November 28, 2006

“A Significant Correction” In Massachusetts

The Massachusetts realtors report on October sales. “Local home prices showed signs of ’stabilizing’ in October, the Massachusetts Association of Realtors said today. The median sale price of a single-family home was down 2 percent in October to $341,000 from the same month a year ago.”

“According to MAR, the volume of detached single-family homes sold in the Bay State during October fell 16.5 percent to 3,239 homes when compared to October 2005. On a volume basis, condo sales fell 17.6 percent to 1,464 condos in October, and the condo median selling price was $261,250, down 3.7 percent from the same month a year ago, the association said.”

“The group’s report was the second one issued today on the local housing market, and its pricing data differed from numbers in an analysis by the Warren Group, a real estate data firm.”

“Massachusetts home sales fell by double-digit percentages in October, and the median sale price of single-family homes dropped 6.9 percent compared to October 2005, according to The Warren Group.”

“The October home price decrease marks the sixth straight monthly drop compared to the same months last year. The 14.9 percent drop in single-family home sales marks the 20th month out of 21 where home sales have fallen in Massachusetts. Eleven of the 20 monthly decreases were by double-digit percentages, reflecting the sharpest and most sustained sales slowdown since the 1989-1991 period.”

“Overall, the number of single-family home sales in October fell to 4,313 from 5,068 in the same month last year. The median sale price fell 6.9 percent to $312,000 from $335,000.”

“Meanwhile, condominium sales dropped 19.5 percent in October, down to 2,226 units sold from 2,765 during the same month in the previous year. The median condominium sale price dropped 4.8 percent to $261,750 from $275,000.”

“Year-to-date through October, all 14 Massachusetts counties experienced declines in single-family home sales. Hampshire’s 4.5 percent sales decline was the smallest while Nantucket’s 30.9 percent was the steepest. Essex, Suffolk and Worcester all saw prices fall by more than 5 percent.”

“‘The October numbers continue the trend we’ve been seeing for some time now, a pronounced slowdown that’s affecting every facet of the housing market,’ said Timothy Warren Jr., CEO of The Warren Group. ‘While we expect the market to stabilize sometime in 2007, it appears as though the housing sector is undergoing a significant correction.’”

The Worcester Business Journal. “MAR points to the combination of mortgage rates being at their lowest level since February and average home prices falling 10 percent from the summer of ‘05 as key ingredients for creating an affordable market for homebuyers.”

“Says David Wluka, president of MAR: ‘For anyone attempting to time the market, this wouldn’t be a bad time to jump in before mortgage rates start inching up or supply levels begin to drop.’”

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Comment by Ben Jones
2006-11-28 12:10:10

The realtors don’t have the press release or the talking points out. If that happens shortly. I’ll update this post.

Comment by pismobear
2006-11-28 12:39:26

Ben, I just got a ‘cold call’ from inviting me to a seminar! I told the girl that ‘the market was crashing’ and that to call me back in about 3 years. She sounded so hurt as I told her the truth.

Comment by Arizona Slim
2006-11-28 12:44:43

Aw, Pismo, imagine the fun you could have had as an audience foil at that seminar. Especially if it was a free seminar with refreshments included.

Comment by SoCalMtgGuy
2006-11-28 12:40:09

Shot some holes in the latest CAR report that came out in the post I got up last night…


Comment by mad_tiger
2006-11-28 13:25:39

Court Allows DOJ Suit Vs Natl Assoc Of Realtors To Proceed

November 28, 2006 3:57 p.m.


A federal court in Chicago allowed the Justice Department’s antitrust lawsuit against the National Association of Realtors to proceed, the DOJ said on Tuesday.

The court rejected the association’s argument that last-minute changes to its policies prevented judicial scrutiny, the department said.

In denying the association’s motion to dismiss the case, the court said that “NAR has failed, with all respect, to demonstrate that this case should be dismissed at the outset,” according to the DOJ.

In September 2005, the department’s antitrust division filed a lawsuit challenging that NAR rules limit competition from real estate brokers who use the Internet to serve their customers.

The lawsuit alleged that the association’s policy threatened to lock in outmoded business models and discourage discounting.

Comment by flatffplan
2006-11-28 13:30:23

hope DOJ crushes the MLS monopoly

Comment by Neil
2006-11-28 13:37:42

I could only hope… Open the MLS. Get the information out there. There is no reason to keep it locked up.


