Post Local Housing Market Observations Here!
What are you seeing in your housing market this weekend? Homebuilder price reductions and incentives? Some reports from around the US. “The slowdown in Baltimore’s housing market continued into May, with sales dropping as homes lingered longer on the market and listings piled up. Sellers often found themselves resorting to price reductions to snag buyers.”
“For the past several months, sales meetings at W.C. & A.N. Miller Realtors have ended with agents announcing how much prices on listings have been reduced, said agent Jerry Murphy. He said the seller of a home he listed in the city’s Guilford neighborhood put the home on the market for $699,000, reduced it to $649,000, then ended up signing a contract for $625,000.”
“‘Buyers these days are usually making an offer and if that offer doesn’t get accepted, going on to the next house,’ agent Trent Waite said. ‘There’s so much inventory on the market, it doesn’t always make sense to pay full asking price.’ A refurbished two-bedroom rowhouse in Butchers Hill had been reduced from $350,000 to $300,000. And with the help of Waite, (the buyer) negotiated to an even lower $265,000 and settled on the house last month.”
The Boston Globe. “Sales on Cape Cod fell nearly 10 percent last year, and that trend has only worsened this spring. The glut of homes for sale is threatening to drive prices down, and more sellers are reducing their asking prices, agents and housing specialists said.”
“‘I don’t know that I’d be jumping into this market right now,’ said Barnstable County Register of Deeds John Meade. ‘Who knows what it’s going to do.’”
A reader posted this from the Falls Church News Press in Virginia. “A leading real estate agent in the City of Falls Church has reported to the News-Press that, with the cooling off of the residential property market throughout the region, single family homes here are now selling on average ‘for about 10 percent below their assessed values.’”
“The report from the realtor, who has a long-standing reputation for doing a major business in Falls Church, indicates that the City may face not a slower rate of growth in values, but an absolute decline in values.”
“There has been no scenario discussed publicly at City Hall to date that has taken this prospect into account, although by comparison to the earlier budget projections, the impact of a net decline in residential real estate tax revenues would be little short of catastrophic.”
“As for Falls Church’s prospects for new commercial development taking up a greater share of responsibility for delivering tax revenue to the City’s coffers, this is prospect is now dimming as all current plans for projects in the City’s commercially-zoned corridors are heavily tied to condominium components, and the condo market throughout the greater Washington, D.C., metro region has become overbuilt and has tanked badly.”
The big news from Arizona is the Republics front page story on ‘Holdout’ hurting sales(see first post today).
A local buyers agent has a column in the Friday paper titled, ‘What to do in a bear market.’ It generally chastizes sellers for trying to get ‘last years prices.’ Mentions the median asking price is $692,000 and the median of sold homes was $582,000, as of June 6th.
OT but excellent. Page 35 of Barron’s. cartoon of realtor showing couple a cavernous living room.
Caption: “I think you can really picture yourself struggling to make payments here.”
The Verde Valley classifieds in northern Arizona show more motivated sellers every week, and the old ads aren’t going away.
No price given on the first two:
‘FSBO 3br, 2ba, Verde Santa Fe 2,200 sq ft EXTREMELY UNDERPRICED’
‘MUST SELL Verde Santa Fe golf course home. Below market value. Open weekends.’
Gorgeous NEW 4br 3ba 2,800+ sq ft Verde Santa Fe. Priced to sell: $519,000 Owner/Agent’
One realtor has gotten the message:
‘Clarkdale 4br 2ba. Owner/agent $148,000′
Skyrocketing home values have been a piggy bank for state and local governments as well as homeowners. Assessed values may not be revised downwards as expeditiously as they were revised upwards.
When Texas RE went bust in the 80’s, the tax situation was an annual headache for all concerned. Each year, as values fell, owners had to challenge the appraisals. Then the various organizations relying on the property tax sank into problems; laying people off and closing schools.
Notice how the Falls Church report said this was ‘catastrophic.’ Sounds like they have already spent a bit into the future. Expect to hear that attitude as taxes are adjusted down.
“A leading real estate agent in the City of Falls Church has reported to the News-Press that, with the cooling off of the residential property market throughout the region, single family homes here are now selling on average ‘for about 10 percent below their assessed values.’”
This might be a common theme nationwide over the next few years. Tax assessors may get very busy. Local gov’s may have to rethink their spending habits.
I have a certain amount of sympathy for local governments who have spent up at the urging of the RE industry to provide infrastructure based on forward projections.
But none at all for those who have simply taken their increasing tax revenue as a given, and bloated their payrolls accordingly.
