The leading edge of the housing crisis in California has been the city of Stockton according to Moody’s Economy.com. The foreclosure rate here has been the highest in the nation, and home valuations have lost a whopping 37% since the height of the market in 2005. After this vast loss of housing wealth, sales volume is picking up. From Q1 to Q2 2008, volume has doubled in Stockton, and this leads Moody’s to believe that the California markets may have turned back from the bottom.
Bloomberg | Dan Levy and Daniel Taub | July 31, 2008
“Half off in a decent neighborhood is close to the bottom,” said Bill Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., manager of the world’s biggest bond fund. Property markdowns of 30 percent to 40 percent give the market “price illumination if not sunshine,” he said.
MoneyNews.com | July 16, 2008
“I’m beginning to hope that there are going to be some surprises in the next few months that would indicate we are at or near a bottom in probably a third to half the country,” said Karl Case of the Case-Shiller Home Price Index.
Case points to the fact that new housing starts fell to 975,000 in April from a peak rate of more than 2.2 million in January 2006. In the past 35 years, only three other times have starts fallen from more than 2 million to less than 1 million.That’s a clear signal, says Case.
August 1st, 2008 at 2:06 pm
“If you see light at the end of the tunnel it is probably an oncoming train.” I think that was a quote by Lowell. The point is, it seems a little premature given the current hosuing crisis to be talking about rebound. I have a feeling things are going to get worse before they get better. The sales volume increasing might simply be an anomaly and not something indicative of a widespread pattern.
August 1st, 2008 at 2:10 pm
How can an increase in sales volume be an anomaly? I think we are defintiely starting to see the market start to mend itself and rebound. Pessimism is a waste of energy. Pacific investment is right. Dropping prices is sunshine.
August 1st, 2008 at 2:13 pm
But new housing has dropped drastically from 2006. That doesn’t seem to be sunshine but rain. I think it is a clear signal that the worst is yet to come.