The mainstream media is fond of quoting the ivory-tower guys who all blame incomes, tight money, unemployment, foreclosures, shadow inventory, tax-credits, etc., for our housing woes.
It is surprising that anyone else can get a word in – I wonder if anyone can hear it?
Thank you to Brad Fikes at the North County Times for this article – an excerpt:
San Diego County home prices fell in September for the second month after 15 consecutive monthly increases, according to a widely watched index. Numbers were also weak nationally, with most cities surveyed showing declines.
The resale value of a typical house in San Diego County fell 1 percent in September from August, according to the Standard & Poor’s Case-Shiller Home Price Index. The value had dropped 0.6 percent in August from July. However, September’s home price was still 5 percent above that of a year ago, according to the index, which tracks home prices for 20 cities and the nation as a whole.
San Diego County houses priced under $314,451 slipped 0.9 percent from August. Houses priced from $314,451 to $474,176 dropped 2 percent in value, while those priced above $474,176 rose 0.5 percent in value.
People are eager to buy, said Jim Klinge, a Carlsbad-based real estate agent, but sellers are asking unrealistically high prices.
“Buyers are extremely frustrated,” Klinge said. “They (sellers) are greedy and are asking way more than what they should be, based on what recent sales have been. This is a new market. You’ve got to be sharp on price if you want to have any chance to sell. It’s a buyers’ market. The buyers call the shots.”
Sellers are making a mistake by basing their prices on active listings, “because those are the prices that aren’t working,” Klinge said. “The inventory’s growing, but it’s growing because the price is wrong, not because there’s no demand.”
Kelly Cunningham, an economist who has studied the San Diego region for more than 25 years, said local home prices are still relatively expensive, despite a substantial drop in prices since their peak about five years ago. That means there’s room for prices to fall further, he said.
“We’re still one of the least affordable housing markets, when you compare our median household income against the price of homes,” said Cunningham, a senior fellow at the National University System Institute for Policy Research.
“With incomes stagnant right now and high unemployment right now, that also suggests there’s a lot of weakness in the housing market,” Cunningham said.
Nationwide, the report also painted a rather gloomy picture, at least from a seller’s perspective.
“While housing prices are still above their spring 2009 lows, the end of the tax incentives and still active foreclosures appear to be weighing down the market,” the monthly report stated.
“Another weak report; weaker than last month,” David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement issued with the report. Blitzer said many analysts think a “double-dip” back into recession will be evidence before spring.
“New construction is running at less than half the pace needed to meet normal demand, so a sustained recovery could be a ways off,” Blitzer said. “Overall, there are few, if any, good numbers in this month’s data.”
Besides the end of tax incentives for first-time homebuyers, Blitzer attributed the weakness to ample supply of houses on the market, and more supply waiting with delinquent mortgages, pending foreclosures, and vacant homes.
To help substantiate my point, I’ll tack on this SD chart, seen at Piggington: