Weekly News Round-Up
Yahoo Real Estate news brings us a story by Forbes reporter Matt Woolsey titled “How Low Will Real Estate Go.” Based on Moody’s Economy.com report, it’s good news for buyers and bad news for sellers. The market correction will continue through this year and into next…unless you live in California’s Central Valley. The Modesto Bee ran an uplifting little story, “It will take till 2011 or early 2012 for valley market to stabilize.” Imagine the joy those readers must feel knowing that little tidbit.
I see that mortgage lender Countrywide has stopped issuing, and even rescinded, home equity lines of credit (HELOC) in Las Vegas, one of the worst-hit areas in this mortgage mess. While they are not the first lender to do so, my guess is that this practice will become more widespread, based on their bottom line and a particular area’s housing market. Will the Bay Area be far behind? You best have a backup plan, just in case.
USA Today, much like Fox News, can be a bit alarmist (IMHO), and I couldn’t help but laugh at the recent headline, garnered to strike fear into the heart of every homeowner, and to grab everyone’s attention: “Foreclosures double, and home prices tumble,” seems a bit behind the times though. Prices have been tumbling for some time, and foreclosures have more than doubled, haven’t they?
Red means hot, but not in a good way. The Wall Street Journal published a short piece on the web yesterday that included a map tracking delinquency rates across the nation. Interesting to see where the worse areas are, California included. Check it out.
Over at SFHomeBlog.com there is a report on “Individual Tax Bills for Tenancy In Common One Step Closer.” This is welcome news by many TIC owners in the city who have been crossing their fingers for a long time waiting for this to happen.
Meanwhile, another local blog, The San Franciscso Real Estate Blog has a post titled “Zillow adds a new feature to their site… Bad News.” (Yeah, like they haven’t been giving homeowners bad news for months now, with the estimated value of homes spiraling downward.) According to the post, “Zillow’s quarterly home value reports now come with a supplemental section that takes an in-depth look at the top 30 markets. The best section in the new report is called, ‘fall from the peak.’” So, if you don’t get enough bad news from the TV, radio, newspaper, and this here blog, then head on over to Zillow and check it out.
Recent Sweet Digs Posts:
Is Play in the Picture When You Search for a Home?
Is the Bottom Already Behind Us?
Oakland New On Market: From Stunning Contemporary to SFR Converts
The Allure of Fruit Trees in the Backyard
There’s Something For Everyone In Berkeley’s Home Listings
David said:
The Zillow feature is pretty awesome. It confirms several logical assumptions that were previously just assumptions of mine:
1) The bust is very symmetrical. MSA’s that boomed earlier (San Diego, Boston, etc) are further ahead in the bust, and back to 2003 prices. MSAs that boomed later (SF, Milwaukee) are behind in the bust phase, and are back to 2004 or later prices.
2) Homeowners are delusional about their own values.
3) Even with busting back to 2004 levels in SF MSA, the annualized price increases since 2000 are high, and unsustainable (6%+ annualized). This indicates a lot of room for continued price drops.
4) The price increase over the past 5 years for SF is 4% annualized, a much more “normal” number. This will become the trendline back to 1997-2000, the end of the last bust when this round is over. Therefore, we have either another ~15% of nominal price drops over the next year, or flat prices until 2011, or some combination of the two. My bet is for another 10%ish drop over the next 12-18 months and then flat prices until 2011 or 2012, depending on exact ‘hood, etc.
May 7, 2008 10:56 AM
susan.brady said:
David – thanks for the analysis. I can always count on you to go the extra mile to explain things. I really do appreciate it!
May 7, 2008 1:59 PM