Are we there yet?
Not even close. And the news only gets worse. From Bloomberg this morning:
U.S. Existing Home Sales Fell More Than Forecast (Update1)
By Courtney SchlissermanJan. 24 (Bloomberg) -- Sales of existing homes in the U.S. fell more than forecast in December, capping the biggest yearly slump in more than a generation.
Purchases fell 2.2 percent to an annual rate of 4.89 million, the National Association of Realtors said today in Washington. For all of last year, sales of single-family homes declined 13 percent, the most since 1982, and prices dropped for the first time in at least four decades.
Falling property values and tougher borrowing rules may lead to more foreclosures and depress housing for most of this year. The worsening real-estate recession is at the core of the economic slowdown and will probably prompt the Federal Reserve to lower interest rates next week and in future meetings, economists said.
``We are not at the bottom in the housing market,'' said Nigel Gault, director of U.S. research at Global Insight Inc., a Lexington, Massachusetts, forecasting firm. ``The Fed is trying to battle against the fundamentals which say housing is not going to recover until we have a substantial decline in prices.''
Home inventories are climbing and housing starts are way down. So what does the stock market do?
Home Builder Stocks Continue Rally
Update1: Turns out even those markets which declared themselves immune are catching cold:
Housing Slump Starts to Hit Stronger Cities; Supply Grows, Prices Weaken In Northwest, North Carolina; Manhattan Looks Vulnerable
By JAMES R. HAGERTY
January 24, 2008; Page D1It's getting harder to hide from the housing bust.
Tight credit, fragile consumer confidence and a weakening economy are slowing sales and depressing prices even in some places -- such as the Pacific Northwest and North Carolina -- that until recently had avoided the housing slump afflicting most of the country.
Even Manhattan, where prices continued to rise briskly last year, looks more vulnerable to a slowdown. Falling home prices and soaring defaults elsewhere have created more than $100 billion of losses on mortgage-related securities at Wall Street firms, destroying many jobs in the New York area. The number of homes listed for sale in Long Island and Queens at the end of 2007 was enough to last 18 months at the current sales rate, up from a 12-month supply a year before.
