“Housing Market In Revulsion Stage”
The News Times reports from Connecticut. “The median prices of both single-family homes and condominiums in Connecticut declined in October, the first time in nearly a decade that both have declined in the same month. ‘We looked at the state prices for the third quarter of the year, and prices declined by 2.29 percent,’ said Norman Krayem, president of the Connecticut Association of Realtors. ‘That’s very, very good.’”
“The Warren Group reported that the median price of a single-family home in Connecticut fell from $271,500 to $265,000. At the same time, the median price of a condominium in the state dropped from $192,000 to $190,000.”
“In Fairfield County, the median price of a single-family home declined only about 1 percent, however, the number of homes sold in the county declined 18.7 percent.”
“In Litchfield County, the median price of a single-family home declined 8.41 percent, from $267,500 to $245,000. The number of homes sold in the county declined by 17.28 percent.”
“Krayem of the Connecticut Board of Realtors said the market grew too pricey. People were shying away from buying, while a big inventory of homes available for sale built up. ‘The prices were outstripping the ability of people to buy homes,’ he said. ‘Especially the first-time buyer. They’re crucial to the market.’”
“Sellers have had to realize that they can’t expect to get the prices they might have received a year ago. ‘Sellers have gotten the message,’ said Timothy Warren Jr., CEO of the Warren Group.. ‘They’ve had to adjust.’”
“‘The buyers are now seeing a better selection of homes at better prices,’ said Matt Rose, a Realtor in Danbury. ‘It’s a good situation in two ways for them.’”
From The Day. “Housing sales in New London County fell nearly 19 percent during October and skidded more than 33 percent in nearby Windham County, according to the Warren Group.”
“In Windham County, sales fell 33.1 percent and the median price of housing dropped from $212,950 in October 2005 to $203,000. New London County’s condominium market also lost steam during October, with sales falling 55.4 percent.”
The Times Union from New York. “Hugh Johnson is upbeat about the economy, to a point. The local investment adviser says housing woes could send the economy into a funk if oil prices soar again. ‘That’s the big risk this economy faces,’ he said.”
“Johnson said the housing market is in a ‘revulsion’ stage, in which prices decline and speculators sell. This followed a period of speculation in which as many as one-fourth of the homes purchased in the United States were bought for investment purposes. ‘That’s speculation,’ he said. ‘The hope, the dream, the fantasy.’”
“New York was hurt less by the housing bubble than places like Boston and California, he said. Parts of upstate New York such as Rochester and Buffalo are still struggling to create jobs. ‘It’s a disaster,’ he said.”
“‘It costs too much to do business in New York state, and somebody has to do something about it,’ he said.”
The Concord Monitor reports from New Hampshire. “The number of people in Merrimack County losing their homes to foreclosure has gone up nearly 60 percent in the past year. According to credit and mortgage counselors, homeowners who signed up in recent years for adjustable-rate and interest-only mortgages, hoping to refinance when their rates increased, are having a hard time making their payments.”
“The sluggish real estate market had made it harder for homeowners to draw equity from their property or sell to recover debt. ‘Some people are apparently experiencing, for lack of a better word, payment shock,’ said Dean Christon, executive director of the New Hampshire Housing Finance Authority.”
“Last year, there were 56 foreclosures in Merrimack County. So far this year, there have been 89, an increase of 58.9 percent. In Concord, that number went from six foreclosures in 2005 to 16 this year.”
“Forty of this year’s foreclosures were on homes financed with adjustable rate mortgages that started in 2002 or later, Register of Deeds Kathi Guay said. ‘Those people that got a great interest rate to begin with, now that the interest rates have changed, have run into a problem,’ she said.”
“Kerry York, of Consumer Credit Counseling Service of New Hampshire and Vermont, said the increase in foreclosures can be attributed to many factors. Many of the people serviced by his agency have reached their limit on several credit cards and are facing high interest rates on those, York said. The cost of gas and home heating fuel is going up. And then their mortgage rate adjusts and their payments get bigger.”
“‘What was a problem six or eight months ago is now a huge problem,’ he said. ‘Income doesn’t go up - not at that rate.’”
