falling because of the large amount of distressed properties hitting the market.
Wait, did the Realtors say the median existing home sales price was $156,100?! Holy [expletive]! It was $170,600 in the fourth quarter! Lawrence Yun, you're not doing your job! Fudge the numbers! Give us some spin!

New homes aren't doing any better than existing homes:
New home sales fell 16.9% in February, to the lowest level since the government began keeping records in 1963, as the reeling housing market failed to generate any momentum.

Sales fell to an annual rate of 250,000 from the revised 301,000 in January, according to the Census Bureau's monthly report released Wednesday. The rate was down a whopping 28% from the 347,000 of February 2010.
Won't Senator Johnny Isakson please use more taxpayer money to prolong the downturn longer, so we don't have to feel the pain right now? We like the Band-Aid pulled off as slowly as possible. If the government hadn't interfered with the free market this whole mess could have been over in 2010, but now we'd like it over in 2014.


  1. James,

    Perhaps you would be a little more credible if you toned down the rhetoric some. You come across on the immature side. Do you believe that housing is a leading indicator?

    Since you are in D.C., can you give us a local perspective? The Wash Bus. Journal states that this area had a net job gain yoy (Jan. 2010-2011) of 40,800. Inman news cited D.C. as the number 1 best RE market for 2011. We were one of only two markets to see price gains in 2010. Local unemployment is dropping. FX is 4.6%, Loudoun 4.2% and Arl 3.7%.

    I keep hearing of multiple contracts. Lemmings? Sheep being led to slaughter? What say you?

    p.s. The David remarks were stupid. I, for one, was very concerned.

  2. Our sales volume and average sales price is up in Johnson County, Kansas. It is not ALL bad.

  3. James,

    Crank it up. This is a blog, right? F'em!

  4. Ian, thanks for the show of support. I've never thought of Bubble Meter as a source of maturity. I mean, have you ever read the comments?

  5. Care to answer my questions? Do you have an opinion of the local market?

  6. "F" who? Perhaps you can enlighten me on the local market?

  7. The problem is that the author of this blog does not recognize anything but negative data. His flock of doomer's is only happy to cheer him on.

  8. No, I don't have an opinion on the local market.

  9. Ok. That is surprising to me but let's get more general. Are we in or headed for a "double-dip"? How do claims that housing is over-priced square with the graph ( to the right) of US Housing prices since 1970? The lines seem to "meet" at this point.

  10. Lynn - I wouldnt be too hard on ole James. Yes while he has been unusually bearish lately, he can be objective. For example here he was 2 years ago say housing has likely bottomed (much to the dismay and anger of his flock of denialists)

    So yes, while James is being a bit bearish lately, I personally think its OK to cut him a bit of a break. If you want to attack someone, go after the idiots who violently argue we in DC are "nowhere near the bottom".

    And thank god for the idiots, for without them, this would be a very boring blog. Take for example when Partisan appeared the other day, kicking in the permabears skulls with his "fill in the blanks"/ show us the bottom routine.

    Personally, I think he is way too optimistic, but im not in the permabear camp either. Thus, there is nothing so entertaining as watching the permabears slink away quietly after Partisan administers yet another beatdown. Its very entertaining - I look back at those permabears statements and just laugh and laugh and laugh!!!

    Thus, while I think its OK to give James the business from time to time, its far more entertaining to watch the DC permabears get crushed! So sit back, pop some popcorn, and watch the show!!!

  11. Lynn, if you want nothing but quantitative facts delivered with a mature tone, be sure to read

  12. I have generally run this as a national housing blog, not a local one. I'm not David. I'm not that interested in local stuff. I know there are still a number of readers from when David ran this blog three years ago, so I'll throw in some local stuff once in a long while, but it has never really interested me. Over time I have also gradually changed the description text for this blog to de-emphasize the DC area.

    The graph at right meets at the most recent quarter BY DEFINITION. Even when I created the graph in 2006, the two lines met at the most recent quarter. The blue line shows the nominal value of today's median priced house over time. The red line shows the inflation-adjusted value of today's median priced house over time. The key thing to notice is that both lines meet ABOVE WHERE THE TREND LINES MEET.

    As I said on this blog a week or two ago, I believe the graph actually overestimates how much home values have fallen, because I believe foreclosures distort the S&P/Case-Shiller index.

    The trend looks like we are headed for a double-dip, although my ability to forecast the future is limited by the fact that I am human.

  13. Point taken. The slant here is over the top but I guess that is intentional. CR has a more moderate approach. I really don't care if people buy or rent. Fear over what has occured with housing in the last few years as well as demographics and tight underwriting suggest that ownership levels will continue to drop. I believe we are in for a repeat of the 90's relative to prices and rental demand (although this situation has been far worse than the early 90's correction). I see stagnant pricing for a number of years but no significant drops unless employment, migration and job creation change materially.

    I assume that James lives in the DC area and I find it surprising that he doesn't have any projections or comment regarding this region. I'd like to hear from David on this.

  14. James is a renter in Centreville, VA.

  15. Huh? How am I too optimistic? For the record, I think we have hit bottom, but that is it. I MAINTAIN THAT CS COULD GO DOWN AS FAR AS 170 AGAIN. Thus my only beef is with those who think we havent hit bototm yet.

    Glad you appreciate my work, but please dont bring me up in a manner that looks like sockpuppetry. For all I know, you are James posting anon.