It’s Friday, and between the writedowns this week and slumping home starts, some people are feeling pretty bearish. None more than PNC Financial Services Group Inc Chief Executive James Rohr though. In remarks yesterday:
Rohr said the U.S. housing market is in its worst slump on record.
Rohr spoke on a conference call after the Pittsburgh-based bank, which operates mainly in eight mid-Atlantic and Midwest states and Washington, D.C., said soured real estate loans led to a larger-than-expected 18 percent decline in first-quarter profit.
"We are in the worst housing market in the recorded history of the United States," Rohr said
That’s Rohr’s opinion, but we’d love to hear from Doomers. This is an open thread for whatever happens to be on your mind.
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Everything’s relative, but yes, this is the worst housing market in recorded history … for sellers.
For buyers, it’s also pretty crappy, but getting better all the time. Socal alone is down 24% from last year. That’s an epic crash. No two ways about it. I thought that would happen over 3 or so years and take 6 or more to settle out along the bottom. This crash is absolutely breathtaking if you follow the market. Noone knows where there market is from one minute to the next.
Chuck Ponzi
Chuck Ponzi is right. I just received comparable sales reports for Capitol Hill in DC from 2005-present, 3BR townhouses in the shadow of the Capitol itself. It’s an amazing and scary picture:
2005 benchmark prices for this sort of home (generally 1800-2100 square feet) were 900k-1.1MM when in fully renovated condition. In 2006, there was a super-heated period where they sold over list price, about 950k-1.2MM. 2007 actually looked very similar to 2005 until the end of the summer.
Then it’s really eye-opening. Beginning in September ’07, the number of comps themselves drop off dramatically in number, with the selling prices coming in between 650k and 900k. Right now inventory is building again like in all annual cycles, and the opening list prices are up to 200k below what they were just eight months ago.
This is where senior staffers to Congress and the White House, as well as executives in the federal agencies live.
Arizona is about 9-12 months behind California. 16% decline for Phoenix metro in this last year. Hopefully that will rise to 25% next year and the next year……
When cookie cutters in the Gilbert area of 85297 are 220-300k and not 120 to 180k, something is still terribly wrong.
The bubble and wave shape are twisting into unusual shapes the further from hyper-glut states you go. In Bozeman, MT our housing is frozen at a crest. Still waiting on those mythical millionares, still waiting for the droves of construction contracts, expecting thousands of tourists. Scince December the county has gone from, immune to recession, well prepared for recession, to a six million dollar shortfall from failed bond sales. Montana is suddenly unable to sell its higher-ed bonds. Local schools are in the drink from lost tax revenue and bonds(effect of a frozen RE wave. No sales, no starts, no tax). Yes, our mrkt is far away from the action but when corps like Zales look to cut costs…Our first strikes are coming from food, fuel and job loses. No Ccard mail. Like a riptide before the forclosure wave actually arrives. I think ppl forgot(2001-03) that when banks shut off money it is instant and nat’l. Less entrenched business units go first and tourism is a fickle pickle. By the time RE looks to meet buyers prices we will be starved down to nightmare proportions.
Example: In ’01 I bought 1100sqft home in Three Forks for 86k. Sold in ’05 156k. It was flipped in ’07 for 245k.
MT is still one of the lowest per capita wage states. Topped with commodity prices, i.e. fuel was 1.25 in ’01. I really feel sorry for the college student looking to do roofing or landscaping in the summer.
Been following your site for almost 2 years. Sure wish more people would have instead of following all the BS. This is getting scarier by the minute. I’ve closed my 3 mattress stores, house is upside down and it looks like it’s getting a lot worse. Small biz is going to disappear. Didn’t the Soviet Union invent the BIG BOX? thanks Al & Ben. Hope your buddies are doing well
Last night on ABC news(Phoenix) some guy that owns a home inspection CO was talking about “the bottom” and how he feels we have hit it.I say bullsh#^ !Thats like standing in shallow water and yelling to everyone a mile away that the water isnt deep.
we went up parabollically + we seem to be coming down in the same fashion. and sooner is better. new construction is way off – something like 17 year lows and that to me is bullish. the sooner they move out their inventory (and not adding to it by building more at this time), the better. we are a remarkably resilient country and this too will pass – but it will take time – but it will certainly take less time if the politicians stay out of it.
“Last night on ABC news(Phoenix) some guy that owns a home inspection CO was talking about “the bottom” and how he feels we have hit it.”
I really need to start my own version of a Nixonian enemies list. It will be a list of liars and incompetents. I will stick to Arizona people only, and then have an easy reference guide to avoid doing business with anyone currently calling a Phoenix bottom.
Your inspection company guy seems to fit the bill, although it sounds hilarious that they would interview him when these are really macro-economic issues that require an extensive understanding of both math and history.
Yeah but the DOW is up 253 pts on all this bad news. Party on Garth. Lots of folks will be standing on soup lines but at least the stock markets will still do well. Invest in Cambells Soup.
What ABC didn’t report: also calling a bottom were bricklayers, landscapers, pool builders, plumbers, electricians, roofers, carpet layers, furniture delivery guys, and the owner of every houseware store in the valley.
It’s called TALKING YOUR BOOK.
Greenspan’s Body Count hits 17.