“James Kenney runs a website aimed at people who want to invest in foreclosed properties. He said the market for them is good. ‘Since there have been so many foreclosures lately, the banks aren’t really in the business of real estate, so they want to get rid of the properties quickly,’ he said.”
“According to his records, 418 foreclosures were posted in October, an increase of 214 percent over October 2005.”
“The median prices of both single-family homes and condominiums in Connecticut declined in October, the first time in nearly a decade that both have declined in the same month. ‘We looked at the state prices for the third quarter of the year, and prices declined by 2.29 percent,’ said Norman Krayem, president of the Connecticut Association of Realtors. ‘That’s very, very good.’”
Sure its good for us (bubble sitters). How about that poor family you shoehorned into a home last year with 100% IO financing because prices are only going to go up, and they will be able to build equity and then move up to their next house in a few years (after the prices doubles on the overpriced POS you put them into). I would like to hear how “good” that is for them?
These a**holes really love talking out both sides of their mouths, don’t they? One side is saying “Priced out forever” the other “Falling prices are good for the housing market”.
Do you have to be schitozphrenic to be a RE spokesperson?
Yep. You also have have zero morals and an unethical bypass at birth. Realtors are lower than used car salesman on the evolutionary scale of respectable professions and a just (barely) above prostitutes. The “screwing” you get from a prostitute will be far more enjoyable than the one you get from a realtor and less expensive. The NAR should issue a standard uniform of1970’s plaid blazers to match their used car counterparts. I’d love to see DL is a plaid blazer circa 1973.
LMAO notorious….. well said!
Will this guy do?
http://www.zeroonerealty.com/mymovie.html
Even Bridgeport participated in the mania. I remember driving through there around 1985 and it was a surreal Mad Max place, with decent late 50s-era developments abandoned and houses with busted windows and covered in fresh graffiti. There was a massive bug out of owners, almost up to the Merritt Parkway. They just picked up and left.
bahah…. B-port. Some worry about the south bronx at nite. You’ll get your head blown off in Bridgeport in broad daylight.
I recall reading how the Bridgeport police used concrete K-rails to barricade off streets to make it very confusing for crackheads to drive in without getting lost on the way to their drug dealers.
mcgovern lefty who would be king opeden a B&B there- that town is scary w diversity
prices declined by 2.29 percent,’ said Norman Krayem, president of the Connecticut Association of Realtors. ‘That’s very, very good.’….‘The prices were outstripping the ability of people to buy homes,’ he said.
Now that prices have dropped 2.29% off peak, affordability has been re-established and first-time buyers will be lining up to buy again. R-i-g-h-t…
*sigh* italics off…
Rising prices, falling prices, no matter — it’s all good. This has been and remains the best of all possible real estate markets, and there has never been a better time to buy!
Signed,
Pangloss
http://en.wikipedia.org/wiki/Pangloss
Classic GS .. I scan the comments looking for yours and I’m never disappointed.
-
>Johnson said the housing market is in a ‘revulsion’ stage
I think revulsion stage is when everyone is PUKING up real estate and nobody wants it and everyone says that it’s a bad investment. That will be the real time to buy. Just like stocks in 2002.
More ‘the market is at the bottom spin.’
“Sellers have gotten the message,’ said Timothy Warren Jr., CEO of the Warren Group.. ‘They’ve had to adjust….”
Yes siree, message received! The sellers have shaved 2.29% off the peak “wishing price”. With haircuts like this, no need to wait until 2010. Grab a piece of Connecticut’s trough now!!!
Actually, isn’t the revulsion/puking stage when your cart on the roller coaster just crests the highest point and reorients you for the downward plunge?
“Just like stocks in 2002.”
Dead cat bounce — so big and long in duration that it is hard to notice so far…
gee Norm, I can buy 15% off peak in CT
that must be GREAT
Anyone with any inside knowledge/anecdotes regarding Fairfield county/Danbury?
It is the richest place in the U.S. Connecticut had no state income tax until recently, so wealthy Manhattan execs lived there and commuted in on the train. More recently, it has been the home base of the hedge fund industry, and a retreat for financial firms that don’t like NY’s racial diversity (ie. UBS).
The big problem with Fairfield — no one who isn’t a zillionare can afford to live there, and the roads in are jammed. They are trying to get more people to take the train to the area.
