‘Changes We Haven’t Seen For A Long Time’
Dataquick has some Bay Area numbers out. “Bay Area home sales in April dropped to their lowest level in five years as prices slowly reached a new peak. A total of 8,358 new and resale houses and condos were sold in the nine-county region last month. That was down 14.2 percent from 9,745 for March, and down 25.1 percent from 11,158 for April last year, according to DataQuick.”
“Last month was the slowest April since 2001 when 7,193 homes were sold. April’s year-over-year decline in sales was the steepest since November 2001 when sales dropped 27.2 percent to 6,644 from 9,122 one year earlier.”
“‘These are strange times for forecasters and analysts. Are we heading into a market lull? Or are we seeing the beginning of a significant downturn? Many of the fundamentals for housing are at a crossroads: Inflation, interest rates, demand, household incomes, prices, and whether homes are a good investment compared to other investments. Summer is going to be interesting to say the least,’ said Marshall Prentice, DataQuick president.”
The Monterey Herald. “Inventory is up, sales have slowed and median home prices in Monterey County have slipped for two straight months. Median home prices for single-family, detached homes for March dropped 2.1 percent from the previous month, according to California Association of Realtors data.”
“The Monterey County peak median home price was $700,000 in February, but that number slipped to $685,000 in March and $670,000 in April. Sales activity in Monterey County was up by 45.2 percent over February, but showed a 25.4 percent decline from March 2005.”
“The year-to-year change varied widely by region within the county, dropping 10.3 percent in Pacific Grove, where the median home price fell from $895,000 to $802,500. San Benito County lost ground, with minus 2.4 percent figures year-to-year.”
“The number of closed sales for the quarter ending March 31 was lower than the same quarter the previous year, 563 compared with 76, and inventory continues to rise. Homes are staying on the market almost twice as long as a year ago.”
“Sandy Haney, chief executive officer of the Monterey County Association of Realtors said, ‘but it’s definitely becoming a buyer’s market.’ It’s a trend showing up in the lists they present after inspection, which are growing longer and more detailed as buyers grow more confident.”
“‘Buyers are definitely back with a vengeance,’ said Haney. ‘They were stomped on for so long.’”
“The high-end markets of Pebble Beach and Carmel have slowed. In North Salinas, there’s been a flurry of middle-class buy-ins to new home developments such as Creekbridge, which in its first phases pushed the demand for existing homes down because of all its modern amenities. New housing developments at Fort Ord in the future also are likely to soften the local market in the short term, Haney said.”
“‘We’re going to see changes we haven’t seen in this area for a long time,’ she said. ‘It’s going to be interesting to see where the housing market goes.’”
“Haney said there’s little likelihood the bottom would drop out of the real estate market. But Haney said there’s been an even greater shift in terms of what homeownership means to most buyers. ‘Homes are no longer forever,’ said Haney. ‘Now, they’re more of an investment. The real estate industry is already metamorphosing.’”
OT Nice day at CFC. Was that sub 28 print real?
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=cfc&sid=0&o_symb=cfc
Somebody stole some shares.
JIM on CFC it appears someone typed oin 28 instead of 38.
The daily has the print but the 1 day day not.
You may take it as a premenition however…
Thanks to the readers who sent in these links. Here
is some more info a reader passed along.
‘Santa Clara County home sales last month had their slowest April five years, a research company reported today. The median home resale price fell to $725,000, taking an unusual dip from the month before. In Santa Clara County, the median price of a previously owned house sold last month was $725,000. That figure was down slightly from a record $735,000 in March. Sales volume, however, was down 24 percent from April last year.’
‘In San Mateo County, twenty-nine percent fewer houses changed hands last month than in April 2005. Alameda County’s sales of previously owned houses fell 21 percent compared with April last year.’
I should have more CA numbers later today.
Sellers had better hurry up and list at a lower price or they will be “priced out of the market forever”.
You mean, they will be “Priced In The Market” forever!
“are we headed for a market lull or a significant downturn….”
Answer:
It’s the eye of a huricane “TSUNAMI KUMA” named for it’s origins.
The great bear wave, confirmed below 1150 S&P
The long forecasted derivative BLOW maybe here! The Mathematical Hedge fund wizards and their Black boxes did it again…But this time it may be Financial Armageden, not just a LTCB.
