Has The Real Estate Market Hit Bottom
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Case-Shiller Report Suggests Reversal Of Home Price Trends
The most recent Case-Shiller report noted a reversal in home price trends. The June report showed:
- Home Prices Up In 14 of the 20 real estate markets it covers
- National Home Prices Posted A 0.5% Increase For The Month Of June
- First Monthly Gain Posted By The Index Over The Last Three Years
Builder sentiment has picked up greatly and new permits are up in all but a handful of markets. Both National news and local television are running news reports suggesting that the National real estate market has hit bottom. So, I fee that it is not a stretch to assume that consumers in the Houston area are asking “Has the Houston real estate market hit bottom?”
If you listen to Realty Times their most recent video report suggests that the real estate market has not only hit bottom but that it has turned the corner and is on its way up. For those who do not know I think it is only fair to note that Realty Times is a webcast and real estate news site that is owned and operated by the National Association of Realtors. I feel this article to be painting a much to rosey picture of the market place.
With this being the first month that the Case-Shiller index has posted a positive number for appreciation rates and the fact that June is one of the hottest months for home sales. I feel it is much to early to be jumping up and down celebrating the return of the Houston real estate market. I do concede that the National real estate market has hit bottom for some of the markets that have been seeing massive drops in home prices since 2005. But even in these markets there is still a huge amount of inventory left in the luxury home market that will have to be sold off before we will see a true turn around in the housing market.
As for the Houston real estate market, we really have not seen any major problems below the $300,000 price point and likely will not. Now over the last 6 months we have had a considerable increase in inventory levels for $500,000 and above market. In fact as of July, 8th 2009 we had 20.5 months of inventory (months of inventory are defined as the length of time it would take to sell every single listing at the sales rate for the last 12 months) for the $700,000 and above price point. This inflated inventory and high unemployment is likely to prevent the real estate market from turning the corner and shooting back up. It is far more likely that we have found a bottom and will scrap along the bottom until we reduce both the inventory levels in the luxury market and the local unemployment rate.