Last week brought more grim news on the housing front, from the widening loss at KB Homes to the cautious comments from Lennar CEO Stuart Miller.
Yet the optimists continue to grope for signs of a bottom, with many focusing on the S&P Case/Shiller Index, which fell less than expected and showed 8 of 20 regions flat or higher vs. a year ago.
But “until we start to see some of the supply come down it’s hard to come up with a scenario that provides any kind of traction for prices,” says Liz Ann Sonders, chief investment strategist at Charles Schwab.
Because inventories remain so high — 10.9 months of supply for new homes — Sonders still believes home prices are likely to fall another 10% to 15% before any talk of a “bottom” can be taken seriously. “Not many metrics we use to judge the health of housing are moving in the right direction,” she says.
Those metrics include mortgage rates, which are higher today than when the Fed started easing in August. “I don’t know that the Fed raising rates would cause major dislocations in the housing market,” says Sonders.
That said, she does see a silver lining in the housing market’s bust; namely, speculators have gotten a comeuppance and we’ve learned that “universal homeownership” is not necessarily a universal good.
in SoCal for housing to be as affordable as it was before the run up it has to fall at least 40% from current prices.
I know townhomes in Aliso Viejo which were selling for $275k in 2001 are now appraised at $450k. These homes should be selling for $250k at most.
I don’t think income or affordability has changed much since 2000, in addition OC has been very hard hit right now due to mass layoffs. Factor in cost of oil and other commodities and you can see affordability should be lower than in 2000.
in SoCal for housing to be as affordable as it was before the run up it has to fall at least 40% from current prices.
I know townhomes in Aliso Viejo which were selling for $275k in 2001 are now appraised at $450k. These homes should be selling for $250k at most.
I don’t think income or affordability has changed much since 2000, in addition OC has been very hard hit right now due to mass layoffs. Factor in cost of oil and other commodities and you can see affordability should be lower than in 2000.
in SoCal for housing to be as affordable as it was before the run up it has to fall at least 40% from current prices.
I know townhomes in Aliso Viejo which were selling for $275k in 2001 are now appraised at $450k. These homes should be selling for $250k at most.
I don’t think income or affordability has changed much since 2000, in addition OC has been very hard hit right now due to mass layoffs. Factor in cost of oil and other commodities and you can see affordability should be lower than in 2000.
in SoCal for housing to be as affordable as it was before the run up it has to fall at least 40% from current prices.
I know townhomes in Aliso Viejo which were selling for $275k in 2001 are now appraised at $450k. These homes should be selling for $250k at most.
I don’t think income or affordability has changed much since 2000, in addition OC has been very hard hit right now due to mass layoffs. Factor in cost of oil and other commodities and you can see affordability should be lower than in 2000.
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