A ‘Decided Softening’ In New York
The Journal News reports from New York. “If there is a housing bubble, fresh data suggest that in parts of the Lower Hudson Valley, at least, it may not so much be bursting as perhaps slowly deflating. The data showed fewer homes sold in the quarter, with 459 deals closed, down 20.3 percent from 576 a year ago. Inventories rose, too, with 1,558 homes available for sale, an increase of 40.4 percent above last year’s level of 1,110.”
“‘We’re seeing what we’ve been hearing all along - there’s a decided softening in the market,’ said Ann Garti, chief executive at the Greater Hudson Valley MLS. ‘Prices have risen to the point where there’s just a finite number of buyers,’ she said.”
“This is the highest number of unsold homes in years, said Roberta Bangs, president of the Rockland County Board of Realtors. ‘When upper-end-priced houses are just sitting, it makes the stats look worse than they actually are,’ Bangs said.”
“The price of single family house in Rockland County fell 3.8 percent in the third quarter, as the region’s slowing housing market forced sellers to reduce prices.”
“Median prices for condominiums fell at more than twice the percentage rate of single-family houses, dropping 7.9 percent to $285,493 from $310,000 a year ago.”
The Record Online. “Local Realtors say homes continue to sell, but buyers are more selective and have more bargaining power. In Orange County, the inventory of unsold homes has doubled in the past four years.”
“‘I’m seeing offers coming in $20,000, $30,000 below asking price,’ said (broker) Paula Meloi in Port Jervis. ‘What’s selling is the best-priced property on the market, whether it’s in a low (price) category or a high category.’”
The Long Island Business News. “Dragged down by energy costs and an ebbing housing and construction market, Long Island’s economy will head into a mild recession next year, according to a report.”
“What’s more, Long Islanders who have tapped home-equity loans will also have far less money to spend next year because rising interest rates have depleted the refinancing market, according to the Center for Management Analysis at the C.W. Post Campus of Long Island University.”
“The report’s author, Thomas Conoscenti, a respected economist who also forecasts Suffolk County government’s sales-tax revenue, also notes that the construction sector on Long Island is beginning to show signs of shrinkage, an important development since the industry accounted for 20 percent of the Island’s employment growth in the last year.”
“‘Weakness in the housing and construction industries will pull down the rest of the economy in 2007,’ according to the report.”
Inman News on Connecticut. “The statewide median sale price of single-family homes in Connecticut fell 0.9 percent and single-family home sales dropped 21 percent in August compared to August 2005, according to The Warren Group, a real estate and financial data company.”
“It was the first time since 1998 that the statewide median single-family home price dropped. The 21 percent drop in sales was the largest since 2000.”
“A total of 3,875 single-family homes were sold in August 2006 in the state, which is the lowest sales figure in August since 1995. Statewide single-family home sales have dropped 11 straight months and 17 out of the last 19 months dating back to February 2005, The Warren Group reported.”
“Condominium sales in August dropped 10.8 percent compared to August 2005, with 1,557 units sold. Condo sales have fallen 10 straight months.”
“Timothy Warren Jr., CEO of The Warren Group, said, ‘Home sales have been falling for well over a year, and now we’re seeing sale prices starting to fall. As we’ve seen in Massachusetts, where prices are now falling 5 to 10 percent from year-before periods, buyers are taking their time and driving hard bargains. We expect to see more of this in Connecticut over the next few months.’”
“Single-family home sales have dropped in each of Connecticut’s eight counties during the first eight months of 2006. Fairfield County continues to experience the steepest decline, with sales dropping 22 percent for the year-to-date period and 29.6 percent in August.”
The Hartford Courant. “For the first time in eight years, the median sales price of a single-family home in Connecticut fell, a sign that declining sales and more homes on the market may be starting to pull down prices.”
“Three counties, Fairfield, Hartford and Windham, saw declines in the median sale price of condominiums. The declines ranged from 10.9 percent in Fairfield to 0.6 percent in Hartford. Hartford County saw its median sale price dip to $179,000 from $180,000.”
“Overall, sales of single-family homes in Connecticut in August fell 21 percent. It was the biggest decline in six years. ‘That doesn’t surprise me,’ said Tom Abbate, a real estate agent in Middletown. ‘Buyers have a lot more choices now. There are many more homes on the market.’”
‘Storehouse is selling off its sleek sofas, modern rugs and hip accent pieces and closing its doors, an early casualty of the slowing housing market. Storehouse has an inventory of approximately $60 million in 70 stores, including five in New Jersey, said James Schaye, co-founder of Hudson Capital Partners, manager of the liquidation. The chain employs 876 people.’
