Some people think it might have.
But color me skeptical.
OK, there is some good news.
Subprime blight areas in the Central Valley and the Inland Empire, which led the crash, have been collapsing at a slightly slower pace recently.
According to Zillow, the real-estate information company, median prices in Stockton — a contender for the title of Subprime Central — have been falling by a little over 2% a month for the past three months. That may sound pretty bad — and it is pretty bad — but everything needs context: Last winter the rate was more than 3% a month, and early last year the rate was nearly 4%
In places like Modesto, San Bernardino and Riverside, the story is similar.
Stan Humphries, Zillow’s chief economist, sees grounds for optimism. “It points to a bottoming of the market,” he says.
Mark Hanson, an independent (and bearish) real-estate analyst, agrees that there are some signs of life. He says there’s a lot of bottom-fishing going on. In the worst hit areas, the cheaper homes are actually being snapped up right now. “Supply is at a multi-year low,” he says. “It’s down 60% from last year. You’re seeing 15 offers for every house.”
The main buyers are first-timers, armed with their one-off $8,000 taxpayer gift, and investors.
Recent low interest rates have helped. And prices there have fallen so far that homes may be genuinely cheap. Dean Baker, co-director of the Center for Economic Policy and Research in Washington, D.C., says real-estate markets are usually about right when homes cost about 15 times rental values. And in a recent report he found that paces like Stockton and San Bernardino have finally fallen through those key levels.
So, it’s good news?
Put that Napa Valley fizz back in the icebox.
Here are the problems.
First, there is no sign of a slowdown in the waves of foreclosures hitting the California market.
If anything, they’re getting worse. And that’s bad news for real estate, no matter how cheap it is.