Let’s take some time to do another checkup on our February 2009 bottom-calling series.
In our last checkup back in October we hadn’t found a bottom yet. Let’s see if we’re there yet.
First up let’s have a look at an updated version of the “Blind Optimism” forecast chart:
Oops. So much for blind optimism. What about that cool inventory forecast model? Let’s have a look at how that’s shaping up:
Hmm, well that model worked great right up until it didn’t. What about dollars per square foot? Have we hit a bottom there yet? Let’s check Redfin’s charts for single-family homes in King, Snohomish, Pierce, and Seattle proper:
Spring 2010: $215/sqft. Summer 2010: $225/sqft. Latest: $199/sqft.
Spring 2010: $164/sqft. Summer 2010: $167/sqft. Latest: $145/sqft.
Spring 2010: $125/sqft. Summer 2010: $130/sqft. Latest: $114/sqft.
Spring 2010: $323/sqft. Summer 2010: $342/sqft. Latest: $298/sqft.
Nope, still not seeing any bottom in any of those charts, either.
When will we hit bottom? My original guess back in February 2009 was December 2010 at 36% off the peak. Then the tax credit came around and stalled the correction of local home prices, putting the bottom on hold for about a year. My new guess is basically jut taking the same prediction and shifting it ahead a year, so December 2011 at a little over a third off the peak (about 11% down from the December 2010 Case-Shiller value). Given the price drops we’ve seen in the last couple months from the NWMLS data, much of the remaining correction may be taken care of in the first quarter.