“Pick-Up In Building Not Neccesarily A Positive”
Some housing news from Wall Street and Washington. The Commerce Department. “Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,772,000. This is 5.9 percent above the revised August estimate of 1,674,000, but is 17.9 percent below the September 2005 rate of 2,158,000.”
“Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,619,000. This is 6.3 percent below the revised August rate of 1,727,000 and is 27.7 percent below the September 2005 estimate of 2,240,000. Single-family authorizations in September were at a rate of 1,207,000; this is 6.0 percent below the August figure of 1,284,000.”
“”Single-family housing starts in September were at a rate of 1,426,000; this is 4.3 percent above the August figure of 1,367,000.”
“The rate of single-family housing starts dropped 20.3 percent in September compared to September 2005.”
“The Census Bureau and HUD noted that month-to-month changes in seasonally adjusted statistics can show irregular movements. It may take four months to establish an underlying trend for building permit authorizations, five months for total starts, and six months for total completions, the agencies noted.”
From CNN Money. “The disconnect between the two numbers surprised David Seiders, chief economist with the National Association of Home Builders, who said builders seemed to be working through a backlog of home permits they held for properties where they had not started construction.”
“Seiders said that a pick-up in building is not necessarily a positive for the market, which has seen the inventory of completed but unsold homes increase to record levels, pushing down prices and forcing builders to offer incentives to sell homes.”
“‘If both permits and starts were up I’d be scared because I think there are still inventory issues that we need to work through,’ he said. ‘I hope the bounce in starts is a temporary phenomenon. I think it’s inevitable that starts will be down in October.’”
From Bloomberg. “Starts increased 14 percent in the South to 975,000 and rose 3.4 percent in the Midwest to 270,000. Starts fell 14.1 percent in the Northeast to 134,000 and decreased 2.2 percent in the West to 393,000.”
“The number of homes under construction fell 1.2 percent in September to a 1.328 million pace. Housing completions rose 11.1 percent to an annual rate of 2.084 million. The number of housing units authorized, but not yet started, decreased 11.1 percent to 202,600.”
“More than half of U.S. homebuilders, 55 percent, are offering extras to entice buyers, up from 37 percent a year earlier, said Gopal Ahluwalia, at the National Association of Home Builders in Washington. Four percent are giving away cars, he said.”
“Toll Brothers reported a 19 percent drop in fiscal third-quarter profit, its first decline in four years. ‘There’s no doubt that real estate is down but certain markets are doing well,’ CEO Robert Toll said. ‘I can’t say that the worst is behind us and I can’t say that it’s not.”
US News and World Report. “To be sure, some the nation’s largest home builders have recently complained of a flood of canceled orders. As inventories of unsold homes have reached record levels, many announced that they are writing down investments on land, stopped building, and laid off both administrative and construction workers.”
“Meanwhile, the inventory glut has also pushed down prices for building materials, which have slumped by as much as 32 percent from a year ago. As a result, lumber mills from Maine to Washington State have announced that they are shutting down.”
From Inman News. “After eight consecutive monthly declines, the National Association of Home Builders/Wells Fargo Housing Market Index gained one point in October, a level of 31. A score over 50 indicates that more builders view sales conditions as good than poor, and the reverse is true for scores below 50, the builders group reported this week.”
“David Pressly, NAHB president said, ‘More than three out of four builders are offering substantial sales incentives to move their product and limit cancellations, and this aggressive strategy is working.’”
“Comptroller of the Currency John C. Dugan told members of the American Bankers Association that a recent underwriting survey showed a ’significant easing’ in residential mortgage lending standards.”
“The survey showed lenders are doing the opposite of what regulators would expect them to do in a cooling housing market: allow longer interest-only periods, more piggyback loans, higher loan-to-value ratios, and more reduced-documentation loans.”
“‘Frankly, that concerns me,’ Dugan said. ‘We don’t want to see the lending decisions bankers make today result in excessive foreclosures, and reduced affordable housing credit, tomorrow.’”
From Lew Sichelman “A lack of enforcement at the state level is a major reason appraisals remain at the root of mortgage fraud, said panelists at a symposium sponsored by the Appraisal Foundation earlier this month.”
