“A Price Adjustment Is On The Way”
The Hartford Courant reports from Connecticut. “Sales of single-family houses in Connecticut dropped sharply in September, raising concerns that prices may dip if sales continue to decline. The 25-percent plunge in sales in September, the deepest in 12 straight months of sales declines, caught the eye of real estate experts. They said the median sales price in Connecticut could not hold up if sales continued to fall at such a clip.”
“‘It would indicate that a price adjustment is on the way,’ Ronald F. Van Winkle, a West Hartford economist, said.”
“Each of the state’s eight counties showed a decline in sales, with the largest drop coming in Fairfield, 30 percent. Fairfield was one of three counties above the overall percentage decline registered by the state. Litchfield County saw the most dramatic decline in median sales price, falling nearly 15 percent in September, to $231,500, from $271,250.”
“‘What you are looking at is a shift back to a more sustainable rate of sales,’ said Barry Rosa, VP at Prudential Connecticut Realty in Rocky Hill. Median sales price increases have slowed because sellers are setting more realistic asking prices because there are more homes on the market than a year ago, Rosa said.”
The New Haven Register. “The Warren Group in Boston reported a total of 3,043 single-family homes were sold statewide in September, compared with 4,043 the same month a year earlier.”
“‘Sellers were sticking to their price. But my guess is it will be hard to sustain double-digit declines in the number of sales for too much longer without sales prices coming down as well,’ said CEO Timothy Warren Jr.”
“Condominium sales plunged 27.3 percent, from 1,694 in September 2005 to 1,232 a year later.”
“In the third quarter, Connecticut single-family home sales fell 20.3 percent, from 13,462 in the third quarter of 2005 to 10,730 a year later. Single-family home sales in Connecticut already had dropped 13 percent in the second quarter, 11.2 percent in the first quarter, and 14 percent in the fourth quarter of 2005, compared with the same periods a year earlier.”
The New Jersey Herald. “A nationwide slowdown in the housing market has stalled the borough’s Main Street renewal plan. With new home sales down 17 percent across the country, developer K. Hovnanian has decided to pull out of two proposed housing projects in the borough.”
“The Hovnanian project was seen as the force that would bring new life to the barren downtown and help reduce the burden on borough taxpayers. ‘What’s down here right now? Nothing,’ said Franklin Mayor Douglas Kistle, who recently saw six Main Street properties go up for sale.”
“Hovnanian’s departure reflects an ongoing trend among home builders scaling back on their production in response to a slowing housing market. In Green Township, Toll Brothers recently dropped plans for a 45-unit development because the economics no longer made sense.”
“‘Builders are pulling back because there’s an oversupply of houses on the market,’ said Walter Molony, a senior public affairs associate for the National Association of Realtors. ‘Unless builders can be assured of healthy profits, there’s hesitancy there.’”
“In Franklin, Hovnanian had proposed building 546 age-restricted units on a 103-acre parcel along Munsonhurst Road. The developer has withdrawn its two-year-old request for a zoning change.”
“The cost of purchasing land, combined with New Jersey’s strict regulatory procedures, has forced Hovnanian to abandon several projects around the state and cut some of its staff, company spokesman Doug Fenichel said.”
“If the developer went forward with its Franklin projects, it might not make a profit when the homes are sold or, looking to make a profit, the homes would be overpriced and not sell, Fenichel said.”
“‘We’d love to be building in Sussex County. We think there’s tremendous opportunities there,’ Fenichel said. ‘We need to find deals that remain economically viable.’”
The FED is allowing the dollar to get crushed in order to save the FB’ers with coming lowed interest rates.
Hope no one is planning XMas in London.
At least the Brits will help the Miracle on 34th Street happen yet again!
It seems like the whole world has suddenly figured out the Fed’s carefully guarded secret game plan to indefinitely continue exercising the Greenspan Put at the first sign of economic weakness…
————————————————————————————————
CURRENCIES
Dollar hits 14-year sterling low; 20-month euro low
Chicago PMI raises speculation Friday’s ISM may surprise on the downside
By Wanfeng Zhou, MarketWatch
Last Update: 5:03 PM ET Nov 30, 2006
NEW YORK (MarketWatch) — The dollar tumbled against major currencies Thursday, hitting a 14-year low against the British pound and a fresh 20-month low versus the euro, after the latest round of economic news fueled concerns the U.S. economy is headed for a sharp slowdown.