With that much money around, prices can certainly get bid up to bubble levels. And with a county full of financial sharks, greater fools may be in short supply when it turns.
WT Economist,
Normally I would agree but with the exception of say Peter Schiff you’d be surprised how many of these guys assumed the RE market still had plenty of legs left. Bill Fleckenstien (Seattle) was among the few to see cracks in foundation long ago. Most of my friends are in some form of finance and you’d be surprised at how few of them were oblivious to what’s been going on in RE. Some have been buying trophy homes in spite of all my better ranting.
my bad,
-how few
+how many
I think you are mistaken. You are talking about Greenwich not Fairfield. Fairfield is middleclass and working poor. Yes, houses are way overpriced, just like the rest of the N.E. But you don’t find any zilionares there.
The worst thing is the build up that took out almost any real charm of these cities and towns in FF Cty. It is way too crowded. You need to go to Litchfield Cty to get what is stereotypical CT in most people’s minds….
Weston (in FF Ct) is still charming. And 2 acre zoning.
New Milford… Dip$hits down the road from Mother in laws bought in q1 02 at $325k. 3/2 ranch on 3 acres. Underwater and went on the market Jan06 @ 500k. No bites. 100k haircut in May, no bites. 80k haircut in Aug06, sold at 320k.
2002 ? that’s incredible
we’re at 2005 march pricing here S of Soviet (DC)
It would be interesting to me to understand who it was that lowered the price by 36% in 8 months. Was it the DipShits or the lenders? If it was the DipShits, they deserve some of your Credit, Captain. If it was the lenders, I’m still surprised at their good sense.
I’m uncertain of the circumstances. The couple is from Scotland and they had some other property somewhere in CT. I vaguely recall my better half saying they might/want/will return to Scotland.
I’m originally from Danbury. My mother bought a two bedroom, two bath, garage, blablabla nice condo in 1995 for $115,000. In 2004 she had it appraised for $250,000. Her neighbors are trying to sell their condo’s for $275,000 or so. New construction last year had condos selling for $500k. Ridiculous considering that people don’t commute to NYC from Danbury and these are just condos. They might go to Stamford, but regardless, people make much less in the Danbury area than NYC area. Anyway, last I heard houses aren’t selling at all anymore.
curious, I know someone who bought a house in Danbury early 2006, paid around 400K, commutes to NYC, takes the train from Brewster. Looking at Raveis.com there seems to be quite a bit more for sale under 400K to the west of Candlewood lake. Mid summer there was very very little available.
I know a few who do that finnman. What an INSANE lifestyle. Out of bed at 4am, don’t get home till 7pm. For what? We’re talking 60-70k/year these people are slaving for. I couldn’t believe it when I first saw it with my own eyes. Then again, I’m from the middle of no where land, Maine.
Part of that is becausehomes closer to NYC cost twice as much. Part of the exurbs only becasue of Metro North across right across the border in NY.
I’ve been monitoring SFH lunder $300k listings in Danbury and surrounding towns (New Fairfield, Brookfield, Newtown, Bethel, Redding, and Ridgefield) since the spring. When I started in the spring “busy season” of 2006 there were 65 listings. A couple months ago the listings seemed to peak around 110. Now there are 88, with many of those having come off in the past week. I’m assuming the ones that came off recently didn’t sell and will be relisted next spring. Incidentally, the number of matches I have in those last two towns is exactly 1, a $295k Ridgefield teardown.
I can’t imagine commuting to NYC from here, but there are definitely people who do it. In fact, some of the listings even quote “an hour to NYC” which I assume means in the middle of the night in a fast car.
I went through Newtown last week to a coworker’s holiday party. On one street, Riverside Drive, it appeared that literally every other house was for sale. I have never seen anything like it before in an established neighborhood– only in these Arizona / Sacramento new ghost towns in Ben’s pictures section.
In downtown Danbury, there are 115 apartments coming to market soon, and ground has been broken on Kennedy Place which will be about 600 more units. There was an article in the local paper yesterday that referred to all of these as apartments, but previously they have always been referred to as condos. I have an email in to the reporter asking for clarification.
Also, west of town there are a number of developments either completed, in construction, or planned. Including one from our favorite Florida whipping boy WCI. My impression from the listings I see from people trying to rent out the completed units, and the slow pace of construction, is that they’re not doing as well as planned.
