Catherine at the Arizona Republic has a blurb on what the bottom might look like.
• The number of resales on the market falls below a seven-month supply.
The Valley has 55,000 existing homes for sale, a 14-month supply.
By the time we get to 7 months supply, everyone and their brother will have long known the market has turned. We just need to see the supply starting to fall to see the “recovery” is beginning.
• Home sales need to stop slowing.
Resales rebounded slightly in October, according to the realty-studies group at Arizona State University. New home sales have held steady since summer, according to RL Brown’s Phoenix Housing Market Letter.
The number of home sales should be a bit better in 2008 (my guess) because prices are lower and there is a lot of pent up demand, but the increase won’t be enough to stop the downward price pressure caused by the huge inventory of homes for sale.
• Affordability improves dramatically.
The median Valley home price fell to $242,000, its lowest level since 2005. That’s definitely an improvement for fledging home buyers, though most homeowners are still cringing at the drop.
Look for further declines in 2008. That does NOT mean every home is overpriced. That means you need to buy at the 2008 price today.
• At least one major home builder goes away.
This hasn’t happened yet, though market watchers say some builders are about to consolidate.
Wow! I thought I was the only one looking at home builder bankruptcies as a good thing.
He saw Taylor Woodrow and Meritage merge but none of the big boys have gone over the edge yet.