Would you now agree that there is a Real Estate slump???

[Texas Proud]

For all of you who kept insisting there was no real estate bubble... and some even defending it only weeks ago....

Do you still believe


http://news.yahoo.com/s/ap/20070215/ap_on_bi_ge/housing_slump;_ylt=AsgmF4JmMj4A0OWU6l6T1W6yBhIF

Housing sales fall in 40 states in 4Q By MARTIN CRUTSINGER, AP Economics Writer
2 hours, 47 minutes ago



WASHINGTON - The slump in housing deepened in the final three months of last year with sales falling in 40 states and median home prices declining in nearly half of the metropolitan areas surveyed, a real estate trade group reported Thursday.

The National Association of Realtors report showed that the biggest declines were in former boom areas.

The biggest percentage decline occurred in Nevada, a drop of 36.1 percent in the sales pace in the final three months of 2006 compared to the same period in 2005.

In other former boom areas, Florida saw sales drop by 30.8 percent, in Arizona sales were down 26.9 percent and they fell 21.3 percent in California.

The Realtors said that while sales declined in the fourth quarter in 40 states, six states showed increases and one state, Utah, had an unchanged sales pace. Three states did not report enough data to make comparisons.

Nationally, sales declined by 10.1 percent in the fourth quarter of 2006 compared to the same period a year ago.

The median price of a new home, the midpoint where half the homes sold for more and half for less, was $219,300 in the fourth quarter of last year, a drop of 2.7 percent from the same period a year ago.

Median home prices fell in 49 percent of the 149 metropolitan areas surveyed in the fourth quarter, compared to the same period a year ago. That was the largest percent of metro areas reporting price declines since the Realtors began tracking price data in 1979.

David Lereah, chief economist for the Realtors, said he believed the data shows that housing, which had enjoyed a five-year boom, was bottoming out in the final three months of last year.

"This information confirms 2006 was the year of contraction and hopefully the fourth quarter was the bottom," Lereah said. "When we get the figures for this spring, I expect to see a discernible improvement in both sales and prices."

 

[justin]

It is definitely "over" in a lot of places, although I don't think a lot of folks in bubble areas think it's over. Although I've thought it is over for over a year now.

By the way, I am real estate investing genius... "Next was Raleigh-Cary, N.C., at $226,300, up 14.5 percent from a year ago". :

2nd highest appreciation in the South.

6th overall I think. Must be all that CA and NY/NJ cash out money flowing in.

 

[tryan]

Yeah, we won't see the "peaks" of a year n'a half ago for another decade - or more.

But nothing drastic will happen until there's a recession.

Spoke to a realtor this morning who said the bank owned foreclosures are being picked-up steadily by eager buyers for 30-40k below what's owed. That's only a 10-15% mark down ... far cry from the 50-60% mark downs I saw in the early 90's.

 

[Sam]

I don't know what to believe anymore. I thought it would be really bad. But that's not what's happening.

In other former boom areas, Florida saw sales drop by 30.8 percent, in Arizona sales were down 26.9 percent and they fell 21.3 percent in California.

Sales is down, but price remains constant, or down by a small to negligible %age. I'm just glad I'm not in those hot areas.

 

[JDARNELL]

CINC house is a realtor in Colorado Springs and she has noticed more time for a home to be on the market, still a lot of buyers asking for all kinds of things, and banks not really comming off asking prices for foreclosures yet.

This year she is busier than last year and last year was her best year ever.

Tomcat98

 

[cube_rat]

The SF Bay Area...

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/15/BUGRRO5D624.DTL

 

[cute fuzzy bunny]

Definitely around here, the previous "most inflated real estate market" in the US...

Prices have dropped by as much as 30%, although in evaluating some properties recently, seems to me they're still priced about 20%+ over what they're worth. Still a fair bit of denial on the sellers part. One agent friend says that things seem to be firming up a bit and some multiple offer situations are cropping up.

Plus springtime tends to bring more buyers as kids get out of school and the weather improves for house hunting.

 

[retire@40]

I know a lot of real estate agents that are hurting. Especially the ones that spent their windfall over the past few years since they expected the glory days to continue forever.

