Comments on: Finally, a Happy Housing Stat

By: Derek Donnan

Derek Donnan — Wed, 01 Jul 2009 09:14:29 +0000

If you look at the numbers in the S&P index there is a clear pattern of the monthly decreases in housing prices being at their lowest for the year during the months of April/June of each year, then outside those months the rate of decrease rises again. Thus what we may be seeing is the typical rate of change in annual reduction that has been the pattern since the crash began as opposed to another ‘one of those green shoots’.

By: tony bonn

tony bonn — Tue, 30 Jun 2009 18:34:19 +0000

i’m sorry – it just doesn’t do anything for me….i guess i am not much of a green shoots type of guy.

commercial real estate is in the early stages of collapse.

By: John Watch

John Watch — Tue, 30 Jun 2009 18:21:24 +0000

Several recent comments regarding the availability of financing have emerged over the past weeks discussing mortgage rates and the ability to sell/buy real estate. Contrary to popular belief, mortgage rates have more to do with the long term debt obligations of the United States, than the current value of real estate. A review of 30 year T-Bills indicates a concern of investors regarding the debt the United States is taking on. This is also reflected in the value of the American dollar, which has declined over the past several months.
In regards to mortgage financing, the markets did not stop; instead the markets went back to operational practices of 2002/03. The United States housing market is on track to sell over 4 million properties this year and the mortgage industry is on track to refinance double that number of properties. This represents about 12% of the residential housing market (4% sales and 8% refinancing).

Homeowners are receiving financing, but not necessarily at the numbers hoped for. Secondly property values are reported to be down in value because of the median sales price. The much discussed Case-Schiller Housing Index does not place a relationship of sales price to the size of the home.
Now many economists and bloggers will state that there is no relevance in Sales Price to Square Footage. To this, we state that there clearly is: Square Footage does matter.

In studies just completed, 15 of 20 major metro areas have experienced a decline in sales price compared to last year and to 2006. But the properties being sold are also smaller and by as much as 15% to 20%. As such, the decline in actual value is not as severe as reports that only analyze the Median Sales Price Indicate. The real estate market is not absolute. The base data from 2006 is different than the data from 2009.
So what is the real decline in housing values and what is the real erosion of the under lying housing market. Well it depends if you do the research or if you are an investor looking to snap up properties at bargain basement prices because incorrect information is being fed to the masses.

Conducting comprehensive research takes time and money, but many of the comments I read just rip into the process, as opposed to trying to understand the process. The markets are in flux and need some clear direction, but if we continue to post inaccurate information we will not see a housing recovery take foot for months.

By: Jessi

Jessi — Tue, 30 Jun 2009 18:15:57 +0000

Just one month is hardly enough to determine much. If the prices are falling the burden will be on the real estate agents working off commission for less than they used to make per house, and if the houses cost less it won’t stimulate the economy as much as it should.
Of course the metro areas will experience growth long before areas where there is simply not as much wealth. And those areas are in the majority. It’s easy to make generalizations based on the big cities but that isn’t representative of the average American, though that is generally overlooked in favor of metro stats.
I agree it will take some time especially since consumer confidence is not quite there yet.
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