There isn’t a week that goes by in which SOMEone doesn’t ask us: “so when do you think the housing market will bottom?” All we’ve been able to say to date is that, so long as in you are in the curvy part of the U, you’re fine … the macro outlook is what you can look to; timing the market is a losing proposition.
This doesn’t mean that one can’t try. Here comes Calculated Risk boldly pronouncing that the bottom of the housing market is upon us.
My guess is that nominal house prices, using the national repeat sales indexes and not seasonally adjusted, will bottom in March 2012.
There are several reasons I think that house prices are close to a bottom. First prices are close to normal looking at the price-to-rent ratio and real prices (especially if prices fall another 4% to 5% NSA between the November Case-Shiller report and the March report). Second the large decline in listed inventory means less downward pressure on house prices, and third, I think that several policy initiatives will lessen the pressure from distressed sales (the probable mortgage settlement, the HARP refinance program, and more).
Those of you familiar with Calculated Risk know that the site is far from bullish. It points to the fact that housing starts and new home sales have already bottomed, and prices are likely to follow suit.
Now, I know what you might be thinking, you loyal Apple readers: “But haven’t you told us that national headlines and the national housing market should be looked at separately from the NYC market?” And you are correct. However as we’ve always noted, as local as local real estate may be, noone is in a bubble. The overall health of the housing market and economy has real implications for the micro dynamics of NYC, from Wall Street’s fate and unemployment to federal regulations and increasing GDP.
We’d love to hear from you: what is your take on this bold prediction and what does it mean for your real estate plans?