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"Housing looks like it has bottomed,"

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nvchaz

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Housing is another area that may prove to be a surprise source of strength. Homebuilding began to buckle in 2006, chopping 1 percentage point from annual economic growth ever since. As the market stabilizes, that drag will dissipate, giving the economy a short-term boost.

"Housing looks like it has bottomed," says Allen Sinai, chief economist at Decision Economics in New York.

Confidence among homebuilders rose in April to its highest level since October as record-low mortgage rates below 5 percent started to stir demand. Prices for home resales in March posted their biggest monthly gain since June 2005, with some regions seeing multiple bids on properties.

‘Seeing a Floor'

In southern California, one of the hardest hit areas, prices have begun to stabilize, according to KB Home Chief Executive Officer Jeffrey Mezger. "We're seeing a floor," he said in a May 4 call with analysts. That's giving the Los Angeles-based company an opening to sell newly built homes.http://www.bloomberg.com/ ... efer=home
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May 11 - US
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klarek the realist

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A three/four month foreclosure moratorium and an $8000 buyers bribe are manipulating the market.  I wouldn't call it the bottom with these foprces at work.  Especially not when unemployment is rising and the moratorium is being lifted.  Just in case you forgot that these things are happening.
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May 11
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Spleng

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Enjoyed that article,  thanks Bette.  Some funny things in there:

"However, if you look at the graph, you will see that every year there is a similar tick upward in consumption, although the exact date of it does vary by a month or two."

"Why? It's called Christmas!"
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May 11
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K101

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"If I had cash right now, I'd be buying low end rentals like crazy."

I have my eye on lower end rentals in my area.  I believe that they have quite a bit further to go where I am, and the numbers do no make sense even from a basic investment analysis yet.  We are not seeing the same heavy competition for such properties that has been described in Reno and a few other places.  I am watching with a closely, though.
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May 11
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Bette Defarm

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I'm not looking for an opportunity here, I just don't want to be ripped off.

Precisely my thought and I'd rather have a tooth pulled than be a landlord. (I would seriously stink at it).
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May 11
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klarek the realist

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Chaz, while I'll agree that ultimately the manipulation will have a net zero impact on the market, it can obviously sway things in the short term.  I'm not looking for an opportunity here, I just don't want to be ripped off.  If these banks weren't hording their assets the way they are, the market would look very different.  Absent all of these forces, who knows exactly what it would look like today, but speaking personally I probably would have bought by now if that were the case. 
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May 11
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nvchaz

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The important thing for the doomers to remember is that if you are locked into a mind-set and an ideology then you may miss opportunities.

Time to take the blinders off and look around you.

Ripple effect: How can there be? Almost 80% of sales are REOs and short sales in Reno. 45% underwater (how can they possibly buy - unless they buy and then walk). $8K retention clause means no movement in the low end segment for awhile, even if transaction cost permitted it.

Obama's plans will come to nought. Market forces are too strong for any government intervention to work. Demographic forces (baby-boomers are aging out of their spending years) are too strong for any government intervention to work.

If I had cash right now, I'd be buying low end rentals like crazy. As it stands I'm just looking for a buy and hold home, perhaps a duplex to help offset my mortgage. Rentals make a lot of sense right now at 5.5% but at 7.5% I don't know.
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May 11
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Southern California is nowhere near bottoming out yet.  It can't be.  The median income still can't even come close to affording the median purchase price.  Link that with the unemployment level, the state's unbelievable budget crisis, the shadow inventory and the Alt-A resets just hitting... the market still just doesn't make any sense.
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May 11
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klarek the realist

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LC, I admit there is a bit of schadenfreude on my part.  Perhaps it's from having to endure the past six years of people patting themselves on the backs for buying $400k houses on $50k salaries, then buying Benzes and acting like hot sh*t at Coastal Flats, slamming down their martinis and bragging about their lavish lifestyles. 

K101: "Well, in my case, I sold my last house for far more than I am offering for my next one"

Pretty much the same for me too.

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May 11
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K101

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Yep, Bette.  It's been an interesting ride down here.  The move was good for us all around.  And, I am soooo glad we have been renting.  We have learned a lot about maintaining houses in FL vs. MA (big difference).   8)
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May 11
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May 11
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Well, in my case, I sold my last house for far more than I am offering for my next one, so I have a good buffer to play with.  I don't like losing equity any more than the next gal, but I think it is a close enough potential gap at this point (considering all the financial and practical aspects) that we are willing to bite for the right house.  We plan to stay for a significant period of time (10 years) and view this as housing and not a "money maker."
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May 11
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Bette Defarm

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  I am trying to pick up a short sale but I don't think the bottom is in yet, at least not in my area, so don't count me.

