‘A Strong Buyers Market Has Emerged’: MAR
The Massachusetts realtors have their February numbers out; the monthly data at the link are PDF files. ” After two consecutive years of record-breaking sales in 2004 and 2005, activity in the detached single-family home market has started to return to more normal levels, with the 2,254 homes sold in February 2006 nearly identical to the 2,255 detached homes sold in February 2003.”
“The decrease in sales activity this February marks the fifth consecutive month detached single-family homes sales have declined in Massachusetts from the comparable month one year earlier. A more encouraging sign is the fact that the 1.7 percent drop in sales between February 2006 and last February is the smallest year-to-year decline in sales to occur in the five month period of sliding sales. The sales decline of 3.7 percent that took place between January and February is largely seasonal in nature.”
“The supply of detached single-family homes on the market rose for a twelfth consecutive month in February, climbing 40.5 percent over the past year from 25,558 homes for sale in February 2005 to 35,907 this February. Inventory, as stated in months of supply, also rose steadily from 11.1 months last February to 15.9 months of supply in February 2006. With the spring approaching listings are up from January as well, when there was 33,627 listings and 14.3 months of supply. The state’s inventory of unsold homes rose for the 20th consecutive month.”
“In Massachusetts, the market is at equilibrium for buyers and sellers when 7.5-8.5 months of housing supply exists, thus a strong buyers market has emerged over the past two months due to surging supply levels and more moderate demand.”
“The 1,168 (condo) units sold in February set a new state record for the month, eclipsing the prior record of 1,133 condos sold in February 2005. Condo sales have improved for 25 consecutive months vs. the same month a year earlier. The number of condos for sale has increased 60.7 percent in the past year, from 11,584 units last February to 18,613 in February 2006. Inventory, as stated in months of supply, also has risen in the past year, climbing to 15.9 months of supply this past February from 10.2 months of supply in February 2005.”
“Similar to the detached home market, condo listings have increased 6 percent from January when there were 17,495 condo units on the market and 14.1 months of supply.”
“Predictions of steep price declines in home values made this past fall remain largely unfounded. While the current median price is 9.5 percent below the record high monthly median of $375,000 set in July and August 2005, today’s prices largely reflect healthier inventory levels, which has eased upward pressure on prices, rather than plunging property values.”
“Condo prices also have begun to moderate, with the statewide median selling price rising 2.2 percent in February from year-ago levels. This marks the tenth consecutive month of single-digit annual price appreciation in the condo market, and the 86th consecutive month selling prices have risen vs. the same month the prior year (dating back to Dec. 1998). The median price of $275,000 is down 4.5 percent from the record high median selling price of $287,900 set in July 2005.’”
“The decline marks the first time since June 1996 that prices have fallen for any 12-month period as a whole.”"
“‘Today’s improved supply levels have brought much needed stability to home prices,’ said MAR President David Wluka in Sharon. ‘The days of bidding wars and double-digit price appreciation are over. This spring, we expect to have a strong buyer’s market for the first time in more than a decade,’ said Wluka’”
“‘There’s definitely some bargain shopping going on right now,’ said Brenda Beaudoin, a realtor based in Dracut.”
“There are ‘too many’ Dorchester condos on the market due to a spree of three-family conversions by investors and developers, said Lee Robinson, an agent in Milton. ‘People are sitting with their hands in their pockets waiting to see if the bubble’s going to happen’ so they can ‘get a better deal,’ said Robinson, who specializes in luxury homes in Dorchester. ‘My voice mail is full of sellers’ brokers making price adjustments,’ including one house price that was slashed 11 percent, to $1.15 million.”
To be updated.
I absolutely despise the buyers/sellers market continuum. Current market conditions still favor sellers.
A more appropriate description of the current market is:
A Fools Market.
grim
BINGO….. If there were actually liquidity in the RE market, todays conditions would be considered a whipsaw.
I would say that losing 9.5% of the value 9 months is a very steep decline… and this is just the beginning.
