“It Had To End Sometime”
The Journal News from New York. “Listings are the low-hanging fruit of real estate. So why did J.P. Endres, a (realtor) in Scarsdale, start turning away some listings last spring? She’s concluded that the would-be sellers wanted too much money for their homes. ‘I said, ‘No thank you,’ Endres said Friday about the first listing she turned down. ‘It would have been a pure-dollar-loss for me.’”
“The potential customer wanted $2 million in an area where the highest selling price had been $1.75 million. The home went on the market with another agent securing the listing. The price was lowered three times before the listing expired with the house unsold.”
“Though housing inventories climbed throughout most of the year and sales softened, the median sales price actually continued rising to record highs in Westchester County. The quarterly high was set in the third quarter at $716,125.”
“Fourth quarter data won’t be in until late this month, but it’s likely prices will be lower in both Westchester and Rockland counties. Preliminary numbers from the New York State Association of Realtors last week showed Westchester’s median was down to $595,000 in November, down 8.5 percent from $650,000 in November 2005.”
“Endres, who’s wrapping up a year as the president of the Westchester County Board of Realtors, said 2006 actually ended up being more of a normal year after five years of ‘insanity,’ but she still thinks most of the homes for sale are overpriced.”
“‘Only about a third of the inventory is priced right,’ she said, estimating that the remaining two-thirds is overpriced by 10 percent or more.”
The Asbury Park Press from New Jersey. “(Broker) Gloria Zastko in North Brunswick, said recent price downturns are nothing new in real estate. But she cautioned people about the more exotic mortgages available.”
“‘When the housing prices do dip a bit, this is going to be a deadly thing. Their monthly payments will go up. It’s just too bad that the criteria is not a little more stringent to make sure that these people can afford to continue with these houses. Surely, people should buy, but they should be qualified to buy,’ Zastro said.”
“Buying a home is the largest investment most people will ever make, said Shrikant Nadkarni, a certified public accountant. Nadkarni said that in today’s market, with rising interest rates and softening real estate prices, buying a home to make a short-term profit is certainly not an attractive proposition.”
The Vineyard Gazette. “The price of the typical home on Martha’s Vineyard fell for the first time in six years in 2006, as buyers left the market and sales figures dropped by nearly 30 per cent. The median price for properties was down to around $690,000 in the third quarter of 2006, a fall of almost six per cent compared with a year earlier when the median price was around $732,000.”
“Land sales were down 35 per cent compared with 2005 and more than 50 per cent compared with 2004. And while complete figures for the fourth quarter are not yet in, industry experts are expecting the market to continue to trend down or at best stay flat.” “Meanwhile, agents’ inventories of properties for sale were up around 30 per cent throughout the year.”
“‘We have seen a definite change over 2006. But things have been going up for eight or nine years. It had to end sometime,’ said Sharon Purdy, a 35-year veteran of the Island market’s ups and downs. But Mrs. Purdy said she sees no signs of a bursting of the housing bubble, rather a slow deflation, which was on balance healthy.”
“‘People are waiting to buy and renting instead. Until that stalemate comes to a conclusion we will remain dormant for quite some time,’ Mrs. Purdy said.”
“‘It’s a classic standoff. The sellers want their price and the buyers want their price and the two have not come close yet,’ said the president of Dukes County Bank, Chris Wells. ‘But I think this correction is different in that leverage is less and there’s a lot less speculation in the market than in the last significant downturn, in 1987 to 1991.’”
‘The number of home sales registered in November was the lowest since 1992. Prices continued to deteriorate, and the median single-family home statewide is now selling for around 13 percent less than the peak of the market in the summer of 2005. David Wluka
President Massachusetts Association of Realtors: ‘Facing a decline in the real estate market after a decade of unprecedented growth, a seller’s first question is: ‘Why won’t my house sell quickly and for more?’
‘The supply of homes on the market continued to skyrocket in November in Massachusetts, with 25 percent more single-family homes on the market than last November and 37 percent more condominium units up for sale.’
‘According to the Massachusetts Association of Realtors, the 35,254 single-family homes on the market would take 10.9 months to sell at the current pace of sales, compared to 7.6 months in November 2005.’
‘In the condo market, where newly built units begun at the height of the local real estate market are just now coming up for sale, the 17,851 units would take more than a year - 12.7 months - to sell at the current rate.’