“During an 18-month period between 2001 and 2002, Fannie Mae referred 860 cases to state regulators. Of those, some action was taken in 391. But as of this month, nothing has been done regarding the remaining 469 cases.”
“A recent Appraisal Institute study found that more than half its members felt pressured to overstate their valuations. And the over-riding reason they go along, said attorney Rachel Dollar, is to keep from being blackballed by brokers, lenders and realty agents.”
“AI president Richard Power said, only four states, Utah, Michigan, North Carolina and Arkansas, have made it illegal to coerce appraisers into making false valuations. And while 33 states require licensing, there are ‘a lot of holes’ in many of the regulations.”
I had a lengthy discussion with a member of the Dallas FED. He admitted that 100% of the run up in homes prices WAS NOT FUNDAMENTALS it was 100% SPECULATION.
I asked why no one would come and say that in public - “We can’t say that in public.” This individual is a former bank president and was very doom and gloom on housing.
Ah hah. I know who you talked to!
I wish you’d have asked him to stipulate to that being the case in the Dallas market as well because that is definitely the case.
I read in the Dallas Biz Journal (a real rag) a few weeks ago about some bimbo who bought an overpriced condo in the new W (Starck) building. She did it because of the room service! WTF??? This is the reasoning that people use to make very expensive purchases?
I wish you’d have asked him to stipulate to that being the case in the Dallas market as well because that is definitely the case.
_______________________________________________
Main focus was on Fl and Az. But the implication was that lax lending standards & speculation were present in many more markets.
Txchick57-
NewW (Starck) Building
Is that where the Starck Club of the mid to late 80’s was located?…Just tripping down memory lane…
No, it’s a condo building in Uptown “designed” by Phillipe Starck. He’s got his name on all kinds of projects in the US now, including one of the Trump ones in Fla I think.
Has he shared this view with McCarthy and Peach?
http://www.newyorkfed.org/research/epr/04v10n3/0412mcca.html
gee, on msnbc you just see the mom increase in starts……..
-
Building PERMITS are the LEADING indicator. Not STARTS. And PERMITS are WAY DOWN.
- “The survey showed lenders are DOING THE OPPOSITE of what regulators would expect them to do in a cooling housing market: - allow longer interest-only periods,
- more piggyback loans,
- higher loan-to-value ratios,
- and more reduced-documentation loans.”
Can anyone say ‘Prolonged Housing Bubble.’
If this is anything like the dot bomb in a just a few months after the most creative financing, many of those loans will be called back. I’m not saying it will be like the dot bomb collaspe, it will probably unfold more slowly. But if some catalyst forces a re-evaluation of loans it could fall hard and fast.
Oh boy… this is only going to make the bubble’s end a “POP” rather than a hissing leak. Think about it:
1. The bubble extends increasing the overhand (excess inventory)
2. Then at once we have a convegence of:
A. Tightening of credit
B. Foreclosures
C. Maximum new home inventory
3. By this extension we have maximized the “Denial” phase. Thus we accelerate the transition trough Fear, Desperation, Panic and into Capitulation.
Naa… not a shameless plug for my blog.
http://recomments.blogspot.com/2006/10/market-cycles-time-to-buy-2008-or-2009.html
Neil
Yeah, no kidding - this is what I would expect them to do. Don’t think of these folks as traditional, staid, cautious bankers - they’re more like Wall Streeters - making deals until the water closes in over their head. Wall Street has no discipline. The regulators are looking at these people as bankers - that’s their FIRST mistake.
There is a lot of pressure not to regulate.
“LENDING is a sober business punctuated by odd moments of lunacy.” The Economist. Sept. 21, 2006
Yeah, remind me to keep my head on tomorrow. A day or two ago I posted something about my refusal to lend $185K on a house here in Maine that even the realtor thinks is worth only $175K. I did agree to meet with the FB, who, in effect, bought the house from her estranged husband for more than it is worth, by agreeing to take on 100% of his credit-card debt. I agreed to meet w/ her to talk about what she CAN do, but made it clear I will not lend. This a.m. I caught myself trying to figure out how I COULD help the deal. NO NO NO. She may be a very nice lady (everyone says so), but I have to keep in mind my ideological and personal interest in the rationalization of the housing market.
Aren’t building permits a commercial indicator - housing permits are the residental indicator - correct?
anyone guess when transactions will get back to normal?
