Buyers ‘Walked’ Last Year And ‘They’re Not Back Yet’
TGIF and it’s time to put this week in the can. “”Paul McCulley, bond-market-giant PIMCO’s Fed-watcher, wrote last week that ‘Weakness in residential property activity self-feeds’ and that we are in for a cyclical ‘wicked turn’ in the economy, and ‘unconventional property-market weakness.’”
“The Treasury Department’s resumption of 30-year bond sales could have an interesting impact on the home mortgage market, with lenders offering more 40-year loans and maybe even 50-year mortgages for the first time. Chris Low..said longer-dated home loans could prevent a dramatic drop in the housing market. ‘It is a kind of a way to play games with monthly payments,’ said Dick Bove. ‘Stretching out the mortgage maturity is simply a way to lower month payments and stimulate sales.’”
“Land speculators are illegally subdividing land in western Box Elder County (Utah) and selling the small parcels on the Internet. ‘I’ve received phone calls from people who want to know what they can do with their land and are surprised when the answer is nothing,’ Garth Day said.”
“The fastest home-building binge in 33 years is bringing new fears of a glut in new homes and not enough buyers. ‘The long housing boom in the tri-state area is dying out,’ said (economist) Mark McMullen. ‘We won’t see a collapse in housing prices, but the real estate industry, the brokers and financial institutions in the New York area, will take a pretty big hit.’”
“McMullen said a glut is already showing up in California and Florida, as well as New York City and New Jersey. ‘In the metropolitan areas on the West and East coasts, there’s over-building,’ he said. ‘The rate is outstripping the number of households being formed and the number of potential buyers.’”
“The Portland area housing boom seems to be withstanding a seasonal winter chill, several real estate industry experts concluded. January’s median figure was down 2.8 percent from the December median price of $252,900. ‘It would be a great sign of strength if we just hold the pricing,’ said Jerry Johnson a professor at Portland State University.”
“‘Pricing power in the Portland area still has not shifted from sellers to buyers, Johnson said. ‘When that change happens, it happens quickly,’ he said. The area’s largest builders increasingly are erecting houses with higher-end finishes, (realtor) Peggy Hoag said. ‘Granted, they’re on minuscule lots, but the houses have character,’ she said. ‘They look Craftsmany.’”
“The Southwest Washington housing inventory is at its highest point in two years, possibly signaling a weakening market. Although new listings increased 9.6 percent, from 1,085 in January 2004 to 1,189 in January 2005, closed sales decreased by nearly 12 percent and pending sales also dropped, by nearly 8 percent. ‘The market has eased off a bit,’ said David Hendrick, association executive with the Clark County Association of Realtors.”
“Fresno has established itself as a defined market for distributors. ‘There is vacant land for miles, but virtually no land is available,’ Stewart Randall said. The market may peak this year, he said. ‘I got to think we’re getting close to the top,’ he said. ‘You ought to consider cashing out or taking advantage of these prices. These things go up and down.’”
“Marin’s housing market continued to cool as home sales sank last month. Sales of single-family homes fell to 136 in January, down from 198 the month before and down from 175 in January 2005. The median price was $867,000 last month, down from $900,000 in December but up from $850,000 in January 2005, according to DataQuick.”
“The trend is similar in the condominium market, with sales dropping about 46 percent. ‘The real estate community is seeing buyer resistance to price,’ said Jack McLaughlin. ‘Prices went up too fast in the last few years so the buyers walked in the middle of last year and they are not back yet,’ McLaughlin said. ‘Sellers are going to continue to have to adjust their expectations and successful sellers are going to be those that price their property realistically and are willing to negotiate.’”