The S&P/Case Shiller® composite index for the month of February was released today.
"'Beginning last November, each report showed gains as fewer cities reported year-over-year declines than in the previous month; those gains ended with this report. Further, in six cities prices were at their lowest levels since the prices peaked three-to-four years ago. These data point to a risk that home prices could decline further before experiencing any sustained gains. While the year-over-year data continued to improve for 18 of the 20 MSAs and the two Composites, this simply confirms that the pace of decline is less severe than a year ago. It is too early to say that the housing market is recovering' says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. 'Nineteen of the 20 MSAs and both Composites declined in February over January. Fourteen of the MSAs and both Composites have now fallen for at least four consecutive months. In addition, prices reached recent new lows for six cities in February – Charlotte, Las Vegas, New York, Portland, Seattle and Tampa – sending a more cautionary message compared to the annual figures. While 14 MSAs and the two composites show improvement over their trough values reached in the spring 2009, we are not completely out of the woods. Existing and new home sales, inventories and housing starts all show tremendous improvement in their March statistics. The homebuyer tax credit, available until the end of April, is the likely cause for these encouraging numbers and this may also flow through to some of our home price data in the next few months. Amidst all the news, however, we should also pay heed to foreclosure activity, which have reached their highest level in at least the last five years. As these homes are put up for sales, we may see some further dampening in home prices.'"
19 comments:
Harriet-
Thanks for posting the updated numbers.
VA-
Yeah I heard that news. I also don't find it very surprising that VA beat MD and DC, seeing that VA tends to more business friendly
did i miss the boat that cara got on?
hb,
It seems that one company begets others and it continues.
The growth of the Dulles Corridor (as well as Ballston, Clarendon, etc.) over the past 20yrs is just amazing. Once we get thru the worst of this recession, I believe a big boom is in store.
I don't know how much room is available for growth in Arlington, but there is plenty of space out this way. The "strip centers" at RTC had already been planned for demo. This has been delayed to the economy and the crazy over-building in the early to mid 2000's.
I expect the one or two level office parks near the Silver Line to go the way of the dinosaur too.
MM,
?
Do you mean the $8k prices floating above their sustainable bottom levels boat that's about to go over the waterfall?
hb,
In reference to your ~0.5% down each month for the next year comment, I expect March April and May to moderate and then be up MoM as January works it's way out of the 3 month average and the full brunt of the $8k final rush kicks in. But after that I wouldn't be surprised by -0.5% again in June, and -1 or even -2% sometime later in the year to make up for it.
I think we'll break 170 again sometime this year, just not sure when. OTOH breaking 180 is almost as likely. Of course we could do both.
Cara said..."I think we'll break 170 again sometime this year, just not sure when. OTOH breaking 180 is almost as likely. Of course we could do both."
Hence the reason I chose a range of values in my sawtooth L shaped recovery scenario.
cara,
the boat that left the "valley" sometime btw November 2009 (YOY -0.60%) and
December 2009 (YOY 1.85%) destined for appreciation happiness.
MM-
Luckily YoY numbers don't matter for us buyers as much as MoM numbers. Most of us realize that buying at the end of 08 probably would have been good timing, but at least each month has been getting cheaper during 2010. Cara may be right and we see a couple of positive MoM numbers come out. Although we are at 176.5 I would bet we see 170 before we see 177.
Well, main stream media seems to be hopping on "the worst is over" scenario and pumping interest rates off-setting any further downturn.
I've seen this on several "news" shows recently. I guess we will see if this brings more people into the market. I'm hoping the worst is over for the economy, but who knows? Just be glad you didn't buy in 2005 (unless you are in an immunizone).
Location, location, location.
hb,
That's the thing; the 4th quarter of 2008 the World was coming to an end. That is when the risk taker's move in. Banks were giving houses away.
It's very much risk/reward. Most here want to know that the bottom is or was in. Of course this is only known in hindsight. I suppose that it will take another 3 yrs until we really know.
What I don't understand is the absolute need for certainty among this board. You win some, you lose some. If you will be devastated if your home (that you intend to be your "home") fluctuates in value, I really don't understand that.
VA-
I totally agree with you that you will never be certain. I have commented that the price/rent ratio is now in a place that it is neither good nor bad to buy now. So if it is your time to buy you should, if it is not your time don't buy. For personal reasons I am in no rush to buy and I do think we will get close to the recent lows. So with the combination of both of these I am not in much of a rush. If I was in a different situation I would probably be more content with buying knowing prices may go down, but rates will likely go up and the net benefit is pretty small.
