Not-Bad Housing News!
Over the last year Imagination has done a video series on home buying for one of our clients. Not coincidentally, this series spurred me into buying a home and even using the client for my mortgage (ROI, ROI!). Now that I’m a home owner I pay much more attention to things like year-over-year property values, which is why these new housing numbers are of interest. Check it out:
The bad news is that home prices are still falling 18% year-over-year.
The good news is that the rate of decline appears to be reversing.
Here’s a summary from The Economist:
The headline number is a pretty good one; Year-over-year prices are off 18.1%, down from 18.7% in March and a better figure than forecast. Perhaps more importantly, 8 of the 20 markets followed by Case-Shiller saw a rise in their index value in April. The increases were widespread—markets from San Francisco, to Denver, to Cleveland, to Boston, to Washington, to Dallas saw a tick upward. The hardest hit markets still posted declines in prices, some large, but the rate of decline slowed across the board.
It’s good news, though times will continue to be difficult in home markets for some time to come. A large number of new purchases, particularly in the major bubble markets, are foreclosure or otherwise distressed sales. And while a bottom in home prices will likely bring a flood of buyers into the market hoping to buy at the lowest price available, it will also bring “shadow inventory” online—homes for sale by owners who had been waiting for markets to level off. In markets with large existing inventory, the dynamic will probably favour renewed downward pressure on prices.
The obvious conclusion from all this is that you should buy a home and use Wells Fargo for your mortgage, even if some still think home prices will fall another 10-15%.
I was surprised to see this chart saying the prices took a dive in the start of 2006. I thought that was much later. But then I took a look at their excel document and it breaks the price down by city. Chicago’s Seasonally Adjusted Home Price Values started going down in April 2007.
That little blip going up on the chart in 2009 is very curious–and hopefully optimistic.