‘Wluka said the biggest problem for agents remains balancing expectations; many sellers still expect 2005 prices, while buyers are looking for bigger drops than the market has shown. ‘It’s been a difficult psychological challenge for us,’ he said. ‘I think all of 2007 is going to be people testing.’
“David Wluka President Massachusetts Association of Realtors: ‘Facing a decline in the real estate market after a decade of unprecedented growth, a seller’s first question is: ‘Why won’t my house sell quickly and for more?’”
Economics 101: Increase the wishing price above the choke price, and the number of prospective buyers drops to zero.
Welcome to Physics 101. Action and reaction are always equal and opposite, even in RE.
Nothing new under the sun. People never learn. And yes I include specially that race of rats at the FED. If everything crashes like the NASDAQ bubble, expect these fools to lower the interest again to ZERO.
Welcome to Physics 101. Action and reaction are always equal and opposite, and RE is no exception.
We keep hearing the ‘this was inevitable’ statements from the industry, but who was it then that was saying ‘buy now or be priced out forever?”
That’s okay. Nobody is holding them accountable, and the sheep soak it right up, so they can lie with impunity. What a great profession they have. Most of us would be fired 10 times over, if not indicted, if we lied to our customers like this. But when your entire industry is built on bull$hit this is what happens.
It’s a lot like politics or preaching.
Promise promises promises.
or socialism or communism
Realtors are the scum of the earth, in the sleaziest country in the world. Slimey realtors are encouraged by a government that encourages their practices. Why else would the U.S. government not regulate this market? The largest purchase of your life and no protection for the consumer. It’s SHAMEFUL. Just the way the United States likes it. Forget that GOD bless America baloney. You can’t screw people on the scale America does without reaping the benefits. 2007 should be the beginning of interesting times for America. I liken the housing debacle to the shot heard round the world. Nothing like a society with its best days behind it. Happy New Year.
“sleaziest country in the world”
Cuba, Russia, Saudi Arabia, Iran, Iraq, Pakistan, China, Venezuela, Argentina, Sierra Leone, Angola, Ruwanda, Somalia, etc.
Yeah right, sleaziest country. During the 20th Century the U.S. was forced to take a role that was unprecedented in world affairs. We did an excellent job. Today our role is even larger. Put Russia (or the former Soviet Union), China, Cuba or Vietnam in that role and see what you would have gotten. Hell, put the French in that role. It wouldn’t have been anything anywhere near as nice. The world would have drowned many times over.
The U.S. has its problems but your bull$hit is myopic propaganda spewed by one tyrant after another, in a hopeful attempt to deflect attention from their own massive wrongdoings.
Try driving south of the border where policemen have their heads chopped off for enforcing the laws. Try visiting some Asian countries, where you have to bribe the customs in order to get on or off the plane.
My guess is that you’ve never spent any considerable amount of time outside of the USA. In Europe, bribery is an accepted way of doing business. The Europeans were scratching their heads at the Olympics scandal in Salt Lake City a few years ago. It was normal business for them.
We have our problems too, but it is alot cleaner here than most other places.
Hey El Jefe,
why don’t you crawl back to wherever you came from? And while you’re on your way home to some shantytown in Tijauna, ask yourself why Mexico, a country blessed with abundant natural resources, is such a pit?
Maybe for the same reason this country has become such a $hithole?
Slimey realtors are encouraged by a government that encourages their practices. Why else would the U.S. government not regulate this market?
Maybe ’cause it didn’t work so well in Soviet Russia??
> My guess is that you’ve never spent any considerable amount of time outside of the USA. In Europe, bribery is an accepted way of doing business.
There are large regional differences in Europe. Generally, the more north you go, the less corruption you encounter. The Scandinavian states beat the US by a lot in the absence of corruption.
Spare me the history lesson. Address the issue of an unregulated government approved housing market. For your information, these crooked realtors are AMERICANS. People make-up America. Crooks in an unregulated industry = sleazy America. Just the way the government likes it. Maybe you flag waving, history buffs don’t read this blog. Or maybe you’re just realtors. Don’t even get me started on this government originated and sponsored housing bubble. Go justify the unregulated housing market somewhere else.