The NAR is disingenous on this point — no one expected home prices to suddenly plummet, and it’s well understood that sellers have been holding out until Spring to see what happens. If no Spring frenzy materializes (and I believe that will be the case), we’ll see a wave of reductions. Sellers will realize that if it didn’t sell in the Spring, it’s much less likely to sell later in the year and most won’t be in a position to wait it out until Spring 07. They’ll dump — especially the “investors”.
wonder who’s dumb enough to buy-why not wait ?
spring 2000 NASD
All the folks who miss the connection between stock prices and housing prices, for one group…
“‘Today’s improved supply levels have brought much needed stability to home prices,’ said MAR President David Wluka in Sharon.”
Mr. David Wluka where have you been for the last 4 years. If you really wanted stability you’d have been ontop of things early on like the maestro at a symphony. You and your ilk had dollar signs dancing before yea eyes while the legislature salivated in anticipation of $’s rolling into the city coffers.
That’s a good point. If anyone wants to know why some are perturbed by realtors actions the last few years, there is the gist. I am sure it wouldn’t be hard to find many quotes by Mr. Wluka about how marvelous the rising prices were the past few years; yet now he feigns relief at the falling ‘values.’
The spin from NAR/MAR/CAR reminds me of the scene in Animal House during the town parade. Kevin Bacon trying to calm the stampeding crowd “All is well, please remain calm, all is well!”, as he gets trampled.
Pardon me, I can help here. I speak fluent Realtorese® and can translate.
“Return to a normal market” == “yoy declining prices.”
“The sales decline of 3.7 percent that took place between January and February is largely seasonal in nature.”
Where is Massachusetts located, anyway, somewhere south of the Equator? Because in North America, January is the coldest month, and February is one month closer to the red-hot spring selling season…
Why yes GS, Massachusetts is located south of the equator and it is indeed a buyers market!
I’d normally agree, but I know where I live (not Maassachusetts) it was very warm (daytime temps in the 60s) Feb was very cold. Those 60s turned into 30s, then it kept snowing.
Anyone know what’s happening on The Cape? I have a vested interest but don’t follow the market. Thanks for any insight.
RE: Cape…Allot of old-timers bailed for the south and sold-out to inland equity/HELOC speculators who were interested in 2nd/home “investment” rental properties.
Now. when winter rolls around, traditional year-round communities are reduced to ghost-towns once tourist season ends.
Traffic to and from remains a nightmare in the summer.
Rental agents reported a “weak” rental season because of crap weather and marginal economy. Such is the circumstance with a tourist economy based on weather and discretionary income.
Property casualty insurers have declared the region, high risk and are not renewing coverage. Thus the pool of providers is shrinking and premiums are going thru the roof. Some weather monitoring grooup recently released a report which stated conditions are conducive to the area being hit with another Category 4/5 hurricane similar to the one which hit in 1938.
If that happens losses will be in the billions, and it’s got everybody spooked.
Allot of people interested in coastal living are heading to southern ME where the hassles are less.
Thanks for the info. I’ll have to check with my brother (who manages and co-owns) re: the insursance.
I moved from the Cape to the West Coast last year, after selling my McMansion - still have alot of ties there. Basically, very little is moving, as prices slowly come down, inventory piles up. A good friend is a r/e lawyer there, and very few closing are happening, mostly re-fi’s, but even those are few. Approx 8-10 of the 13 employees at the formerly busy law office have been laid off in the last 3-6 months.
Insurance rates are going through the roof because of the hurricane and coastal storm threat, sometimes doubling. Several of the companies writing insurance on the Cape are not renewing policies, and thousands of houses have to go the the Mass state sponsered insurance program. My policy went from $800/month to $1200/month in late 2004, and I understand it’s at least 2-3x that now.
Per month???
Whoops, sorry, $800 to $1200/yr (not month)
OT, but GOOG is in the S&P now??
They barely got there in time — only a few days ago their stock was behaving more like the NASDAQ circa late Y2K…
Once in the club, always in the club?
