Irrational housing market exuberance

Remember this - it's important.

Multi-year, almost decade-long trends do not reverse themselves in a V-shaped bottom as some might have you believe today regarding the housing market.

The bottom in housing, when it comes, will be marked by a distinct lack of interest rather than the frenetic bottom-calling that has persisted for the last few years now.

The way you'll know that a bottom in the housing market has arrived is when you don't hear anyone talking about it. When the hopes of the last optimists have been dashed (the eternal optimism of real estate sales types excluded), that's when we'll have reached the bottom.

Based on yesterday's irrational housing market exuberance in the mainstream media, the bottom is still probably at least a couple years away.

To wit:

LV home sales soar in November - Las Vegas Review Journal

The bottom of the Las Vegas housing market appears to be taking shape late in the year. Home sales have improved and inventory has been reduced. Prices continue to fall, but the rate of decline has dropped under 3 percent for the last two months.

The Greater Las Vegas Association of Realtors reported 2,183 single-family home sales in November, more than double the 968 home sales in the same month a year ago.

The number of homes available for sale declined 3.1 percent to 22,770 in November from a year ago and the median home price fell 32 percent to $186,000. The price is down just 2.1 percent from October.

It's the third straight month that home sales have doubled from a year ago. That trend is expected to slow during the Christmas holidays, said Patty Kelley, president of the Realtors association.

You'd be well-advised to dismiss sales volume rising from historically low levels based on an unusually large number of foreclosures as a sign of a bottom.

Wells Fargo CEO sees progress in housing market - BusinessWeek

Wells Fargo & Co. President and Chief Executive John Stumpf said Wednesday that the economy is likely to get worse before it gets better, but that he has seen some signs of improvement in the housing industry.

"We're starting to see a couple early signs that maybe we've reached the bottom in housing, or close to it," Stumpf said at a financial services conference sponsored by Goldman Sachs Group Inc. in New York.

For one, Stumpf said he has begun to see multiple bids on properties, a sign that demand is increasing.

Yes, demand for bank owned properties is increasing. In some parts of the country, home prices have come back to within hailing distance of reasonable valuations under normal economic conditions. It's too bad we don't have normal economic conditions anymore.

Housing market to recover in 2009 - New Mexico Business Weekly

The national residential real estate recovery has begun and by next June, the excess inventory of available homes should be absorbed, according to Alexis McGee, president of Foreclosures.com, a leading real estate and property information specialist.

“Recovery is underway. Affordable is back in the housing market,” says Sacramento-based McGee. “In 2009, housing will not only recover, but we’ll see buyers leap into this market in droves, depleting our housing oversupply, and actually putting higher price pressures on the market.”

Based on November’s foreclosure rates, McGee says the nation’s foreclosure hemorrhage has finally slowed and 2009 should see a significant decline in foreclosures as buyers return, pushing home prices up and fueling a real estate recovery.

Geez. I don't know how this lady can look at herself in the mirror.

Here's little cold water for all the folks above.

Foreclosure Storm Will Hit in 2009 as Loan Changes Fail - Bloomberg

U.S. foreclosure filings climbed 28 percent in November from a year earlier and a brewing “storm” of new defaults and job losses may force 1 million homeowners from their properties next year, RealtyTrac Inc. said.

A total of 259,085 properties got a default notice, were warned of a pending auction or were foreclosed on last month, the seller of default data said in a report today. That’s the fewest since June. Filings fell 7 percent from October as state laws and lender programs designed to delay the foreclosure process allowed delinquent borrowers to stay in their homes.

“We’re going to see a pretty significant storm next year,” Rick Sharga, executive vice president of marketing for Irvine, California-based RealtyTrac, said in an interview. “There are two or three clouds that suggest a pretty heavy downpour.”

Don't buy now, you won't be priced out of the market.

The year 2010 looks to be the year to start thinking about buying something.