- Moody’s Economy.com has a study out today looking at when prices will bottom out nationwide. I don’t have the full report but here are some of the group’s key findings. Keep in mind these are nationwide results:
House prices will stabilize by the end of this year.
The national Case-Shiller house price index will decline by another 11% from the fourth quarter of last year for a total peak-to-trough decline of 36%.
By the end of this unprecedented downturn, house prices will have declined by double digits peak to trough in nearly 62% of the nation’s 381 metro areas. In about 10% of metro areas, price declines will exceed 30%.
The report clarifies that the price bottom in some of the county’s hardest hit markets might not come until 2010 or 2011, according to The Wall Street Journal.
For California, economists such as Chris Thornberg have suggested that peak-to-trough decline will be worse. From my story on the most recent Case-Shiller index for San Diego County:
Thornberg forecasted a bottom for prices within the next year, and projected a peak-to-trough decline at between 55 and 60 percent for California. It’s already fallen about 45 percent statewide, he said. Relative to today’s pricing, that would mean another 25 or 30 percent drop, he said.
- Bloomberg News ran a story about vacant homes and foreclosure with some fascinating numbers in it from the U.S. Census Bureau. Here’s one: the percentage of empty homes that are listed for sale is 2.9 percent, the most ever on record back to 1956. And the homeownership rate in the country has fallen to 67.5 percent — that’s where the rate was in the first quarter of 2001.
The story quoted USD’s Norm Miller on the difficulty for homeowners that are underwater:
The worst U.S. housing slump since the Great Depression is deepening as foreclosures drain value from neighboring homes and make it more likely owners will walk away from properties worth less than their mortgages. About a third of owners whose home values drop 20 percent or more below their loan principal will “hand the keys back to the bank,” said Norm Miller, director of real estate programs for the School of Business Administration at the University of San Diego.
“When you’re underwater and prices continue to fall, you tend to walk,” Miller said in an interview. “It’s a downward spiral that’s tough to stop because it feeds on itself. Foreclosures encourage other foreclosures and falling prices discourage buying.”
- Here’s a droll tale of the city of Escondido’s hankering for some In-N-Out from reporter Tony Perry in today’s L.A. Times.
(Shh — to avoid intra-county civic rivalry, don’t tell Escondido that Chula Vista just got a new In-N-Out, according to the San Diego Metropolitan Magazine’s February news roundup.)