‘Sellers Willing To Take A Hit To Make A Deal’
The Washington Times has this report. “Last month was the best month for buyers since 1997. All over the Washington area, buyers could negotiate from a position of strength when making an offer on a home. Sellers, many of whom didn’t want to believe the seller’s market was over, seem to be finally accepting this truth. And that’s causing sales prices to drop.”
“Compared to June, there were 700 more homes for sale and 600 fewer sales. Median sales prices in Arlington fell 15 percent from June to July, and July’s figures were down 9 percent compared to July 2005. Other jurisdictions saw prices fall by single digits last month.”
“In fact, sales prices fell in every Washington-area jurisdiction between June and July. The fact that median prices fell throughout the region in July does seem to indicate that the slower market is causing sellers to accept lower offers. Sellers were reluctant to do so earlier in the year. But now that homes regularly take two to three months to sell, home sellers seem to be willing to take a hit to make a deal.”
The Baltimore Sun. “After a couple of heady years of soaring demand and accelerated building of homes, sales are down, inventories are up and buyers are canceling new-home contracts at twice the rate of a year ago. So builders are enticing buyers by offering to throw in extras. Such packages haven’t been seen in more than a decade, experts say.”
“In the Baltimore area, cancellation rates jumped in Baltimore City and the five surrounding counties in the first half of the year compared with the first half of 2005. Chris Wood, a mortgage lender in Severna Park, said he has seen new-home contracts fall through because the buyers are having trouble selling their existing homes first.”
“‘The package of incentives builders are reporting to us now look similar to the early 1990s, when the market had a bona fide economic recession and housing took a heavy hit,’ said David Seiders, chief economist for the National Association of Home Builders. ‘The incentives clearly cannot stop a bona fide housing downswing, but they certainly can help limit it.’”
The Fairfax County Times. “According to the Northern Virginia Association of Realtors, housing sales slowed locally in July, dropping 39 percent from a year ago. As a result, the number of homes available in the market shot up 147 percent compared to this time last year.”
“A main factor for the slowing sales, according to one agent, is negative media attention about the housing market and the economy. ‘There is a psychological fear out there that things are going to slow down, and it’s stimulated by the media,’ said (realtor) Alica Yowell. But she said sellers are starting to get fed up and are no longer bowing to pressure to lower their asking prices.”
The Leesburg Today. “Veteran industry experts frequently point out that real estate prices are falling, but only from the over-inflated heights to which they had climbed in recent years. Most agreed there is a definite cooling of the super-heated Loudoun market.”
“Their advice to sellers? Don’t expect anywhere near the astronomical prices of a year or 18 months ago. You won’t get them. Instead, price your home realistically, while being prepared to lower it by $100,000 or more. And expect it to take longer to sell.”
“Jeanette Newton, director of the Dulles Area Association of Realtors, said..people should remember real estate is a long-term investment, and she has no patience with ‘all that trash about I lost money.’ ‘They never had it,’ she says forthrightly, claiming Loudoun is still a strong market.”
“Susan MacNamara Gonzalez, who specializes in helping homeowners prepare their home for sale, gets a close up look at sellers’ emotional distress. Some look as if they’ll yell or burst into tears, she said.”
“Attorney Eric Zimmerman in Leesburg, who does a lot of real estate closings, quipped ‘What real estate market? Is there one out there?’ He is seeing significantly fewer closings. ‘The market may be off 25 percent, but it’s 50 percent for us.’”
“Longtime Leesburg Realtor Ron Resnick, noted a vast difference in today’s sales numbers. ‘If you’re looking at a year ago, you’re going to be pretty disappointed,’ he said, cautioning that anyone who bought a year or so ago to flip it quickly for a huge profit should ‘expect a rude awakening.’”
“(Broker) Chuck Anderson is forthright on what he sees as one reason for the huge swings in the market. ‘Greed has run the whole market,’ he says. ‘You still will probably make more than you should.’”
“Purcellville Realtor Carl Fischer agrees that ‘greed drove the market to a point it could not succeed.’ ‘Buyers were buying properties they couldn’t really afford, caught up in the hope they could hold for a year and gain $100,000,’ he said, while sellers were not satisfied with better than average gains, unhappy they couldn’t get more.”
“‘Townhouses at present are a nightmare.’ The bloated upper end single-family home market means a drop of at least $100,000 is needed, he said.”
I think the REIC is trying to take this site down!
Ben, What do you think the problem is with this site recently? Too many hits or something more nefarious? I’m a conspiracist so I bite on any unusual activity
we need a REICo statue.
Circle the wagons!!….we’re under attack! General DL and his troops are trying to bring us down!
Ben,
Given that this blog constitutes part of your livelihood, I believe any efforts to interfere with it would constitute an illegal interference with free commerce.
I am pretty sure it’s a problem with the host. We will be switched over to a new host by Monday.
single digit prices declines in a month annualized …we’re looking at very significant numbers. looks like we are slowly going from denial to acceptance.
simmssays…Smartest of Phones
http://www.americaninventorspot.com/smartest_smartphones
spam spam spam spam
wonderful spam!