I’d say soon at 10-15% lower prices
“‘I can’t say that the worst is behind us and I can’t say that it’s not.’’”
Vintage Toll my friends, you gotta love it.
He can’t be sued for that remark and at this point, that’s important.
This just in:
The worst isn’t behind us
“Seiders said that a pick-up in building is not necessarily a positive for the market, which has seen the inventory of completed but unsold homes increase to record levels, pushing down prices and forcing builders to offer incentives to sell homes. ‘If both permits and starts were up I’d be scared because I think there are still inventory issues that we need to work through,’ he said. ‘I hope the bounce in starts is a temporary phenomenon. I think it’s inevitable that starts will be down in October.’”
It seems like the builders are gambling on a respiking of the punch bowl. But hopefully our Fed officials will recognize where this would lead and take preventive action. The inventory crash currently underway is already bad enough (soon I am guessing we will have 5 million homes on the market - 1 surplus home for every 60 American men, women and children), and adding fuel to the fire would only worsen the ultimate crash.
Core inflation remains high. On Monday, Paul Volcker was on Charlie Rose, and he said he is worried about inflation taking off. So will the Fed raise rates next week?
I have a better chance at winning the Olympics in Female gymnastics than the Fed raising next week.
I am convinced as of a few weeks ago that the Fed’s primary objective is to do anything they can to avoid “systemic risk” and that in their minds falling housing values are a “systemic risk”. They are thus targeting housing at the expense of inflation.
They will hold next week, to continue the “soft landing” that they’re trying to engineer.
If they raise, housing tanks immediately, we go into recession immediately, and they are blamed.
If they hold, inflation continues, and the US of A loves inflation. Stocks like it. Housing evidently likes it. The politicos like it too.
Besides, what are the chances the Fed’s gonna raise just before the election anyway? slim to none.
The fed will pause. You will then come to the dark side with me.
Well, not everyone likes inflation. Especially all those foreign countries that hold US Treasury Bonds…they really don’t like it. Do you honestly think the Fed cares more about FBs?
“Do you honestly think the Fed cares more about FBs? ”
HAHAHAHAHAHAHAHAHAHH Whew! You kill me. No, I’ve discusssed this before, they care about the BANKS.
As it stands now, the banks have put themselves into a tight spot. what’s the adage: owe the bank $100k that you can’t pay and YOU’RE screwed. Owe the bank $100,000,000 that you can’t repay and the BANK is screwed.
Banks are just starting to realize that a lot of their loans are “bad”. The people in those houses can’t afford them. Worse, they can’t afford the higher reset payments, and they don’t have the equity (or cash) to sell. If home depreciation continues (which it will), we’ll be seeing a whole lot more of foreclosures, and also MBS call backs. This could pull some banks into insolvency. Not to mention the chaos as all those MBS become worthless, and all the derivatives and hedges that people thought would protect them become worthless due to counterparty failure.
example: lower in this thread, look at WAMU’s problems. That balance sheet is T-R-O-U-B-L-E.
If their customers aren’t allowed to refinance out of the mortgages they’re not paying, then this could bring WAMU down. If WAMU goes, how safe is Wells? Countrywide? what about the hedge funds that have been working with the above 3.
No, the Fed couldn’t give a stinky crap about us. It’s the banks that are in trouble.
And if it’s between the banking system and the dollar? who would the Fed (a bank) choose? Your guess is as good as mine.
But like I said, you don’t have to listen to me. Let’s see what happens oct 24/25!
To clarify with a real world current example (writtten just hours ago by Reuters):
HERE IS WHO THE FED IS TRYING TO HELP BY NOT RAISING RATES:
From today’s Reuters:
Article “WaMu profit down 9 pct, cuts 5,200 jobs in quarter”
(I don’t know how to tinyurl this, and it’s too long!)
“But net interest margin, the gap between what WaMu earns on loans and pays on deposits, fell to 2.53 percent from 2.65 percent in the second quarter. Many banks’ margins have shrunk because short-term rates are higher than long-term rates, raising borrowing and deposit costs.
If the Federal Reserve keeps rates steady, Killinger said net interest margin has likely bottomed, “and we would expect it to increase in the fourth quarter.” Margin should rise to between 2.85 percent and 2.95 percent for 2007, he said.
