Monday, May 15, 2006

Homebuilder Sentiment Falls

From Reuters:
US homebuilder sentiment sinks in May - NAHB

"U.S. homebuilder sentiment slumped in May to its lowest since mid-1995 on rising mortgage rates, declining affordability and the retreat of speculators, the National Association of Home Builders said on Monday."

"The NAHB/Wells Fargo Housing Market index fell six points to 45 in May from an upwardly revised 51 in April, the group said."

"Economists polled by Reuters had predicted the index would drop to 49, which would have been the index's lowest level since a downturn immediately after the September 11, 2001 attacks on the World Trade Center and Pentagon."

""Based on historical experience, particularly the 1994-1995 episode, the pattern of movement in the HMI is not inconsistent with the orderly cooling-down process we're projecting for home sales and single-family housing starts in 2006," NAHB chief economist David Seiders said in a statement."

"The group predicts new home sales will slide 12 percent this year from record sales last year."

44 Comments:

Anonymous Anonymous said...

National Median, Sales Down In First Quarter: NAR

The realtors association has some numbers out. “Real estate gains came to an abrupt halt in the first quarter of 2006, with the median price of a U.S. home falling 3.3 percent from the fourth quarter of 2005, according to a report by the National Association of Realtors.”

“Prices were basically flat or lower during the quarter as inventories of houses for sale rose and their time spent on the market lengthened. Median prices nationwide fell from $225,300 in the fourth quarter of 2005, to $217,900, a drop of 3.3 percent.’

“Many major metro areas showed slight declines, including Boston, Washington D.C. (down 2.4 percent), Los Angeles (down 0.8 percent) and Chicago (down 0.8 percent).”

5/15/2006 12:55:00 PM  
Anonymous Rich In NorthNJ said...

Sales for NJ -8.1%
03 174.3
04 188.6
05 184.4
1stQ 06 170.6

Prices
NY-Northern NJ-Long Island, NY NY-NJ-P 11.2 %
03 343.5
04 385.9
05 445.2
1stQ 06 458.5

New York-Wayne-White Plains, NY-NJ 15.8%
03 387.3
04 436.6
05 495.2
1stQ 06 528.7

5/15/2006 12:59:00 PM  
Blogger minutesfromNYC said...

Check out this stock:

HOV

eek!

5/15/2006 01:02:00 PM  
Anonymous Anonymous said...

Grim:

Today I saw this house still for sale, with price tag of $989,900.

But realtor told me it was listed at $1,495,000 and already under contract.

So could make your lowball list in the coming months.

What I want to know is what was the exact listing price now? Do you still think it is overpriced at the current price? Also wondering for how much that it was under contract for.

Thanks a lot for your help,

Central Jersey house hunter

MLS: 2271107

5/15/2006 01:09:00 PM  
Anonymous Anonymous said...

rich in northnj:

If I recall correctly, what most people on this site have determined from looking at some different data is that better homes are still in demand and holding up/lifting prices. Stuff at the bottom hasn't moved. Another curious phenomenon that people have noticed is the relist at higher price tactic some realtors/sellers are using. Then, when the property is sold it looks like the buyer got a great deal, but was actually paying close or above the OLP.

I think we'll see drops in those other areas, as well...

JM

5/15/2006 01:19:00 PM  
Anonymous Anonymous said...

I agree realtors and sellers are playing games with listings. Just because you get the price off 15% does not make it a good price. manipulation and spin working overtime.

5/15/2006 01:38:00 PM  
Anonymous Anonymous said...

all HB stucks are tanking. back to back new 52 week lows, see for yourself!

5/15/2006 01:53:00 PM  
Blogger RentinginNJ said...

Prices in the Newark-Union MSA (perhaps the best proxy for North Jersey, because it doesn’t include NYC) fell for the second straight quarter.

2005 Qtr. 3 446.8 (peak)
2005 Qtr. 4 413.9 (-7.4% from peak)
2006 Qtr. 1 405.3 (-9.3% from peak)

The Newark-Union MSA Includes the following counties:
Essex
Union
Morris
Sussex
Hunterdon
Pike (PA)

5/15/2006 02:04:00 PM  
Anonymous Jung said...

The report quoted NAR's chief economist David Lereah saying, "With the supply of homes picking up very nicely in many areas of the country, pressure is coming off of home prices."

what a genius. He managed to figured out a way a positive sounding way to say how prices are dropping. I really want to smack this guy silly in front of his kids.

5/15/2006 02:16:00 PM  
Blogger pesche22 said...

well , well, now we have seen some
technical damage in the stock market.

this may excellerate the selling in the housing market.

we may even have some panic setting in.

stand by,,

5/15/2006 02:17:00 PM  
Anonymous Anonymous said...

Wait a second. real estate does not fall in price.

NOT!

5/15/2006 02:17:00 PM  
Anonymous Anonymous said...

