March 28 — January housing statistics from Case-Shiller were released this week – and the news continues bad for sellers, good for buyers. Of the 20 metro markets that this firm tracks, only 1 metro managed higher real estate prices vs. the year ago period, Charlotte (+1.75%). The 19 others had declining prices, with 10 of them experiencing double digit declines. Las Vegas, Los Angeles, Phoenix and San Diego had the biggest drops (Las Vegas went down over 19%). Overall the 20 city index showed a 10.7% decline in January 2008 vs. Jan. 2007.
Meanwhile industry pundits had plenty of theories about what this all means, and above all, when it will get better. One of the most interesting we read was by Barry Ritholz. His point is that until illogical sellers get the picture that there is too much inventory out there and reduce their prices, the market will be soft.
Another provider of housing data ran into flack this week over the positive way it slanted its reporting of its February numbers. The NAR (National Association of Realtors) chose to highlight sales changes from January to February, instead of the more traditional year to year comparisons (thus eliminating seasonality). The effect was to mask the declines that actually existed year to year – although sales increased 3% from January, they were 24% behind the year ago period.
Other pundits wonder when the market will turn around – can the end of the bad news be near?