Signs Of A Slow-Down In Your Housing Market?
What do you see in your housing market this weekend? Motivated sellers? Open houses? Builder incentives? “This weekend only, you can take advantage of ultra savings on hundreds of inventory homes in Virginia, Maryland, Delaware, New Jersey / New York!”
“Arora Hills in Clarksburg, Montgomery Co. Original price: $ 845,127, 72 Hour Sales Event Price: $744,990 Savings of $100,137. Paynter’s Mill, Near Historic Lewes in Sussex Co. Original price: $529,378, 72 Hour Sales Event Price $479,378, Savings of $50,000. Lansdowne on the Potomac. Original price: $1,089,990, 72 Hour Sales Event Price: $939,990, Savings of $150,000.”
Readers shared dozens of observations in the topics thread. Highlights, “I saw an open house sign yesterday at 5:00pm.”
“I saw at least 6 open house signs, yesterday at lunch hour between Belmont Shore and Downtown Long Beach. Probably broker open houses but there were a lot! There are condos buildings with maybe 12 units with 5-6 for sale signs out front on my daily commute.”
“Signs of slow-down topics: 1. Locally, I’m seeing construction slow down or stop entirely. Except for bulk earthwork, that is still being done. 2. Here’s a quote from my listing realtor, when I asked him why I didn’t see many open houses last week: ‘Open houses are becoming obsolete. With the growth of the internet in the real estate world, people have a lot of information at their fingertips and see no need to go out on Sunday afternoons to look.’ Is the open house obsolete?”
“In my Rhode Island surburbs, the local weekly newspaper posts real estate closings. Last year at this time we saw about a half-dozen per week. This year: two weeks ago: 4. Last week: 0. This week: 0. Quite a trend!!”
“Realtors getting very snarky here lately. Have had to have very pointed conversations with them to put them in their place. I smell fear!”
“There are several sites that have slowed down or stopped all together within 6 miles of my home. It is quite a turn of events. Some of these projects stopped at the state where they were grading the lots, some of them the buildings are half complete, and have not been worked on in about 2 months. This is both residential and commercial buildings. I hope they at least finish them.”
“While driving around my metro area, I’ve noticed something I wonder if people are seeing elsewhere. In established neighborhoods, things look pretty normal and everything is nicely kept up. Almost no homes for sale. Neighborhoods that have gone up in the past ten years or less (i.e., younger families)… for sale signs everywhere.”
“Seeing the same thing here in Madison, WI. Established neighborhoods look normal. Newer ones have an inordinate number of for sale signs.”
“We live in North County San Diego, and the newer developments definitely seem to have more turnover. Anecdote: when we were doing ‘bubble monitoring’ in one new development in 2004, I asked the salesperson some questions about the loans offered by the homebuilder financing arm. When asked what the 30 yr FRM rate was, he just stared at me blankly and said, ‘Gee, I have no idea. Haven’t seen anyone use one of those in months.’ Again…this was mid-2004, hot, hot selling season; and nobody was using these loans. How much are these places going to hurt?”
“In my Reno neighborhood (the subdivision is about six years old), between 5-10% of the houses are for sale at any one time. I know of only one house that has been foreclosed upon.”
“Phoenix is firmly in the 46,000 camp at 46,292 (zip). I see a trend; the records fight the increase until each Friday, and then they cross into the next thousand grouping. Phoenix is clipping along at about a 1,000 increase/week.”
“It’s the same pattern here in Northern Virginia. Realtors like to list starting Wednesday and accelerating toward the end of the week. Then there is a peak on Saturday, and then some contracts over the weekend take down the numbers a little. But not enough not to make a higher high the following weekend. It has been this way *every single week* since I started keeping track January 1, 2006.”
“I’ve also been following Ashburn, VA a little bit. It’s in Loudoun County, VA, which has been one of the fastest-growing counties in the U.S. in the last five years. 45% of the total listings have now been reduced. About two months ago, that number was about 35%.”
A reader sent me some info from a foreclosure website. Maricopa county in Arizona, which includes Phoenix, is showing 4,923 preforeclosures this morning.