I wish all these people trying to flog their blogs here would be admonished, then banned. It’s very irritating.
I think Ben has the power to do it.
I got caught floggin’ the blog
Comment by nnvmtgbrkr
2006-08-25 10:07:59
I got caught floggin’ the blog
You still see OK?
Damn, you guys are slow. I throw you a hanging curve like that one and it takes hours for someone to hit it out of the park? However, the people who did it are the ones I expected. Senor Ass Pounder always “rises to the occasion.”
Condensed and addapted for HBB:
“Could I have.. spam housingbubbleblog highinventory pricedeclines spam, without the spam?”
“Ewwww..”
“What do you mean, `ewww’?!? I don’t like spam!”
“Don’t cause a fuss, dear, I’ll have your spam. I love it! I’m having the spam spam spam spam spam `15% in the bag’ spam spam spam.”
“15% in the bag is off this year.”
“Could I get spam instead?”
“Oh, you mean spam spam spam spam spam, SPAM, spam spam spam?”
A 15% price drop in one month? Is that a typo? If not, then that’s a staggering figure. Look out below - the crash is here.
while I do believe the crash is here, I think a 15% drop in median is likely some weird pattern (e.g. high end constipation, low end runs would do it). Somebody told me inventory and sales were better to look at.
1-year’s worth of 15% monthly drops in the median would leave it off by 86%, leaving 14% of June 2006 valuations for bagholders. I am not arguing that this is likely, but just trying to illustrate how vertically-straight-down the median price is currently crashing.
It’s true, the YOY decline was almost 10%. Lots of condos in Arlington.
“Last month was the best month for buyers since 1997. All over the Washington area, buyers could negotiate from a position of strength when making an offer on a home….”
I strongly disagree, just because inventory is through the roof does not make it a great month for buyers. That statement is an excellent sales tactic for securing more advertising dollars. In my opinion, “best month for buyers since 19??” would be a significant price decline in the double digits.
“Last month was the best month for buyers since 1997. All over the Washington area, buyers could negotiate from a position of strength when making an offer on a home
Yeah? Ask the buyer who bought on the 1st only to find himself down 15% by the 30th. He will probably have a different opinion on whether it was a great month for buyers!
“Last month was the best month for buyers since 1997. All over the Washington area, buyers could negotiate from a position of strength when making an offer on a home….”
He meant to say “Waiter” not buyer
This is from the Wash Times free RE section (can be picked up in the supermarkets for free if you can’t spend the 25 cents for the full paper). Chris Sicks is a sad RE shill.
Note the caution on the downside: Once again, I must caution you not to read too much into a single month’s data. Home price data is particularly slippery, and it’s always safer to draw conclusions from a full year’s data.
Did he say that when prices were rocketing upwards?
Ben should have run the Headline yesterday “Home prices fall; sales plummet” where the bearish Patrice Hill provides unbiased coverage.
http://www.26hoursale.com
$850k reduced to $700k. That’s desperation. It’s also an indication of the margins they’ve been enjoying in recent years.
First Time poster here. Was checking ZipRealty this morning, and found this . Talk about a desperation sale. Thats $130,000 in under 6mos. I always East County (East San Diego, that is), was over priced but wow.
Should this go for $49,000? Looks like my old Round Rock, TX starter home that crashed from $78K to $40sK.
What an idiot. The guy f***s around for 5 months with THIRTEEN up and down price changes that in the end brings the house down a whopping total of 1% from his original price, only to wait 5 months before slashing the price. Better late than never I guess. A couple more price reductions like that and he may find a buyer!
Hehehe, how would you like to be one of the sorry saps that closed on the “grey’s landing” 4 bedroom model recently that just took a $208K haircut in this sale? Ouch!
Was down in that area a couple weeks ago…
Lennar is actually guarantee the price to the buyers as well… If you buy at current price and they lower in the neighborhood during some specified timeframe, you get refunded the difference…
They were advertising it on billboards everywhere down there… Suggested something about “Why wait on the fence about buying, Low price guarantee on Lennar Homes”… or something along those lines.
Just trying to unload inventory no matter the price… So many unneeded houses have been built in these areas because of false demand from specuvestors that has now become even more supply…
What I can’t believe is that anyone would pay 700K for anything built by that builder. Complete junk.
They will only offer that deal for a short time-frame ,and they will offer incentives instead of lowering prices anyway so Lennar has nothing to lose by making that proposal .
It’s all about a big selling con game and how to get buyers out to the tracts. The builders are badmouthing each other now ,also trying to expose each others sale gimmicks
Will they take into account all of the incentives they throw in to later buyers as “lowering” the price? If not, there deal is worthless any way. How do these real estate people sleep at night? That feather-bed of bagholders’ money must help.