“…He added that furniture sellers have been hard pressed in recent years to compete with Ashley Furniture, which sells affordable, good-quality Asian imports. Ashley is the largest furniture company in the U.S., with stores in Cherry Hill, Millville, Mount Holly and Turnersville.
In order to compete, Broyhill is moving its manufacturing operation from North Carolina to China. La-Z-Boy also has streamlined its operation in order to contain costs.”
“We are going to see more casualties, especially among the companies that are slow to change,” he said. “I expect deflation in the furniture industry will last over the next five years.”
A double whammy there. “In order to compete, Broyhill is moving its manufacturing operation from North Carolina to China.” There goes the local economy taking it in the groin.
Bad news for NoVa. Storehouse’s owner is HQed here; tried to sell Storehouse but found no buyers.
“‘I’m seeing offers coming in $20,000, $30,000 below asking price,’ said (broker) Paula Meloi in Port Jervis.”
The amateur “bargain hunters” are out apparently.
I make it a point to go out and low ball by 30 to 40 percent on a regular basis. I get a lot of ..”oh, we got an offer just 20,000 less than our asking” and I tell them congrats. Of course the houses are still there, with no takers.
I’m sure one of those low ball offers will hit pretty soon. Aim for the houses that have been on the market for a long time, who have motivated sellers, and who have room to drop the price.
there are a huge amount of houses in my town that have beenon the market since last winter.Amazingly enough they don’t go down in listing price(other than a couple that went down by 10 or 20 ). I feel the delusion is still strong.I don’t know how much my low ballin’ is helping but i’ve asked my homeowner friends to do the same. Perhaps we are sadistic individuals (desperate housewives?) but we’re having fun.
Thank God there are a lot fewer people expecting last year’s price plus 20%. Of course there are still some, who will no doubt go down with the ship before they “give their home away”.
Good for you, keep up the good work! I would personally be uncomfortable with a 30% lowball at this juncture. You may want to keep it closer to the 40-50% mark. I may have to go out and do some lowballing, sounds like a bit of fun. This may even qualify as “charity” work for tax purposes?
You may want to keep it closer to the 40-50% mark.
ABSOLUTELY!
haha.. In 6 months they are going to be SO happy their offers were not accepted!
Talk about catching a falling knife.
I am thinking of putting in offers on a few homes at 50% of asking price. That ought to make the owners feel a little sick, and hopefully help them pick up the pace on the price drops. This market needs to get moving again.
Looks like Danni beat me to it.
it’s ok michael…we can start a revolution!
There has been much talk about what RE is worth. Here in CA many believe RE is 50% to 60% overvalued. At this point everything is simply a prediction. However if you consider what it takes to qualify for a 650K mortgage these days you can see that nobody can buy a home these days. The only people around here that can buy a house is someone who has “equity” in an existing house. Lately it is clear that many home owners are finding it difficult to sell and pull out their “equity”. Seriously folks your home is worth only what an average Joe can afford to pay. In my case I can afford to buy a 275K to 325K home. Here in CA that would be 650K to 325K - a 50% reduction.
AMEN! imo, Long Islanders believe that our precious island is “different” Like we’re somehow better because we can supposedly afford the outrageous prices on houses that are 400k to 1 mil in a blue collared neighborhood. Ahhhh, but we’re different. NOT!
LI *IS* different! They have the worst accent in all of the US!!!
There aren’t a lot of average Joes left in LA, unfortunately. It’s becoming like Manhattan.
It is a joke in california.I know the sacramento area was invaded by flippers from the bay area.Here in arizona I have already seen 25% price cuts by new builders. They are the current market so if you are thinking about buying resale be vary careful as most are at least 25% overvalued around here.
There has been very little building, and not a whole lot of flipping, going on here in LA.
It ain’t Manhattan yet. There are lots of average joe incomes in LA — for example, people in the entertainment industry who are underemployed — crew, actors, writers, producers, etc. Many have been banking (some literally) on home equity that is now evaporating. I’ve seen major drops in wishing prices, and the beginning of real price drops in my area — atwater, silverlake, los feliz. And nothing is moving.
A couple of examples from Zip in my neighborhood:
http://tinyurl.com/m85vt
Owner paid $929,009 on 06/23/2005, now in forclosure at 899K wishing.
http://tinyurl.com/kabmx
wishing drops from 950K - 750k in three months.
This just proves my point, people at that end of the income scale can’t survive here without pulling out home equity, and if they don’t already have a house, they have little hope of ever getting one. Many of the movie industry workers commute from Simi Valley, which is a little more reasonably priced. Anyway, I’ve been noticing a lot of low-middle class families getting out of California, or at least out of LA County, moving toward Thousand Oaks, which is sad, because there are hardly any kids left around here for my children to play with.
And its not as if Thousand Oaks is that affordable these days either.