Recently in Texas, Gov Perry signed a bill that would reduce property taxes. Evidently, the various tax districts knew this was coming so they were especially aggressive with their appraisals this year. End result to the taxpayer - zero savings.
Here in the greater Puget Sound Area the assessors in King, Pierce and Snohomish counties have values 25 to 40% below the market (depending on how outragious the seller sets the price at). I think this is an acknowledgement on the local government’s part that prices have moved too far too fast. I am pleased that they are being conservative.
The bubble is alive and well (though starting to fizzle) in the Pacific Northwest!
“The impact of a net decline in residential real estate tax revenues would be little short of catastrophic.”
Like so much that has been discussed here, this impact of a decline in prices has been little discussed by the public, media, and governments. Because many of the programs instituted based on new tax revenue are long term, this will hit communities where it hurts.
My local gov has been spending like a drunken sailor for the last six years. Not only will property taxes decline, but sales and use taxes too as more people begin to cut back.
The latest from Mish Shedlock, a good read if not yet posted on another thread.
http://globaleconomicanalysis.blogspot.com/
I’m loving it… Reductions everywhere. Sit tight for a while with cash and pick your dream home at leisure…
From Sotheby’s Santa Fe Home Page:
Price Reduction: 22 Los Prados
Inviting and versatile 2,815 square foot home
Price Reduced: 15 Mint Circle
1.71 acre lot in Estates II of Las Campanas
Santa Fe is paradise to me. It has just been out in the stratosphere for years now. Talk about a place with outrageous home prices and not many decent jobs.
I have gotten a job offer there, however, which is why I want Mr. Need to Leave CA to email me please!
or give me his email!
It’s not out online yet, but just got the NYTimes sunday mag (home delivery gets it a day early) - subject in red on the cover: “Debt”. There’s an article inside titled “Reasons to Worry” which highlights the “collapse in household savings” and “the rise in home-mortgage debt…” best quote in it regarding the cost of servicing the federal debt which is increasing dramatically as interest rates are rising: “It turns out that George Bush has the biggest ARM in the world.”
Scary stuff, well-known here on this blog and now will be read tomorrow by many more…
What else does it say? Can you post some of the wording?
http://www.nytimes.com/2006/06/11/magazine/11national.html?_r=1&oref=slogin
For those who read the article (Thanks, Bubblechick!), the debtlodocus’ tail is about to get much much longer as the fat middle slips into poverty. Even as the end of the tail is being chewed off by the velociraptors.
In today’s LATimes, there is a story (link) about declining enrollment in certain LA schools as low income, mostly immigrant families move away from gentrifying neighborhoods. Of course, the school district has a big building program rolling in these same neighborhoods, responding to yesterday’s problem.
These folks at the end of the tail are leaving for: “She ticked off the names: Pacoima, Victorville, Orange County, Desert Hot Springs, Canyon Country, Riverside, Temecula, Whittier, Georgia, Florida.”
South-Central gentrifying? I never though I would live long enough to see that.
From the article:
“Since becoming president, George Bush has presided over one of the steepest peacetime rises ever in the federal debt.”
Oh, really? I thought we were at war.
Amazing! (Stopped reading their poison at this point.)
You just know Ben’s going to put a thread up tomorrow or Monday on this one :).
The Boston Globe. “Sales on Cape Cod fell nearly 10 percent last year, and that trend has only worsened this spring. The glut of homes for sale is threatening to drive prices down, and more sellers are reducing their asking prices, agents and housing specialists said.”
In NY’s own version of the Cape - the Hamptons, prices are already down versus year ago and it’s only just begun.
SD zip = 21,752 homes as I write, and as usual, they only show a couple of newly listed homes as of today in order to delay the bad news (an exercise in futility if ever there was one!). To paraphrase Patrick, I might add “SD Housing Crash Continues — Bubble Has Popped.” This inventory correction started at a level of 13,896 on Jan 2, 2006, and has rather steadily ever since like a slowly-erupting volcano. The increase thus far is about 57%, with 35% currently marked “Price Reduced.” The “Price Reduced” percentage has also grown steadily all year, though prices are supposedly still increasing here, if you believe DataQuack’s numbers. At anywhere near the recent rate of increase, the number of used homes on the market will at least double from its Jan 2006 levels, and this will get added to the large number of homes and condos under current construction. SOUNDS LIKE A CRASH TO ME!
Seems to me that Long Island is in the same boat, MLSLI #’s show 31,969 listings, or 1 listing per 100 people as population is about 2.8 million…San Diego also at 1 listing per 100 people with 21k listings and pop. 2.1 million. Does 1/100 ratio = crash?
