patrick.net

I don't think we will hit bottom until the incentives are gone. Too much government involvement in the way of tax credits and FHA BS loans for us to find a true bottom. They want you to think this is bottom and buy, but I refuse to until the monkey business with housing stops.

Agree with Tude. It's impossible to call it a bottom because there is so much in play right now to prop up prices. Pull the plugs on those, see what happens, then we can talk of a market bottom if that is the case.

Def. not in 11229, 11230, 11235; with 2/3 "luxury*" Bedroom condos selling for 500K-1.4 million and old crusty single-family homes starting at 500K, it's far from the bottom here. I think the developers, agents and owners are still running on bubble vapor.

* Featured "luxuriates" include: in-door plumbing and sears/kenmore appliances.

klarek says

Agree with Tude. It’s impossible to call it a bottom because there is so much in play right now to prop up prices. Pull the plugs on those, see what happens, then we can talk of a market bottom if that is the case.

How can one even think of buying a house while the government is so actively propping up housing prices?

Can the government do this forever? If the government backs away prices must fall.

Nationwide, which is pretty non-specific, we may be at or near a bottom, but many (me included) expect a long, extended 'L' shape so-called "recovery". I.e. no serious increases for some time. I predict people expecting a big re-inflation (and there are many in SF bay area saying this) will be sorely disappointed.

In CA and SF bay area in particular, this tells you a lot, from today's Patrick news:
http://www.washingtonpost.com/wp-dyn/content/article/2009/09/08/AR2009090803507.html?ref=patrick.net

"The most severe problems have surfaced in states with the steepest price drops. About 75 percent of option ARMs financed homes in California, Florida, Nevada and Arizona, where prices have plunged on average 48 percent from the second quarter of 2006 to the first quarter of this year, according to Fitch."

There are a ton of over-paid houses in my area, often bought with option ARMs and prices have not fallen much ... YET!

Even with the tax credit home sales in Southern California fell by 11 percent in August.
The average "price increase" is less than the 8,000 dollar tax credit so it is really a price decrease and means nothing.
It should be interesting to see what happens after the tax credit goes away and the
"prime sales season" is over. Hopefully they won't create another tax credit for a while so we can see what
prices ought to be like.
I am seeing more "bank repo" open house signs on the weekends so I get the feeling that banks are worried about the tax credit ending. They apparently are taking back about 80 percent of foreclosed properties even though "investors" are supposed to be buying up everything. Sooner or later they will have to unload it all.

pinnacle says

Even with the tax credit home sales in Southern California fell by 11 percent in August.
The average “price increase” is less than the 8,000 dollar tax credit so it is really a price decrease and means nothing.
It should be interesting to see what happens after the tax credit goes away and the
“prime sales season” is over. Hopefully they won’t create another tax credit for a while so we can see what
prices ought to be like.
I am seeing more “bank repo” open house signs on the weekends so I get the feeling that banks are worried about the tax credit ending. They apparently are taking back about 80 percent of foreclosed properties even though “investors” are supposed to be buying up everything. Sooner or later they will have to unload it all.

Tax credit program will not be allowed to expire. When housing sales figure decline in the coming months - NAR will lobby Congress for program extension/expansion. I think that Congress will increase the amount from $8000 to at least $10,000.

It is interesting that they came up with 8,000 in the first place. If they wanted to stimulate sales, the five figure tax credit sounds much more lucrative.

The tax credit is not the big government intervention. Private banks are practically not backing mortgages. The government is backing something like 80% of all mortgages, and there still is the 3.5% downpayment nonsense.

The government is the only one with any skin in the housing game.

I agree with Tude. The government needs to get their grubby hands out of the market and the chips just need to fall where they may. We are prolonging the decrease in house prices. Lets just get it over and done with. When China stops lending the US money, then all h*ll will break lose. Then the government can't do anything!! We need to go back to reality. We are living in a fake economy.