Real estate bottom…

What’s the latest news headline?  “Housing prices are bottoming out, recovery expected within the 1 – 2 quarters”

Nationally, the decline in residential housing prices has slowed, and about half of all markets are now experiencing a rise in “for sale” list prices.

This trend change is occurring earlier than our previous forecast, and we expect the number of markets with rebounding prices to increase as the year continues.

• People are pricing new listings higher than last quarter. The nationally weighted-average asking price for homes has risen between 0.1% to 2.5% over the last quarter depending on price level. This is a significant change from the downward trend of the last 2 years.
• The largest rebound (2.5%) has occurred among luxury homes, which had already experienced a stabilization of pricing beginning a year ago.
• Generally, more expensive markets (higher median home price) are rising faster.
• Distressed and FSBO inventories have remained flat over the last quarter, a welcome change from previous growth.
• “For sale” inventories have also been flat, suggesting that demand and supply may be in equilibrium.
• We rate most markets as “affordable”: investors should be able to cover ownership/operating costs and financing at current rents.
• However, shrinking employment in virtually every market will continue to undermine demand.
• Many cities in California and Florida continue to have exceptionally high level of inventories, but inventories are stable or declining slightly.
• Detroit maintains its distinction of having the lowest prices for investor grade (entry-level) houses. Inventories are dropping and approaching national standards, but the future of the automotive centers depends on the restructuring of the industry.
• 47% of US housing inventory is distressed (foreclosures, bankruptcies, etc.) or FSBO; this percentage has grown substantially since 4th quarter 2008 as FSBO sales have grown.