HOUSING BUST!

Babababababababa BOYCOTT Houses

Boooooooyaaaaaaaa

Bob

5/15/2006 02:18:00 PM  
Anonymous Anonymous said...

-rich in northernnj - Northern NJ prices went up 11.8%.

I don't know where you are getting these numbers, but I am positive that this is not the case for Morris County. Things are dropping like rocks there.

Where did you get this data?

-CJ

5/15/2006 02:19:00 PM  
Anonymous Anonymous said...

Attach the bunjee cord Bubbleheads .You fools are going to need it.
Bababababababbababa
BONZAI!!!!!!!

Bob

5/15/2006 02:21:00 PM  
Anonymous Rich In NorthNJ said...

I agree Anon2:19, with such low demand high end homes must be causing the increase in price gains.

And I don't know which NAR pricing stat to use for my area (Bergen County):
NY-Northern NJ-Long Island, NY NY-NJ-P
or
New York-Wayne-White Plains, NY-NJ
But as RentingInNJ mentions, these numbers include NYC (and/or Long Island, White Plains and P=PA?)!

Rich

5/15/2006 02:21:00 PM  
Anonymous Rich In NorthNJ said...

I don't know where you are getting these numbers, but I am positive that this is not the case for Morris County. Things are dropping like rocks there.

Where did you get this data?


Within the NAR press release is a link to the data.

1Q Existing Home Sales:
http://tinyurl.com/zay72

Metro Home Prices
http://tinyurl.com/lftzj

5/15/2006 02:26:00 PM  
Anonymous UnRealtor said...

I don't know what this 'high end homes not dropping' talk is about, I'm watching prices drop in ALL towns (Summit, Short Hills, Chatham, etc).

5/15/2006 02:34:00 PM  
Anonymous Rich In NorthNJ said...

I don't know what this 'high end homes not dropping' talk is about, I'm watching prices drop in ALL towns (Summit, Short Hills, Chatham, etc).

True, prices are down from peak of ’05-Q3, but up from the ’05-Q4.

If you don’t think it is higher end homes* that are propping up prices, what then do you believe is the reason for the price increase? With slow sales what else can it be? Is it the fact that NYC is part of the equation?

*I’m thinking of homes priced the $900 – multi-million dollar range, not so much as areas as you list them. My thinking is that these high-end homes may be the majority of what is selling and even with reduction in prices… that’s still big money.

Rich

5/15/2006 02:53:00 PM  
Anonymous Anonymous said...

PapapapapapapapaPANIC!

http://www.signonsandiego.com/news/metro/20060515-9999-1n15default.html

5/15/2006 03:00:00 PM  
Anonymous Rich In NorthNJ said...

Actually, my theory would be wrong due to the fact that these are MEDIAN prices.
So there were price increases for the first quarter.
Few buyers bought, just more fools did.

So prices did not come down. But, this doesn’t mean your statement about prices coming down in the areas you mentioned because these prices are for the 1st quarter (Jan-Mar) only.

5/15/2006 03:24:00 PM  
Anonymous Anonymous said...

Still up about 10% from one year ago though, so doesn't mean much.

5/15/2006 03:31:00 PM  
Blogger DebtVulture said...

I just saw a pre-foreclosure of a house that was bought last summer for $1.25M in Bergen County. Things will get more interesting once more of the ARMs get reset.

But seriously though, who would purchase a $1.25M house and not be able to afford it within one year.

5/15/2006 03:33:00 PM  
Blogger RentinginNJ said...

But seriously though, who would purchase a $1.25M house and not be able to afford it within one year.

Just refinance into a new 1 year ARM! After all, houses only go up and interest rates only go down. You had better buy the house while its's still only $1.25 million, otherwise you will be priced out of a McMansion forever!

5/15/2006 03:43:00 PM  
Anonymous Anonymous said...

Rich In NorthNJ:
Actually, your theory might be correct even these are MEDIAN prices. More high-end sells means both average price and media price would be higher.

5/15/2006 04:05:00 PM  
Blogger chicagofinance said...

"RentinginNJ said...
But seriously though, who would purchase a $1.25M house and not be able to afford it within one year."

Job loss, divorce, family death or disability, something unexpected [such as rising interest rates :)].

That's why we advise that you have an Emergency Fund of between 2 and 6 months depending on circumstances.

5/15/2006 04:06:00 PM  
Anonymous Anonymous said...

Emergency fund what's that. just get an I/O loan and everything is oakie dokie.
House Prices never go down.

Bababababababa BOYCOTT HOUSES!

Bababababa HOUSING BUST.

Bonzai!!

Bob

5/15/2006 04:29:00 PM  
Anonymous Anonymous said...

Adjusting arms, higher property taxes and higher property insurance along with property upkeep/utilities/gas putting real hurt in to pocket books.

