Orange is the New Red

In what's headlined the Map of Misery, the Economist has a story (with map of misery, natch) this week that suggests the nation has only hit the halfway point in the housing bust.

The map, from the Federal Reserve, shows the change in the housing price index by county from the last quarter in 2006 to the same time in 2007. And it's color-coded. The hotter the color, the worse things are in that state (sorry, California and Florida and, um, Nevada? I get Vegas, but this was done by county.)

I've heard that, generally, Memphis is immune (or more immune than other parts of the country) to these types of market fluctuations. Mostly because real estate prices here haven't been driven up by enormous demand or boatloads of Memphians with gobs of extra cash to spend. So even if the market corrects itself downward, it doesn't have that far to go.

But if you look at Memphis' little corner on the map, you might notice that it's light orange.

So home prices aren't decreasing, but they are staying roughly the same. Because of the conventional wisdom about demand here, I can only assume that the supply side of the equation (foreclosures?) is driving down prices.

And here's more good news from The Economist: "The discrepancy between supply and demand suggests that prices could fall a lot more. By historical standards there is a huge glut of unsold homes on the market. The homeowner-vacancy rate—which includes all vacant homes for sale—has soared to a record level of 2.9%, which means that there are some 1.1m 'excess' houses for sale compared with the average between 1985 and 2005."

Well, at least they came up with an appropriate title for their map.