In case this wasn’t posted.
WALL ST. ROUNDUP
Rising foreclosures seen for sub-prime mortgages
From Bloomberg News
December 20, 2006
About 1 in 5 sub-prime mortgages made in the last two years will end in a foreclosure, exceeding the failure rate for all home loans in oil patch states in the 1980s, a study released Tuesday by a consumer group predicted.
The rate, nearly double the group’s predicted foreclosures on sub-prime loans made in 2002, reflects slowing home price appreciation and riskier lending since 2004, according to the Center for Responsible Lending, a Durham, N.C.-based nonprofit group.
Sub-prime mortgages are loans to borrowers with poor or limited credit histories, or especially high debt burdens.
Michael Fratantoni, a senior economist at the Mortgage Bankers Assn., said the home price forecasts the group used were “unduly pessimistic.”
What’s more, only about 25% of foreclosures lead to borrowers losing their homes to lenders, while the rest are refinanced, modified or cured through other scenarios, Fratantoni said.
Realtors Association Concerned over Rising Rate of Defaults and Foreclosures:
http://tinyurl.com/ymgh93
David
Bubble Meter Blog
I imagine their really concerned.It is their fault in the first place. It is just a PR move to try and get some credibility back.
Exactly…it’s like blaming a bus crash on the passengers..the spin doctors make the most absurd comments and believe that society will gobble it up (which in fact most have)….
In my blog post I bashed the NAR. They deserve it for thier irresponsible cheerleading!
In my blog post I bashed the NAR. They deserve it for their irresponsible cheerleading!
We need a national association of bubble bloggers to combat the new advertising message of nonsense from the NAR.They have so much money they just spew out bullsh@t constantly. It is sad that many americans believe the cr@p.Can we continue to grow the economy by borrowing?We need more job creation. Seems like lately we are just borrowing from overseas.
Don’t misunderstand the NAR’s concern; it’s not concern for FBs and homeowners. They are concerned auction houses and other property distribution channels will soon open up and take away a bigger slice of their market share.
bingoRemember when W tried to squeeze the MLS- mls is laughable in the face of the internet- if you need a realtor you’re an economic girlieman for sure
‘They are concerned auction houses and other property distribution channels will soon open up and take away a bigger slice of their market share.’
You hit the nail on the head. The NAR will always exist as long as they can shield themselves. They do not know a FB from Adam. Put yourself in their place. Why should they have any concern for a “you broke it, you bought it” environment? I really think that 2007 will be a watershed more than 2006.
Be afraid NAR…be very afraid:
http://www.consumeraffairs.com/finance/ameriquest.html
Joseph of Southfield MI (10/15/06)
I was misled about the cost of my mortgage , and also the prepayment penalties that I would experience upon refinancing. I was also misled about the escalation of my interest rate through out the course of the Loan.
Do to these Misreperesentations I lost thousands of dollars during the course of and elimination of this loan. Me and my Family,endured a great deal of Stress which cause all sorts of mental and physical problems within our home.
Adriana of Laredo TX (10/24/06)
Ameriquest representative promisedwe were getting a 30-year fixed rate loan but my payments have skyrocketed. We were told we could refinance after one year so our payments could go down, without having to pay closing costs. We did, and were charged $12,000 at closing time. They made us think we were getting a great deal and we were locking the rate.
Now, our payments are increasing to the tune of $450 at a time! We are struggling to pay month after month. The representatives promised to help us and now we are about to lose everything.
Catherine of Walpole MA (11/14/06)
My husband had just suffered a major break down, and was on medication for depression and lost his job. This man called from Ameriquest and told him he could get him Christmas money and take away all his worries about paying bills and mortgage. He talked us into a loan that is double or previous loan.
We may possible lose our home. Our Mortgage is over 3000.00 per month which is more than I make in a month. We were scammed into doing this.
George of Jeffersonville IN (12/01/06)
We refinanced our house with AMC in 2004 my husband and I are both on disability/fixed income. Our payment was higher than we expected it to be to begin with but we went along with them telling us it most likely will not go up anymore. One of their agents said he had been with them 10 years and had never seen the interest go up …..
