The foreclosure data out yesterday showed foreclosures threat up 24% in the first quarter. And there are more foreclosures in the pipelines -- 3 million potentially this year. That is going to continue to depress prices. Prices are already 30% after their peaks, which could drop another 10%.
But the good news that we're hearing is that there is a bit of a thawing going on in the housing industry. Some of these buyers are getting off the sidelines and the government programs working their way. The economists I talked to yesterday said that the bottom is, in fact, nearing. You could potentially hit bottom in late 2009.
Markets Near Bottom
If you look at these areas where you didn't have this huge run-up in prices, that's where we're either nearing bottom, close to a bottom. So a lot of the Texas markets, for example. Dallas, Austin, Houston -- you didn't have this huge bubble to burst to begin with. That's one area. In the Northeast, looking at the Boston market, which fell relatively early, some signs of stability there coming back to the market. Yet the financial sector has gotten hit very hard. But nowhere near the way it did in New York, for example.
Pittsburgh another area. The thing that's interesting about Pittsburgh, everyone thinks steel country, manufacturing city. But, health care is the big booming industry there. If you look at the University of Pittsburgh, that health care, that medical center employs 40,000 people. So this is one area that is always on the rip of where the job growth is for 2009. Those are the ones that are near bottom, out of bottom.
Markets With More To Lose
If you look at the California market, those have been struggling. San Francisco, for example; look at Phoenix, the median price of a home there is $125,000 right now. Las Vegas, of course, is continuing to take hits. Miami, which is an area that's totally overbuilt. In these areas, people are actually jumping in and buying, because prices are 40%, 50% off where they were just a year ago. Unfortunately the foreclosed properties are going to continue to track down prices, again, for awhile.
The experts I talked to yesterday say it's probably a year or so off from these markets actually bottoming out. And then finally, if you look at New York, right there, and Charlotte, N.C., the banking hub. I mean these are areas that are just now starting to see the effects of all the losses in the finance ago sector. And unfortunately look at a market like New York, 180,000 jobs expected to be lost, yet again, this year. So they're lagging behind other markets.