“Google to be added to S&P 500 Index
By Bambi Francisco, MarketWatch
Last Update: 7:32 PM ET Mar 23, 2006
http://tinyurl.com/of6my”
P.S. This looks like an arrested slow motion crash, but I guess the S&P500 thingy will provide a nice DCB…
http://tinyurl.com/bgbu3
About that DCB:
http://tinyurl.com/qe7f6
The 1-day GOOG stock chart shows evidence of yet another conundrum: The numbers at the top show a 6.57% gain, but the graph shows a plummeting share price. Could anyone versed in technical analysis please read these tea leaves for us?
YOY decline! We need to keep a tally of all the markets with YOY declines! The list is growing!
I disagree that prices go down seasonal/winter in a good market ,( they just hold if anything ). In California we use to notice ,(of course this was years ago ), that the high end market liked to make their moves during the winter months .I use to work in Bev. Hills Ca. for a while and Nov. thru Feb. was our busy time .Also the last area to go up in prices is the condos , and its the first area to usually start tanking or get excess inventory .
I think most of us agree the market will slide, not crash, down. Of course any one of a dozen catastrophes, or major events, could trigger something more precipitous resulting in immediate drops of sales prices. However; I think that the market is moving towards a decline, not a stable plateau as realtors would have us believe. Also I believe the market will decline in major steps as opposed to a linear decline. The first big step is after the Spring push fails to materialize. gordo
As Alan Greenspan repeatedly lectured us, bubbles are hard to recognize while they are in progress. I will amend his assertion to say that the same goes for crashes. It is only through the lense of historical retrospective that a crash becomes obvious.
A useful exercise to convince yourself of the above is to go to a library with some old newspaper clippings from the Wall Street Journal around late-1929 through early 1930 (I did this). Try to find anything suggestive of business conditions that were not in a perpetual state of normalcy; you will have little success. However, you will see many articles that suggest a psychological state of collective denial…
“It is only through the lense of historical retrospective that a crash becomes obvious.”
Especially when the players have/had ROSE COLORED GLASSES during the RUN UP of prices (circa 2005 or earlier).
The GOOG story will be another one for the annals of market crashes. I love their search engine, but since I never buy anything they advertise, and because I read the WSJ article which suggested that much of their vaunted earnings come from the same kind of conservative short-term fixed-income assets where I park my money, I have absolutely no conviction they belong on the S&P500. I submit that in retrospect, their business model will prove to be of the late-90s tech stock vintage: Cart out an endless stream of deceptions to pump up the stock price (the latest being entry into the S&P500 club) while the early-purchasers of their stock cash out in droves… In short, this is a classic Ponzi scheme!
OT: Here is a nugget I found on the yahoo finance page. Looks eerily similar to what this blog has been preaching. Our friends at Bankrate.com must be reading Ben’s blog. I am not great with computers so I apologize if the link doesn’t work.
Real Estate Bubble Dos and Don’ts
Down 10%!!!!!!!!!!!!!!!!!!!!!1111
Keep Builder suckers!
*building
New home sales down 10.5%!!!!!!!!!!!!!!!!!!!!
At least the new home construction numbers are holding up. Who cares about sales, anyway, as long as they can keep adding the value of more completed homes to that inventory line on the balance sheet? Of course, the valuations are based on the recent comp price, which conveniently does not reflect the value of the new car thrown in as a sales incentive.
YOY decline in new homes. Jan revised lower! Its over!!!
Resale numbers look even funnier now, don’t they.
I always prefer a used home to a new one. They just don’t build’em like they used to…
I’m with you on that one .
“In Massachusetts, the market is at equilibrium for buyers and sellers when 7.5-8.5 months of housing supply exists, thus a strong buyers market has emerged over the past two months due to surging supply levels and more moderate demand.”
I wonder if there might be a correlation between 1) how quickly a market goes from a white-hot seller’s market to a strong buyers market, and 2) how bad things are going to get.
“today’s prices largely reflect healthier inventory levels”.
Only the NAR could spin a 15.9 month supply as “healthy”.
We are renting here in Amherst as I was reluctant to buy last July when we came out here. We will continue to rent until I see real value in home prices here.
Price cutting is occurring but not deep enough for my tastes.
Realtor: It always a good time to exchange a house. Why? Cause if you use us we take 6%.
