The Housing Bottom is Here

I think the payroll # on friday is helping them to change thier tune

"Calculated Risk Is Wrong: THERE IS NO HOUSING BOTTOM IN SIGHT"

"Housing analysts have been confidently predicting a bottom for the housing market for the last three years and they have been totally wrong. Anyone who acted on their advice and purchased a home has taken a beating. The clamor about a bottom finally arriving this year is just as loud and will be just as wrong.

Those of you who have an interest in your local housing market – either as a prospective buyer, seller, or just a homeowner worried about how low the value of your house might go – need to disregard this nonsense about a bottom arriving now. There is no housing bottom in sight."

http://www.businessinsider.com/calculated-risk-is-wrong-there-is-no-housing-bottom-in-sight-2012-2

All these analysts & investors are wishfull thinkers.
I remember Sam Zell last year on CNBC saying " That's it! We've bottomed!!!!" and proudly saying he was buying a lot of properties... Today, it seems like his tune has changed, and he now blames the government for it...
http://www.cnbc.com/id/46308436
Another one who've been catching falling knives!

That's the 01/15/2010 Sam Zell interview on CNBC: http://www.squarefeetblog.com/commercial-real-estate-blog/2010/01/15/sam-zell-on-cnbc-discusses-housing-and-more/
Quote" " We've seen a bottom on residential real estate!!! " Fvcking hilarious!

CR was talking about a bottom in housing starts and new home sales..not prices

"Ready to Rebound"

"After falling 34% over the past six years, U.S. home prices will soon bottom. They could turn back up by spring 2013."

"TO BE SURE, PLENTY OF headwinds remain for home sales. Unlike the stock market, home prices display much long-term momentum and inertia. Prices, all other factors being equal, tend to move in their past direction, and lenders, chastened by recent experience, remain tight with mortgage credit. Going through the home-loan application process these days is like undergoing a financial colonoscopy. In contrast, during the salad years of the housing boom, banks were shoving money at borrowers, with few questions asked.

The biggest impediment to a turn in the home market remains the so-called shadow inventory of some 3.671 million homes, according to estimates by Mark Zandi of Moody's Analytics: those that remain somewhere in the foreclosure pipeline. Payments on some are 90-plus days delinquent; others are already lender-owned properties, known as REOs (real estate owned), that haven't yet been listed for sale. "

"NONETHELESS, THE POSITIVES these days outweigh the negatives.

Take the daunting 3.7 million homes that Moody's estimates is in the shadow inventory. Zandi points out that this foreclosure pipeline has been steadily shrinking since its peak of 4.53 million homes in the first quarter of 2010. The decline is primarily a result of a precipitous drop in loans entering the foreclosure channel.

The 30- and 60-day early-stage delinquency rate has been dropping like a stone for several years because of tightened mortgage-underwriting standards. "

http://online.barrons.com/article/SB50001424053111904797004577281453828447714.html#articleTabs_article%3D1

funny all this talk about the "bottom" in the "housing market".. Real estate is location, location, location. It may very well have bottomed somewhere. But on SE's local, NYC, it has a lot further to go...

>Real estate is location, location, location.

I thought real estate was "what I could have bought instead: Sprint, Bank of America, S&P500"

Yes all these articles are national trends. Also, Schiller said that sales will pick up but that prices will continue to decline for quite a while because the tsunami of foreclosures coming to market will be picked up on the cheap by investors and that will put pressure on all housing.

did apt23 stop bleeding?

It will be very very very easy to tell when the housing bottom has arrived! No guesswork required!

When all Manhattan apartments in prime areas like the UES between Fifth and Park, from 59th to 79th are ALL $500 psf - then we've hit bottom! Voila! Just ask w67, Brooks2, and bsexposer. And it's happening...

any

day

now

i think we just reach the peak

I think we make up fake stilted English.

It is interesting that bulls quote these market bottom based on housing falling significantly when nyc hasn't had those kind of losses. So such logic wouldn't necessarily by applicable to nyc. Not that nyc couldn't go up for other reasons. Just not because we came off so much since that didn't happen here.

It seems sellers are waiting for prices to go higher (offer price they want is higher then current market price), but buyers aren't bidding up the prices (bids lower than or at least not much higher than current prices)
A) So are buyers going to start going on a frenzy to bid up prices to get sellers to come back into the market?
B) Buyers stay in a holding pattern until some point where some sellers are forced to come down, lowering the market and possibly adding to negative pressure to negative forces from foreclosures.

What are folks 6mo & 1 yr predictions on nyc market?

I have said it long time ago and I stay firm: prices will rebound in 2015.

john75, then when will price start to drop? if it'll rebound.....

