Look at these charts from Investor's Business Daily; especially that middle one; supply is dwindling until we hit 2005 and then it rockets up.Some choice quotes:
"Fall chills hit existing-home sales in October, even as prices kept climbing. It's the latest of several signs that the housing boom is finally over."
"Existing-home sales fell 2.7% to an annual rate of 7.09 million from Sept.'s revised 7.29 million, despite heavy selling in areas hit by Hurricane Katrina, the National Association of Realtors said. Without storm-related sales, the drop would have been 3.2%. The number of unsold homes hit a 19-year high of 2.87 million — 16.3% higher than a year ago."
"In what many analysts see as some last-gasp gains, home prices continue to set records...the median sales price in October was [up] 16.6% above a year ago. Such huge advances are not sustainable, economists say."
"...high-end home prices are already cooling. The rest of the market is expected to follow, since higher prices can't hold up as sales fall and supply swells."
"In red-hot markets like Florida and California, sellers appear to be losing their grip on the market..."
"In California, real estate agents saw sales drop 2.8% vs. a year earlier while prices fell 1% from September. But the median price for a single-family home still swelled 17.2% vs. a year earlier to an eye-opening $538,770."
"...foreclosures and defaults are starting to pick up. U.S. foreclosures jumped more than 18% in October from September, according to Web foreclosure marketplace RealtyTrac. Another report from Foreclosures.com showed rising mortgage defaults in California too."
4 comments:
"In what many analysts see as some last-gasp gains, home prices continue to set records...the median sales price in October was [up] 16.6% above a year ago. Such huge advances are not sustainable, economists say."
I have seen this quote for five years now. Any idears when these last-gap gains are going to stop?
I just don't see the logic -- home prices continue to rise even with all this inventory therefore the prices must come down.
What supply and demand graph are they looking at?
One possible explanation of the pricing action would be that the truely insolvent and debt laden first time home buyers that never should by anyway AND understand that fact are being scared away by the future economic outlook and the BK laws. The lowest rung of the marginal buyer is not coming to the party.
I am guessing that the more middling existing homeowner with some equity is still in the game. They are going after higher priced properties.
Also, the condo sales collapse could have something to do with it.
Anyway you look at it, you can find some data to support whatever viewpoint you want to support. Eventually, the bulk of the data will point to reality.
I wrote to Marin's cheerleading counterpart of David Lereah...Jack McLaughlin... about that amazing condo statistic for October (i.e., sales down over 50%). Even I was incredulous. I thought it must be a typo since none of that dude's graphs show the decline. I haven't heard anything back. If and when I do I will be sure to post about it one way or the other.
Also, I've heard it claimed that major declines in the condo market preceed major declines in SFH market. That was true in SoCal where I lived through the last housing bust. But is it true in general? It makes some sense, but I don't know. Does anyone else know?
Well, those condo sales figures are for real; I confirmed them with the Marin Assessor's Office's figures. Damn!
Post a Comment