Throwing away $10k-$15k a year in property taxes and $300-400 in utility expenses up in smoke gets old very quickly.

Lots and lots of empty McMansions coming down the pike.

BABABABABABBABA BOYCOTT HOUSES!

Just say NO MAAS to ripoff prices.

Bonzai!

Bob

5/15/2006 04:34:00 PM  
Blogger grim said...

Didn't have much time to comment on all the news today. Sorry everyone. Work has been keeping me busy lately.

grim

5/15/2006 04:45:00 PM  
Blogger DebtVulture said...

"RentinginNJ said...
But seriously though, who would purchase a $1.25M house and not be able to afford it within one year."

Job loss, divorce, family death or disability, something unexpected [such as rising interest rates :)].

That's why we advise that you have an Emergency Fund of between 2 and 6 months depending on circumstances."



Chicago - in my opinion, anyone spending this much $ on a house should have enough of a net worth to have more than 6 months of a cushion. In fact, in my opion, at this price level, you should be putting down much more than 20% for a down payment and that $ should represent no more than 20% of your net worth. Call me conservative, but that is my opion. I find myself contemplating spending this much for a house closer to NYC but then I would hate to get rid of my 5.375% 30 year mortgage and have more money tied up in a house.

5/15/2006 05:05:00 PM  
Blogger chicagofinance said...

Vult: conservative? No way.

I have seen my share of blow-ups.

If "conservative" means that you want to be in control of the major decisions in your life regardless of what happens in your family and career, well good "conservative" for you.

If you enjoy watching your life spin out of control at the drop of a hat - I guess this means "normal" in 2006.

What do I know?

5/15/2006 05:14:00 PM  
Anonymous Rich In NorthNJ said...

Actually, your theory might be correct even these are MEDIAN prices. More high-end sells means both average price and media price would be higher.

Good point! Guess I've been on the computer a tad to long today!

5/15/2006 05:21:00 PM  
Blogger DebtVulture said...

Chicago....yeah, I think we share similar financial values. When I purchased my house, I put 30% down and got a 30 year mortgage and had plenty left over to continue investing for my eventual retirement. I could have bought a house twice as large but I didn't. I am very thankful for what I have and know I am pretty fortunate.

5/15/2006 05:24:00 PM  
Anonymous Anonymous said...

I have been tracking a few towns in Essex and there seems to be a lot of UC - Under Contract homes over the past two months. I am in the market, but won't even look at a home unless it is 30 days or more on the market. Much to my surprise, they are going fast!!!!!

Is this just the end of the Spring sale?

5/15/2006 06:04:00 PM  
Blogger pesche22 said...

now everyone pay attention tonight
No maas, on the boarder.

They are on their way to New Jersey.

5/15/2006 06:34:00 PM  
Anonymous Anonymous said...

Rich In NorthNJ said...
Where did you get this data?

Within the NAR press release is a link to the data.

1Q Existing Home Sales:
http://tinyurl.com/zay72

Metro Home Prices
http://tinyurl.com/lftzj

So thats where the disconnect is. You actually believe the NAR's numbers. You do realize that they aren't actual numbers, and they are based on Surveys...right? Trust me, try to audit there numbers from the last couple of years. When you see that 04 numbers differ with every report, you will understand. Now my question is...when something is quantifiable, why would you use surveys to collect data.

-CJ

5/15/2006 06:36:00 PM  
Blogger bubble disciple said...


I have been tracking a few towns in Essex and there seems to be a lot of UC - Under Contract homes over the past two months. I am in the market, but won't even look at a home unless it is 30 days or more on the market. Much to my surprise, they are going fast!!!!!

Is this just the end of the Spring sale?


Maybe they negotiated good prices.

As for measuring price changes, it would be good if we had a way to calculate the average ratio of selling price to assessed price for each town.

This would filter out some of the short-comings of median prices and take improvements/depreciation into account.

5/15/2006 07:36:00 PM  
Blogger rymingrealtor said...

As for measuring price changes, it would be good if we had a way to calculate the average ratio of selling price to assessed price for each town.

Realtors can get a statistic that shows percentage of list price however it is the percentage of the last list price.

5/15/2006 08:00:00 PM  
Blogger grim said...

While the "% off List" measure has some value, and the "% off Original List" might have a bit more. I believe that both have shortcomings which make them imperfect for any kind of trending or valuation.

Asking prices are all over the board at this point.

grim

5/15/2006 08:46:00 PM  
Blogger Grim Ghost said...

I would suggest watching out for the OFHEO index. It comes from the Federal government and follows changes to the price of the same house, while controlling for renovations etc. It tends to sample cheaper houses a little more, but is still a very useful index.

5/15/2006 08:58:00 PM  
Anonymous Anonymous said...

MLS # 2238439
High Bridge (Hunterdon)
OLP $349.9K
New LP $299.8K

5/16/2006 04:39:00 AM  
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