Worst Residential Real Estate Bear Market since 1945, Says New Winans Report

Residential News » Residential Real Estate Edition | By Alex Finkelstein | October 31, 2008 8:38 AM ET

(NOVATO, CA) - The Winans International Real Estate Index, which has being measuring U.S. new home prices from 1830 to present day, reported today the nation is suffering the worst residential real estate bear market since 1945.

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Ken Winans

"When will this bear market end?" asks Ken Winans, head of Winans International Real Estate Index and author of Investment Atlas. "Probably not for awhile," he estimates.  

He bases his estimate on a home's selling time. "Past real estate bear markets ended when the average time it took to sell a new house dropped to 3 ½ months," he says. "Currently, it is taking over nine months."

He says his chart showing negative percentages for price, sales and listings on properties in all of the U.S., the West, Northeast, South and the Midwest illustrates the current bear market.

The chart shows new home prices are down 17 percent; new home sales have been reduced by 57 percent; and new property listings are down by 27 percent since the real estate market's historic peak set in March 2007.

Winans chart, new 10-30-08.JPG"While this is humbling news to millions of homeowners nationwide, not everyone is feeling the pain to the same degree," Winans points out.

He says his chart shows the greatest declines in home prices have been felt in the Western states. "The Northeast is actually seeing price increases since earlier this year, but on significantly reduced levels of sales and listings," he says.

Winans says that "in comparing today's housing market to past real estate bear markets, it is interesting to note that while price declines are only slightly worse than the 1969 - 70 bear market, sales and listings have dried up much worse today than 38 years ago."

He adds, "Fortunately, while the current condition is bad, it is not record setting." The worst decline of U.S. new home prices in the last 150 years was the 68 percent decline from 1929 to 1932, Winans says.

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