Wednesday, December 14, 2005
The Market Part of Housing Markets
In the last two weeks enough observations have come inm to confirm an ongoing gut wrenching price decline in the housing markets. I personally feel about $200k poorer but couldn't care less since I didn't care about the last $400k of increase. Anyway, what we are in now is best described as a freefall. We need to know what the market clearing price for housing may be. We won't know that number until houses start to sell again. I've called the next few months "the silent spring" because I don't think we'll see any sales.
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2 comments:
The DQNews is never off topic. California typically lags any trends but adopts them and exceeds them. I wouldn't trust all the data turning at once. This is the "froth" and uncertainty we hear so much about. I'm not one to fight the tape but I'm not going out in front of it either. Ben Jones, et al have the certitude of the righteous. So convinced they will eventually be right that they have no use for anything else. Funny thing is going to be their reward. somehow they imagine a 50% price reduction so they can walk in and pick up a home (or two) on the cheap. What hey don't think through is that no matter how much or little prices change they won't be able to qualify for whatever sized loan is necessary. Part of any radical changes are sure to lock them out then as much as now.
Basically i believe the IE and SoCal in general is imune to frothy behavior because there is so much unmet demand for basic housing and Prop 13. The two also build off each other to keep people from recycling properties in a timely fashion as well.
A "free fall"? "until houses start to sell again"? "I don't think we'll see any sales"? Come now. Pull yourself together, Robert.
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