hey guys jst ran into this ad and i wanted to share.
Real-time listing prices in these areas are dropping, and experts expect them to fall further this year.
During the housing bust, while the effects of foreclosures and a crushing recession tore through real estate markets in states like Florida, California and Nevada, the Denver metro seemed insulated from economic harm. It has consistently performed relatively well among the 20 major metropolitan housing markets tracked in the S&P/Case-Shiller Home Price Index, which measures sale prices, and is published with a two-month lag. In its January report, covering the year ending in November, Denver topped those markets with a 0.5% home price increase.
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But real-time asking price data provided to Forbes by Altos Research, a Mountain View, Calif.-based real estate research firm, suggest the Mile-High city is taking a turn for the worse. In July 2009 listings showed a .5% decline from the year before, the first time the city posted a price tag decline since 2008. The slump has since worsened; in January year-over-year asking prices were down 3%, to $368,870.
Denver is not alone. In eight other areas, current housing trends show similar sustained year-over-year slumps. Altos' data allows its researchers to forecast trends in the coming year, and near-term prices in these spots are expected to continue to drop. They're not all places you might expect. Some, like Charlotte, N.C., and San Francisco, Calif., we last week identified as a smart place to think about buying since, according to our measures, buying for the long-term there had become attractive.
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On others, economists looking at long-term price estimates have been bullish. During the housing boom, Dallas benefited from a relative lack of price inflation and speculation, and thus took less of a hit during the bust. Home values were roughly flat in 2005 through 2007 and stayed above the national average even after it peaked, as opposed to bubble cities like Las Vegas, where home values rose to 21% above the national average in late 2006 and are now below it by 31%, according to data from Zillow.com.
But in August, according to Altos, for the first time list prices in Dallas showed a 0.5% decrease from the same month the previous year. They have continued to drop moderately and in January were 1.2% lower than a year earlier, or $237,720. Austin is experiencing similar price declines. Price tags began to fall in November by 2.5%, and this month prices were down 4.25% from the previous year, to $289,216. Modest dips, to be sure, but ones worth noting in cities with housing markets thought to be relatively healthy.
"Particularly in Dallas and Austin, it is entirely possible that there could be a double-dip recession or at least a slowdown in the rate of recovery," says James P. Gaines, research economist at the Real Estate Center at Texas A&M University. "Some of that is because there is a little more reality slipping into the market in what the expectations are by sellers. They're beginning to figure out that prices are not going up like they did a couple of years ago, so they can't just take whatever their house is worth, add 20%, and go list it."
Trouble In Store for Money Cities
Certain cities that owe a big chunk of their revenue to the financial services industry have also come late to the housing slide. The ripple effect of Wall Street's 2009 decline has reached the Charlotte, N.C., metro area, headquarters to Bank of America, among other major financial institutions. Prices fell 1% in May from the previous year and are now down 5% from the previous January, to $242,488.
"Charlotte is the banking center of the south, and the jobless rate has jumped to higher than the national average," says Scott Sambucci, vice president of data analytics at Altos Research. "You can only hold off the pressure for so long; even if it's a great place to live, eventually fewer and fewer people have jobs, and rest of the economy feels like it's not really recovering."
In San Francisco in June prices were down 4.5%. As of January they are down another 8.5% to $1,024,828. High-priced homes make up a huge chunk of the city's housing market and many of these homes aren't being bought, a decline in demand that pushes down prices. Part of the reason is that it's harder now to obtain non-conforming, or "jumbo loans," considered more risky and not backed by Fannie Mae or Freddie Mac.
"The price of homes in San Francisco is among the highest in country. A large percentage of those homes are people needing to take out jumbo loans, and not a lot of lenders are doing that," says Sambucci. "It's a tougher market at the top end because fewer of those mortgages are getting approved, so people needing to sell at the top end might not list their homes, because there are no buyers."
Stormy Markets in Resort Areas
High-end second home spots aren't expected to fare well either. Among the picturesque vineyards of Napa County, Calif., trouble is brewing: Prices there, as elsewhere in California, started falling in mid-2007, but asking prices in August 2009 fell 3.25%, a dramatic plunge compared to recent drops. This month they've fallen 7.25%, to $740,066. In tony Naples, Fla., prices had risen two percentage points between June and August 2009, though they were still down 15.5% from the previous year. In September they started to sink, and this month prices are down 18% to $572,162. Budgets for second homes simply don't exist for many, and restrictions on jumbo loans don't help this market either. Hilton Head, S.C., a favorite of southern luxury homeowners, is experiencing a similar trend: asking prices fell 4.25% in August 2009 and 9.25% in January to $472,240.
"The high-end market has been harder hit because before, you had 35-year-old investment bankers with big bonuses buying $3 million and $4 million properties at 10% down, and they can't do that now," says Jonathan Miller, president and CEO of New York City-based Miller Samuel Real Estate Appraisers. "In many ways, the problems we're having are credit-related."
In these places the story has been negative for some time, but these data point to few signs of a speedy recovery. In healthier markets like Denver, Dallas and Austin, prices are only down a few ticks, but their sudden change in fortune is worth keeping an eye on.
A lot of the market data simply has the experts baffled. Gaines jokes that his presentations on market conditions feature a slide picturing a deer in headlights, as a metaphor for how real estate economists feel.
"None of the old models tend to work anymore," he says. "All of this is a guesstimate."
By The Numbers: America's New Housing Crisis Capitals
Denver-Aurora-Broomfield Metropolitan Area
July 2009 price drop from the previous year: -0.5% (median price: $403,268)
January 2010 price drop from the previous year: -3% (median price: $368,870
Dallas-Fort-Worth Arlington Metropolitan Area
August 2009 price drop from the previous year: -0.5% (median price: $251,242)
January 2010 price drop from the previous year: -1.2% (median price: $237,720)
Austin-Round Rock, Texas Metropolitan Area
November 2009 price drop from the previous year: -2.5% (median price: $299,233)
January 2010 price drop from the previous year: -4.25% (median price: $289,216)
Charlotte-Gastonia-Concord, N.C.-S.C. Metropolitan Area
May 2009 price drop from the previous year: -1% (median price: $266,371)
January 2010 price drop from the previous year: -5% (median price: $242,488)
San Francisco County
November 2009 year-over-year price change: -4.5% (median price: $1,094,129)
January 2010 year-over-year price change: -8.5% (median price: $1,024,828)
Hope this helps
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