U.S. Housing Markets: Is There Light at the End of the Tunnel?

Despite the influx of bad news about the U.S. housing markets, segments of the U.S. residential market are showing signs of stability and improvement

As the data are from January, the low point in the seasonal cycle, we could continue to see improvement in the coming months, according to the January 2008 RPX™ Monthly Housing Market Report released today by Radar Logic Incorporated. "While we see similar pressures as have been reported by others, these may be the result of a specific confluence of factors which we believe need to be watched closely," said Michael Feder, Chief Executive Officer of Radar Logic Incorporated. "The spring is when most markets show seasonal rebounds and there is some evidence that we could observe this phenomenon in the next several months." Key Observations: -- For January 2008, of the 25 Metropolitan Statistical Areas (MSAs) examined, two residential markets (New York and Charlotte) show price increases, two markets (Milwaukee and Philadelphia) were neutral (+/- 1%) and 21 markets experienced price declines on a year-over-year basis. -- However, since December 2007, seven markets show price increases and two other markets, although down, show relative improvement. -- Prices in the two largest markets, New York and Los Angeles, exhibit some bifurcation, with 'motivated sellers' accepting lower prices and non- motivated sellers holding or increasing prices. -- Luxury and mainstream markets are behaving differently. The luxury market is outperforming the broad real estate market in both New York and Los Angeles. -- The impact of the recently increased levels and availability of Federally supported mortgage credit likely does not influence the January figures and may become increasingly important as we enter the traditional buying season over the course of the next few months.