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New home prices and median income
Monday, January 19, 2009
The more you look at this, the more it seems imperative to get the much larger data set for existing home sales from the NAR. If anyone knows where that can be found, please advise.
Regarding the chart above, I dare not make any comments (see this item from earlier today), but you probably know what I'm thinking about that squiggly red line...
ooo
6 comments:
I never argue with data. Sometimes I worry that the source of the data isn't good though.
New homes correct much faster than existing homes. Still think certain areas have a long way to go. Most of the cities are existing home markets and we should look at the Case Shiller index more.
Also expect real incomes to drop much much farther this time.
James
The red line's going to leap up like a salmon?
The red curve started to go up right after Greenspan became head of the Fed.
Coincidence ?
The graph shows prices are still about 4.1x median income. It remains to be seen though, if prices stabalize at 3.85x income or around 3.5x income. If you buy at 3.85 and things drop to 3.5 its another 10% decline.
Also this is a mixture of numbers. As we Clownafornians know, prices got up to 8x/10x income in many areas. Still sitting there in many cases.
We also really need to get a feel about how far incomes will contract. Figure there will be a substantial period where income craters. Could be the recession lasts three years on main street.
2012 we will probably be in recovery.
Thanks
James
Median incomes. I wonder if they will be increasing or decreasing in the next 2-3 years.
If you take a look at the Fannie, Freddie and MBA Mortgage Market forecasts (and their archives) you can get quarterly [NOT monthly] figures for existing home sales.
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