A couple of weeks ago I wrote an article entitled â€œWhereâ€™s The Bottom.â€ In it I explained that the housing market here in Denver will begin to rebound by the end of the year based on a few factors like home prices to rent ratios, inventory on the market and employment. I also said some markets like Arizona, Nevada, Florida and California would be the hit the hardest with falling home values. Take a look at this list from Forbes and it reinforces what we talked about last week.
The following are the top 10 cities where prices have fallen the most in the last year, according to ZipRealty.
1. Sacramento, Calif.: – 18.5 percent
2. Las Vegas: – 17.2 percent
3. San Diego: – 17.1 percent
4. Tampa, Fla.: – 11.7 percent
5. Los Angeles: – 10.7 percent
6. Miami: – 10.6 percent
7. Phoenix: – 9.5 percent
8. Jacksonville, Fla.: – 8.7 percent
9. Detroit: – 7.7 percent
10. Atlanta: – 7.1 percent
On Wednesday Fed Chief Ben Bernanke met with member of Congress and told them â€œhe anticipates signs of a rebound in the housing market by the end of 2008.â€ San Francisco Fed President Janet Yellen says the country will avoid an “outright recession.” A survey of economic forecasters by the Philadelphia Fed indicates slightly less than 50-50 odds of a recession. Bernanke also did not rule another rate cut which would be good for many people looking to buy or refinance. Speaking of the mortgage front even though the stimulus package was approved by Congress and the President we may not get the raise in conforming loans from 417K into the 600â€™s. There is a lot of talk about FHA moving their loan limit to 417K to match the conventional market. FHA is also considering changing their 3 percent down payment requirement to one and half percent. It looks like FHA loans are going to become popular again.