“And if it’s between the banking system and the dollar? who would the Fed (a bank) choose? Your guess is as good as mine.”
Well, I’ll go out on a limb and say they’ll protect the dollar. Two reasons, one of which I’ve already mentioned. The second is called economic hedgemony. If there is a run on the dollar (inflation),then it’s game over for certain. Which one poses more systemic risk? WAMU’s of the banking industry or oil purchases no longer denominated in dollars? HMMM let me think about that one.
JWM:
I used to also strongly agree with your above point. Then I watched the fed hold rates x 2 (soon to be hold x 3) in the face of higher than acceptable (to them) inflation.
Now I’m simply not sure anymore.
I have a longer post about this where I elucidated the whole theory on a different thread,
http://thehousingbubbleblog.com/?p=1630
just do a “find” for my name, I think it’s my second post in that thread. Don’t want to bore people ’round here
I’d be interested in your comments.
Last post didn’t show.
JWM:
I used to agree with your point above, now I’m simply not sure anymore.
Here’s my full thought on this (I just posted it the other day, don’t want to waste others’ time. I’d be interested in your thoughts.
http://thehousingbubbleblog.com/?p=1630
I have to agree with JWM and would add one other tidbit.
If there is inflation, effective rates will rise. Think about that $800 Billion a year we must borrow. At some point the Fed “pushes a rope” and doesn’t determine the rates. We are not Japan with a large trade surplus that allows for arbitrarily inflating a currency. We are a debtor nation that must maintain some sensitivity towards are creditors.
The idea of the US having to buy oil in Euros or RMB scares me…
Neil
Until yesterday, I would have agreed that the fed would protect the dollar above all else. However, Bloomberg interview a former Fed economist yesterday and to paraphrase the economist;
“The Feds main constituents are Wall Street, Agriculture and large banks, with the banks being on top of that list.”
“The other point made was that the FDIC has more regulatory control over the small banks and credit unions.”
Volcker = the ghost of inflation past. Merry Christmas!
I’ve never heard of a country saying “Wow, that inflation really helped us out and fixed all of our problems!” Sure, the late 1970s helped people holding debt, but the last I checked, we brought in Volcker to fix the chronic problems that resulted. Hell, I was in diapers in the late 70’s, yet I know this. Surely the Fed isn’t completely oblivious?
“The inventory crash currently underway is already bad enough (soon I am guessing we will have 5 million homes on the market - 1 surplus home for every 60 American men, women and children), and adding fuel to the fire would only worsen the ultimate crash. ”
Getstucco Marx!
You are forgetting about the 30 Million NON-Americans that want to buy houses here, too. It’s getting to a point where I don’t know what “American” means….just anybody that crosses the border?
“‘Frankly, that concerns me,’ Dugan [comptroller of the currency] said. ‘We don’t want to see the lending decisions bankers make today result in excessive foreclosures, and reduced affordable housing credit, tomorrow.’”
Too late; it’s already baked in pal.
Exactly! The bankers are riding the tiger. If they don’t keep the standards relaxed they will just accelerate the colapse in prices.
Related article to starts and permits data out today…
—–
Building permits decline tempers housing news
Observers: One-month uptick in starts doesn’t mean downturn over
http://www.msnbc.msn.com/id/15316000/
This article suggests that the increase in housing starts is a bearish indicator for the housing market, and actually reflects builders’ desire to hurry up and get projects completed before prices fall too much further.
Note to flippers: Sell now are be priced out forever. The builders will continue to build out new inventory with lower all-around costs (materials/labor/land) and come in way under your costs.
Sorry if I’m being nit-picky here, but it’s, “Sell now or be priced in forever”.
“‘Frankly, that concerns me,’ Dugan said. ‘We don’t want to see the lending decisions bankers make today result in excessive foreclosures, and reduced affordable housing credit, tomorrow.’”
Cow. Barn. Door.
It’s just amazing that the level of concern and alarm is heightened just now for all these comptrollers, economists, and other assorted ding dongs when just a few months ago, they were taking long lunches.
It’s different this time; there is no speculation in housing; that’s silly; demographics are changing; it’s not like stocks; they can’t wake up next morning and sell; where are they going to live?
Great delusional denying minds think alike.