David
Bubble Meter Blog
“This spring, we expect to have a strong buyer’s market for the first time in more than a decade,’ said Wluka’”
and Saturday Night Live’s church lady snickers… “WELL, ISN’T THAT SPECIAL…”
wtf happened to the SPRING RALLY? You know, the one these b@st@rd’s proclaimed would be the solution to 2005 year end SLOWDOWNS?
Comic Realty… er, aah I mean classic, Comic Relief. At least for us Bloggers!
This is the moment I have been waiting for as a housing bear and doubter of this so called housing boom. My feeling for the last 2 years is that the main driver of this bubble was mainly mass speculation due to expectation of continued appreciation. Most people do not realize how rampant this speculation is. I used to live in Florida and a wholly 30-40% of people I know in that state are involved in this speculation in some way. Its not as bad in California but is also quite a substatial number (although more people here seem to be enjoying an inflated lifestyle due to cash outs in Cali. than any other state). Now my main feeling was as soon as this expectation of easy and never ending appreciation is gone, then the speculation will be removed from the market, homes will be dumped and in short-game over. I think as the months go by moving foward the psychology will change and eventually become a steam roller which will flatten the housing market, just like what happed to tech stocks in 2000.
So RE people, there will be no “Spring Bounce” and no more risk free easy money and RE “no brainers(as the young condo speculator in Money magazine said as he bought a condo 1500 miles away sight unseen with 30 seconds notice. Its all over now but the waiting.
I agree with you . This spring/summer the real estate bunch will be playing up the urgency factor to buyer’s by saying “You better get in before the interest rates sky-rocket “.
(I absolutely despise the buyers/sellers market continuum. Current market conditions still favor sellers.)
I agree. Prices are still to high on the coasts. And sales volume still hasn’t come down that much given the prices. We are in the early stages here.
My daughter told me she was afraid “the way things are going” she won’t be able to live in Brooklyn when she gets older, now that it’s cool to do so. I told her not to worry.
I think that we are jumping the gun here. Appreciation has run in the high 150-180% over a couple of years, and the drop in prices has been around 10%… There is still a lot of fat to trim. Wait until prices in MA have dropped around 40-50% across the board, and you will be back to the overpricing of 1999. After all, my rent has not gone up since then, and my salary has stayed the same. Housing will come to reflect that, and then some.
Patience… Now is NOT the time to jump in. It would be jumping in at the exact WRONG time, and catching a falling knife…
To Notorious D.A.P.
Was this the URL you were referencing:
To D.A.P.
I’ll try anew:
I guess I’m not bery goot a us’in this here link thing!
http://www.bankrate.com/brm/news/real-estate/reminiguide/moves1.asp?caret=12
Yep. Told you I was computer illiterate. Thanks.
I think that the numbers are even worse. Check this listing out. See the nice green leaves on the trees? Notice how it is nice and bright? See how the listing only says 69 days, putting it somewhere in January? Well, for those of you who do not know because you live in a place with NO seasons… We are IN Ma. There have been no leaves since October. Leaves turn (change color) in late september. That house has been in the market since june or july at least.
Realtors=professional lyers.
http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=70315295&page=9&property_type=SFR&mls=mls_boston&cKey=1cs5874b&source=MLSPIN
It is common practice in MA to cancel an MLS listing and then relist it to get a new MLS number. Just happened today to a house I have been watching for six months. After being on the market for a year and after three price cuts, it remains overvalued and unsold. So now they relist it, trying to fool the buyer into thinking the house has just gone on the market. So much for the recent NAR campaign extolling realtor integrity.
another trick is to list at new prices and then have the selling price very close to the asking. You never see that a house is on the market for a year and sells at 20% less than originally listed, even though I’ve seen it with my own eyes. Instead its on for three months and sells close to ask, at least as far as it looks in MLS.
still no sign in MA of major trouble- even a 10% decline in 9 months is not a hard number. Smaller houses selling in greater numbers could skew this. Definitely things are downish, but still people listing and other people buying.
Agreed on the no major trouble signs yet. But I have seen properties stay on forever, and sit. Another thing that I am seeing is a whole lot of bunching in certain price ranges. There are a lot of properties, lets say from around 300 to 500, and they are widely divergent. You get 2000-2500 square foot Mc mansions for around 450K, and a 1200 Square Foot POS for around 350K.
