Believe It: 14 Examples of Why Housing May Have Bottomed

"We will come back big time on employment when residential construction comes back," Warren Buffett said last year. "You will be surprised, in my view, how fast employment changes when that happens."

Great to know. Because we're just about there.

Here are 14 examples showing how housing is already at -- or is very close to -- the bottom and ready to rebound.

 

For more on housing's future and a possible rebuttal, check out this interview I did with Yale economist Robert Shiller last winter.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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  • Report this Comment On August 25, 2012, at 3:41 AM, BMFPitt wrote:

    Housing bottoms when interest rates peak.

  • Report this Comment On August 25, 2012, at 10:53 AM, mountain8 wrote:

    Normally.

  • Report this Comment On August 27, 2012, at 5:02 PM, AvianFlu wrote:

    Here is how it works.

    Interest rates down...house prices up.

    Interest rates up...house prices down.

    Rates are at historic lows. There is only one way for them to go....up. Therefore, house prices will be declining in the future.

    But what do I know. I was only a Realtor for 15 years.

  • Report this Comment On August 27, 2012, at 5:45 PM, cooncreekcrawler wrote:

    What's your new job?

  • Report this Comment On August 27, 2012, at 6:55 PM, Darwood11 wrote:

    Very Good!

    I do admit, the rate for current 30 year fixed mortgages is really amazing.

    It's unfortunate but we live in a "lemming society" which is 180 from the "individualistic" society I was taught about; a lot can happen in 50 years! What that means is people chase the latest fad via twitter or FB. They don't do the numbers and they tend to believe the politicians, or at least they did.

    For now, that means that many are missing an incredible opportunity. So they can rent from others, who will reap the rewards.

  • Report this Comment On August 27, 2012, at 6:58 PM, daveandrae wrote:

    Some more fuel for the fire...

    I am in the process of refinancing my mortgage.

    Today, the mortgage broker asked me what i thought my home was worth. I told him no less than 219k, ( I paid 175.5k for it in May of 1998). I told him that the 219k figure was really low balling the value of my real estate as I would never sell my home for such an absurd amount.

    Well, when I got home, my curiosity got the best of me. For my neighbor right across the street just put his house up for sale no less than three weeks ago. I thought it should fetch a pretty good price, as it is the only house for sale in my neighborhood. The neighborhood is in a great location, and, the home itself, has been well cared for. So I called the real estate agent to find out the listing price.

    "That house has already sold"

    "WOW!"

    "Could you please tell me how much it was listed for?"

    "$259,900"

    "DOUBLE WOW!"

    So i ran the figures against my own home and it all made sense. For all I did was appreciate the value of my home by 3% a year over the last 14 years and it came out to 265k. Right around the asking price of my neighbor's home.

    What does this all mean?

    I don't know, but it sure does feel like one hell of a positive indicator to me. :-)

  • Report this Comment On August 27, 2012, at 7:12 PM, Darwood11 wrote:

    /\---- The statistics I've seen indicate that over the long term, homes have pretty much appreciated in value at a rate equal to inflation. That's the long term averages and that was one of the incentives I used to purchase. That and comparison to 10 years of rent with the idea that once the home was paid for I'd be able to funnel that money into my retirement nest egg, and I did.

    It's only in recent years that people apparently decided a home was a way to get rich. The truth? A lot of realtors got rich, and a few old timers on the coasts who bought before the boom and then sold at the top. Even those who bought with no money down discovered the ugly truth, which is: the bank owned the home. They were serfs on the land.

    A proper way to consider your home or condo "investment" is to compare the rental price to the price to purchase, and include real estate taxes and repairs.

    What you consider the value of having the freedom to decorate to your choice is a personal matter.

    For most of us, there is an advantage to own,

    For anyone who wants to run the numbers, I suggest the free online "buy versus rent" calculator at the New York Times

  • Report this Comment On August 27, 2012, at 11:16 PM, ThePoulTrend wrote:

    It is all where you live personally. I hate to rain of the parade but here in CT this state is now seeing the worst of the worst when it comes to the Housing Crisis. My mother bought her home in 2005 for $350,000.00 the estimated value now is a sad at most $290,000.00 with 2 neighbors nearby selling right now for $275,000.00 and $325,000.00. There is at least 15 homes for sale on the 3 roads nearby. 4 Vacant homes that are falling to the ground.

    My father of which lives a town over owns a Construction Company of which has moderately seen an increase in work, however more towards the condos side new construction is vary minimal. Many Self Employed Companies have closed there doors, and many who work for the Unions are with little or no work at all. My Father of who built his home in 2001 had an estimated value of 895,000.00 at the peak. It is estimated at 660,000.00 max right now with 4 out of the 12 homes on the road for sale right now. As I sat down with several neighbors I found that the biggest thing riding most of the Home Owners right now to the ground is the Taxes. Currently home owners on my mothers, and fathers roads are currently paying more in taxes now than they were back when the houses were at the peak.

    I would estimate right now that there is at least 10k homes in CT in the process or soon to be process of Bankruptcy.

    Many have lost work, and or jobs, and are thinking of bankruptcy. Over the past few months just walking through my local gym of which is FILLED 24/7 most people are either out of work, been out of work for a year plus, and possibly facing bankruptcy.

    Sadly the market in the state of CT, i do not feel has hit its low. There will be many more foreclosures on the horizon, and many vacant homes popping up in this area. Without work in this area and the high cost of living i assume many will leave and there will be better opportunities in other states. However Connecticut for the far see future has a huge storm sitting over its head.

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