Repeat after me: Prices are set at the margin. The marginal seller in a declining market is a seller who has to sell (ARM reset, job loss, divorce, death). Where are those compelled sellers going to live? That’s their problem — the forces that compel them to sell don’t care. Fortunately for them, with rents running so far below ownership costs, their problem is not a hard one to solve.
You hit the nail on the head I think Thomas.
What you will see though is the Realtors Association find a way to remove forced sales from reported comps. Maintain the illusion . Yeah I know– I’m a kook. Don’t think they can? The Empire removed housing costs from inflation calculations for the same reason but in the other direction. Among three dozen other revisions , adjustments and restatements. M3 approaches infinity? Ah , it don’t mean anything anymore anyhow? Tell them it is okay. Pat the lumpen masees on the back. Maintain the illsuion. The Dow gets stuck here at twelve K , or some other level. Just yank some underperformers out the average and stick Apple in maybe. Or maybe if housing market craps and energy resumes the bull, take Home Depot back out and re-replace it with Chevron again. RE drags the banks down , hell get citigroup out and throw Google in there. I mean we gotta have it be representative of the era after all. Maintain the illsion at all costs. Rents going up as FB’s sell and lease? Re-replace rentals with Sales prices of housing again as they crap out. But use the real numbers for this calculation , not the new Realtor’s one noted above. Don’t worry , nobody’ll ask. Tell them it is okay. It is good to borrow more and spend it patriotically. Who was the FEd Board jackass that actually told everyone to go out and buy and SUV? US production numbers look weak? Sssshhh. Don’t you know that Intel just came out with a faster processor? Plug the new clock-speed into our productivity adjusto-matron and Voila! Productivity has increased. It’s okay. What do you mean the Chinese didn’t show up at the last treasury auction? The Chinese can’t sell their $ holdings , they’ll shoot themselves in the foot. It will be okay. Or any one of a thousand other sleight of hand , nobody -asks- so -don’t- tell econospins.
Where was I again? Oh yeah , forced sales. Watch for it. “Mr Lereah reported that sales of homes with mortgages more than 30 days delinquent will not be included in future…(oooh ooh , or maybe even better ..” sales of homes with negative equity are not truly representative of the term “Home” since they were mostly speculative purchases anyways..) , so in the future such data will not be…”
Rant off. Tinfoil on. Get me a beer. Mets force game 7.
Nice rant.
“Seiders said that a pick-up in building is not necessarily a positive for the market, which has seen the inventory of completed but unsold homes increase to record levels, pushing down prices and forcing builders to offer incentives to sell homes.”
Why is it that people believe that HIGH prices is “good for the market?” It certainly isn’t good for half of the market–the buyers.
I don’t see anything wrong with letting builders build houses. They won’t build if they don’t think they can sell at a profit; and a profit means that someone wants to buy the house. Sure, builders may sometimes get it wrong, but they are quick to adjust. In general, they are not the ones with their heads in the sand. There has been way too many restrictions on building in general, especially on the coasts. I say let’s build LOTS of houses! The prices don’t need to be this high.
I agree. We should build and build and build and build.
we will then have affordable housing everywhere! The best way to do it IMO. we’ll no longer need affordable housing programs and gov’t entitlements and rent control or any of that.
The only people “hurt” by this plan are the ones who are using their housing as an investment anyway.
how many times have I heard “you can’t live in a stock”.
well then, I guess you shouldn’t be able to “invest” in a home then either!
“A recent Appraisal Institute study found that more than half its members felt pressured to overstate their valuations….”
Should we conclude 50% of appraisals were inflated? It’s a stretch but with all the speculation and price increases it’s hard not to lean in that direction.
“The survey showed lenders are doing the opposite of what regulators would expect them to do in a cooling housing market: allow longer interest-only periods, more piggyback loans, higher loan-to-value ratios, and more reduced-documentation loans.”
This is trouble.
I live in the midwest near Cincy, we have seen a slight increase in building pemits. The reason for this, I believe, is the local building community wants to be ready with new product in the spring expecting a rebound in house buying. (They already have a mass of inventory sitting empty) These guys are going to lose their pants (they already lost their shirts) when the rebound doesn’t happen in the spring. I firmly believe some of these builders will just keep building until the bank takes it all away. What a mess.
