The Real Story For Fall Sellers ...

Several reports and blogs today suggest that the summer honeymoon for prices will lose momentum as we roll further into fall.  Scott Sambucci at Altos Research states that many pundits believe that the U.S. housing market is likely to reach bottom by early 2010; however, in the meantime he suggests that prices will continue to slide an additional ten percent (10%).  In support of his opinion he points to the summer season concluding, rising national unemployment rate, higher level of foreclosure-driven inventory (see L.A. Times front page article regarding FHA loan reserves and pending foreclosure risks).

What facts do we know right now about the housing market locally?  Well the 90-day rolling average of median list prices hits an 'inflection' point in early August, then it moves consistently down each week in the fall.  As of today, a ten city composite shows asking prices down about 1.25% from early August numbers.  In addition, there is a noticeable delta between the overall market median price and new sellers entering the market this Fall, especially compared to the Spring 2009.  Experts point to several factors for the current market pessimism:

1. Lagging effects of the government's HAMP program;
2. Effects of the foreclosure moratorium programs;
3. The alleged end of the first-time homebuyer tax credit of $8,000;
4. National unemployment rates;
5. FHA concerns and proposed legislative initiatives that may limit these loan programs; and
6. Interest rate pressures in the spring of 2010

What we will see in published reports (newspapers, etc.) over the short term is that the sales volume, prices and inventory will reflect a slight market rebound.  However, note that these published statistics  report on 90 day old data (i.e., S&P/Case-Shiller reports).  So later in the fall we will begin seeing what is happening in the market in the early part of October.