Maybe we are just getting immune to the housing crisis
; to the news that homes are underwater in Phoenix and Florida; that all the "sand states" are in real estate
hell; and that it costs less to buy than rent in Las Vegas, where 51 percent of the buyers are coming in with cash
But here's a shocker: Seattle, Chicago and Atlanta are not doing so hot, either.
That's the home of on-line real estate
giant Zillow and four Fortune 500 companies: clothing merchant Nordstrom, Internet retailer Amazon.com, coffee chain Starbucks and logistics company Expeditors International of Washington
plus a host of thriving online and biotech companies. In nearby and uber affluent Redmond, we find Microsoft and Concur, Visible.net, and Data I/O Corporation. Why would these areas be experiencing a decline in real estate
As Stan Humphries, chief economist for Zillow, told the New York Times
, he is quite perplexed. "When I go out and talk to people around town, they say, 'Wow, I thought we were going to have a 12 percent correction and call it a day,' " says Humphries. "But this thing just keeps on going."
Humphries's figures have chiseled Seattle real estate
down a whopping 31 percent from the mid-2007 peak -- height of the bubble -- and he says the market still has as much as 10 percent to fall.
As for the rest of the country, Humphries estimates we all have 5 to 7 percent more to go down before stabilizing, as soon as the hangover from last year's first time homebuyer's tax credit
"We went into 2010 feeling gangbusters, thanks to Uncle Sam," Mr. Humphries told the New York Times. "We ended it feeling penniless, with home values
Now look at Atlanta: Atlanta didn't have much of a boom, yet home prices there are down almost 8 percent over last year.
Chicago home values
are down 7.6 percent, one of the worst markets in the country. In fact, of the 20 cities covered by Case Shiller, only five are in positive growth territory when compared to a year ago: Boston, San Francisco, San Diego, Los Angeles and Washington
, D.C. Even my bubble-free Dallas looks to have a 4 percent drop in home values
, though Case Shiller reported in January that our home values were up 1.4 percent November 2009 to November 2010.
Honestly, this is like watching water boil.
David Brown of Metrostudy's Dallas housing
office sure was not kidding when he said we could expect to see mixed signals in the housing market almost month-to-month, because demand will not measurably strengthen until job
Experts, some of whom have said we may be in for the dreaded double dip, are perplexed that though the overall economy seems to be mending, housing remains stubbornly weak. Huge headache for the Obama administration, which brought us the first time homebuyer credit
at the beginning of last year. The credit
spurred some sales, particularly in entry-level
homes, but critics now say it distorted the market. The administration now advocates scaling back the home mortgage deduction
and dismantling of the GSEs
, which could result in even fewer home sales.
We've got low interest rates, but mortgage applications are at a 15 year low. CoreLogic, a data firm, said last week that American home prices fell 5.46 percent in 2010
. Excluding distressed sales, the five states with the greatest depreciation were: Idaho (-10.41 percent), Alabama (-8.72 percent), Arizona (-7.09 percent), Oregon (-6.30 percent) and Washington
Redfin is an on-line real estate
brokerage firm based in, ironically, Seattle. The company says "foot traffic" picked up in the last several weeks. And while still low, mortgage rates
are rising, which could nudge buyers. I asked Plano, Texas ReMax agent Gina Branch what in the world it will take to get buyers back in?
"Financing is a big part of it, but there's still a lot of job
insecurity out there," says Gina. "Buyers are afraid to take the leap not knowing how stable their jobs are. We've got to get people back to work to improve confidence in the market and get buyers off the fence."
If interest rates nudge up, she, too, thinks the fence-sitters will jump in.
But then there's the case of the "accidental landlords", that is, sellers who couldn't sell their homes so they put them up for lease. Whenever the market finally does come back, all those accidental landlords will unload, straining the market with more inventory plus the never-ending string of foreclosures.
"So many sellers are waiting in the shadows," said Redfin's chief executive, Glenn Kelman. "The inventory is going to expand and expand and expand. I don't see any basis for significant price increases."
Before you crack out the Prozac, listen to Fiserv, the company that produces the Case-Shiller Home Price Indexes. After analyzing prices in 375 communities, Fiserv calculates three-quarters of them will be stable by December
IF there are no downside surprises for the economy.
"We're at a period near the bottom but with more volatility than we normally see at this point," said David Stiff, Fiserv's chief economist. "This sort of double dip is unprecedented for housing."
You can say that again.
Candy Evans is an award-winning, Dallas-based real estate reporter, blogger, and consultant. She's the gal who brought House Porn to the Bible Belt! Read more at SecondShelters.com. Send story ideas and tips to CandyEvans@secondshelters.com.
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