Just good old salesman pavlovian conditionning. “Buy it before the other buys it. Quick. Quick. Quick. It’s dissapearing fast.” It always work. The fear of missing out. The fear of not being with the others. The fear of being left behind. Fear, fear, fear. Now they will have something to really fear.
Marc, very good little summation there. Fear, fear, fear (as you cited) - plus the ability to purchase almost anything by a lending industry gone wild put us in this situation.
it may be fear but not fear alone. It’s fear with greed, fear with embarrassment, fear with loneliness, etc.
There’s something else about Pavlov that (I think) is interesting: When undergoing deconditioning, dogs would go through a process called extinction: when the bell was no longer paired with the scent of meat, the dogs would eventually discover that there was no benefit to responding to the bell. The graph of the extinction response is pretty much a straight line downward. In other words, once people stop pairing homes with profits, the market should drop precipitously. The only catch is there was also something called a spontaneous recovery: the dogs were so well-conditioned that they’d make a quick comeback if the meat and bell were paired again, which seems to be what everyone talks about on this forum as a dead cat bouce. Alas the dogs will continue their deconditioning when they see that that was only a temporary recovery.
Lionel –
I still don’t foresee where the spike in demand needed to produce a dead (Pavlovian) cat bounce is going to come from? This is not to say that I don’t believe it could happen — I just can’t conceive of it, considering the juxtaposition of a vacuum on the demand side, created by a sudden absence of qualified buyers in a tightening credit environment, against a supply glut, thanks to new homes coming on the market at a near-record rate.
GS, you’re probably right. I guess it depends on what time frame we’re talking about. It could be a year or so from now, when the bell rings and a few buyers jump back in, thinking it’s bottomed out.
My guess is that the whole game changes once the MSM really picks up the story and runs with it. Once Time Mag has a cover with a house exploding in a mushroom cloud, the extinction will likely be complete.
Pavlov experiment shows, “Dogs are smarter than people”
I think we will get some dead-cat bounces because people’s belief in appreciation will die a slow death. Several knife-catchers will ignore any fundamental valuation based on cashflow and jump in at any sign of renewed appreciation.
Mioww! Mioww! Wouf! Wouf! Wouf! I agree.
First you will have a dead-cat-bounce and after that
a-dog-eat-dog market.
If that dead-cat bounce doesn’t happen in the spring, it’s nothing but downhill — in a hurry.
Lionel,
That point about spontaneous recovery is for me probably the most interesting thing I’ve read on this blog in months.
I think that explains a lot about the current state of the Australian and UK RE markets.
Westchester is toast. Everybody thinks that White Plains, Bronxville, Hartsdale and Scarsdale is just busting with all old money where everybody owns their homes outright. It’s a myth. The social climbers, that want to be around that old money, have bought way above their heads. The last time I was riding through Scarsdale was the first time I ever saw “For Sale” signs. In the spring their inventory will soar. There are a lot of families that will decide they either need to act quickly and cash in or act quickly and cash out.
Can anybody think of an area that deserves a huge haircut more than Westchester County? Except for all of California, I can’t.
London, England. Not the same country.
But if you think your bubble is bad, try crazy London and the UK in general.
Agreed. The UK is as bad or even worse than the US. I’m a Brit but I’m shocked at the changes in the UK (almost all created by real estate greed) in the last 25 years. The UK used to be a pretty decent place to live be you rich or poor. Not anymore. It’s now as greedy as the US but I suppose that seeing as the UK is now the 51st State, one shouldn’t be surprised. It just flies a different flag.
In 1979, I had my mother (now long gone) fly out and stay with me in the US for a month. After a few weeks of visting places like Disneyland and the Grand Canyon, etc, I asked her what she thought of America. Now, this was a not very well educated lady. She was lower working class but she had zero prejudice and who’s reply to anyone who expressed a racist opinion was, “There’s good and bad in all people.” Her answer to my question was, “It’s really nice. I loved places like the Grand Canyon. And Las Vegas and Disneyland are really something to see.” I then asked her what she thought of Americans. She simply replied, “They’re very nice but when I look around I get the impression they’re very greedy.”
Why is this? Well, the US standard of living was always higher than europes until about 20 years ago so, for a european seeing the abundance of food and the quality of life for ordinary American working people making high wages, it probably looked like greed. However, things have changed. Now the US standard of living is not much different from the europeans. In some cases the US standard of living is not as good.