What I've been hearing from the brokers is that sellers are having a hard time believing their house isn't worth what they thought it was worth, so after insisting to put their house on the market for that "imagined" amount, many are just pulling them off the market when 6 or more months go by without a bite. Some lower the price, but not enough to intersect the demand line.

I've also heard from friends in Europe that real estate is dropping there too, so it appears to be an international event.

 

[Texas Proud]

The SF Bay Area...

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/15/BUGRRO5D624.DTL

I love it....

"Bay Area home sales fell in January, continuing a 24-month slide as prices dropped to their lowest level in the last year and a half. "

And at the end...

"That five-year run up is probably over," Karevoll said.

Ya don't say!!!

 

[Texas Proud]

I've also heard from friends in Europe that real estate is dropping there too, so it appears to be an international event.

I was shocked how expensive it was in London back in 2000... some of my coworkers were buying small houses for 350,000 pounds... and thought they were getting a bargain.... but, the prices kept going up... and if you wanted to buy with $$$, forget it... it was down to about $1.30 back then, but now is about $2.00...

 

[SteveR]

Utah sales may hve been flat but the sales prices were up over 20% (average) for 2006. With the economy booming and unemployement down to 1.8% I see no change for a while.

I am taking out some profits from my vacation cabin and will end up with a 5 year gain of about 60%.

The house is in a medium-high end area and will continue to hold its value; especially with us keeping the house up to date (kitchen appliance replacement now in progress).

Even if the market slides back down when we do decide to downsize, we should still make more than we put into the house not counting the value of living in it over those years.

 

[theloneranger]

Some friends went to the Vero Beach, FL area for a real estate auction.
Appears that only half of the properties offered were sold at about half the asking price.
Offers on the other half did not reach the minimums set and were unsold.

 

[honobob]

No Way in the Bay!! 5% YOY and predictions of 5-7% over the next year. Even the OP's article says "Median home prices fell in 49 percent of the 149 metropolitan areas" When does 49% rule over 51%? Plus you have to understand the difference between median sales prices and actual sales. The median can go down with all actual sales higher than previous sales prices. I get a report for the Bay area that shows repeat sales for the same properties and there aren't any that have sold for less than prior sales for the same property.

"The resale-housing market remained flat in January, with the median price of an existing home holding steady at $640,000. Marin County saw the biggest jump, with the median price climbing 7.6 percent, to $935,000 from $869,000."

I think I'd be a little red faced if I'd spent over $50K to sell in Marin and see the median price raise $66K!!!

I'm out looking for a SF property but anything good is being snapped up within a week. Maybe not 20 offers but it only takes one more than yours to mean you're still looking.

 

[eridanus]

No Way in the Bay!! 5% YOY and predictions of 5-7% over the next year.

The Shiller housing data for SF indicate a .9% YoY decrease through Nov06.

http://tinyurl.com/22s6mc

Edit: Removed NAR; left Shiller.
Edit2: More corrections. I was mixing NAR sales figures....

 

[Brat]

Threads on this forum caused me to search for realtor focus websites. I like to watch the Bay Area, Portland and Seattle. The following have an attitude (haven't found anything interesting for Portland).. so:

Bay Area

Dull, but interesting links: http://www.viewfromsiliconvalley.com/index.html

Funny: http://www.socketsite.com/

http://sf.curbed.com/ (link to their LA counterpart)

Seattle or Seattle folks:

Worried about technology: http://www.truliablog.com/

Technology and other concerns: http://www.raincityguide.com/

Sweet Digs, you DON'T want your house discussed by these contributors: http://blog.redfin.com/redfin/

These folks are convinced prices will sink fast: http://seattlebubble.blogspot.com/

 

[honobob]

The Shiller housing data for SF indicate a .9% YoY decrease through Nov06

My figures were from December to December. I would expect a decrease in Oct and Nov. in anticipation of the Holidays. Plus there were 2 January neighborhood sales that exactly reflected a 5% increase. I can't tell if Schiller's figures reflect new and existing homes. I believe new homes (tracks) are unproven and fluxuate more in price.

