New Research: Worst Doesn't Appear To Be Over by Broderick Perkins
Evidence that the worst is over for the housing market can't be found in recent reports of swelling inventories, falling prices and lost jobs, which are more indicative of a housing market not quite ready to recover. However, now that the Super Bowl is over -- often a market turning point at least on a seasonal level -- attention should more fully focus on the business of buying and selling homes and the shape of this year's housing market should become clearer. For now, early 2007 reports reveal a continuation of last year's downturn. Here's the shape of things as they are: A year ago, the number was only 1.57 million homes waiting sales. The vacancy rate for owned units, 2.7 percent, broke another record moving from 2.0 percent a year earlier. The rate has never been above 2 percent from 1965 to 2005, with the long-term average at only 1.4 percent. Housing starts were down nearly 18 percent over the past 12 months, but given the high inventories of vacant homes, that may not be down enough. The number of housing units in 2006 rose by 2.14 million, but the number of units occupied rose by only 1.04 million, less than half as much. The rate of home ownership was slightly down at 68.9 percent in the last quarter, compared to 69.0, both in the third quarter of 2006 and the last quarter of 2005. The over supply is forcing some owners who can't sell to sell their homes to rent and that could push down rentals or stop the fast rate of rent hikes recently seen. The index's composite shows prices for the 20 metro areas as a group rose only 1.7 percent over the past year, as the price index fell 0.4 percent from October to November 2006. Over the past year, home prices were down in seven of the 20 cities, led by a 5 percent drop in Boston, but up in the others, by as much as 13 percent in Seattle, - The U.S. Census Bureau's "New Residential Sales in December 2006", released Jan. 26, shows the median price of new homes nationwide dropped from $290,200 in December 2005 to $290,100 in December of 2006. The median peaked this year in August at $317,300.
- Finally, after wages nationwide never fully kept pace with home price increases during the boom, more and more workers are finding themselves with zero wages during the post-boom era.
The U.S. Labor Department's unemployment rate came in at 4.6 percent in January. That's lower than the 4.7 percent a year ago, but the rate has steadily risen since October, when it was only 4.4 percent and the housing market was in the midst of coming back down to earth. |