Better buy or your kids will be talking behind your back, “My dad is a cheapskate, he won’t buy me a house with my own room, bathroom, nannyroom, etc…………….”
Also in the Washington Times today (”Charting the Markets”), it highlights the very slow sales rate in the region:
“Prince George’s County was the only jurisdiction in the region that managed to hold onto a 30 percent sales chance last month. Loudon County had the lowest chances, once again, at only 9 percent.”
Their accompanying graph showing sales of existing homes versus inventory is horrendous looking! Sorry I can’t scan it and paste it here, but it seems that sales vs. inventory numbers tracked each other fairly closely until early summer 2005, and then they diverged. Really, really diverged.
Metrowide sales in July (*) were 7,868 while inventory was 48,737.
That 48,737 looks like a new high, though I don’t have records that go back very far.
(*) They seem to have mislabelled the month on the chart, no worry.
OT… but related to Florida Association of Realtors (FAR) numbers put out yesterday…
I found this data yesterday and tried to post, but have been having problems with your blog… oh well… Here is the info anyway…
http://www.elliottwave.com/features/default.aspx?cat=mw
Highlights of article below:
“How much does $4100 matter?
To start with, it’s the difference between $252,300 and $248,200. Yes the math is elementary, but… each of those two numbers were the reported median average sales price in July 2005 for existing homes in the state of Florida.
How can you have TWO median average prices for ONE month? Stick with me.
You have two median averages for one month when the Florida Association of Realtors (FAR) publishes two different figures — a year ago FAR said $252,3000 was the figure for July 2005, but yesterday FAR said that $248,200 was the figure in that very same July 2005.
Okay, so that’s a discrepancy… does it matter? Well, I’d say it does when FAR reports that the July 2006 median average sales price for existing homes in Florida was $250,800, which is obviously more than $248,200 — which in turn means that FAR could claim that existing home prices in Florida were higher in July 2006 vs. a year ago.”
I hope this gets a bit more press than I think it will. Obvious manipulation (what market isn’t these days?) for the purpose of drawing less attention to a bad market in the hopes to lure in more buyers. Just out and out lying. I expected no less from this group of low-brow vultures.
There is an explanation for that. If they are reporting sales when they go to pending, then as the closings happen or not happen, the month will be revised.
An interesting figure would be # of sales times sales price on a monthly basis, as if that data could actually be supplied. Couple that with number of sales in price ranges (ie. x sales in $50k - $100k, y sales in $100k - $150, z sales in $150k - $200k etc…)
This blog is obviouslyhaving server problems this morning. Sorry for the delays. If you read this post when it first ran, please check it again as the last two links have been reposted. Be sure and read the Leesburg article in full. Lots of interesting quotes.
“Last month was the best month for buyers since 1997. All over the Washington area, buyers could negotiate from a position of strength when making an offer on a home. Sellers, many of whom didn’t want to believe the seller’s market was over, seem to be finally accepting this truth. And that’s causing sales prices to drop.”
Too bad those dropping prices will eventually bite those lucky current buyers in the back of the neck.
I’m glad the Washington Times is reporting on the falling prices in NoVA. Despite a 4% YOY drop, the first YoY drop in years, the Washington Post has not made a single mention of it (and they are well aware of it).
I agree with the realtor who said SFH’s in the western suburbs need at least a $100,000 price drop. And that is just to get people looking. Anyone with common sense knows that the vast sea of cookie cutter tract homes out west are due for a substantial price correction - way more than $100,000. It’s only a matter of time.
At the upper end, how about half a million. The lady in Herndon who was profiled in the WSJ article a few days ago wasn’t facing foreclosure. She just wanted to head for her retirement destination. She originally listed her big house for about $1M, lowered it somewhat, then held an auction. The highest bid was $475k, and the buyer ultimately offered $530 which was accepted. That’s the new price point for McMansions in the area. Farther out in Loudoun the prices should be even less.
Imagine how happy her neighbors were to see that story published.
“Imagine how happy her neighbors were to see that story published.”
If only the average Joe read the WSJ. Unfortunately, most people still haven’t gotten the memo.
I work with very well educated people but they are still buying homes without a clue that there is even a possibility that prices might drop in the future. Arghhh!
Labor Day Massacre…any listing over 4 months old must be seeing these headlines and feeling very sick. They will take their 3 day Labor Day vacation, and finally bite the bullet. Who is left to buy once school starts and all the investors are trying to get out from their alligators. I smell Crash!
“Labor Day Massacre…any listing over 4 months old must be seeing these headlines and feeling very sick. They will take their 3 day Labor Day vacation, and finally bite the bullet. Who is left to buy once school starts and all the investors are trying to get out from their alligators. I smell Crash!”
I am begining to think you and Auger Inn are right…. This whole mess could gain a mass of it’s own. It would be the missing peice of what the “funny money” lacked in past slaughters.
The day after Labor day millions of people wake up and realize the are totaly broke…….. They are dead but have not hit the ground yet.
