In housing market, ‘hints of a bottom’

LOL. This story is a re-run from several months ago. I expect a similar story again in six months.

actually, since the housing market is tied to my husband's job- this does affect me even if I do have a good loan on my house etc and we are not residential builders or real estate agents...
I will say that on a vacation this month to Florida things seemed more optimistic. The area we were in has been dealing with this since 2006. Although they believe prices will continue to decline for a few months, inventories are dropping as homes are priced right for the market. They actually have comps (comparisons) now and the real estate agencies believe they are slowly moving forward. Interestingly, sales are to end users vs. investment co. at this time.
I believe the mortgage co and credit issues will cause the situation to linger longer since they will not recover as quickly as other market areas.

I can see recovery being very slow. Builders all over are still hoping to cash in on huge homes- and huge profits.

The demand for smaller homes is up, but there are no takers in the builders trade.

Baby boomers are in a new buying trend: condos and smaller homes <1800 sq ft. There are no homes in my area that meet this criteria (that are livable or fixable).

There is a glut of homes over 2600 sq ft, huge lots, four or five bedrooms etc. But Grandma and Grandpa don't want to take care of a huge house, or mow a big yard.

Get a clue builders!

Stories like this make me laugh. We are nowhere near the bottom in the housing market. It will take years and years before we start to see anything that even begins to resemble a normal housing market in this country. Anyone who tells you anything different is either wrong, an NAR zombie or mentally disabled.

Mortgage resets are not due to peak until next month. Foreclosures are estimated to peak some time around next April. These figures only deal with homes that are selling, many of which are foreclosure sales. We continue to have a credit crisis that impacts mortgage availability and we are in the midst of an economic downturn.

Nogrog is correct. While we could technically hit a bottom some time in the next 6 months or so, it will take years for the housing market to get back to any kind of strength. And even then, we will only return to the more normal growth in home values of 3-5% per year. Without the exotic loans of the past decade or two, there will be far fewer buyers trying to upgrade into homes far larger than they need. And those with poor credit or lack downpayments will not be able to qualify at all.

The Bush propaganda machine keeps trying to wake up Polyanna with these pie in the sky reports. There are lots of buyers who would like to buy. There are lots of sellers who would love to sell. Until someone figures out how to make loans without going broke, it ain't happening. There is no liquidity out there, and even good credit loans are hard to come by. And Peter gets it, although he is forgetting the third cycle, so add about a year to the prognosis.

Mortgage resets have two more cycles to go, and each cycle begins a new cycle of foreclosures. It isn't pretty, and government has no idea what to do about it. Actually, no one does. It is a 6 - 8 Trillion Dollar Problem. Hillary's idea when the whole mess started was, let's just take a Billion Dollars and save these people really demonstrates how clueless elected officials are. Not picking on her...this time. None of them understand it.

And those that do, those who made huge piles of money creating this problem are waiting, because they are going to make huge piles of money getting out of this situation as well. The rich really and truly do get richer, no matter what else happens.

What did you expect? This is another Bush economy. We've seen this before - from the father.

In '90 - 91 the US experienced a recession, partly fueled by oil. If you recall, the housing market took a dive. I recall the houses on either side of me being empty for 5 years. I was layed off from my aerospace job (but managed to hang onto my house by taking a lower paying job).

It took a full seven years before my southern California neighborhood recovered. My own house (which I've always viewed as my home, not an investment) had more than doubled in selling price in the 4 years of ownership leading up to the recession., but at the deepest point of the recession it had lost about 90% of that "gain".

So high oil prices, foreclosures, business failures, mass unemployment: I think these are the only things the Bush family knows to give to America.

I think this current problem will impact the country for a longer period, due to the waves of resets. I see some areas - especially those new housing ghost towns - not recovering for 10 to 15 years, because my perception is that this current crisis is at least twice as bad as the '90 - '91 recession.

Oh, by the way, I quit the aerospace industry 11 years ago, went into IT, and never looked back.

Yep Peter17- absolutely there are areas that will survive and even flourish. Last time around I recall it was the mid-west that did well. I think the areas of the country that will have the worst problems will be those areas that saw their house prices inflate the fastest and that lose the most jobs.

