July 25, 2007
Market correction in 2009? Watch NECN video & use this new tool
Responding quickly to today's front page story in the New York Times (Home Lender's Woes Fuel Market's Decline) and over 200 similar stories on Google News, New England Cable News quickly invited The Real Estate Cafe to present the local home buyers' perspective on national headlines which reveal the lowest home sales in five years. The three minute video clip is worth watching, even if there is a lot more to say about why Countrywide's CEO told reporters that home prices were falling “almost like never before, with the exception of the Great Depression" and that "the housing sector would continue to suffer until sometime in 2008 and not begin recovering until 2009."
As we told NECN, and as documented on our Real Estate Bubble Map, people don't realize how long it takes for housing markets to correct. It's not four months, it's not fourteen months, it can be four years as was the case in the last down cycle in Greater Boston:
Past housing price corrections:
Price decline: 13%
Duration: 3.5 years (14 quarters)
Overvaluation prior to price correction: 37%
Valuation peak: 1987Q1
If you are one of the many home buyers across Massachusetts watching housing prices fall and plotting your home buying strategies for the second half of 2007 or beyond, The Real Estate Cafe invites you to test our new map-based MLS search. Each MLS listing is linked to Zillow so you can identify price trends, compare the asking price to recent sales, and identify other possible home buying opportunities nearby, even if they are NOT listed in the MLS. If you are trying to time the market, you can even sort listings by how long they have been on the market to help identify "motivated sellers."
Cross-posted on The Real Estate Cafe's social networking site. Please join the discussion with other home buyers and sellers there.
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The data on the last price correction is really interesting. One could argue that this market has been in decline for nearly two years, and another 18 months (Q4 2008 or Q1 2009) seems realistic.
One thing that makes me nervous is when bloggers and others refer to Zillow as if it is a reliable source of pricing information. It's not. Zillow itself doesn't even claim to be all that accurate.
In fact, Zillow claims to be accurate within 10 percent in the Greater Boston area only 66 percent of the time. That means 44 percent of the time it's inaccurate by more than 10 percent.
Posted by: Rich Rosa | Aug 8, 2007 11:31:23 PM
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