The NAR reported that
Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3.0 percent to a seasonally adjusted annual rate1 of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008.
You'll probably read in most places how existing home sales were "down" again. True, but there is a big "BUT..."
Existing home sales from March through August of last year were stable at 4.9 million/year seasonally adjusted (+/-.05 million). In the wake of Black September they immediately declined into the 4.5-4.7 range and have remained there for 5 months.
While existing home sales aren't improving, they aren't meaningfully contracting any more. Barring another Black September-like shock in the next 6 months, they should bottom about the end of this year.
Generally Stable???
Bloomberg has a little problem with your assesment.
It seems the February bounce was short lived as the prime borrowers begin to reset this year.
According to many reports the next shock is coming. While the bubble states are still seeing increases in foreclosures there is a
new trend emerging.
Less bad will be questioned here.
It has always been about class warfare.
Click on
this graph from Calculated Risk's article today. The last 5 months are a sideways squiggle.
The last five months
have seen moritoriums placed on foreclosures by various states and agencies like Fannie, Freddie and FHA. These are now coming off.
According to Mr. Mortgage almost 80% of all NOD turn into defaults. Of those defaults 90% are turned into bank REO's.
Speculation on my part looks to me like we are setting up for another leg down.
It has always been about class warfare.
Let's assume your speculation is correct
The landslide of REO properties flooding the market should drive prices further down, and if anything cause volume of sales to pick up.
I do agree that we're nowhere near a bottom in housing in terms of prices.
Thats just the thing...
The REO's aren't making it to the market as fast as they are going on the banks books. I keep waiting for the banks to finally give up the ghost as RE management is not what they want to do. Having all those depreciating assets on their books is costing them lots of money.
I expect that a new wave of foreclosures might convince them to unload ... we'll just have to wait and see.
I agree that more inventory coming to the market will drive home affordability even further. But its the type of new inventory that is the game changer.
So far though, all we have seen is the implosion of the subprime market which has translated into 50% of sales being foreclosures. The thing about those are only first time home buyers and investors and not the meat of the housing market.
Prime mortgages that about to reset will dwarf the subprime market and effect a larger swath of housing ... the all important move up buyer. Without the move up buyer any RE recovery will stall. And with increasing unemployment more foreclosures will be on the way.
It has always been about class warfare.