September 15, 2010
QuickLinks: But What About That Bottom?
∙ U.S. Home Prices Face Three-Year Drop as Supply Gains [Bloomberg]
∙ Home Price Double Dip Begins [CNBC]
First Published: September 15, 2010 11:45 AM
Comments from "Plugged In" Readers
A few take-aways / observations. The contrarian in me thinks maybe all this publicity is signaling the bottom, but probably not. I do think that 2011 and maybe early 2012 will have flushed out the market a bit.
Riholtz's observation about inflation it the real killer / problem over the next 10 years. 3% seems like the magic #.
Quote:After reaching bottom, prices will gain at the historic annual pace of 3 percent, requiring more than 10 years to return to their peak, he said.
Also, the national inventory level is at a record 12.5 months. Considering SF is somewhere around ~4 (a guess since we don't have an official number ;) it seems that we're in a much better, although not altogether rosy, position relative to the rest of the country.
I'm not saying SF RE is a good investment (especially not in condos), but if I HAD to invest in SF RE I would feel much better about putting it here, or in NYC or some other metro area than just about anywhere else.
Lastly, I'll add that a remodeled SFH on Washington St in PH just sold in 12 days at what I will assume will be near peak pricing. Crazy.
Posted by: eddy at September 15, 2010 12:07 PM
"Considering SF is somewhere around ~4 (a guess since we don't have an official number ;)"
I've given a July '10 number of 4 months (up from 2.9 months in July '09). Waiting for DataQuick to publish Bay Area stats for August, maybe tomorrow.
Personally, I would be more interested in how SF's historical and YOY numbers compare to now, rather than SF vs. national. I think DQ makes you pay for older reports, or I'd consider calculating it.
Posted by: sfrenegade at September 15, 2010 12:50 PM
Where's the risk premium for earthquakes in SF? You can assume that your house is going to get totalled over the next 20 years. RE in SF is an insane investment.
Posted by: anon at September 16, 2010 12:56 AM
Foreclosures Rise; Repossessions Set Record
CoreLogic: House Prices decline 0.6% in July
The CoreLogic numbers seem to track the CSI very closely. So you can add the CoreLogic number to the list of reasons to expect a drop in the CSI in the months ahead.
Posted by: badlydrawnbear at September 16, 2010 1:08 AM