Both in the US and the UK, ordinary working people have been given, in the last 20 years (and it increased rapidly in the last 10 years in the UK more than the US) a lot of free money via property. More than any other time. Property owners in the UK and the US and in other places like Australia have collected, or should I say “sucked out”, more money from overvalued property than their COMBINED parents and grandparents and great grandparents could have earned at their jobs over their lifetimes.
Where’s the fault in that? Doesn’t it put lots of money in ordinary peoples hands for them to enjoy life? Yes, it does. However, I worked around very, very wealthy people (net worth of $25 million was not unusual) for over 40 years and I noticed one thing which separates those who have had money all their lives and the “average” Joe who suddenly finds himself or herself with bundles of cash. The ones with money (old money) are far more careful about what they buy and how they invest. In other words, they know the value of a buck. On the other hand, the “new money” spends, spends, spends. Bigger tv’s. One in every room if they can suck more money out of their house. A new truck with all the gizmos. A new Range Rover or Merc for the wife to go to the supermarket. Vacations in the West Indies, etc. All sucked out of property. Meanwhile, the old money is still intact. It seemed the “old money” only spent money that was free and clear.
Finally, I have a problem as to where all of this will end. Property just cannot go up $40,000 a year so that Joe Sixpack can suck money out of his property ATM and buy next years 3D tv because last years plasma tv is now obsolete and 3D is in. Or swap in that 2 year old truck because GM has just brought out a truck which parks itself or warns you that you haven’t washed the truck in two weeks. At some point the piper has to be paid if ONLY to bring back some “equalization” where people (who want to) can afford to buy property. That means the divide between those who own $600,000 property, which is mostly debt because they have sucked out all the value (and worse they could not afford to buy the house they are living in if they were starting out) and those who have carefully saved a $30,000 deposit to buy a property for $200,000, come into some kind of line. As we all know, you cannot buy $600,000 houses on $15 an hr. jobs.
Mike: Good post, why aren’t the folks like you & me ? Save for retirement, no HELOCs, no cash out re-fi’s live within you means ? I cringe when analyzing what you are really doing when you go out & buy a new SUV on your home equity (turn a
oops formatting problems …
turn a less than 10 year depreciating “asset” into a 30 year interest sucking leach! Duh no wonder the bankers are sooo eager to hand CASH to you. Or open your credit card statement, and pooh take the “check” and go SPEND! me, hello paper shredder. I too would like to live in a nicer community but paying 400 - 600K for the privilege? Or the statement posted on the blog of a hard working individual during the boom who was saving towards a 20% down, and the Realtor told him … son, the prices are going up 20% plus a year! buy now …
“Can anybody think of an area that deserves a huge haircut more than Westchester County?”
Yes, the eastern end of LI where many folks from NYC and its suburbs, including Westchester, have speculated on second homes. I believe the second homes they stretched for will be cut loose before their primary residences.
I agree with you about the number of folks who are stretched out and over their heads in Westchester though. It’s pathetic.
Is everybody that ashamed to just lead a simple, honest life? It’s as if the whole world has to prove themselves on a daily basis. Whether it’s trying to look cool by talking loudly on a cell phone in a crowded train or buying a house in Westchester to say, “I bought in Westchester.” “Oh, you bought in Westchester?” said Frannie FuzzyBottom. “Nigel and I just bought in the Hamptons. Little Skyler and Scout saw the house and we just knew we had to buy it for them.”
My number one wish for the housing crash is that it brings the gift of humility to millions of people.
Not to fear for little Skyler and Scout - we’re cultivating our frienships with people at Goldmann so they’ll hire them one day. They’ll both be making millions before they are 30. We’ve taught them how to choose their friends on the basis of what they can do for you. And we’ve taught them not to get tangled up with emotions — when its clear a friend can no longer enrich you, move on and acquire a new friend.
Whoa. I have an ex-friend who exhibits the same attitude. She actually refers to people as “social currency”! She bought a second home in the Hamptons a few years ago, too.
Speaking from experience I think you have to get whacked real good once in life to appreciate the simple life. Or at least see the person next to you get whacked.
It’s been awhile since anything generationally bad has happened.
Is everybody that ashamed to just lead a simple, honest life? It’s as if the whole world has to prove themselves on a daily basis.
