A 44 page tome chocked full of data has been released by Harvard University’s Joint Center for Housing Studies. In their annual State of the Nation’s Housing report, Harvard’s JCHS doesn’t reveal anything earth-shattering. Crunching through the data from 2008 shows that the housing market . . . pretty much stinks.
Here are some of the “highlights”:
- Sales of existing single-family homes were down 30 percent last year from the 2005 level to 4.35 million, their lowest level since 1997.
- New home sales showed a record-breaking plunge of more than 60 percent from 2005 to 2008. Actual declines were even larger because cancellations, which are not backed out of reported sales, rose over the period.
- Housing starts were down by more than 30 percent for the year in 2008 and more than 50 percent from the 2005 level.
- The national homeownership rate slid from its peak in 2004 to 67.3 percent in the first quarter of 2009, erasing all of the gains since 2000.
- Measured on a monthly basis and adjusted for inflation, the national median home price fell by 29.8 percent from October 2005 to January 2009.
- According to the Mortgage Bankers Association, at least 3.2 million homeowners entered foreclosure in 2007 and 2008, and an additional 600,000 entered foreclosure in just the first quarter of 2009.
- Foreclosure rates in California, Arizona, Nevada, and Florida surged from less than 0.9 percent at the start of 2007 to 5.9 percent by the end of 2008. According to the Mortgage Bankers Association, by the first quarter of 2009 there were nearly 800,000 outstanding loans in foreclosure in just those four states, amounting to 46 percent of the national total.
And it goes on and on.
The Bright Side?
The “echo boomers” – children of the baby boomers – are beginning to reach home buying age. A lot of baby boomers had a lot of children, and these echo boomers are beginning to enter the workforce and could help fuel a revival of the housing market.
Additionally we are beginning to see signs of recovery, or at least stabilization, across much of the Phoenix real estate market. Sales are up, inventory is down, and prices are stabilizing (generally speaking). Some have even “called the bottom” and some continue to proclaim “now is a great time to buy”. And it may indeed be, for some people in some circumstances. I’ll stand pat in my assessment that there is never a right time to buy for everyone.
Fair Warning
As mentioned on this blog countless times in the past, it is important to understand that real estate is local – very local. Taking reams of data and aggregating them into national-level metrics and indexes can be somewhat misleading if what you are really interested in is what is happening in Neighborhood X. Even aggregating across a metro area the size of Phoenix often won’t tell the true story at the “hyper local” level. Yes, national/metro trends are important, but they do not tell the full story.
If you like data, you’re going to love Harvard’s report. Here is where to find it:
The full report, “The State of the Nation’s Housing 2009”. (color, PDF)
The black and white version (recommended if you are going to print the report).
State of the Nation’s Housing Fact Sheet (PDF).
State of the Nation’s Housing press release.
Previous “SON” reports (1998 – 2008).
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{ 15 comments… read them below or add one }
Looks like there is some positive things starting to happen.
Thanks for the data; though it is depressing to realize the actual declines are larger, it is great to remember that real estate is so super localized, so even though national stats are really bad, there are areas (even around the really bad areas) that are starting to do better, or that never got hit that badly to start with.
Jay – I’ve been trying to get the LOCAL point across to @reisglobal
His last tweet to me – gas prices have been increasing the last two weeks. this is a clear example of a global economic factor affecting all real estate.
I keep trying to explain that LOCAL factors are more significant than global, even a meltdown affects areas differently. Poor guy just doesn’t get it!
**john harper´s last blog post..Twitter Discount Coupons for a New Homebuyers
We are starting to see some positive signs in our market as well. Our sales are down by over 26% in the first quarter of this year but are only down 16% last month year over year. I am hoping that the interest rates will continue to fuel demand. The last 6 months has been a tough time for real estate agents everywhere.
**Halifax Real Estate´s last blog post..Halifax Real Estate Market Stats for May 2009
The Twin Cities market continues to see more pending sales weekly (a 33% increase last week compared to the same time last year) along with shrinking inventory. Albeit, it seems REO agents here are gearing up their staff in wake of the coming foreclosure inventory yet to hit the market. So I think all these positive signs are only short term.
Thank you pointing out that real estate is a local matter. In San Diego there is a genuine shortage of homes for sale, particularly in the conforming price range, which in San Diego means loans under $697,500. Houses that are below $500,000 are getting multiple offers across the board, and many of these houses are selling above asking price. The investors have moved back in to the San Diego market, and all-cash buyers are more and more frequent, particularly for low-priced foreclosure properties. The investors are usually more experienced with real estate matters, and if they sense that there is a bottom forming, then I tend to believe them. Time will tell if interest rates hold steady, or if the banks decide to dump a whole boatload of foreclosures on the market all at once. So there are a lot of wildcards, but some markets are showing glimmers of hope.
Thank you for the links to the Housing Report. Though its true that real estate is very local its nice to get a national perspective on things.
Celina Home Builder
I completely agree that real estate is a local matter, the market changes from place to place. However, thank you for the link to Harvard’s Housing Studies, its still informative on a national level and a good read.
Frisco Homes for Sale
It is always amazing to clients when I sit down and show them just how very localized the market can be-a home one neighborhood over might be valued a lot more than a home in the next door neighborhood simply because of the neighborhood name or popularity. Thanks for all the links, the overall information is just as important as the hyper-localized information when it comes to the health of our economy and real estate market trends.
Thanks for the data. It is incredible how local the real estate market can be. It comes down to location, location, location.
McKinney Homes & Real Estate
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I heard about the term “echo boomers” for the first time two weeks ago. They are going to revitalize the market. They are the ones whom will truly help the market.
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