I also live in Cincy. A friend is trying to sell his house for $290k, that’s what he bought it for 14 months ago. Problem is, builder is selling the same house with the same options for $240k.
There’s a new house being built a couple doors down from me, I’ve never seen a house go up so fast. Seems like the builders are rushing to get homes completed.
WAMU blows up afterhours.
Although the nine month numbers are not posted up on their website WAMU booked $428 million and $72 million of “capitalized interest income from option adjustable-rate mortgages” for the six months ending June 30, 2006 and June 30, 2005 respectively per the cashflow statement. Net income for the two periods was $1,752 million and $1,745 million for the two periods. Wishful income has increased from 4.1% to 24.4% of net income.
http://tinyurl.com/y5t2xr
Also look on the principal payments for loans held in portfolio. Unless they shrunk their portfolio by 15%, they’re alot of defaults!
According to Reuters, “The third-largest U.S. mortgage lender, after Countrywide Financial Corp. (NYSE:CFC - News) and Wells Fargo & Co. (NYSE:WFC - News), posted a $33 million loss in its home loans group, compared with a $302 million year-earlier gain. Loan volume fell 34 percent to $37.2 billion and margins on loans sold declined.”
Prosperity is right around the corner and beyond the horizon. Keep handing out those POA.
OT-
But I thought I’d share. Fresh from the Inbox as of today.
“100% NIVA w/ Blank Employment ”
Tightening lending standards my a$$
“Don’t worry about a thing young Trooper and Keep shooting.” “General Armstrong Custer has those Indians surrouned and he Know what he is Doing”
In case this wasn’t posted…
O.C.’s ‘Affordable’ Homes Aren’t
Some who won housing lottery at a former base find they can’t come up with down payments near 50%.
http://tinyurl.com/y55qo3
More evidence that many builders (big and small) are slimeballs.
As cruel as it sounds, requiring a hefty down-payment on ALL housing would quickly bring sanity back to the RE market and lower prices for everyone. One of the biggest drivers of this thing has been the fact that no one –not even FBs– have any of their own skin in the game. That’s how you get Casey Serin types buying multiple flip properties with no jobs.
I 100% agree. 20% down payments should become mandatory again. I even support a minimum down payment of 20% + the last year’s appreciation on the house. That will keep everyone sane!
I’m ok with 10% down + appreciation +PMI.
Neil
Harm posts “As cruel as it sounds, requiring a hefty down-payment on ALL housing would quickly bring sanity back to the RE market and lower prices for everyone.”
Here! Here! buy that man a pint!……. I don’t want to bust ball’s of the kids but a real 10% with the income would do.
I bought first in a “wild, hot, market” in 1976…. with 10% as the min. When the bust came prices remained flat, This was Simi Valley Ca.
If anything screams that there is an affordibilty problem it’s this. The next time I hear a permabull go on about affordability, I will throw this article in their face.
I thought CAR re-adjusted it’s affordability defintion to include the new Creative Finance.
Home prices to fall 2 percent in 2007, Realtors project
The California Association of Realtors’ annual residential projection calls for “modest” price declines and a 7 percent decrease in sales next year.
LONG BEACH – The median price of a California home will drop 2 percent in 2007 and sales will fall 7 percent, according to an industry forecast released today.
Leslie Appleton-Young, chief economist for the California Association of Realtors, is projecting a “modest” price decline following years of price gains in the double digits.
Young projected that the median California home price will fall to $550,000 next year from this year’s projected median of 561,000. Sales will tumble to 447,500 homes changing hands in 2007, compared to 481,200 home sales expected this year.
“The housing market clearly downshifted in 2006,” association President Vince Malta said in a prepared statement. “The residential real estate market in 2006 was characterized by a gap between buyer and seller expectations.”
Last year, Appleton-Young had forecast that home prices in the state would increase 10 percent. Today’s report now projects the 2006 increase at 7 percent from 2005.
