The Phoenix market returned to normal as it posted gains near the historical average in 2006. Now with inventories sky high and tremendous downward pressure on prices questions abound about what 2007 will bring. Will home prices see another normal year or will 2007 be a painful lesson that speculation can go in both directions?
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Yet another city could not keep up with in inflation in 2006, as San Jose saw falling real prices of $10,000. The falling prices are a stark contrast from 2005 when prices rose more than $125,000! Real estate locals are claiming this is much talked about soft landing. Will 2007 bring more price stagnation or will 2007 look like 1990 and see falling real prices of nearly 10%?
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Boston posted its largest nominal and real price drops in its history during 2006! For the year nominal home prices fell more than $25K, far exceeding the sum of all losses during the early 1990s bust. Yet compared to the west coast, affordability levels appear fairly tame. Will this translate to a new boom in 2007 or has the market completely run out of steam?
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While San Diego and Orange County home prices showed declines over the past few quarters, Los Angeles was still able to squeak out a gain in Q4. For the year LA posted a respectable 9.8% gain, dashing the hopes of bubble bloggers. So will LA enter a period of modest gains and actually have a soft landing or will the continued price gains just lead to a bigger fall?
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Orange County real home prices stagnated in 2006, posting the smallest real price gain since 1996 - the end of the prior SoCal bubble bust. However, looking at the entire year masks the mid-year trend which saw real median prices fall more than $20K in two quarters. Will the slow start in 2007 turn in to huge losses by year’s end or will Realtors get their soft landing?
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Different California city in a different region, but the same declining result. Median real prices fell more $25,000 and median nominal prices fell more in 2006 than ever before. Still many are claiming a successful “soft” landing and 2007 always brings new hope. Will the slow January numbers continue throughout 2007 or will we begin to see moderate price increases by year’s end?
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The national news looks rosy compared to what San Diego experienced. Median real prices fell more $35,000 and median nominal prices fell more in 2006 that the ENTIRE 1990s bust (yes you read that correctly)! Still many are claiming a successful “soft” landing and 2007 always brings new hope. Will the slow January numbers continue throughout 2007 or will we begin to see moderate price increases by year’s end?
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By now most everyone knew it was coming, but it’s now official. The National 2006 housing market had its largest real price decline in 16 years! However, thanks to all time low mortgage rates, the affordability index remains near the historical median. Will 2007 bring even more declines or is David Lereah correct and we’ve already hit bottom?
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The Buffalo market just recently passed the $100K median price point and remains one of the most affordable US cities. However, the local economy has stalled and the major job producer as of late has been Indian casinos. Will housing remain insanely inexpensive or has the small metro reached its tipping point with just a $100K median price?
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It’s not often that I forward articles of interest, particularly those that are dated. However, I found these two research papers of particular interest.
While much of my research showcases the risk of many coastal markets, it also shows that many of other areas have not experienced the coastal boom. As I have written before it appears that certain areas are just prone to bubbles (i.e. California), while others have experienced a bubble during times of tremendous economic boom (i.e. the oil boom of the late ’70s and early ’80s).
No matter your personal view, both articles are relevant to the debate of future home prices. The articles have made me question: “Is this time actually different?” Or are we (the bubble busters) using the same false-logic that Realtors tried to use on us?