Overall, 43 million U.S. residents, or 16 percent of the population, moved to a new residence during the one-year period[1999-2000].
http://usgovinfo.about.com/library/weekly/aa060401a.htm
I wonder if you can put together the number of people who are in the process of moving vs. the number of houses for sale to determine at what point equilibrium would be reached?
- You know your market is not in equilibrium when list prices are about where they were last summer and 50 or so new listings are added to the MLS every day.
- You will know your market is returning to equilibrium when
a) Inventory stops correcting
b) For sale prices have stopped falling
c) Everyone is talking about what a terrible investment real estate is
Getstucco — sounds like a crash to me, too. Got my helmet and seat belt on, rent paid, checkbook totally tuned up.
Hi from Phoenix
The girl I play golf with has now reduced her Cave Creek home another 10K. Started at 419K now 374k a 45K reduction plus real estate agent costs (she was sure she was going to sell FSBO). Ha Ha Ha. AND she is a crappy golfer! The girls are starting to believe my bubble talk.
She needs to cut about $30K every two weeks, without blinking, if she wants to sell that dawg.
Follow it all the way dowwwwwwn…….
I was just looking at homes on zip for Westchester, CA and the number of homes added in the past month is unbelievable. Most of the homes have been on market for months and months, with minimal reduction. Asking prices of $849,000 for a 3/2 next to the airport is freaken insane.
I think this is the end; prices are so out of wack that even those oblivious to the housing bubble can no longer afford to by a home. I believe a lot of people will simply loose interest and the desire to buy. Once you raise the bar TOO high, people just toss in the towel and move on (as in staying in their rental or renting something better).
We really have a huge mess; I think the fallout will be so great, that even some on this blog are going to be shocked.
buy* a home
looking4mee — ??? “…number of homes added in the past month [that is, new listings not previously listed] is unbelievable. Most of the homes have been on the market for months and months…”
Sounds like you mean, “Most of the [other] homes have been on the market for months and months.”
I suppose you are correct in that “some” on this blog will be shocked, but I think that will be very few relative to the number of long-termers who will not be shocked. We’re just patient, like gators waitin’ for a great meal.
I like that one, Chip. Couldn’t agree more. Quite a few of us expect the “doom and gloom” we, at Ben’s blog, are notorious for.
Multi-decade asset deflation, here we come. (kidding…sort of)
The most shocking thing would be a soft landing and an economy that hums along through 2008.
The longer this lunacy of debt, wealth effect (better called wealth envy), unaffordable housing prices continues, the less I will be shocked by a negative outcome.
Just spent the day at my folks house in melbourne, fl. The next door neighbor has had the house up for sale for ~ 2 months with no takers. He cut the price last week from $329k to $299k. My old man said the guy told him he hasn’t gotten one person there to even look at the place. It’s here!!
He needs to cut it by that much every two weeks if he is serious about getting out of it, IMO. 10% after two months will not cut it in this market.
That shocks me. I graduated from a college in Melbourne in 2000, and you could hardly give away homes in that area.
Historically, during “normal” markets, haven’t homes typically sold at 5% to 10% below asking price?
I don’t know. Prices are still quite depressing. There was a home n East Mesa which caught my eye listed at $239,000 but sold for $243,000. I couldn’t belive it! The comps just aren’t moving downward much. My friend bought into the neighorhood last June and paid $215,000 but with the rising rates I’ll need to see prices fall from $230-240,000 to around $190,000 to have a similar monthly mortage as my buddy if I put the same amount down as he did.
nomad1 — if all you care about is getting a “today’s $240K house” for $190K, I think you have nothing to worry about, except that you may buy in well before the bottom, at that price.
Eggzackly! Don’t try to time the market. Be familiar with the area where you want to buy. Be comfortable with your finances. Have a plan. When the market and your plan meet, it’s time to buy.
If you see a $240k house that you can comfortable afford on a 30 year fixed with a 20% down, buy it. Then hunker down while the rest of the storm whirls around you. Until then….keep your rent paid up!
Lots of property for sale here in Polk County Florida, southwest of Orlando.
Lots of out of state and overseas tinhorn speculators thought they could come in here, buy everything up and double housing prices for their own profit. They are wrong. Very wrong. And they are gonna pay.
I look for prices to adjust back to 2001 levels within the next two years. There are over 600 properties on the MLS just for my little town of Winter Haven, population approx 60,000-70,000……there is an unbelieveable amount of inventory here and NOBODY IS BUYING.
The stare down has begun and fear is in the air. I am renting and waiting until the madness comes crashing back down to affordability.