The older I get, the more of a genius Thoreau becomes:
“Our life is frittered away by detail… Simplify, simplify, simplify!”
Fairfield CT.
“Can anybody think of an area that deserves a huge haircut more than Westchester County?”
Putnam, Dutchess and all of western CT.
“It’s just too bad that the criteria is not a little more stringent to make sure that these people can afford to continue with these houses. Surely, people should buy, but they should be qualified to buy,’ Zastro said.”
Mr. Zastro it’s a might late to play like you and your ilk had/have a conscious.
“The price of the typical home on Martha’s Vineyard fell for the first time in six years in 2006, as buyers left the market and sales figures dropped by nearly 30 per cent. The median price for properties was down to around $690,000 in the third quarter of 2006, a fall of almost six per cent compared with a year earlier when the median price was around $732,000.”
Again, another second home place where the overstretched social climbers are suddenly starting to realize they are in deep doo doo. Anybody want to bu a used BMW cheap?
“‘People are waiting to buy and renting instead. Until that stalemate comes to a conclusion we will remain dormant for quite some time,’ Mrs. Purdy said.”
This is happening in the Hamptons. Last year was a particularly strong rental market. The RE cheerleaders out there have lately been spinning the Wall Street Bonus Babies story - that this huge infusion of cash will propel the Hamptons to new heights. The reality is quite different and agents, RE lawyers, title closers etc. are all sitting around with hangovers wondering why their phones have stopped ringing.
Hello!
2nd home and “destination” markets would make a good topic since there was so much spec in these areas= WOW big crash
It was never not all about speculation in these places. All that cocktail party talk about how one’s cottage in the Hamptons tripled in value has disappeared. Now that RE investment is no longer a badge to wear, watch for the bragging to rear its ugly head somewhere else after a possible cooling off period marked by restraint as these folks try to piece themselves back together and desperately find the next symbol that will demand everyone stop and realize just how important they are.
What a bunch of empty losers> They’re ostensibly always competing with the Jones’ but are really competing with their inner lack of self worth.
I looked in mid-coast Maine for a simple 1200 or so ft vacation place in 2003/2004. Fixer-uppers with a trailer parked on the next lot for 300K or so. Then started watching Nova Scotia, and watched the bubble arrive there, with rising Canadian dollars. Never bought. Curious to see what prices will be in 2008 or so–until then I’ll just continue renting a summer place for a few weeks.
“I looked in mid-coast Maine for a simple 1200 or so ft vacation place in 2003/2004. Fixer-uppers with a trailer parked on the next lot for 300K or so”.
Did this have saltwater frontage?
I’m not sure about midcoast, but down in Washington County, in places like Jonesport, you can drive down a road and see every other house with a For Sale sign offereing bay frontage or ocean frontage. This has been going on for years, way before the current bubble. I have always had the sense that everyone simply had their bait out hoping to hook a money laden tourist. The idea is to sell your $100,000 house for $300,000 and then move half a mile away into a similar house for a similar $100,000 “non-sucker” locals’ price.
I know in the interior there are “farmer’s prices”. Here a farmer sells a local 100 acres for $30,000. Chances are it’s not even advertised. Yet in the same area outsiders will pay $30,000 for five acres. They see you coming.
I believe the single biggest bargains in Maine will be around the Sunday River ski resort where there is a huge supply of condos and new developments. Right now the big realtor scam is they’ll show you a development with say 90 one acre sites and 80 are marked as “Sold”. What they are not telling you is they’ve been sold to another developer - often a relative. I’m watching this closely. I believe that such one acre lots with great views and proximity to the ski area will be on fire sale in the next 2-3 years as developments go bust and the market implodes. I would not be surprised to see today’s $79,000 one acre lots go for $20,000. I don’t see Sugarloaf collapsing the same way - this is where the Mainers tend to go. These folks paid a lot less and there’s a lot less out of staters and overbuilding.
Portland Mainer,
I’m sure you’re right–in Maine, I’ll always be “from away” and an easy target. I was looking in Knox county–around the St. George Peninsula (Martinsville, Tenants Harbor, South Thomaston) and Friendship/Cushing/Northport…it’s where I rent a saltwater farm for a few weeks every summer. Even my landlady there warned me about the runup in prices and the rising taxes. Still, it’s my idea of heaven-even in winter.