It is rather odd that the W. Times has reported more fairly on this than the Post. Yesterday’s Times headline, in large print, all the way across page one, said:
“HOME PRICES FALL - SALES PLUMMET”
Really rather alarming. Trouble is, no one reads the Washington Times.
I (a known RE bear) got phone calls early in the morning from acquaintances who saw the headline and never believed me before.
“Trouble is, no one reads the Washington Times.”
True. At my local metro station (the subway for you non-DC’ers), a guy stands there every morning handing out FREE full copies of the Times and no one takes them.
Hey, someone is cooking the book at Florida Realtor Association by cheating the last year July Median price number to ensure that this July 2006 saw an “actual increase” in Median price. I think HousingBubble should make this headline. You can read this article on http://www.elliotwave.com , to the right.
—————————————
How much does $4100 matter?
To start with, it’s the difference between $252,300 and $248,200. Yes the math is elementary, but… each of those two numbers were the reported median average sales price in July 2005 for existing homes in the state of Florida.
How can you have TWO median average prices for ONE month? Stick with me.
You have two median averages for one month when the Florida Association of Realtors (FAR) publishes two different figures — a year ago FAR said $252,3000 was the figure for July 2005, but yesterday FAR said that $248,200 was the figure in that very same July 2005.
Okay, so that’s a discrepancy… does it matter? Well, I’d say it does when FAR reports that the July 2006 median average sales price for existing homes in Florida was $250,800, which is obviously more than $248,200 — which in turn means that FAR could claim that existing home prices in Florida were higher in July 2006 vs. a year ago.
And it’s all the more noteworthy in light of what I explained on this page yesterday, namely that median prices did decline in 3 of the 4 major U.S. regions in July, while the 3.2% gain in the South is all that kept the national median sales price from showing the first decline in 11 years.
Obviously Florida is the biggest real estate market among the states in the South, and in fact second only to California among the 50 states in total home sales for the past three years. It would be interesting indeed to see how much the figure published a year ago would have changed the national median average published yesterday.
The discrepancy I describe above appeared in a blog on the Wall Street Journal’s website this afternoon. The reporter noted that while data is often revised, FAR did not return calls for comment about this discrepancy. The blog also noted that upon further analysis, restatements of prior-year numbers by FAR magnified year-over-year growth in 12 of the past 19 months.
I’ll go ahead and state the obvious about how much $4100 matters in this case — it’s possibly the difference between screaming headlines in yesterday’s news (Home Prices Down Nationwide!), vs. the ho-hum stuff that came and went.
OT, but this is interesting …
couldn’t post a link, but there’s an article on CNet titled “Study: Tech, not spec, fueled U.S. housing boom”
http://news.com.com/Study+Tech%2C+not+spec%2C+fueled+U.S.+housing+boom/2100-1028_3-6109598.html?tag=nefd.top
My candidate for the next asset bubble is tech stocks. It’s time. It’s been 7 years.
Nope. Too soon. Give it another 9 years.
I’ll check back with you on that one in a year. I’m going to be buying those turkeys in October. Already have a Microsoft ‘08 leap position bought several months ago.
It’s needs to be a “new” tech…right now that is nano, alt fuels, genes, oh and the big fat new tech war machines. But those are priced speculatively now anyway.
anyone want to see a developer in Arlington (in this case Waterford) pay 133% more for land than what was paid less than a month earlier?
http://www.arlingtonva.us/Departments/RealEstate/reassessments/scripts/Inquiry.asp?action=view&lrsn=29687
4 adjacent lots (the link above is one) were bought on 3/17/06 for $2M (1511, 1509, 1519 Rolfe St) and 9/30/05 for $1.3M (1515 Rolfe St). they were then sold on 4/14/06 (27 days later) for $7.7M. i drive by these lots, the houses are still there. someone w/ great foresight bought them, kicked out the residents, boarded up the windows, and then sold them to Waterford Arlington LLC, from the name likely a subsidiary of Waterford Developers. this is a block down the hill from Odyssey in Courthouse, a heavily glutted area. what kind of monthly debt service are we talking here?
Hate to be cynical but that could have been a member of a congressman’s family selling it to Contractor for a nice profit.
Nice sleuthing - this has to be a scam. More than likely, the first sale is a sham sale to transfer them to the name of someone who needs a lot of money quick. Said individual has some say about how this Waterford Arlington spends its money - presto, I just made $4 million. You can run but you can’t hide, not even in Sri Lanka.
must have beenpurchased in a bundle of units…click
“next rpc” to see other units at same prices
That is a complete joke.
Tech not Spec?
Right. Gotta love the Fed. Bring back the gold standard and forget about the Fed.
I have a question. what happens when you have to sell but are underwater $100,000? sounds crazy, but that can happen if you have 4 houses bought in new developments. what will they do if the person who holds the loans was just a financial firm with no experience in actually “taking delivery.”?
I dont understand what you are asking. Please clarify and I, or someone else, may be able to help you.
