Archive for February, 2009

House Price Index Update — Miami and New York

posted on February 10th, 2009 filed under: Real Estate News

A real estate downturn is a process, not an event.  As noted previously in this blog, significant downturns in real estate prices have taken three to four years from the time prices start falling to the point that they reverse up from their ultimate trough.  And that is based on modern experience.  If this period is more like the Great Depression, the modern experience might be too soft a comparison.

Anyway, we are only a year or so into the price declines in New York, and about two years in Miami.  There remains much work to be done on the downside.  As Jeff Saut of Raymond James likes to say: "Sometimes me sits and thinks, sometimes me just sits."

Today's postcard from Miami:

Chart.OFHEO.Miami.3Q08

And from New York:

Chart.OFHEO.NY.3Q08 

One note to tuck away in the back of your mind: Real estate price indices are terribly lagging indicators.  It takes a long time to collect and report the data, and the OFHEO series on which these charts are based is especially slow.  As a result, these charts will show a reversal only well after it has happened — probably several quarters late.  But we're nowhere near that stage of the process.

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