Interesting NYT article on the nascent housing “recovery,” focusing on Sacremento, California.
Housing prices in the Sacremento area have been cut in half from their mid-2005 peak, primarily driven down by (you guessed it) foreclosures. The lower prices have attracted both speculators and first-time buyers, the latter who made up 53% of the market.
The headline, Where Home Prices Crashed Early, Signs of a Rebound, is perhaps more optimistic than the body of the article.
“Sales volume tends to recover long before prices. In fact, some analysts think price declines in many markets are accelerating. First American CoreLogic, a real estate data firm, reported that “the depth and breadth of price declines continued to worsen in February.” Fitch Ratings recently revised its estimate of future declines to 12.5 percent, from 10 percent, saying the drop would extend to the end of next year. . .
When the market peaked and the ability to refinance all those costly mortgages dried up, the carnage began. There have been 28,898 foreclosures in Sacramento County since 2005.”
Interesting stuff . . .
Where Home Prices Crashed Early, Signs of a Rebound
NYT, May 4, 2009