Sounds crazy to be underwater $100K on 4 houses bought in new developments? Are you sure you don’t $1 million?
Sounds crazy to be underwater $100K on 4 houses bought in new developments? Are you sure you don’t mean $1 million?
From the Leesburg article: For homebuyers looking for an upgrade or first home, now is the time to buy.
Uh-huh. Sure thing. They must be passing out a higher grade of crack in Loudoun County than elsewhere…
More drug-induced silliness from a Leesburg appraiser, of all people: “Plenty of people are paying extraordinary prices for extraordinary properties.”
No, sir, the problem is that plenty of people in Loudoun County have been paying extraordinary prices for perfectly ordinary properties. That, fortunately, seems to be on the decline.
Interesting how this article takes on a ‘rah-rah’ boosterish tone, when all of the hard facts it presents show a market in a true freefall–far worse than anywhere else here in metro D.C.
“sellers are starting to get fed up and are no longer bowing to pressure to lower their asking prices”
The most idiotic quote yet.
Get fed up. If you won’t deal, your neighbor will.
Sellers, don’t lower the prices any more, simply take your homes off the market and hold them for the next 12-18 years and you’ll be fine.
The Sellers are asking for a fight, the buyers will really give them one and the realtor too. Bare knuckles fight only.
“A main factor for the slowing sales, according to one agent, is negative media attention about the housing market and the economy. ‘There is a psychological fear out there that things are going to slow down, and it’s stimulated by the media,’ said (realtor) Alica Yowell. But she said sellers are starting to get fed up and are no longer bowing to pressure to lower their asking prices.”
Is this agent on crack?! GOING TO slow down?? The reason that prices HAVE gone down is because home values have soared out of reach of most people. I guess it doesn’t matter that the media attention that spurned a psychological fear of being priced out forever started this whole debacle in the first place, does it? I have 7 letters for her misguided sellers that refuse to reduce their prices on the way down…PETS.COM. Woof!
i truly cherish realtor quotes, you can’t make that stuff up!
I hear that, bacon. The Schadenfreude is almost unbearable.
“It’s the MEDIA,” screams little Suzie Sixpercent. “They’re fueling HYSTERIA!”
Funny how I never heard Sh*t from you about THIS, Suzie:
http://tinyurl.com/odgj3
Uh-HUH. So, good luck with everything, then. Enjoy 2007, Suzie.
Ironically, the entire article (penned by “the media”) is a fluff piece for realtors. The headline reads: “Realtors bust fears of housing bubble.” But Alicia still thinks it’s all the media’s fault. Laughable.
My favorite quote from the article:
“Judging by recent proposals, Reston’s housing development, primarily of the high-rise variety, will remain strong for the next decade.”
Yes, judging by builder proposals, most of which will now be cancelled, housing will remain strong. LOL.
These fools published the article just days before the housing numbers came out and the MSM called it over. They must feel like idiots.
nice.
I just can’t believe how wrong the estimates have been……
More signs of a housing slump
Pace of new home sales falls more than forecast as inventory builds, prices decline.
August 24 2006: 11:06 AM EDT
NEW YORK (CNNMoney.com) — More alarm bells for the stumbling housing market rang Thursday, as a government report on new home sales showed a bigger-than-expected drop in sales, along with a continued rise in unsold homes and a further weakening of prices in the closely watched sector. Piling on more proof that the housing boom is over, the Commerce Department reported Thursday that new home sales fell by 4.3 per cent last month to a seasonally adjusted annual sales pace of 1.072 million units.
New homes sold at an annual pace of 1.07 million in July, according to the Census Bureau report, down from the 1.12 million pace in June, which was also revised slightly lower than the original reading.
Here were the projections, everyone got it wrong……..how can so many people be so wrong?? A colleague of mine said that it’s a product of garbage in - garbage out. Funny how everyone on this blog would have got the numbers right, but the “experts” were totally wrong.
