The housing market will remain depressed, with record high foreclosure levels, rising mortgage rates and a glut of distressed properties dampening the market for years to come, industry experts predicted on Tuesday.
"We don't see a full market recovery until 2014," said Rick Sharga of RealtyTrac, a foreclosure marketplace and tracking service. He said that he expected more than 3 million homeowners to receive foreclosure notices in 2010, with more than 1 million homes being seized by banks before the end of the year.
Both of those numbers are records and expected to go even higher, as $300 billion in adjustable rate loans reset and foreclosures that had been held up by the robo-signing scandal work through the process. That should make the first quarter of 2011 even uglier than the fourth quarter of 2010, he said. ...
Mortgage rates will start to rise in 2011, further dampening demand and limiting affordability, said Pete Flint, chief executive of Trulia.com, a real estate search and research website. "Nationally, prices will decline between 5 percent and 7 percent, with most of the decline occurring in the first half of next year," he said.
Friday, December 10, 2010
Four more years of housing stagnation expected
RealtyTrac and Trulia expect continuing housing market stagnation:
Subscribe to:
Post Comments (Atom)
Posts
New MRIS report is out, Northern Virginia is up - again +7.4% YOY.
ReplyDeletehttp://www.rbintel.com/
So much for "expriring tax credit will cause prices to fall". That was a fun myth while it lasted.
I guess the tax credit had no affect on the price of this home below. It's in a very nice neighborhood yet its value is less than its purchase price back in 1993. At one time, it was valued at more than 600k. So be very, very cautious about reports of YOY increases. They usually come from used car, I mean, real estate agents.
ReplyDeletehttp://www.zillow.com/homedetails/10420-Breckinridge-Ln-Fairfax-VA-22030/12260162_zpid/
Ahh yes, my favorite argument technique. When someone takes data you dont like, representing a county of 1 million people, spread out over 400 square miles, show its wrong by referencing what happens to a single house. Brilliant!!!
ReplyDelete"So be very, very cautious about reports of YOY increases. They usually come from used car, I mean, real estate agents."
ReplyDeleteYep, thats why I question when that same source showed data indicating prices were down -24.9% YOY back in Dec 2008.
http://www.rbintel.com/sites/default/files/Fairfax%20County.pdf
Stupid realtards! What a bunch of biased crap designed to get us to buy houses!
Welcome back Mr Seattle blog chart. Where have you been? We have been talking about interest rates lately and you have been quiet. I guess it's because I ran you off.
ReplyDeleteAny comments on why the house above is valued less than its 1993 purchase price?
ReplyDeleteYou are right - I am vanquished. I have seen the light, interest rates will rise and home prices will not do what they have historically. Asked and answered. You won, I lost.
ReplyDeleteAs to why the house is less than its 1993 price? Its a turd, perhaps? Dont know, dont care.
Anyhoo, going back to my original comment - prices are up 7.4% YOY. Remember when this blog used to say "just wait til the tax credit expries, prices will fall". That was fun playing that game of make believe wasnt it?
You know what else was fun? Remember when prices first started going up YOY and this blog said "its nothing but a blip" and "we are NOWHERE close to the bottom".
ReplyDeleteTHAT was hysterical! I look back on those comments now and just laugh and laugh and laugh!!!
"Here is the REALLY REAL question -- as prices fall and fall and fall and fall, with a single month or two uptick thats so microscopic on that blue line that it is barely visible to the naked eye, do you TRUELY believe the fall is over? I think you are just trolling.
ReplyDeleteNovember 17, 2009 7:50 PM"
OH how sad for Anon! His microscopic uptick has gone on for 18+ months now.
BWAHAHAHAHAHAHAHAHA!!!!!!
But why is that home located in a nice section of Fairfax valued lower than it's 1993 purchase price? Let's figure that one out first. You said it may be "a turd" and you "don't care". But here's another one on the same block with a value lower than its 1993 purchase price. Another turd Mr. Realtor?
ReplyDeleteWhy is the Fed Reserve doing everything in their power to keep interest rates low if rates have no relationship to home prices? Let's figure that one out after you provide me with an answer to the first question. Come on, show everyone on this blog how brilliant you are. Offer intelligent explanations to both questions or get off this blog!
You are the Realtor Jester.
http://www.zillow.com/homedetails/10424-Breckinridge-Ln-Fairfax-VA-22030/12260160_zpid/
ReplyDeleteAnon - I bring very little to this blog in terms of intelligence and the like. I am a troll, pure and simple.
ReplyDeleteYears ago, I would have engaged in a tit for tat debate with you, but as with all those other debates from days of yore, they dont matter at all - the market does what it wants to do.
In this case, the market wants to go up 7.4% YOY. Thus, as a troll, I very much want to stick it to you and your former doomers who said it was a "blip" and we were "nowhere close to the bottom". I like to reminisce on those days and laugh and laugh and laugh.
I also know all I have to do is point out month after month how prices are going up and up, and it makes you angry, oh so angry!!!