VA-Investor, tbw, Cara,
On the Grumman location, I am rooting for Fairview Park. They have a miniature golf-club and my company used to take us there to celebrate business successes.
Raytheon and Verizon already have a presence nearby and there is plenty of space for new buildings.
tedk-
Did they say they are going to build a new building? Right now there is a lot of available space, so I wouldn't be surprised if they just take an empty building and perhaps revitalize it some.
Va_Investor said...
What I don't understand is the absolute need for certainty among this board. You win some, you lose some. If you will be devastated if your home (that you intend to be your "home") fluctuates in value, I really don't understand that.
That's ridiculous. Say I had bought a townhouse in 2007 when I got married. This fit our life circumstances at the time. I would be stuck in that townhouse for much longer than the ideal time of 5-7 years when we would have a kid ready for school. We'd likely still be underwater and unable to get a SFH in a desirable school district due to our negative equity.
Buying a home has more of an effect on personal net worth than any other decision I've made in my lifetime - including switching to a higher paying job. That is why I wait for certainty in the market. I don't know the market isn't going to tank another 10% now that the government supports are gone. The only reason I even consider buying now is because we have enough saved to get a home that will keep us happy for 20+ years. At least if we get screwed it will just be our retirement that suffers, and not our kids education and quality of life in the mean time.
HB--
I don't know if they are planning to add new buildings. Just saying there is space if they want to.
tedk/housebuyer,
According to Washington Business Journal it seems to be between 3120 Fairview Park Drive or 800 N. Glebe in Ballston. It looks like the Fairview Park property exists already, but the N. Glebe property for what I found appears to be under construction.
Glad the bubble's over. Buy now or be priced out forever!
tedk-
That makes sense. It would also allow them to get a nicer building in the future if they wanted to expand.
Jeremy-
I could be wrong, but I don't think VA is talking about buying at any point. In 2007 I think it was very clear that housing prices needed to come down. Now if the government is able to use interest rates and a little inflation it is not clear prices need to fall. So yes in 2007 it was a bad idea to fall, but now you might win (prices don't fall you get a good interest rate) or you might lose (prices fall some)
HB said...
"Jeremy-
I could be wrong, but I don't think VA is talking about buying at any point. In 2007 I think it was very clear that housing prices needed to come down. Now if the government is able to use interest rates and a little inflation it is not clear prices need to fall. So yes in 2007 it was a bad idea to fall, but now you might win (prices don't fall you get a good interest rate) or you might lose (prices fall some"
Agreed -- what was "certain" or (near certain) in 2007 is that prices were falling and had the potential to fall alot more. Now, that is not the case. Its very possible prices will fall -- its very possible prices will rise.
BTW, I think what we are getting to now is why it is so hard to "see" the bottom, even when it is smacking you in the face. 5 years ago, if you would have told me that prices would be going up for the better part of a year, and many of us would be debating whether this was the bottom or not, I would have said "thats insane, how can that even be a debate when prices are going up?" Still, in the here and now, lingering doubt remains.
If that was the bottom, people 10 years from now will look back on this blog and think we were idiots for not seeing it. Still though, that post hoc reflection doesnt tell us anything about whats going on in the here and now. The govt intervention may or may not be a big factor in all this, so its reasonable for some people to hold off til the intervention ceases (which presumably should be next month).
At the same time, the fact that QE ended last month, and despite the prognostications that it would send interest rates soaring since there would be no buyers, so far, it looks like yet another huge nothingburger. Whose to say the end of the 8K credit is going to be any different?
Even worse, what if prices DO start falling again? Lets say prices get back down to March 2009 values again. Do we "not pass up this second opportunity at the bottom" and move in? Or do we continue to sit, waiting for prices to drop even further?
Finally, what if they do not drop below the March 09 levels. Will we then recognize that was the bottom, or will we then find another red-herring type excuse to blame it on?
There is an old saying, "they dont ring a bell at the bottom" which is very appropriate here. Whenever the true bottom hits, there will not be champagne fountains, and shining rays of nirvana from heaven above. At the bottom there will be high unemployment, massive debt, govt intrusion, etc, etc. -- and thats true whether the bottom was March 2009 or March 2019.
Each one of us will have to climb our own personal wall of worry and decide when its best to dive in, despite the remaining headwinds at the time. Some went in too early and became (in hindsight) knifecatchers. Some of us will make very good choices and buy very close to the bottom. Others will wait far too long and miss the bottom by a mile. However, thats just the way it is -- you cant force someone to recognize "its over" when they have real and legitimate fears staring them in the face.
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