A sign we're at bottom?

[WestSideBilly]

http://www.nytimes.com/2009/05/20/busin ... on.html?hp
http://www.marketwatch.com/story/housin ... e-recovery

Seems that builders are in no rush to throw new units at a saturated market. And that we still have a long ways to go.

[mukoh]

Billy, starts are a good thing for the market, that means no units coming in at an emergent pace. Builders right now cannot get financing if their life even depended on it which it does.

The article you are referring to also points out that mainly multi-family construction has plunged, which is a good people who own rental properties of 10+ units. Less new inventory for rentals.

Here are the headlines from NAHB.

5/18/2009 Builder Confidence Continues To Rise In May Press Release

4/15/2009 Home Builder Confidence Posts Biggest Gain In Five Years

http://www.nahb.org/page.aspx/category/sectionID=134

May 18, 2009 - Builder confidence in the market for newly built, single-family homes improved for a second consecutive month in May to the highest level since September of 2008, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI rose two points to 16 this month.

"Builders are responding to what they perceive to be some of the best home buying conditions of a lifetime," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "You're not likely to get a better deal in terms of mortgage rates than what's available right now. Combine that with the affordable prices, multitude of home choices and $8,000 tax credit for first-time buyers that are now available, and you have a very appealing set of reasons to make a move." etc... etc... etc...

[WestSideBilly]

I was being facetious about the bottom.

[Lake Hills Renter]

A friend of mine was going on the other day about how we're past the bottom because a real estate agent friend and an appraiser friend were both talking about how they were busier than ever right now. I threw out some numbers from here about closed vs pending sales, etc but it was all deaf ears. Maybe he's right, but anecdotal accounts are not evidence. When the numbers show it, I'll believe it.

[ira s]

I'm busy too these days. There are a lot of people out there looking at houses to buy. But I'm also not in the camp that we're past the bottom or even there yet. I don't see a straight line downward. look at the charts of some other cities like Boston, and you'll see where they would reverse course for a couple of months and then proceed downward again, and that's what i think is happening here.
I'm hearing in my dealings with other agents their spiel about vastly reduced inventory, and that's a sure sign to buy before prices shoot up in response to that. Eh. Things don't always work that logically. We had very bloated inventories in '06 but prices continued to rise, long past where I thought they'd stop rising...So...they're right in the sense that price rises will eventually follow low inventory in most cases, but it could be a year or two or three before prices rise, and there's no saying that these low inventories will stay low.

[mukoh]

ira, the rate we were clipping them off was about 5 times higher though, so a buyer looking at the house saw it sell by morning in '06. The inventory is seriously getting depleted. My friend is looking in Kenmore for $500k or less. Try punching that into MLS for 2005 or newer. Lots of stuff there?

[davidlosh@davidlosh.com]

There's about 20 in Kenmore with that limited scope of search. If you look at cancelled and expired there are more. If you count town houses there are more.

If you were to just make offers to people I'll bet some one would sell for between $400K and $500K. $450K was the going rate in 2006 and 2007.

Inventory will never be depleted. There's always more.

For that matter for the number of building lots, and construction costs down so much, I'll also bet a new house could be pre sold pretty readily in that price range.

[deejayoh]

[ira s]

Inventories in some areas, especially in the 350-500 thousand dollar category, are down about 70% from two years ago. That was pointed out to me by a listing agent to convince my clients that they'd better make a full price offer right now.
A lot of sellers took their houses off the market because they couldn't sell them.
I've gotten to the point where I don't believe anything anybody says.

[Alan]

DJO,

People have short memories. Last years inventories became 'normal' for some people. Last years prices became normal for some people too.

[EconE]

[deejayoh]

[Civil Servant]

Lately I've noticed a rising tide of people pontificating on the market bottom who don't have any basis to make the claims they're making. Tuesday I was at a work event and the guy next to me, after I'd revealed in small talk that I was renting, told me that I'd better get on the ball because the bottom was coming in four or five months and after that prices were going to start going up like crazy again. I told him the reasons I doubted this (price-income ratios, supply, Case-Shiller index, etc.) and asked him what statistics he tracked. He conceded that he'd just been talking to some guy on the bus and was repeating what Bus Guy had said. But that was only the most recent example of the same sort of conversation/lecture I've been on the receiving end of, all in the past few months. What does it mean, housing-Zeitgeist-wise, when everyone is a bottom-caller, and when they feel qualified to act in that role no matter how little they actually know?

[ira s]

They used to say that when the bag boy at Safeway starts giving you stock tips, it's time to sell.

Even if by some fluke bus guy was remotely right and we truly are near the bottom, it's pretty unlikely that we'll see a rapid escalation in prices.
Take it from me, I don't know anything either.

[BillE]

Civil Servant, I get that all the time. "Better buy now...prices are down." Then I ask how far prices have dropped from the peak and they can't answer. "I hear sales are picking up." Then I ask them if they know how many of those pending sales are actually closing and they can't answer. I also like to ask them if employment has picked up and I just missed it in the news.
A few days ago at work someone caught me in a sour mood and gave me the "better buy now" bit. The first thing that came out of my mouth was, "you just watch a ****ing NAR commercial or something?"