npr on home price direction

Ritholtz makes great points http://www.npr.org/templates/story/story.php?storyId=129800148 ------------------ Mr. BARRY RITHOLTZ (Author, "Bailout Nation"): In a typical, normal housing cycle, in any given time, this four, five, six months supply of housing available, we're now running well in excess of double that over 12 months of supply and that's just the homes that we know about that are... [more]

Ritholtz makes great points http://www.npr.org/templates/story/story.php?storyId=129800148 ------------------ Mr. BARRY RITHOLTZ (Author, "Bailout Nation"): In a typical, normal housing cycle, in any given time, this four, five, six months supply of housing available, we're now running well in excess of double that over 12 months of supply and that's just the homes that we know about that are currently listed for sale. There's a huge overhang of what we call shadow inventory, which are homes that are either owned by the banks and not put on the market or that speculators and investors had purchased and they're not defaulting on them yet, they're still carrying. And then in addition to that, you have these massive tailwinds of mortgage rates that had entered a 20-year decrease. The cost of credit and the availability of credit had gotten increasingly beneficial to real estate buyers. Go back to the mortgage rates of 1980, they were 17.5 percent. You could go out and get a 30-year mortgage right now, today, at four-and-three-eighths. ++++++++++++++++++++++++ But sums it up... Mr. RITHOLTZ: You know, I never have a hard time buying an asset class if you can get a desirable property at the right price. And that's the key. The problem is people have a real fear of buying an asset that's in free fall. And I think the worst of the housing drop is likely behind us. But by my metrics, we're 10 to 15 percent above fair value. [less]