So angry in fact that you feel COMPELLED to feed me (in this case by pointing to houses on Breckenridge lane). It makes me so happy that I get to you like this. All I have to do is point out how prices are going up YOY and I get fed.
OK heading home for the weekend. I will see you next month when its time for my feeding. Like shootin fish in a barrel!
Have a good weekend
BWAHAHAHAHAHAHAHAHA!!!
No explanation? Just rat salad.
ReplyDeleteHe's singing off for the weekend because he cannot offer an intelligent explanation. You have silenced Mr. Seattle Blog Chart again!!!!
ReplyDeleteSpoof
Hey, whatever the reason the area has been showing some stability for a while now. I'd say the biggest risk to home prices is not interest rates, but the new Congress. If government spending/hiring really goes down, areas around DC can't help but feel it. If past predicts the future, such spending reductions will be mostly for show and will be short lived, but who knows. Certainly could be real and lasting. Who would have guessed that Obama would be pitching extending the Bush tax rates even a few weeks ago?
ReplyDeleteWe live in strange times.
jj
It is not prudent to rely on statistics that are broad in scope when deciding whether a certain locale or neighborhood has home values that are fundamentally sound. The statistics may show year over year increases, but those numbers could be influenced by the sale of signoficantly more higher priced homes sold raising the average value. If you look at the entire neighborhood of the two homes cited above, almost all of their values are near their 1993 purchase prices. If these homes are not selling, they will not be factored into the YOY data and thus the data is skewed in favor of those neighborhoods where prices have not decreased as much giving a false sense of housing stability.
ReplyDeleteAnon, I was intrigued by the prospect of houses selling at 1993 values, thinking you had found some strange wormhole where values were frozen in time. Unfortunately that does not look to be the case.
ReplyDeleteInstead, it looks like that 1993 sale and value is not for an individual house, but for the whole block. You will notice, both the places you show (10420 Breckenridge, and 10424 Breckenridge) were sold on the same day (1/19/93), and for the same price (455K). It is highly unlikely that both places would sell on the exact same day for the exact same price.
Better explanation seems to be that it was a multi parcel sale where the landowner transfered ownership to the developer (or vice versa). Thus, back in 1993, the whole block was sold for 455K.
On top of that, from someone who was here in 1993, it seems highly unlikely an everyday townhouse would sell for 455K. My guess is a place like that would sell for around 250K in 1993, (275-280K in 2000 at the end of that largely stagnant decade).
In fact, here you go, look at this neighbor, 10418 Breckenridge:
ReplyDeletehttp://www.zillow.com/homedetails/10418-Breckinridge-Ln-Fairfax-VA-22030/12260163_zpid/
Again, this place shows that same multi-parcel sale on 1/19/93 for 455K. Then, on 6/17/93 that individual TH sold for 258K.
So if these places are now valued in the 420K to 450K range, thats more like 2003 prices than 1993 prices.
S. Battle.
ReplyDeleteVery good observation. It appears that 2003 prices would be more appropriate. Actually, I would think 2003 valuations are more in line with historical appreciation averages. So if those townhomes are priced at 2003 levels, I would venture to say that those are rational values.
I would buy a home at a 2003 value. It was after 2003 when the mortgage industry became the wild west with all of those exotic mortgage products.
ReplyDeleteIt is not prudent to rely on statistics that are broad in scope when deciding whether a certain locale or neighborhood has home values that are fundamentally sound.
ReplyDeleteBingo! The issue I've got with the "MRIS regional data" is not so much that REALTORs lie or that the data is "garbage", but that these metrics are overly broad even before you take into account distortions like...
The statistics may show year over year increases, but those numbers could be influenced by the sale of signoficantly more higher priced homes sold raising the average value.
However, the CS data really addresses a lot of this type of noise by tracking same-house-sales and the CS numbers have show that the DC MSA is about the only one left in the country (excepting the big Texas MSAs) levitating.
I think the DC levitation can be attributed to two things: relatively low UE and really low Mtg. rates. Some parts of NoVa really did take a hit...particularly in places where inventory really spiked. Areas where it has not spiked have remained stable - capable of absorbing what does come on the market. I think the telling metric is months of supply. For folks out in South Riding (and the like), it's long been time to 'grab your ankles, and pray for lube'...for Arlington, not so much.
It will be interesting to see if the new rates and the announce pay freezes start to tighten things up and slow the market. I still doubt it will crater, but I do think it's possible to lose a little wind.
I also agree: 2003 pricing is probably "correct" in that it's in-line with the historical price trends (as tied to inflation). I think the wacky mtg. products were out there in the market much earlier (and they really stepped on the gas selling them in '01) but there was some lag time before the house prices got to be nuts.
Oh, the Texas MSAs aren't plunging, but for two reasons, the major one being the biggest bit of Irony you could imagine: sound banking regulation.
ReplyDeleteTexas had it's own bubble/bust a few years ago - more tied to oil (and the Texas economy) - and after recognizing the real risks posed by lax lending standards, this "conservative" and "business friendly" (ie, lazziez faire) state recognized the need for strong banking and lending regulation which basically prevented Texas banks from making risky loans to people who couldn't afford them (kind of like consumer protection) during this bubble. Although national and Texas politicians who fancy themselves "free market" persons are trying to tout those policies as the source of Texas' stability, it's mainly the government regulation. Of course, right now the oil economy is doing relatively well also.