Jake, actually the formula for buying a home was established years ago on a tried and true formula.....
you pay 20% down, as in cash, then get into a FIXED mortgage, 30 years is good, with a balance of no more than three to three and a half times of your yearly gross income. You will find very few people facing foreclosure that have abided to this rule.
Single family home ownership is the American Dream, but many dreams only come true with hard work and diligence, not from the fast talking Realtor and mortgage broker. NEVER get into an ARM or a 100% or greater loan, one who does is only asking for failure.
Very true, the 20% down rule is VERY difficult to achieve, as many times rent is higher than what a mortgage payment would be, even with tax and insurance. Also make sure you get a PITI (Principal, Interest, Taxes and Insurance) loan, many homes have been lost for failure to pay taxes.
Don't set expictations too high on your first home, hence the term starter home. Do try to buy the least expensive home in the most expensive neighborhood, you will get the best return on your investment.
Make sure your credit score is as good as you can make it, as this will get you a better loan rate.
With housing prices at a several year low, there are very good buys out there.
Good luck, work hard and I hope you achieve your goal.
Don't let your anger get in the way.

This story is a bit shallow, because while it, like many other articles, only deal with whether or not the market is about to recover or still falling, it ignores one basic fact: NOBODY can get a loan for the life of them. Many Mortgage Brokers try desperately to get loans for their clients, but to no avail. No more Stated Income loans, minimum 30% down and grim interest rates, does not make for a recovery; who has this kind of money today? Therein lies the answer to the basic question about a recovery...

Even with New Home sales, where they offer free Pools, Appliances and other incentives; 95% of the people who walk in and want to buy, can't qualify for a loan, or have the necessary down-payment...how is this getting better?

The fact that he mentioned 'a bottom' means the bottom isn't here yet. It will come when no one wants to touch the housing sector. When no one has anything good to say about it. For financials, airlines, and autos, that came on July 15 th when Charlie Gibson's three 'guest' financial gurus had nothing but doom to say about those sectors….I got airline stocks and financial funds the next day. Look at the charts since then…

"Buy when there is blood in the streets…even if the blood is your own". Who said it?

I love it... I'm buying homes at less than $100. a square foot...not junkers, not trashed homes, but fairly new, large homes with the only thing missing being the lawns. I just bought a 3,000 sq. ft. home that was 3 years old for $84.00 a sq. ft. I can't build a nice garage for that!

People get a grip we are looking at 10years before market recovers....

The new Housing & Economic Recovery Act can benefit manufactured home buyers even more than buyers of conventional home. The tax credit/loan that Uncle Sam is offering is up to seventy five hundred dollars. Because of assembly line building and massive purchasing by factory builders the cost of manufactured homes is considerably less then site built. So the percentage that the tax credit will cover on an manufactured home can be considerable greater. This is covered in the recent article "What the Housing & Economic Recovery Act Means to Manufactured Home Buyers" at

The market is doing what any market does when it's pumped up. It pops. In some areas, like the Milwaukee area, it wasn't over-valued as severely as it was in the sunbelt, so the pop was a bit less severe (so far).

Is the market affecting me? Yes. Just sold an old Victorian (closed on Friday) after renovating it for six years. It took about 5 months to sell. So I guess all that inventory had something to do with the length of time it sat on the market. Actually, we had a firm offer within a month of listing, and it took our buyers longer to sell their house. We did a good quality renovation; the buyers recognized that and the house sold for a good price--good for both us and the buyers.

Now, we'll start building. Materials are down by at least 20% from late last year, and contractors are very willing to compete with each other for our business. With housing starts down by 40%, most of the fly-by-night contractor outfits are out of business, and for those that have been able to stay in business retained only the best talent. We're building in a neighborhood that is still in demand, and we will see about 15-20% increase in equity as soon as we get our occupancy permit. We'll do much of the labor intensive work ourselves to build up equity.

I had no trouble with obtaining financing. Equity from the house paid for the lot, with a bit left to spare for working capital. So the bottom line is: yes it has impacted me. Positively.

the market will recover when the average real estate broker can afford a house