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Comment by snake_eyes
2006-11-29 07:22:06

Why not close the barn door now that the horses are gone?

Comment by DC in LBV
2006-11-28 12:15:41

Wow, with NAR, Florida, NY, and now Massachusettes all releasing on the same day, Ben is a BUSY boy.

Ben, I do not know how you are able to keep up with it all today. Great job!

Comment by lefantome
2006-11-28 13:00:14

Or he could be outsourcing most of the research work now and lying around his lavish Arizona estate, burning through the generous donations from his faithful. On second thought, your probably right….he’s working really hard. ;)

Comment by luvs_footie
2006-11-28 12:19:22

So which is it?…….. -2% or -6.9%.

Of course you’d have to believe the MAR…….NOT

The Massachusetts realtors report on October sales. “Local home prices showed signs of ’stabilizing’ in October, the Massachusetts Association of Realtors said today. The median sale price of a single-family home was down 2 percent in October to $341,000 from the same month a year ago.”

“Massachusetts home sales fell by double-digit percentages in October, and the median sale price of single-family homes dropped 6.9 percent compared to October 2005, according to The Warren Group.”

Comment by Moopheus
2006-11-28 12:59:14

Warren Group counts sales from the deed registry, which includes FSBOs and other non-MLS sales. MAR of course counts only sales by MAR members.

Comment by bubbleboi
2006-11-28 13:25:35

Thank you Moopheus. I’m assuming this is your area. Have you followed the discrepancies between the Warren numbers and the MAR numbers over time? are the Warren prices consistently lower?

Comment by jp
2006-11-28 13:50:37

MAR of course counts only sales by MAR members.

And the difference in price is less than the commission, which implies that getting a realtor results in less money for the seller. Interesting…

Comment by jp
2006-11-28 13:51:10

close italic. hrmph.

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Comment by jp
2006-11-28 13:52:06

really I mean it!

Comment by waaahoo
2006-11-28 12:24:24

“Says David Wluka, president of MAR: ‘For anyone attempting to time the market, this wouldn’t be a bad time to jump in before mortgage rates start inching up or supply levels begin to drop.’”

You first Davie.

Comment by Arizona Slim
2006-11-28 12:34:28

I’d like to have a puff of what David’s been smoking. Just a puff.

Comment by Rhea
2006-11-28 12:44:23

You tell him!

Comment by pismobear
2006-11-28 14:07:25

Ben, I just picked up my local paper. They already have printed the spin. Last year this time it was 20% down with a 30 yr fixed. Today (or LAY-Lereah spin) 10% down with an adjustable rate. Pump and Dump! What say you?

Comment by santacruzsux
2006-11-28 12:48:44

Doesn’t it seem that the entire country is suffering from attention deficit disorder? The spin is reaching new levels of absurdity every day and yet very few people bat an eyelash. Market timing advice from the President of the MAR? WTF?

It is now official, used car salemen are more reputable than realtors.

Comment by OCDan
2006-11-28 13:50:16

Say what Santacruz? I missed that post because I couldn’t focus.

Sarcasm off!

Here’s the problem SantaCruz. Most Americans are….fat, dumb, and lazy. They want a million dollars, but they don’t want to work for it and/or wait for investment returns. They also don’t want the millions for their kids or to do something good with it. They want it to blow on more crap they don’t need to impress people the don’t know or who don’t care about them. This country suffers from Attention Deficit Disorder because we have become through many various ways, completely impatient. We have no patience because we are in a hurry for everything. No due diligence anymore. People want it yesterday. Sad thing is is that it is just another nail in the demise of this country unless we can right the ship!

Comment by santacruzsux
2006-11-28 14:04:12

LOL! Well I will agree with you up to 50%, but I don’t want to believe that most Americans are fat dumb and lazy. That really pains me to think that may be the reality of the situation. I think part of the ADD issue may be that it is too difficult for many people to pay attention because of so many competing demands for their time. I know that on days when I am extremely busy in my own little world, that I have to assume that the rest of the world will take care of itself, but I never let that attitude infect my thinking on a long term basis. I will never assume that one person has all the answers and that anyone that wants my money is truly looking out for my interests before theirs.

Blinded by greed is an easy assumption and may be true, but blinded by ignorance and hopeful naivete is just as dangerous.
I guess it has come to the point where many folks have decided that vigilance is best left for others to do.