Where do you get this info and what are the historical comparisons? Also, what is the definition of pre-foreclosure? I don’t see any distress in the Phoenix market at this time. I posted this on a previous thread:
I’ve been closely watching the Notice of Trustee’s Sale counts for Maricopa County (Phoenix) over the last 17 months. The market is slowly turning down because of massive increases in inventory and YOY sales declines, but the distress hasn’t started yet. The number of TS notices has been relatively flat, approximately 650 to 750 per month (12 months).
This slowdown is causing a small number of layoffs, but nothing substantial enough to make the foreclosure numbers move. Impending ARM resets and rising interest rates may prove to be the leading cause of an increase in foreclosures, and I suspect that the same applies for California. In other words, the real distress in the market will begin as a result of ARM resets that begin in 2007.
As for Arizona, when the foreclosure count doubles to 1500 per month, the crash will have begun, and prices will drop by 60% to 80% from 2005 highs. (Unless, of course, the Fed drops rates to 1% and prices double as a result of global currency hyperinflation.)
A reader sent me a link to one of the major foreclosure sites. I don’t want to say which one, but I viewed the database myself. It was complete with detail on each property. Most of the auction dates looked to be set for June or July.
Ben, I’ve been playing in this park a long time, and I don’t know the definition of pre-foreclosure or how it can be quantified from any data source. Is that 30-60-90 past due delinquency. I wouldn’t press the issue except for the fact that Notices of TS in Maricopa are flat, and show no signs of rising. I don’t think there is a better barometer, unless this source is looking at tax delinquencies, and those are not what I would call a pre-foreclosure. If they are tax past-dues, then you can only look at 2 data points per year for historical comparisons, and again, this would not be a solid foundation for any conclusions as to the state of distress in the market. The number 4,923 is meaningless unless it can be defined and historical numbers are available for comparison.
Pre-foreclosure is the first step in the foreclosure process. It is a Notice of Default (NoD) that is recorded with the county clerk so it is fully measurable. It is a 90 day warning to the homeowner before Notice of Trustee Sale (NTS) is issued. The NTS comes on day 91, and it is finally in foreclosure. By this time, the owner has not paid for six months on average. I’ve seen cases where the owner has not paid for 15+ months before getting to this stage due to lender discretion.
Foreclosure hunters get leads from the recorded NoDs and NTS. They confront the owners and try to work out a deal so that the house does not go into foreclosure. Door knocking is a hard business, and few can cut it. (I cannot.)
In Arizona, a Notice of Trustee’s Sale is required to be recorded 90 days prior to the Trustee’s sale. Some may call this a Notice of Default, but the legal instrument is called Notice of Trustee’s Sale. You can get the information for recorded “N/TR Sale” in Maricopa County at:
http://recorder.maricopa.gov/recdocdata/GetRecDataSelect.asp?mcrs=1
For information on Arizona’s foreclosure process, see
http://www.defaultresearch.com/foreclosure_laws.php
In Arizona, there is not any requirement that a “warning” Notice of Default be recorded 90 days prior to recording a Notice of Trustee’s sale. The Notice of Trustee’s sale is the only document recorded, and it is recorded 90 days prior to the Trustee’s Sale date.
Ben, how many in Pima county?
I don’t know. I’m not a subscriber, but I am going to now!
Here are the numbers for properties in foreclosure in Maricopa County Arizona. Their data may include properties that are on “hold” due to bankruptcy filing or other court order, but the count for the last 90 days is far below 4923.
Jan 05 1297
Feb 05 940
Mar 05 1040
Apr 05 766
May 05 759
Jun 05 767
Jul 05 748
Aug 05 795
Sep 05 669
Oct 05 728
Nov 05 704
Dec 05 749
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 505 thru 5/19
Housing going up for sale like gang busters in South Chandler. I was in Higley AZ and saw 8 houses for sale ON A SINGLE BLOCK!! The ship is sinking and the rats are making for the exits. We may be looking at 60,000+ listings on ziprealty.com by the end of the summer.
