Well, thing are getting worse. The January 14, 2008 issue of the NY Times had a front page article "Wallets Thick And Thin Seem To Be Closing". It states "Strong evidence is emerging that consumer spending, a bulwark against recession over the last year even as energy prices surged and the housing market sputtered, has begun to slow sharply at every level of the American economy, from the working class to the wealthy". The article states: "Official statistics do not yet show that consumer spending has dropped, but they do suggest that in late 2007 it slowed in areas like automobiles, furniture, building materials and health care, said Mark Zandi, chief economist at Moodu's Economy.com". The article states that same store sales at Kohl's and Macy's dropped 11% and 7.9% respectively in December.
On January 29, 2008, the NY Times article "New Home Set Records: Sales Fell 26% In 2007" stated that "Sales of new homes fell last year by 26%, the steepest dropped since records began in 1963, the Commerce Department said". Prices also fell sharply. In December, the median price of a new home fell to 219,200, down10.9% from December 2007". The article continues: "Compared with December 2006, sales decreased 56% in the Midwest, 43% in the west, 36% in the south and 27% in the Northeast".
On a more local level, the February 3, 2008 NY Times had an cover article in its Metro Section entitled "Home Prices Start to Dip, Recalling 90's Slump". This article states "In the NY Metropolitan area, where values have not declined like other parts of the country, cracks in the housing market have begun to show and the trend is reminding some analysts of the severe downturn in the region during that recession that followed the boom's years of the late 1980's. The article states that even in Manhattan signs of weakness have appeared beneath the headlines about ever-rising average sales prices of condos and coops.
The article cites James W. Hughes, the Dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. He said that housing prices in New Jersey rose 145% from 1980 to 1988, then fell about 9% by 1992. He said the pattern for the suburbs in New York and Connecticut were similar. For those who owned houses their value more than doubled. For those who bought near the peak, they faced significant losses if they had to sell quickly. It took 10 years for house prices in New Jersey to reach their 1988 level. Taking inflation into account the recovery wasn't complete until 2002. This is a 10-year period. "A lot of pain was felt by peak-of-market buyers that bought in 1988", Mr. Hughes said. Those are the ones that really got stuck.
The article continues "from 1998 to 2006, the suburban housing market was sizzling again, with prices of homes in New Jersey rising 135% during that period", he said. According to the data that Mr. Hughes used, prices in the region (New Jersey) peaked in mid-2007. The article states the figures for Long Island showed a similar pattern and compared with most of the country. New York City property values have held up better. During the 12 months ending in November, prices in the metropolitan area fell by 4.8% according to Standard and Poor's/Case – Shiller Home Price Indices. But that was not as bad as the 7.8% drop in the Washington area and far better than the declines of more than 12% in Miami, San Diego, Los Vegas, Phoenix and Tampa, Florida. If one were to extrapolate the data from New Jersey, the market declined in 1988 through 1992 and did not start to recover until 1998 and peaked in 2007. This is a 6-year period from the market's low to the beginning of a recovery (1992 to 1998).
While extrapolating this 6-year period in today's market may not be correct, it does show the history of housing prices in the recent past. This data reveals why no one can say when the housing market will recover. Trends are only revealed after they occur.
As more data is revealed, the picture will become clearer but it will take significant time for the housing market to recover.
Real Estate Appraisal |
Home Appraisal |
Property Appraiser |
Appraisers Online |
Real Estate News |
About Peter Zachary |
Order Form |
Site Map |
© 2015 Peter L. Zachary & Associates, Inc.