"No Housing Recovery On This Chart Either"

"Minutes ago, the US Census Bureau released the February Housing Starts data, which printing at 698K was a mild disappointment, as it was below expectations of 700K, and down from a revised 706K. However, as usual, the headline gives only half the story. Here is the reality: in February, only 48.1k homes were started (Not Seasonally Adjusted). This compares to 46.5K in January. However, of this number Single Unit houses, those which are relevant for actual housing demand, and not the 5+ units more relevant for rental purposes, declined from 33.0K to 31.5K. In fact, the 31.5K number was the weakest since December's 31.0K, and then all the way back to February 26.6K. What offset this? The surge in multi-family housing units, as usual, which rose from 12.3K to 16.1K. Recall that lately there has been a shift from owning to renting, and as such builders are focusing on this. All of this is summarized in the SAAR based (Seasonally Adjusted) chart below.

It gets worse: looking at actual completions, far more important in this New Normal economy, where everyone is willing to take credit for a hole in the ground as "new housing" what really matters is the rate of completions. And in January, it was a meager 28.6K, a tiny rise from January, and lowest than any number in 2011, except for last February. Sorry - there is no housing bottom. If anything, true housing continues to creep along the bottom as can be seen in the chart below."

http://www.zerohedge.com/news/no-housing-recovery-chart-either

I don't think this should be called price recovery but price appreciation. at least not by anyone who has either worked in or reported on the financial industry prior to 2002.

Here's the more optimistic view!

New building permits surged 5.1 percent to a seasonally adjusted annual rate of 717,000 units last month, the highest since October 2008, the Commerce Department said on Tuesday.

The jump in permits, which exceeded economists' expectations for an advance to a 690,000-unit pace, reinforced views the housing market was improving and that home building would add to economic growth this year for the first time since 2005.

In February, housing starts slipped 1.1 percent to a rate of 698,000 units, but there was more new construction activity in January than previously reported. Moreover, starts were up 34.7 percent from February last year, the biggest year-on-year rise since April 2010.

The data followed a report on Monday that showed sentiment among home builders held at a near five-year high in March.

"Builders are not just spending money on permits unless they absolutely intend to use them. We will see housing starts above 700,000 units next month," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

"We are likely to see as much as a 20 percent increase in housing starts this year compared to last year. That is a healthy gain and it's going to add lots to jobs and lots to GDP and that's all that really matters," he said.

http://www.reuters.com/article/2012/03/20/us-usa-economy-housing-idUSBRE82J0HO20120320?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Feedfetcher

personal observation about the building permits, there is tons a construction going on out here in Nj and being......curious and ....inquisitive...I stop to ask about the project when I can, these are overwhelmingly teardown projects already purchased by the OWNERS, not builders, in their original rundown, affordable, state. moreover, while I definitely drive a lot and all over, this sort of thing is not happening in so called up and coming areas but estatblished towns with good schools and amenities. so my impression of what I see out here is the product that is moving a true bargains, and the people moving it are BUYERS not builders. builders are actually quite cautious.

Surged?

31.5k new build number is what is needed to keep all the union contractors 'employed.' if you are gonna pay for the cook, waiter and gas.... Might as well bake some pies.

Go back to your Marginal cost analysis.

Building will continue until inflation hits and building materials sky rocket. Then low mortgage rates and lots of inventory will drive existing home sales up... the housing market will start to rebound in 2012. Warren Buffett was right last month when he said - buy homes.

Merill Lynch put out a research note this morning: Home price forecast update

"We have ... updated our home price model and believe that prices are bottoming now. However, we continue to believe the recovery will not begin in earnest until 2014. ... we expect roughly flat home prices this year and next with modest growth in 2014."

Merrill had expected a further decline, but now they expect prices to be mostly flat for the next two years.

http://www.calculatedriskblog.com/2012/03/misc-merrill-house-pricesbottoming-now.html

you guys are talking about florida and las vegas right?

"Please Highlight The Housing Recovery On The Following Chart..."

"...of New One Family Homes for Sale (source) which at 150,000 is the lowest print... Ever."

http://www.zerohedge.com/news/please-highlight-housing-recovery-following-chart

In order for housing to recover, banks have to lend. It's nearly impossible to get a mortgage and cash buyers are depleting by the days. Therefore, who's putting up the fund to sustain a recovery ? Move-up buyers are staying put. I am simply curious as to who will be buying ? Investors ? Hedge funds ? Inquiring minds want to know.

"Housing Hype: Recovery Turns to Relapse?"

"Housing was charging back. Spring sprung early. Sentiment among home builders doubled in six months. Any talk that the fundamentals might not be supporting the sentiment was met with harsh criticism. And then suddenly it wasn’t.