Greed. Its a disease. The market will soon be purged of the speculators and get-rich-quickies; most of whom never belonged in the “Real Estate Investment Arena” anyway.
I hope these people lose their asses.
I think a lot of us learned to live frugal lives while we saw people use their overinflated houses as ATM machines to buy those big SUVs, Plasma TVs, and so on. We learned from previous bubbles, skeptical as people put themselves deeper into the hole. And we kept in mind the demographics, that when boomers start to downsize in a few years they will consider reducing their homes from 2 to 1, but the problem is “by selling to whom?” Generation X? We had all these thoughts in mind. It’s all common sense, but we were silenced. Now we are out in the open on this blog. The chickens have come home to roost. We chose not to be greedy and we are going to reap the rewards by being more financially protected during the coming bad years. I’ve been buying savings bonds and municipal bonds like crazy since the Fall of 2001. I’ve been renting longer than that. I don’t want to say this, but the coming bad years may be very bad. It could be deflation and it could be inflation. It could be a combination of both - a depression in real estate and inflation in agriculture goods, health care, college costs, water utilities, oil, precious metals, and especially an inflation in the amount of taxes on all these things. I started buying shares in one agriculture stock and have been buying precious metals over the last ten years. My own skills are fortunately in high demand and I think I’ll be able to be well paid through at least 2010. But I can live on my conservative investments for several years without a job if I need to. With over 1 billion Muslims in this world, perhaps ten percent of them want to crush western civilization, and China would welcome a battle to the death between the west and Islam, we are up that creek without a paddle. Of course add the debt crisis of the average Joe fiddling while Rome is burning.
Well stated. There are far bigger issues at play than the housing bubble implosion.
Great points Bill. I too have been stocking up the cellar so to speak…
IMO we Americans need to mind our own business. Let the Arabs kill eachother, they have been doing that for centuries. We don’t need to base our entire foriegn and military policy on the price of oil. Sure, there would be short-term pain in adjusting to alternative energy sources, but the Arabs have no power without oil. The best way to inflict pain on them is to make oil yesterday’s energy source.
“IMO we Americans need to mind our own business. Let the Arabs kill eachother, they have been doing that for centuries. We don’t need to base our entire foriegn and military policy on the price of oil.”
I’m afraid it’s too late to mind our own business in that matter. We made permanent enemies there. By withdrawing, that would not stop the radical Islamics from coming for us. On the other hand if you say we should only defend within the 50 states and the U.S. territories, I tend to go along with that. Then what about making the water routes safe for American companies to trade? Our first priority though should be to shore up our defenses here on our land, institute racial profiling instead of this political correct b.s. Stupid to spend precious money frisking grannies at airports in random searches while unshaved olive-skinned shifty eyed men get on board a passenger airliner. I do think if we focus here at home it would cost far less than to sit in some other nation and act like honey to the terrorist bees. But who am I to second guess our military strategy? I don’t know anything about strategy so my opinion does not count.
Hi Bill… welcome to the “depression camp”. Our numbers are few but growing. Our motto is “Hope for the Best, but Prepare for the Worst” (and I do mean worst).
Bill,
“I’m afraid it’s too late to mind our own business in that matter. We made permanent enemies there.”
Once the crazy mullas get nuclear weapons, we are in deep doo doo. Just imagine yourself as a person who deeply believes that you are doing God’s will by destroying His enemies at any cost. This is the perspective they have, and they’re working on the technology to do so.
All they have to do is detonate one of these babies NEAR a port, not in it, to do irreparable damage to one or more costal cities.
Wake up America!
And if/when they do that, the thought of buying property will seem ridiculous. Iran’s nuclear capacities should have been taken off line LAST year.
Target #1= New York City (most Jewish, most financial damage)
Target#2= Washington DC (seat of government)
Target#3= Any major west coast port city.
Just some thoughts.
Think it can’t happen? hmmm.
PS- Sorry for getting too political. Just responding to other posters with what I see as a bigger picture.
Back to the housing market, then!
Word has it that the housing market “is not too swift” as told by a convenience store worker I know. Some regular customers are complaining about the cost of living and have decided to sell and move to a cheaper area. Good luck with that, I say!
Comment on the “learned to live frugally” comment…
I have a 1981 TV (only one) with a UHF knob on it and an ‘85 Honda Civic, although I could afford to buy new ones. Waiting a few years until I can get used HDTV plasmas for 1/3 todays prices from stuck flippers at garage cails.