K101, I was just looking at your state stats and nearly fell out of my chair...  it appears there's a ton to choose from. I bet you're glad you moved south :)

Middle and high end are increasing in volume.

Not in my state.

Waiting For The Ripple Effect

"....the tax credit is not having the desired ripple effect through the rest of the market, at least not yet.

The health of the housing market depends, in large part, on drawing first-time home buyers into the market to purchase entry-level homes. The sellers of those entry-level homes are then able to move up to mid-level homes, and the sellers of those homes can move up to upper-priced homes, and so on.

But Ed Sutton, an agent with RE/MAX Flagship in East Hartford, said the ripple effect is not happening on a wide scale because many of the entry-level homes being purchased are already vacant and in foreclosure, the previous homeowners long gone."
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May 11
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Lady Chattel

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In my price point and my income level......this $8K bribe is chump change to me........if I were buying a $50K property and made $25K per year perhaps yes........

In our area Klarek the tick tick boom people are falling each and every month....loosing the McMansion, turning in the Land Rover leases, and selling their Gucci bags on ebay......another's misery is another's glee.....sounds mean but it is reality.....just as some like Linda tries to encourage people to scoop up investment properties we are just trying to scoop up a house to live in.......not too different really I suppose.

A friend told me her hubs company cut back all executive salaries 15%....so they are not taking a vacation this year.......we got a sweet deal on a Disney Cruise......$4K for a 10K vacation........oh yeah....
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May 11
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nvchaz

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In other words, these recovery initiatives will cause a false spike later this year but the window of opportunity for the little guy will shut thereafter. Best get while the gettin's good.
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May 11
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akoi

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Klarek has brought up some valid points. Most of my clients/buyers feel as though this 8000. is a reason to purchase now, but There is an indication that some parts of the country are still in a decline.

west coast may have leveled out, but areas like Michigan  have continued to nose dive
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May 11
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klarek the realist

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LC, I'm the same way.  I'm less concerned with "the bottom" at this point, and really just focusing on my own financial ability, as well as what I deem acceptable to purchase.  And I'm going to buy assuming that I will own for the full 30 years.  With all this manipulation going on and potential buyers jumping off the fence, I'm even more reluctant to go out and look at properties.  Maybe the banks will unload their inventory soon, maybe not.  I'm pretty irked, but I'm not going to let my anger cloud my judgment.  The buyer's bribe will expire at years' end, and I believe chaz is correct in saying that rates will likely go higher.   Price discovery is inevitable.  I just hate this market manipulation.
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May 11
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Lady Chattel

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K101, you sell out, your a disgrace to our profession, hee hee.........


I would buy before the bottom if it meant I got a house I truly could enjoy and live in and was "affordable" according to my litmus test......
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May 11
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Actually I basically agree. The true bottom will be 2012.

But there is a unique opportunity for first time home buyers on the lowend right now.

Last weeks poor treasury auction is already causing rates to creep up -- we will be at 7.5% or more by this time next year, probably sooner. Each point on a $100K home is $100/month. That's alot for the po' folks.

$8K is 8% on a $100K home and REOs are going for 50% - 60% off peak on the low end. So 60% off peak is a good thing.

REOs on the low end are getting flushed out first. Middle and high end are increasing in volume. Low end REOs starting to diminish.

Cash will be king in 2010. Scrutiny of FHA risk levels will begin and tighten. Consortiums with cash will be absorbing REOs squeezing out the broke guy like me.

Renter v. Owner equation now favors owner in many markets including mine. I can stash cash and move up in 2012 when the 3 year retention requirement is satisfied. There will be huge bargains in 2012 for middle and higher end homes.
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May 11
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"The true bottom will be realized when the "doomers" on Zillow jump in and purchase a house"

True, LC.  I am trying to pick up a short sale but I don't think the bottom is in yet, at least not in my area, so don't count me.  8)
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Lady Chattel

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The true bottom will be realized when the "doomers" on Zillow jump in and purchase a house..... and you can quote LC on dat one......
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Bette Defarm

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Nothing Suggests We're Anywhere Near the Bottom

"....Nor are the "programs" trotted out by Obama (and his predecessor, to be fair) doing anything. We recently learned that "Hope for Homeowners" made a grand total of..... wait for it..... 51 loans.

FIFTY ONE? No, that is not a misprint:

Senior federal housing officials say that of 51 loans made under the program, 50 were made by Melville, N.Y.-based Lend America, and those 50 loans are being held up pending ongoing federal investigations. The officials, who insisted on anonymity because they are not authorized to speak on the matter, declined to offer specifics except to say anything from inadequate documentation to unethical practices could be the focus of the queries.

Remember, "Hope for Homeowners" was supposed to help four hundred thousand people stay in their homes. The net closed loan count is fifty one over a period of six months."
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