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Comment by NH_renter
2006-11-28 15:34:01

I wouldn’t single-out Americans alone. It’s basic human nature to want something for nothing. We all want it, but some of us (for various reasons) know better than to try.

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Comment by snake_eyes
2006-11-29 07:27:06

It’s actually worse than “something for nothing”. It’s something now in exchange for our children’s and grandchildren’s future prosperity.

Snake Eyes (NH_owner)

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Comment by Craven Moorehead
2006-11-28 12:50:37

Supply levels already have dropped. There was a huge pullback in inventory numbers at the end of October. This is all the wish-pricers letting listings expire, with the idea of sitting things out through the winter and relisting in the spring. Inventory will skyrocket again in April and May, hammering prices even more easily offsetting Wluka’s theoretical interest rate hike. Which, if I might add, is a nice scare tactic but immaterial at this point in the game.

Comment by CarrieAnn
2006-11-29 05:46:24

“Supply levels already have dropped.”

Craven-I think many will be back in the spring but a certain percentage will see the light and that move-up home they were stretching for just got pulled off the table of consideration. If market prices aren’t dropping fast enough, who wants to accept that lowball to sell their home only to have higher priced homes to chose from. Personally I’d rather rent or stay put in that situation and wait until things stabilize.

Comment by snake_eyes
2006-11-29 07:32:00


Do you think this theoretical interest rate hike may actually occur? I mean, the dollar is dropping on rumors of a Fed cut and ‘06 MBS are performing just terribly.

Comment by mina
2006-11-28 13:59:06

we’ll be right behind you.

Comment by mina
2006-11-28 14:03:30

this was supposed to nest under “you first, Davie”

it would have been much funnier there …

Comment by giantaxe
2006-11-28 14:15:38

or, in other words, “we need sales before my members default on their loan payments for their McMansions and Mercedes”.

Comment by CA Guy
2006-11-28 12:44:17

“Says David Wluka, president of MAR: ‘For anyone attempting to time the market, this wouldn’t be a bad time to jump in before mortgage rates start inching up or supply levels begin to drop.’”

Is this guy taking halucinogens or is he just a scare monger desparate to drum up any sales he can find? Probably both. Only an idiot would believe that we will see supply levels dropping anytime soon, especially once all the genius “investors” move to re-list come spring 2007. Only a lying sack of crap used-car salesman would use this type of comment. I believe this bubble implosion will be the death knell for these realtor associations.

Comment by Arizona Slim
2006-11-28 12:46:48

Okay, everybody. Let’s start a real estate association death wish list. I’ll go first:

1. NAR
2. CAR
3. I’ll think of more associations. Just give me time…

Comment by SunsetBeachGuy
2006-11-28 12:48:32

Better watch out, Susan Jacobsen will be all over you with a message about the virtues of realt-whores.

Comment by Moopheus
2006-11-28 13:01:00

Wluka, Leslie Appleton-Young, and Lereah were clearly all grown in the same vat.

Comment by santacruzsux
2006-11-28 13:04:32

Yah, Epsilons accidently placed in Alpha containers.

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Comment by snake_eyes
2006-11-29 07:33:59

And drugged up on Soma.

Comment by snake_eyes
2006-11-29 07:36:16

“Swallowing half an hour before closing time, that second dose of soma had raised a quite impenetrable wall between the actual universe and their minds.”

Comment by Captain Credit
2006-11-28 12:54:46

I wonder if Wluka wears a shiny suit?

Comment by James
2006-11-28 13:15:59

I remember going to a used car dealer and looking at some POS cars. I wanted transportation but had pretensions of making it into a hot rod.

The dealer finally said to me “Buddy, the cars a thousand bucks. You get what you pay for. Your just expecting too much from a low end car. Go get a used Toyota for transportation. If your rich then buy the Monte Carlo and fix it up”

I went and got a used Excel and it lasted for 180,000 miles.

Comment by ockurt
2006-11-28 12:53:55

O.C. house prices fall for third month

The California Association of Realtors reported that the median price of a single-family home here was down 2.9 percent in October.
The Orange County Register
The median price of an existing single-family house in Orange County fell from last year’s level for the third month in a row, the California Association of Realtors reported today.

Comment by crispy&cole
2006-11-28 12:56:17

Ben is working on a post - 3 months in a row of DOWN. I can’t wait to comment!

