Noe Valley Comes Roaring Back

While single family home prices for San Francisco as a whole can’t seem to recover beyond being around 18% down from their all-time highs, Noe Valley home prices have come roaring back since the start of the year. The three month moving average for April was down just 1% from its all-time high of March 2008.  In May, the moving average slipped back to 6.5% off the all-time high.  Take a look (click to enlarge):

Double Dip — Again?

Woke up this morning to NPR announcing that new home sales were the lowest they’d been in 15 years.  The housing market is already in a double dip, with some additional price declines  on the horizon, though we’re near the bottom.  As for the broader economy, we’re skating awfully close, but nobody really knows yet whether we’ll eke out some anemic growth or slide back into recession.

This charming news was followed by another bit of analysis that makes so much sense in retrospect that I’m surprised we haven’t heard it stated more often.  What’s well known is how the wave of foreclosures has affected millions of people directly and the corresponding effect on the economy as they lose their homes, their savings, and their credit ratings.  But second only to that in terms of its drag on the economy is the effect that declining values have had on people’s ability to move to where the jobs might be.  Simply put, there’s a huge number of people who would move, but they can’t because they’re so underwater on their homes.  Since they can’t move, they remain unemployed or underemployed, and since there won’t be any significant recovery in the housing market until jobs come back, they remain stuck in a vicious downward cycle.   You can find the transcript here. ...  Additional Details

Continued Improvement in the Housing Market or Borrowing from the Future?

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The National Association of Realtors (NAR) reported yesterday that existing home sales in October rose to their highest level in more than two years.  Nationally, sales were up 10.1% over September and up 23.5% year over year.

Most of the increase in sales, however, was not in the western region, where sales were  only up 1.6% from the previous month.  (Oh, the devil is always in the details.)  And more “good news”:  The western region median price of $220,200 — clearly this is not San Francisco — was down 14.7% year over year. ...  Additional Details

Dead Cat Bounce?

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At the end of last month, the media was full of Case-Shiller’s upbeat report on the national housing market for July 2009, its most recent reporting month. Three months of improving sales “continue to support an indication of stabilization in national real estate values,” according to the September Report.

Here’s the chart, by the way, which also shows that on a national basis we are back to Autumn 2003 price levels.

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See that little up-tick at the very end of down side of the mountain?  That’s what every one is celebrating, folks.  Indeed, it’s hard not to laugh when the Report includes tortured phrases like “the rate of annual decline … seems to be decelerating”  or “all metro areas are showing an improvement in the annual rates of return, as seen through a moderation in their annual declines.” Whoopee! ...  Additional Details

Homes vs. Condominiums: How much extra do you pay?

Recently, I blogged about the fact that condominiums seemed to be holding up better than single family homes in terms of their decline from their all-time highs.

At the same time, I noted that there was only about $100,000 difference in median value between condos and homes.  That seemed like a small delta and I was interested to see whether it was, historically speaking.  Turns out that it is.

Since, until recently (ahem!), home prices along with everything else have tended to go up, I decided not to look simply at the difference in price between condos and homes.  Instead, I converted the price difference to a percentage of the median value of condos sales for the given period.  This represents the “premium” for owning a home rather than a condo.  Here’s the result. ...  Additional Details

More Grim News on Housing

Saturday’s NY Times proclaims “A Gloomy Outlook for Home Sales’ Big Season.” The headliner, by the way, was “Job Losses Hint at Vast Remaking of U.S. Economy.” Is it really any wonder we have difficulty sleeping a’ nights?

Here are some of the cheery highlights:

  • One out of every seven apartments and houses in the US are vacant, a level not seen since the 1960’s. That’s about 19 million units
  • Less than a third of those are actually for rent or for sale, meaning that many more could yet come onto the market.
  • New contracts for previously owned homes fell at their fastest pace for two years.
  • Some areas that have fallen fastest, like inland California, are seeing improved sales.
  • Urban areas that have withstood the recession reasonably well, like San Francisco and New York, are “frozen.”

We pass Elk Grove on our way up to Tahoe.  Beautiful spot east of Sacramento.  You can buy a 3 BR house there for $193,000.  The same house sold for $336,000 four years ago.  The mortgage is a $100 less than it costs to rent a 2BR apartment.  It’s hard not to think of that as positive.  That is, unless you were the one who lost $143,000 in equity. ...  Additional Details