Hate to be one of the sellers. Who will be able to get out first?
Who will set the lower comp? And where are the buyers? Why
are buyers not coming?
That is the kicker. There are no buyers. They’ve vanished. Sellers and their listing agents will be at wits’ end on this — no matter (sort of) how much you reduce your price, there are no buyers. I think we are entering high-stakes poker for sellers.
I used to play poker overseas, to be sociable (read: I always lost $20), with a guy who played two games a week. Nickel-ante (my group) and high-rollers — oil guys who would bet $1,500 a hand. Short of winning the lottery, I would not have the stomach to play a single hand in the high-stakes game. Sellers of homes are about to join that game, like it or not.
My sign of a slowdown here in the SFV came from our local zip charts themselves. The following represents March to April price declines for the areas I am tracking. I say forget y-o-y price “gains”. I want to know what’s happening right now!
Encino 91436 -14%
Encino 91316 -3%
Sherman Oaks 91403 -19%
Sherman Oaks 91423 -.8%
Studio City 91604 -11%
Valley Village 91607 -5.5%
Van Nuys/Sherman Oaks 91401 -8%
So much for their precious Spring bounce.
Thanks agrntjmf…I live in Studio City and the prices here have been just STUPID. Time to come back down to earth. Keep the info coming! It is much appreciated!
“We live in North County San Diego, and the newer developments definitely seem to have more turnover. Anecdote: when we were doing ‘bubble monitoring’ in one new development in 2004, I asked the salesperson some questions about the loans offered by the homebuilder financing arm. When asked what the 30 yr FRM rate was, he just stared at me blankly and said, ‘Gee, I have no idea. Haven’t seen anyone use one of those in months.’ Again…this was mid-2004, hot, hot selling season; and nobody was using these loans. How much are these places going to hurt?”
We went househunting in SD in late 2004. The realtor who sold our previous home tried to convince us that we needed to buy a place or get priced out forever, and suggested we use an I/O ARM in order to make the purchase more affordable. At that point, it dawned on me (and luckily, my wife, after I explained the situation) that buying a home in SD amounts to competing with four main groups:
1) Those willing to use I/O ARM financing to stretch themselves beyond their long-term ability to repay a loan, unless prices go up by 10%+ forever (70% of the market);
2) Investors / flippers who buy the homes in order to resell them at a higher price within the next couple of years (20% of the market);
3) Those with large home equity gains from other frothy markets — mainly other CA cities (9% of the market);
4) The truly rich, who can plop down the purchase price of a home anywhere in the world if it suits them (
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That describes EXACTLY why we didn’t buy in ‘03/04/05. I didn’t want to compete with people in any of those groups in a market priced totally contrary to fundamentals.
New agents’ catch phrase:
‘you’d better sell now or you’ll be locked in forever!’
Good one bottomfisherman! Get em all on the market now.
I like that one!
- SD Zip = 20,566 and accelerating.
- Only 5 homes show a listing date of 5/20/06 (today)
- 195+ homes listed on 5/19/06 (yesterday) — not sure how to get the full count.
As of 9.30pm Saturday San Digo MLS is showing for 5/19 & 5/20 this is for SFH’s
335 new listings
36 listings back on market
155 pending
102 closed
41 withdrawn
44 cancelled
Quite a few avaiable!!!
Seeing some price reduction, but surprisingly long market times with relatively very small reductions.
We drove around North County today, and noticed a distinct lack of open houses, and lots of for sale boards with no flyers in the boxes. Does this suggest the Realtors will not spend any money on these listings, since they don’t expect them to sell?
In area where we are interested asking prices are on average still 20% higher than spring 05.
Many “reduced” listings in the local paper this morning, but nothing to get too excited at. I went by the mall today because my sister’s air force unit was showing off their wares to the public. On the other side of the parking lot an RV dealer was showing his wares. I figured sales would be pretty slow because of the cost of gas, but no, I watched them make two sales in fifteen minutes. One was a fifty-thousand dollar fifth wheel. This economy shows no sign of slowing.
it shows that morons are buying new RV’s when the market is flooded with used RV’s, they lose value faster than a car does.
