Looking for a housing market recovery
Predicting when the housing market will recover and/or when prices will rise is a game that has attracted many players, if only because the slump has dragged on for so long that everyone's had an opportunity to weigh in.
Here are two more forecasts in that vein:
Metropolitan Regional Information Systems, the company that runs the local multiple-listing service used by home buyers and sellers, says in a report issued today with real estate information firm Delta Associates that it's "too soon to declare the Baltimore metro area housing market in recovery, but 2010 may herald recovery."
"Yearly statistics show a modest decline in prices since the 1st quarter of 2009, but improvement in both volume and days on market," the report said.
First American CoreLogic, another real estate information firm, offered its own take in a separate report on single-family home prices. Baltimore metro area prices were down 6.6 percent in February compared with a year earlier even as national prices bumped upward ever so slightly, it said.
The company expects continued -- but smaller -- decreases for a while in the Baltimore metro area. Its forecast is that prices next February will be down almost 1.5 percent.
Maryland, meanwhile, had the seventh-largest price drop among the states in February, the company said -- 7.5 percent.
Distressed sales are playing a significant role there. Counting only traditional home sales, prices are down 3.2 percent in the state, the company said. And its forecast for Maryland is for a 1.5 percent drop in price overall next February, but a more than 5 percent gain when excluding distressed sales.
More food for thought ... and debate.
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Comments
I sent this comment to you for another blog but never saw it posted, so I'm not sure if you received it.
I once tracked MD DAT data for houses in North Baltimore neighborhoods, and noticed that people who bought their houses at the peak of the late 1980s/1990 boom saw their property prices decline. In fact, if they sold their house within the decade they usually either took a small loss or just barely broke even (and this isn't factoring in inflation, realtor expenses and the general upkeep on properties as well as the taxes paid).
It wasn't until 1998-1999 that property prices started to nudge above the late 1980s peak prices. So I wouldn't be surprised to see the following: 1) house prices bottom out in about a year's time, and 2) house prices stay flat for multiple years, and 3) house prices don't reach their 2006 peak prices for 8-10 years, if not more.
Of course I could be wrong, but I am also aware that too many people have very short term memories when it comes to real estate trends.
Posted by: Tom | April 27, 2010 9:06 AM
Hmm, I don't remember seeing that comment, Tom, so it must have been eaten in transit. Thanks for trying again.
Posted by: Jamie Smith Hopkins | April 27, 2010 9:12 AM
Statistics that exclude distress sales are meaningless because distress sales are part and parcel of the market.
Moreover, supply is being intentionally limited by banks that delay putting foreclosures on the market.
Posted by: John | April 27, 2010 11:43 AM
Baltimore Metro area was late to the price decline party. It will lag some other areas in recovery. Prices still too high for average income. BRAC is done and DC gov jobs level out/in decline.
Posted by: ASH | April 27, 2010 9:39 PM
I don't know anyone on the Wall Street or in Washington, so pretty much everyone I know have not seen a salary increase or a bonus for at least two years. Basic expenses, like food, insurance, gas, car maintenance are all up at the same time. Our savings are melting away gaining some point zero %; the pension funds - puff, gone!
It is more difficult to get mortgage now than just a year-two ago. The mortgage rates will most likely go up in the near future.
So with this situation who in their right mind would expect the real estate to go up in value? It's just the wishful thinking by the dilusional sellers and the agents who will say just about anything their clients want to hear. Remember that TBS ad few years ago? "It's a buyers market, baby! ... It's the sellers market!".
We need to see at least some significant ECONOMIC recovery (and in reality, not on paper) for any upwards movement to appear on the real estate market. I think Tom is correct, if not optimistic.
Posted by: Jelena | April 28, 2010 2:28 PM