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Have We Hit the Bottom of the Housing Market?

This post was written by jd on April 16, 2009
Posted Under: Real Estate
frogs1

Another indicator that we may be nearing the bottom of the housing market is builder confidence in April made its most dramatic increase in nearly seven years, according to an industry report.

According to  CNN Money

“The Housing Market Index, a survey-based measurement of sales, as well as sales expectations, rose by more than 50% in April, according to the National Association of Home Builders, which compiles the index with Wells Fargo.

The index rose to 14 from its prior level of 9, which was the biggest increase since May 2003

“After a very long period of extreme distress, it’s given the builders some sense of reaching a bottom,” said David Crowe, chief economist for the association”

This is just one of several indicators that we may be bottoming out. Sales in Nevada County have been increasing in April to a point where we have 199 pending sales on the Nevada County Multiple Listing Service (MLS) as of yesterday.

There are large home price changes occurring, some as much as minus $600,000 or more. These large price reductions are in all probability, based on sellers setting their own price based either because of emotional reasons or basing their price on what houses sold for a few years ago. In a declining market, it is very important to list your home a little below the market.

You should have a good market analysis of your home made by your real estate agent and base your listing price based on facts, not emotional reasons, how much money you need to get out of your home, or what you think your house is worth. (I know, sometimes that is hard to do) It’s an un-fortunate fact of life that the market sets what a house sells for and not what we want to sell our house for, No?

Oh, to answer if we have hit the bottom of the housing market, I don’t know and I doubt if anyone else does either. But it sure looks close to the bottom.

Reader Comments

Hey John, of those 199 pending sales right now, what fraction do you think are sold because the previous owner/resident defaulted on the loan?

#1 
Written By David Pinegar on April 17th, 2009 @ 12:49 PM

I having really checked, but based on the fact that the mediam price for the 192 homes are $207,000, and the highest listed is under $300,000, I would say 50% or more.

#2 
Written By jd on April 17th, 2009 @ 5:03 PM

Great, interesting reply.

I’m thinking, as is the usual pattern with me, I was a little early when
I thought real estate might have already bottomed. Probably it would
have now already for sure, if not for the accident-waiting-to-happen
financial crisis that real estate in fact triggered.

To me is is really creepy that the banks may have a huge foreclosed
inventory overhang they are keeping off the market. But it totally makes
sense, even aside from the market conditions, I suppose they can only
efficiently handle so many foreclosures/sales at one time.

I remember riding back from Fiddletown a few years ago, thinking that is
was not a good time to buy land because prices had been really high and
had only started to fall. Maybe there will be a stock market crash too?
Why not? I thought, but rather than do any research, I just thought
about it a little, and for various reasons I thought there would not
happen. However I definitely didn’t think it was an especially good time
to buy stocks either. But I suppose the question helped me be a little
more on-guard back in August-september when the shit hit the fan.
Currently my net investment lossses are 15%, which is a lot better that
they would be if I had not made a bunch of changes in the last 6
months… even though all the changes I made in the first few months
caused me to loose tons of money.

Written to me per e-mail by David Pinegar

#3 
Written By jd on April 19th, 2009 @ 6:40 PM