is bargain time for home buyers
"Even though existing home prices are basically flattish
on a national level, I would issue a bit of caution with that number," he
says. "Housing is inherently a local market, and national numbers are notorious
for not offering an accurate snapshot of what is happening in a particular market."
So, while prices in Southern California and parts of Florida may be down significantly,
other markets may still be enjoying healthy price gains.
the whole, Levy says to expect prices, on average, to drift slightly lower as
a function of clearing out excess inventory. And inventory is the key.
One way economists rate home sales is by calculating how many months it would
take to sell all the homes listed for sale at the current buying rate. That number
determines the housing inventory.
According to Lereah, the
inventory of existing homes appears to have topped out at 7.4 months' worth of
homes on the market.
"That's not bad for a contraction.
Usually you would see double-digit inventories, but that didn't happen,"
he says. "But interestingly, that low number raises eyebrows, because everyone
is looking for a bursting bubble."
And while he doesn't
think prices have yet hit bottom nationwide, Lereah says he believes there are
only a few more months where home prices can fall before turning up again.
year end, we will probably see a 1.4 (percent) appreciation nationwide,"
The latest housing inventory numbers show 6.8 months'
worth of homes on the market in January, but Lereah warns that number may be adjusted
upward as more exact figures become available.
"It will probably be closer
to seven months when the revised numbers come
in. I suspect we will see 6.6 to 6.5 months
by year end," he says. "This takes
us to the upper end of normal. As a rule of
thumb, 5.5 to six months is a balanced market."
But again, Lereah stresses that housing appreciation
is uneven nationwide.
"Some areas of the country saw
a severe retraction. Places like southern California, Florida, Washington D.C.,
Las Vegas -- they all saw a sharp recession in real estate," he says. "They
lost from 15 to 30 percent."
And while falling prices
are bad news for homeowners, homebuyers in those depressed markets are now taking
a fresh look at those bungalows that were priced out of their reach even a few
"All real estate is local," Lereah says,
adding that that phrase will be the title of his new book expected to come out
Michael Giusti is a freelance writer based
in New Orleans.