Traveling from Portsmouth, NH and Boston area after that, Sugarloaf was my favorite NE ski destination. It was never overcrowded when I went and you could enjoy a fantastic day of skiing. I’ve always hoped that the fact that it wasn’t as easy to get to would spare it the fate of Sunday River,our families’ favorite spot in the early 80s before it was discovered by the masses.
I think Sugraloaf is somewhat insulated by the insanity because of the distance.
I will only go to Sunday River midweek when you still have the slopes to yourselves.
spike66, You will do a lot better for Maine vacation property if you make sure the place you are looking is at least six hours’ drive from Boston, i.e., not too attractive to Boston weekenders and absolutely impossible for NYC week-enders.
az-lender,
from the west side of Manhattan to St. George is about 7-8 hrs continuous driving–will have to use a map to check the boston time. Never would I go for a weekend only. I’m always interested in reading your posts about Maine–realistically, I rent a far more beautiful place than I could afford even if prices took a major dive. Still, in a year or two, who knows?
I’m just looking for a simple place that I could buy outright for cash. Thanks to you and Portland, Mainer for the advice.
Have you ever driven down to Popham Beach or to Reid State Park on the next peninsula over? Each is a beautiful peninsula and it might be worth a look sometime. I’m not sure about prices but would think they’ll be coming down this year. The Five Islands Lobster Company is a great spot for lunch if you’ve not been there: http://www.fiveislandslobster.com/
And the best time for Popham is at low tide, as you’ll be able to get out to a great little island. Just look at the Fort Popham tides: http://www.maineharbors.com/tide2.htm
Last but not least, take a walk up Morse Mountain at over to Seawall Beach: http://www.bates.edu/morse-mountain.xml
By the way, in a totally different area of the state, I finally hiked into Katahdin Lake. What a place. Check out the nearby webcam (when it’s clear out):
http://www.katahdincam.com/
Portland, Mainer,
many thanks for the links, need some time to look them over.
The president of Dukes County Bank, Chris Wells, says “But I think this correction is different in that leverage is less and there’s a lot less speculation in the market than in the last significant downturn, in 1987 to 1991.”
Well, there’s what seems like a whopper given all the empty subdivisions and condo towers… any figures anywhere on this? And I wonder how many people are failing to classify purchases using teaser mortgages that the buyer will not be able to afford in a year or two as “speculative”…
Yes — the MSM was tossing around the figure that 36% of homes bought in 2005 were seconds and investor purchases. If that is not a record, I want to know what the record was, with documentation!
Interesting to watch these realtors slowly doing the “switch” sales technique. Last year ALL of them were saying, “Now is a good time to buy.” Now, realtors like Gloria Zastco and J. P. Endres are saying homes are too expensive (what happened to prices can only go up) and that buyers should be careful about exotic mortgages (what happened to your payments will only be $800 a month on a $450,000 house).
We must stop calling real estate brokers and realtors “professionals”. Their organization is headed up by one of the biggest fact distorting spin artists outside of politics, David Liar. Realtors stock in trade is mis-representation and it seems most would put their children on the streets to make a buck. However, seeing as hookers are also called professionals I suppose there isn’t much difference.
Even waitresses, plumbers and auto mechanics call themselves “professional”.
It’s preposterous.
“‘I said, ‘No thank you,’ Endres said Friday about the first listing she turned down. ‘It would have been a pure-dollar-loss for me.’”
Realtors (TM) take note of a great survival strategy in a falling market: Only accept listings which reflect current market value. Otherwise, you will waste most of your valuable time trying to help hopeless sellers (HS) move their properties at wishing prices where there will never be any offers forthcoming. In the current market, the scarce buyers don’t need to waste an instant of their time on wishing prices that are way out of line with reality.
‘But I think this correction is different in that leverage is less and there’s a lot less speculation in the market than in the last significant downturn, in 1987 to 1991.’”
Less speculation NOW? Yeah right.
It ends with credit sanity–coming soon to town near you. He can dream all he wants–find a lender–not easy soon.
This seemed like a real non-sequitur to me as well.
Very funny indeed. These guys are real funny. They should try stand up comic. Less leverage! Ha! Ha! Ha! Ha! It’s killing me it”s soo funny.