A slew of new housing data last week disappointed the analysts and the stock market, and all of a sudden you started to hear concern that maybe housing wasn’t exactly in a robust recovery."

http://www.cnbc.com/id/46855457

fresh data from the front
http://www.youtube.com/watch?v=BIxToZmJwdI&feature=player_embedded

If we keep calling a bottom, one day we might be right...not today

Here's that data...
ignore the above link or...just enjoy

http://www.economonitor.com/blog/2012/03/pending-home-sales-permits-starts-completions/?utm_source=contactology&utm_medium=email&utm_campaign=EconoMonitor%20Highlights%3A%20A%20Lull%20in%20the%20EZ%20Puts%20the%20Spotlight%20on%20China%20and%20the%20Fragile%20U.S.

Schiller has been adamant about the fact that sales may increase but price drop is not finished. He telegraphs that sentiment over and over and I bet we see that confirmed in the numbers tomorrow.

Stop arguing. We won't know whether at any moment in time we're still bottoming or have bottomed and rising until six months after the fact.

"ROBERT SHILLER: Suburban Home Prices Will Not Rebound In Our Lifetime"

( ) "A perpetually sluggish housing market, which Shiller believes has become %u201Cmore and more political,%u201D might push the country in a %u201CJapan-like slump that will go on for years and years.%u201D "

http://www.businessinsider.com/shiller-real-chance-of-japan-like-housing-slump-2012-3

I belive that for some areas..I hear some places in arizona are below 2002 prices

Who is he speaking of? Shiller is a lot older than me, my Grandfather lived 99 years (;

"ROBERT SHILLER: Suburban Home Prices Will Not Rebound In Our Lifetime"

http://www.ft.com/intl/cms/s/0/9a7ca5d0-7808-11e1-b437-00144feab49a.html#axzz1qM3iZzko

US home prices ended a long run of monthly declines in January, but the average cost of a home has fallen to the level of nearly a decade ago, an indication of how deeply the market has contracted since the financial crisis.

For every bullish articles, I can find 3 other bearish ones and vice versa. The "argument" is in the inventory and that includes all inventory, not just the visible ones. Inventory is going the wrong way! Enough said.

I don't know where we are in the market and at the same time I must admit, I am wincing when I walk by buildings, with apartments in them that I was looking at buying in 2009. That felt like the bottom for me, where there were some great buys. I am very specific in the area that I look, UWS usually between 63rd st to 81st st and up to 86th st depending on the day. Plus estate condition, those pats were pummeled in 2009.

IE Mid 2009 490 WEA 9B, fine condition, some water views went for $1,500,000 after 262 days.
Recently 6B went into contract, asking $2,195,000 at 120 days, it was in estate condition and had lesser views.
So not just the 25% increase in purchase price, I think most people would pay $150,000 for better views and condition, so maybe 35% less in 2009.

I am so noticing a difference.

correction apt's not "pats"

??? ok..

this kind of article is garbage

high end RE will continue the bubble, but the low end will continue dropping. nothing will change as long as the current ponzi-scheme type economic goes on

Where's is NYC new inventory heading? I know around the peak a ton of inventory came online at once in FiDi, Williamsburg, LIC, DoBro, Brooklyn Heights, Harlem just to list a few of the less prime neighborhoods...now most of that is sold. Is there nearly as much in the new construction pipeline now?

'Housing: Toll Brothers "Orders up significantly", "Best Spring season in five years" '

' "It's been the "best spring in five years," [Toll Brothers CEO Douglas Yearley told CNBC]. In 2012 "our orders are up significantly and continue to be up significantly. I'm optimistic right now." '

' This still hasn't shown up in the Census Bureau new home sales reports - but it will. Lennar reported sales up 33% year-over-year, Hovanian reported sales up 30% - however KB Home reported a decline in sales, though, as Tom Lawler noted today "KB Home’s surprise YOY drop in net orders for the quarter ended February 29th was company specific, and may have been related to its “preferred mortgage lender” issue." '

http://www.calculatedriskblog.com/2012/03/housing-toll-brothers-orders-up.html

I think the Central Manhattan market still has 25% to drop and here's why. I've been looking at 2br 1bath apartments. It is cheaper to rent these apartments than to purchase the exact same place. Yesterday I looked at a coop property in midtown asking $800k or $4100 in rent. Even including brokers rental fees and application fees, the mortgage payment & maintenance costs is almost a $1000 more a month than rental. I assumed a 20% deposit, 5% mortgage rate and 30 year term. Even taking out tax savings, renting is cheaper.
Cheaper and less risky.

Geoff:

1. Get another mortgage quote. You should be able to do better than 5% even without doing an ARM
2. Take amortization into account
3. Asking price is not the selling price or the rental price. Either can be negotiated.

If you put in a bid for $750K or $775K, and get a 10/1 ARM for 3.7%, mortgage payment is $2,850, with $940 a month in amortization.

Buyers main risk is loss when selling. Renting has the risk of having to renegotiate rent every year or two.

What is the general buy/rent ratio? 800K which probably ends up being 750K-775K is about 16. That doesn't seem too high.

