Wednesday, May 12, 2010

Housing Stories and Market Update

by Bill McBride on 5/12/2010 03:55:00 PM

A couple housing stories ... the first provides analysis from Barclays analysts that suggests distressed sales will stay elevated for some time. The second is from Diana Olick about house prices and the tax credit.

From Jon Prior at HousingWire: Shadow Inventory To Peak in Summer of 2010: Barclays

Barclays defines the shadow inventory of foreclosures as loans in 90-plus day delinquency or already in the foreclosure process. ...

The shadow inventory should reach its height in the summer in 2010 before falling gradually as the market absorbs 130,000 distressed properties per month, according to the report. Over the next three years, analysts forecast 4.7m distressed sales with 1.6m in 2010, another 1.6m in 2011 and 1.5m in 2012.
From Diana Olick at CNBC: Home Buyer Tax Credit Takes its Toll
From one of our own CNBC producers, Andrea Mantia:
"I've been househunting for a few months now...we totally got caught up in the "tax credit frenzy"....thank God we took a deep breath and relaxed...EVERY SINGLE HOME we had our eye on dropped in price this week...and this is in Bergen Co (NJ) where prices weren't budging!"
Anybody surprised that asking prices have adjusted down?

Stock Market CrashesAnd on the stock market:

Click on graph for larger image in new window.

This graph is from Doug Short: "Four Bad Bears".

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.