Either way I know I can sell my house for more than I could last year and if you feel the market is down .9% I don't see how that justifies spending 6 times that to get out of the market. Unfortunately some people are.

 

[wabmester]

I thought it would be really bad.

By 'bad," do you mean a dramatic fast-falling market? Houses don't do that. They are sticky on the way down. If history is a guide, appreciation will first slow, then house prices will go down slowly for several years, then sideways for a few more. At the bottom, they will have overcorrected (i.e., below the inflationary trend line). And then prices will skyrocket with an uptick in economic growth.

 

[mickeyd]

RE slump?

If so, they forgot to advise Vanguard REIT Index fund of this fact. Someone is building a mess of new 3000-4000sq/ft homes near me her in south TX, not to mention all of those damn commercial buildings and apartments that they insist on constructing. Must have forgotten to advise those guys also.

 

[spideyrdpd]

I think the sales are trending back towards the norm.
I think some people bought poorly for houses they never planned to live in and figured they would double their money overnight.
So yes if you bought swamp land in florida you could say that your going to be in swamp slump

 

[jazz4cash]

RE slump?

If so, they forgot to advise Vanguard REIT Index fund of this fact. Someone is building a mess of new 3000-4000sq/ft homes near me her in south TX, not to mention all of those damn commercial buildings and apartments that they insist on constructing. Must have forgotten to advise those guys also.

It seems more like the market is tapering back from an unsustainable growth rate to me.....not a slump unless you're a realtor. Im in DC which was one of the boom areas and considered to be recession resistant..........so more likely to level off without going in the tank. My real concern, tho is the REITS........Fidelty (FRESX)up 7.89 YTD, so how are they correlated to residential market?

 

[dumpster56]

It is definitely "over" in a lot of places, although I don't think a lot of folks in bubble areas think it's over. Although I've thought it is over for over a year now.

By the way, I am real estate investing genius... "Next was Raleigh-Cary, N.C., at $226,300, up 14.5 percent from a year ago". :

2nd highest appreciation in the South.

6th overall I think. Must be all that CA and NY/NJ cash out money flowing in.

Right on point Justin.

I have been sub teaching in wake county and yes the NY and NJ money is fueling the sales in this Raleigh area. However our developer and 12 custom area builders are VERY SLOW these past three months!

 

[wabmester]

so how are they correlated to residential market?

Commerical real estate investment generally lags residential by a few quarters.

 

[Sam]

By 'bad," do you mean a dramatic fast-falling market? Houses don't do that. They are sticky on the way down. If history is a guide, appreciation will first slow, then house prices will go down slowly for several years, then sideways for a few more. At the bottom, they will have overcorrected (i.e., below the inflationary trend line). And then prices will skyrocket with an uptick in economic growth.

The two markets that I know, Lowell, MA and Houston, TX did not behave that way. In Lowell, it was practically a free fall, where price dropped more than 50% in less than 2 years. Houston was almost the same, but not quite dramatic, it took a little longer, around 3 years, I think.

 

[wabmester]

The two markets that I know, Lowell, MA and Houston, TX did not behave that way. In Lowell, it was practically a free fall, where price dropped more than 50% in less than 2 years. Houston was almost the same, but not quite dramatic, it took a little longer, around 3 years, I think.

Well, prices would fall quicker with wide job losses or something that suddenly made an area less desirable. But I didn't even see 50% declines in SoCal after the aerospace contraction. I'm sure Houston and Lowell got hit hard with job losses.

Who knows. If the economy picks up, we could even see a rise in prices. It happened in London when banks did well, and it happened in parts of Oz due to the huge commodity bull run.

 

[Texas Proud]

RE slump?

If so, they forgot to advise Vanguard REIT Index fund of this fact. Someone is building a mess of new 3000-4000sq/ft homes near me her in south TX, not to mention all of those damn commercial buildings and apartments that they insist on constructing. Must have forgotten to advise those guys also.

Most of Texas is an exception to the slump.. we have not been overpriced as much as other markets... and as someone said, it was about 50 50 on ups and downs... we are building a bunch of branches all other the place, but there are not that many good sites left as everybody is doing the same thing..