I think that a lot of higher end sellers are dropping faster because they are more aware of the rapidly changing environment, while the lower listings have trouble adjusting.
Remeber that these lower listings were under 100K in 1999!
Yes the resale market is out of whack. I think people that came late to the game (i.e. bought 2004ish) and overpaid for a 1200-1600 ft crap house (3, 2.5) think they deserve a quick 50% gain, whereas nicer homes purchased earlier (pre-bubble) have a lot more equity to work their prices. I see small houses in the same exact neighborhood with prices equal to larger, nicer ones.
The actual new MLS is 70352653 . Property is at 11 Mountain View, Holyoke, MA. The realtor is Carlson Realty. This property has been on the market for almost a year (started at over 700K, now at 529.9K), but the MLS number is brand new. Realtor magic.
The picture looks better without the snow…and the Realtor is probably to cheap to pay for an updated photo.
Is there any Govt dept to which we can complain about relisting the same house under a different MLS number to hide the fact it wasn’t selling? Shouldn’t it be illegal since it dupes the buyers?
You could try to get the AG involved as it is a deceptive business practice, but I doubt that they would get very far, the old, it was only a couple of rotten apples and such… Now if this thing does burst, I would not like to have a realtor license, specially in MA, where any protections granted would quickly be taken away, and you (if you had a realtor license) would end up impaled in the town square by angry mobs of flippers and recent home buyers, chanting in unison about how property prices NEVER drop!!!!!
but it’s truly widespread practice I think. It would be interesting to find out whether anybody with power to end it even thinks it counts as ‘deceptive business practice’. It is done all the time here in Michigan, not even a secret. Listings “expire” and then the new one comes on. Sometimes the mls-people are a little slow getting the old one off the system and both are on the same page, different season (or not). Tiny price reductions usually. Last year it seemed to me I got a lot more ‘revised listings’ in my emails from the realtor sending me mls-postings, i.e., “price adjustments” (guess which direction?), but now I hardly ever get one of those notices…just a “new* listing with the same old house at a slightly lower price.
I am flipping tired of hearing this mindless mantra of “buyers market”
It will only be a buyer’s market when the prices are reflective of an advantage to the buyer.
When the buyer can actually AFFORD to buy a home without risky mortgage products, or falsifying their income, or eating ramen and peanut butter for the next forty years, THEN it will be a buyer’s market and the buyers will call the shots regarding which houses they want to buy.
Until then- it is a sucker’s market and the only ones who have anything truly to gain from calling it anything other than what it is are the people who benefit directly from a buyer’s stupidity to buy anything at the current inflated prices.
I wished I could recall the posting from an investor/realtor who compared the MLS listling price to the county records selling price–sometimes 20% less than the MLS. He claimed that since MLS was a private network, realtors could enter anything they wanted for the actual sales price to make themselves look good. I have seen it here–house on the market 180 days, sold at asking according to MLS. Does anybody believe that? What kind of fool would pay asking for a house on the market for six months? It makes you realize that RE is not a market like the stock market. No transparency, secret information, and a conspiracy among many interested parties to not disclose what is really going on. No wonder many of my co-workers still tell me what a great investment RE is and they wished they could get in on it. It will take many independent horror stories at the coffee machine to overcome this propaganda and mind-set. Now I realize why it may take 5-7 years for a bottom.
A local agent leaves fliers on my porch weekly.
They are nice stock, in color, and always show the houses selling at the exact listing price. Never over. Never less. Deceptive, methinks?
you get fliers showing sales in the area?! that just strikes me as weird…is he/she trying to get people to sell their houses or buy houses?
Can someone in MA tell us please about the ‘luxury home’ segment of the market in *Dorchester*? What has changed there in the past 15 years that has made for anything approximating luxury homes? And who is buying condos in Dorchester?! Last I recall it from 1990 it was not such a desirable neighborhood?
cheers!
He/they are trying to get both listings and buyers. They are very aggressive, and they have done extremely well in this particulary $500k-$800k neighborhood. Lots of marketing, advertising, and open houses.