I looked at a trailer to park on the side of the house (wouldn’t show from the street or the house) and use as extra space if a bunch of guests come and also take it rambling every so often on the back of the SUV (yes, I’ve got one — V6). It was $6-$8K for a nice used one. Decided against it anyways
Keep in mind a “fifth wheel” doesn’t even have a motor, folks.
$50k is not alot of money for a new 5th. At least a decent one anyways but that isn’t your point. I was figuring the market would be flooded with all sorts of toys at fire sale prices right now but I’m not seeing it….. maybe we won’t. Irrespective of that, I don’t see how the average joes of the world are sustaining the consumption spending. Do these people not see anything past the hand in front of their face? I’m hoarding cash like crazy in an effort to sustain basic living expenses in the future but It seems like I’m the only one.
We’re hoarding too, Lingus, and don’t worry, your idea about the toys appearing at fire sale prices are happening — perhaps not as fast in your area as in ours, but the biggest RV dealer in the state is offering a year’s worth of gasoline if you’ll just take one of those pesky things off their lot - plus, the last ad I heard for them on the radio was offering to take ” anything ” in trade — jewelry, muscle cars, trucks, snowmobiles, boats….they’re hurting. We have a much worse economy than you, probably, but it will filter out like evil tentacles to most, if not all states. Since our economy has been one of the worst in the nation for the last 4-5 years, well, I think we’re just seeing the crap hit sooner.
Silverback, I surmise you’re somewhere in the midwest….. Indiana?
I follow the classified closely in the Verde Valley, AZ. Signs of weakness everywhere.
‘First time on the market. New build, almost finished. Great buy - under market 4br 3ba $632,500.’
‘Buyers Take Notice 16 units waiting for offers. Buyers, you are in the drivers seat. Make a deal.’
‘FSBO great deal in Cottonwood Ranch. Appraised at $270,000. Will sell for $250,000 OBO.’
‘Red Rock Views Price Reduced, Motivated Owner Relocating’ (lrg bold print)
‘Motivated seller, all offers considered.’
‘2.39 acres of utopia. Only 15 minutes from Sedona. Owner will entertain all offers’
‘Free Expired Listing Analysis Find out the reason your home didn’t sell while it was listed.’
One of my favorites is a huge house that has been on the market so long, I’ve forgotten how many years, when they were asking $2 million:
‘4Br 3.5 ba Vacant Immediate possession. Very best terms arranged. Price Drastically Reduced To $1,499,000.’
Dozens of new homes for sale or rent, especially in the Brookfield subdivisions in Cornville. I have also noticed a major drop off in construction. One cul de sac was rushed up to the site phase, and nobody has been around for weeks.
Ben, if you see this, I’d truly appreciate a link to the 2.39 acres of Utopia near Sedona. If the deal were good enough, I’d consider biting.
The realtors around here just learned how to use digital cameras, so no link. But before you get out your checkbook, some details.
‘Horse property with stalls and corral, ride out onto the Coconino national forest. Guest house with single car garage. $890,000′
So it sound like there isn’t even a house. If it is where I think it is, the 15 minutes will be half done on a bone jarring dirt road that the forest service grades when it suits them. There may or may not be utilities. These folks probably paid $5k per acre just a few years back.
Anybody can ride out on the FS roads, and maybe plink a few cans, or park the RV. Dirt biking is big, too. I just don’t see this area ever being serious residential housing. It’s more suited to running cows for a few bucks a year, which is what the FS does with the hundreds of thousands of acres surrounding it.
Oh, lol. Thanks but no thanks.
I’m just a sucker for that Sedona area though.
Yea but no body fat! What more do you want.
Here’s your sign:
Pulled up behind a pickup truck this morning in San Jose, it was the guy who goes around planting for sale signs in yards. The truck was half empty at 12:00 pm.