Comment by smf
2006-11-28 12:56:04

“Says David Wluka, president of MAR: ‘For anyone attempting to time the market, this wouldn’t be a bad time to jump in before mortgage rates start inching up or supply levels begin to drop.’”

These people are just plain idiots. Whatever interest rates or inventory level changes occur it still does not affect the fact that homes are way overpriced for most people in this country, especially first time buyers.

Here I sit in the top 10% of the income in this country and we would not and could not even think about purchasing a home worth more than 450K.

Comment by lefantome
2006-11-28 13:35:22

Any ‘supply level’ drop, is just as phony as the ‘demand level’ increase over the last several years. Wannabe sellers pulling their listing does not decrease the supply level, any more than speculating with someone else’s money on 5 homes was real demand.

And if interest rates do begin to increase (and I think they will) then these housing prices will tumble even further. It’s all about howmuchamonth David, remember?

Comment by pismobear
2006-11-28 14:27:28

It’s the idiot slimy drive by media who print every thing as gospel that comes out of LAY-Lereah’s mouths. Who is this jerk off Robert Kleinhenz at CAR? He’s as bad as LAY.

Comment by 98033renter
2006-11-28 14:35:28

I’m telling you, I’m in exactly the same boat where we are in Kirkland WA - it’s very surreal seeing what even just ‘blah’ houses are going for around me. It’s like I’m in some parallel universe, by the published numbers making a very good top 10% regional income and yet not willing (or able, by traditional lending standards) to pay more than about *half* the going rate for a decent house around here. I could do it, I guess, if I wanted to totally halt saving for retirement, kids education, etc., but I’m not interested in working until I’m 70 - or maybe 60 or even 55 if I keep playing my cards right…

We rent a place for ~$2300 a month that would easily sell for $650k+ based on local comps. If I were to buy this place it would need another $50k minimum in non-luxury-or-cosmetic basics to suit me - modern windows, bathroom upgrades, etc., just more sunk money for a box to live in. As the economics stand now I figure every year I rent is shaving a year off my retirement date, just in the delta between a mortgage nut and my rent total using conservative compounding and cost-of-money estimates.

I try not to sound too sanctimonious on this whole topic, and I actually don’t talk about it with many people as they vehemently disagree, but it just continually blows me away.

I’ve been lurking here a long time, something about today’s round of news releases just touched me off…

Comment by Vermonter
2006-11-28 16:52:33

I know that feeling of living in a parallel universe…

I live an 1900’s era farmhouse in VT. For most rural property, it doesn’t have a whole lot of land. There’s a 77 acre parcel behind us that we’ve hoped off and on to buy part of.

About 2 years ago, it sold for $80,000. (Bought an actual house for $88K only 3 year previous to that). The guy who bought it was going to divide it up into at least 3 parcels to build on, retaining one for himself.

2006 roles around - all he’s done is added a road up into the forest and basically cut down trees at random to look for better views. He’s decided to list a lot with a little less than 5 acres. I suspect it requires an expensive mound septic system from way it’s listed and the position of the lot. His wishing price: $93,500.

This is for raw land - if a GF comes along, they will need to do all improvements and maintain a private road going forward. It has some views, but the main view is of my neighbor (you’re sitting in his backyard) and the joy of looking at our compost pile. An architect will need to be *very* creative with windows.

When I mentioned the wishing price to my husband, he didn’t really seem to understand what the big deal was about. I pointed out that by the time you bought the land, improved it, and put a *small* house on it, you were looking at easy $200K. And folks spending $200K (at least around here) are not going to want a small house.

Maybe he will find a GF, but the price is totally and completely insane. (Heck, for lots of reasons I didn’t think the parcel was worth $80K to begin with…) I know how we got here (easy money), but the disconnect at times is just staggering…

Comment by Cow_tipping
2006-11-28 12:59:11

I’ll give you an example of the funky math …
House prices went up 300% in the last 5 years. I think they will only drop 75% in the next year. Yea, good time to buy.

Comment by 45north
2006-11-28 13:20:38

I have never tried, but I think that it would be impossible for a human being to tip a fully grown cow. I tried to catch a 1 year old heffer when I was 24 - I could run faster but was afraid to tackle it.

Comment by Im_not_catchin that_knife
2006-11-28 13:01:31

David Wluka needs to start addressing his sellers: “I’ve been spinning for 6 months now and no one is buying. Maybe it is time to drop your asking 30% to be in line with local salaries” or “Have you seen all the new condos on Rte 93 and 128. Maybe you should take a small loss now and lower you asking price”. Most saavy buyers are not jumping in until the knife hits the floor, falls on its side and stops spinning.