"Montpelier said...However, the CS data really addresses a lot of this type of noise by tracking same-house-sales and the CS numbers have show that the DC MSA is about the only one left in the country (excepting the big Texas MSAs) levitating."
ReplyDeleteIts nice to see a bear who can be honest with himself, even when the data shows him a picture he doesnt like. Too bad others here cannot follow his example...
Montpelier isn't a bear, he's a realist.
ReplyDeleteIf Montpelier is a bear, then Anon 9:38 is a cheerleader for the local market.
then Anon 9:38 is a cheerleader for the local market.
ReplyDeleteNot really. As I said before, I am a troll. I get my jollies by getting a rise out of the bears who 18 months ago said this was a "blip" and "we are nowhere near the bottom"... Just as I did 5 years ago, laughing at the bulls who said we were "nowhere near the top".
Back then, Lance was my favorite target. Sadly he has left. Thankfully, you are still here to feed me.
ah lance. its funny how there's morons and both sides of the fence. the worst king of stupidity is not being about to change your mind in the face of evidence because you can't admit you were wrong.
ReplyDeleteRates are rising and pressure on home prices will become heavier each point increase. As the troll prematurely celebrates a false bottom, I will always be lurking in the night awaiting each opportunity to provide clarity on this blog. The troll celebrates when many homes are near 2003 values. I celebrate not buying into the nonsense of home ownership. Many homeowners out there would love to have the "peace" of mind that I currently enjoy. Smooch!
ReplyDeleteAmerican homes are expected to be worth $1.7 trillion less in 2010 than they were worth last year, according to a report released Thursday by real estate website Zillow. This year's drop in home values is 63% bigger than the $1 trillion dip in 2009, and brings the total value lost since the housing market's peak in 2006 to a whopping $9 trillion. While the homebuyer tax credit helped prop up the housing market in the second half of 2009 and the first half of 2010, home values continued their slide in the second half of the year. Almost $700 billion in value was lost in the first half of the year, compared to Zillow's estimates of $1 trillion in the second half.
ReplyDelete--A slump in government-backed mortgage securities that’s sent yields to the highest level since May is threatening a recovery in the U.S. housing market, which had been bolstered by record-low borrowing costs. Yields on Fannie Mae-guaranteed securities that most affect loan rates jumped as high as 4.21 percent yesterday, an increase of 1 percentage point from an all-time low in October, according to data compiled by Bloomberg. They ended New York trading at 4.1 percent. Higher loan rates “won’t be fun” for a fragile housing market, said Scott Simon , head of mortgage bonds at Newport Beach, California-based Pacific Investment Management Co., manager of the world’s biggest bond fund .
ReplyDeleteAs the troll prematurely celebrates a false bottom, I will always be lurking in the night awaiting each opportunity to provide clarity on this blog.
ReplyDeleteGlad to know I will have some company for years to come.
Oh and just a reminder on that "false bottom" which has been going on for 18+ months now. In CS terms, we were once at 165. Today, we are near 190.
If prices stay at 190 for years, I win.
If prices dip mildly down to 180 before rebounding permanently, I win.
If prices take a massive double dip down to 166 before rebounding permanently, I win.
Have a nice day!!!
sounds pretty reasonable. anyone who really expects a recovery before 2014 is dreaming.
ReplyDeleteIt took Japan nearly 18 years to see any type of recovery nationally. We are doing EXACTLY what they did. Why would anyone expect a different result? I think just from history of seeing it happen to Japan, 2014 is VERY optimistic.
ReplyDeleteTo top the facts of history off, Japan seen a recovery only because after home prices went back to reality, people also had jobs making products that the world actually wants and buys (thus giving their citizens the ability to buy when prices were back to realistic levels).....America, not so much. Hey, at least America is giving jobs to China and India though, someone will be able to buy a home in THOSE countries!
There may be no Santa Claus, but there is a definite relationship between interest rates and demand for homes.
ReplyDeleteThe Mortgage Bankers Association said its seasonally adjusted composite index of mortgage application activity declined 2.3 percent to 589.7 in the week ended Dec.10.
The jump in rates is effectively reducing credit for the U.S. housing market that has remained in a fragile state despite two years of government efforts to curb foreclosures and stabilize home prices.
Most analysts expect home prices to resume their fall in 2011, creating a drag on the economy.
The gauge of loan requests for home purchases declined 5 percent to 200.3.
The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage application activity declined 2.3 percent to 589.7 in the week ended Dec.10.
ReplyDeleteThat's really key: the purchase (vs. refi) index is the key. IIRC, the purchase index was up last week slightly (people trying to beat the rise in rates). The rate increases hurt the refi index more (sooner). However, again, mixing broad stats with highly localized outcomes...does not work.
What's the purchase index look inside specific neighborhoods in the DC MSA? Nobody has a breakout like that, and that's really what you need.