I’m seeing lots of signs on corners, looking for all the missing homebuyers here in SD. One is a “fake” FSBO sign with a hand written toll free number + extention. Another is by a realtors’ group in conjunction with a mortgage financing group, touting affordability.
How about a couple of very bored realtors sitting at a farmer’s market I went to this morning as a sign of a dead market?
The SD signs which give me a kick are the “For Sale” signs with “SOLD” pasted in red letters across the top. The funny thing is that these signs are out along the main road, not in front of any partcular home. I assume Realtors (TM) have stuck them out along the main drag to remind potential buyers that, yes, homes have sold before in San Diego, at least historically speaking…
Bubblelocked.
In the city of San Francisco, prices are hanging tight but volumes are down phenomenally. About 5 months ago we had friends in from out of town and took them out on Haight. There was an open house for a 3-story Victorian that somebody was asking $1.2 million for. Plus it probably needed about $100K in work before you could call it nice. A few weeks ago my parents were in town and we walked by the same home, which was STILL for sale at the same ridiculous price, and still open.
Article about record inventory in Orlando from
the Orlando Slantinel
http://tinyurl.com/o7azb
Today I received two postcards from builders with units to sell: Hovnanian with some so-called luxury homes out in the middle of nowhere, and Prado on Lake Ave. in Pasadena. I can’t believe they’d be doing that if there was so much pent up demand.
Hampton Roads (SE Va.) Realty Times has Williamsburg officially in a buyer’s market with declining prices, which is exactly what I see in the listings — about a 10% decline from last year. Va. Beach a buyers’ market stalled out.
Now, here is the more interesting comparison of statistics: according to the official realtor blog, the median SALES price for houses in southern HR is $235,500. But on the housing tracker site, the median price is about $350,000. Meanwhile I am noting that there is still over 10% appreciation yoy at the bottom, but only 2% at the top.
Seems to me, it’s the BOTTOM that is selling, the locals having been priced out of everything else, while the top is already starting down. And, THAT explains the high median “listing” prices — which is the opposite of what I’ve read from other posters here.
I get a postcard for KB Homes 4 new developments every couple weeks asking me to come by and grab a some Starbucks GC’s while I’m at it. I’ve collected about $50 so far in a couple months and there’s still a ton of inventory left
(Sacramento)
South Bay (LA) is reaching some hefty inventory #s. I’ve been tracking MB, RB and HB for 1 1/2 yrs now. All are now atleast triple the inventory from 1 yr ago - MB approaching 200, HB 100 and RB 300. It does not seem like a lot but the mood is changing. all the fat, arrogant realtors out here are not nearly as confident as the once were. Pricing have come down maybe 5% but this will change very quickly after the denial phase changes. Time to jum in will be late 2007 at the very earliest - hopefully a 30-40% shave by then.
A new milestone in my community (Lansdowne, in NoVA): for the first time in the two years I’ve lived here, I saw a “Preforeclosure Sale” sign on a street corner. And not just one, but two - in different locations.
Southwest Charlotte: New inventory and pendings are still roughly in balance, but in the 3 neighborhoods I watch, sales are slow. The homes that do sell are the best prepared, not fronting a major street, and close in to town.
If I had to call momentum one way or another, I’d still label it an up market. But it’s a grudging one.
http://washingtondc.craigslist.org/rfs/162490715.html
From craigslist: “Price Guaranty in effect to protect purchasers from future price drops.” What greater sign do you need than that?? It seems to me that new homebuilders and new condos have a real advantage over regular folks in this market because they can offer “incentives” and “price guaranties.”
On Thursday night about 6 pm, a realtor was standing on a busy corner here in Normal Heights, next to an open house sign, and he was trying to hand out flyers as cars stopped at the red light. Young guy. Ugly, ugly condos with I-805 right behind them.
I’ve been watching a nearby (soCal) development from its first new home release early-’05.
[no exaggeration] Back then, there were several thousand people crowding thru the models and potential buyers lined the street as wait-listed names were called on loudspeakers for the honor of purchasing a new home. Within minutes, a few dozen homes would be gobbled up. “Better luck next time…” to those not lucky enough to be selected from the list.
