'Housing Downturn' in 'Full Swing'
From the San Francisco Business Times:
Wells Fargo Senior Economist Scott Anderson said he expects the Bay Area to enjoy its highest level of employment growth since 2000 this year. But a softer housing market will slow growth across the state next year...From the Associated Press (via Forbes):
Bay Area housing prices should fare better than the rest of the state, but Sacramento could suffer a harsher drop as investors and speculators exit the city's housing market. "The housing downturn is in full swing in Central California as speculators and investors exit the market as quickly as they entered," Anderson wrote in his overview of the Central Valley in which he also discusses the region's loss of manufacturing jobs.
Housing prices, slumping after a five-year boom, are projected to decline in more than 100 of the nation's metropolitan areas, with the Northeast, Florida and California among the areas hardest hit. The forecast by Moody's Economy.com, a private research firm, presents one of the starkest views yet of the housing slowdown that has been gathering force in recent months.From the Central Valley Times:
The West Chester, Pa., forecasting firm projects that the median sales price for an existing home will decline in 2007 by 3.6 percent, which would be the first decline for an entire year in home prices since the Great Depression of the 1930s...
The report said the most vulnerable areas for price declines were those regions where red-hot markets attracted speculators known as "flippers" who purchased homes in hopes of selling them fast for a quick profit.
"Housing's downturn has turned even more dramatic with the rapid flight of the flipper from the market," the report said. "These investors have gone from sending home sales and prices shooting higher to driving sales and prices lower."
John Rubino is convinced the current retreat in the nation’s housing market has all the signs of a bubble that’s bursting. Mr. Rubino, a financial writer and advisor, says the bursting could be so severe, that it might trigger if not an actual depression, at least a recession in the United States...
"Crazy times, as we seem to be heading into, are also full of opportunities," he says. "If you are in the market for a home, I would say wait a couple of years and you’ll able to get a great deal on your dream house." [Hat tip: Bakersfield Bubble]
3 comments:
sonoma county is about 5-6 months behind sacramento as far as price declines,however as sales continue to slow,inventories continue to rise,and the pressure on those with loans resetting increases we may well catch up.i expect a screaming spring in '07,with picket lines of recent fb's standing in front of the (closed) offices of local builders.lots of drama on the way,and i'm sure we will have the same "unbiased,in depth coverage" from the media that we did on the way up.
denial in Sacramento?
No way, why Sacramento has,
1. A built in pent up lingering need for condos of all types and all costs
2. Sacramento has a booming job market, where all kinds of new employment abounds, and there are plenty of new Walmart jobs
3. The State continues to offer numerous employment opportunities for everyone, all genders and sexual orientations, and they are plenty above the minimum wage (maybe)
4. Sacrament area is just so extra special, and unlike Sonoma or Napa or Marin or Santa Clara or Alameda, there is NO housing bubble or collapse of residential construction here...no way, now how!
That's why Sacramento needs more urban highrise condos and damn if the Developers won't build them, why the local government should just subsidize them more!
Moody? never heard of him!
Anonymous, don't forget the all-important:
5. Sacramento is the next mega-city and will be the size of Los Angeles before you know it.
6. Housing prices have never fallen since the Depression.
7. Okay, housing prices fell in the 1990s, but only a teensy-tiny bit.
8. Everyone has to live somewhere.
9. It's vital to buy now to get into the market.
A former neighbor repeated this claptrap in his most patronizing tones when I suggested maybe buying at the top of the market and renting at a loss was a stupid idea. I laugh every time I look at how much houses comparable to his "investment" have dropped in value this week.
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