MEDIAN -0.5% 315 1100
AVERAGE -0.7% 315 1097
High Forecast 1.1% 322 1155
Low Forecast -3.5% 305 1050
Previous 2.9% 312 1131
———————-
ABN Amro 0.3% n/a 1114
4CAST Ltd. -3.0% n/a 1070
Action Economics 0.5% 316 1100
AIG Global Invest. 0.5% n/a 1125
Alleti Gestielle SGR -0.6% 317 n/a
Argus Research Corp. 0.8% n/a 1155
BBVA -1.0% n/a 1120
BMO Capital Markets -0.5% 310 1100
BNP Paribas -2.0% n/a 1090
B of A Capital -1.4% 315 1100
B of A Securities 0.2% n/a 1080
Bantleon Bank AG -1.5% n/a 1110
Barclays Capital 0.0% 315 1100
Bear Stearns -1.0% n/a 1100
Bank of Tokyo-Mitsubishi 0.3% 315 1110
Briefing.com -1.0% 310 1085
Calyon -1.2% n/a 1085
CIBC World Markets -0.4% n/a 1090
Citigroup -3.5% 305 1100
ClearView Economics 0.5% n/a 1100
Commerzbank -0.3% 310 n/a
Countrywide SEC 0.2% 314 1090
Credit Suisse -2.0% 315 1100
Daiwa Securities 0.0% n/a 1100
Danske Bank n/a n/a 1100
DekaBank -1.0% n/a n/a
Desjardins Group -0.3% 322 1095
Deutsche Bank Research 1.0% n/a 1075
Deutsche PostBank -0.1% n/a n/a
Dresdner Kleinwort -1.7% n/a 1100
DZ Bank -0.3% n/a 1090
TN Financial -1.0% n/a 1100
First Trust Advisors -0.2% 310 1100
Fortis -1.0% n/a 1100
Global Insight -1.9% n/a 1108
Goldman Sachs -1.0% n/a 1074
HSBC Markets -0.1% 310 1090
I.D.E.A. 1.1% 320 1120
ING Financial Markets -0.5% n/a 1090
Informa Global Markets 1.0% 320 1080
Insight Economics -1.5% 315 1075
IntesaBci 0.5% 315 1080
J.P. Morgan -3.0% 320 1100
JPMorgan Asset Mg -0.3% 315 1050
Lehman Brothers 1.0% n/a 1110
Macroeconomic n/a 320 1080
Merrill Lynch -0.1% n/a 1120
Mizuho Securities -1.5% 315 1075
Moody’s Economy.com -0.5% 320 1080
Morgan Stanley -1.0% n/a 1050
National Bank Financial -0.7% n/a 1050
National City Bank -2.2% n/a 1050
Nord/LB -2.8% 308 n/a
PNC Bank 0.4% n/a 1115
Promotora Bursatil -0.7% 314 1127
RBC Capital Markets -0.3% n/a 1100
RBS Greenwich Capital -3.5% n/a 1100
Ried, Thunberg & Co. -2.7% 315 1100
Scotia Capital -1.0% n/a 1075
Societe Generale 0.8% 315 1130
Stone & McCarthy -2.0% n/a 1100
TD Securities -1.0% n/a n/a
Terra K Partners 0.0% 318 1090
Thomson/IFR 0.5% 316 1154
UBS Securities LLC -2.5% 320 1075
Univ. of MD 1.0% n/a 1130
Wells Fargo 0.5% 316 1100
Westpac Banking -1.0% 318 1097
Wrightson -2.0% n/a 1125
When gamblers(overextended flippers) enter the market, the boom is over.
Typical gamblers “secret desire to lose”
‘Funny how everyone on this blog would have got the numbers right, but the “experts” were totally wrong.’
The “experts” generally have an ulterior motive to overestimate on the upside, as their constituents get paid more when all the sheep believe lies like “real estate prices always go up.” More circumspect commentators (e.g., Robert Shiller), who often turn out in retrospect to have offered the most accurate accounts of what was unfolding, are tarred-and-feathered as “permabears” by the mouthpieces of the Real Estate Industrial Complex (REIC). And a number of us who think we know quite a bit about how much lying is going on choose this forum to contest it, rather than making futile attempts to break through the barriers set up by editors in the pro-RE mainstream press.
how can so many people be so wrong??
Because analysts are not worth their pay. These boys and girls get paid to take data and draw a straight line through it. Sometimes, for some really complicated analyses, they draw the straight line on a logrithmic graph.
Calling tops and bottoms is not the path to continued employment. Much safer to just draw a line like everyone else, stay employed, and when the market turns you say “What a surprise! Nobody saw it coming!”
“But she said sellers are starting to get fed up and are no longer bowing to pressure to lower their asking prices.”
Gee, guess they don’t want to sell after all. May as well take it off the market.
In the 1980’s Boston market prices declines 50% even with 2/3rds of the sellers pulling their homes off the market. For many sellers we’re seeing a domino effect. “If I cannot get my price, I’m not moving to the bigger home.” That still leaves the larger house unsold… Hmmm…
No wonder Buffet predicted the high end of the market would be hard hit.
But do recall in the next two years how many sellers will have no choice. 80% of the population moves every 5 years. Is that going to stop? I doubt it. I’m seeing my industry exporting jobs from “high cost” areas to “low cost” areas. We’re not shutting offices or anything… the workers just would rather relocate (we pay relocation to keep good workers) to lower cost of living sites. For us, its cheaper than losing good people.
Judging from the U-haul index (yes, a shameless plug for my own blog), the support for home prices in bubble markets is going to continue to plummet.
Neil
This was also from the Times today. The link was at the bottom of Ben’s link.
http://www.washingtontimes.com/fhg/20060823-083048-5809r.htm
It closed with this bit. . .
The Washington area is a growing and thriving community. My guess is that the doomsday scenario will not pan out. Real estate values will continue to rise over time, but not without interim dips. We might be headed for an interim dip.
