Is April 2008 the Bottom of the U.S. Housing Market?

According to this Opinion article by Cyril Moulle-Berteaux, in the Wall Street Journal, May 6, 2008, it might be--

  • "Home sales peaked in July 2005" (I can buy that. In August 2005, the time on market started stretching out longer and longer. But it was August of 2007, when the loan credit shrank, that prices started to drop.)

  • "Prices got so high that people who intended to actually live in the houses they purchased...stopped buying". Yes, the speculators left the building.

  • "It now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s." And due to the reduction in types of loans, first-time buyers especially are at a disadvantage.

  • "When the rate of house-price declines halves, there will be a wholesale shift in markets' perceptions." So in other words, could there be a shift in supply vs demand as people start to recognize some good buys?

  • "House prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market." He says we will see seven months supply by the end of 2008; currently, in many areas there is 10-11 months supply on the market.

  • "Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do." Another answer is that there are a lot of cash and 50% cash buyers -- not everyone is a first-time buyer -- and the cash buyers eventually become active in the market.

What do you think? Is is time to sow new ground yet, like those civic-minded Rotary guys in the old photo (local park, by the way)? Are we close to the bottom the market? If you don't think so, or you do, just leave a comment.

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