There were so many people showing up at that time, nearby parking quickly filled and attendees were bussed by the developer from a remote lot. Free snacks and drinks to keep the masses buttered up.
As the months passed, the numbers of buyers dwindled to point the loudspeakers were no longer used (although they were set up). The person making the announcements would just talk loudly to the several couples that showed up for that month’s release of homes. The seating was largely empty. No more need to sit on the curbs and lawns along the street.
The latest release occurred very recently: About 8 cars in the lot adjacent the sales office (no doubt belonging to the sales agents themselves). No more loudspeakers or catered refreshments. The only activity I saw during this “event” was limited to one family that went into the sales office briefly to grab a brochure. But no meaningful price reductions so far.
“[no exaggeration] Back then, there were several thousand people crowding thru the models and potential buyers lined the street as wait-listed names were called on loudspeakers for the honor of purchasing a new home.”
If you have to line up to buy something, you’re getting screwed.
yeah, many got screwed
…strangely, they all seemed eager as they stepped up to take the big one.
Mission Viejo, CA
OPEN HOUSE TODAY 1-5PM. ENTER TO WIN A $100 LOWES GIFT CARD.
4 BED , 2.5 BATH POOL/SPA HOME! EVERYTHING HAS BEEN UPDATED!
MLS: S440035
The desperation has only begun!!!
Phoenix: 1,418,041 (2004)
8125 (homes available)
Mesa: 437,454
3340
Scottsdale 221,792
5154
Prices have shown little sign of dropping in East Meas/85205/school district 4 despite the rise in inventory or DOM.
Just got an email yesterday from a Brooklyn broker I’d dealt with last year — saying that inventory is up 78 percent and it’s a buyers market, and how can he help me.
Meanwhile, the top RE stories in NY Times sunday section:
1. McMansion buyers suffer long commutes to Manhattan because of crazy Manhattan prices (this has been going on for years-wonder why it’s a story now..)
2. Harlem townhouse sold for a record 3.89 million, except maybe not -no one can confirm price
3. A couple buys a home for over a mil in the bronx
http://www.nytimes.com/pages/realestate/index.html?adxnnl=1&adxnnlx=1148216668-1vww/f23FgXV9o/910c0Lw
Yay! More stories about rich people buying houses — Happy happy fun talk - no bubble here!
But if you look at Times residential sales listed for the city, all but 1 sold for under the ask.
In Costa Mesa in OC the sign spinners are creating a subtle breeze.
The Shea Homes development called Half Moon Lane has sold 12 of the 25 and only 5 since Jan. 14th 2006. This development’s signage first listed the prices in the high 900s, then went up to 1 mil, now has dropped back into the high 800s. The current listing range is 889k to 1,186,142. There are 25 homes in the development. There are also 2-4 homes newly built by another developer mingled on the city street with these homes.
Buyers looking at our home have been very surprising. Being a 4BR/2.5BA, I’d thought our home would be shown to families with a few children, maybe even high school kids. Instead the buyers have all been older than us by quite a few years. I think these people are all boomer downsizers.
But even more startling is how few people from our age group we see. As I’ve posted before, entry level homes in our town were selling like hotcakes, but the sellers must have all left town since all 3 of us 4BR colonials were still on market. Either that or sellers bought homes in town for double (doubtful)
We took ours off the market yesterday. The reason we chose to move was that we didn’t fit so well w/the materialistically competitive culture we found here. Now we think that culture may be changing. After assessing the local rental market, renting with a family in CNY is not the nobrainer that it is as DINK situation in bubbleland. Our mortgage is below $550. Rents run $800 - $1000 for metal boxes. $2000 for a home. I think the worst we could lose from our purchase price is $40,000 because we bought pretty low on the curve. I could spend that in rental and storage fees in 3 1/2 years. After realizing this fact, the stress from the 5 hour cleaning sessions we’d do before each showing no longer seemed worth it. So we’re just gonna sit back and watch the show.