“I have a 1981 TV (only one) with a UHF knob on it and an ‘85 Honda Civic, although I could afford to buy new ones. Waiting a few years until I can get used HDTV plasmas for 1/3 todays prices from stuck flippers at garage cails. ”
You beat me there by a few years. I have a 1990 Mitsubishi 26 inch color TV. It’s fine with me. No need for some newfangled boob tube with maybe 1% better clarity at twice the price.
If you live in LA, Channel 7 has High-Definition TV that looks great on our older sets. We won’t buy a HDTV until we are sure the standards are agreed upon (remember the Beta vs. VHS nonsense?) and prices come down a lot. Our eyes are not that bad. TV looks pretty great (we recently got satellite) and the Hi-Def feeds are truly amazing, even on conventional sets.
Went to the country south of San Jose - Gilroy, Los Banos. A lot of stuff for sale, and I mean A LOT. But with the gas prices we have now, not a lot of Bay Area commuters are buying.
High gas prices and long commutes, extremely overpriced houses, and toxic loans, what’s the incentive to buy this dinosaur?
http://www.exuberance.com/photos/panos/Sprawl-SanRamonCA.html
That is a blight on the countryside. Why did they even bother to leave the McYards around those barracks? They might as well have built row houses. Urban blight in a country setting. Sheesh.
I drive past that crap every other week. I shake my head in wonderment and shame.
A recent MLS data mining run suggests that in many markets across the country, the inventorys are still edging up (rocketing up in some markets like San Diego). In most markets being tracked, the median prices are flat to very slightly lower. This is only on 3 data points over time, not enough to be any kind of trend or prediction.
Falls Church used to be nice, but since the early 90s has been absolutely overrun with immigrants, illegal and otherwise. The city refuses to enforce occupancy laws, since the restaurant owners whine that their busboys and cooks are being unfairly targeted (but hey, the dwindling number of American citizens who haven’t been able to flee don’t mind paying extra property taxes to subsidize all the social services extended to illegals, or for educating their children in what used to be good schools). A few decent enclaves remain, but nobody in their right mind sees much of a future for the place, and the home prices are just insane considering the direction the community is headed in — straight to Barrio-ville.
I live in Nashua NH(prices doubled here in the bubble also). It should be an interesting real estate season. My and wife seem to count lots of signs on every road and route we drive. I even play “count the signs” with my 3 year old. I don’t have any financial numbers but listings are significantly higher here and folks have started to low ball, something unheard of last year. I definately can imagine the early 90’s senario of lowering prices with high tax evaluations. A modest home here is about 3-4 grand and we don’t have the great weather or the Boston ecomomy very close.
Two homes newly on the market within walking distance of my SD rental this weekend. One of them a FSBO owned by twenty-somethings (savvy Gen-Y buyers) who bought last fall and are already hitting the road. The other has an open house today with no attendies in evidence.
Generally speaking, there is not nearly as much of a sense of urgency with respect to weekend open houses in my area, despite the fact that there are considerably more homes on the market than last fall when every weekend featured open houses on every side street…
2006-06-11 17:47:29
Long Island MLS numbers:
03/31/05 15,524
02/19/06 24,691
03/25/06 26,893
04/03/06 27,143
05/03/06 29,196
05/11/06 30,089
05/21/06 31,048
06/05/06 31,662
I just talked to my new landlady - (a failed sell, going to rent it out “until market gets better”). She said “Real Estate prices can’t go down because of the county assessments”. She thinks it’s impossible for prices to go below what the county assesses them for. (That was a new jaw-dropping one for me!) She also said of course that Real Estate is the best investment because it never goes down.
Anyway, we just got back from a long weekend and the Northern VA May numbers are out.
http://www.nvar.com/market/marketstats/may06/index.html
http://www.mris.com/reports/stats/
Single Family market stats:
Arlington County (close in suburb) - May settlements down 31%, June contracts down 36%, and new listings up 24%. (Total active listings up 191%). Median Sold Price: +2.03 %
Fairfax County (closer in) - May settlements down 33%, June contracts down 43%, and new listings up 17%. (Total active listings up 224%). Median sold price: - 0.54 %
Prince William County (far-flung suburb) - May settlements down 40%, June contracts down 47%, and new listings up 24%. (Total active listings up 254%). Median sold price: 4.26 %
I just posted Northern VA May numbers here, but the post didn’t show up. Hopefully just stuck in the queue.
This is the YOY total sold dollar volume differences from this year to last, in Northern VA.
2006 vs. 2005
January: -$235,035,730
February: -$198,522,255
March: -$269,343,327
April: - $522,570,255
May: - $850,099,218
Total difference in dollar volume this year: -$2,075,570,785.