Well guess what? it did go up and we have been informed it will again in 6 months ,our interest rate now is 9.9 My husband and I are so distressed over this it is affecting our health. We do not want to lose our home but with medical and prescption cost we may not be able to afford our payments
If simultaneously feel bad and have disdain for these people. Don’t they read what they sign?
That 25% rule may have been true in the past. Not so sure about now. How (or why would you want to) do you refinance a home your under by 20-25% already? Just walk away and take the hit now, otherwise you will be taking the hit for the next 5-10 years as you pay for something you could purchase again for far less. Not to mention the tax/insurance burden on the overpriced asset. In a normal market, yes, I would assume that people would want to keep their homes and the lenders would work with them. Now the lenders will work with them, but there is really not much they can do. Your already in a negative am IO loan, and you STILL can’t make the payment?
Exactly what I thought when I read it. The “25%” rule may have applied before under old qualification rules and in a reasonable market situation but, with so many people at this unprecedented extreme, and prices declining I doubt 25% will hold up.
“…Register of Deeds Kathi Guay said. ‘Those people that got a great interest rate to begin with, now that the interest rates have changed, have run into a problem,’….”
They got excellent interest rates Kathi but did they get good housing prices? Poor bastards — thought they were getting the housing deal of a lifetime and instead they got the hosing deal of a lifetime.
“In Windham County, sales fell 33.1 percent and the median price of housing dropped from $212,950 in October 2005 to $203,000….”
Heckkkk, it’s getting cheaper or approaching parity to live up North compared to the boonies in Northern Florida. What gives?
In other words, if it is cheaper to live up North, where are retirees going to get the money to buy in Florida? There was a time most Northern retirees could sell their homes and buy a MiniMcmansion in Florida and then have some cash left over. Apparently, from this report, the number of retirees able to this is much smaller than Florida developers and homeowners alike anticipate.
It sems obvious to me that the increased insurance costs and property taxes for new owners has officially removed Florida from the “affordable” list. -
‘We looked at the state prices for the third quarter of the year, and prices declined by 2.29 percent,’ said Norman Krayem, president of the Connecticut Association of Realtors. ‘That’s very, very good.’”
Not so good for the equity extractors since they won’t be able to pay their bills. Not so good for flippers trying to unload their sure-fire money-maker.
mrkMaven…lets not forget the single biggest demographic movement are the aging baby-boomers who have amassed great amounts of wealth will soon be looking at downsizing and living the “dream” of sandy beaches and year round tans…Florida could be a mecca once again …. they are probably making noise with their voting power to have insur prem. capped to make that possible…time will tell..and a glut of SFH will compound the problem for more years to come as they unload these energy sucking boxes…
The average boomer has $55K in their IRA and 401K. Most of their wealth is in their home. Uh-oh!
Before this devolves into a boomer-bashing thread, let’s look at that $55k number. For most boomers, it hasn’t been too easy to get to that modest-sounding level. Why? Because they’ve had to deal with high housing costs, which leaves less money to save for old age. Not to mention the high costs of health care, education, energy, and transportation. All of these cost money that could be put away for the future.
Umm…not to be over cynical here but most boomers don’t have any money for the same reason people my age don’t: they pi$$ it away on crap. My parents have had all sorts of opportunities to save and they pretty much just didn’t. My in-laws have done a better job at saving, but my MIL still relies on “retail therapy”.
I’m not saying the throw money away issue alone belongs to the baby boomers, just suspicious of “but our life as been so hard” argument when it comes to the boomers in particular.
Missing of course, is the biggest expense of all: taxes
They’ve also been through the most prosperous economic booms in history. If they managed to save nothing from all the prosperous times, I don’t feel bad for them. No other generations ever had it that good.
they’ll probably have to raid the 401k to pay the mortgage.
with 50k in the 401k, full retirement isn’t going to happen for many. the problem is when the housing market falls and people need to pay off those bills, the stock market will fall with it.
THere were 89 foreclosures in Merrimack County in NH. It contains about 200-300 people. My god the sky is falling. Gimme a break, NH is rock solid.
200-300 thousand people I mean
“New York was hurt less by the housing bubble than places like Boston and California…“
There’s a lag between cities Hughie boy.
Is Hugh Johnson a friend of Mike Hunt?
Sorry… Childish, I know.