Especially if you factor in the obligatory 30 min parking-lot-simulation that is the 101 in the rush hour, to get from A to B.
Of the 90+ places I’m tacking on ZipRealty (from Malibu to Marina del Rey, Tarzana to Studio City) not one had a price reduction today.
None have become incative, either. If I was a seller, I’d be bored too…
..maybe L.A really is different…;-)
Lack of affordabilty is why prices have to drop. There just aren’t enough “rich people” to sustain the market. Who’s going to buy all these oridnary houses in Burbank, Silverlake, Atwater, Valley Village, etc. priced at 800K and up? Mexican immigrants? Weathly Europeans dying to live North Hollywood? I’m not sure how much flipping went on in LA, but there were huge numbers of people (some with good incomes) who bought more house than they can afford based on the “you can’t lose in real estate” fairy tale. Now that the mentality has shifted houses sit, and sit.
I agree, but it’s nothing like Phoenix or Florida where people were buying up a dozen houses or condos on spec. People here stretched themselves the past couple of years to buy a house, but because they are actually living in the house as opposed to just betting on price appreciation, I think a greater percentage will do what they need to do to hang onto the property. It’s not as easy to just hand the keys over when you need a place to live, rents are still quite high, your job is here, and financing to buy a new house is drying up for iffy buyers. Who knows how this will play out in LA, I’m curious myself.
Yeah, well, since it was Californians who where buying all those houses & condos on spec using their equity, it’s only a matter of time before the chickens come home to roost.
But will they dump their ten Phoenix condos, or their personal residence in West LA?
They won’t have a choice… they’ll lose all of them.
Port Jervis was never worth that much to begin with.
You have to understand Port. A $20-$30K slash is huge there.
There’s not much work there, and it’s too far, mostly, to commute from there to NYC.
“sales …fell 21 percent. …‘That doesn’t surprise me,’ said Tom Abbate,…‘Buyers have a lot more choices now. There are many more homes on the market.’”
Uhhhh right. More choice = declining sales. Cognitive dissonance must be communicable via the MLS.
Absolutely. Also, if you asked this turkey a year ago what he thought, he would have said the current situation is impossible. The fact that it is happening is, from his perspective, the very definition of surprise.
I hope this is seen by the suckers who this Nostradumass cajoled into overpaying for a house in the past year. Perhaps they will run into him in a dark alley somewhere.
Well, I could see how an increase in choices may slow the pace of sales. After all, if you find that many houses on the market meet your needs, then you may be more inclined to wait and see if the absolutely perfect house might come on the market next week. And if you’re dealing with a very large inventory, just the process of making a decision about which house to make an offer on is going to be slower than for a low-inventory market.
Some agents are reporting shopper fatigue. We could see a slowdown as people take longer but that should have worked itself out over a few months. People don’t actively shop for a home for 6 months.
yeah, with a lot of inventory to look at and slightly falling prices, I bet people will just wait the market out.
uh, I thought NY RE prices are immune to a decline, just like Florida….
“‘We’re seeing what we’ve been hearing all along - there’s a decided softening in the market,’ said Ann Garti, chief executive at the Greater Hudson Valley MLS.
Yet another retrospective genius. I know people kid themselves all the time, but usually it is kept internally. Like “I’m really very pretty.” Apparently, claims of foresight and insight get traded around like currency amongst real estate types. And you thought the U.S. dollar was weak…
I see this on the part of investors also. I know some guys who manage to get EVERYTHING they buy, brand new, at over 1/2 off. Not with coupons or sales days like us schmoes, but with their keen negotiating skills. Even during the hottest point of the RE market, they managed to find the one idiot who would sell them a house for $1. I haven’t checked any records to confirm this, because I simply do not care. However, my bullsh1t alarm is constantly blaring in their presence.
I’ve been interested in buying some acreage in Delaware County, NY. Of course prices shot through the roof in recent years, leaving me landless, but I’m wondering whether I should expect some softening in the acreage market, as home sales appear to be majorly softening in many upstate NY counties. Any replies would be much appreciated.
“If there is a housing bubble, fresh data suggest that in parts of the Lower Hudson Valley, at least, it may not so much be bursting as perhaps slowly deflating.”
This statement supports my main conjecture about the hissing bubble: The national housing market is crashing, but the crash is playing out in geological time.
This part of the original post bonked me over the head:
“What’s more, Long Islanders who have tapped home-equity loans will also have far less money to spend next year because rising interest rates have depleted the refinancing market, according to the Center for Management Analysis at the C.W. Post Campus of Long Island University.”
Personally, I could never understand why HELOCs became so popular. After all, you’ve reduced your home equity by the amount of the loan. Plus, you have to pay the loan back with a variable rate of interest.