For those interested in the NJ or NY Metro area market, I’ve got a new edition of “Price Reduced!” up on my blog:
http://njrereport.com/index.php/2006/10/18/price-reduced-101-1015/
MLS Town OLP LP % Reduced $ Reduced
2282353 Wayne Twp $33,900 $16,000 52.8% $17,900
2323221 Moonachie Boro $13,500 $8,500 37.0% $5,000
2295061 Hopatcong Boro $249,900 $179,000 28.4% $70,900
2270364 Roselle Boro $480,000 $345,000 28.1% $135,000
2279379 West Milford Twp $875,000 $629,900 28.0% $245,100
2328324 West Orange Twp $369,900 $269,900 27.0% $100,000
2293209 Paterson City $205,000 $149,900 26.9% $55,100
2278542 Roseland Boro $1,489,900 $1,100,000 26.2% $389,900
2325537 Plainfield City $389,900 $289,900 25.6% $100,000
2278161 Morristown Town $799,000 $599,000 25.0% $200,000
2270544 Berkeley Heights Twp $599,900 $449,999 25.0% $149,901
And thousands more just like those.
Caveat Emptor!
Grim
New Jersey Real Estate Report
This is kind of funny.
Realtors cool to Zillow.com chief
http://tinyurl.com/ycswad
LOL! If I want a used car value do I ask the used car salesman or do I go to KBB or Edmunds?
My new bumper sticker:
Stop air pollution, duct tape a Realtors mouth shut.
Does anyone think building is picking up because builders with all this land, all these options, with still historically low rates, and with lower prices for materials and labor are trying to get these things built and sold ASAP??? The market is not improving, it’s getting worse from an inventory perspective.
Houses cost less to build today than they did one year ago.
Seller’s Rule #1 during asset bubble crash: Be the first one out the door.
I don’t think building is picking up. (1) Once permitted, most builders feel committed to start. (2) Starts data is taken from surveys of builders, not any actual documents at a courthouse. Even definition of start is subjective. (3) Data is subject to seasonal adjustments. Thus, lots of white noise in data. Would be very surprised not to see a decline to below trend next month.
Re the Jax comments above: 21,931 listings in NE Fla MLS - I believe this is 9 counties with a population of roughly 2 million.
Stalemate in SFH pricing can’t go on much longer - the elastic on the balloon is getting really stretched - thank God it’s different here -
http://www.northfloridanewhomes.com/search.asp
It’s so funny. One minute the realtors are blaming the media. The next minute they are quoting them. In the back of everyone’s mind is the same fear: Asset bubbles don’t correct, they crash. That’s why the builders are trying to wring the last tiny bit out of the market and then jump out. They are too late and it will only come back to haunt them.
Many builders will be developing land that was purchased several years ago so with fairly stagnant build costs they can still make a profit, even in a falling market. I believe that the number of vacant American homes reached a record high recently so I fail to see how adding to supply can be seen as bullish.
The bit Ben quotes from Bloomberg needs repeating: “Starts increased 14 percent in the South to 975,000 and rose 3.4 percent in the Midwest to 270,000. Starts fell 14.1 percent in the Northeast to 134,000 and decreased 2.2 percent in the West to 393,000.”
A month ago I jumped the gun, seeing what looks to be a pause in local construction. The danger signs are still there - like lots of homes lingering on (and on and on)the market where traditionally buyers get into fist fights to get into the school district - but no, construction is chugging on, with the McMansions still asking 6, 7, 8 times average income for our suburban zip code. People have heard of the bubble, but consider it a regional phenom far, far away from here, where 3.8%/year or something close has held pretty steady for decades.
I harp now and then on the differences between our little market and the larger ones lived in by most posters here, but you are missing the big picture if you don’t notice where the construction starts are still going gangbusters. I do feel that the next big milestone in this unfolding history will be when the coastal aftershocks finally hit the heartland. Don’t some prognosticators think that without the mania of the last 5 years, between outsourcing, job losses, lagging wages, etc., that we would have had rather painful depreciation by now in many parts of the country?
Right now the blogosphere day-to-day is just “Blah Blah Blah crazy Floridians”, California excess, and “can you *believe* that $780K outhouse?!?” It’s all getting rather dull. I wanna know how deep the valleys are. You can have your inflation-adjusted 1997 prices, bubble-sitters; I’m starting to think some of us will be waiting for a bottom somewhere between the disco era and Flashdance.
Buy memphis a keg!
FTR, I heartily agree, but then again I’m a charter member of the “depression camp”.
‘pick up in building not necessarily a positive’
Absolutely not a positive. Just what they need, more inventory?!