The State of the Nation's Housing 2008

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Released today. A good read!

http://www.jchs.harvard.edu/publications/m...008/son2008.pdf

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Excerpt:

The current housing slump is shaping up to be the worst in 50 years. This downturn rivals the first 30 months of the 1978–1982 cycle in terms of production and sales cutbacks, but eclipses that cycle in terms of price declines. The seasonally adjusted median single-family sales price peaked in October 2005, and then dropped by 12 percent in nominal terms and 18 percent in real terms over the following 30 months. By comparison, 30 months after real

prices peaked in November 1989, the real median price was down just 4 percent and the nominal price was up 6 percent. Thirty months after the peak in May 1979, the real median price had fallen 8 percent and the nominal price had increased by 20 percent.

Another one:

... demographic fundamentals still point to increased housing demand over the next decade. But the excess inventory must be worked off before the demand for new homes rebounds. This in turn requires a return to stable-to-rising home prices, sustained job growth, and accessible credit. When that happens, and assuming immigration remains strong, the inventory overhang will start to thin, prices will firm even more, and average annual production, including manufactured housing, will likely head back toward 1.9 million units.

[mawilson 2,133]

Minimum wage is currently $5.85 per hour. Housing wage is the hourly wage needed

to afford a two-bedroom apartment at the Fair Market Rent, paying 30% of pre-tax

income and working 40 hours a week for 50 weeks.

Source: US Department of Housing and Urban Development 2008 Fair Market Rents.

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Minimum wage is currently $5.85 per hour. Housing wage is the hourly wage needed

to afford a two-bedroom apartment at the Fair Market Rent, paying 30% of pre-tax

income and working 40 hours a week for 50 weeks.

Source: US Department of Housing and Urban Development 2008 Fair Market Rents.

The only 'surprise' in that map to me was Alaska.

[Ban Hammer 13,352]

The only 'surprise' in that map to me was Alaska.

they have higher wages up there anyways.

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The only 'surprise' in that map to me was Alaska.

they have higher wages up there anyways.

Oh i see.

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Another interesting excerpt:

The propensity for Americans to form households is driven largely by the age distribution of the population, slowly changing social norms, and the pace of immigration. In the decade ahead, the aging of the echo boomers into young adulthood, the longer life expectancies of the baby boomers, and projected annual immigration of 1.2 million all favor an increase in net household formations.

Meanwhile, the impacts of recent social trends are likely to be minimal. Although deferred first marriages, high divorce rates, and low remarriage rates will continue to make single-person households the fastest-growing household type, these trends have started to level off. Assuming that age-specific household formations remain about constant, changes in the number and age distribution of the adult population should lift household growth from 12.6 million in 1995 –2005 to 14.4 million in 2010–2020.

With their high levels of immigration and high rates of natural increase, Hispanics and Asians will contribute significantly to household growth. Minorities are expected to account for more than two-thirds of the net increase in households over the next decade, with the foreign born alone contributing at least one-third of the gains.

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Retsinas is one of the authors of the study. Here's what he said to CNN:

Retsinas said parts of the country, such as the Northeast, with fewer vacant homes could see signs of a recovery in spring 2009. He was less sanguine about markets like the Southwest, where excessive overbuilding at the height of the market means it could take two years or more to sell off excess inventory.

Recovery in the Midwest represents that biggest challenge, because the housing downturn there stems from regional economic problems beyond overbuilding.

"They're not reacting to an overheated housing market there," Retsinas said. "They live in an economy that is shedding jobs."

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Bottom line - short real estate all the way to 2009!

http://finance.google.com/finance?q=SRS