If you’re buying for the short term, be careful. Long-term buyers are safe.
Henry Savage is president of PMC Mortgage in Alexandria.
Long-term buyers are safe???
In other words, “if you’re trying to flip, don’t overpay by $100,000 but if you’re a long-term buyer, overpaying by $100,000 is fine. That’s just mortgage — you just pay a little each month, right buddy? Forget that that’s $100,000 that you won’t be putting towards your retirement over the next 30 years, or $100,000 you won’t have for your kids college.”
In other words, “if you’re trying to flip, don’t overpay by $100,000 but if you’re a long-term buyer, overpaying by $100,000 is fine. That’s just mortgage — you just pay a little each month, right buddy? Forget that that’s $100,000 that you won’t be putting towards your retirement over the next 30 years, or $100,000 you won’t have for your kids college.”
This is exactly the critical reason why it is important not to overpay at ANY time regardless of how long one intends to stay in the property.
People always tout real estate as a ‘long-term’ investment. That’s because they consider the difference between the purchase price and the sales price to be a pure gain. No other investment is evaluated in this manner.
Nobody ever adjusts for transaction costs, taxes, interest expense, repairs & maintenance. No, it’s all just pure gain; not even adjusted for inflation. “I made $200,000 on my house when I sold!”
Looking at it that way, how could it not be a good long-term investment.
not sure if this has already been posted. Interesting article
http://www.denverpost.com/business/ci_4228048
that article makes Requiem for a Dream look like Mary Poppins.
“The perpetrators told investigators - and prosecutors agree - that the fraudulent tactics used to sell homes out of one Jefferson County real estate office were widespread in the Denver area. One government source estimates 20,000 illegal immigrants hold FHA-insured loans in metro Denver alone.”
“A main factor for the slowing sales, according to one agent, is negative media attention about the housing market and the economy. ‘There is a psychological fear out there that things are going to slow down, and it’s stimulated by the media,’ said (realtor) Alica Yowell.
——
Oh give me a break! The bubble popped simply because they ran out of buyers. As the sellers dipped deeper and deeper into the buyer pool, prices went up while buying ability went down. This went on until last winter, until finally the most qualified buyer could no longer afford the lowest price, even with all the low rates and neg-ams. And now with ARM resets, people who HAVE to sell are finding that the buyer pool is dried up. The negative media is following, not leading.
Don’t get me started on how the word “demand” has been skewed…
I love it. “Shoot the messenger” is well underway, exactly as predicted. Odd, but nobody was complaining when the MSM was cheerleading/hyping the RE market all the way up.
“But she said sellers are starting to get fed up and are no longer bowing to pressure to lower their asking prices.”
As I read these articles about seller mentality, the image that keeps popping into my head is the spoiled brat in Willie Wonka and the Chocolate Factory movie. Mentioned something about this on a different thread the other day, but I find the resemblance striking.
Veruca Salt.
“If you don’t buy my house at my asking price, I’m going to take my listing and go home.” Brilliant financial strategy. I’m sure that’ll amuse the lender once the ARM resets.
This is exactly the critical reason why it is important not to overpay at ANY time regardless of how long one intends to stay in the property.
Yup. If you get into a house for $100,000 and your neighbor gets into his for $200,000, I don’t see the problem so much as he gets a smaller profit when he sells it. The problem is that — make no mistake — he’s paying $100,000 over the next 30 years that I’m saving.
The thinking, “well, my house will appreciate, naturally” dominated the buying mindset for years. And, even if it were true, it still ignores what you call the “the critical reason not to overpay at ANY time”.
The thinking, “well, my house will appreciate, naturally” dominated the buying mindset for years.
Now look what the mindset will be, “wow, look how much money this guy lost on this house, I’m not going to buy it”
There was a related article by June Fletcher in the Personal Journal section of today’s WSJ which talks about the growing use of auctions by homeowners and builders to move stuck inventory.
———————————————————————————-
Houses on the Block
by June Fletcher
August 25, 2006
As inventory rises and the housing market slows, builders and developers are heading to the auction house to unload newly built homes. The process has its risks, but buyers can find deep discounts.
When I was in the Ft. Walton Beach/Destin area I saw the auction house listed below a few times on some pretty nice properties in the local paper. Although the properties are mostly high end it might be something to keep an eye on.
http://www.national-auction.com/
The housing bubble isn’t just isolated to Florida and California. In my hometown of Freehold NJ, what once was pristine farmland has been turning into an appalling sprawl of million dollar McMansions and high priced strip malls. There are numerous 10,000 square feet homes built on flat cornfield that are larger than many Hampton Inn hotels. The property taxation levels on these new McMansions is simply unbelievable. Just the property tax alone on these homes can run from $2000-$3000 per month. I’m not sure exactly how the Housing Bubble debacle will end; let’s just hope there isn’t blood running down the streets.
