Has the housing market bottomed?

BSW

IMHO, it is premature to declare that housing market has bottomed just based on the activities in the past few months.  

Using So. Cal. as an example, there are a number of human factors underlying the recent "recovery" in real estate market.  First, the inventory has decreased drastically over the past year or so (~40%).  Second, there is the typical spring rally in the housing market.  Third, there are incentives offered by both the state government and the federal government.  

Aside from these human factors, you also have to consider the median price has dived about 50% (yes, 50%!) since the peak around late 2005 in quite some areas (admittedly, the lower end has suffered more percentage-wise while the upscale properties fared much better).   By natural law, when something dropped so hard in such a relatively short timeframe, a rebounce should not be surprising.

Nonetheless, it is POSSIBLE the norminal price of housing could have reached bottom.  That is if employment does not deteriorate too much further and/or huge inflation is indeed on the horizon.

One more thing, even if housing price has reached bottom, it by no means signals that a booming market will be back soon.  If history is any guide, the bottoming process of real estate in So. Cal. lasted about 5-6 years during its last boom-and-bust cycle in the early 1990s.  That was the period the market stayed at the trough with a little bit fluctuation, not including the early sliding phase and the later climbing phase.

Fig

yeah, the question is who will step in to buy after this round of buying? People who just lost their homes won't be qualified to buy for the next 7 years. The 20% down payment requirement also disqualifies many people for buying at the current price level, let alone pushing the housing market higher.

summer123

yeah, the question is who will step in to buy after this round of buying? People who just lost their homes won't be qualified to buy for the next 7 years. The 20% down payment requirement also disqual ...
Fig 发表于 2009-7-31 02:08

Chinese from China

MTLYBZB

maomi

I bought a house back in mid June, which is still under construction. Tens of houses were sold in that community since my purchase. There are only 3 houses left with list base price at least $10k above my base price. My guts feeling is that the shopping spree was due to the tax incentive for first time home buyers, also summer time is always the peak season for house market. The housing data in Winter time will not as pretty as it is now.

Poo