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Thread: Housing Recovery Begins

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    Housing Recovery Begins



    http://mjperry.blogspot.com/2009/04/...late-2008.html

    WASHINGTON, DC – U.S. home prices rose 0.7% on a seasonally-adjusted basis from January to February, according to the Federal Housing Finance Agency’s monthly House Price Index. January’s previously reported 1.7% increase was revised to a 1.0% increase. For the 12 months ending in February, U.S. prices fell 6.5%. The U.S. index is 9.5% below its April 2007 peak.

    The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions, seasonally-adjusted monthly price changes from January to February ranged from –1.2% in the East North Central Division to +3.8% in the Pacific Division.

    MP: The chart above shows that the OFHEO Home Price Index increased in each of the last two months, following a 20-month period of 18 monthly decreases. The two consecutive month increase in home prices in January and February 2009 was the first time in almost two years that the index increased two months in a row (since March and April 2007). The chart also suggests that housing prices may have bottomed out at the end of 2008, and we might now be in a period of sustained price increases and a housing market correction.
    "So little pains do the vulgar take in the investigation of truth, accepting readily the first story that comes to hand." Thucydides 1.20.3

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    Former Staff Senior Contributor Ironduke's Avatar
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    Is that graph adjusted for inflation? If not, I'd think somewhere below 150 would be a more appropriate level for housing prices. If we're going to see sustained increase from 200 I think we're just going to be in a smaller bubble. What I'm inferring from that graph is that adjusted for inflation, and comparing similar houses, housing prices are still at twice the level they were in the base year.

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    Contributor NUS's Avatar
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    http://www.sfgate.com/cgi-bin/articl...sn=001&sc=1000

    Banks aren't reselling many foreclosed homes

    A vast "shadow inventory" of foreclosed homes that banks are holding off the market could wreak havoc with the already battered real estate sector, industry observers say.

    Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.

    "We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market," said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. "California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You'd have further depreciation and carnage."

    In a recent study, RealtyTrac compared its database of bank-repossessed homes to MLS listings of for-sale homes in four states, including California. It found a significant disparity - only 30 percent of the foreclosures were listed for sale in the Multiple Listing Service. The remainder is known in the industry as "shadow inventory."

    "There is a real danger that there is much more (foreclosure) inventory than we are measuring," said Celia Chen, director of housing economics at Moody's Economy.com in Pennsylvania. "Eventually those homes will have to be dealt with. If they're all put on the market, that will add more inventory to an already bloated market and drive down home prices even more."
    Banks have 600 000 unsold houses (and may be more in future). Is recovery possible with this problem unsolved?

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    Quote Originally Posted by Ironduke View Post
    Is that graph adjusted for inflation? If not, I'd think somewhere below 150 would be a more appropriate level for housing prices. If we're going to see sustained increase from 200 I think we're just going to be in a smaller bubble. What I'm inferring from that graph is that adjusted for inflation, and comparing similar houses, housing prices are still at twice the level they were in the base year.
    Matt,

    It's an index, so the relative change from month to month is the exact same, no matter how you scale it.
    "So little pains do the vulgar take in the investigation of truth, accepting readily the first story that comes to hand." Thucydides 1.20.3

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