I think we will find out that most people who bought McMansions couldn’t actually afford them and will have to downsize to a smaller house. The value of McMansions will fall dramatically along with property taxes as owners appeal tax valuations. Lets face it, all they are is the same home construction, just bigger and more expensive to heat and cool. Those granite countertops and stainless steel appliances don’t make you a better cook and are actully harder to clean than good old solid surface countertops and baked finish ovens. Tile floors look nice but are cold on the feet and chip easily. Laminate looks lke fake plastic wood no matter how expensive it is. Drywall is drywall. All you McMansion buyers did was spend too much money on what will considered tacky 10 years from now.
$2000-$3000 per month in property taxes? Man do I feel poor. Who are these people that can afford that?
Bruce’s hometown too. Maybe we’ll get a few “sprawling McMansions and strip malls” songs soon as the economy tanks!
“(Broker) Chuck Anderson is forthright on what he sees as one reason for the huge swings in the market. ‘Greed has run the whole market,’ he says. ‘You still will probably make more than you should.’”
Any decent buyer’s broker would make this guy eat his words.
Of course they’re are no “decent” BB’s, it’s all collusion for a seller paid commission…so buyer’s would be well served to steer clear.
By this turkey’s own admission it’s still a long way’s to the bottom.
‘There is a psychological fear out there that things are going to slow down, and it’s stimulated by the media,’ said (realtor) Alica Yowell. But she said sellers are starting to get fed up and are no longer bowing to pressure to lower their asking prices.”
Absolutely! That’s what’s been going on here. The media has been putting all that pressure on the sellers, and they’ve been cutting prices left and right.
But NO MORE! No sirree BOB! Sellers are going to HANG TOUGH! Those prices are staying FLAT! We don’t need no stinkin’ buyers! We’re the sellers! We set the price!
Of course none of the ridiculous price increases were stimulated by media, were they?
If I don’t get my asking price, I’m gonna scream and throw a tantrum til’ I get my way! I’ll hold my breath until I turn blue and pass out!! I could even die from asphyxiation, you know! Then you ’stupid buyers’ will be sorry…
The high rise condos in Reston weren’t built on bubble alone. There is talk of a new Metrorail subway line going through. If that happens, you could zip from Dulles Airport, through Reston, all the way to downtown. Reston could very well remain strong (compared to other areas of NoVA.)
I have an acquaintance who got a job offer in another city and was going to sell the house there. When he realized that the THs were selling 100k below what he expected (ridiculous prices!) then he decided to stay.
Reston will go down the toilet like everything else. You can zip around on the metro in Arlington….. right?
I call B.S. on oxide. I take the metro every day from Arlington to D.C. (4 miles) and it’s a sh@# way to travel. People are already packed like sardines. You literally have to wait for the second or third train sometimes because they are packed. Why? Because the blue line and the orange line share the same tracks going into D.C.. There is already too many people taking the train. You think when, and if, the orange line stretches out to Reston it’ll be much better?
Oxide, you don’t know what you’re talking about.
Yeah, and that’s probably only about 25 years away at the current rate of progress. They haven’t even decided yet on whether to build the Tysons Corner portion of that line above or below ground. By that time, the value of a Reston condo might just be getting back to its early ‘06 level.
Wow, you mean I can actually go from Dulles Airport to downtown D.C. on a train via Reston? How thrilling! That has to be worth at least, uh, er, let’s see . . . a 0.5% premium for Reston property?
Well, I started to write that with a connection to Vienna, Tysons Corner … And then thinking again, the entire DC area is a hell hole, rotten miserable traffic, houses with prices tripple the home value even in non-bubble times. Forget it … nothing will or can save that place.
It isn’t *that* bad. And once housing prices come back into line with rents and incomes, it won’t be bad at all. Lots of cities have miserable traffic nowadays. Heck, name me one big U.S. city that doesn’t. The living’s not bad in the D.C. area, and the temporarily silly housing prices are the only problem that I see.
‘Sellers Willing To Take A Hit To Make A Deal’
Is this true in your area? Where I’m at, sellers are indignant about price reductions, the realtors even more so.
‘Sellers Willing To Take A Hit To Make A Deal’
Is this true in your area? Where I’m at, sellers are indignant about price reductions, the realtors even more so.
don’t worry, they’ll be lowering the prices soon enough. Or the Lender or RTC will do it for them…
This article is a good indicator of something we’ve been waiting to see. Realtors “talking the market down”. They’re getting tired of those overpriced listings… sitting in empty “open houses”… They need a comission check.
Think about it. $500,000 house. 10% off to get a sale. That’s a $30000 comission cut to $27000, of which $6750 ends up in the listing agent’s hands after the brokers and buyer agent is payed.
If you were an agent, would you take $6750 now, or hope for $7500 in a few more months? Would you really care about how much equity the seller lost, to get that sale through???
http://www.klastv.com/Global/story.asp?S=5323747
“Now, she has nowhere to go and no profit”
and no monthly payment greater than rent, and no taxes, and no maintenance costs, and no insurance . . .