Here’s an article from the Reno Gazette-Journal paper yesterday- 12/31. Scathing RE article in the Business Section titled, “Top 10 stories of 2006″.
“The Housing Market decline: Be extra nice to your Realtor friends this holiday season. And maybe expect their parties to be B.Y.O.B.
BY the fourth quarter, the Reno metro area’s median home price was down nearly 15 percent from the all-time high of $370,000 in January.
Realtors have taken the news hard, with the National Association of Realtors launching a nationwide advertising campaign to convince buyers that the market still is safe, the first campaign of its kind.
The good news is that it shouldn’t fall much more than that, according to national experts such as Moody’s Economy.com, which predicted a 17.2 percent decline for Reno by 2008. That would mean just 2.2 percent more to fall for Reno.
Key numbers: $57,600-amount the median home price is Reno dropped from January to October.”
What do you call a $57,600 median home price drop in Reno?
The good old days.
Next year they might just say, “we only lost $57,600 in 2006? I really miss those days. 2007 was so much worse.”
I agree, and ditto for San Diego. If you look at a price chart for SD from 1998-2006, you realize that last year’s small drop was the mere beginning of the slide off a temporarily high plateau. Look for more sliding as the world gradually wakes up to the reality that real estate does not always go up, even over the moderately-long run.
temporarily high plateau?
everybody i know sees their home worth what it was in 2005. how can it be a temporary high ? its costs 600k to own in carlsbad, period.
LOL.
Also I have to laugh when RE agents say that 2006 was a more
normal market . What could be normal about sellers and banks losing the bogus equity gains of prior years and realtors refusing to take listings ? Oh , I guess its normal for buyers and sellers to be at a standoff ,right that’s normal .I guess its normal for every other house to be listed or waiting to come on the market again after not selling for the last year .
I guess it’s real normal for all these sellers to need to sell within a year of owning a place needing a wishing price or they will lose their shirt .
“Oh , I guess its normal for buyers and sellers to be at a standoff ,right that’s normal”
Actually the buyers at a standoff are the same ephemeral entities as all the baby boomers moving into Florida or South Carolina or Maine or Colo Springs, or…
To assert that buyers are in a standoff with sellers, they are making the unsupported a priori assumption that buyers exist.
There are no buyers. That’s the fatal flaw in their argument.
I agree with you ronin .
I predict that there will be a 10% decline in the number of realtors who pay their dues this coming month. They are due the end of January for national and state. Check it out in March. I expect that the ones that still are in business will be the ones that have been in business over 10 years, since they experienced the downturn before.
My prediction is 30% decline in membership ,than another 30% will bail after they see that the spring bounce of 2007 ended up being a excess inventory nightmare that leads into a dead market with mobs screaming for hangings .
Is your prediction nation wide? I first thought 20% the end of January, but I thought of a nation wide number not just the 5 states that seems to get discussed on this blog. I think your number is too high for the whole United States
I guess my focus is mainly on California and I was kidding a little bit, but I would imagine all states have a excess amount of agents that jumped in in recent years .
I live in Upstate New York. Pop. 150,000 between 2 counties. We went from 300 to 650 during the last 3 years. Our market peaked Aug 2005, folks have just figured it out now.
‘But I think this correction is different in that leverage is less and there’s a lot less speculation in the market than in the last significant downturn, in 1987 to 1991.’”
I know a couple of people have already spotted this one, but seriously WTF?!? What kind of snow cave do you have to inhabit to think there was more leverage last time around? Can this idiot even tie their own shoelaces? Our entire economy is more “leveraged” than ever before. He must be using some RE dark matter theory that the NAR has secretly armed DL with.
Josh
Calculated Risk blog has the graph of leverage over the past 30 years.
You blow up the bubble soo much that even the numbers on the graph seem reasonable. It’s fairly easy with ultra low interest rates maintained by phony-baloney inflation rates.
But let’s say real inflation start to pop up everywhere? The fuc-ed up graphic, that piece of sh-t and propaganda, will seem quite different indeed. The graphic is as credible, as the phony-baloney CPI rate.
No inflation my a$$. So here is the question. What will happen when all the bull going on in the bond market and the diverses manipulations are discovered ? Not a nice story.
That graphic is just Stalinist bunk and the sh-t is just to about hit the fan and the phony-baloney graphic.