Is the Housing Bottom Here?


Has the housing market bottomed out? That’s what they’re saying over on the Calculated Risk. Noting that the data shows that new home sales hit a low in mid-2010 and have gone sideways since, the soothsayers at the economics blog predict that housing prices, a metric that hits a lot closer to home for buyers and sellers, will hit a low point next month and rebound from there. The writer cites three reasons for the optimism: (1) the national price-to-rent ratio (historical graph on the jump) is finally back to “normal” levels; (2) there’s been a large decline in listed inventory; (3) housing policy initiatives are likely to lessen the downward pressure of distressed sales. Of course, all real estate is local, so results may vary.
The Housing Bottom is Here [Calculated Risk]

10 Comment

  • brownstoneshalfoff

    “the national price-to-rent ratio (historical graph on the jump) is finally back to ‘normal’ levels”

    Ha! Here’s NYC’s history…

    http://tinyurl.com/2envfd7

    PERIOD: PRICE/RENT
    1890-1892: 9.5-10.1
    1912: 10.6
    1925: 8.0
    1930’s (Great Depression): <5.0
    1942: 5.7-6.4
    1972: 6.0-7.0
    1973: 5.0-6.0
    1975 (White Flight): 2.0-3.0
    1988: 9.32
    1992: 3.57
    2006-2007: 15.0
    Peak to Date: 20.0-16.0

    We're nowhere near back to normal (10x)!

    ***Half Peak Comps Euroding***

  • slopemope

    reading these status for ny’ers is like analyzing a foreign country. author basically sidesteps shadow inventories by rationalizing that they will be solved politically, and makes no mention of how the economy might perform without a 1.3 trillion dollar deficit (i.e.worth about 3 years of economic growth, placed on the credit card).

    Private equity coming to the distressed housing sector may help: http://tinyurl.com/7ooy4sk – - in fact, this may be a good pressure relief valve on shadow inventory that the market needs.

  • callalily

    BHO, you missed your chance. You should have bought in 1992!

  • wasder

    New York, as always, remains a unique real estate market that only tangentially relates to national trends. And as always, micro neighborhoods within the city also behave in very different ways. Some parts of Brooklyn have in fact seen substantial price increases since the collapse, while other neighborhoods would appear to be flat or slightly down. Any article that purports to apply national trends to the NYC market should be taken with a grain of salt.

    • sixyearsandcounting

      Right on, wasder. Co-ops and condos in Ditmas Park have been pretty level through the recession. Lots of new businesses have opened on Cortelyou Road. In large part this is because people have been priced out of Park Slope, the BoCoCa hoods, etc., or are being a little bit more conservative with their real estate purchases. The net result benefits DP.