On the Aggressive Lender blog, we were discussing loaning money. I have a question for all.
Hey, I want to buy the SanFrancisco-Oakland Bay Bridge. Will all of the kind folks on this blog pony up about 3B so I can go check with Arnold. THNKS LOL
I’ll kick in some, but I want a convertible mezannine structure, and would prefer that you get both tax credits and additional financing with the state’s guarantee. Also, you should go for the Golden Gate. There’s much better economics associated with it.
Granite paving and decorator-ready tunnel for me.
Hey, maybe Arnold can buy that OC house for $75M. He’s rich, or he can sell a state bond to pay for it. Which would you guess? Maybe Arnold can sell the Hearst Castle to the dude selling that OC house. Or we can carve it up into 1000’s of small condos to help alleviate the housing shortage. We could get 5000 undocumented workers (or more) in there. What do all of you think?
Hearst castle actually isn’t that big to be honest with you. Nice, but not huge.
Hearst Castle condos for everyone!
I want one that overlooks that great gold inlay pool!
That $75 million price has got to be some kind of a gimmick. The Cameo Shores neighborhood simply isn’t all that swank (I mean, it’s nice, but you’re basically talking low-rise 1960s doctor/lawyer pads.) Even with that house covering 3 lots (and I mean, virtually the entire land area of all three lots, I’d say $30 million, tops.
Plus the design of the house is frankly ghastly, even by post-modern standards. The designer called it the “Portabello” house, after its alleged reference to a portobello mushroom, the correct spelling of which he was apparently not familiar with.
It does have a nice location, though. The perfect spot for newlyweds to have an adventurous romantic evening after walking a mile over the rocks from Little Corona, not that I’d know.
how about 2500 in the Hearst Castle. We could cram another 25,000 into Disneyland. 10,000 into Knott’s Scary Farm. 20,000 in Tragic Mountain. 25,000 into Universal Studios. 20,000 into SeaWorld. 20,000 into Paramounts Great America (Santa Clara). 20,000 into Six Flag Marine World (Vallejo). Take each County Fair Grounds, 10K per. Now, we have room for about 7 millon or so undocumented workers. Housing problem solved. Of course, then tourists will have no reason to come to CA. So a lot of tourist money gone. But the flow from out of the country will more than make that up. LOL
How do you tell the difference between a dead skunk and a dead realtor (mortgage broker, appraiser, etc - pick your title)?
The skunk has skid marks in front of it.
“Haney said there’s little likelihood the bottom would drop out of the real estate market.
Based on what exactly? Gut feeling? Wishful thinking?
But Haney said there’s been an even greater shift in terms of what homeownership means to most buyers. ‘Homes are no longer forever,’ said Haney. ‘Now, they’re more of an investment.
What she means is “homes are no longer for living in“.
The real estate industry is already metamorphosing.’”
Yes. It’s “metamorphosing” from a butterfly into a dung beetle.
Haney should study history. There has been a deep RE downturn in each of the last three decades: 70, 80, 90’s. Maybe they should be teaching this in RE classes for new agents.
Maybe she can take bets up to $100,000 that there will be a soft landing. I am sure there will be some bloggers here that will pony up and bet on a hard landing.
The Carmel/Pebble Beach and increasingly Pacific Grove and Carmel Valley markets are dominated by outsiders, people from SF and LA who buy a weekend golf place. Carmel is a ghost town on weekdays. I think they’ll be harder hit in a general downturn as the second home market takes a dive.
Now come on. You all know you want this
http://www.ksl.com/?nid=148&sid=268346
Just think what that place will look like when the owner gets their 2nd ARM adjustment. Surely they’ll be waist-deep in bourbon bottles when it begins to amortize.
From DataQuick:
San Francisco 681 497 -27.0% $751K $778K 3.6%
San Mateo 850 631 -25.8% $731K $750K 2.6%
Wow, so close to negative. When do we go negative? I thought by fall but it looks like it could be sooner.
Thoughts?
San Francisco 681 497 -27.0% $751K $778K 3.6%
What are these numbers? Monthly or yearly gains?
Sorry, YOY.
This is a nice tidbit on the MOM for Santa Clara County as well:
“Santa Clara County home sales last month had their slowest April in five years, a research company reported today. The median home resale price fell to $725,000, taking an unusual dip from the month before.”