That’s a pretty high price to pay for a vacation or a Hummer.
(I’ve been interested in buying some acreage in Delaware County, NY. Of course prices shot through the roof in recent years, leaving me landless, but I’m wondering whether I should expect some softening in the acreage market, as home sales appear to be majorly softening in many upstate NY counties.)
Delaware tends to over-react on the downside. My in-laws considered leaving their current retirement home in Hamden for another locale, but I found prices already softening and told them they would have to sell RIGHT NOW. They decided to stay. I’d say prices will be much lower in a year or two.
One big factor — the City of New York, which is buying both acreage and development rights to protect its watershed. That pushes up the price of land higher than it would otherwise be.
What do you want the acreage for? If it is for a low-impact use, one option would be to reach an agreement to sell development rights (other than your own home of course) to the City of New York. You get the land for hunting, forestry, some agriculture perhaps (I don’t know what you have in mind), but no longer have the right to additional development, which the City would then owns. If the market reacts to falling prices faster than the bureaucrats, the City might end paying for much of your purchase. Who knows? You might even find a way to have the city co-purchase, if you and your successors agree to look after the land.
Disclaimer: I am from that region of upstate originally, and travel there frequently.
One area that you might find some deals would be Hancock, which experienced severe damage in the summer floods. But then again, do you want to own land in a town that almost got wiped off the map? It could take decades for the place to get back to where it was, pre-2006-flood.
Also, checkout neighboring counties, such as Broome, and Chenango - land is still very affordable there. With beautiful rolling hills, to boot.
There is a huge amount of speculation going on with land prices in NY. It’s getting picked up at grossly inflated prices by retards here in NJ and some even dumber ones from NYC. Here in NJ, we see to export these dumbasses to NY. The only thing they see when the read the price is “CHEAP”. Yeah… it’s cheaper than NJ but that’s about all. There is NO work there yet many of these guys buying expensive dirt are in their 30s and 40’s who use the excuse, “I bought it to hunt on and I might build a house on it”. And do what with it? Rent it out? To who? Besides, what these guys pay for this overpriced crap to “hunt on”, I can spend a week in MT and blast all the big game I want, meals prepared for the next 30 years.
Land specuvestors are long on pipe dreams, short on reality.
Thank you folks, for your excellent Upstate NY comments. And yes, I’m one of those idiots who is looking for some land to hunt and perhaps build a cabin on in the future. Basically looking for a weekend place in the woods for me an my family.
Good things come to those that wait. It is not time to buy. Be patience, your time will come. This correction is only in its early stage. Lots more downside movement coming.
I saw 3 more SOLD signs this weekend. One was a very nice and well kept craftsman style built too close to a main road that had only been on for a few weeks. It caught my attention because a home a few properties away (also nicely updated) that had been on the market for 6+ mos. was also sporting a SOLD sign. I wondered if speculators were buying things up. The 3rd one had only been on a few weeks too. This one wasn’t that well kept or in a great location so that SOLD sign kind of surprised me. All of these homes were under $200k.
Running commentary on my town: lots of high end homes still on market and no one’s budging on price. Two historic mansions did move last week. (One’s rumored to be haunted! Both are gorgeous, well kept homes and priced in the $600ks. No water though. Probably overpriced. Owners of haunted house had DEEP pockets and only moved to an estate across town. Second mansion was an interior designer on Main who is relocating. The home did still have an incredible kitchen and living area. No word if new owners will use the home as residential or commercial (or mixed). I’ve seen some reductions since summer. Home near $1 mil came down $50k but then no more. One 5 year old horse farm with 15+ acres dropped from $599 to $549k.
One of those 2200sf, 1980s colonials which hit the market B4 Christmas is still sitting and only offered one reduction, $249k to $235k. The sellers are no longer living in the state and the home is vacant. I’d say we’re in for a long winter up in the hinterlands.
BTW, WE Rent and Peggy: Surgury went well. Praying for no chemo! And for housing to once again become my overwhelming obsession.
Hi CarrieAnn,
We love these market snapshots but it would help if you mentioned your location.
Carrie, you’re from Syracuse right? It’s hard to believe there is speculative elements there.
South of Syracuse. I don’t mean to demean the city but the real estate environment between city and burbs is night and day.
Sales down 20.3% / inventory up 40.4% in 12 months translates into a “slowly deflating” bubble??
As for Connecticut- prices are down on many condo’s- the inventory is up markedly. The decline ranges from 3-8%.
yes - but only recently have I been seeing proce reduced. Some ppl still hanging tough or taking places off the mkt. Big mistake as they will never get better than now…. well maybe 15 years from now…
I think its fair to say the valueof this NYC apartment just dropped considerably
http://corcoran.com/property/listing.aspx?Region=NYC&ListingID=871010