The U.S. currency sold off sharply after a report showed business activity in the Chicago region slowed to its lowest level in more than three years in November. The Chicago purchasing managers index fell to 49.9% in November from 53.5% in October. Economists were expecting the index to rebound slightly to 54.4%. See full story.
“For the first time since April 2003, Chicago manufacturing conditions reached contractionary levels,” said Kathy Lien, chief strategist at FXCM. “This is the first time that we are hearing the recessionary bells ring and the market is not taking this well.”
Late in New York, the dollar was quoted at 115.74 yen, compared with 116.38 yen late Wednesday. The euro changed hands at $1.3239, up from $1.3149, after touching $1.3274, the highest level since late March, 2005.
For the month, the dollar lost 4.1% versus the euro and 1.4% versus the yen.
The British pound traded at $1.9652, compared with $1.9451, after rising as high as $1.9698, the loftiest level since 1992. The dollar changed hands at 1.1984 Swiss francs, compared with 1.2098 francs.
The euro fetched 153.23 yen, compared with 153.04 yen. See live foreign-exchange rates.
“The market is look for an excuse to sell dollars,” said Dustin Reid, a foreign-exchange analyst at ABN Amro. The euro will reach 1.33 versus the dollar next week, he said.
The U.S. currency has been under fire over the past week, on growing worries that the Federal Reserve will lower its interest rates to spur economic growth, while the European Central Bank and the Bank of England will continue to lift rates to curb inflationary pressures.
http://tinyurl.com/y84j8g
dollar plight will be huge problema for Ben Shalom..yen appreciation is key, which is still lagging.
Chinese patience in keeping the us treasuries is wearing thin…maniacal stock market one day will catch those hedge fund pimps w/ their pants down, i am sure.
So does this mean that all the Chinese made crap I buy from Wal-mart will be getting expensive ???
No,
The Yuan is pegged to the USD. It just means that the Chinese need to buy less Treasuries to keep the peg.
John Doe
Socal Bubble
“The Yuan is pegged to the USD.”
The peg officially ended over a year ago. The unofficial peg is getting phased out so slowly that it is very hard to notice — kind of like watching home prices crash in slow motion.
http://www.forbes.com/markets/feeds/afx/2006/11/30/afx3218655.html
wow I just got back from my trip to London. if anyone goes there you will soon realize how worthless the dollar is. i kept asking what the people think will happen once the US economy goes into recession.
A good business to start up would be one that fights the government over the value of the home for property tax. These guys are not going to lower your valuations gladly, and I think to specialize into this service, digging into there rules to slap back an answer when the evitable “we cant lower your value today” comes up at these meetings. will be greatly needed.
here’s mine http://www.fcta.org
may be one in your state-
This a mature industry here in chicago. There are at least three law firms here that specialize in real estate tax appeals.
I go to Joe Blow for my mortgage, Jane Blow for my appraisals, yet have to go to a law firm to get my property tax lower???
I’m thinking more like an H&R Block thing will be sprouting up, First encounter with the Tax Board, [at least in Michigan] is a window of time to state your case,[ like income tax] from there they appeal to the state.
I also see groups or class actions in getting these lowered to proper level.
18 of 24? hoods near Hartford didn’t get to nominal par till 2002 from 1988 peak =wow
I am spacy - what is this in reference to: plz translate for me! I am slow today….
“the largest drop [in sales] coming in Fairfield, 30 percent”
Last week I was passing through Fairfield County and happened into a second-hand shop on the main street of Darien. Every sweater was $80+, never mind coats and dresses. Second-hand shop! Gives you a clue what they are probably asking for second-hand houses. Rotsa ruck, ritzies.
1st time buyers are completely priced out in Fairfield County, except in the sketchy areas of Stamford and places that are more than 1.25 hrs away from NYC. Starter homes within 1 hr of NYC are generally in the $700,000-$1M range for asking price.
Westchester starter homes are coming down, though. I’m seeing a lot of things starting to emerge in the 600’s and 500’s.
“The Hovnanian project was seen as the force that would bring new life to the barren downtown and help reduce the burden on borough taxpayers.”
Who is responsible for the gargantuan lie that more residential development equals lower taxes? The truth is quite the opposite yet the MSM prints this garbage from the mouths of charlatans as if it is the truth.
Right on …….Also guess Hovnanian is cancelling projects because there isn’t alot of speculators these days to buy out new home projects . I wonder if builders will build something end-users like or can even afford ?
“I wonder if builders will build something end-users like or can even afford ?”
Only if they can continue to make a million off a $10 bet.
