More Thoughts On Housing

Last week, I posted some comments from the NAR metro home sales report that offered what I believe are datapoints supportive of the soft landing thesis.

I don't believe it is useful to cite any one specific location as a tell for the overall housing industry. After all, as I noted in my post last Monday, there were several areas that are still posting double-digit price increases. Rather, I personally track 5 large cities that I feel give me a good representation of conditions in various parts of the country.

After updating my data after last week's NAR report, here is what I came away with:

• Prices in Los Angeles are still at all-time highs, even though the rate of appreciation has slowed
• Ditto for San Francisco, where prices are less than 1% from all-time peak
• Prices in New York remain at all-time highs as well
• Prices in Chicago are at all-time highs, even as appreciation slows
• Prices in Miami have fallen -6.6% from all-time peak in Q405, a modest decline given the runup

I believe we will see further modest declines, but nothing like the capital destruction that resulted from the tech bubble. I think the housing industry will bounce along a bottoming formation, with weakness in one area offset by strength in another.