Zillow – The Housing Market has Bottomed
Interesting housing commentary from Zillow today. They say the US housing market has bottomed (via CNBC):
The housing market appears to have finally hit a bottom, real estate website Zillow CEO Spencer Rascoff told CNBC Wednesday.
According to Zillow (Z) data, home values - which have been in freefall since before the 2008 financial crisis – have bottomed, Rascoff said on CNBC’s ”Squawk on the Street”. “So five years into the housing recession and down 25 percent from the peak, we are finally at a bottom.”
As I’ve previously stated, I am not a believer in the idea that the housing market will experience an “event” style bottom. That is simply not consistent with past bubbles. If you study most of the major bubbles throughout history you’ll find that busts are followed by “workout” periods where the excesses of the boom get worked off over a very long period. That said, I don’t see huge downside in housing, but I think it’s a mistake to start claiming that house prices have made an event style bottom….At least that’s what history would tell us.
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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6 Comments
It feels like “real” SF Bay Area experiencing “event” bottom. There was very slow beginning of the year and then torrid activity started in Spring. Multiple offers above market price , bidding wars etc.
I’m a FLA based realtor and things are definitely firming up. I wouldn’t declare a bottom here, but we’re definitely seeing a pick-up in foot traffic and offers. It will be interesting to see what happens this fall and whether we slowdown again.
Here’s more from Corelogic. Same story.
http://www.mortgagenewsdaily.com/08072012_corelogic_home_prices.asp
I’d tend to agree with CR. When you look a past bubbles the big price declines don’t just turn on a dime and then quickly turn into in bidding wars on the upside with only higher prices on the horizon. You tend to get a very long drawn out, frustrating, base building period with perhaps a few false starts during that base building period. We haven’t seen that yet as the price lows weren’t really all that long ago. Maybe this time is different but I’m assuming this is little more then a false start.
+1. Like
Banks are just doing a better job of keeping inventory off the market.