Housing slowdown is slowing down
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Kai Ryssdal: Home values are down — again. That’s the latest word from the Federal Housing Finance Agency, that’s the government’s home-loan regulator. It says housing prices fell 6.3 percent nationwide. That’s year over year, from last January to this one. But if you do as a monthly comparison, from December ’08 to January ’09, the housing market actually rose 1.7 percent. So would that glass be half empty or half full? We asked Marketplace’s Mitchell Hartman to help us figure it out.
MITCHELL HARTMAN: What appears to be happening is that the housing slowdown is itself slowing down. Falling interest rates are bringing buyers back. And that’s offsetting the drag on prices from all the foreclosures on the market.
Today’s report shows some places — the Northeast and Midwest — are already heading out of the slump. This morning, realtor Johanna Gettinger was showing a house in Ithaca, New York. It’s a three bedroom priced at $245,000.
JOHANNA GETTINGER: When a house is priced well and in good condition, or certainly like this house totally renovated, people will rush toward it. There is a pent-up demand.
Gettinger says this house will probably sell with multiple offers in a matter of days. But that’s not happening everywhere. The clients Gettinger was showing around in Ithaca? She says they just sold their house in Portland, Oregon. They only owned it for six months and took a 4 percent loss.
And they can consider themselves lucky.
BOB ULERY: There are certain other suburban markets where you’ve seen prices down 30-35 percent or more.
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Bob Ulery has been a broker in Portland for 17 years. He says the problem in these neighborhoods isn’t foreclosures, but corporate layoffs and relocations as the economy churns.
ULERY: You have an oversupply, a huge oversupply, of expensive homes come on the market, and you don’t have enough buyers out there for them. And so how do you fix it? You keep lowering the price until you finally get a buyer. It’s just as ugly as that.
Which is what’s happening across the West, especially in Arizona, Nevada, and California, where home prices are still declining as the speculative bubble deflates.
I’m Mitchell Hartman for Marketplace.
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