Economics

When Will Your Market Hit Bottom?
Written by Jonathan Smoke   
12.10.2007
Glenn Roberts, Jr. of Inman News has an excellent current article, “When Will Market Hit Bottom?” in our Real Estate News. The article is the first of a three part series regarding current longer-term forecasts for housing.

In this first installment, the author covers sentiments of several well-regarded economists from coast to coast who collectively seem to be oriented towards 2010 being the year when things will start to get better.
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New Homes Sales Slowly Improve
Written by Jonathan Smoke   
11.30.2007
The Commerce Department reported yesterday that new-home sales rose 1.7% in October over September as the median price of a new home in October was down 13% from the prior year.

Imagine that—economics 101 was right. If demand falls, the sure fire way to increase sales or keep them at the same level is to lower prices. Builders have done that significantly in 2007, so despite a dramatic fall in demand caused by a lack of confidence and limited credit, new home sales are slowly pecking away at inventory levels.
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Reversed New Home Premium Likely Understates Extent of Discounting
Written by Jonathan Smoke   
11.21.2007
BusinessWeek’s top news story online yesterday was an article by Prashant Gopal about builders discounting and offering incentives so much that in many major markets, buyers are now “paying more for the lived-in look.”

Kudos to Prashant for that turn of phrase to describe the reversed new home premium. My boring way of describing this reverse is that while new homes normally sell at a premium to comparable properties, in 2007 that premium has turned into a discount. When comparing the cost of new homes as a price per square foot to existing homes, we are seeing a rapid decline and departure from the norm.
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Thankfully, Permits and Starts Continue to Fall
Written by Jonathan Smoke   
11.20.2007

The Commerce Department reported October housing starts and permits today. Many were surprised to see total housing starts actually increase in October, but the “headline” increases were in multifamily. Digging into the data, single-family starts and permits both declined, and we should be thankful for that.

Specifically, single-family starts fell to an annualized rate of 884,000 in October from 954,000 in September. Single-family permits fell to an annualized rate of 807,000 in October from 877,000 in September.
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Be Thankful 2007 Is Almost Over
Written by Jonathan Smoke   
11.19.2007

With the Thanksgiving holiday, it’s short week for economic news and news about housing. As we gather around the turkey, watch football on TV, and plan out any bargain shopping runs, let’s be thankful first and foremost that 2007 is almost over. Will 2008 be better for housing?
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