“The 25-percent plunge in sales in September, the deepest in 12 straight months of sales declines, caught the eye of real estate experts. They said the median sales price in Connecticut could not hold up if sales continued to fall at such a clip. ‘It would indicate that a price adjustment is on the way,’ Ronald F. Van Winkle, a West Hartford economist, said.”
The 25 percent plunge in sales suggests that tony Connecticut is in for a hard landing. Connecticut is where Mark Twain learned the hard lesson about the evils of piling on household debt that many Americans will have to relearn over the next twenty years.
http://www.marktwainhouse.org/theman/bio.shtml
“In these later years, Sam’s writings turned dark. They began to focus on human greed, cruelty and questioned the humanity of the human race.”
We better revive some of Sam’s later writings for the coming years.
From the Mark Twain link: “In an effort to economize and pay back his debts, Sam moved his family to Europe in 1891.” Oops, current Connecticut residents will have to move to Bolivia.
Drove through West Hartford last week and was dumbfounded with the number of for sale signs along a stretch of road in one of the nicest areas of town.
I can’t believe there ever was a bubble in sleepy West Hartford. So if there can be massive (for W. Hartford) inventory in a place unlikely to be bubbled what’s going on in real estate?
I’m sure all the reasons have been explained here multiple times, I’m just amazed at its impact in as quiet a place as I’ve known for over forty years.
west hartford is a zoning nightmare….they will build homes in backlots. the only good thing is that there basically is not more land there - unless they can get UCONN to sell their campus on troutbrook. look at the sh!t they built on the St. Joe’s ppty at quaker and asylum. there are certain neighborhoods that always have had for sale signs e.g. ridgewood near the pond….
OT, but big news. The teardown house down the street I’ve mentioned before in the toney North of Montana section section of Santa Monica finally sold. This was a true market indicator, basically an estate sale — a family unloading their deceased grandmother’s place of 50 years for inheritance money. It was originally put on the market this past spring for $2.2 million (the same price that a similar tear-down on the same block sold during the frenzied days of summer 2005). Well, this one missed the peak. It finally sold, after about seven months and multiple price reductions…for $1.6 million. That is a 27% reduction from its original, and at one time “comp-realistic” asking price. Southern California is in free-fall, and that’s a fact.
Wow, LA Story…..1.6 million. Amazing.
I know well the area you’re talking about - these are tiny houses on tiny lots, wedged in between condo and apartment blocks that tower over them. Who in their right mind would pay 1.6 million dollars for what is basically a very small plot of land?
My guess is that Gramma and Grandpa bought the place for about 8K in the 50’s, back when Santa Monica was a slightly run-down beach town. Which means that the grandkids managed to get a 20,000% increase…
There seems to be a lot of ‘land only’ property going in SM. For a ‘reasonable’ price, you can tear down the miniscule dilapidated 80 year old Craftsman and build a 16 unit condo on a lot on about 5000 ft. That is, of course, if you can afford to buy the $1 million plot, before planning your cash cow condos..
Going back to a previous thread where someone asked how much of a premium each place had, and how much people are willing to pay for the premium - I’d say that Santa Monica is probably has the highest premium, and people willing to pay pretty much anything for a 9040(1-5) zipcode.
As you might be able to tell - I’m getting increasingly frustrated by the mindset here in LaLaLand - I’m still seeing absolutely ridiculous asking prices on really very ordinary houses - obviously no one has told the sellers that no one wants, or can afford to buy, ‘bijou’ residences for $1 million plus.
‘If the developer went forward with its Franklin projects, it might not make a profit when the homes are sold or, looking to make a profit, the homes would be overpriced and not sell, Fenichel said. ‘We need to find deals that remain economically viable.’
We’ve come a long way from the ‘build it and they will come’ days.
In Franklin, Hovnanian had proposed building 546 age-restricted units on a 103-acre parcel along Munsonhurst Road. The developer has withdrawn its two-year-old request for a zoning change.
The cost of purchasing land, combined with New Jersey’s strict regulatory procedures, has forced Hovnanian to abandon several projects around the state
As a resident of a once beautiful semi-rural locale, now bastardized and uber-developed beyond recognition, I am happy that some open space is getting a reprieve…for a while.
WTF up with the homebuilders? Didn’t they get the memo that it’s a great time to buy or sell a house?
that memo was only meant for the clueless sheep on main street, the HB got an earlier memo back around the time Toll was dumping his stock.. “the Titanic has hit the iceburg”