For some reason I saved an MSNBC news story from June 19th 2007, almost 2 years ago, which discusses the housing downturn at that time and questioned whether or not we were close to the bottom. Almost 2 years later we still don’t know when we will find the bottom. Written by John W. Schoen, Senior 
Producer for msnbc.com and Titled: Housing industry still looking for the bottom, the article focuses a bit on the impacts the downturn was having on homebuilders. An interesting point made in the article was that Builders perceptions of the market at the time was at a 16 year low, the sharpest decline since 1991. The survey was taken at a time we saw new, privately-owned housing starts to be off about 22% from the prior year, or about 1.5M starts. Taking look at todays data on new residential construction as reported on the U.S. Census Bureau website, privately-owned housing starts for February 2009 were at 583,000, almost 1 million below that of May of 2007! This may beg the question: what does this mean to Builders perceptions today, but we all probably know the answer to that question. This video, pulled from the article gives further perspective of where we were at the time and specifically talks about California needing to go even lower as it was requiring and income of at least $100K to qualify for the purchase of the average home. I believe that as soon as we see job losses begin to level, that it will be at that point the housing market will begin to move. Just like the stock market, the bottom of the housing market cannot be predicted.
Today in the Beaverton Oregon area of Washington County, easily 63% of the sales activity is below $300,000 and less than 10% is above $500,000. The price points above $450,000 are almost non-existent, clearly a factor of a weak job market. The “move-up” buyer who would be purchasing the $500,000 home is very probably sitting on the side lines, waiting to see if thier job will survive this recession. With a stronger job market and a pick up of the higher price points, I think we’ll see the result lead us into a stong recovery.
