Realty Viewpoint: Real-time Housing Composite Shows Possible Bottom Near

April 4, 2008 - PRLog -- The index tracks homes for sale in 23 metros through real-time listing prices. (Editor's note: The 10-city composite uses the same metro data as the S & P Case-Shiller Index for Denver, Boston, Miami, San Diego, Los Angeles, Las Vegas, Washington, DC, Chicago, New York, and San Francisco. Other cities such as Dallas are calculated separately and will be included in a future 20-city index, once again mirroring the Case-Shiller metros, says Altos. The 20-city index is expanded to include Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland, Seattle, and Tampa.)

The largest declines were in San Francisco (off 5.2 percent) and Las Vegas (off 5.2 percent) while southern cities Houston, Dallas, and Charlotte saw modest price increases of one percent or more for the quarter.

Asking prices went down in 14 of 23 markets during March, with Chicago reporting the largest drop in listing prices (off 3.9 percent.)

What's causing prices to drop are expanding inventories of homes for sale in all the composite cities. Chicago's listings for sale increased 12.3 percent.

At the same time, days on market improved with homes languishing 118 on average, down from 121 in February and 124 in January. The cities with the longest days on market were Miami and Detroit, both at 146 days. The fastest turnovers were in San Francisco (65 days on market) and Austin, Texas (67 days on market.)

What these figures suggest to me is that we're getting closer to a bottom.

Here's why. Lower listing prices are a terrific indicator that sellers attitudes are changing. Instead of waiting a long time for offers, and then allowing the buyers to beat them down to a lower closing price, they are reducing their prices up front to bring more buyers to the table.

And it appears to be working.

Days on market are trending lower. This has resulted in some dramatic declines in marketing times. In Seattle DOMs improved by 26 percent, 24 percent in Portland and 11 percent in Boston. On the other hand, it's spring. This is the biggest selling season of the year, so it's natural for more homes to come to market, just as it's natural for more buyers to buy.

We'll know more in April. If home prices reverse and start to go up in places where inventories are trending fewer days on market, we'll know we've reached the bottom, at least for those cities.

Website: www.jasonthoele.com