NY Times on Housing Downturns

Posted by Dave Fratello on Tuesday, June 5th, 2007 at 11:20pm.

Let's break away from our little burg, where no one seems to be hitting the housing panic button just yet, and look at some bigger-picture data.

Sunday's New York Times Business section featured this article by Floyd Norris discussing the history of housing booms and declines. Norris notes:
There are few economic trends harder to measure than home prices, given that every home is unique, and a house in one area can cost far more than an identical one in another location. All such measures show the market has weakened, but some do not yet show a broad national decline.
One index does show national declines, the Case-Shiller index, mentioned here last week. Norris compares today's national data to those from a previous downturn that began in October 1989:
Prices are falling more rapidly this time, just as they rose more rapidly coming into the 2006 peak than they had a generation earlier...
(Follow the NYT story link above to see some graphs you'll find terrific and a bit scary.)

Norris reports that it was not for 99 months – achem, 99 months – that prices returned to their peak levels.

To some of us in MB, all that talk sounds like it's from another planet, not just another time. Price declines? Eight-year slumps? Not here!

No question, MB seems to be insulated from some of the nastier trends out there today, but can we really defy the national market completely? Local RE leaders would say yes.

FYI, if you are inclined to read more doom-and-gloom, er, analysis, on the national housing market, a mid-year analysis over at Calculated Risk provides both chat and charts worth your time.
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