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Shadow Housing Inventory

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July 21, 2008 – Comments (3)

Calculated Risk has a piece that features a couple home owners that feel that housing prices are down and if they wait their homes will recover in prices.

I like the expression "Shadow Housing Inventory."  What happens is eventually these kind of people end up selling and they keep the supply coming that holds the price down.

I have been a great promoter of if you can see a top in the housing market wait 4-7 years to buy.  You might not find an absolute bottom, but prices are likely to be reasonable.

Japan had something like 18 years of price declines, but if you look at their prices even 4 to 7 years after the peak trying to buy was hardly affordable.

I have a friend with a place in Florida and the prices there now are sounding no too bad to me, at least where she was quoting them.  Florida peaked first and started falling first. 

What was also interesting to me is I did a search on Florida housing bubble blogs and they've all become quiet, as if there really isn't much to write about anymore.

3 Comments – Post Your Own

#1) On July 21, 2008 at 9:58 PM, Tastylunch (29.29) wrote:

I think if you can hold off a little longer Dwot, that next year is likely ot be even better for fla real estate. Be interesting to know what floridabuilder thinks.

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#2) On July 21, 2008 at 10:34 PM, dwot (47.53) wrote:

When the prices come down they are usually down for a couple years so there is no rush.    But, if I lived there and was looking to buy I would probably be out looking, but taking my time.

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#3) On July 22, 2008 at 3:45 PM, Richthofen80 (88.48) wrote:

I would wait. right now a great deal of people in florida have Option-ARM loans. The exposure to those loans is larger than subprime. Those are beginning to reset now. As those reset even more inventory is going to come on the books.

 Florida has Zero well-paying jobs out there. No industrial base, its mostly service-oriented jobs. Based on that Florida house prices should still come down until they're affordable enough for someone working at Checkers.

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