I would add more - A) a 2BR/1BA SHOULD sell at a discount to its rent. Ask anyone who rents that kind of apartment if it is the kind they would want to buy even if they could ignore the fact that real estate is illiquid and has high transaction costs. The answer is no. And the first time you are in quiet contemplation on teh can and one of your kids comes banging on the door and says "I have to go to the bathroom!" you understand why.

When you rent you also have multiple cheap options. You can stay on. Your rent could go down. Your transactions can happen in the space of a week or two and at minimal costs. If your rent goes up, guess what? You can move to where the rent is lower. You may not get to live anymore on your same block, but you won't have high transaction costs as a hurdle for controlling your costs.

People act as if rising market rents obligate a renter to paying more. That is ridiculous. A renter can choose to end the pain any time. The same is not true if you own.

FYI - I say this as someone who lives in a $4000 2BR/1BA and could afford to buy one. But I am sure I am not the only person whose dream in life isn't to tie myself in a 2BR/1BA. One day it will be either a bigger apartment in the city or a bigger apartment outside of the Manhattan.

AvUWS: I agree with you. Buying should always be at a discount to renting, or why buy at all? My current rental, a one bedroom in the 70's and Columbus rents for $2300. The same apartment sells for $5-600k. A good friend of mine rents a condo in the Trump buildings on Freedom Place. Purchase price $1.? Million. His rent is $3k+-. Exact same apartment. To me, that's a horrible investment for the landlord, (3% or so). Bad investment for an owner/user too.

Are 10/1 jumbo rates really under 5%? Advertised or people actually getting them?

Yes 3.5-3.7%. Obv they change everyday. 7/1 ARM's 3.125%

are these conforming rate or jumbo rate?????

3.5-3.7%. Obv they change everyday. 7/1 ARM's 3.125%

taking a macro approach on the "bottom", I would think we need to see ground zero locations, like Nevada, Florida, and areas of California really rebound in sales, and not just volume but prices actually going up. Once we see these areas coming back, then i would safely call the bottom in and out across the nation. Otherwise, right now its flat, some months you will see more activity and some you will see none. Historically, real estate bubbles that burst are followed by many years of the market being Flat...so i doubt we are seeing V shape recovery.

"Improving Housing Market Driving Economy: Jamie Dimon "

"The U.S. housing market is very close to a bottom and there are already signs its improvement is giving a boost to the overall economy, JPMorgan Chase CEO Jamie Dimon told CNBC Wednesday.

"I believe we’re very close to the inflection point. People look at prices that are still coming down but all the other signs are flashing green," Dimon said ()"

http://www.cnbc.com/id/46883527

the word "recovery" in this context is so incorrect in this context, it's annoying. and frankly the idea that THIS is the anomaly and not the bubble is so deeply entrenched in the public subconsciousness that i think it's a sign of...something. i had a lovely conversation with an intelligent, accomplished older person who was complaining about how in the past his house doubled in value every 2 years, he said it like it was a given and the truth, it was bizarre. i asked, hasn't that only been the case since about 2002 or so? until it abruptly ended when everyone lost their money (briefly) and their minds (permanently) sometime in 2009? he was like, sure, that's true. and went back to referring to it as though it has been a given all his life! weeeeird.

So you talked to a nutcase. That's worth posting?

i talk to nutcases all the time. way to miss the point.

I talk to nutcases too.

we have that in common

We are the same.

you say that now

"Home Prices Seen Dropping 10% in U.S. on Foreclosures: Mortgages"

"As many as 1.25 million of America%u2019s least cared for homes are headed for auction after a year-long probe into foreclosure practices kept them off the market.

Sales of repossessed properties probably will rise 25 percent this year from 1 million in 2011, according to Moody%u2019s Analytics Inc. Prices for the homes could drop as much as 10 percent because they deteriorated as they were held in reserve during investigations by state officials resolved in February, according to RealtyTrac Inc. "

http://www.bloomberg.com/news/2012-04-03/home-prices-seen-dropping-10-in-u-s-on-foreclosures-mortgages.html

How is Sprint doing?

"The Truth About The 'Housing Bottom': Home Prices Across The Northeast Are In Total Freefall"

"For nearly two years, I have been warning in my articles posted on BUSINESS INSIDER that there is no housing bottom in sight. I’ve been correct.

Yet one analyst after another has been proclaiming that the housing bottom is finally here. This is nonsense!

Many of these "experts" have skin in the game and hope to lure you back into the market. They base their assumptions on the fact that housing prices seem to be falling more slowly. They're not. Take a look at these shocking numbers I uncovered in the last two weeks:"

http://www.businessinsider.com/home-prices-across-the-northeast-are-still-declining-2012-4

thats really a pathetic piece of research. also seems like a shill piece for raveis.com