According to Calculated Risk, the answer to that question depends on the answer to this question: has the unemployment rate peaked?
See the informative graphs for Miami, Chicago and Dallas. Money quote: ” The pattern I expect is for house prices to fall (after a bubble) until the unemployment rate peaks – and possibly for some time after the unemployment rate peaks.”
Seems to me that the sentence before the one you quoted is the money quote:
“House prices and the unemployment rate appear unrelated, and we would probably have to look at net migration to understand why prices fell.”
The data to support the claim that if the unemployment rate has peaked, we’ve hit the bottom in housing are certainly not clear in the posted graphs.
David,
The sentence you quote refers only to Dallas.
The point you make with regard to the bottom is also made in the “money quote.”
I attended this season’s Realtor economic forecast in Chicago where NAR economist Lawrence Yun had statistics showing increasing home prices in several major markets during past recent recessions and during increasing unemployment. I am remiss making this comment without the data from the presentation in front of me, but they were surprising numbers and the fact stuck with me (will get those charts when I return to the office).
I know several different factors were at work in those cases as they are now. Consider anecdotally, I personally know 100% that higher unemploymemt and “low job confidence” have been huge factors in my clients’ decsions to buy or wait… and a huge factor in not meeting as many clients this year in the $500K and over budgets. Many of those buyers are in financial industries and now have “201Ks”. This has definately lowered the median and average price of sales as the lower end of the market in the top tier neighborhoods have been most active.
I would definately say the employment environment has been the most influential and dominant factor on home prices in our area.
Okay, to amend my last comment the Lawrence Yun presentation showed for “Home Sales” mid 1970s recession a moderate loss in home sales, early 1980s recession, deep cuts in home sales, early 1990s recession, no impact on home sales and 2001-2004 recession showed, of course, a high increase in home sales.
I do not have the national home price data at hand, but it’s relatively easy to get for those periods. We know they went way up in the 2000s.
78% of all statistics can be interpreted to say anything you want. 45% of the time.
I think it is too early to say all homes in all price ranges have hit bottom, but I think homes that are attractive to first time buyers may have bottomed out – i.e. I’m seeing a fair number of $250-300K condos and $300-350K SFH moving around my house, but not much movement of $800K+ SFH around where I work. Granted this is all anecdotal, but it will be interesting to see the Case-Shiller HPIs and sales transactions for June and July.