Comment by Catherine
2006-11-28 13:01:47

“Says David Wluka, president of MAR: ‘For anyone attempting to time the market, this wouldn’t be a bad time to jump in before mortgage rates start inching up or supply levels begin to drop.’”

Do you guys laugh as hard as I do at these inane comments? Seriously, maybe I’ve just read too many lately and I’m punchy.
But these people are cracking me up.
Anybody read Roz Chast? The characters out of CAR, MAR, and NAR remind me of her stuff.

Comment by Markmax33
2006-11-28 13:10:47

Here is Gary’s Watt’s new forecast. Lets have fun with this one!! I love how is 2006 number is only through August! 15% is in the bag!

Comment by SunsetBeachGuy
2006-11-28 13:30:05

I thought that he crawled back under his rock after Jon Lansner ripped him a new one, after Watts’ last forecast blamed the media.

Comment by santacruzsux
2006-11-28 13:41:38

This one is still blaming the media. Same old story.

Comment by SFer
2006-11-28 13:49:29

And he’s still making the Scars reference.

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Comment by winjr
2006-11-28 13:14:38

““Local home prices showed signs of ’stabilizing’ in October, the Massachusetts Association of Realtors said today. ”

I’m beginning to think that the NAR sent a memo to all the local associations: “No matter what your local numbers say, write that they show signs of a “stabilizing” market”. Ignore continuing price declines”.

Comment by Cow_tipping
2006-11-28 13:15:06

Interest rate increase is actually a great sign. Its indexed to inflation. Your wages will adjust with it, and my 5% fixed on the 15 year mortgage in my house will make it even better. Now buying a new house also will work great because the “how much a month” mentality of the usual consumer will get a reality check, the prices will ahve to drop cos “it costs too much a month and they cant afford that” and your wages should adjust and cover it all.
No better time to buy than when interest rates are at 15% and house prices have dropped 75%.

Comment by GetStucco
2006-11-28 13:24:32

“Local home prices showed signs of ’stabilizing’ in October, the Massachusetts Association of Realtors said today.”

“Massachusetts home sales fell by double-digit percentages in October, and the median sale price of single-family homes dropped 6.9 percent compared to October 2005, according to The Warren Group.”

I am trying very hard to put 2 + 2 together: Are they saying the rate of decline in the median sale price of single-family homes in Massachusetts has stabilized at 6.9 percent?

Comment by climber
2006-11-28 14:06:43

“timing the market” “now” I wonder if David Wluka is licensed to give out investment advise. I think he ought to be a little more careful with his words.

Comment by Tom
2006-11-28 14:15:51

GM layoffs at H2 plant. Ford buyouts popular with workers. Pfizer laying off 20% of US Sales force. Well they can always be real estate agents errrr wait… Housing is losing people too– between agents, brokers, appraisers, loan officers, and construction jobs combined with the slow start at Wal Mart and other retailers this is bound to get nasty. Look for unemplyment to take a huge leap and for foreclosures to continue to rise as inventory increases and prices decrease. My only question is “How does David Lereah ’spin’ this?”

As David Lereah says, “Housing Bust is over, we have hit bottom, prices will only go up, housing is a can’t lose investment are the words we hear from the NAR. Now is as good a time to buy or sell a home because if you dont, your realtors and mortgage agents will lose their houses that they wanted to flip and if things get really bad, they could lose the house they actually live in.”

Comment by Dont know Nothin About Buyin No House
2006-11-28 22:14:20

Has anybody found a quantifiable coorelation between number of sales and prices. I.e. if home sales decrease x percent, then expect a price decrease of y percent so many months later, sort of equation?

Comment by appraiserboy
2006-11-29 17:09:30

i just did a search for mls sales data for 2 adjacent towns in mass., both considered to be affluent. the average sales price dropped $100k to $570k and the average days on market increased from 80 to 135. this was for 10/1-11/29 from 05 to 06. the amount of sfh sales went up from 64 to 71. this indicates to me that panic selling has started to factor into the data.
i am forecasting #1) real cold weather starting on 12/1; #2)sellers wishing there homes had been one of the 200 that just blew up in the danvers, ma paint factory explosion, #3) my brother in-law attorney has to start pounding the pavement again shortly. (#3 best of all)

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