Probably negative by June or July. That was the peak for this cycle. The BA market is tough and hanging in their but it still has to be subject to basic economics and will be down soon.
But Haney said there’s been an even greater shift in terms of what homeownership means to most buyers. ‘Homes are no longer forever,’ said Haney. ‘Now, they’re more of an investment. The real estate industry is already metamorphosing.’”
BINGO!…..there you have it. Until we return to home as something to live in and hopefully pay off, we will not have a healthy market. Until investment properties “pencil” in the black, we will not have a healthy market. Fundamentals, fundamentals, fundamentals. Our friend Haney here just perfectly diagnosed a sick and dying market.
the funny thing is that everyone has become convinced that it’s a great investment exactly when it’s NOT (ie, when prices are ridiculously high relative to rents, incomes, etc).
Whats up with CNNmoney’s quick turn around on the real estate. I have seen them try to paint a nice rosey picture after forcasting doom! I wouldn’t call it doom from what they were predicting for price decreases but hey it was more than most would say. What happened. Did some real estate related industries tell them they would pull adv. dollars? Any thought?
http://money.cnn.com/2006/05/18/real_estate/reguide_what_up_in_washington/index.htm
I wouldn’t read too much in to it. Writers are paid to write, not to agree. Two writers could sit in adjacent cubicles and look at the same data and see different things. The editor publishes both sides because controversy sells. It doesn’t mean CNN, as an entity, believes one thing or the other.
I thought it was interesting that the median price of a house in Seattle is so much higher than Las Vegas. It means we are way more affordable than they are.
Or they are way more desirable than you are?
Anyway, you have to compare prices per square foot as a ratio to incomes and rents, not the absolute numbers.
It to keep the readers interested. Only predicting doom get boring (to the average CNN reader). Doom/turn around/doom/bubble/doom will keep them coming back for more!
Complete offtopic, but I think this will be interesting to GetStucco (about the stock market, from the owner of Dallas Mavericks)
http://www.blogmaverick.com/entry/2252572946170125/
This is in continuation about the “new business model”
Nothing short of terrific! It is a whores business on Wall Street. Every man only interested in me.
“April home sales in Sonoma County sank to their lowest level for a month in five years while prices remained flat, further evidence the housing market is settling down.”
“The April median resale price was $596,925, the second consecutive month with little change compared with prices a year ago.”
In Sonoma the median is: $618,000
Glen Ellen: $714,000
Sebastopol: $618,500
Petaluma: $649,500
Healdsburg: $655,000
Penngrove: $942,500
Cotati: $672,000
Windsor: $594,475
Rohnert Park: $580,000
Santa Rosa: $570,000
803 on the price reduced list
Looks like the REAL number is DOUBLE what the Press Democrat is claiming …
Sonoma County listings progression
3/20/06 = 1742
3/26/06 = 1766
4/03/06 = 1888
4/19/06 = 2828
4/25/06 = 2868
4/30/06 = 2898
5/07/06 = 3052
5/13/06 = 3187
5/18/06 = 3310
Sonoma Valley listing progression
2/14/06 = 172
2/14/06 = 183
2/24/06 = 193
2/25/06 = 200
2/27/06 = 214
3/01/06 = 219
3/04/06 = 220
3/12/06 = 230
3/20/06 = 236
3/26/06 = 238
4/03/06 = 268
4/19/06 = 291
4/25/06 = 305
4/30/06 = 315
5/07/06 = 328
5/13/06 = 346
5/18/06 = 363
According to rereport.com’s April Data for Sonoma County the average count for Days on the Market is: 85. In April of 2005 it was 59
In Sonoma: 100
Glen Ellen: 217
Santa Rosa: 90
Rohnert Park: 69
Petaluma: 55
Sebastopol: 87
Penngrove: 98
Healdsburg: 90
Cotati: 132
Windsor: 75
380 homes were sold in April of 2006 compared with 504 for April 2005.
At the current rate of sales: 380 this translates into an 8.7 month supply of homes on the market.
whoops… left out a part:
Press Democrat reports:
“The number of homes listed for sale at the end of April has doubled from the past year, reaching 1,571.”
WRONG!!!!
