Construction spending in January 2008 fell 1.7 percent from December 2007 and dropped 3.3 percent from one year earlier, to $1,121.5 billion, according to the government.
Chicago Condos Online released the following stats: year-to-date, units closed are down 24 percent. In January, they were down 36 percent, so the market is picking up significantly. With median sales price up 12 percent, total sales volume is down by 8 percent.
On a month to month comparison, February 2008 to February 2007, units sold are down 13 percent. Median sales price is up 13 percent, according to chicagocondosonline.com.
Now here are some thoughts for contrarians looking for the positive side to all this:
- For December 2007, of the 25 Metropolitan Statistical Areas examined, four residential markets showed price increases.
- Transaction volumes have been a leading indicator for price decline in most cities. Boston, Cleveland, Detroit, Sacramento and San Diego are experiencing a recent increase in volume after a period of price declines.
- The Economic Stimulus Act of 2008 is now law. Cities with higher price points may see increases in the liquidity of the residential mortgage market as a result, possibly sparking an end to the slide in housing prices.
(source: December 2007 RPX Housing Market Report)
So are we in a recession? In her February newsletter, Mesirow Financial’s Chief Economist Diane Swonk says we may not know for sure until July, when all the economic data is in. And she says that may be too late.
Hard as it may seem, it’s worth trying to stay optimistic. Thinking you’re down on your luck may become a self-fulfilling prophecy.
Published: Mar 3, 2008