From Norcal mls: 3310
SFH’s only: 2828
Ziprealty SFH only: 2549
803 on the price reduced list
Looks like the REAL number is DOUBLE what the Press Democrat is claiming …
they also claim there is a 4 month supply of houses on the market.
Thanks for posting this info!! It’s good to see since it seemed to me like there were far more listings than the PD mentioned.
No problemo!
I can’t believe that the PD actually tried to float a number that was literally HALF of reality both for listings and for number of months supply on the market. Just for kicks I tried 6 different MLS systems and none of them gave me a number under 2800 for the county. So how they are justifying the numbers they came up with I have not a clue. I tried running numbers with just houses and no duplexes or condos and it didn’t make much of a difference. The number between 2800 and 3310… nothing brought it down to the 1500 range. Whatever realtor pulled that one out took it from where the sun don’t shine. 
forgot… the only system that gave me a number less than 2800 was ziprealty.
Wow, what a jump. Soon the forces of gravity and basic economics will take effect on the RE market.
“There’s nothing in the air that changes the fact that boomers are in their peak earning years and they want to buy second homes,” David Lereah, NAR’s chief economist, told the Resort & Second Home Real Estate Committee during the 2006 REALTORS® Midyear Legislative Meetings & Trade Expo.
This guy is a piece of work. Will he ever stop his lies!!!
http://www.realtor.org/rmodaily.nsf/pages/News2006051801
-This- sorta boomer has sold all investment property and I don’t know of anyone looking to buy at this point. Lereah is also convieniently forgetting that our parents are liquidating. And I mean liqudating big time. Tax exemptions for selling, retiring away from the cold cities, living longer, paying for grandchildrens college, the list is endless. Lereah says “want to buy second homes” not BUYING second homes. Talk about splitting hairs.
No.
“The Monterey County peak median home price was $700,000 in February, but that number slipped to $685,000 in March and $670,000 in April.”
Annualized rate of decline in median home price for Monterey County =
[(67/70)^6-1]*100% = -23%.
Let the YOY price declines begin!
Of course, this is typically the time of year when the vast majority of all price appreciation occurs. In other words, it could be even worse than 23%.
Agreed. In a market which is in steady state (level trend — no bubble runup or crash in progress), the fact that there are more buyers and sellers in the market during the peak season means that, on average, both sellers and buyers do better — buyers find a home more close to their ideal, and sellers find a buyer willing to pay slightly more than if they sell during the slow season. The denser market rewards both buyers and sellers, and shows up in the data as a higher average sale price during the peak months.
BUT THIS YEAR IS DIFFERENT! Bwahahahaha!
“‘Buyers are definitely back with a vengeance,’ said Haney. ‘They were stomped on for so long.’”
Buyers are nowhere to be found. What is going on now is the revenge of the forever-priced-out renter:-)
c’mon - can you really take a guy named haney seriously?
“Mr. Douglas, I’ll give you a dollar-fifty for that old wheelbarrow and not a cent more”
Hey. We can all pitch in, and not only buy the Bay Bridge. But also, Golden Gate, San Mateo, Dumbarton, San Rafael, Benecia, Cartinez, and Antioch bridge together. Then we will control the bubble Bay area roadways.
You must forgive David Lereah. He was speaking with Scary Gary lately. Don’t forget - it is in the bag.
Actually, they are both scumbags
‘Homes are no longer forever,’ said Haney. ‘Now, they’re more of an investment. The real estate industry is already metamorphosing.’”
Soon they will be more of an albatross, sinking the household net worth of anyone who bought within the past couple of years.
People get really confused when real estate pros talk about the home as an investment. They think the industry insiders mean homes are a good investment for the average joe.
Far from it. What they really mean is that the monumental amounts of money that people spend on homes is now a vehicle for investment by banks, real estate agents and brokers, mortgage brokers and packagers and buyers and other assorted insiders.
The public is only there to supply the churn. The insiders were wildly successful the last few years in getting millions of average people to throw huge sums into the pot. The pros held the winning cards and they got very rich. But the little guys are mostly left owing money on over-inflated over-supplied assets.
Heay Haney,
I’m a potential buyer, I could even do a cash deal, but I’m not even close to entering the market until prices in Santa Clara County drop to pre 2000 levels, or the median price drops 40% from February’s record price of $735k - which means that I wait for $441k. If that never happens, no biggie - I can be just as happy somewhere else.